Sitting of 29 September 1915

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

PRIVATE BUSINESS.
London County Council (Celluloid, etc.) Bill (Suspended Bill) (by Order),
Glasgow Corporation (Celluloid) Bill (Suspended Bill) (by Order),
Consideration, as amended, deferred till Thursday, 14th October.

TRADE REPORTS (ANNUAL SERIES).
Copies presented of Diplomatic and Consular Reports, Annual Series, Nos. 5473 to 5480 [by Command]; to lie upon the Table.
WORKMEN'S COMPENSATION.
Copy presented of Statistics of Compensation and of Proceedings under the Workmen's Compensation Act, 1906, and the Employers' Liability Act, 1880, during the year 1914 [by Command]; to lie upon the Table.
SHOPS ACT, 1912.
Copy presented of Order made by the Council of the county of Cardigan, and confirmed by the Secretary of State for the Home Department [by Act]; to lie upon the Table.
MERCHANT SHIPPING (SUB-DIVISION OF SHIPS).
Copy presented of Second Report of the Committee appointed by the President of the Board of Trade to consider and report on the Sub-Division of Merchant Ships (Home Trade Passenger Steamers, Cargo Steamers) [by Command]; to lie upon the Table.
BOARD OF AGRICULTURE AND FISHERIES.
Copy presented of Regulations for Grants in Aid of Agricultural Research in England and Wales, 1916–17 [by Command]; to lie upon the Table.
IRISH UNIVERSITIES ACT, 1908.
Copy presented of Accounts of Receipts and Expenditure of Universities and Colleges, Ireland (including the Fee Fund Grant), for the year ended 31st March, 1915, together with the Report of the Comptroller and Auditor-General thereon [by Act]; to lie upon the Table, and to be printed. [No. 357.]
FOREIGN JURISDICTION ACTS, 1890 AND 1913.
Copy presented of Order in Council, dated 24th September, 1915, applying Section 20 of the Finance Act, 1894, to the Territory of Weihaiwei [by Act]; to lie upon the Table, and to be printed.

UNIVERSITIES OF OXFORD AND CAMBRIDGE ACT, 1877 (OXFORD).
Copy presented of Statute made by the Governing Body of Corpus Christi College, Oxford, on 12th June, 1915, and sealed on. 18th June, 1915, amending Clause 13 (b) of the Statutes of the College [by Act]; to lie upon the Table, and to be printed. [No. 358.]
Copy presented of Statutes made by the Governing Body of Queen's College, Oxford, on 11th November, 1914, and 19th June, 1915 (and sealed on 19th June, 1915), amending (a) Statute Tit. I., Clauses 3 and 7, and Statute Tit. XVI., Clauses 1, 3, and 4, and (b) Statute Tit. II., Clause 11, of the Statutes of the College [by Act]; to lie upon the Table, and to be printed. [No. 359.]

MESSAGE FROM THE LORDS.
That they have agreed to,—
Consolidated Fund (No. 4) Bill, without Amendment.

ORAL ANSWERS TO QUESTIONS.
  WAR.

    MERCHANT SERVICE (SHORE BADGES).
    Mr. PETOasked the Secretary to the Admiralty whether his attention has been called to the increasing inconvenience

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    suffered by officers and men of the merchant service when on shore, owing to their having no badge indicating the nature of their employment; and whether he will grant war badges to all officers and men in the merchant service when they apply for them?
    The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Captain Pretyman): The question of the grant of a war badge to officers and seamen of the mercantile marine has been very carefully considered, but the practical difficulties in the way of giving effect to the proposal are such that I regret that it cannot be adopted.
    Mr. PETO: I beg to give notice that I shall raise this question on the Motion for the Adjournment of the House this evening.

    ENEMY ENTERPRISES IN CROWN COLONIES (BRITISH POLICY).
    Sir EDWIN CORNWALLasked the Secretary of State for the Colonies whether his attention has been called to the fact that it was officially stated in the Singapore Legislative Council that the policy of Great Britain was not to close down private enterprises run by or in the interests of those with whom we are at war except for military reasons; whether this represents the view of His Majesty's Government; and whether, in view of the steps which are being taken in some Colonies to liquidate German firms, but with the prohibition of enemy trading, he will define the policy of the Government on this question?
    The SECRETARY of STATE for the COLONIES (Mr. Bonar Law): The policy adopted by His Majesty's Government in regard to enemy firms in the Crown Colonies is identical with the policy being enforced in the United Kingdom.

    NON-COMMISSIONED RANK (PROMOTIONS).
    Mr. WINGasked the Under-Secretary of State for War if he is aware that there are cases in which privates are promoted to lance-corporal and further promoted to acting sergeant, and at the front further promoted to acting company sergeant-major; will he explain why on returning
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    home wounded these men on resuming duty are reduced to the position they held previous to leaving for the front; and will he take steps to ensure these men maintaining the rank at home to which they have been promoted abroad, as reduction for Army convenience in the rank is resented, such reduction inferring degradation?
    The UNDER-SECRETARY of STATE for WAR (Mr. Tennant): I should like at once to dissipate the notion that the noncommissioned officer who reverts from an acting rank to his substantive rank undergoes any reduction, still less degradation. Vacancies occur in units in the field with such frequency that most vacancies can be filled by a substantive promotion, though there may still be a few cases when promotion to acting rank only is given. The essence of acting rank is that it should only be held while the duties of the acting rank are actually performed. This is, I think, well understood in the Army, as is the fact that acting rank must be given up when the soldier comes home and ceases to perform the duties of the rank in which he had been appointed to act. It is not possible nor desirable to do away entirely with acting rank in the units at the front.

    COMMISSIONS FROM RANKS (UNIFORMITY OF PRACTICE).
    Lieutenant - Commander WEDGWOODasked the Under-Secretary of State for War whether he is aware that some commanding officers of units are much more willing than others to grant leave to men in the ranks who have seen service and done well to accept commissions; and whether anything has been done to secure uniformity in this matter?
    Mr. TENNANT: My hon. and gallant Friend will recognise that there are different features in different cases, and that absolute uniformity is not possible; but the Army Council desire that there should be a general uniformity, and General Officers Commanding have been directed to ensure that the Army Council's instructions regarding the recommendation of suitable candidates for commissions are carried out by all commanding officers.
    Lieutenant-Commander WEDGWOOD: May I ask whether these recommendations are a recent order, or are old-standing Regulations?
    Mr. TENNANT: There have been a great many letters issued to commanding officers on this vexed and difficult subject of recommendation for commissions. If my memory serves me rightly, the last one was sent out four or five weeks ago.

    PRISONERS OF WAR IN GERMANY (WINTER CLOTHING).
    Mr. MOUNTasked what steps are being taken by the War Office to supply prisoners of war in Germany with clothing for the winter months; and whether, among the clothing which is being or will be sent are included shirts, underclothing, boots, mufflers, and socks?
    Mr. TENNANT: The War Office has been in consultation during the last two weeks with some of those who have taken a leading part in looking after the welfare of prisoners of War in Germany, and they will in a few days be considering definite proposals with regard to the supply of clothing to prisoners during the winter months. I cannot at the present moment state what the measures to be taken will be, but I can assure the hon. Gentleman that the consignments to be sent, like those which have already been sent in the past, will include shirts, underclothing, boots and socks. It is proposed to leave the provision of mufflers to private enterprise.

    SOLDIERS' LEAVE (TRAVELLING TIME).
    Mr. LEICESTER HARMSWORTHasked the Under-Secretary of State for War if he will, when framing regulations regarding leave to officers and men who normally reside in the remoter parts of the United Kingdom, take into consideration the time consumed in going to and from their homes, and to grant in addition to the leave reasonable travelling time?
    Mr. TENNANT: I can assure my hon. Friend that the point he mentions is taken into consideration as far as it is possible to do so. I have before explained to the House that the exact rules or conditions under which leave can be given must be a matter for the discretion of the military authorities in France, and that it is not possible to prescribe any stereotyped system from here. It will always be possible, I fear, for comparisons to be made
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    between the treatment of one case and another, but such comparisons must be useless without the full knowledge of the facts present to the mind of the military commander in France. In the case of officers, especially, a definite limit to the number of days absence must be set on military grounds, and those who live at a greater distance must suffer to a certain extent in comparison with those who live at a less distance.

    RECRUITING.
    Mr. ELLIS DAVIESasked whether permission for Major Sitwell, of the War Office, to hold a recruiting meeting at the Dinorwic slate quarries during the meal hour was refused; and, if so, whether such refusal will be dealt with under the Regulations under the Defence of the Realm Act as calculated to discourage recruiting?
    Mr. TENNANT: My hon. Friend's question does not, I think, state correctly the attitude taken up by the manager of the Dinorwic slate quarries. He found himself unable, under the rules and regulations at the quarry, to allow a meeting to be held during working hours, but suggested that the meeting should be held after working hours, or any time on a Saturday, and, furthermore, offered to do anything to assist in the matter. If no meeting has yet been held, the reason is that the representative of the War Office has not yet been able to find time to make the visit. I may add that I understand that all men who have left their employment at the quarries in question to join the Forces or to do munition work have been told that they will be reinstated when the War is over, provided they are capable of doing the work allotted to them.
    Sir LEO CHIOZZA MONEYasked the Under-Secretary of State for War if he is aware that at recent inquests two soldiers, of forty-six and forty-three years of age, respectively, were shown to have committed suicide, the one because he was a chronic invalid and the other because he was unable to keep pace with young men; and if he will say why such men are recruited while millions of young men remain unrecruited?
    Mr. TENNANT: I am not aware of the facts stated in the first part of the question, and if I were aware of them I should not, I think, have drawn the conclusion suggested by my hon. Friend. I am willing to believe, and I do believe, that at

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    the time the two men in question were enlisted they were found by the military and medical recruiting officers to be in all respects suitable to be recruited so far as these officers were able to judge. I do not know whether it was so in this case, but it does, I am informed, frequently happen that men, in their eagerness to be accepted, suppress material facts affecting their suitability for enlistment and that these facts only come to light afterwards.

    NON-COMMISSIONED OFFICERS REDUCED IN RANK.
    Mr. PETOasked the Under-Secretary of State for War whether, in the case of non-commissioned officers who have been reduced in rank owing to some fault and who are subsequently wounded and discharged as unfit for service, he will consider the possibility of reinstating them to the rank of which they had been deprived and allowing them the pension appropriate to it?
    Mr. TENNANT: No general rule to the effect suggested, irrespective of the circumstances of the individual case, could be made, and of course a man who has been already discharged cannot now be promoted. If the hon. Member has any particular case in view, perhaps he will communicate with me.

    ARMY HORSES (BOARDING OUT).
    Mr. PETOasked the Under-Secretary of State for War whether, in view of the expense to the country of maintaining vast numbers of horses in the various horse-camps and the difficulty of keeping them in health in winter, he will consider the adoption of a system of boarding them out among selected farmers under the superintendence of county committees, and thus assist in food production?
    Mr. TENNANT: The system of boarding out remount horses with farmers and others already obtains to a considerable extent, on terms ranging from "meat for work" to 25s. per week according to the condition of the animals and the accommodation provided, and many of these horses are at work. General Officers Commanding-in-Chief will be directed to extend the system of issuing horses on "meat for work" terms as far as is possible and expedient.
    Mr. PETO: Will the right hon. Gentleman answer that part of the question which deals with the appointment of county committees after these horses are boarded out with farmers?
    Mr. TENNANT: I regret that I omitted to answer that. We have in our employment in the Remount Department many local gentlemen of horsey propensities with knowledge of horse flesh and horse keeping, and it is not considered necessary in those circumstances which prevail very widely all over this country to adopt the hon. Member's suggestion.

    COMMANDING OFFICERS (TEMPORARY PROMOTION).
    Mr. PETOasked whether the decision arrived at by the War Office with reference to the promotion of officers commanding battalions on active service to the rank of lieutenant-colonel applies to the minor seats of war such as East and West Africa; and, if not, whether he can state the reason for the limitation?
    Mr. TENNANT: If, as I understand, the reference is to the special rules recently made for temporary promotions, cases outside Europe will be considered on their merits. The circumstances differ from those which the special rules were designed to meet.

    WAR EXPENDITURE (TREASURY CONTROL).
    Mr. MOLTENOasked the Chancellor of the Exchequer whether the Comptroller and Auditor-General has made a Report to Parliament upon the working of the arrangements for the withdrawal of Treasury control from certain classes of war expenditure, as provided for in the Treasury Minutes dated 8th December, 1914, 29th March, 1915, and 29th January, 1915; and, if not, when such Report will be made?
    The CHANCELLOR of the EXCHEQUER (Mr. McKenna): The answer to the first part of the question is in the negative. The Treasury Minutes to which my hon. Friend refers came into force towards the end of the financial year 1914–15, and it will be open to the Comptroller and Auditor-General to include any comments which he desires to make on their working in his Reports on the Army and Navy Appropriation Accounts for that year and subsequent years.
    Mr. MOLTENOasked whether the Comptroller and Auditor-General has made any comment on the use of the special power given to the Secretary of State for War by the Treasury Minute of the 8th December, 1914, and the Treasury Minute of the 29th January, 1915; and whether he has called the attention of the Treasury to any cases in which these powers may appear to have been exceeded?
    Mr. McKENNA: I am not aware of any comment by the Comptroller and Auditor-General upon the Treasury Minutes referred to. He has not drawn the attention of the Treasury to any cases in which the powers given thereunder have been exceeded.
    Mr. MOLTENOasked who is now responsible for the making of contracts for the War Office requirements containing special financial provisions of an unusual character, such as specific capital advances to contractors for plant and which provides specifically for assistance to the contractor in respect of the additional capital outlay involved; whether such contracts would require Treasury sanction in times of peace, but are now made without that sanction; by what Department or Departments are such contracts now made, and who is responsible to the House of Commons for them; and whether he can state what amount has been advanced for special advances to contractors up to the present time?
    Mr. McKENNA: The Secretary of State and the Minister of Munitions of War are responsible to Parliament for the contracts made by them respectively, including contracts of the special character referred to, which would not be made in time of peace without Treasury sanction. The Treasury has no information as to the amount advanced to contractors by way of special advances up to the present time.

  BUDGET PROPOSALS.

    RELIEF FROM SPIRIT DUTY.
    Mr. PERCY HARRISasked the Chancellor of the Exchequer if he intends to introduce a Clause in the Finance Bill to provide the relief from Spirit Duty promised to hospitals; if not, will he bring it in as a Vote in Supply; and whether, if the latter course is pursued, there will be any delay in the receipt of this relief by the hospitals?
    Mr. McKENNA: I propose to submit to the House a Vote in Supply at the earliest suitable opportunity.
    Mr. LEIF JONES: Can the right hon. Gentleman not see the propriety of basing the amount granted to hospitals on the number of patients treated rather than as a rebate on the amount of alcoholic consumption?
    Mr. McKENNA: We proceed on a different principle based on past expenditure.

    EXCESS PROFITS TAX.
    Mr. LOUGHasked (1) whether all the following businesses and professions will be included under the proposed taxes on excess profits: bankers, bill discounters, insurance companies, accountants, trades unions, friendly and co-operative societies, and all branches of the medical and legal professions; and (2) whether the proposed exemption of agriculture from the tax on excess profits will extend to estates and enterprises in the Colonies as well as in the United Kingdom; and whether this exemption will be confined to agricultural productions, or if it is to be extended so as to cover the sale and distribution of agricultural products such as cattle, grain, wool, cotton, bacon, butter, tea, sugar, and rubber?
    Mr. McKENNA: Trades, manufactures, and business concerns (including agencies) assessable to Income Tax Schedule D are within the scope of the tax. For more detailed information my right hon. Friend will perhaps be willing to await the circulation of the Bill.
    Mr. LOUGH: I desire to have this information in order that the matter may be considered. Could the right hon. Gentleman give me the particulars asked for in the first question, as to whether these businesses will be included? No one at present understands.
    Mr. McKENNA: I think any banker will know whether he is included under Schedule D or not. I do not think any banker or bill discounter will have the slightest doubt about it.
    Sir G. YOUNGER: What will be the position of fire insurance companies? They are in a wholly different position to some of these others.
    Mr. McKENNA: That is the objection to raising this question in the form of a

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    question and answer. Obviously it is a matter that must be dealt with when the Bill is circulated to the House.
    Mr. HAROLD SMITHasked the Chancellor of the Exchequer whether, in ascertaining the liability to tax on excess profits, taxpayers may elect to take the year immediately preceding as the datum line instead of the average for the three years?
    Mr. McKENNA: The answer is in the negative.
    Mr. HORNER: Can the right hon. Gentleman arrange that where, on account of strikes or any other exceptional reasons, the profits of the one year prior to 1914 were unusually low, the tax-payer can substitute any other year for the bad year?
    Mr. McKENNA: I think that is a question which would be better discussed when the Bill is before the House.
    Mr. CLANCY: Has the attention of the right hon. Gentleman been directed to the special case in Dublin, where a railway strike disastrous to trade took place in the year 1913–14, with the consequence that almost every trade and business in the city and adjoining parts of the county were dislocated, and in some cases ruined for the time being? Will he consider the injustice that would be done, if that year were taken as one of the average years for normal profits?
    Mr. McKENNA: The date of which my hon. Friend speaks is inaccurate, because I believe the strike he refers to was in 1914, and I am not sure that it would come under the years of assessment included for the datum line.
    Mr. CLANCY: I thought this might affect his consideration as to the form in which the Bill should be introduced.
    Mr. HAROLD SMITHasked whether exemption from liability to pay tax on excess profits will be granted to companies incorporated in the United Kingdom whose operations are wholly carried on and directed abroad, in the Dominions, or in Dominions which have imposed or may impose a similar tax, respectively?
    Mr. McKENNA: The answer is in the negative.
    Mr. HAROLD SMITHasked whether a company which holds shares
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    in another company which has paid tax on excess profits will be relieved pro tanto (so far as the dividends received are concerned) from liability to pay the tax on excess profits?
    Mr. INGLEBYasked whether, in the case of a young company which has only been in existence two or three years, and cannot therefore have acquired a prewar standard, it is his intention to tax as excess profits the increased profits that have naturally accrued from the development of the company's business?
    Sir J. D. REESasked how it is proposed to assess war profits in the case of foreign firms represented in the United Kingdom by agencies or branches, the head offices being situated in neutral countries?
    Mr. McKENNA: As regards these questions, I would ask the hon. Members to await the circulation of the Bill in connection with the more detailed provisions of the tax.
    Mr. HAROLD SMITHasked whether under any circumstances pre-war profits are liable to taxation as excess profits; and whether trading companies, the books and accounts of which are closed each year subsequent to the 1st of September, will be exempt from taxation of excess profits in respect of profits made before the outbreak of war, although such profits appear in balance-sheets drawn up subsequent to the 1st of September, 1914?
    Mr. McKENNA: It is not proposed to apportion in the manner suggested the profits shown in an ordinary business year of account.

    ALLOWANCES TO LANDOWNERS.
    Mr. ELLIS DAVIESasked what is the estimated yearly loss to the Revenue owing to the allowances made to land-owners under the Finance (1909–10) Act, 1910, c. 8, s. 69, and under the Finance Act, 1914, s. 8?
    Mr. McKENNA: With Income Tax at 3s. 6d. in the pound and Super-tax at the rates proposed in the Budget Resolutions, it is estimated that the annual cost of the allowance under the Sections quoted would amount to £310,000.

    POSTAL AND TELEGRAPHIC CHARGES.
    Sir J. D. REESasked the Postmaster-General when it is intended that

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    the changes proposed in the Budget shall become effectual in his Department if sanctioned by Parliament?
    The POSTMASTER-GENERAL (Mr. Herbert Samuel): The postal and telegraphic charges for which legislation is required can only take effect after the passage of the Finance Bill. I hope it may be possible to bring them into effect on 1st November.
    Legislation is not required for the increases in trunk telephone charges and call office fees and the charges for postal orders. These will take effect from the 1st October.
    Fixed annual "flat rate" payments for telephone service will be raised in each case at the end of the period for which rental has already been received, or at the earliest date thereafter on which existing agreements can be terminated.
    Sir J. D. REES: Can the abolition of the halfpenny postage be introduced before the Budget is passed through the House?
    Mr. SAMUEL: No, Sir, it requires legislation.

    BUDGET RESOLUTIONS (REPORT STAGE).
    Mr. LOUGHasked the Prime Minister whether, having regard to the number and importance of the Resolutions and the new principles embodied in some of the taxes, he can see his way to allow a second day for the Report stage of the Budget Resolutions?
    The PRIME MINISTER (Mr. Asquith): If the Resolutions are not carried to-day, the discussion will be continued to-morrow.

    WAR LOAN (FIVE-SHILLING VOUCHERS).
    Mr. HOGGEasked the Chancellor of the Exchequer whether he contemplates withdrawing the 5s. voucher?
    Mr. McKENNA: I am not yet in a position to add anything to the answer I gave to my hon. Friend on 14th September.

  DEFENCE OF THE REALM ACT.

    LONDON AND DISTRICT SCHEDULED AS A MUNITION AREA.
    Sir JOHN LONSDALEasked the Minister of Munitions if the Central Control Board (Liquor Traffic) has decided to
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    schedule London as a munition area; and if he will state the area to be scheduled, the nature of the restrictions to be imposed, and the date when the Regulations will come into force?
    The PARLIAMENTARY SECRETARY to the MINISTRY OF MUNITIONS (Dr. Addison): An Order in Council was made on the 24th instant scheduling the City of London, the whole of the Metropolitan; Police District, the Petty Sessional Division of Romford, and the Urban District of Watford, with the Dartford area (which had been scheduled on the 6th July), as an area under the Defence of the Realm (Amendment) (No. 3) Act. In view of the urgent representations of the Military Authorities, the Board will in the course of this week issue an Order regarding "treating." Dilution of spirits to 45 degrees under proof in the case of gin and to 35 degrees under proof in the case of other spirits will be permitted. The question of the restriction of hours, and other matters usually dealt with by the Board's Orders, are being carefully considered with a view to the special requirements of London.

    NATIONAL INSURANCE COMMISSIONS.
    Sir J. LONSDALEasked the Financial Secretary to the Treasury if, in the investment by the National Debt Commissioners of moneys received from the Irish Insurance Commission, the approved societies receive the full return in interest resulting from the purchase of stocks, etc., at a discount; and if there is a difference between the amount received as interest by the National Debt Commissioners and the amount credited to the approved societies, will he state the amount of such difference and the purpose to which it is applied?
    The FINANCIAL SECRETARY to the TREASURY (Mr. Montagu): The income account of the National Health Insurance Fund (Investment Account) receives the whole of the interest earned on investments and any profit on realisation of securities, and is, on the other hand, chargeable with any loss on realisation. Interest is credited to approved societies, as such rate as the income account above mentioned can afford, the rate being fixed from time to time by the National Health Insurance Joint Committee. The invested

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    funds are applied both as to principal and as to interest solely for the benefit of the National Health Insurance Fund.
    Mr. HOGGEasked the Prime Minister whether any changes are contemplated in the organisation of the Insurance Commission; and whether the separate existence of the Scottish Insurance Commission is threatened?
    The PRIME MINISTER: I understand that the organisation of the Department as a whole is under consideration by the Retrenchment Committee. Until their report has been received I can make no statement.
    Mr. BOOTH: Will the Retrenchment Committee consult the Advisory Committee set up under the Insurance Act before it makes any proposals for drastic alterations?
    The PRIME MINISTER: I am not responsible for what the Retrenchment Committee does.

    BUILDING TRADE (MEN OF MILITARY AGE).
    Sir CHIOZZA MONEYasked the President of the Board of Trade what is the estimated number of workers employed in the building trade in the United Kingdom; what is the number of men of military age so employed; and how many of these have joined the Army or Navy?
    Captain PRETYMAN: My hon. Friend is aware that the whole statistical position revealed by the National Register is being considered both from the industrial and military points of view. It would not be in the public interest to make partial statements with regard to the results.

    PUBLIC EXPENDITURE (RETRENCHMENT COMMITTEE).
    Sir J. LONSDALEasked the Prime Minister if the Government have given consideration to the Report of the Committee on Public Retrenchment; and if he will state whether, and to what extent, effect will be given to the recommendations of that Committee?
    The PRIME MINISTER: Immediate steps are being taken to give effect to those recommendations which do
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    not require legislation. The remainder will be dealt with in the Finance Bill, and they will, I trust, be approved by this House. The only recommendation which His Majesty's Government has been unable to accept in its entirety is that dealing with the increase of postal rates.
    Mr. BOOTH: Are we to understand that any recommendations dealing with the reconstruction of the Insurance Act and its administration will be dealt with in the Finance Bill?
    The PRIME MINISTER: I am not quite sure. I should like notice of that question.
    Mr. KINGasked the Prime Minister whether, in view of the extravagance and waste disclosed from time to time in camps, purchase of materials, and other directions, he will extend the sphere of inquiry for the Retrenchment Committee to cover the operations of the War Office or, alternatively, appoint another Committee with the object of diminishing the present ineffective expenditure?
    The PRIME MINISTER: I dealt with this matter in my speech of the 20th July on the Vote of Credit. I have nothing to add to what I then said.

    NAVAL AND MILITARY SERVICES (PENSIONS AND GRANTS).
    Mr. HOGGEasked the Prime Minister whether it is proposed that the present separation allowance payments shall be altered soon to a flat rate; and, if so, whether he is prepared to make a statement on the subject?
    The PRIME MINISTER: I am not aware of any proposal to alter the present scheme of separation allowances.

  COMPULSORY SERVICE.

    TRADE UNION RESOLUTIONS.
    Mr. W. THORNEasked the Prime Minister whether he is aware that, at the Trades Union Congress held in Bristol in the early part of September, a resolution was passed against Conscription which had a backing up of 3,000,000 organised workers, including 600,000 miners and about 300,000 railway workers; if he is aware that a number of executive councils and branches of trade unions in this country have also passed resolutions

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    against Conscription; if he can state how many resolutions he has received from the organised workers protesting against Conscription in any shape or form being forced upon the country; and if such resolutions have been placed before the Cabinet?
    The PRIME MINISTER: I am aware of the facts stated in the early part of the question. I have received some 400 resolutions in this sense from labour bodies in the past three months.

  OPERATIONS IN MESOPOTAMIA.

    BRITISH SUCCESSES.
    Colonel YATE: I desire to ask the Secretary of State for India if he can give the House any information with regard to the operations in Mesopotamia?
    The SECRETARY of STATE for INDIA (Mr. Chamberlain): I have received two telegrams, both dated 29th September, from Sir John Nixon, which I will read to the House.
    The first telegram says:—
    "Complete success attended the operations of the 6th Division on the Tigris on the 28th September. The position of the enemy is a long one on both banks astride the river, seven miles to the east of Kut and extending from the left bank for six miles. The plan of attack was well conceived. General Delamain's detached force consisting of two brigades, after a demonstration which they made on 27th September, crossed over from the right bank. By a night march they gained the enemy's left, and by a gallant attack carried its northern extremity at 10 a.m. By 2 p.m. the remainder of this portion of the enemy's position was carried after much opposition. By nightfall the force had advanced west of the enemy's position, which was wired in and strongly entrenched and in which the enemy had been pinned all day by another brigade. The troops bivouacked in their position with the fall of darkness, our outer flank was covered by armoured motor cars and Cavalry, which were engaged all day against Turkish cavalry. The Turks had to be dislodged trench by trench, and fought with the greatest tenacity. Some guns and several hundred prisoners, with many rifles and quantities of ammunition, were captured, and the enemy's losses in dead were very severe, the trenches being
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    full of corpses. It is believed that our casualties are under 500."
    The other telegram says:—
    "Enemy position in advance of Kut al Amara captured with many prisoners and guns. Enemy in full flight towards Baghdad. Our force pushing in pursuit. Details follow."

    Indian Specie Bank.
    Sir J. D. REESasked the Secretary of State for India whether the Governor-General in Council has arrived at a decision regarding the appeal of the Thakor Saheb of Morvi against the permission given to the official liquidator of the Indian Specie Bank to sue His Highness in the High Court of Bombay?
    Mr. CHAMBERLAIN: The Chief of Morvi's appeal has been rejected by the Government of India.
    Sir J. D. REES: Is this always to be regarded as a precedent?
    Mr. CHAMBERLAIN: The Government of India came to this decision on the merits of this particular case. It is not a precedent, except in the sense that it shows that in certain cases where the circumstances are such as to make that course the right one the Chief may be sued. There is no cause for general anxiety, and I do not think any such general anxiety exists.

    India (Imperial Conference).
    Sir J. D. REESasked whether any decision has been arrived at in regard to the question of the representation of India at the next Imperial Conference; and, if so, whether he can now inform the House of the nature of such representation as is contemplated?
    Mr. CHAMBERLAIN: No decision on this very important subject has yet been taken by His Majesty's Government nor can any decision be taken without consultation with the Governments of the Dominions. But the Viceroy was authorised by me on behalf of His Majesty's Government to inform his Legislative Council when accepting the Besolution that such an expression of Indian opinion as was embodied in the Resolution unanimously carried by them last week would receive the most careful consideration by His Majesty's Government. When full accounts of the debate are available I do not doubt that they will be read with equal interest and sympathy in all parts of His Majesty's

    835
    Dominions, but the constitution of the Imperial Conference is at present fixed by the resolution of the Conference itself and it can only be altered with the consent of the Governments represented therein.

    Non-payment of Rates (Camberwell).
    Sir J. D. REESasked the President of the Local Government Board whether 10,000 summonses for non-payment of rates were recently issued by the Camber-well Borough Council; and, if so, whether any inquiry has been, or will be, instituted into the alleged recent increase of 5d. by the guardians, whereby the total rate has been brought up to nearly 10s. in the £?
    The PRESIDENT of the LOCAL GOVERNMENT BOARD (Mr. Long): I am informed that, for the last quarter, the number of summonses issued for non-payment of rates by the Camberwell Borough Council was 5,869, being about the average number. As regards the last part of the question I understand that the rate levied by the guardians for the next half-year shows a decrease, and that the total rates levied in Camberwell for all purposes for the year ending March, 1916, amount to 9s. 2d. in the £, as compared with 9s. 7d. in the previous year, or a reduction of 5d. in the £

    London Institution (Reconstruction)
    Sir J. D. REESasked the President of the Board of Education whether the reconstruction of the London Institution and its adaptation for use as a school of oriental studies is proceeding, or is to proceed, during the current year?
    The PARLIAMENTARY SECRETARY to the BOARD of EDUCATION (Mr. Herbert Lewis): The reconstruction of the London Institution is proceeding, and it is anticipated that the school will be ready for opening in January.

ORDERS OF THE DAY.

  BUSINESS OF THE HOUSE.
  Mr. CHAPLIN: May I ask the Prime Minister if he can tell us what business is to be taken to-morrow, and what the course of business will be for next week?
  The PRIME MINISTER: To-morrow we shall continue the discussion on the Report of the Budget Resolutions if they are not completed to-day. Then we shall move a Resolution proposing that the House shall adjourn until Tuesday week, 12th October.

  WAYS AND MEANS [21ST SEPTEMBER.]
    BUDGET RESOLUTIONS.

      TEA.
      Resolution reported,
      1."That in lieu of the duty of Customs payable on tea there shall, on and after the twenty-second day of September, nineteen hundred and fifteen, until the first day of August, nineteen hundred and sixteen, be charged the following duty, that is to say:—

      £

      s.

      d.

      Tea

      …

      …

      the lb.

      0

      1

      0

      And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."
      Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."
      Mr. LOUGH: On a point of Order. I think that it might be for the general convenience of the House if you would kindly tell us whether any general discussion can be allowed on the Resolution, or whether throughout the day the discussion will be confined to the particular Resolution that you put from the Chair?
      Mr. SPEAKER: The discussion must be confined to each Resolution as it comes up. There can be no general debate.
      Question put, and agreed to.

      COCOA.
      Resolution reported,
      2. "That in addition to the duties of Customs now payable on cocoa imported into Great Britain or Ireland there shall, on and after the twenty-second day of September, nineteen hundred and fifteen, until the first day of August, nineteen hundred and sixteen, be charged the following additional duties, that is to say:—

      £

      s.

      d.

      Cocoa, the lb.

      0

      0

      0½

      Cocoa husks and shells, the cwt.

      0

      1

      0

      Cocoa butter, the lb.

      0

      0

      0½

      and so in proportion for any less quantity.
      And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."
      Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."
      Sir J. D. REES: I do not think I ought to allow this Resolution to pass unnoticed or without giving expression to a view very widely held by everybody concerned—a view which, although put forward on previous occasions, has elicited no explanation from the Chancellor of the Exchequer. The right hon. Gentleman cannot be surprised if, when no answer is given on points of this character, sinister interpretations are put upon the preference which is given to cocoa as against tea. The same remark applies as regards coffee and cocoa. The difference is exceedingly marked, and, although I do not wish to elaborate the point, I think it would not be proper to refrain from uttering these few words before the Resolution passes.
      Sir WALTER ESSEX: Is it the intention of the Chancellor of the Exchequer to give information with regard to the amount of cheques returned owing to the operation of his suspension or limitation of forestalments in the Customs Houses of the country generally? I understand that very large sums of money have been handed back by the Customs Department to persons who had paid them over, but who were refused delivery of goods until the Budget Resolutions had passed?
      The CHANCELLOR of the EXCHEQUER (Mr. McKenna):I think the proper time to answer that question will

      845
      be when I bring in a Resolution dealing with the whole subject. I propose to introduce a Clause in the Bill upon which this question can be raised, but if I were pressed now I could only deal with the forestalments of cocoa.
      Sir W. ESSEX: Will the right hon. Gentleman give the information later?
      Mr. McKENNA: Of course.
      Sir J. D. REES: Am I to take that as an answer to my question also?
      Mr. McKENNA: I did not take the hon. Gentleman's observations seriously. He spoke of "sinister conclusions," and I assumed him to refer to conclusions which could only be drawn by sinister persons. This tax is the same as has been imposed by both parties for a great many years, and I do not know what sinister conclusions are to be drawn from taxation which has been equally acceptable to both parties in this House.
      Sir W. ESSEX: I think the right hon. Gentleman rather missed my point—
      Mr. SPEAKER: The hon. Member has already exhausted his right to speak.
      Question put, and agreed to.

      COFFEE.
      Resolution reported,
      3. "That in addition to the duties of Customs now payable on coffee imported into Great Britain or Ireland there shall, on and after the twenty-second day of September, nineteen hundred and fifteen, and until the first day of August, nineteen hundred and sixteen, be charged the following additional duties, that is to say:—

      £

      s.

      d.

      Coffee (not kiln-dried, roasted, or ground), the cwt

      0

      7

      0

      Coffee, kiln-dried, roasted, or ground, the lb.

      0

      0

      1

      and so in proportion for any less quantity.
      And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."
      Resolution agreed to.

      CHICORY (CUSTOMS).
      Resolution reported,
      4. "That in addition to the duties of Customs now payable on chicory imported into Great Britain or Ireland there shall, on and after the twenty-second day of September, nineteen hundred and fifteen,
      846
      until the first day of. August, nineteen hundred and sixteen, be charged the following additional duties, that is to say:—

      £

      s.

      d.

      Chicory, raw or kiln-dried, the cwt.

      0

      6

      7

      Chicory, roasted or ground, the lb.

      0

      0

      1

      and so in proportion for any less quantity.
      And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."
      Resolution agreed to.

      CHICORY, ETC. (EXCISE).
      Resolution reported,
      5. "That in addition to the duty of Excise now payable on chicory there shall, on and after the twenty-second day of September, nineteen hundred and fifteen, until the first day of August, nineteen hundred and sixteen, be charged the following additional duty, that is to say:—

      £

      s.

      d.

      Chicory, raw or kiln-dried, the cwt.

      0

      6

      7

      and so on in proportion for any less quantity; and in addition to the duty of Excise now payable on any article or substance prepared or manufactured for the purpose of being an imitation of or in any respect to resemble or to serve as a substitute for coffee or chicory, and on any mixture of any such article or substance with coffee or chicory, there shall, on and after the twenty-second day of September, nineteen hundred and fifteen, until the first day of August, nineteen hundred and sixteen, be charged the following additional duty, that is to say:—

      £

      s.

      d.

      For every quarter of a pound of such article, substance, or mixture

      0

      0

      0¼

      And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."
      Resolution agreed to.

      SUGAR (CUSTOMS).
      Resolution reported,
      6. "That in lieu of the duties of Customs now payable on sugar imported into Great Britain or Ireland there shall, on and after the twenty-second day of September, nineteen hundred and fifteen,

      847
      until the first day of August, nineteen hundred and sixteen, be charged (without prejudice to the continuance after the said first day of August of the duties now payable) the following duties:—

      £

      s.

      d.

      Sugar of a polarisation exceeding 98 degrees, the cwt.

      0

      9

      4

      Sugar of a polarisation not exceeding 76 degrees, the cwt.

      0

      4

      6

      and intermediate duties varying between 9s. 4d. and 4s. 6d. on sugar of a polarisation not exceeding 98 and exceeding 76 degrees;

      Molasses (including all sugar and extracts from sugar which cannot be tested by the polariscope):—

      if containing 70 per cent. or more of sweetening matter, the cwt.

      0

      5

      11

      if containing less than 70 per cent. and more than 50 per cent. of sweetening matter, the cwt.

      0

      4

      3

      if containing not more than 50 per cent. of sweetening matter, the cwt.

      0

      2

      1

      Glucose:—

      solid, the cwt.

      0

      5

      11

      liquid, the cwt.

      0

      4

      3

      Saccharine (including sub-stances of a like nature or use), the oz.

      0

      3

      0

      and so in proportion for any less quantity.
      And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."
      Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."
      Mr. LOUGH: I think, in view of the length of the Resolution which has just been read, the House, will feel that when we are dealing with such large and complicated duties in this rapid way, we might have the details printed on the Paper, so that we may have an opportunity of studying them. (Mr. Gulland handed the right hon. Gentleman a printed copy of the Resolutions across the Table.) On this particular question there are two or three matters to which I would like to draw the attention of my right hon. Friend. I did not fully understand his statement about sugar in connection with the Budget speech. He explained to us that, in some
      848
      way, the full extent of the new duty would not fall on the consumer at the present time. I should like to know what the right hon. Gentleman meant by that. He is the greatest sugar merchant—perhaps the sole sugar importer—and he has told us that he proposes so to reduce the tax that the additional burden on the consumer will only be ½d. per lb., although the new duty represents 1d. in the lb. I do not think the House understood that the Government were making a profit of anything like ½d. per lb. out of sugar.
      Mr. McKENNA: A farthing.
      Mr. LOUGH: Then, if they only made a ¼d. per lb. upon their purchases of sugar, how is it, although the new duty represents 1d. per lb., the charge to the consumer will only be at the rate of ½d. per lb.?
      Mr. McKENNA: As a matter of fact the addition is only ¾d. per lb., not 1d.
      Mr. LOUGH: We are now getting at the figures. But I do not think it was generally understood throughout the country that the Government were making a profit of ¼d. a lb. on sugar. In a speech which the right hon. Gentleman made he admitted that sugar had doubled in price practically since the War commenced. That is a tremendous increase. Those Gentlemen in this House who are anxious that the Government should fix prices and take charge of particular branches of trade, might well direct their attention to this point; that in the case of the one commodity which the Government have taken entirely in hand, the price has been doubled, and this heavy burden is being placed upon the community. There is another statement upon which my right hon. Friend might very well throw some further light. That was a statement referring to cube or loaf sugar. Most of us to-day see loaf sugar disappearing from our tables and other sugar of various kinds substituted for it. Even in this House we have ceased to get loaf sugar. That is a very serious thing.—[Laughter] —
      Mr. W. THORNE: There is something more serious than that.
      Mr. LOUGH: Although it may seem to be a matter for laughter now, I understand that loaf sugar is mainly manufactured in this country, and if high prices have been paid for it, the Government, or somebody else, must be getting large profits out of it. I should like to know why this great

      849
      increase should have taken place in the price of this particular quality of sugar. It seems to me there is one thing the right hon. Gentleman might do for the consumers of this article. He might open the ports. It is a shocking thing, at a time when these great additional charges are placed upon the country, that the step should be taken of keeping the ports closed so that nobody can bring in sugar in plentiful supplies if it were found possible to do so. The House might well look at this singular infringement of the principle of Free Trade and the rights of the consumers in this country. At the time my right hon. Friend first succeeded to his office there was only one main reason given for the step taken. There were several reasons, but the chief reason given was that sugar might be imported from enemy countries. There may be some explanation of it, but what it is I do not know, because we have not had much discussion upon the subject. Subject to what we hear from my right hon. Friend, it seems to me now that that difficulty is entirely removed because our enemies cannot export anything anywhere. [HON. MEMBERS: "Don't they?"]
      Sir A. MARKHAM: What about coal to Sweden?
      Mr. LOUGH: That is another thing. I would rather not be drawn aside from my argument. I will put it this way: that it is very difficult for the enemy now to export anything, especially since Italy joined in the War. It is this happy country which appears to be the only land, so far as the belligerent countries are concerned, into which free imports can come. Thanks to the excellent work which has been done by our Navy, our imports are not only keeping up to the usual figure, but are larger than ever before. If we can get imports in freely, why should we not be allowed to import sugar? We are now, if this 1d. is put on, paying three times as much as was charged before the War. Although my right hon. Friend anticipates a smaller amount from this extra 1d., I calculate it will produce, unless consumption is greatly reduced, something like £14,000,000 a year. I do not think so large an amount has been estimated for, because my right hon. Friend is, no doubt, right in making a conservative estimate.
      Mr. McKENNA: It will be over £14,000,000.
      Mr. LOUGH: And at the rate at which it was consumed it would be a burden of
      850
      £14,000,000. My opinion is, that if the ports were opened and the free import of sugar were permitted from all quarters except enemy countries, the price of sugar would fall very much and there would be a great reduction of price to compensate for the heavy tax we have to bear. The hon. Baronet behind (Sir G. Younger) says the Government will lose a large amount of money. I do not want the Government to lose a lot of money, but I want the Government to be candid and to tell us how much they are getting out of sugar. They ought not to try by a side wind to get a large revenue out of it of which we in this House know nothing. After all, what are we here for—
      Mr. BOOTH: Ask your Leader.
      Mr. LOUGH: If it is not to pronounce an opinion upon a matter of this kind. If the Government have taken what they want out of sugar, and this 1d. in the lb. represents something like nearly £14,000,000 a year, that is a good large round sum, and the Government should not try by a side wind to get any more. If they want more, they should make the duty 1¼d. or 1½d. Let them say what they are going to do in an open, straightforward way, and not keep the ports closed, making themselves monopolists of an article of consumption which is of first importance in the articles of food consumed by the people of this country. We have not had a Debate on the question of sugar since my right hon. Friend has had this matter in hand. I have always, looked with some suspicion on the closing of the ports to sugar. In August last year, when my right hon. Friend took the matter up, there was a great panic about sugar and about nearly every commodity. There was a panic about tea, for example. For six months following the Government sometimes prohibited the export of tea—they made six changes with regard to it—and then at the end of six months they dropped tea altogether and left tea to the ordinary laws of supply and demand. The result is that tea is not more than 10 per cent, dearer to-day than before the War broke out. [An HON. MEMBER: "That is the wholesale price."] Quite so. The Board of Trade figures give some 34 per cent., but those are founded on the high prices inflicted by Government interference.
      Now that the Government has washed its hands of tea, and says that anybody can do as they please about it, the price has

      851
      come down, and I believe it will come down to the pre-War figure. Why not take the same wise course with regard to sugar? I believe that my right hon. Friend, if he were quite frank with us, would say that this interference was caused originally by the panic prices. They did not last three weeks. Why should not the Government deal with sugar as they did with wheat, namely, interfere with prices for three weeks and by that means bring down the prices, and then allow the ordinary laws to operate? The matter has never been explained to the House. Now that we are getting the heavy impost of 1d. a lb., and we are candidly told that the prices of some kinds of sugar will go up more than 1d. and a heavy burden is put on the consumer, my hon. Friend should give us some information of the sort I have intimated in a full, complete and candid way. He is the great sugar merchant at home. We all depend on him. He fixes what prices he likes and lets us have loaf sugar or whatever he likes. I should like to ask whether he can hold out any hope of opening the ports to sugar, and what course he proposes to take in regard to it?
      Mr. OUTHWAITE: My right hon. Friend propounded the question, What are we here for? If we are here for anything else than just to swallow what the Government puts before us in this matter of taxation I think we should oppose these duties, because I do not believe that in accepting them we are representing the views of people outside the House. I wish to enter my protest against this initiation of an endeavour to finance the War to such a great extent by imposing indirect taxes on necessities. It is very obvious that we could have taxation in other directions to a far greater extent without inflicting any hardship upon individuals. These taxes will inflict great hardship upon individuals. The Chancellor of the Exchequer told us in his Budget speech that children were buying more sweets, and therefore it was obvious that he could levy a further duty upon sugar. He did not tell us what is happening to those million old people who are trying to eke out an existence on 5s. a week. Their expenses and their rent have gone up; their tea is taxed, and now we are proposing to levy a heavy tax on sugar. The limitation placed upon us prevents us referring to other alternative systems of taxation, and we can only oppose these taxes without intimating
      852
      other sources from which the money could be found. At any rate, this tax is a violation of the principles of taxation for which the Liberal party in the past has stood, and I do not propose to swallow my principles to please the Chancellor of the Exchequer at the head of a Coalition Government.
      Mr. DENMAN: We have decided that the preceding Resolutions are to have statutory effect under the Provisional Collection of Taxes Act. In this case we decide nothing of the kind. I want to ask. therefore, if the tax comes into operation before the passage of the Finance Bill into law? As the point arises on later Resolutions, perhaps it will be convenient if the right hon. Gentleman tells us when the motor car and similar taxes will have effect. In no case have we given them statutory effect under the Resolution.
      Mr. SPEAKER: The hon. Member is mistaken. If he will look at the Resolution with which we are dealing he will find in the last sentence it is declared that it is expedient that this Resolution shall have statutory effect under the Provisional Collection of Taxes Act.
      Mr. DENMAN: I beg pardon. It arises on the next Resolution.
      Mr. GOLDSTONE: I want to urge one point upon the notice of the Chancellor of the Exchequer in the matter of the taxation of sugar. In his Budget speech the right hon. Gentleman indicated that his proposals would have the effect of raising the price of granulated sugar by ½d. per lb., but in practice that has not been so. I understand that already the price of granulated sugar is more than it was by at least ½d., and in some cases by 1d. If that is the opinion of the Chancellor of the Exchequer as to what the amount of the increase should be, I suggest that he should cause that to come about by fixing a maximum price for granulated sugar. That is essential if the net amount of the tax is to be imposed upon the consumer. If the seller is to be allowed to squeeze out what additional price he can, it appears to me that the ordinary consumer, particularly the poor consumer, will be very hardly hit. It may not be so from the point of view of the experience of the Chancellor of the Exchequer, but I think he will find, no matter what he may indicate in his Budget speeches, that unless he takes steps to translate those Budget speeches into legislative enactment the

      853
      ordinary consumer will pay more than he ought to pay under the proposals of the Budget.
      Mr. McKENNA: Can the hon. Member give me any data on that point? If he will tell me the names of shops where granulated sugar is being sold for over 4d. a lb. I shall be very glad to deal with the case. I do not know any.
      Mr. GOLDSTONE: I am afraid I cannot give exact data, but I am quite convinced that the right hon. Gentleman should give us the essential corollary to his speech and fix a maximum price. He already holds command of the supplies and it should be quite an easy matter for him, in regulating the sales, to add the net price, so to speak, of the tax, and say that no seller over the counter shall sell the sugar at a greater price than is necessary to give the amount of the tax and the price that has been usual charged. Unless he does that he is not treating the ordinary consumer fairly. In this connection, too, I desire to emphasise what my hon. Friend (Mr. Barnes) said in the matter of the £11,500,000 which will be taken from those who are mostly poor by the results of this Budget taxation of sugar. It occurred to me that there are other measures which might have been taken which would have relieved the mass of the poor from these rises in the price of what are necessaries for them. So far as Income Tax is concerned, when a man's income actually falls he gets his rebate as a matter of course. I do not anticipate that for some time to come the taxes on sugar will be reduced, and if they are maintained, and ordinary people have their wages reduced, as they may when the present production of munitions decreases, employment will be scarcer, and there will be a greater fight on the part of the very poor to maintain anything like their present standard of existence. If the taxes are maintained with a falling weekly wage, you have then, as I think, a difference between the Income Tax payer and the person who is paying on necessities like sugar and tea; for if these taxes are maintained and employment, as I think it may, in certain industries falls, and the weekly wage earners are hit by the falling off of employment, and yet the price of these necessities is kept high because of the tax, you impose a disproportionate tax on the poor if you take this £11,500,000 from sugar and do not, as I think you ought, raise more from Income Tax and less from necessities. The two points I urge on the Chancellor of the Exchequer
      854
      are the fixing of a maximum price at which sugar should be sold, and also that he should remember in the months to come, when employment is not so brisk, these indirect taxes will press hardly on the poor, on old age pensioners, widows, and the like, and these two points I think are worthy of consideration.
      Sir W. ESSEX: This is a tax on an article not merely in common use, but one of vital necessity to the people of this country for the upkeep of physical energy, as it provides the necessary equipment of sustaining the strength of all those who have to put out any amount of energy in the discharge of their daily work. I think this is an unfortunate tax. Sugar should have been left alone entirely. Anything that tends to lower the vitality of our people should be regarded with suspicion and doubt. I do not join with the hon. Member (Mr. Goldstone) in his complaint about the incidence of the tax. I do not see how the Chancellor of the Exchequer is going to carry out his proposal to prevent an addition being made by the vendor to the amount which he has to pay in duty. After all, the vendor will have to pay for his duty and the cost of his material. He will want a profit on the totality of the capital he puts out. That is an ordinary matter of business. You may force him on this occasion to a diminution of his profit—and I am not here to say that you should not do so—you may force him to forego the profit that he might reasonably look forward to upon that portion of his expenditure which is represented by this added tax, but it may not be laid down as a general principle upon things involving large expenditure for revenue purposes, that you may take that course safely without doing grave injustice to the traders throughout the country. I hope no one will misunderstand my remarks. I am fully against this tax, but I do want our Friends to see the difficulties in which they put the Chancellor of the Exchequer upon a matter of principle in regard to the expenditure of trading capital and the non-return thereto of interest or profit upon it.
      Mr. SHERWELL: I think my hon. Friend who has just spoken is hardly fair to the case put by the hon. Member for Sunderland (Mr. Goldstone). As I understood the hon. Member for Sunderland, he does not object to the ordinary reasonable profit of trade applying in the case of the vendor of a taxable commodity such as the article we are now considering.

      855
      While I am perfectly in agreement with the view that at a time of great national crisis and emergency such as this, we must have more than one form of taxation, and that this is not the opportune moment for insistence upon the purist view that all revenue should be derivable from direct taxation alone, I nevertheless most strongly hold the view that at all times, and especially at a time of crisis like this, it is the bounden duty of any Minister who proposes to tax commodities of ordinary consumption to take some measures to protect the consumer against a wholly disproportionate increase of price in that commodity. If the Chancellor of the Exchequer can give the House an assurance that in connection not merely with this particular tax, but in connection with all taxes upon commodities of ordinary consumption, he will take some step to protect the consumer, and notably the poor, against an extortionate increase of price, out of proportion to the additional tax imposed, he will relieve some of us of a very considerable difficulty which we feel at the present moment.
      Mr. McKENNA: I am in doubt as to how to reply to the criticism of my hon. Friend the Member for Sunderland. If he has information that, in the language of my hon. Friend who spoke last, a disproportionate or extortionate increase of price has taken place in sugar, I should be very glad if he will let me have the information.
      Mr. GOLDSTONE: I think I will be able to state a case which my hon. Friend has just mentioned to me since I finished my speech.
      Mr. McKENNA: I am exceedingly sorry that I had not the information earlier. The Royal Commission on Sugar Supplies take every step in their power to prevent any disproportionate or extortionate increase of price, and the system they adopt is a very simple one. They sell the sugar upon the terms that it is to be retailed within a limited price. I shall be very glad indeed to know of any case in which it is alleged that an extortionate profit has been charged. As far as my information goes, there is no such case. Certainly every step has been taken that can be taken to prevent the very evil of which my hon. Friend complains, and of which, as yet, we have no definite information. My right hon. Friend (Mr. Lough)
      856
      who opened the Debate did not show that exactitude of expression which this House ordinarily expects from him. When he speaks upon matters of trade we anticipate that we shall have precision, definite statement, and just conclusions.
      Mr. LOUGH: Why?
      Mr. McKENNA: My right hon. Friend asks me why I expect that of him. My reply is short. Twenty years' experience in this House has taught me to expect all these attributes in a speech from him. On this occasion he fell short of the high standard which he has set for himself. He stated, first of all, that the price of sugar has doubled since the War. That statement is an exaggeration. The price of sugar has gone up since the War, not 100 per cent., but, I think, something like 60 per cent, or 66 per cent, in different places. Then he attributed the rise in the price of sugar to the action of the Government. I put the question to the House. How can the action of the Government in closing the ports here against sugar raise the price in America? It is the world's price of sugar which has gone up. The world's price of sugar has risen for the most obvious of all reasons. One of the greatest producers of sugar in the world is Germany, and she is one of the greatest exporters. Germany and Austria between them were the greatest exporters of sugar anywhere.
      An HON. MEMBER:Russia.
      Mr. McKENNA: No; Germany and Austria were far greater, and the hon. Member will find that that is so if he will consult the right hon. Gentleman next to him. When the export of German and Austrian sugar was prohibited, naturally there followed a great rise in price, which was not limited to this country, but extended over the whole world. We may be right or we may be wrong—that is not the point we are arguing now—in closing the ports. But, at any rate, there is this to be said for it, that by closing the ports we ensure that in this world's market, which is already depleted owing to the closing of German and Austrian supplies, there shall only be one buyer from this country. No speculation in sugar exists in this country to-day.
      Mr. BOOTH: Except the Government.
      Mr. McKENNA: It does not speculate. The Government is buying for delivery. The effect of our action has been this. We

      857
      have bought large quantities of sugar upon Government account. We have had, in buying, the best advice obtainable in the country—the best business advice—and we have, so far at any rate, been fortunate enough in the mass of our purchases to buy considerably below the average of the world's price at any time. Our general purchases have been cheap purchases. The result is that while selling sugar, I will not say with the daily variation of the world's prices, but more or less at the same price at which it could have been bought if the ports had been open, we, by virtue of having bought cheap, have made a profit. Now my right hon. Friend goes on to say that he does not wish the Government to obtain any revenue by a side wind, of which the House knows nothing. The Government have exactly conformed to the standard of my right hon. Friend. Having made this profit, instead of taking the revenue by a side wind, I have asked the House to impose a public duty upon sugar. I am only telling my right hon. Friend how we have avoided doing it by a side wind. Instead of putting this money, by a side wind, into the Exchequer, I have asked the House to adopt a tax; but, having this profit in hand, it is not necessary to add to the price of the sugar which we sell the whole amount of the tax. We are absorbing part of our profit by the tax.
      Mr. LOUGH: How much of the profit do you keep out of it?
      4.0 P.M.
      Mr. McKENNA: I will tell my right hon. Friend in a moment. We absorb part of that profit by the tax. Thus, while we add three farthings to the duty, the rise in price to the public is only one halfpenny. That is to say we distribute to the public a part of the profit from that which we have hitherto made.
      Mr. LOUGH: Have you distributed the whole of it?
      Mr. McKENNA: We have not. We have still more than that. But we do not propose to pay that further profit by a side wind into the revenue. We propose to keep it for the time being, and for a very simple reason, which I will explain. When we go out of business as sugar dealers—
      Mr. W. THORNE: Which I hope you never Will.
      Mr. McKENNA: We shall inevitably have a large stock of sugar on our hands.
      858
      Now we do not desire that the public should have any loss upon the sugar which we hold at the conclusion of the War, and we therefore hold a certain amount of profit in hand to enable us to sell the last few hundreds of thousands of tons, if necessary, at a lower price than the price at which we bought it. If the world's market is down below that price, we can then come in and sell our sugar at the world's price of the day. If, on the other hand, the world's price is not down, and we end up with a profit, the House will be in that case informed. The House will be asked to vote that profit into the Exchequer. At any rate, if my right hon. Friend goes back over the whole period of this last year since this sugar transaction has been carried on, if he looks at the world's price of sugar, and if he considers the charge for freights, and what the markets would have been if there had been free scope for speculators in this country, he will find that the price which had been actually charged to the consumers in the United Kingdom is less than would have been the case if the consumer had been left to the mercy of the speculator.
      Mr. LOUGH: You cannot prove that.
      Mr. McKENNA: Yes, I can prove it. I can quote the markets abroad from day today, and I can show that the price in this country was, on the average, less than the world's price outside; and I can show as well that as the effect of the profit we are now able to hand over to the public this-reduction in the duty on sugar.
      Mr. JONATHAN SAMUEL: Is not that due to the fact that sugar has dropped in America, and that you are buying sugar cheaper?
      Mr. McKENNA: No, it was done before the drop in prices in America. The drop which we have made in the price affects sugar which we bought months ago. A lot of the sugar which we hold now was bought six months ago. We are at the moment buying sugar at a cheaper rate. It is a very convenient moment to buy. It will not remain that. Freights are so heavy as to be almost impossible. That has to be added to the price. My hon. Friend the Member for Sunderland (Mr. Goldstone) asked for consideration for these taxes in future in relation to other taxes after the War is over. Of course, in any future consideration of the taxes, the whole body of taxation will have to be taken in one view. It would be idle to give a pledge

      859
      about a particular tax and to say that sugar, or tea, or Income Tax must be the first to be relieved. The endeavour has been made to have some balance of taxes which will as far as possible enable us to make the burden tolerably fair over all classes of the community. If that view is correctly carried out it is quite obvious that, when relief comes, relief will have to be spread equally over all classes. I do not think that my hon. Friend imagines that when relief comes the indirect taxpayer will not get fair relief in proportion to that given to other sections of the community.
      Sir A. MARKHAM: I am interested to hear the definition of "speculator" by the Chancellor of the Exchequer. I am interested, as a business man, to hear that when the Government buy they buy for delivery and therefore they do not speculate. Is not the whole transaction, as I understand the statement of the Chancellor, pure speculation and nothing more than speculation? He is going at the end of the War to keep a large stock in hand, so that, if the price should then fall, he will be able to cover himself. What he has not answered, and what the House is entitled to know, is what profit he has made on this transaction. Surely the House of Commons is entitled to know that. I am not at all clear myself that the country does not owe a great debt of gratitude to the Chancellor for having bought this sugar. I am not at all clear that he has not acted quite rightly, but he must not say that he has not speculated, because he has. I do not think that the House of Commons should be kept in the dark as to these financial transactions. Really we might almost wind the House of Commons up altogether if that were to be so. The Government seem to think that they have a right at the present time to withhold all information even when we come to business transactions. According to the Chancellor there has been no speculation. The House of Commons is not given that information. I ask my right hon. Friend to give this information to the House and to the country.
      Mr. McKENNA: May I, with the leave of the House, say in reply to my hon. Friend that I shall be very glad to give this information if he will not press for it up to a very late date. It would be obviously undesirable to give the information beyond a certain date, but up to a very recent date I can give what the profit has been.
      Mr. BOOTH: I listened with a keen amount of interest to this Debate, and I think that no Minister of the Crown in recent days, speaking from that bench, has ever disclosed such a gigantic transaction as that which my right hon. Friend the Chancellor of the Exchequer has explained. Transactions of this kind are well known in America and in other countries. While I am not in a position, and I do not wish at this stage to challenge that transaction, surely one may utter a note of warning to the House that possibly, if this is going to be applied all round, and if Ministers of the Crown are going to buy and sell on this great scale, great misfortunes to the State may arise in the future. I am perfectly sure that where the right hon. Gentleman is concerned nothing objectionable can possibly occur, but this is the beginning. Things may grow. Transactions may be done afterwards in a hurry, without form. Ministers may not always see where they are being led, and you may have the gravest consequences, both to the trade and to the State. My view of the profit is that it is entirely illusory. The right hon. Gentleman is both buyer and seller. He buys himself and he sells at his own price. He admits that he can fix the retail price, and he speaks then about the profit which he has made. There is not an office boy in the City who could not make a profit if he can fix the price at which he can sell. It is a very deceptive term to use if the right hon. Gentleman can put up the retail price for sugar another ½d. per lb. and then impress the House that he has done a very clever transaction. All that he has done is to tax the community, and particularly the poorest portion of the community, in order to increase his resources. The right hon. Gentleman's profit is simply a tax extracted from the breakfast table. Does the right hon. Gentleman suggest that he is not speculating when he says that the sugar whose price is now being reduced was bought months ago? Any man who buys sugar, not being a sugar dealer but a politician, and goes into the sugar business for the first time and buys in a huge way, and holds it up for months, and decides when he should sell it and at what price, is a speculator, and there is no other term to use. Then we are also told that he is keeping something behind, so that when eventually he removes the tax and abandons his business he may have to cut the loss, and he wants some funds in hand. Surely what is that but speculation? He is not buying for delivery.
      Mr. WING: Insurance.
      Mr. BOOTH: Anything further away from insurance I do not know. It has nothing to do with insurance. I presume that the right hon. Gentleman does carry insurance, but that is not it. The right hon. Gentleman is going to keep in hand money which he calls profit, which I say is really only a paper estimate.
      Mr. McKENNA: You say that it is a speculative gain?
      Mr. BOOTH: No, the right hon. Gentleman does not listen to me as carefully as I listen to him. It is not a speculative gain. No gain has been proved. I do not regard a tax upon the poorest part of the community as a gain. The right hon. Gentleman says that he is going to keep an amount which at present is a paper estimate of the profit he could get, if he exacted from the community a price which he has in his mind. If he did exact that price he estimates that there would be a certain margin which he calls profit, and he is keeping that in hand, so when eventually he gives up business as a sugar dealer and leaves it to the right hon. Gentleman on the Front Opposition Bench, or to other traders, he may be able to minimise any loss that will arise through a forced sale, and clearing out of business quickly. As an ordinary retailer must put up "selling off," "must be sold regardless of price," so when the right hon. Gentleman gets to that stage he wants something in hand to see him through that critical period. I do not object to that. It may be all right, but I wish to support the view of the hon. Baronet (Sir A. Markham). We want more light on this transaction. One cannot forget that his colleague, the Colonial Secretary, when he sat opposite stated, that he was not convinced that this purchase was wise. I am not in a position to express an opinion, but does the right hon. Gentleman, who is now a colleague of the Chancellor of the Exchequer, now say that this transaction was either wise or foolish, or has he looked into it? I do not know. It is one of those mysteries of the Coalition Government into which rude Back Benchers must not inquire. Therefore I leave it. Perhaps some time we shall know whether it was good or bad, but I may utter a note of warning. If transactions of this kind are pursued they may have the greatest peril to the State, a peril as to which the Liberal party and writers outside have warned the public, when these questions were
      862
      discussed for over a generation. I believe that in this case no harm will result, but, at any rate, I wish to be prudent and to protect ourselves against such transactions in the future.
      Mr. J. SAMUEL: I am sorry that I was not in the House in time to ask one question of the Chancellor of the Exchequer with regard to the Sugar Duty, because when I listened to his speech on the Budget I understood that he had reduced the price of sugar by 3s. per cwt., in view of the fact that he was introducing a very large addition to the Sugar Duty. I think that he made the point that the one would counterbalance the other. Now, I believe, that the Government did right in buying this large quantity of sugar at the beginning of the War, and I believe that they have safeguarded the interests of the country when they did so at that period, but I do think that if the Government are going to become the buyer and seller of sugar it ought to adopt the same plan as the sugar merchants do during a time of peace when they buy and sell. Now, there is no market so sensitive as the sugar market in time of peace. That is to say, the prices rise and fall, and if there is a drop in the market of even 1s. per cwt., the merchant gives the advantage to the shopkeeper, and it is transmitted more or less to the consumer. [HON. MEMBERS: "Oh, oh!"] Yes; that goes on. Any drop is periodically certified, and the market is sensitive to the rise and fall occurring each day. I wish to know how long it is since the Government have been able or should have been able to reduce sugar by one ¼d. a lb.
      I think I am justified in asking that question because I believe the Government have been holding up this sugar for a very considerable period beyond the time that they should have been justified in doing it; or, in other words, that the reduction which has been made was not due to the increase of the Sugar Duty, but to the fact that the sugar market justified the reduction. The Chancellor of the Exchequer is, I think, chairman of the Commission, and I should like to impress upon him that if the market shows a reduction in the price of sugar it would be wise on the part of the Government, considering the importance of sugar, not only as a raw material, but to the consumer, especially the working-class consumers, that they should give to purchasers the advantage of this reduction day by day,

      863
      or at least as soon as possible after a reduction has taken place in the sugar market. There is an impression abroad, and I was certainly under that impression until I made inquiries, that this reduction took place because of the increased duty. I do not think that is so, because if it were so you would be losing practically three shillings per cent. on your sugar, which you would not be justified in doing unless you could afford to reduce the price of sugar quite independent of the duty. With regard to the duty, I should like to point out that we are really going back a very long time in the history of the tariffs of this country when we are raising this duty. If the estimate of the right hon. Member for Islington is correct, we are to pay £14,000,000 a year, or, if we take the estimate of the Chancellor of the Exchequer for a full year, £11,700,000, in duty upon sugar.
      Mr. McKENNA: The two estimates are more or less the same. The £11,700,000 is due to the addition of taxation; my right hon. Friend (Mr. Lough) is including the tax of 1s. 10d. with the addition.
      Mr. J. SAMUEL: That will come out at £14,000,000—the old and new tax. I find, on looking into the history of the Sugar Duty, that the largest amount ever raised in revenue from it, so far as I can find—and I have looked back through the last century—was the amount raised in 1863, namely, £6,249,000. The Sugar Duty then was 18s. 4d. per cwt., and that was reduced in 1864 by Mr. Gladstone to 12s., and again reduced by Mr. Gladstone in 1870 to 6s.; and, up to 1874, it was left by him at nearly a nominal sum. In the year 1874 the Sugar Duty was abolished. This increase is something like £8,000,000 of money from Sugar Duties, and it is a very large increase indeed of taxation upon the consumers—the working classes. I therefore press upon my right hon. Friend that he ought to give the public the advantage of every reduction in the sugar market as soon as it takes place, for I think that the consumer ought to have the advantage of that reduction. I want to raise another point in reference to another part of the Budget, namely, the Plate Glass Tax.
      Mr. SPEAKER: The question before the House is the Sugar Duty.
      Mr. J. SAMUEL: I have said what I wish to say upon that point, and, in regard to the tariff on plate glass, I will reserve my observations for another occasion.
      Mr. SAMUEL SAMUEL: With regard to the Sugar Duty, I should like to have seen a difference of duty between refined sugar and raw sugar. I recollect that in both London and other places we saw a very great sugar industry which was killed by the Sugar Convention, which induced the importation of large quantities of sugar into this country, on which we relied so much on the outbreak of the War. Our refineries and the industry in cane sugar have been killed for many years, and we are dependent upon beet sugar for our everyday requirements. That leads me to the other question of the Government trading in sugar. The Chancellor of the Exchequer, I am afraid, does not know what took place at the outbreak of hostilities. The fact was that they were dependent upon beet sugar, which could be imported into this country almost at a week's notice, and the consequence was that the stocks which came to this country were almost infinitesimal, because they came here week by week to fulfil requirements. When the War broke out it was not difficult for a band of speculators to buy up all the available supplies of sugar that were free in the market. That is what happened, and the price more than doubled at that time. Certain gentlemen went to the then Chancellor of the Exchequer, or to the Treasury, to point out that there was a corner in sugar, that the sugar market had gone mad, and that the best thing to do would be for the Government to go in and take the control of sugar. I have had forty years' business experience in merchandise throughout the world, and I know something of the sugar market. The Government in August bought sugar, and the price of cane sugar in Java was about 12s., free on board.
      The Government bought everything they could lay their hands on, and I think that within about a month they had driven the price up to 19s., free on board. There was no competition, and they were buying madly, because they had been advised of this great monopoly in sugar. There is no firm of merchants or bankers, however, who could have carried out the operation of the Government, on account of the enormous expenditure on interest that would have been involved. When the Government had satisfied their appetite and bought everything they could possibly lay their hands on it was discovered, I presume by those who were in control, that they had bought at a very high price, and that there was other sugar in the world that could have been brought into this

      865
      country and sold at a lower price than the Government could afford to sell for without involving them in a loss. In the month of October, having carried on this business for about two months, it became necessary for the Government to prohibit the import of sugar by anybody else, and the only reason that one can give for that procedure is that they knew that they had bought badly.
      Mr. McKENNA: The hon. Member will allow me to say that I hope he does not desire to convey to the House the statement he is making is an accurate statement.
      Mr. S. SAMUEL: I shall prove that. My own firm were interested in 12,000 tons of sugar in the Argentine. We had advanced money on that sugar to the cultivators in April, May, and June of 1914, and that sugar was to be shipped to this country. Two steamers were chartered to carry the sugar—the "Wentworth" and a "Glen" steamer—at 20s. a ton. On the 26th October one of these boats was nearly loaded when the Government issued their proclamation prohibiting anybody to import sugar into this country. Application was made to the Government to allow these cargoes of sugar, which had been bought and paid for, the amount being £125,000, to come to this country. No business man would say that if those two cargoes had come here it would have put up the price of sugar. The application was refused. These two cargoes were offered to the Government for their purchase, and the Government, or their agents, refused to buy them, without giving any reason or any excuse for not allowing them to be imported into this country. The consequence was that the cargo which had been loaded had to be discharged, and it cost the sugar refiner in the Argentine some thousands of pounds to do that. The steamers were chartered at 20s. a ton, and the freight went up to 50s. The charter of 20s. had to be cancelled, because the owner of this steamer was only too pleased to have the excuse that she was to carry nothing but sugar. I give that as only one instance of many.
      Mr. McKENNA: Will the hon. Gentleman say a word about his proof that the whole reason why the Government prohibited the import was because they had bought badly. That is the point—the proof. The Government said at the time that the reason they prohibited the import was to prevent the export of German-Austrian
      866
      sugar. That was the reason and the true reason. Perhaps the hon. Gentleman can give some explanation why he denies that that was the true reason.
      Mr. S. SAMUEL: I am afraid the right hon. Gentleman does not know very much of the sugar trade, because Argentine sugar is cane sugar—if that is the reason of the prohibition.
      Mr. McKENNA: Really the hon. Gentleman must know that the prohibition was general. It covered all sugar, both beet and cane. The hon. Member, who is familiar with sugar, must know that when refined it is very difficult—I do not say impossible—to distinguish between them. Moreover, cane sugar in America was being replaced by beet sugar from Germany, cane being sent over here, so that we were getting German sugar once removed.
      Mr. S. SAMUEL: The Argentine is not the United States of America, and the Argentine produces cane sugar, and not beet sugar. I do not blame the right hon. Gentleman, because he was not responsible for what took place. I leave the matter to the sense of the House and the sense of the country. They can form their own conclusion as to whether it was justifiable to prohibit the import of sugar at that time. Then it is claimed that the Government have been able to make a profit out of sugar, as the hon. Member who spoke before me pointed out. If they are able to charge any price they like and prohibit the importation of any competing firm, they naturally can make whatever profit they like. I recollect some years ago the case of a gentleman named Colonel North, who tried to create a monopoly in camphor. He bought up everything he could lay his hands on and sent up the price enormously. Everything was, in fact, magnificent so long as he could keep on buying, but the moment he wanted to sell the price went down. That applies to every kind of merchandise. If the Government choose to go in in competition with other people and buy, they can buy as much of anything as they like, but the moment they want to sell they will find, when they come to realise the remainder of their sugar, that they are going to be involved in a very heavy loss. The moment the War is over you will have beet sugar coming in from all parts of the world, and I presume there will be no prohibition unless we put on a special duty against competing

      867
      sugar. Apparently, as the Chancellor of the Exchequer has told us, the Government have been accumulating a stock of hundreds of thousands of tons of sugar. That is because they do not understand the business. Merchants who have to do the business do not accumulate large stocks. They sell to the consumers. What has helped to send up the price, or, rather, to put the exchange against this country, is the unbusinesslike manner in which these transactions are carried out. I hope that these sugar transactions will prevent the Government from going into other speculation. I am not now, I fear, allowed to talk about wheat or meat and all sorts of things that the Government are dabbling in. The consequence of those will be that the taxpayer will have to pay very heavily for their adventures in transactions of which they have practically no knowledge.
      Question put, and agreed to.

      SUGAR (EXCISE).
      Resolution reported,
      7. "That on and after the twenty-second day of September, nineteen hundred and fifteen, until the first day of August, nineteen hundred and sixteen, there shall be charged on sugar made in Great Britain or Ireland the following duties of Excise, that is to say:

      £

      s.

      d.

      Sugar of a polarisation exceeding 98 degrees, the cwt.

      0

      7

      0

      Sugar of a polarisation not exceeding 76 degrees, the cwt.

      0

      3

      4

      and intermediate duties varying between 7s. and 3s. 4d. on sugar of a polarization not exceeding 98 and exceeding 76 degrees;

      Molasses (including all sugar and extracts from sugar which cannot be tested by the polariscope):—

      if containing 70 per cent. or more of sweetening matter, the cwt.

      0

      4

      5

      if containing less than 70 per cent. and more than 50 per cent. of sweetening matter, the cwt.

      0

      3

      2

      if containing not more than 50 per cent. of sweetening matter, the cwt.

      0

      1

      7

      Glucose—

      solid, the cwt.

      0

      5

      11

      liquid, the cwt.

      0

      4

      3

      868

      £

      s.

      d.

      Saccharin (including substances of a like nature or use), the oz.

      0

      3

      0

      and so in proportion for any less quantity."
      Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."
      Mr. MOLTENO: I desire to ask why the Excise Duty in this case is lower than the Customs Duty? The Customs Duty on sugar is 9s. 4d. and the Excise Duty is only 7s. The same applies to mollasses and other sugar articles. There is a very considerable protective effect in the difference between the Customs and Excise Duties. That does not prevail in any of the other cases. In tobacco, for instance, Customs and Excise Duties are exactly the same, and so it is with motor spirit. There is a protective effect in the Excise Duty on sugar of 2s. 4d. per cwt., or £2 7s. 6d. per ton in favour of sugar produced in this country.
      Mr. DENMAN: May I ask, is an Excise Duty being collected on glucose at present, and under what authority?
      Mr. McKENNA: My hon. Friend (Mr. Molteno) will find, if he looks at the old duty of 1s. 10d., that there was no corresponding Excise Duty at all. Excise Duty was not charged on the experimental manufacture of sugar in order to allow the industry to be started under conditions of particular advantage. We have merely continued the former practice in regard to this particular business. No doubt when the business becomes self-supporting, then will be the time to consider whether there should be Excise charge.
      Mr. THEODORE C. TAYLOR: I hardly expected to live to hear from a Free Trade Chancellor of the Exchequer the infant industries argument. There is a distinction of 25 per cent., I take it, between the duty on the finished article coming from abroad and the Excise Duty on the finished article made here. We actually have a Gentleman whom I have looked upon as one of the very high priests of Free Trade, and a Chancellor of the Exchequer who understands a little about political economy, getting up this afternoon and using an argument that is used in the case of every beginning of every protection in every country where it is introduced.
      Mr. McKENNA: I merely stated the historical fact with regard to the late duty.

      869
      I did not state it as an argument, but as the fact that the late duty of 1s. 10d. did not carry with it an Excise Duty for the reason which was then given.
      Mr. TAYLOR: I am very glad to hear the right hon. Gentleman disclaiming that argument. Therefore I misunderstood him. We have had some talk about this before. We have some small industry beginning to make beet sugar in this country. The reason a former Chancellor of the Exchequer, the right hon. Gentleman's predecessor, gave for not taxing it with Excise was the old argument of the girl with the illegitimate child, when she said, "It was a little one." The old duty was 1s. 10d. and now it is 9s. 4d., while the Excise Duty is 7s., which gives an advantage of 2s. 4d. I think that is a very instructive commentary on a good many other things. I am sure that those who really believe, as I believe for one, that Protection is an injury to the industry to be protected, and I am speaking from a knowledge of from thirty to forty years of its effects in the United States, must regard this introduction of the principle of protecting our home industry by a differential duty between an article made abroad and made at home as a very dangerous innovation. I did not intend to get up at all this evening and speak about the Sugar Duty. I object to the Sugar Duty entirely, because I think it is a tax on existence. This bonus of 2s. 4d. to the home industry is no more deserved by the producers of sugar in this country than by the growers of tobacco. Some time ago I was in a beautiful valley in Yorkshire, and I read in a guide book that a great deal of tobacco had been produced there. "There is a great deal of land in this country that undoubtedly ought, with proper scientific and agricultural arrangement, to be producing, in competition with other countries, beet sugar. Anything in the way of helping the industry of a legitimate character, such as technical education and organising it on a scientific basis, I should be very happy to support. The recognition of this 1s. 10d. as a bonus, and the canonisation of it and the insertion of it into our tariffs as a principle of our taxation, is not, I can only say, justified in any way by any profession of the Government hitherto used, and we have had no reason at all for expecting it. All I can do is to protest against it with all my heart.
      Mr. DENMAN: I press for an answer to my question as to whether the right hon. Gentleman is or is not collecting an Excise
      870
      tax on glucose at present? Clearly there is no statutory authority for it.
      Mr. McKENNA: We are collecting a Glucose Tax at the rates of 1s. 2d. and 10d.
      Mr. BIGLAND: The hon. Member for Dumfriesshire (Mr. Molteno) asserted that there was no preference given to any other article but sugar. I think he is wrong, and that there is a preference in the case of tobacco. There is a differential duty between the raw leaf and the manufactured tobacco, but that is not perhaps analogous. There has been, however, direct encouragement to tobacco growing in Ireland. I was very pleased that that was instituted by the late Government, and I hope it will be continued. When we come to consider the question of tobacco I shall be quite pleased if the Government see their way to do in the case of tobacco what they have already done for sugar. With regard to what was said by the last speaker, I would like to remind him that I feel a certain amount of diffidence in speaking about the matter, and I think he ought to do so because he accepted a bribe from Germany on sugar of £1 10s. per ton for many years, and by accepting that bribe he absolutely precluded his own countrymen from growing that sugar under equal conditions. I claim that all the people in this country were guilty of accepting the bribe, because it was nothing but a bribe when the German Government gave £1 10s. on every ton of sugar they exported out of Germany. That was done for no other reason but to ruin our Colonies and to prevent us in England from growing sugar. Having been guilty of accepting that bribe and hurting our own people, I think the least the hon. Member can do, or that any of us ought to do, is to be satisfied when an act of justice is being done to our own people, and that there should be no voice in this House raised against it.
      Mr. OUTHWAITE: I wish to join with those who have protested against this differentiation of duties, on the ground that it is the thin end of Protection. What arises out of this proposal is, that it allows private individuals to make a profit behind the tax by acting as private tax-gatherers. The Chancellor of the Exchequer tells us that we have to submit to a large increase of taxation, and he calls upon individuals to make great sacrifices, while at the same time he selects a certain section of producers and allows them to become pensioners upon the Exchequer, for that is

      871
      what this protection of sugar producing in this country means. I know that the last Chancellor of the Exchequer refused to propose an Excise Duty on the ground that it would destroy an infant industry, but I think that we might have hoped for something better from the present Chancellor of the Exchequer. It shows that this is a compromise Budget, and that these duties are sops given to the Tariff Reformers in the Cabinet for the purpose of getting their acceptance of other taxes. During a time of war, of all times, when people are thinking in the main of what is happening in the field, it is most unjust that a system of taxation which has been twice rejected by the people should be sneaked in in this manner.
      Question put, and agreed to.
      Resolution reported,
      8."That there shall be charged on a licence to be taken out annually by a manufacturer of sugar an Excise Duty of one pound."
      Resolution agreed to.

      DRIED FRUIT.
      Resolution reported,
      9. "That in addition to the duties of Customs now payable on dried fruit imported into Great Britain or Ireland there shall, on and after the twenty-second day of September, nineteen hundred and fifteen, until the first day of August, nineteen hundred and sixteen, be charged the following additional duties:—

      £

      s.

      d.

      Currants, the cwt.

      0

      1

      0

      Figs and fig cake, plums (commonly called French plums and prunelloes), prunes, all other dried or preserved plums, and raisins, the cwt.

      0

      3

      6

      and so in proportion for any less quantity.
      And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."
      Resolution read a second time.
      Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."
      The FINANCIAL SECRETARY to the TREASURY (Mr. Montagu): I beg to move to leave out the words

      £

      s.

      d.

      Currants, the cwt.

      0

      1

      0

      872
      I ask the House to accept this Amendment not for any reason connected with the merits of the tax. Since the Resolution was taken representations have been made to us that in 1890 a Convention was signed with the Greek Government, undertaking that without a year's notice we would not ask Parliament to increase the duty on currants. That Convention was subsequently ratified, and has never been repudiated. We have not given any notice to the Greek Government, therefore we are bound by our Treaty obligations to withdraw this part of the Resolution. It might possibly have been expected that this Convention would have been in mind when the Resolution was drawn, but owing to the heavy pressure on the Department at present the matter escaped observation.
      Mr. DUNDAS WHITE: When my right hon. Friend rose, I hoped that he was going to say that the Government proposed to withdraw this Resolution altogether.
      Mr. SPEAKER: The hon. Member must confine himself to the Amendment.
      Sir W. ESSEX: Will the right hon. Gentleman tells us what difference this Amendment will make to the Treasury estimate of the total yield of this tax?
      Mr. MONTAGU: £60,000.
      Sir W. ESSEX: Out of how much?
      Mr. MONTAGU: £180,000.
      Sir W. ESSEX: That lends point to the observation of my hon. Friend (Mr. Dundas White). Why not drop the Resolution altogether?
      Mr. BENTHAM: The statement of the Financial Secretary is perfectly correct as to there having been an agreement with the Greek Government not to put any fresh duty on currants without giving a year's notice. But there is a good deal to be said in regard to other clauses of that agreement. I mention this, because it is very probable that currants will be extremely dear this year, and I hope the Government will be able to prevail on the Greek Government to allow the exporters of currants to send out their full quantity, instead of less than 35 per cent., as they have done for several years.
      Amendment agreed to.
      Original question, as amended, proposed.
      Mr. DUNDAS WHITE: I regret that the Government have seen fit to make this heavy addition to a petty tax on the food of the people. The total amount that would have been raised by the Resolution was £180,000. I understand that by the Amendment just made one-third of that sum has gone. I suggest that the remaining two-thirds should go also. The sum involved is not large, but the tax itself is a very undesirable one. It is a tax upon most wholesome articles of food, and articles that could be most readily purchased by the poor during the winter. Figs, raisins, and prunes are just the classes of fruit the production of which we ought to encourage, in order that the people might get them as cheaply as possible. They are the very things we ought not to tax. It seems curious that these articles have been selected. They have been on the list of dutiable articles for a long time. If that list had been prepared in modern times, and it had been decided to tax dried and preserved fruits, the tax would have extended not only to dried fruits, but also to tinned and canned fruits and those other fruits with which we are now familiar. I do not want those fruits taxed; far from it; but the very same reasons which can be urged against the taxation of those articles are equally applicable against the taxation of dried fruits. When we are considering the raising of something like £100,000,000 additional, it seems rather ridiculous to increase this somewhat mean tax so as to bring in an extra £120,000. It will only bring in that amount for the State, but it will probably cost the taxpayers a good deal more in the way of extra price. That is one of the objections to all these duties, particularly these petty duties on food. The proposed tax on figs, prunes, raisins, and various other dried fruits, is to be 3s. 6d. per cwt. That works out at about one-third of a penny per pound. I think the exact figure is. 375d. As we have no coin corresponding to that, the price is bound to rise by at least a halfpenny, so that the consumer will have to pay considerably more than the Exchequer will receive. I hope the Government will yet reconsider whether, having withdrawn a part of the proposal representing one-third of the revenue to be derived from the tax, it would not be well to abandon the tax altogether.
      Mr. DENNISS: I wish to call the Chancellor of the Exchequer's attention to a matter of pressing and urgent importance
      874
      in regard to one of these duties, namely, the duty upon headgear.
      Mr. SPEAKER: This Resolution deals only with dried fruit.
      Resolution, as amended, agreed to.

      TOBACCO (CUSTOMS).
      Resolution reported,
      10. "That in addition to the duties of Customs now payable on tobacco imported into Great Britain or Ireland there shall, on and after the twenty-second day of September, nineteen hundren and fifteen, until the first day of August, nineteen hundred and sixteen, be charged the following additional duties, that is to say:—

      £

      s.

      d.

      Upon tobacco unmanufactured, namely:—

      Containing 10 lbs. or more of moisture in every 100 lbs.

      weight thereof—

      Unstripped, the lb.

      0

      2

      0½

      Stripped, the lb.

      0

      2

      0½

      Upon tobacco manufactured, namely:—

      Cigars, the lb

      0

      3

      6

      Cigarettes, the lb

      0

      2

      10

      Cavendish or Negrohead, the lb.

      0

      2

      8

      Cavendish or Negrohead, manufactured in bond, the lb.

      0

      2

      4

      Other manufactured tobacco, the lb.

      0

      2

      4

      Snuff containing more than 13 lbs. of moisture in every 100 lbs. Weight thereof, the lb.

      0

      2

      2½

      Snuff not containing more than 13 lbs. Of moisture in every 100 lbs. Weight thereof, the lb.

      0

      2

      8

      and so in proportion for any less quantity.
      And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."
      Resolution agreed to.

      TOBACCO (EXCISE).
      Resolution reported,
      11. "That in addition to the duties of Excise now payable on tobacco grown in

      875
      Great Britain or Ireland there shall, on and after the twenty-second day of September, nineteen hundred and fifteen, until the first day of August, nineteen hundred and sixteen, be charged the following additional duties, that is to say:—

      £

      s.

      d.

      Upon tobacco unmanufactured, namely:—

      Tobacco containing 10 lbs. Or more of moisture in every 100 lbs. weight thereof, the lb.

      0

      1

      10

      Tobacco containing less than 10 lbs. of moisture in every 100 lbs. weight thereof, the lb.

      0

      2

      0½

      Upon tobacco manufactured, namely:—

      Cavendish or Negrohead manufactured in bond, the lb.

      0

      2

      4

      and so in proportion for any less quantity.
      And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."
      Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."
      5.0 P.M.
      Mr. PATRICK WHITE: I desire to draw the attention of the Chancellor to the probable result of the proposed Excise tax on the tobacco industry in Ireland. The tobacco industry in the three countries is, for many reasons, of great importance. One reason is that there is above 100,000 acres of derelict land which, if cultivated, would afterwards grow good crops. The matter is of such importance that the Development Commissioners have appointed a special committee to deal with it. The second reason is that the industry gives employment, more than any other, to women and children. While the men are at war, as they are from many of the country districts, it is of great importance, and I consider the duty of the Government, to provide employment for the women and children, instead of hindering them. At the present moment the Government are giving a consideration to home-grown tobacco to the extent of 2d. in the lb. That 2d. in the lb. leaves a preference of 4 per cent, over the imported article. If you put on the proposed Excise Duty without any corresponding allowance you
      876
      reduce that 4 per cent to about 2½ or 2¾ per cent. That will be a serious hampering of the trade. I appeal to the Chancellor of the Exchequer for consideration for this important infant industry. Some capitalists have been induced to put their money into it. They have informed me—many have written to me to the effect—that if this high Excise Duty is imposed upon the industry their money will be all lost. I ask the Chancellor to give consideration to this matter, and not to crush this industry. Perhaps, when the revenue duty come on, he will be able to give effect to some reasonable proposal that will prevent this industry being wiped out. I ask him not to reduce the preference that it already has over imported tobacco. I trust I shall find the right hon. Gentleman a sympathetic Chancellor. This industry has taken root largely in Ireland. A considerable quantity of tobacco is grown in the country districts, and in those districts where tobacco is grown there has been no emigration for a number of years. I believe money is being kept in the country, and thus giving home employment. I should suggest to the Chancellor that, if necessary, a similar arrangement to that of the Import Duty on sugar; even a 20 per cent, consideration would be preferable to the present proposal.
      Mr. BUTCHER: I should like to support the views which have been put forward by the last speaker. I hope the House will remember that we should do something for Ireland in reparation for the treatment Ireland received in former days in respect of tobacco. It has been said, though it may not be within the memory of everyone, that at one time there was a substantial and valuable tobacco-growing industry in Ireland. That was some 200 years ago. Irish memories are sometimes long, but I do not think the House will refuse to put matters right, even when the wrong has taken place long ago. At the time I speak of Ireland really had produced a large amount of tobacco. The British Parliament—I think in 1660—decided that they must absolutely kill this Irish industry. The reason put forward then was the somewhat strange one that it was in order to encourage the new possessions, or plantations, in Virginia. With that object they put not merely a duty on Irish tobacco, but an absolute prohibition on the growth of it. The first Act of Parliament was ineffective. The industry was strong, and it went on. The British Parliament passed

      877
      a further series of Acts, and finally, by a stringent prohibition, killed the Irish industry.
      Some patriotic Irishmen in recent years have endeavoured to revive an industry for which the soil and climate of Ireland are certainly favourable. Experiments have been carried on for some time. They have now got past the experimental stage, and a good article is being produced which is now upon the market in both Ireland and England. I have no doubt the tobacco growers of Ireland would be glad to place a sample of their products at the disposal of the Chancellor of the Exchequer. [An HON. MEMBER: "That has been done!"] That might win his sympathy, or possibly, if it has been done, as the hon. Member says, possibly a further generous present would be gladly given. The fact is that at the present you have this industry not merely started but actually existing as a commercial enterprise, giving a very considerable amount of employment, as the hon. Member behind me says, not to the men, but to the women and children in Meath and other counties in Ireland. It must be owned—and no one knows it better than the Chancellor—that it is very difficult to get a new tobacco upon the market in England. For some reason or another, which it is not necessary to go into now, Irish tobacco has had a great struggle in order to get a place upon the English and Irish markets. It has got that place. It is increasing its hold upon these markets.
      Everyone who is interested in Irish tobacco will agree that if the duty is increased by 50 per cent, that the existing small allowance of 2d. in the lb. will be insufficient to enable that industry to retain its place. It is no question of Free Trade or Protection, or anything of that kind. It is a question of increasing that small allowance, which is quite a trumpery matter for the Treasury, from 2d. to 4d., which would enable this industry to go on for the benefit of Ireland. It is purely a commercial question. I think one may use arguments as to some reparation because of the injury done to Ireland in past times, and I hope the Chancellor will see his way—I do not ask him to do it today—to consider favourably the matters put before him, and, if possible, see his way to make this small concession, which is exceedingly small from the Treasury point of view, while it would be of great value to tobacco growing in Ireland. The cost to the Treasury would be insignificant.
      878
      No principle really is involved. If the right hon. Gentleman can give this concession it will make a very great difference in the development of this industry.
      Sir JOHN JARDINE: So far as the arguments advanced by the hon. Member from Ireland, I wish, as a Scottish Member, to associate myself with them, and particularly in connection with the cultivation of tobacco in Scotland. Scotland suffers from the very same evils that have been mentioned by the hon. and learned Gentleman who has just spoken—that is, from Acts of Parliament passed here. In the county of Roxburghshire, which I represent, losses by a certain farmer sustained in 1874 have been remembered to this day, and recorded in every statistical account that has been since printed. This man had grown a good crop of 13 acres, when there came an edict from the Parliament of the United Kingdom, and he was compelled to hand over all his tobacco to the revenue officers to be destroyed. He only got compensation at the rate of 4d. or 5d. per lb. for it. That has lingered to this day in the minds of the people of the parish of Smailholm. Everybody who has dealt with this parish in literature has mentioned the fact. A few years ago, following the energetic example of the cultivators in Ireland, Scotsmen determined that they would grow tobacco in Scotland. A number of us took the matter up. We succeeded in passing an Act which made the growing of tobacco legal in that country, and required that certain revenue regulations should be made. That is the law now in existence. There has not been much time to develop the industry there, but it being a matter of Scotland, where the people are industrious, it soon will be developed. Therefore I would press for consideration for Scotland when consideration is given to this matter in relation to Ireland, because of the greater measure of loss sustained by the people of Scotland. I understand that my right hon. Friend the Chancellor coincides with the view I am putting forward.
      Mr. McKENNAwas understood to indicate dissent.
      Sir J. JARDINE: I put forward these considerations in the hope that nothing the right hon. Gentleman does in the matter of this Budget will have the slightest hostile influence on the Irish or Scottish industry, particularly in the parish of Smailholm, or on any development that may be given to the industry in the

      879
      Lowlands, and particularly in Roxburghshire. Some day or other it will be a very successful industry.
      Mr. JOHN O'CONNOR: I desire to say a few words in support of the suggestions made by my hon. Friend (Mr. P. White). In doing so I desire to express my very great regret that my hon. and gallant Friend the Member for East Clare (Mr. W. Redmond) is not in his place to defend this child of his own creation. It was by his efforts that this industry got that very small encouragement from the Treasury that it at present enjoys. However, he is better employed in defending the high interests of the country by the performance of military service, and leaving to us, who are sadly left at home to-day, what he would have done very much better had he been here. The House has had the advantage of a historical survey of the position of Ireland in regard to this manufacture from the hon. and learned Gentleman the Member for York. It was largely to make restitution to Ireland that this concession was granted. It was felt, not only by the party in power when that concession was made, but by every party in this House, that, owing to the manner in which Irish industries bad been treated in the past, that it was due from this nation to Ireland to make some restitution for the wrongs that had been done in the past by crushing out Irish industries by what I might almost call wicked legislation.
      Those concessions have been used in the very best manner by enterprising people in Ireland. Land has been taken into cultivation from pasturage and applied to the raising of tobacco. Capital has been invested, and the industry looks at the present moment in such a position as leads one to think that it may soon be on a firm basis. But what you gave with one hand a short time ago you are about to take away with the other. The tax which you are about to impose upon this industry, upon tobacco manufactured at home, will strike Ireland, and Ireland alone. In the other parts of the three Kingdoms time has not allowed the persons who would be so inclined to make a beginning. Therefore the tax will hurt Ireland alone, and hurt her infant industry which we desire to encourage.
      I believe the argument of infant industries does still affect the mind even of Free Traders. It did affect the mind of that
      880
      great teacher John Stuart Mill, and surely, if ever there were a case where that principle of general exemption might be applied, it is the case of Ireland. Now it may be said that a tax is about to be put upon the production of sugar at home. There is no analogy between sugar and this commodity of tobacco as raised in Ireland, because in this country, with regard to sugar, you have large factories where you have had established those industries in the past, where machinery is already in existence and plant laid down for the production of sugar, and if the industry be re-established by this duty—well, then you will reap some reward from it; but the only effect of this duty upon home-grown tobacco will be, not to reap any reward or any revenue to the Exchequer, but actually to crush an infant industry which is just trying to raise its head. Therefore I trust that the Chancellor of the Exchequer will take seriously to mind the suggestion made by my hon. and learned Friend and be good enough to refer to the Debates of the past two years on the subject—they were not many, but they were very earnest—and will also take into account the historical references of the hon. and learned Member. I am perfectly convinced that if he does investigate the subject from this point of view, he will find that, not only is this tax on this industry not warranted, but that it will bring absolutely nothing in, and, if I may say so, he will in the future have the mortification, the unhappy reflection of having killed an industry which had some little prospect of success.
      Mr. OUTHWAITE: The hon. and learned Member for North Kildare (Mr. J. O'Connor) seems to have given very good reasons why the duty on tobacco should not be increased, but when he suggests that the Excise Duty should be kept at a lower rate so that protection shall be given to an infant industry, I hope the Chancellor of the Exchequer will turn a deaf ear to his pleadings. I hope I shall not be regarded as an opponent of Irish industries. I should be delighted if Ireland had the whole management of this master herself, so that she could grow and smoke her own tobacco, if she liked, and levy taxation which, instead of going into the Irish Treasury, would be diverted into the pockets of the Irish landowners. That is the principle involved in this matter. The hon. and learned Member for York said there was no principle involved in this. There is a

      881
      very big principle involved. We stand upon the principle that when you levy taxation the whole of that taxation shall go to the Treasury to be spent for the public benefit, but under the system of Protection a portion of the increased price paid by the consumer will go into the pockets of private individuals. If you purchase tobacco imported from America, the whole of the increased price due to the duty will go to the Treasury. In the case of Irish-grown tobacco the proportionately increased price will go into the pockets of the landowners, so that there is a very great principle in the question.
      Mr. J. O'CONNOR: It is not making a profit at present.
      Mr. OUTHWAITE: What is the use of continuing an industry if it is not likely to make a profit? It is pleaded that it is an infant, but the tariff infant always remains an infant. The duty on steel in America was proposed for the purpose of encouraging the infant steel industry. The duty remains and has been increased since then. The hon. and learned Member opposite has mentioned a great Free Trader in the past, John Stuart Mill, as advocating the imposition of duties for the purpose of encouraging infant industries. I happen to know something about it because he did so in reply to a correspondent in the State of Victoria, Australia That letter was used for Protectionist propaganda in that State, but the infant industry exists today. The tariff started at 10 per cent, and has been soon raised to 20, 30, 50, and 100 per cent. The infant is still there to be protected, and, therefore, it is very necessary, having regard to the principle involved in such a proposal, to see that it does not get any initiation in our fiscal system.
      Mr. T. C. TAYLOR: The hon. and learned Member for York, and the hon. and learned Member for Kildare, who followed on the same lines, claimed that there was a case for special consideration on the ground of the injury done to Ireland in the past—that is to say, cruel penal legislation. I agree with the hon. and learned Members that the legislation was most unjust, directed as it was against Irish industries in order to kill them. I could not help thinking, when the hon. and learned Member for York was speaking, that there is a still more important industry, which still survives to some extent, I am glad to say, the woollen cloth in
      882
      dustry, which by an Act of legislation in the eighteenth century was extinguished as near as possible in order to assist the industry in this country. If there is a case for helping an industry like tobacco, which is an industry of luxury, is there not at least as good a case for other industries, such as the production of woollen cloth, which at a later date than 1660 was practically killed in Ireland by legislation in this House for the benefit of England? It seems to me a very curious thing that these claims should be put up for tobacco and nothing said about wheat, which I only use for the purpose of illustration. Here we have an article of luxury, so pronounced that I think it is taxed more in proportion to its value than any other article in the list of things we do tax—possibly more than spirits.
      Mr. McKENNA: Much more!
      Mr. TAYLOR: It has been thought proper by Chancellors of the Exchequer of all parties to tax it higher than any other article, and yet this is an article for the benefit of which the infant industry argument is used. That argument is always used in every country when protection is asked for at first, and it always proves that the infant is never able to do without it later on. I do warn the House of Commons and the Government that it is the beginning of Protection—the thin edge of the wedge of Protection. Is it fair, while we have a Coalition Government in power to alter the principles of taxations in this country? Surely, the fair thing is that when we have a Coalition Government we should have the status quo on the ground of common action. I protest against the introduction of principles so alien to the principles of taxation of this country. I protest with all my heart against the introduction of them as being absolutely unfair to those of us who have believed in and practice the principles that are generally called the principles of Free Trade. It is not fair because we have a Coalition Government to bring in the principles of Protection, and embody them in our Budget proposals. Surely, if there is any kind of article for which it would be right to infringe the principle laid down by my hon. Friend just now, namely, that the result of taxes should go to the Exchequer and not into the pockets of private individuals—a very sound tenet, surely, of taxation, and one that has served this country very weir in the past, and upon which all our Chancellors of the Exchequer so far have acted

      883
      —it should not be for an article of luxury like tobacco, but rather for the sake of an article like wheat. [An HON. MEMBER: "Sugar"!] Certainly sugar is a necessity of the poor; tobacco is a luxury of everybody. This argument about the wrongs of Ireland in the past has no application in the present case. A little bit of favour has been given to the industry of tobacco growing in Ireland, and I would join with the hon. and learned Member for Kildare in paying tribute to the persistence and ability with which the hon. Member for Clare has pressed this matter. As I have said already, I would be very glad for any means to be employed except this unsound one—if you like by paying a bonus, if it is thought necessary. But this principle of levying duties, a higher on the foreign product and a lower on the home product, although no doubt it has its advantages, is not the principle upon which the taxation of this country has been levied for years past, and on grounds of absolute fairness I protest as a believer in this canon of taxation, namely, that the result of taxation should go into the pocket of the Exchequer, and not by a side wind into the pockets of individuals, and create the vested interest which has been such a curse and cause of corruption in so many other countries. Under present circumstances it is absolutely unfair to introduce a new principle of taxation in this country.
      Mr. McKENNA: So far from there being anything unfair in the present proposal, it is absolutely in accordance with my hon. Friend's own ideas. It will be observed that the additional Customs Duty on manufactured tobacco is 1s. 10d., and the additional Excise Duty 1s. 10d. Therefore I assume that my hon. Friend's observations, so far as they were intended to bear upon our Debates in this House, related to some other duty than the Tobacco Duty. When we come to some other duty, perhaps that will be our best opportunity to discuss the matter of unfairness. In the meantime, what is the whole discussion about? Under the former duties, there was an allowance of 2d. a lb. in order to cover the cost of Excise restrictions on manufactured goods. Well, the Excise restrictions on manufactured goods remain after the additional duty is imposed precisely as before the full duty is imposed. What ground, then, is there shown for adding to the 2d. per lb. which is the present allowance?
      884
      I should not be ready to admit that it is a protective tariff. It was intended to cover the cost of the excessive restrictions placed on manufacture and leave it there. I do not desire to raise any new question of controversy. All I ask is to leave it there and let us get on to the next duty and be satisfied with the 2d. a lb. to cover the cost.
      Mr. BIGLAND: I agree with what the hon. Member for Kildare has said on this question. I have listened to the eloquent appeals which have been made during the past three or four years on this point, and I should be exceedingly pleased if the Chancellor of the Exchequer could see some way of increasing this small advantage to the Irish tobacco grower. We already allow him 2d. per lb., and I think it is agreed that that does not enable him to overcome the initial difficulties. It has been stated that to raise 1 acre of tobacco in Ireland it is necessary to spend £18 in wages alone on that acre. It has been shown that if the Chancellor of the Exchequer would give a wider and a fuller rebate on home-grown tobacco the acreage under tobacco would immensely and quickly increase. When this War is over we shall require employment in every imaginable way for our home industries, and I think the Chancellor of the Exchequer might take time by the forelock and do something to increase employment in this country by making this rebate 4d. or 6d. instead of 2d. The right hon. Gentleman only needs to inquire how much employment is given already in this country by the tobacco industry to assure him on this point.
      Lieut.-Commander WEDGWOOD: Is the hon. Member aware that there is a war on, and that we want to get elsewhere?
      Mr. BIGLAND: I am preparing the ground for when the War is over. The land of Ireland can grow this tobacco if you will only put the people in a position to compete with those who have had a monopoly in this respect for eighty years. Why not try and give this employment and this industry back to our own people? I should be exceedingly pleased if the suggestion of my hon. Friend the Member for York has some weight, and I hope it is not too late to increase this Excise preferential treatment on home-grown tobacco, which will tend to increase employment.
      Question put, and agreed to.

      MOTOR SPIRIT (CUSTOMS).
      Resolution reported,
      12. "That in addition to the duty of Customs now payable on motor spirit imported into Great Britain or Ireland there shall, on and after the twenty-second day of September, nineteen hundred and fifteen, until the first day of August, nineteen hundred and sixteen, be charged the following additional duty, that is to say:—

      £

      s.

      d.

      Motor spirit, the gallon

      …

      …

      0

      0

      3

      And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."
      Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."
      Mr. J. O'CONNOR: I want to say a word or two on this Resolution in order to suggest that it would be a fitting opportunity to extend a concession to a very deserving class of persons similar to that which has been made to the medical profession. I think it is the eighty-sixth Section of the Act, 1909–10, which provides:—
      "Motor spirit used to supply motive, power to a motor car kept by a duly qualified medical practitioner while it is being used by him for the purpose of his profession."
      There is another class of professional man who is probably in the same category as the medical practitioner that this Section is intended to benefit—I allude to the veterinary surgeon. No doubt a very good case was made for the reduction of this tax to the medical profession, because medical men are called upon to assuage human suffering and have to go long distances to attend patients suddenly attacked with some disease or other. I know this is the case in Ireland, and I think it is a right and proper thing to allow this reduction, and it was so considered by this House in 1910, when the members of the medical profession were given the benefit under that Act. Every argument that was used with regard to human suffering in order to give this benefit and concession to the medical profession may likewise be used on behalf of the veterinary surgeon. It is not because the object of the suffering is a dumb animal that the sympathies of the human heart are not excited as much as
      886
      in the case of human suffering. Therefore I submit to the House that if there was a good reason in the past for making this concession to the medical profession, those good reasons equally apply to the case of the veterinary surgeons, who are called upon, very often late at night, to go long distances in order to administer to the wants of poor suffering dumb beasts. I submit that this occasion should be taken to remedy what I consider to be a mistake in the Act of 1909–10 Let me also point out to the House that the veterinary surgeon is affected by the Motor Tax and by the use of motor vehicles to a much greater degree than the medical profession and in a manner in which that profession is not affected at all. The veterinary surgeon has been affected in his business to some extent by the destruction of horse traffic and horse haulage. There are less horses than there used to be, and there will be less use for them in the future, and consequently less demand for the veterinary surgeon with regard to horses. That being so, I think this profession is entitled on that account to some consideration from this House. I do not think I shall make this appeal in vain. It is certainly a case worthy of the consideration of the Chancellor of the Exchequer, and I hope that he will avail himself of this opportunity of remedying what I believe to have been a mistake in the past.
      Mr. McKENNA: My hon. and learned Friend the Member for North Kildare (Mr. John O'Connor) will appreciate that if his views were adopted by the Government—I express no opinion on this point—they could not be adopted now on this Resolution, and it will have to be done subsequently in the Bill.
      Mr. J. O'CONNOR: That is what I suggested.
      Mr. McKENNA: I think the hon. and learned Member's proposal would be much more appropriate as an Amendment to the Clause of the Bill dealing with this matter. We should then have our hands quite free to discuss this question when we get to the Bill. I say that without intending to convey any reply to my hon. and learned Friend, either positive or negative, with regard to the proposal he has made. I will, however, take this opportunity of saying that when we come to the fourteenth Resolution I shall propose to omit it.
      Sir H. CRAIK: I would like to say something on this point before the right hon. Gentleman makes up his mind.
      Mr. McKENNA: I am going to make a Motion when we come to the fourteenth Resolution to omit it, so that any doubt my hon. and learned Friend might have that he would be precluded in the Bill from moving an Amendment of the kind he now wishes may be satisfied, and this will be done if the House agrees to omit the Resolution. Of course, if the House determines to adhere to that Resolution, my hon. and learned Friend will understand that his proposal could not possibly be accepted. I shall, however, pave the way subsequently for the consideration of this proposal by moving the omission of the fourteenth Resolution.
      Sir H. CRAIK: Will the right hon. Gentleman say what the effect would be of omitting the fourteenth Resolution?
      Mr. McKENNA: I merely wish to tell my hon. and learned Friend now in advance that I propose to move its omission, but I cannot discuss it now.
      Sir F. BANBURY: I think the suggestion of the hon. and learned Member for North Kildare is a very good one, and if he accedes to the suggestion made by the Chancellor of the Exchequer I shall be very pleased to support him at the proper time when he moves his Amendment to the Bill.
      Sir P. MAGNUS: Will the right hon. Gentleman tell us now what will be the effect of his Motion to omit the fourteenth Resolution?
      Mr. McKENNA: I will do so when I get to it.
      Question put, and agreed to.

      MOTOR SPIRIT (EXCISE).
      Resolution reported,
      13. "That in addition to the duty of Excise now payable on motor spirit made in Great Britain or Ireland there shall, on and after the twenty-second day of September, nineteen hundred and fifteen, until the first day of August, nineteen hundred and sixteen, be charged the following duty, that is to say:—

      £

      s.

      d.

      Motor spirit, the gallon

      …

      …

      0

      0

      3

      And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the pro-
      888
      visions of the Provisional Collection of Taxes Act, 1913."
      Resolution agreed to.

      MOTOR SPIRIT (ALLOWANCE).
      Resolution reported,
      14. "That the temporary increase of the duties on motor spirit shall not operate so as to increase the allowance or repayment in respect of the duty now made to persons using motor spirit for certain purposes.
      And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."
      Resolution read a second time.
      Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."
      Mr. McKENNA: I beg to move, "That the House doth not agree with the Committee in this Resolution."
      If this Resolution be now omitted, then automatically, in accordance with the provisions of the Act, the industries and the professions to which the abatement of half the Spirit Duty was allowed will still be entitled to that abatement, and in future, instead of 6d. they will have to pay 3d. per gallon duty. Whereas formerly they paid ½d. instead of the full duty of 3d., hereafter they will pay 3d. instead of the full duty of 6d. Unless this Resolution is negatived, we could not hereafter consider freely the various deductions and modifications of the duty as it might affect particular trades and industries.
      Sir H. CRAIK: I was anxious to urge this point on the right hon. Gentleman, and I have to thank him for the concession. It would have been a very serious increase of the tax, an increase of 200 per cent., upon the medical profession at a time when a very large number of them are giving gratuitous services to the dependants of soldiers and sailors, and would have placed a burden upon them which would have been out of all proportion to the burden placed upon others.
      Question, "That this House doth agree with the Committee in the said Resolution," put, and negatived.

      MEDICINE DUTIES.
      Resolution reported,
      15. "That the Excise Duties now payable on medicines shall, on and after the

      889
      twenty-ninth day of September, nineteen hundred and fifteen, until the first day of August, nineteen hundred and sixteen, be doubled, and a duty shall be charged on the first sale on or after the twenty-ninth day of September, nineteen hundred and fifteen, of any medicines on which the duty now payable has been paid equal to the amount of the duty originally paid.
      And it is declared that it is expedient in the public interest that this Resolution shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913,"
      Resolution read a second time.
      Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."
      Mr. McKENNA: I beg to move, "That the words, 'twenty-ninth day of September' ["That the Excise Duties now payable on medicines shall on and after the twenty-ninth day of September"] be left out, and the words 'twentieth day of October' be inserted instead thereof."
      It was represented to the Treasury and to the Customs Department that there would be very grave and, in fact, insuperable difficulties in restamping large quantities of patent medicines which had already been stamped, and that reasonable time must be given to the trade to enable them to conform with the law. In view of those representations, which we were quite satisfied were fair, reasonable, and honest representations, we ask the House to postpone the operation of the Resolution on the tax from the 29th September to 20th October. I believe, in addition to this concession, that as a matter of practice we shall have to admit of the use of an ordinary postage stamp, properly cancelled, instead of the large special stamp which is usually affixed to patent medicine bottles, but that is a mere matter of machinery for which no Parliamentary authority is necessary.
      Motion made, and Question proposed, "That the words 'twenty-ninth day of September' ["on the first sale on or after the twenty-ninth day of September"] be left out, and the words 'twentieth day of October' be inserted instead thereof."—[Mr. McKenna.]
      Sir H. DALZIEL: Can the right hon. Gentleman say whether the dates he suggests are the dates suggested by the deputation and satisfy the trade?
      Mr. McKENNA: I understand so. I understand that they satisfy both the Customs Department and the trade.
      Question put, and agreed to.
      Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution, as amended."
      Mr. GLYN-JONES: The trade is very grateful to the Chancellor of the Exchequer for this extension of time. It would have been, as he says, absolutely impossible for them to have prepared their stocks by to-day, and the small stamp, which I understand he has promised to provide will also enable them quite definitely to have their goods ready for legal sale by the 20th day of October. There is one other matter which I should like to press upon the Chancellor of the Exchequer. The trade also made a further suggestion about the alteration of the scale. There has really been no time between the receipt of the deputation by the Chancellor of the Exchequer and today for him to have fully considered what they had to say about the scale on which the duty is based, but I ask him before the Finance Act is drafted to be good enough to carefully consider the proposals which they made, not to modify the stamps, but the values which the stamps are to carry.
      Question put, and agreed to.
      15. Resolved, "That the Excise Duties now payable on medicines shall, on and after the twentieth day of October, nineteen hundred and fifteen, until the first day of August, nineteen hundred and sixteen, be doubled, and a duty shall be charged on the first sale on or after the twentieth day of October, nineteen hundred and fifteen, of any medicines on which the duty now payable has been paid equal to the amount of the duty originally paid.
      And it is declared that it is expedient in the public interest that this Resolution, shall have statutory effect under the provisions of the Provisional Collection of Taxes Act, 1913."

      MOTOR CARS, ETC.
      Resolution reported,
      16. "That on and after the twenty-ninth day of September, nineteen hundred and fifteen, until the first day of August, nineteen hundred and sixteen, there shall be charged on any of the following articles imported into Great Britain or Ireland a Customs duty of an amount equal to thirty

      891
      three and one-third per cent, of the value of the article, that is to say:—

      Motor cars, including motor bicycles and motor tricycles.

      Accessories and component parts of motor cars, motor bicycles, or motor tricycles."

      Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."
      Mr. LOUGH: I would like to make an appeal to my right hon. Friend the Chancellor of the Exchequer to consider the great principle raised by this Resolution before we proceed any further with it. I do not think he can give us the answer which he has given us on other points, that we had better wait for the Bill, because if we were to carry this Resolution this very heavy duty which is embodied in it would come into operation to-morrow, and we should have a new precedent, and I venture to say a flagrant instance of Protection in connection with the industries of this country. My right hon. Friend, in his Budget speech, felt that he had a difficulty here—a difficulty which I venture to say appealed to him more strongly than it would to many Members of the Ministry. He therefore tried in his speech to put it on an exceptional basis. He put it under the heading of "foreign exchanges and luxuries." I do not want to be at all harsh on my right hon. Friend, because I know that he has a very heavy task before him at the present time, but I do think that a more weak and helpless defence of a great and new tax was never heard in the House of Commons. This will not help the difference in the exchange between this country and the United States. Other steps, which we all hope will be successful, are being taken at the present moment to deal with that rather urgent question. I think we may altogether put on one side this question of the exchange as irrelevant, and certainly irrelevant in face of the very great principle which this duty raises.
      The other point, that these things are luxuries is, if I may say so without offence, even more absurd. We ought to be more particular than we are in talking about luxuries in connection with things like motor cars and cycles. Perhaps the House does not know that 67 per cent. of all the motor cars that are being imported at present into this country are being used either for purposes of trade
      892
      or for the War. There is no luxury in that great proportion of these imports. The remaining 33 per cent. are cheap cars and cycles, mainly from America, that are being used by doctors and other professional men to save the use of horseflesh, and are really as far removed from luxuries as it would be possible to imagine. A very great injury will be done to very large businesses in this country if this Resolution is carried. The Chancellor of the Exchequer made a very curious allusion to the figures in his Budget speech. He said that those who wished could look at our returns of imports and find the figures in justification of the tax. He gave us no justification himself. He said, "Look at the figures and you will find it." I do not want to be hard on him, because I recognise the limitations under which he was working when he made his Budget speech, but I did look at the figures for eight months, and in every case the imports are substantially reduced. These figures do not show the increase in the imports on which it was understood these vast proposals were placed. I see that the imports of motor cars, cycles, etc., during the eight months ending August last year amounted to £5,503,000, and for the corresponding eight months this year to £5,330,000, so that there is a reduction of £173,000. The comparative figures with regard to the whole series of duties proposed are £8,300,000 two years ago and £7,600,000 now, so that a great blow has been struck at each of these trades already.
      Mr. J. SAMUEL: Will the right hon. Gentleman explain whether that figure represents complete motor cars or parts of motor cars which are made in this country?
      Mr. LOUGH: The figures which I have used include motor cars, cycles, and parts thereof.
      Mr. J. SAMUEL: You have not analysed them.
      Mr. LOUGH: I do not want to trouble the House with several figures on each head. I only put this broad point. The imports have not increased. On the contrary, they have decreased, and the trades are not in any particular flourishing condition at the present time. They are suffering under considerable difficulty.
      Mr. LEIF JONES: If my right hon. Friend has the figures, would he mind giving them to the House, because it makes an important difference whether the cars are imported whole, in which case they are

      893
      not manufactured in this country, or whether they are imported in parts, in which case they are manufactured in this country.
      Mr. LOUGH: My hon. Friends, with the best intention in the world, want to lead me into an argument which I do not desire to follow. It is very useful indeed in this House to keep to the line you yourself understand, and I am only just putting the simple point that the imports, taking them as a whole, have not increased. My two hon. Friends, bursting with intelligence, want to get figures from me to support their arguments. Even if I had the figures I think I should decline to give them, because it is much better for hon. Members to look up their own arguments.
      Sir CHARLES HENRY: Will my right hon. Friend say whether they include tyres?
      6.0 P.M.
      Mr. LOUGH: I would rather not say anything about it. I leave that to my hon. Friends opposite. I want to put a simple, broad point. The mistake which the Chancellor of the Exchequer makes in connection with this great and urgent matter is that he is of opinion that the explanation he makes in his speech will in some way condone the evil he is doing by his acts. The other night he gave a very courteous and encouraging reply to one of my hon. Friends upon this point, and he said that the future conduct of the Government would not be in the least prejudiced by what he was now doing, and that the time would come when he would again stand alongside his right hon. Friends as a Free Trader. I desire to differ from him on that point. I assure him that this House is a practical place, where you cannot escape from the consequences of what you do by any statement you choose to make about it. If you set up a tariff in this country to-day, it is no use saying you are setting it up to meet an emergency and that hereafter you will be able to resume your old position as a Free Trader. You will not be able to do so, and our position as Free Traders will be prejudiced for ever if we take the step which the Chancellor of the Exchequer asks us to take to-day. It is a very grave step, even in an emergency and in the circumstances in which we stand, and I appeal to the right hon. Gentleman to reconsider his position.
      What is the argument the Government put forward with regard to this? They want money, and it is to get money—large
      894
      sums of money—that they have taken the steps embodied in the Resolution. The House is with them, in a most generous, whole-hearted spirit, in giving the money asked for, and all the House asks is that the money should be taken without raising vital questions of principle, which may divide the House, and which many of us think are barred, owing to the particular circumstances of the day. Should it not be evident to the Prime Minister, who is pledged to the principle of Free Trade, and is it not evident to the Chancellor of the Exchequer, that they are raising, in connection with these proposals, the gravest principles associated with the trade and commerce of this country that can possibly be discussed here? Do these Gentlemen, and the section of the Cabinet which they represent, not consider that they are bound by the principles of Free Trade? I say nothing about other right hon. Gentlemen; it is quite consistent from their point of view that these duties should be introduced; but after the most eloquent and powerful appeals which have been made from the Government Bench that we shall not raise political discussions involving principles that go to the bottom of our convictions, so that the Government and the House may unanimously proceed with the great work of carrying on the War to a successful issue, it does seem that the Chancellor of the Exchequer is making a very great mistake in introducing these particular proposals. The questions of Free Trade and of Conscription are two of the largest questions which could be raised, and I notice with profound regret that both have been raised by the Government, while the House unanimously desires to avoid acute discussions, which are calculated to interfere with the great work on which we are all united.
      Only one reason is given for the step we are asked to take to-day, and that is the necessity to get money. But how much money will be obtained by these duties? The estimate is £2,000,000. I venture to say that that is far too liberal an estimate, in view of the probable effect of the duties. A duty of 33 1–3 per cent. will add one-third to the price of carrier cycles and all those small machines which are used in industry. There will be, in consequence, a tremendous falling off in the import of these machines as well as in the consumption, and this in turn will involve a falling off in the revenue to be derived from this source The amount, in fact, will be far less than is anticipated. Only £2,000,000

      895
      at any rate is estimated to be secured from this source, and I could mention to the right hon. Gentleman several methods in which that amount could easily be obtained. Some of them, indeed, have already been mentioned in the course of the discussion this evening. The House does not grudge the money to the right hon. Gentleman, but we do not want to enter into a bitter and acute controversy, such as is involved in the issue of Tariff versus Free Trade. How will the right hon. Gentleman get rid of the evil of this step? If the tariff comes into operation to-morrow, great vested interests will be interfered with. If we set up a tariff here, we know what the effect will be. The duty goes on small, but the tendency is for it to grow larger. This duty admittedly is not a small one, it is large; it will not get less, but it may get larger, because huge vested interests will be created, and the people concerned in those vested interests will come to the Chancellor of the Exchequer and say, "You put this tariff on, you induced us to buy machinery, to open works, to lay down plant, and surely now you will not ruin us by abolishing the duty?" I venture to submit with great deference to the right hon. Gentleman that this evil will not be avoided by any explanation he may now give with regard to it. I warn the right hon. Gentleman with great deference that if these duties are persisted in, then the great Free Trade controversy will again be aroused. I am not raising it to-day; we can easily stop at this point. The right hon. Gentleman can withdraw the duties and get the money he requires in other ways, and then there will be an end to it, but if he does not do that, then I say we shall have, in deference to the pledges we have made to our constituents, to analyse his proposals, and to go into them in far greater detail than I intend to do on this occasion.
      I will advance only one further argument. There are various points at which evil is sure to come into existence, but one appeals particularly to us, as Liberals, and to our constituents. We want the taxes of this country to be pure; we want to pay the money, especially if the taxes are heavy, for the purposes for which the money is voted by the House, namely, the carrying on of the War. We want to see the money raised by the country go straight into the Treasury. And here you find the root objection to these bad taxes. It is idle to tell me that the industries which you are
      896
      taxing do not exist in our country. Here we have a gigantic cycle industry, and the price of all the articles which are produced in our own country will be raised in exactly the same proportion as you are raising it on imported articles. Again, you have no Excise Duty. Why, I ask, is there this inconsistency? We have been putting Excise Duties on everything so as to balance the Customs Duty. Why does the right hon. Gentleman dare to bring in a tax which provides for a high protective duty at this time, and yet propose no Excise Duty to balance it. I will not labour that point further. All the evils which inevitably arise from Protection will arise in this case, and I wish to submit that the game is not worth the candle. I appeal to the Government to preserve the unity of feeling which they have, with such great credit to themselves, preserved in this House for the last fourteen months. I plead with them to preserve it still, and not to raise this great controversy on a vital issue on which we have the strongest feelings—an issue which has been raised and fully discussed in this country during the past few years. I urge them not to raise it again, but to stick to those principles on which they appealed to the electorate of the country and on which they were returned to power.
      Lieut.-Commander WEDGWOOD: I am very glad the right hon. Gentleman opposite has opened the opposition to the carrying through of this particular Resolution. It is the thin end of Protection, but at the same time it is rather a thick end. The right hon. Gentleman passed over, unduly lightly, one of the main reasons which induced the Government to bring in this tax. The other day the Chancellor of the Exchequer made it perfectly clear that, in introducing it, he was not thinking so much of the money to be got by the tax, as of the reduction in our imports and the consequent improvement in the American exchange. What is the American exchange at the present time? What does it mean? It means that a British sovereign will not buy as much goods in America as it used to buy; that the £ has depreciated in value by about 12 per cent., and that this drop in the exchange in America has, in fact, established a very effective tariff against America in this country. There is a 12 per cent, duty on everything that comes from America, established by the very fact that the exchange has gone against us. It is a

      897
      tax on goods that come from America into this country. Having got their tariff, having got a protective tariff on everything that comes from America, the Protectionists in this country—the Tariff Reformers—then produce a tariff designed to nullify the already existing tariff that the balance of trade between this country and America has actually set up. I do not see the point of it in the least. If you want a tariff, you only have to continue to export far less goods than you used to and to import far more; then the exchange will go against you, the automatic law of supply and demand will come in, and you will find you have to pay far more than you used to for everything you get from that country. Thus you get a tariff. Surely that is enough, without trying to put things right in an accidental and artificial way by imposing a special tariff on certain articles which come from America.
      The right hon. Gentleman the Member for Swansea (Sir A. Mond) showed conclusively the other day how very small was the body of trade with America which was helped by this particular tax. It was merely a question of £6,000,000 worth in the year out of a total trade of some £800,000,000. Obviously if you are going to take your artificial steps to put the exchange with America right you will have to go far further than dealing merely with motor cars. This Motor Car Tax at the present time seems to be about one of the worst the Government could have touched. Remember that our one object at this time is to economise labour in this country. Our object is to get as many as possible of our males into the fighting line at the Front. We want them there, where they can do the best possible work for their country. I maintain, and I think the whole House will agree with me, that nothing is so helpful in economising labour in this country as the introduction of motor cars. All these cheap cars are coming in, including the Ford cars, which come from America. The Ford car is talked of as being the rich man's car, but a prosperous man will not look at a Ford car. These cars are cheap and are used for commercial purposes. The shopkeepers, whose hands have enlisted and are fighting at the front, have managed to economise without getting fresh people to replace their shop assistants and delivery hands who have gone to the Front by the adoption of the carrier cars. These cars have come in and taken the place of the old horse and van.
      898
      They do the work at twice the rate of the old horse and van. By this means they have effected an enormous economy in labour in this country. Nor is that all. The majority of these cars which come in are not used for the business purposes. The majority of the cars are used by the Government itself, including an enormous number of Ford cars. Therefore this is the worst possible tax you could have put on in order to remedy the exchange, if you think you can remedy it by artificial means, because you are preventing that economy in labour in this country which is of the greatest possible importance at the present time.
      That is not the only way in which you are making it more difficult to get the men where you most need them—at the Front. You are also by this tax setting up, as the right hon. Gentleman (Mr. Lough) has said, a very strong vested interest. It is no use anybody pretending that this tax is not a protective one, or to say that all motor-car firms in this country are producing munitions; therefore there is nobody to protect. The Conservative Press has made that quite obvious. I saw only the other day, in the "Globe" newspaper, which is, of course, strongly Conservative in its tone, a leading article devoted to the iniquity of the Free Traders of this country who were objecting to this tax on motor-cars, in which they said—I am quoting from memory—that the motor-car manufacturers in this country, with enormous patriotism, had voluntarily turned over their works to the Government to produce munitions instead of motor-cars, and that therefore the least the Government could do in return was to give them a protective tariff, so that after the War they would be able to compete with the foreigner and get back their old trade, and that, secure under the shelter of a 33⅓ per cent, tariff, they should be able to recover their old position. A great number of firms in this country would be only too glad if their works, which have been ruined by the War, could be used for making ammunition for the Government at the present prices of ammunition. The patriotism was not in turning the works over to the Government. That was ordinary business common-sense. If we are going to assist industries that are being ruined, I suggest that a protective tariff on crockery would be much more useful. It is not so much a luxury as motor-cars, and a protective tariff upon it would be a great deal more useful than the protective tariff on motor-cars.

      899
      For these two reasons alone, apart from all questions of principle, we ought to vote against this tax. In the first place it is an attempt artificially to put right the state of affairs which itself is readjusting the trade between this country and America—I mean the American exchange. That itself automatically is readjusting the exchange of good between us and America. This is an attempt to check that, and therefore unnecessary and undesirable. In the second place, you are selecting the one item which is going to make it more difficult for people to go and fight at the front, and create a larger demand for labour in this country, where it is not wanted. For these two reasons, apart from all question of principle, this tax is a bad one. I would emphasise what the right hon. Gentleman opposite has already said, and would urge upon the Chancellor of the Exchequer not to throw down now this frightful bone of contention between us. I do not think the Liberal Members of the Cabinet who consented to this tax can possibly understand what it means to the ordinary rank and file of Liberals in the country. Here, for ten years, we have not only been using arguments at street corners, and meetings week by week and month by month, but we have been believing in those arguments. [Laughter.] We are in the happy position of being able to believe in the arguments we have used. We have been using those arguments, we believe in them, and they have become, in a sense, the faith of the Liberal party. To have them thrown over for a palty revenue of £2,000,000 a year in an attempt, foredoomed to failure, to set right the exchange between us and America, to have them thrown over with merely the ipse dixit of the Chancellor of the Exchequer that this is only temporary, and that he will be virtuous again as soon as War is over, that seems to me and to Liberals in the country to be playing with a very serious subject, and a joke which is not worth playing.
      It is not as if we wanted money and could not get it any other way. We would have been glad if the Income Tax had been increased by another penny in the pound. It is not only that their faith is taken away from under their feet, it is more than that. This Coalition Government came in on a supreme pledge that there was to be no breach of the party truce. We were not to have any subjects brought before the House of Commons which would tend to
      900
      show the enemy that there were two parties. If this thing goes through there is a breach of the party truce. Let there be no mistake about this. The matter will be debated. We shall have public meetings all over the country—[HON. MEMBERS "No! No!"]—on both sides. [HON. MEMBERS: "On your own side!"] This is the throwing down of the gauge of battle. Not only is it a breach of the party truce or a question of Free Trade versus Protection. Those of us who believe in the taxation of land values have been quiet during the last year because we have had other things to do. We have not urged upon the Chancellor of the Exchequer that he should embody in his Budget any of our views, but if we find that taxes on various articles are to be put into the Budget of this country, then we shall be bound to bring up our system of taxation and our suggestions as to how the money should be raised, and in that case there will be more dissension, more division, and more of all that political agitation which it ought to be the object of every decent citizen in this country to put an end to during the War.
      Mr. McKENNA: I have listened with very great interest to the speech of my hon. and gallant Friend (Lieutenant-Commander Wedgwood). He will not be surprised when I say that in his general argument I entirely agree with him. But I am not quite sure that I could admit, by any means, all the statements which he made. He quite accurately, if I may say so, represented the condition of the American Exchange as a protection of this country against American imports. That is quite true. He said, "Leave it alone; leave it to automatic adjustment." I wish it would adjust itself. If it were automatic, I would be only too glad to leave it alone. But my hon. and gallant Friend forgets that the circumstances are quite abnormal. In ordinary times he and I are at one in thinking that duties on imports for purposes other than revenue are anathema. In ordinary times when the exchange goes against a country, exports from that country obtain an advantage, and imports are placed under a disadvantage; but the condition now between this country and America is that we have got compulsory imports and insufficient power to export. There is, consequently, no automatic readjustment as there would be under the conditions of ordinary trade. The only condition upon which you can get automatic readjustment

      901
      would be that the Government should discontinue giving orders in America for munitions of war, both on its own account and on account of the Allies. Nobody would be more eloquent than my hon. and gallant Friend in opposition to any proposal to discontinue our fighting the War to the utmost of our powers. These imports are compulsory imports. There is no other word for us to use. So long as that condition remains the exchange cannot be left to its own automatic care. [An HON. MEMBER: "What about the Loan? "] The loan is an effort to restore the exchange. The loan is not automatic.
      Mr. J. M. HENDERSONmade an observation which was inaudible in the Reporters' Gallery.
      Mr. McKENNA: I do not think my hon. Friend heard the speech of my hon. and gallant Friend. I am answering his speech. Let me point out this: that every effort that may be made to restore the exchange by the imposition of obstacles in the way of imports which you may not be particularly anxious to receive into the country operates in favour of those articles which you do desire to receive. We will assume, for the sake of my argument—my hon. Friend must admit this assumption—that if the effect of this duty on motor cars is to raise the exchange in this country in relation to America, it means that we shall get our wheat and our meat cheaper from that country. I understand my hon. Friend agrees with that. Therefore, under the exceptional circumstances of this time, it may be right to take measures to raise the exchange of this country in relation to the United States by using import duties.
      I for one should protest most strongly against the statement of my right hon. Friend (Mr. Lough) that I am prejudicing for ever my position as a Free Trader. I know that the time will come, I hope very shortly, when I shall be quoting what I am saying now as evidence that I did not prejudice my position as a Free Trader, and my right hon. Friend will also be relying upon the statement that we are not prejudicing our position as Free Traders, because our whole case is that while Free Trade is the best policy for this country, and, as I believe, for all countries, in normal circumstances, there may be conditions in war, not when the system or the principle of Free Trade breaks down, but when you cannot leave the principles of Free Trade to operate because you have got compulsory imports and insufficient power to export, and it may be desirable
      902
      to exclude imports which are not of particular service to the country. [An Hon. MEMBER: "Why not prohibit them?"] There are other objections to prohibition. My right hon. Friend said that I could not escape his argument by any explanation I could make.
      Mr. LOUGH Mr. LOUGH made an observation which was not heard in the Reporters' Gallery.
      Mr. McKENNA: My right hon. Friend's exact words were, "He could not escape the argument by any explanation he could make." Then it is prejudged. If nothing I can say can justify my action, it is quite useless attempting to say anything.
      Mr. LOUGH: I think I ought to get fair-play. The argument I was submitting to the House was that my right hon. Friend's words cannot be weighed against his deeds and that he would be judged hereafter by what he does and not by what he says.
      Mr. McKENNA: There never was anything truer said. I hope my right hon. Friend will take his own lesson to heart and judge men, not by what they say but by what they do—judge them by their acts just as you judge trees by their fruits, and not by what they say. On one point I think a very strong argument was raised. It was urged that many of the cars which are brought into this country are brought in for business purposes, and that in taxing them we may be taxing something which we do not wish to exclude, and that consequently, not on the Free Trade or Tariff Reform argument, but merely the argument of utility which I am putting forward now —I am basing my case for the moment merely upon that argument—it is undesirable to put a duty upon anything which facilitates business. I think that argument is immensely strong, and consequently when we come to deal with the tax in the Bill—it is not necessary to alter the Resolution for the purpose—I shall propose to exempt all motor lorries and vans used exclusively for trade purposes, together with their parts.
      Mr. WATT: Chassis?
      Mr. McKENNA: Chassis and parts of chassis to be used exclusively for purposes of trade. I hope no one will quote against me the words I am using now, but I desire to convey the intention that motor cars and parts of cars which are intended exclusively for the purposes of trade will be exempt. I have always said with regard to these taxes that if Members will direct their minds to a particular tax as it affects

      903
      us now, until 1st August next, during this War, I shall be only too happy to hear everything they have to say. But when you get to the general argument of Free Trade or Tariff Reform I am bound to say it leaves me for the moment quite cold. My hon Friend (Lieut.-Commander Wedgwood) protested against this tax, and complained that we were raising a great controversy on principle. I dispute that absolutely. I decline in all arguments hereafter—not now, but in future years—to admit, and I say so now, that I abandon the principle. My hon. Friend was interrupted by an hon. Gentleman sitting opposite who said, "Why are you raising it then?" My hon. Friend's reply was, "You have got what you want." Does my hon. Friend really in fairness think so? If I were a Tariff Reformer I should never accept this. [An HON. MEMBER: "The thin end of the wedge!"] If it is limited to that, I shall not quarrel with it. I speak as a Free Trader and I do not pretend to express the opinions or the views of Tariff Reformers, but I think in justice to them it must not be alleged that this is a Tariff Reform Budget. When we come to these taxes one by one, I think it will be far better if we debate each of them on its merits. This is only one stage of the Bill and not a very convenient stage for debating the tariff. We know the views of Free Traders, of which I proclaim myself one. I think that is an argument which will be far better used when the Bill is brought forward.
      Sir H. DALZIEL: It comes into force to-morrow.
      Mr. CHANCELLOR: Will my right hon. Friend give us an assurance that Excise Duty will be put on?
      Mr. McKENNA: I will at once give my hon. Friend the reason why I have not even considered Excise Duties. We simply could not do it. I explained in my Budget statement that there is a very real limitation to the powers of the Customs officials. Although new duties are introduced, there is no new Excise introduced. One hon. Member pointed out that we have Excises on other articles, but no new Excise. We have machinery already existing with regard to the other duties, but to impose an Excise upon these articles, with all the restraints they would entail on manufacture, would be a task absolutely impossible to impose upon the Customs at present.
      Mr. CLOUGH: May I ask you, Sir, if an Excise Duty is not included in this Resolution? Will it be in order to introduce it when the Bill is introduced? Will it not be against the Rules of the House to add to the taxation, and therefore out of order?
      Mr. SPEAKER: No tax can be introduced except by a Resolution of the House. That is quite elementary.
      Mr. McKENNA: I am only observing that it would be much more convenient when we get to the individual taxes. I do not mind if there is a general Debate now on this, but I deprecate a general Debate, as we had before, upon each of these duties on the general principle, because in discussing the general principle we lose the value of the argument for and against a particular tax, and I am quite sure there will be a good deal to be said on the particular merits of the particular taxes as they affect the trades concerned, just as in this tax there is a great deal to be said upon the business side of taxing the motor lorry, and it would be a great pity if in the heat of controversy on general principle we lost sight of the business effect of particular taxes quite regardless of their effect in principle. I would therefore deprecate our devoting too much attention to the fiscal controversy and too little attention to the particular tax. I hope the House will be willing to accept the proposals as they stand. I cannot believe the motor-car industry will obtain any advantage from the imposition of this duty. At this time, as I am informed, and I believe I have good means of information, the whole of the domestic manufacture is at a standstill. [HON. MEMBERS: "No."] I am informed, and I believe my information is good, that the manufacture of new motor cars has ceased, and I believe that to be the case. Our own industry is, in consequence, at a very great disadvantage for the future, but I do not think that would be an argument to justify the duty. We ask for this duty in order to limit the import of an article which is extensively used solely for the purpose of luxury. I merely observe inferentially that the duty does not and cannot protect a trade which is not at work, and the trade which is supposed to be protected is suffering by the fact that its business is being gradually invaded by the products of foreign manufactures, a condition which the trade would not have to suffer if the whole of its works had not been taken over for the purposes of the War.

      905
      These are considerations which operate precisely in the opposite direction from the line taken up by my right hon. Friend. I appeal to him to believe that the Government as a whole have no intention by these duties to adopt or discard either one theory or the other. It is intended to be a recognition that these theories on both sides must for the time being remain in abeyance, that the conditions of our trade and of our finance are absolutely abnormal, and that every Member of this House, be he a member of the Government or a private Member, is absolutely at liberty, whenever these Resolutions come up for consideration again, to support them or vote against them according to the circumstances of the moment, regardless of the position which he may have taken with regard to them at the present time. I really think that in these circumstances it would be only fair if on both sides of the House fiscal controversy were allowed to drop.
      Mr. OUTHWAITE: Why do you raise it then?
      Mr. McKENNA: I am endeavouring to say that I do not intend to raise it. If my hon. Friend thinks that I am mistaken and that I am raising it, I hope, at any rate, he will give me credit for honesty of intention not to raise it. I personally think that I am not raising it. I hold myself absolutely at liberty if I occupy the position this time next year which I occupy now, not to invite the House to renew this tax. I hold myself absolutely at liberty when the War is over, or if the War is continuing and conditions are different, and the exchange is in our favour and the need of excluding imported luxuries no longer exists—I shall regard myself as absolutely free to ask the House to drop this tax. Holding that opinion, I cannot see that my hon. Friend is justified in saying that I am raising controversy. Others may think that this may lead to controversy in the future. Let us, however, take these taxes as they stand, for what they are worth. I do appeal to the House to let the fiscal controversy subside and to deal with the taxes on their merits.
      ROYAL ASSENT.—Message to attend the Lords Commissioners. The House went, and having returned,
      Mr. SPEAKER reported the Royal Assent to—
      The Consolidated Fund (No. 4) Act, 1915.

    WAYS AND MEANS [21ST SEPTEMBER].
    Report again considered.
    WAYS AND MEANS [21ST SEPTEMBER].

      MOTOS CARS, ETC.
      Resolution reported,
      16. "That on and after the twenty-ninth day of September, nineteen hundred and fifteen, until the first day of August, nineteen hundred and sixteen, there shall be charged on any of the following articles imported into Great Britain or Ireland a Customs duty of an amount equal to thirty-three and one-third per cent, of the value of the article, that is to say:—
      Motor cars, including motor bicycles and motor tricycles.
      Accessories and component parts of motor cars, motor cycles, or motor tricycles."
      Motion made, and Question again proposed, "That this House doth agree with the Committee in the said Resolution."
      7.0 P.M.
      Mr. CHAPLIN: Whether we are to be judged, as we were warned not long ago, by what we say or what we do in this Debate, I am going to be bold enough to express the regret which I feel that this House, or, at any rate, some of its Members, should have been carried away into forgetting what is the real object of the Budget we are now considering. Tariff Reformer as I am, and always have been all my life, I can only say, with absolute and perfect sincerity, that if I had been placed in the same position as those who are Free Traders find themselves at the present moment—remembering what is the business we are really engaged in, and ought to be engaged in, and ought to be thinking about, and nothing else—nothing would have induced me to try to make a fight on this occasion for the principles which I have advocated, and which appear to me to be entirely out of place on such an occasion. Nor do I think it is fair to the Chancellor of the Exchequer. He has been placed in a position of great difficulty, and with a more enormous task to perform than any other Chancellor of the Exchequer has ever had to perform in this or any other country in the world. I was sorry, more sorry than I can say, to hear an hon. and gallant Gentleman (Lieut-Commander Wedgwood), for whom I have the utmost respect and admiration for the gallantry which he recently displayed himself at the front, say in a moment of heat what I do not think he would have

      907
      said if he had really considered what it meant, that if these taxes were to be enforced it would mean, so far as he was concerned, meetings and agitation all over the country against the Budget. That from a man who has been displaying such magnificent courage on the field was a statement which I did greatly regret, I honestly confess, because nothing could be more harmful, and nothing could be worse than that the feeling which is suggested by language like that should exist in the House of Commons at the present moment, when the one object and the only object which all of us ought to have before us, is to see how this War can best be prosecuted.
      A tremendous task has been thrown upon the Chancellor of the Exchequer. He has discharged that task with enormous skill; nobody denies him that. Certainly his proposals have won practically universal admiration in all parts of the country. It has been left to a few speakers on this occasion to embark upon a controversy, which, if it was continued, I quite admit might lead to serious consequences, and might lead even to a split among both parties. It is only because I do feel this most earnestly, and because I thought that I saw feelings displayed in the House which might have a most serious effect if the display was continued, that I have ventured to rise and appeal, as I do most earnestly to Tariff Reformers and Free Traders alike, that, whatever views they may take upon this question, they should forget for the time being these old lines of party controversy, as to which the Chancellor of the Exchequer has told us all repeatedly to-night, the moment the War is over we shall be quite free again, so that neither he, nor any of those who think with him, will be bound in the slightest degree by the proposals which they have made to-night.
      Mr. LEIF JONES: The appeal which the right hon. Gentleman has just made to the House will, I am sure, command the sympathetic consideration of every one of us. I have listened to the appeal of the Chancellor of the Exchequer, not to raise this controversy at the present moment, with a great deal of sympathy. I do not agree with my hon. and gallant Friend that if the Chancellor of the Exchequer persists in these taxes there will be a public agitation throughout the country, with the utmost earnestness and vigour and all the power which political parties
      908
      have at their command, as there would have been if we had been at peace. I do not think that that is possible at the present moment. It is not only undesirable, but it is impossible to do it. The country would not tolerate that politicians should engage in controversy, apart from the War. Still less, perhaps, a controversy connected with the War, at any rate on a matter of old controversy between the parties. The country would be very intolerant of anything like a strong fight against proposals put forward in the name of a united Government. But for that very reason I think that a greater responsibility rests upon the Government in this matter, because it is very difficult for Free Traders to sit still in this House while the Chancellor of the Exchequer proposes taxes which he says are not intended to have a protective effect, but which, in our conviction, can have no other than a protective effect. We cannot discard our opinions; we cannot put aside what we think to be our knowledge. Therefore, in viewing these taxes, they must realise that a new departure has suddenly been made by the Government of the country, and that controversy has been raised which we all wish to avoid.
      Mr. W. THORNE: You should relax your principles, the same as we do the trade union rules.
      Mr. L. JONES: That may happen, but it is not a desirable thing that it should happen, and the fact is that the whole of these Import Duties raise so small an amount of money that we are entitled to appeal to the Government as to whether it is a wise thing to raise these controversies in the minds of the people for the sake of this small amount. I feel confident that if the Government could have asked the House of Commons before introducing these Resolutions, or before introducing this Budget, whether they wished this controversy to be raised on the present Budget, they would have got from life-long Tariff Reformers, like the right hon. Gentleman, and from Free Traders alike, absolutely the same answer. They would have been told, "Do nothing in this Budget, which would disturb the harmony which exists at present between all parties in the House of Commons. Do not break the party truce. Do not introduce new proposals, or new taxes, which violate the principles of a large section of the House."
      Mr. CHAPLIN: When the hon. Member speaks of these as new taxes, does he remember any great war approaching this which was not the occasion of taxes of the same sort being proposed?
      Mr. L. JONES: The right hon. Gentleman does not quite follow me. I do not complain of the Government imposing taxes practically wherever they think there is revenue to be raised. That is the argument which is used by the right hon. Gentleman the Chancellor of the Exchequer in justification of the particular tax which we are now debating. But why does not he, as all Chancellors of the Exchequer in recent years have done, put on a corresponding Excise Duty for every one of these proposals? Had he done that he would have raised no controversy, but would have gone on the old-established lines. Free Trade has not yet been upset as the established policy of this country. It is the accepted policy of the last seventy years; it has never been upset by any Chancellor of the Exchequer during that period. One attempt was made to upset it, and the result was the election of 1906. I am quite aware that my Tariff Reform friends think that they were making progress in the country. I doubt it, but I do not go back on old controversies. It was quite easy for the Government to avoid anything like a fiscal controversy by the simple expedient of following the old Budgets of the last seventy years, and including an Excise Duty wherever they put on an Import Duty. I still appeal to the Government, and I think that we are entitled to appeal to them, to take this course. We do not want this controversy. Hon. Members opposite have told us that they do not want to pursue it. Nobody in this House wants this controversy. I think, therefore, that the Free Traders in the House are justified in appealing to the Government not to depart from the old-established principle, but to give us Excise Duties to correspond to the Import Duties which they are putting on, and then, whatever we may think of the particular tax, I do not think that there will be opposition in any quarter of the House.
      What argument can the Chancellor of the Exchequer advance against this proposal? If his object is to raise money, then by putting on a corresponding Excise Duty he would raise more money. He tells us also that he wishes to discourage the consumption of luxuries. To do that he
      910
      must discourage the consumption of home luxuries, as well as the consumption of imported luxuries; and here, again, the argument for an Excise Duty must be considered a strong one. There are only three grounds on which my right hon. Friend has justified this tax. In the first place, he wants to raise money. In that case an Excise Duty will result in raising more money for him. Then he desires to diminish the consumption of luxuries. In that case also an Excise Duty will help him. In the next place, he wants to benefit the American exchange. On that point my argument is that I do not think that you are going to benefit the American exchange at all by your Import Duties. It is better for the exchange, in the ordinary course, for trade to take place between this country and America, for the very good reason that imports are paid for by exports, and freights upon imports do not enter into exchange, because they are paid by Englishmen to English shipowners, whereas freights upon exports are paid for by the foreigner to English shipowners, and therefore any trade that takes place tends to move the exchange in favour of this country.
      I do not think that my right hon. Friend would dispute that very elementary proposition. In ordinary times any trade taking place between this country and America tends to make the exchange in our favour. That being so, my right hon. Friend is surely wrong in saying that the mere reduction of imports is going to benefit the exchange, unless he thinks that we can keep exports at the same figure, even when we do not receive these imports from America. I admit that if exports go on at the same figure, while the imports are reduced, obviously the exchange will benefit to that extent. But there is no proof that the exports will go on. The exports are sent to pay for these things which are imported. English merchants are not going to send them the money for things that are not necessary. I believe that there is no evidence to the contrary. It is impossible that the American exchange should not be heavily against us, so long as the Government is necessarily importing these enormous quantities of munitions and necessaries of life. Our power of exporting is not equal to paying for the imports at present received. There is no way of automatically getting the exchange back to a normal figure. The measures which the Government are taking in regard to the loan of £100,000,000

      911
      in America will, I imagine, produce a good effect. The American exchange has been moving upwards for some time. I have no doubt, now that the loan is an assured fact, that that process will continue. If my right hon. Friend does wish to reduce the consumption of luxuries he should do it all round. He should not confine himself to imported luxuries, but should put on Excise Duties to a corresponding amount. If he does not, then whatever we may do here, and however we may endeavour to avoid controversy, he will infallibly introduce unrest throughout the country.
      I will give an instance of this. I represent a part of the country which is largely interested in the lace industry. The lace industry has suffered a great deal in recent years from foreign competition. Already I have had a communication from the Nottingham Chamber of Commerce asking that the Chancellor of the Exchequer, in whatever he may do to prevent the consumption of imported luxuries, should put an Import Duty upon foreign lace. I do not know why certain industries of this country are to be picked out for favour as compared with other industries. I have told the Nottingham Chamber of Commerce that I have always consistently opposed all Import Duties unless a corresponding Excise Duty was imposed, and I made that answer to the Nottingham people, but I added that I know of no reason why hats and plate glass should receive protection and Nottingham lace should not receive protection. This unnecessary departure from principle on the part of the Government is arousing fiscal controversy throughout the country, whether we wish it or not. I am not going to pursue the matter, and I agree that it ought not to be pursued at the present time, but, because it is not to be pursued, I say that the Government should not have violated their own principles on which they have hitherto acted by introducing these duties.
      The SECRETARY of STATE for the COLONIES (Mr. Bonar Law): Since I came into the House I have been told that my right hon. Friend the Chancellor of the Exchequer has been vigorously denounced, and I should like to occupy the time of the House for a very few moments in order to correct, if I can, some of the misapprehensions which may have arisen in connection with these duties. I am quite sure
      912
      that my hon. Friends behind me will accept my word for the statement that, in regard to the motives which caused the introduction of these duties, there is no intention such as that which has been imputed. There is an impression that they are due to the existence of a Coalition Cabinet, and that they are the result of pressure put by my hon. Friends and myself, who are Members of the Cabinet, upon our colleagues. That is a complete delusion. In the absence of the Chancellor of the Exchequer, I rather hesitate to say, but I feel that I am justified in saying it, that this particular duty was suggested by the right hon. Gentleman to the Cabinet, and none of us, so far as I know, had any previous conversation with him on the subject. Personally, I believe myself that these particular duties would have been imposed with equal certainty if there had not been Unionist Members of the Cabinet, and I believe, also, that in that case they would have gone through the House with much less opposition. [HON. MEMBERS: "No, no!"] At all events the House will recognise that they are not due to any pressure put by me.
      I have made in this House as many fiscal speeches as others, but I can assure the House that the subject, personally speaking, does not interest me in the least at this moment, and, what is more, I can say for myself, and I believe for all my colleagues, that we would not have considered ourselves justified, but would have felt we were not "playing the game" as loyal Members of the Coalition Government if we had attempted in any way to use our influence in order to induce our colleagues to go back on principles for which they have fought so often in this House. The motives for which these duties are imposed are simply to carry out the campaign of economy, and of avoiding the import of goods which has been going on all through the country. I was invited to go to the Guildhall along with the Prime Minister to make a speech on this subject. I believe that a book has been published on the authority of the Government urging the country not to buy imported goods, because of the condition in which the country stands. I say, speaking for myself, that a Government which goes that length, which recommends people not to buy imported goods, and does not at the same time take the only step it can to make it more difficult and less likely that these goods should be imported, is stultifying itself, altogether apart from any fiscal

      913
      question. If I were merely to consider this question from the fiscal point of view, and if I were considering how it would help us when the War is over in carrying on the controversy in which we were so interested, I should say at once that these duties are the very last which I would impose myself, and that they are in a form which seems to me contrary to all the principles I laid down at the time I was advocating a change in our tariff. The duty is thirty-three and one-third per cent.
      I remember over and over again, in this House and out of it, trying to prove to Free Traders, who say that importers always pay the duty, that they are wrong. I remember trying to convince them that if there were a moderate competition in the home market it would have the effect of making foreign imported goods sink to the level of the home prices. That was one of the strongest arguments, because obviously thirty-three and one-third per cent. does not meet the case. Obviously it is the very last that would be imposed by a Government really trying to introduce a fiscal change in this country. Let me say something more. The only ground on which I think I can see any question of opposition to these duties, from the point of view of the fiscal controversy, is the idea that they will lead to something else. Duties of this kind would never be continued under any circumstances when the War was over—I mean duties on this scale—and I think that if there is any real objection it is because the people who object have not as strong faith as they ought to have in the value of their own theories. The only possible objection from their point of view is that the imposition of these duties will give an object-lesson which will show, after the War is over, that they have not done harm, but may have done good. I recommend to my hon. Friends behind me the more robust faith of a colleague of mine, I think the President of the Board of Trade, who said, "I am glad to see these duties, for they will prove the fallacy of all your arguments." But I do seriously ask the House at a time like this not to believe that the Government, or that any section of the Government, is imposing these duties with the idea of helping the old controversy, even now or after the War is over. It is nothing of the kind.
      These are sumptuary taxes, and you may perhaps object to them on the ground that it is not worth while making a change
      914
      for all that you get out of them either in the way of exchange or of revenue. It is quite true that these duties do not cover many articles, and I would like to have seen them cover a larger number. Other articles were discussed, for instance, that by my hon. Friend behind, and objections were made on technical grounds. Those objections may seem sufficient not to make it worth while to press them. As regards Excise, is it not really driving pedantry to the last extreme. When you impose duties of this kind on imports not for the sake of Protection, but for the purpose of helping us to carry out what we are teaching with regard to economy, to insist on putting up Excise Duties for six or nine months—I hope it will not be longer—is to carry pedantry to an extreme. Surely at a time like this we can forget past controversies of this kind, which come back to me as if they had occurred in a previous state of existence. They do not interest me in the least. What will have happened to Tariff Reform as to a great many other things in which we are interested, no man can say; but of this I am absolutely certain, that the step which the Chancellor of the Exchequer is asking the House to take will have no effect one way or the other in this controversy, and I do hope the House will not think it worth while to make a serious fuss about what, after all, after careful deliberation, the Chancellor of the Exchequer thought worth doing in connection with this great struggle in which we are engaged.
      Sir ALFRED MOND: The right hon. Gentleman has certainly made a difficult position more difficult to understand than before. Many of us—I cannot say myself—and certainly a large section of the people outside the House, see in these duties which we are now discussing some concessions to Tariff Reform opinion in the country. I am not surprised that the right hon. Gentleman repudiates that suggestion, and I very gladly believe that it is the last way in the world that he or any intelligent Tariff Reformer would introduce this subject. When we are asked not to raise this controversy and not to continue this discussion, I would point out that we have not introduced any controversy whatever. We are not dealing with a question of theory; we claim that we are dealing with a question of fact. You are introducing in the Budget for the first time for many years protective duties—that is to say, duties on the import of goods which are also manu-

      915
      factured in this country—without corresponding Excise Duty. That is protective, and these duties are protective as far as they go, and no amount of reasoning why you are doing it will get over the fact that you are asking us to vote for a protective tariff on these articles. I admit that the Chancellor of the Exchequer might have made out a case of so overwhelming a character and of so grave national importance that even the most convinced Free Trader would have been ready to frankly admit it. The Chancellor of the Exchequer has done nothing of the kind; he cannot do anything of the kind.
      What are the reasons he brings forward for these duties? The first argument is as to exchange; but I submit that the amount affected by the rate of exchange is not worth the consideration of a penny of taxation. The right hon. Gentleman took me to task the other day for comparing the amount of exports which I said would be excluded—£2,400,000 in six months—against the total imports of £429,000,000. He observed that I ought to have compared the total amount of imports which are excluded with the balance of trade for the six months. I cannot get the figure of the balance of trade for the simple reason that we are now importing Government goods in large quantities which are not recorded in the Board of Trade Reports. Why does not the Chancellor of the Exchequer tell us what that figure is, and what this £2,400,000 should be compared with? Surely the loan of £100,000,000 in the United States is, for the purposes of exchange, sufficient; and as to the exclusion of £2,400,000 worth of goods, they are. not all from America but from all parts of the world, and this tax on all the goods coming from America is not going to have an enormous effect on the exchange. Coming to the question of revenue, £2,000,000 is raised from these duties, when we are spending £5,000,000 a day on the War, of which this protective tariff will not pay for more than twelve hours.
      Then there is the sumptuary argument. You want to prevent people from purchasing luxuries, and therefore you are going to tax that class of products which are not luxuries at all. That is what we cannot understand. Sixty-seven per cent. of motor cars are used for business purposes and the War, and the right hon. Gentleman has not told us whether motor cars used for war purposes are going to be excluded. A large number of foreign
      916
      motor cars are brought to this country and sent again to France for war purposes, and I saw the other day an appeal to send motor ambulance cars to Russia. I have very little doubt that probably some of those cars are American cars. We are supplying cars for ambulance purposes, but apparently we are to be stopped buying cars for ambulance purposes for our Allies on the plea that we must not admit luxuries. I have a large number of letters of protest from different industries. One does not want to awaken past controversies, but I am astounded how everything I prophesied about tariffs is coming so true. We have got now to occupy our minds with every industry and the details of every industry which is supposed to come under the tariff. We are asked questions, for instance, about rebate. Perhaps the Financial Secretary to the Treasury may be able to tell us, if an English motor-car manufacturer import parts necessary for him to make motor cars which he is going to export to other countries, whether he will be allowed rebate on those parts or not? I have a letter here from a representative firm, who did a large business in exporting cars all over the world, and they say unless they can get a rebate they must take this business out of this country to New York. How is that going to help the exchange?
      You are going to put a heavy duty on watches, and on some of the remaining businesses which our French Allies have got. I have got letters of protest and of bitter complaint because the French Government had allowed the makers of French cars to keep up their connection in this country, and to make a small number of motor cars and bring them here, but you are putting on a duty that is going to knock the French car entirely out of existence. Is that fair? Does that help our exchanges? Surely it is as important for us to get our exchange with France more normal as to get our exchange with America more normal. It is surely injurious to the business of this country that the exchange with France should be bad, yet you are levying the duty in a most extraordinary way. I would like to give an example of how the way the Chancellor levies the duty affects French cars and American cars. An American Ford car will import parts for assembling valued at £42, on which the duty is £16. A medium-priced American car, complete with body, will be valued at, say, £120, with the duty of £40. On the other hand, a medium

      917
      French car will cost £225, with the duty of £70. On an expensive French car, like the Delaunay Belleville, the duty may be £220. The duty of £16 or £40 would not affect the American cars, but in the case of the high-priced cars it will completely kill the French and Italian trade, and further benefit the American manufacturers. Thus we are going to damage our exchange with Italy and with France. It is not a benefit to English trade that the Italian and the French exchanges should be so much in our favour. We could send more exports to those countries if the exchange was more normal. You are going to damage those exchanges and get no result in America, not because of the duty, but on account of the way you were going to levy it.
      It would take too long to go into other methods, but just take the subject of tyres. The right hon. Gentleman affirms and believes that the duty has no protective intention, but he is giving a protection of 33¼ per cent, ad valorem duty to British tyre makers against our French Allies. I saw the other day that a large firm of tyre makers were putting up their price by 33¼. On what principle can you justify a protective tariff in favour of English tyres against the French. I understand that the right hon. Gentleman, in the case of motors, says that they are not being made here, but he cannot allege that in the case of tyres, which are manufactured, I think, to the value of half a million pounds per year. He has already taken a good deal out of these duties, and will he not take the tyres out, too? I did not press the right hon. Gentleman for an Excise Duty. I was perfectly well aware that the practical difficulties in his way make it impossible to do so. May I ask why he chose this moment to throw additional work on the Custom House Department. Those of us who are engaged in exporting goods know the difficulties of obtaining export licences at the Custom House, and yet this is the moment which the right hon. Gentleman chooses to start ad valorem duties with people who have no knowledge of valuations of the kind whatever. The right hon. Gentleman has never explained how the valuation is to be done or what Court of Appeal there is to be against any over valuation. I get numbers of letters asking what things are excluded and what are included. A tariff is a delicate and scientific thing, and cannot be introduced in this crude manner, and you will cause
      918
      endless disturbance and difficulties by your method of assessment. The right hon. Gentleman has never done anything—he-has been studying the subject. I am sure if the right hon. Gentleman the Member for West Birmingham (Mr. Chamberlain) had charge we would have had something very elegant. It does not make it any better for the poor people who are being taxed, and it does not do away with the damage you are doing to a considerable number of industries because you do it in this way.
      I do hope we shall have, and I think we must have, some more accurate and better worked-out plan. The question of parts, for instance, is very important. I understand that some parts come largely, if not entirely, from other countries, and aroused on British cars. The British Government will tax those parts, which will then be used by British motor-car manufacturers, who in some cases will sell those cars to the War Office, so that the Government will pay with the one hand the duty which it is levying with the other. These are all little troubles connected with tariffs. I think we might try and avoid them. I was challenged the other day or, at least, I saw a statement, that in presenting figures from the Motor Trade Association, declaring that £16,000,000 of capital was employed and 30,000 men in the trade, that I had not much belief in those figures. I am sorry if I conveyed that impression. I have every reason to believe in those figures, and I understand that they can be absolutely proved. That is a very large amount, and it is a very serious question. Is this the right moment to go and impose this duty, or is there any reason for doing it? I can quite understand that the Cabinet, in the innocence of their heart, thought what a splendid thing it would be to stop people buying motor cars. May I point out that I know people who have big cars and who have actually bought American small cars in order to practise economy. It is very much cheaper to run a small car than a big car; therefore you discourage economy by compelling people to go round in big motor cars instead of buying the cheap cars. I saw the figures worked out the other day when I was being urged to do the same thing, which I did not do because I did not want to make the American exchange any worse.
      The right hon. Gentleman (Mr. Bonar Law), of course, is in a difficult position, and I am afraid his attempts to white-

      919
      wash himself to-day, and the support he has received very ably from the Chancellor of the Exchequer, may satisfy him, but will not satisfy anybody else. He has got here a protective tariff. He may as well frankly admit it. What the result will be after the War I cannot say. The right hon. Gentleman the Colonial Minister thought it would have no effect, though some of the journals which support that policy think otherwise. Personally, I prefer not to prophesy as to what is going to happen to any of us after the War. I think the War is so absorbing, and the results of it are so incalculable, that there is not much use in discussing what is going to happen afterwards. I do think it is a great pity to introduce all this trouble at this time, and surely it is trouble. The Chancellor of the Exchequer by these duties has evoked a great deal of feeling inside and outside the House, and having already abandoned half the duties on motor cars this after noon—
      Mr. McKENNAdissented.
      Sir A. MOND: Will it be a third?
      Mr. McKENNA: It may be.
      Sir A. MOND: Having abandoned a third, can he not abandon the other two-thirds? Does he really want to put us in the position of being opposed to him at this moment, and of having to stir up a controversy at this moment on the details of all the various duties on the different stages of the Budget? I cannot imagine that he or his colleagues really think what they are going to get by way of advances is worth all the trouble and all the heartburning they are going to be subjected to, not only here, but outside. After all, the right hon. Gentleman perhaps no longer receives those communications which he used to get as secretary of the Free Trade Union. If he did he would see how many of those who formerly admired and adored him are to-day regarding his action with pain and horror. He would realise how we are asked to conduct campaigns which we do not wish to do. Is that really the temperate spirit which you wish to introduce at this moment? Have you not got one controversy on your hands which is quite sufficient for you? Do you wish to raise another? I cannot believe you seriously do, and I think the more the right hon. Gentleman will examine the details of his duty, the worse he will find
      920
      them to be and the greater the difficulties will appear. He will have, for instance, to make arrangements for bonded warehouses and complicated arrangements for rebates. Where, may I ask, does he intend that the valuation should take effect? Is it at the port of landing or at the port of shipment? That point has not been made clear, and I have been asked about it by several people, because it would make a considerable difference. If you take the duty at the port of landing, you arrive at the extremely curious result, in the case of motor cars, of a different rate of duty according to the port at which the car happens to be landed, since the freights to the various ports differ. On the other hand, I do not see how the right hon. Gentleman can charge this duty on the price on the other side of the Atlantic. I wonder whether we could have an answer to the question as to the rebate on goods coming here to be re-exported. That is a question of practical importance. Is the right hon. Gentleman going to establish bonded warehouses to which these goods will be taken, or will the tax be taken at once? All these practical points will have now to be dealt with, and I do not envy the right hon. Gentleman his task. I would still advise him as a friend to drop these duties. He reminds me of a story of some French troops who had been in the trenches for a long time. They got bored and evacuated the trenches, so that the Germans took them, and then there was great joy when the Frenchmen attacked and drove the Germans out again. The right hon. Gentleman is evacuating the trench, but I must warn him that the retaking of a trench once evacuated results in very heavy casualties, and you very often do not get back again to the same position.
      Mr. MORRELL: I cannot help thinking that the right hon. Gentleman the Chancellor of the Exchequer deserves our sympathy. He finds himself attacked by all those with whom he has previously worked. He is attacked by every genuine Free Trader in the House and defended only by the right hon. Gentleman the Member for Wimbledon (Mr. Chaplin) and his colleague the Colonial Secretary (Mr. Bonar Law). After listening to the Debate on these duties I feel sure that the right hon. Gentleman must be asking himself whether it is really worth while to raise a controversy of this sort, and to cause all the trouble to which these duties must inevitably lead, for the paltry sum

      921
      which it is proposed to derive from them. We have been appealed to by the right hon. Gentleman the Member for Wimbledon, and by the Colonial Secretary, not to introduce domestic controversy at this time. Of course, we all feel that at a time when we are engaged in a struggle practically for national existence we ought at all costs to preserve the unity of the nation. But if there is controversy, on whom does the responsibility fall? Surely it falls upon those who for the first time for fifty years have thought it necessary to upset the system of free trade upon which the finances of this country have been based. It is the merest cant on the part of the Chancellor of the Exchequer to tell us that these are not protective duties. There duties mean Protection and nothing else. Some hon. Gentlemen opposite think Protection a good thing. I would ask those who believe in Protection whether this is a suitable moment at which to set up a protective tariff of this kind. I would put this case to the supporters of these duties. Supposing the Government had come down and said that in consequence of the War, and owing to the difficulties of the situation, they thought it necessary, while not for a moment desiring to raise the Home Rule controversy, to set up a Parliament in Dublin only for the duration of the War, and without in any way prejudicing the Home Rule question, what would the Ulster Members have said? They would have said that it was a breach of the honourable understanding that no subject of domestic controversy should be raised during the War. I say that this is just as much a breach of the honourable understanding between parties as the setting up of a Home Rule Parliament in Dublin would be.
      The right hon. Gentleman made a very elaborate speech in which he endeavoured to show, first of all, that these duties would make bread cheaper; secondly, that it was desirable to diminish imports, and there were objections to prohibition; and thirdly, that it was desirable to diminish luxuries, and at the same time it was impossible to put on an Excise Duty. The right hon. Gentleman answered himself when, taking up the words of the right hon. Gentleman the Member for Islington, he said that every politician is judged a great deal more by what he does than by what he says. The right hon. Gentleman will be judged by the fact that he is the first Chancellor of the Exchequer in recent
      922
      years who has thought it necessary—not for the purpose of raising revenue which could not be raised in other ways, but for no good reason which can be shown at the present time—to depart from the Free Trade system. I suppose it is no use-making more appeals to the right hon. Gentleman. A great many appeals have been made to him already, but he appears, not to listen to any of them.
      Mr. McKENNAdissented.
      Mr. MORRELL: I withdraw the statement that he does not listen to any of them. He does not take the obvious step of saying that he will consider the desirability of putting on an Excise Duty which appears to me to be the only way in which he can make these taxes tolerable, or of dropping the proposals altogether. If he cannot adopt either of those courses, at any rate let him say that before he introduces another duty of this sort—and there are other duties to come on later—he will consult the feeling of Members of the House of Commons rather more than he has done, and that he will avoid if possible, while the War is on, prolonging what must inevitably be a bitter controversy for which he and not we will be responsible.
      Mr. McKENNA: May I remind my hon. Friend that I was pressed to give up this tax because I had already given up such a large part of it. Yet my hon. Friend says that I am deaf to all appeal.
      Mr. MORRELL: I withdraw that.
      Mr. McKENNA: As regards the machinery of the tax, it will be exactly like the machinery in connection with any other imported article—manufactured tobacco, for instance. Arrangements will be made for a rebate just as in the case of any other article which already falls under our Customs law. I quite recognise, and had already recognised, the force of the argument in relation to tyres. The argument is entirely different from that on pleasure motor cars. I propose when we come to the Bill to exclude tyres from the ordinary definition of motor parts. As a matter of fact, in ordinary parlance it would not be regarded as a motor part, and it is only by a technical construction of the language that it is so included. I shall propose that it be excluded even from the technical language.
      Sir HENRY NORMAN: I do not desire to say a word on the fiscal side of the

      923
      question, partly because Free Traders, at Any rate, will agree that my right hon. Friend (Sir A. Mond) in his very able and genial speech has completely smashed the case put forward by the Chancellor of the Exchequer. I desire only to touch on three matters. The first is one raised by the remarks of the Chancellor of the Exchequer, and which has been raised for some time past by letters in the Press. It is said to be unfair to the manufacturers of British cars that at a time when they are patriotically engaged in devoting their works to the manufacture of munitions, American car makers should come in and steal away their market. [An HON. MEMBER: "Hear, hear!" If that were the case, the argument would deserve the cheer which my hon. Friend bestows upon it. But I submit that it is not the case. The American car manufacturer supplies, at a price at which it has never been supplied before, an article which meets a want in this country, and he had taken that particular market from the manufacturers of British cars through the British manufacturers' own fault before the War began. Therefore, that appeal, ad misericordiam, has really very little weight indeed. The second matter is in regard to the building of car-bodies in England. A great many so-called cars from abroad are chassis only. The bodies are built in this country. That is very frequently the case with the higher class French and Italian cars. I have seen it stated that all American cars come over here with American bodies. That is not the case. A great many people who, for reasons of economy, desiring not to be luxurious, and for other good reasons, buy American cars, prefer to have an English body at a slightly increased cost, although the whole car costs very much less than a corresponding English car. A great many bodies of American cars are made in this country. If these duties are enforced, they will at once throw out of work a great many persons engaged in building motor-car bodies in this country.
      The third point is one which I have raised in a question addressed to my right hon. Friend, but which, perhaps, it would be more convenient to raise now. It is with regard to American cars which are used for ambulance or other Bed Cross work. A great many of these cheaper cars are used not only for ambulance work —they are so used in large and increasing numbers—but also for many other pur
      924
      poses which may be described generally as Bed Cross purposes. For instance, to almost every Y.M.C.A. unit on the Continent, a large number of whom are doing work of the utmost value, one or two cheap cars are necessarily attached to facilitate the work. Moreover, there are very few hospitals abroad which have not these cheap cars attached to them, and they are absolutely necessary. The hospital with which I am more closely connected has no fewer than four, which are running all the time. These cars do very hard work, and, like all cars on bad roads, they rapidly wear out, and we shall have to replace them. Many other people will be in the same position. Does my right hon. Friend mean that we should pay a tax of 33⅓ per cent, on cars coming into this country to be taken immediately over to France for hospital purposes?
      Mr. McKENNA: They would not pay. There would be a rebate on export in any event. Even if they are not excluded specifically from the tax, they would get the drawback on export in any event.
      Sir H. NORMAN: I am much obliged. What will be the position of cars of this kind introduced for hospital work in this country?
      Mr. McKENNA: That is another point.
      Mr. LOUGH: Also cars for doctors?
      Sir H. NORMAN: Perhaps the Chancellor of the Exchequer would prefer not to answer that question at the moment. If these cars are to be excluded from the tax—and surely in justice they must be, because my right hon. Friend is right in saying that you cannot get British cars at the present moment—to have to pay a duty of 33⅓ per cent, on an imported foreign car for use as an ambulance in the service of sick and wounded men in this country, would be a very great injustice which I cannot for a moment think my right hon. Friend would contemplate. The Chancellor of the Exchequer has given way upon tyres—a very important item; if he again gives way on cars used for ambulance and Bed Cross work, how very little will there be left? Is it worth while troubling the waters to this extent—which really is a serious extent to many of the Free Traders in the country—for so little actual gain to the Exchequer?
      8.0 P.M.
      Sir A. MARKHAM: I am in thorough agreement with the proposals that the Government have put forward in relation

      925
      to these taxes. Take the question of motor cars, which I shall deal with first. My right hon. Friend who has just sat down has referred to the importation of French and Italian motor cars. He knows perfectly well—or ought to know—that practically no cars whatever are coming to this country to-day either from France or Italy. If there are a few, they are practically a negligible quantity. That statement is perfectly correct, for in point of fact nearly every motor-car works in France is working on munitions. Practically also every motor company in this country are doing likewise. During a period when the British motor-car industry is turning its attention to the making of munitions it seems a perfect outrage to allow American cars to come in and displace the trade which in the ordinary course of events, had the War not taken place, would have gone to British manufacturers. It is all very well to say that the British manufacturers are getting the benefit of working on munitions. That is not the point.
      The War will only be for a comparatively short period, and the manufacturer knows that after a car has once become established, and people like a certain car, which may have displaced his, it becomes very difficult to change that car for a car of an English type. I have always in my Constituency advocated it, and I have never met a working man in my life who was not in favour of the taxation of luxuries. I have had some experience of workmen, and they are in favour of the taxation of the luxuries which come into this country. Hon Members below the Gangway appear to me to come into contact with workmen who are in favour of allowing luxuries to come into this country. The hon. Member who spoke a while ago (Mr. Leif Jones) told us that the lace makers of Nottingham had petitioned him to urge upon the Government to place a tax upon imported lace. I have not the slightest hesitation in saying that I should vote for a tax on imported lace. But the right hon. Gentleman the Chancellor of the Exchequer would not thank me for saying that I am in favour of duties on imported goods. That is a view I have always advocated in my Constituency, and I have always said so in this House, so that I am not a heterodox Free Trader. Be that as it may, the Government are in the position of having, so far as they can, to regulate the exchanges. I do not say that these taxes are going to do very much in that direction. If they
      926
      assist at the present time they are, after all, helpful. On the general principle of protecting the manufacturers, at a time when their business is disturbed, and when you are going to hand over their trade to the Americans, they being engaged in the making of munitions, and being brought under the control of the Government, I support the Government. It is wholly unjust that you should not give to these manufacturers a reasonable protection in their trade for a period.
      What are all these arguments of the hon. Member for Swansea? He suggests that this country is going to be brought to ruin because of this vicious principle of taxation. The right hon. Gentleman knows Germany, better perhaps than most people, and he knows perfectly well that the whole prosperity of Germany, in fact, the prosperity of the whole civilised world, with the exception of this country, has been built up on the very principle to which he suggests the ruin of this country may be due. As a business man the right hon. Gentleman knows, so far as the effect on the dislocation of the Customs goes, which he put forward, and which hon. Members below the Gangway received with loud acclamation, those arguments are merely debating points, which the House of Commons can discuss. During many years I have heard all these small debating points on the fiscal question advanced time after time. But these points ignored altogether certain aspects of the case. Business man that he is, the right hon. Gentleman knows that in point of fact these principles do not in many cases apply in practice.
      I hope the Government are not going to give way about these taxes. I hope they are going to stick to what they have put in their Budget. If the right hon. Gentleman, or the Treasury, yields, he will not give satisfaction to many. He will not give satisfaction in my Constituency, where they are wholly in favour of taxation of luxuries, though they are wholly opposed to the taxation of the necessaries of life, or any other of the commodities which enter into the ordinary use of life. Representing, as I do, one of the largest industrial constituencies in this country, I have never yet known, or ever yet met, a single working-man—and I repeat what I said before—who was not in favour of the taxation of luxuries, and as these are taxes on luxuries I do urge the right hon. Gentleman to stick to his Budget and not to give way to these people who are raising

      927
      these questions. They are not discussing these matters merely on their merits, but on the point as to who is going to gain a little bit one way or another—Free Trader or Tariff Reformer! The merits of this question are not being discussed in the country. The people are not talking about motor-car taxes. Only the people who are interested in the trade are talking; others do not care twopence about the matter. To say that the country is boiling with indignation over some of these taxes, as the right hon. Gentleman the Member for Swansea wishes us to believe, is pure nonsense. There is no agitation in the country whatever against these taxes. The only tax in the Budget that I find people object to is the tax on sugar.
      Mr. LLEWELYN WILLIAMS: I congratulate by hon. Friend who has just sat down on the frank honesty of his speech. He has told us in so many words that this is a Protectionist Budget. These, he said, were Protectionist proposals. He says frankly that every other country except our own has thriven on a Protectionist basis, and frankly that he is in favour of these taxes and of this Tariff Reform, because, I suppose, he wants to introduce into this country, amongst other Prussian institutions, a scientific tariff. I am glad that my hon. Friend has been frank, as he always is.
      Sir A. MARKHAM: That is just what I did not say. I said I was in favour of a tax on luxuries.
      Mr. WILLIAMS: My hon. Friend went further. I understood him in so many words to say that the prosperity of Germany and other countries was based on their tariff systems. If that means anything—of course, my hon. Friend does not reason the same point very long—but if his words meant anything, they must have meant that the Protectionist system of trade in this country, in his opinion, was a better system than the Free Trade system.
      Sir A. MARKHAM: May I interrupt my hon. Friend? What I said was, referring to the prophecy of the dire results from these taxes of the hon. Member for Swansea, that the right hon. Gentleman very well knew that the whole prosperity of the world, except this country, has been built up on a Protectionist basis.
      Mr. WILLIAMS: My hon. Friend suggests his belief that if we adopted a Pro-
      928
      tectionist system in this country no dire results would follow?
      Sir A. MARKHAM: Hear, hear.
      Mr. WILLIAMS: That is just what I am endeavouring to say. On the other hand, we Free Traders have always held, and I hold strongly now, that Protection is a bad thing as a matter of business. It is not a question of mere theory. It is not a question of this fiscal theory or the other fiscal theory. It is a question of fact, and what is the best thing for the business of this country. What we have always been told, and what we have always believed during some scores of years now, was that this country has been prosperous, and it has become the wealthiest country in the world because of our Free Trade system. That is why we object very strongly, not to the question of these taxes so much—because that is a very small matter—but because the proposal introduces a principle which it will be very difficult for us unless we protest against it now, to oppose in future. I have no doubt that the speech of my hon. Friend will be used against him if he ever comes forward again as a Free Trader.
      Sir A. MARKHAM: I have always said it.
      Mr. WILLIAMS: I confess I have heard my hon. Friend speak perhaps oftener than most of the other private Members of this House, and I will pay him this compliment: I never heard him make the same speech or use the same arguments in favour of any proposition for long together. He said that there were no French motor cars imported. I understood that only a short time ago the French Government gave effect to an arrangement to enable manufacturers of French motor cars to export them to this country, and so keep up the connection of that industry in this country. If that be so, what answer are we going to make to our Allies when they make representations to us? Are we to tell the French Government that they have been spending money in vain? They did not merely arrange this matter for a short period. That Government are not merely carrying on the War as my hon. Friend and some other Members in this House seem to think. The French Government are looking forward to what will happen afterwards. You will have to live after the War, and the French Government say, in order to carry out what

      929
      they are doing and to keep up this trade connection in England—which is a very valuable thing for their manufacturers—that it is worth while to keep trade alive during the War. The French Government are willing to spend public money in order to keep this trade connection alive during the War in order that when the War is over they may be able to enlarge their trade. If, however, this proposal of the Chancellor is carried out in its entirety, if there is no system of rebate or something of the sort to enable our French and Italian Allies to send their motor cars to this country, that connection must be jeopardised. All the Government is going to do is to help the American motor car industry, because we are told by many hon. Members that we are not producing any motor cars here. This imposition of 33⅓ per cent. ad valorem tax will stop the importation of motor cars from France and Italy. Therefore, all that it would mean would be that we should be importing all our motor cars from America at the expense of ourselves, at the expense of France, and at the expense of Italy. I do not think my right hon. Friend really means to do that, and I think it would be a very unfortunate result if that were to happen. And why? I have listened to my right hon. Friend in his new role of apologist for Protection. I have heard him on many occasions defend the Free Trade system when his acute mind was brought to bear on our fiscal system. My right hon. Friend convinced me so thoroughly as to the value of Free Trade principles in the past that this sudden conversion on his part to the advocacy of Protection has failed to convince me to the contrary. What are the arguments he has adduced in favour of these proposals? First of all, he says we want them for revenue purposes. Well, if revenue is going to be derived from them, there must be an importation, and there must be an importation on a very large scale. The revenue is so small I can hardly believe that that is my right hon. Friend's motive in introducing these strange taxes. Then the Colonial Secretary says that these are "sumptuary" taxes. Who are the people who purchase Ford motor cars? No rich man would be seen in a Ford motor car. My hon. Friend opposite (Mr. Houston) laughs. I should like to ask him if he has ever bought a Ford motor car for his own private use.
      Sir A. MARKHAM: I have, and found it not at all bad.
      Mr. L. WILLIAMS: I am asking my hon. Friend opposite, and he has not dissented. I say the ordinary rich man in this country—and I put my hon. Friend (Sir A. Markham) on one side in a class by himself—never buys a Ford motor car. Who is it buys a Ford motor car? Professors in university colleges, doctors in country practice—those are among the people. These are not luxuries to them: they have become necessities. To small tradesmen in small villages and towns who have grown accustomed to carry on their business by means of these cheap cars, they are no longer luxuries, but are necessaries, and they cannot carry on their business without them. Those are the people who will be hit by this tax. The rich man will not care if he has to pay another 33⅓ per cent., but the people I have mentioned—people with small salaries, or whose income is limited—will care very much. They have done away with horses for years, and have been carrying on their business and their practice by means of these motor cars. I say it is unfair that those people, who are very badly hit already by other portions of the Budget, should be further hit by this Protectionist tariff.
      It does seem to me there is great force in what the right hon. Gentleman the Member for Swansea pointed out, that when you consider the huge volume of our import trade from the United States, this question of two and a half millions really would not appreciably alter the rate of exchange. But my objection to this is much more profound than my objection to the practical side. This is a gratuitous introduction of a very acute controversy, which we had hoped had been laid during the War. What did the Prime Minister say when the Coalition Government was formed? What was the object he had in view? We on this side did not disguise the fact that we did not welcome the formation of the Coalition Government, but we accepted what the Prime Minister said in the spirit in which he said it. On 15th June he said that the object of the formation of this Coalition Government was
      "to obliterate all distinctions and to unite every personal and political, as well as every moral and material force in the prosecution of their cause."
      How can it be said that the introduction of this acute controversy is going to unite every personal and political, as well as every moral and material force? I say we are constantly on this side being asked to give up one cherished principle after an-

      931
      other, and if we protest, then we are told, "Ah, well, you are raising a controversy; you are raising a clatter and a racket which you ought not to do." I think it is high time that we who have been faithful and loyal followers of the old Government, and who have loyally supported the Coalition Government ever since it has been formed, who have never tried to embarrass the Government in any shape or form, should ask my right hon. Friend, who knows what I have said is true, not to ask us to continue giving up our principles, but to leave some of the old secular controversies aside, and not gratuitously to raise issues which we hoped had been laid in peace during the continuance of the War.
      Sir RYLAND ADKINS: I think those of us who have had the pleasure of hearing the Debate this afternoon will have found, I will not say our minds made up, because possibly they were made up before, but the point of view from which we regard this controversy clearer than ever, and our resolution on the subject stronger. I have listened, as we all have, to the unparalleled clarity and ingenuity of the Chancellor of the Exchequer, and he really deals so delightfully with an impossible position, that one does not know whether to condole with him on the position, or to congratulate him on his achievement in it. It is no disrespect to him to say that the most interesting and most enlightening speech this afternoon was that of the Colonial Secretary. He told us, with a clearness of expression we all envied, that this had nothing to do with any pressure of the leaders of that great party which has been accustomed for so many years to sit on that side of the House. If it had been due to that, I think many of us would have been inclined, out of pity, to have looked upon this proposal with almost a favourable eye. All of us recognised that when these eminent Gentlemen found the opportunity come, or made the opportunity, or in any other way we do not know, took their share in the government of the country, it was bound to make a difference. Who among us, Free Traders though we be, could have grudged them some anodyne for the unsuccessful agonies of years? Therefore, if the Colonial Secretary had said that this was put in the Budget in order to meet the conscientious view of a very large and important section of the Government, we should have felt the
      932
      weight of that argument, however unpleasant it was for us to listen to it. He told us quite another story, and he says that he has nothing to do with it. He says that, so far as he knows, his party have no special responsibility for it, and that the suggestion of this tax came from the Chancellor of the Exchequer.
      Mr. McKENNA: I think my hon. Friend must have misunderstood the Colonial Secretary. I do not think he suggested that these taxes came from me. I think he referred to the Motor Car Tax. I do not want any misconception of anything that was said, because the Colonial Secretary's observation only applied to the Motor Car Tax.
      Sir R. ADKINS: I refrain from asking who was the person who suggested the taxation on foreign motor cars, and I doubt whether it is a wholesome thing that we should know it. What remains is that the Cabinet are responsible for it, and we are told by the Colonial Secretary that he and his Friends were not responsible for it. We understand that it came from the Chancellor of the Exchequer before any of the leaders of the great party to which I have not the honour to belong had even conversed with him about it. If that is so, whoever heard accents more persuasive than those of the Colonial Secretary. If that be true, surely one of the greatest arguments for these taxes has absolutely disappeared. We were prepared to pay a considerable price for what are supposed to be the unspeakable benefits of a Coalition Government, but now we must look at the result from the duller, more ordinary, and less interesting point of view as to how it will effect the financial welfare of the country. If it be true, as the Colonial Secretary suggests, that the Chancellor of the Exchequer is the only parent of this tax, then all I can say is, that when my right hon. Friend turns his Free Trade principles out to grass in this way, he reminds me of the great magnate once turned out to grass, of whom the poet wrote:—
      "He murmured as he mouthed the unwonted food, It may be needful, but it is not good."
      We cannot believe that we are hurting his feelings, however much we differ from his judgment, when we say that we do not see our way to follow him in regard to this, which is the only great blot on one of the best Budgets ever presented to this House. Why do we call it a blot? Why do we express the same attitude of mind? Not because we think these particular taxes

      933
      are going to do a great deal of harm, but we do it because we think they are going to create a state of mind in the country of criticism which it is not in the interest of the country to have created when it is in the most critical part of a great war. I spent the last week-end in Lancashire, not discussing fiscal matters, but in trying to promote recruiting, and I hope I am not doing wrong in saying here that I was very much impressed by the strength of the feeling and the vigour of the judgment of persons with whom I had been in the habit of acting for years, and on whose intelligence and bona fides I could place absolute trust with regard to these taxes, which are awakening very strong feelings and very strong disappointment and regret.
      What do we find? We find that they are now whittled down to very little indeed, because one concession after another has been made. I am not one of those who take concessions for the purpose of criticising in a hostile spirit, but these concessions have really whittled down this tax to next to nothing. If it is for the benefit of the country to have sumptuary taxes—and I am trying to agree with my hon. Friend that it is a good thing—let us have sumptuary taxes that press all round and are substantial. If you have a sumptuary tax which keeps out foreign articles of luxury, let us also have an Excise which deals with home-made articles of luxury, and let us do it thoroughly and well. We are not now dealing with a tax of 33¼ per cent. on imported motor cars, but with a fragment of that tax, and if we conscientiously feel obliged to withhold our support for the full tax, can we be expected to go into enthusiastic delight over the ghost of that tax which is left? If it be necessary to raise taxation in this way, surely a great deal ought to be raised. My right hon. Friend knows the lines—
      "Virtue, I grant you, is an empty boast,
      But shall the dignity of vice be lost."
      If the principles of Free Trade are to be broken, let us have them broken for an adequate result. If the country is in a position which demands the putting aside of ordinary rules, methods, and principles, let us at any rate get in return great help from such taxation and great and severe discipline and stimulus towards economy. But this tax and its allied ones do not effect that purpose. They do not have such an effect as would counteract the breaking down or the violation of this theory, and would not counteract the serious state of feelings which the introduction of this tax
      934
      has brought about. Now that we know from the Colonial Secretary that he has no special sympathy with them, and that if he had had to do them he would have done them differently, surely no one will be heartbroken if my right hon. Friend, after full consideration, thinks that the state of feeling and opinion in the country is such that the withdrawal of these taxes would be in the long run wiser than the insistence upon them. That is all I wish to intrude upon the House at the present moment, and I should not have done that if I had not felt that the indirect effect of these proposals is greater and more harmful than any benefit which is likely to result from them.
      Mr. J. M. HENDERSON: As I listened to the Chancellor of the Exchequer to night he reminded me very much of a strong man struggling with adversity, because the groundwork of his arguments were mutually contradictory. First of all he said that he wanted revenue, and then that he wanted to prohibit luxuries. Then he said he wanted this tax to put right exchange. The Chancellor of the Exchequer is an old Free Trade orator, and he knows perfectly well the dilemma in which you put the Tariff Reformer when you tell him that you cannot get revenue by his proposal. If you keep out motor cars by this tax you cannot get the revenue, and therefore you must either have the revenue and the luxury or no luxury and no revenue When he came to speak of the exchange I really thought that it was the weakest argument I had ever heard. The American exchange cannot be affected by this to any extent. It is quite a drop in the ocean. The American exchange will right itself only in one or two ways. You must either increase your exports beyond your imports or Americans must buy up their own stock from this country. They are doing that very largely now. American railway stock is being bought up largely in America by the money which they are receiving in exchange for munitions. It will right itself in that way to a very large extent, because there is very little buying of American railway stock in this country. I see from the American exchange that American railway stocks are almost up to the pre-war figures. Then there is this loan of over £100,000,000. You will relieve the exchange to that extent. You want to keep these things out, and, that being so, the amount that you would possibly get after the deductions which you have very reasonably

      935
      made would be infinitesimal. If it is a million or a couple of million, it is very little good, except pro tanto.
      Mr. McKENNA: It is much more.
      Mr. HENDERSON: The imports amount to only £5,000,000.
      Mr. McKENNA: The imports for eight months are over £5,000,000. The estimate made for the year is something like £8,000,000. We estimate that the effect will be to reduce the imports by half, and the reduction of £4,000,000 worth of imports will make a very great difference in the exchange. With regard to the balance of £4,000,000, that is quite an item worth taking into account.
      Mr. HENDERSON: Why not go the whole length of the £8,000,000, and prohibit them altogether?
      Mr. McKENNA: You cannot.
      Mr. HENDERSON: Do not let us jump from revenue to exchange. You say you are going to reduce the imports by £4,000,000. Then you are going to reduce that amount further by your concessions in respect of lorries, and so forth. That brings you down to £2,000,000. A third of that amount is £666,000, and that is not worth troubling about. My right hon. Friend says that this is not Protection. All Free Traders that I know are of quite a different opinion. The paper that has largely fought for this for years—I refer to the "Morning Post"—rejoices in it as a first step, and it is idle to say that people do not think it is. All the protestations of my right hon. Friend will never convince us that this it not an injurious step which he is taking. We were under the impression that this was a tax which had been rather forced upon my right hon. Friend from the fact that there were Tariff Re-formers in the Cabinet, but we have the head and front of the Tariff Reform movement coming into the House and saying, "These are not the taxes I would have imposed." "I do not want them," he says in effect. "You can take them off." If he did not say so, at any rate he led the House to understand that it would not offend him very much if the whole thing were taken away. My right hon. Friend was not here, and I assure him that I am not likely to misrepresent what the right hon. Gentleman said. That was the impression the right hon. Gentleman left upon the House. It will only make it
      936
      easier for my right hon. Friend to withdraw them. If by withdrawing them he does not offend any Tariff Reform member of his Cabinet, then for Heaven's sake withdraw them. The Liberal party throughout the country will look upon this as a first step towards Protection. You may set aside motor cars as something rather particular as an element of luxury, but you cannot say the same as regards glass, hats, and the rest of it.
      Mr. McKENNA: We will deal with those articles when we come to them.
      Mr. HENDERSON: This is clearly protective, and we could not go forward at the next election, when all parties get back on to their old platforms, and say, "We will have nothing to do with this thing. We cannot agree with it." We should be taxed at once: "You agreed to these things. You agreed to similar taxes." It would be no use saying it was under certain circumstances. That is the fault of those who bring these matters forward. The bedrock of the stability of the Liberal party, and the fundamental part of our success, was our strong and inveterate objection to anything in the shape of a tariff. We came here in 1906 on that ground, and we have steadfastly and strongly supported Free Trade all through. We have never deviated from that policy. My right hon. Friend said that he did not want to be judged by words, but by deeds. It is a very good thing that he does not want to be judged by words, because we could quote to him speeches that would make him blush at the present time. I will go behind him, and quote the Prime Minister himself. The Prime Minister, in his great speech at the Albert Hall in November, 1909, said:
      "What we are concerned to prove is that while protection was injurious in the days of our grandfathers, a revival of protection in any shape or form to-day would be not only most injurious but fatal to the productiveness of this country, to the wealth and comfort of the people, and to our competitive capacity in the markets of the world."
      That is where we stand to-day, and I for one will not have it said of me, nor should I like it to be said of the Liberal party, that we allowed ourselves to be associated with this insidious inception of that against which we have all along preached.
      Mr. DENMAN: I do not want to repeat the arguments which have been already so admirably put from both sides of this House urging the Chancellor of the Exchequer not to proceed with the duties referred to in this Resolution. I would only

      937
      express my agreement with three arguments that have been adduced. Firstly, that as a sumptuary tax this particular tax is exceedingly badly devised. I should personally support the Chancellor of the Exchequer most heartily in the imposition of any vigorous tax that would really lessen the use of motor cars for private purposes at the present time. But this tax will not have that effect even in a very slight degree. The people who at present own cars will be in no way hindered from using them to their utmost capacity by the tax now proposed to be imposed. Secondly, I agree entirely with those who urge that the game is not worth the candle. Surely this is not the time to introduce controversial taxes to produce so very small an amount of money. Finally, I agree with the general argument that the cars that will be given up as a result of this tax are precisely those which, on sumptuary grounds, ought to be allowed. Everyone must see that the useful cheap American cars are for people who cannot possibly afford the more expensive cars of English make, and to choose this moment to prohibit the use, as in many cases this tax will do, of the cheaper car and leave the field open to the more expensive car, does not appear to me to be a sound method of procedure.
      My real object in rising was to put a specific question to the right hon. Gentleman. I want to ask at what date he proposes to start the levying of this tax? As he said in his speech, it would be very convenient if a good deal of the discussion on the details of these taxes were postponed to a later stage of the Bill, provided, of course, that the collection of any duties under this Resolution is also postponed. I agree entirely it would be a most convenient method of procedure. But it is important that the Chancellor of the Exchequer should realise, which no doubt he does, that he will have no legal authority to collect the taxes on the date mentioned in the Resolution even if we pass this Resolution to-night. Earlier this afternoon I raised the same point in connection with another tax. It would perhaps be superfluous to suppose that the Chancellor of the Exchequer would encourage any illegal act on the part of his subordinates. At an earlier stage he assured me he was not collecting the new duty on glucose manufactured in this country, for which he has no statutory authority, but if he will inquire of the manufacturers of glucose he will discover
      938
      that since last week duty has been levied at the rate mentioned in the new Resolution, although that Resolution has no statutory effect. Therefore, I do urge the Chancellor of the Exchequer very strongly to state most definitely to the House that he will not proceed to levy these duties until the moment comes when he is legally entitled to do so. That moment will be when the Finance Act receives the sanction of His Majesty. If he will give us that assurance, I hope the House in general will agree that the Debate has served a very useful purpose, and that it can be resumed at a later stage; but if the right hon. Gentleman were to propose to commit the illegal act of levying the tax to-day, as the Resolution would seem to anticipate, and to-morrow and onwards, then I think there are many of us who would feel that we ought to take our opposition as far as the Rules of the House will permit.
      Mr. DUNDAS WHITE: I desire, in a few words, to add my voice to the appeal which has been made to the Chancellor of the Exchequer regarding the imposition of this tax at such a time as this, engaged as we are in a great war. It does seem a thousand pities that an apple of discord should be thrown down here to create divisions among ourselves for the sake of an amount of revenue which, compared with the new revenue to be raised, is absolutely trifling. I admit I had thought there might be considerable difficulty in the way of any recall of this tax, on the ground that it had been inserted in order to meet the views of those Members of the Cabinet who are associated with the Protectionist movement. No one recognises more fully than I do the importance of not doing anything that may cause a split in the Government. But after the speech of the Secretary of State for the Colonies we see there is no danger to be feared from that quarter, and I think I am fairly interpreting what the right hon. Gentleman said when I state that he disavowed the parentage of this tax and any parental affection for it. Therefore, the withdrawal of this tax will not cause any split in the Coalition Cabinet.
      I was much surprised at many things in the speech of the Chancellor of the Exchequer. There was one point which appeared at first sight to carry some weight, and that was that, after all, this was not the time to discuss the principle of this tax and that the particular proposal should only be discussed on its merits. That is an argument which I have very often

      939
      heard from those who have never even called themselves Free Traders. After all in a country and in a Parliament like this, which to a great extent determines not only the system of taxation for this country, but the system of taxation for India and the Crown Colonies, it is as well, when you are departing from fundamental principles, to consider the principle itself. It is no answer to say that this is only a small tax or only a temporary tax. The fact is, when you make such a departure you raise the whole question of principle, and those who differ from you are entitled to have that question of principle settled after free debate in which it can be fully discussed.
      There was another proposition made on which also I should like to say a word. The right hon. Gentleman said more than once, "We only ask for this tax just now. Next year if the question comes up again you will have your hands perfectly free to vote as you like." But the facts do not bear that out. If you make a new departure you create a precedent. If you set up a system of taxation, if you protect certain home industries by a tariff of 33⅓ per cent., you will find that under that protection vested interests grow up, and when you have to face the question next year you are not dealing with matter de novo as now, but you find those interests which have grown up under that protection come to you and say, "We will be ruined if you remove the duty. When it was put on we understood it would remain, as many of its supporters desired. We have embarked our money in it; we are putting capital into these industries. You will ruin us if you withdraw the duty." We have had that argument used from these benches to-day in the case of tobacco.
      Mr. McKENNA: Does my hon. Friend seriously say that capital is now being embarked in this country in the motor car industry? Does he seriously suggest that?
      Mr. WHITE: I suggest this, that if for the time mentioned in this Resolution, you once impose a duty of 33⅓ per cent., or any other protective duty, then under that protective duty, vested interests will arise, and that those vested interests will form an abiding difficulty if at a future stage you attempt to remove that duty. You can find it stated much more clearly and completely than I can hope to do in many a Free Trade
      940
      pamphlet issued by the Free Trade Union, that vested interests is one of the greatest dangers. If it had not been for the appeal of my right hon. Friend that questions of detail should not be asked, there are certainly two questions of detail I should like to put to him. Without pressing him for an answer, I suggest that these are only a few of many other questions which arise, and I know various others have already been put. Let me put these two. How are you going to distinguish at the stage of importation whether the chassis is to be used for Red Cross work in France, or for Red Cross work in this country? How do you know what kind of body is going to put upon it, or how it is to be used? What are you going to do? Is a car to be kept in bond, or is every car to be labelled or marked in some way so that you can trace it? I wonder if that question has been thought out.
      9.0 P.M.
      There is another question. This is a tax upon accessories, not only of motor cars, but of motor bicycles and of motor tricycles. It is common knowledge that a great many of the accessories, including nuts, bolts, brakes, lamps, and a number of detailed accessories of motor bicycles and motor tricycles are the same as those used on ordinary bicycles and tricycles. When these things come into the country how will you know for what they are intended? Are they to be taxed, and is a rebate to be allowed if they prove to be non-taxable articles? Such a system will involve an enormous amount of labour, a great deal of friction, and a great deal of waste. There is one other consideration, and the House is entitled to an answer to this question. We are now engaged in a great War, fighting on terms of the closest intimacy with our Allies in the Entente. There is no question about it that before the War we were receiving from France and Italy a considerable number of these chassis and cars it is now proposed to tax. Questions have been raised as to what extent they will come into the country. As to that, I cannot say, but there will be no doubt about it after the War is over, that they will begin to come in again. Is it wise, when we are so desirous on being on the best of terms with our gallant Allies, that we should put a tax on things of that class, which under normal conditions they manufacture, and which we hope they will soon be manufacturing again? I really suggest to the Chancellor of the Exchequer that there should

      941
      be a special exemption for cars and accessories which may come from our Allies. I wonder if the Chancellor of the Exchequer would add that to the other concessions he has made. I suggest to him that it is worthy of consideration. It is to me very disappointing that this question has been raised. It seems to me it has been raised most unnecessarily, and for no adequate purpose. We have just embarked in another great discussion, which happily has been stilled for the moment. I could wish that this discussion was stilled by the removal of the cause of the discord, and to remove the cause of discord the proper course is to withdraw these proposals.
      Mr. J. M. ROBERTSON: In joining in the appeal that has been made from various parts of the House to my right hon. Friend, I feel bound to dissociate myself from some of the arguments that have been brought in support of it, not from those brought by my hon. Friend who has just spoken, because the considerations he urged seemed to me extremely powerful. I have difficulty in seeing how my right hon. Friend can resist the arguments that he has put, and, indeed, some other arguments also. On the other hand, I listened with certainly a good deal of entertainment to the brilliant speech of my right hon. Friend the Member for Swansea (Sir A. Mond) and with some astonishment to some of the arguments of a serious kind that he employed. The ground of his case at the commencement against the setting up of what he called a tariff on this question mainly rested on the fact that a tariff in operation, even to this extent, is a difficult thing to work. That the argument of mere difficulty should be used in War time, especially by my right hon. Friend, who is prepared to face some difficulties in administration on another question did, I confess, astonish me. We are to decide which of all the workers in the country are to fight, and which are to stay at home; which industries should go on, and which should be stopped. When my hon. Friend is prepared to face such difficulties as that it is a little astonishing that he should think the mere difficulty of a tariff is a ground for opposing it. As to the painful character of the controversy that he said was aroused, pain is notoriously a thing difficult to measure, but my right hon. Friend has been so ready to inflict pain and controversy in other directions, that
      942
      I am unable to attach any serious weight to his deprecation of these fiscal proposals on that score.
      I am myself, I suppose, a good deal of a Free Trader, yet in War time the mere consideration of the fact that we are making a technical breach in Free Trade practice would not in the least deter me from assenting to a set of taxes if I thought they were of fiscal use. In war time all other considerations go, and that is the reason why I view with perfect tolerance my right hon. Friend's proposals. If you tell us that you need to get revenue in this way, or need in this way to do something which is of economic importance towards the maintenance and the carrying on of the War, I should not ask seriously whether this is the thin end of the wedge. If you could not drive out that thin end afterwards I should not have much confidence in our power of resisting its re-introduction. I should never ground an objection to these taxes at all on that score, if they had the validity or any of the virtue that my right hon. Friend seemed to impute to them in making his proposals in his very admirable and lucid Budget speech. But if I understand him aright the only motive for these taxes on imports was sumptuary, and that he wanted to restrict useless and luxurious consumption. That is an obviously right motive in war time. The waste that still goes on in a hundred different forms is deplorable, and i£ the waste can be effectively checked by fiscal measures, well, let fiscal measures be employed! I am prepared even to go to this extent: I see the waste of butcher meat that goes on in this country among the masses of the people, who are the most wasteful in consumption of butcher meat of all people in Europe, that if we should come to the pitch at which it was seriously necessary to restrain that, I should theoretically be prepared to contemplate even a duty on meat, putting it solely on these grounds. I do not think my right hon. Friend sees any possibility of action of that kind, but if I could contemplate theoretically such a measure as that I could contemplate theoretically the imposition of a tax on certain other forms of imports.
      But as my right hon. Friend has pointed out, this tax is going to be the most un-economical method possible of checking it. The machinery for the collection of it will itself be economically wasteful, and I know that my right hon. Friend, who is an economist through and through, realizes

      943
      the inexpediency of fiscal measures which in themselves mean a waste of effort, a waste of staff, and a waste of money. That is one of the grounds on which I deprecate his taxes altogether. I have been unable from the start, strongly disposed as I am to take a sympathetic view of any finance he proposes, to see that these taxes are worth putting on. May I put what seems to me the real criticism of his suggestion that we must put a sumptuary check on wasteful consumption. The true way to restrain wasteful consumption in the running of motor cars is deliberately to limit the licences issued for motor cars, and I seriously think we may have to come to that. In the first place, while there is a great deal of talk of the number of men of military age who might be available for the Army, there can be no doubt that a large number of men of that age are being employed as chauffeurs for a purpose which cannot be called economic. In the conduct of such a serious War as this it would be a perfectly reasonable and just measure, both towards the releasing of men of military age and towards the limiting of wasteful consumption, to make a register of all the motor cars of the country. I do not think that was done in the Government's Registration Bill, which was looking into the nation's resources in the matter of persons of both sexes and all ages. If the Government would make a register of all the cars in the country and set up a machinery to take a decision as to which of those cars need be in use, in that way you could restrain the wasteful use of petrol and at the same time release a number of men of military age. A restriction was placed in Germany, I believe, very soon after the outbreak of the War on the use of motor cars, and that is a measure which could be absolutely justified even without contemplating any of the measures of compulsory Conscription which have been put before us. At all events it is a perfectly fair and economic way of doing what is wanted. If too much petrol is being consumed merely in the luxurious use of motor cars, strike at it directly by calling in all licences and reissuing only the licences that it is in the public interest to have in use. That is a just mode of control. It is really a more conscientious mode of control than any kind of indirect limitation you can make by merely making motor cars more expensive, and in doing that it seems to me you will at once secure your end in a way that
      944
      involves none of the hundred and one very serious difficulties which have been indicated in the criticism put by a number of my hon. Friends.
      As to some of the other taxes, I have never been able to form any serious opinion why they were proposed at all. I presume the reason for the tax on headgear was the sumptuary motive. In that case also I desire to check luxurious, wasteful expenditure, but the total amount of expenditure involved was so trifling in comparison with the amount of expenditure on other forms of gear of all kinds that it was difficult to see why in this momentous Budget, this historic Budget, dealing with the greatest masses of revenue and expenditure that any Chancellor has ever dealt with, I am afraid the greatest which will ever be dealt with, that trifling item of headgear is introduced into the taxation at all. I do not know that there will be any such difficultes in that case as were shown to be involved by various speakers in the case of the duty on motor cars and parts of motor cars. There will be no difficulties, but the thing was really not worth doing; and when we come to musical instruments, I think if you have to give up as much as you have given up on motor cars, and if you realise, as I think this House realises, that hats were not worth touching, I do not think there is any serious case to be made out for the taxation of imported musical instruments. After all, if there is any form of luxurious expenditure involved about which you need have less scruple, it might be in regard to music. I do not mean to say that the instruments imported as a rule make much for higher musical culture. The imports of articles which I have heard spoken of as coming under the operation of the proposed taxes I frankly confess are not things that I myself want very much to admit. There again you affect instruments of all kinds. There are none coming now from Germany, and you affect imports of musical instruments from some of the Dominions.
      Mr. DEPUTY-SPEAKER (Mr. Whitley): I am afraid other hon. Members will want to follow the right hon. Gentleman. He is travelling over a number of Resolutions. He must keep to one at a time.
      Mr. ROBERTSON: I conclude by saying I earnestly trust that if all the arguments I have brought before my right hon. Friend have not been relevant, he will at least recognise their total force.
      Mr. McKENNA: With the leave of the House I should like to make one or two observations in reply to the speech of my right hon. Friend, which I am sure we shall all have listened to with very great pleasure. He recognised, as I have endeavoured to recognise from the first, that we are not discussing this proposal as a tariff measure under ordinary peace conditions, but that the circumstances of war, which are quite exceptional, give an aspect to the tax which it would not and could not bear in peace. The criticism against the tax was directed to the merits of the proposal itself quite independently of any fiscal theory. No one will doubt the loyalty of my right hon. Friend to the principle of Free Trade, and I hope no one will doubt mine. My hon. Friend (Mr. Denman) raised the point that we do not in this Resolution give the usual words taken from the Provisional Collection of Taxes Act, 1913.
      Mr. DENMAN: I did not raise precisely that point. I said my right hon. Friend had no power at all. I quite agree that you cannot put these words in and give yourself power.
      Mr. McKENNA: That is the point I am coming to. My hon. Friend drew attention to the fact that these words are not in this Resolution, and argued from that that we have therefore no power to collect the tax until it is embodied in a Statute. I do not agree with him. We could not have inserted these words under the Provisional Collection of Taxes Act, because that Act only applies to Resolutions providing for the variation of existing taxes, or for the renewal for a further period of any tax enforced, or imposed, or proposed during the previous financial year, and as this is a new tax it does not come within the purview of the Act of 1913.
      Mr. DENMAN: The right hon. Gentleman will recollect that when the Government introduced the Provisional Collection of Taxes Bill there were words that made it apply to new taxes. An Amendment was proposed omitting the words applying the Bill to new taxes, on the ground that it was exceedingly undesirable that the Committee should have power to give statutory effect at all to new taxes. This Amendment, proposed by the hon. Member for Falkirk Burghs (Mr. J. Macdonald), was accepted by the present Chancellor of the Exchequer on behalf of the Government. I have here his own words.
      Mr. McKENNA: My words?
      Mr. DENMAN: Yes.
      Mr. McKENNA: Quote them.
      Mr. DENMAN: I will quote only the concluding words:—
      "I agree with him that we have to look in this case beyond the possible loss and the possible inconvenience to the public, to the much larger question as to whether a tax which has not yet received the sanction of Parliament should become operative as a tax until such sanction has been given."—[OFFICIAL, REPORT, 14th April, 1913, col. 1713.]
      That is to say, the right hon. Gentleman was convinced that it was not desirable in the case of new taxes that a mere Resolution of the House should give that statutory sanction which was given by the Bill under discussion to existing taxes, and he concludes:—
      "On behalf of the Chancellor of the Exchequer I propose, therefore, to accept the Amendment."
      The statute, as he says, relates merely to existing taxes.
      Mr. McKENNA: The hon. Member is perfectly right in his recollection of what took place, and the quotation which he has given is quite in point. Nevertheless, that does not deprive this Government or any Government or Parliament of the powers which in fact exist. It is quite true that under the former practice it was customary to levy the taxes upon a Resolution of the House, and it was believed that the practice had given the equivalent of statutory effect to the Resolution of the House. That is quite true. It is quite true that the power to levy the tax remains now what it was before. Whether there is authority behind the power now, it is no more possible to say now than it was possible to say then. Whatever authority there was then, which was assumed to exist then, and which had been assumed for a great many years, exists still.
      Mr. DENMAN: The right hon. Gentleman will remember that the whole of the Debate on that occasion was to define very clearly what the powers should be hereafter, and the whole point of the Amendment, whereby words were omitted, was to exclude new taxes from the operation of this Bill that gave the Committee power to give statutory authority for the collection of taxes before it was passed.
      Mr. McKENNA: The hon. Member is perfectly right. That is under the Provisional Collection of Taxes Act. I am not claiming powers under that Act. The hon. Member is also perfectly right if he says that suppose to-morrow the Customs,

      947
      under this power, choose to collect the tax, and any person chooses to resist them, we cannot enforce the payment of the tax. It will probably be found, however, convenient, both for the Customs and for the individual, that he should pay the tax. It would be a voluntary act. If we get this Resolution we shall then take the power to collect the tax as from that date, and it will be convenient for the merchant to pay at once. But if the merchant declines to pay he will be within his right in declining to pay, in accordance with the opinion I have expressed in the House. I express that opinion again. In my judgment he will be within his rights in refusing. I would not, however, recommend him to do so,. because he will be adding to his own trouble. If he says, "I will not pay the tax," and he has to have it collected hereafter, there will be a certain amount of trouble, and there will have to be inquiry into the number of cars he has imported and so on. On the whole, he will be well advised to pay the tax for his own convenience, as well as the convenience of the Treasury. But that is really a point which does not touch the substance of this discussion.
      I am going to make an appeal to the House. We have had what I might call a Second Reading Debate at considerable length on this question, and I think that probably we have all of us made up our minds as to whether we do or do not regard it as a breach of fiscal propriety. I put this tax forward on behalf of the Government, not on any fiscal grounds, but on economic grounds. We do obtain revenue from it; we shall very materially limit the import of a very expensive article coming from abroad, and we shall restrict in this country expenditure which, for the time being, must largely be regarded as useless. These three conditions are satisfied by this tax, and it is upon "those grounds that I introduce it. I do not think we shall get any better result by continuing to debate general principles. I would, therefore, ask the House to let me have this Resolution now, and I will not ask them to go further to-night. There are other considerations which apply to the later taxes of a similar kind on the Paper, and it might be better that we should consider during to-night and tomorrow the arguments that have been put forward on either side in relation to this and other taxes. I would suggest that the
      948
      formal Resolution be given now, and that we renew the discussion on the further taxes to-morrow.
      Mr. OUTHWAITE: I would respond to the appeal made by the Chancellor of the Exchequer, except for the fact that I expect there will be a Division on this Resolution, and I should like to express the reason why, if a Division takes place, I shall go into the Lobby against the Government. This is not a question of such limited importance as the Chancellor of the Exchequer desires us to believe. I am afraid that I expressed by way of interjection some disbelief in the enthusiasm of the right hon. Gentleman for this proposed tax arising from fiscal conviction. I can assure him, if I did so, I really was paying the highest possible tribute to his great attainments in the sphere of political economy. I would like to put this question to him. Supposing there had been no Tariff Reformers in the Cabinet, would he, as Chancellor of the Exchequer in a Liberal Government, have proposed this tax?
      Mr. McKENNA: Yes; I would certainly have proposed this tax in any Government under these circumstances. I desire, as far as in my power lies, to limit the unnecessary use of motor cars, the expenditure of money upon them, and the payment of money abroad for their import.
      Mr. OUTHWAITE: Then we reach this point, that in order to limit the sale of motor cars in this country you are prepared to scrap the Free Trade system and to involve this country in controversy. [HON. MEMBERS: "No, no!"] Hon. Members opposite say "No, no!" There will be no controversy so far as they are concerned because they are getting what they have desired. I think the Colonial Secretary professed too much when he intervened a short while ago and said that he would not have made any such proposals as these. But these are the proposals that his Tariff Reform League have been making in the constituencies for years past. The tax upon motor cars has been a chief point in their propaganda. They have gone down into the villages and have said to the agricultural labourers, "Here you are working hard for 13s. or 14s. a week, and paying taxes on your tea, sugar, and so on, while the rich man is importing his motor car free. We will put a tax upon imported motor cars, and relieve you of the tax on tea and sugar." There is no use in the Chancellor of the Exchequer objecting to

      949
      our stating that in this matter he is raising the fiscal issue. To-night we are under Free Trade. To-morrow we are under Protection. To-night, if we allow this Resolution to go through, we make a breach in the Free Trade system. We allow the enemy within our gates. And what an hour it is to do this to begin the destruction of the work of Cobden and Bright!
      Why have we this finance measure before us? Why are we raising this enormous taxation? It is in part because all the bankrupt Tariff Reform countries virtually are coming to us and asking us to finance their share of the War. If Tariff Reform creates the maximum amount of wealth and is the best fiscal system under which to live, as has been suggested from these benches, why is it that we have to lend £400,000,000 to our Allies to finance the War? Is it not because we are the richest country in the world that we have been able to bear, not only our share of this gigantic burden, but we have been able to help Tariff Reform countries as well? Yet it is at this hour, when the magnitude and beneficence of the Free Trade policy is most demonstrated, that a Free Trade Chancellor of the Exchequer comes down and asks us to make a beginning of the destruction of that policy; for what you begin now you will continue to do. We have to remember this, that these taxes upon imports are the sole sources of new revenue to which the Chancellor of the Exchequer has gone, and he warned us in his Budget speech that a further increase of taxation will be necessary, and consequently it is undoubted that it is to an extension of these Import Duties that he will go. If we lose the principle tonight, how can we in any way prevent or oppose the extension of the principle? We tax hats to-night. Why should we not tax boots to-morrow? We tax one form of conveyance now. Why not tax another? To-night we levy these taxes to reduce consumption in one direction. To-morrow we proceed in another direction.
      Once you have gone on those lines, before this War is over you will have a tariff established over the bulk of the imports of this country. The maintenance of peace has been allied with the maintenance of Free Trade. War is ever the mother of Tariff Reform and Protection. To-night we have heard the argument used that the country is not interested in this matter, and that the country is thinking of other things. Therefore I
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      think it is scandalous that, in such conditions, a great change in our fiscal policy should be effected. The fact that the country is thinking of the War is the very reason why you have no right to introduce a policy which, when the country was thinking of it, was rejected at three General Elections. I appeal to the Chancellor of the Exchequer to realise that in raising this issue he is raising one that will provoke controversy. It is wrong to ask us to scrap our principles. All he can suggest in favour of this course is that by doing this we will alter the exchange to the amount of a few million pounds. He could do it in other ways. When this question has been up before, we have been told from the Front Bench that that result could be achieved by the sale of our securities in America. The Chancellor of the Exchequer, if he likes, could so alter the taxation under the Income Tax as to compel the holders in this country of securities in America to part with their securities, and to part with those gigantic areas of land, for instance, which they hold on the continent of America. It could be done in other ways also. So there is nothing in the Chancellor's statement which will in any way alter my determination to vote against this Resolution if, as I hope it will be, it is put to the test of a vote.
      Mr. J. S. FLETCHER: The House will acknowledge that I very seldom trespass upon its time, and I would not have risen but for the extraordinary argument used by the hon. Member who has just sat down—that we are a Free Trade country, and are obliged to support Tariff Reform countries. How, then, does he explain that we have actually sent our Lord Chief Justice, who ought to be employed at home, to America to implore Protectionist Americans—he must know that the head of every party in America are known Protectionists—to lend us £100,000,000? Therefore, that part of his argument falls to pieces. The leaders of the party to which I belong are dumb. They have joined the Coalition Government. I do not wish to impugn their motives in so doing, but, as no Tariff Reformer has yet risen in this Debate, I wish to say that I personally disapprove thoroughly of these taxes which the Chancellor of the Exchequer has brought forward, because the sound doctrine of Tariff Reform, which I have been brought up to believe, is that small Import Duties spread over a number of objects are not felt by the country and are a legitimate or a de-

      951
      sirable mode of taxation. That was the view held by Sir Robert Giffen, in many points a Free Trader, and expounded by him very shortly before he died in a very powerful article, I think in the "Edinburgh Review." Therefore I am in principle against these additions to the Budget, and, if I go into the Lobby in support of the Government, it is quite for other reasons. And if it was not for the crisis in which we are at present, I should certainly support the hon. Member who has just sat down, though I differ from him as to the, reasons, because these taxes are not Tariff Reform additions to the Budget, but are heavy forms of taxation which would never have been resorted to had the Conservatives been in power.
      Mr. LOUGH: I have already made an appeal to my right hon. Friend. I understand that he has said that if he got this Resolution he would not ask for any of the further Resolutions to-night, but he sees the great difficulty in which we shall be placed by taking this one Resolution. I think that we might come to a further arrangement as to this. The whole thing for which we are contending will be given away if my right hon. Friend imposes these duties. As he has met us in the most kindly spirit with regard to the rest, and as this has been greatly whittled away in the Debate, I venture respectfully to suggest that he should go one little step further and allow us to adjourn this question now and think it all over. I greatly deprecate the criticism which was urged against my right hon. Friend, and against the concessions which he made to us. I never saw a Minister in a strong Debate like this make greater efforts to meet the views which I am sure he felt were conscientiously expressed, and expressed with great reluctance, against these proposals. We all want to help. Therefore if he would go this little step further and let us adjourn at this stage, so that we may think over what has taken place, I feel certain that the Government would find with the assistance of the right hon. Gentleman on the left (Mr. Bonar Law), who has helped already in the Debate, a way out by tomorrow. He is really asking us in passing this Resolution to reverse our policy since 1842, which is a bit thin. Though I admit the force of the arguments on both sides, I would appeal to my right hon. Friend to go this little step further and adjourn now. Though I
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      understand that I cannot move the Adjournment, as I have already spoken, yet if the right hon. Gentleman would give me some indication that this course would be acceptable perhaps one of my hon. Friends would move the Adjournment.
      Mr. McKENNA: I should have been glad if possible to fall in with the suggestion of my right hon. Friend, but I do not think that the course which he recommends would help us. The matter would come on for decision to-morrow by a different House which had not heard the Debate, and the decision would then be come to, which I beg the House to come to now. I have, with the exception of a few minutes when I was called away, attended the whole of this Debate. I have endeavoured to impose this tax on its merits. I have heard all the arguments which have been put forward, and wherever there has been an argument which appeared to me to be justified, I have met it by a concession. But on the rest of the arguments I confess I am absolutely unconvinced. I am told that I am protecting trades, yet a Tariff Reformer opposite gets up and tells me that I do not know my business. I agree with him —I do not. It is not Tariff Reform.
      Mr. OUTHWAITE: Are not tyres in the transaction?
      Mr. McKENNA: I have given away tyres.
      An HON. MEMBER: What is left?
      Mr. McKENNA: What is left? Some millions expended on imported motor cars, which in the present War we will be much better without. I think there are no elements of controversy that ought not to be satisfied. I do not think it is reasonable to ask me to go further. I cannot give up hundreds of thousands of revenue which can be readily obtained. I cannot give up the saving of expenditure on these articles of luxury, and there is no trade in existence that could be alleged to be protected by these taxes. The whole arguments having been thrashed out, I beg the House to come to a decision and let us have the tax to-night, and then proceed with the discussion of other matters, and deal with them on their merits.
      Mr. T. C. TAYLOR: In a matter of this very great importance I think the Chancellor of the Exchequer might give us a few hours more to-morrow, when we might have some suggestions to make.

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      For example, we might ask him to declare that these taxes will continue only during the War, and if they are to continue only during the War why not say so now? If the Government will tell us that, it will ease the minds of many of us. There are many suggestions that might be made if opportunity were afforded to us, and I do put it to the Government that with us this is a matter of principle. The late Leader of the Opposition, the present Minister for the Colonies, told us to-night, and I believe one of his supporters said the same, that he really did not think that he would have proposed these duties. They said they would not, and I believe they would not. The way to Protection is to give a little at a time. You have hats and caps and other articles, you will get to shoes and other things, and once you get these vested interests in 33⅓ per cent. you get the real difficulty which Free Traders have had to fight. In the United States you have what is called "special interests" of individuals against the interests of the community. I do not want to prolong this controversy, but I do wish to put this question solemnly and seriously.
      Supposing a Tariff Reform Government bad been in power, with the Minister of the Colonies at its head, and suppose that a policy of Protection had been carried out for years—the more years the better for the purpose of my argument—and then the Free Trade opposition, who had joined with them as a Coalition Government, proposed to them that they should forego their own principles and give way to Free Traders in matters which had been carried out upon principles acknowledged by the country for years, what would they have felt like? Would not they feel that their case had been given away? That is how we feel to-night. I do not counsel my Friends to go into the Division Lobby. I generally find that I get more by treacle than by vinegar from the Government. I find that I get more from the Government by sweet reasonableness than by denouncing them in public. We are all patriots, and I hate these controversies. I assure my hon. Friends on the other side that nothing but the most certain and deep convictions, based on a life-long study of this question has caused me to beg the Chancellor of the Exchequer to take these few hours more to consider this matter. I do not think that any advantage of it will be taken to-morrow by prolonging the Debate unnecessarily, but we do ask for this further time, and outsiders, in
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      view of what is contemplated, might be allowed to see what the newspapers have to say. [HON. MEMBERS: "Oh, oh!"] Newspapers help to make opinion in this country I wish they did not, and I wish that men thought more for themselves. I beg the Government to take some notice of the arguments which have been put forward by some of its most faithful supporters, who are no worse Englishmen for being Free Traders.
      Mr. McKENNA: This is not the last occasion on which this question can be discussed and divided upon, and there is no reason whatever to regard this particular moment as the critical moment of the tax. This tax will not be law unless it is included in a Statute, and this Resolution has no other value except for the collection of the tax. If we adjourn this discussion the controversy would begin all over to-morrow again. I have listened to the whole of the Debate, and I feel quite confident that this is not a protective tax in the ordinary sense of the word. I feel satisfied that the present conditions are not those in which the motor-car industry could be protected, when no motor cars are at present being manufactured in this country. Do hon. Members think that the motor-car industry could establish a vested interest in the making of motor cars under a protective tariff between now and the 1st of August, 1916? The next Budget will be introduced long before the 1st of August, 1916, and it will probably be introduced in six months from now. All these arguments and speculations have no point. This tax will have to be renewed in the next Budget. The time for considering after the War will be on the next Budget, when the tax will have to be renewed in order to carry us over the 1st of August. I put this tax to the House, not as Free Trade or a Tariff Reform Tax, but simply on its merits, to secure the objects I have named. I would ask the House to come to a decision now on this tax, and then I will ask the House not to consider the rest of the Resolutions to-night, in order that we may have the opportunity of clearing our minds, on both sides, with regard to the individual taxes on their merits.
      Mr. PRINGLE: I do not desire to delay the House from coming to a decision. I wish also to acknowledge the very handsome way in which the Chancellor of the Exchequer has, during the course of this Debate, met the critics of the new taxes. At the same time I do not think that my

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      right hon. Friend quite appreciates the position. It is true he himself very strongly and sincerely believes that there is no protective element in the new taxation, but he cannot conceal from himself that a very large section of the House hold, with equal strength and with equal sincerity, that there is a protective element in them, and that a Division upon this question is for them a Division upon a question of principle. I myself have no desire to divide against the Government. I have already divided against them on several occasions, but on this particular question I should not desire to divide against them. I think that my right hon. Friend should see, from the course of the Debate, that if there were a Division to-night, and if it were taken under normal conditions, that there would be a strong likelihood that the Division would reflect the general course of the Debate, and that the Government proposals would be beaten. I have followed the Debate very closely, and I have also followed the trend of opinion among those who sit upon this side of the House, and I have come to the conclusion that there is a strong probability that the proposal would be beaten. Surely, it is not fair or right that the Government, relying upon the present condition of affairs, should snatch a decision from the House which it would not have taken were the House in a position to give vent to its opinions in the ordinary way. That is the first point I make, but there is another aspect of the case.
      The taxes are coming into immediate operation, and those of us who have been opposing this particular tax feel that the discussion has shown how absolutely poor is the case in favour of this form of taxation. My right hon. Friend has made a number of concessions, it is quite true. He has, I believe, withdrawn commercial vehicles and withdrawn tyres and, I believe, accessories, and has, I understand, signified his willingness to withdraw vehicles for ambulance purposes and those vehicles intended for the use of doctors. Under those circumstances he must have reduced to almost one-half the revenue which can possibly be obtained from this tax. That is not the only aspect in which we ought to regard the matter. The cost of collection of the reduced amount of taxation will be as great as the cost of collection of the whole tax in its orignial form. He will have his whole machinery of valuation and of bonding and of re-
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      bates, and those will be in reference to the few hundred thousand pounds which are going into the revenue. Surely, in view of all these facts, the net gain to the revenue is going to be so extremely small as not to justify the imposition of the tax at all. Under the circumstances we are justified in enforcing and impressing this point on him so far as we can. I have purposely not entered upon the fundamental question, which bulks so largely in theory, but I would remind my right Friends. I know that the Chancellor of the Exchequer does not believe that the principle is raised at all. He does not believe that he has given anything away in theory, but I would remind my right hon. Friend that even although he thinks he has given nothing away in theory, he has given away a great many quotations that will be useful in times of future controversy. I have heard my right hon. Friend demonstrating with great force and great eloquence the absurdity of achieving two objects by means of protective taxation, and that they are irreconcilable, namely, the obtaining of revenue and the exclusion of the articles taxed. But in this tax he goes one better than the Protectionists whom he formerly denounced. Having demonstrated that it is impossible to achieve two objects, he sought in his Budget speech to prove that he can achieve three.
      Mr. McKENNA: My hon. Friend is quite mistaken in thinking that I have never said you could not at one and the same time exclude half of the import and allow the other half to come in, and so obtain revenue. You cannot exclude the whole and get revenue, of course; I have always said that.
      Mr. PRINGLE: I am sorry that my right hon. Friend should have been tempted by my argument into other unfortunate admissions. If he goes on at this rate, he will not have a shred of fiscal orthodoxy left to cover his economic nakedness, and he will soon be proving that by reducing the tax by a third we will be rectifying the exchange. He is going to get about £600,000 from this tax, and the fraction by which the exchange will be improved is going to be extremely small, and the amount of luxury which is going to be restricted is going to be absolutely insignficant. I was glad to hear the Colonial Secretary say that these taxes were intended to be sumptuary in their object. I think it would be far better, if you had a sumptuary aim, to do it directly.

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      We have already machinery of graduation in regard to motor cars, according to horse-power, and why not stiffen your graduation and increase the taxation on the higher-power car? That is a very good sumptuary tax, and a perfectly direct tax, and one that would achieve its object without the slightest doubt. It would also relieve some of those gentlemen whom our Conscriptionist Friends state are slackers, and would enable those gentlemen probably to go to the front. I think under all these circumstances a case on the merits, apart altogether from the theory, has been demonstrated against these taxes. I have listened to many fiscal Debates, and to many Debates on taxation, but I have seldom listened to a Debate in which the argument has been so one-sided as on the present occasion. We have had the Chancellor of the Exchequer himself, who is no mean controversialist, and who can in most controversies look after himself very well. He has not been single handed. He has been in alliance with the Colonial Secretary, who has long made a reputation as one of the most skilful debaters in the House of Commons.
      Mr. BONAR LAW: I did not argue the question to-night.
      Mr. PRINGLE: I understood that my right hon. Friend was arguing for the tax on sumptuary grounds. Apparently he admits that it was intended to be an argument on sumptuary grounds. So far as it was an argument on sumptuary grounds I think I have completely demolished it, because I have shown that you can obtain the sumptuary effect in a far better way, absolutely directly, and without costly machinery, by using the existing fiscal machinery with regard to motor cars, and the existing machinery with regard to men-servants. There is still another way; you could alter the duty on petrol for pleasure cars. We have a differentiation in regard to the Petrol Duty at the present time. You only require to increase the duty so far as pleasure vehicles are concerned to secure the sumptuary effect which we are told is the only effect the Cabinet had in view. I quite agree that there is some doubt as to the exact object of the Cabinet, because unfortunately the Chancellor of the Exchequer was not in the House when the Colonial Secretary spoke, and after the Colonial Secretary had left my right hon. Friend gave a different interpretation of the Colonial Secretary's speech.
      Mr. BONAR LAW: What is your interpretation?
      Mr. PRINGLE: At the solicitation of the Colonel Secretary, which I cannot resist, I will endeavour to develop it. My recollection is that the Colonial Secretary told us that neither he nor his Tariff Reform colleagues—I do not use the term in any invidious sense—had anything to do with the genesis of these taxes.
      Mr. BONAR LAW(indistinctly heard): As a matter of fact, we were discussing one Resolution only. Perhaps even then I ought not to have gone so far as I did.
      Mr. PRINGLE: The right hon. Gentleman disclaims all pride of parentage in this particular duty.
      Mr. BONAR LAW: Or any other.
      Mr. PRINGLE: Then he agrees with my interpretation, or with the interpretation which the House put upon his speech—that he had nothing to do with the initiation of these duties. There was a conflict of opinion. I find now that the Colonial Secretary agrees with the original interpretation of his speech, and that the Chancellor of the Exchequer, who limited the matter to the particular tax, was not quite accurate.
      Mr. McKENNA: My hon. Friend must not charge me with inaccuracy when he has not the slightest ground for so doing. If he wishes to charge me with inaccuracy in any statement, I shall be glad if he will say specifically wherein I was inaccurate.
      10.0 P.M.
      Mr. PRINGLE: I am prepared to leave the matter to the OFFICIAL REPORT. When we are dealing with these matters as we hear them in the course of Debate, it is quite possible for either the speaker or the hearer, or both, to be under an erroneous impression as to what was said. I certainly have no desire to misrepresent the right hon. Gentleman. I will return very shortly to the main point. This matter has undoubtedly aroused very deep feeling among hon. Members on this side, who, if they were acting under ordinary conditions, would express their feelings by going into the Division Lobby. [An HON. MEMBER: "We are going to divide."] There are some who intend to do so. I regret it. If there is a Division, my right hon. Friend may be perfectly sure that the number in the Lobby will not in any way represent the number of those who are

      959
      opposed to the tax. Under these circumstances, it is surely unwise for the Government to take advantage of what I may call the self-sacrifice of those who decline to go into the Lobby, in order to press proposals which would otherwise run considerable risk of being defeated.
      Mr. OUTHWAITE: Why do you not vote against them?
      Mr. PRINGLE: My hon. Friend asks why I do not vote against them. I think I have sufficiently explained that, and it is unnecessary to deal with the point further. Apart altogether from fiscal theory and from the controversies in which we were formerly engaged—which I think have figured too largely in the course of the Debate—on the practical merits from any point of view, either in respect of producing revenue or in respect of setting right the exchanges, or in respect of diminishing luxuries, the tax has been proved to be absolutely illusory. In these circumstances I submit that those who have taken part in the discussion are entitled to ask the Government to withdraw the proposal.
      Mr. J. SAMUEL: I understood from the speech of the Colonial Secretary, which we all very much appreciated, that these taxes on motor cars, musical instruments, clocks, watches, hats, and plate glass all hung together. He described them practically as sumptuary taxes. The Chancellor of the Exchequer stated that between now and to-morrow the Government would consider in the light of to-night's Debate what they would do with regard to the remaining taxes. [HON. MEMBERS: "No!"] I understood him to say so. I see the hon. Member for Oldham (Mr. Denniss) present. He is going to show that the tax on hats is not a sumptuary tax.
      Mr. DENNISS:I am not going to object to the tax at all. I am only going to ask the Chancellor of the Exchequer to postpone the date, so that the articles called hats may be defined.
      Mr. J. SAMUEL:I understood that the hon. Member was going to show that it was not a sumptuary tax. There will be strong opposition to the plate glass tax. Nobody can describe that as a sumptuary tax, as plate glass is an absolute necessity to the trading community. The tax on glass, I may say, takes us back to the year 1845—practically to Protectionist days. That tax was not so heavy then as it will foe under this Bill. I am speaking of glass
      960
      as a whole, because it is only proposed to tax plate glass, and the Plate Glass Tax was abolished in 1853. I am not, however, going to discuss that matter now. I am putting it to the Chancellor of the Exchequer and asking him if the taxes upon these various articles which I have enumerated are dropped does he propose after that to continue this tax upon motor cars that are left? That is the point I want to put to him. Is he likely to decide to-morrow to drop this sumptuary tax now that it has been whittled down to so very, very small a point?
      I should like to make this further point. The imports of motor cars in a particular year, say 1913, was a little over £7,000,000. In the same year we exported between £4,000,000 and £5,000,000 worth of motor cars. That export was growing. If you look back to the year 1906 we only exported £800,000 worth of motor cars and parts thereof. Our trade is a growing one, and I would point out that if you decrease imports for the sake of the exchanges you are bound also to decrease your exports. I should like to see a Return from the Chancellor of the Exchequer by which we would get details as to the amount that will be saved from this tax in the form of trade rallies, tyres, and other things. If that were examined, and the reductions which have been allowed are taken into account, there will be found very little left to make the tax effective!
      Mr. McKENNA: By leave of the House I will answer. [HON. MEMBERS: "Why?"] The hon. Member only wants me to answer his first question. In reply I would say that I propose to ask the House to continue this tax whatever happens to the other taxes. From the first I have asked the House—I may be right or I may be wrong—to be so good as to consider each tax on its merits, for I do not see any connection between them. That is only seen, by those who see fiscal theory behind them.
      Mr. RADFORD: I beg to move, "That the Debate be now adjourned."
      I rise to make an earnest appeal on this very important matter, to ask my right hon. Friend to consent to the adjournment of this Debate. I have listened to a very great part of this Debate with great interest, great anxiety, and an earnest desire not under present circumstances to vote, on this occasion, against the Government. But I confess that up to the

      961
      present I find myself quite unconvinced, and the course of this Debate has developed a suspicion which was in my mind at the start, namely, that this proposed tax upon motor cars is really a protective measure. This is the measure of the Chancellor of the Exchequer on behalf of the Coalition Government. When Free Traders and Protectionists coalesce I had hoped that the issue—that is to say, the Budget—would be something of a mongrel type. On the contrary, I find on examination that this is pure Protection. I have had some difficulty in following the several speeches of the Chancellor. I do not in the least impugn the financial Free Trade integrity of my right hon. Friend, but I say this, that two years hence he may be standing at that desk—as I hope he will be —and telling us that he is still the same Free Trader that he was years ago. But I would remind him that two years is a sufficient time in which, under the shelter of a protectionist duty of 33⅓ per cent. a very strong industry may be built up. That being so, it appears to me that we have taken a step in connection with Protection that we may all of us live to regret. For this reason I should very much like the Chancellor to see his way to accept the Motion that the Debate be adjourned so that a further opportunity should be afforded to consider the matter before a Division is forced upon us. If it comes I shall feel it my duty very reluctantly to go into what my right hon. Friend would call the wrong Lobby.
      Sir NORVAL HELME: I beg to second the Motion for the Adjournment of the Debate. I do so with the sincere desire to facilitate a particular settlement of what is a very difficult question. As sturdy Free Traders we feel very keenly giving away the principle of Free Trade; but we recognise, as individual Members of Parliament, the situation in which the country is placed, and the necessity for supporting the Government. I think if the right hon. Gentleman would recognise the difficulty in which the House stands at present, we might meet tomorrow and, without loss of time, possibly be able to come to a decision; whereas if a Division is forced to-night, we would vote in favour of the Government, and I should do so on the ground of national expediency, in order to support the Government and prevent anything being done really to weaken the Government in the face of the enemy. We do desire, above all things, to maintain Free Trade. If for the moment, on the
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      ground of fiscal requirements, without yielding the principle for one moment, we can have such an assurance from the Government that this matter may be left purely as a question of revenue raising, on the clear understanding, as my right hon. Friend put it, that that should only be for the duration of the War, this matter might go to a vote. I hope the right hon. Gentleman will meet the general wish of the House. [HON. MEMBERS: "No!" and "Yes!"]
      Question put, "That the Debate be now adjourned."
      Sir T. WHITTAKER: I understand from the Chancellor of the Exchequer that he intends that the remaining taxes of this nature should be considered to-morrow by the Government. I want to suggest to him that he should consider this Motor Tax with the rest of them, for this reason: I have felt that the only substantial argument in favour of these taxes was the influence they would have upon our foreign exchanges. All the rest I regard as rubbish. The effect upon our foreign exchanges was a substantial argument for them. But today the Chancellor of the Exchequer has given away at least half of these somewhat large taxes, and, therefore, in my judgment, he has knocked the bottom out of the argument for the taxes on the ground of the influence which they would have upon the foreign exchanges. Now, I should be inclined to support the tax upon motor cars and cinema films on the ground of the influence it would have on the foreign exchanges, and I would not mind making the tax bigger even to the extent of keeping them out altogether on that ground. But the right hon. Gentleman, in my judgment, has practically knocked the value out of these taxes from that point of view. I do suggest, therefore, that the Government should reconsider the whole matter, and to do so they should consent to the Adjournment.
      Mr. McKENNA: I really hope my hon. Friends will not press their Motion. Do let me repeat as simply as I can what the situation is. The decision which is taken to-night has no operative effect one way or the other. If we adjourn now and resume the discussion to-morrow, we are no further forward. I really should be deceiving the House if I were to agree to the Adjournment and give the impression that to-morrow I should ask the House not to go on with the taxes. I should still ask the House to go on with these taxes

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      to-morrow. My right hon. Friend who has just spoken, with whose speech, excepting the matter of estimates, I entirely agree, has put his objection to going on with the tax that it is not worth while on the ground of exchange, but that depends on his estimate and my estimate of the total amount that has been given away. It is worth while going on. The value of the cars imported now is about £8,000,000 a year. I put it to the House whether this House would not be right in making a protest against the import of £8,000,000 worth of motor cars in war time. We assume that we shall keep out about half of that, even with these concessions. Now £4,000,000 is a very serious item in the exchange. At any rate, supposing my estimates are wrong, the question can be raised again on the Bill. It would be misleading the House to adjourn it now with the expectation that to-morrow we are coming down to abandon the tax. We should not, and we should begin all over again and be no further on than to-night. Therefore, I beg my hon. Friends, who have debated this subject for hours, and presented every point of view with regard to it, to let us have the Resolution at this stage of the taxes.
      Mr. LOUGH: I do not think I ever heard so good a case made out in support of the Motion now before the House as we have had to-night. I think it is quite clear to the House that my right hon. Friend is not so confident about his position as he would make us think. We are here reversing a policy which has prevailed in this country since 1842. [HON. MEMBERS: "Oh!"] I am not going into the merits; I have said all I want to say on that point. I am only saying now that we ought not to do this hastily. Would two days be too long for this question Some hon. Members on this side think any time is too long; they do everything in a hurry. I am sure that hon. Members opposite, who have given great attention to the Debate, and all who have been speaking against the Government with a profound sense of reluctance, feel, I am sure, that they want a little more time for consideration. It is not unreasonable we should ask it, and I appeal to the Government to be a little more reasonable in the matter, and at least give way to this Motion.
      Mr. ANEURIN WILLIAMS: I think it must be very evident to the Chancellor of the Exchequer that this proposal is very much disliked on this side of the House.
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      I hope, therefore, he will not use his power to force it through to-night, simply relying on the fact that we should be loath to go into the Division Lobby against the Government at a time of national crisis of this sort. I think that is only fair to those who have given so much loyal support to the Government throughout this painful time. We shall feel that we are very badly treated if this is forced through against us to-night. By to-morrow the right hon. Gentleman will have had an opportunity of considering many of the suggestions which have been made in this Debate. The Chancellor of the Exchequer has put forward three reasons for these taxes. The first is for revenue the second for checking luxuries, and the third for exchange. Many other suggestions have been made by which we believe those objects can be much better obtained than by the proposals now before us, and therefore the least the right hon. Gentleman can do is to take a little more time to consider those suggestions, and see whether he cannot meet the strong objections held on this side. There is the suggestion of an Excise Duty to safeguard the question of principle. The right hon. Gentleman said an Excise Duty would be cumbrous and would not work, and he also said that no English motor industry now existed to be protected by the Customs Duty he is proposing. I would like to ask how can the Excise Duty cause trouble if no cars are going to be made? I strongly appeal to the right hon. Gentleman to allow us to adjourn this Debate, and not force this proposal through to-night.
      Sir A. MOND: We have been told that we are not acquainted with the figures as to the amount of motor cars imported into this country. May I point out that the total amount of cars, chassis, and parts imported into this country for six months amount to £3,991,424, and if you double that you get nearly £8,000,000; £500,000 of that is for tyres, and that has gone. The right hon. Gentleman himself estimates the amount of commercial cars at one-third, and that takes away another £900,000. Consequently, you are left with £1,700,000, and if you double that you get £3,400,000. The right hon. Gentleman said that he is now going to exclude £4,000,000, and he seems to me to be adopting Tariff Reform arithmetic. I think, in fairness to the House and to himself, the right hon. Gentleman might consent to an adjournment, so that these figures can be gone into.
      Mr. McKENNA: Those seem to be the same figures which the right hon. Baronet presented to the House before. We have been told that the figures for the first eight months amount to £5,300,000, and if that is correct a rapid mental calculation will show that it is at the rate of about £8,000,000 a year. That disposes of the first point in the right hon. Gentleman's calculation. Recent figures indicate that motor cars are coming in faster, and the total is at the rate of £8,000,000 a year. His second point is to assume, when we estimate for a reduction of the imports by one-half, that half reduction will be equally distributed over trade cars and over pleasure cars. We do not assume that; nor do I think on reflection he would do so. He would assume that pleasure cars would be kept out in far greater proportion than trade cars. Consequently, his calculation is entirely a fallacious one.
      Lieut. - Commander WEDGWOOD: It seems to me, if the right hon. Gentleman relies upon the figures given either by the hon. Member for Islington (Mr. Lough) or by the hon. Member for Swansea (Sir A. Mond), that he might very well be mistaken in taking either of them. Surely it would be far more satisfactory if he got his figures from his own Treasury officials, who can supply the actual and correct figures on which this new tax is to be based. He might also at the same time find out from the same officials what proportion of these cars imported from America are for Government purposes. I happen to be associated with a branch of the Navy which consumes a considerable number of these cars, and I think that a very large proportion must be used either for hospitals or for military purposes in France. We do not want particularly to exclude them. They are just as important as munitions. I am sorry the right hon. Gentleman is unwilling to concede to us this adjournment of the Debate. I do not think that he can realise all the exemptions to this tax which he has already granted to-day. Before the tax is to be collected you want to have a very clear line drawn to show what are commercial vehicles and what are not commercial vehicles. He indicated to the hon. Member for Blackburn (Sir Henry Norman) that he might also omit cars imported for hospitals and for doctors. After that he talked about motor lorries, but lorries are not the only commercial vehicle by any means. Then there is the question of parts. You cannot collect the tax
      966
      to-morrow without some clear line drawn to show what parts are to be allowed in free and what parts are not to be allowed in free. I understand that parts required for commercial vehicles will come in free and that those coming in for pleasure vehicles will be taxed. It will require enormous ingenuity on the part of the collecting authorities before they can start collecting a tax which is so very ill-defined as this tax we are proposing to pass tonight. I think for these reasons it is certainly desirable that this Debate should be adjourned, so that we may have a clear indication what is to be taxed and what is not to be taxed, and also what the revenue is likely to be, because the original estimate must have entirely gone by the War.
      Surely the Chancellor of the Exchequer and the Secretary of State for India (Mr. Chamberlain) must know that it would be with the greatest possible reluctance we should divide in this House and give anybody, however ignorant, the idea that there was any want of confidence in His Majesty's Government so far as the conduct of the War is concerned. It is really not putting their supporters in a fair position. We have been told to-day by the Secretary of State for the Colonies (Mr. Bonar Law), "who was an ardent Tariff Reformer, that this tax was not, as we commonly imagined, forced upon the Government by the Conservative section of the Cabinet, but that it was the suggestion of the Chancellor of the Exchequer himself. Anybody who knows anything of the Conservative Members of the Cabinet will be assured that they would sacrifice their pet theories rather than produce a division in the country. I honestly believe that. If, then, we are clear that these are not their pet theories—and we know that no Tariff Reformer would propose a duty of 33⅓ per cent.—if they did not originate this idea and if this tax is to bring in such a minute revenue as this revised tax will do, then surely this Cabinet can reconsider the question with an open mind, provided there is no Division. If the Resolution is passed, then the tax will begin to be collected, and once that occurs the Government is placed in a very difficult position, and they might have to climb down as they did in the case of the Whisky Tax six months ago. If the right hon. Gentleman consents to the adjournment, I am sure the Government will put everything right tomorrow. They had not appreciated how strongly we feel on this subject. I hope

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      the Chancellor of the Exchequer will continue to secure unanimity. We have not the slightest grievance against him. We might perhaps have made a better fight with him as a traitor to Free Trade, but we are convinced he is as sound a Free Trader as ever, and it is merely the pride of paternity in this particular tax that has induced him to take up his present attitude. The rate of exchange is not likely to be affected by this duty, and the sumptuary effect could be far more easily produced by increasing the tax on motor cars. The figures ought certainly to be again worked out by the Department before the House is asked to vote on this question.
      Mr. McKENNA: I am afraid there is some misunderstanding. This tax is now being collected, and whether we adjourn or not we shall be in precisely the same position in that regard to-morrow as we are at this moment.
      Mr. MOLTENO: I desire to join in the appeal, and inasmuch as it will not make the slightest difference in the matter of the collection whether we adjourn or not, surely the right hon. Gentleman can see his way to make this small concession to his supporters, patricularly in view of the extraordinary uncertainty with regard to the figures involved in this question. I understand he has suggested that of the imported cars only one-third are used for business purposes. But the information given me by men particularly concerned in this business, who have made special inquiries, is that business cars represent 77 per cent. of the cars imported from America since the beginning of the War. That puts a very different complexion on the matter, and we ought to have more accurate figures than we are in possession of. I imagine it is quite true that two-thirds of the motor cars imported since the War began are in use for business purposes. An immense amount of labour is now being saved by tradesmen who purchase these cheap American cars and deliver their groceries, meat and bread to their customers.
      Mr. SPEAKER: The hon. Gentleman is not now addressing himself to the question before the House.
      Mr. MOLTENO: I will not pursue that any further. I would make one further appeal to the right hon. Gentleman. When the formation of the Coalition Ministry was announced in this House by the Prime
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      Minister he said that the formation of that Ministry did not mean that he gave up any of the causes to which he had devoted his political life, that equally those Gentlemen who had joined from the other side were not going to give up any of the principles to which they had devoted their political lives, and that there would be a truce on all matters of controversy. I appeal to the right hon. Gentleman to preserve that spirit and that intention. He has told us he does not think that he is departing from that assurance in what he is proposing.
      Mr. SPEAKER: The hon. Gentleman is not addressing himself to the question now before the House, which is the question of the adjournment of the Debate. He is discussing the question as a whole.
      Mr. MOLTENO: I was just venturing to suggest a further consideration to the right hon. Gentleman for giving a little more time, and asking that that consideration should be taken into account.
      Mr. L. JONES: The right hon. Gentleman says that it will make no difference to the tax or to the situation whether we adjourn the Debate now or not. I venture to say that to adjourn will give ah opportunity to the Government to meet to-morrow and consider it. In view of the very strong feeling evinced in the House I do not think we are asking too much in inviting the Government to hold a meeting of the Cabinet to-morrow morning, at which to consider the Debate that has taken place to-day, and to come to a decision whether, in view of what has taken place, it is worth while proceeding with this Tax.
      Mr. GOLDSTONE: The Chancellor of the Exchequer says it will make no difference. I venture to disagree. Every time this House registers a decision it makes it more difficult to go back upon a thing, so from that point of view he might give way probably to a greater extent than he would otherwise do if he were to defer it for a day. The matter can be put before a meeting of the Cabinet, and the sense of this side of the House, in the strong terms in which it has been expressed, can be conveyed to the Prime Minister and his colleagues. The spirit in which the Debate has been conducted has been admirable. I venture to assert that, if this matter is forced upon the House to-night that spirit may not be maintained. There will be such an offence committed. The sense of

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      the House, so far as this side of it is concerned, will have been outraged. The appeal has been unanimous and strong from men who will with great reluctance support the Government, and from those who, if there is a Division, will vote against them. The feelings of the House, or of a very considerable portion of the House, ought not to be overridden in this way. Hence I associate myself whole-heartedly with the appeal now made that the matter should be deferred.
      Mr. J. M. HENDERSON: I have been in this House for ten years, and I have never yet experienced a case where so large an appeal from their own supporters to the Government to adjourn was not granted at once. It must be evident to my right hon. Friend that the feeling on this side of the House is unanimous against the proposals or unanimous in favour of an Adjournment in order to consider them. That is one unanswerable reason why the Adjournment should take place. Certain Amendments have been foreshadowed. You are not in a position now to tell us your exact estimate of what this tax will bring in, and the Chancellor of the Exchequer ought not in a case of this kind, when there is so much feeling, to impose a tax the amount of which he cannot tell us. He should be able to give us something a little more definite before he asks us to put our decision on record. He says it makes no difference. It makes this difference, that if he gets this he can put it in his Finance Bill, and if he does not get the Resolution he cannot. I appeal to him, and the whole of his supporters on this side appeal to him to adjourn and consider the matter a little more, and not be quite so officially obstinate as he appears to be.
      Mr. MORRELL: I desire to support the appeal which has been made. Everyone agrees, whatever his views may be upon the question, that the occasion is an important one. It is the first occasion on which the House has ever been asked to take a step of this kind at such short notice. During the whole of the Debate, so far as I am aware, neither the Prime Minister nor any leading Member of the Cabinet, except the Chancellor of the Exchequer and one or two others, has been present. The Prime Minister himself certainly has not been present during the whole Debate. He is not aware of the strong feeling which this proposal has excited. Would it not be worth my right
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      hon. Friend's while to consult with his colleagues upon the point before forcing the House to take a Division which we do not want to have to take. He suggested earlier that when I said he was making no concession I was speaking unfairly to him, but this is a point on which he might well make a concession considering the appeal which has been made to him. It is not much to ask that he should consent to the Adjournment of the Debate.
      Sir W. BYLES: I have the greatest possible dislike to the proposal or to anything which even smells of Protection, but I have an equally strong, if not even stronger, aversion to taking any step which would appear to be in opposition to those Gentlemen who have the conduct of the War in hand, and I ask my right hon. Friend not to ask me to choose between the two. I cannot believe it would pass the wit of man, certainly not this man, my right hon. friend, to arrive at some via media, some modification of the proposal which would get at any rate the acquiescence of every Member of the House.
      Mr. HIGHAM: I wish to associate myself with the appeal that has been made to the Chancellor of the Exchequer. I should hate to vote against the Government, even on the question of the Adjournment. I do not desire to have to vote against this tax. I recognise the strength of the appeal that the right hon. Gentleman has made to us, and if he defers the matter till to-morrow he may be able to find some way which will allay the strong feeling which exists on this side of the House. I am a sturdy supporter of the Government as it now stands. I want no dissension in face of the great War in which we are engaged, and if the right hon. Gentleman would take till to-morrow to think the matter over he would find a way of meeting our wishes in some way or of convincing us to support him in the proposal he would then place before us.
      Mr. McKENNA: I really think that my hon. Friends are not in this matter doing their own cause justice. If I agree to the Adjournment of the Debate upon this Resolution, having asked the House to take the Resolution on the understanding that I would adjourn consideration of the other Resolutions, they are asking me to treat all the Resolutions as being part and parcel of a single policy. I have tried, as far as any human being can make himself clear, not to commit myself or the Government to this tax as being part and parcel

      971
      of any policy. I cannot agree to the interpretation which has been put upon our action. The Committee in its wisdom may reject any one of these taxes entirely; they do not hang together; they are not intended to be part and parcel either of a Free Trade or a Tariff Reform policy. I beg the House to take each individual tax upon its own merits. That is the first point. The second point relates to the suggestion of official obstinacy on my part. It is nothing but a sincere desire on my part not to have any misunderstanding with my hon. Friends. If I agree to the Adjournment of the Debate now it would be implied that I was asking the House to adjourn with the intention of asking the House to reconsider the Resolution tomorrow. I will make a bargain with my hon. Friends.
      HON. MEMBERS: No, no!
      Mr. McKENNA: I am prepared to make a bargain with my hon. Friends.
      HON. MEMBERSdissented.
      Mr. McKENNA: If they will agree to give me this Resolution to-morrow without discussion.
      HON. MEMBERS HON. MEMBERS indicated dissent.
      Mr. McKENNA: If after consideration to-night they agree to give me this Resolution to-morrow without discussion—
      HON. MEMBERS: Without vote?
      Mr. McKENNA: If they will give me the Resolution to-morrow without discussion, it is perfectly immaterial to me or anybody else whether we have the vote now or at the beginning of the business tomorrow.
      Mr. MORRELL: Will the right hon. Gentleman consult with his colleagues?
      Mr. McKENNA: Certainly.
      Mr. ANEURIN WILLIAMS: Will the right hon. Gentleman consider the question of Excise Duties?
      Mr. McKENNA: No, Sir, New Excise Duties are impossible. The machinery is absolutely impossible to set up. If it is an understood bargain, I would be quite willing to agree to the Adjournment now.
      An HON MEMBER: You are wasting time!
      HON. MEMBERS: Vote, vote!
      Mr. McKENNA: It is ten minutes to eleven o'clock. It would be a reasonable bargain to make that if we take this Resolution to-morrow, we take it without discussion.
      Sir H. CRAIK: Who can make that bargain?
      Mr. McKENNA: My hon. Friends here.
      Mr. LOUGH: By leave of the House I appeal to my hon. Friends to accept this offer—this very liberal offer which the Chancellor of the Exchequer has made. I understand it to be this, that to-morrow, if the Government think it right to proceed with this Resolution, we divide, if we wish to divide, without any Debate. We either divide, or we agree to the Resolution without debate. I think it is a very fair compromise, and I think we ought to accept it gratefully from the Chancellor of the Exchequer.
      Motion made, and Question proposed, "That the Debate be now adjourned."
      Question put, and agreed to.
      Debate to be resumed to-morrow (Thursday).
      Subsequent Resolutions to be further considered To-morrow
      The remaining Orders were read, and postponed.

  MERCHANT SERVICE.

    WAR SHORE BADGES.
    Whereupon Mr. SPEAKER, pursuant to the Order of the House of 3rd February, proposed the Question, "That this House do now adjourn."
    Mr. PETO: I want to bring very shortly before the notice of the House a point which I raised at Question Time to-day, and which I have raised on several other occasions during the course of the War. Strong representations have been made to me, and I have no doubt to other hon. Members, that the men and officers serving in the merchant service find themselves at a grave disadvantage on the rare occasions on which they are able to go ashore owing to their having no badge or distinguishing mark to show that they are doing their duty and their share of the country's work in the present crisis. The matter of war badges in the merchant service was, I believe, one entirely in the hands and the discretion of the Board of

    973
    Admiralty. At a later period it was taken over by the Board of Trade, and again the whole question of badges for war service was taken over by the Minister of Munitions. The present position with regard to the merchant service is not very clear. But I have the privilege of having present both the Parliamentary Secretary to the Admiralty and the Parliamentary Secretary to the Board of Trade, whose attendance this evening I have been very sorry to have to ask for after the long Debate, though I greatly appreciate it. As far as the Admiralty are concerned the point is a narrow one. I believe that these war badges are given to officers and men who are serving upon some of the ships, certainly upon the transports. Those who are serving upon other of the ships chartered by the Admiralty and who are engaged in coaling the Fleet and carrying munitions and on other services of that kind, as far as I am personally informed, had not had these war badges issued to them. Then the wide question arises, as to men serving in the merchant service—engaged perhaps in the transport of horses from New York to France, of beef for the French Armies, perhaps in the Argentine, also to ports in France, or of necessary stores or the very food on which our own civil population is existing—why these officers and men who are doing quite equal service are refused any recognition of the fact. It is the settled policy of the Government that they are not required to give up their seamen's duties and enlist in the Army in any capacity on land. It is recognised and agreed that they are doing better service where they are. Therefore I desire to ask those two right hon. Gentlemen in their Departments whether they cannot find out some way of satisfying what is a greatly felt want, and giving these men the opportunity of showing quite clearly that they are not slackers who are staying at home, but that they are men who are doing their share of the country's work?
    11.0 P.M.
    It is obvious that the manufacture of munitions, as well as the maintenance of the food supply of the country, could not possibly be carried on if it was not for our merchant service. It is also obvious, and there is no dispute on the point, that these men are suffering the perils of war. Many of them have been killed. Many of them have had to incur and undergo great hardships, and are doing very much more dangerous work than a great many men who have been enlisted in His Majesty's land forces.
    974
    I will quote two letters which were recently received by the secretary of the Imperial Merchant Service Guild, explaining what the position of these men is when they come ashore without a distinguishing mark. One officer, the master of the "Wray Castle," St. Nazaire, wrote:—
    "I would like to draw your attention to what both myself and my officers consider a great hardship. A man ashore at home, in safety, making shoes or clothes for the troops is entitled to a 'war badge' to show that he is doing 'his bit' for the Empire. Now, we are running between Montreal and St. Nazaire carrying live bullocks (about 1,000 a trip) for beef for the troops in the trenches; twice a month we are passing through the war zone at the risk of our lives, but we are not entitled to wear the war badge. Three months ago I was in London (where my home is) and an officious lady, on recruiting bent, came up to me and asked me 'Why I was not in khaki and could I not do something for King and country?'"
    The second one I want to quote is from Manchester, and is written by the third officer of the "Glendhu." He says:—
    "I would like to speak of the recruiting meetings that are being held here. We are accosted by the recruiting sergeant on an average of three or four times a day. We were informed by a Government official on our arrival here that it would be useless for merchant service men to attempt to join the Army, but then when we are ashore people are not to know but what we are some of the many young men that are loafing about here, and although our answer is always accepted as satisfactory, it makes a chap feel such a bally ass in front of the crowd that is always looking on."
    I have a number of similar letters, and more are coming in. I only want, further, to deal with the Board of Trade's official objection in their reply to the Imperial Merchant Service Guild. In effect, they base their objection upon two points—the enormous number of badges to be issued, and the difficulty of their being transferred to persons who have no right to wear the badges. Both are very strong objections, but I think they are not insuperable. I suggest that there is a way out of the difficulty. It is not every merchant seaman, nor engineer, fireman, or officer of a merchant ship, who has occasion to require this badge. There is no need to indiscriminately distribute it all round. I suggest that the badges should be distributed with regard to firemen, seamen, and engineers through their union, or to those men who are not members of the unions, through harbour masters or other competent port authority. With regard to officers, the distribution could be made through the Imperial Merchant Service Guild and the Mercantile Marine Association, which, together, practically cover the whole of the masters and officers in the merchant service. These associations and unions know their members, and the harbour masters, before issuing the badge, would know the recipients to be genuine.

    975
    Something further might be required, for undoubtedly there is some risk of the badge being issued to those who have no right to wear it, but I submit that in view of legislation passed in this House during the War, there could be no possible difficulty in passing a Bill simply to make it a penal offence for any persons to wear the Merchant Service War Badge or other distinguishing mark agreed upon unless properly entitled to do so. I suggest that a £5 penalty or something of that kind would probably meet the case. I can assure the right hon. Gentleman and the House that this produces a great sense of grievance. We all agree that these men are doing work which is second to none that is being rendered in this War. Again and again independent letters are received showing that this grievance is genuinely felt, and it is really for the right hon. Gentleman to find some way out of the difficulty in order that the work of the country may be carried out in all its details. I do hope, having taken this opportunity of bringing the matter to their attention, that the Parliamentary Secretary to the Admiralty and the Parliamentary Secretary to the Board of Trade will look at it from a broad point of view, not with regard to any section of the men employed, but with regard to the whole service, and give them some token of the valuable services they are rendering to the country.
    Mr. BARNES: I desire to support the appeal which has been made by the hon. Member for Devizes. Like him, I fail to see why War badges are issued to workmen only and not to men who are incurring a great deal more risk. I believe that the badges are much appreciated by the workmen, and in fact I know they are so appreciated. There are many workmen who would have been quite willing to go to the War but who are prevented from doing so owing to the nature of their calling. The badge indicates the fact that they are here not by choice, but because they are working just as well in the interests of the country as if they were at the front. If that is true of the workmen, it is true also of a great many people who have not yet obtained badges. I understand that the badges are served out to the men on the transports in the direct employment of the Admiralty, and no doubt that is very well so far as it goes. I fail to see why they should be refused to the men in the merchant service who
    976
    are running, I will not say as great a risk, but are certainly running very great risks. I have just been across the Atlantic, and passed through the submarine zone twice. I went out on the "Adriatic." I know that the men on it feel that they are suffering an injustice. I believe they had gone through the submarine zone about eight or nine times up to the time I crossed, which was some months ago. They consider that they should receive some recognition in consequence of the danger they are passing through. The hon. Gentleman has dealt with some of the difficulties that may be incidental to the issuing of the badges, and it may be that all of the men are not members of trade unions, but I do not think that applies so much to the mates, or masters, or engineers, who are, I believe, connected with one or other of the organisations. I know that is so in regard to the engineers of whom I can speak with some knowledge, since I am a member of one of the organisations that has a great many members at sea. There is another organisation that deals specifically with the sea-going engineers, I refer to the Marine Engineers' Association. One or other of those two bodies practically cover all sea-going engineers. There might be a small margin left out, but after the members of those organisations had been dealt with it would be very small. I earnestly support the appeal which has been made, and I hope that something may be done.
    The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Captain Pretyman): The Board of Trade do not complain for a moment of the way in which my hon. Friend has brought this matter forward. It is hardly necessary for me to endorse every word that they have said as to the position occupied by the officers and men of the mercantile marine in the national service at the present time. It is absolutely true that these men are not only serving the country but incurring very grave personal risk in doing so. As between those who are on Admiralty transports and those on purely mercantile vessels, I am rather inclined to think that the risk in the latter case is at least as great as in the former, because they have less opportunity of escort, and many of the voyages, particularly the coasting voyages, are extremely dangerous at the present time. Therefore I may say at once that so far as concerns the principle of putting the men of the mercantile marine on an equal footing with those who are

    977
    serving the nation and demanding some badge by which passers-by may see that they are serving the nation, the Board of Trade are entirely in agreement with everything that has been said. But when you come to apply the principle to the mercantile marine you meet with difficulties. The question has been very carefully and most sympathetically examined. But the difficulties are very great indeed. It is quite easy to give these badges to the officers, and I quite accept what has been said as to the engineers, but I am sure my hon. Friend will agree that it is impossible to confine any issue of badges to any class in the mercantile marine. If the badges are to be issued they must be issued without distinction to all the officers, all the engineers, all the deckhands, all the firemen, and in fact to everybody concerned. It is impossible to look at the problem from any other aspect. That means that every man in the mercantile marine must have a right to the badge. When you come to deal with coasting voyages particularly, unlike the over-sea voyages, the men do not have to sign on through any official channel, and it is competent for the master of a vessel to engage a man merely for the voyage. Take, for instance, the particularly dangerous voyage at the present time from Newcastle to London. The master can take on a man merely for the voyage, and men who are competent hands might be taken on who simply desired to work their passage from Newcastle to London. Nobody knows what men of that kind might do with the badge. I am bound to say that very little evidence of any widespread feeling on the subject has reached the Board of Trade. I quite accept the letters which my hon. Friend has read as indisputable evidence that some regrettable incidents have occurred, and that a certain number of people have felt the want of these badges; but, as I say, the Board of Trade have no evidence of any widespread feeling on the point.
    Mr. BARNES: The same thing was said about the issue of badges to the workmen.
    Captain PRETYMAN: I am coming to the suggestion of the hon. Member (Mr. Peto), but I want to make my point first. I think it quite conceivable that we might, if we were to accept his suggestion as it stands, have the result that a great many of these badges would get into unauthorised hands, and I deprecate penal legislation in these matters. The hon. Member told us that in order to enable his pro-
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    posal to be carried out penal legislation would be necessary. I think that we should have very serious complaints from the mercantile marine if it were found from the indiscriminate issue of these badges that a great many people were wearing them who had no right to do so. I think that would rightly cause very great resentment among the men of the mercantile marine. That is to be guarded against. My hon. Friend has made the sensible suggestion that the badges should only be issued through certain recognised bodies—the trade unions and the officials of the Board of Trade—to those who specially applied for them. I am sure he will see that the effect of that would be that there would be an unlimited scope for application, and it would be impossible for us to foresee to what extent that opportunity would be utilised. It might be that there would be no safeguard to that system—no safeguard against such men as I referred to, men engaged in coastal voyages from Newcastle to London—men who really wanted to get hold of a badge in order to sell it. Such a system would be greatly abused.
    Still I do not wish to close the door to a consideration of the matter, and the particular suggestion which has been made by my hon. Friend who spoke last, endorsing what had been previously said, shall certainly be represented to the President of the Board of Trade, and it will be examined. We fully recognise that if the mercantile marine desire these badges they are fully entitled to them as a matter of principle—as fully as any other man employed on any munitions work. But there are very great difficulties in a considerable issue of badges of this description unless we are satisfied that the administration of the system would be really satisfactory, and not bring about greater evils than those which, I admit, to some extent follow from the present system, tinder which no badges at all are available for the purely mercantile marine.
    The PARLIAMENTARY SECRETARY to the ADMIRALTY (Dr. Macnamara): I think it is due to my hon. Friend that I should explain shortly the Admiralty Regulations in regard to the issue of these badges: exactly how the matter stands, and the method of those responsible for the distribution. The issue of badges to those engaged in munitions work or other war work is now generally in the hands of the Minister of Munitions—under Section 8 of the Munitions of War Act.

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    Before that Act was passed, and before I the Ministry of Munitions was constituted, the Admiralty had already issued war service badges in certain cases. It was agreed with the Ministry of Munitions that the Admiralty should still control the issue of badges at the Royal dockyards, Admiralty establishments, as well as the civilian crews of vessels owned, chartered and requisitioned by the Admiralty; and to the permanent dock labourers in the docks. We proceed along those lines. Therefore, so far as all transports and all other ships owned, chartered, or requisitioned by the Admiralty are concerned, my hon. Friend's request is met. My hon. Friend referred to the fact that crews of transports receive these badges, but so do all the crews engaged on Admiralty work —colliers and others. On all the ships owned, chartered and requisitioned by the Admiralty they get these badges, and in case of ships auxiliary to the main Fleet but in commission, they get more than
    980
    that, because they get uniforms. Therefore the only outstanding case which the hon. Member puts is the question of the merchant service engaged in the ordinary avocation of merchant work. That is a question for the Board of Trade, and I cannot, of course, add a single word to what my hon. and gallant Friend said.
    Mr. PETO: How long have the crews of these auxiliary vessels had the badges issued to them?
    Dr. MACNAMARA: The men of the auxiliary vessels in commission get uniform. The transports have had badges for some considerable time, but I cannot say offhand how long the crews of the colliers have had them. The only point remaining outstanding is the ordinary merchant service engaged on its ordinary work.
    Question put, and agreed to.
    Adjourned accordingly at Seventeen minutes lifter Eleven o'clock.

WAR.
  BUDGET PROPOSALS.
    EXCESS PROFITS TAX.
    EXCESS PROFITS TAX.
  ENEMY BONDS (OFFICIAL QUOTATIONS).
  ENEMY BONDS (OFFICIAL QUOTATIONS).
  WHEAT, FLOUR, AND BREAD PRICES.
  WHEAT, FLOUR, AND BREAD PRICES.
  GERMAN NEWSPAPER ARTICLES.
  GERMAN NEWSPAPER ARTICLES.
  INVALID PRISONERS (EXCHANGE).
  INVALID PRISONERS (EXCHANGE).
  SCHOOL CERTIFICATES OF PROFICIENCY.
  SCHOOL CERTIFICATES OF PROFICIENCY.
  Tillage Area (Ireland).
  Tillage Area (Ireland).
  Longford Estate (Turbary).
  Longford Estate (Turbary).
  Kerridge (Cheshire) Wesleyan School.
  Kerridge (Cheshire) Wesleyan School.
  Swine Fever (Departmental Committee's Report).
  Swine Fever (Departmental Committee's Report).
REPRESENTATIVE PEER FOR IRELAND.
Writs and Returns electing the Earl of Cavan a Representative Peer for Ireland in the room of the Earl of Kilmorey, deceased, with the Certificate of the Clerk of the Crown in Ireland annexed thereto: Delivered (on oath), and Certificate read.
CLACKMANNAN COUNTY WATER ORDER CONFIRMATION BILL.
  GLASGOW WATER ORDER CONFIRMATION BILL.
  To be read 3a on Wednesday next.

RETURNS, REPORTS, &c.
Trade Reports (Annual Series)—

No. 5473. Muscat (Muscat, 1913–1914);

No. 5474. Egypt (Port Said, 1914);

No. 5475. United States (Porto Rico, year ended 30th June 1914);

No. 5476. Chile (Antofagasta and Atacama, 1914);

No. 5477. Dominican Republic (Dominican Republic, 1914);

No. 5478. Japan (Hakodate, 1914);

No. 5479. China (Shasi, 1914);

No. 5480. China (Shanghai, 1914):

Congested Districts Board (Ireland)—Report of the Board for the year ended 31st March 1915:
Judicial Statistics (Ireland), 1914—Part I. Criminal Statistics.
India (Military)—Despatches regarding Operations in the Persian Gulf and in Mesopotamia:
Board of Agriculture and Fisheries—

1. Annual Report of Proceedings under the Salmon and Freshwater Fisheries Acts, &c., &c., for the year 1914;

2. Regulations for Grants in Aid of Agricultural Education and Research in England and Wales, 1916–1917:

South Africa—Report to the Board of Trade on the Trade of the Union of South Africa (and Rhodesia) for the year 1914. By Mr. H. E. Gauntlett, in charge of the Office of His Majesty's Trade Commissioner for South Africa:
Workmen's Compensation—Statistics of Compensation and of Proceedings under the Workmen's Compensation Act, 1906, and the Employers' Liability Act, 1880, during the year 1914:
Queenstown Harbour—Report from the Committee appointed by the Postmaster-General to consider the omission of the call at Queenstown on the American Mail Service; together with Minutes of Evidence, Appendices and a chart of Queenstown Harbour:
Merchant Shipping (Subdivision of Ships)—Second Report of the Committee appointed by the President of the Board of Trade to consider and report on the Subdivision of Merchant Ships (Home Trade Passenger Steamers, Cargo Steamers). (In continuation of [Cd. 7743]):
Presented (by command) and ordered to lie on the Table.
Diseases of Animals Acts, 1891–1914—Order, No. 9519, dated 21st September 1915, postponing the operation of the two Orders described thereto until 4th October 1915:
Shops Act, 1912—

1. Order by the Secretary for Scotland, dated 24th September 1915, under the Act, affecting a certain class of shops in the Burgh of Dundee;

2. Order made by the Council of the County of Cardigan and confirmed by the Secretary of State for the Home Department, affecting certain classes of shops within specified areas within the County:

Destructive Insects and Pests Acts, 1877 and 1907—Orders numbered—

1. D.I.P. 241, dated 11th September 1915, declaring an area described in the Schedule thereto to be infected with American Gooseberry Mildew and an infected area for the purposes of the American Gooseberry Mildew (Infected Areas) Order of 1915;

2. D.I.P. 242, dated 11th September 1915, declaring an area described in the Schedule thereto to be infected with Wart Disease and an infected area for the purposes of the Wart Disease of Potatoes (Infected Areas) Order of 1914:

Supreme Court of Judicature (Accounts)—Account of the Receipts and Expenditure of the Paymaster-General on behalf of the Supreme Court of Judicature in respect of the funds of suitors of the Court in the year ended 28th February 1915; also Account of the National Debt Commissioners for the same period in respect of funds held by them on behalf of the Supreme Court of Judicature; together with the Report of the Comptroller and Auditor-General thereon:
Church Temporalities (Ireland)—Accounts of the Irish Land Commission in respect of Church Temporalities in Ireland from 1st April 1914 and from 26th July 1869 (the date of the Irish Church Act) to 31st March 1915; together with the Report of the Comptroller and Auditor-General thereon:
Public Records (High Court of Justice, &c.)—Schedule containing a list and particulars of classes of documents existing or accruing in Instance Causes in the High Court of Justice, Probate, Divorce and Admiralty Division (Admiralty), formerly the High Court of Admiralty, since the taking effect of the Admiralty Court Rules, 1859, deposited in the Public Record Office or in the Admiralty Registry, and not considered of sufficient public value to justify their preservation therein:
Foreign Jurisdiction Acts, 1890 and 1913—Order in Council, dated the 24th September 1915, applying Section 20 of the Finance Act, 1894, to the Territory of Weihaiwei:
Universities of Oxford and Cambridge Act, 1877—

1. Statutes made by the Governing Body of Queen's College, Oxford, on 11th November 1914 and 19th June 1915 (and sealed on 19th June 1915), amending (a) Statute Tit. I Clauses 3 and 7, and Statute Tit. XVI Clauses 1, 3, and 4; and (b) Statute Tit. II, Clause 11, of the Statutes of the College;

2. Statute made by the Governing Body of Corpus Christi College, Oxford, on 12th June 1915 (and sealed on 18th June 1915) amending Clause 13 (b) of the Statutes of the College:

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

OPERATIONS IN MESOPOTAMIA.
THE UNDER-SECRETARY OF STATE FOR INDIA (LORD ISLINGTON): My Lords, it will, I am sure, be of interest to the House if I read a telegram which has been received to-day from the Commander-in-Chief of the Mesopotamia Expedition. It is as follows—
"The enemy's position in advance of Kut Al-amara captured with many prisoners and guns. Enemy in full flight towards Bagdad. Our forces pushing in pursuit. Details follow."
And subsequent to that message the following details have arrived by telegram—
"Complete success attended the operations of the 6th Division on the Tigris on the 28th September. The position of the enemy is a long one on both banks astride the river, seven miles to the east of Kut and extending from the left bank for six miles. The plan of attack was well conceived. General Delamain's detached force consisting of two brigades, after a demonstration which they made on 27th September, crossed over from the right bank. By a night march they gained the enemy's left, and by a gallant attack carried its northern extremity at 10 a.m. By 2 p.m. the remainder of this portion of the enemy's position was carried after much opposition. By nightfall the force had advanced west of the enemy's position, which was wired in and strongly entrenched and in which the enemy had been pinned all day by another brigade. The troops bivouacked in their position with the fall of darkness, our outer flank was covered by armoured motor cars and cavalry, which were engaged all day against Turkish cavalry. The Turks had to be dislodged trench by trench, and fought with the greatest tenacity. Sonic guns and several hundred prisoners, with many rifles and quantities of ammunition, were captured, and the enemy's losses in dead were very severe, the trenches being full of corpses. It is believed that our casualties are under 500."

BUSINESS OF THE HOUSE.
Standing Order No. XXXIX considered (according to Order), and suspended for this day's sitting.

CONSOLIDATED FUND (No. 4) BILL.
Brought from the Commons.
THE LORD PRESIDENT OF THE COUNCIL (THE MARQUESS OF CREWE): My Lords, this is the Bill that I stated at our last sitting it is desired to pass through all its stages this afternoon. I beg to move that the Bill be read a first time.
Moved, That the Bill be now read 1a.—(The Marquess of Crewe.)
On Question, Bill read 1a.
Then (Standing Order No. XXXIX having been suspended) Bill read 2a: Committee negatived: Bill read 3a, and passed.

THE BALKANS.
LORD ST. DAVIDS LORD ST. DAVIDS rose to ask His Majesty's Government whether they can make any statement as to the present position of affairs in the Balkans.
The noble Lord said: My Lords, in rising to put this Question I would begin by expressing the regret which we must all feel, no less than the Government themselves, that during the fourteen months that have passed since the war began the Governments of the Allied Powers have not succeeded in re-cementing that union of all the Balkan States which might have done so much to bring the war to a conclusion. I am sure that if the Government vouchsafe any answer on this point to-day, they will tell us two things. They will tell us, first of all, that it was a very difficult thing to do; secondly, that they have tried their hardest to do it. I am quite sure that it was a very difficult thing to do. Had it been easy, I have no doubt it would have been done. The problem is not only a difficult one; it is a very old one. Before placing this Question on the Paper I devoted some time to again looking through Gibbon's "History of the Decline and Fall of the Roman Empire." The old Greek Empire in the East fell for one reason only—because they had before them the same problem which the Government have before them to-day, and because, like our Government, they failed to solve it. The problem that brought down the old Greek Empire was this—how were you going to make Greeks and Bulgarians and Serbians all work together instead of against one another. That was the problem then. You have these people
932
living to-day almost in exactly the same places, with precisely the same feelings towards one another that they had on the day the old Greek Empire fell. I venture to say that if you could bring to life the last Greek Emperor of Constantinople, and if an intelligent Foreign Office clerk could spend two hours in telling him the principal facts as to what had happened in Eastern Europe since his death, the last Greek Emperor of Constantinople would be just as capable of dealing with the problem to-day as any Foreign Secretary.
But, after all, the problem was solved once. It was solved before the first Balkan War by the present Prime Minister of Greece; and having been solved once, surely it ought not to have been beyond the capacity of the Foreign Offices of Europe to solve it again. I want to put this question to the Government—Have they taken the right course; have they taken the usual businesslike course? I have no doubt they have given a lot of thought to it. I would go so far as to say that some of the Foreign Offices may have thought of very little else. But have they done what they ought to have done all the same? What have they done? Doubtless they have followed the usual course. I have no doubt that somebody in London has written a beautiful Despatch and that at Paris somebody has read it through and said "I don't like Clause 3" and "I suggest something instead of paragraph 17"; then it has gone on to Petrograd, and somebody there has objected to Clause 5 and to paragraph 20, and has suggested some alternative wording; and by the time the Despatch has come back a battle somewhere has been fought and has been lost and won, the whole circumstances have altered, and the thing has had to be begun all over again. If the Government told the truth, I venture to say that this is what the Foreign Offices of the Allied Powers have been engaged in doing. Is that the right course? Ought they not to have done what any one of us would have done if we had had a difficult business problem before us?
Supposing any one of us had had a business affair which he had to negotiate not only by getting his two or three partners into agreement but by getting three or four other people of conflicting views to join together. What in those circumstances would be have done? Written a letter? Writing letters is not of

933
much use. I venture to say that there is only one thing he would have done. He would have gone and met the other gentlemen and talked the matter over. I have observed that the three or four people who have been really carrying on this war for the country do adopt that businesslike course. I say the three or four people because, although we have a Cabinet of about two dozen members, I do not assume that everything is managed by a couple of dozen Ministers. As I say, the three or four people who have been obviously carrying on the war for this country with great energy do adopt this course when they have a difficult problem before them. They do not write letters; they go over to the Continent and meet the principal Frenchmen and the principal Russians and discuss the matter, and come to some decision. Why has that not been done in foreign affairs in this great problem of the Balkans? No more important problem than this has been before the Government, and I submit that this is the course that ought to have been adopted.
I may be told "Oh, but the Government have representatives, men of ability and men they can trust, in the Balkans, who have been doing the best they can." I do not want for a moment to say anything that would reflect on the abilities of any of the gentlemen who have been looking after His Majesty's affairs as British representatives in the Balkans. But I do say this, that what was wanted in this matter was not only a man of ability but a man of outstanding ability and reputation, a man who was known to carry the people of this country behind him, a man whose word, if he said "Yes" or if he said "No," would be known to bind the Government of this country. This affair in the Balkans should have been negotiated, not in writing, but by word of mouth, and should have been negotiated not by junior representatives but by a man of high Cabinet position, and it would indeed have been a worthy task for a Prime Minister or an ex-Prime Minister of this country. I would press on the Government, if it is not too late—they know better than I do whether anything can now be done—that that is a course which even at this late hour the Government would be wise to adopt.
As I am speaking on this subject there are two other suggestions of a different kind in connection with the Balkans which
934
I would like to put before the Government for their consideration. I do so with great diffidence. Although I have been many years in Parliament I have spoken only once on foreign policy. On that occasion—some members of the Government may remember it—I unsuccessfully moved in the House of Commons the rejection of the Anglo-German Agreement. Had I been successful in that Motion General Botha in South West Africa would have been saved a great deal of trouble, and I think Sir John Jellicoe, with the problem of Heligoland before him, will have very much wished that on that day I had succeeded in defeating the Government. This is only the second speech I have ever made in either House of Parliament on foreign affairs. In those circumstances perhaps I may be permitted to throw out two or three other suggestions to the Government for their consideration. One is this. Sir Edward Grey told the House of Commons yesterday how doubtful is the position in the Balkans. He spoke in no uncertain tone. As far as we can gather, there are people in the Balkans who think that they can attack Serbia without attacking either Great Britain or Russia. They have no unkindly feeling towards this country, and many of them have naturally the utmost gratitude towards Russia for the part she took in the liberation of Bulgaria. To many people in Bulgaria it must surely be a bitter pill to think they would be opposing the Russians. But they have their own domestic quarrels with Serbia, and they seem to think, some of them, that they could attack Serbia and do us no harm. I would suggest this to the Government. I do not know, and I am not asking, whether there are any Russian troops in Serbia to-day. There may be. If not, I would suggest that His Majesty's Government should approach the Russian Government at once and ask them to send a force to Serbia, however small, even if only 500 men, but to send that force in Russian uniform. Then let it be known—that is the point—that these men are on the Serbian frontier and that if anybody, for whatever motive, attacks Serbia to-morrow, it will be the uniform of the Tsar of Russia, the uniform of the men who liberated Bulgaria, that would have first of all to be fired against. I venture to think that this is a suggestion which the Government might entertain. It would cost very little, and it might have a great moral effect.
The third point is a different one, but also has to do with the Balkans. Since the beginning of the war the Monarchy of this country has declared the annexation of Cyprus, which before we only occupied and administered. Cyprus now belongs to the Throne of this country. In Cyprus you have a Greek population of about a quarter of a million. It would be no hardship if you assimilated the law in Cyprus as regards the Greeks to the law which the Greeks themselves in the kingdom of Greece have passed of their own volition for their own advantage. What I suggest is this. I would like the Government to-morrow to issue an Ordinance creating in Cyprus compulsory military service just as exists in the kingdom of Greece. I would have exactly the same conscription law passed, with the necessary modifications, as if Cyprus were part of the kingdom of Greece. In proportion to the Army which Greece raises from her population by her system of compulsory service, that would give you in Cyprus a force of about 25,000 men. In these times 25,000 men even are not to be despised. Why not raise that force and start drilling them? But I would go a step further and press this, too, on the Government. Let them raise this force and notify to the Greek Government that if it should happen that during the course of this war Greek troops and our own find themselves fighting side by side we would send this force from Cyprus to Greece, put it under the orders of the Greek Commander-in-Chief, and let it take its place in the Greek ranks. If you did that to-day, you would add to the good feeling that already exists between this country and Greece. I think it would very favourably affect the judgment of the Greek people, and this is a time when this country wants all the friends she can get. I venture to think that the course which I suggest is a practical one, and one which could do no harm. It may in certain circumstances add to our forces; it will undoubtedly add to our friends. That, my Lords, is the other suggestion which I desire to press upon the serious consideration of the Government.
THE MARQUESS OF CREWE: My Lords, I am sure that the House has listened with close attention to the interesting speech of my noble friend, this being, as I think he himself stated, the first occasion on which we have heard him engage in a discussion on foreign affairs in this House.
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I desire to say at once that I fully appreciate the care that he took, while skirting on delicate topics, to say nothing which could in any sense cause difficulty to His Majesty's Government or the administration of Foreign Affairs. I have no doubt that every one here will have seen the statement made by my right hon. friend in the House of Commons yesterday to which my noble friend alluded; and on the general question I have no desire, even if I had the authority of my colleagues for doing so, to add anything to what Sir Edward Grey then stated. A general discussion at this moment of Balkan affairs is bound to be an exceedingly delicate matter. Beyond that, it is almost certain to be in the end misleading, because a single statement made on a particular day, at a time when events are moving rapidly from day to clay, is almost bound, if looked at two or three days later, to give a wrong impression of the views of His Majesty's Government on the whole situation. It is obviously impossible to carry on day by day a public discussion, or for the Government to give daily information on the various phases of politics in any particular part of the world; and, that being so, a single statement made in any detail is bound to prove misleading.
We are entitled to say, as my right hon. friend implied yesterday, that we are in one sense in an advantageous position in this Balkan question. We are completely disinterested on all the points which stir opinion there—not owing to our superior virtue, but owing to the force of circumstances and of facts. From the point of view of this country it is altogether immaterial by whom a particular district in South-East Europe is occupied as far as our own national interests are concerned. All that we say is that we generally desire to see the boundaries of these States drawn so far as possible on racial and national lines. Even that statement is, of course, bound to be subject to a certain degree of qualification. You cannot draw an absolutely perfect ethnographical map of South-East Europe. In many districts there is an admixture of races which makes the accurate definition of boundaries on racial lines scarcely possible and there are various other qualifying considerations. But subject to them, those are, as is familiar to all the world, the lines on which we desire to see a settlement made, and we believe that that desire of ours is

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fully recognised by all the Balkan States, and quite as much by Bulgaria as by the other States in that part of the world.
Corning to the particular points on which my noble friend spoke, it is, of course, a sad and familiar fact that the relations between some of the Balkan States have been completely poisoned by the events of 1913. Although, as my noble friend quite truly pointed out, the causes which have culminated in that state of feeling are deep-rooted and go far back through the centuries, while that fact in itself, of course, adds greatly to the difficulty in dealing with them, yet the fact remains that several of these States entertain a profound distrust of each other's motives, and consequently they ascribe to the actions which other States may take in some cases a meaning which may not be warranted but is one which prevents anything like an increase of amity between them. That being the state of things my noble friend believes that, in spite of the great difficulty of bringing about a better feeling between the different States, much might have been done by instituting a plan of oral discussion between statesmen of the first rank among the Allies, I presume with representatives of the different States concerned, rather than by proceeding through the usual methods of diplomacy and correspondence.
LORD ST. DAVIDS: The suggestion which I put forward was that they should deal with the States themselves, not with their representatives. My suggestion was that your important person, with a Frenchman and a Russian, should go to the Balkans and negotiate at first hand with the principals concerned, not with subordinates.
THE MARQUESS OF CREWE: I quite understand my noble friend's desire, and he has certainly made the actual method which he thinks ought to have been adopted clearer in the explanation which he has just given. There is always, I think, something tempting in the desire to send persons of the first eminence to deal personally with a difficult and complicated situation, and in many cases I am sure there is much to be said for it. But the plan is not always successful, as has been found by Germany quite recently in two instances. The Germans sent two statesmen of the first rank, both men of great experience and ability—
938
Prince Billow to Rome, and Herr Dernburg to New York and Washington. Those missions did not meet in either case with anything approaching success; and certainly in one instance, possibly in both, it may be questioned whether the German Government would not have acted more wisely if they had left those enterprises alone. But I do not quote these instances in order to decry the principle of oral discussion as compared with discussion by correspondence, because I have no doubt that in a great number of cases genuine advantage can be derived from it. But in the first place the individual has to be most carefully selected, and it is not always easy, from among the very small number of those who are qualified both by the necessary ability and by the public estimation in which they stand, to find a person who is able to go and who can be spared from other duties not less important. My noble friend will, of course, see that the analogy which he presented of conferences which have taken place between Ministers or between eminent soldiers in France is not entirely complete, if only from the great difference that exists between the two cases in the time which has to be occupied in the respective missions. Had it been found possible—which it distinctly was not—for the different Foreign Ministers of the Allied Powers to meet and to discuss these questions, I do not say for a moment that we should have succeeded in arriving at a solution of this intensely difficult Balkan problem, but there would have been, I agree, a far better chance of doing so than is possible by the ordinary methods of the telegraph and the post. It would have been equally impossible to find representatives of the various Allied Powers who could have acted on the plan which my noble friend suggested. It would not be desirable to go into the reasons which cause me to make that statement, but I think my noble friend may take it that it would not have been possible to find representatives of the different countries who could have undertaken the commission of which he speaks. Therefore my noble friend will understand that as a matter of principle I am far from disputing the advantages which might have followed from the course which he has suggested, but I am bound to state that in my opinion it was not a possible course to pursue in the circumstances as they actually exist. But I can tell him, assuming it to have been a failure of the best possible course,

939
that the failure was not due to want of consideration on our part or of that of the other Governments of the advantages which might follow from it.
As regards the two other points which my noble friend raised—that of the employment of Russian troops in conjunction with the Serbian Army, and the interesting suggestion which he made for the junction to a Greek force in certain contingencies of a force from Cyprus—he will excuse me, I hope, if I do not attempt to enter into any discussion of them. I can assure him that we have noted with interest not merely the fact that he should have made those two suggestions but also the moderate and careful manner in which he dealt with them. As my noble friend may well suppose, a number of suggestions of possible expedients of a similar general character to these can be counted, not merely by tens, but by hundreds, and in their turn they receive the best consideration that we can give to them. I would say, in passing, that my noble friend will have noticed the fact that the first of his suggestions is one made not to us but to one of our Allies, and therefore stands in a somewhat different category. But I can assure him that we shall consider both of those suggestions again.
On the general matter I will merely say this. The House will have noted the statement which the Foreign Secretary made yesterday—that so long as Bulgaria remains non-aggressive the relations between Bulgaria and ourselves will remain unimpaired. I have nothing to add to that declaration or to the subsequent statement on the same subject of my right hon. friend. We all, of course, expect that the Balkan States will take the course which they conceive to be the soundest in their own interests, and it would be impossible to expect them to take any other course. Their view of what those interests are, taking a long view, is bound to be affected by the logic of events. But I should like once more to lay emphasis on the indisputable facts which my colleague stated yesterday in the House of Commons of the different results to be expected from the policy of the Allied Powers and the policy of the Central Powers, assuming that either is in a position to carry that policy into effect after the war. I sincerely hope that those grave words of my right hon. friend will
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have been taken to heart, as I believe they will be, by the parties concerned. The statesmen who control the destinies of the Balkan States are competent politicians with great knowledge of affairs and fully alive to all the facts of the political situation, and I decline to believe that the statement of my right hon. friend—so clear, and pointing to inevitable results without any use of menace or any desire to do anything but to call attention to the facts as they are—can be ignored by ally of the States upon whose action so much depends even more for themselves than it ever in any circumstances can for us.
LORD ST. DAVIDS: As no one else appears to desire to say anything on this subject, I would like to thank the noble Marquess for the kind words he spoke as to my method of putting this case this afternoon. As to the second and third points which I raised, naturally I will not say any more. But as regards the first point, I should like again to press the noble Marquess. The noble Marquess pointed out that eminent men—he instanced Prince Bülow and Herr Dernburg—had not been always successful. I cannot say myself that I have any blind faith as to the infallibility of eminent men. I have known eminent men do very silly things. But the noble Marquess said that we could not spare a really big man from this country at the beginning of the war. There is something in that. I would, however, like to point this out to the House and to the Government. We know, from the experience of a former war, that the Balkan States together are enormously stronger than Turkey. They were enormously stronger than Turkey at the time of the first Balkan War. Since then they have added to their domains; they have added to their population, and they have had time to reorganise—
THE EARL OF CAMPERDOWN: I would point out to the noble Lord that he is making a second speech, which is not in order as there is no Motion before the House.
LORD ST. DAVIDS: If I am out of order I will not continue my observations. But I have heard noble Lords over and over again make second and third speeches, and this is the only time that it has been objected to.
THE EARL OF CAMPERDOWN: I have objected before to noble Lords making second speeches.
THE MARQUESS OF CREWE: I was unwilling to interrupt my noble friend Lord St. Davids. At the same time I confess I find myself in full sympathy with my noble friend opposite (Lord Camperdown), because I have noticed, as I think has been also remarked by other noble Lords, that the tendency to make a second series of observations when there is no Motion before the House has greatly increased of late, and it is a practice which clearly ought to be diminished. The rule is a very simple and familiar one. Where a Question is asked a second speech can only be in the form of a Supplementary Question arising out of something which has been said in reply; but if the noble Lord desires to make a formal reply he can only do so by putting down a Motion for Papers or some other Motion.
THE EARL OF CAMPERDOWN: Or by leave of the House.
THE MARQUESS OF CREWE: Yes, or by leave of the House, which is only given in special circumstances, and, so far back as my recollection goes, rather unwillingly given. I hope my noble friend (Lord St. Davids) mill not think that my observations apply particularly to him. I can say that for some time past some of my noble friends on this Bench and myself have been waiting for an opportunity to make some observations of this kind, because we have noticed with regret that the custom of making second speeches has increased. As we all know, in this House we are not unduly strict or particular on matters of order, but in a House like this—the only Assembly in Europe, I imagine, in which there is no Speaker with powers of calling members to order—it is necessary from time to time to draw attention to contraventions of our exceedingly lax code of rules.
LORD ST. DAVIDS: I will put myself in order by asking a Supplementary Question. I would ask the noble Marquess whether, assuming the whole facts of his statement to be correct, it is not the case that the policy of effecting a re-union of the Balkan States through negotiations on paper has broken down; and whether, even at this late hour, the Government will consider the possibility of adopting the other policy of sending out some one to negotiate face to face.
THE MARQUESS OF CREWE: I think I am entitled to ask for notice of that Question. But in order not to trouble my noble friend to put it again on another day, I will say that we are certainly prepared to take the possibility of such a step as he desires into consideration. I am afraid, however, that at this moment I can say no more.

IMPORTATION OF HOPS.
LORD HARRIS LORD HARRIS rose to ask the President of the Board of Agriculture what quantities of hops have been imported from Belgium in each of the last three years and in the present year; and whether he is satisfied that no portion of this year's importation has come from that part of Belgium temporarily occupied by enemy armies.
The noble Lord said: My Lords, I am afraid it will occur to your Lordships that the apparently insignificant subject which I am raising is inappropriate between the highly important one which has been discussed and the one to follow, but in this matter I represent a community with a real and substantial grievance, and therefore I feel that I am justified in bringing it publicly forward. In doing so I shall take advantage of the latitude which this House allows and diverge a little from the actual subject of the Question. Not only the hopgrowers, but the pickers who are dependent on the cultivation of hops, have this real grievance—that in consequence of our fiscal policy the cultivation of the plant in this country has decreased in a comparatively short period by 50 per cent., namely, from over 70,000 acres to rather over 30,000. Hops have plenty of enemies without those which are imposed by law. To quote an old Kentish dog-gerel—
"First the flea and then the fly,
And then the lice, and then they die."
Added to this is the fact that, owing to the fiscal policy of this country, the English growth is practically swamped by foreign importation. And it is to be remembered, as regards this particular plant, that it would be perfectly possible for this country, if it had a free hand, to grow every hop that is required not only here but throughout the whole Empire.
The position of Government this year is extremely inconsistent. They have themselves implored us all—and the Press has supported them—to curtail our expenditure on foreign produce; yet a policy is

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maintained which results in English money being sent out of the country for the purchase of foreign hops. That is hard enough, but we are, in addition, strongly suspicious that British gold is not only going to the United States for United States hops, but that it is going to the United States for hops grown in Europe, possibly behind the lines of the German armies, and that they are represented to be Belgian hops. I have only this moment had a Paper put in my hands which was moved for and presented to the House of Commons yesterday, and it is very significant as showing the justification of the question which I have asked. The importation of hops from Belgium between September, 1913, and August, 1914, was 23,000 cwts. Between the same months of 1914–15 that importation had increased to over 27,000 cwts. notwithstanding that Belgium had been during that period over-run by the German Armies, that a considerable area in it was in the occupation of the German Armies during a good part of that year, and that the ordinary agricultural operations of the country had been most seriously interrupted.
I should be only too glad to hear from my noble friend that he thought it possible to induce the Chancellor of the Exchequer to do what has been urged for so many years and is regarded by the growers as merely an act of justice—place a small duty on foreign hops. But if we have to put up with a continuance of what is, in our opinion, unfair competition from abroad, I hope the noble Earl will be able to impress upon his colleague who controls the Customs to use every possible vigilance to ascertain whether or not there is any ground for our suspicion that hops are coming into this country from behind the German lines and represented to be hops coming from behind our lines. I believe that this year there are only 1,500 acres under hops in that part of Belgium which is behind our lines, and, giving a liberal growth of ten cwts. per acre, that would be only 15,000 cwts. If that number is exceeded from Belgium, then I should say that our suspicions are, without question, justified.
THE PRESIDENT OF THE BOARD OF AGRICULTURE AND FISHERIES (THE EARL OF SELBORNE): I can give the noble Lord the information for which he asks. The quantities of hops imported from Belgium in each of the last three years
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and in the present year up to August 31 last have been, in round figures, as follows:—In 1912, 35,000 cwts.; 1913, 23,000 cwts.; 1914, 6,000 cwts.; 1915, up to August 31, 23,000 cwts. The exact quantity which may have been imported from that part of Belgium which is in the occupation of the enemy cannot be stated. I am not prepared to say that none has come from the part of Belgium which is occupied by the Germans, because a certain amount may possibly have come by way of Holland, but the amount must be only small, because the total importation from Holland in the twelve months from September, 1914, to August, 1915, was only 258 cwts. I regard it as quite impossible that hops could have been smuggled through the German and the British military lines from that part of Belgium which is occupied by Germany to that part which is occupied by the Allies.
I am afraid I cannot follow the noble Lord into that part of his speech which dealt with fiscal policy, because agreement on fiscal policy, I would remind him, was not the basis on which the present Government was formed. But I wish to take this opportunity of expressing my agreement with him in the importance which he attaches to hop-growing as part of our greatest national industry. I doubt if those who do not live in hop districts sufficiently realise what an extraordinarily valuable form of intensive culture this is to any country. The annual expenditure per acre of hops never falls below £20; it goes up in some cases to £60 an acre, and it is found generally to vary somewhere between £30 and £45 an acre every year; and of that cost of production over half is paid directly in wages for labour, and the remainder is almost all paid to labour indirectly. Certainly in England, there is no form of agriculture which supports so large a number of people or distributes such a great volume of wages comparative to the acreage involved. Therefore I have no hesitation in saying that it would be, in my opinion, a national calamity if the hop industry of this country was, from any cause whatever, permanently ruined.
LORD HARRIS: Might I have the figure for 1914 again?
THE EARL OF SELBORNE: In 1914 the quantity of hops imported from Belgium was 6,000 cwts.
LORD HARRIS: In the Return which was made to the House of Commons and contained in the Paper which I have in my hand 22,918 cwts. is the figure given for 1913–14.
THE EARL OF SELBORNE: I will try and find out where the discrepancy is; possibly the two sets of figures do not cover the same period.
EARL ST. ALDWYN: Did my noble friend say that this year, up to August 31, 23,000 cwts. of hops came here from Belgium.
THE EARL OF SELBORNE: Yes.
EARL ST. ALDWYN: Where could they have come from if not from behind the German lines?
THE EARL OF SELBORNE: They were grown in France and Belgium—they all came from Dunkirk.

NAVAL AND MILITARY WAR PENSIONS, &c., BILL.
Amendments reported (according to Order).
THE MARQUESS OF CREWE: My Lords, in moving that this Report be now received, I think it would probably be for the general convenience if I were to say a word on the position in which we find ourselves owing to the action which was taken by your Lordships' House in making certain substantial Amendments in Committee. Since then we have had the opportunity of consulting our colleagues whose Departments are specially concerned with this measure, and I will tell the House what the result of that consultation is. We have arrived at the conclusion that the changes which are brought about by the Amendments made here in Committee are in fact considerably greater than they would appear to be on a superficial examination of the Bill and a comparison between its form now and that in which it was before Committee. It will be seen, I think, that the adoption of these Amendments by your Lordships has in fact brought about a reversal of the principle on which the Bill was framed and on which it was passed through the House of Commons.
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The intention of the Bill as it came up here was that the pensions and allowances on the normal scale should be, as they always have been, the care of the Admiralty and of the War Office, but that a private body—in this case the Corporation of the Royal Patriotic Fund—should be entrusted with the duty of supplementing those national pensions through funds collected either centrally or more probably in the main locally, and by the employment of persons exercising local influence for that purpose. That was the main object for which the body to carry out these purposes was a Committee of the Royal Patriotic Fund Corporation, it being believed that owing to the constitution of that Corporation and the fact that the larger number of persons who possess great local influence are members of it these objects could thus be best carried through. I shall be told that public money would be needed to carry out, in all probability, part of the work entrusted to this new body. That is undoubtedly true. But the intention of the framers and promoters of the Bill was that if a public grant had to be made it should be made in the form of a large single contribution from the Exchequer to the funds of the body entrusted with the distribution, and not by undertaking a regular annual payment for the purpose.
In the form in which the Bill now stands the suggestion is that the National Exchequer should undertake these duties, the body having ceased to be in the main a private corporation such as was intended in the original form of the Bill, and that the private contributions would only be such crumbs as the Exchequer could collect for further supplement of pensions and allowances after having undertaken to supply them itself. It was stated, and so far as I know generally believed, in the House that in those circumstances the crumbs would not be forthcoming on a large scale. I am bound to say that I think that this belief was probably well founded. Our view is, therefore, that the whole principle of the measure is affected and indeed altered by your Lordships' Amendments, the result of which, as I indicated at the beginning of my remarks, does not spring to view at first sight in the mere substitution, as it appears, of two members for six from the Royal Patriotic Fund and in the other changes which have been made. But in the opinion of His

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Majesty's Government the basis is thus altered, and consequently the action which His Majesty's Government have to take upon it is thereby to some extent affected.
The Ministers who preside over the Departments which are specially concerned and affected by the measure require more time to consider the whole question in all its aspects—more time, that is, than could reasonably be asked for in carrying the Bill through its further stages in this House. In our opinion, therefore, the most reasonable and easy course is for the Bill to go down to another place in its present form with such Amendments as, in the opinion of the House, may be needed to make that form more shipshape and coherent than it is left by the Amendments which were carried in Committee. In those circumstances we think that it would be better for His Majesty's Government, as we cannot pretend to adopt the changes which have been made by the House, not to ourselves attempt to undertake the work of trimming off the rough edges of the Bill, but to let that be done by those noble Lords who are responsible for the Amendments carried, and of course we shall not raise any objection to their doing this to any extent that they think fit.
There are, I see, several Amendments to be moved at this stage, but they by no means cover the entire ground of amendment which noble Lords will, I conceive, wish to undertake if the Bill is to go down in anything like a complete form to be considered by the House of Commons. There are various other Amendments, some of them of a drafting character, which in order that the Bill shall present a decent appearance on its return noble Lords would, I have no doubt, wish to see included; and it would probably be the most convenient course that noble Lords should move those at the last stage of the Bill, after the Third Reading. We can get through this afternoon those Amendments which are down for to-day, and we can take the Third Reading on any day—perhaps early next week—that noble Lords might find convenient, by which time they could place the other Amendments on the Paper. We all, of course, desire to make the Bill a workable one, even though we may not all be agreed as to the precise lines on which its operations ought to move. After all, this Bill has
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to frame a system which is to last for years to come—a system which, as I said on a former occasion, will go on for a period long exceeding the utmost period of the life of probably any member of this House. Therefore it is clearly important that it should become law in the best possible form.
I should like to add this. Although in some of its details, and, even more, in some of its principles, it has been a matter of discussion between different members of this House and also in another place, the subject itself is one which we ought to carefully guard ourselves from regarding in any sense as one of controversy. It is merely a question of finding the best method of arriving at results in the care of these people, all of whom deserve and will continue to receive the utmost sympathy of the public men of all parties and schools. Therefore although there may be some contest as to principles there is none whatever as to the object, and I sincerely hope that when the Bill is considered elsewhere—and I believe this will be the case—this fact will be carefully borne in mind, because it would be painful and odious to us all if this high national object were to become a matter of anything like dispute or acrimonious controversy. I now move that the Report be received.
Moved, That the Report be now received.—(The Marquess of Crewe.)
LORD BALFOUR OF BURLEIGH: My Lords, I would ask the noble Marquess to make his view of future policy a little more distinct. The only Division which took place was in regard to Lord Devon-port's Amendment, which had the effect of cutting out the Royal Patriotic Fund. Is that the Amendment which requires so many corresponding Amendments, or are the Amendments which are required consequential upon the Amendments which were moved by the two noble Marquesses opposite? Because a great many of the Amendments which were inserted in Committee throughout the Bill were on the initiative of the two noble Marquesses, the one in charge of the Bill and the noble Marquess, Lord Lansdowne. If it is in consequence of Lord Devonport's Amendment that further Amendments are required, it rests, I think, with him or those who supported him to try and meet the suggestions of the noble Marquess. If, however, the further Amendments indicated

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are consequential on the Amendments moved by the two noble Marquesses supporting the Government, it falls upon them, surely, to make the additional Amendments required.
THE MARQUESS OF LANSDOWNE: My Lords, I think the answer to the point raised by my noble friend opposite is that the Amendments which will be necessary in this Bill, and to which reference was made by the noble Marquess who leads the House, are mainly consequential upon the decision of your Lordships to strike the Royal Patriotic Fund Corporation out of this Bill. So far as I am aware, if there are any Amendments consequential upon the Amendments which stood in my name they are certainly few and insignificant. But the point of my noble friend's observation was, I think, this—that the House having determined to make what we regard as a fundamental change in the structure of the Bill by striking out the reference to the Royal Patriotic Fund Corporation, it seems futile for us to follow that up by touching up the Bill throughout in order to make it accord with that Amendment. In our view it is better to allow the matter to take what I conceive to be its usual course—namely, that the Bill should go from your Lordships' House back to the House of Commons, where it will be for that House to decide whether they can accept the change which your Lordships have made. There can be no doubt that in that House the objections and arguments brought forward by noble Lords in this House are sure to be raised, and we shall have to see whether they prevail in the other House of Parliament as they prevailed in this. Until that point is cleared up it would be, in our opinion, useless for us to pursue the task of doing what I think the noble Marquess called trimming the rough edges that have been left on the Bill by the somewhat drastic treatment it received at your Lordships' hands the other evening.
EARL ST. ALDWYN: My Lords, I confess I do not understand why the treatment which this Bill has received at your Lordships' hands should be considered as of such drastic importance as my noble friend has just Mated. What is it that we have done? A majority of this House struck out the words, "Committee of the Royal Patriotic Fund." Well, the Committee never was a Committee of the
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Royal Patriotic Fund in the Bill as proposed to your Lordships' House. It was a Committee appointed mainly from outside the Royal Patriotic Fund altogether, the Corporation of the Royal Patriotic Fund being allowed to appoint six members of that Committee as against nineteen appointed by the Government or by Government Departments. The representation of the Royal Patriotic Fund on the Committee was afterwards reduced to two instead of six. But that is all. Those are the alterations which your Lordships have made in this Bill which have induced the two noble Marquesses who have just addressed your Lordships to take so strong a view of what has been done. I do not wonder that the noble Marquess who leads the House should have admitted that it does not spring to the view at first sight why these alterations are so terrible. I should have thought it perfectly possible, if it was considered that there was any great virtue in the words "Committee of the Royal Patriotic Fund," that they might have been restored in another place, and, if necessary, the additional members of the Fund might have been placed upon the Committee, as indeed was suggested, I think, by the noble Marquess the Leader of the House himself. But it is for the Government to judge of the effect upon their own Bill of the Amendments made by your Lordships, and I hope that before they decide upon any action in regard to it they will really consider whether what your Lordships have done justifies the description which has been given of it.
THE EARL OF CAMPERDOWN: My Lords, I rise to ask a question. If Amendments are proposed from this side, will the Government express their opinion with regard to the advisability or not of accepting them? It is quite possible, if Amendments are proposed from this side, that if the Government were to say that they thought they had better not be put in the Bill they might be withdrawn. But we shall be under a considerable disadvantage if the Government, by taking the course which I understood the noble Marquess to indicate, were absolutely to refuse to us the benefit of their opinion upon any Amendment which might be proposed.
THE EARL OF CROMER: My Lords, as I have taken some little part in this discussion I rise to confirm what has been said by the two noble Lords who have

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just spoken. His Majesty's Government appear to look upon the Amendment carried in this House as what is called a wrecking Amendment. We never regarded it in that light. We regarded the question of the Committee being formed on the basis of the Patriotic Fund as an important detail but no more than an important detail, and I cannot see why it should not be regarded as a detail still. Certainly it was not our intention in the smallest degree to put forward what is called a wrecking Amendment.
LORD SOUTHWARK: My Lords, is it not the fact that in the Bill as brought up to your Lordships' House there is no provision made in respect of public money? My noble friend Lord Devonport also pointed out that there was no likelihood of private funds being forthcoming, because he told us that those connected with the Royal Patriotic Fund had said that all their money was already allocated. With regard to the National Relief Fund I think there was an anticipation, when this Bill was framed, that there would be some millions of money forthcoming for these objects from that Fund, but I understand that that hope, too, is not to be realised. The question therefore is, Where is the money coming from? If you are going to have public money you ought to have public control and it ought to be under the Treasury, whereas in the Bill as originally drafted this Statutory Committee was to be a sort of sub-committee of the Royal Patriotic Fund, to whom they were to report, and not to report to the State, and there was to be no one responsible in the House of Commons. I quite understand that the Bill has been greatly altered. At one time I intended to suggest to His Majesty's Government that it would be a good thing to withdraw the Bill, redraft it, and reintroduce it into the House of Commons, and then send it up here as a new Bill. It seems to be decided that those who have hitherto had control of pensioning in the Army and the Navy are not to be the bodies to be used for the purpose of these supplementary grants. If you are going to have this new Statutory Committee I suggest, in drafting a fresh Bill, that this new body should have considerable powers beyond those of simply making supplementary grants. There are all manner of services that will be demanded and will have to be carried out in connection with our soldiers and sailors after this war.
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There are at present very many societies and much overlapping; yet we hear of much distress amongst old soldiers and sailors, whether Crimean veterans or otherwise. I suggest that when you are making a new statutory body you should have a body that should take over all these matters and be responsible to the State. I did suggest on a former occasion that the bodies that had been doing the pensioning hitherto—the Chelsea Board, and the bodies connected with the Admiralty—might have their powers extended; and if you want this under any particular body, put it under either of those. I quite concede that we have greatly altered the character of this Bill by the alteration we have made. There is no doubt about it that the money to be provided for our soldiers and sailors is going to be State money, and not money collected by voluntary subscriptions. I see a provision in the Bill that these local committees in the country are to solicit and receive contributions from the public towards any of these purposes. That is the only hope of any money coming in voluntarily for what this Bill proposes to do, but I think most of us realise that there will not be much money forthcoming in that way.
LORD TENTERDEN: My Lords, on the Second Reading of this Bill I advocated two things—that there should be State control, and that the pensions should be provided for from Government funds. The chief object I had in advocating State control was to make sure that the money would be forthcoming from the Government. Great exception is taken to the alteration made by Lord Devonport's Amendment, which in effect does provide for State control. To my mind the most essential point., the one I have had at heart most, is that the money for the pensions of our soldiers and sailors, officers and men, should be forthcoming, and if the Government are prepared to give a guarantee that any deficit whatever will be made up by them, then as far as I can see it matters little whether we provide for State control or whether we do not. What the noble Earl, Lord St. Aldwyn, said in Committee is only too true, and he speaks with the authority of an ex-Chancellor of the Exchequer. He said that when you start legislating on matters of this kind and provide public funds the result is that voluntary contributions fall off and eventually cease to exist. There is no doubt

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in my mind that that will take place here. Voluntary contributions will fall off to nil, and State control will ipso facto be established whether it is put in the Bill or not. I ask that the Government should guarantee that any deficit under the Bill will be made good by the Government, and that might get over the difficulty which has arisen.
THE MARQUESS OF LANSDOWNE: My Lords, I merely wish to notice an observation which fell from my noble friend Lord Cromer, which shows that he is to some extent under a misapprehension. He spoke of us as if we had charged him and his friends with a desire to wreck this Bill. Neither my noble friend nor I make any such charge; nor do we think for a moment that that is the desire of my noble friend and those who acted with him. I believe, on the contrary, they would like the Bill to pass and are far from desiring to wreck it. Our position is simply this. Your Lordships have made what we regard as a very important change in the Bill. The noble Earl opposite treats it as a matter of detail. I think it amounts to a great deal more than that, but opinions may differ as to the gravity of the change. Our view is that this change having been made by noble Lords opposite it is for them, and not for us, to deal with any Amendments necessitated by that change and consequential upon it. But if they, or noble Lords in any part of the House, think proper to move Amendments, we shall certainly—and this is the answer I have to give to my noble friend Lord Camperdown—discuss them and say quite frankly what we think about them. But in our view the responsibility should not be with us.
On Question, Report received.
Clause 1:
Establishment of Statutory Committee.
1.—(1) For the purposes herein-after mentioned relating to pensions and grants and allowances made in respect of the present war to officers and men in the naval and military services of His Majesty and their wives, widows, children and other dependants, and the care of officers and men disabled in consequence of the present war there shall be constituted a Statutory Committee, consisting of twenty-five members, appointed as herein-after mentioned.
(2) Of the said twenty-live members—
eighteen (of whom one shall be chairman and one vice-chairman and some shall be women and not less than two shall be representatives of labour) shall be appointed by His Majesty;
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one shall be appointed by the Treasury;

one shall be appointed by the Admiralty;

one shall be appointed by the Army Council;

two shall be appointed by the Soldiers and Sailors' Families Association;

two shall be appointed by the General Council of the Royal Patriotic Fund Corporation.

(3) There may be paid to the chairman or vice-chairman, out of moneys provided by Parliament, such salary as the Treasury may determine.
(4) All other expenses of the Committee (including such travelling and other allowances to members of the Committee as the Committee may determine) shall be paid out of the funds at the disposal of the Committee.
(5) Seven members of the Statutory Committee shall constitute a quorum.
The Statutory Committee may appoint subcommittees consisting either wholly or partly of members of the Statutory Committee, and may delegate to such sub-committees, with or without any restrictions or conditions as they think fit, any of their powers and duties under this Act.
Subject to the foregoing provisions of this subsection, the Committee shall regulate their own procedure.
(6) The term of office of a member of the Statutory Committee shall be three years; but a retiring member shall be eligible for re-appointment.
(7) The Statutory Committee may, with the consent of the Treasury, appoint and employ a secretary, assistant secretaries, and such other clerks and servants as they may require, and may pay out of funds at their disposal to such secretary, assistant secretaries, clerks and servants, such salaries or remuneration as they, with the consent of the Treasury, may determine, and may with like consent establish a scheme of pensions for persons in their permanent employment or grant pensions to such persons on retirement.
THE EARL OF LICHFIELD THE EARL OF LICHFIELD had an Amendment on the Paper to the first paragraph of subsection (2)—
(2) Of the said twenty-five members—
eighteen (of whom one shall be chairman and one vice-chairman and some shall be women and not less than two shall be representatives of labour) shall be appointed by His Majesty;
The noble Earl moved, before the words "representatives of labour," to insert "employers and not less than two shall be."
The noble Earl said: I was very glad to hear the remark that fell from Lord Crewe to the effect that though we might differ as to the form which this Bill should take we were all actuated by the same motive, and that was to get the best possible terms for the gallant men who have given so much for their country. I was also pleased to hear Lord Lansdowne

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state that the Government would be glad to give their opinion on any Amendments that we might bring forward. I must ask indulgence for putting this Amendment down a second time, but I withdrew it somewhat prematurely in Committee and did not give my reasons sufficiently for suggesting this alteration. Further, I would point out that the Bill has been so altered in Committee that there is more reason now for putting employers as well as representatives of labour on to the Statutory Committee. In the first place, there are now eighteen members of the Statutory Committee to be appointed by the Crown, as against twelve as the Bill originally stood. Therefore if places were given to at least two employers of labour there would remain a larger number of free places than there were in the original Bill.
Again, take the clauses that were incorporated in the Bill in Committee. The noble Marquess the Leader of the House moved one, and another was also inserted, in which specific reference was made to employers as well as representatives of labour. In Clause 3 the noble Marquess, Lord Crewe, moved a subsection, which was agreed to, providing that for the purpose of making provision for the care of disabled officers and men the Statutory Committee should appoint a special subcommittee "which shall include representatives of employers and of labour." And a new clause was subsequently added directing that the local committee may appoint, for the care of disabled officers and men, a special sub-committee "which shall include representatives of employers and of labour." I think it is evident that the Bill would be more complete and would better carry out the provisions which are indicated in those clauses if two representatives of employers were added to the Statutory Committee.
Your Lordships may perhaps wonder how it was that employers were not put down specifically in the Bill as drafted. The reason evidently is that the Report of the Special Committee of the House of Commons with regard to Pensions and Grants was adopted in this respect. In that Report, which was published in April last, the Committee recommend that two members of the Statutory Committee shall be representative of labour, but they make no mention of employers. This Committee was appointed for the special
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purpose of dealing with pensions and grants, and had nothing whatever to do with the care of disabled officers and men. But if we turn to the Report of Sir George Murray's Committee on the Provision of Employment for Sailors and Soldiers Disabled in the War, we find that, after recommending the appointment of a Central Committee acting under the direction of some existing Government Department, they specially recommend that on that Committee should be included representatives of employers of labour and of trade unions and other labour organisations. Therefore it would seem only reasonable that in this Bill, in which is incorporated the care of disabled soldiers and sailors, the provision which that Committee recommended should be inserted. Then, again, there is the very important question of demobilisation. I am aware that no mention is made of it in this Bill, but surely it is our duty, as far as we can, to see that the Committee constituted under this Bill should be capable of dealing efficiently with this question, because it would seem almost impossible to contemplate the establishment of two unconnected organisations, one dealing with disabled and the other with able-bodied sailors and soldiers.
I will trouble your Lordships with a short extract on this question from the Report of Sir George Murray's Committee. They said—
"It has been suggested to us that an organisation so created—"
that is, the Central Committee which they suggested—
"might ultimately be utilised for the purpose of dealing with the employment of ex-sailors and ex-soldiers of all kinds, whether able-bodied or disabled. The numerous agencies at present engaged on this work in different parts of the country, and the complexity of their operations, make it highly desirable that some step should be taken to co-ordinate their activities and to prevent overlapping. But such a scheme does not come within the terms of our reference, and we are aware that the question has already received a good deal of attention elsewhere. It is only mentioned in this place because it seems to us almost impossible to contemplate the establishment of two unconnected organisations—one dealing with disabled and the other with able-bodied sailors and soldiers."
Having that in view, and also the fact that the care of disabled officers and men is one of the most important parts of this Bill, I think it is highly desirable that employers and labour representatives should be brought together on the Statutory Com-

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mittee. I hold no brief for employers. I do not know what their views may be. I am sure that whether they are on or whether they are off the Statutory Committee they will be quite ready to take their share and do all they can to help these great questions forward. But if employers are given official representation on the Committee I cannot but think it will be a good thing for the country and for labour itself. Therefore I have ventured to bring forward this question again for your Lordships' consideration in the hope that His Majesty's Government may be willing to reconsider it.
Amendment moved—
Clause 1, page 1, line 16, after the first ("be") insert ("employers and not less than two shall be").—(The Earl of Lichfield.)
THE MARQUESS OF CREWE: On the previous occasion when my noble friend opposite moved this Amendment I asked him to withdraw it for reasons which I then stated. Certainly on this occasion I do not make any appeal to him of that kind, in the first place because, as my noble friend stated, we do not pretend to take precise responsibility for the shape in which the Bill goes down to the other House.
THE EARL OF CAMPERDOWN: But the noble Marquess promised that the Government would give us their opinion about Amendments that were moved.
THE MARQUESS OF CREWE: Certainly, and I am going to do so. And in the second place—as I was going to add—because my noble friend has this Amendment greatly at heart. He has pointed out two reasons which in his opinion make it specially desirable. In the first place, he says that as the care of disablement is one of the principal functions of the Statutory Committee employers as well as representatives of labour ought to be specifically represented. I should have thought that, as a matter of fact, disablement questions would have been dealt with more or less exclusively by the committee for dealing with those matters rather than by the Statutory Committee sitting fully. My noble friend will remember that the Disablement Committee is designed to include a number of persons who are not members of the Statutory Committee, and therefore it would probably assume a somewhat different aspect from that which the Statutory Committee would itself take. The other reason which I think was in my noble friend's mind was the possibility of
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the whole question of disbandment, demobilisation, falling to be dealt with by the same body. That, of course, is a vast question which we have not begun to face as yet, and whether when the time comes it will be possible to do what Sir George Murray's Committee indicated was the most likely course—namely, that of dealing with it by precisely the same body as that which deals with these questions of pensions and allowances—I am not in a position to say. But I do not make that observation in order to detract from the weight of my noble friend's contention.
As regards the main purposes of the Bill—that is to say, pensions and allowances, which are stated as being the principal purposes for which the Statutory Committee is framed—I can only repeat what I said before, that I do not feel quite certain that my noble friend's addition would add to the favourable reception of the measure in another place, simply for this reason, that it would not be doubted that so far as the general interests of employers of labour are concerned they would be quite adequately represented by the Statutory Committee as constituted. The same could not precisely be said of the interests of labour, and that is why labour representatives were expressly included, and that does appear to constitute a difference between the two categories. As I said before, the reason for expressly including women was somewhat of the same character. But certainly if my noble friend opposite and other noble Lords who have taken a prominent part in the debate consider that this Amendment ought to be included, I should make no further protest, although, as I say, from my noble friend's own point of view I doubt whether he is wise in desiring to include it.
EARL ST. ALDWYN: I agree with what has been said by the noble Marquess who has just sat down. I do not think this is an Amendment which would be favourably received in another place. If I rightly understand what the noble Marquess said, His Majesty's Government have included representatives of labour by name in this proposal because it was considered that the views of the labouring classes might differ from those held by other members of the Committee and they would not be adequately represented by them. All the other members of the Committee will necessarily be in a greater or lesser degree employers of labour, and I do not know that in effect the

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words proposed by the noble Earl would have any real effect in altering the composition of the Committee. Anybody who employs labour at all would be an employer of labour, and might be put on the Committee as representing employers. I hope the noble Earl will not think it necessary to press this Amendment.
LORD HAVERSHAM: I also hope the noble Earl will not press this Amendment, and for this reason. His object is that on the Statutory Committee representatives should be placed of the different classes. If this were an industrial dispute it would be quite right to put on representatives of employers and of labour. But this is a Committee which has to deal with the pensions and allowances of officers and men of the Services and their various dependants. The Statutory Committee is certain to include a number of members who will be quite competent to look after the interests of the officers and men; amongst the representatives will be some appointed by the Admiralty and some appointed by the Army Council. But the industrial classes produce the great majority of the soldiers, and therefore for that reason the Government have included representatives of labour. As Lord St. Aldwyn said, almost all the other members are in a certain sense employers of labour, so that nothing would be gained by putting this Amendment in the Bill.
THE EARL OF CROMER: This Amendment was very fully discussed on the former occasion, and the noble Earl who moved it has said nothing to alter my own personal opinion as regards the fundamental point. He will remember that the idea we had was not to earmark so many individual members of the Committee, but to leave the number at eighteen and give the Government the widest latitude as to who should be appointed. It does run contrary to that to have two representatives of labour at all, and no doubt if we were logical the proper thing would be not only not to insert representatives of the employers but to delete the representatives of labour. The noble Marquess, however, urged some very cogent reasons against doing that, so I think on the whole the best thing to do is to leave the measure as it stands.
THE EARL OF LICHFIELD: I withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 2:
Establishment of local committees.
2.—(1) For the purpose of assisting the Statutory Committee in the execution of their duties, a local committee shall be established for every county and county borough, and for every borough or urban district having a population of not less than fifty thousand the council of which so desires, and for any other borough or urban district for which the Statutory Committee, on the application of the council thereof, considers it desirable that, having regard to the special circumstances of the case, a separate local committee should be established.
(2) The constitution of a local committee shall be such as may be determined by a scheme framed by the council of the county or borough or urban district and approved by the Statutory Committee; so, however, that every such scheme shall provide—

(a) for the appointment by the council of the county or borough or urban district of at least a majority of the local committee; but the members so appointed by the council need not be members of the council; and

(b) for the appointment by the local committee from amongst their own number of a chairman; and

(c) for the inclusion of women and representatives of labour among the members of the local committee.

(3) The scheme, in the ease of a county, may provide for the division of the county into districts and the appointment of a sub-committee for each such district, which sub-committees are hereinafter referred to as district committees, so, however, that every borough and urban district within the county having a population of not less than twenty thousand, and in the case of the county of London the city of London and each metropolitan borough, shall be a separate district, and that the council thereof shall have the right of appointing at least a majority of the members of the district committee, and in the appointment of every such district committee some of the members appointed shall be women.
Such a district committee may, but need not, contain any members of the local committee.
(4) A scheme regulating the constitution of any such local committee or district committee as aforesaid shall provide for the substantial representation amongst the members of the local or district committee of persons who have within the area either as members of the Soldiers' and Sailors' Families Association, or the Soldiers and Sailors Help Society, or otherwise, been performing functions similar to those to be performed by local committees under this Act.
(5) For facilitating the preparation of such schemes as aforesaid the statutory committee shall as soon as practicable prepare and issue forms of model schemes.
(6) A local committee or district committee may also appoint sub-committees, either for any special purposes or for any special parts of their area, and any such committee may consist either wholly or partly of members of the local or district committee.
(7) Any two or more local committees may combine together for the joint exercise of any of

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their powers and duties under this Act, and may for that purpose appoint a joint committee, and may agree as to the proportions in which the several local committees represented on the joint committee are to contribute towards the expenses of such joint committee.
(8) A local committee may delegate to any district committee, and a local committee or district committee may delegate to any subcommittee, whether appointed for any particular locality or not, any of its powers and duties under this Act, whether with or without any restrictions or conditions as it may think fit.
(9) Any expenses of a local committee (except so far as they may be paid by the Statutory Committee) shall be paid out of funds at the disposal of the local committee.
(10) In the application of this section to Scotland "county borough," "borough," or "urban district" means a royal, parliamentary, or police burgh.
EARL ST. ALDWYN EARL ST. ALDWYN had an Amendment on the Paper, in subsection (2), after the words "Statutory Committee," to insert "whose decision, in the event of any difference between the council and the Committee, shall be final." The noble Earl said: I moved this Amendment in Committee in the form in which it now appears on the Paper. The noble Marquess, however, was of opinion that this particular wording would not in reality meet the case from a drafting point of view, and he suggested the terms of an alternative provision which he was prepared to accept. Those terms have been embodied in the new Amendment which I now propose to move. The object, of course, is solely to secure finality in the settlement of the scheme, and to leave the decision in the case of difference with the Statutory Committee.
Amendment moved.
To insert the following new subsection:
"If within such time, not being less than one month, as may be allowed by the Statutory Committee the council does not frame a scheme or such a scheme as the Statutory Committee approve, the Statutory Committee may themselves frame a scheme, which shall have a like effect as if it were framed by the council and approved by the Statutory Committee."—(Earl St. Aldwyn.)
THE MARQUESS OF CREWE: The noble Earl has quite correctly represented what occurred on the last occasion. It appeared to us also that it would not do to leave the Bill without some one having the last word in what I hope will be the very rare event of its being found impossible by the local council and the Statutory Committee to agree on a scheme, and that this being so
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it was more advantageous to place that last word in charge of the central rather than of the local body in order to secure something nearer approaching uniformity, although it has never appeared to us that local schemes could be or ought to be absolutely uniform in character. The terms which the noble Earl has read out are considered, as I understand, by those who are competent to give a legal opinion on the subject, better suited to ensure the object he has in view than the words that were originally placed on the Paper.
On Question, Amendment agreed to.
Clause 3:
Functions of Statutory Committee.
3.—(1) The functions of the Statutory Committee shall be—

(a) to decide any question of fact on the determination of which the amount of a pension or grant payable out of public funds to a dependant, other than a widow or child, may depend;

(b) to frame regulations for supplementary grants in cases where owing to the exceptional circumstances of the case, the pension or grant or separation allowance payable out of public funds seems to the committee to be inadequate;

(c) out of funds at their disposal, to supplement pensions and grants and separation allowances payable out of public funds, so, however, that no such supplementary grant shall be made except in accordance with such regulations as aforesaid;

(d) out of funds at their disposal, to make grants or allowances in cases where no separation allowances or pensions are payable out of public funds;

(e) out of funds at their disposal, to make advances on account of pensions or grants or separation allowances due to any person out of public funds during any interval before the payment thereof actually commences;

(f) to decide, in any particular case, whether, as respects a wife, widow, child, or other dependant, any pension or grant or separation allowance and, as respects an officer or man, any supplementary grant has, under the regulations subject to which it was granted, become forfeited;

(g) to decide, as between two or more claimants to any pension or grant or separation allowance, which, if any, of the claimants is entitled thereto;

(h) to determine any other questions in relation to pensions or grants or separation allowances which may be referred to the committee by the Admiralty or Army Council;

(i) to administer any funds which may be placed at the disposal of the committee by local committees or by any society or other organisation having funds applicable to the making of grants of the nature of those which the committee are authorised to make, or otherwise;

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(j) to make provision for the care of disabled officers and men after they have left the service, including provision for their health, training, and employment;

(k) to make grants in special cases for the purpose of enabling widows, children, and other dependants of deceased officers and men to obtain training and employment.

(2) The Statutory Committee may refer to any local committee for their consideration and advice any question pending before the Statutory Committee, and may request any local committee to collect and furnish them with any information they may require with respect to any matter, and may delegate to any local committee the distribution within their area of any grants made by the Statutory Committee, and may pay or contribute towards the payment of the expenses incurred by the local committee in respect of any of the matters aforesaid.
(3) For the purpose of making provision for the care of disabled officers and men, the Statutory Committee shall appoint a special sub-committee which shall include representatives of employers and of labour.
(4) Paragraphs (8), (9), (10), and (11), of the First Schedule to the Patriotic Fund Reorganisation Act, 1903 (relating to funds, accounts and audit) shall apply in respect of the Statutory Committee in like manner as they apply in respect of the Corporation.
(5) The Statutory Committee shall in each year make a report of their proceedings to His Majesty.
(6) Pending the appointment of a local committee or sub-committee for any area, the Statutory Committee may make arrangements with any organisation for the performance within that area by the organisation of the functions of the local committee mentioned in paragraphs (a), (b), and (c) of section four of this Act.
(7) For the purpose of enabling the Statutory Committee to discharge their functions the Admiralty and the Army Council shall on request supply the Statutory Committee with such particulars as they may require with regard to any payments made by them to any officer, sailor, marine, soldier, widow, child, or dependant, and the Statutory Committee may on request duly communicate all such and similar information to any charitable body legitimately interested in the case of any officer, sailor, marine, soldier, widow, child, or dependant.
LORD BALFOUR OF BURLEIGH LORD BALFOUR OF BURLEIGH moved to omit from subsection (7) the words "and the Statutory Committee may on request duly communicate all such and similar information to any charitable body legitimately interested in the case of any officer, sailor, marine, soldier, widow, child, or dependant," and to substitute the following words, "and the Statutory Committee shall on request communicate to and shall on request be entitled to receive from any charitable body legitimately interested in the case of any officer, sailor, marine, soldier, widow, child, or dependant all particulars relevant to such case."
The noble Lord said: In regard to this Amendment I am entirely in the hands of the House and the Government. If the Government do not desire that it should be put in, I will not go further with it; but it does seem to me, when there are two bodies concerned in the administration, extremely desirable that there should be an interchange of opinion and of information between them. As the Bill first stood, there was nothing to insist upon the Soldiers' and Sailors' Families Association giving information to the Statutory Committee, but the Statutory Committee was bound to give the information to the other outside voluntary associations. On the Committee stage the Government changed that to a permissive form, inserting the word "may" instead of "shall" in this subsection. My object is only to bring about the best possible administration, and to endeavour, if possible, to secure that all information shall be interchanged between the two bodies. I think that would be an improvement on the Bill as it stands. But, as I have said, if there is still a serious objection on the part of the Government, I will not press the Amendment.
Amendment moved—
Clause 3, page 6, line 23, leave out from ("dependant") to the end of the clause and insert ("and the Statutory Committee shall on request communicate to and shall on request be entitled to receive from any charitable body legitimately interested in the case of any officer, sailor, marine, soldier, widow, child, or dependant all particulars relevant to such case").—(Lord Balfour of Burleigh.)
EARL ST. ALDWYN: There are a good many different kinds of charitable bodies. I can conceive that there are such bodies who might be entirely indisposed to give this information, and my noble friend provides no machinery by which his "must" shall be carried out. Would it not be better to leave the clause as it is?
THE MARQUESS OF CREWE: Perhaps I ought to say a word, as my noble friend opposite (Lord Camperdown) desires to hear the Government's opinion. Our objection to the Amendment in the form in which the noble Lord has moved it is undiminished by reconsideration. The noble Lord, as I gathered on the last occasion, pins his faith to the adverb "legitimately" interested in the case of any officer, soldier, and so on, and he

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considers that the word provides a sufficient safeguard against the demand for a large quantity of possibly most private and delicate information by a set of persons who constitute themselves into a society and profess to be, and very likely actually are, interested in a particular case. In our view that is a somewhat dangerous proposition. It is undoubtedly true that there are societies to which such information very properly could be supplied, and I should hope and believe that in those cases it would be supplied. But I cannot agree that any set of persons who may have what may be a quite legitimate interest in an individual are thereby entitled to receive large masses of very confidential information. I hope the noble Lord will not press his Amendment.
LORD BALFOUR OF BURLEIGH: I withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 8:
Short title.
8. This Act may be cited as the Naval and Military War Pensions, &c. Act, 1915.
THE EARL OF LICHFIELD: There is no allusion whatever in the short title of this Bill to the very important part of it which deals with the care of disabled officers and men, and I think it important that the public should be made aware as widely as possible of the provision that Parliament is making for these disabled officers and men. I am conscious of the difficulty of expressing the scope of a Bill at all adequately in a short title, and I need hardly say that I have no particular love for the words in the Amendment standing in my name. But still I think, and perhaps your Lordships will agree, they are an improvement on the title as now in the Bill. This is, of course, a matter entirely for the Government. If my Amendment were carried Clause 8 would read, "This Act may be cited as the War Pensions, Help to Disabled Men, &c., Act, 1915."
Amendment moved—
Clause 8, page 8, line 7, leave out ("Naval and Military")
Clause 8, page 8, line 8, after ("Pensions") insert ("Help to Disabled Men").—(The Earl of Lichfield.)
THE MARQUESS OF CREWE: As a matter of fact the question of its title has really no effect on the Bill, and of that I take it my noble friend is aware. But he desires that its short title should call some attention to the fact that the Bill, besides dealing with pensions and allowances, deals with these questions of employment and disablement. I should have thought that if after the word "Pensions" merely the words "Help, &c.," were inserted without mentioning "Disabled Men," that would have met the case. But I do not wish to object to my noble friend's Amendment as he has phrased it if the House desires to accept it.
LORD HAVERSHAM: I would point out to the noble Earl that what he wishes to put in is already in the Preamble. Any one reading the Act would see that it is intended for the purposes he desires to emphasise.
THE EARL OF LICHFIELD: I am aware of the words in the Preamble. My object is to insert words which will be used in connection with the Bill when it is cited.
THE EARL OF CAMPERDOWN: At all events I hope the word "Help" will not be put in by itself, because "Help" is a very general term.
On Question, Amendment agreed to.
Short Title:
Amendment moved—
In the short title, leave out ("Naval and Military") and after ("Pensions") insert ("Help to Disabled Men").—(The Earl of Lichfield.)
On Question, Amendment agreed to.
THE EARL OF CAMPERDOWN: May I ask the noble Marquess when it is proposed to take the Third Reading?
THE MARQUESS OF CREWE: As to that, I am very much in the hands of the House. I have no doubt that noble Lords opposite will be able to tell me when the Amendments they would desire to move on the Third Reading will be ready, and I should propose that the Third Reading should be taken then on the first convenient day. I understand that the House of Commons is about to adjourn almost directly for a short period, but it is desirable, I think, that we should proceed with this measure, and that whether the House of Commons

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meets next week or not we should sit either on Tuesday or Wednesday, whichever day is most convenient to noble Lords opposite who have Amendments to move. We could then dispose of this measure and it could go down to another place.
EARL ST. ALDWYN: Would not Wednesday be the most convenient day, being the middle of the week?
THE MARQUESS OF CREWE: Yes, Wednesday is quite suitable so far as we are concerned.
Bill to be read 3a on Wednesday next, and to be printed as amended. (No. 159.)

CHURCHMEN IN THE ARMY.
LORD BALFOUR OF BURLEIGH LORD BALFOUR OF BURLEIGH had the following Question on the Paper—
To ask the Paymaster-General whether he will give to the House the figures upon which the calculation is based that 70 per cent. of the British Expeditionary Force in France are members of the Church of England.
The noble Lord said: Since I came into the House I have received a telegram from Lord Newton asking for a postponement of this Question. In the circumstances I beg to postpone it until a later date.
House adjourned during pleasure.
House resumed.

ROYAL COMMISSION.
The following Bill received the Royal Assent—
Consolidated Fund (No. 4).
House adjourned at Seven o'clock, to Wednesday next, a quarter past Four o'clock.