Sitting of 16 August 1921

Preamble
The House met at three of the clock, The LORD CHANCELLOR on the Woolsack.

MINISTRY OF HEALTH PROVISIONAL ORDER (CARDIFF EXTENSION) BILL.
THE CHAIRMAN OF COMMITTEES (THE EARL OF DONOUGHMORE)THE CHAIRMAN OF COMMITTEES (THE EARL OF DONOUGHMORE) had given Notice to move—
"That the promoters of the Bill have leave to suspend any further proceedings thereon, in order to proceed with the Bill, if they shall think fit, in the next session of Parliament, provided that notice of their intention to do so be lodged in the Private Bill Office not later than three o'clock on the day prior to the close of the present session, and that all fees due thereon up to that period be paid;
"That such Bill shall be deposited in the Private Bill Office not later than three o'clock on or before the third day on which the House shall sit after the next meeting of Parliament, with a declaration annexed thereto, signed by the agent, stating that the Bill is the same in every respect as the Bill at the last stage of the proceedings thereon in this House in the present session;
"That the proceedings on such Bill shall be pro formâ only in regard to every stage through which the same shall have passed in the present session, and that no new fees be charged in regard to such stages;
"That the Standing Orders by which the proceedings on Bills are regulated shall not apply to such Bill in regard to any of the stages through which the same shall have passed during the present session;
"That all petitions presented in the present session against the Bill stand referred to the Committee on the same Bill in the next session of Parliament.''
The noble Earl said: My Lords, with reference to the Motion which stands in my name as regards the Ministry of Health Provisional Order (Cardiff Extension) Bill, this Bill reached your Lordships' House last week, and the time for petitioning expired yesterday afternoon. Three petitions have been deposited, but it is quite
672
obvious that it is impossible for your Lordships adequately to consider such a Bill in Committee at this period of the session. I beg to move this Motion which stands in my name. I understand my noble friend who represents the Ministry of Health agrees.
Moved accordingly, and, on Question, Motion agreed to.

Message from the Commons: That they agree to the Education (Consolidation) Bill, with Amendments.

SAFEGUARDING OF INDUSTRIES BILL.
Debate on the Amendment of LORD EMMOTT to the Motion for the Second Reading— namely, "That the Bill be read a second time this day six months "—resumed(according to order).
THE MARQUESS OF CREWE: My Lords, I am well aware of the difficult conditions under which the House is working this week and the heavy task which lies before it to-day in the Railways Bill. Therefore, I propose to say what I have to say as briefly as possible, but before I make a few observations about the Bill itself, which I cannot well omit, there are two preliminary matters to which I am obliged to refer because they have been the subject of observations by the noble Marquess who leads the House, and by the noble and learned Viscount on the Woolsack.
The first is concerned with the conditions under which we are considering the Safeguarding of Industries Bill which has received the certificate of Mr. Speaker as being a Money Bill. It seems to have been assumed by those who have spoken for His Majesty's Government that this fact makes it certainly unnecessary, and possibly improper, for us to enter into any detailed discussion of the provisions of the Bill. That is really an elementary misunderstanding of the purpose of the Parliament Act. The circumstance in which that Act was passed is well known to your Lordships. It was due to the summary rejection by this House of the financial provisions for the year 1909-10. It was therefore desired not to destroy those ancient privileges of this House, which the noble and learned Viscount on the Woolsack has set himself to guard, but to declare what has been the

673
understood rule for the best part of three hundred. years— namely that in matters of finance the House of Commons must have the last word.
But it was carefully safeguarded by the Act that every possible opportunity should be given for discussion, and, if possible, for Amendment, even in the case of financial Bills. That, of course, was the purpose of saying that a financial Bill must come up to this House a month before the end of the session if any alteration was to be made in it. How can it be necessarily said that your Lordships, with the agreement of the House of Commons, may not desire to make some Amendments in this Bill? After all, Government Bills are amended. Take, for instance, the Railways Bill, which comes up to this House after having been examined by two Standing Committees in another place and having gone through a long Report stage there. We shall shortly enter on the Committee stage here, and I observe that the noble Earl, Lord Lytton, has put down no less than 69 separate Amendments.
THE EARL OF CRAWFORD: Many of them are drafting.
THE MARQUESS OP CREWE: Never mind; I do not care whether they are drafting or not. The point is that it may be necessary to amend even Goverment Bills. It is quite conceivable that the noble Viscount may see some drafting Amendments which may usefully be applied to the Safeguarding of Industries Bill. If he does, I have no doubt the Bill would go back and the Amendments would be agreed to, and the Bill passed in the ordinary way.
The other preliminary matter on which I am, unfortunately, bound to say a word is that of the much-discussed and somewhat tedious subject of the Paris Resolutions of 1916. I should not have thought it necessary to discuss them at any length in relation to this Bill had it not been that the noble and learned -Viscount on the Woolsack mentioned my partial responsibility for the Resolutions, and went on to imply that I was thereby debarred from criticising the subject matter of this Bill. I have no desire to vindicate my personal consistency or that of Mr. Asquith or Mr. Runciman; who were also responsible for the Resolutions. That is a trivial personal matter. If we have all our lives been Tariff Reformers without knowing it, it does not much matter
674
and is not worth while wasting the time of your Lordships' House over.
But there are some points in connection with those Paris Resolutions in relation to the particular Bill we are now considering which make it necessary to say something about them. I need not repeat at length what I have said more than once in this House before, that the circumstances of 1916, when that Conference was held, make those Resolutions, passed in entirely different circumstances, to be a not particularly useful guide in all respects to the action either of ourselves or any of the Allied countries. At that time, in 1916, the war was greatly in the balance. Our part in it had been confined to the two battles of Ypres, the lamentable failure of the attack on Gallipoli arid a general holding of the Western line. The French had carried through that:most glorious defence of Verdun in two separate series of engagements, but no advance had been made. The situation on the Eastern Front was unfavourable, and the grand offensive was impending which took the form of the battle of the Somme.
Nobody could speak then of the probable scope of our victory in the terms in which it could have been spoken of three years later. It is quite arguable that it may have been a mistake to hold an Economic Conference then at all, and there is no doubt that if the Conference had been held in June, 1919, instead of in June, 1916, the conclusions arrived at would have been very different. I do not myself, however, regret that the Conference was held, because between the countries who were represented, France, Italy, Belgium, Portugal and ourselves, the holding of it did constitute a form of solidarity which had a very useful moral effect in the military sense as well. I may remind your Lordships that the United States had shown no sign whatever of coming into the war; that the German fleet was intact— the battle of Jutland had been fought, without bringing about anything like the destruction of the German fleet, although it sealed it in its harbours— and there was no reason to suppose that the German mercantile marine would not be active at the conclusion of hostilities. And most of all, no word was said, naturally, because the circumstances did not permit it, of an indemnity to be claimed from Germany amounting to thousands of millions sterling.
The circumstances, in fact, were altogether different. That, however, is

675
not the particular point I want to make at this moment. The point I want to make is that the purpose of the Resolutions— I think I may claim to know more about it than others here as I was present in Paris — all through was the declaration of an economic concert between those who were then fighting together as Allies. Various methods, as the terms of the Resolutions show, could he employed by the different countries, but it was a declaration of a single joint purpose to be carried through together. I do not want to quote at length, but I will give your Lordships one or two sentences in order to show what I mean.
The Allies declared that the Powers of Central Europe were preparing"for a contest on the economic plane, which will not only survive the re-establishment of peace, but will at that moment obtain its full scope and intensity." In order to meet that it had become the duty of the Allies—
" to adopt and realise from now onward all the measures requisite on the one hand to secure for themselves and for the whole of the markets of neutral countries full economic independence and respect for sound commercial practice, and on the other hand to facilitate the organisation on a permanent basis of their economic alliance."
We do not see much of that in this Bill. Then, as regards the transitory measures for the period of reconstruction, which, I suppose, is the period in which we are living— because I should be very sorry to think that the conditions which prevail now are anything but transitory— the Allies decided—
" to fix by agreement a period of time during which the commerce of the enemy powers should be submitted to special treatment and that goods originating in their countries shall be subject either to prohibitions or to a special regime of an effective character."
When you come to the permanent measures of mutual assistance and collaboration, the Allies decided—
" to render themselves independent of the enemy countries, in so far as regards the raw materials and manufactured articles essential to the normal development,.of their economic activities."
Then comes a paragraph which the noble Viscount on the Woolsack quoted, in which it is stated that they may, according to their own economic views,
" have recourse either to enterprises subsidised, directed or controlled by the Governments themselves, or to the grant of financial assistance for the encouragement of scientific and technical research, and the development of national Indus
676
tries and resources; to customs duties or prohibitions of a temporary or permanent character."
That is to say, it runs through the whole gamut of the possible safeguarding of industry. It goes on to say—
" Whatever may be the methods adopted, the object aimed at by the Allies is to increase production within their territories as a whole to a sufficient extent to enable them to maintain and develop their economic position and independence in relation to enemy countries:"
I may remind your Lordships of a point of which I think some of you must be aware, that at that time these Resolutions were looked upon with a great deal of suspicion by some people whose idea of the British Empire is that it should be like a porcupine, bristling with quills directed against all other countries, Allies and neutrals just as much as enemy countries, that it should be self-contained for all purposes, and that these provisions for working in concert with particular Powers, some of them rivals of our own in trade and commerce, constituted an infraction of the proper principles of Imperialism.
That was undoubtedly so, but those who took alarm in that way really need not be in any way disturbed by the Bill for which His Majesty's Government are now responsible, because there is not a word in it which carries out the principles or the aims of the Paris Resolutions. I say quite distinctly that I regard this measure as a definite repeal of those Resolutions, and a denial of the aims and objects which they expressed. I think His Majesty's Government have quite a fair answer to that statement in saying what I have just said myself, that the circumstances have so changed that the Resolutions can hardly now be made operative on the lines in which they were drawn. But I really should advise His Majesty's Government not to say too much about these Resolutions, not to drag them in for argumentative purposes, whether against myself, or Mr. Runciman or anybody else; because I think the best thing that can happen to His Majesty's Government is that the Paris Resolutions should disappear into the region of forgetfulness, and that our Allies should not point at this Bill, as they very well may, and say:"You see what the then Coalition Government proposed to do. How are you proposing to carry- out the intentions which were expressed? "— not only by my humble self, but also by Mr. Bonar Law and by Mr. Hughes; the Australian Prime Minister.

677
I pass for a few moments to one or two points within the Bill itself. I will deal first of all with Part I, the safeguarding of key industries. It was announced in the manifesto of 1918 that key industries were to be safeguarded. That manifesto described the vital goods on which the life of the nation might depend, and announced the intention of preserving and sustaining these key industries in the way best adapted to the purpose. That way is presumed to be indicated in Part I of this Bill. Alter the best reflection I have been able to give to this question of key industries, I think that we can only look at it from the point of view of Imperial defence, and that if you attempt to go outside the safeguarding of materials directly required at the outbreak of a war you will find yourself wandering away into that protection of staple industries which, as we have been so often and quite truly reminded, is another thing altogether.
You will find that such an industry as that of agriculture, upon which the noble Lord behind me made so interesting a speech yesterday, will not be able to understand why, being by common consent a vital industry in time of war, it should not receive similar protection in time of peace. You will find— as you do find, because those interested in it keep on writing both to the newspapers and to individuals like myself— that the iron and steel people are quite unable to understand why, if you are going to safeguard industries, you are going to leave out an industry which is obviously one of those most necessary to preserve and promote in war time. I think, therefore, that you have to confine yourself to what is required for conditions of military, naval and air defence, just in the same way as you do not make any form of weapon the subject of free trade, in the sense of depending upon foreign countries for it, however friendly they may be, but you see that, somehow or other, is made at home.
I take only one or two of these materials in the Schedule, and I take first of all optical glass, which is a topic with which I have to some extent had to concern myself. Something has already been said about optical glass, and it no doubt presents a subject of no small difficulty. It is one of those materials which modern warfare has shown to be necessary, from the very first outbreak of a war, in considerable quantities, but those quantities are only relatively considerable. A noble
678
Lord spoke yesterday about the weight of optical glass used in this country. I am told that the whole of the optical glass used in the world in a year does not amount to twenty tons, and you have to add to that that every country is now convinced that it must, if possible, produce its own. Your Lordships will see that by putting a duty of 33 per cent. on imported optical glass you cannot build up the industry here. There is no open market considerable enough to make it worth while for any firm to devote itself to the making of optical glass. It can only do it by also making a large quantity of ordinary glass, which is an article unprotected, as I understand, by this Bill, and you will not get any guarantee that it will be made.
As we all know, there was one firm, that of Messrs. Chance, who, to their very great credit, persisted before the war, and were the only firm which made first-rate optical glass. First-rate optical glass is exceedingly difficult to make, and in order to produce all the instruments of which it forms part you have to make from seventy to a hundred different varieties of it within that small output of which I have spoken, namely, 20 tons all over the world. It requires a special quality of sand, of which there is only a very small quantity in England, and which you find at one place. There is a good deal in France and Germany. The conclusion I reach about this particular subject is that you do no good by including it in this Schedule. I hate subsidies and the whole principle and system of subsidising industry, but I think that this one business of optical glass forms an exception, and that it ought to become.a matter of national concern, precisely it the same way that the big steel firms do not make armour plates and big guns for amusement, but because they know that they will get orders from the Government and possibly from foreign Powers. They are, in the strict sense, subsidised, because they are given regular orders, and I feel pretty well convinced, as I am assured by those most entitled to speak on the subject, that the only way you can establish an optical glass industry permanently in this country is by direct support.
I do not dwell at this moment upon the subject of chemical glass, which is altogether different and bears, in fact, no relation to optical glass for the purposes of the argu

679
ment or of this Schedule. I do not say.anything about it now, because I shall place an Amendment on the Paper regarding this glass and other matters used for scientific purposes, upon which I shall be able to speak at greater length. Equally, with regard to fine chemicals, they have to be regarded very much from the point of their educational and research use, and will therefore fall under the same heading.
The only other subject in the Schedule about which I wish to say a word is that of gas mantles. Thorium compounds are protected by the Schedule. The subject of gas mantles is an interesting one because it is, if not the one industry, at any rate the most prominent of the industries, which there was a deliberate attempt by Germany to destroy in this country. The way it was done was by getting control of the sources of supply. The principal source of supply is in a country which the noble Earl opposite knows very well— namely, Travancore. There the Germans had, through a German company, obtained complete control of the supply, with the intention of sending the whole of the product to Germany and flooding this country with gas mantles until British industry was destroyed. We were able, I am glad to say, to check that by getting hold of the supply, and I think it will be found, in most of these cases where dangerous dumping is alleged, that those who desire to destroy an industry have got hold of the sources of supply of the raw material.
On dumping generally I want to say very little. More than one noble Lord, I think, has stated what we understand to be the true definition of the word— namely, that it is the selling in this country of commodities at a price lower, in some cases far lower, than that either of the cost of production or the cost of sale in the country of production, with a view to the destruction of some particular industry here. It is curious to note that although no protection is granted to key industries, and I am very glad it is not, if their rival imports come from any part of the Empire, yet the whole of the Empire, as I understand, may be found guilty of dumping, and it may suffer the penalties attached to that offence.
It is quite clear— as I believe has been admitted— that a large number of applications are likely to be received by the Board of Trade, either under the key
680
industry head or under the dumping head, for inclusion in the privileges granted by this Bill. I have heard of several. I have been told that there is a strong demand that potassium compounds of -all kinds— mentioned by the noble Lord behind me yesterday, at any rate in one connection — should receive protection. I received a letter the other day from a gentleman who complained bitterly that Swedish boards for the making of boxes were admitted into this country, and thereby deprived a considerable number of the workers of their proper employment. From the other point of view— the point of view, not of keeping out, but of admitting— you will find plenty of applications. The noble Lord behind me mentioned agricultural implements. There is a very strong move indeed, which I think must have come to the notice of noble Lords, with regard to semi-raw steel of every kind. The light steel bars of which steel sheets are made form the groundwork, as the noble Viscount very well knows, of an important industry both in Scotland and here.
Of course, it may be that these people will all get their way. It is no doubt true that in the course of the progress of the Bill through another place these dumping penalties were fenced about with a number of qualifications which may bring it about that they are seldom exacted, and which must, in the opinion of those who take the Tariff Reform view of dumping, tend to make the provisions of the Bill almost, if not quite, nugatory. In the first place, as we have been already told, His Majesty's Government do not propose to act where Treaties are already in existence; that is to say, they do not propose to denounce those commercial Treaties. In the second place, if manufacturers can prove, as the steel bar people may be able to prove, that more unemployment would be caused by keeping out the semi-manufactured material than would be caused by admitting it, I understand that the dumping penalty would not be applied. And it is also demanded that the industries likely to be affected should be carried out with efficiency and economy. I do not hesitate to say that, so far as- these dumping provisions are concerned, from the purely labour point of view, they are so much safeguarded as to make them undoubtedly to a great extent inoperative.
I do not want to dwell upon the currency question and its application to dumping,

681
because that was covered with great skill by the noble Lord who moved the rejection of the Bill, and was also dealt with at length by Lord Sheffield. I was greatly impressed by one observation which Lord Sheffield made on this matter, and which I believe to be profoundly true— namely, that it is not the low rate of exchange value in any particular country that constitutes the real difficulty and danger, but it is the perpetual fluctuation. That I believe to be absolutely true, because the noble Lord pointed out— what we all know to have been the case in the past— that there were countries where the native coin was of an absurdly low denomination in point of value— take, for instance, the South American dollar and the currency of some of the South American Republics— and yet trade had been carried on with those countries with perfect facility and without friction for a number of years. One cannot help feeling also that, if the fall in currency values is going to be taken into account, it must tend to aggravate the dangers which it is designed to meet. If you penalise the German mark in this way you will tend to keep the German mark low. It seems to me that we are bound to be in for something of a bad time in this matter of exchange, and that the only thing to do is to try to shorten it as far as we can by encouraging freedom of transporting goods, if possible, between all the different countries of the world.
My noble friend opposite has moved the rejection of this Bill, and he has done so because he regards this as being definitely a Tariff Reform measure, not because it in any way carries out to the full the hopes and wishes of the Tariff Reformers who have been active since 1903, but as a marked step in that direction. The noble and learned Viscount on the Woolsack on August 2, speaking of this Bill, used these words—
" Those of us who for many years have believed in such an adjustment as is contemplated by the terms of this Bill, …"
I like the word '' adjustment," although I am not quite certain what it means in this particular connection. The Bill is no doubt not an extreme measure of Tariff Reform. It bears the result of a struggle between the conflicting views held by different members of the Government. It represents something of a"Pull devil pull baker"method, and I am inclined
682
to think that the baker has not been altogether unsuccessful at his end of the rope.
But the real objection, I venture to think, is that it is bound to have a thoroughly unsettling effect upon trade generally and even a more unsettling effect upon industry. For that reason I shall most cheerfully follow the noble Lord opposite into the lobby against the Bill. It is only fair, I think, for the House to remember that the protest against this Bill has not come from Free Trade organisations. They do not represent what noble Lords and others are fond of calling shibboleths to the extent that the word has become a shibboleth itself. They represent the fears of organised industries against what is going to happen under the Bill. I feel, therefore, that it is the duty of those who share those alarms to record a protest— it is not possible to do more, and I do not complain of that— against both the terms of the Bill and the spirit in which it has been brought in.
THE CHANCELLOR OF THE DUCHY OF LANCASTER (VISCOUNT PEEL): My Lords, as I have been asked somewhat specific questions on this Bill I think it would be only courteous to noble Lords if I made a reply on some of the points which have been submitted. The debate has been a very interesting one, and I cannot say that the bulk of the speakers have been strongly in favour of the Government measure. I should like to make two observations. First of all, I think that a great deal of the criticism offered by noble Lords— I say it with very great respect— has been of a somewhat contradictory nature. A good deal of it has been directed not so much against the provisions of this particular Bill as against an imaginary measure of general tariff reform and against the fears they entertain that this measure itself may be in some way a precursor and a harbinger of worse things to come.
Let me give an example of what I mean when I describe as somewhat contradictory the criticism that has been dealt out to us to-day and yesterday. We have heard a great deal from many speakers about the injury that this Bill was going to do to various manufacturing businesses. On the other hand, we had a speech from Lord Colwyn, a very experienced man of business, who told us that in every company meeting, from every director, front every board and every set of shareholders, there is going to

683
be a great demand to come under the provisions of this Bill. Are we to assume that these shareholders and directors know nothing of their own interests? Cannot we assume that if they want to take advantage of the provisions of the Bill it is probable that they have some inkling of where their interests lie, and therefore that this statement that this measure is going to be so dangerous to British industry must be a good deal qualified in the minds of some of your Lordships? I do not see my noble friend in the House, but perhaps he will spend some portion of his recess in trying to bring some unity into that curious contradiction.
Again, there has been a great deal of criticism and attack levelled at the way in which this Bill will work, and much has been said of damage it will do to industry. After a great deal of such criticism we had a very carefully considered speech from the noble Marquess opposite who told us that in his opinion, with all the qualifications, this Bill is going to be inoperative. How an entirely inoperative Bill is going to bring upon industry those dangers that he also prognosticates he was very careful not to show us, because I am sure that even he, with all his debating ability, would have been wholly unequal to the task.
I must say something about key industries, although I can dismiss that matter fairly rapidly because I do not think the bulk of the attack has been directed to the safeguarding of key industries. It is true that there have been, if I may so call them, extremists like my noble and learned friend, Lord Phillimore, who says,"Why do you want to protect these war industries at all? You are never going to have a war again; therefore, why trouble about war industries? '' I think I can leave the observations of the noble and learned Lord to the consideration of the House. But for the most part I think we only differ upon the question of the method in which they should be safeguarded, and some noble Lords, with an enthusiasm for subsidies that I have not noticed on other occasions, when we proposed that there should be a tariff developed an intense love for paying out of the Treasury in support of those industries sums which they know perfectly well could not be paid at the present time; and if that proposal could be brought before your Lordships they themselves would denounce it with even greater vigour than they have attacked this tariff proposal.
684
The noble Marquess, Lord Crewe, also said something as to the uselessness of trying to protect the glass industry by this particular duty of one-third. Of course, it may be so, and if this is an ineffective method no doubt some other method of dealing with it will be found. But I can hardly congratulate the noble Marquess, if I may say so, on the method he chose for dealing with the glass industry, because he wished, I think, that the industry should be supported by means of the Government purchasing glass in the same way as it purchases ships from great firms.
THE MARQUESS OF CREWE: The noble Viscount. will remember that I was dealing only with optical glass.
VISCOUNT PEEL: Yes, I am dealing with optical glass, but I understand that at present the Government is not buying optical glass, and probably does not want to buy optical glass for some time. I do not know whether he wishes the Government to do that which was done under the old silver scheme in the United States, and to buy a great deal of glass and store it. I an told if that was done it would be very dangerous or rather very useless, because so rapid is the development in the processes, and so on, in the making of optical glass that if it was stored for five years it would be practically useless; and not only would the glass be useless, but there would be a form of subsidy. He also told us that all these different countries were taking so much care of their own optical glass and so anxious were they to produce it themselves that there would be no market. for ours. That, I should have thought, was a very good reason for safeguarding ours, but I let that pass for the moment, because, as a matter of fact, I understand we have rather a good market in the United States. A good deal of optical glass is being sent at the present time from this country to the United States.
I want to revert for one moment to some arguments which were used by my noble friend, Lord Emmott, last night, because he dealt with the matter at some length and made, of course, the chief speech. in favour of the rejection of the Bill. My noble friend attacked the Government very strongly for not proceeding on what he calls '' scientific or industrial data."

685
He described himself as a sort of early Victorian. He had a passion for what went on in the last century, and he described the way in which, differing from the statesmen of to-day, this matter would have been dealt with by Huskisson, and by Peel, and by Gladstone and Disraeli. I think Huskisson would be rather pleased to find himself in such high company as these others. But I would point out, if I may, to my noble friend, that it is very disappointing to a speaker, when he has introduced a Bill, to find that noble Lords have apparently paid no attention whatever to the statements he has made.
I pointed out that so far from it being true that this matter had not been considered by experts, that was precisely what has been done. There is, first of all, the whole weight of the Committee of the late Lord Balfour of Burleigh which went most carefully and scientifically and deliberately into this question of the dealing with dumping in order to safeguard these industries. It is very unfair, I think, to ignore so completely as my noble friend has done the careful and elaborate Report of that Committee.
LORD EMMOTT: Of course, I cannot carry on a debate with my noble friend, but I have no chance of speaking again. He is particularly appealing to me, and may I ask him to apply himself to the definite paragraph in the Report on page 52, which recommends a process entirely different from that decided upon by the Government.
VISCOUNT PEEL: If the noble Lord had been content to wait, I was going on to deal with that. I am certainly not going to criticise him without dealing fairly with the matter. So much was he annoyed that, I think, he even criticised me for introducing this Bill, on the ground, I believe, that I ought to hold exactly the same opinions as one of my ancestors. That seems to me a most extraordinary argument to use by so active and forward and independent a person as my noble friend. I trust that if he were to apply the same sort of argument to himself he would be a little more tolerant to his descendants, and would not cut them off with a shilling because they ventured to differ from the opinion of their distinguished ancestor.
But I was not going to forget what was said in the Report. I know quite well that what my noble friend is really attack
686
ing is this— that one general duty is put on and not a carefully graduated duty, or a different duty, as is suggested in the Report referred to. What my noble friend really wants is a full-blooded tariff, because it is only under a full-blooded tariff that it is possible to have these nicely calculated and carefully graduated duties. The proposal of the Government is a much more homely and simple one. They have found so many difficulties in the way of graduating the duty that they have decided that it is better on the whole, at any rate for this short period, to have this simple tariff.
The matter goes much further than that however. All these complaints to which my noble friend refers are going to be examined by an expert Committee. That Committee has to thresh the matter out thoroughly, and, as the noble Lord knows, go into the whole question. That Committee will be composed of competent business men. Through the whole of this discussion-there seems to be an assumption that these competent business men are absolutely blind to all these obvious considerations— considerations which have been put before the Government both in this House and in another place. Again, my noble friend, in his zeal in favour of dumping, declares that no single case of dumping has been established.
LORD EMMOTT: Economic dumping.
VISCOUNT PEEL: I do not know what is the distinction. I will give him a case of economic dumping if he wishes, and this is from an absolutely unexceptionable Committee, which was appointed, I believe, by Mr. Runciman, and was presided over by Sir Alfred Booth, a shipowner, whose economic views are very well known to the noble Lord. What did the Committee report? They said—
" From statistics and evidence given to us, we are convinced that rough machined forgings and finished crank shafts were systematically dumped into this country. We feel certain that this was governed by political considerations, the object being to cripple our forges with a view to reducing the potential output of guns and other war material•• It should be noted also that the German steel works were constructed after observation of British practice, that they were of very large size and intended for an output far in excess of Continental requirements. Dumping was then deliberately arranged for, and was effected by means of their special selling agencies and the Kartel system."
I may go on to show how careful this Committee was to distinguish between

687
this class of dumping and the mere selling of the surplus production, because they say, as regards steel plates:-
" Dumping by Germany was alleged to have taken place here, but it does not appear to have gone much beyond the occasional disposal of surplus products at low prices."
There we have a definite case reported by this Committee, and I think, in that way I certainly can meet the challenge of my noble friend as to there having been no case of economic dumping established.
Another point he asked me about was as to the effect of German reparations. He knows, as he stated quite correctly, that the amount of the payment under German reparations on goods coining to this country has been reduced from 50 per cent. to 26 per cent. This has no effect whatever as a tariff, because for some months now the Germans have paid that amount over to their exporters. The matter has been amicably arranged, and the German exporter gets the whole of his property. This amount is only paid in one way, and therefore it does not affect the question of the export.
My noble friend made a series of prophecies about Germany. I only quote these because I think they affect the argument he addressed to your Lordships. The first case he took was this. Germany, he said, would probably, unless it set its house in order financially, go almost bankrupt, and if that took place there would probably be very little exporting of any kind from that country. On the other hand, if Germany was to stabilise its exchange, then all the bounty on export through collapsed exchanges would disappear, and there would be no need for this Bill. He was perfectly correct, because, of course, as soon as that happened the particular danger and mischief to which this part of the Bill is directed would disappear, and the collapsed exchanges portion of the Bill would, as regards Germany, be of no effect.
My noble friend also gave us an interesting and elaborate series of figures from which it appeared that the exports from the 'United States were enormously greater — I think he was quoting 1920 figures— than they were from Germany and some other countries, and he drew the inference that where the exchange of a country had depreciated, compared with the country to which it was sending goods, the fact seemed to have very little effect indeed
688
upon their export. I am sure my noble friend was going rather far in making a deduction of that kind. I should like to say that the particular figures he used in connection with Germany were not of very much value because, for various reasons, and to some extent in connection with the Reparations Bill, there was very little export indeed for some months from Germany, but it is certainly unwise to argue from that that there will not be exports in future. When Germany is a little restored there will be a gigantic increase in her exports. In connection with this we have also to consider the way in which they are working in Germany, and the extent to which, as Lord Sheffield testified, the people there are ready to work at very low wages.
A few points were put to me by my noble friend, Lord Bledisloe, who came forward, as he constantly does, as the champion of the agricultural interests. The first point was this. So important an industry is agriculture that they should have representation on these panel committees. I made an inquiry on the subject, and I understand that this question is being very carefully considered. He put to me further questions. One was, I think, about tractors. I understand that farm tractors mainly come from America, so that the collapsed exchanges portion of the Bill would not apply to them. But I think lie laid most stress on the question of fertilisers.
LORD BLEDISLOE: I raised the question of tractors in connection with the test of employment.
VISCOUNT PEEL: That was rather an interesting and particular case. My friend suggested that the more tractors you got into the country the more unemployment, because they did away with the necessity for a certain amount of agricultural labour, but I do not think that really bears very closely on this particular Bill. Lord Bledisloe is most interested in the question of fertilisers, and the question whether their price would be likely to be raised to the farmers as the result of this Bill. He questioned me about potash, and I am able to say to him that potash, at least in the form in which it is used in agriculture, will not come under Part I. Potash in certain compounds, of course, when it comes under the denomination of certain

689
fine chemicals, would. That, however, would have no bearing on the point the noble Lord put to me connection with agriculture.
LORD BLEDISLOE: I referred to potash in connection with Part II.
VISCOUNT PEEL: In connection with Part II the question is rather more difficult, because I understand there is some question as to whether"blending"is the same thing as"manufaeturing." Therefore, I would rather like to consider that point more carefully before giving a definite answer.
Another point he raised was about basic slag. I think the noble Lord will appreciate the fact that it is exceedingly difficult to prove that the under-cutting of basic slag, produced in this country by imports of basic slag, was doing any damage to the industry, because basic slag, as one knows, is a by-product of a particular industry, and therefore the process of proving displacement of labour would be indirect and very difficult. I do not think he need have very great anxiety upon that point. Moreover, I have the figures dealing with basic slag and I find that the imports before the war, in 1910, 1911, 1912 and 1913, were very small, ranging from 16,000 tons up to 51,000 tons, whereas the exports from this country ranged between 231,000 tons and 157,000 tons in those four years. So that, the exports being so large, it does not look as if there was very much. danger at present of any displacemsnt of employment from the cause suggested. Then I think the noble Lord referred to super-phosphate.
LORD BLEDISLOE: I did not refer to super-phosphate, the same principle applies.
VISCOUNT PEEL: Very much the same principle applies. There is a great excess of production over consumption in this country, I understand, and therefore there are large exports. I think I have really removed the fears of my noble friend on the particular points I have mentioned and, released from this danger, I hope he may follow his natural tendencies and support the. Government on this Bill.
Two or three points were put to me by the noble Earl, Lord Beauchamp. He
690
asked me why are-light carbons were included in the Bill. They are included, I understand, because they produce an enormously stronger illumination for searchlights than anything else, and it is essential, therefore, they should be safeguarded. Moreover, in connection with lamp black, as a by-product of the industry, it is very useful to have it produced in the country itself. Then he asked me whether drawbacks would be given on goods exported from this country, and made from materials which had paid this duty on import into this country. I understand that that drawback will not be given. It would be possible, and even easy, to do it if there was a regular tariff, but it is more difficult to do it with a limited Bill of this kind, and probably not very necessary, because the price of the export would not be determined by the import of that particular material, as the material so dumped would be used by a certain limited number of makers only.
I think the noble Lord has a further safeguard in that the Committees who examine into the matter have, as he knows, the duty of seeing what the effect may be on other consuming industries. Obviously, if damaged by losing their export trade, they would suffer, and that matter would have to be considered by these Committees of business men. I should say as regards the practice of other countries with reference to repayment of this dumping duty Canada does, and America does not, give some rebate on export. I think the noble Lord also raised a general question about the large increase of staff required to deal with this matter. I am informed there will be no, or hardly any, addition to the staff which would be necessary to deal with it.
Let me deal now with one or two general points connected with the speeches of the noble Lord, Lord Sheffield, and others. I think a great many of the difficulties which have been raised by noble Lords will really be matters of consideration for the business men who sit on the Committee to decide whether or not they shall report to the Board of Trade that a duty shall be put on. All these dangers, many of which they have had in their minds and which they have expressed, will be considered and dealt with by those business men. I ought to mention one point with regard to depreciated exchange because the noble Lord, Lord Sheffield was tinder some mis

691
apprehension. He was dealing with the fact that the German manufacturer might have an advantage in this country; that is to say, he might be able to sell his goods at a certain price and not suffer, because the cost of production and the wages of labour in that country had lagged a little behind prices, and he was anxious to show that in many cases the wages of labour and the cost of production had not lagged behind prices.
LORD SHEFFIELD: I did not say that. I said wages were low, but the price of articles did not result from the exchange.
VISCOUNT PEEL: Therefore, there was no Advantage for the German exporter. That was the point. I want to point out that what I relied on as establishing a bounty was mainly the question of the difference between the internal and external valuation of the mark. That would not be affected, and that is what would do the damage, and would have to be dealt with by the collapsed exchange duty. Again, some apprehension was shown that there might be a collapsed exchange duty put on against France, and that was described as being an awkward pin-prick. I understand there is not much likelihood of that duty being put on because, owing to the conditions of the French exchange. and also in the case of the Belgian exchange, it is exceedingly doubtful whether there is really any bounty which could he dealt with under the exchange provisions of the Bill.
There are two remaining points with which I must deal before I sit down. They were raised by the noble Marquess, Lord Crewe. I have not hitherto said, as your Lordships know, very much about the Paris Resolutions because I was not particularly interested in them. It was not my business to establish or to deny the consistency of Lord Crewe and his colleagues in what they did at Paris and in what they are doing now. I thought that was a matter rather for their own consciences to establish than for me to defend. But there is one point I should like to make with regard to the extraordinary statement which I understand the noble Marquess, Lord Crewe, to make, that Mr. Runciman was contemplating defeat when he was drawing up these particular Resolutions.
THE MARQUESS OF CREWE: No. I am afraid I must correct that at once. What I
692
said was that no one contemplated the scope of the victory which was actually achieved.
VISCOUNT PEEL: But he also said that they were to deal with matters after the war.
THE MARQUESS OF CREWE: Oh yes. There were three sets of Resolutions. One dealt with the war period, another with what is called the reconstruction period, and the third set, intended to be permanent, with the relations between the different Allies.
VISCOUNT PEEL: I have one observation to make on that. Undoubtedly the Resolutions, or some of them, were aimed against dumping. The defence of the noble Marquess and others is that they were made in concert with other Powers, and were only to be acted upon in concert with other Powers. I cannot understand that argument. Some noble Lords, and especially Lord Beauchamp, have defended dumping and have said that the more dumped goods come in the better. In their opinion dumping is a great advantage to this country. If it is an advantage to this country then it is a criminal act on the part of the Government to try to stop it, and if the Government is trying to stop it in concert with other Powers it makes the matter all the worse. The Government, however, is not so criminal as that, because it is trying to deal with dumping by itself.
The noble Marquess, I think, was trying to maintain that there was an opportunity on this Bill of moving Amendments, and otherwise dealing with it quite freely. No doubt your Lordships have an opportunity of dealing with Amendments on this Bill, but, unfortunately, you have lost the power of enforcing them. I am surprised to find the noble Marquess drawing a comparison between this measure and the Railways Bill. It is worth while moving Amendments on the Railways Bill because you have the power of enforcing them. But under this Bill it is purely an academic exercise; you have no power to enforce them. It will no doubt be interesting to hear the Amendments moved, whether they are carried or not, but I am afraid that the power of insisting upon them being taken by the other House has departed.
This unfortunate change, as we know, was made by the Parliament Act. I confess

693
I was rather interested to realise that the three most prominent attackers of this Bill, or at least two of them, took a most prominent part in persuading your Lordships to pass the Parliament Act. I wonder whether in some of their calmer moments a feeling of remorse or sense of repentance comes to these noble Lords when they find that on a matter most vital to them they are deprived of all means of making any resistance. If that is so, they have the consolation of knowing that their wounds, deep and painful as they may be, are wholly self-inflicted.
THE EARL OF MIDLETON: My Lords, I do not rise to detain you with any reply to the speech of the noble Viscount to which we have just listened. I desire to put a constitutional point which I think has not been raised during the whole of the debate, and on which If feel very strongly indeed. The withdrawal of this Bill in its main provisions from the purview of your Lordships' House is, in my opinion, a great violation of the agreement entered into between the two sides at the time of the Parliament Act. That point will bear in a most important manner on the next stage of the Bill. It was most clearly laid down by those who were responsible for the Parliament Act that no Certificate would be given by the Speaker of the House of Commons under the provisions of that Act unless the Bill had to do with revenue and not with policy. In any reconsideration of the position as between the two Houses grave objection will be taken to any authority in the House of Commons, however eminent, being the judge of what should or should not be submitted to this House.
I desire to point out the effect of the Certificate given by the Speaker. This is not a Revenue Bill in any sense. I will put it to the most simple test. There has not been, as far as I know, in the whole course of its consideration any estimate given of the revenue that will be produced by the measure. I doubt if any estimate has been asked; and no member on the Government bench could give me the information. And for the best of all reasons; this is not a revenue measure. It is a measure dealing with policy, and it is a question of policy which in the next stage, quite apart from the revenue to be raised, we might have legitimately canvassed from the point of view as to whether the trade of this country should be placed
694
in the hands of a public Department for a series of years at the very moment when the abolition of Government control is being clamoured for all over the country. But we are debarred on the next stage from taking any action in regard to this.
If the Roll of Peers is canvassed it will be found that it has been the policy of successive Governments to place on the. Roll of your Lordships' House names specially eminent in the trade of the country. We have probably got a far larger number of men here now than ever existed in either House of Parliament before, who have a right to speak and give advice to their fellow countrymen on this subject. The action taken over this Bill is, in my opinion, a flagrant violation of the understanding arrived at at the time of the Parliament Act. It is contrary to public policy as it withdraws a most debatable Bill from proper discussion in your Lordships' House, and, having regard to the numerous doubts which have been expressed as to whether the principle, which many of us would like to advocate, is properly carried out by the details of the Bill, which we are unable to canvass, if the noble Lord goes to a Division I shall support him in the lobby.
THE LORD CHANCELLOR (VISCOUNT BIRKENHEAD): My Lords, the noble Earl who has just spoken has raised a wide topic of constitutional doctrine on which I must ask your leave to make a brief observation. The noble Earl says that an agreement was reached at the time of the passing of the Parliament Act that measures comparable to the present Bill should not be deemed to be comprehended within the important section which deals with Money Bills. When he speaks of a bargain having been made I must ask him the question— Between what Parties is it suggested that this bargain was made? The Party to which I belong, and to which the noble Earl belongs, were in no position to make a bargain. We were the Party that was overcome; we were overcome by Lord Beauchamp, by Lord Crewe and by others, and so far from our being in a position to ask for the slightest concession, I am unaware that we did. A deliberate policy was successfully pressed upon this House from another place that if Mr. Speaker ever certified that any Bill was a financial Bill, then the consequences should follow which we deplore to-day.
I have always resented, as deeply as I resented then, that it should be in the

695
power of Mr. Speaker, by his mere Certificate, to declare what is the character of a Bill. But it was not we who gave him that power. I have sometimes been consulted, while a measure was under discussion in this House, as to whether or not it were of a financial character. I have always declined to answer that question, for this reason, that holding my position, I do not choose to give an opinion on such a matter— being, as I am, Speaker of this House— that might be overruled elsewhere, without appeal, by the Speaker in the other House. I never will give such a ruling, so long as I occupy this position.
But that we should hear the complaint made as if we were to blame seems to me to he most unreasonable. The noble Lord, Lord Emmott, has put down a Motion for the rejection of this Bill. The pistol of the noble Lord, in a well-known expression, has entirely misfired, under the terms of that proposal to which, I think, he gave his influential support in the House of Commons.
LORD EMMOTT: I was Chairman of Ways and Means.
THE LORD CHANCELLOR: Really, I hope the noble Lord will forgive me. He was at that time Chairman of Ways and Means in the House of Commons, but at Election times I believe he supported that policy. Does he desire to say that he did not approve of it and support it?
LORD EMMOTT: The noble and learned Viscount said"in the House of Commons." I said I was Chairman of Ways and Means, and had nothing whatever to do with the passage of the Bill in the House of Commons. What was said at Election times is a different thing.
THE LORD CHANCELLOR: Although in the House of Commons the noble Lord occupied a position which precluded him from giving effect to his true opinion, his true opinion could be explained, and was explained and given effect to at Election times; and the consequence is that the Motion which he has made, and which I shall presently put to the House, can produce no result whatever. The noble Lords who are attempting to criticise this Bill are the noble Marquess, Lord Crewe, and the noble Earl, Lord Beauchamp. Let me say at once that I have heard a great part of this debate, and I have seldom heard a debate to which, in my judgment, more has been contributed of
696
knowledge and of experience. I think it is a shocking thing that all that knowledge and experience should be rendered futile. But it was rendered futile by this very Act, and it is a boomerang which to-day has come to strike Lord Crewe and Lord Beauchamp who were themselves the original authors of it.
Lord Crewe says that we have an opportunity to-day, or that we should have an opportunity, to protest against the iniquities of the Government and to make our Amendments to be considered in another place. I have only some fifteen years' experience of Parliamentary life; Lord Crewe has more experience. But my own experience has been that, if we take an objection and embody it in an Amendment of either House, the degree of attention which it is likely to receive elsewhere has a very close correspondence with the power which you possess to give effect to your decision, and my own experience of Amendments in either House is that they have produced singularly little effect when there is no power, for any reason, constitutional or otherwise, to make them effective.
We, the Government, in reply to the remonstrance made by the noble Lord, can say that we have merely done this. We introduced a Bill; that Bill, in due agreement with the course contemplated by the Parliament Act, was placed before Mr. Speaker; Mr. Speaker has issued a Certificate— that was put into his hands by the noble Marquess— to the effect that this is a Money Bill. Automatically, mechanically, certain conclusions must follow, and they have followed. The indignation of the noble Earl should not rest upon the Government or upon any Government which has inherited the Parliament Act, but upon those who conceived the spirit of the Parliament Act.
THE MARQUESS OF CREWE: My Lords, perhaps I may be allowed to offer one observation by way of correction of what the noble and learned Viscount has just said, in case all your Lordships are not acquainted with the absolute terms of the Parliament Act. The noble and learned Viscount, speaking rather elliptically, seemed to imply that it is in the power of Mr. Speaker to decide whether a particular Bill presented to him is a Financial Bill or not. But the terms on which Mr. Speaker is to found his judgment are laid down at length in subsection (2) of Section 1 of the Parliament Act. I need

697
not trouble your Lordships by reading the whole section, bit it gives a Very elaborate description of what a Money Bill is.
The noble Earl, Lord Midleton, who asked this question, spoke of an understanding which was made at the time of the passing of the Parliament Act. This understanding had to do with the framing of this description of a Money Bill. That is to say, the intention of the words in this subsection (2) was that any Bill which could be regarded as in pari material to the Revenue Bill of the year should be subject to this disability. But it by no means followed that all Bills dealing in some way or other with finance would be subject to the same disability.
His Majesty's Government, having no doubt carefully considered and scanned the terms of this subsection (2), took steps in another place, I have no doubt, to admit within the Safeguarding of Industries Bill nothing—even including things which they might have desired to admit— which might possibly prevent Mr. Speaker from giving his certificate. It was their intention that the Bill should not be discussed here, and I can congratulate them heartily on the success which they have thereby achieved. But I say without hesitation, having been one of the original parties to the transaction which the noble Earl, Lord Midleton, has mentioned, that it certainly was not the intention of those who framed the Parliament Act, and were responsible for its passing, that all financial measures, and particularly questions concerning tariffs— measures introducing a. general tariff— should be treated here precisely as if they were Revenue Bills,dealing with the Services
of the year. As a matter of fact, Mr. Speaker, no doubt, gave his Certificate on the facts as they were set before him. It would be by no means certain, I understood, that this Bill would be declared to be a Money Bill. But it was so declared, and, very clearly, there is nothing more to be said.
I wish to add only one word more, that I cannot admit what the noble and learned Viscount, I think, stated rather cynically that no discussion in this House or in another place is of.any use unless you are in a position to enforce your views by a majority vote. if that can be taken literally, it would simply mean that there would never be any purpose in the minority discussing anything. It was arranged by the Parliament Act that a Bill of this kind, like all other Bills under the Parliament. Act, must come up a month before the end of the session. That was for the purpose of Amendments being moved which might do one of two things. They might, in one way, act persuasively, and, if reasonable; they might cause the majority in another place to accept them, or, to take an extreme instance, they might so excite public opinion outside that honourable members in another place would have such pressure put upon them that they would not venture to keep the measure in its original form. That was the purpose of the Parliament Act and I feel bound, therefore, to correct to some degree what the noble and learned Viscount has said.
On Question, Whether the word"now"shall stand part of the Motion?—
Their Lordships divided:—Contents, 68; Not-Contents, 43.

CONTENTS.

Birkenhead, V. (L. Chancellor.)

Chilston, V.

Glenarthur, L.

Churchill, V.

Gorell, L.

Sutherland, D.

Goschen, V.

Harris, L.

Hardinge, V.

Hylton, L.

Ailsa, M.

Hood, V.

Invernairn, L.

Bath, M.

Peel, V.

Killanin, L.

Curzon of Kedleston, M.

Kintore, L. (E. Kintore.)

Linlithgow, M.

Abinger, L.

Knaresborough, L.

Ailwyn, L.

Lambourne, L.

Ancaster, E.

Ampthill, L.

Lawrence, L.

Bradford, E.

Annesley, L. (V. Valentia.)

Lee of Fareham, L.

Chesterfield, E.

Armaghdale, L.

Lovat, L.

Clarendon, E.

Ashfield, L.

Merthyr, L.

Eldon, E.

Balinhard, L. (E. Southesk.)

Montagu of Beaulieu, L.

Fortescue, E.

Charnwood, L.

Roundway, L.

Lucan, E.,

Clinton, L.

St. John of Bletso, L.

Lytton, E.

Clwyd, L.

Saltoun, L.

Malmesbury, E.

Colebrooke, L.

Sandys, L.

Morton, E.

Cottesloe, L.

Somerleyton, L. [Teller.]

Onslow, E.

Decies, L.

Stanmore, L. [Teller

Plymouth, E.

Desborough, L.

Stuart of Wortley, L.

Selborne, E.

Ebury, L.

Teynham, L.

Strange, E. (D. Atholl.)

Faringdon, L.

Wavertree, L.

Wharncliffe, E.

Gisborough, L.

Wigan, L. (E. Crawford.)

NOT-CONTENTS.

Crewe, M.

Askwith, L.

Methuen, L.

Lincolnshire, M. (L. Great Chamberlain.)

Avebury, L.

Muir Mackenzie, L.

Bledisloe, L,.

Nunburnholme, L.

Chalmers, L.

Parmoor, L.

Beauchamp, E.

Channing of Wellingborough, L.

Phillimore, L.

Doncaster, E. (D. Buccleuch and Queensberry.)

Clifford of Chudleigh, L.

Redesdale, L.

Denman, L. [Teller.]

Rowallan, L.

Kimberley, E.

Desart, L. (E. Desart.)

Saye and Sele, L.

Midleton, E.

Elgin, L. (E. Elgin and Kincardine.)

Shandon, L.

Strafford, E.

Southwark, L.

Emmott, L.

Stanley of Alderley, L(L. Sheffield.)

Farrer, L.

Gladstone,

Gainford, L.

Strachie, L.

Grey of Fallodon, V.

Hemphill, L.

Terrington, L.

Joicey, L.

Treowen, L.

Anslow, L.

Mac Donnell, L.

Vernon, L. [Teller.]

Ashton of Hyde, L.

Meston, L.

Weir, L.

On Question, Motion agreed to.

Resolved in the affirmative, and Bill read 2a accordingly, and committed to a Committee of the Whole House.

RAILWAYS BILL.
Order of the Day for the House to be put into Committee read.
Moved, That the House do now resolve itself into Committee.— (The Earl of Lytton.)
THE EARL OF MAYO: My Lords, I wish to make a correction. I stated the other day on the Second Reading, when speaking of monopolies, that the London and North Western Railway had a monopoly from Chester to Holyhead, and from Holyhead on to Kingstown, and, as an instance, I mentioned that some years ago the Nationalist members said that if third-class compartments were not put on this railway they would have to take action. Of course, I meant the Irish mail trains that run from Euston to Holyhead, and from Westland Row, Dublin; I did not mean the other trains, but only that particular Irish mail train. That was granted by the London and North Western Railway Company and the Nationalist members attained their object.
House in Committee accordingly.
[The EARL OF DONOUGHMORE in the Chair.]
Clause 1:
Grouping of railways.
1.—(1) With a view to the reorganisation and more efficient and economical working of the railway system of Great Britain railways shall be formed into groups in accordance with the provisions of this Act, and the principal railway companies in each group shall be amalgamated, and
700
other companies absorbed in manlier provided by this Act.
(2) The groups to be formed shall be those specified in the first column of the First Schedule to this Act, and as respects the several groups the railway companies to be amalgamated (in this Act referred to as"constituent companies ") shall be those set out in relation to each group in the second column of that Schedule, and the companies to be absorbed (in this Act referred to as"subsidiary companies ") shall be those set out in relation to each group in the third column of that Schedule, and the companies constituted by such amalgamation are in this Act referred to as amalgamated companies.
LORD PARMOOR LORD PARMOOR moved, in subsection (1), to substitute "may"for "shall." The noble and learned Lord said: Though I have put down five Amendments in form, they really all come under one. Your Lordships will notice that in Clause 1 there is an obligation that the railways shall be formed into groups, and that the principal railway companies in each group shall be amalgamated. Then, in subsection (2), the groups to be formed shall be those specified in the first column of the First Schedule, and the railways to be amalgamated shall be those set out in relation to each group in the second column; and the companies to be absorbed shall be those set out in relation to each group in the third column.
I will not trouble your Lordships again with what I said the other night in reference to the stringent character of the monopoly which this Bill sets up. I think it was not disputed afterwards, that the monopoly was, and was intended to be, of a most stringent character. But unfortunately I was told I was out of order in seeking to postpone the matter in order that we might properly discuss on some future occasion, and with a greater measure of time, the conditions that were attached

701
to the monopoly, and supposed to be in favour of the public. In my view, none of them is in favour of the public. The public are the one body whose interests have been put on one side in reference to this bargain made with the railway companies. Some people, no doubt (I recollect Sir William Harcourt making the remark years ago) are in favour of coercion in all matters of this kind, but I think that in business matters you really ought not to have coercion unless it is essential, and particularly so in matters of railway management.
The noble Earl, Lord Lytton, the other evening said that in his view the proposals of this Bill were an antidote to the cry for nationalisation. If you have coercion in the form in which you find it through every portion of this Bill it appears to me that, whatever the name you give it, you have a form of nationalisation in reality. You have everything fixed through official bodies: you have rates fixed, you have the conduct of the railways practically transferred from them to an official body; you have endless Committees and inquiries; in fact, every railway company will have to have a large staff, merely to draw up the reports which are necessary under this Bill to be presented to various official bodies. And generally, if you have the. word"shall," then' follows throughout this Bill a most stringent form of monopoly.
Of course, I am very much in favour of railway directors having as much power as possible, and surely, if you are to have railway directors at all, you ought not to supersede their discretion in all matters, either by Statute or by official interference; and what I am asking here is that power should be left to the railway companies to decide for themselves whether they think it is in the interests of the traders and their shareholders that these groups and amalgamations shall be carried out.
There was one argument which the noble Earl used more than once the other night, to which I should like to refer. He seemed to say that we cannot touch any portion of this Bill without in some sense invalidating what he called a compromise made with the railway companies under the conditions which are attached to the Bill itself. But surely that is carrying the principle of compromise outside the Legislature much too far. The same principle, if carried to the same extent, would really make the Legislature, not the initiative
702
body in legislation, but merely a body to carry out legislation which has been agreed to by certain groups of people outside. Further it is, of course, notorious that, although this Bill may have been based on a compromise, it was materially altered in many respects, and after prolonged discussion, in another place. So much was it altered that as regards Part III, which is a most crucial portion of the whole Bill, that Part was referred to a different Committee from that which considered the other Parts of the Bill. A reference to a different Committe could hardly be justified if your Lordships were compelled to adhere to the principle which the noble Earl enunciated— the principle of a compromise which was not to be touched, a sort of sacred contract made between the parties.
Amendment moved—
Page 1, line 10, leave out (" shall ") and insert ("may")—(Lord Parmoor.)
LORD GAINFORD: I do not know whether this is a practical Amendment or not, but personally I am not satisfied that economies will be secured by these amalgamations. I think the railway companies are the best judges, and if they deem these amalgamations to be necessary they would naturally take place. I am all for voluntary arrangement, rather than for compulsory amalgamation. I believe that the interests of the staff, as well as the interests of economy on behalf of the shareholders, would be better left in the hands of the existing railway companies— at any rate the large railway companies of this country — than entrusted to the huge amalgamations proposed in this Bill.
It is, however, really on the part of traders that.I wish to voice a view which I know is entertained outside. That is that if they are to receive the same kind of justice which they have received in the past they will be much more likely to secure that careful investigation into their cases from time to time if it is undertaken by local bodies rather than by a huge amalgamated concern. It is because that view is held outside that I sympathise with the object of this Amendment.
THE UNDER-SECRETARY OF STATE FOR. INDIA (THE EARL OF LYTTON): The noble and learned Lord, Lord Parmoor, was mistaken, I think, in saying that I spoke of the Bill as a compromise and sug

703
gested that any alteration of it would invalidate that compromise. That, of course, would be claiming for negotiations outside what it would not be proper to claim in presenting any Bill to any House of Parliament. I did not mean to suggest that, because agreements had been made between parties, it was not open to Parliament to review them. What I did say was that this Bill represented an equipoise or balance of interests, which had been agreed to between a number of people whose interests were very divergent, and that your Lordships would find it extremely difficult when you sought to amend it in detail, to preserve that equipoise. And though, of course, it is open to your Lordships to upset the balance, and to throw over any agreement that was made between any two or more parties who have been consulted, still I recommended the Bill to your Lordships on the ground that in its present form it represented an agreement between all these parties— the railway companies, the Government and the railway users, the traders— and I hoped that in criticising the details of the Bill your Lordships would do nothing to upset that balance.
Turning to the Amendment moved by the noble and learned Lord, I would point out that it is almost a Second Reading point. It goes so completely to the root of the whole Bill that if it were adopted it would entirely alter the character of the Bill. I concede to the noble and learned Lord, of course, that there are two methods by which you can deal with this policy of grouping. You can deal with it either on a voluntary basis, by agreement, and that is the policy which is favoured by the noble and learned Lord, and by Lord Gainford who supported him; or you can proceed on the line which the Bill follows— namely, that of compulsory grouping.
A great many arguments could be used in favour of voluntary grouping, but it is not the policy which has been adopted in the Bill. Although the relative merits of those two schemes were very carefully considered by the Government and discussed with all the interests which this Bill affects, they ultimately decided that they could bring about the kind of grouping and amalgamation which would really conduce to operating efficiency and economy, only if there were an element of compulsion in it; and the Bill proceeds on those lines. If tins Amendment were accepted the
704
result would be that any single company of the many mentioned in the Schedules might hold up the whole proceedings and, by refusing to come into a group, render impossible the application of all these clauses. As the Amendment is so directly against the principle of the Bill, I earnestly hope that your Lordships will not agree to it.
LORD PARMOOR: In answer to the noble Earl, it is true that the voluntary principle would preserve the principle of competition as regards any company which did not come into the grouping scheme. That is the object of my Amendment— to allow, at any rate, some remnant of competition to survive even in connection with the principle of grouping and amalgamation. It would have the effect of leaving in the hands of any one company the power of saying whether it would be grouped or not.
The second point, with which I think the noble Earl hardly dealt, is the position to which my noble friend, Lord Gainford, referred, of the traders and users of the railway lines under this monopoly or grouping system. I do not think it can be said for a moment that they have really had their views heard in the same way as the railway companies views have been heard. Take an illustration, with which I am pretty familiar, provided by the agricultural system. I find a very large body of opinion— I only judge it from what has been brought to my notice in letters written to me, in which the writers say that they fear very much the effect of these monopoly groups. The farmer practically has not been heard upon the matter.
Therefore, I hope that your Lordships will accept my Amendment. I agree that it is a drastic Amendment, but it goes to the whole principle of a stringent and complete monopoly or the preservation of what I think ought to be preserved— the competitive element.
LORD STUART OF WORTLEY: I do not think the noble and learned Lord has altogether appreciated what must be the necessary effect not merely of the Amendment he has moved but of the whole series of Amendments which stand in his name. I am not sure whether he realises that no amalgamations are possible without Parliamentary permission and he proposes to give that Parliamentary permission.

705
In a subsequent Amendment which is consequential upon this one he also prescribes the amalgamations which alone shall take place under such Parliamentary permission.
LORD PARMOOR: No.
LORD STUART OF WORTLEY: I am sorry, but in my humble opinion that is the necessary effect of the series of Amendments placed on the Paper by the noble Lord. If we decided anything at all upon Second Reading, I take it that it wag this. Though in the palmy days before the war unrestricted competition was productive of highly luxurious services which the public enjoyed, bitter experience has shown us since that it is one matter
Resolved in the affirmative, and Amendment disagreed to accordingly
LORD NUNBURNHOLME LORD NUNBURNHOLME moved, at the end of the clause, to insert the following new subsection—
" (3) Notwithstanding anything contained in this Act, the Hull and Barnsley Railway shall not be included in any group in contravention of the agreement set forth in Schedule D. to and con
out of many in regard to which we must retrench, because in the present circumstances we cannot afford it. Therefore, I take it that we decided upon Second Reading that this kind of carefully regulated grouping should take the place of the unrestricted competition of former days. I submit that it ought not to be possible for individual companies to hold up the system of grouping which, after an immense amount of discussion in which all parties were most freely heard, was arrived at as the best.
On Question, Whet her the word"shall"shall stand part of the clause?
Their Lordships divided: Contents; 83; Not-Contents, 9.

CONTENTS.

Birkenhead, V. (L. Chancellor.)

Goschen, V.

Emmott, L.

Grey of Fallodon, V.

Faringdon, L.

Sutherland, D.

Hardinge, V.

Gisborough, L.

Ailsa, M.

Hood, V.

Glenarthur, L.

Bath, M.

Peel, V.

Gorell, L.

Curzon of Kedleston, M.

Hamilton of Dalzell, L.

Lincolnshire, M. (L. Great Chamberlain.)

Abinger, L.

Harris, L.

Ailwyn, L.

Hylton, L.

Ampthill, L.

Invernairn, L.

Annesley, L. (V. Valentia.)

Joicey, L.

Ancaster, E.

Anslow, L.

Killanin, L.

Bradford, E.

Armaghdale, L.

Kintore, L. (E. Kintore.)

Chesterfield, E.

Ashfield, L.

Knaresborough, L

Clarendon, E.

Askwith, L.

Lambourne, L.

Doncaster, E. (D. Buccleuch and Queensberry.)

Avebury, L.

Lawrence, L.

Balinhard, L. (E. Southesk.)

Merthyr, L.

Eldon, K.

Cawley, L.

Meston, L.

Fortescue, E.

Charnwood, L.

Roundway, L.

Grey, E.

Clifford of Chudleigh, L.

St. John of Bletso, L.

Lucan, E.

Clinton, L.

Saltoun, L.

Lytton, E.

Clwyd, L.

Sandys, L.

Malmesbury, E.

Colobrooke, L.

Shandon, L.

Midleton, E.

Colwyn, L.

Somerleyton, L. [Teller.]

Morton, E.

Cottesloe, L,.

Southwark, L.

Onslow, E.

Decies, L,

Stanmore, L. [Teller.]

Plymouth, E.

Desborough, L.

Stuart of Wortley, L..

Strafford, E.

Desart, L. (E. Desart.)

Teynham, L.

Strange, E. D. Atholl.)

Ebury, L.

Wavertree, L.

Chilston, V.

Elgin, L. (E. Elgin and Kincardine.)

Weir, L.

Churchill, V.

Wigan, L. (E. Crawford.)

NOT-CONTENTS.

Beauchamp, E.

Denman, L. L.

Parmoor, L. [Teller.]

Mayo, E.

Gainford, L.

Strachie, L.

Gladstone, V.

Nunburnholme, L. [Teller.]

Terrington, L.

firmed by the Hull Barnsley and West Riding Junction and Dock Act, 1880, or of section 8 (Company not to purchase Hull and Barnsley undertaking without consent of Corporation) of the North Eastern Railway (Hull Docks) Act, 1893."
The noble Lord said: In rising to speak to the Amendment in my name, I have been requested by Lord Terrington to ask the Minister in charge of this Bill

707
whether he would also consider the Amendments, standing in the name of Lord Terrington, to the First Schedule, with reference to the Hull and Barnsley Railway. I have been asked to move this Amendment by the Hull Corporation and the Hull Chamber of Commerce. The Hull Corporation is entitled, under the Hull, Barnsley and West Riding Junction Railway and Dock Act, 1880, to a right of veto upon any infringement of the independence of the Hull and Barnsley Railway. This right of veto was repeated in an Act of the year 1893, when the North Eastern Railway acquired all the Hull docks with the exception of the Hull and Barnsley railway dock, and it was again repeated in 1899 when the North Eastern Railway and the Hull and Barnsley Railway were authorised by Statute to construct jointly a new dock at Hull.
It will be seen that the Hull Corporation has jealously guarded its rights with regard to the preservation of the independence of the Hull and Barnsley Railway over a period of forty years. This right of veto has been strenuously fought for because the Hull Corporation was actively associated in the promotion of the Hull and Barnsley Railway, realising at that, time that the existence of a second railway company, or as we should perhaps call it now, a second group, was of the greatest benefit to Hull. It seems as if this right of veto is being swept away ruthlessly, and without even an acknowledgment, under this Bill. In the Schedule agreement attached to the Hull and Barnsley and West Riding Junction Railway and Dock Act, 1880, it is provided that if there is any question arising between the railway and the corporation as to the unreasonableness of consent, such question shall be referred either to the Railway Commissioners or to the Board of Trade. I think all this goes to show that the corporation's right of veto was very thoroughly recognised then, and, by confirming it in successive years, it has continued to be recognised.
Now, however, it is not even acknowledged, but is simply ignored, and the value of the previous Acts would appear to be of no account. In fact, it is as if those Acts were mere scraps of paper, quite contrary to what the Englishman hoped for during the late war. The corporation insisted on this right of veto so that they might always keep two lines running into Hull, and in order that the docks might
708
not be in the hands of one company. Other great ports that had two or more railways serving them before the war still have competition under the group sytem. I may remind your Lordships that Hull ranks as the third port, and that it is geographically in such a position that it is of very great importance for the coalfields of West and South Yorkshire, and the industrial towns of the West Riding. One would have thought that a port of this importance would have been entitled to receive careful consideration under the grouping system. But no; even the competition so carefully fostered by the corporation is taken away, and Hull is entirely under the. North Eastern grouping.
May I point out to your Lordships that Bristol, a similar port, is served by two groups, a Western group and a North Western group, and in addition by a joint railway, the Severn and Wye Railway, which is not included in the First Schedule. Another great port in a similar position is that of Liverpool which is also served by more than one group. In addition to two groups it has also the Cheshire Lines Railway, which is not included in the Schedule, which is partly owned by a company in the North Eastern group. I would like to emphasise the point that the Great Central Railway, although in the North Eastern group, can run into Liverpool.
South Yorkshire coal owners, and West Riding towns such as Halifax and Bradford, are all opposed to the grouping of the Hull and Barnsley with the North Eastern. They realise also that all competition is ttoin, to cease if Hull is to be under one grouping only. I am asked to protest against this unfair treatment of our third port. All Yorkshiremen are aware that, the North Eastern Railway is a powerful one, and I speak with due respect in the presence of its noble Chairman. It has long wished to absorb the Hull and Barnsley Railway. We all readily admit that the North Eastern Railway has spent a great deal of money in Hull since they acquired the Hull docks, and in the town itself there is no feeling against that railway. No doubt it was in the interest of the railway company to spend that money to bring traffic to Hull, and I hope it will continue to make improvements in the port. But that does not alter the fact that the contention of Hull is that it should have more than one group of railways, and its docks should not all be in the hands of the same

709
group. Situated as it is in a corner of Yorkshire, serving as port for a large area extending right into the midlands and to the north west into the centre of industrial England, it is not fair that it should be left in the hands of one group only.
Up to now I have only mentioned the Hull Corporation's right of veto, but the Hull Chamber of Commerce is also actively opposed to the grouping contained in this Bill. The Chamber of Commerce is composed of men representing all classes of industry. There is a strong shipping committee in connection with it, and all are agreed that the proposed grouping is most detrimental to the business interests of the port. I have mentioned the shipping committee in particular because it was stated in another place that shipping firms favoured the grouping. That is not the case, because directly the Hull Chamber of Commerce read the section referred to they had a meeting of their shipping committee and sent a telegram to the Central Shipping Committee in London asking them to refute that statement.
As a community Hull is solidly opposed to the grouping. I know that the argument has been advanced that the Hull and Barnsley and the North Eastern Railways have no direct railway connection to each other's docks and lines, and that this causes delay; but I cannot help saying that people who bring forward that argument cannot be aware of the real facts in the port of Hull where most of the unloading and loading of ships is done by lighters and keels. Even goods are transferred from one dock to another by means of lighters, and they do not pass over the railway at all. I refer chiefly to trans-shipment traffie. Also it has the great advantage, besides this system of lighters and keels, of having direct communication with the inland waterways of this country. In addition, it is generally considered more convenient by the merchants of this city to bring goods required to be loaded on to ships by lorry if they do not being them round by water, and load them on the other side of the ship. There is thus not very much traffic which would have to be exchanged between the two systems of railways. I think your Lordships will see my point of the great advantage it is to bring lighters with one set of goods to the further side of the ships in dock, and have railways or lorries for loading up the ship on the other side at the same time, thus
710
doubling the despatch of loading or unloading.
In any case, I submit that the business community of Hull should be allowed to know what is best for the welfare of the port, and they are certainly opposed to the present grouping. Your Lordships will have received a document, and I believe there is to be an Amendment moved, with regard to King's Lynn Railway and Dock Company. That company are praying to be included in the North Eastern group. It. seems rather incongruous that, on the one hand, you should have one company wishing to be grouped with the North Eastern, and, on the other, you should have Hull asking that she should be allowed by the right of veto to escape from the monopoly of being under one group only, and that the North Eastern group. I would ask the Minister in charge of the Bill whether the inclusion of the King's Lynn Company cannot be taken as counterbalancing the exclusion of the Hull and Barnsley railway.
The Hull Corporation and Chamber of Commerce urge that if grouping is necessary the Hull and Barnsley railway should be grouped otherwise than under the Bill so that. Hull should at least have two strong groups. They know that in the past the port has flourished under competition in every way. It is a fact that if two strong groups serve the port, industry and commerce will thrive, and they know that the elimination of competition must have a deadening effect on the trade of the port. The group to which they wish to be attached is the North Western and Midland group. The Corporation would not use its right of veto unreasonably, and it is felt that to ignore this right, and deny the port any competition, is a most unfair and high-handed proceeding in these days of self-determination. I beg that your Lordships will give fair treatment to this port which suffered very heavily during the war owing to the action of the enemy.
May I mention that in another place all four representatives of Hull spoke in favour of the contention of the Hull Corporation. There was no Division on this subject. A former member for Hull, Lord Eustace Percy, also spoke in favour of our contention, and so did the member for Durham and the member for Burton, all representing either large colliery, or railway, or brewing interests, or great

711
trading interests of sorts. I personally have no axe to grind in this matter either as a trader or as a railway director, but I speak for the City of Hull with which I have been long connected and which my father, my brother, and myself represented in another house for very nearly forty years. I beg that your Lordships will take away the heavy disability which is now being placed upon it, and that you will recognise the Corporation's right of veto and allow for grouping to be substituted which would meet with the approval of all concerned in this matter so vital to the well-being of this great port.
Amendment moved—
Page 2, line 3, at end insert the said new sub-section.— (Lord Nunburnholme.)
LORD TERRINGTON: Your Lordships have heard a great deal of the facts of the case from Lord Nunburnholme, but I should like to say that I share with him the honour of being the only other member of your Lordships' House who was born in Hull, and I think we are the only members of the House who have been actively identified with Hull practically all our lives. No one who is not so identified has any idea of the intense feeling which exists in Hull, from the highest citizen to the lowest, with regard to this Bill, in respect of the manner in which it brings about the amalgamation of the North-Eastern and the Hull and Barnsley railways. I do not think there has ever been a more striking instance of municipal agreement on a subject than is provided by this case. A statement has been issued, and I believe forwarded, to every member of your Lordships' House, signed by the Lord Mayor of Hull, the Chairman of the Corporation Parliamentary committee, the High Steward, the Sheriff, the President of the Incorporated Chamber of Shipping and Commerce, and the President of the Hull and District Chamber of Trades. In addition resolutions have been passed by the Bradford Exchange and the chambers of commerce and exchanges of other West and South Yorkshire towns in opposition to the proposed grouping.
My noble friend has gone sufficiently into the details and history of the Hull and Barnsley Railway, and how it came into existence, that it is only necessary to remind you that the railway was chiefly the result of the initiative and determination of the citizens of Hull towards the
712
end of the 'seventies for the express purpose of breaking down the monopoly in Hull of the North-Eastern railway. The Corporation of Hull invested £100,000 in the company in ordinary shares and the Act sanctioning the railway forbids the corporation to part with these shares. The corporation appoint two directors, and for many years my late father was one of the directors representing the corporation.
I need not deal with the attempts to bring about the amalgamation. So far as I can see, no good reasons have yet been adduced by the Government for placing the Hull and Barnsley Railway in the same group as the North Eastern, when its natural group, apart front any questions of monopoly, would seem to be Group 3 with the Midland and other railway companies, there being an. actual physical junction with the Midland Railway at Cudworth. I think the noble and learned Lord, Lord Parmoor, admirably summed up the situation, and, as an instance of the glaring inequality of the arrangement, he picked out the particular case of these two railway companies. As one who has been brought up with a full knowledge of the traditional North-Eastern policy I can fully endorse his remarks on this aspect of the question.
LORD KNARESBOROUGH: I have listened carefully to the two speeches which have been delivered and have tried to find out whether any arguments have been brought forward in addition to those which were placed before the two Committees and the House of Commons. I cannot discover anything new, and. we must assume therefore, that the Bill, and the arguments for and against it, remain in the same Position as when the Bill left the other House. There an Amendment was moved on Report in the identical words of the Amendment now before us. It was not a new question sprung on the House of Commons. The subject had been debated absolutely ad nauseam in the Committees until some members told me that they were absolutely sick of the name Hull and Barnsley. Therefore, the House of Commons was thoroughly acquainted with the whole subject. It went to a Division. What was the result? There were 19 members who voted for it, and 326 against it.
What is the real point of this Amendment? There is only one point in it, and it is whether the Hull and Barnsley Rail

713
way is to remain in the group as placed at the wish of the Railway Companies Association and included in the Government Bill, or to go to the Midland and London and North Western group. What is the history of the matter? Some forty years ago the Hull and Barnsley Railway was initiated. There were three bodies concerned in the matter. There was the old Hull Dock Company, a separate undertaking in which the shares were mostly owned by the citizens of Hull; there was the North Eastern Railway Company, and the new Hull and Barnsley Railway Company, which was both a railway and a dock company. The Hull and Barnsley Railway Company immediately instituted a wasteful competition. The result was that they ruined the old Hull Dock Company in which a large amount of local capital had been sunk; it was rendered practically bankrupt. The Hull and Barnsley Railway Company were in great difficulties themselves and if a large sum of money had not been raised for them in city of London they would have gone into the hands of a Receiver. Therefore, they had no money to deal with the old Dock Company, and, unless the old docks were to be abandoned (which would have been perfectly ruinous for Hull) there was no alternative but that they should be acquired by the North Eastern Railway Company. That happened, and they were bought by the North Eastern.
The Hull Corporation have always tried to keep up fierce competition between the North Eastern Railway and the Hull and Barnsley Railway, but events have proved too strong for them. As Hull increased and more accommodation was wanted, the question arose as to who was to supply the new dock accommodation. The Hull and Barnsley Railway Company had no money, and it was arranged that they and the North Eastern Railway Company should make a joint dock. The North Eastern Railway Company was to pay not only for it: own share but also for the share of the Hull and Barnsley Railway Company as well, and the result is that they have lent to the Hull and Barnsley Railway Company £1,500,000 at 3 per cent. interest. But the arrangements are still, on the whole, most unsatisfactory. There are two passenger stations a considerable distance apart, so that passengers who go from one to the other have a long way to walk or drive. Goods traffic has to be carried a long distance, right across Hull; coal
714
exporters have to keep two separate depots for their coal; and in many ways the present system is wasteful and uneconomical.
What was the origin of the Railways Bill? Nationalisation had been proposed, and, no doubt, had it been seen that the country was in favour of it, would have been carried out. When, however, it was seen that the country was absolutely opposed to nationalisation, the Government thought that some advantages might be gained, and some disadvantages avoided, by dividing the country into large groups, so as to eliminate wasteful competition. Hull has been quoted by the Ministry of Transport as an exact instance of wasteful competition. The supporters of this Amendment want this wasteful competition to be continued. The Hull and Barnsley Railway Company are anxious to be incorporated in accordance with the Government grouping, and the general opinion outside Hull is that this arrangement will be for the benefit of the City and of all concerned.
The proposer of this Amendment has said that the shipping interest is against it. That I entirely and absolutely deny. Without inflicting a long quotation upon your Lordships, I should like to refer to a speech that was made in another place on this subject. The speaker was Sir William Rayburn, and he said—
"Since the first day this Bill came before the Committee, I have never put in my word, and I would not have intervened now, had it not been for this repeated statement that the whole business community of Hull will be grievously injured if the Hull and Barnsley Railway is put into this group. I have been a user of the port of Hull for over forty years, and I am also Chairman of the Parliamentary Committee of the Chamber of Shipping, and there has been no complaint made by any user of the port of Hull that the Government measure is going to be injurious to shipping."
I will not quote all his speech, because it may fatigue your Lordships. This is his Conclusion—
"The fact remains that shipping as a rule welcomes this change. We have all suffered from time to time more or less from the congestion and trouble that there has been with the various systems in Hull, and I corroborate all that the Parliamentary Secretary has said in regard to the waste that goes on by the competition that has taken place in times gone by and up to the present; and I am convinced it is going to be for the benefit of Hull itself, whatever the Hull Corporation may think about it. At any rate, I strongly support the Government in the grouping of the Hull and Barnsley Railway with the Eastern group, and it would be a great calamity to the Hull and Barnsley Railway itself and the community of Hull if any other step were taken. I hope the Government will persevere in resisting the amendment."

715
That was a perfectly independent speaker, well versed in the question upon which he was speaking.
LORD NUNBURNHOLME: May I intervene, with the noble Lord's permission, for one moment? After the Hull people had read that speech, they immediately sent a telegram to the Central Shipping Committee in London protesting that the member for Dumbarton did not represent their opinion.
LORD KNARESBOROUGH: No, but he represented what was very much more valuable, and that was his own opinion. A perfectly independent opinion. I come now to another question. The noble Lord sitting beside me (Lord Nunburnholme) will not, I think, contradict me when I say that the Wilson Line is by far the most important shipping business in the city of Hull. Now, Mr. Sanderson who is the manager of the Wilson Line, is also a director of the North Eastern Railway. He is entirely in favour of the scheme. I know it is objected by the party opposed to us that he is a director of the North Eastern Railway, but the fact cuts both ways. To begin with, his interest in shipping many times exceeds his interest in railways, but he is a perfectly independent man, and he certainly would not go against the interests of Hull if he thought that this grouping were going to be injurious. But he is entirely in favour of it. You may say that is because he is a railway director. Supposing he had not been a railway director, what would have been said? People would have said Mr. Sanderson knows all about shipping but he knows nothing about railways. We are aware, however, that he knows a good deal about railways as well as about shipping, that he represents by far the most important shipping interests in the port of Hull, and that he is in favour of this grouping. That, surely, is a very strong argument against the Amendment which has been moved.
It must not be forgotten that already the Lancashire and Yorkshire, the London and North Western, and the Midland Railway companies, who are all members of the North-Western group, possess running powers into Hull and these running powers are not affected in any way by this Bill. The North Western, Midland, and West Scottish group have separate access to the East Coast at Goole, to which port the Lancashire and Yorkshire Railway
716
has its own line, running direct from Liverpool and Manchester. So much for the reported isolation of Hull. No doubt the agreements referred to do exist, and in ordinary circumstances, would, no doubt, have to be respected. But circumstances have changed absolutely since these agreements were made. To begin with it is not proposed that the North Eastern Railway Company should have a monopoly. The Hull and Barnsley Railway will become part of a vast combination extending from the North of Scotland to the Thames.
Circumstances have forced the North Eastern and the Hull and Barnsley railway companies to construct a joint dock, and to work together amicably in many ways, and I feel sure that to introduce fierce competition again would be a calamity for all concerned. The North Western group are already strong enough in all conscience, and the North Eastern group will have all it can do to hold its own against them. It would be manifestly unfair at this point to weaken the North Eastern group, and at the same time to add to the strength of the North Western group. I have taken to heart what we were told yesterday, when we were advised to compressour remarks as much as possible. I have no doubt there will he other speakers on both sides, but, so far as I am concerned, I beg your Lordships to reject this Amendment, which I am sure would be a misfortune fortune for everybody concerned.
LORD HAMILTON OF DALZELL: The noble Lord who has just sat down has told us that the House of Commons became heartily sick of the name"Hull and Barnsley." I hope I shall not inflict the same evil upon this House, and I, also, will try to be as brief as I can. The two noble Lords who were responsible for the Amendment are both, as they have told us, intimately connected with the city of Hull. The noble Lord who has just sat down is, as your Lordships know, the Chairman of the North Eastern Railway Company. I am a director of the Hull and Barnsley Railway, and if your Lordships will allow me I should like to put one or two facts before you from the point of view of that rather hardly-used little railway.
I admit quite frankly that the Acts of Parliament referred to in the first Amendment of Lord Nunburnholme do give the Hull Corporation considerable

717
control over any change in the constitution of the Hull and Barnsley Railway, and, of course, it is for your Lordships to consider how far restrictions of that kind should be allowed to hold good when a matter of national importance, affecting all the railways of the country, is under consideration. I can quite imagine that if the two noble Lords who move these Amendments, instead of moving Amendments to a Bill of this nature, had been in fact moving the rejection of a private Bill promoted by these two railway companies to secure their amalgamation, they might have had a good chance of success. I can further imagine that if we could put the clock back say twenty years their chance of success would have been even greater, because in those days there was a very firm belief in the value of competition between railway companies as the principal, if not the only, safeguard for traders and the travelling public. But we know that there has been a very considerable change of opinion since then. The Bill now before the House is a recognition of that change, and the vote which your Lordships gave just now, I think, endorses it.
I ask you to consider for a moment exactly what it is that we are asked to do by these two Amendments. Lord Nunburnholme asks us to maintain the veto of the Hull Corporation, whatever that may be worth, and as far as I can see from the Notice Paper he is content to leave the matter there. Supposing your Lordships were to agree to that, what would happen? It would be the Hull Corporation, and not Parliament, which would decide into which group this railway should go. I cannot think you are likely to agree to that. Then we come to the other Amendment which I understand we are considering now, in the name of the noble Lord behind me. He goes further, and he asks the House, having taken the Hull and Barnsley Railway out of the Eastern group to which it properly belongs, to put it into a group which is entirely concerned with railways in the west. I hope very much that your Lordships, having accepted the principle of the geographical grouping of railways, will not accept an Amendment of that kind.
There is really only one other thing that I want to say. The noble Lord who last spoke, and others, have alluded to the objects with which this particular railway was promoted. I have no doubt it is true,
718
as we have been told, that the Corporation of Hull, inspired by the ordinary ideas of those days, did consider that great benefit would be derived from the introduction of competition into the port. But that was not the only object for which the railway was promoted. It did not weigh very heavily with the hard-headed business men outside the city of Hull, who found a great deal of the money for that venture. What they were concerned with was the traffic which the line would carry, naturally, and what they had their eye on was the South Yorkshire coalfields, which were being developed at that time.
There is no reason to consider that this railway is in any way the property of the Corporation or citizens of Hull. I believe I am within the mark in saying that, including the £100,000 of stock held by the Corporation of Hull, less than 3 per cent, of the capital of the company is held in Hull or the immediate neighbourhood. It is right that your Lordships should know that, in case of any misapprehension on the subject. In fact, the traders of Hull for the greater part have made very little use of this railway, except as a lever with which to try to extort better terms out of the North Eastern Railway. They have very seldom put any traffic upon it.
LORD NUNBURNHOLME: I must differ from the noble Lord on that statement. The Hull and Barnsley dock was the mainstay in the growth of Hull. Without that dock the New York and Boston trade could never have been developed at all, and trade with the Far East also could not have been conducted.
LORD HAMILTON OF DALZELL: I am very glad to hear the noble Lord say so, and I hope all the traders of Hull will bear it in mind when next they have to consign goods. Now that the Government have brought forward a measure in which the Hull and Barnsley Railway must inevitably fall into one or other of two groups, I think the shareholders have a right to ask your Lordships to have consideration for their interests, and that they shall not be made a pawn in some obscure game of the Hull Corporation, which that corporation wants to play with the object of paying off some old score against the North Eastern Railway. I hope that your Lordships will not agree to the Amendment.
VISCOUNT GREY OF FALLODON: I do not know whether the noble Earl in charge of the Bill intends to give us any guidance in the matter. If he is going to do so, perhaps, it is unnecessary for me to say anything, but as he has not risen, although I do not want to prolong the debate, and although I speak as one specially concerned as a director of the North Eastern Railway Company, I hope your Lordships will not give your decision on the somewhat narrow grounds upon which the question has hitherto been argued. I agree with the noble Lord opposite, who seconded the Amendment, when he said that he based his case very much on the speech made by my noble friend, Lord Parmoor. I think he was perfectly justified in that statement, but then the speech of Lord Parmoor was really a speech against the whole principle of grouping in the Bill, and that is exactly the case for this Amendment. If you are going to decide on this Amendment, you cannot do so by treating it simply as a matter concerning Hull or the North Eastern Railway Company, but you must treat it as a matter which strikes vitally against the whole principle of grouping on which the Bill is based.
I think the interests of the North Eastern Railway and Hull are one. The idea which exists in Hull, that there is some difference between them, is founded on an illusion. I may mention that since 1883 one-sixth of the capital expended by the North Eastern Railway Company, amounting to three and a-half millions, has been spent in Hull. That shows, at any rate, the amount which Hull does owe to the feeling on the part of the North Eastern Railway Company that they have an interest in doing all they can for the port of Hull, in addition to the £1,500,000 advanced to the Hull and Barnsley Railway Company for the dock.
But that is not the point upon which I am going to insist. I would ask your Lordships to realise that, if you put this Amendment into the Bill, you are really disturbing the system of grouping which exists in the Bill. The North Eastern Railway Company do not ask for this grouping, and I think the opinion of my colleagues was that they would rather have no grouping: they would rather be left as they were. The old system had its advantages and its disadvantages; the grouping system has its advantages and its
720
disadvantages. On the whole the North Eastern Railway would rather be left alone. But the general opinion, not only of the Government, but I think of the country— of Parliament certainly— was in favour of grouping. The North Eastern Railway Company have therefore accepted the system of grouping, and intend, of course, loyally to work.it, because it is no use falling between two stools: if you are not to have the old system, you must do your utmost to make the new system a success. And that is the standpoint from which the North Eastern Railway Company approached the question of grouping.
But do not suppose that the grouping in the Bill is the grouping for which we should have asked. We accept it and are going to do our best to work it. But the Western group— the London and North Western, the Midland, and the Lancashire and Yorkshire railways, all grouped together— is a stronger group than the Eastern group, with which the North Eastern Railway is associated. If the system in the Bill is to be altered fairly it ought to be altered rather to strengthen the Eastern group than to strengthen the Western group. The whole object of this Amendment is to take something away from the Eastern group— the Hull and Barnsley Railway— and put it into the Western group. If the grouping system is to be altered at all this is an alteration in the direction of making it less fair. And I would ask your Lordships to come to a decision on the general ground of the principal grouping, because if you are to begin to alter the system of grouping which now exists in the Bill you must do it on very much larger considerations than those which have been advanced for this particular Amendment.
THE EARL OF LYTTON: Although we are discussing a specific Amendment in the name of Lord Nunburnholme, I think it has been for the convenience of the House to consider whether the Hull and Barnsley should be put into the Eastern or into the Western group; because that is really the matter which is at the bottom of the Amendment which we are considering. Hitherto, this discussion has been conducted entirely, I think, by those who have, for one reason or another, a particular interest in the question. We have heard two speeches in favour of the Amendment by noble Lords who are specially interested in the town of Hull,

721
and we have had speeches from three railway directors— the Chairman of the North Eastern, a director of the Hull and Barnsley Railway Company, and the noble Viscount who has just sat down. I agree with him that it would be a mistake if your Lordships were to come to a decision merely upon arguments used by those who have a definite interest on one side or other of this controversy. And I should like, therefore, to put one or two reasons before your Lordships which are not based on any of the considerations that have hitherto been advanced.
It will, I think, be admitted by your Lordships that the noble Lord who moved the Amendment made out a very strong case from the point of view of the opinion of Hull. He represented to your Lordships that on this question there was a practically unanimous opinion among those who came from Hull; and if we were only concerned with the interests of Hull I should find it difficult to argue the point with them, although I think another argument may be advanced, and that it would be easy to show that in some respects the people of Hull were mistaken in thinking that competition, which for so many years they have striven to maintain between those two railway companies, has been for the advantage of Hull. The noble Lord would doubtless reply with much force— and would be entitled to claim— that Hull itself was the best judge in such a matter. And therefore, though I do not agree with the view which he has expressed, I am not prepared to argue this question solely from the point of view of the interests of Hull, although I would assure the noble Lord that in the opinion of the Government there is nothing in the Bill, as it stands, which will in any way be detrimental to the interests of Hull. We are convinced that, if the Bill stands as at present, and the Hull and Barnsley railway is put into the Eastern group, that will not, as is feared by those in Hull, have any serious consequences to the interests of that great port.
But that is not the only interest which has to be considered. The noble Lord, Lord Terrington, stated that in his opinion no good reason had yet been made out for the Bill as it stands. I hope I can, in a few words, convince your Lordships that there is a public interest, an interest of traders, an interest of those who use the port of Hull, which is in favour of the
722
Bill as it stands. and not of the Amendment of the noble Lord. Lord Nunburnholme complained, in the first instance, that by the operation of this Bill the port of Hull was being deprived of any competition in railway service, and he said that it was the only important port in the country which was not served by more than one railway line.
I want, in the first place, to remind your Lordships that that statement is not strictly true; that Hull will not, by this Bill, be deprived of any railway communications other than those of this Eastern group; because there are other lines— lines in the Western group— which will have running powers into Hull. The Lancashire and Yorkshire, and the London and North Western, both have running powers, and. exercise them; and the Midland Railway, in addition to those two, have contingent powers of running into Hull. Therefore, it is not true to say that Hull is exceptional in this respect, that it is entirely without any competition in railway service.
But there is one respect in which Hull is entirely exceptional, and in so far as it is exceptional the situation is greatly to the disadvantage of traders who use that port. In all the other big ports to which the noble Lord referred— Liverpool, Bristol, and so forth— the docks arc in the hands of a single authority, and the traders using those ports have the means of sending their goods direct from the port into which they come on to the railway lines which deliver them at their destination. Here, however, in Hull (and this is what is meant when it is said that Hull is a classic instance of wasteful competition) there have been for many years two docks, one owned by the North Eastern Railway Cmpany, and the other owned by the Hull and Barnsley Railway Company. Owing to the competition between those two companies, whenever any goods came into one of those docks and were destined for a place on the line of the other railway company, the goods had to be transhipped from the vessel and carted across on to the line which would carry them to their destination, thereby involving waste of time, and waste of money. That is what is meant by speaking of the competition between these two railway companies as wasteful competition. It is that kind of competition, which is not, as the noble Lord, Lord Parmoor, said on the Second Reading, healthy competition,

723
but is wasteful and detrimental competition, that we are anxious to get rid of.
If your Lordships accepted the Amendment of the noble Lord, Lord Nunburnholme, you would perpetuate that system which is at present so disastrous and with which the Bill is destined to do away. It is not only from the point of view of the traders that this is needed, but from the point of view of the railway companies. The preservation of this form of competition necessitates the keeping up of duplicate organisations and staff in these two docks, and consequently increases unnecessarily the running expenses of the railways. I could develop at great length the defects which result from the maintenance of this particular competition. I hope, however, I have said enough to convince your Lordships that it is not in the interests of the public that this Amendment should be carried and the alteration made in the Bill.
LORD NUNBURNHOLME: I think there is nothing in my Amendment to prevent the Hull and Barnsley Company running the line into the North Eastern system or vice versa.
THE EARL OF LYTTON: I agree.
On Question, Amendment negatived.
Clause 1 agreed to.
Clause 2:
Preparation and settlement of amalgamation schemes.
2.—(1) The constituent companies in any group may on or before the first day of January, nineteen hundred and twenty-three, submit to the Minister of Transport (hereinafter referred to as"the Minister ") an amalgamation scheme framed in accordance with the provisions of this Act which has been agreed to by all those companies.
(2) The Minister shall refer to the amalgamation tribunal hereinafter constituted any scheme so submitted to him, and the tribunal, unless it appears to them that the scheme does not conform with the requirements of this Act or that the provisions of this Act relating to the procedure preliminary to the submission of an agreed scheme have not been complied with, shall confirm the scheme.
(3) If the constituent companies in any group fail to submit an agreed amalgamation scheme framed in accordance with the provisions of this Act on or before the said date, a scheme for the amalgamation of the constituent companies in that group shall be prepared and settled in accordance with this Act by the amalgamation tribunal.
(4) Any two or more constituent companies in any group may at any time after the passing of
724
this Act, submit to the amalgamation tribunal a preliminary scheme for the amalgamation of such companies upon such terms as they may agree, and the amalgamation tribunal shall approve any such preliminary scheme unless after hearing such of the other constituent companies in the group as may desire to be heard, the tribunal shall consider such preliminary scheme to be not in conformity with the requirements of this Act or to be inconsistent with or prejudicial to an amalgamation scheme for the group in accordance with the provisions of this Act.
In the confirmation or preparation and settlement of an amalgamation scheme for the group, the amalgamation tribunal shall give effect to any preliminary scheme which shall have been so approved, but so that the interests of the other constituent companies in the group shall not be prejudiced thereby.
Any preliminary scheme so approved shall, subject to such provisions in that behalf as may be therein contained, come into force forthwith and the provisions of subsections (2) to (6) of section seven of this Act shall apply thereto.
LORD PARMOOR LORD PARMOOR moved, in subsection (2), after"The Minister shall refer to the," to insert "Railway and Canal Commission hereinafter referred to as the "The noble and learned Lord said: I do not know whether the noble Lord will consider it, but the object of my Amendment is to leave matters of amalgamation to an already existing tribunal which was constituted half a century ago and which at the present time has a Judge as its Chairman with two other members, one of whom has a knowledge of railway matters and the other a knowledge of trading matters. It is notorious at present that this tribunal has a very inadequate amount of work to do, and it has been suggested more than once that the salaries paid to its members are out of proportion to the work the tribunal is called upon to do. My suggestion is that it is unnecessary, and a source of expense, to constitute a new Amalgamation Tribunal.
I say nothing about the way in which that Tribunal is constituted or the members of which it is composed, but there is a much better tribunal in the existing Railway and Canal Commission. It is presided over by a Judge of the High Court. The questions to be decided before it will be argued no doubt by railway counsel such as the very eminent counsel who is named as a member of the Amalgamation Committee; and on amalgamation questions largely by such accountants as the one named as a member of the Amalgamation Committee. But you have to consider, I presume, that that accountant, eminent as he is, is not

725
the auditor for all the railway companies, and it would be much fairer, I think, and much more proper, to take the existing tribunal in which all parties have confidence and of which a learned Judge was made President in 1875, and not to set up a new body constituted ad hoc, with all its paraphernalia and expense.
I recognise that unless the Government are prepared to accept the suggestion I make it would be no good my asking your Lordships to divide. I earnestly hope the powers of the existing tribunal will not be overlooked. I think the constant multiplication of tribunals for ad hoc purposes is a great mistake, both as regards public confidence in those tribunals and the unnecessary expense entailed. I beg to move.
Amendment moved—
Page 2, line 11, after the second (" the ") insert (" Railway and Canal Commission hereinafter referred to as the ").—(Lord Parmoor.)
THE EARL OF LYTTON: I am sorry that I cannot hold out any hope of being able to accept the noble and learned Lord's Amendment. I agree with him, of course, as everybody must, in regretting the multiplication of organisations and tribunals, and I share with him the desire to place upon an existing tribunal, if it were possible, the duties which are going to be entrusted to this Amalgamation Tribunal. But I submit that the composition of the Railway and Canal Commission renders it unsuited to the purpose which this Tribunal will have to fill. In the first place, the Railway and Canal Commission is presided over by a Judge, and the work which the Amalgamation Tribunal will have to do will be of so strenuous a character that it would be impossible for its Chairman to continue to carry out the duties of a Judge. Therefore, if those duties were given to the. Railway and Canal Commission, it would necessitate taking the Chairman of that body away from his judicial duties for the period of two years, during which this Tribunal will operate.
Apart from the Chairman, I submit that the really essential work which the Amalgamation Tribunal has to fulfil is to carry out a very intricate financial problem. Its main purpose will be to settle questions of how much stock of the new amalgamated company should go to each of the companies of the group, and the gentlemen who are mentioned in the Bill in Clause 8 are,
726
by virtue of their financial experience— one of them, at any rate, is— peculiarly suited to do this particular work which the Tribunal has to undertake. The composition of the body which is set up in the Bill is very much better for the purposes required than the Railway and Canal Commission would be.
Amendment, by leave, withdrawn.
THE EARL OF LYTTON THE EARL OF LYTTON moved to leave out subsection (4). The noble Earl said: This is the first of a number of drafting Amendments. There are several places in the Bill in which references are made to preliminary schemes. I propose by a new clause, after Clause 7, to bring all those references together in one clause, and I shall accordingly move to delete such references at various places before that. This is the first of such occasions. I beg to move.
Amendment moved—
Page 2, line 26, to page 3, line 4, leave out subsection (4).—(The Earl of Lytton.)
On Question, Amendment agreed to.
Clause 2, as amended, agreed to.
Clause 3:
Prorisions to be contained in amalgamation schemes.
3.— (1) An amalgamation scheme under this Act—

(a) shall provide for the incorporation of the amalgamated company under an appropriate name, with power to hold land for the purposes of the company, and make such provisions as appear necessary or expedient with regard to the share and loan capital of the amalgamated company and the vesting of the property, rights, powers, duties, and liabilities, whether statutory or otherwise, of the constituent companies; and

(b) shall provide generally as to the terms and conditions of amalgamation and for the winding-up of the constituent companies; and

(c) shall incorporate Part V. of the Railways Clauses Act. 1863, subject to the provisions of this Act; and may incorporate with or without modification any of the provisions of the Companies Clauses (Consolidation) Act, 1845, and the Acts amending that Act, and such modifications may provide that any committees appointed under section ninety-five of the Companies Clauses (Consolidation) Act, 1845, may comprise persons who, though not directors of the company, are proprietors and possess such other qualifications (if any) as may be provided by the scheme; and

727

(d) shall give effect to the provisions contained in the Second Schedule to this Act with respect to the direction of the amalgamated company, or in the case of a preliminary amalgamation scheme to such alternative provisions in that respect as may be agreed between the companies affected and embodied in the scheme, and may with the consent of the proprietors provide for the payment of compensation out of the assets of a constituent company to the directors of the company who suffer loss by abolition of office; and

(e) shall incorporate the provisions contained in the Third Schedule to this Act with respect to existing officers and servants; and

(f) may make such incidental and supplemental provisions as appear necessary or expedient in order to give full effect to the provisions of the scheme and the purposes of this Act:

Provided that the scheme may provide for the postponement for a period not exceeding five years, or, if for special reasons the amalgamation tribunal think fit, ten years of the winding up of a constituent company with or without any change in the name of the company in order to enable such company to continue to exist for the purpose of receiving and holding any securities of the amalgamated company for the benefit of any class or classes of the holders of any loans, debenture stock, rentcharge, lien, guaranteed preference ordinary, preferred ordinary, or deferred ordinary, or other stock or shares of the constituent company or of any company the interest or dividends of which is guaranteed by or secured on the revenues of the constituent company, according to their respective rights and interests in pursuance of and in accordance with any arrangement which may be approved by the amalgamation tribunal and included in the scheme, and during such postponement of winding up a constituent company shall cease to be a railway company within the meaning of section two hundred and sixty-seven of the Companies (Consolidation) Act, 1908, but any securities of the constituent company which are at the date of amalgamation securities in which trustees are by law entitled to invest trust funds, shall continue to be such securities.
(2) With respect to the Western group the following provision shall have effect:-

(a) The amalgamation scheme shall provide for constituting the Great Western Railway Company the amalgamated company, and for amalgamating therewith the other constituent companies in the group;

(b) For the purposes aforesaid the scheme may provide for increasing all or any of the existing classes of loan and share capital of the Great Western Railway Company, or creating new classes of loan or share capital of that company, with such rights, priorities, and conditions as may be specified in the scheme, and for allocating to the holders of the loan and share capital of the other constituent companies the additional and new capital of the Great Western Railway Company so created
728
to such amounts and in such manner as may be provided by the scheme;

(c) Notwithstanding anything in any special Act affecting the Great Western Railway Company, or the holders of any class of loan or share capital in that company, the additional capital of each class shall form part of, and rank pari passu with, the existing capital of that class, and any new class of capital may with the consent of the majority of the holders of the class of security affected rank before any existing class of capital:

(d) Paragraph (a) of the foregoing subsection, so far as it relates to the incorporation of the amalgamated company, shall not apply, and paragraph (b) thereof, so far as it relates to the winding up of the constituent companies, shall not apply, to the Great Western Railway Company.

THE EARL OF LYTTON THE EARL OF LYTTON moved in subsection (1) at the end of paragraph (b) to insert:"including the allocation to holders of securities of the constituent companies in substitution therefor and in satisfaction of all claims arising there under of such securities of the amalgamated company and of such amounts as may be specified in the scheme.'' The noble Earl said: As the amalgamation schemes for which this clause provides will necessitate the exchange of securities in the amalgamated companies for the securities of the constituent companies, it is necessary to provide for that, and for the acceptance by the shareholders of the securities of the constituent companies, of the allocation made to them of the stock in the amalgamated companies. That is the purpose of this Amendment. which I beg to move.
Amendment moved—
Page 3. line 18, after (" companies ") insert the said words—(The Earl of Lytton.)
On Question, Amendment agreed to.
THE EARL OF LITTON THE EARL OF LITTON moved to omit from subsection (1) (d) the words:"or in the case of a preliminary amalgamation scheme to such alternative provisions in that respect as may be agreed between the companies affected and embodied in the scheme." The noble Earl said: I beg to move the Amendment which I have placed on the Paper.
Amendment moved—
Page 3. line 34, leave out from (" company ") to end of line 38 —(The Earl of Lytton.)
On Question, Amendment agreed to.
THE EARL OF LYTTON THE EARL OF LYTTON moved, at the end of subsection (1)(d), to insert the following new paragraph:
" (e) shall contain such provisions with respect to the management of any superannuation, pension, provident, widows and orphans' and other benefit fund or funds established by any constituent company as may be necessary in consequence of amalgamation so, however, as to preserve in all other respects the management of such funds unaltered until other provision is made by Parliament; and ".
The noble Earl said: The Government have agreed with the railway companies and the Railway Clerks' Association to Make this Amendment in fulfilment of a promise with respect to their superannuation fund. The Government have agreed to make this specific provision to retain the existing system of management of these funds, so far as practicable, until other arrangements are made under the sanction of Parliament.
Amendment moved—
Page 3, line 43, at end insert the said new paragtaph,—(The Earl of Lytton.)
On Question, Amendment agreed to.
Amendment moved—
Page 4, line 16, leave out from (" any ") to (."of ") in line 18, and insert (" loan or share capital ")—( The Earl of Lytton..)
On Question, Amendment agreed to.
LORD SUMNER LORD SUMNER moved to leave out paragraph (c) of subsection (2) The noble and learned Lord said: The Amendment which I have to propose now upon this clause is the omission of paragraph (e) of subsection (2). It may seem in itself comparatively a minor matter, because it will only be for the use of one of the amalgamated group of railways, and only be used with the rights of the holders of the senior securities of that railway, but it is to me so inconsistent with the scheme which applies to the same persons in other groups, it is so striking an instance of the policy of this Bill of sweeping away contractual arrangements that have been made for considerations, both by Parliamentary and other bargains, that, at any rate in the hope of getting some satisfactory explanation of it, if there be one, I put down this Amendment.
May I explain to your Lordships briefly how the matter stands. The first duty, as we have seen from the clauses that have been passed, is for the constituent companies to prepare an amalgamation scheme,
730
and after this scheme e is so prepared it is referred to the Amalgamation Tribunal and adopted by it. If, on the other hand, the constituent companies in a group are unable to prepare a scheme, then it falls to the Amalgamation Tribunal to prepare and settle a scheme, and, of course, to give to it full judicial sanction. In the case of the Western group a different plan is adopted. The Western group consists of the Great Western, Railway alone of the great railways, with a number of small railways added to it, and the amalgamation scheme, in the case of the Western group, makes the Great Western Railway the amalgamating company, and the other constituent companies are to be amalgamated with it.
Your Lordships will see that subsection (2), by which this is provided, then proceeds at paragraph (b), at the bottom of page 4, to state that the scheme may provide for increasing all or any of the existing classes of loan and share capital of the Great Western Railway Company or creating new classes of loan or share capital, and for allocating to the holders of the share and loan capital of the other constituent companies this additional and new capital to such anounts and in such manner as provided by the scheme. That is to say, that a large quantity of new Great Western capital may be raised— not"must"but"may ''— and distributed as the scheme may provide, and may then be distributed among the holders of loan and share capital in the other companies, but—
" Notwithstanding anything in any special Act affecting the Great Western Railway Company, or the holders of any class of loan or share capital in that company, the additional capital of each class shall form part of, and rank pari passu with, the existing capital of that class…"
That is the first, and that is the imperative, part of the paragraph—
" and any new class of capital may, with the consent of the majority of the holders of the class of security affected, rank before any existing class of capital."
Your Lordships will see there that the scheme for the Western group is to provide that the additional capital, if additional capital he raised, is to form part of, and rank pari passu with, the existing capital of each class.
That is to say, if you are a holder of preference shares you may find the preference shareholders of the class to which you belong a much larger body than it was before, by reason of what I may call the

731
watering of the stock by the issue of new capital belonging to that class. In the same way, if you are a holder of preference stock, you may find that a considerable amount has been added to the debenture stock which is in front of you, by reason of the creation of fresh stock, winch thereupon, under paragraph (b), becomes added to the existing debenture stock. And all this may be done notwithstanding anything in any special Act affecting the Great Western Railway Company, or the holders of the class of shares in question. It is a smaller matter but in addition to that you may find that the majority of the holders — there is an Amendment on the Paper altering that to the majority"in value"— may, against your will, put a quantity of this new issue in front of you altogether, and what was one of the senior securities may assume a lower place.
In a Bill which ruthlessly trampled upon the existing statutory rights of such an important corporation as the Corporation of Hull, one must expect to find in other parts of the Bill that the mere holders of preference shares in one of the railways may have to suffer likewise. But I find that the system I have indicated is quite different from the system which is adopted in the remainder of the groups, because if you refer to Clause 7, subsection (2), you will find that it is there provided that—
" Before an agreed amalgamation or absorption scheme is submitted to the amalgamation tribunal, the scheme shall be submitted to the proprietors and debenture stock-holders of each constituent and subsidiary company affected thereby in the manner provided in Order sixty-two of the Standing Orders relative to private business in the House of Commons."
That is to say, that whereas an amalgamation scheme, before it goes to the Tribunal, must be submitted in this respect to the holders of the various securities of the constituent companies, in the case of the Great Western Railway Company the holders of the various securities of the principal company arc to have no such condition, but, by the very terms of the Bill, the scheme must contain this interference notwithstanding anything in any special Act which may affect them and he a protection to them.
Furthermore, if one looks at Clause 12, one finds that there again, where one of the constituent companies exercises a power, which the clause gives to it, to borrow money on mortgage on its undertaking, it can only do so with the consent of a
732
majority, in amount, of the proprietors and of the holders of the existing mortgage securities. In that case, therefore, you are neither to have a large quantity of further money put pari passu with the debentures that you hold, nor to have a further quantity of borrowed capital put in front of your own preference capital. I know of no explanation— I can find no explanation on the face of it— why it is that in the case of the Great Western Railway Company there is to be no chance of the Tribunal settling the scheme, under Clause 2, subsection (3), in this regard; no chance of the various classes of persons interested being consulted pursuant to Standing Orders; and no chance of their being obliged to give their consent before their rights can be interfered with— and those are rights which are secured by something in some special Act, or else this clause would not be here.
Of course, I know the answer will be that you will find the explanation in an agreement. Somebody has agreed with somebody that this shall be so. It is always a very simple thing for A and B to agree together to give away the rights of C, and in this class of legislation it is a very short cut to a symmetrical Act which at any rate has a comprehensive appearance. But I want to be assured that C is being properly protected. My interest in C in this particular case is that, to a greater extent than any other class of investment in the United Kingdom, preference shares and debentures, but preference shares particularly, are held in comparatively small quantities by or for the benefit of comparatively humble and poor people who have had those shares bought for them in the days when they were worth a great deal more than they are now. That money has been invested in that way because it was always believed that at any rate if they rested on a Parliamentary bargain, upon the protection of any special Act, they would be respected in all future legislation, and, whatever might happen to those securities, Parliament would never interfere with them.
I cannot help thinking that it is incumbent upon the House to scrutinise closely, and demand a certain amount of lucid explanation upon the point, before it passes such a thing as this. I know nothing of what these special Acts are, I know nothing of what negotiations there may have been. It is impossible for me

733
to make any suggestion of a provision to take the place of this particular paragraph. I. think it quite possible if it were provided that they should form part of, and rank pari passu with, the existing capital of that class, subject to the approval of the Amalgamation Tribunal, a sufficient opportunity would be given of, at any rate, assuring that Tribunal either that their rights are not seriously interfered with or that it was inevitable that it should be so. But as it stands one can do nothing by way of criticism except to ask that the:House should strike out now, leaving the space clear for a more palatable substitute to be introduced by those interested, at the Report stage.
I venture to submit to your Lordships that this is a provision which, even in private Bill procedure, would have been very closely scrutinised. It is a provision which ought not to form part of any public general Act, and, least of all, this far-reaching public general Act. It is a matter for evidence and argument before a private Bill Committee, and it should not find a place here at all. But if it is necessary, in order to preserve the delicate equipoise of this singularly constructed Bill, that something must be there, lest the whole pack of cards should tumble to the ground, then I hope your Lordships will allow me to suggest that we should strike this out now and trust that the widow and the fatherless will be a little less flagrantly disregarded in anything that may be brought up upon the Report stage. I beg to move.
Amendment moved—
Page 5, lines 10 to 19, leave out paragraph (c).—(Lord Sumner.)
THE LORD CHAIRMAN: In order to preserve the rights of the following Amendment I suggest to your Lordships that I should put the question that the first line of paragraph (c) stand part.
LORD FARINGDON: I should like to place before your Lordships one or two facts that I think have hardly come to the notice of the noble and learned Lord who has just spoken. Not only is the Great western Railway Company a constituent company, but it also becomes an amalgamation company, and therefore the provisions of subsection (2) of Clause 7 apply-equally to that as to the other constituent companies. The main object of this clause is a comparatively simple one. The Great Western Company is absorbing a con
734
siderable number of subsidiary undertakings. Those undertakings have various kinds of guaranteed stocks— preference, debenture and ordinary stocks. The object of the clause is to allow an extension of those stocks for exchange for a corresponding amount. or some agreed amount, of the stocks of the company that would be merged in the Great Western undertaking. I think when you take into account the fact that, as I say, under subsection (2) of Clause 7, the scheme will have to be submitted to the approval of the Amalgamation Tribunal, there is not the least fear of anything unfair being done as far as the Great Western Railway Company is concerned.
Certainly, the principle of increasing the amounts of stock already in existence has been found in the past in all amalgamation arrangements to be an extremely advantageous one to the holders of securities. May I take a case in point? Take the guaranteed preference stock of a small railway. It has, on account of its smallness, a value very different from that of one of the great companies of the Kingdom. The result of an exchange is that, without imposing any greater burden upon the concern that acquires, a much greater market value is given to the security of the small company. Be that as it may, the proposal here cannot in any way be considered to be unfair. The amount of the various stocks which in the case of the Great Western Railway Company are extremely few— they have their various debenture stocks, then they have their guaranteed stocks and ordinary stocks— will have to be enlarged so as to assume the responsibilities of the subsidiary companies that they will acquire. Then it all has to be approved by the Amalgamation Tribunal.
LORD SUMNER: I understand the noble Earl does not desire to give any explanation on this, which no doubt seems to be somewhat of a domestic matter. I am afraid I cannot accept as satisfactory the explanation of this matter by the noble Lord, Lord Faringdon. Section 7, subsection (2), gives a certain consultative right before an agreed amalgamation scheme is submitted to the Amalgamation Tribunal, but Clause 3, subsection (2), to which I have been drawing attention, says that with respect to the Western group the amalgamation scheme shall do certain things, and if power is exercised under the scheme of providing for this

735
increase of capital then, notwithstanding anything in the special Act, that new capital shall rank pari passu with the old, and. therefore, in the face of the express prescriptions of the clause to which I am objecting, Clause 7, subsection (2), gives no opportunity to the shareholders in question at all.
The next point that the noble Lord made was that it will be really a great boon to the old classes of shareholders, because they will be getting associated with a new and more valuable security created by the extended, consolidated and grouped lines. That may or may not be so. But I think the parties who hold the share debentures, and not the House, ought to decide that. Whether the future securities are going to be quite of the value that is suggested is at any rate a thing about which I have no knowledge and can have no confidence. As to the third point the noble Lord made, it is like the housemaid's point, in that it is a very little one.
THE EARL OF LYTTON: This is a very technical matter, and I do not know whether I can make it any clearer. Clause 3 was inserted in the Bill for the purpose of keeping in existence the Great Western Railway Company, after grouping has taken place; and in this respect the Great Western Railway Company differs from all the other companies that are grouped under the Bill. In all the other groups that are formed the groups will be composed of two or more large existing railway companies, and it is provided that they shall, in every case, cease to exist, and that a new company shall he formed to take their place, and provisions are made in the Bill for the allocation of stock in the new group.
In the Western group the Great Western Railway Company is the only big railway company in the group, and all the other smaller companies will, therefore, be absorbed by this company, and the name and identity of the Great Western Railway Company will be retained. That is the reason why the Great Western Railway Company is in a different position from all the others that are amalgamated in different groups. With regard to paragraph (c), to which the Amendment applies, that has been inserted in the Bill for the purpose of enabling the Great Western Railway Company to pay to the shareholders of the other companies mentioned in the Schedule on amalgamation
736
the different classes of its stock which, otherwise, it would not be able to do. The noble and learned Lord has forgotten that on amalgamation the Great Western Railway Company will receive the assets of the companies with which it is grouped, and in consideration of those assets it is given power, which it would not otherwise have, to pay to the shareholders of these companies the different classes of its own stock. If this paragraph is omitted there would be no power left in the Bill for this to be done.
On Question, Amendment negatived.
VISCOUNT CHURCHILL VISCOUNT CHURCHILL moved Amendments in subsection (2) to make the closing words of paragraph (c) read:— and any new class of capital may with the consent of the majority in value of the holder of any class of security affected rank before any existing class of capital.' The noble Viscount said: This is really in the nature of a drafting Amendment to make it clear that the majority of stockholders is one of value and not of numbers.
THE EARL OF LYTTON: I accept the Amendment.
Amendment moved—
Page 5, line 17, after (" majority ") insert ("in value ") and leave out the third (" the ") and insert (" any ").—(Viscount Churchill.)
On Question, Amendment agreed to.
On Question, Whether Clause 3, as amended, shall be agreed to:
EARL GREY: Before we pass to the next clause I should like to call attention to subsection (I), paragraph (c), which makes it possible for the amalgamation companies to appoint small local boards in different parts of their areas. This did not appear in the Bill as originally introduced, but on the Committee stage in another place an Amendment was moved to proscribe the formation of local boards, their numbers and duties. It was not really a practical proposal and was withdrawn on the promise of the Minister that he would introduce other words on the Report stage giving effect to the principle, which was supported by a good many of the larger towns, especially in the North of England.
It is generally expected that with the formation of these large groups the natural gravitation of the boards will he to London,

737
and that the needs of the large centres of industrial population in the North will be at a certain disadvantage owing to their remote geographical situation. It is not necessary to remind your Lordships that the amalgamation of the private banks into large joint stock banks has operated to some extent to the detriment of local traders far removed from London, who desire accommodation from the banks. The local branches of the joint stock banks have not the same power of meeting them that the old private banks had, and it is naturally feared that the removal of the present existing boards of the railways to one large joint board in London will also act to the detriment of those who wish to make representations to them.
On Report stage in another place the present words were put into the Bill, and they make it possible for the main board of the amalgamated group to appoint local committees, which shall include persons other than directors of the main board. They may appoint shareholders in the group to represent them as local hoards. I would ask the noble Earl in charge of the Bill whether he could not go a little further, as I think was understood in another place when the original Amendment was withdrawn, and make it compulsory upon the amalgamated companies to appoint local boards. I do not think it will be necessary to say how these local boards should be composed, or how many there should be, but it would be reasonable, in the interests of the traders of the country, to lay the duty on the amalgamated boards to appoint such numbers of local boards as arc found to be necessary, and not leave it optional as at present. In the course of the passage of the Bill through another place, perhaps the companies have been considered rather than the traders, and as this is a change for the benefit of the local traders I think it is one which might fairly receive your Lordships' consideration. I hope the noble Earl will be able to move something a little more definite on the Report stage.
THE EARL OF LYTTON: I have Considered the point raised by my noble friend, but I am not prepared to give him an answer now. When he told me that he would refer to this subject on the Motion that Clause 3 stand part, I understood that he was going to ask me whether provision would be made in the Bill for these boards, and I should have been prepared to tell
738
him that there is in the Bill a provision to enable these boards to be established. As, however, he is already aware of that, I must have mistaken the purpose of his question. I understand that he now wishes to ask me whether we should be prepared, not merely to say that there shall be the power to appoint on these local bodies members who are not directors of the companies, but that we shall insert in the Bill a provision that such bodies shall be created, and that there should be placed upon them members who are not directors of the companies. That seems to me to be going very much further than anything the Government have undertaken to do, and I am not at this moment prepared to agree with my noble friend that it really would be a desirable change. I cannot hold out any promise that it will be made, but, as the point is new to me, I will undertake to consider it.
LORD KNARESBOROUGH: I think it would be most undesirable that anything compulsory should be put in this Bill with regard to sub-committees. There is going to be a new departure in these matters; there are going to be absolutely new boards of directors, dealing with very large districts. You may be quite sure that they have quite enough work to do and, if they find it necessary to delegate their powers to sub-committees, it is very desirable that they should do so. But I think it should be done voluntarily; at any rate, until the country has had time to see how the whole thing is going to work. They should not be hampered in any unnecessary way. Let them work out their own salvation, and, if the thing does not develop satisfactorily, we can have an amending Bill.
On Question, Clause 3, as amended, agreed to.
Clause 4;
Preparation and approval of absorption schemes.
(4) A constituent company may at any time after the passing of this Act submit to the amalgamation tribunal a preliminary scheme for the absorption of any subsidiary company upon such terms as may be agreed between such companies, and the amalgamation tribunal shall approve any such preliminary scheme unless after hearing such of the other constituent companies in the same group as may desire to be heard the amalgamation tribunal shall consider such preliminary scheme to be inconsistent with or prejudicial to an amalgamation scheme for the group in accordance with the provisions of this Act, and any

739
preliminary scheme which shall have been so approved shall come into operation in accordance with such provisions in that behalf as may be therein contained.
THE EARL OF LYTTON THE EARL OF LYTTON moved to leave out subsection (4). The noble Earl said: This is a drafting Amendment.
Amendment moved—
Page 6, lines 12 to 26, leave out subsection (4). —(The Earl of Lytton.)
On Question, Amendment agreed to.
Clause 4, as amended, agreed to:
Clause 5:
Provisions to be contained in absorption schemes.
5.—(1) An absorption scheme under this Act—

(a) shall provide in such manner as appears necessary or expedient for the transfer to the amalgamated company or to the constituent company in the case of a preliminary absorption scheme of all the property, rights, powers, duties, and liabilities, whether statutory or otherwise, of any subsidiary company to which the scheme relates; and

(b) shall provide for the consideration to be given to the subsidiary company or companies, and generally as to the terms and conditions of the transfer, and may provide for the consideration consisting in whole or in part of securities of the amalgamated company; and

(c) shall provide for the winding up of the subsidiary company or companies, and may provide on any such winding up for the holder of any securities of the subsidiary company receiving in substitution therefor and in satisfaction of all claims arising thereunder securities of the amalgamated company forming part of the consideration for the transfer of the undertaking and may, with the consent of the proprietors, provide for the payment of compensation out of the assets of a subsidiary company to the directors of the company who suffer loss by abolition of office; and

(d) shall incorporate the provisions of Part V. of the Railways Clauses Act, 1863, subject to the provisions of this Act; and

(e) shall incorporate the provisions contained in the Third Schedule to this Act with respect to existing officers and servants; and

(f) may make such incidental and supplemental provisions as appear necessary or expedient in order to give full effect to the provisions of the scheme and the purposes of this Act.

THE EARL OF LYTTON THE EARL OF LYTTON moved to omit or to the constituent company in the
740
case of a preliminary absorption scheme." The noble Earl said: This is drafting.
Amendment moved—
Page 6, line 30, leave out from ("company ") to (" of ") in line 32.—( The Earl of Lytton.)
On Question, Amendment agreed to.
THE EARL OF LYTTON THE EARL OF LYTTON moved, in paragraph (c), after"thereunder '' to insert"such." The noble Earl said: This and the next Amendment, taken together, make a similar provision as regards the issue of stock in amalgamated companies to subsidiary companies to that which has been made in CIause 3. This is merely to make the two clauses identical in form.
Amendment moved—
Page 7. line 4, after (" thereunder ") insert(" such ").—(The Earl of Lytton.)
On Question, Amendment agreed to.
Amendment moved—
Page 7, line 7, after (" undertaking") insert (" and of such amounts as may be specified in the scheme'").—(The Earl of Lytton.)
On Question, Amendment agreed to.
LORD PARMOOR,LORD PARMOOR, moved, in paragraph (c), to omit the words:"and may, with the consent of the proprietors, provide for the payment of compensation out of the assets of a subsidiary company to the directors of the company who suffer loss by abolition of office." The noble and learned Lord said: It is the same point as before.
Amendment moved—
Page 7, line 7, leave out from (" undertaking ") to (" and ") in line 11.—(Lord Parmoor.)
On Question, Amendment agreed to.
THE EARL OF LYTTON THE EARL OF LYTTON moved, after paragraph (d), to insert the following new paragraph:
"(e) shall contain such provisions with respect to the management of any superannuation, pension, provident, widows and orphans' and other benefit fund or funds established by any subsidiary company as may be necessary in consequence of absorption so, however, as to preserve in all other respects the management of such funds unaltered until other provision is made by Parliament; and".
The noble Earl said: This is an agreed Amendment, to carry out a promise which was given with regard to superannuation funds.
Amendment moved—
Page 7, line 14, at end insert the said new paragraph.—(The Earl of Lytton.)
On Question, Amendment agreed to.
Clause 5, as amended, agreed to.
Clause 6:
Provisions as to determination of terms and conditions of amalgamation or transfer.
6. For the purpose of determining the terms and conditions of amalgamation between any constituent companies or of the transfer of the undertaking of any subsidiary company, the amalgamation tribunal shall take into consideration all the circumstances of the case, and in particular the value on a net revenue earning basis of each of the constituent and subsidiary companies as a separate company, and its value as a component part of the amalgamated company: so, however, that regard shall not be had to economies or accretions of traffic or other circumstances tending to enhance its value as such component part attributable solely to the provisions of this Act relating to amalgamation and absorption:
Provided that in the case of the line of one company being worked by another company under an arrangement is whereby a percentage of the gross receipts of the line so worked are payable to the owning company, the amalgamation tribunal in determining the terms and conditions of transfer shall not take into account ally higher charging powers than those authorised in respect of the line under the statutory provisions in force in the year nineteen hundred and thirteen.
THE DUKE OF BUCCLEUCH THE DUKE OF BUCCLEUCH moved to omit all words after"circumstances of the case"down to the proviso. The nobly Duke said: in moving this Amendment, I may say that there seems to have been very considerable controversy over this clause in another place, both in Committee and on the Report stage, and it resulted in the clause appearing before your Lordships in its present form. My object in moving this Amendment is to simplify the clause, which at the present time is very complicated and ambiguous, and I doubt if anyone can understand it. Moreover, I consider that this Amendment, if your Lordships thought fit to accept it, would avoid a great deal of litigation. A Tribunal has been appointed for the purposes of amalgamation, and I believe that Tribunal is generally considered to be a satisfactory one. The effect of my Amendment is to leave the solution of these questions to that body, instead of having various provisions, which are probably not understood, and will lead to an enormous amount of litigation, which no doubt would be extremely useful and "beneficial to the legal profession.
I feel sure that your Lordships will wish that this amalgamation should be effected with as little cost as possible to the shareholders of the railway companies, who, as your Lordships are only too well aware, have suffered enormous losses within the last few years. Of coarse, there is a certain amount of difference between the very big companies and the smaller ones. It is quite obvious that the big companies do not wish to pay too much and the smaller companies, naturally, are even more anxious not to receive too little. Surely, the tribunal to decide this question is the one which is constituted in this Bill, which has been instituted by Parliament, and which is there for this very purpose. In discussing this clause a great deal has been said about fictitious and inflated values. I do not deny that the smaller companies, and especially the Scottish companies with which I am connected, are, equally with the big English companies, opposed to any fictitious or inflated values; but they do desire that every kind of real value should receive ecognition, and that the Tribunal should not be practically tied down to the one point of net revenue earning power.
I notice that my noble friend, Lord Plymouth, had put down an Amendment to line 30. If that Amendment were accepted, it would practically leave the clause in the position in which it left the Committee in the House of Commons, which was very- much more satisfactory than after it had been amended on Report. I will read to your Lordships the words that were put in on Report, and ask if it is possible for any sane person to understand what they mean. They come in after line 30 on page 7—
"so, however, that regard shall not be had to economies or accretions of traffic or other circumstances tending to enhance its value as such component part attributable solely to the provisions of this Act relating to amalgamation and absorption."
Now, anybody who could understand what that means must be a very skilled lawyer, and, as your Lordships know, lawyers always hold different opinions, or, at any rate, a certain number of them do, when there is a big case to fight out at considerable length. Excepting those of your Lordships who have been brought up in the law, I should be very doubtful if any member of this House could understand the meaning of these words, even if he tried. I believe that it would be a great

743
improvement if these words were left out, and a still greater one if my Amendment were accepted, with the effect of leaving the Tribunal to take into consideration all the circumstances of the case.
I could say a great deal more upon this matter, but it has been largely discussed in the past, and I wish to be as brief as possible. I submit, that, if instruction to the Tribunal is required, the instructions in this clause are not only inconsistent and undesirable, but the whole clause requires re-casting. First of all, it says that the Tribunal are to consider all the circumstances of the case; then that they are to consider one particular circumstance; and then that they are to pay no regard to other circumstances. It is simply humbugging the whole thing and laying us open to a large amount of litigation, and I do not see what is the use of appointing this Tribunal unless it is to have considerable powers. It is quite obvious that if there is to be an appeal from this Tribunal to the Law Courts either in England or Scotland it will not hasten the process of amalgamation, or make the work of the Tribunal very easy. I move this Amendment because I consider the words proposed to be left out to be unnecessary, objectionable, unintelligible, and likely to lead to endless litigation.
Amendment moved—
Page 7, line 26, leave out from (" case ") to end of line 34.—(The Duke of Buccleach.)
THE LORD CHAIRMAN: In order to preserve the rights of the noble Earl (the Earl of Plymouth) I suggest that the first three words of the Amendment only shall be put, and that the Question shall be lines 26 and 27, that the words"and in particular"shall stand part.
THE EARL OF PLYMOUTH: I only want to say that as I have got an Amendment which follows I am very much obliged to the noble Earl in the Chair for safeguarding my Amendment. With regard to the Amendment before the Committee, I personally should be quite content to accept it. A great deal of controversy has taken place as to the exact meaning of the words which the noble Duke moves to omit. The Government stated in another place that they mean to express certain things, which others have considered are very doubtful, having regard to the actual wording of the clause. It seems to me, as it does to the noble Duke.
744
opposite, that much the simplest and clearest way is to get rid of these words, as to which there is a good deal of difference of opinion, and simply to state that the Tribunal"shall take into consideration all the circumstances of the case." I am afraid, however, that the Government, in another place, thought it necessary to add something to these words. We shall hear, no doubt, from the noble Earl in charge of the Bill, what is their intention with regard to this Amendment.
LORD PARMOOR: I should like to say a word or two in support of the Amendment, because I have had considerable experience in cases of this character. I think it would be eminently right that the clause should stop at the word"case"The effect of that is to leave the whole matter in the hands of the Amalgamation Tribunal, and no question of law arises at all. It is a pure question of fact for their determination, upon consideration of all the circumstances of the case. When we come to the particular conditions which the noble Duke desires to exclude, there are three patent inconsistencies which cannot fail to promote complication and difficulty. The first valuation is of each of the constituent and subsidiary companies as a separate company. That is one basis. The second is its value as a component part of the amalgamated company.
These two bases are absolutely inconsistent in themselves. It. has been held to be so in rating cases and in a large number of compensation cases. The value of one of these companies as a separate company, and its value as a member of the amalgamated company, would not be the same. That is giving two absolutely inconsistent directions to the Amalgamation Tribunal, and what I want to know is how they are going to reconcile them. Then the clause goes on to say,"so, however, that regard shall not be had to economies or accretions of traffic or other circumstances tending to enhance its value as such component part—" Well, you have been told to value it as a component part, and immediately after you are told to exclude economies or accretions of traffic or other circumstances tending to enhance its value as such component part. The clause also adds:"attributable solely to the provisions of this Act relating to amalgamation and absorption." Well, it would be attributable solely to the provisions of this Act, because the amalgamation is

745
carried out under the provisions of this Act, and so, in a certain sense, I might go further and say that there are four inconsistent directions, which is a thing which you ought to avoid. I sincerely hope that the Government will adopt the Amendment, and stop the clause at the word"case," which would really leave the whole matte, where it ought to be left, to the Amalgamation Tribunal.
LORD STUART OF WORTLEY: I do not think these words are quite so difficult to understand as is represented. In fact, I must confess to a suspicion that it is only because they are too well understood that the Amendment has been moved. Of course, a smaller railway, which is part of a linked system, is and always has been a very valuable link in that system, and the first part of these words which it is proposed to cut out are intended, no doubt, to preserve to that railway that kind of value; and part of that value is no doubt the power of refusing, at certain points of junction, to go on with the handing over of traffic to other members of what has, up to now, been a linked system. On the other hand, here you get the intervention of the Legislature, which, by a more or less rigid system of grouping, is going to fix that value and very greatly to add to it.
Of course, it is possible for one company in a systen to say:"I will hand over my traffic to another group at the present time." It is equally possible for the larger partners in the system to do the same. But what these words are intended to prevent is that that position of advantage shall not be added to by the intervention of the Legislature in grouping a line which might, to suppose an extreme instance, consist of no more than ten miles of road, but which so dominated the whole of the proposed organisation that it would claim to receive, as its share of the capital of the whole, an amount entirely out of proportion to its real value. I conceive that that is only what is aimed at by these words. It may be possible to give a more lucid expression to the idea which they contain, but the idea is a very serious one indeed, and I entertain no doubt that it is the kind of wording which results from the attempt to solve the difficulties of expression on the spot in a Legislative Assembly. I do not think we shall be much more successful if we proceed to try to alter the wording now and here, even with the great resources at our command.
THE DUKE OF ATHOLL: I wish to support the Amendment of the noble Duke for the following reasons. Up to the word"case"the clause is quite understandable, it is straightforward, and it is fair to all parties concerned, and, incidentally, it leaves the Tribunal quite untramelled. I am in agreement with the noble Duke, and, with all due deference to the Minister of Transport and his legal advisers, I find the last part of the clause absolutely unintelligible. That is as it appears to the lay mind. But we have just heard two noble Lords of great legal ability, and already they have fallen out over the interpretation of the clause. We can see what we may expect when there is more profit and less, pleasure in the discussion.
If these words mean anything at all, they contradict the whole of the first part of the clause. Certainly, you cannot read the two parts of the clause together and get sense therefrom. The only result will be a very fine feast for the legal fraternity, for which the shareholders will have to pay. That it will lead to litigation is perfectly certain, and surely that is what we ought to avoid. In my opinion, also, it is not straightforward, for I think it really conceals the purpose of its authors, which seems to be a desire on the part of the larger companies to depreciate beforehand the value of the smaller companies, which they hope some day to absorb. The last thing the larger companies appear to want is to give the Tribunal a free hand. They wish to dictate beforehand to your Lordships' House what the 'Tribunal is to include, and what it is to exclude, from its consideration. Surely, that is an absurd condition, under which no private arbitrator would ever serve, and which, in the case of a national tribunal, composed of experts, as this is, is little less than an insult. What is the good of setting up a tribunal of experts like this, and then trying to tie their hands? Surely it is sufficient to say that the Tribunal shall have regard to all the circumstances of the ease. It matters not whether the company is a big or a small one, let them all bring forward their evidence, and let members of the Tribunal be appointed with enough common sense to be able to separate the fictitious value, from the real value.
Clause 6, as originally drafted, was easy to understand. As amended in Committee in another place it was at

747
least intelligible, when it stopped at the words"amalgamated company "—which I think is practically Lord Plymouth's Amendment, though I think, in view of the composition of the Tribunal, we might accept the noble Duke's Amendment. But on Report in another place (and I think I shall not be far wrong if I say owing to pressure from some of the larger companies) the Minister of Transport added the words of which we complain, nominally to prevent fictitious values from being put forward. I think the big companies are quite able to look after themselves in these matters. The avowed intention of the large companies seems to be to tie down this Amalgamation Tribunal to consider nothing but the present net revenue-earning power, and this, as your Lordships know, does not nearly represent the value of the companies which would probably come under the arrangement.
Take the hypothetical case of a new railway which has got undeveloped ground, with a reasonable expectation of its becoming a much better concern very soon. As far as I can see, the shareholders in that case would get no return from the money they have put down, simply because they have not yet had time to develop. The only excuse is that unless a tribunal gets special instructions it may be induced to apply inflated values to some of the undertakings. That is hardly complimentary to the brains of the members of the Tribunal. No company wants to inflate its values, for the good reason that it would be in a hopeless financial muddle afterwards. What the smaller companies, and the Scotch companies especially, want is that the Tribunal should be absolutely free and untrammelled, with the single direction from Parliament to take all the circumstances of the case into consideration. If the Government stick to the clause it simply means that they do not trust the Tribunal which they are going to set up, and it will be squeezed by the pressure of the larger companies.
In a later part of the Bill, the Government are prepared to trust the Tribunal with the giving out of £60,000,000 of national money, without any conditions of any sort, on the excuse that it is a domestic matter between the companies. Surely a matter that affects the shareholders themselves, as this clause does, is a domestic matter to them, and I find that the statement pre
748
pared on behalf of the Central Council of Railway Stockholders Protection Association says that it is the most valuable clause in the Bill for shareholders, and they particularly ask your Lordships to accept the Amendment which the noble Duke has moved.
THE EARL OF LYTTON: This clause is one of the most important clauses in the Bill. It is the clause which is going to' determine the conditions on which the railway companies are to be amalgamated, and the words we are discussing are words which indicate to the Tribunal which is to consider this matter the lines on which they are to determine the values of the amalgamated companies. There are two parts of the Amendment of the noble Duke, and I will deal with them separately. The first is the question of whether you should, after"all the circumstances of the case"keep the instruction to the Tribunal as to what they are in particular to do; and the second deals with the last words in the clause, which is a modification of the previous instruction.
The noble Duke, in moving his Amendment, wishes that no instructions should be given to the Tribunal, and that they should be merely told the terms of the amalgamation, and should fix the values of the component parts, after considering all the circumstances of the case. I differ from the noble Duke in thinking that is desirable, for reasons which I will mention in a moment. But I would point out to him that, whether it was desirable or not, it certainly will not, as he thinks, minimise litigation. It will have, I submit, exactly the opposite effect, because it will enable all sorts of questions which are ruled out by these later words to be submitted to the Tribunal and argued before it. Whereas, if the clause remains in its present form, those subjects of litigation will be ruled out. Therefore, the noble Duke is opening the door wider to controversies which may be argued before the Tribunal and not, as he thinks, narrowing the issues with which they will have to deal.
I would like to explain to your Lordships exactly what it is that we ask this Tribunal to do, and what are the instructions which the Bill gives to the Tribunal. It has been suggested by several noble Lords who have spoken to this Amendment that the clause as worded is unintelligible. I do not think there is any doubt whatever about

749
the meaning of the words. If there is a doubt we can settle the phraseology when we are agreed as to the object. The object of the clause is to instruct the Tribunal that, in considering all the circumstances of the case, they are to pay particular attention to the value of the undertaking on a net revenue-earning basis. In other words, although they are not to exclude the consideration of some other subjects, they are specially to value the undertaking upon a net revenue-earning basis. I submit to your Lordships that is really the only true value of one of these railway companies; it is only by what that company is worth in this combination as a source of revenue, a means of earning revenue, that you can estimate its true value.
Therefore, I might, be asked why it is that we have not merely directed the Tribunal to value these component companies in that way on their net revenue-earning basis. The reason for that is that there are other subjects which have also to be taken into consideration. The company may have been under-maintained in the past; it may have heavy liabilities to the superannuation fund of its employees; or it may have been very well maintained and hold large areas of land for extension of works or the provision of factory sites. Those being subjects which it would be fair and reasonable also to consider, the clause is worded in this way to provide for t heir consideration by the Tribunal. If we adopted the noble Duke's Amendment and stopped the clause at"all the circumstances of the case," it would enable the Tribunal, if it thought fit, to value these undertakings without regard to their revenue-earning capacity at all. They might take some other basis of valuing them— the Stock Exchange valuation or something of that sort and it is not the intention of the Government that the Tribunal should fix the value of these undertakings on any basis but a revenue-earning basis with the addition of some other considerations which might arise. That is the reason for the clause being worded as it is clown to the words"amalgamated company.''
There is a further provision in the clause which specifically says that in valuing these undertakings primarily upon their revenue-earning basis, but also having regard to other considerations, if necessary, the Tribunal is not to give any value to them in respect of economies or accretions of
750
traffic or other circumstances tending to enhance their value which have accrued to them by reason of their amalgamation in the new group. I will endeavour to explain to your Lordships the reasons for putting in those words.
LORD LOVAT: Before the noble Earl passes from the point of the revenue-earning value, does he mean by that the revenue-earning value at the present date, in the year 1921-22, or the revenue-earning value of 1913, pre-war?
THE EARL OF LYTTON: The revenue-earning basis of the company at the time of the amalgamation. I was proceeding to deal with the last words in the clause and to explain why those words were inserted. If those words were not there it would be possible for a company— as, for instance, the North-Eastern Company— which has a considerable forwarding traffic, to say, when it came into the amalgamation:"Hitherto, I have been able to forward my traffic by one of two alternative routes. In consideration of the fact that I am now in this North-Eastern group I will forward all the traffic which comes to me by that route alone. Therefore, I am a valuable partner and ought to receive consideration by virtue of that value which I bring into the group." The Government maintains that a company ought not to receive any additional value in respect of considerations of that kind, and I will endeavour to give to your Lordships what seems to me to be an overwhelming reason why it is right that no value should be given for such considerations.
There are, as your Lordships know, two main groups, the North-Eastern group and the North-Western group. There may be two lines, one of which is placed in the North-Eastern group and the other in the North-Western group, and each of them may claim an enhanced value by reason of the fact that they undertake to forward their traffic along the route in which they will hereafter be grouped. But it will be noticed that there is no corresponding debit to either group in consequence of that traffic having been taken away. Therefore, the capital of both these two new groups will be inflated without any reference to the net earning capacity of either of them. On consideration, I am sure your Lordships would agree that that is not a desirable state of affairs to bring about, and as we want

751
to rule out specifically any claim on such grounds, these words are put into the Bill, are perfectly clear, and would shut out from discussion before the Tribunal any claims upon those grounds.
Taken as a whole, therefore, the clause instructs the Tribunal that, in considering all the circumstances of the case, they are to value the undertakings primarily upon their net revenue-earning basis, and are not to give any enhanced value to them by reason of economies or accretions of traffic that may arise solely from the grouping which takes place under the Bill. That is the object of the clause, and I beg your Lordships not to change its purpose. If, after the explanation I have given, the wording is not considered clear, I shall be prepared to consider any Amendment to make it clearer, but the Amendment which is now before the House, in the name of the noble Duke, would simply leave all the questions we want to shut out to be discussed at great length before the Tribunal and, in consequence, would greatly increase, instead of diminish, the area of litigation.
THE MARQUESS OF SALISBURY: If the words of the Bill were as clear as the speeches of tile. noble Earl we should not be in so much difficulty. I think he has entirely misunderstood the claim which the noble Duke who has moved this Amendment has made, that by excluding these words he will diminish litigation. Let me point out to the noble Earl that the noble Duke was perfectly right. The. earlier words of the clause, which the noble Duke consents to leave in, deal only with matters of fact—" the circumstances of the case." The words which he intends to strike out, if the House agrees with him, deal with most intricate matters of law. Of the meaning of those words none of the lay members of your Lordships' House, I venture to say, have a glimmering. It is not only that confusion will arise in the minds of the lay members of your Lordships' House, but all these elaborate provisions and limitations will almost certainly lead to litigation. Litigation does not take place upon matters of fact—I mean elaborate litigation does not— it is always upon the construction of the Statutes which govern the case.
That is not all. So far as the question of fact is concerned, probably the matter will end with the Tribunal, but when you
752
get to the interpretation of these elaborate words of the latter part of the subsection, they will all be subject to appeal. I do not say that there is any appeal as a right, but there will be so strong a case for appeal in order to interpret these wonderful words that the Tribunal would certainly he morally obliged to give leave to appeal. Therefore, we shall have a long series of elaborate law suits before the Court of Appeal, and possibly before a Court even higher than the Court of Appeal, to interpret the exact meaning of these words.
I suggested just now that I did not think any lay member of your Lordships' House knew what the words mean. I am quite sure also that the legal members of your Lordships' House differ as to what they mean. My noble and learned friend, Lord Parmoor,who is not only a very great lawyer but made his reputation by dealing with this particular kind of case, has a totally different view as to the meaning of the words from that which the Government have, and a totally different view of their meaning from that of Lord Stuart of Wortley, who spoke just now. Surely your Lordships are not going to be so unwise as to leave in words upon the meaning of which the legal members of your Lordships' House cannot agree, and which will inevitably lead to litigation of a kind and of a bulk to which the earlier words of the section will not give rise.
Take, again, the clear explanation of my noble friend. He said that the object of the Government was that certain circumstances should be considered in particular. Why are certain relevant circumstances to be put in a lower position than other circumstances? I venture to think there is not a single member of your Lordships' House—
THE EARL OF LYTON: Because they are much less indicative of the value of the undertaking.
THE MARQUESS OF SALISBURY: If that is the case, surely Mr. Talbot and Sir 'William Pleader and Sir Henry Babington Smith are fully qualified to arrive at a just conclusion. Why should the Government say to these distinguished men:"Although you are much more likely to understand it than we are, and although you are selected because of your expert knowledge and your justice, you are to he bound to put certain particulars in a preferential position when considering the justice of the case." Why should they do that? There

753
is no reason whatever. What you want is justice, and you have selected three very distinguished men in order to get justice. Why should you try to bind them? Even if the words were much clearer than they are, even if we could form any conclusion in this House as to what they mean, why should you bind these men of great distinction, whom you have selected because they are qualified to deal with this in a way which I am certain—I say this with great respect to your Lordships—none of us is? I see one or two noble and learned Lords present, and perhaps they would be able to do so, but the great bulk of Lordships would not. I venture to recommend, as a mere layman utterly unqualified, I admit, to deal successfully with a subject of this kind, that you should trust your Tribunal, and not put into an Act of Parliament words which you do not understand.
LORD AMPTHILL: I should like to point out that the noble Earl has raised another element of doubt in his seemingly lucid explanation, which was inconsistent with the Bill itself. When asked by my noble friend, Lord Lovat, from what period the valuation of the revenue-earning basis was to date, he said: "The time of the amalgamation." But the Bill says something else. It says that no increase of value which may result after the passing of this Act is to be taken into account. Therefore, the valuation of these companies would be from the present date. The noble Earl said it would be at the period of amalgamation. If you set up any sort or kind of tribunal, I think the essential condition is that you should trust it.
LORD LOVAT: I wish to make a small point regarding the question of the date when the valuation is to take place. The noble Earl has definitely stated that it will be at the time of amalgamation. May I point out how very unfair that is to the small railways? I think it is agreed that the small railways have suffered very much more than the large railways by the conditions imposed upon them by the Government during the war. In a small line in the north of Scotland, with which I am acquainted, our labour bill has gone up 315 per cent: Under this Bill you are not going to take the revenue at the time when the railways were working under normal conditions, in 1913, but you take it after you have imposed certain terms,
754
and you are going to make the wretched shareholders suffer by Regulations which have increased the labour bill by 315 per cent. Surely that is not fair. You are, in fact, making permanent conditions which were imposed during the war. The only time at which you are going to judge the revenue of the small lines is the time during which they have to pay high wages and have low earning power. It will practically mean that you are going to gauge the value of these lines under what must be considered abnormal conditions. I hope this House, which has always had a reputation for fairness, will see that such terms are not imposed upon the small companies because of any understanding arrived at in another place.
LORD SUMNER: I can show in two sentences the shortcomings of this clause. The first part of the clause will tell the Tribunal to take into consideration all the circumstances of the case, and the last part of it will tell them that there are some circumstances of the case they are not to take into consideration at all; while, in between, it says there are sonic circumstances which are to be taken into account in particular, leaving all other circumstances to be taken into account in general. I cannot help thinking we shall hear more of this clause before we have done with it, if passed as it stands.
VISCOUNT CHURCHILL: I sincerely hope your Lordships will keep the Bill in its present form. The clause was accepted by His Majesty's Government as the result of long negotiations between the companies, and it was thoroughly threshed out for many, many days in another place. In fact, they had as many as six Divisions, and as many as fifteen Amendments, only four of which were carried. I say that merely to show your Lordships that it has been discussed ad nauseam, and it would be a great pity if it were altered at this stage of the Bill.
THE EARL OF ELGIN: The noble Viscount who has just spoken has referred to discussions in another place, and to this clause being agreed to. The point is as to who agreed. It was a compromise, and a series of compromises which amount, in my opinion, and I think in the opinion of several other noble Lords, to a dish of hotchpot. The Tribunal which has been set up to deal with the amalgamation pro-

755
posals has the respect of every one, and I submit that it should he left to consider the whole question of the case. Reference has been made to the question of whether or not litigation will be caused by leaving out the end of the clause. I would like to give you the comparison of an amalgamation which took place in Scotland between two bodies of different sorts— namely, two Churches. That led to endless litigation, before a. Committee of this kind, set up to deal with the question. But their findings, as the findings of this Committee, were findings from which there was no appeal; and if we, in adopting the extra. qualifications of this clause, give openings to lawyers to appeal on paints of law, I think there is no doubt. whatever that it will lead to litigation and not stop it.
LORD KNARESBOROUGH: should like to support what has just been said
Resolved in the affirmative, and Amendment disagreed to accordingly
THE EARL OF PLYMOUTH THE EARL OF PLYMOUTH moved, after "particular," to insert"but without prejudice to the generality of the circumstances to be taken into consideration." The noble Earl said: There has been a difference of opinion as to the effect of these words, and the noble Earl emphasised this by saying that if the words following the words"all the circumstances of the case"are left in, it would rule out subjects which he admits might properly be considered by the Tribunal. That is the
756
by the noble Viscount, Lord Churchill- The matter of this clause has been discussed for months by the Railway Companies' Association, and privately, and certain things have been accepted by the different railway companies as a compromise between different views. This is one of the things which is introduced to save matters which we should not have assented to otherwise. I really think at this last hour to upset the whole balance of the arrange ments which have been arrived at would lead to great difficulty and would be rather a rash and unnatural proceeding.
On Question, Whether the words"and in particular '' shall stand part of the clause? —
Their Lordships divided: Contents, 37; Not-Contents, 29.

CONTENTS.

Birkenhead, V. (L. Chancellor.)

Grey of Fallodon, V

Gainford, L.

Hood, V.

Gorell, L.

Ancaster, E

Hutchinson, V. (E. Donoughmore.)

Hamilton of Dalzell, L

Bradford, E.

Harris, L.

Chesterfield, E.

Hylton, L.

Clarendon, E.

Ailwyn, L.

Joicey, L.

Lucan, E.

Annesley, L. (V. Valentia.)

Joicey, L.

Lytton, E.

Armaghdale, L.

Killanin, L.

Malmesbury, E.

Charnwood, L.

Knaresborough, L.

Mayo, E.

Clinton, L.

Methyr, L.

Onslow, E.

Clwyd, L.

Somerleyton, L. [Teller]

Colebrooke, L.

Stanmore, L. [Teller.]

Chilston, V.

Cottesloe, L.

Stuart of Wortley, L.

Churchill, V.

Faringdon, L.

Wigan, L. [E. Crawford.]

NOT-CONTENTS.

Ailsa, M.

Goschen, V.

Glenarthur, L.

Linlithgow, M.

Invernairn, L.

Salisbury, M.

Ampthill, L.

Kintore, L. (E. Kintore.)

Askwith, L.

Lawrence, L.

Doncaster, E. (D. Buccleuch and Queensberry.) [Teller

Balinhard, L. (E. Southesk.)

Lovat, L. [Teller.]

Bledisloe, L.

Montagu of Beaulieu, L.

Grey, E.

Decies, L.

Redesdale, L.

Midleton, E.

Ebury, L.

Saltoun, L.

Morton, E.

Elgin, L. (E. Elgin and Kincardine.)

Strachie, L.

Plymouth, E.

Sumner, L.

Strange, E. (D. Atholl.)

Emmott, L.

Weir, L.

point I want to get quite clear. I want to know what really is the value of the words"all the circumstances of the case," when they are followed by the words"and in particular." The Government desire that due regard should be had to all the circumstances of the case that can properly be considered, and I ask that my Amendment should be accepted in order to make the matter perfectly clear.
Amendment moved—
Page 7, line 27, after (" particular ") insert (`' but without prejudice to the generality of the circumstances to be taken into consideration" ), — The Earl of Plymouth,)
THE EARL OF LYTTON: I submit that these words are really not necessary, and that they will not add anything to the clause, except a fresh element of confusion and make it more unwieldy than it is now. The only words of this clause which shut out anything from the consideration of the Tribunal are those which begin "so, however, that regard shall not be had ''; that is, the words which are the subject of the noble Earl's next Amendment. To state that the Tribunal is to take into consideration certain things in particular does not shut out the consideration of other aspects of the question in general. If you were to say that in considering general questions you roust not forget the particular, and in considering the particular you must not forget the general, we might go on indefinitely and get Amendment after Amendment- on the Paper; a kind of perpetual motion.
THE MARQUESS OF SALISBURY: I was interested to hear the noble Earl say dart the words of the clause are already confused. He said the Amendment would add to the confusion. I am sure the Government, do not wish to be responsible for an Act of Parliament which is confused, and I invite my noble friend to see whether he cannot simplify the words of this clause. I agree that the Amendment will not simplify it. On the contrary, it will make it, as the noble Earl very epigrammatically put it, much more contused. But after we have had an admission that the words are confused, the Government are bound, having a regard for their reputation, to do their best to make them clear, and I hope that before the Bill passes out of your Lordships' care the Government will do so.
Amendment, by leave, withdrawn.
THE EARL OF PLYMOUTH THE EARL OF PLYMOUTH moved to leave out the words:"so, however, that regard shall not be had to economies or accretions of traffic or other circumstances tending to enhance its value as such component part attributable solely to the provisions of this Act relating to amalgamation and absorption." The noble Earl said: This Amendment is somewhat important. I am asking the House to restore this clause to the condition in which it. left the Standing Committee of the House of Commons. A great deal of discussion took place in the Standing Committee on this clause and it left without
758
this addition, which was moved on Report stage. In the opinion of those I have consulted it adds very much to the danger of injustice being done to some of the small companies on amalgamation, and I ask the Government whether it really does not go further than they intend. I appreciate the point which the noble Earl made with regard to the North Eastern railway. But will not this cut out other possibilities of consideration that ought not to be entirely ignored? I refer, generally, to the condition of small companies which have spent money on certain work which will give to the amalgamated company a very distinct advantage. I admit that the advantage will only go on amalgamation, but at the same time it is an asset which the shareholders of the small company very rightly contend should be taken into consideration when the whole capital value of their own concern is finally fixed. These words cut out from consideration subjects other than those which the noble Earl indicated the Government desired.
Amendment. Moved—
Page 30, leave out from ("company") to end of line 34.— (The Earl of Plymouth.)
THE EARL OF LYTTON: I hope the House will take it that we really settled the principle involved in this Amendment on the last Division. I do not propose to argue the point as to whether or not these words should remain in the Bill. I rise for the purpose of answering one question. The noble Earl asked me whether it is not the fact that if these words remain in the Bill more will not be struck out from the consideration of the Tribunal than I explained to your Lordships the Government desired to exclude. I can give you an assurance upon that point. So far as I am advised, the clause, as at present drafted, does carry out quite clearly and distinctly the objects of the Government, which are these: that the company should be in the main valued upon its prospective net revenue-earning capacity at the time of the amalgamation, without regard, however, to an increased revenue-earning capacity which may result in consequence of its being put, into a particular group by the powers of this Bill. That is the object of the clause and that, I believe, is what the clause says. I do not think it does exclude anything from consideration of the Tribunal except an accretion of value which comes to the

759
company solely by virtue of the operation of this Act. It is desired to exclude that, and that is what I believe the clause does.
In answer to the noble Marquess, Lord Salisbury, I would say that I think I made it clear in my original speech that if it could be pointed out that the clause as at present worded did not carry out what I have explained to your Lordships to be the intention of the clause, I should be quite willing to consider any alternative form of words. The Amendments which we have considered, however, were not suggested for the purpose of carrying out more clearly the intentions of the Government, but of altering the sense of the clause. For that reason I was unable to accept them. If I have not made the sense clear, I am quite willing to accept any Amendments which may be suggested to me with a view to carrying out that object.
Amendment, by leave, withdrawn.
Clause 6 agreed to.
[The sitting was suspended at fire minutes past eight o'clock. and resumed at a quarter past nine o'clock.]
Clause7:
Supplementary provisions as to schemes.
7. —(1) Every amalgamation scheme and every absorption scheme shall be so framed as to come into operation on the first day of July, nineteen hundred and twenty-three, or such earlier or later date, as the amalgamation tribunal, with the consent of the Minister, may fix:
Provided that each amalgamation scheme shall be deemed to come into operation immediately before the absorption scheme or schemes by which subsidiary companies are absorbed by the amalgamated company formed by the amalgamation scheme.
(2) Before an agreed amalgamation or absorption scheme is submitted to the amalgamation tribunal, the scheme shall be submitted to the proprietors and debenture stock-holders of each constituent and subsidiary company affected thereby in the manner provided in order sixty-two of the standing orders relative to private business in the House of Commons, and that order shall apply accordingly as if the scheme were a Bill, and any statement required by the order to be deposited at the Private Bill Office shall be deposited with the amalgamation tribunal.
LORD SUMNER LORD SUMNER moved, in subsection (I), to leave out"with the consent of the Minister." The noble Lord said: The Amendment I have to move is such a very short one that I am afraid I shall not be able to keep it going long enough to give
760
an opportunity to noble Lords to reassemble, who, no doubt, would have been very glad to support me if they had not been otherwise engaged. Therefore, I must make my appeal to the noble Earl to give an unusual measure of benevolence to my proposal, to make up for the scanty attendance of Peers. The clause reads—
" Every amalgamation scheme and every absorption scheme shall he so framed as to come into operation on the first day of July, nineteen hundred and twenty-three."
There is a positive prescribed date—
" or such earlier or later date, as the amalgamation tribunal. with the consent of the Minister, may fix"
Now, the commencement of an amalgamation scheme or absorption scheme— that is to say, the commencement of its active operation— is a date of great importance, particularly to the company which is to operate under the scheme, and I presume, therefore, that if the prescribed statutory date could not be complied with, or if it was possible to bring the scheme into operation before the prescribed statutory date, the reference to the Amalgamation Tribunal, which would justly and intelligently deal with the question, was not only a. deliberate hut well-advised measure.
But the clause says:"with the consent of the Minister"the Amalgamation Tribunal may fix. What I want to ask is what on earth has the Minister got to do with it? Or, if I may borrow the expression, how does it happen that the Minister comes"butting in "? You are setting up a Tribunal which is a real judicial Tribunal of high quality, a Tribunal to which we are committing a matter of very great importance, because I imagine that outside the War Cabinet three men have never disposed of enormous sums of money, or given a determination which will conclude the disposition of enormous sums of money, to so great an extent as these three men will do. Why is the consent of the Minister necessary for the fixing of a date any more than it is necessary for the fixing of the sum which the absorbing railway shall pay to the absorbed railway, or any of the other questions that are to come before it?
My suggestion to the noble Earl is that there is, on the face of it, no ear or rational explanation why the Minister's consent should be required, and that, unless the Minister's consent is absolutely indispensable, instead of being, as it seems to

761
me, absolutely unimportant., it is not only respectful to the Tribunal, but it is eminently in accordance with the feeling of the country, that for once in a way, at any rate, the Minister should be kept out of it.
I do not wish to use any harsh terms of an official who has been constituted by an Act of Parliament, the head of a permanent Department, and who therefore must be given something to do in order to justify his existence. Throughout this Bill the Minister of Transport interposes constantly, and with singularly disturbing flower. Attention will be drawn to sundry clauses later on, in which I do not dispute that his interference is much more important, much more grave, and possibly; more justifiable. But in this particular ease, which is I think almost the first we have conic to, apparently the Minister is required to give his consent for no purpose. whatever except. to give him a fleeting importance in a matter which, so far as I can see, does not concern him.
If he does not consent, then, if the statutory date cannot be adhered to, I do not know how this scheme is to come into operation at all. And, on the other hand, if he consents and the Amalgamation Tribunal does not consent, again there is a deadlock. What is the practical purpose of introducing two different and discrepant functions— the function of the Tribunal, which will, I suppose, decide by a majority, and the function of a Minister, who decides individually, subject to his responsibility to Parliament. What I ask the House to do, unless the noble Earl can give Sonic convincing reason for this provision, which has been profoundly concealed from view, is to strike out the words "with the consent of the Minister"in order that, in this respect at any rate, the Bill may be disencumbered of the intervention of the Minister where it is least wanted, and least capable of being useful.
Amendment moved—
Page 8, line 5, leave out (" with the consent if the Minister")—(Lord Sumner.)
THE EARL OF LYTTON: Like the noble Earl, I regret also that the present attendance in the House makes it difficult for us to have a very full discussion of this particular Amendment and to put the matter to the test of a Division. The noble and learned Lord has asked me what the Minister has to do with this clause at all. I will give him a reason. I
762
think there is an adequate reason for introducing the Minister in this case. The matter at issue is not merely, as Lord Sumner suggested, the fixing of a date, but the alteration of a date which is fixed by the Act. The Act fixes the date when these schemes shall come into operation, but it says that only in certain circumstances is that date to be postponed, and the question is whether or not the Minister's consent to the postponement should be necessary. The date of the coming into force of these amalgamation schemes is nor merely a matter of convenience to the railway companies, but there is also a. question of policy involved, and that is the reason why the Minister is introduced.
It may be in the interests of the railway companies to postpone the date of cooling into force of the amalgamations, and the Tribunal, if it considered only the circumstances put before it by the railway companies, might decide that, if they were in agreement, the date should be postponed. But the general public and the traders who are to get the benefits of the amalgamation will not derive army of those benefits in the form of economics or of reduced rates which might result until the amalgamation scheme comes into existence. Therefore, while it might. be in the interests of the railway companies to postpone the date, it might be in the public interests that the amalgamation should take place on the appointed day, and the Minister is put in so as to ensure that he shall consider— there is no one else there to consider— the interests of the users of the railways. whom I have called the traders or the general public in this question of whether the date for the coming into force of the amalgamation scheme shall be postponed.
Since there is, or may be in some cases, a reason other than those which would be before the Tribunal for not delaying this date, the Minister is there to represent that should the case arise. If the railway company are unable to bring the amalgamation scheme into operation on the appointed day it is inconceivable, I think, that the Minister should withhold his consent. But his consent is necessary so that the date should not be postponed in a manner which would be contrary to the interests of those who will derive benefit from the amalgamation if it is impossible for the amalgamation to take place on the appointed day. It is in order that those

763
interested may be safeguarded in settling the question that the Minister is inserted in the clause.
LORD SUMNER: I think the noble Earl has been justifying a different clause from that which stands in the Bill. He has been justifying a clause which would read:"such date as the amalgamation tribunal, after hearing the Minister, may fix." The Clause does not merely deal with postponement but with anticipation of the Statutory date. Supposing the railway company, and the traders, and the passengers, and all the other people wish the date to be accelerated, and the Tribunal was willing to do so, it is the consent of the Minister that is still requisite; not his statement whether there is any public reasons to the contrary or not. What the clause does is to put up two authorities to fix one thing, whereas what is wanted is that one authority should fix it, after hearing all the interests. I suggest to the noble Earl that to make the clause conform to his explanation, which I have no doubt is very much better than the clause, it will be better to introduce a, few amending words upon the Report stage, and, if you do not get rid of the Minister, at least put him in his proper place.
THE EARL OF LYTTON: I will consider that.
LORD SUMNER: I do not wish to press my Amendment if the noble Earl will consider the matter.
THE EARL OF MAYO: I should like to ask the noble Earl this question. How can the public, the traders, and the passengers interested be brought before the Minister? Is there a clause in the Bill that does that?
THE EARL OF LYTTON: In the usual way. If any body of persons are interested in the date, they can make representations to the Ministry.
Amendment, by leave, withdrawn.
THE EARL OF LYTTON: I beg to move the purely verbal Amendment which I have placed on the Paper.
Amendment moved—
Page 8, line 13, leave out (" submitted ") and insert (" referred'')—(The Earl of Lytton.)
On Question, Amendment agreed to.
(Clause 7, as amended, agreed to.
THE EARL OF LYTTON THE EARL OF LYTTON moved, after Clause 7, to insert the following new clause—

"— (1) Any two or more constituent companies in any group may, at any time after the, passing of this Act, submit to the Minister for reference to the amalgamation tribunal a preliminary scheme for the amalgamation of those companies, or for the absorption by one of such companies of the other or others of them.

"(2) A constituent company may at any time after the passing of this Act submit to the Minister for reference to the amalgamation tribunal a preliminary scheme for the absorption by that constituent company of any subsidiary company or companies in the same group upon such terms as may be agreed between those companies,

"(3) The amalgamation tribunal shall approve any such preliminary scheme so submitted to them unless it appears to them that the provisions of tins Act relating to the procedure preliminary to the submission of a scheme, have not been complied with, or unless, after hearing such of the other constituent companies in the group as desire to be heard, the tribunal consider the scheme to be inconsistent with or prejudicial to an amalgamation scheme for the whole group made in accordance with the provisions of this Act.

"(4) Every such preliminary scheme shall, subject to such provisions in that behalf as may be contained therein, come into operation forthwith after it is approved.

"(5) Subject to the provisions of this section all the provisions of this part of this Act relating to amalgamation and absorption schemes shall, with the necessary adaptations, apply respectively to preliminary amalgamation and absorption schemes except that a preliminary amalgamation scheme shall, instead of giving effect to the provisions contained in the Second Schedule to this Act with respect to the direction of the company make such alternative provision in that respect as may be agreed between the companies to be amalgamated.

"(6) In the confirmation or preparation and settlement of the amalgamation scheme for the group the amalgamation tribunal shall give effect, to any preliminary scheme approved by theta but so that the interests of the other constituent companies in the group shall not be prejudiced thereby.

"(7) Any company formed by a preliminary amalgamation scheme shall be deemed to be a constituent company for the purposes of this Act in lieu of the companies amalgamated by the scheme, and shall not be deemed to be an amalgamated company within the meaning of this Act,"

The noble Earl said: This is the new clause which I foreshadowed early in the afternoon. It is purely drafting, with one exception, which I should mention. It merely brings together all the references in the Bill to preliminary schemes, but in one respect, and in one respect only, it makes an alteration in that it enables one constituent

765
company in a group to absorb another in a preliminary scheme. This may be a more convenient course, as it would obviate the necessity for the formation of an entirely new company and the issue of new stock certificates. It really makes the preliminary scheme more complete, but in so far as that is not actually drafting, it requires to be mentioned.
Amendment moved—
After Clause 7, insert the said new clause — (The Earl of Lytton.)
On Question, Amendment agreed to.
Clause 8:
Constitution, and procedure of amalgamation tribunal.
8 — (1) For the purposes of dealing, in accordance with the foregoing provisions of this Part of this Act, with schemes of amalgamation and schemes of absorption, there shall be constituted a tribunal, to be called the Railways Amalgamation Tribunal (in this Act referred to the amalgamation tribunal ") consisting of three commissioners, who shall hold office until all matters with respect to which they have jurisdiction under this Part of this Act have been settled.
(2) The commissioners shall be Sir Henry Babington Smith, G.B.E. (who shall be chairman), Sir William Plender, G.B.E., and George John Talbot, Esquire, K.C., and in the event of any vacancy occurring amongst the commissioners by death, resignation, or otherwise, before the expiration of the term of office of the commissioners, His Majesty may appoint a person to fill the vacancy.
(6) The amalgamation tribunal or person holding au inquiry under this section shall take into 'consideration all objections to an amalgamation or absorption scheme which may have been lodged by any class or body of persons within the prescribed time and in the prescribed manner and, where any objections have been so lodged, shall hear any objectors whom the tribunal consider entitled to appear.
(7) The amalgamation tribunal may, and if so ordered by the Court of Appeal or Court of Session shall, state in the form of a special case for determination by the Court of Appeal or Court of session as the ease may require, any question of law which may arise before them, and the decision of the Court of Appeal or Court of Session shall be final unless that court give leave to appeal to the House of Lords, which leave may b given on such terms as to costs or otherwise as the Court of Appeal or Court of Session may determine.
(8) Subject as aforesaid the amalgamation tribunal may, with the approval of the Lord Chancellor and the Lord President of the Court of Session, make rules regulating their own procedure and the procedure at any inquiry tinder this section.
Amendment moved—
Page 9, line 34, after the word ("three") insert ("first") —(The Earl of Lytton.)
On Question, Amendment agreed to.
Amendment moved—
Page 9, line 39, leave out ("chairman") and insert (- president")—(The Earl of Lytton.)
On Question, Amendment agreed to.
Amendment. Moved—
Page 9, line 42, after (" commissioners insert (" for the time being") —(The Earl of Lytton.)
On Question, Amendment agreed to.
Amendment moved—
Page 10, line 32, after ("scheme") insert ("or in respect of the subject-matter of the inquiry")—(The Earl of Lytton.)
On Question, Amendment agreed to.
LORD SUMNER LORD SUMNER moved, in subsection (7), to leave out"final unless that court give leave," and insert"subject." The noble and learned Lord said: The progress that the noble Earl was good enough to allow me to make on ray last. Amendment encourages me to hope that I shall do a little more with him on this Amendment and that I may even prevail upon him to accept it. If he feels in that melting mood he has only to intimate to me that he will be prepared to accept my Amendment, and 1 will not inflict any reasons for it upon the House. It is an Amendment to Clause 8, subsection (7), which provides that the Amalgamation Tribunal may, and if so ordered by the Court of Appeal or t he Court of Session shall, state in the form of a special case for determination by the Court of Appeal. or the Court of Session, as the case may require, any question of law which may arise, and the decision of the Court of Appeal, or the Court of Session, shall be final, unless that Court give leave to appeal to the House of Lords, which leave may be given on such terms as to costs or otherwise as the Court of Appeal or the Court of Session may determine. The alteration that I want to ask the House to make in this clause is that the appeal to this House, instead of being permissive only, and permissive only by the Court of Appeal— the Court appealed against— should be, like the great majority of appeals from the Court of Appeal, an appeal as a right.
I would ask your Lordships to notice that the whole of this subsection deals entirely with bringing questions of law before the Court of Appeal and the House of Lords. No question of mere fact, no tedious inquiry into matters of detail or figures, can be brought before the Court of

767
Appeal at all. The second point is that it is impossible for any frivolous or vexatious appeals to be in question, because you cannot get the matter before the Court of Appeal at all unless either the Amalgamation Tribunal itself has thought that the matter was serious enough to require consideration by a higher tribunal, or the Court of Appeal, when applied to, has ordered that a special case shall be stated because of the importance of the matter. Therefore, all fear of a pauper litigant dragging a railway company before the House of Lords, at great cost to the company, and none whatever to himself, may be dismissed at once.
Then, your Lordships, having in mind the interesting and not unamusing discussion that took place on Clause 6, will, I imagine, by this time appreciate that there are a good many questions of law that can be raised upon this Bill, and a good many questions of law that can be raised in connection with the different circumstances that will affect the undertakings of the different railway companies, large and small, and that millions of money depend upon the actual interpretation of these clauses. Unless those questions of law are decided not merely in accordance with the Act, because that, after all, depends upon the Legislature, but are decided in accordance with the interpretation which the Courts of Law may place upon the Act, one party or the other will go away with a sense of injustice. I imagine that this is a matter in which perhaps less than in most others, it. would be in the public interest that they should be prevented from having the fullest discussion and determination on any question of law that really arises governing the rights and the termination of the inquiry.
I wish to disclaim two or three things. We heard a good deal of discussion on Clause 6 about making work for lawyers. I hope that the noble Lords who have got that off their chests will now make up their minds that that is not the real object with which even lawyers discuss Bills in Committee before the Legislature. I also hope that they will not imagine there is any amour propre on my part about the matter. If I consulted my own interests only I should strongly support an Amendment that there should be no appeal to the House of Lords in any circumstances because nothing can be more tedious, except indeed the interpretation of a will, than endeavouring
768
to interpret judicially the language which your Lordships have passed into law legislatively. I do not even say that a decision of the House of Lords is any better than a decision of the Court of Appeal. It only has the merit that lies in its being the last decision, and unchallengeable. I have the highest respect for the decision of the Court of Appeal, and, let me hasten to say, no less respect, but even more, for a decision of the Court of Session.
The judicial system of this country is so arranged as a hierarchy that the last word is said in the House of Lords. There are two conspicuous exceptions. One is bankruptcy, where you have to get leave to come to the House of Lords, and the other is the domain of criminal appeals, in which the certificate of the Attorney General is necessary to bring a highly important criminal matter before this House. Otherwise, final matters of all kinds come here as of right, and any person who is injured and has a case under the Workmen's Compensation Act can come here as a matter of right to have the decision of the County Court, and the decision of the Court of Appeal, on it reviewed before your Lordships' House.
Now I ask why it is that in constituting a new and most important Tribunal to deal with new and most important questions there should be any desire to cut down the ordinary appeals which are open to practically everybody else. It cannot be a question of money, because, after all, the most eminent counsel cannot discuss the six or eight lines of Clause 6 interminably, and the expense of witnesses and all that kind of thing is absent altogether. It cannot be a question of time, because, just as the Court of Appeal would at any time accelerate an appeal if the matter were pressing, so this House, if properly approached, would, I am quite certain, do its best to expedite an appeal upon the same ground, and I cannot help thinking that, little as those who sit here to determine the matter may be pleased by the result, the railway companies themselves and the shareholders and those interested in the railways would have greater satisfaction, and greater acquiescence, even if the determination went against them, if they knew that they had not been deprived of the last word in the last tribunal which you give to everyone else. I ask you to accept my Amend-

769
ment, the effect of which will be to say that the appeal to the House of Lords, instead of being subject to the leave of the Court of Appeal, shall be an appeal as a right; that the decision of the Court of Appeal will be subject to an appeal to the House of Lords.
Amendment moved—
Page 11, line 1, leave out ("final unless that Court give leave") and insert ("subject")— (LordSumner.)
THE LORD CHANCELLOR: My noble and learned friend has made a case on behalf of a change in the proposals of the Bill which is very arguable and on behalf of which he has fully stated the available considerations. The view of those who are responsible for these proposals lies in the opposite sense. The question here is, in fact, a very short one. The amalgamation schemes, which are the subject matter of these Tribunals, deal with the transfers which will take place when amalgamation is proposed. It is, of course, obvious that in the great majority of cases the issues are not of law at all. They are considerations affecting valuations, stock and broad considerations of fair business dealing, and it is not contemplated, and it cannot be in fact the case, that many of them will present legal considerations at all.
It is at least as equally obvious that these schemes ought not to be exposed to any delay which can be reasonably avoided. I do not mean that any delay should be considered excessive if it could be fairly claimed that the interposition of the delay could not be avoided. But what are the facts here? Where such a scheme has been prepared and dealt with by the Tribunal, an appeal is granted to the Court of Appeal in a case where a point of law is raised. There is no difference between the noble and learned Lord and myself, and the fact is well known to your Lordships that the authority and experience of the Court of Appeal in this country are very great. No one who is familiar with the work of that Court will dispute this, that in any proper case, where a point of law springing from the discussion of such a scheme has been called to the attention of the Court of Appeal, the Court will, most certainly, grant leave to appeal to this House.
The only issue between Lord Sumner and the Government is this. He suggests that in dealing with these rare cases there should, as a matter of right, be an appeal
770
to the House of Lords. The Government suggests, in the interest of the expeditious dealing with these amalgamation schemes, that where the Court of Appeal, which, ex hypothesi, will have heard the matter and be fully cognisant of the point of law which is raised, thinks it a point important enough to go to the House of Lords it shall have the right to grant leave to appeal to the House of Lords, and that if it is not sufficiently important it should not go. I do not think Lord Sumner will quarrel with this conclusion, that it is almost inconceivable, in any case where there is a balance of opinion between the two, views as to whether there was a point which should or should not reasonably engage the attention of this House, that the Court of Appeal would not give the benefit of the doubt to those who desire to take the sense of this House.
The noble and learned Lord asked whether there was any precedent for the course which is now proposed by the Government. There is, in fact, a very close precedent to be found in Section 23 of the Metropolitan Water Act. That Act, as its name implies, dealt with a very large subject matter, affecting great financial interests, and just as there are schemes here for amalgamation, involving the Valuation of large property, so there were schemes there, and Section 23 provided that where a Court of Appeal gave leave to appeal to the House of Lords, there should be such an appeal, and that where it did not give such leave, there should be no such appeal. So far as I know, this section of the Metropolitan Water Act has worked with the most complete smoothness and efficiency, and I, at any rate, have never heard of a single case in which there has been a complaint that the Court of Appeal has refused leave to appeal in any case in which the reasons were of sufficient magnitude in the view of experienced lawyers to justify a still further appeal.
While, therefore, my noble and learned friend has made out a very arguable case, I am inclined, on the whole, to suppose— and this is the view which the Government have adopted— that the balance of advantage lies on the side of seeing that, if the party who desires to carry the matter further convinces the Court of Appeal that there is a matter sufficiently disputable to be brought to a further appeal, it should be so brought, and otherwise, that it should not be so brought.
On Question, Amendment negatived.
Clause 8, as amended, agreed to
Clause 9 agreed to.
Clause 10 (Composition of claims under railway agreements):
THE EARL OF LYTTON THE EARL OF LYTTON moved, in subsection (10), to substitute"fifteenth day of August"for"fourteenth day of August." The noble Earl said: This is a small drafting Amendment, but as it relates to a point about which there was some dispute as to what was the exact date of the decontrol of the companies, I beg to move it.
Amendment moved—
Page 14, line 27, leave out ("fourteenth") and insert (" fifteenth''). —(The Earl of Lytton.)
On Question, Amendment agreed to.
Clause 10, as amended, agreed to.
Clause 11:
Allocation of compensation under railway agreements.
11 —(1) Out of the first instalment of thirty million pounds referred to in the last preceding section—

(a) the sum of twenty-five million pounds shall be forthwith distributed amongst the companies to which the said section applies in proportion to the net receipts of those companies, respectively, during the year nineteen hundred and thirteen, covered by the first seven items in account No. 8 of the First Schedule to the Railway Companies (Accounts and Returns) Act, 1911, as already agreed for the purpose of the compensation accounts between the Government and the railway companies (but excluding any receipts classified as miscellaneous receipts (net) in the said Account No. 8), supplemented by—

(i) the inclusion in such net receipts of any sums placed to the credit of a suspense account in respect of the four per cent. increase in rates out of the revenue of nineteen hundred and thirteen; and

(ii) the addition of any sums payable by the Government to the said companies respectively for the year nineteen hundred and twenty under the agreements or arrangements aforesaid in respect of interest on capital expenditure; and

(b) the sum of five million pounds shall be set aside for distribution subject as hereinafter provided amongst those railway companies who are able to show to the satisfaction of the amalgamation tribunal (hereinafter called the"tribunal ") that they have suffered
772
abnormally by the standardisation of rates of pay, hours of duty, and other conditions of service. For the purpose of determining the basis of compensation owing to abnormal increase in working expenses due to such standardisation the cost of salaries and wages for the last four months of the year nineteen hundred and twenty-one of the railways to which the said section applies compared with the cost of salaries and wages of the same railways for the same four months of the year nineteen hundred and thirteen shall be ascertained and the average percentage increase shall be deemed to be the normal ratio of increase for the purpose of this section. Any company whose ratio of increase is above such normal ratio shall make out a claim showing the extent above the normal ratio of increase to which it has suffered by standardisation during the said four months, The claims of all the companies presenting such claims shall be considered by the tribunal, who shall allocate amongst such last-mentioned companies in proportion to the claim which they may establish to the satisfaction of the tribunal, the said sum of five million pounds or such lesser sum as may be sufficient to satisfy such claims as so established; and

(c) any sum remaining out of the five million pounds after payment to the various railway companies under the preceding paragraph and including any interest which may have accrued, shall be distributed between the whole of the companies as if such sum and the interest thereon had been added to the twenty-five million pounds referred to in paragraph (a) of this subsection.

(2) Out of the second instalment of thirty million pounds payable under the said section of this Act—

(a) the sum of twenty-five million pounds shall be distributed amongst those companies who on the thirty-first day of December, nineteen hundred and twenty, were in arrear in respect of the maintenance and renewal of way and works and/or rolling stock (abstracts A and B set out in the form of accounts scheduled to the Railway Companies (Accounts and Returns Act, 1911) in ratio to the extent to which they were so in arrear. The amount of such arrear shall be ascertained in accordance with the arrange ments agreed between His Majesty's Government and the railway companies in Great Britain in respect of arrears of maintenance and renewal work, as set out in addendum 2 of Command Paper 654 (1920).

(b) The sum of five million pounds shall be set aside for distribution subject as hereinafter provided amongst those railway companies who shall have established or shall establish to the

773
satisfaction of the tribunal their right to participate in the distribution of the sum of five million pounds mentioned in subsection (1) (b) of this section in accordance with the provisions of that subsection except that the words"the year nineteen hundred and twenty-two"shall be deemed to be substituted for the words"last four months of the year nineteen hundred and twenty-one"and the words"year nineteen hundred and thirteen"shall be deemed to be substituted for the words"same four months of the year nineteen hundred and thirteen" in the said subsection;

(c) Any sum remaining out of the five million pounds after payment to the various railway companies under the preceding paragraph, and including any interest which may have accrued, shall be divided between the whole of the companies as if such sum and the interest thereon had been added to the twenty-five million pounds referred to in subsection (1) paragraph (a).

(3) No portion of the sum of sixty million pounds referred to in the said section of this Act or the interest thereon shall be allocated to any company which is neither itself conducting its traffic nor maintaining its undertaking unless the tribunal shall determine, on the application of such company, that such company would, but for the provisions of the last preceding section, he entitled to receive compensation from the Minister of the Crown under the Regulation of the Forces Act, 1871, the Ministry of Transport Act, 1919, or otherwise arising out of or in respect of possession of their undertaking by the Crown, but no such application shall be made after the thirty-first day of December, nineteen hundred arid twenty-one.
LORD STUART OP WORTLEY LORD STUART OP WORTLEY moved, in subsection (1) (a), to substitute"twenty-four million five hundred thousand"for"twenty-five million." The noble Lord said: I beg to move the first of a series of what undoubtedly look like an extremely formidable set of Amendments, but I think I shall be able to show that they have a benevolent object, and they represent, on the part of those with whom I am supposed to act, some moderate measure of sacrifice. The substance of them is this. There are certain small companies which are best described as the "worked" companies. They are companies which date from the inception of our railway system, which came into being as the product of local sanguineness and enterprise, and which in the course of time became practically part of the system of larger companies. On their adoption into those systems, the larger companies became the working companies, which ran the traffic
774
and the operation of these companies, subject to arrangement that they should receive a certain portion of the gross receipts.
Now, in consequence of the wording of this Bill, it might have been that these small companies would have found themselves shut out from some of the compensation which it is intended under this Bill should be afforded out of the £ 60,000,000 which the Government have agreed as satisfaction and discharge of the claims of the companies against the Government for the effects of control. To put it quite shortly, some Amendment such as this is necessary, if they are to be participators, in any shape or form, in that distribution. These Amendments will have the effect that if these companies, on going before the Tribunal, can satisfy the Tribunal that they have substantially suffered, they can get a sum, not exceeding in the aggregate, amongst the lot of them, half a million of money, which conies out of the £ 25,000,000 alluded to in one of the sections of this Bill. I think no one will wish the small companies to suffer damage by reason of the wording of the Bill, and it has been agreed on both sides, as a fair settlement of the claims which otherwise would have remained unsatisfied. I ask your Lordships to accept this series of Amendments as giving practical effect to that intention. I beg to move.
Amendment moved—
Page 14, line 33, leave out ("twenty-five millions") and insert ("twenty-four million five hundred thousand") —(Lord Stuart of Worlley.)
THE EARL OF LYTTON: I agree that this provision is necessary, and I accept the Amendment.
THE LORD CHAIRMAN: Does that cover all the Amendments of the noble Lord?
LORD STUART OF WORTLEY: It covers all on Clause 11.
On Question, Amendment agreed to.
Amendments moved—
Page 14, line 35, after ("applies") insert ("(other than the companies referred to in subsection (3) of this section) ").
Page 15, line 14, at end insert the following new paragraph:
("(b) The sum of five hunched thousand pounds shall be set aside for the payment thereout of such compensation as may be awarded by the amalgamation tribunal to any of the companies referred to in subsection (3) of this section; and")
Page 15, line 17, after (" companies ") insert (" to whom the said section applies (other than the companies referred to in subsection (3) of this section) and ") —(Lord Stuart of Wortley.)
On Question, Amendments agreed to.
THE EARL OF LYTTON: I have to move three drafting Amendments.
Amendments moved—
Page 15, line 19, leave out ("hereinafter called the tribunal")
Page 15,line 41, after ("the") insert ("amalgamation ")
Page 15,line 44, after the second ("the") insert (" amalgamation"). —(The Earl of Lytton.)
On Question, Amendments agreed to.
Amendments moved—
Page 16, line 4, after ("the") insert (" two said sums of five hundred thousand pounds, and")
Page 16, line 5, at end insert ("to whom the said section applies (other than the companies referred to in subsection (3) of this section)")
Page 16,line 6, after (" the ") insert (" two last ") and leave out (" paragraph ") and insert (" paragraphs ")
Page 16,line 8, at end insert (" entitled to participate in the said sum of twenty-four million five hundred thousand pounds ")
Page 16,line 9, leave out ("sum") and insert ("sums")
Page 16,line 10, leave out from ("the") to end of the subsection and insert ("twenty-four million five hundred thousand pounds")
Page 16,line 15, after ("companies") insert ("to whom the said section applies (other than the companies referred to in subsection (3) of this section) and ") — (Lord Stuart of Wortley.)
On Question, Amendments agreed to.
THE EARL OF LYTTON: I now have to move a drafting Amendment, which is in manuscript.
Amendment moved—
Page 16, line 22, leave out ("ratio") and insert (" proportion"). —(The Earl of Lytton.)
On Question, Amendment agreed to.
THE EARL OF LYTTON: This is also a drafting Amendment.
Amendment moved—
Page 16, line 34, after the first ("the") insert (" amalgamation"). —(The Earl of Lytton.)
On Question, Amendment agreed to.
THE EARL OF LYTTON: The next is also a manuscript Amendment and is drafting.
Amendment moved—
Page 17, line 5, leave out ("and"). —(The Earl of Lytton.)
On Question, Amendment agreed to.
Amendments moved—
Page 17, line 8, after ("companies") insert ("to whom the said section applies (other than the companies referred to in subsection (3) of this section)")
Page 17,lines 9 and 10, leave out ("twenty-five million") and insert ("twenty-four million five hundred thousand")
Page 17,leave out lines 24 and 25, and insert ("thirtieth day of April, nineteen hundred and twenty-two. The amount of such compensation shall be determined by the tribunal and shall be paid out of the said sum of rive hundred thousand pounds") —(Lord Stuart of Wortley.)
On Question, Amendments agreed to.
Clause 11, as amended, agreed to.
Clause 12:
Power of constituent companies to issue redeemable debenture stock.
12 — (1) It shall be lawful for any constituent company and, with the consent of the constituent companies in the group, for any subsidiary company, prior to amalgamation under this Act, with the sanction of the Minister, and notwithstanding any limitation on the powers of borrowing of the company, to borrow on mortgage of its undertaking by means of terminable securities to such amount, at such rate of interest, redeemable within such period, and subject to such conditions as the Minister may sanction, with the consent of the majority in amount of the proprietors and of the holders of the existing mortgage securities of the company, at a special meeting called for the purpose, and of the existing preference stockholders, but the amount so borrowed shall in no case exceed one-eighth of the existing mortgage securities of that company.
THE EARL OF LYTTON: There are two drafting Amendments to this clause.
Amendments moved—
Page 17, line 38, leave out ("a special meeting") and insert ("special meetings")
Page 17,lines 38 and 39, leave out ("and of the existing preference stockholders"). —(The Earl of Lytton.)
On Question, Amendments agreed to.
THE EARL OF ELGIN THE EARL OF ELGIN moved, towards the end of subsection (1), to leave out"one-eighth"and to insert"one-half." The noble Earl said: The object of the Amendment is that railway companies may

777
have the opportunity of raising money for the benefit of their business. It must be clear to your Lordships that in present circumstances it is extremely difficult for railway companies or any industrial concern to raise money, and the only form in which it can be raised is by an increase of the debenture capital. I am moving this Amendment in order to restore the words which were included in the Bill when it was introduced by the Minister of Transport. By various Amendments during its passage through another place, the"one-half"has been whittled down to"one-eighth," and it is with the intention that the companies may have a more reasonable liberty in raising money during this intervening period before amalgamation that I move the Amendment.
Amendment moved—
Page 17, line 40, leave out (" one-eighth ") alai insert (" one-half ") —(The Earl of Elgin.)
THE EARL OF LYTTON: As the Bill stands, the railway companies would have power to borrow up to the amount of £ 48,000,000. Under the Amendment of the noble Earl their borrowing power would he brought up to £ 192,000,000.
THE EARL OF ELGIN: No.
THE EARL OF LYTTON: That, I understand, is the effect of the Amendment.
THE EARL OF ELGIN: It brings the proportion from one-third, which they possess now under the Common Law, plus one-eighth of that third, to one-third plus a half of a third, which makes the half.
THE EARL OF LYTTON: I do not; think there is any dispute about this. The effect would be to increase the borrowing powers of the company. The clause would only apply for a period of two years, and I am informed that the companies' will find it very difficult, if not impossible, to borrow and spend the amount of money which is allowed to them under the Bill as it stands, and there is no need whatever to increase the amount. For that reason I cannot accept the Amendment.
On Question, Amendment negatived.
Clause 12, as amended, agreed to.
Clause 13 agreed to.
Clause 14:
Power of trustees to invest in securities of amalya mated companies.
14. For the purposes of the provisions of the Trustee Act, 1893, and the Trusts (Scotland) Acts, 1861 to 1910, relating to the securities in which trustees are authorised to invest trust funds, an amalgamated company shall be treated as it were a railway company in Great Britain incorporated by special Act of Parliament and had in each of the ten years immediately before the date of amalgamation paid a dividend at the rate of not less than three per centum per annum on its ordinary stock.
THE EARL OF LYTTON THE EARL OF LYTTON moved, after "an amalgamated Company," to insert"or a company constituted by a preliminary amalgamation scheme." The noble Earl said: This is really consequential on the preliminary scheme clause which I have already moved, after Clause 7. That clause provided that a new company formed by a preliminary amalgamation scheme is not to be regarded as an amalgamated company. Otherwise, in the case of a preliminary amalgamation of, say the North Western Railway Company and the Lancashire and Yorkshire Company, the debenture holders of those companies would suddenly find themselves holding non-trustee securities.
Amendment moved—
Page 18, line 35, after ("company") insert ("or a company constituted by a preliminary amalgamation scheme") —(The Earl of Lytton.)
On Question, Amendment agreed to.
Clause 14, as amended, agreed to.
Clause 15:
Power to make orders as to working of railway companies.
15 —(1) With a view to securing and promoting the public safety, or the interests of the public, or of trade, or of any particular locality, the Railway and Canal Commission may, on the application of any body of persons representing any such interests, by order require any railway company or companies, or the Minister may on the application of any such company or companies by order authorise the company or companies, to afford such reasonable railway services, facilities, and conveniences upon and in connection with its undertaking (including the provision of such minor alterations and extensions and improvements of existing works as will not involve in any one case an expenditure exceeding one hundred thousand pounds) as may be specified in the order:
Provided that, if on any such application a company satisfies the Railway and Canal Commission that under all the circumstances the capital required for the purpose cannot be provided or expended as proposed without pre-

779
judicially affecting the interests of the then existing stockholders, the order shall not be made:
Provided further that the powers under this subsection shall be in addition to and not in derogation of any other existing powers of requiring measures for securing the safety of the public or the provision of reasonable facilities.
(2) The Minister may after such reference as is hereinafter mentioned by order require or authorise any railway company or any two or more railway companies on such terms and subject to such conditions as may be specified in the order—

(a) to conform gradually to measures of general standardisation of ways, plant and
equipment. (including methods of electrical operation, type, frequency, and pressure of current);

(b) to adopt schemes for the co-operative working or common user of rolling stock, workshops, manufactories, plant and other facilities:

Provided that

(i) it shall not be necessary to make such a reference as aforesaid if the company or all the companies affected by the order consent thereto; and

(ii) if on any such application to enforce the order as is hereinafter mentioned any company satisfies the Railway and Canal Commission that the order is such that the capital expenditure involved cannot be provided or expended without prejudicially affecting the interests of the then existing stockholders, the order shall not be enforceable as against that company.

(3) Before making any order under the last foregoing subsection the Minister shall (except as hereinbefore provided) refer the draft order to a committee consisting of a representative of each of the amalgamated companies (each of which companies shall, on being so required by the Minister, nominate a representative), and three persons of experience in the subject-matter of the proposed order selected by the Minister from the panel set up under section twenty-three of the Ministry of Transport Act, 1919, as extended by this Act, and the committee before reporting or advising shall, if they see fit, give public notice and permit any persons affected or likely to be affected and any authority or body of persons authorised to make applications under this Act to place their views before them, either in writing or orally.
(4) Any order of the Minister under this section shall be complied with by any railway company to which the order relates, and in the event of non-compliance shall (subject as hereinbefore provided) be enforceable by order of the Railway and Canal Commission on the application of the Minister in any of the ways referred to in section three of the Railway and Canal Traffic Act, 1854, or section six of the Regulation of Railways Act, 1873.
THE EARL OF MAYO THE EARL OF MAYO moved, in subsection (1), after "the Railway and Canal Commissioners may, on the application of," to insert"any person or." The noble
780
Earl said: These words will strengthen the position of those who can go before the Railway and Canal Commission. I should like, if I may, to take the next Amendment at the same time because it is consequential. It is to insert in subsection (1), before "any such interest," the words"or having." Then it will read as follows—
" The Railway and Canal Commission may, on the application of any person or any body of persons, representing or having any such interests "—
On the Second Reading of the Bill, the noble Earl said this was the charter of the traders, and I asked him where was the charter of the passengers, because I thought that the passengers had not the same strong rights as a. body of traders had under this clause. Therefore, I put this Amendment down. It does not affect the Bill and it strengthens, I think, the position of those persons to whom I have alluded. I hope the noble Earl will accept it.
THE LORD CHAIRMAN: Should it be"person"in the singular or"persons"in the plural?
THE EARL OF MAYO: It is"person"in the singular.
Amendment moved—
Page 19, line 6, after (" of ") insert (" any person or ") —(The Earl of Mayo.)
THE EARL OF LYTTON: This Amendment would do a good deal more than the noble Earl suggests. If it were put into the Bill it would give to any individual person a right, which is now given to any body of persons, to make representations to the Railway and Canal Commission. It is true, as the noble Earl has said, that on the Second Reading I referred to this clause as the charter of the traders, and that he asked me where the passengers came in. I told him that the passengers would be in the same position as the traders, that they would have the same right of making representations as was given to the traders. But there is no provision in the Bill which says that any individual trader might make representations. It must be remembered that this clause gives to the traders, the general public, a right which they do not possess to-day. Under this clause they may, in future, appear before the Railway and Canal Commission and demand that the railway company shall be ordered to do certain

781
things in their interests. This may put upon the railway company very considerable expense, and I do not think it would be reasonable to give to any single individual without any particular locus standi the right of appearing and demanding that the railway company should be put to very considerable expense in his own particular interest alone. I am afraid I cannot accept the Amendment.
THE E MARQUESS OF SALISBURY: I should like to ask my noble friend, merely for my own information, what he means by a"body of persons"to make representations. Does that mean two persons? Would two persons be a body of persons?
THE EARL OF LITTON: That is stated in Clause 78.
THE EARL OF MAYO: Is the noble Earl prepared to accept the second Amendment? There would be no harm in inserting the words"any such interests," because the word is"persons"in the plural and not"person"in the singular.
THE MARQUESS OF SALISBURY: Perhaps the noble Earl would be kind enough to indicate where, in Clause 78, the passengers are dealt with.
THE EARL OF LYTTON: A local authority would be able to make representations on behalf of pasengers or traders. If a local authority, under Clause 78, were to make such representations, they might be made in the interest of passengers as well as of traders. When we were discussing this question on Second Reading, the noble Earl referred, in particular, to the interests of the passengers on the North Western Railway travelling to Holyhead, and he said that those persons to-day suffered by reason of the unchecked monopoly of the railway. This Bill, of course, does not create a monopoly. He wanted to know whether there was any relief under this Bill, and I pointed out to him, or intended to point out, that if a local authority in Ireland were moved by persons travelling on this line to make representations, they could go before the Railway and Canal Commission and ask that further facilities he granted. I think it is only in the case of a local authority that the passengers could be represented in a corporate way.
THE EARL OF MAYO: Will the noble Earl accept the Amendment on line 7, after"representing," to insert"or having "?
THE LORD CHAIRMAN: The other Amendment must be withdrawn first.
Amendment, by leave, withdrawn.
THE EARL OF MAYO: Will the noble Earl accept the next Amendment which gives them a little more power? It is, after the word"representing," to insert"or having."
THE EARL OF LYTTON: I do not quite understand what is the effect of it. I thought the second Amendment was consequential on the first. The noble Lord has withdrawn the word"person," and he now wants to insert"or having,'' after"representing," in line 7. It would then read"may on the application of any body of persons representing any such interest."
THE EARL OF MAYO:"Or having any such interest."
THE EARL OF LITTON: I am afraid I am not clear what change that would make in the Bill. If the noble Earl will allow me to make inquiry as to its effect I will give him the answer when we reach the next stage of the Bill.
LORD SUMNER: May I point out that it means if two or three passengers had an interest in getting season tickets altered, then those two or three persons would have an interest, and he able to come forward and do this.
THE EARL OF LITTON: I should like to consider it.
THE EARL OF MAYO: I will bring it up on Report.
Amendment moved—
Page 19, line 12, after (" undertaking ") insert (" or their undertakings ") —(The Earl of Lytton.)
On Question, Amendment agreed to.
LORD AMPTHILL LORD AMPTHILL moved to leave out proviso (i). The noble Lord said: My noble friend, Lord Bledisloe, has asked me to speak first, as we have the same Amendments. I speak on behalf of a great and important group of manufac-

783
turers, and a great and growing British industry. What I have to say is, I believe, in the interests of the general public. The first two Amendments standing in my name are merely intended to clear the way for the insertion of a new subsection after subsection (3). That new subsection is merely a safeguard. It will not make any difference whatever to the declared objects of the Bill. All that it will do, so far as am able to judge, will be to prevent any misunderstanding or transgression of the declared intentions of the authors of the Bill, and it will, moreover, relieve a great anxiety that exists among those who are primarily concerned as to possible, though unintentional, effects of the Bill.
There is nothing more injurious to trade and industry than the want of a sense of security, and the insertion of this new subsection will give a feeling of confidence, where there is none at present, among those for whom I am speaking. The fear entertained by those engaged in the manufacture of locomotives and rolling stock is that these great groups of railway companies may some day be tempted to secure a monopoly of that industry in this country. Nothing would be easier for them than to do that from the vantage ground established by the Bill under Clause 15. Anything in the nature of a combine or trust of that kind would be, of course, fatal to private industry, and it would moreover be something entirely distasteful to the people of this country. The position is that without some share of the home trade it is impossible for private firms to carry on overseas trade. It is necessary in every trade to have a share of the home market so as to be able to spread the overhead charges over the whole business, so that the whole incidence of these charges does not fall on the overseas trade alone, for in those conditions it is impossible to compete with the foreigner.
If railways were to co-operate to build the whole of their own locomotives and rolling stock they would be building for the whole of the railways in the United Kingdom, and it follows there would be nothing at all left for private enterprise. There would be no opening for private firms in this country to build either locomotives or railway wagons or any railway appliances. An industry which it has taken forty years to build up, in which a very large sum of money is invested as capital, and in which a large number of work-people are employed, would be destroyed. I could give your Lordships facts and figures
784
in regard to the capital, the number of people employed, and so on, but I think it is not necessary to elaborate the point to that extent. Your Lordships know that this industry of the building of locomotives and rolling stock is a very important one in many great centres in this country. If you destroy that industry it would be a very serious blow to the general industry and trade of this country. Besides that, it would be contrary to the public interest in other ways, as it would not mean cheaper rolling stock or cheaper locomotives, or, consequently, cheaper travelling and cheaper transport.
The declared object of this Bill is to bring about economy, and it is only in the belief that the railway companies themselves would build their rolling stock more cheaply than the private contractor that a monopoly of that kind could be justified. But there is abundant evidence to show that railway companies cannot build as cheaply as the private contractor. Here again, if it were necessary, I could give your Lordships any amount of facts and figures, but those facts and figures are very difficult to follow unless you have the papers before you. Perhaps it will suffice if I say that the Minister of Transport himself has made this admission. At a meeting held on March 7, 1919, with representatives of various associations connected with the supply of rolling stock, the Minister of Transport stated that his personal opinion was that private manufacturers build better than the railway companies, provided they obtain standardisation and the quality required, and that he himself was against huge shop extensions. It is also, I believe, generally recognised that you cannot carry on new work and repairs in the same shop, for the result invariably is that the new work has to be put aside in order to carry out urgent repairs, and economy is not the result.
There is a good deal of misapprehension on this point because the overhead charges put in by the railway companies in their accounts are totally inadequate, and they are calculated by misleading methods. The railway companies are not to blame for that because the form in which those accounts are submitted is prescribed by Statute, but the fact is that it is almost impossible for the railways to keep their costing system for manufacturing apart from the rest of their great undertakings. The result would be that traders and the travelling public would have to pay higher

785
rates for transport facilities in order that the railway companies might subsidise the manufacturing part of their business and meet the actual deficits on that part of their concerns. That is where the general public is directly affected.
This is not a new question. It has been fought out many times before, and the decision has always been in favour of the public as against the railway companies, ever since the year 1875, when members of the private trade obtained an injunction against the London and North Western Railway Company, restraining that company from manufacturing for sale or hire. Private traders have no objection whatever to ordinary competition. On the contrary, they welcome it, but your Lordships will see that competition with railway companies, especially railway companies fortified by amalgamation into groups, is grossly unfair, because they can employ their power to charge rates to subsidise the manufacturing part of their business. The private -trader has no such extraneous means of bolstering up his business and reducing his prices. The railway companies can take their manufactures at costs which are not disclosed in the accounts, but which are generally known to be excessive.
By inserting the new subsection that I have on the Paper you will ensure that there will be a fair hearing for the general public and private traders before any further move is made in the direction of a State controlled monopoly; a thing which, I believe, is odious to the people of this country. The Amendment I now move merely paves the way for the new subsection, which says:—
"No order shall be made under this section as regards co-operative working for the purpose of constructing locomotives or rolling stock if it shall appear to the committee that such construction can be carried out at less expense by private enterprise or that such co-operative working would be detrimental in the public interest to the furtherance of British trade."
This Amendment removes the proviso which allows an agreement - between the railway companies to preclude any consideration of the public point of view. In popular parlance, if it is a"put-up job"between the railways there would be no hearing for the general public. With that proviso cleared out of the way you can then put in the further subsection which will be a necessary safeguard and will not in
786
any way affect the principle or the avowed intentions of the promoters of the Bill.
Amendment moved—
Page 19, line 41, to page 20, line 2, leave out proviso (i) —(Lord Ampthill.)
LORD BLEDISLOE: As I have a similar Amendment on the Paper perhaps your Lordships will allow me to say that I endorse everything Lord Ampthill has said so very clearly in explanation of the Amendment. My Amendment differs in a small degree from his as it seemed to me desirable to base our case upon the public interest and upon that only. My words are—
" if it shall appear to the committee that such construction can be carried out at less expense by private enterprise or that such co-operative working would be detrimental to the public interest."
I think we are on strong ground if we base our case on the interests of the public. As Lord Ampthill has pointed out,the strength of our case, apart from the somewhat unfair competition of the railway companies as manufacturers of rolling stock, undoubtedly is that even if they do produce similar goods at the same actual cost, and they suffer a loss, they are able, by coining to Parliament and asking for higher fares or rates because they- are losing money on this side of the business, to charge the public with the actual loss incurred upon their vehicles, and this, too, when they have killed competition on the part of the private trader.
I live in the neighbourhood of the City of Gloucester where the chief industry is represented by the railway carriage and wagon works. That company employs several thousand persons in the city, of which this is the chief industry, and they manufacture largely for the Argentine, Brazil, Canada and other overseas countries. If, by this somewhat unfair competition on the part of the railway companies, they lose their whole trade, their overhead costs will be enlarged to such an extent that they will find it impossible to carry on with any prospect of a fair profit this very important export business for which they are already celebrated in the manufacturing world. I may remind your Lordships that up to the time of the introduction of this Bill the railway companies have had no statutory power whatever to manufacture locomotives or wagons or rolling stock of any kind except for their own requirements. It is quite possible under the Bill as it stands for them to manufacture for other

787
railway companies and for outside sale to persons not connected with the British railway world at all.
In reference to what my noble friend said as to the distinction between the construction of rolling stock and the repair of such stock, I may point out that even the railway carriage and wagon works have during the last few years entirely separated their constructional works from their repair works. Repair work is now done by a separate company on behalf of these various construction companies, for the sake of economy, and as an entirely distinct business. I hope your Lordships will accept this Amendment if only to put a stop to what is likely to be a somewhat dangerous development. It is difficult to see where this process is going to stop, for if the railway companies are to be able to manufacture rolling stock for their own use and that of other railway companies, why should they not embark upon collieries, not only for their own use hut to sell to the outside public, or upon the construction of rails or even upon brickmaking or quarrying, in order to provide their own railway stations or other masonry structures? It is not easy to see where you will stop. When you are constituting a very big monopoly with the full approval of His Majesty's Government, surely, in fairness both to the public and to these competitive private concerns, the process ought to be limited in the way that my noble friend suggested.
THE EARL OF LYTTON: Lord Ampthill has said quite truly that his first. Amendment, which we are now discussing, was only a preliminary to his second Amendment, which he will move later, and that the two must hang together. He has supported these two Amendments by referring to the position of the manufacturers of locomotives and wagons, whom, in this matter, he represents, and who, he fears, may be injured under the Bill as it stands.
I would point out to him, however, that this first Amendment in his name goes very much further than he, I think, would wish or intend. If your Lordships will look at the clause you will see what the Amendment does. It is stated that the Minister may order the railway companies to do certain things:—
" to conform gradually to measures of general standardisation of ways, plant and equipment, to adopt schemes for the co-operative working or common user of rolling stock, workshops, manufactories, plant and other facilities."
788
He is only to make those Orders after he has referred the matter to the Committee which is mentioned in subsection (3) of the clause. Then comes the proviso which my noble friend wishes to leave out— provided that in any case where all the parties are agreed it shall not be necessary to refer to the Committee.
LORD AMPTHILL: It does not say anything about all the parties.
THE EARL OF LYTTON: If all the companies affected by the Order consent thereto. If you leave out the proviso the effect would be that supposing it is represented by the Minister that economies can be effected by the common user of rolling stock or workshops between two or more companies in the amalgamation, and they are agreed that that would be a desirable thing and economies may be effected, if this Amendment is carried it will be impossible for this common user of rolling stock to take place without going to a tribunal and discussing the whole matter, although all the parties concerned in the arrangement are agreed to make it. I am pointing out to the noble Lord that his Amendment will have an effect which he obviously did not contemplate when considering only manufacturers of locomotives and wagons.
I now come to the Amendments as a whole and the cases which the two noble Lords have put to your Lordships. They fear that these large new groups of railway companies may embark upon the business of locomotive manufacture to such an extent as seriously to prejudice the interests of those private traders engaged in the manufacture of them to-day. The case I have to put to your Lordships on the other side is this. In the interest of the public who use the railways and have to pay the railway rates, it is obviously desirable that every conceivable economy should result from these manufactures, and not only economies but efficiency in the use of railway plant. It may be that two or more companies are amalgamated and one company may have a locomotive building shop or wagon building shop with a capacity in excess of its own requirements, arid another company, which has become a member in the group, may desire to take from the former company some of the locomotives which can be built in these available shops. My noble friends say that in the interest of some private manu-

789
facturer these companies are not to utilise their spare shop accommodation and are not, by co-operative working in this way, to produce economy in railway administration and efficiency in running from which the whole public who use the railways will benefit, lest these companies may damage the interest of some private trader.
I admit the Amendment of Lord Bledisloe is extremely plausible and was stated in terms very difficult to object to, because he says this:"I am only going to protect these people in so far as it can be proved that they build more cheaply than the railway companies, and in so far as it can be shown that the public interests are not prejudicially affected." If such a scheme could be devised, without the objection to which I am coming in a moment, I should have nothing to say, because it is to my mind inconceivable that the railway companies should build wagons or locomotives if they could get them more cheaply from somebody else. Their only reason for building them in their own shops is that they will thereby effect economies.
Lord Ampthill said it was conclusively proved that the private manufacturers could build much more cheaply than the railway companies. If that is the case, then I submit they have nothing to fear, because there is no conceivable reason why the railway companies should incur greater expense by building for themselves instead of going to those who can build equally efficiently and more cheaply for them. Lord Bledisloe would no doubt say:"I have made provision for that." But how is the Committee before whom this case is brought, to decide whether it is possible generally for a body of private manufacturers to manufacture more cheaply than these railway companies? They would have to go minutely into the whole question of the cost of production of the private manufacturer on the one hand and the railway companies on the other, and moreover, even though that were possible and they could ascertain (which I submit would be very difficult, if not impossible) the actual cost of production at a given moment of two sets of plant, it would still be quite possible for one of these manufacturers, in order to prevent this combination in co-operative working which I have represented as in the interests both of the railway companies and of the users of the railways, by producing temporarily and offering for sale locomotives or wagons
790
below cost price. It might be to their advantage to offer a particular set of locomotives or wagons at a very much reduced cost in order to prevent the leave of the Committee being given to an amalgamation of this kind.
Therefore, I do not feel that the procedure suggested by Lord Bledisloe is really a possible or workable one. I admit that this is a difficult question, and that there is a great deal to he said on both sides of the case, but I am sure that your Lordships will agree that we should endeavour to consider the matter, as far as we can, in the public interests. Lord Bledisloe himself has admitted that. There are two sets of interests — the railway interests on the one hand and those of the private manufacturer of locomotives on the other. Neither of these are public interests. The question we have to consider is whether, in the public interest, it is desirable, with this Clause 15 in the Bill, that the railway companies should use their existing plant to the best possible purpose; that where you have one set of shops which turn out a particular type of locomotive, that that should be the particular type of locomotive, constantly repeated in large numbers, and at the service of all the railway companies; and that another shop which turns out a particular type should manufacture in large numbers that type, and that these should he available for use on the railways, thereby keeping down the cost of manufacture, leading to economies in railway management, and also efficiency in administration. I submit that to enable one set of private traders to interfere with those obvious advantages which the public would derive, is certainly not in the public interests. For these reasons I hope your Lordships will not accept the Amendment.
LORD GAINFORD: For some years I was associated with a firm of private locomotive builders and I am afraid that the noble Earl has not realised how valuable it has been to the public that we have had in the country a very large number of private, firms competing in construction with the great railway companies. Up to the present the position has been that each railway company has had an engineer who was constantly looking into the question of the type of locomotive best suited to his own traffic. He altered his specifications from time to time, and always had a different specification from that of the other railway companies. When locomotives were wanted tenders were placed before a large

791
number of private builders so that the railway company might find out whether they could place their orders to the best advantage in their own shops or among private locomotive firms. As a result of this great competition, before the war we manufactured by far the best locomotives in the world. We had no standardisation as they had in America, and I do not suggest that we produced cheaper locomotives, but they were better constructed and would stand more wear and tear than any others.
It would be most unfortunate, I think, if, under a system of grouping, the railways were to place one great engineer in the position of establishing works at a particular centre, which not only produced locomotives exclusively for his own group of railways, but, by means of standardisation, might kill the whole of the competition which has been so beneficial in the past and at the same time produce locomotives for the other groups of railways. It seems to me that Lord Bledisloe's Amendment meets the position. It has to be proved by investigation through a Committee that it is to the advantage of the public that the locomotives can be produced at a reasonable cost.
The noble Earl alluded to the impossibility of ascertaining what the costs are. We have had recent experience in the coal industry, where the variety in ascertaining the costs is very much more complicated than can be the case with locomotives, and I am satisfied that ordinary accountants would very accurately and readily ascertain what the costs of building locomotives in a private yard would be. If a case was made out in the interests of the public against the wholesale construction of locomotives by a group of railways to the prejudice of private enterprise, the Committee would interfere and justice would be done.
LORD JOICEY: I cannot understand why it should be supposed that the grouping of the railways will end in the practical destruction of the private building of locomotives and wagons: It would be a monstrous thing to put serious obligations on the railway companies to supply the needs of the public and then prevent them from supplying themselves with the plant which is absolutely necessary to carry out those obligations. I have had some experience of dealing with this question, and I must say that if we had depended upon the private builders during
792
the last five or six years we could not have carried half the traffic we were obliged to carry during the war. There were times when we tried to get tenders for locomotives and wagons. We could not get tenders from the private builder. In the few cases in which we did get a tender the price quoted was so enormous that placing orders with private builders was quite out of the question.
I feel quite sure that it would be a great mistake, in the public interest, to interfere with the manufacture of locomotives and wagons which the railway companies require for themselves, and I am glad to hear, from the full explanation of the noble Earl, who is always so lucid, that it is not his intention to accept this Amendment. I have not the fear that many noble Lords seem to entertain, that industries are likely to be destroyed. Railway companies live upon private manufacturers. They get their traffic from them and they get their profit from them not only by means of the transport of the goods they manufacture, but from the travelling of their employees on the railways. The last thing that railway companies wish to do is to destroy private enterprise amongst their best customers. I am quite sure that the alarm which has been created among many of these private builders that they are likely to suffer from the grouping of railway companies leading to the companies making their own wagons and locomotives, is groundless.
LORD STUART OF WORTLEY: I do not know whether my noble friend, Lord Bledisloe, or my noble friend, Lord Ampthill, reflects how much too much they have proved. Their argument, if it is good for anything, is good to establish that there ought not to be any railway factories at all. I am not quite sure it does not go so far as to prove that there ought not to be any standardisation. I would ask your Lordships to reflect how it has come about that there are any factories for locomotives and wagons conducted by the railway companies themselves. What is the fundamental, radical and initial distinction between a railway company and any other kind of trader? After all, a railway company is nothing but a trader. The distinction is this: that the railway company is obliged to continue its industry. Even whether it pays or does not pay, it is under an obligation to continue to serve the public. It

793
appears to be the case that anybody may indulge in any kind of imputations and insinuations against a railway company at any time. It is unnecessary for my purpose to indulge in anything of the kind, but I ask your Lordships to reflect upon what are the necessary implications and consequences which result from the fact that the railway company is placed in such a position that it is obliged to get the stuff from somewhere or it cannot discharge its statutory obligations.
Here is a Bill which proposes grouping and suggests that standardisation should be required as between the groups in the future, in the public interest. What is that certain to result in? The group will probably result in the concentration into some small number of factories of a great number of factories. That would be economical. The result will be that there will probably be less to do in some of the other railway factories than those factories are capable of doing. Here comes along standardisation. It is very likely to produce the necessary amount of employment for those half-employed factories which it is desirable should not be scrapped and should not become totally unemployed. I submit that it is undesirable that not only the process of standardisation should be made difficult, but that it would be attended with undesirable consequences, I submit, would necessarily be the result of the acceptance of this scheme of Amendments.
LORD EMMOTT: Might I just ask a question about this Amendment? The clause is all governed, I think, by the £ 100,000 limit. Expenditure under this clause cannot be more than £ 100,000 on any particular scheme, and that amount would not go very far to-day in locomotive work. Would it be possible to put down new large works under schemes under this clause, and if so, what are the opportunites for objection on the part of anybody interested?
THE EARL OF LYTTON: I think the noble Lord is right about the over-riding conditions which apply to the whole clause. I am not clear what it was that he asked me.
LORD
EMMOTT: My question is, whether new large works could be put down under this clause, and if so, would anybody interested have the power of raising objec-
794
tions and putting their case before the Tribunal or Committee?
THE EARL OF LYTTON: I do not think any large new works could be established. What is contemplated under this clause is that the works of one railway company may be used to supply the needs of another railway company. I am informed I have made a mistake in telling the noble Lord that the £100,000 limit applies to subsection (2). It only applies to subsection (1), and therefore the £100,000 limit would not apply to the matters (a) and (b) in subsection (2). What I say is contemplated under this Bill is that when two railway companies have amalgamated, the wagon building activities of one company may be used for the interests of another company not engaged in building wagons themselves, and by that system of co-operative working it will make the wagon building done by the railway companies themselves go very much further than it does at the present moment, where it is limited to the company which manufactures the stock.
LORD AMPTHILL: My noble friend and I have been misunderstood and misrepresented to a really ludicrous extent. Noble Lords, if they will forgive my saying so, have talked as if it was our wish and as if it was the effect of the Amendment we put down to prohibit railway companies from manufacturing themselves. There is nothing of that kind here. All we suggest is that that matter should be submitted to this Committee which the Bill sets up, and if that Committee says it is cheaper to go to private contractors, then the Minister of Transport and the railway companies, which have a staff of very ambitious engineers, should not be allowed to go into any grandiose scheme which will cause higher railway fares and higher transport rates to be charged to the general public. That is the whole of our object, and you will find nothing else in these words. I think the facile verbosity of the noble Earl was entirely beside the point, and, to be quite frank, I wondered where he got his proof from, because apparently when this debate opened he was unacquainted with this question.
I will go a step further. This morning we were on the verge of agreement with the Department. I put it down to the grandiose ambitions of the Minister himself that an obstacle is being put to this very necessary and harmless little Amend-

795
meat, which is a safeguard for the general public and for a very important industry. The noble Earl attributed to me arguments I did not use, and he also drew entirely imaginary distinctions between the Amendments suggested by my noble friend, Lord Bledisloe, and myself, when these Amendments are absolutely verbally identical, except for three entirely unimportant words which I am quite ready to leave out. He drew a distinction as though we were proposing different things. The burden of his argument was a suggestion that the manufacture of rolling stock would interfere with the common user of rolling stock. Why on earth should any such notion enter their heads?
He went on to alarm your Lordships by suggesting every kind of inconvenience and delay would arise if the Committee had to go deeply into the whole question. Of course, the Committee have to do that anyhow in these schemes, unless the companies are all agreed. Why should they not do it in every case, more particularly when it is in the interests of the general public. The new subsection we are proposing refers only to construction. The noble Earl talked as if it was a proposal to deprive railway companies of all the powers they might get under the scheme. It

CONTENTS.

Birkenhead, V. (L. Chancellor.)

Chilston, V.

Emmott, L.

Churchill, V.

Faringdon, L.

Goschen, V.

Gisborough, L.

Grey of Fallodon, V.

Glenarthur, L.

Sutherland, D.

Hood, V.

Gorell, L.

Hutchinson, V. (E. Donoughmore.)

Hamilton of Dalzell, L.

Ailsa, M.

Harris, L.

Bath, M.

Peel, V.

Hylton, L.

Crewe, M.

Joicey, L.

Linlithgow, M.

Killanin, L.

Ailwyn, L.

Kintore, L. (E. Kintore.)

Annesley, L. (V. Valenlia.)

Knaresborough, L.

Ancaster, E.

Balinhard, L. (E. Southesk.)

Merthyr, L.

Bradford, E.

Charnwood, L.

Redesdale, L.

Chesterfield, E.

Clinton, L.

Sandys, L.

Clarendon, E.

Clwyd, L.

Saye and Sele, L.

Doncaster, E. (D. Buccleuch and Queensberry.)

Colebrooke, L.

Somerleyton, L. [Teller.]

Cottesloe, L.

Southwark, L.

Lucan, E.

Decies, L.

Stanmore, L. [Teller.]

Lytton, E.

Ebury, L.

Stuart of Wortley, L.

Malmesbury, E.

Elgin, L. (E. Elgin and Kincardine.)

Weir, L.

Onslow, E.

Wigan, L. (E. Crawford.)

NON-CONTENTS.

Salisbury, M.

Selborne, E.

Montagu of Beaulieu, L.

Ampthill, L. [Teller.]

Nunburnholme, L.

Grey, E.

Askwith, L.

Strachie, L.

Mayo E.

Bledisloe, L. [Teller.]

Sumner, L.

Midleton, E.

Gainford, L.

Terrington, L.

Resolved in the affirmative, and Amendment disagreed to accordingly.
THE MARQUESS OF SALISBURY: I wonder whether the Government would
796
is nothing of the kind. It only says that the companies are not to have any grandiose schemes for manufacturing locomotives and rolling stock if the Tribunal can prove that it would be cheaper to give it to private enterprise. I hope your Lordships will not be misled, but will support my noble friend and me in these Amendments.
VISCOUNT CHURCHILL: The noble Lord who has just sat down apparently contemplates that railway directors in the future will not be imbued with the ordinary common sense of business men. Is it likely that they will place orders for locomotives and rolling stock in the dearest markets simply for the purpose of spiting private firms? They will buy their rolling stock in the cheapest quarter. And as to prices, I have had considerable experience in placing orders for locomotives in outside firms, and I will guarantee that at our Swindon works we can build them 40 to 50 per cent. cheaper.
On Question, Whether the proviso proposed to be left out shall stand part of the Clause?
Their Lordships divided: Contents, 55; Non-Contents, 14.
indicate how far they intend to go to-night? It is not that I desire unduly to shorten the proceedings, but it would be for the convenience of noble Lords, I understand, if they knew about to what point

797
the Government proposes to go, so that they may know if their Amendments are likely to come en.
THE EARL OF LYTTON: There are a great many Amendments on the Paper but I do not think that they will take so much time as might appear. Practically the whole of my Amendments, which bulk very largely on the Paper, are drafting. Again, all the Amendments standing in the name of the noble Lord, Lord Parmoor, will not be moved, because he is not here. I very much hope that we shall be able to finish to night.
THE EARL OF MAYO THE EARL OF MAYO moved, at the end of the clause, to insert the following new subsection:—
" Any railway company or railway companies owning or running solely for their advantage, any passenger or cargo boats carrying passengers daily, or at regularly advertised intervals, shall be deemed to be governed by and included in this section."
The noble Earl said: On a previous occasion I alluded to the monopoly which the London and North Western Railway Company have from Chester to Holyhead. They have now a monopoly for their steamboats and have the mail contract from Holyhead to Chester and vice versa. This new subsection, which I am proposing to insert, not only covers the monopoly of that particular railway company but also every other railway company, which runs steamboats of its own. It reads as follows:
" Any railway company or railway companies owning or running solely for their advantage, any passenger or cargo boats carrying passengers daily, or at regularly advertised intervals, shall be deemed to be governed by and included in this section."
I put in"at regularly advertised intervals"because it sometimes happens that cargo boats carry passengers, although they are not looked upon as regular passenger steamers.
The clause provides that any body of persons, including traders, can go to the Railway and Canal Commission and get their grievances attended to, and I should like also that the grievances of persons and local bodies and traders, and especially passengers, should be attended to, when a railway company has a monopoly of running certain steamboats over certain routes, at regularly advertised intervals. That does not interfere with the principle of the Bill, and I do not know whether it interferes with the Merchant Shipping Acts, If it
798
does, I hope the noble Earl— the subsection has been drafted by myself without legal assistance, and it is plain English— will allow it to be brought up on Report in a form approved by the draftsman of the Bill.
Amendment moved—
Page 20, line 34, at end insert the said new subsection— (The Earl of Mayo.)
THE EARL OF LYTTON: I do not want to quarrel with the drafting of the Amendment, although I am bound to say I do not think it is drafted very skilfully, because the noble Earl says it applies to any railway owning or running passenger steamers, and the clause refers to all railway companies, whether running steamers or not. Any railway company running passenger and cargo boats, in so far as it is a railway company is affected by the clauses of this Bill in respect of the matters with which this Bill deals— namely, the provision of reasonable railway services, facilities and conveniences. It would not apply to the boats run by the company nor would it if the Amendment were accepted. In so far as the railway services of the companies are concerned, the insertion of this Amendment would have no effect whatever. I am afraid the insertion of these words would simply make nonsense.
THE EARL OF MAYO: If my subsection is made so that it is not nonsense will you allow it to be brought up on Report, because what I want to get at is that these railway companies which run certain boats and get a monopoly should come under the provisions of this Bill.
THE EARL OF LYTTON: They are under it.
THE EARL OF MAYO: Are their steamboats under it?
THE EARL OF LYTTON: The London and North Western Railway Company, to which the noble Earl is constantly referring, is under this Bill. It is subject to the provisions of this clause now.
THE EARL OF MAYO: Their steamboats are?
THE EARL OF LYTTON: The steamboats are not, any more than they would be under the noble Earl's Amendment. I would point out to the noble Earl that the steamboats of the company are in a different position. They have no monopoly. There is nothing to prevent any company

799
at this moment from running a service of boats in competition with the London and North Western Railway; but in respect to railway facilities, which are the monopoly of the railway, that company is under the Bill at the present moment.
THE EARL OF MAYO: It is impossible to run competitive steamboats between Holyhead and Kingstown. It is a question of the contract for the mails. The boats that have not got the contract for the mails cannot run without the subsidy granted by the Government for the mails. But, of course, it is no use my persisting with the Amendment.
Amendment, by leave, withdrawn.
LORD ASKWITH LORD ASKWITH moved to leave out Clause 15. The noble Lord said: The noble Earl, in moving the Second Reading of this Bill, said lie did not desire to upset the balance of compromise arrived at by certain parties, but I can imagine no clause in this Bill more likely to interfere with any balance, including a bank balance. The clause commences with a statement that it is introduced with a view of securing and promoting the public safety, although under the services, facilities and conveniences that are supposed to be afforded, including alterations, extensions and improvements of existing works, there does not seem much chance of the public safety being improved; and, in fact, there are at the present time a good many methods of ensuring the public safety. But the real point is that the railway companies can at any time be required to spend £ 100,000, the only answer being (which a railway company would undoubtedly make, and which would be rather a difficult thing to prove) that the interests of the then existing stockholders would be prejudicially affected. That is the first part of this clause.
The second part seems to be a remnant of the desire to control the railways and to have still greater interference with the course of trade, or with the co-operation with which the railways are now, instead of competition, supposed to be carrying on their business. The Minister who, on this occasion, has to be advised by a Committee, under subsection (3) may, if the Committee so suggest, do all kinds of acts of interference with what the railway companies are about. He may ask them to conform gradually to measures
800
of general standardisation of ways, plant, and equipment, including methods of electrical operation, type, frequency, and pressure of current; and he may also ask them to adopt a scheme for the cooperative working or common user of rolling-stock, workshops, manufactories, and other facilities. I can scarcely imagine greater interference with the smooth working of business, or a greater upsetting of any plans that the railway companies might have made, either by themselves or in conjunction with others, for the smooth carrying on of their business, and for that co-operation which has been so much extolled.
I do not find in any of the Amendments suggested any panacea for this kind of interference. It rather looks as though this clause would lead to a great deal of litigation, and that it would probably lead to a great deal more expense than is thought. There is the possibility of £ 100,000 being added to estimates for building and other works at different times, estimates which we know are most liable to be extremely unlikely to be realised in fact as estimates of the ultimate cost arrived at, and very heavy expenses may be brought upon the railway companies, in consequence. I beg to move.
Amendment moved—
Leave out Clause 15 —(Lord Askwith.)
THE EARL OF LYTTON: I find it very difficult to take this Amendment seriously, because the noble Lord is asking the House to strike out the one clause which gives to the traders and users of railways the benefits of the Bill. I mentioned to your Lordships on the Second Reading that this Bill represented a balance of interests between the railway companies, the State and the traders or users of railways. This is the clause par excellence in the whole Bill where the benefits to the traders are conferred, and the noble Lord proposed that it should be struck out; that we should leave all the evils, such as they are, of the limited monopoly system which is set up by the Bill and should take away the one clause which helps to mitigate those evils and provide some advantages to the public.
The interests of the public in the railways are twofold. First, the provision of adequate services and facilities. Under this clause the public are given for the first

801
time, a right of appeal to the Railway and Canal Commission to compel the companies, who are now so much stronger by reason of amalgamation, to give reasonable facilities and services. If this clause were struck out that would go. The next interest of the public is in the reduction of the present excessive railway rates and fares. The only thing which can, in time, reduce the present high rates and fares on the railways is the carrying out of economies which, under the later provisions of this clause, it is hoped could take place. Only by this co-operative method and by the common user of railway stock and so forth, cart these rates be reduced in future. The noble Lord says that all that is to go. I spoke of this clause on the Second Reading as the charter of the trader. And so it is. I cannot really believe that at this stage your Lordships would seriously consider the proposal to take tills clause out of the Bill.
LORD NUNBURNHOLME: I hope the noble Lord will press his Amendment. The conclusion I have drawn, after listening to this debate, is that the only benefit the general public will get out of this Bill is the sliding scale of wages to which the men's representatives have agreed. All the so-called economies due to grouping I believe to be more or less fallacious. There is nothing in them. When we get back to lower wages and cheaper coal the railway companies will be able to stimulate trade and reduce rates.
On Question, Amendment negatived.
Clause 15, as amended, agreed to.
Clause 16:
Power to snake orders as to acquisition of land, &c.
16. For enabling railway companies to effect alterations, extensions, and improvements of existing works in pursuance of an order of the Railway and Canal Commission or the Minister under this Part of this Act the Minister may make any such order authorising the acquisition of land or easements and the construction of works as could have been made under paragraph (d) of subsection (1) of section three of the Ministry of Transport Act, 1919, for the purposes specified in that paragraph, and that paragraph and section twenty-nine of the same Act, and the rules made under that section, and the regulations contained in the Second Schedule to the same Act shall, so far as they relate to railways, apply accordingly.
LORD BLEDISLOE LORD BLEDISLOE had an Amendment on the Paper to leave out"or the Minister." The noble Lord said: If I were to move
802
the Amendment 1 am bound to raise the. whole of the questions which are raised by Clause 16 as a whole. I think it would be better done on the Amendment of my noble friend, Lord Emmott Therefore, I do not move my Amendment.
LORD EMMOTT LORD EMMOTT had given notice to move, after"Act," where that word secondly occurs, to insert"other than the proviso in subsection (3) of that section"and, at the end of the clause to insert:"subject to the substitution of the following Regulation for Regulation No. 1 (4) in the said Second Schedule (namely):
"4. Where the Minister does not amend or withdraw a draft to which any objection has been made, then (unless the objection either is withdrawn or appears to him to be frivolous) he shall before making the order direct an inquiry to be held in the manner hereinafter provided and may, after considering the report of the person who held the inquiry, make the order either without modification or subject to such modification as he may think fit or may refuse to make the order. On the making of an order, notice shall be given to all persons affected who.may have appeared at the inquiry (if any), and if any of such persons within four weeks from the date of such notice as aforesaid give notice in writing to the Minister that he objects to the older and the objection is not withdrawn, or if, for any reason, the Minister thinks it desirable, the order shall be provisional only, and shall not have effect sinless and until confirmed by Parliament, but in any other case shall have effect when made by the Minister as if the same had been confirmed by Parliament".
The noble Lord sad: We have had a considerable discussion on Clause 15 under which the Railway and Canal Commissioners are empowered, by Order, to require the railway companies to confer reasonable railway facilities and conveniences, and the Minister of Transport is empowered to authorise a railway company to afford such services. Clause 16 provides that for the purpose of enabling a railway company to effect these alterations, extensions, and improvements, and in pursuance of an order either of the Railway and Canal Com omission or of the Minister of Transport, the latter may make a further Order authorising the compulsory acquisition of land and easements, and the construction of works. If the clause were struck out these powers could only be secured, I understand, by Private Act of Parliament, as was the case before the war. The object that I have in the Amendments that I have put down— I will differentiate between them in a moment— is to retain Parliamentary control so far as that is practicable and reasonable.
The Association of Municipal Corporations which asked me to move this Amend-

803
ment, are strongly of opinion that Clause 16 should be omitted, but I did not feel able to propose that Amendment because it seemed to me that sonic clause of that kind is required in order to implement what is contained in Clause 15. But the contention that they made to me was that under the schemes of amalgamation, where there will be only eight or nine large companies in the future, it will be very easy to produce omnibus Bills with a great many of these comparatively small proposals, and that such Bills ought to go before the Houses of Parliament. The objection to this clause as it stands is that the Minister is at once promoter and judge and that is what I want to try to avoid. I do not think there is adequate security that there will be an impartial hearing and decision. It will be difficult for the Minister who, after all, is mortal, when application is made for the subsequent Order for compulsory powers, to consider the matter impartially, and it is unlikely that, having authorised the improvements in the first place, he would be able to refuse to give the necessary compulsory powers.
Questions of great importance and complexity do sometimes arise in applications by railway companies and other bodies for compulsory powers for land and there are competing applications at times. The interest of local authorities is that the land applied for in a railway scheme may seriously interfere with sonic local proposal, such as a town planning scheme, and they may want to be heard. If they are opposing it is submitted that the proper tribunal to decide these questions is a Committee of Parliament. What I want to achieve is an appeal to Parliament when necessary. This principle is recognised in another Bill which I think is at this moment before your Lordships' House— The Water Undertakings (Modification of Charges) Bill. This Amendment, along with my second one, practically proceeds on the lines of the clause in the Water Undertakings (Modification of Charges) Bill. That Bill empowers the Minister of Health to alter the water rates and provides, if objection is taken to the Minister's Order, that the Order shall be provisional only, and shall not have effect unless confirmed by Parliament.
I am afraid it may be a little confusing to your Lordships, but I have put down three Amendments which are practically alternative. The reason was this. Yesterday, I was pretty busy on other matters,
804
and the first Amendment in my name on the Paper was suggested to me, I suppose I may say, from Government quarters as an alternative that might possibly be accepted. Personally, I prefer my second Amendment, and if it is to the convenience of the House I should prefer to move that. These alterations and extensions are governed by subsection (1) of clause 15, and they are subject to the £ 100,000 maximum. I think that is clear.
The one objection that could be stated to the Amendment which I have put down is really to the latter portion of it which reads—
" On the making of an order, notice shall be given to all persons affected who may have appeared at the inquiry (if any), and if any of such persons within four weeks from the date of such notice as aforesaid give notice in writing to the Minister that he objects to the order and the objection is not withdrawn, or if, for any reason, the Minister thinks it desirable, the order shall be provisional only, and shall not have effect unless and until confirmed by Parliament."
In the Water Undertakings (Modification of Charges) Bill, of which I have spoken, I think twenty water ratepayers have to object in order that the Order should be provisional. It may be said that my proposal is rather extreme, that the objection of one single person should be enough, and I would be glad to make it more reasonable if I saw any way of doing it, but I would point out that the expense of Parliamentary opposition is very great, and that any puerile opposition may at any time be mulcted by the imposition of costs on the objector. Therefore, although I should be glad to hear what the noble Earl has to say about it, I should like to move my second Amendment, namely, page 21, line 5, at the end insert the form of words which is on the Paper. I beg to move.
Amendment moved—
Page 2l, line 5, at end insert the said words.— (Lord Emmott.)
THE EARL OF LYTTON: Clause 16 which we have now reached. has to be taken together with Clause 15 which we have just passed. In Clause 15 it is laid down that in certain circumstances the Railway and Canal Commission may make an Order to the railway companies to carry out certain objects, and if the railway companies agree, the Minister may make an Order enabling them to carry out those matters. In Clause 16 it is provided that

805
where the acquisition of land is necessary in order that those things may be done, the Minister may, in certain circumstances, make an Order for the acquisition of such land. There are three Amendments on the pa per dealing with this question. One is an Amendment in the name of Lord Bledisloe, to leave out the whole clause. I would only mention in passing that the effect of doing that would be that, having given power to the Minister in Clause 15 to do certain things, there would be no power afterwards, if the acquisition of land was necessary, to provide the land for the purpose, and it would be necessary therefore to come to Parliament, which would mean a delay of about a year and a half or two years.
The other two Amendments are down in the name of my noble friend, Lord Emmott. The long one, which he is proposing to move, would have the effect of enabling any single person to require that the matter should come before Parliament. I am unable to accept either of the Amendments, but I should be willing to accept an alternative which I have suggested to Lord Emmott; and I briefly explain what its effect would be. Section 29 of the Ministry of Transport Act lays down that in the cake of any scheme which costs more than £ 1.000,000, before the land may be acquired the matter is to be referred to the Lord Chairman of this House and the Chairman of Ways and Means in the House of Commons, who are to decide whether or not, in their opinion, it is a matter of such importance that it should come before Parliament. By an Amendment which I have suggested to Lord Emmott that limit of a million pounds is removed, and the effect of the Amendment would be that in every case where an Order is to be made the Minister must submit it to the Lord Chairman and the Chairman of Ways amid Means for their decision as to whether it was of such importance that it should come before Parliament. They would decide whether the land should be acquired on the Order of the Minister or whether it should first co me be fore Parliament.
THE EARL OF SELBORNE: What knowledge would they have of objections taken?
THE EARL OF LYTTON: They would have no knowledge of objections taken, but would consider whether the scheme
806
was of such magnitude as to justify submission to Parliament. When we discussed the Ministry of Transport Bill, Lord Emmott tried to obtain the procedure he is now moving. The Government was unable to meet him, and inserted the limit of £ 1,000,000. We are now proposing to remove that limit and say that in every case this procedure shall have effect.
There is a parallel for the procedure as it is in the Bill. Under the Light Railways Act, 1896, it is possible for the Light Railway Commissioners to make an Order, without any Parliamentary control, for the construction of a light railway, and in those cases it was a much bigger undertaking, and involved a larger expenditure of money than the schemes we are considering under Clause 16. The proposal I am now offering is one which would give all necessary safeguarding of public interest, and prevent serious and unnecessary delays in cases where submission to Parliament is really unnecessary.
LORD BLEDISLOE: May I remind your Lordships that the Act to which the noble Earl has just referred is specifically described as a measure of temporary application only, and, in fact, in the very clause to which lie has referred, these words appear—
" With a view to affording time for the consideration and formulation of the policy to be pursued as to the future position of undertakings to which this section applies, the following provisions shall have effect for a period of two years after the passing of this Act."
It is clear that than machinery was not intended to be permanent. When one comes to examine the value of this concession which the noble Earl offers, I think one is entitled to ask as to the justice of this provision from the standpoint not only of the railway companies but also of those whose interests might be seriously prejudiced by this compulsory acquisition of land on the ipse dixit of Minister. As Lord Emmott has said, he is both the promoter and the judge in these matters.
The value of this so-called concession depends entirely upon whether the Chairman of Committees in this House and the Chairman of Ways and Means in another place are prepared to say that the proposals of the draft Order are of such a character or magnitude that they ought not to be proceeded with without the authority of Parliament. They may be of very serious magnitude as regards the interests of the

807
unfortunate owners of land who are going to be displaced for the purposes of the railway companies, not necessarily in the national interests. That may be a very serious matter to the individual whose land is to be compulsorily acquired. To the railway company the cost may be less than £ 1,000,000, but it may be considered of such a character or magnitude that the transaction cannot be proceeded with without the authority of Parliament, by a provisional Order which has later to be embodied in an Act of Parliament. There is no procedure laid down in this Bill or in that to which reference is made in this clause which affords any adequate protection, according to our old ideas, to any one whose property may adjoin the railway company's undertaking which may be required by the company and admitted by the Minister to be suitable for the purpose.
Lord Emmott has asked what sort of Tribunal can be found to whom an appeal can be made against the Minister. I do not know what can be found unless your Lordships are prepared to accept the Tribunal which, for other purposes, the Government are prepared to set up in connection with the Ministry of Health. There is the panel of arbitrators, as Lord Emmott has pointed out, set up under the Acquisition of Land Act, 1919. It may he said that their function is not to authorise the acquisition of land but to estimate the value of the land acquired. Then again, there arc the panels set up on the nomination of the Lord Chief Justice for the purpose of Part II of the Agriculture Act, that part of the great scheme of agricultural policy which is not yet scrapped. The suggestion has been made that the Development Commissioners might be a suitable tribunal, but that would be going somewhat outside their sphere, nor could they be considered a judicial body Unless the Government can find some independent judicial person to give a final decision on these very difficult and delicate questions of the acquisition of land, I hope your Lordships will be satisfied in maintaining the old procedure and in insisting upon a. private Bill being passed through both Houses of Parliament, in order to avoid serious injustice being perpetrated under the ipse dixit of this formidable Minister.
THE EARL OF LYTTON: I would like to make one explanation in, reply to the question put by Lord Selborne. He asked
808
what means the two Chairmen of both Houses of Parliament would have of hearing objections that might be raised by landowners and others. I told him it was sometime since we had discussed this matter on the Ministry of Transport Act. Since then I have refreshed my memory and I find that before any Order can be made for the acquisition of land a public Inquiry has to he held at which all objections may be made, and all that information— the result of the public Inquiry and the objections so heard— would, of course, be supplied to the two Chairmen, who would consider it before coming to a decision as to whether, in their opinion, the Order of the Minister should be sufficient or the matter referred to Parliament. There is one more question with which I think I should deal. The noble Lord who spoke last referred to the provision in the Ministry of Transport. Act as a temporary provision. It is temporary in that Act, but the machinery as applied in this Act is a permanency.
THE EARL OF SELBORNE: if my memory serves me aright, the particular provision to which allusion has been made was accepted by this House expressly on the stipulation that it should be a temporary provision during a transition period, and I think the exact date on which that temporary power expired was August 15, 1921. On the very next day, the Goverment come down to us with a proposal to make permanent these inflated powers of a Minister. I quite agree that the suggestion which my noble friend has just made is very different to the one embodied in the Bill. It is not easy when one has an Amendment presented even with the extreme lucidity, ability and grace of my noble friend, to grasp its bearing, especially when there is legislation by reference to the provisions of the Transport Act, and therefore I speak subject to that reservation. But the position, as embodied in the Bill, is simply a proposal to give to a Minister power absolutely unheard of in our Parliamentary history— namely, that a minister, having in 'one capacity approved of a certain policy, in another capacity has power to insist that the land necessary for carrying out that policy shall be acquired by the railway company.
That, however well in time of war, however tolerable in a transition period, after war is intolerable as a permanent

809
system. What does my noble friend suggest? In the first place, he objects to the Amendment on the ground that might give opportunity for a certain individual to bring the provisions of my noble friend's Amendment into force. I admit that is an objection to an evil which I prefer to the evil of the inflated power of the Minister; and it must be remembered that my noble friend is bringing forward his Amendment on behalf of no less a body than the Association of Municipal Corporations of the United Kingdom. My noble friend propose very much to clip the wings of the Minister— I admit that — because he proposes to introduce my noble friend the Chairman of Committees and his"opposite number"in the House of Commons. We have an cnormous respect for their judgment, and impartiality. But I interpolated the question:"What will they know of the rights of the question?" My noble friend's first answer was that they would know nothing of the rights of the question; they would only be in a position to give;in abstract opinion as to whether the scheme wits, on the face of it, so large or so important that obviously even a. modern Coalition Minister ought not to have the power to deal with that proposition. But, on consultation with these admirable sources of information which are always at our disposal when we sit 0,l tit Treasury Bench, he tell me that the public inquiry would have taken place, and the results of that, would be put before my noble friend and his colleagues.
I think that is a. very important fact and makes the proposition of my noble friend certainly more palatable than it was to me at the first taste. But I confess, as at present advised, and subject to further elucidation of this problem, I prefer the simple plan of my noble friend, Lord Emmott, by which the objectors do not require any fresh power. Pray, remember, that there is no question of the acquisition of fresh power by the party interested, but they retain the present power of having these matters dealt with under Provisional Order by Parliament. That is the old constitutional plan. And, remembering what Lord Emmott has said— how severely anybody is sure to be mulcted who may make an unreasonable objection— I should have thought that on the whole that was the safer course.
THE EARL OF LYTTON: The noble Earl
810
referred to this power given under the Bill as a wholly new and unprecedented one in Parliamentary history. I have referred already to the powers possessed by the Light Railway Commissioners in respect of the Orders for the construction of light railways and the acquisition of land for that purpose.
THE EARL OF SELBORNE: Not the Minister.
THE EARL OF LYITON: No, but there is a parallel even for the Minister, because the powers conferred in this Bill on the Minister of Transport are precisely the same as the powers conferred on the Minister under the Small Holdings Act, where the Minister of Agriculture first decides that a small holding has to be created, and then authorises the acquisition of land, compulsorily if necessary, for the purposes of such small holding. 'Therefore, it is not really true to say that this power is something inherent in the vice of a Coalition Government, or the present Minister of Transport.
Having said that, I have only one word to say to Lord Emmott on procedure. The Amendment I am prepared to accept stands first on the Paper, and there are two alternatives, open to him. One is to move the first Amendment, which I should agree to, and then to challenge me on the second Amendment, and, if he can get the House to agree with him on that, strike out the first Amendment on Report. The other alternative would be not to move his; first Amendment, but, if he is beaten upon the second Amendment, then to bring up on the Report stage f le Amendment which is first on the Paper, to which I should be willing to agree.
THE MARQUESS OF SALISBURY: I have not the memory of my noble friend opposite, and I confess I have completely forgotten the text of what at that time was the celebrated Clause 28, which we discussed at great length, but I have been trying to refresh my memory, and it is perfectly clear that the phraseology of that provision not only said in express terms that it only applied to operations of very large magnitude, but in its very essence it evidently is only apt for matters of very large magnitude; because the governing words are these—
"If either such chairman reports to the Minister that he is of opinion that the proposals

811
of the draft order are of such character or magnitude that they ought not to be proceeded with without the authority of Parliament "—
then the Provisional Order procedure is substituted
The governing words are"character"and"magnitude." We may strike out"magnitude"for the purpose of this discussion, because we are now applying our minds to the compulsory acquisition of small parcels of land belonging to individual landowners.
LORD BLEDISLOE: Or corporations.
THE MARQUESS OF SALISBURY: Or corporations. So that it is only a question of character. The undertakings evidently in the minds of those who drafted this section of the Ministry of Transport Act were great undertakings involving very large interests and matters of a very special character, a character which anybody would admit to be of, perhaps, national importance. That is the kind of import which the word"character"has. When you are dealing with small parcels of land in all parts of the country, how is the Chairman— even so able a man as the Lord Chairman of this House, or the Chairman of Ways and Means— to apply the word"character"to the acquisition of a small parcel of land? One parcel of land will not be distinguishable in character from another. It will be a question of evidence as to whether a particular parcel ought to be acquired or not; not a question of character, but of the specific conditions applying to the particular parcel. So that when the Lord Chairman or the Chairman of Ways and Means gets this Act of Parliament in his hand, he will say:"I cannot apply this word character; it is not apt. It was evidently put upon the Statute Book originally for a totally different reason." That is, in fact, the case; because it was put upon the Statute Book in order to apply to those undertakings about £ 1,000,000 in value. Indeed, that was the limit in the Act below which it would not apply at all.
Therefore, I think my noble friend will find when he comes to consider it that it is a botched piece of work, if I may use so uncivil a phrase, to take a section of the Ministry of Transport Act which has words in it which are not intended to apply to individual cases, and throw it bodily into this Bill, where it is a stranger and will be very difficult to construe. I think my noble friend Lord Emmott should insist upon his Amendment, and if the House is
812
with him, put it into the Bill. Then, if between now and the Report stage, the noble Earl is able to show him that by some modification of the word"character"or by some mending or tinkering of the Transport Act he can make it apt, my noble friend may accept the change. But I cannot believe that the noble Earl or the Government would be satisfied with the alternative they have suggested.
THE MARQUESS OF CREWE: I confess I am not entirely convinced by the very ingenious estimate which the noble Marquees behind me has just set forth with regard to the use of the word"character"in the Transport Act. It seems to a plain person that its meaning is not obscure. Assuming that the Lord Chairman and the Chairman of Committees in another place are called upon to consider the results of the inquiry that has been made about a parcel of land which it is desired to take for railway purposes, they would first consider whether the magnitude of the scheme was such as to make it necessary to bring it before Parliament. If it is proposed to take the land of a single individual for a particular purpose the question of magnitude I think might very easily arise. It might mean a very large proportion of the estate of one person.
But I should think that the word"character," on the other hand, is very simple of construction— that is to say that supposing the land designed to be taken obviously brought about such destruction of the amenities of a dwelling-house, or otherwise meant the destruction of a particularly small property as a place of residence, the Lord Chairman and his colleague would presumably decide that that was a case which ought to be brought before Parliament. I do not desire to attempt a comparison between the merits of the proposal most favoured by the noble Lord opposite, Lord Emmott, and that which the noble Earl is willing to accept, but I confess I cannot see that the objections that have been raised from this side of the House to the latter are of the supremely convincing kind which the noble Marquess behind me has attempted to indicate. So far as I am concerned I should be quite prepared to agree to the suggestion of the noble Earl opposite.
LORD STUART OF WORTLEY: The situation is difficult. It might be described as humorous, if it were not so very serious when we consider the interests at stake.

813
The railway companies, who are the objects of all this procedure, are naturally not in love with Clause 15, which subjects them to internal interference with the conduct of their business and possibly to incurring very large expense in the interest no doubt of the public, but, for the purposes of the argument, against the companies' will. Then we have Clause 16. It is a clause which purports to give them the power to execute the orders which have been made upon them to grant the facilities demanded by the public. Then comes my noble friend, Lord Bledisloe, with Amendments saying that this is going to involve the taking of land compulsorily from private owners.
The fact is that we are arguing all these necessary precautions and inquiries at too late a stage. They ought to have been suggested as part of the inquiry as to whether the facilities sought should have been granted. It ought to have been gone into then. The facilities, when asked for, could very easily have been shown to require the acquisition of land. It is at that stage that you ought to give a locus standi to owners to say,"I do not want you to take my beautiful lands." It is at that stage a decision ought to be given, either for or against him. I described this situation as humorous. What I mean is that the railway companies in this matter are between the deep sea and something else. For that reason, they are not in love with this procedure, but in other directions they have got charging powers and certain advantages, and they are loyally bound to support the Minister in inflicting upon them the things which the companies are asked to suffer in the interest of the public, in consideration of the advantages they have got in other directions.
It is suggested that this acquisition of land should take place always and invariably with all the full procedure of recourse to Westminster and all the hearings and inquiries which are usual before Private Bill Committees. The procedure which the noble Earl in charge of the Bill
suggests is a precedent which is much older than the Ministry of Transport Act. I refer to the Scottish Private Bill Procedure Act in which the two Chairmen of the two Houses are charged with a duty which, I believe, is expressed in words almost, if not quite, identical with those which are proposed by the Amendment which the noble Earl has offered to my noble friend, Lord Emmott, who sits below the gangway. I thought it would comfort your Lordships to know that at least there is that amount of precedent, and it has been found to work extremely well in these Scottish cases. The question of magnitude and character is discussed by the two Chairmen who have before them the fruits of local inquiries and are amply able to discuss and decide the question whether the great expense should be incurred And in addition, of course, they hear the parties themselves.
LORD EMMOTT: The situation is really very difficult. One of the troubles we are under in regard to this Bill is in having to discuss it so hurriedly, and with so little time to go into all these matters. We really have to choose between leaving powers which are very extravagant to the Government, and, if my Amendment is accepted, making it possible for one or two people to force Parliamentary proceedings instead of taking an Order from the Minister. On the whole, we are going so fast towards bureaucracy in these matters that I think I ought to take the decision of the House on my Amendment. If the decision of the House is against this Amendment, I understand the noble Earl would not object, on Report, to the other alternative, and I am greatly in hopes that if this Amendment is accepted by the House, the Government draughtsman, or the noble Earl, or somebody, will find some way to avert the dangers which they think they see lurking in the latter portion of it, between now and the Report stage.
On Question, whether the proposed words shall be here inserted?
Their Lordships divided: Contents, 25; Not-Contents, 33.

NOT-CONTKNTS.

Birkenhead, V. (L. Chancellor.)

Lytton, E

Colebrooke, L.

Malmesbury, E.

Cottesloe, L.

Onslow, K.

Faringdon, L.

Sutherland, D.

Gorell, L.

Chilston, V.

Hylton, L.

Bath, M.

Churchill, V.

Killanin, L.

Crewe, M.

Grey of Fallodon, V.

Knaresborough, L.

Peel, V.

Merthyr, L.

Ancaster, E.

Somerleylon, L. [Teller.]

Bradford, E.

Abinger, L.

Stanmore, L. [Teller.]

Chesterfield, E.

Ailwyn, L.

Stuart of Wortley, L.

Clarendon, E.

Annesley, L. (V. Valentia.)

Weir, L.

Lucan, E.

Clwyd, L.

Wigan, L (E. Crawford.)

Resolved in the negative, and Amendment disagreed to accordingly.
THE MARQUESS OF SALISBURY: My Lords, I beg to move that the House do now resume.
THE. EARL OF LYTTON: I hope your Lordships will continue until we get to Clause 31. There are low no controversial matters until we reach that clause. I agree that at this stage it is undesirable to have any further controversy, and if we can clear off the Order Paper matters on which there is no controversy it would be helpful.
THE MARQUESS OF SALISBURY: I agree.
Motion, by leave, withdrawn.
Clause 16 agreed to.
Clauses 17 and 18 agreed to.
Clause 19:
Rates tribunal.
19 —(1) There shall be established a court styled the Railway Rates Tribunal (in this Act referred to as the"rates tribunal "), consisting of three permanent members, with power to add to their number as hereinafter provided, and the rates tribunal shall be a court of record and have an official seal which shall be judicially noticed, and the rates tribunal may act notwithstanding any vacancy in their number.
(5) Any person appointed a. permanent member of the rates tribunal under this Act shall, within three calendar months after his appointment, absolutely sell and dispose of any stock, share, debenture stock, debenture bond, or other security of any railway company in Great Britain or in any industrial or other company concerned with or interested in the carriage of traffic by rails by which he shall, at the time of his appointment. own or be interested in for his own benefit, and it shall not be lawful for any person appointed a permanent member of the rates tribunal under this Act, so long as he shall hold office as such permanent member, to purchase, take, or become interested in for his own benefit any such security as aforesaid, or if any such security or any interest
816
therein shall come to or vest in such permanent member by will or succession for his own benefit he shall, within three calendar months after the same shall so conic to or vest in him, absolutely sell and dispose of the same or his interest therein.
THE EARL OF LYTTON: The Amendments standing in my name to this clause are all purely drafting.
Amendments moved—
Page 23, line 4, leave out (" chairman ") and insert (" president ")
Page 23,line 17, after (" member ") insert (" for his own benefit.")
Page 23,lines 18 and 19, leave out (" for his own benefit ") —(The Earl of Lytton.)
On Question, Amendments agreed to.
LORD STUART OF WORTLEY LORD STUART OF WORTLEY moved to leave out subsection (5). The noble Lord said: The object of this Amendment is to do away with the requirement in the Bill which says that the members of this Amalgamation Tribunal, before they sit for the decision of cases, must get rid of—
" any stock, share, debenture stock, debenture bond, or other security of any railway company in Great Britain or in any industrial or other company concerned With or interested in the carriage of traffic by railways which he shall, at the time of his appointment, own or be interested in fur his own benefit."
My reasons for moving this Amendment are, first of all, that, as the Bill stands, it will greatly restrict the choice of men; and, in the second place, that there is no precedent for this course; it is not required of His Majesty's Judges or of Railway and Canal Commissioners. It would be extremely hard upon a man at this time, and it is difficult to forsee any time in which the condition of markets would not cause such very stringent requirements to be a serious obstacle.
Persons placed in judicial positions in this country are above the least suspicion of the kind, and I do not know why it should be considered necessary to retain this provision.
Amendment moved—
Page 23, lines 0 to 24, leave out subsection 5) — (Lord Stuart of Wortley.)
THE LORD CHAIRMAN: In order to safeguard the rights of Lord Lytton's Amendments I will put the Question that the first line of the subsection stand part.
THE EARL. OF LITTON: I am afraid I did not notice the noble Lord's Amendment when I said that I did not wish to take any question which was controversial. If he wishes to press it, and if the House wishes to discuss it, I will not ask your Lordships to continue the discussion on this stage. The effect of the Amendment would be to remove the clause which says that the members of this Tribunal must not be interested financially. You cannot fairly ask a man to settle rates when he is interested personally either in the rates or in the Company which is to charge them. I hope the noble Lord will not press his Amendment.
'THE MARQUESS OF CREWE: I cannot help thinking that there is more to be said for the proposition of the noble Lord behind me than the noble Earl opposite thinks. I think that in cases of this kind—
THE MARQUESS OF SALISBURY: Would it not be best for the House to resume?
THE MARQUESS OF CREWE: The noble Marquess behind me is extremely anxious that the House should be resumed, and I assume, therefore, that further discussion of this Amendment may be taken upon Report The Motion of the noble. Marquess that the House be resumed is, I take it; the Question now before us.
THE LORD CHAIRMAN: It was withdrawn.
THE MARQUESS OF SALISBURY: I beg your Lordships' pardon. I think the noble Earl has been most candid and courteous, but he said just now that if we reached controversial business he would consent to the further adjournment of the discussion. When I found that the noble Marquess the Leader of the Opposition was going to continue the discussion on this Amendment, I suggested that the proper course would be for the, House to resume.
THE EARL OF LYTTON: If the noble Lord is willing to withdraw his Amendment, it can be discussed on Report, but there are some uncontroversial matters of which we can get rid in a few minutes. If the noble Lord wishes to continue the discussion on the Committee stage, I would suggest that the House be resumed.
LORD STUART OF WORTLEY: The last thing I wish is to subject your Lordships to any long sitting or discomfort. This matter can be raised on Report, and if by leaving it until then we can make more progress, I am quite willing to fall in with that course, and to withdraw the Amendment.
Amendment, by leave, withdrawn
Clause 19, as amended, agreed to.
Clause 20 (Appoirtment of officers and expenses of tribunal).
LORD ASKWITH: I desire to ask a question as to whether it is intended that the permanent members of the Rates Tribunal are to be remunerated under this clause but not the members who May be drawn from the panel under Clause 23, subsection (4), and who are stated to be persons conversant with, and having knowledge of, technicalities that may arise in particular eases.
THE EARL OF LYTTON: The noble Lord is correct in his assumption as to the effect of the Bill. It is not an oversight; It has always been the intention.
LORD ASKWITH: They are not to be paid?
THE EARL OF LYTTON: That is so.
Clause 20 agreed to.
Clause 21:
Procedure.
21 —(1) The rates tribunal may from time to time, with the approval of the Lord Chancellor, the Lord President of the Court of Session, and the Minister, make general rules governing their procedure and practice and generally for carrying into effect their duties and powers under this Part of this Act, and such rules may, amongst other things, provide for—
(c) the constitution of local joint commit tees in such centres as the tribunal may determine:
(3) The rates tribunal shall annually make a report to the Minister of their proceedings under this Act.
THE EARL OF LYTTON THE EARL OF LYTTON moved to leave out paragraph (c) of subsection (1). The noble Earl said: This is a drafting Amendment.
Amendment moved—
Page 24, lines 21 and 22, leave out paragraph (c) —(The Earl of Lytton.)
On Question, Amendment agreed to.
THE EARL OF LYTTON THE EARL OF LYTTON moved at the end of the clause, to insert"which report shall be laid before Parliament." The noble Earl said: This provides that a report shall be laid before Parliament.
Amendment moved—
Page 25, line 2, after ("Act") insert ("which report shall be laid before Parliament."— (The Earl of Lytton.)
On Question, Amendment agreed to.
Clause 21, as amended, agreed to.
Clauses 22 to 26 agreed to.
Clause 27 (Functions of tribunal):
THE EARL OF LYTTON: My Amendments to this clause are drafting Amendments.
Amendments moved—
Page 27,1ine 33, at end insert the following new paragraph:
(" (i) the constitution of local joint committees and their functions and the centres at which they arc to be established ")
Page 27, line 33, at end insert the following new subsection:
(" (2) The powers of the rates tribunal under paragraphs (b) to (f) of this section shall not be exerciseable until the appointed day.") —(The Earl of Lytton.)
On Question, Amendments agreed to.
Clause 27, as amended, agreed to.
Clauses 28 to 30 agreed to.

BUSINESS OF THE HOUSE
THE FIRST COMMISSIONER OF WORKS (THE EARL OF CRAWFORD): On the Question that the House do resume I would suggest that this Bill should be put down as the first Order to-morrow. Noble Lords expected that the Corn Production Acts (Repeal) Bill Amendments would be the first Order, and accordingly have been
820
notified to be present at three o'clock. In those circumstances I think it would be desirable, if your Lordships agree, that we should meet a little earlier, and I suggest two o'clock, for the purpose of taking this Bill as the first Order. I do not -know how long it will take but I am told the Amendments remaining are not very formidable. The Amendments to the Corn Production Acts (Repeal) Bill are not very controversial.
THE MARQUESS OF CREWE: May I ask whether the Committee Stage of the Safeguarding of Industries Bill will be taken to-morrow?
THE EARL OF CRAWFORD: As the third Order
THE MARQUESS OF SALISBURY: When will the Report Stage of this Bill he taken?
THE EARL OF CRAWFORD: We had hoped to finish tonight, and take the Report Stage to-morrow. It will he remembered that the interval between the Committee Stage and Report, as forecasted, had to be abandoned. It is hoped to take it at the earliest possible moment.
THE MARQUESS OF SALISBURY: The noble Earl will note that there have been several matters of importance left over to Report Stage.

BISHOP'S STORTFORD HARLOW AND EPPING GAS ORDER.
LORD SOMERLEYTON LORD SOMERLEYTON rose to move, That the draft of a Special Order proposed to be made by the Board of Trade under Section 10 of the Gas Regulation Act, 1920, on the application of the Bishop's Stortford Harlow and Epping Gas and Electricity Company, which was presented on the 10th August (Cmd 1454), be approved. The noble Lord said: I beg to move the Resolution standing in my name. Nine Orders under this section having been already approved, thirteen others are now submitted for approval. There is no Amendment to any of them, except the last one, and that is a drafting one.
Moved accordingly and, on Question, Motion agreed to.

CHELMSFORD GAS ORDER
Moved, That the draft of a Special Order proposed to be made by the Board of Trade under Section 10 of the Gas Regulation Act, 1920, on the application of the Chelmsford Corporation, which was presented on the 10th August (Cmd. 1462), be approved —(Lord Somerleyton.)
On Question, Motion agreed to.

ELLAND-CUM-GREDHILL GAS ORDER
Moved, That the draft of a Special Order proposed to be made by the Board of Trade under Section 10 of the Gas Regulation Act, 1920, on the application of the Elland-Cum-Greetland Gas Company, which was presented on the 10th August (Cmd. -1465), be approved —(Lord Somerleyton.)
On Question, Motion agreed to.

HARWICH GAS ORDER.
Moved, that the draft of a Special Order proposed to be made by the Board of Trade under Section 10 of the Gas Regulation Act, 1920, on the application of the Harwich Gas and Coke Company, which was presented on the 9th August (Cmd. 1444), be approved —(Lord Somerleyton.)
On Question, Motion agreed to.

LEA BRIDGE GAS ORDER
Moved, that the draft of a Special Order Proposed to be made by the Board of Trade under Section 10 of the Gas Regulation Act, 1920, on the application of the Lea Bridge District Gas Company, which was Presented on the 9th August (Cmd. 1555), be approved —(Lord Somerleyton.)
On Question, Motion agreed to

NORTH MIDDLESEX GAS ORDER
Moved, That the draft of a Special Order proposed to be made by the Board of Trade under Section 10 of the Gas Regulation Act, 1920, on the application of the North Middlesex Gas Company, which was presented on the 10th August (Cmd. 1452), be approved — (Lord Somerleyton.)
On Question, Motion agreed to.

REDHILL GAS ORDER
Moved, That the draft of a Special Order proposed to be made by the Board of Trade under Section 10 of the Gas Regulation Act, 1920, on the application of the Redhill Gas Company, which was presented on the 10th August (Cmd. 14630), be approved —(Lord Somerleyton.)
On Question, Motion agreed to.

SALISBURY GAS ORDER
Moved, That the draft of a Special Order proposed to be made by the Board of Trade under Section 10 of the Gas Regulation Act, 1920, on the application of the Salisbury Gas Light and Coke Company, which was presented on the 3rd August (Cmd. 1443), be approved —(Lord Somerleyton.)
On Question, Motion agreed to.

SOUTHGATE AND DISTRICT GAS ORDER.
Moved, That the draft of a Special Order proposed to be made by the Board of Trade under Section 10 of the Gas Regulation Act, 1920, on the application of the Southgate and District Gas Company, which was presented on the 10th August (Cmd. 1453), be approved —(Lord Somerleyton.)
On Question, Motion agreed to.

TUNBRIDGE WELLS GAS ORDER
Moved, That the draft of a Special Order proposed to be made by the Board of Trade under Section 10 of the Gas Regulation Act, 1920, on the application of the Tunbridge Wells Gas Company, which was presented on the 2nd August (Cmd. 1439), be approved —(Lord Somerleyton.)
On Question, Motion agreed to.

WALKER AND WALLSEND UNION GAS ORDER.
Moved, That the draft of a Special Order proposed to be made by the Board of Trade under Section 10 of the Gas Regulation Act, 1920, on the application of the Walker and Wallsend Union Gas Company, which was presented on the 10th August (Cmd. 1464), be approved —(Lord Somerleyton.)
On Question, Motion agreed to.

WELWYN, KNEBWORT EH AND DISTRICT GAS ORDER
Moved, That the draft of a Special Order proposed to be made by the Board of Trade. under Section 10 of the Gas Regulation Act, 1920, on the application of the Welwyn, Knebworth and District Gas Company, Limited, which was presented on the 9th August (Cmd. 1449), be approved —(Lord Soinerleyton.)
On Question, Motion agreed to.

THURSTONLAND GAS ORDER
Moved, That the draft of a Special Order proposed to be made by the Board of Trade under Section 10 of the Gas Regulation Act, 1920, on the application of the Thurstonland Urban District Council, which was presented on the 11th August (Cmd. 1468), be approved, subject to the following Amendment—
Clause 10, subclause (2), at the beginning insert"Except as provided by Section 11 of this Order "—(Lord Somerleyton.)
On Question, Motion agreed to.

PANTEG ELECTRICITY SPECIAL ORDER 1921.
Moved, That the Special Order made by the Electricity Commissioners under the Electricity (Supply) Acts, 1882 to 1919, and confirmed by the Minister of Transport under Section 26 of the Electricity (Supply) Act. 1919, in respect of the Urban District of Panteg in the County of Monmouth, which was presented on the 12th;July (H.C. 167) be approved —(The Earl of Lytton.)
On Question, Motion agreed to.

ESTON ELECTRICITY SPECIAL ORDER 1921
Moved, That the Special Order made by the Electricity Commissioners under the Electricity (Supply) Acts, 1882 to 1919, and confirmed by the Minister of Transport under Section 26 of the Electricity (Supply) Act, 1919, in respect of the Urban District of Eston in the North Riding of the County of York, which was presented on the 12th July (H.C. 167-1), be approved —(The Earl of Lytton.)
On Question, Motion agreed to.

BEDWAS AND MACIIEN ELECTRICITY SPECIAL ORDER 1921
Moved, That the Special Order made by the Electricity Commissioners under the Electricity (Supply) Acts, 1882 to 1919, and confirmed by the Minister of Transport under Section 26 of the Electricity (Supply) Act, 1919, in respect of the Urban District of Bedwas and Machen, in the County of Monmouth, which was presented on the 12th July (H.C. 167-2), be approved —(The Earl of Lytton.)
On Question, Motion agreed to.

MYNYDDISLWYN ELECTRICITY SPECIAL ORDER 1921.
Moved, That the Special Order made by the Electricity Commissioners under the Electricity (Supply) Acts, 1882 to 1919, and confirmed by the Minister of Transport under Section 26 of the Electricity (Supply) Act, 1919, in respect of the Urban District Council of Mynyddislwyn in the County of Monmouth, which was presented on the 12th July (H.C. 167-3), be approved —(The Earl of Lytton.)
On Question, Motion agreed to.

RISCA ELECTRICITY SPECIAL ORDER 1921
Moved, That the Special Order made by the Electricity Commissioners under the Electricity (Supply) Acts, 1882 to 1919, and confirmed by the Minister of Transport under Section.26 of the Electricity (Supply) Act, 1919, in respect of the Urban District of Risca, in the County of Monmouth, which was presented on tilt? 12th July (H.C. 167-4), be approved —(The Earl of Lytton.)
On Question, Motion agreed to.

WEST HARTLEPOOL, (EXTENSION) ORDER 1921
Moved, That the Special Order made by the Electricity Commissioners under the Electricity (Supply) Act, 1882 to 1919, and confirmed by the Minister of Transport under Section 26 of the Electricity (Supply) Act, 1919, in respect of part of the Parish of Stranton, in the Rural District of Hartlepool, in the County of Durham, which was presented on the 12th July (WC. 167-5), be approved —(The Earl of Lytton.)
On Question, Motion agreed to.

GUILDFORD CORPORATION ELECTRICITY SPECIAL ORDER 1921
Moved, That the Special Order made by the Electricity Commissioners under the Electricity (Supply) Acts, 1882 to 1919, and confirmed by the Minister of Transport under Section 26 of the Electricity (Supply) Act, 1919, in respect of the Borough of Guildford, the Parishes of Arlington, Merrow, West Clandon, Worplesdon, and part of the Parish of Compton, in the Rural District of Guildford, and the Parishes of Shalford and St. Martha in the Rural District of Hambledon, in the County of Surrey, which was presented on the 12th July (H.C. 167-6), be approved —(The Earl of Lytton.)
On Question, Motion agreed to.

SCOTTISH BOARD OF HEALTH (FACTORIES AND WORKSHOPS TRANSFER OF POWERS) ORDER, 1921
LORD STANMORE LORD STANMORE had on the Paper a Notice, in accordance with the provisions of Section 8, subsection (3) of the Scottish Board of Health Act, 1919, to move to resolve, That this House approves the Scottish Board of Health (Factories and Workshops Transfer of Powers) Order, 1921 presented the 21st day of June, 1921.
The noble Lord said: A precisely similar Order to this has already been made for England, and the object of this Resolution is to make an Order for Scotland. I beg to move.
Moved accordingly, and, on Question, Motion agreed to.

THE SCOTTISH OFFICE
THE MARQUESS OF LINLITHGOW THE MARQUESS OF LINLITHGOW rose to ask His Majesty's Government whether, having regard to the statement made by the Lord Chancellor in the House of Lords on June 7, they can state when it is proposed to introduce a Bill to raise the slates of the Secretary for Scotland. The noble Marquess said: My Lords, it has been suggested that the apparent disinclination of His Majesty's Government to give effect to what I think I shall not he corrected if I call the assurance of the noble Viscount on the Woolsack on June 7 that the status and emoluments of the Secretary of Scotland would be raised, has been due to a failure to reiterate the demand by those both in this House and in another place, who are interested in this project. I do not think that this is the ease, because it can hardly be suggested that the failure to
826
repeat this Question shows any lack of interest in the matter by those who come from Scotland. I trust that we may be told in what it is that those of us who have been concerned in this matter have failed.
So far as I remember, the contingencies which the noble and learned Viscount suggested as those which might make it impossible for His Majesty's Government to implement their promise were, first, that the industrial situation should be unfavourable, and I do not think that that held good; secondly, that the principle of the Bill might be controverted in another place, and, so far as I know, that is not the case. And, indeed, I can hardly suppose that it will be pleaded that lack of Parliamentary time was the cause of the failure to introduce the measure. I trust that Scotsmen who are interested ill this question may have the assurance this evening that the undertaking which His Majesty's Government has given on this point may he carried forward to the next session.
THE LORD CHANCELLOR: My Lords, the noble Marquess is perfectly right in his recollection that very plain statements of intention have been made, both by me in this House and by other Ministers elsewhere. On the last occasion when I replied myself to a question which dealt with the present session, I stated that, if the Bill was uncontroversial, or was likely to be treated as uncontroversial, in another Place, it was still the hope of the Governmwnt, to introduce legislation during the present session. I am informed that inquiries made in the channels commonly employed disclosed the fact that, however uncontroversial the Bill might be amongst. Scottish members, it was not uncontroversial if one took the House as a whole, and certainly would not pass on to the Statute Book without a. discussion, which might in the event prove to be protracted. As far as I know the Government has in no way modified its view that it is a separate case, and one which ought to be dealt with. I have given such assurances in this House, and I in no way recede from them. I have taken every opportunity which presented itself tome of impressing upon my colleagues s the case for the assurances that have been given.
I would suggest to the noble Marquess that he might abandon his assaults upon me, for I am a willing victim arid that he-should mobilise the cohorts of his fellow-countrymen in the House of Commons

827
and fall upon my colleagues there. If wavering there has been, it has been there and not here. As far as I am concerned I have never varied from the views I have already expressed and in respect to which, with the authority of my colleagues, I gave assurances which had, as I believed then and as I still believe, the acquiescence of my colleagues, speaking of them in a body.

LICENSING (No. 2) BILL.
Returned from the Commons with the Amendments made by the Lords agreed to.
ABERDEEN CORPORATION (ELECTRICITY WORKS RAILWAY) ORDER CONFIR-MATION BILL.
BRIDGE OF ALLAN WATER, ETC ORDER CONFIRMATION BILL.
Third Reading (which stands appointed for this day) put off till to-morrow.
The Lord Chancellor acquainted the House, That the Clerk of the Parliaments had laid upon the Table the Certificate from the Examiners that the Standing Orders applicable to the following Bill have been complied with:
Ministry of Health Provisional Order (Cardiff Extension)
The same was ordered to lie on the Table.
STIRLINGSHIRE AND FALKIRK WATER ORDER CONFIRMATION BILL.
DUMBARTON BURGH (WATER) ORDER CONFIRMATION BILL.
Brought from the Commons; read la; to be printed; and (pursuant to the Private Legislation Procedure (Scotland) Act, 1899), deemed to have been read 2a (The Lord Stanmore), and reported from the Committee: Bills to be read 3a on Thursday next.
NORTH BRITISH RAILWAY (BURNT-ISLAND HARBOUR TRANSFER) ORDER CONFIRMATION BILL.
AIRDRIE AND COATBRIDGE TRAMWAYS TRUST ORDER CONFIRMATION BILL.
GRANGEMOUTH AND STIRLING WATER ORDER CONFIRMATION BILL.
Brought from the Commons; read 1a; to be printed; and (pursuant to the Private Legislation Procedure (Scotland) Act, 1899), deemed to have been read 2a (The Lord Stamnore), and reported from the Committee: Bills to be read 3a on Thursday next.

MANCHESTER CORPORATION (GENERAL POWERS) BILL [H.L.]
Returned from the Commons, agreed to, with Amendments.
House adjourned at twenty minutes past twelve o'clock, midnight.