Sitting of 18 February 1921

Preamble
The House met at Twelve of the Clock, Mr. SPEAKER in the Chair.

PRIVATE BUSINESS.
Batley Corporation Bill,
"to empower the Mayor, Aldermen, and Burgesses of the borough of Batley to construct additional waterworks; to make further provision in regard to their water, gas, and electricity undertakings; to make further provision for the improvement, health, and good government of the borough; and for other purposes," presented, and read the First time; and ordered to be read a Second time.
Bradford Canal (Abandonment) Bill,
"to authorise the Leeds and Liverpool Canal Company and the Undertakers of the Aire and Calder Navigation to abandon the Bradford Canal, and to sell or dispose of the site thereof and of the property connected therewith; and for other purposes," presented, and read the First time; and ordered to be read a Second time.
British Dye Stuffs Corporation (Railways Transfer) Bill,
"to transfer to and vest in British Dye Stuffs Corporation, Limited, certain railways and works in the city of Manchester; and for other purposes," presented, and read the First time; and ordered to be read a Second time.
Burnley Corporation Bill,
"to authorise the Corporation of Burnley to construct a street improvement and additional waterworks and to provide and work omnibuses; to extend the time for the construction of certain waterworks authorised by The Burnley Corporation Act, 1908; to empower the corporation to purchase and develop lands referred to in the will of the late James Witham Thompson and to modify the provisions of that will; to make further provision with regard to the tramways, water, and
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markets undertakings of the corporation and the health, local government, and improvement of the borough; and for other purposes," presented, and read the First time; and ordered to be read a Second time.
Cambridge University and Town Waterworks Bill,
"to confer further powers on the Cambridge University and Town Waterworks Company; and for other purposes," presented, and read the First time; and ordered to be read a Second time.
Cardiff Gas Bill,
"to empower the Cardiff Gas Light and Coke Company to sell gas on a heat unit basis; to make new provisions as to charges for gas and the application of the profits of the company; to confer further financial powers upon the company; to extend the limits of supply; and for other purposes," presented, and read the First time; and ordered to be read a Second time.
Colne Corporation Bill,
"to enable the Corporation of Colne to run omnibuses and to make further provision for the improvement, health, and good government of the borough," presented, and read the First time; and ordered to be read a Second time.
Coventry Corporation Bill,
"to make provision for the transfer of the undertaking of the North Warwickshire Water Company to the Mayor, Aldermen, and Citizens of the city of Coventry; to establish a fund for granting superannuation allowances to officers and servants of the corporation; and for other purposes," presented, and read the First time; and ordered to be read a Second time.
Croydon Corporation Water Bill,
"to empower the Mayor, Aldermen, and Burgesses of the county borough of Croydon to construct additional waterworks and to purchase a well and pumping station situate within the borough from the Metropolitan Water Board; to confer further powers upon them in regard to their water undertaking; and for other purposes," presented, and read the First time; and ordered to be read a Second time.
East Surrey Water Bill,
"to confer further powers on the East Surrey Water Company," presented, and read the First time; and ordered to be read a Second time.
Harrogate Gas Bill,
"to amend the provisions relating to the method of charge by the Harrogate Gas Company for gas supplied by them and to the dividends on their ordinary capital; company; to authorise the company to company; to authorise the company to raise additional capital; and for other purposes," presented, and read the First time; and ordered to be read a Second time.
Herts and Essex Water Bill,
"to extend the area of supply of the Herts and Essex Waterworks Company, Limited; and for other purposes," presented, and read the First time; and ordered to be read a Second time.
Lancashire County Council (Drainage) Bill,
"to constitute the Lancashire County Council the drainage authority for the county palatine of Lancaster," presented, and read the First time; and ordered to be read a Second time.
Lee Conservancy Bill,
"to increase the tolls and charges to be demanded by the Lee Conservancy Board and the sums payable to them by the Metropolitan Water Board; to enlarge the powers of the Lee Conservancy Board; and for other purposes," presented, and read the First time; and ordered to be read a Second time.
Leicester Corporation Bill,
"to empower the Mayor, Aldermen, and Citizens of the city of Leicester to execute street improvements and construct and work new tramways and to extend their powers of providing and using omnibuses; to confer further powers with reference to their gas, water, and markets undertakings; and for other purposes," presented, and read the First time; and ordered to be read a Second time.
Limerick Markets Bill,
"to increase the tolls and charges leviable by the Limerick Market Trustees; and for other purposes," presented, and read the First time; and ordered to be read a Second time.
London County Council (General Powers) Bill,
"to empower the London County Council to acquire lands; to make provision with regard to celluloid in warehouses and wholesale shops; to amend the law relating to coroners, coroners' inquests, employment agencies, and lying-in homes; and for other purposes," presented, and read the First time; and ordered to be read a Second time.
Manchester Corporation Waterworks Bill,
"to empower the Lord Mayor, Aldermen and Citizens of the City of Manchester to construct an aqueduct in substitution for part of the Haweswater Aqueduct authorised by The Manchester Corporation Act, 1919," presented, and read the First time; and ordered to be read a Second time.
Metropolitan Water Board (Charges) Bill,
"to amend the powers of the Metropolitan Water Board of charging for water supplied by them; and for other purposes," presented, and read the First time; and ordered to be read a Second time.
Metropolitan Water Board (Various Powers) Bill,
"to empower the Metropolitan Water Board to make waterworks and to acquire lands; and for other purposes," presented, and read the First time; and ordered to be read a Second time.
Middlesex County Council (General Powers) Bill,
"to extend the time for the construction of new roads and works authorised by the Middlesex County Council (Great West Road and Finance) Act, 1914, and the acquisition of lands therefore; to confer further powers upon the Middlesex County Council in relation to the prevention of the pollution and obstruction of streams in the County of Middlesex; to authorise the Council to establish superannuation and fire insurance funds and to regulate lying-in homes; and for other purposes," presented, and read the First time; and ordered to be read a Second time.
North Stafforshire Railway Bill,
"to confer further powers upon the North Staffordshire Railway Company," presented, and read the First time; and ordered to be read a Second time.
Nuneaton Corporation Bill,
"to confirm an agreement between the Corporation of Nuneaton and the Corporation of Leicester with reference to the supply of water in bulk; to empower the Corporation of Nuneaton to construct additional waterworks and to provide and work omnibuses; to consolidate the rates of the borough; and to confer further powers upon the corporation with reference to the health, local government, and improvement of the borough; and for other purposes," presented, and read the First time; and ordered to be read a Second time.
Portsmouth Water Bill,
"to increase the rates for the supply of water by the Borough of Portsmouth Waterworks Company; and for other purposes," presented, and read the First time; and ordered to be read a Second time.
Radcliffe and District Joint Gas Board Bill,
"to constitute and incorporate a joint board consisting of representatives of the urban district councils of Radcliffe, Prestwich, Whitefield, and Little Lever, and to transfer to and vest in such board the undertaking of the Radcliffe and Pilkington Gas Company; and for other purposes,' presented, and read the First time; and ordered to be read a Second time.
Rotherham Corporation Bill,
"to empower the Mayor, Aldermen, and Burgesses of the county borough of Rotherham to construct additional waterworks; to confer further powers upon the said Mayor, Aldermen, and Burgesses; to make further provision with regard to the health, local government, and improvement of the borough; to authorise the formation of a superannuation fund; to provide for the consolidation of rates levied in the said borough; and for other purposes," presented, and read the First time; and ordered to be read a Second time.
St. Helens Corporation Bill,
"to empower the Mayor, Aldermen, and Burgesses of the borough of St. Helens to construct street improvements; to provide and run omnibuses within and without the borough; to consolidate the rates of the borough; to make further
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provision with regard to the tramways, gas, water, and electricity undertakings of the corporation and the health, local government, and improvement of the borough; and for other purposes," presented, and read the First time; and ordered to be read a Second time.
Southampton Corporation Water Bill,
"for empowering the Mayor, Aldermen, and Burgesses of the borough of Southampton to acquire the undertaking of the South Hants Waterworks Company for equalising the rating of the said borough; and for other purposes," presented, and read the First time; and ordered to be read a Second time.
Sunderland and South Shields Water Bill,
"for authorising the Sunderland and South Shields Water Company to construct new works and to raise additional capital; for increasing the charges of the company and extending their limits of supply; and for other purposes," presented, and read the First time; and ordered to be read a Second time.
Sutton District Waterworks Bill,
"to authorise the Sutton District Water Company to construct additional waterworks; and for other purposes," presented, and read the First time; and ordered to be read a Second time.
Swansea Gas Bill,
"to empower the Swansea Gas Light Company to sell gas on a heat unit basis; to make new provisions as to charges for gas and the application of the profits of the company; to raise additional capital; and for other purposes," presented, and read the First time; and ordered to be read a Second time.
Thames Conservancy Bill,
"to amend the enactments relating to the payments to be made to the Conservators of the River Thames for the taking of water by the Metropolitan Water Board and by certain water companies; to revise the tolls and charges leviable by the Conservators in respect of merchandise conveyed on and vessels using the said river; and for other purposes," presented, and read the First time; and ordered to be read a Second time.
Thames Deep-Water Wharf and Railways Bill,
"to incorporate the Thames Deep-Water Wharf and Railway Company, and to empower that company to construct a wharf and railways and other works in the county of Essex; and for other purposes," presented, and read the First time; and ordered to be read a Second time.
Westgate and Birchington Water Bill,
"to confer further powers on the West-gate and Birchington Water Company; and for other purposes," presented, and read the First time; and ordered to be read a Second time.
Wigan Corporation Bill,
"to empower the Mayor, Aldermen, and Burgesses of the borough of Wigan to construct tramways and a public abattoir; to provide and work trolly vehicles and omnibuses and to acquire lands for street improvements; to make further provision in regard to the gas, water, electricity, markets, baths, and other undertakings of the corporation and the health, local government, and improvement of the borough; to confer powers upon the corporation in regard to the industrial development of the borough, the provision of housing accommodation, and the prevention of flooding; to consolidate the rates of the borough and to empower the corporation to establish a municipal bank; and for other purposes," presented, and read the First time; and ordered to be read a Second time.
Wrexham and East Denbighshire Water Bill,
"for extending the limits of supply of the Wrexham and East Denbighshire Water Company; for authorising the company to construct new works and to raise further capital; for increasing the charges of the company; and for other purposes," presented, and read the First time; and ordered to be read a Second time.

ADJOURNMENT.
Resolved,—"That this House at its rising this day do adjourn until Monday next."—[Commander Eyres-Monsell.]
ORAL ANSWER TO QUESTION.
  IRELAND.

    SHOOTINGS, MALLOW.
    Mr. J. H. THOMAS: I beg to ask the Chief Secretary to the Lord Lieutenant of Ireland whether he has made further inquiry with regard to the incidents at Mallow, and what is the exact position?
    The CHIEF SECRETARY for IRELAND (Colonel Sir Hamar Greenwood): The right hon. Gentleman the Member for Derby asked me yesterday if it were true that the legal representatives of the persons concerned at Mallow had been refused permission to attend the inquiry there. I am informed by the Commander-in-Chief that the legal representative of the Mallow railwaymen concerned or interested in the events following the murder of Mrs. King was not refused admission to the military inquiry on any occasion. Every allegation of ill-treatment made by my right hon. Friend will be carefully inquired into. The Court will re-assemble to-morrow (Saturday) for that purpose, and the railwaymen's legal representative will be asked to attend the inquiry.
    Mr. THOMAS: I very much appreciate the efforts which have been made to elicit the truth.

BILLS PRESENTED.
  PROPORTIONAL RFPRESENTATION BILL,
  "to make provision for the proportional representation of the electors of the House of Commons; and for other purposes connected therewith," presented by Sir THOMAS BRAMSDON; supported by Sir Ryland Adkins, Lord Robert Cecil, Sir Donald Maclean, Major Morrison-Bell, Mr. T. P. O'Connor, Mr. George Thorne, and Mr. Aneurin Williams; to be read a Second time upon Friday, 8th April, and to be printed.[Bill 1.]

  CORN SALES BILL,
  "to provide for the greater uniformity in the weights and measures used in the sale of corn and other crops; to amend The Corn Returns Act, 1882; and for purposes connected therewith," presented by Mr. LANE-FOX; supported by Mr. Acland,

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  Mr. Cautley, Major Sir David Davies, Captain FitzRoy, Lieut.-Colonel Royds, and Mr. Edward Wood; to be read a Second time upon Friday, 15th April, and to be printed. [Bill 2.]

  LICENSING BILL,
  'to amend the Law relating to licences and certificates for the sale and supply of exciseable liquor, the regulation of clubs, the penalties for drunkenness, and other purposes relating thereto," presented by COLONEL GRETTON; supported by Rear-Admiral Sir Reginald Hall, Mr. Grant, Lieut.-Colonel Sir Frederick Hall, Sir Park Goff, Mr. Betterton, and Mr. George Terrell; to be read a Second time upon Friday, 22nd April, and to be printed. [Bill 3.]
  TRADES UNION ACT (1913) AMENDMENT BILL.
  "to amend the Trades Union Act, 1913," presented by Mr. WILSON-FOX; supported by Mr. Bigland, Mr. Betterton, Sir Frederick Banbury, Captain Sir Beville Stanier, Mr Lane-Fox, Sir Charles Hanson, Colonel Roundell, Lieut.-Colonel Jackson, Brigadier-General Cockerill, Mr. Renwick, and Mr. George Terrell; to be read a Second time upon Friday, 29th April, and to be printed. [Bill 4.]
  GUARDIANSHIP, ETC., OF INFANTS BILL,
  "to amend the Law relating to the guardianship, maintenance, and custody of Infants," presented by Colonel GREIG; supported by Viscountess Astor, Sir James Agg-Gardner, Mr. James Brown, Dr. Murray, Sir Martin Conway, Major Hills, and Captain Loseby; to be read a Second time upon Friday, 6th May, and to be printed. [Bill 5.]
  TITHE ANNUITIES APPORTIONMENT BILL,
  "to provide for the apportionment of annuities created by the redemption of tithe rentcharge," presented by Mr. PRETYMAN; supported by Brigadier-General Colvin, Mr. Royce, Mr. Lane-Fox, and Mr. Cautley; to be read a Second time upon Friday, 15th April, and to be printed. [Bill 6.]

  IMPORTATION OF PLUMAGE (PROHIBITION) BILL,
  "to prohibit the importation of the plumage of birds and the sale or possession of plumage illegally imported," pre-
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  sented by Mr. GALBRAITH; supported by Viscountess Astor, Sir John Butcher, Mr. James Brown, Mr. Cairns, Mr. Joseph Green, Sir Charles Oman, Colonel Parry, Dr. Worsfold, Colonel Sir Charles Yate, Mr. Thomas Davies, and Mr. Trevelyan Thomson; to be read a Second time upon Friday, 6th May, and to be printed. [Bill 7.]

  SEX DISQUALIFICATION (REMOVAL) ACT (1919) AMENDMENT BILL,
  "to amend The Sex Disqualification (Removal) Act, 1919," presented by Mr. HOWARD GRITTEN; supported by Mr. George Terrell, Sir Ernest Wild, and Mr. Inskip; to be read a Second time upon Friday, 8th April, and to be printed. [Bill 8.]
  REPRESENTATION OF THE PEOPLE BILL,
  "to amend The Representation of the People Act, 1918," presented by Mr. WALTER SMITH; supported by Mr. Clynes, Mr. Grundy, Mr. Adamson, Mr. Arthur Henderson, Mr. Spoor, Mr. Thomas Shaw, and Mr. Tyson Wilson; to be read a Second time upon Friday, 22nd April, and to be printed. [Bill 9.]
  LOCAL RATES (INCREASE PREVENTION) BILL,
  "to prevent increase in local rates," presented by Lieutenant-Colonel ROYDS; supported by Mr. Pretyman, Mr. Wilson-Fox, Colonel Gretton, Mr. George Terrell, and Captain Brown; to be read a Second time upon Friday 29th April, and to be printed. [Bill 10.]
  LOCAL AUTHORITIES (PAYMENT OF EXPENSES) BILL,
  "to provide for the payment of certain expenses and the making of certain allowances in connection with local authorities and other public bodies and with committees of such authorities or bodies; and for other purposes connected therewith," presented by Mr. SWAN; supported by Mr. Tyson Wilson, Mr. Adamson, Mr. Clynes, Mr. Frederick Hall, and Mr. Thomas Griffiths; to be read a Second time upon Friday, 6th May, and to be printed. [Bill 11.]

  BASTARDY BILL,
  "to amend the Bastardy Laws and to make further and better provision with regard to bastard children, and for other purposes connected therewith," presented

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  by Captain BOWYER; supported by Captain Brown; to be read a Second time upon Friday, 29th April, and to be printed. [Bill 12.]

  SECRETARY FOR WALES BILL,
  "to provide for the appointment of a Secretary for Wales," presented by Mr. MATTHEWS; supported by Mr. Hinds, Sir Robert Thomas, and Major John Edwards; to be read a Second time upon Friday, 22nd April, and to be printed. [Bill 13.]
  MINIMUM WAGE (TEMPORARY SUSPENSION) BILL,
  "to reduce unemployment by suspending during a limited period the obligation to pay the statutory minimum rate of wages, provided a reasonable living wage be paid," presented by Brigadier-General COCKERILL; supported by Captain Brown and Brigadier-General Colvin; to be read a Second time upon Friday, 18th March, and to be printed. [Bill 14.]
  JURORS' EXPENSES BILL,
  "to make provision for the payment to common jurors of expenses incurred by them in discharge of their duties," presented by Captain TUDOR-REES; supported by Mr. Bottomley, Major Breese, Major John Edwards, and Mr. Myers; to be read a Second time upon Friday, 22nd April, and to be printed. [Bill 15.]
  IMPORTATION OF PLUMAGE (PROHIBITION) (No. 2) BILL,
  "to prohibit the importation of the plumage of birds and the sale or possession of plumage illegally imported," presented by Captain BROWN; supported by Colonel Sir Charles Yate, Sir John Butcher, Mr. Thomas Davies, Lieutenant-Colonel Croft, Mr. Frederick Green, Lieut.-Colonel Arthur Murray, and Captain Sir Beville Stanier; to be read a Second time upon Friday, 22nd April, and to be printed. (Bill 16.]

  TEMPERANCE (WALES) BILL,
  "to promote temperance in Wales by conferring on the electors in prescribed areas control over the grant and renewal of licences, restricting the hours of opening of licensed premises for the sale of intoxicating beverages, by amending the law relating to clubs, and by other provisions incidental thereto," presented by
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  Major BREESE; supported by Mr. Sidney Robinson, Mr. Haydn Jones, Mr. Hinds, Major David Davies, and Captain Tudor-Rees; to be read a Second time upon Friday, 6th May, and to be printed. [Bill 17.]

  SEX DISQUALIFICATION (REMOVAL) ACT (1919) AMENDMENT (NO. 2) BILL,
  "to amend The Sex Disqualification (Removal) Act, 1919," presented by Mr. GEORGE TERRELL; supported by Sir Ernest Wild, Mr. Howard Gritten, Mr. Wilson-Fox, Lieut.-Colonel Royds, and Major Boyd-Carpenter; to be read a Second time upon Friday, 15th April, and to be printed. [Bill 18.]
  LICENSING (SCOTLAND) BILL,
  "to amend the Scottish Licensing Law," presented by Mr. WILLIAM SHAW; supported by Rear-Admiral Adair; to be read a Second time upon Friday, 29th April, and to be printed. [Bill 19.]
  DOGS' PROTECTION BILL,
  "to prohibit the vivisection of dogs," presented by Sir FREDERICK BANBURY: supported by Sir John Butcher, Colonel Burn, and Mr. Joseph Green; to be read a Second time upon Tuesday, 12th April, and to be printed. [Bill 20.]
  TRADE DISPUTES BILL,
  "to repeal the Trades Disputes Act, 1906," presented by Sir FREDERICK BANBURY; to be read a Second time upon Tuesday, 19th April, and to be printed. [Bill 21.]
ORDERS OF THE DAY.
  KING'S SPEECH.

    DEBATE ON THE ADDRESS.
    [FOURTH DAY.]
    Order read for resuming Adjourned Debate on Question [15th February],
    "That an humble Address be presented to
    His Majesty, as followeth:—
    Most Gracious Sovereign,
    We, Your Majesty's most dutiful and loyal subjects, the Commons of the United Kingdom of Great Britain and Ireland, in Parliament assembled, beg leave to offer our humble thanks to Your Majesty for the Gracious Speech which Your Majesty has addressed to both Houses of Parliament."
    Question again proposed.

    PEACE TREATIES.
    Mr. BOTTOMLEY: I beg to move, at the end of the Question, to add the words
    "But humbly express our regret that, having regard to the long period which has elapsed since the signing of the Armistice, and to the fact that the country as a whole has so far had no opportunity of expressing its opinion as to the provisions of the various Peace Treaties which have been signed with your late enemies, and of the policy of your Ministers in regard to indemnities, and reparation, and the trial of war criminals, Your Majesty has not announced your intention of dissolving the present Parliament at an early date."
    The object of this Amendment is to direct attention to two of the fundamental provisions of the Peace Treaty—those relating to the subject of reparations and to the punishment of war criminals. So far as reparations are concerned, they formed no part of the originally proposed terms of peace, and when His Majesty's Ministers appealed to Mr. Wilson to tell them on what terms the peace might be concluded, Mr. Wilson, in his famous 14 points, was perfectly silent on that subject. It was only in response to strong outside pressure, and as the General Election approached, that the Prime Minister swallowed the gospel of reparations, and, with the enthusiasm characteristic of new converts, preached it on every possible occasion. He reminded us that Germany should be compelled to pay to the last farthing of her liability, and he used the classic phrase that he would search her pockets for the money. Next week, I believe, some German delegates will be
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    here discussing this very point, and I am going to suggest to the Prime Minister that he should put that threat into literal action. He might then, perhaps, discover some documents which would enlighten us as to Germany's real financial position.
    The other subject is that of the punishment of the criminals, and I want to state at once, without, I hope, being unduly disrespectful, that my complaint and charge in regard to both these matters, so far as the Government is concerned, is that their conduct and policy since the signing of the Treaty—which in itself was far too lenient on the subject of indemnities—has been of almost unimaginable ineptitude and childlike simplicity, whilst the wily men of the Wilhelmstrasse have been fooling them to the top of their bent. Let us consider for a moment what has happened. The Armistice was signed in November, 1918, and from that day till the end of June, 1919, the Prime Minister, with the representatives of the Allies, and with 70 other plenipotentiaries representing the most remote kingdoms of the world, sat in solemn conclave day after day, and, for aught that I know, night after night, considering the terms on which peace should be signed. They took the best expert advice that they could regarding Germany's financial position, and, on the 28th June, 1919, a solemn Treaty was signed with the signatures of all those representatives and of Germany herself, embodying the result of the deliberations of all those talents for many months previously. I want to ask the Prime Minister, is he going to tell the House to-day that the Government were altogether misled during the period preceding the Peace Treaty, that the experts were all wrong, and that the German delegates were fooling them when they signed the Treaty? It may be well to remind the House of what was signed on the 28th June, 1919. I remember the right hon. Gentleman, in one of those triumphant entries into the House which were a feature of last year, coming in flushed with joy at the fact that this Treaty had at last been signed, and this, shortly, is what he said:
    "Germany accepts the responsibility of Germany and of her Allies for causing all the loss and damage to which the Allied and Associated Governments and their nationals have been subjected."
    There is the first assumption by Germany of the full responsibility. It is

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    under the heading of "Reparations," and means the full financial responsibility. The Treaty goes on to propose that Germany should at once hand over to Britain and the Allies 20,000,000,000 marks. That was to be paid during 1919 and 1920 and the first four months of the present year. That is what the Prime Minister made Germany agree to, and that is what we cheered him for making her agree to. It was further provided that the first charge on that money was to go to the main-tence and upkeep of the Army of Occupation on the Rhine. Where are the 20,000,000,000 marks? The Prime Minister must have expected them; he must have been satisfied that Germany could pay them; and Germany herself must have represented that she could when she signed the Treaty. Last year the Secretary of State for War admitted that all his estimates had gone wrong because he had budgeted for £48,000,000 from Germany, of which practically not a penny has been received. That was the first provision of the Treaty, and I want to know why it has not been carried out. Then, by the 21st May of this year, we were to tell Germany the extent of her liability. She had assumed the full responsibility for the whole cost of the War. Something else had to be done. She had to hand over to us, I think it was, 40,000,000,000 bonds; but not one of those bonds has been delivered. She was also liable to be called upon for another 40,000,000,000 bonds. I want to ask the Government why it is that the whole of this elaborate and sacred covenant is being thrown to the winds, why it is that they allowed it to be put into the Treaty, and why this House is now to assume that Germany cannot carry out her obligations?
    The right hon. Gentleman said in Paris the other day, and I think he said it over here, that he was satisfied that Germany can pay. He must have been satisfied when this Treaty was signed. If she cannot pay, he must have evidence that we do not possess. I have sent representatives to Germany to report to me as to what they find there, and Germany is not that broken-backed beast that the Prime Minister has pictured. She is doing very well indeed. Her children are well fed and well clothed. I have heard of appeals for starving children in Vienna and elsewhere, but I have not heard of
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    any in Germany. Why on earth should we let her off the provisions of this Treaty? It has been agreed that her total liability is £1,300,000,000—not a very great sum in excess of what the War, in one way or another, has cost the British Empire; but even that figure is to be revised. Next week they are sending over here to make some counter-proposals. Where is there any finality? As far as that part of my case is concerned, I say that we have had no evidence to satisfy this House that Germany is not in a position to fulfil what I call the lenient obligations of this Peace Treaty as far as reparations are concerned. In that connection I would make this passing reference to a phrase in the Gracious Speech. His Majesty tells us that
    "The War has left upon the nation liabilities which can only be met by heavy taxation."
    I do not subscribe to that. If Germany will fulfil the obligations of that Treaty, it will considerably lighten the burden on the shoulders of the nation. It can be done without injuring labour, because there is plenty of coal in Germany and plenty of other things that can be used here to expedite manufactures. I will not pursue the question of the best way of collecting the indemnity.
    The PRIME MINISTER (Mr. Lloyd George): That is the most important thing.
    Mr. BOTTOMLEY: Was that considered when the Peace Treaty was signed?
    The PRIME MINISTER: Certainly.
    Mr. BOTTOMLEY: The Peace Treaty says she can pay it in gold marks and in other ways. Let her do it in accordance with the provisions of the Peace Treaty. On the other part of my Amendment the case against the Government is so strong that I marvel that Ministers have come down here to-day to face it. The late Prime Minister declared in this House that the criminals, whoever they were, whatever their rank, should be brought to justice. The Peace Treaty contains a very startling statement. Here is the commencement of it:
    "The Allied and Associated Powers publicly arraign William II of Hohenzollern, formerly German Emperor, for a supreme offence against international morality and the sanctity of Treaties."
    That is a most solemn indictment. The

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    Prime Minister came back again and kept his little bonne bouche up his sleeve. He had many difficulties to overcome at the time, but I knew something was coming. I have had the privilege of sitting here and studying him, and it is a great education. Suddenly he said, "I have something to tell you about the trial of the Kaiser. We have arranged, or it has been arranged, that we are going to try him in London." Do not tell me that before the Prime Minister made that speech he had not satisfied himself that it could be done. Later on I asked the Attorney-General how the trial was going on. He said, "the arrangements are well advanced." I am not sure the scaffold was not ordered. Then suddenly we were told we could not have the Kaiser. I put further questions, and I was asked, "Surely you do not suggest that we should go to war with Holland." I do not, but we might send a couple of policemen over to bring him back. The British Empire, France, Italy and Japan kow-towed to Holland, expressing our deep regret that she did not see her way to pocket her scruples of national sentiment or her traditional love for granting asylum to people. We protested and the right hon. Gentleman ended up with something which this House perhaps has not remembered. In effect the Prime Minister said, "We are sorry you will not give him up, we think you ought to, but at least you ought to do one of two things or both. You ought to try him on the spot or send him to some remote place where he cannot be in close touch with Germany." Holland has not done either of these things. She has absolutely ignored and treated with contempt that courteous and mild request of His Majesty's Ministers. Then he ended up with this very mild threat of what might happen if the Kaiser did not come back. He said,
    "The Powers urge upon the Dutch Government in the most solemn and precise manner the importance attaching to a fresh consideration of the question before her. They desire that it may clearly be understood how grave the situation might become if the Netherlands Government were not in the position to give those assurances which the safety of Europe so imperatively demands."
    That is where we left it. "You must not let him be so near the German frontier. You must try him on the spot or do something with him and we warn you of the grave peril which will ensue
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    if you do not do it." They treated the Note with absolute indifference. So he remains there and will remain there, I suppose for the rest of his days.
    So far as the other question is concerned, the Treaty says Germany shall surrender to us the alleged war criminals whose names have been published, and in accordance with that provision I believe nearly a thousand names of war criminals have been given to Germany by the British Government, and months and months have elapsed, and Germany treats the whole thing with callous and impertinent indifference. So much so, that at last the Government knew that something must be done. We cannot get them over here because it will cause political trouble. Then we hit upon a most unique solution. I have often wondered what the late Mr. Gilbert would have given for it. It would have made his operas even more renowned than they are We said, "Here is an idea. Try your criminals yourself." Every man his own judge and his own jury! Germany said, "That is a good idea. Leave them to us." Time went on and on and on, until at last the Attorney-General said to the Government that something must be done, and so they picked out seven test cases of war crimes of the grossest inhumanity and savagery, and they said, "Now we will test your bona fides. Take these seven men and try them and let us see what sort of result we get." That was months ago. They wrote and said, "we cannot get the evidence." Then the Government said, "We will send it to you," and they compiled a volume of evidence and sent it to Leipzig last October. Not one of them has been brought to trial yet. Yet the Allied Note in which we consented to this farcical arrangement said Germany undertook immediately to institute proceedings. What is going to happen? Pressed yesterday, the Attorney-General at last said this, and it was a grave statement coming from a responsible Minister of the Crown, "Until quite recently we had no reason to suspect that Germany was not serious about these trials, but now I am not sure that we have not cause for complaint." That is a solemn and serious declaration, and it means this, and this only, that it is the bounden duty of the Government without one day's delay to say to Germany, "Fix your date now for the trial of these seven men and we will

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    send someone over to represent the British Government Perhaps the First Commissioner of Works might go over. I have heard the Attorney-General in the Courts apply for a date to be fixed for a trial. Now we will say to Germany, "Fix a date for the trial of these seven men or send them over here."
    I do not want to occupy unnecessary time. We are under a Parliamentary contract to get rid of this subject by two o'clock and others want to speak, but I say this quite sincerely, that the feeling in the country is much deeper than perhaps the Prime Minister recognises. Some election pledges are soon forgotten, but not where people's homes are left injured, where empty chairs are left and where people have been maimed and wounded, and these two conditions of the Treaty, reparation to the last farthing and punishment, first of all of the Kaiser and then of the War criminals, have been burnt right into the very soul of the people. They will come up again at the General Election, which will not be so very long delayed. The Prime Minister has not denied that it is going to come this year. He has told us that the papers say so, and therefore it must be so; but we are told by the Lord Chancellor that it will not be this year. At any rate, it will not be very long, and these things will come up again.
    I do not raise these matters for any theatrical effect, but because my soul and conscience tell me that it is the only way to do. If we are to stop fooling with this question we should let Germany know next week when her representatives come here that this House at least has had enough of it. If the Treaty cannot be enforced Ministers must apologise for having signed it. We will get all we can, and we will have it soon. Let there be a time-limit. Let Germany give bonds for whatever she owes us and we will find a market for them, they will very soon be valuable. Above all things, let us get the war criminals brought to trial and punished, and if Germany will not do it, let us do it. I may sound flam-buoyant or jingoistic, but if Germany does not fulfil the Treaty let us do what Germany would have done if she had won and if she was in the position we are in to-day. Let us send a representative body to Berlin to take charge of the Customs of the country and find out
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    for ourselves where we can get the money. If the Prime Minister will send me over and give me a small commission on what I get I will find some money. I will find a lot of gold and I will find some good wine. We should send there and insist upon the terms of the Treaty being fulfilled. The people had no opportunity of considering the terms of the Treaty and the methods of the Government in carrying them out, therefore, the only opportunity that is given to us is by means of an appeal to the country on the basis of my Amendment.
    Colonel C. LOWTHER: I beg to second the Amendment. My hon. Friend has traversed the Amendment so comprehensively that there remains, fortunately, very little for me to say He has censured the Government in no measured terms. He spoke of their unimaginable ineptitude. Those may seem harsh words, but surely it is the extraordinary attitude of the Government that has brought such a censure upon themselves. It is their vacillating and ambiguous policy which is largely responsible for what I call the criminal delay in not coming to some settlement in regard to the amount of the indemnity. My hon. Friend took a retrospective view of the situation. Therefore, I will not go into that, but I would remind the House that the Prime Minister laid it down as a supreme axiom in his electioneering programme that Germany should pay the cost of the War up to the uttermost farthing. That was the reason why he was returned into power with an enormous Coalition majority. That was the reason why he was sent to the Conference table to plead our cause. It is not surprising that some of us grow impatient and that our constituents ask us when we are going to fulfil our pledges.
    From the moment that the Prime Minister went to the Peace table sinister rumours reached this country and circulated through the Lobbies of this House, rumours to the effect that Germany was to be let off very lightly. These rumours did not come, as the Prime Minister thought at the time, from one and impeachable authority; they came from many authorities, and from many authentic French authorities, which I could give to the Prime Minister if he wished to receive them. There was no doubt about it that the international financier was again active. The Press was inundated

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    with articles and paragraphs to endeavour to prove that Germany was hopelessly and irretrievably ruined and bankrupt, and could never pay a penny. That was all exoteric. It was all very good for children. It might be very good electioneering claptrap, but it was not true. What to me is amazing is that the verdict of these pseudo financiers was accepted by the Leader of the House. He accepted it as true, but surely the Leader of the House at the time of the General Election believed in the policy of the Prime Minister, as we all did. He kept a discreet silence on some things, but considering what was the chief plank in the Prime Minister's platform he must have accepted it. They did not stump the country together, but they went about like the Zanzigs, two beings with but one single thought, to make Germany pay for the War. Directly the Prime Minister went to the Conference table, and as soon as the Leader of the House was installed in office, he seemed to turn a financial somersault. He poured ridicule upon those who thought that the Prime Minister could possibly carry out his pledges. I am not saying that the Prime Minister did not want to carry out his pledges. I believe he did. What I find fault with is that he never took this House into his confidence. We were left completely in the dark. When a poor, misguided Member like myself dared in my arrogant ignorance to put forward the argument that Germany could in time pay £10,000,000 or £15,000,000 towards the cost of the War, spread over forty or fifty years, he treated me as if I was a congenital idiot. Time and time again my hon. Friend (Mr. Bottomley) and other Members on this Bench interrogated the Leader of the House and asked him to give us a day for the discussion of this all-important subject—does not the Prime Minister think it is an important subject—but every time we were given an evasive answer. "I have nothing to add to my former evasive answer," said the Leader of the House, or "it would not be in the best interests of the country"; "It would be detrimental to the best interests of the country." We got stock phrases of that sort, which are always given when they do not want to answer. I will tell the House what was detrimental to the best interests of the country, and that was the extraordinary attitude of the Leader of the House. I am sorry he is not here. He avowed, not
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    only privately, but openly, that he was one of those who always thought from the beginning that Germany could not pay very much by way of indemnity. That was a nice thing for the Hun to read. Talk about "detrimental to the best interests of the country"! What was the effect of such a statement as that? It was obvious. The more we lavished our sympathy upon Germany the more loudly she pleaded penury and bankruptcy, and when she had finished with that cry she rubbed in revolution and Bolshevism.
    I am sorry to say that the right hon. Gentleman, the ex-Prime Minister, supported the Leader of the House in that supposition. He did not go quite so far. He said at Paisley that £2,000,000,000 is quite enough to charge Germany and certainly the utmost farthing she could pay. Can the Prime Minister reconcile that statement and the Leader of the House reconcile his statement with the statement made by the German Finance Minister the other day that Germany was prepared to pay and could and would pay £7,500,000,000. The report circulated in every paper from the Conference in Paris fixed the sum of £11,500,000,000, plus 12½per cent, on German exports as the amount of the indemnity. We do not know that. Private Members know nothing. They are treated as idiots. We might as well send some phonograph here and turn it on occasionally with a set speech when we are not listening and until we get on to that Bench, which possibly may be soon, we have got no power whatever. I happened to be in Paris during the recess and had the privilege of talking to some very eminent masters of finance and also to some of the great statesmen, and one and all were amazed when they were told that the Prime Minister and 400 Members of this House were pledged up to the hilt to extract from Germany the utmost farthing that that country can pay.
    The French from the very beginning have said Germany shall pay, and Germany can pay, for the War. They are resolute, fixed of purpose, adamant still to-day. While we have wavered and faltered, they have remained firm. It is for us to stand by them now. They never thought that Germany could pay very much at present. Who in his senses could think such a thing? But, look at the resources of Germany, its enormous assets, its cement, its aniline dyes, its timber, its agriculture,

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    its coal. You may say it has been denuded of some of these resources, and that we have taken the greater part of its coal. It is not true. Not one-tenth of its coalfields have been taken. It is still the greatest coal-producing country in Europe. It has enormous recuperative powers. It would be a great mistake if we do not settle an indemnity which, though it cannot pay much to-day, could be paid in 40 or 50 years if its resources are fostered. I believe that something of that sort is the intention of the Government. I would ask the Prime Minister three questions. First, is it true that there is this intention of settling the indemnity at £13,500,000,000? Second, how is it that the Government always accept the views of the pessimists and not of the optimists? And third, if they do not accept the views of the Hewins Commission or the Brussels Conference, are they going to accept the views of the Paris Conference? Do not let us forget the psychology of the Hun. He is as crafty as he is cunning, and as cunning as he is long suffering and revengeful. He is still waiting for the day. Do not let us fall into the fatal error of leaving France to battle alone, not for a vindictive, but for a just and honourable peace.
    Mr. WISE: As I was one of the experts who went to Germany in March, 1919, I may take the opportunity of endeavouring to explain the position as it was at that date. When I came back I had the honour of addressing Members of the House of Commons in Committee Room, and as the hon. Member for South Hackney (Mr. Bottomley) was not present on that occasion, I interviewed him privately, and endeavoured to explain the position of Germany at that date. No man is more anxious than I to bleed the German to-day, but it must be done in a proper way, and not to the detriment of this country. The hon. Member for South Hackney has referred to the gold position in Germany. When I was there in March, 1919, there was £94,000,000 of gold in Germany. Of that, £44,000,000 was transferred for the payment of food. At the present moment Germany has £54,000,000 in gold in the Imperial Bank in Germany. My figures in my report were supposed to be reliable. In fact, I was informed they were so useful that, although my report was printed, the
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    figures were not put in, so that certain countries should not see the figures.
    Mr. BOTTOMLEY: Did you see the gold?
    Mr. WISE: I had not time to count the gold. The hon. Member has referred to railways. We have, I understand, a first charge on the railways of Germany. What is the good of the railways? Suppose we took over the railways and the forests of Germany, if they paid 100 per cent, dividend, you have only got marks in payment of the dividend. The great difficulty in the matter is the transference of marks into sterling, which is what we want in this country. There are only three ways in which an indemnity can be paid—by the sale of goods, by service, or by gold. I have tried to explain that gold is out of the question. The total amount of gold in the world is only £1,500,000,000 odd, so what is the good of considering gold when discussing large figures? Then there is service. I am sure none of us wants the Germans over here to work for us. Then there is kind. We can get a certain amount of raw material, such as potash, from Germany into this country—[HON. MEMBERS: "Coal!"] We do not want coal in this country. In pre-War days we exported coal to Germany. Germany sent coal to Belgium and Belgium sent coal to France. We do not want German coal here, but we do want such things as potash. That is only a small item. Therefore, the only way, as far as I can see, and as far as any person who has looked into the problem can see, is by the export of goods. Do we want this German export of goods? Are we not likely to have more unemployment if we buy these German goods? If there is one thing more than another that would be to the detriment of our unemployed it would be the purchase of these German goods. There is one other way which I might add to the list, and that is to make the Germans cut down their timber, and we and the Allies to take it from them; but that is only a small item. Hon. Members, if they look into this in a business way, will see that in many respects it may be to the detriment of this country to accept any large sum as an indemnity.
    The PRIME MINISTER: I congratulate my hon. Friend (Mr. Wise) upon the first serious contribution made to this discussion. I came

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    down here to take part in a Debate upon one of the most important questions that can possibly concern the administration of this country. It is a question on which I shall have to meet, or at least somebody will have to meet, the representatives of Germany in the course of the next few days. I was looking for some enlightenment upon matters which were difficult and dark. I thought there might have been something which had escaped not merely the Government, but financial experts behind the Government, and that at least we, would get light thrown on these dark places and would receive real help in elucidating our problems. But I never heard more inadequate speeches on so great a problem. There has boon a discussion in the French Parliament which I followed closely. It lasted some days. There were those who thought that the Paris proposals were fair and there were others who thought those proposals were unfair, but those who arraigned the Paris proposals arraigned them upon a most careful examination of the whole of the figures and by well thought out and well considered arguments which were a credit to the Assembly where they were used. But here is an arraignment of the whole policy of the Government in reference to something upon which we are going into conference, and I confess that I have never heard speeches on so important a problem which contributed less to elucidate the matter. I can understand the Seconder of the Amendment, if he will forgive me for saying so, because from what I have heard from him on the subject I do not think he has over displayed any special intimacy with financial problems. When he could not discriminate between multiplying 42 annuities reaching a figure of £13,000,000,000 and an indemnity of £13,000,000,000 it indicated a confusion of mind—
    Colonel C. LOWTHER: When did I say that? I never mentioned it.
    The PRIME MINISTER: I beg the hon. Member's pardon. He does not know what he mentioned. He said that the Paris decisions were decisions to demand an indemnity of £13,000,000,000.
    Colonel LOWTHER: I said nothing of the sort, and will you allow me to say so. I asked you as Prime Minister whether the reports in the Press were true that the Paris Conference had fixed
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    the amount of the indemnity at £13,500,000,000. That is all I said.
    The PRIME MINISTER: That simply means that from whatever source the hon. Gentleman received his information he depends on the multiplication of the number of annuities which are to be paid in the course of 42 years, and he confuses that with an indemnity of £13,000,000,000, which shows a confusion of mind and makes it impossible to examine a problem of this kind. It is a totally different proposition. For instance, take the last 10 or 15 years of that indemnity. Assume that it reaches the maximum figure which we anticipate. Its present value is only about £800,000,000. The present value of that amount is a little over £800,000,000, 30 years hence; that is the value of deferred payment. It is a confusion which persists in the minds of so many people and it is brought here as a serious criticism of the proposals of the Paris Conference.
    Mr. BOTTOMLEY: That is all known to schoolboys.
    1.0 P.M.
    The PRIME MINISTER: I wish the things which are known to schoolboys were inserted in the speeches of hon. Members. The Mover of the Amendment has not the same excuse, for he has some experience of financial matters. I am going to defend the proposals to which I agreed at the Paris Conference, and I propose to support them at the Conference next week or the following week. The hon. Gentleman who seconded the Amendment said that I made a statement that Germany could pay the whole cost of the War. I never said anything of the kind.
    Colonel LOWTHER: I never said that. I said that you had stated that Germany could pay—you laid it down as an axiom that she should be made to pay to the utmost of her capacity. I took care not to paraphrase. You may do it, but I do not.
    The PRIME MINISTER: I waited for the words which are now put down and inserted for the first time—"up to the limit of her capacity."
    Colonel LOWTHER: I said so. I am within the memory of the House.
    The PRIME MINISTER: There is a very great difference. I am perfectly pre-

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    pared to have my pledges quoted if quoted honestly. The statement I made at Bristol, where I dealt with these proposals at length, was a statement that we would make Germany pay to the limit of her capacity. That I stand by. The whole point is the limit of her capacity. I quoted it afterwards in Birmingham. It was a statement that we would make Germany pay to the limit of her capacity. I said we were advised by official advisers that she could not pay the whole cost. I said so at the election. I pointed out the reasons why they had come to that conclusion, but I also said there was another Committee which had come to the conclusion that she could pay, and I said the Allies with the help of experts will examine that proposal, and will take expert advice as to what her capacity is and upon that they will base their indemnity. That is exactly what the Allies have done. We have taken the best expert advice available to France, to Italy, to Belgium and to ourselves. They are some of the ablest men I have ever had the privilege of meeting. Upon their advice we put forward this demand. We are carrying out to the utmost extent of the power of any country the terms of the Treaty. The hon. Gentleman said "Germany was to have given you so many bonds." She has done so. The value of them depends upon the value of the German security at the present moment, but she has delivered the bonds. He said that she was to pay £1,000,000,000. Does he know what she has paid?
    Mr. BOTTOMLEY: I did not say £1,000,000,000. Your memory is a bit bad to-day.
    The PRIME MINISTER: You said that she was to pay before the 21st May—1,000,000,000.
    Mr. BOTTOMLEY: I quoted the words of the Treaty—22,000,000,000 marks.
    The PRIME MINISTER: That is £1,000,000,000 sterling.
    Mr. BOTTOMLEY: But you go and say words we did not say.
    The PRIME MINISTER: I do not want to quibble about words with the hon. Gentleman. I accept that correction, if he thinks it is a correction. I converted the 20,000,000,000 marks into£l,000,000,000 sterling. That is the only difference. I will accept the 20,000,000,000 marks, which
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    is the same thing in my judgment. Does he know what has been paid? He comes here to criticise and attack the Government for not carrying out the Treaty and he has not the remotest conception of what has been done to carry it out. As a matter of fact, a vast quantity of materials—raw materials, ships, property, coal—has been delivered, and at the present moment the question is what the value is. Take the ships. Ships have been delivered to this country. If you take their value at the time they were delivered, they are worth so much. If you take their value at the present time they are down to £15 or £16. The same thing applies to other property and to the coal delivered. The question in dispute is that Germans say if you take the value of that material at the time it was delivered it is more than the 20,000,000,000 marks. We say it is less. That is the dispute which is in course of being examined by the Reparation Commission. But would anyone have imagined, from what the hon. Gentleman stated, that Germany had delivered anything at all? As a matter of fact, even from our account it is a matter of hundreds of millions which have been delivered to the Allies by Germany. But not a word of that is stated in the criticism of the action of the Government! Hundreds of millions sterling have been delivered. It is purely a question of the time at which you assess the value of the material handed over, whether it is coal or ships or potash or property or what not.
    That is the position with regard to what has already been done. Now I come to the other point. The hon. Gentleman did not betray the slightest appreciation of the practical difficulty of exacting an indemnity from another country and paying it in this. That is a practical difficulty You can collect any indemnity you impose, within some sort of reasonable limits, in Germany, but how are you going to transfer it here? This is the sort of loose thinking there has been upon this subject. The hon. Gentleman says, "Why do you not go there and collect the customs? Send me there to collect the customs on commission." Supposing he goes over there to collect the customs. What does he collect? He collects in marks, just as you collect here in the paper money of this country. Whether you are dealing with tobacco, or sugar, or what not, you collect in marks. Who wants them? He

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    would bring here shiploads of German paper, and he would report that there were no liquid assets to distribute. Why? Because they are not convertible. What is the good of collecting at the custom houses of Germany payment in the currency of the country? Because there is no other currency they have got. If they had other currency they would have none of these difficulties. Take railways. It is said, "Why do you not seize these?" Very well, we seize them. We appoint another—I suppose the Seconder of the Amendment—to go there. He would be in the ticket office. One of them would be an exciseman and the other a ticket collector. Just see what happens. A man goes there and says, "I want a ticket to Frankfort from Berlin." What does he pay in? He pays in marks. You collect nothing but marks, paper marks. Tell me what you could make of them if we got them all here. They are no use. Over 240 of them—how many are they?—[An HON. MKMBER: "Two hundred and thirty!"]—Two hundred and thirty of them at the present moment are necessary in order to make £l sterling, and if you begin to collect them like that you would require one shipload to pay the fare of the hon. Gentleman home, in marks. Something has been said about schoolboy finance. That really is schoolboy finance. These are the practical difficulties of paying in a currency which is no use to you.
    Then the hon. Gentleman said, "Why do you not take wood pulp?" How much? You would put the mills of Newfoundland out of order, and the Anti-Waste League could not possibly run its campaign. Their election literature might not be repeated, and there are some papers which might go out of print. How much wood pulp would be brought into this country if all of it were brought from Germany? If you said to Canada, "We do not want any more stuff from you"; if you said to Newfoundland, "We do not want anything from you"; and if you said to Sweden, with whom we do business—they send us wood pulp and we send them something else—"We do not want anything more from you; we are going to trade with nobody but Germany." All of our papers, weekly and daily, are going to be printed on something which will be marked "Made in Germany." It will be stamped on the hon. Gentleman's (Mr. Bottomley's) paper. Nothing but German paper!
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    Supposing we did this, how much indemnity could you pay out of that? What indemnity would you pay out of that? You really must consider this as a practical proposal, and that is what these able experts have been doing. I have not been going on any advice of my own or a close examination of my own. We are bound to act upon the advice of men who are sitting from day to day, from week to week, and from month to month, and examine these matters in view of all the practical difficulties, and this is the conclusion they have come to. If you press for impossible things you get nothing. I take the view that we have got to do the best for the country out of what is essentially a bad job, as every war is. This War has cost something beyond anything which any country could pay. The War has cost £50,000,000,000. Take the £15,000,000,000 which the Central Powers have to pay, and there remains £35,000,000,000. Does anyone think that any country in the world could pay that as an indemnity? The hon. Gentleman said, "Do unto them what they would have done unto you if they had won." Very well, take that. It is an inversion of the Golden Rule, but take it. Does anyone imagine we could have paid it? How? Has anyone considered the difficulties we had with regard to finance in America during the War? France, which was a rich country, could not do it.
    Lieut.-Colonel J. WARD: Surely they would have looted England, and taken every bit of the private wealth there was in the country?
    The PRIME MINISTER: Let us say they came to England, cleared out the National Gallery, cleared out all the old furniture, and took everything else away. How much would it come to. Has the hon. Member really entered into the question of the valuation of these things? If they cleared out all the gold we have got—I forget how much that is, but it is not a prodigious quantity—if they took all that away, I doubt very much whether we could have paid one year's indemnity out of it. The hon. Member has referred to foreign investments. Our foreign investments are greater than those of Germany, but are they enough to pay for that, and that shows how much the hon. Gentleman knows, because we had to hypothecate enormous sums of our foreign investments during the War to be able to carry on at all, and we had then to borrow

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    £1,000,000,000 from America in order to go along. He does not realise the difficulties of doing it. You would have to pay it from this country in goods or services. There is no other way you can pay indemnities to any other land, so that Germany is in the same position. That is why we have introduced this element, of an export tax upon her goods. What does that mean? Everything she sends out in goods is gold. She gets something which is the equivalent of gold for it outside. You will have to make an allowance to enable her to get the raw materials and the food which are necessary for her to produce, otherwise the goods would not be forthcoming, and that is the calculation we have got to make. I do not want to enter into this controversy except in the spirit of doing my best to exact out of Germany the last farthing she is capable of paying, but I do not want to go there—and as far as I am concerned I will not go there—in the spirit of putting forward proposals which, upon the advice of the best experts we have, we know to be utterly impracticable and will only raise false hopes in the country.
    That is what I have to say upon that matter. Upon other topics which have been raised, the hon. Gentleman made great play of the fact that Holland refuses to surrender the Kaiser. He thinks that if we had simply insisted they would have done so. I do not think so. At any rate, that is the conclusion come to, not only by the representatives of this country, but by those of France as well. The hon. Member admires the determination of France in contrast with the poor, feeble spirit displayed by the representatives of his own country, but France has just as strong a view upon this as ourselves, that you could not run the risk of anything in the nature of hostile action, that it was not worth it, and merely to bluff, to say, "Unless you do this, we will do that," would be undignified. Now I come to the question of the criminals. There is a great difference between a trial in another country and a trial in your own. The witnesses are not forthcoming. There is the fact that you cannot bring witnesses and confront them, and all that has to be taken into account. We make full allowance, but we shall insist. Britain has been pressing this hard, and we propose to press it right to the end against
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    those who have been guilty of atrocities. War itself is an atrocity, but this is something which is an outrage upon outrage itself. In regard to such offences as were given yesterday in the catalogue by my right hon. and learned Friend the Attorney-General, there we must insist, and when the German representatives come here in a fortnight's time, we shall certainly put to them the points which were put by the learned Attorney-General yesterday and say that we must insist upon a trial for these offences.
    Let me say this in conclusion. We have already indicated to Berlin that in my judgment and in the judgment of the Allies Germany is not doing all she ought to do in order to meet her obligations. I do not want, in replying to hon. Gentlemen who have gone into real extravagancies, to be put in the position of appearing to defend the action of Germany. It is impossible to do that, but if I go to the Conference, it will be my first duty to insist that Germany shall carry out the essential parts of the Treaty which I think at present she has failed to carry out. She has not taxed herself up to the limit of her capacity. She has not taxed herself up to the level of the Allies. She has not done so. Her Customs and Excise are not adequate, even in comparison with the French and British. She has to do her best to appreciate the mark by balancing her Budget. Her Budget now is a ridiculous one. Her Budget, I think, is about one-fifth of her expenditure. That is intolerable. It is not that Germany is too poor to meet these demands. We shall not be convinced that she is until she has imposed upon her people charges which we are entitled to expect. I have a suspicion—I said so before—that she is coming into court rather with ragged clothes in order to make a good case on her Judgment summons, and to reduce the monthly payments. The mark is not as ragged as it appears. It can put on a little more polish. It is not as shabby as it looks. That is my conviction at the present moment, and that is one of the points we shall certainly press upon the German Delegation when they come here, that they really must make the same efforts as any other country to balance their accounts, improve their currency, and make it more possible for them to meet their obligations.

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    But do not let us ignore, all the same, how much has been accomplished. The German Fleet has disappeared. The German Army has disappeared. The gigantic war material of Germany has been surrendered. The German Colonies have been given up. Very considerable quantities of materials have been surrendered. So far the Treaty has been enforced. It will be our duty to see that the rest is enforced to the utmost of the capacity of Germany to discharge. Upon that we will take advice, but I implore hon. Members, who think that greater things can be accomplished, to exercise a deep sense of responsibility when they examine this problem, and not to advise that which is impracticable, which no sane man with experience would ever recommend this country to embark upon. But do not forget that a deliberate failure by Germany to carry out her obligations means action by the Allies to enforce it. Before any Government takes that responsibility, the responsibility of calling upon their respective countries to enforce these obligations, to take the stern steps which are necessary to do so, Governments, Parliaments, peoples must be satisfied that the failure of Germany is not due to something which can be reasonably explained, but to a deliberate attempt on her part once more to defy a Treaty.
    Mr. THOMAS SHAW: I am going into the Lobby with the Mover of the Amendment, should he press it to a Division, but for different reasons from those given by him. He has told us how we can perform the impossible. He would send a couple of policemen to Holland to seize the ex-Kaiser, because Holland is a little country, and, generally speaking, he has blown the trumpet. If we began a new war it would no doubt help the circulation of newspapers, and high fees would be paid for lecturing, and things of that kind, but there would be certain disadvantages about the position. Our objection to the Government's policy is not that they have not performed the impossible, but that their present position is a huge game of bluff, and the demands now made can scarcely be realised. The Prime Minister has told us quite definitely now what some people knew during the War, that you could only exact an indemnity really in goods or services, that if you took the goods you were in danger of flooding
    470
    your own country with the products and causing unemployment, and, if the services were not there, you could not possibly get them. We would prefer to have a clean-cut policy, not making. Germany do what Germany cannot do, but a policy built on the idea that Europe must be restored, peace must be made in Europe, and Europe must be got to work, if the best results are to be got by everybody. It would be infintely better for this country that that policy should be followed, and Germany only pay half the amount that might be dragged out of her, than to drag a greater amount out of her and keep the Continent of Europe upset.
    What is the use of our talking in terms of marks when we are talking of Germany and her taxation? To calculate the taxation of Germany at the rate of 230 marks to the £ is not honest. Everybody who has been in Germany knows perfectly well that the mark in Germany itself has a totally different value from 230 to the £. Therefore, to make calculations of Germany's taxation on the basis of 230 marks to the £ is neither reasonable, just, nor honest. We are told that Germany is not suffering. The hon. Member for South Hackney has sent his emissaries forth, and they have reported to him that Germany is doing fairly well. I have seen a little of Germany myself, and may speak from personal knowledge, and anyone who says, after seeing the working people in Germany, that Germany is not suffering, is either blind or absolutely without sympathy. That is the comment I have to make on the statement of the hon. Member for Hackney. The Germans are evidently suffering from under-feeding. I am not saying they are not justly suffering, but I do say they are suffering An hon. Member says, "Serve them right." It may serve them right; I am not arguing that point. I made that perfectly clear, but we ought not to be misled by stories that the Germans are doing well. I will go further and say that the children in Germany are suffering very badly. It is perfectly true there is no comparison between the sufferings in Berlin and the sufferings in Vienna, but that the children of Berlin are suffering from under-feeding there can be absolutely no question. If any impartial inquirer goes there he will report that Germany is undoubtedly suffering.

    471
    We want this general election because we say that not only were the promises made at the last election bluff, but that the present programme of the Government is bluff. Who believes that for 42 years we are going to be able to levy a tax on Germany? I doubt very much whether any Member of the Government believes it; certainly no Member of our party believes that you are going to lay a tax for 42 years on any country. We are advised to do what the Germans would have done had they been the conquerers. But was it not just because we did not believe in German principles that we went to war with her, and to be advised now to lower ourselves to the level of German psychology is about the weakest thing I have ever heard said in this connection, and unworthy of Britain. Our policy on these Benches is to make the terms of peace such as, whilst extracting the maximum amount, to ensure that Europe shall be restored and the wheels of industry turned round so that every country will be better for it.
    Colonel GREIG: That is the Government policy.
    Mr. SHAW: Exactly, but it is because the policy of the Government is such a reversal of the statement on which it was elected that we want a General Election. [An HON. MEMBER: "There is no reversal."] No reversal of the statements made at the General Election? The Mover of the Amendment has proved conclusively that the statements made were that we were going to make Germany pay every penny, that we were going to search her pockets, that we were going to hang the Kaiser. These things you said! Have you done them? What is your policy now? Do you now talk about hanging the Kaiser, about making Germany pay every penny, about searching her pockets? You recognise now that you cannot simply do the things you said you could. Our policy here is to try to get you before the country so that you may be able to tell your story again. [An HON. MEMBER: "The same story!"] You would tell the same story? If you do, God help you! If you tell the same story that you did, and what you have failed to do then the electors can be trusted to look after you. No, you will tell a modified story. That is our position. We support this Amendment because we believe the whole policy
    472
    of the Government in regard to the Peace Treaties should be submitted to the electors, and because we believe the promises made have not been kept. We support it from a totally different point of view from the Mover of it, but we shall go into the Division Lobby and vote for it.
    Lieut.-Colonel J. WARD: I just want to say one or two words in reference to the speech to which we have just listened from my hon. Friend above the Gangway. I quite agree with the principle of this Amendment in reference to indemnities, prosecution of the war criminals, and so on. That was agreed to and put forward as the Government policy at the last election. I am bound to confess, however, that I do not take the slightest notice of these Opposition demands either from the hon. Member for Hackney (Mr. Bottom-ley), or from the hon. Member above the Gangway (Mr. Shaw), for a General Election—on the ground that the Government secured its majority by promises that it has been unable to perform. I remember, as I have stated before in this House, the election of 1906, when the Conservative party were almost destroyed, when it took only a very small portion of the seats above the Gangway to contain the lot of them. For seven days immediately after that election I listened to the first speeches I ever heard in this House. They were all demands on the Government to resign—before it had even begun work—on the ground that it no longer—even in these seven days—represented the views of the people, and that it had secured its majority by fraudulent means and by promising things which it never could perform, and so on. These same demands are now made from above the Gangway by men who were supposed to have swept aside all these pettifogging, old party tactics. They are adopting exactly the same. You are one whit better than the others of other years in reference to this particular point, and when, as I hope, you will some day get a majority and will sit on the opposite side your opponents will be over here on this side, doing exactly the same thing.
    The fact of the matter is you have sunk into the political party game with a most remarkable ease considering the high moral standard you were supposed to possess in relation to ordinary politics. I therefore regret that there is any reference whatever in this Resolution to the

    473
    question of a General Election, or as to whether the Government represents the country or not. The salient features to me are these: as you know I was a pacifist and opposed conscription. Suddenly the power that had taught its people that military domination was the only thing that counted in the progress of the race started to establish itself as the head of the world. It suddenly decided to put its principles into practice. If at that time the nations of the world and if England in particular, and Britishers in general, had not stood in the breach, Heaven knows what would have happened to civilisation as we previously understood it. We know perfectly well—though I perhaps did not express it correctly in my interruption of the Prime Minister, and I apologise if he thinks I was offensive in any way—but we know perfectly well what the situation amounted to. To discover it you have only to read Bulow or other books published by Germany before the War on the conduct of war. One of the foremost books published by a great authority in Germany was on "how to conduct war." The writer described not merely how armies shall be prepared, but how the people shall be prepared, and how the other peoples shall be fought. He goes on to describe how you should deal with your enemies; yet you potter about on matters of this sort.
    If Germany had beaten us there would have been a German Army of Occupation on the Thames instead of the British Army of Occupation on the Rhine. Would they have pottered about the matter as to whether our sovereigns were worth what they were supposed to be worth? They would have occupied the country from end to end, would have imposed slavery and levied toll upon its inhabitants—and this in accordance with the documents that were prepared even before the War began. Talk about not making the enemy pay! We should have been paying, not for 42 years, but for several generations. Until means had been found to throw off the burden, we should have been slaves and bondmen of these people who you are pretending to-day are our brothers. Do not forget that the Seconder of the Amendment hit the nail on the head, that at the back of this pacifist propaganda which at the present time is going on on Labour platforms—unconsciously, for they do not know what they are doing—
    474
    is the financial gang who do not wish Germany to pay. These are involved to a certain extent in Germany's financial position, and it is a fine thing for them to get pacifist labour men all over the country to play their game. It is said: "Do not hurt the poor German, he is poor, and his people are starving. They are being underfed," and all this, that, and the other. Appeals of that sort can be made to Englishmen and Englishwomen, because they are always ready to try and treat a fallen foe in accordance with their games and sports, fairly. It is a moral certainty that such appeals as those, if the boot had been on the other foot, would have been utterly useless to those who would have extracted the last farthing of wealth out of us. I believe the Government are now really "toeing the line" on this subject. I know it is the custom of Governments to slide out of everything that is not easy and comfortable unless there are some thorns in the flesh prodding them on. There has not been sufficient vigour displayed in extracting from Germany what she ought to pay and in securing the trials of the criminals who actually destroyed the boats and sunk women and children after the ships had gone, who were responsible for the atrocious murder of people in that way, and should they escape punishment the War really would have been fought in vain. Should there be another war, if it is understood that men can perform atrocious deeds of that kind under the guise of the conduct of war and still be able to shuffle out of punishment, then we destroy one of the principles for which we went to war. That is why I am going to support this Amendment, and I shall do so because I can see quite plainly, with the ease and comfort of the Government Benches, they are likely to allow these Huns to slide out of every liability they have incurred unless someone prods them.
    Mr. HOWARD GRITTEN: I wish as a short preliminary to deprecate the custom, or what appears to me to be the growing custom, of springing important subjects of Debate on this House without due notice, whereby the majority of hon. Members are precluded from giving adequate preparation to a subject on which they may feel very strongly, and which they may desire to present to the best of their ability. I was only notified of this Debate this morning, and

    475
    it is impossible to make one's case with any cogency at such a short notice as amounts to no notice at all. The members of a school debating society, or of the amateur Parliament of Slocum-on-the-Mud, are treated with more consideration by their officials. The Prime Minister has seen fit to belittle the speeches which have been made in support of this Amendment, but I am afraid that, so far as the intelligence of the ordinary Member is concerned, he has thrown very little light on our difficulties, and he must pardon us if some of us cannot follow him into the intricacies of his financial calculations or into the realms of la haute politique. What we plainer men want to know is the definite amount Germany is to be made to pay, and the definite time in which she has to make the payment So far as I have listened to this Debate it has proceeded on the general line of policy, or want of policy, on the subject of indemnities or reparations. The public sentiment on this subject is undoubted. It has been skilfully focussed and epitomised by the Mover and Seconder of this Amendment. But I venture to suggest that their case would be better fortified by the evidence of some concrete instances of the pressing necessity for demanding reparation from Germany. I like to come down to bedrock.
    In the few minutes at my disposal, I propose merely to give one particular instance or exemplification of the general proposition, and that is afforded by the sufferings of some of my own constituents. On 16th December, 1914, the Hartlepools were bombarded by three first-class German cruisers. The earliness of that date I wish to emphasise as being germane to the general tendency of this Amendment. The complaint I make is that the sufferers have been waiting for compensation ever since that date. Except in an abbreviated form by questions which I have put in this House, the details have never been made public. I do not want to elaborate, but, suffice it to say, that the Hartlepools were suddenly bombarded by three first-class battle-cruisers from 8 a.m. to nearly 9 a.m., using broadsides, ripple-fire, and every mode of attack except landing-parties. The local battery was only manned by territorials, who in private life were business men, tradesmen, and working men. Yet they stood to their three little guns with the fortitude, the
    476
    endurance, and the sangfroid of regular soldiers and veteran troops. Although it was a small battery with only three guns, yet they did considerable damage to the German cruisers. They beat them off; they killed and wounded numerous Germans on the Blucher and Seidlitz, and blew away part of their armaments. They caused a fire on the Von der Tann, and that vessel was never heard of for some time afterwards. But the havoc and suffering wrought among the civilian population were almost beyond description. I went up at once. I found whole streets blown to fragments, and four hospitals overcrowded with the wounded and dying. To sum up, 130 were either killed at once or died subsequently, and 454 were wounded. And yet the first Official Report was that 22 had been killed and 50 wounded, although it is true that these numbers were increased slightly by a second report to 29 killed and 64 wounded! No doubt the Government had their reason for camouflaging the real facts. But neither time, nor place seemed to matter to Ministers and officials. The Admiralty issued a Report stating that the bombardment took place at 9.20 p.m., and the War Office said 11.35 p.m. Also it was officially stated that my constituency was in Yorkshire! I suppose Durham and Yorkshire are all one to the official mind, whose knowledge and sympathies do not extend beyond the red tape which encircles Whitehall. Some of us pressed at once and have pressed ever since for compensation to these poor sufferers. First of all the Government sent down what they called official assessors. These gentlemen delegated their duties to a firm of valuers, while they enjoyed themselves at the Grand Hotel. The compensation granted was not only inadequate, but in some cases was so insufficient as to amount to a positive insult. Ever since that time I have been receiving piteous representations from these sufferers, some of whom are reduced to the direst poverty. I have pressed the Government, both by questions and by letters, to advance something to these poor people, and all the satisfaction I have received is to be told that we must wait until Germany pays. These poor people cannot wait for an indefinite period. Some of them may be forced to the workhouse whilst they are waiting for the Government to obtain reparation from Germany. Apparently the Government has not common human sympathy.

    477
    It can continue to maintain Ministries and Departments, which are costly, useless, and which nobody wants and most people ridicule; but it cannot advance even small sums to some of my constituents who have had to endure bereavement, bodily injury, and grievous loss. To injury it has added the insult of red tape. First of all, claimants were told to register their names and claims with the Town Clerk. This involved much labour. But, this process being completed, they were then told: "You must register your names and claims with the Reparations Department in Cornwall House." If I may add my small word, I would urge the Government to imitate the sterner and more commendable attitude of France, to stand not on the order of their going, but to proceed at once, and, instead of fobbing us off with these indefinite
    promises, which do not satisfy anybody, not to allow themselves to be cozened and cheated and befooled by the cunning and chicanery of the Germans. I also appeal to them to display ordinary common humanity, to realise the sufferings of their humbler fellow-countrymen and the cruel hardships that have been incurred by those hundreds of poor people whom I represent, and, at any rate, to see their way to make some payments on account.
    Mr. BOTTOMLEY rose in his place, and claimed to move, "That the Question be now put."
    Question put accordingly, "That those words be there added."
    The House divided: Ayes, 40; Noes, 181.

    Division No. 2.]

    AYES.

    [1.58 p.m.

    Barker, G. (Monmouth, Abertillery)

    Hayday, Arthur

    Shaw, Thomas (Preston)

    Bowyer, Captain G. E. W.

    Henderson, Rt. Hon. A. (Widnes)

    Shaw, William T. (Forfar)

    Campbell, J. D. G.

    Hirst, G. H.

    Short, Alfred (Wednesbury)

    Cape, Thomas

    John, William (Rhondda, West)

    Spencer, George A.

    Carter, W. (Nottingham, Mansfield)

    Lunn, William

    Thomas, Rt. Hon. James H. (Derby)

    Clynes, Rt. Hon. J. R.

    Mills, John Edmund

    Walsh, Stephen (Lancaster, Ince)

    Cohen, Major J. Brunel

    Morgan, Major D. Watts

    Ward, Col. J. (Stoke-upon-Trent)

    Glanville, Harold James

    Myers, Thomas

    Wignall, James

    Graham, D. M. (Lanark, Hamilton)

    Poison, Sir Thomas

    Wilson, W. Tyson (Westhoughton)

    Griffiths, T. (Monmouth, Pontypool)

    Redmond, Captain William Archer

    Young, Robert (Lancaster, Newton)

    Gritten, W. G. Howard

    Rees, Capt. J. Tudor (Barnstaple)

    Grundy, T. W.

    Robertson, John

    TELLERS FOR THE AYES.—

    Hall, F. (York, W.R., Normanton)

    Rose, Frank H.

    Mr. Bottomley and Colonel Claud

    Harbison, Thomas James S.

    Royce, William Stapleton

    Lowther.

    Harmsworth, Hon. E. C. (Kent)

    Sexton, James

    NOES.

    Adair, Rear-Admiral Thomas B. S.

    Cory, Sir C. J. (Cornwall, St. Ives)

    Hancock, John George

    Agg-Gardner, Sir James Tynte

    Cowan, D. M. (Scottish Universities)

    Hanson, Sir Charles Augustin

    Amery, Lieut.-Col. Leopold C. M. S.

    Davidson, J. C. C. (Hemel Hempstead)

    Harmsworth, C. B. (Bedford, Luton)

    Baird, Sir John Lawrence

    Denniss, Edmund R. B. (Oldham)

    Henderson, Major V. L. (Tradeston)

    Baldwin, Rt. Hon. Stanley

    Doyle, N. Grattan

    Henry, Denis S. (Londonderry, S.)

    Barnston, Major Harry

    Du Pre, Colonel William Baring

    Herbert, Denis (Hertford, Watford)

    Benn, Sir A. S. (Plymouth, Drake)

    Edge, Captain William

    Hewart, Rt. Hon. Sir Gordon

    Bennett, Sir Thomas Jewell

    Edwards, Major J. (Aberavon)

    Hilder, Lieut.-Colonel Frank

    Betterton, Henry B.

    Edwards, Hugh (Glam., Neath)

    Hinds, John

    Blades, Capt. Sir George Rowland

    Elliot, Capt. Walter E. (Lanark)

    Holmes, J. Stanley

    Blair, Sir Reginald

    Elliott, Lt.-Col. Sir G. (Islington, W.)

    Hope, James F. (Sheffield, Central)

    Borwick, Major G. O.

    Entwistle, Major C. F.

    Hopkins, John W. W.

    Breese, Major Charles E.

    Eyres-Monsell, Commander B. M.

    Hunter, General Sir A. (Lancaster)

    Bridgeman, Rt. Hon. William Clive

    Falcon, Captain Michael

    Hurst, Lieut.-Colonel Gerald B.

    Brown, Captain D. C.

    Falle, Major Sir Bertram G.

    Illingworth, Rt. Hon. A. H.

    Bruton, Sir James

    Farquharson, Major A. C.

    Inskip, Thomas Walker H.

    Bull, Rt. Hon. Sir William James

    Flannery, Sir James Fortescue

    James, Lieut.-Colonel Hon. Cuthbert

    Burgoyne, Lieut.-Colonel A. H.

    Forrest, Walter

    Jesson, C.

    Burn, Col. C. R. (Devon, Torquay)

    Fraser, Major Sir Keith

    Jodrell, Neville Paul

    Campion, Lieut.-Colonel W. R.

    Fremantle, Lieut.-Colonel Francis E.

    Johnson, Sir Stanley

    Carew, Charles Robert S.

    Galbraith, Samuel

    Johnstone, Joseph

    Carr, W. Theodore

    Geddes, Rt. Hon. Sir E. (Camb'dge)

    Jones, Sir Edgar R. (Merthyr Tydvil)

    Cautley, Henry S.

    George, Rt. Hon. David Lloyd

    Jones, Sir Evan (Pembroke)

    Cecil, Rt. Hon. Evelyn (Birm., Aston)

    Gibbs, Colonel George Abraham

    Keliaway, Rt. Hon. Fredk. George

    Chadwick, Sir Robert

    Glyn, Major Ralph

    Kenyon, Barnet

    Chamberlain, Rt. Hn. J. A. (Birm. W.)

    Gould, James C.

    King, Captain Henry Douglas

    Chilcot, Lieut.-Com. Harry W.

    Grant, James A.

    Lane-Fox, G. R.

    Churchman, Sir Arthur

    Gray, Major Ernest (Accrington)

    Law, Rt. Hon. A. B. (Glasgow, C.)

    Clay, Lieut.-Colonel H. H. Spender

    Green, Joseph F. (Leicester, W.)

    Lister, Sir R. Ashton

    Coates, Major Sir Edward F.

    Greene, Lt.-Col. Sir W. (Hack'y, N.)

    Lorden, John William

    Coats, Sir Stuart

    Greenwood, Colonel Sir Hamar

    Lynn, R. J.

    Cockerill, Brigadier-General G. K.

    Greig, Colonel James William

    M'Curdy, Rt. Hon. C. A.

    Colvin, Brig.-General Richard Beale

    Hacking, Captain Douglas H.

    M'Donald, Dr. Bouverie F. P.

    Cope, Major Wm.

    Hall, Lieut.-Col. Sir F. (Dulwich)

    Mackinder, Sir H. J. (Camlachie)

    McLaren, Hon. H. D. (Leicester)

    Parry, Lieut.-Colonel Thomas Henry

    Sykes, Colonel Sir A. J. (Knutsford)

    M'Lean, Lieut.-Col. Charles W. W.

    Pearce, Sir William

    Taylor, J.

    McMicking, Major Gilbert

    Pease, Rt. Hon. Herbert Pike

    Terrell, George (Wilts, Chippenham)

    Macnamara, Rt. Hon. Dr. T. J

    Pennefather, De Fonblanque

    Terrell, Captain R. (Oxford, Henley)

    McNeill, Ronald (Kent, Canterbury)

    Pliditch, Sir Philip

    Thomson, F. C. (Aberdeen, South)

    Macpherson, Rt. Hon. James I.

    Pollock, Sir Ernest M.

    Thomson, Sir W. Mitchell- (Maryhill)

    Magnus, Sir Philip

    Pownall, Lieut.-Colonel Assheton

    Thorpe, Captain John Henry

    Malone, Major P. B. (Tottenham, S.)

    Pretyman, Rt. Hon. Ernest G.

    Wallace, J.

    Mitchell, William Lane

    Purchase, H. G.

    Ward, Col. L. (Kingston-upon-Hull)

    Molson, Major John Elsdale

    Rawlinson, John Frederick Peel

    Warner, Sir T. Courtenay T.

    Mond, Rt. Hon. Sir Alfred M.

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

    Wheler, Lieut.-Colonel C. H.

    Montagu, Rt. Hon. E. S.

    Remer, J. R.

    White, Lieut.-Col. G. D. (Southport)

    Morden, Lieut.-Col. W. Grant

    Renwick. George

    Wild, Sir Ernest Edward

    Morison, Rt. Hon. Thomas Brash

    Roberts, Samuel (Hereford, Hereford)

    Williams, Lt.-Com. C. (Tavistock)

    Morrison, Hugh

    Roberts, Sir S. (Sheffield, Ecclesall)

    Willoughby, Lieut.-Col. Hon. Claud

    Morrison-Bell, Major A. C.

    Roundell, Colonel R. F.

    Wilson, Daniel M. (Down, West)

    Munro, Rt. Hon. Robert

    Samuel, A. M. (Surrey, Farnham)

    Wilson, Colonel Leslie O. (Reading)

    Murchison, C. K.

    Sassoon, Sir Philip Albert Gustave D.

    Wise, Frederick

    Neal, Arthur

    Scott, A. M. (Glasgow, Bridgeton)

    Wood, Sir J. (Stalybridge amp; Hyde)

    Newman, Sir R. H. S. D. L. (Exeter)

    Shaw, Hon. Alex. (Kilmarnock)

    Worthington-Evans, Rt. Hon. Sir L.

    Newton, Major Harry Kottingham

    Simm, M. T.

    Yate, Colonel Sir Charles Edward

    Nicholson, Reginald (Doncaster)

    Smithers, Sir Alfred W.

    Young, Lieut.-Com E. H. (Norwich)

    Norman, Major Rt. Hon. Sir Henry

    Sprot, Colonel Sir Alexander

    Younger, Sir George

    Norris, Colonel Sir Henry G.

    Stanley, Major Hon. G. (Preston)

    Oman, Sir Charles William C.

    Stevens, Marshall

    TELLERS FOR THE NOES.—

    Ormsby-Gore, Captain Hon. W.

    Stewart, Gershom

    Lord E. Talbot and Mr. Dudley

    Palmer, Major Godfrey Mark

    Sturrock, J. Leng

    Ward.

    Parker, James

    Sutherland, Sir William

    Question, "That the Question be now put," put, and agreed to.

    Main Question again proposed.

    TELEPHONE SERVICE.
    Mr. REMER: I beg to move, at the end of the Question, to add the words,
    "But regret the absence from the Gracious Speech of any announcement that the telephone service will be placed under private enterprise, in view of the necessity for a cheaper and more efficient service."
    2.0 P.M.
    In moving this Amendment, I would first like to call attention to the very strong opinions which have been expressed on the telephone service within the last month or six weeks, almost unanimously, by the business community. This feeling has been aroused more fiercely in all kinds of Associations and Chambers of Commerce connected with trade than probably on any other subject which has been discussed by them for a very long time. The opinions have not been merely an echo of a Press agitation. I do not think a Press agitation could ever arouse public opinion unless there was some solid sound foundation for it, and more particularly is that the case if the public opinion which is aroused is the calm and cool opinion of the business community. We have just concluded a Debate in this House during the last two days on the unemployment question. If there was one thing which came out more prominently in that Debate than anything else it was that the business community as a whole is now faced with unparalleled difficulties and anxieties, and I am sure, when we come to realise the amount of irritation which the business man has almost daily
    480
    to face through the telephone service, we shall agree we ought to take every step possible to remove that cause of irritation. I may be asked why has this agitation on the part of the business community been aroused against the telephone service? Let me at once say, quite frankly and bluntly, that the telephone service of this country is thoroughly bad and inefficient. I am quite sure that the difficulties about raising the charges would not have arisen, and that the volume of strong public opinion on that point would not have been created if the telephone service had been an efficient service. If it had been efficient there might have been a few grumbles and some small complaints, but the complaints would not have reached that loud volume which they have attained during the past six weeks.
    I propose to give three examples from personal experience of the inefficiency and incompetence of the telephone service. I suppose, like myself, every Member of the House has received letters on this subject. One of my constituents wrote to me complaining that he could not get put on the telephone service. He conceived a novel and original way of getting the telephone connection. He went to the Manchester Exchange and gave a number of his friends 1s., telling them to send telegrams on any subject they liked to be delivered at his private house, which was four miles from the post office: After this had been going on for about ten days the postmaster came to him and said, "Is there no way by which I can

    481
    get out of the terrible trouble you are putting me to? "The reply was, "If you put me on the telephone I shall not need to have any more telegrams." Prior to this my constituent had been told, as an excuse for not putting the telephone on, that there was a shortage of labour and material, but 48 hours after this conversation the requisite labour and materials appeared, and he was put on the telephone system and is on it at the present moment. That is my first example of the inefficiency of the telephone service.
    The second example deals with a matter on which I have had correspondence with the right hon. Gentleman himself. Another of my constituents wrote complaining of his inability to get put on the telephone. This was the case of a very important business concern. The right hon. Gentleman, in answer to my letter, said the reason why my constituent could not be put on the telephone was because of the shortage of material, and especially of silk. This firm happened to be one of the largest silk manufacturers in the United Kingdom and their works working two days per week, and naturally they did not regard this excuse as adequate. After it had been pointed out by them that it was not a good reason, the excuse was altered, and instead of it being alleged that there was a shortage of silk, they were told that the reason was that the price of the silk required happened to be higher than the price of foreign silk.
    These are two examples of the most incompetent and inefficient telephone service which has existed in any part of the world. I now come to the third example. This is from my own personal experience. I have a telephone in my private office. I am persistently being cut off, and have been so cut off frequently during the last three years in the middle of important conversations. After complaining to the telephone managers, I was told that if I would only give a specific instance my complaint would be immediately remedied. I gave a specific instance. A gentleman came to the telephone and asked for me personally. I spoke to him. He said, in most courteous language, that the facts were not as I had stated in my letter, but while he was in the middle of telling me so the old trouble recurred, and we were cut off in the middle of the conversation, thereby proving conclusively
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    that my complaint was well founded; that there was some inattention on the part of the operator, and that the telephone service was not as efficient as it ought to be.
    These three cases are typical of many complaints which every Member of this House have received from business men. They show what the business man is suffering from day by day, and they constitute one of the reasons, I might say the chief reason, why the business community are so fiercely condemning the Postmaster-General at the present moment. I have read very carefully, as most of us have done, the report of the Select Committee dealing with the question of increased charges, I think the House owes a debt of gratitude to the Committee for the careful way in which they have examined this problem. But what does that report mean? If it means anything it means that the nationalisation of the telephone system has failed, and failed badly. It has proved quite conclusively that the nationalisation of this or any other service is bound to fail. We have, fortunately, in this country a telephone service with which we can compare the Post Office service. I refer to the telephone service in the City of Hull. In 1912, when the telephone service was nationalised, this municipality decided to continue it as a municipal service, and the National Telephone Company's plant was bought by the Hull Corporation from the Post Office. I am not going to enter into the details of the service except to say that the Hull Corporation supply a telephone service at a very much lower rate than the Post Office service. My object in referring to this particularly at the moment is this. The Postmaster-General has been speaking recently, and on the 8th February, addressing the National Association of Traders, he gave various reasons why the Hull Corporation were able to supply the telephone cheaper than the Post Office were. One of the reasons that he gave was that the rents of the premises—offices and exchanges—of the Hull Corporation's service were 5d. instead of 7s.1d.per station. I do not know whether he is aware of it or not, but that statement is a complete mare's nest. It is not correct. The inference which the right hon. Gentleman drew was that the Corporation were providing these premises free of rent and rates, and the figures

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    do work out in the accounts at 5d. per station. He has entirely overlooked, however, the fact that in the capital account of the Hull Corporation there appears a sum of £14,000 which the Corporation borrowed for the purpose of building these premises, and that they are paying interest on this sum, so that, instead of the amount appearing in the form of rent, it appears in the form of interest on capital which they have borrowed. A further point which shows the inefficiency and mismanagement of the Post Office in their telephone service is that they have not adopted the ordinary business policy with reference to interest and depreciation. It is almost impossible to understand the method which the Post Office adopt in writing down for depreciation each year, but, adding these two figures together, the amount per annum per station in the case of the Hull Corporation service is £l 6s. 5d., while in the case of the Post Office it is £3 7s. 5d. In other words, the amount is over £2 higher per station in the case of the Post Office than in the case of Hull.
    I do not propose to go any further without making a definite and constructive proposal. My Amendment deals with the proposal that this service shall be put under private enterprise, and I believe that the only remedy is to let the business men of this country show that they can, by business methods, manage the telephone service much more efficiently and cheaply than the Post Office can. I have taken some trouble to draw up a scheme by which this can be done, and I put it before the House as a constructive proposal to which I hope the right hon. Gentleman will give his very careful consideration. The scheme that I propose is that the telephone service shall be leased to a private company, and I have taken the trouble to find that there is a body of responsible public men who are prepared to guarantee the proposal which I am making. They are prepared to pay the Government a considerable sum of money annually for the privilege of providing the public with a service of telephones at the present rates, without any increase in charges. The effect of this, so far as the Government and the right hon. Gentlemen are concerned, would be that, instead of the loss with which they are now faced, they would have a
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    profit; they would have something coming into the revenue instead of having to provide money, and instead of having, as happens with all Government-controlled establishments, the blight of Government control turning what were profits in the case of the National Telephone Company into a most serious and disastrous loss. Under this scheme we should have a sound profit coming into the revenues of the country. It is obvious to everyone who has examined the history of nationalisation whether of the telephone service or anything else, that it is always disastrous. When people are working for themselves they work harder and more efficiently than they ever will do if they are working under Government control Under Government control they are faced with the blight of red tape and of inefficiency on the part of those who do not understand the job that they are trying to do; and they find also that there are political influences which cannot but be bad for employés under State enterprise. Political graft creeps into all nationalised industry, and I am certain that it has crept into this telephone service. I know that I shall be told that the inefficiency and dearness of the telephone service is the result of the War; but we must remember that this telephone service, which produced a profit under the National Telephone Company, produced, immediately it was put under the State, a loss. That is the elementary fact which I will ask the right hon. Gentleman to explain, and which is the most damaging thing that he has to explain.
    The POSTMASTER-GENERAL (Mr. Illingworth): It is the easiest.
    Mr. REMER: I am very glad to hear that it is the easiest, because it is the point upon which business men feel most deeply, and the one they feel to be the most difficult for the right hon. Gentleman to explain. If the whole country were to serve as civil servants, logically there would be an end of all responsible Government. We find that, similarly, nationalisation means, as the hon. Member for Plaistow (Mr. W. Thorne) mentioned in an interruption in the Debate on Unemployment, the end of our freedom, the end of everything which British people love, and which they desire to see in their national institutions. If we could only get back to the elementary principle which used to obtain in the public service, when

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    business men managed the telephones on sound businesslike lines, instead of having them under the blight of Government control as a nationalised industry, I believe that we should be able to give the country not only an efficient service, but a cheaper service than we have at the present time.
    Captain THORPE: I beg to second the Amendment.
    A recent publication, with all the appearances of considered judgment, suggested that this was a proper time to raise a statue at the public expense to a lady telephone operator. The reason given why she should be held up to honour at the present time and handed down to posterity, was that she presented a subscriber with the particular number for which he had asked, and did so without delay. That is an emphatic, but, I think, not exaggerated indication of the public feeling at the present moment about the telephone service. It is true that the right hon. Gentleman who at present occupies the position of Post-master-General is not entirely to blame. He finds himself in an unfortunate position. He is the legal successor of other people who started an inefficient and uneconomical system. He has what in the law is called a damnosa hereditas. He finds himself burdened with something of which he has to make the best that he can, something that is bad from top to bottom. The complaint is not a new one, but it has been brought before the public in a striking manner by the suggestion that the expenses should be increased. The increase of expenditure and the decrease of efficiency is one of the inevitable concomitants of all Government enterprise. When the Government took over the telephones some 13 years ago, I understand the wages of the telephone operators were raised 20 per cent, in order that they should be made equal to the wages of the telegraph people in the Post Office. Their efficiency immediately descended 20 per cent., and the history of every subsequent rise, as I understand it, is a decrease in the efficiency of the service. The recent charges are such as give one very seriously to consider whether they are justified by the subsequent services which are rendered to the community. The proposition is roughly that in a large number of cases there shall be an increase of 160 per cent, over the pre-war rate, and in
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    some cases of 250 per cent. Business men immediately ask themselves, "Where is this going to stop? If we pay more, are we going to get a better article?" I believe the business community would be prepared to pay any sum for an efficient system. Is this going to make it efficient? That is the first question, and from our experience in the past, if we are not over-persuaded by my Friends on the Labour benches, who would persuade us that the nationalisation of everything is the ultimate good, I feel convinced that this is only another demand indicating a later demand without any subsequent increase in efficiency. The country does not want to pay more unless it is going to get better returns. The country anticipates nothing from a Government-managed enterprise and wants to take this opportunity of saying it will not pay more until it is satisfied that something is going to be done to consider and alleviate its complaints.
    Of course, one could give isolated complaints, and one could spend the whole day doing it, but I heard one this morning which is perhaps somewhat novel. It was from a gentleman in my constituency who, as the result of some successful commercial enterprise, decided to have a telephone installed in his private house. It was installed with the usual paraphernalia of instalment. They require nearly as many workpeople to instal a telephone as they require prelates to consecrate a bishop. A large army descended on his house and in due course a telephone was installed. He received with some pride a telephone book. He turned his name up. He found his name was right; his number was wrong, and his address was wrong. He made a complaint. I have no reason to doubt that the complaint was immediately considered, but I should have no surprise myself if it had been returned with the request that it should have been submitted in triplicate. That is a not uncommon form of dealing between the Government and a private individual. Another case is that of a village in Scotland. It is full of health seekers in the summer and empty in the winter. There was a generally expressed desire to have a telephone system installed. The usual formalities were gone through, and the Post Office required that a certain number of people should add their names to the demand for a telephone system. The census was taken in the winter, and it so happened that the number of people

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    who resided in the winter and required telephones caused the census to be two below the requisite number. The Post Office, properly, of course, under the system in which they live, wrote back and said: "As the number falls below the requisite number you cannot have a telephone system." They were quite right if they go by the rules which govern Government offices, but they were quite wrong if they are running the telephone on a commercial system. A private company would have gone into the facts and said: "Here is an opportunity of development. Here is perhaps a little risk. We will take it, and if it succeeds it will benefit our shareholders." The Government cannot do that, and they would be wrong to try.
    These are only indicative of the thousands of complaints which could be made against the system of nationalisation. My hon. Friends on the Labour Benches, whom I see present in large numbers to support this continued nationalisation of telephones, must find it a difficult task to support the present Government ownership. One wonders how often Members on these Benches find their dogmas shaken. We can conceive of one or other of the more extreme Members of that Party retiring on some evening to bed, and just before he goes into bed the telephone bell rings, and I have no doubt he says to himself, as many of us might have said, "That is a trunk call; I must go to it. It may be from Lenin at Moscow or from the Member for Central Hull." He goes to it and he hears a young lady say, "What is your number?" He gives his number and he hears the reply, "Oh, I am sorry, wrong number." There is no reason why that should continue. Presumably the lady will continue to draw her salary as long as she sits at the desk. Presumably she may make mistakes, but she only has to continue to live and be respectful to her chief in order to retain her job. In my submission the whole system is wrong. It is proved abundantly that private enterprise can run telephones, as it can run other things. It is proved in Hull. Glasgow has made a success of it. Has anyone any fault to find with the American system? Every shop and every house in America has the telephone. We are told that the increase of telephone wires increases expenditure. That principle, if true, does not appear
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    to have hindered development in America. The hon. Member (Mr. Remer) suggested that a private company should be asked to take it over. If I may elaborate that in one respect I would suggest that the public might be protected by these provisoes, namely, that the company should give an undertaking that the charges under their management should not exceed the present charges and that the percentage of profit paid to the shareholders should not go above a certain figure, and that any sum above that figure should be spent in reducing the charges to the subscriber. That is a proposition which I understand has been used with effect in the case of gas enterprises, and when you have a body of business men who are prepared to take the risk, it appears to me to be a mistaken policy for the Government, whose duty after all is to govern and not to run business enterprises, to hand it over.
    The Postmaster-General has received a large number of deputations. One can only wish he had received as many letters of complaint—and perhaps he has—as individual Members. He informed one deputation that there were no skeletons in the cupboard at the Post Office. He meant by that that all the cards were on the table and he had nothing to conceal. He has a chapter of loss. He has no prospect of greater success. He has a tale of inefficiency and irritation. If anyone had expected a skeleton in the cupboard I think perhaps he was only anticipating by a very short time the decomposition of the telephone service. One hopes that in the very near future there will be a skeleton in the cupboard, and that it will be the skeleton of the present system, and that a more efficient, more useful service will take its place, and that we shall look back to the present day as days of the past in which we learned that the Government never could and never will successfully run a big business enterprise. The right hon. Gentleman (Mr. Illingworth), who has many friends, is known to some of his admirers as the Napoleon of the Post Office. I hope he will forgive me expressing the hope that this afternoon the Napoleon of the Post Office will meet with his Waterloo.
    Mr. ILLINGWORTH: The hon. Member for Macclesfield (Mr. Remer) has truly said that this question has excited

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    a certain amount of public interest. There are certain subjects which always do excite public interest: one is the telephone service, and the other is the question of temperance. With respect to the telephone service, the Press has taken up the subject very vigorously and have shown interest in my past, my present, and my future. They are among the large flat rate users who will have to pay in future a fair share of the expenses of the administration of the telephone service. Like the other large telephone users, they have been getting at a very low rate a service which has been paid for by the smaller people. The hon. Member for Macclesfield comparing the telephone service with that of the National Telephone Company said that it was now a very bad service. I am afraid the hon. Member has a short memory. I have always taken an interest in the telephone question, and in the days of the National Telephone Company I was one of those who made themselves rather troublesome to the company in criticism of their service. I do not wish merely to give my own personal experience, but I can point out from the Debates in this House and from extracts from newspapers the general feeling of the public with respect to the service rendered by the National Telephone Company. A Select Committee of this House was appointed in May, 1898, and one of their references was:
    "Is the telephone service now, or is it calculated to become, of general interest?"
    Their reply was:
    "The telephone service is not at present of general benefit either in the United Kingdom at large or even in those limited portions of it where exchanges exist."
    Under the monopoly which was given to the telephone company they could go where they liked and not go where they did not like. Unless there was a fair chance of getting profit in a certain district they could refuse to extend their service there. Not only that, but they only had a flat rate", which was extremely expensive, and did not allow the smaller users any benefit. In accordance with the report of the Committee the Government offered to give licences to towns of 50,000 inhabitants and more. On this point as to the efficiency of the service an inquiry was held at Glasgow, and the service there was regarded as very inefficient. One of the Members for Glasgow said the service
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    there was the worst in the world. Sir James Fergusson, who was the Post master-General at one time, and afterwards became a director of tin National Telephone Company, said that the National Telephone Company were treated like criminals and the enemies of the public. That does not show that the nation at large was satisfied with private management. After mny years the system was still unsatisfactory. I will read an extract from the "Times" of the 10th September, 1906:
    "The Postmaster-General had no power to compel the company to give either a good or a cheap service, and, except in so far as municipalities could exact terms for the Use of the streets, the public were at the mercy of the company. The official inquiry which took place at Glasgow showed that the service actually given by the company was very far from ideal, both being dear and bad."
    The Manchester "Dispatch" also made the following statement in 1907:
    "The patience of the long-suffering telephone users in London has come to an end, and they have formed an association for their own protection."
    The "Daily Express," which has taken a great interest in telephone matters for a considerable time, stated on 3rd August, 1907:
    "It would be, perhaps, an exaggeration to say that the telephone service in London cannot be more inefficient that it is; but, certainly, the telephones in comparison with the service in foreign cities, which are inferior to London in size and importance, are both very dear and very bad. It is comforting to know that the services rendered to the community by the Post Office are, on the whole, admirably carried out, despite the absence of competition, and this circumstance, taken together with the fact that 'hope springs eternal in the human breast,' makes one have some small encouragement."
    To-day, numbers of people are not quite as satisfied as they might be with the telephone system, or, at any rate, as they hope to be. There are various reasons for it. For one thing, the National Telephone Company left its system in a very bad state. At a certain date their licence was to terminate, and they had to hand over their plant to the Post Office at a price which had to be settled by arbitration, and their outlay was very small towards the end. There was a great lot of work which had to be done by the Post Office when they took over the telephones, and they were expending considerable sums of money. Then the

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    War came along, and the expenditure went down considerably. In the last year of the National Telephone Company, then expenditure was £395,000. The Post Office expenditure in 1913 was £1,800,000; in 1914 it was £3,400,000, and in 1915 £3,300,000. Then the War came, and the services made demands on the efforts of the Government, and in 1917 the expenditure dropped to £288,000; in 1918 it was £189,000, and in 1919 £251,000. Hon. Members will quite understand that through not laying out sufficient money in these years, arrears of work accumulated, and the plant of the Post Office got into a very unsatisfactory state. In 1920 we began laying out money which has not yet shown results as it will do before long. The expenditure was £2,600,000. The programme for 1920–21 is £5,803,000. Most of the engineers went into the Army, and there were very few men left to give assistance.
    An hon. Member has referred to another company who say that they will be prepared to take over the service, and continue it at pre-War prices with post-War expenses. I hope that they are a very rich corporation. It would be a very expensive undertaking to try to carry out. I would like to know if there is any service or business in this country that can be earning dividends and charging only what we propose to charge—on the average 80 per cent, over pre-War prices. If there are any I would like to hear of them. I have asked on several occasions, but have never had any reply as to where it can be done. The hon. Member for Macclesfield (Mr. Remer) referred to the profits earned by the National Telephone Company, which he said had all disappeared since the Government had taken over the telephone It is purely the question of the difference of accounts. The National Telephone Company put their financial interest and other items, as well as their dividends, as profit. They also had no depreciation fund. Instead of that, they put aside so much a year, which they called the reserve fund, and then the sum which they paid to the Post Office in the way of royalties.
    Mr. LYNN: How much was that?
    Mr. ILLINGWORTH: Ten per cent. on the gross receipts. The profits in 1911 were £1,592,000. The dividends, including debenture interest, etc., £739,000, amount
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    transferred to reserve against depreciation, £500,000, and royalty paid to Post Office, £353,000. The Post Office accounts are on commercial lines. Interest on capital is regarded as expense and not as profit, and also depreciation is charged as expense. Made up for 1913–14 on the same basis as the National Telephone Company, the figures are: interest on capital, £507,000; depreciation, £1,211,000; and surplus, £396,000. So that taking the accounts on the same basis the National Telephone Company in 1911 made profits of £1,592,000. While the Post Office figure in 1913–14 was £2,114,000. That is not an isolated instance. I can give for several years the National Telephone Company and the Post Office figures. In 1906 the profits of the National Telephone Company were £1,035,000; in 1907, £1,172 000; in 1908, £1,264,000; in 1909, £1,334,000; in 1910, £1,435,000; in 1911, £1,594,000. For the Post Office: In 1912–13 the figures were £2,014,000; in 1913–14, £2,114,000; m 1914–15, £2,030,000; in 1915–16, £2,006,000; in 1916–17, £2,202,000; in 1917–18, £2,129,000; and in 1918–19, £1,869,000. Taken on the whole, the final result of the figures taken on the same basis is very favourable to Post Office management as compared with that of the National Telephone Company.
    Mr. R. YOUNG: Have there been large increases of salaries in these years?
    3.0 P.M.
    Mr. ILLINGWORTH: In 1915 there was an increase in these items, and at the time of the transfer there was an increase of wages of about £150,000 odd. With reference to Hull, the accounts have been very carefully gone into. The average charge per station there is £7 5s., or £3 10s. less than the charge for the Post Office. The depreciation is 16s. l0d. as against £2 6s. 9d. at the Post Office, or a difference of £l 9s. 11d., and there are other charges which are much higher at the Post Office than at Hull. Items of expenditure which the Post Office incurs and Hull does not, include headquarters' expenses. Hull has no research department, and a large portion of the plant is fortunately underground, and in consequence suffers very little storm damage. In a large system like that of London with many exchanges, many calls have to be put through more than one exchange, which means that operat-

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    ing expenses are doubled at once. The General Manager of the Hull telephones was asked at the Select Committee of Inquiry, "Suppose you were to take over the national service, would you be able to bring the national service into line with the Hull service?" He replied, "No. It is simply because it is local that it is cheaper. Ours is a local service. Over 95 per cent. of our calls are local, and the Post Office is handicapped in having a national service." He added that a national service must be much more elaborate than that at Hull, and so he could not run it more cheaply. The increase in telephone rates by the Post Office is only 67 per cent. over the present charges, or 80 per cent. over pre-War charges, and it is hoped that with this increase it will be possible to make both ends meet. It has been suggested that we should look forward to an increased use of the telephone instead of increasing charges. On the face of it, it seems that that ought to be so, but practical experience is against the proposal. It has not been an effective remedy in this or in any other country. When you have to increase the service you have to increase your capital charges; if you double the service you have to double your plant; there is double the space occupied and there is need for doubling the staff. Although in some cases there might be a slight decline on overhead charges, yet in effect it does not amount to anything. In 1903, the National Telephone Company, had 278,000 stations and their working cost per station was £3 14s. 8d. In 1911 the company had 561,000 stations and the working cost per station was £3 14s. 11d.
    The flat rate has been inquired into in many countries at various times. It has been condemned wherever it has been adopted. The annual meeting of the National Telephone Company in 1908 condemned it. The experience has been the same in the United States and in Canada. It was abolished in the provinces in this country in 1907, except for those firms who already had it, and I do not think it fair to new firms to make them pay on the message rate when their old competitors are paying on the flat rate system. Several people have said: "Keep the flat rates on, but double the charge." There are 120,000 flat rate subscribers in the, country—30,000 in London and 90,000
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    in the provinces. If you doubled the charge you would make it £40 in London and £25 in the country. At that figure it would pay only 55,000 out of the 120,000 to keep the flat rate and then they would be subsidised to the extent of £800,000 a year by the other subscribers. At present they are subsidised to the extent of £1,200,000. It has also been suggested that the charges should be £50 in London and £30 in the provinces. Then it would only pay 25,000 subscribers to continue on the flat rate, and in that case they would be subsidised to the extent of £525,000 a year. But apart altogether from the injustice of the thing it is financially unsound, because the more they use the telephone the greater is the cost to the Post Office, and the Post Office receives no increase of revenue whatever. I do not think there is any more justification for continuing the flat rate for subscribers to the telephone than for introducing a flat rate for people who use the telegraph or the postal service and allowing anyone to have unlimited use of those services for a certain figure. Not only that, but the flat rate system increases the use of a line and increases the inefficiency of the service, because users cram as many messages on the line as they can and the number of engaged calls is greater. Further, I think it is generally admitted that people do not wish to be subsidised by the Government, and that the charges must be increased in order to make the system pay its way.
    Mr. RENWICK: Will the right hon. Gentleman tell us what they are going to do in regard to increasing efficiency?
    Mr. ILLINGWORTH: I have already explained that we are laying out immense sums of money. I will give the hon. Member figures as to what is being done to increase the number of exchanges. In regard to trunks, we are laying 450 miles of ducts, which will contain 696 miles of cables, and in the following year we shall lay 300 miles of ducts containing 742 miles of cable. When these cables are laid there will be an immense relief to the wires. Then, automatic exchanges are going to be arranged for in Dundee, Sheffield, Southampton, and Swansea, and there are various other automatics. Six new exchanges have been opened in the country since the Armistice, there are 24 more exchanges in course of erection, 17 more new exchanges have been arranged

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    for, and probably 70 or 80 are being enlarged, and so on.
    I think I have dealt with most of the points raised, but I should just like to give a few instances of decreases in charges, because all we have heard about is the increase in charges. From London to Elstree is now 4d. and will be l½d., though I think the local charge will have to be added on to that; from Glasgow to Paisley is at present 4d., it will probably be l½ and from Glasgow to Renfrew is 5d. and it will be only l½d. There are many others that I could quote. Some 25 per cent. of the charges have been decreased. The London area has been mapped out into areas of five miles radius.
    Lieut.-Colonel Sir F. HALL: With regard to call offices. If you go to a call office, and wish to call up a London exchange and it happens to be outside the five miles radius, how are arrangements going to be made?
    Mr. ILLINGWORTH: That is a small detail. It is very interesting, but I am not at the moment prepared to answer it.
    Mr. LYNN: May I, at the very outset, as a newspaper editor, resent the base insinuation made by the Postmaster-General that this agitation is being carried on by the newspapers, because we object to the flat rate for the use of the telephone. I think no more unfair insinuation could be made.
    Mr. ILLINGWORTH: I did not make it
    Mr. LYNN: You did! I can assure the House, as one who has had thirty years experience of newspaper offices, that the last thing in the world we want to do is to have any relations whatever with the Post Office, and for the simple reason that the affairs of the Post Office are so badly managed that newspapers are more and more relying on their own resources, and getting outside the telephone and telegraph systems. Personally, the last thing in the world I want to do is to lift a telephone receiver. The Postmaster-General said, talking with regard to the National Telephone system, that it could not have been more inefficient, but I think we have now reached the lowest stage possible, though probably I am making a mistake in thinking that there are not even deeper depths that the Post Office can reach.
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    From what the Postmaster-General said, it appeared that the only real way in which we can increase the revenue of the Post Office is to reduce the number of subscribers. Why not wipe them out altogether and have done with it? Then probably you will have an enormous surplus. The right hon. Gentleman reminded me of the draper who lost on each article he sold, but made his profit on the turnover. When we come to look at his facts we find that for fifteen calls a day we have got to pay £40 a year, and even for three calls a day it is going to cost us £15 a year. I wonder if the Postmaster - General would take the trouble, or find someone in his office to take the trouble, to compare the cost under the National Telephone Company with his own. I quite agree with him that no one in this House, and very few in the country, want to see the telephone service subsidised. What we really want is to pay for an efficient service, but we are paying, and we are not getting an efficient service, and I see no signs of getting an efficient service. The Postmaster-General made a little joke of his own when he pointed out to a deputation of newspaper owners that they had increased their prices by 100 per cent., but the newspapers have got to compete and to pay, and if they do not give an efficient service they lose their revenue. They are different from the Post Office, which can always fall back on the public, and the public have got to pay for whatever mistakes are made. If the newspapers were run on the same lines as the Post Office there is not a newspaper which would not have been bankrupt years ago.
    The Select Committee says it is unfair to be too hard on the Post Office because it only got hold of the telephone service two and a half years before the War. The Post Office officials, however, did not really take over the telephone service as novices. They acquired the trunk lines in 1892, and as far back as 1907 the Postmaster-General asked for £6,000,000 for developing the then telephone system worked by the Government. I think this is a point that most Members, and certainly I myself, feel strongly on, that shortly after the Post Office took over the telephone service the service became more and more inefficient. The hon. Member for Macclesfield (Mr. Remer) referred to one or two cases. I can easily get from Northumberland Avenue to the

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    head of Fleet Street in a taxi quicker than a telephone connection. I have tested that several times, and it is a fact, and that sort of thing is going on all over the country. People who want to get into communication with anybody at a short distance never think of trying to get through on the telephone, and yet the Paymaster-General comes here and talks of this service as an efficient service, whereas it is the most amazingly inefficient service that I think any Government Department has ever put up. He referred to the Telephone Company. In the last year of its existence it paid £353,000 in royalty, which was 10 per cent. on the gross receipts. It paid £739,600 in dividends and carried over to reserve the sum of £501,536. In the first year of the Post Office management I find the profits were £303,000, and the following year they had dropped to £239,000, while I believe at the present time there is a loss of something like £4,000,000 a year. I do not know whether the Postmaster-General calls that good business or not, but I think most of us will think it very bad business.
    I agree with the hon. Member for Macclesfield that the Post Office is quite incompetent to carry on this service with efficiency. This is not the only thing that the Post Office has been carrying on badly. In the year 1870 it took over two prosperous and flourishing telegraph companies, and for the first two years of Post Office management there was, I believe, a profit; but the Post Office has been making a loss ever since. The same thing must happen with the telephone service. After having listened to the Postmaster-General's very inconclusive speech, I doubt very much if the increased charges will have any effect in getting rid of his deficit. After all, in business we find that we have got to cut our coat according to our cloth, and that is exactly what the Post Office never do. They will spend enormous sums of money in developing the telephone system. I see that inside the next four years they mean to spend £35,500,000 on the telephone service at a time when the burdens on the country are heavy enough in all conscience, and I hope this House will have the courage to resist and to resent these new commitments. The Postmaster-General says it is easy to criticise a Department, and that is the one point on which I agree with him, because no Department I know of
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    lays itself more open to criticism than that of the right hon. Gentleman. If any business concern was run in the same way as the Post Office, it would be bankrupt in a few years, yet the right hon. Gentleman comes down here and asks us to agree to increased charges and increased expenditure of money. I agree with my two hon. Friends who have spoken that we made a blunder when we agreed to the telephone service going into the hands of the Post Office. There is only one effective remedy, and that is to take our telegraph and telephone services and put them in charge of a business trust that will manage them in a businesslike way. I have no doubt that this proposal will meet with the hostility of the Socialists and the bureaucrats who have no desire to compete for a living in the open market, but I appeal to the business men of this House to refuse to have anything more to do with these State systems which are run so inefficiently as this telephone service has been. It has been muddled from beginning to end, and it will be muddled as long as the Post Office is allowed to run it.
    Lieut.-Colonel W. GUINNESS: I beg to move, as an Amendment to the proposed Amendment, to leave out the words
    "the telephone service will be placed under private enterprise, in view of the necessity for a cheaper and more efficient service,"
    and to insert instead thereof the words
    "an inquiry will be instituted into the possibility of effecting economies in the telephone service and of obtaining additional revenue by judicious development and an increase in the number of subscribers, rather than by heavy increases in charges which may tend to hinder that development."
    The persuasive speeches of the Mover and Seconder of the Amendment have not persuaded me that their proposal to retransfer to private enterprise is, in fact, practical. I agree that, in the abstract, private enterprise is undoubtedly more efficient, and that nationalisation and elimination of competition was a mistake, but you cannot consider a matter of this kind in vacuo without reference to the facts of the present position. It is, or it seems, obvious that the re-transfer to private control of the telephone system, as it has now been inflated in cost to the State, could not be done without an enormous capital loss. It was bought for an excessive price, and that excessive price will have to be written off before

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    you can re-transfer it on a commercial basis to private control. Then, how are you, after all these years, to avoid heavy capital expenditure by re-dividing your exchanges? It is common knowledge to any of us who know anything of the telephones of the country, that a vast number of telephone exchanges are located in the post offices. It would mean a very great and unremunerative expense again to divide up and change all that in order to re-establish private control.
    Then we have heard nothing from the Proposer or the Seconder as to the intention of this private company in regard to a staff, and I gather that they would not take over the staff, because the hon. and gallant Member for Rusholme (Captain Thorpe) particularly criticised the wages that are being paid to the staff. It is quite clear that, in that case, before you went back to private control, the State would have to meet a colossal bill for compensating these established civil servants. I think, therefore, it would only be possible to re-transfer to private control if you were to saddle the taxpayer with an enormous burden, and I do not believe that would be justified, as it would be only in the interests of one section of the community who use telephones. I do not believe there is in the country to-day any great backing for this idea that has been brought forward for re-transferring to private enterprise, but I do think there is an enormous amount of dissatisfaction with the present state of efficiency of the telephone service. The Postmaster-General in these Departmental matters is very easily satisfied. I remember last Session showing him that it was quicker to telegraph to Paris via New York than direct, and he seemed to think that was entirely rational and reasonable. To-day he defends himself against any alleged inefficiency against the Post Office by producing ancient Press cuttings about the National Telephone Company, going back in some cases more than 20 years. I do not think that deals with the case now at all.
    The point which is in all our minds is that, as a result of criticism when under private control, the service was greatly improved, and the more criticism there is now, the less the service is improved from the point of view of the man who uses it,
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    because the sole result of criticism is that more money is poured out. My hon. Friend the Member for Newcastle interrupted and said, "What are you doing for more efficiency?" and the Postmaster-General's answer was, "We are spending large sums of money." That is not efficiency from the point of view of the user of the telephone service, because he has got to pay that money, and, so far, we have had very little sign of wise expenditure in pouring out these public funds. In addition to the irritation felt by the public at the complacent indifference of the Post Office to the public convenience of this country, there is a strong objection to a universal message rate. It is felt that this message rate has been found to be very arbitrary in its imposition. Many people check their message rates, and find in many cases they are overcharged. I do not say it is intentional on the part of the Post Office. It is very easy to understand that operators in the hurry of the moment may often charge up wrong numbers, but, undoubtedly, the present message system is unsatisfactory, and people do not like getting, as they do, demands for further payments without any information as to how many calls they have had, or how these payments are incurred. It is absurd to think you can argue with the Post Office. You can no more argue with them than you can with a man who has his finger on your windpipe, because they will cut off your service as soon as you even suggest delay in payment.
    The objection to this proposal for a universal message rate is not in any way prompted by the desire to avoid payment for service, and I am sure telephone users recognise that it is not fair that the State should subsidise them, but that, in view of the general increase of the price of every other service and commodity, it is reasonable that they should pay more. But until an automatic register is available, the message rate is considered, by anyone who uses telephones on a large scale, as most objectionable. It does not distinguish at the present time between effective and ineffective calls. This is not the view only of a few people in this House, but of the whole business community. It is the view, as I think most of us will have heard from the constituencies, of the great majority of local authorities in the country. I have had given me the resolution passed by the greatest municipal authority in the country, the

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    London County Council, who resolved yesterday:
    "It is regrettable, in view of the present dissatisfaction with the London telephone service as it is at present administered, that the Report of the Department Committee does not encourage the belief that adequate steps are being taken to bring the service to the highest possible state of efficiency."
    That is on the first point. On the second point they say:
    "While recognising the importance of placing the telephone service on a sound financial basis, it is highly desirable in the public interests that the 'unlimited user rate' system should be retained on such conditions as are necessary to place it on a sound economic basis; that users should still have the option of adopting this system."
    And so forth. I do not think the Government are wise in ignoring this demand for consideration, and, in view of the extravagance, as I believe, of the proposal for reverting to private control, I should like to bring the Debate on to more practical grounds by moving the Amendment in my name. I may say that the wording of my Amendment is directly inspired by the very fair and able report of the Committee which was presided over by the hon. Baronet the Member for Lewisham (Sir E. Coates). That Committee, which sat last Session, had a very narrow reference. They were asked to inquire into what revision of charges was necessary to place the service on a remunerative basis. They had no alternative. They were not allowed to see whether the service could be carried out with greater efficiency. They said in the second paragraph:
    "The limitations imposed on your Committee by the restricted Terms of Reference precluded inquiry into the efficiency of the Telephone Service."
    Further on, they show in the very words that I have taken, that much might be done by development. They say that—
    "Additional revenue should be looked for from judicious development rather than from such heavy increase in charges as may tend to hinder that development. Development admittedly depends to a large extent on small users among whom the service might, by canvassing and advertisement, be made more popular than it is at present."
    There is overwhelming evidence coming to Members of this House day by day of extravagant administration, and this has never been looked into in recent years by any public inquiry. So far as I can make out from this Report, although it does not include Sir Evelyn Murray's statement, the wages paid in the telephone service have gone up by three and a half
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    times during the period of the War, and we are always hearing of the great disregard of local conditions in payments made by the Post Office. I heard of a case the other day in which twenty miles of cable had to be laid, and the Post Office deliberately paid double the agricultural rate, that is, twice as much for hire as the farmers had to pay under the Agricultural Wages Board.
    Naturally if that sort of thing is going on telephone administration is going to cost us a lot of money. One cannot help fearing that the Post Office do not want effective competition with their twopenny post; they want to increase the cost of the telephone so that people will be induced to buy stamps and keep up the revenue of the Post Office. Anyhow the answers which we have had in this House show little signs that they think of the convenience of the public or the general improvement of the service. The revenue from the public has decreased, according to the report of the Committee, during the War. We ought to have evidence that the Post Office is at least trying to push forward development and to get back to the normal state which they would have reached had it not been for the interruption of the five years of war. I am not satisfied at the compulsory measures rate. It is impossible to follow the figures given by the Post Office on the subject, and when I heard the right hon. Gentleman this afternoon he only convinced me more that we ought to have an inquiry into the details. I recognise the telephone service must be self-supporting, but in view of the objection to the measured rate and the narrow reference under which last year's inquiry was carried out I do urge that another effort should be made to find a way out of the present difficulty by less objectionable lines than the proposals put forward.
    Rear-Admiral Sir REGINALD HALL: I beg to second the Amendment to the proposed Amendment.
    The Postmaster-General, replying to a question as to what he was doing for efficiency, said he was spending a good deal of money. He gave the House a good many figures to prove it. May I give the House a few figures of the inconveniences felt by the commercial community in spite of the spending of these vast sums of money. On the Baltic Exchange the

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    following were the delays in getting connections on the telephone: Scotland, 90 minutes; Liverpool, 40; Hull, 40; Bristol, 60; Newcastle-on-Tyne, 60; Cardiff, 60, Birmingham, 30; and Manchester, 60. I need hardly point out to men of business what that means. I do not know whether the Postmaster-General realises that delays like those militate against the effective use of the telephone. But I should like to take up the challenge he put forward to the right hon. Baronet beside me (Sir F. Banbury) when he asked: "Do you propose to reduce expenditure on the railways?" I should reply to that: "Certainly." Railways are only too anxious to reduce their expenditure when they are allowed to do so. I would point out to the Government that they would like to have a Committee of Inquiry into the expenditure of railways, and I would suggest that the Government should apply to the railways what they have to the telephones and set up an inquiry.
    Sir F. BANBURY: An independent Committee!
    Sir R. HALL: Yes, an independent Committee to inquire into Government administration of the railways which we say has been extravagant and uneconomical.
    Major Sir E. COATES: As Chairman of the Select Committee to which the original reference was passed, I would like to say a few words upon the Debate and in regard to the original Amendment. I certainly consider it is a somewhat wide scheme for anyone to suggest taking over a huge portion of capital of something like £40,000,000 and running the institution concerned as a private institution. I cannot but think that if those who put that matter forward had really looked into the matter, or had studied even the evidence given before us as a Select Committee, they would have realised, I think, in regard to the management of the telephone system, that when it was taken over by the Government in 1911, it was, as the House has been reminded, doing well for its shareholders. What happened when the Government took it over? We are told that the Government does not know how to manage anything. At the same time we are bound to look the facts in the face. These are that after the Government took over the system they not only made
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    it pay, but two years before the War they had a considerable surplus after providing for interest on capital, depreciation, and pension fund, and a very much higher depreciation than the National Telephone Company ever thought of when they had it under their control.
    In so far as the Pension Fund is concerned, the National Telephone Company themselves only provided £13,000 in 1911 towards the Pensions Fund. When the Government took the business over, they had themselves to find some big pensions and increases of wages to the telephone staff to make them equal to the servants in the telephone department of the Civil Service. They had to pay a charge of £400,000. They not only paid that £400,000 during the next few years, but they made a profit. Then the War supervened. Most of us are business men. We know the difficulties that were confronting the country. We know the difficulties we had in our own businesses and our own domestic affairs. Does anyone imagine that the Government are to be free from these difficulties? Certainly not. The Government themselves have had difficulties, and greater because they have a huge Civil Service, and naturally had to carry on, so far as the telephone system was concerned, and give bonuses and increased wages. Criticism has been passed upon the amount of £4,000,000 required to put things straight. But we must bear in mind that 74 per cent, of that £4,000,000 is simply war bonuses. Do Members of this House wish the Government to cut the wages down?
    Sir F. BANBURY: I do. [HON. MEMBKRS: "Hear, hear!"]
    Sir E. COATES: Apparently there are other Members, too, who wish to cut wages down, but I question if they are in the majority. It cannot be done. We come to the question: What action should the Government take in order to meet these difficulties of the £4,000,000 caused by a rise in price? I maintain the Government are taking the right course in putting up the price to the user of of the telephone. If there is to be a £4,000,000 loss and you have to pay your wages, where is it to come from? There are only two sources, either the user or the taxpayer. Are you going to ask the taxpayer to pay it? [HON. MEMBERS: "Certainly not!"] Then the user must pay it. When you consider your various

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    charges, you should once and for all endeavour to make the charge a fair one for rich and poor alike. The Committee realised that that was the best advice they could give to the House. When we started to look into this matter some six months ago, most of us had had experience of the flat-rate system ourselves. I have been a flat-rate subscriber for the last 30 years. As the evidence came before us day after day we realised that the flat rate had to go, because it was apparent that flat-rate users were having something they ought not to have, and the poorer users were being charged in order that we might have a low rate.
    Throughout our investigations we kept that fact clearly in mind. We had very competent witnesses before us, and as far as we were able we had the best advice we could get from representatives of the various associations all over the country connected with the various Chambers of Commerce. Really, I only regret that amongst the many witnesses who came before us, we did not have any representatives from the bankers, the chartered accountants or the Law Society. We invited them to send witnesses, but they did not see their way to do so. Those who have read the evidence will have noticed that the witnesses who came before us all thoroughly understood their work, and they were very helpful to the Committee. I will consider for a moment what the witnesses said about the flat rate. I believe there were only about two witnesses who said that we must have the flat rate kept on. One witness said that if the flat rate was kept on, then you must limit it, but you cannot have an unlimited limited rate.
    There was a very able witness representing the London Chamber of Commerce and he told us their views with regard to the flat rate system and the charges generally. The London Chamber of Commerce were in favour of the flat rate system, although their own representative who gave evidence, when pressed for his own private opinion, said he was against the flat rate system. There was another witness whose articles have appeared in the "Times," and he was very helpful to us. He said that the flat rate must be abolished, because it was not fair or right. If the flat rate has to be abolished, what is the next step? We felt that we should scrap the measured rate and have the message rate with this
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    proviso, that the larger users of the message rate should have a rebate or discount after 2,000 calls, our view being that as the calls went up to 2,000, 3,000, 4,000, 10,000 or 15,000 the rebate should gradually increase and in that way we felt that we had left a loophole for those who desired the flat rate, and also one for those who had been accustomed to the measured rate. One witness told us that under the flat rate system you might call up as many of your friends as you like, day or night, and no note is taken of the number of calls, but directly we get to the message rate it has to be counted, because you pay for the number of messages which pass over the telephone line from your own extension.
    One of the difficulties which we foresaw, and which we are told by experts cannot be overcome, is the fact that no invention has yet been found which will check the efficient and inefficient calls in the subscriber's house. That is the great difficulty, and that is where I hope some improvement will be made, because a certain amount of dissatisfaction will always exist when users are overcharged. On this question of overcharging, may I draw attention to something I learned on the Committee which I did not know before it was given in evidence. It is that all over the country a system was started some years ago of having telephone advisory committees formed in various areas which were in touch with the telephone authorities in that area. There are only some 50 of these advisory committees, but when we get the message rate I think we shall find these committees will number hundreds in the larger areas of the British Isles. Anyone who has any objection to make against the telephone service may go to the advisory committee, lodge his objection, and the telephone committee will look into it, and approach the Post Office authorities if necessary. I did not hear the Postmaster-General mention that although there are 120,000 flat rate users in the country, they are only about 20 per cent, of the general users of the telephone, and yet that 20 per cent. used 40 per cent. of the lineage of the telephone, and in that way they are to a great extent blocking the system and hoping to make it more inefficient. I am not an expert, but I think when we have this system of the message rate, we shall not have the line so congested, because everyone will think before they

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    spend their fee, and they will see that their servants do not use the telephone unnecessarily.
    My hon. and gallant Friend has proposed an Amendment asking for the appointment of a further committee of experts to look into the question of the efficiency and development of the telephone system. I would like to add my voice to the appeal which has been made to the Postmaster-General and ask him to give us this committee. I feel that the public would like it, because for some reason or other they are not satisfied. We have all of us at one time or another cursed the telephone, and I have done so when it was under the National Telephone Company, and even during the time it has been under the Post Office. I do not think the Postmaster-General has anything to fear by granting this committee. If he does set it up, I would ask him to put a very stiff back to the question of the rates, and the appointment of this committee must not stop the putting of this new system into force. Get the new system going, and let the committee report as to what line of action they would take. I hope my right hon. Friend will see his way to grant the concession which has been asked for.
    The ATTORNEY-GENERAL (Sir Gordon Hewart): It is obvious to anyone who has followed the course of this Debate throughout the afternoon that the mood of the House has to some extent at any rate undergone a change. The first Amendment which was proposed, and which as I understand is still in a sense before the House, was one regretting the absence from the Gracious Speech of any announcement that the telephone service would be placed under private enterprise in view of the necessity for a cheaper and more efficient service. The point, and the whole point of that Amendment, was that for some reason suggested in the epithets in the later part of the phrase the control of the telephones should now or at the first possible moment be taken out of the hands of the Post Office and placed once more in private hands. I listened with attention to the arguments which were used or suggested in support of that proposition. Although there were many complaints of alleged inefficiency in the existing system, there was not a word said to suggest that the remedy proposed would go any dis-
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    tance whatsoever towards removing them. I was reminded of the kind of speech which one hears or reads in defence or rather in praise of Socialism. The orator begins by depicting the evils of the existing social order, and when in that way he has created a suitable atmosphere he proceeds to say that under a socialistic system all these evils will disappear, and there will be a new heaven and a new earth. There is a gap in the argument. I could not help thinking that there was a gap in the argument this afternoon. No doubt everyone who has spoken has had complaints to make of the telephone system as it is now. I might quote a familiar example. I believe it is no small grievance from which most of us have suffered:
    "'Number engaged.' This is often now the answer received from the Central Call Office for from 10 to 20 minutes and more at times. When you speak to a superviser, you are put on at once, and on inquiry you find that the number said to be engaged has not been called. It is very annoying to business men who have trains to catch and appointments to keep to be treated like this. I hate making complaints, especially about employés, but there is a limit to one's endurance."
    4.0 P.M.
    That, it will be agreed, is a typical complaint. [HON. MEMBERS: "Hear, hear!"] Yes, but it was made on 9th January, 1907, when the telephone service was still in the benign hands of the National Telephone Company. We may have our complaints and our grievances, but I have not heard one word to suggest, nor can I imagine one word to suggest, that the solution of the difficulty is to place the telephone service under private enterprise. Indeed, when once it is conceded, as I imagine it is conceded on all hands, that you cannot have an efficient telephone service unless it be a monopoly—the notion of competitive telephone systems with different registers of telephone subscribers is one from which the mind recoils—it follows that the monopoly must be in the hands of the Government.
    I pass from that Amendment with which the Debate began to the proposal which, as it appealed to me, attracted far more attention, that while the telephone service should remain in the hands of the Government there should be, and there should be forthwith an inquiry of the kind which is indicated in the second Amendment. My hon. and

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    gallant Friend based his attack, if attack be the proper word, upon what he conceived to be the objections to a universal message rate. I should have thought that anyone who has studied what I may perhaps be permitted to call the masterly memorandum put out by the Post Office on this matter, upon whatever else he may have been left in doubt, must have been convinced by the case for the universal message rate. What was said upon that matter? I will quote only two opinions, one expressed in the memorandum and one which I have otherwise obtained. As America has been referred to, I will quote an American authority. It was said by the Merchants' Association of New York City in the year 1915 that a system which exacts an average uniform charge for varying degrees of service is obviously inequitable. Again, the Vice-President of the New York Telephone Company, in 1913, said:
    "Flat rates simply make it impossible properly to develop the telephone service. The real conflict of interest in this case, therefore, is not between the Telephone Company and business firms, but between the relatively small number of subscribers who have an unlimited business service and the larger number of subscribers whose service is limited."
    That is the testimony of American authority. May I just add a testimony nearer home. Mr. Gane, at the time he was manager of the National Telephone Company, speaking in the year 1899, said:
    "There is no doubt whatever, as far as my judgment goes, that not only this country, but nearly all other countries, commenced the telephone service on wrong principles. The essential principle in my opinion is payment per message, namely, according to user, but how to get back again to that is the difficulty. I say most frankly to the Committee, that in my humble judgment the whole principle on which these charges have been founded is a wrong principle."
    I submit to the House that it is apparent, when one looks at the matter without prejudice, that the flat rate must be unfair. One can quite understand in some kinds of businesses the wisdom and the principle of what is called a reduction upon quantity. If a man has some commodity to dispose of, it may be useful to him to take a reduction upon quantity. He might save delivery charges and warehouse charges, and might avoid loss on seasonal trade. But why in the world should there be a reduction on the quantity of telephone messages? One
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    might say on the other side, that where you have ex hypothesi a limited total capacity of service for a very large business community, the man who uses an enormously large number of telephone calls should pay more in proportion, after a certain point, whatever the reasonable number might be, and I should have thought a case might be made out for compelling that man to pay more than is paid by the man who only has a reasonable number of calls.
    It does not depend on hypothesis. We have here on the fourth page of the Memorandum on the New Telephone Rates a little table, and when one looks at it it will be found that the figures are very striking. There are various rates of charges for users of limited numbers of calls. If a man uses from 3,000 to 4,000 calls the charge, should the revised rates come into operation, would be £19 11s. 8d. Up to that point therefore it does not pay the subscriber to have a flat rate of £20. How many subscribers are there who come into this category? Apparently no fewer than 90 per cent, of the users of the telephone fall into it. Those who have between 4,000 and 5,000 calls are 2 per cent. of the total number of subscribers, those between 5,000 and 6,000 calls are also 2 per cent., and those over 6,000 calls constitute 6 per cent., so that those who wish to pay £20 for the unlimited service are only 10 per cent. of the whole and they might have 100,000 calls. I can imagine that those who have had for many years the unlimited use of the telephone system would be content with the payment of £20, and that they would be alarmed to discover that henceforward if they have from 4,000 to 5,000 calls they will have to pay £35, and if from 5,000 to 6,000 calls £41, and in the case of their having 12,000 calls they may have to pay up to something in the neighbourhood of £70 or £80. I can well imagine their feeling of distaste at that. But what strikes me more is the credulity and alacrity with which the 90 per cent. come forward, if they do, and say, "Please let us go on paying for the large user." That I do not understand, and I cannot help thinking that in the minds of those men there is a lacuna in the argument. They say, "We have many grievances against the telephone system. Somebody is crying out against that system. We had better join in." They do it without stopping to examine the facts and without perceiving that one

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    result of their action will be that they are to pay more to enable the large user of the telephone system to pay less. I do not know who the distinguished American was who said that in the telephone business the flat-rate system was a system in which the benefit was enjoyed by the sharps and the money paid by the flats. Of course, one never uses words like that in England, but that is the principle, and if I thought that, by going any way towards meeting this second Amendment, I was supposed to be conceding on behalf of the Post Office anything in favour of the flat rate, or admitting any alleged objection to the universal message rate, I should be very reluctant to take the course which I am now about to take. Subject to this observation, that of course the new tariff must be put in force on the date named, that is to say, on the 1st April next, the Government recognise that it is quite desirable, and may even be useful, to have an inquiry, and I would suggest to my hon. and gallant Friend that the words indicating the scope of that inquiry might be even more comprehensive than those of his Amendment. If it is in accord with his view and with the view of the House, I would suggest that there should be appointed a Select Committee to inquire into the organisation and administration of the telephone service. Within the generous ambit of that phrase, everything which is relevant to the improvement of the telephone system can, I think, be explored.
    Lieut.-Colonel GUINNESS: Not the charges?
    Sir G. HEWART: That is an ingredient in administration, and is included in the instruction.
    Lieut.-Colonel GUINNESS: Could it not be specified that they are to inquire into the charges?
    Sir G. HEWART: I do not want to put in that word, but I cannot appreciate how a Select Committee inquiring into the organisation and administration of the telephone service could for one moment close its mind to the question of charges. I throw out that suggestion, and would ask my hon. and gallant Friend, in these circumstances, to withdraw his Amendment; but of course it is impossible, as I think the House recognises for us to have anything to do with
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    the first Amendment, which relates to the abolition of State control.
    Lieut.-Colonel GUINNESS: I am quite prepared to withdraw my Amendment if it is made clear that the flat rate is to remain an open question. I feel that it is most necessary that this should be specified, in view of the very strong line which the Attorney-General has taken against it in his speech. I think we are all prepared to agree that the rates should come into force pending the result of the inquiry, but we do wish it to be put upon the Committee as an obligation that they should again look into this matter of the system upon which the charges are made.
    Sir F. BANBURY: May I suggest to the Attorney-General that if he added, after the words he has just read, the words "and the method of making charges," that would meet the contention of my hon. and gallant Friend and would, I think, meet the desire of a vast number of people outside the House.
    Sir G. HEWART: Yes, I think it will be quite convenient to add those words. They are implicit in what is there already. With regard to the observation of my hon. and gallant Friend, I am sure he will agree that these rates cannot be deferred beyond the named date, namely the first day of April, but that does not prejudice the inquiry with regard to the future, though I should sincerely hope, so far as the flat rate is concerned, that the labours of the Committee which has recently reported will not be merely repeated by the Select Committee which is now to be set up. The question, however, is not prejudiced by the fact that the new rates come into force on the 1st April.
    Sir F. BANBURY: May I ask my right hon. Friend one question? Assuming that this Committee does not report for several months, and supposing that it reports against the charges which have been in force during that time, will a rebate on those charges be allowed?
    Sir G. HEWART: I will answer that question at once. That would be administratively impossible.
    Mr. REMER: In the circumstances, I beg leave to withdraw my Amendment.
    Amendment to the proposed Amendment, by leave, withdrawn.
    Amendment, by leave, withdrawn.
    Main Question again proposed.
    Motion made, and Question, "That the Debate be now adjourned," put, and agreed to.—[Lord Edmund Talbot.]
    Debate to be resumed upon Monday next (21st February).
    Whereupon Mr. SPEAKER adjourned the House, without Question put, pursuant to Standing Order No. 3, till Monday next (21st February), pursuant to the Resolution of the House of this day.
    Adjourned at Sixteen minutes after Four o'clock.

  SHIPBUILDING INDUSTRY
  SHIPBUILDING INDUSTRY
BRITISH ARMY.
  DESERTION.
  DESERTION.
NAVAL AND MILITARY PENSIONS AND GRANTS.
  DEPENDENT'S PENSION (MISS J. PLUMPTON).
  DEPENDENT'S PENSION (MISS J. PLUMPTON).
TRANSPORT.
  RAILWAY COMMUNICATION, DURHAM AND NORTHUMBERLAND.
  RAILWAY COMMUNICATION, DURHAM AND NORTHUMBERLAND.
POST OFFICE.
  TELEPHONE SERVICE, LIVERPOOL.
  TELEPHONE SERVICE, LIVERPOOL.
  STAFF (TRANSFERS).
  STAFF (TRANSFERS).
  TEMPORARY EMPLOYEES.
  TEMPORARY EMPLOYEES.
  HOUSING (BUILDING GUILD SCHEMES).
  HOUSING (BUILDING GUILD SCHEMES).
  ALLOTMENTS, BRIGHTON AND CHISWICK.
  ALLOTMENTS, BRIGHTON AND CHISWICK.
  BRITISH NORTH BORNEO COMPANY.
  BRITISH NORTH BORNEO COMPANY.
  FARROW'S BANK.
  FARROW'S BANK.