Sitting of 4 July 1923

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

PRIVATE BUSINESS.
River Wear Watch Bill [Lords],
Read the Third time, and passed, with Amendments.
Caledonian Insurance Company Bill [Lords],
As amended, considered; to be read the Third time.
Ministry of Health Provisional Orders (No. 3) Bill,
Lords Amendments considered, and agreed to.
Greenock Corporation Order Confirmation Bill [Lords],
Considered; to be read the Third time To-morrow.

ORAL ANSWERS TO QUESTIONS.

  SUDAN (BLUE NILE DAM).
  Sir EDWIN STOCKTONasked the Under-Secretary of State for Foreign Affairs whether the firm of Messrs. S. Pearson and Son are now engaged in carrying out any works in the Sudan which were originally started under State control; and, if so, why a private firm was brought in to finish them?
  The UNDER-SECRETARY of STATE for FOREIGN AFFAIRS (Mr. Ronald McNeill): In the early part of last year the Sudan Government, being dissatisfied with the progress made by the contractors engaged in building the Blue Nile dam, decided to terminate their contract. The completion of the work was subsequently entrusted to the firm mentioned by the hon. Member.

  CHINA.

    MISSIONARIES (PROTECTION).
    Sir E. STOCKTONasked the Under-Secretary of State for Foreign Affairs whether he has received any representations from the missionary bodies as to the serious effect on their work in China from the existing unrest; and whether the British Minister at Peking has been specially asked to press the Chinese Government to secure for them the measure of protection expected from any duly-constituted Government?
    Mr. McNEILL: The answer to the first part of the question is in the negative. In regard to the second part, His Majesty's Minister will, of course, do all in his power to secure proper protection for the missionaries, as for other British subjects in China.

    TRADE OUTLOOK.
    Sir E. STOCKTONasked the Under-Secretary of State for Foreign Affairs whether he is aware of the apprehensions felt in commercial circles at the trade outlook in China, due to the disturbed internal condition; and whether his Department has received any representations on the subject and, if so, of what nature, from any leading commercial bodies in this country?
    Mr. McNEILL: His Majesty's Government are fully alive to the apprehensions caused by the present situation in China. Representations have been received from a large number of important commercial bodies emphasising the serious menace to British interests resulting from the present disorders in China.
    Mr. COLLISON: Is it not a fact that a number of British subjects are at present held in captivity by Chinese bandits for the purpose of ransom? What are we doing in regard to them?
    Mr. McNEILL: So far as I am aware, there is no one in prison at the present time.
    Mr. COLLISON: Are there not 24 Europeans at present in prison? I have received a cable to that effect.
    Sir HARRY BRITTAIN: Is not most of the trouble due to the fact that Government finance in China has come to an end?
    Lieut.-Colonel J. WARD: Is not the plain reason for these disturbances the fact that there is really no Government in China?
    Mr. McNEILL: That really is the position.

  RUSSIA.

    BRITISH PROPERTY (SEIZURE).
    Sir W. DAVISONasked the Under-Secretary of State for Foreign Affairs whether he is aware that timber belonging to British firms has been seized by the Russian Soviet Government in Russia; that no compensation has been paid to the owners in respect of the said timber and that the same timber, bearing the private marks of the firm in question, has been sold in London by the Russian Soviet Government under the trade agreement, which agreement has been held by British Courts of law to bar British citizens from taking action to recover their property; and whether the British Government intend to allow the continuance of this condition of affairs whereby British citizens are precluded from enforcing their rights to obtain possession of their own property in British Courts by reason of the terms of the said trade agreement?
    Mr. McNEILL: I would refer the hon. Member to the answer given to him on the 7th May last, and to that given to the hon. and gallant Member for South Hackney on the 4th December last.
    Sir W. DAVISON: Are there any precedents for the British Government entering into an agreement—apart from the Irish Free State agreement—which deprives British citizens of the right to sue in British Courts for their own property?
    Mr. McNEILL: I am unable, without notice, to say anything about precedents.

    BRITISH RELATIONS.
    Mr. MORELasked the Prime Minister whether, seeing that accredited diplomatic representatives of the Japanese and Russian Governments have been appointed to discuss matters of moment to both States, that the Italian Government has recently appointed a new Italian trade representative at Moscow, and that the French commercial mission in Russia is understood to have
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    concluded important contracts beneficial to French trade and enterprise, he will consider the advisability of an early conference between accredited diplomatic representatives of the British and Russian Governments with a view to the settlement of outstanding disputes and the resumption of normal relations between the two countries?
    Mr. McNEILL: I have nothing to add to the answers given to the hon. Member and to the hon. and gallant Member for Central Hull (Lieut.-Commander Kenworthy) on the 18th June.

  LIQUOR REGULATIONS (UNITED STATES).
  Sir W. DAVISONasked the Under-Secretary of State for Foreign Affairs whether his attention has been called to the judgment which has just been given by the Court of Appeal of the United States of America in the case of the Schooner "Henry L. Marshall," from the Bahama Islands, which was seized by the American authorities on the high seas when 10 miles from the American coast because she had transferred liquor to American craft while on the high seas; whether he is aware that the American Appeal Court have held the seizure of the vessel to be legal; and what action the British Government propose to take in the matter, seeing that the effect of the above decision is contrary to the accepted rules of international law and applies American municipal law to foreign ships on the high seas outside the accepted three miles limit?
  Mr. BECKERasked the Under-Secretary of State for Foreign Affairs if his attention has been called the fact that the United States now claims that if a ship of any nationality transfers part of her liquor cargo to an American craft anywhere at sea, the presence of the United States boat or boats gives the United States the right of search and seizure of the foreign ship; will he state the attitude of His Majesty's Government in such a contingency; and will he take steps to see that our merchant ships are protected from this menace?
  Mr. McNEILL: The action taken by His Majesty's Government, in the face of the seizure of British vessels by the

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  United States Government outside the three-mile limit, was explained in my reply to the hon. Member for Bow and Bromley on the 6th June. In the course of last autumn the United States Government issued instructions that these seizures were to be discontinued, except in cases where the vessel's own small boats could be shown to have entered the three-mile limit for an illegal purpose. I am not aware that any claim such as that referred to by the hon. Member for Richmond is now advanced by the United States Government. The case referred to by the hon. Member for South Kensington is an exception, since the vessel in question was found on investigation to have obtained British registry by fraudulent means. It was therefore intimated to the United States Government nearly a year ago that His Majesty's Government did not regard her as a British vessel. Had she not been condemned by the United States courts, steps to secure her forfeiture would have been instituted in the Bahamas, where she fraudulently obtained British registry.
  Captain Viscount CURZON: Can the hon. Gentleman assure us that the Government will not tolerate one course of action with regard to territorial waters in American waters and another course in Russian waters? Will the same rule apply to both?
  Mr. McNEILL: I can give an assurance that the British Government in both cases will do their utmost to maintain British interests.
  Captain WEDGWOOD BENN: Will the Government put the forces of the British Empire behind this discreditable practice of rum-running?
  Mr. McNEILL: No; on the contrary we are doing everything we can to prevent it.
  Sir H. BRITTAIN: A most unfair question.
  Captain BENNasked the Prime Minister whether he will lay upon the Table the terms of the American proposal asking for powers to seize outside the three miles limit ships alleged to be engaged in the smuggling of intoxicating liquor?
  The PRIME MINISTER (Mr. Stanley Baldwin): I am perfectly willing to do
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  so, provided that the consent of the United States Government can be obtained. Steps will be taken to secure this.

  INTERNATIONAL COMMERCIAL ARBITRATION.
  Mr. GRAHAM WHITEasked the Under-Secretary of State for Foreign Affairs if it is the intention of His Majesty's Government to ratify the protocol on international commercial arbitration prepared by the League of Nations; and if His Majesty's Government will endeavour to promote similar agreements with the United States of America, Russia, and other countries not at present members of the League of Nations?
  Mr. McNEILL: The question of ratifying the protocol on international commercial arbitration prepared by the League of Nations is still under consideration, and His Majesty's Government have not yet reached a decision in the matter. The second part of the question does not, therefore, arise.

  TURKEY (MUDANIA CONVENTION).
  Mr. NOEL BUXTONasked the Under-Secretary of State for Foreign Affairs what steps it is proposed to take in regard to the breach of the Mudania Convention which was recently proved by the capture by a British destroyer of a cargo of Turkish guns on its removal from Thrace; and whether he can give an assurance that the Mudania Convention is now being strictly observed by Turkey?
  Mr. McNEILL: Protests against the flagrant breach of the Mudania Convention, revealed by the presence of these guns in Thrace, were addressed to the Turkish authorities by the Acting British High Commissioner at Constantinople on 18th June, and by the three Allied Acting High Commissioners jointly on 21st June. The Turkish Government have repeatedly assured the Allied Governments that they are strictly observing the Convention, and the Allied authorities in Turkey will continue to make every effort to see that these assurances are better observed in future.
  Mr. BUXTON: Is there any further answer to the second part of the question,

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  as to whether there are any other breaches of the Mudania agreement to complain of?
  Mr. McNEILL: I would not like to answer that question without notice. I think there probably are, but I could not say for certain.

  POLAND (UPPER SILESIA).
  Mr. MORELasked the Under-Secretary of State for Foreign Affairs whether an undertaking was given by the Polish Government when the partition of Upper Silesia was arranged that Poland would refrain from introducing compulsory military service into the portions of Upper Silesia which became Polish under that decision; and whether information has reached His Majesty's Government of an intention on the part of the Polish Government to apply the Polish military law to that territory?
  Mr. McNEILL: The answer to the first part of the question is in the negative. His Majesty's Government have no information with regard to the intentions of the Polish Government as to the application of the Military Service Act to Polish Upper Silesia.

  SLAVE TRAFFIC.
  Mr. CHARLES ROBERTSasked the Under-Secretary of State for Foreign Affairs whether Great Britain still adheres to the declaration set forth in the Berlin Act of 1885 that traffic in slaves, whether by land or sea, is a violation of the principles of the right of nations, and thereby places upon all civilised nations an obligation to use their authority and influence towards its abolition; and whether, in view of the belief that the present Government is unwilling to collaborate with other nations in this objective, he will give an assurance that in the efforts of the League of Nations against slavery Great. Britain will co-operate with other Powers for the abolition of slavery in territories where Great Britain has influence as well as in territories under its direct authority?
  Mr. McNEILL: The hon. Member presumably refers to Article IX of the Berlin Act of 1885, the text of which bears some resemblance to the first part of his ques-
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  tion. His Majesty's Government have never failed to carry out their obligations there under and under the Convention of 1919, which has partly replaced it; and the second part of the hon. Member's question, therefore, does not arise. The imputation that His Majesty's Government is not collaborating for the suppression of the slave trade is one of which I have never heard except in the mouth of the hon. Member to-day. His Majesty's Government have every reason to resent it. No Government in the world has shown greater earnestness in putting down the slave trade.
  Mr. ROBERTSalso asked the Under-Secretary of State for Foreign Affairs whether the convention of 10th September, 1919, is assumed to restrict in any way the previous official declarations made by Great Britain to use her authority and influence towards a complete abolition of slavery in all its forms?
  Mr. McNEILL: I regret that I am unable to answer the hon. Member's question, in the absence of specific information as to the particular official declarations to which he refers.

  ROYAL NAVY.

    CAPITAL SHIPS (CONTRACTS).
    Mr. ROSEasked the First Lord of the Admiralty the approximate date upon which the contracts for the four capital ships, since cancelled, were placed, and the approximate date of the placing of the two smaller capital ships now under construction; and the prices to be paid to contractors in both cases?
    The PARLIAMENTARY SECRETARY to the ADMIRALTY (Commander Eyres-Monsell): The four battle cruisers subsequently cancelled were ordered in October, 1921. The two battleships now under construction were ordered in December, 1922. It is not the practice to disclose contract prices.

    NAVY AND ARMY PAY.
    Major Sir BERTRAM FALLEasked the First Lord of the Admiralty whether, seeing that no part of the proposed reduction to be made in the pay of the Army will be applicable to officers, noncommissioned officers, and other ranks

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    now serving, he can give a similar assurance to the Royal Navy?
    Commander EYRES - MONSELL: I assume that my hon. and gallant Friend is referring to a recent statement by the Secretary of State for War in another place, but that statement was obviously not intended to refer to officers, since a revision of officers' pay, on lines which were announced when the new rates were granted, will be due in all three Services in 1924. I can, however, assure my hon. and gallant Friend that this whole question will be dealt with in the case of the Navy just as sympathetically and with as great a regard to what is due to serving officers and men as in the case of the Army.
    Viscount CURZON: Can the right hon. Gentleman assure us that, whatever readjustments may take place with regard to the Navy, two men doing precisely the same job and under similar conditions will not receive different rates of pay?
    Commander EYRES - MONSELL: There is a very competent Committee, the Anderson Committee, now dealing with these things. The less I say about the matter the better.

    CIVIL PENSIONERS (RE-EMPLOYMENT).
    Mr. PRIVETTasked the Parliamentary Secretary to the Admiralty whether he is aware that the practice of the Treasury in the case of re-employment of civil pensioners, where the pension is suspended on re-employment, is to base the ultimate pension on total service and emoluments at the time of final retirement; and whether he can apply this concession to His Majesty's Dockyard pensioners who were re-employed for short periods as hired men, during which their pensions were suspended?
    Commander EYRES - MONSELL: There are no Regulations under which the further service of pensioners re-employed in a hired capacity can be reckoned for increase of the pensions formerly granted them on retirement. A concession of this nature would require the authority of an Act of Parliament amending the Superannuation Acts. The rule incorporated in those Acts precluding the counting of such subsequent
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    hired service for additional pension is applicable in the case of all State pensioners and not merely to those pensioners who have served in His Majesty's Dockyards. The practice of the Treasury referred to is applicable only in the case of certain pensioners re-employed in an established capacity and is in operation in the Admiralty as well as in other Government Departments.

    NAVAL BASES (ROSYTH AND SINGAPORE).
    Lieut.-Commander KENWORTHYasked the First Lord of the Admiralty what has been the total cost involved in creating the naval base at Rosyth; and what features in Rosyth required for the maintenance of a fleet in wartime will be lacking in the projected naval base and dockyard at Singapore?
    The FIRST LORD of the ADMIRALTY (Mr. Amery): The total cost of the construction of the naval base at Rosyth and its appurtenances for land, permanent works and machinery was £11,335,207. The principal features of the Rosyth establishment not reproduced for the projected scheme for Singapore are one lock, two graving docks, one tidal basin for submarines, and one tidal basin and depot for destroyers. I would, however, warn the hon. and gallant Member against drawing any comparisons between the two, as the local conditions that have to be met, as well as the cost of labour and materials which are widely different.
    Lieut. - Commander KENWORTHY: Does that mean that, owing to the increased size of the ships and the greater distance, the same facilities at Singaport will cost more than at Rosyth? Is that the meaning of the kindly warning of the right hon. Gentleman?
    Mr. AMERY: The docks are for larger ships, and the general cost of material and Labour has gone up since Rosyth was taken in hand.
    Lieut. - Commander KENWORTHY: Does it mean that the same facilities at Singapore will cost more than Rosyth?
    Mr. AMERY: The facilities are not the same.

  BRITISH WORKMEN (FRANCE).
  Mr. HAYDAYasked the Minister of Labour whether his attention has been drawn to the fact that British subjects

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  enrolled for work in France have been drafted into Germany to be used as strike-breakers in the Ruhr; and whether he will make inquiries into this matter?
  The MINISTER of LABOUR (Sir Montague Barlow): According to all the information I have been able to obtain, there is not, the slightest foundation for this suggestion. I have verified that none of the British workmen sent for work in France through the agency of my Department have been drafted to work in Germ any.

  UNEMPLOYMENT.

    BENEFIT.
    Mr. HAYDAYasked the Minister of Labour whether his attention has been drawn to the case of R. Carter, of Barrow-in-Furness, who refused employment in Kendal, 43 miles away, and where the rate is 3½d. per hour less in Barrow, because he would be unable to keep his family in Barrow and himself in Kendal on the wages offered; whether he is aware that, in addition to being convicted at the instance of the guardians, his claim to unemployemnt benefit has been disallowed by the umpire in accordance with the provisions of Section 7 of the Unemployment Insurance Act; whether the umpire has admitted on several occasions that the operation of Section 7 in such cases has inflicted hardship; and whether he will consider the advisability of amending Section 7 or referring the matter for consideration to the Committee which is inquiring into the operation of the provision relating to persons who are thrown out of employment in consequence of a dispute in which they are not directly concerned?
    Sir M. BARLOW: The answer to the first two parts of the question is in the affirmative. The decision in the class of cases referred to is arrived at, I believe, after full consideration of all the circumstances, and although the Umpire in one or two cases in which he has disallowed benefit has said that living away from home in such conditions may involve some hardship, this does not necessarily indicate a view that benefit ought to be allowed. I do not think a case has been made out for the amendment of Section 7 in this respect, nor would it be advisable,
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    in my opinion, to add this problem to that already before the Committee to which the hon. Member refers.
    Mr. HAYDAY: Will the right hon. Gentleman consult with the Minister of Health, with a view to joint action on the question of this disqualification leading to prosecution by boards of guardians and terms of imprisonment being imposed in these cases, the number of which is increasing?
    Sir M. BARLOW: I think the best course would be for my hon. Friend to put down a question to the Minister of Health on this point. If there is any further difficulty, I will gladly do anything I can by joint action.
    Mr. SHORTasked the Minister of Labour whether he is aware that Joseph Page, 12, New Place, Penfold Street, Darlaston, recently had his unemployment benefit disallowed by the Darlaston Employment Exchange: that he served the customary six weeks and then renewed his application for benefit: and that his application was refused; and, if so, whether he will explain under what Regulation or Section of the Unemployment Act benefit was refused?
    Sir M. BARLOW: In the case of covenanted benefit a disqualification for a six weeks' period is followed in accordance with the Act by resumption of benefit. But where uncovenanted benefit is in question, as in this case, the claimant has, in addition, to satisfy the local employment committee that benefit ought to be resumed after the termination of the six weeks, and Mr. Page was unable to do this.
    Mr. GROVESasked the Minister of Labour whether he will inquire into the circumstances attending the stoppage of unemployment insurance money to Mr. J. Preston, 184, Chobham Road, Stratford, who on 30th May was offered a job as painter in Lancashire, and declined to accept such because he could not keep his wife and family in Stratford and maintain himself in Lancashire on £2 16s., and moreover pointed out that there were painters signing the unemployment register in the county of Lancaster; and whether he will see that the man is not penalised?
    Sir M. BARLOW: I am having inquiry made into the circumstances of the case referred to by the hon. Member, and will let him know the result as soon as possible.
    Mr. SHORTasked the Minister of Labour whether he is aware that the unemployment benefit of Mr. Weaver, 12a, Tudor Street, Tipton, has been disallowed by the Tipton Employment Exchange; that the disqualification was on the ground that he was not genuinely seeking employment; that he was willing to take any situation the Exchange offered; that his wife was recently the victim of a stroke and is now bedridden; that because he gave some attention to the care of his wife it was concluded he was not genuinely seeking employment; and will he cause inquiry to be made with a view to his benefit being restored, as the family is without income from any source?
    Sir M. BARLOW: I am having inquiry made in the case referred to, and will communicate the result to the hon. Member.

    JUVENILE CENTRES.
    Major Sir FREDERICK KELLEYasked the Minister of Labour whether he proposes that juvenile unemployment centres shall remain closed from July till 17th September; and whether he will consider the possibility of making a grant where it is proposed to keep a centre open during part of the intervening period?
    Sir M. BARLOW: I regret that I am unable to authorise the payment of grant in respect of juvenile unemployment centres for the period to which the hon. and gallant Member refers.

    OUTDOOR RELIEF APPLICATION (DUDLEY).
    Mr. SHORTasked the Minister of Health whether he is aware that Mr. Marsh, 20 Court, 4 House, Dudley Port, Tipton, who was unemployed, recently made application for relief from the Dudley Board of Guardians and was refused and told to take his family into the workhouse; and will he cause inquiry to be made as to the reason for this action on the part of the board?
    The MINISTER of HEALTH (Mr. Neville Chamberlain): I have been in communication with the Dudley Board of Guardians with regard to this case, and have received the following communication from them:
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    "In accordance with the instruction of the board, Marsh was informed that relief would be afforded to him upon his performing the prescribed task of work. Without hesitation he declined to receive relief upon these conditions. I may say that when his application was made inquiries were instituted at the local Labour Exchange and it was found that he was disqualified from benefit because he had left his work without just cause. I may also add that during the past two years the man has only done one month's work.
    Since the date upon which Marsh applied for relief neither the guardians nor their officers have any information relating to him."
    Mr. SHORT: Is the right hon. Gentleman aware that this man was thrown out of employment because of a dispute, and will he inquire into the reply of the guardians?
    Mr. CHAMBERLAIN: I have no information further than that which I have already given.
    Mr. LANSBURY: What is the nature of the test work which is offered to this man?
    Mr. CHAMBERLAIN: I could not say without notice.

    EMPLOYMENT EXCHANGES (ROTA COMMITTEES).
    Mr. J. JONESasked the Minister of Labour whether in certain areas great difficulty is experienced, owing to the prevalence of unemployment, in obtaining workers' representation on the rota committees attached to Employment Exchanges; and whether, in the circumstances, he will suspend the Regulation under which unemployed persons are debarred from membership of these committees?
    Mr. F. ROBERTSasked the Minister of Labour whether his attention has been drawn to the fact that in certain districts it is impossible, owing to the severe unemployment, to obtain representatives of the workers on the unemployment rota committees; and whether he proposes to take any action in the matter?
    Sir M. BARLOW: I am not aware that any very serious difficulty is being experienced at the present time in obtaining workers' representatives on local employment committees rotas, owing to the rule that persons who are themselves in

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    receipt of unemployment benefit should not be called upon to adjudicate on claims made by others. I am still of opinion that the rule should be maintained.
    Mr. J. JONES: Does the right hon. Gentleman recognise that in certain districts it is rather difficult to get people to take on these jobs, while there are men who are unemployed who are prepared to act and are quite capable of so doing?
    Sir M. BARLOW: It has not been brought to my attention that there is any difficulty in getting properly qualified workers to take these posts.

  BOILERMAKERS' TRADE DISPUTE.
  Major Sir F. KELLEYasked the Minister of Labour whether he will now take steps to bring together the parties in the boilermakers' dispute; how many men are involved in this dispute; how many thrown out of work by it though not directly involved; and what is the approximate loss of wages through it?
  Mr. D. G. SOMERVILLEasked the Minister of Labour if he is aware that but for the boilermakers' lock-out one of the leading firms in Barrow would be able to take on a large number of additional hands and so help to relieve the abnormal unemployment in that town; and whether, in view of the urgency of the unemployment problem, he can now see his way to intervene in the dispute?
  Sir M. BARLOW: I am aware that unemployment in the shipbuilding industry has been increased as a result of the dispute referred to, but statistics of the kind desired are not available. I understand that the Boilermakers' Society is at present balloting its members on the question of working under the Agreement between the Shipbuilding Employers' Federation and the Federation of Engineering and Shipbuilding Trades. In these circumstances, I am not proposing to take any action.
  Mr. SOMERVILLE: Can the Minister state if he has any intention of interfering, as the position is so serious?
  Sir M. BARLOW: As my hon. Friend knows—no one better—it is quite impossible to express, in advance, an intention
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  with regard to these difficult matters, the complexion of which changes from day to day and almost from hour to hour.
  Mr. BOWERMAN: Assuming that the ballot is not in favour of a settlement, will the right hon. Gentleman's Department then intervene?
  Sir M. BARLOW: I must return a similar answer to that question. I must wait until the circumstances arise before I decide what course to take in regard to them.

  WORKMEN'S COMPENSATION (EYESIGHT FAILURE).
  Mr. D. G. SOMERVILLEasked the Minister of Labour whether, in view of the request for the inclusion of eyesight failure in the Workmen's Compensation Act, his Department possesses any reliable record showing how the individual senses are affected by particular industries; and whether in such cases steps are taken to differentiate at any stage between failure due to advancing years and failure due to conditions of work?
  The UNDER-SECRETARY of STATE for HOME AFFAIRS (Mr. G. Locker-Lampson): I have been asked to reply to this question. The Department is in possession of a great deal of information as to diseases and affections which are caused by particular industries and processes; but so far as regards failure of eyesight, such as shortsightedness or other kinds of eye strain, it would not be possible to differentiate between the effects of the conditions of work, advancing years and other possible causes.
  Viscount CURZON: Does the hon. Gentleman's answer apply to the case of railwaymen disabled by injured eyesight?
  Mr. LOCKER-LAMPSON: As my Noble and gallant Friend knows, certain afflictions of the eye are already included under the Act of 1906 and they are being added to.

  SKIMMED DRIED MILKS.
  Mr. HURDasked the Minister of Health the result of his consideration of Regulations for the proper labelling of skimmed dried milks as unfit for children?
  Mr. CHAMBERLAIN: Draft Regulations dealing with this matter have been prepared in my Department, and I am causing them to be forwarded to the other Departments concerned as a preliminary to discussion.
  Mr. HURD: Is there any necessity in this matter to consult other countries, seeing that this is purely a domestic affair of our own?
  Mr. CHAMBERLAIN: So far as I am aware, it will not be necessary.

  CEMENT CONTRACTS (MIDDLESBROUGH).
  Mr. TREVELYAN THOMSONasked the Minister of Health (1) whether he is aware that, in view of the fact that by refusing to allow the Middlesbrough Corporation to purchase foreign cement, which they consider satisfactory for road-making purposes, at a much lower price than that demanded by the British combine, he is increasing the charge upon their rates for unemployed work; in these circumstances, will he make them an extra grant from the unemployed fund in order to compensate them for this extra burden;
  (2) whether, in view of the special representations made to them by the Middlesbrough Corporation in favour of their continuing to buy satisfactory foreign cement for their unemployed road works at a saving of more than 9s. 6d. per ton over the British combine's price, he will reconsider his refusal to sanction these purchases, so as to qualify them for assistance from the Unemployed Grants Committee?
  Mr. CHAMBERLAIN: This matter is one for decision by the Unemployment Grants Committee, and I understand that, in view of the facts placed before them by the town council, the Committee are considering the matter further.
  Mr. THOMSON: Can the right hon. Gentleman expedite a decision in this matter, seeing that the work is already in hand and unemployed labour is awaiting engagement, pending the decision?
  Mr. D. G. SOMERVILLE: Before the right hon. Gentleman replies, may I ask is it not a fact that the purchase of
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  foreign cement tends to reduce the British combine's price?
  Mr. CHAMBERLAIN: I cannot answer the last supplementary question. I have already informed the hon. Member for West Middlesbrough (Mr. T. Thomson) this matter is not in the discretion of my Department, but in that of the Unemployment Grants Committee. I understand new information has been submitted to that Committee, which is no doubt the reason why the decision has been delayed.
  Mr. THOMSON: Is it not a fact that this information was submitted last week and an early reply promised; and will the right hon. Gentleman bring pressure to bear on the Committee, seeing that this is an urgent matter and within his province?
  Mr. CHAMBERLAIN: I am sure the Committee will come to a speedy decision. The hon. Member says the information was only given last week, and they must be allowed a reasonable time.
  Mr. THOMSON: I meant the additional information.

  HOUSING.

    MITCHAM.
    Mr. EDEasked the Minister of Health if he is aware that in the Report of the Surrey county medical officer of health for 1922 it is stated on page 32 that almost all the houses in Bath Road and Rock Terrace, Mitcham, are let out to two or three families; and can he say what steps are being taken to remedy that state of affairs?
    Mr. CHAMBERLAIN: The answer to the first part of the question is in the affirmative. The Mitcham Urban District Council completed 304 houses under the previous housing scheme, and I understand that they have under consideration the question of further housing provision under the Bill which is now before Parliament. I may add that a return made in March last shows that during the previous five and a half months 134 houses, of an annual value of under £35, had been built by private enterprise, 55 houses containing not more than five rooms were under construction, and plans had been approved for 112 houses of the same type during the period referred to.

    WORKING-CLASS HOUSES, SURREY.
    Mr. EDEasked the Minister of Health the total number of houses for the working classes that were estimated at the end of the War to be required by the local housing authorities in the administrative County of Surrey to make good the then existing shortage; how many houses have since been built by the housing authorities; and how many by other persons for working-class occupation?
    Mr. CHAMBERLAIN: According to a return made in 1919 by local authorities in the administrative County of Surrey, the total number of houses required by them for the working classes was 9,028; 3,538 houses have since been built by local authorities in the administrative county. Information as to the total number of houses built by private enterprise is not available, but financial assistance has been given under the Housing, Town Planning, etc., Act, 1919, to the provision, in the administrative county, of 214 houses by public utility societies, and under Section 1 of the Housing (Additional Powers) Act, 1919, to the provision of 2,249 houses. A return obtained in March last, which did not include rural districts outside the Metropolitan Police District, showed that in the County of Surrey 732 new houses of less than £35 annual value had been completed between 30th September and 31st March, and that 881 houses of five rooms or less were under construction at the latter date.

    RATE-FREE DWELLINGS.
    Mr. HARDIEasked the Minister of Health whether he can lay upon the Table or place in the Library information relating to the new dwellings in New York, United States of America, which are free from local rates for a given number of years?
    Mr. CHAMBERLAIN: I am making arrangements for such information as I have available to be placed in the Library.

    WHITE HART LANE ESTATE.
    Mr. R. MORRISONasked the Minister of Health whether he has received any communication from the Welfare Association of the London County Council White Hart Lane. Estate informing him that the majority of the
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    tenants occupying the post-War houses on the estate would welcome some arrangement whereby rent and rates could be compounded and collected weekly; whether he is aware that the local authorities concerned, while expressing their willingness, have been unable up to the present to come to terms with the London County Council; and whether he has taken, or intends to take, any action in the matter?
    Mr. CHAMBERLAIN: I have not received any communication on the subject from the association referred to, but I have seen a copy of the correspondence between the county council and the Tottenham District Council with respect to the collection of these rates. The matter is one primarily for arrangement between the two councils, and I should accept any satisfactory scheme agreed upon.

    LAND VALUES, GOVAN.
    Mr. HARDIEasked, the Minister of Health if he is aware that the Glasgow Corporation has agreed to pay £6,292 for 6½ acres of ground at Langlands Road, Govan, and that the owner of these acres only contributed to the corporation on a valuation of £11 per year; and whether, in future purchases of ground for housing, he will bring in legislation to regulate the price on the rates paid?
    Captain ELLIOT (Parliamentary Under-Secretary for Health, Scotland): I am informed that the facts are as stated in the first part of the question. I am not in a position to give an undertaking in the sense of the last part of the question.

  HIGH COURT (REGISTRY OF JUDGMENTS).
  Mr. LEACHasked the Attorney-General if he will arrange that all judgments given in the High Court of Justice for £20 or over and unsatisfied at the expiration of 21 days from the day judgment is given shall be registered in the registry of judgments, the same as is done with County Court judgments?
  The ATTORNEY-GENERAL (Sir Douglas Hogg): I have no reason to suppose that there is any demand for such a registry as suggested by the hon. Member, or that any real advantage would be

  427
  gained by its institution. Furthermore, the suggestion is impracticable. In 1922, 29,219 judgments were signed for sums over £20 in the King's Bench Division alone, and the Court has no means of knowing in respect of any one of them whether it was satisfied within 21 days, or at all.

  MONEYLENDERS ACTS.
  Mr. LEACHasked the Attorney-General if he is aware that great hardship is often inflicted on persons who have to resort to moneylenders and who, through ignorance of the law and inability to pay for legal advice, are debarred from having the protection given by the Moneylenders Acts, 1900 and 1906; and will he therefore arrange that Judges and Registrars of County Courts, before giving judgment in this class of case, shall go into each transaction and give relief where the defendant is entitled thereto as prescribed by the Act?
  The ATTORNEY-GENERAL: I am not aware of the fact stated in the first part of the question. As to the second part, whenever a defence under the Moneylenders Acts is raised, the Judge or Registrar goes into the transaction, and gives relief if the defendant be entitled to it; and in the County Court the defendant can ask for this relief at any stage of the proceedings, and even during the trial itself, without having given previous notice of his intention to do so.
  Mr. W. THORNE: Is the right hon. Gentleman aware that there is a number of money-lending firms in London who are pestering Members of Parliament with circulars offering to lend them £100 without any security, and can he put a stop to this pernicious system?
  The ATTORNEY-GENERAL: The hon. Gentleman is quite right. I have had some myself.
  Mr. THORNE: Did you borrow any money?
  The ATTORNEY-GENERAL: I mean the circulars, and I wish very much that a stop could be put to such circulars, whether addressed to Members of Parliament or to other persons, but it is not very easy to devise a remedy.

  HOUGHTON TOWERS, BEDFORDSHIRE.
  Mr. WELLSasked the First Commissioner of Works if he will make an order, under the Ancient Monuments Consolidation Amendment Act, 1913, for the preservation of the ruins of great literary and historical interest, known as Houghton Towers, Bedfordshire?
  The FIRST COMMISSIONER of WORKS (Sir John Baird): As the ruins in question have not been recommended by the Ancient Monuments Board to be scheduled under the Act as of national importance, I regret that I do not see my way to issue a Preservation Order, which would have to be confirmed by a Bill in Parliament. I, however, greatly deplore the proposed destruction of such an interesting building.

  VACCINATION.
  Dr. CHAPPLEasked the Minister of Health what is the proportion of vaccinated to unvaccinated children of the age of 10 years and under; whether there has been any progressive change in this proportion; and what steps he proposes to take in order to safeguard the population against a possible epidemic of small-pox?
  Mr. CHAMBERLAIN: It is not possible to state definitely what proportion of the children now living of the age of 10 years and under has been vaccinated. The available statistics show the numbers of children born in each year who were vaccinated within a period expiring at the end of the year following the year of birth. These statistics suggest that the proportion of children now living of the age of 10 years and under who have been vaccinated is not more than 50 per cent. I will send the hon. Member a statement giving the figures for each of the years 1912 to 1921, and showing that the proportion of vaccinations to births has fallen from 50·1 per cent. in 1912 to 38·3 per cent. in 1921. As regards the last part of the question, my Department has recently circulated to sanitary authorities and boards of guardians memoranda as to the steps which should be taken on the occurrence of small-pox, and all possible assistance is rendered by medical officers

  429
  of the Department to the authorities of those districts in which an outbreak occurs.
  Dr. CHAPPLE: I beg to give notice that I will raise this question on the Adjournment to-morrow.
  Lieut.-Colonel FREMANTLE: Does the right hon. Gentleman think the decrease in the number of vaccinations is due to the increase of conscience of the conscientious objectors or to the decrease in keenness of the magistrates who certify the objections?
  Mr. T. THOMSONasked the Minister of Health the average percentage of vaccinations to total births for the last five decennial periods and the number of cases of small-pox per 1,000 of the population for the same periods?
  Mr. CHAMBERLAIN: As regards the first part of the question, the percentages of vaccinations to total births in the periods referred to were as follow:

  Year.

  Percentage.

  1872–1881

  85·6

  1882–1891

  82·2.

  1892–1901

  68·0

  1902–1911

  67·0

  1912–1921

  43·4.

  As regards the second part, particulars as to the total number of cases of smallpox in England and Wales are not available for any year prior to 1911. The number of cases per 1,000 of the population for the period 1912–1921 was 0·004.
  Mr. HURD: May I ask, seeing the gravity of this question in the West country, whether the right hon. Gentleman has any suggestion to make to safeguard the public interest?
  Mr. CHAMBERLAIN: I am keeping a very close watch upon the situation, and, so far as I can see at present, there is no necessity for any special legislation, if that be what my hon. Friend means.
  Sir HENRY CRAIK: Could not the Minister intimate in some way to magistrates and others responsible the necessity of taking great care in the examination of the pleas for exemption on grounds of conscience?
  Mr. THOMSON: Has the right hon. Gentleman any information which shows
  430
  whether the percentage of cases of small-pox has increased relatively to the decrease in the number of vaccinations?
  Mr. CHAMBERLAIN: Yes, undoubtedly.
  Mr. THOMSON: The right hon. Gentleman has not given it.
  Viscount CURZON: Has the right hon. Gentleman any explanation to offer with regard to the very remarkable drop in the last set of figures which he gave, from 67 per cent. to 43 per cent.
  Mr. CHAMBERLAIN: I think that is due to the agitation against vaccination which has taken place in various parts of the country.
  Sir H. BRITTAIN: Can the Minister of Health say whether every member of his Department has been vaccinated
  Mr. SNOWDENasked the Home Secretary whether his attention has been called to the difficulties put in the way of parents wishing to take advantage of the Vaccination Act, 1907, by magistrates who disapprove of exemption being granted to objectors to vaccination; and whether he will inform all magistrates sitting in open Court that they must accept statutory declarations under that Act, whatever their views in respect of vaccination?
  Mr. LOCKER-LAMPSON: Complaints are occasionally made that individual magistrates refuse to receive declarations, but they have been very infrequent. The Secretary of State has no authority to give the instructions suggested in the last part of the question, but he has repeatedly said that it is the duty of Justices to take care that no unnecessary difficulties are put in the way of those desirous of exercising their statutory rights.
  Sir W. DAVISON: Is it not a fact that it is the duty of a magistrate to satisfy himself that the applicant has a bona fide conscientious objection within the meaning of the Act and not merely a political objection?
  Dr. WATTS: Is it not a fact that many magistrates themselves have conscientious objections to granting these certificates?
  Mr. W. THORNE: Is it not the duty of the magistrate to carry out the law?
  Mr. LOCKER-LAMPSON: I hope that there is no political question involved. Certainly it is the duty of the magistrates to carry out the law, and very few complaints have been made.
  Sir H. CRAIK: If the Home Secretary has no authority to intervene at all, why is it, in view of the impending danger to the public, that he interferes in a sense contrary to security?
  Mr. LOCKER-LAMPSON: It is not within the purview of the Home Office to send any instructions to magistrates. All we could do would be to send a Circular round to the clerks to the magistrates drawing attention to the various Regulations.
  Lieut.-Colonel FREMANTLE: Can the hon. Member suggest any relief for the actual cases, which are innumerable, in which magistrates grant exemption for an objection that is in no way conscientious and is really political?
  Mr. SPEAKER: I should like to see that question put down on the Paper, because it carries an imputation.

  INSTITUTIONAL STAFF, EDMONTON.
  Captain Viscount EDNAMasked the Minister of Health whether he is aware that the institutional staff employed by the Edmonton Board of Guardians has increased since 1914 from 313 to 671; that the cost of salaries has increased from £1,600 to £70,800, although the number of inmates under their care has only increased from 2,163 to 2,318; and whether he is satisfied that this increase in staff and salaries is justifiable, and that no further economies can be effected?
  Mr. CHAMBERLAIN: With the exception of certain principal appointments, the establishment of the guardians and their remuneration is a matter within the guardians' discretion. I am bringing the hon. Member's question to their notice, and will inform him of their reply.
  Mr. LANSBURY: Is the figure of £1,600 in the question correct?
  Mr. CHAMBERLAIN: My information is that that figure should be £16,000.

  EX-SERVICE MEN (MENTAL CASES).
  Mr. LANSBURYasked the Minister of Health whether his attention has been called to a resolution in reference to ex-service men in mental hospitals who have been transferred to the pauper class passed by the Association of Poor Law Unions and Parishes of London and Greater London, to the effect that, having regard to the fact that these men were accepted for military service and to the extreme dubiety as to whether or not their mental condition is attributable to or aggravated by such service, the ex-service men who have been so transferred should be restored to their previous status; and whether, in view of the representative character of the association, he will make representations to the proper authority in order to remove all ex-service men suffering from mental disability from the care of Poor Law authorities?
  Mr. CHAMBERLAIN: My attention has been called to this resolution, and I will forward a copy of it to the Minister of Pensions, who has the primary responsibility in the matter.

  NORWICH AND SMALLBURGH UNIONS.
  Mr. CECIL WILSONasked the Minister of Health what is the weekly cost per inmate of the Norwich and Small-burgh unions, distinguishing between adults, juveniles, and infirmary cases?
  Mr. CHAMBERLAIN: I regret that this information is not available.

  MIDWIFERY FEES.
  Lieut.-Colonel FREMANTLEasked the Minister of Health if he is aware that Poor Law midwifery fees have not been revised since 1847; and whether he will take steps to bring them into line with the fees ruling at present for services of a similar nature?
  Mr. CHAMBERLAIN: It is true that the Order of 1847 has not been revised, but in a number of cases special arrangements between the guardians and their medical officers as regards midwifery fees have already been approved. I will, however, consider the question of the revision of this part of the Order.

  PATENT MEDICINES.
  Lieut.-Colonel FREMANTLEasked the Minister of Health if it is proposed to introduce a Bill to give effect to the recommendations of the Select Committee on Patent Medicines, proposals for which were agreed with the parties concerned in 1920?
  Mr. CHAMBERLAIN: In the present state of business, the Government cannot undertake to introduce legislation on this subject during the present Session.

  NAVY AND ARMY CANTEEN BOARD.
  Colonel Sir ARTHUR HOLBROOKasked the Under-Secretary of State for War whether he is able to state what proportion of the sum of £100,000, allocated from the Navy and Army Canteen Board's funds after the Armistice for recreational kit for troops awaiting demobilisation, was sent overseas: how the amount distributed at home by the Army physical training authorities was divided between the various branches of the Army; and if this sum of £100,000 was included in the item of £599,327 referred to as various general grants in the Report of Sir William Plender (Command Paper No. 1,717)?
  The FINANCIAL SECRETARY to the WAR OFFICE (Mr. Gwynne): I cannot precisely verify the hon. and gallant Member's information, and I am not aware of its source, but, if it has been derived from the inquiries of the Select Committee of which he is a member, I would suggest that the matter could best be pursued at present by that Committee rather than by way of question and answer in the House. In general, my information is that, in the early months of 1919, £100,000 was issued from the funds of the Expeditionary Force Canteens to the Field-Marshal Commanding-in-Chief the British Armies in France for expenditure on recreational kit for the troops in France and Flanders then awaiting demobilisation. The sum actually so spent was a-bout £84,000, and the Commander-in-Chief was instructed in July, 1919, to return the cash balance to the Expeditionary Force Canteens. None of this expenditure related to troops at home. I cannot say how the expenditure was distributed amongst the various
  434
  branches of the Army overseas. No doubt the expenditure in question is included in the total of £599,000 odd on page 6 of the Command Paper, where "Recreational Kit" is specifically mentioned.

  AGRICULTURAL PRODUCE (DISTRIBUTION AND PRICES).
  Lieut. - Colonel Sir ARTHUR CHURCHMANasked the Prime Minister whether he is yet in a position to state the attitude of the Government towards the recommendations made in the two interim Reports of the Departmental Committee on the Distribution and Prices of Agricultural Produce; and whether he proposes to allow a day for their discussion in the autumn?
  The PRIME MINISTER: The answer to the first part of the question is in the negative. The recommendations of the Departmental Committee referred to in their first two interim Reports are receiving the active consideration of the Government, and with regard to the earlier Report on milk and milk products, I may mention that the Government have already decided to give increased assistance for the encouragement and expansion of co-operative dairy schools, milk depots and cheese factories, while the President of the Board of Trade, the Minister of Agriculture, and the Secretary for Scotland are calling a conference of representatives of the milk trade to discuss other recommendations of the Committee. With regard to the last part of the question, as there are still two more Reports to be issued, I think it would be premature at this stage to consider the grant of a day for the discussion of the recommendations of this Committee.

  FILMS (IMPORTS FROM UNITED STATES).
  Sir A. HOLBROOKasked the President of the Board of Trade whether, having regard to the fact that the British film production industry is being destroyed by the dumping of American films, he will consider the imposition of an embargo of 33 1/3 per cent. on all American films brought into this country; and is he aware that, whereas 90 per cent.

  435
  of the films shown in this country are of American origin, the American embargo upon English films is so effective that the proportion of British films exhibited in America is only one-eighth per cent.?
  The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Viscount Wolmer): I do not think that the course suggested by my hon. Friend would achieve the result he desires. I have recently had the pleasure of receiving a deputation from the film-producing industry on this subject, and I am going into the question in detail with them.
  Sir A. HOLBROOK: Is the Noble Lord aware that the British film-producing trade is being killed by the present system of dumping the American films into this country—bringing them in by way of France?
  Viscount WOLMER: Yes, Sir; I am.

  RUHR OCCUPATION (SHIP PLATES).
  Sir F. KELLEYasked the President of the Board of Trade whether the holding up of ship plates on the Ruhr is still delaying ship construction in this country; and whether adequate supplies of these plates are now available at home?
  Viscount WOLMER: The issue of licences for the export of ship plates from the Ruhr commenced on the 11th June and is, I understand, proceeding satisfactorily. Consequently, I hope that any delay in ship construction due to the non-delivery of such plates will soon be at an end.
  Mr. BECKER: Could not these ships' plates be equally well made in Sheffield?
  Viscount WOLMER: No, Sir; the question is not one of making ships' plates; those in question were ordered last year in Germany.
  Sir F. KELLEY: Could these plates not be better made in Rotherham than in Sheffield?

  INDIA.

    MILITARY EXPENDITURE.
    Mr. LANSBURYasked the Under-Secretary of State for India what amount of reduction in expenditure on the Indian
    436
    Army and British troops stationed in India was recommended by the Inchcape Committee; and what is the actual amount of reduction recommended in the Estimates for the current year?
    The UNDER-SECRETARY of STATE for INDIA (Earl Winterton): The Inchcape Committee recommended that the net military Budget should be fixed at 57¾ crores, subject to such addition as might be necessary on account of inevitable delay in carrying out the various economies proposed. This represented a reduction of 9¼ crores on the revised Estimate for 1922–1923. The final Budget Estimate for 1923–1924 has been fixed at 62 crores, a reduction of 5 crores on the revised Estimate for 1922–1923.

    ARMY (STRENGTH).
    Colonel Sir C. YATEasked the Under-Secretary of State for India if he will give a statement showing the combatant strengths of all arms of the Army in India, both British and Indian, in 1913, and the corresponding figures when the sanctioned reductions have been carried out?
    Earl WINTERTON: As the exact scope of the reduction has not yet been finally decided, I would ask my hon. and gallant Friend to put down his question again next week, when I hope to be able to give him the information required.

  SMALL HOLDINGS SCOTLAND.
  Sir T. HENDERSONasked the Under-Secretary to the Scottish Board of Health if he will say, with reference to the small holding at Harrietsfield, on the Ancrum House estate, recently vacated, how many applicants there were for the holding; what the increase of rent was; if the rent was increased with the approval of the Scottish Board of Agriculture; and whether the new tenant of the holding has the full protection of the Small Holdings Act?
  Captain ELLIOT: I am not in a position to reply to the first part of the question because applications for vacated holdings fall to be made to the proprietor and not to the Board of Agriculture for Scotland. I understand that the rent has been increased from £30

  437
  to £52 by agreement between the proprietor and the ingoing holder. Such agreements do not require the approval of the Board of Agriculture. I am informed that joint application is being made to the Land Court by the proprietor and the tenant for registration of the tenant as a landholder, which, if granted, will give him the tenure of the Landholders Acts.

  AIRCRAFT PRODUCTION (ACCIDENTS).
  Mr. HAYDAYasked the Secretary of State for Air whether he is satisfied that the present methods in the production of aircraft are safe and reliable; whether he is aware that, for instance, in the works of the Bristol Aeroplane Company, much of the work is done by piecework and that War-time female labour is still employed at a wage of about 27s. per week; and whether he will institute a full inquiry into the causes of recent disasters, with special reference to the conditions under which the particular machines were produced, and to ascertain whether the institution of piecework in aircraft factories has any bearing upon the increase in the number of accidents?
  The SECRETARY of STATE for AIR (Lieut.-Colonel Sir Samuel Hoare): The answer to the first part of the question is in the affirmative. As to the second, I am aware that much of the work done by the Bristol Aeroplane Company is on a piecework basis, and that women are employed on covering, doping, and other light work, for which they are qualified. As regards the third part of the question, all accidents are already fully investigated by the Inspectorate of Accidents, and the result of the investigations has not been of a nature to indicate the necessity for a special inquiry under the two heads referred to by the hon. Member. Accidents due to faulty workmanship are very rare and, when they do occur, there is no reason to suppose that they are in any way connected with the use of the piecework system in construction.
  Mr. HAYDAY: Could the right hon. Gentleman say to what, extent there is adequate inspection at the works?
  Sir S. HOARE: There is very full inspection by the inspectorate of the Air Ministry.
  Viscount CURZON: Is it not the fact that there has only been one serious accident to a British aircraft in the last 12 months?
  Sir S. HOARE: I cannot answer that without notice, but I think the noble lord is right.

  GENERAL ELECTION (VOTING PAPERS).
  Mr. FRANK LEEasked the Secretary of State for the Home Department whether he has now completed his promised inquiry into the complaints raised concerning the stamping or non-stamping of voting papers at the General Election by the presiding officials, which resulted in the rejection of many votes otherwise good; and whether he is now prepared to advise that a perforating stamp or one requiring the use of ink should be provided?
  Mr. G. LOCKER-LAMPSON: My right hon. Friend has now completed inquiries in this matter. The stamping instruments used in North-East Derbyshire and a number of other constituencies at the last General Election have been carefully examined, and it is found that the instruments, assuming they were used with ordinary care, could not have been responsible for the absence of the official mark on ballot papers. In the circumstances my right hon. Friend does not think there is any sufficient reason for incurring the very considerable expense of providing stamping instruments of a different kind from those now in use. He is, however, considering what action can be taken to prevent the loss of votes at elections on account of the absence of the official mark on ballot papers.

  BRITISH ARMY.

    ALEXANDER MILITARY HOSPITAL, PORTSMOUTH.
    Mr. PRIVETTasked the Under-Secretary of State for War whether he is aware that the authorities of the

    439
    Alexander Military Hospital on Ports-down Hill, Portsmouth, do not give attention to cases of accident to civilians, which are frequent in the vicinity; and whether he will issue instructions that in all cases of accidents first-aid should be rendered at the hospital?
    Mr. GWYNNE: I would point out that Army hospitals are not intended for persons unconnected with the Army, and I am not in a position specially to authorise a standing arrangement for the treatment of civilians at any hospital at the expense of Army funds. I am not aware, however, that first-aid has been refused by the hospital referred to in any case where it was requisite on urgent medical grounds. If the hon. Member will be good enough to give me particulars of any incident which he has in mind, I will make inquiries and communicate with him further.

    CANADIAN HAY.
    Brigadier - General CLIFTON BROWNasked the Financial Secretary to the War Office whether he is aware that Canadian hay is being supplied to troops in the Aldershot Command and to other garrisons in this country; if the quality of this Canadian hay is equal to English hay; what is the price per ton; and whether, when there is good British hay for sale locally, the War Office will give preference to home-grown hay, other things being equal?
    Mr. GWYNNE: I am aware that some of the hay at present being supplied is Canadian, and I understand that it is at least equal in quality to the English hay. At Aldershot, however, the Canadian hay is less than half the total quantity supplied to date. It is the invariable practice of the Department to regard contract prices as confidential, and I regret, that I am unable to furnish particulars of them. As regards the last part of the question, it is the practice of the War Office, other things being equal, to give a preference to supplies of home production, and, although it is not considered advisable to stipulate for British hay exclusively, the hon. Member may rest assured that the great bulk of the hay supplied under War Office contracts is grown in this country.
    Mr. HARRIS: Is it desirable to discriminate against Canadian produce?
    Mr. GWYNNE: I did not say I was discriminating against Canadian produce. I used the word "preference," and said that, all other things being equal, we gave preference to the English hay, the same as we give the Colonies preference against foreign countries.
    Sir H. BRITTAIN: Has not the hon. Gentleman said that the Canadian is just as good as English hay?
    Mr. GWYNNE: That is my information in the present case; but, of course, you get good hay and bad hay in Canada, as well as in England. Much depends on the season.

  COAL OUTPUT AND ROYALTIES (YORKSHIRE).
  Mr. LUNNasked the Secretary for Mines the total coal output for the County of Yorkshire for the year ending 31st March, 1923; what was the total amount paid in royalties; and what was the amount of such royalties paid, if any, towards the burden of local rates in the districts from which such royalties were derived?
  The SECRETARY for MINES (Lieut.-Colonel Lane-Fox): The total output of saleable coal in Yorkshire during the year ended 31st March, 1923, was 43,266,000 tons. I cannot say what was the amount paid in royalties in Yorkshire alone; in the eastern district, comprising Yorkshire, Nottinghamshire, Derbyshire, Leicestershire, Cannock Chase and Warwickshire, with a total output of 85,154,000 tons, they amounted to £1,505,000. Royalties are not assessable to local rates in these districts.
  Mr. LUNN: Is the hon. and gallant Gentleman aware that in the King's Speech of 1921 there was a paragraph that the Government intended to nationalise the minerals, and does this present Government intend to introduce a Bill to make the minerals public property?
  Lieut.-Colonel LANE-FOX: I know of no such intention on the part of the Government.

  REGISTERED NEWSPAPERS (POSTAGE RATES).
  Mr. THORNTONasked the Postmaster-General (1) whether his attention has been called to the fact that, though registered newspapers which when made up for the post weigh less than two ounces are transmissible at the printed paper rate for a postage of ½d., cases of surcharge are constantly occurring, as country postmasters are not acquainted with this Regulation; whether he will take steps to call the attention of postmasters to the Regulation;
  (2) whether he will consider making the weight for registered newspapers larger than two ounces, as, in order to comply with the Regulation and send newspapers for ½d., very inferior paper has to be used?
  Captain DOUGLAS KING (for Sir L. Worthington - Evans): My right hon. Friend has asked me to reply. The ordinary postage for a registered newspaper is 1d. for any weight up to 6 oz. Any newspaper under 2 oz. in weight can, however, be sent as a printed paper for lad. My right hon. Friend is not in a position to increase the limit of weight for the ½d. post; and he could not introduce a fresh special rate for registered newspapers. There is no reason to suppose that postmasters generally are not acquainted with the fact that the ½d. rate of postage can be applied to newspapers if they weigh less than 2 oz; but in view of the hon. Member's representations, my right hon. Friend will have special attention called to the matter in the Post Office Circular.
  Mr. THORNTON: Does not the Postmaster-General agree that, in order to come within the rate, very inferior paper bas to be used?
  Captain KING: I do not know, but I will call the attention of my right hon. Friend to that point.

  MOTOR OMNIBUSES (HOODS).
  Mr. LANSBURYasked the Home Secretary whether he is now able to state the policy of the Home Office in respect to allowing motor omnibuses with hoods to be placed on the streets?
  Mr. LOCKER-LAMPSON: The question has been referred to a Committee
  442
  set up by the Ministry of Transport, and my right hon. Friend proposes to await the report of the Committee before coming to any general decision.

  BEER (BULK AND STANDARD BARRELS).
  Major McKENZIE WOODasked the Chancellor of the Exchequer the number of bulk and standard barrels produced in Great Britain in April and May, 1922 and 1923, respectively?
  The FINANCIAL SECRETARY to the TREASURY (Sir William Joynson-Hicks): The number of bulk and standard barrels of beer produced by brewers for sale in Great Britain in April and May, 1922 and 1923, respectively, is as follows:

  1922.

  Bulk. Barrels.

  Standard. Barrels.

  April

  1,714,133

  1,325,876

  May

  2,544,376

  1,975,529

  1923

  April

  1,841,406

  1,438,433

  May

  2,596,054

  2,022,179

  Mr. W. GREENWOOD: Does this question relate to beer.
  Major WOOD: Yes.

  "LONDON GAZETTE" STATE PRINTING.
  Sir A. HOLBROOKasked the Financial Secretary to the Treasury the nature of the complaints, if any, made with reference to the printing of the "London Gazette" by Messrs. Wyman; and was there any particular complaint which led to the notice being given to terminate their contract?
  Sir W. JOYNSON-HICKS: This contract was determined because the Treasury were of opinion that the work could be more advantageously carried out elsewhere, and therefore decided to take the opportunity of a break to give notice. It was not necessary to state any specific reason as the period had run out.
  Sir A. HOLBROOK: Is the right hon. Gentleman aware that he said last week that specific complaints had been made? What are they?
  Sir W. JOYNSON-HICKS: My hon. Friend must have run me into saying more

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  than I intended. I think we gave notice, and we were entitled to give notice. I do not want to cast any aspersions.
  Sir C. KINLOCH-COOKE: Will the right hon. Gentleman inform the House whether this is to be the general practice?

  ENTERTAINMENTS DUTY.
  Mr. LAMBasked the Financial Secretary to the Treasury whether he can give any assurance that, when issuing revised regulations in connection with the payment of Entertainments Duty, the Commissioners of Customs and Excise will make it clear that duty will not be payable in the case of agricultural shows which include educational exhibits depicting the methods employed at farm institutes, etc., for the training of young agriculturists and for assisting farmers and smallholders and, similarly, that duty will not be payable in the case of agricultural shows which include riding and driving competitions?
  Sir W. JOYNSON-HICKS: Under the clause which was added to the Finance Bill on the 2nd July, exemption from Entertainments Duty may be granted in respect of agricultural shows which, inter alia, consist solely of an exhibition of the products of agriculture, or of materials, machinery, appliances or foodstuffs used in the production of those products, or displays of skill by agricultural workers in work pertaining to agriculture, together with a band. Where an agricultural show includes exhibits outside those mentioned, the question whether exemption from Entertainments Duty can be granted depends upon whether such exhibits, if forming a separate exhibition, could have been exempted under any other provision of the law. As regards riding and driving competitions, I cannot add anything to the statement which I made in the debate on the 2nd July.
  Mr. LAMB: Will exhibits from agricultural elementary schools be allowed in the case of work done by the children in elementary schools in agricultural areas?
  Mr. HURD: In view of the large number of people who run these shows who do not read the newspapers, can the right hon. Gentleman send us some circular statement which we can send to these people so that they may know exactly how they stand.
  Sir W. JOYNSON-HICKS: The difficulty is to determine whether the exhibits are of an agricultural character. I can imagine certain elementary school exhibits which would not have anything to do with agriculture and which would not come within the Clause. My hon. Friend has anticipated something which I intended to say this afternoon, and I am considering whether it can be carried out.
  Mr. SNOWDEN: Does the right hon. Gentleman use the phrase "exemption from the tax" as meaning that in each particular case application has to be made to the Excise authorities for exemption?
  Sir W. JOYNSON-HICKS: I really do not know, but I will find out, and let the hon. Member know.

  PALESTINE (JEWISH OFFICERS).
  Mr. SNOWDENasked the Under-Secretary of State for the Colonies how many Jews and how many persons who, though not professing Jews, are of Jewish extraction are included among the superior officers of the Palestine administration; what appointments they severally hold; and what proportion they bear to the toal number of superior officers?
  The UNDER-SECRETARY of STATE for the COLONIES (Mr. Ormsby-Gore): As I informed the hon. Member for Frome on the 20th March, of the 35 highest posts in the Palestine Administration, apart from that of the High Commissioner himself, 33 are held by British Christians and two by British Jews. Of these 33 Christians, I am given to understand that two may be described as being of Jewish extraction, though not Jews by religion. I do not think any useful purpose would be served by giving the names of these two latter gentlemen or indicating the particular posts held by them.

  KENYA (CRUELTY CHARGES).
  Mr. SNELLasked the Under-Secretary of State for the Colonies (1) whether, seeing that white men in Kenya Colony, charged with causing the death of natives, are tried by juries composed exclusively of white men, he will, in the interests of justice, consider the advisability of securing some variation of this practice;

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  (2) if he is aware that Kenya Colony is the only Colonial territory, under the direct control of the Colonial Office, in which within recent years natives have been either flogged to death or have died as a result of ill-treatment at the hands of settlers; and whether he will consult the Governor of the Colony, who is now in this country, as to the advisability of taking such action as will prevent any recurrence of these atrocities and bring the Colony into line in this matter with other territories under the direct control of the Colonial Office?
  Mr. ORMSBY-GORE: The matter referred to in the hon. Member's two questions has engaged the anxious consideration of successive Secretaries of State for many years, but, without attempting to minimise its importance, I must guard myself from any suggestion that I do not realise that the vast majority of the British settlers in Kenya are as free from any tendency to ill-treat natives as are British settlers in other parts of the world. I can assure the hon. Member that the matter will be fully discussed with the Governor, but as a case of this kind is now before the local Courts, I would deprecate any reference to a discussion of the subject which might prejudice the trial.
  Mr. RHYS DAVIES: Will the hon. Gentleman take steps to deal with the subject after the trial is over?
  Mr. ORMSBY-GORE: We had better not discuss this matter while the trial is on, and until we have full particulars before us.

  BAROTSELAND.
  Mr. C. ROBERTSasked the Under-Secretary of State for the Colonies whether he is aware that the native chiefs of Barotseland, including some of the signatories of the original concession, dispute strongly the interpretation put upon that instrument by the Chartered Company; whether they are known to be desirous of laying their views before the Secretary of State; and whether, before reaching any arrangement with the Chartered Company, he will give facilities to these chiefs to visit this country, includng that of allowing their expenses to fall on the Barotse native fund?
  Mr. ORMSBY-GORE: The answer to the first two parts of the question is in the affirmative; as to the third, I do not think that personal presentation in London of the views of the native chiefs on the matters now under discussion would be of advantage, but I would refer the hon. Member to my answer to the hon. Member for Bedford Mid on 13th June.

  DEATHS FROM STARVATION.
  Lieut.-Commander KENWORTHYasked the Minister of Health if he is aware that, for 50 years prior to 1918, the Local Government Board published lists, entitled Returns of deaths upon which a Coroner's jury has returned a verdict death from starvation or death from privation, together with observations, furnished to the Local Government Board by boards of guardians, with reference to cases included in the Return; will he say why this Return has been discontinued; and whether the data for this Return are in the possession of the Ministry of Health?
  Mr. CHAMBERLAIN: I would refer the hon. and gallant Member to the answer given to the hon. Member for Oxford University on the 27th April last in reply to a similar question. I am sending the hon. Member a copy of that reply. Thee data for this Return have not been collected since 1918, and are not in the possession of my Department.
  Lieut. - Commander KENWORTHY: Does the right hon. Gentleman propose to re-institute this Return?
  Mr. CHAMBBERLAIN: No, Sir; that was the answer I gave on a former occasion.
  Mr. LANSBURY: May I ask whether, in view of the importance to the country of knowing how many persons do die of starvation during the year, the right hon. Gentleman will reconsider his decision and have the Return taken?
  Mr. CHAMBERLAIN: The Returns that were formerly made depended on the terms of the verdict of the Coroners' juries. They were classified by the several Coroners, and as a result the Returns proved to be highly misleading. Therefore it was thought advisable to drop them.
  Mr. LANSBURY: Is the right hon. Gentleman aware that the reason for considering them not right or proper was because the juries definitely attributed deaths to starvation and the Department did not, and still do not, want that fact known?
  Mr. CHAMBERLAIN: That was not at all the reason. The reason was that there was no uniformity and no scientific principle followed in classifying the verdicts.
  Mr. LANSBURY: What is the need for uniformity? It is found that a man dies from one disease in one district and another man from another disease in another district, and you do not ask for uniformity in those cases. Coroners' juries disagree and bring in various verdicts.

  DOCK WORKERS' TRADE DISPUTE.
  Mr. W. THORNE(by Private Notice) asked the Minister of Labour if he is aware that there are about 25,000 dock workers out on strike in several seaport towns, as a protest against the reduction of 1s. per day in their wages, which has taken place in accordance with the agreement arrived at last August, in consequence of the drop of 10 points in the official cost of living since that date; if he is aware that the dock and other organised workers are absolutely dissatisfied with the way in which the cost of living is arrived at; if he is aware that a mistake made of one point in arriving at the cost of living means a reduction in wages amounting to at least £100,000 per week; and why the Committee he promised has not been set up to investigate how the cost of living is arrived at?
  Mr. GOSLING(by Private Notice) asked the Minister of Labour whether the Minister is aware that the fall of one point in the cost of living figures between May and June, and a total of 10 points between September and June, have occasioned considerable difficulty in giving effect to certain agreements, owing to the inability of housewives to reconcile the prices quoted by the "Ministry of Labour Gazette" with the actual retail prices: what is the process of obtaining prices and calculating the cost of living figures; and whether, having regard to the changes which have
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  taken place in the standard of living between the ascertainment of the basis of calculations, the Minister does not agree that the time has arrived for setting up an inquiry into the whole matter?
  Sir M. BARLOW: I am aware that a stoppage of dock labour has occurred at several ports. In September last an agreement was reached which provided for a reduction of the minimum daily wage by 1s. on and after October, 1922; and for a further reduction of 1s. on and after 4th June, 1923, so soon as, to summarise it shortly, the cost of living figure had fallen 10 points. The cost of living figure for September was 79. It is now 69, i.e., the full 10-point reduction has now taken place. The figure has been falling continuously in each of the last six months, and on three occasions (including the last) it fell by one point and no more. As regards the last part of the question, I would refer the hon. Members to the reply which I gave to the hon. Member for the Moseley Division (Mr. Hannon) on 24th April last, in which I stated that it will be desirable, when working-class conditions become more normal, that an inquiry into working-class expenditure should be made as a preliminary part of an investigation into the whole question of the cost of living figure. It is quite clear that any calculations based on conditions as at present would not form a reasonable basis for the future. With regard to the question asked by the hon. Member for Whitechapel (Mr. Gosling), I am sending him a full statement showing the process by which the monthly cost of living figures prepared by my Department are arrived at. As the hon. Member knows, the figures are based upon more than 5,000 returns obtained from shopkeepers all over the country, including multiple shops, co-operative societies, etc. The prices so arrived at are, of course, an average for the whole country, and may not coincide with particular prices in any particular area.
  Mr. SEXTON: Are not the index figures of the Board of Trade based more upon the wholesale than upon the retail prices?
  Sir M. BARLOW: Yes. I am glad that that supplementary question has been asked, because there seems to be some

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  confusion in the public mind. The Board of Trade index figures are wholesale index figures; the Ministry of Labour index figures are retail index figures.
  Mr. GOSLING: What is the answer to what the housewives say when they go to market and find that the Board of Trade figures do not operate?
  Sir M. BARLOW: I am afraid the hon. Member has rather continued the confusion which I attempted to avoid. He refers to the Board of Trade figures, but it is the Ministry of Labour figures that he has in mind, because he is dealing with retail prices. When the housewife makes a remark of that kind, the reply is the reply that I gave in the last part of my answer, namely, that the figure arrived at is an average figure, taking returns from 5,000 sources all over the country, and, consequently, you cannot rely on that average so arrived at as giving a true guide in any one particular area. It is an average figure for the whole country.
  Mr. CLYNES: Would the right hon. Gentleman arrange for the publication in some form of the information which is to be sent to the hon. Member for Whitechapel?
  Sir M. BARLOW: I think there will be no difficulty about that. It is a summarised and, perhaps, rather simpler form of the very full statement which was published in the "Labour Gazette" last year, indicating very clearly and fully the exact process by which the figure was arrived at. That statement was couched in rather technical terms, and I have endeavoured to make a somewhat simpler statement.
  Mr. THORNE: May I ask another supplementary question?
  Mr. SPEAKER: I think it would be convenient if the statement were printed in the OFFICIAL REPORT.
  Mr. THORNE: Will the right hon. Gentleman come along with me and bring two Treasury Notes, and spend them in the shops, comparing the result with the retail prices published in the "Labour Gazette," in order to find out for himself?
  Mr. MUIR: If the information as to prices given by the Ministry of Labour is to serve as a guide to people in estimating the cost of living, and in calcu-
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  lating the ratio of their own purchases to the figures given by the Ministry of Labour, could not the right hon. Gentleman provide that estimates should be got from various districts that could be classified, and an average given for each district rather than for the whole country?
  Sir M. BARLOW: The figure is a national figure, and I think that, if we attempted to arrive at particular figures for particular areas, we should, indeed, be in difficulties, and should be even more criticised than we are at present.
  Mr. McENTEE: Is it not a fact that the practice of averaging figures all over the country works out generally detrimentally to the large towns, and particularly to London?
  Sir M. BARLOW: I cannot say that, I do not think it does, because so many of the returns are furnished by the towns themselves. I think it is only fair to add that all these circumstances were, I assume, present to the minds of the persons who signed agreements embodying this figure as the test. It was known, at the time when these agreements were made, that the figure was made up in the way I have indicated.
  Mr. J. JONES: In view of the unsatisfactory nature of the reply, I desire to move the Adjournment of the House, in order to consider a matter of urgent public importance, namely, the threatened stoppage of the whole riverside transport of the country in view of the dissatisfaction of the men with the way in which they are at present finding themselves placed.
  Mr. SPEAKER: The Adjournment of the House cannot be moved because of a dispute in an industry. This has often been ruled.
  Mr. JONES: It is not important or urgent!

AGRICULTURE (SCOTLAND) AMENDMENT BILL,
"to amend the Agricultural Holdings (Scotland) Act, 1923," presented by Lieut.-Colonel ARTHUR MURRAY, supported by Major Dudgeon, Mr. Falconer, Mr. Gardiner, Mr. Frederick Martin, Major Sir Archibald Sinclair, and Major McKenzie Wood; to be read a Second

451
time upon Thursday, 12th July, and to be printed. [Bill 186.]

MESSAGE FROM THE LORDS.
That they have agreed to,
War Memorials (Local Authorities' Powers) Bill, without Amendment.
Maidstone Corporation Bill.
Rawmarsh Urban District Council Bill, with Amendments.
Amendments to,
South Elmsall and District Gas Bill [Lords],
Oakham Gas and Electricity Bill [Lords], without Amendment.
That they have passed a Bill, intituled, "An Act to empower the Mayor, Aldermen, and Burgesses of the borough of West Hartlepool to provide and work trolley vehicles; and for other purposes." [West Hartlepool Corporation Bill [Lords.]

WEST HARTLEPOOL CORPORATION BILL [Lords].
Read the First time; and referred to the Examiners of Petitions for Private Bills.

BILLS REPORTED.
Ministry of Health Provisional Orders (No. 9) Bill,
Reported, without Amendment [Provisional Orders confirmed]; Report to lie upon the Table.
Bill to be read the Third time To-morrow.
Great Western Railway (Additional Powers) Bill [Lords],
Reported, with Amendments, and Special Report; Report and Special Report to lie upon the Table, and to be printed.
South Staffordshire Mond Gas Bill [Lords],
Reported, with Amendments; Report to lie upon the Table.
Wakefield Corporation Bill [Lords],
West Gloucestershire Water Bill [Lords],
Reported, with Amendments; Reports to lie upon the Table, and to be printed.

ORDERS OF THE DAY.

  FINANCE BILL.
  Order for Third Reading read.
  Motion made, and Question proposed, "That the Bill be now read the Third time."
  Mr. SNOWDEN: I beg to move to leave out the word "now," and, at the end of the Question, to add the words "upon this day three months."
  We have now reached the last stage of the long discussion on the financial proposals for the year, and I make no complaint about the amount of time which the Government have devoted to the various stages of this Bill. The Labour party has on many occasions, during those various stages, stated its views on the financial proposals contained in the Budget, and, incidentally, its views upon taxation in general. We moved the rejection of the Finance Bill on Second Reading, and in our Amendment we summarised the reasons why we asked the House not to assent to the Measure. Briefly, we objected to the Bill because, in the first place, it did not, in our opinion, make adequate provision for the reduction of Debt, and did not, indeed, conform to the declarations made, during the last few years, by more than one Conservative Chancellor of the Exchequer, who had stated that there ought to be a minimum provision of £100,000,000 a year towards the reduction of the Debt. It seems to us altogether inadequate that, with a Debt of over £7,000,000,000, a proposal should be made, which is, apparently, to be permanent, apart from what the Chancellor of the Exchequer may occasionally do, for a provision of only £50,000,000 a year. I understand that an arrangement has been made by which, some time in the course of this month, a day will be set apart for the discussion of the Labour party's proposal for a considerable reduction of the Debt, and, therefore, under this head I shall confine my observations this afternoon to repeating that we regard the provision contained in this Bill as altogether inadequate. I do not think I should be doing an injustice to the Chancellor of the Exchequer if I were to say that he himself really accepts the views which were expressed by his predecessors, that the provision for Debt reduction ought
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  to be much more considerable than is proposed in this Measure.
  4.0 P.M.
  The second reason why we opposed the Second Reading of the Bill was that we considered that the remissions of taxation proposed by the Chancellor of the Exchequer were, in the main, to be given to those taxpayers who had the greatest ability to pay, and who had the least call upon the Exchequer in such a national situation as that in which we are placed to-day. The Bill to which we are to give a Third Reading this afternoon is substantially the same Measure. There have been one or two very minor and insignificant concessions made, involving in the aggregate a very small sum indeed. We proposed Amendments in the Committee stage of the Bill which, if carried, would, in our opinion, have given, not equal, but proportionate concessions to the different classes of taxpayer. The great bulk of the Income Tax remission is going to people who could, at any rate, continue to bear the burden which last year was imposed upon them without unduly feeling the strain. I pointed out in the general Debate on the Budget and, later, on the Second Reading of this Bill, that out of the £26,000,000 in a full year which is to be remitted to the Income Tax payers £23,000,000 goes to people with incomes higher than £450 and that a paltry sum of £3,000,000 goes to the relief of those Income Tax payers whose incomes are below £450 a year. I know that on one occasion the Chancellor of the Exchequer said that it was an impossibility when reducing taxation not to give a greater relief to the people who already paid the largest amount. That may be quite true in regard to indirect taxation, or at least some forms of indirect taxation, but it is not true of the Income Tax, and, if the Amendments which we sought to incorporate in this Bill had been accepted, then a larger proportion of the total amount which is to be conceded would have gone to people with incomes, say, below £500. That is the second reason why we ask the House to assent to the Amendment which I now move, namely, that the remission of taxation which has been made is not going to the relief of those people who are to-day feeling most heavily the burden of taxation.
  May I put it in another way? The people within the Income Tax paying

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  class will pay in the present year in Income Tax, Super-tax, and Estate Duties a sum of about £450,000,000. The amount which is paid in indirect taxation is about £250,000,000, and it is generally assumed that four-fifths of the total receipts from Customs and Excise are raid by people outside the Income Tax paying class. The amount which is paid in taxation by the working class, therefore, is £250,000,000 this year. The well-to-do class are contributing to the National expenditure £450,000,000—of course, I am using round figures, which are approximately correct—but that class get back this year £340,000,000, and therefore they are only contributing to the expenses of the country a net sum of £110,000,000. Suppose we take old age pensions, soldiers' pensions, widows' pensions, and a number of other services, then, out of the £250,000,000, £135,000,000 has been devoted to services directly benefiting the working class.
  Mr. A. CHAMBERLAIN: I am only asking for information, but will the hon. Member specify the services which he has included?
  Mr. SNOWDEN: Yes; there are old age pensions, the State contribution to national insurance, soldiers' pensions and widows' pensions. I have not included education.
  Mr. CHAMBERLAIN: Or the health services?
  Mr. SNOWDEN: No, not the health services. There is a contribution of £115,000,000, out of the £250,000,000 paid by the working-class, towards the other national services. Hon. Members may allocate that just as they please. If they take the Army and Navy, it does not fall far short of meeting the expenditure on the fighting services. If they prefer it, they can allocate it to the education services. The Education Vote is not so large as £115,000,000, and, if they do that, there remains a very considerable sum which the working class will contribute to the public health service. Therefore, the workers of this country, out of their inadequate and limited means, are contributing more to the expenses of the country than the Income Tax paying class, and yet this is the class, who are contributing so disproportionately, not only in the actual sum but much more when we regard their ability to pay, who
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  have been specially selected by the Chancellor of the Exchequer for a very considerable relief of the taxation they already pay.
  It is impossible to regard this Budget and the remissions of taxation made in this Budget apart from what was done in the Budget of last year. Last year there was what is called a reduction of 1s. in the £ in the Income Tax. Of course, that is on the flat rate. There are very few people indeed who get the full amount. That will cost in a full year £32,000,000, and the reduction of 6d. this year will cost £26,000,000, making £78,000,000 altogether. Then, in this Bill there is a proposal to reduce the Corporation Profits Tax. We do not object to that, because, however opinions may differ as to the effect of the Income Tax upon trade and industry, there are no differences of opinion that the Corporation Profits Tax has a disastrous effect upon industry. We may, therefore, take £90,000,000 as the remission of taxation in these two years. Last year there was a remission of a little over £5,000,000 of the Tea Duty. This year the only concession which the Chancellor of the Exchequer has made has been in regard to the Beer Duty. I am not going to express my own personal view about the Beer Duty, because, if I did so, I doubt if I should be able to carry the unanimous approval of hon. Members who are sitting behind me, but, at any rate, I shall carry them with me unanimously when I say that, if the choice had been put to them whether there should be a remission of the duty on tea or sugar or a remission or a reduction of the Beer Duty, every one of my colleagues, without hesitation, would have said, "We will take the remission of the duty on sugar and leave the duty on beer."
  The Chancellor of the Exchequer expressed sympathy with the desire for a reduction of the Sugar Duty. The only objection he had to making some reduction this year was the extraordinary plea that, if it were made then, in view of the present state of the world's sugar market, the advantage would not go to the consumers of this country. I am not going to argue that question. I think his argument was completely and conclusively answered by my hon. Friend the Member for Hillsborough (Mr. A. V. Alexander) on the Committee stage of the Bill. The Chancellor of the Exchequer

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  will agree that the world's sugar market, from his point of view, has been within the last few weeks much more favourable to a reduction of the duty, with an assurance that it would be more likely to go as a benefit to the consumers of sugar, but, be that as it may, if this were the only country in the world where the United States found a market for their sugar, then there might possibly be something in the original intention of the Chancellor of the Exchequer. That is not the case. The price of sugar in this country is regulated, not by what the American sugar monopoly can get in this country, but by world prices, and, therefore, if the Chancellor of the Exchequer had made some reduction in the Sugar Duty this year, I am perfectly certain that, if not the whole of it, a very considerable part of it, would have gone to a reduction in the price of sugar. May I remind the House once more that under the pressure of War necessity and financial necessity this enormous duty upon sugar was imposed. There is no other previously taxed article on which the duty has been increased so much as the duty upon sugar. It is not merely that it is a burden upon the consumer of sugar. As every hon. Member knows, it has its disastrous effects upon a great many trades and industries which use sugar to a considerable extent. We had that pointed out yesterday in the Debate upon mineral waters, and the Financial Secretary to the Treasury had no effective answer to that contention. I am sure that I am expressing—and it is not inappropriate that on the last stages of this Bill I should do so—the general admiration, indeed, the unanimous admiration, of the House at the way in which the Financial Secretary conducted the proceedings during the Committee stage of the Bill up till last night. I am very sorry that, to some extent, he tarnished that reputation by his speech last evening in support of the retention of Clause 27 in the Bill. However, we may remember his previous admirable work in the various stages of this Bill and forgive the slight lapse in which he indulged last night. The Chancellor of the Exchequer stated that he could not reduce the Sugar Duty this year because he was not certain the benefit would go to the consumer. Then why not tea? That is an article of universal consumption. It
  470
  enters very largely into the expenditure of the working classes. If the price of tea had been reduced it is not at all unlikely that you would not have the discontent you have at present. "Ah," said the Chancellor of the Exchequer, "I cannot do it. We did that last year. You surely do not expect us to be reducing the Tea Duty every year." Our reply to that is that you reduced the Income Tax last year and you are reducing the Income Tax again this year, and our contention is that you have a great deal to do in the way of reducing indirect taxation on such articles as tea and sugar before you have any moral right to make a further reduction in the taxation of the rich.
  A third very general point in our opposition to the Budget, as now embodied in the Finance Bill, was that it did nothing at all to encourage trade and industry. If the Government had reduced the Sugar Duty they might have done some little in that direction. It has been maintained that the reduction of the Income Tax is likely to stimulate trade. I do not want to go into that point again. I have made speeches upon it in this House until I am tired of hearing my own voice, so I will confine myself to saying that no one has ever adduced a shred of evidence in support of that contention. I have been prepared to go so far towards meeting that that if you could reduce the Income Tax at one fell swoop by three or four shillings in the £ I have no doubt it would have that effect. But it would be caused by its psychological effect rather than by any economic causes or reasons. If you want to improve trade in the present financial position of the country you will not do it by reducing the Income Tax. You have no assurance whatever that the remission of Income Tax is going to be used to stimulate trade. As a matter of fact it will not do it. The class of people who are getting a remission of taxation under this Budget are not going to invest it. Large as the amount is in the eyes of most of us, it is a very small matter to them, and they are accustomed when they make an investment to invest very much larger sums than anything they are likely to receive by the remission of the Income Tax this year. It will go, so far as they are concerned, in trying to get back some part of their reduced standard of living and of their expenditure upon luxuries which they

  471
  have been compelled to curtail during the period of high taxation during the last two or three years. There is all the difference in the world, so far as stimulating trade is concerned, between reducing the Income Tax paid by the rich and reducing the taxation of the people, and the same thing applies to Income Tax payers in the lower ranges—say up to £500 a year. If a man with a family whose income is £500 a year is relieved to the extent of £5, he will not invest it. He will spend it on his family, as far as it will go in better food and boots and more clothing, and in that way he will be directly stimulating trade and increasing the volume of employment.
  I want to say a few words upon two or three specific matters. We have put forward on the Committee stage of the Bill a great many Amendments. Only one has been accepted, and that is the Amendment dealing with Inhabited House Duty, and when I moved it I said we did so because we wanted something that we thought we might possibly be able to get in this Bill from the right hon. Gentleman's good nature and geniality. We are not so moderate because we believe the Inhabited House Duty ought to be continued. I do not believe it ought to be continued. It is a survival of the old vicious system of taxation. It ought to have been swept away long ago when it was possible, in the then easier financial position of the country, to make substantial remissions of taxation. The Inhabited House Duty is really a second Income Tax, and a very heavy one, and it has become all the more onerous through the increase of rents in recent years. What I am doing now is to offer suggestions to the Chancellor of the Exchequer for the preparation of his Budget next year. I hope he will not think that because he has made some remission in Inhabited House Duty this year he has finished with that for the present generation. I hope he will not even leave it to the new Labour Government to do.
  A word or two about the Entertainments Duty. I was in the House of Commons when that was first proposed, and I opposed it then. I have always opposed it. I think it is one of those amateurish taxes that no really intelligent Finance Minister ought to impose. It is irritating,
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  it is vexatious, and it cannot be imposed on an incidence that is fair. Surely the right hon. Gentleman who has had charge of the Bill will agree with that after all he has heard in the course of the Debates. He has made some concessions in regard to agricultural shows and industrial entertainments, but I do not think that is going to be very much. There are very few agricultural or even industrial exhibitions which can be held without some kind of auxiliaries in the way of sports, in which case they are precluded from any benefits under the new Clause, and there are a great many other institutions—charities, societies, educational organisations—which are now liable whose claims are as great as those of the agricultural and the horticultural show. There is only one way of dealing with it, and that is to sweep it away altogether, and I hope between now and the presentation of the next Budget the Chancellor of the Exchequer will give very serious attention to that matter.
  May I say a few words about the matter which occupied the House for a considerable part of yesterday's Sitting? I refer to Clause 27, which has been incorporated in the Bill. I am not going to add anything to what was said yesterday as to the method by which this change has been made. The Financial Secretary defended this new Clause on the ground that he, who was in the House when the 1909 Budget was under consideration, has only just discovered, 14 years later, that those who support the taxation of land values and a valuation do so in order that it may be used to carry out their desires. We have never made any secret of that. We hold the position that the whole economic value of land belongs to the community and that no individual has the right to appropriate and enjoy what belongs to the community as a whole. Let there be no mistake about it. When the Labour Government does sit upon those benches it will not deserve to have a second term of office unless in the most determined manner it tries to secure social wealth for social purposes. From one point of view I do not at all regret what took place yesterday. We saw what the Tory party really is. The Tory party is still the same party as in the days of Lord George Hamilton, when he said:
  "It is the duty of a Tory Government to look after its friends when it is in office

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  and to take care that they are safeguarded in the event of the Tories being out of office."
  That was made quite clear by many speakers in the course of the Debate yesterday. I wonder if those who so frankly stated those views last night know what an asset they were giving to Labour propaganda? Yesterday's Debate and the confessions that were made that the Tory party is going to prevent it from coming into its own, that they are going to do nothing while in office, and, so far as they can, make it difficult for those who follow them to do justice to the dispossessed of the country is worth at least 50 seats to the Labour party at the next General Election. [HON. MEMBERS: "Wait and see!"] I have waited and seen. I see more Labour Members—the whole strength of the Labour party on these benches. To-day there are 146 Members of my party. I have waited, and I am quite content to continue to wait, confident that I shall continue to see. From the other side of the House one wise observation was made, and that was by the right hon. Member for West Birmingham (Mr. A. Chamberlain) when he warned his friends that what they were doing was likely to make it more difficult for the defence of private property. I can imagine nothing which will be of greater service to what you call the extreme elements of the revolutionary movement in this country than such exhibitions of class war—a thing I have always repudiated—as were manifested upon the benches opposite yesterday. If hon. Members opposite are wise—I do not know that it is my business to give them this advice—if they are wise in their own interests, they will take heed of the warning given to them by the right hon. Member for West Birmingham.
  We oppose this Bill because it is a rich man's Budget. It is a Budget in the interests of rich men. In many of its parts it has been dictated by big business interests. We oppose it because it is unfair to the great masses of toiling people in this country. We oppose it because it does nothing to provide funds for much-needed social reform. For all these reasons, and there are many others that I might cite, we ask the House not to assent to the Third Reading of the Bill.
  Mr. HARDIE: I beg to second the Amendment.
  I have had one great picture torn from my vision by the Debates on this Bill. I had always believed that it was always possible for that man to remain human in his arguments in defence of what he possesses; but I realised two things yesterday. I realised the terror of the landowner, and I realised the viciousness that was made manifest on the other side when they understood, or when they faintly realised, what will take place when our numbers justify us in sitting on the other side. This Bill is a rich man's pleasure-hunt. He has been out hunting ever since this Bill came in. He has been hunting down the poor man with his taxes on tea, sugar, coffee, entertainments, etc. All the taxes that could be flung upon him have been flung upon the working man. We have been asked to apply the sense of justice to our ideas in formulating our schemes, but it does not seem that any sense of justice is introduced by the opposite side into their schemes and arguments. There has never been suggested from the other side that taxation, to be fair, ought to be on the basis of ability to pay. Last night a Gentleman from the. Government Benches, when the Land Clause was under discussion, asked for some information in regard to the difficulties of procuring land, implying that there was no difficulty. Why should the landlords have fought against the Land Clause? They were saying yesterday that the thing does not matter; it is only a needless expense. If it is only a needless expense, why were they so energetic?
  We had illustrations given of land on which money had been spent, and which was costing money to run. I have yet to learn of any land that costs money to run. It is only because land is not run that you require to spend money upon it, because labour applied to land always produces wealth. Why is it that those who put up these arguments do not get rid of the land which they say does not pay? Why do they always hold on to these great estates, in regard to which they try to show by figures that they are losing heavily every year? Do they only continue as landlords because they are great national patriots? Do they desire to keep up the dignity of the nation by this land being owned by Lord Tom-noddy? We are asked to believe that

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  unless the land is owned by somebody with a weighty name the grass will refuse to grow. Then we had a counting of trees last night. It is always dangerous for a man to talk about counting anything in relation to timber. It lends itself very easily to one remark, and that is, that all that is upright would also be included in the calculation. Travelling about in London, I have realised the horror of what is called the leasehold, and I can see why Members on the Government Benches fight, because they see that with an efficient Department operating, the system of short-term leases would go out of business. What happens to-day? There is the ever-open maw of the landlord. No matter how industrious a man may be in building upon land, and in making improvements on land, when the lease is up it all falls into the maw of the landlord. The horrors of the leasehold continue because people are outside the knowledge of the system of the short-term lease.
  I could have given the hon. Member who wanted information last night some figures that would be of interest. Here is the way that this Finance Bill affects even our present ideas in regard to houses. In Glasgow we have tried to get land for the purpose of building houses. We wanted 20 acres of ground at Balgray, Springburn, and we were asked to pay £8,000 for it, although the only rate payable upon the land was £80 per year, showing that there was no relation between the sale price of the land and the rates that were paid upon it. The Glasgow Corporation also tried to get 6½, acres of land at Langlands Road, Govan, for house building, and they were asked to pay £6,292 although the land only contributed £11 a year to the rates. At Moss Side Road, Glasgow, the Glasgow Corporation tried to get 9½ acres of land and they were asked to pay £9,196, although the rateable value was only £5 per year. If we had an efficient organisation through the Values Department, this kind of swindle could not continue. It is nothing short of pure swindling. Where is the morality of men on the other side when they claim the right in land although they cannot make even a grain of sand? Even as landlords they cannot improve the land; they have to get labour on to it. In our cities, as they grow, the landlord sits
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  there, with his eyes half-closed, watching the increasing industry of the citizens, and just as that industry increases he puts up the value of his land. Every time Glasgow spends money in taking the tramway into the country, the landlords on each side of the road get their pockets filled because the citizens' money is being spent. They have not spent a single halfpenny on the land, but they get the values on it. They are not even sportsmen. They not only hide the register, but they take every low-down means to try to deprive the public of information which they ought to have in order to bring back to the community that which is created by the community.
  If the Government next year wants to improve the position of this country in relation to its trade it must get away from the class-conscious method of taxation shown in this Bill. They cannot go on expecting industry to increase or improve so long as they continue to place taxes upon industry, and all that is produced by industry, and at the same time give an incentive to the parasites. That is what is being done now. This Bill taxes every man and woman who is doing some honest work. The Agricultural Rates Bill is the first of the landlords' charters. This Bill taxes every man and woman who is doing some useful work; it bears the stamp of class consciousness, and it says to the parisites: "Go on and rob." Let us give a warning from this side to the other side, that if they want to avoid disaster, they should avoid that kind of basis in the Finance Bill of next year.
  Mr. WISE: I feel confident that the Prime Minister will be pleased with the reception of this Budget not only in this country but also abroad. I should like to couple my name with that of the hon. Member for Colne Valley (Mr. Snowden) in congratulating the Financial Secretary to the Treasury on the splendid way he has steered this Budget through the House. He had a great responsibility and one appreciated his sympathy in certain cases, when we could not get all the Amendments through. I have studied this Budget and I cannot help thinking that in most respects it is sound finance. I have also had an opportunity of reading in various foreign papers the criticisms of this Budget. In one particular French paper I noticed that the editor, in an article, asked "How

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  has England regained her financial position?" This article did not quite explain how England has regained her financial position, but we all know that it is due to the fact that we have taxed our people during and since the War. We have about 2,500,000 Income Tax payers compared with about 900,000 in France. This item alone explains the position. Another newspaper which I noticed criticised our Budget in a satisfactory way, was a United States of America paper. The heading of an article in this paper which I read was "The Astounding Financial Position of England." We are in this position because we balanced our Budgets. We have grasped the nettle and reduced expenditure. Many other countries have not grasped the nettle, and their expenditure has gone up by leaps and bounds. There are very few countries which are balancing their Budgets at present, but that is a necessity which all of them must face sooner or later. The hon. Member for Colne Valley referred to indirect taxation. So far as I could gather, from his figures, direct taxation produces £450,000,000 and indirect taxation £250,000,000 a year, and the indirect taxation falls mostly on the poor. He seemed to leave out of account that the rich pay their indirect taxation as well as the poor.
  Mr. SNOWDEN: I said that they pay one-fifth.
  Mr. WISE: I am sorry that I did not catch that remark.
  Mr. SNOWDEN: They pay one-fifth of the indirect taxation, but if there is any remission of indirect taxation they get the benefit of it.
  Mr. WISE: Naturally, but I did not gather from the hon. Member's figures that he had taken into account that the rich man was paying, possibly, more indirect taxation, proportionately speaking, than the poor man. It is very hard to follow figures like those which were given by the hon. Member, and no doubt he will forgive me if I have quoted him wrongly. I think that the main point in this Budget is the New Sinking Fund, and I should like to bring forward two points in regard to that. My hon. Friend the Member for Colne Valley wants £100,000,000 a year put to Sinking Fund. Is that right?
  Mr. SNOWDEN: I said that the right hon. Member for Hillhead and the right hon. Member for West Birmingham both said £100,000,000 a year.
  Mr. WISE: I suppose that the hon. Member agrees with that?
  Mr. SNOWDEN: To that extent.
  Mr. WISE: The Budget allows for a Sinking Fund of £40,000,000 this year, £45,000,000 next year, and £50,000,000 in 1926. I am pleased that the Finance Act of 1866 is not altered. That Act allowed all the surplus of our Budget to go in reduction of Debt, but the 1875 Act is altered. That Budget was introduced by Sir Stafford Northcote, and, I think, it can be claimed that it was a success, because, although it was starting a new Sinking Fund, it went on for 13 years. At the same time, you cannot compare the 1875 Budget with the 1923 Budget, which is endeavouring to fix the amount for three years, because the conditions are different, and we have hardly got what we call peace in Europe. My point with regard to the Sinking Fund is, that I think it a great pity to have fixed the amount for the next two years at £45,000,000 and £50,000,000. I think that in the present condition of Europe it might have been far better to wait.
  I cannot help thinking that if there is a mistake we have deflated rather too quickly. In the last three years we have taken £447,000,000 cash out of revenue for the reduction of our Debt. I do not think that industry can stand that. I am against inflation, but deflation is far more difficult, and requires far more watching than inflation. And if we deflate too quickly we shall soon get into trouble. My point is that, with regard to the two years following, it might have been better to leave the actual amount at £40,000,000, and allow the extra £5,000,000 and the extra £10,000,000 to go back into industry. I know that my right hon. Friend the Member for Norwich (Mr. Hilton Young) does not quite agree with me in regard to that, but I do think that it is essential to have a Sinking Fund, and I am only criticising it with respect to these two sums of £45,000,000 and £50,000,000 which have to be found in the next two years. I was reading the other day a report of the annual meeting of a company, which will show how necessary it is that industry

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  should have as much money to play with as possible, so that we may get the volume of work back into industry, and in that way endeavour to relieve unemployment. The chairman said:
  "It is an interesting fact that during the past year the community have received from us by way of Imperial rates and local taxes twice the amount winch the shareholders receive. That is for eight months of the year the business has been run entirely for the community, leaving four months for the shareholders and the risk for the 12 months."
  Those are very important words. They show how difficult is the position of industry. It is more difficult to-day than in January on account of the French going into the Ruhr, but it makes it, possibly, more difficult to deflate than it would be if industry were in a better position. The United States of America deflated too quickly, and the position there is that there is a rise in prices. Our manufacturers can compete with anybody in the world, and can even send goods into America, in spite of the tariff, because the costs in America are so high that they have become almost exorbitant. But industry must not be throttled by taxation. America was a debtor nation, but it has become a creditor nation, and even what seems to be a small point like that is a big point as affecting the financial position of the whole world. In March, April and May there was more imported into America than was exported from America.
  Let me turn to another point. Taking the revenue and expenditure returns, I notice for the last quarter the excess of expenditure is £27,000,000. That does not worry me. What worries me is that the larger part of this is for increased interest on War debt, £21,000,000. Part of it can be explained by the interest on the United States debt, which came to £14,400,000, but we still have an increase of £6,000,000 or £7,000,000 on our War debt. With regard to internal loan, I hope sincerely that before very long we shall be able to carry through more conversions of 5 per cent. interest into 3½ per cent. or something lower than 5 per cent. With regard to external loan, it is difficult to realise how important it is in regard to our financial situation. Comparing the external and the internal debt, it might be said by way of explanation that with the external you pro-
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  duce and do not consume, but with the internal you produce and consume.
  I hope that before the next Budget appears we may have an opportunity of getting something satisfactory with regard to reparations and Allied debts. We cannot get stability either in this country or in any part of the world until some satisfactory conclusion is made in regard to reparations. As hon. Members know, the. Pact of London created in May, 1921, is still in existence with the large amount of £6,600,000,000. That is an impossible amount. As I explained to the House on more than one occasion, the only possible way in which that amount could be paid is by the whole of industry being idle throughout the world except in Germany. I sincerely hope that we may be able to get some relief from taxation through the Allied debts. The amount lent is enormous. What with War debts, relief loans and reconstruction loans, the amount is £1,254,000,000. We can congratulate Austria on her recent loan, but we have got to remember that that loan is partly guaranteed by ourselves, and that we took part of it ourselves. I had hoped that we might have got back some of that money which we had lent Austria as a relief loan, but I understand that that hope has not been realised.
  5.0 P.M.
  I trust that before next year the Prime Minister will consider very carefully the question of double taxation. I am sorry that on Monday night I misinterpreted something that was said by the Financial Secretary to the Treasury. I understood that he was going to set up a Committee, and I apologise for the misunderstanding, but I wish that he would set up a Committee to go into this question of double taxation. It is one of the important matters which will require consideration during the next few years. There is also a point with regard to credit. I do not think that we all realise the great asset which this country has in having cheap money and cheap credit. Our exchange with New York has gone against us for a few weeks past, but that is natural. It always did in the old days when the harvest started in America. But I think that if we watch our opportunity with regard to the exchange, and make our purchase of dollars at the right time, I hope it will not in a very large degree affect

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  our credit—anyhow, our credit in other parts of the world. It is extremely necessary that taxation should be put on a just and proper foundation. I think it would be advantageous to everybody to have the Royal Commission on Income Tax set up again, with a view to settling certain matters which could be settled by them far better, possibly, than across the Floor of the House. The heavy burden of taxation will no doubt go on for at least a generation. Taxation which is destructive of the life of business in the end defeats itself. There must be the fluid life and the activity of the people earning and making more than they consume in order to collect taxes and sustain, the Government. There are many canons in our finance, but there is no more important canon than that we should have justification and justice with regard to all taxation. We hold a great position in the world with regard to finance. It is the envy and admiration of almost the whole world, and I feel certain that we shall continue to hold that position as long as we carry out the justice which is a commanding station in finance and taxation.
  Mr. HILTON YOUNG: The hon. Member for Ilford (Mr. Wise) has started a very large number of very interesting hares, and, in order to avoid too great a distribution of my thoughts, let me select one, and pursue it with what speed I may. It has occurred to me that it is, perhaps, readily intelligible, but a matter of some regret, that in the course of these Debates we have had no general pronouncement from the Chancellor of the Exchequer upon the wider and most important aspects of national policy in matters of finance. I refer particularly to the vexed question of inflation or deflation. I think, perhaps, it is a pity that the occasion of the Finance Bill should pass without some pronouncement being made upon national policy in this respect, because it is of such vital moment to the other civilised nations of the world. A policy of inflation or deflation carried out in one country affects the exchanges and the trade and commerce of all countries alike. Suppose, for example, it were to get about throughout Europe and America that the present Government—I do not suggest it is so—were bent upon a policy of extreme and rapid deflation, that would cause very
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  great apprehension, and very great disturbance to the commercial communities of the whole world, and it, would be, therefore, of advantage, I imagine, that from time to time there should be some guidance to the general public as to what the attitude of the British Government is, the attitude of the British Government being, of course, in this matter of preeminent importance in the councils of Europe.
  Upon the question of inflation or deflation—a question so difficult that I certainly cannot hope to illume it—let me, if I may, detain the House for a few moments, at any rate, to suggest that there is a problem—an anxious problem—and to indicate the solution which, with such common sense as one is able to exercise, appears to be the reasonable view. The words "deflation" and "inflation" have been, in the course of our Debates, thrown across the Floor of the House as if they were two exclusive alternatives. The first point I want to suggest, and upon which, if I may do so without assumption, I want to ask the attitude of the Government, is that there is really a third alternative. I have no idea what the Latin word should be—I suppose it would be non-flation. To that school, I suppose, I belong, and, I imagine, the hon. Member for Ilford belongs. Although it is, I suppose, a startling proposition to some financiers of the old school—now of the very old school—deflation is not, I imagine, good in itself. It brings evils, very well known now, and very recent in our experience. The fall of prices which comes with deflation brings unemployment. I do not know arithmetically, but I know qualitatively, that a large part of unemployment in Europe has been due to deflation. It brings unemployment, and all the evils which come in its train. It brings in its train violent fluctuations of the exchange, which, in turn, tend to increase the disturbing effects on trade.
  Inflation also has its disadvantages, of which some nations have had bitter experience. A rapid rise of prices may bring temporary benefits, but, alas, they are only temporary, and inflict untold hardship on the middle-classes, and all with fixed incomes, as we have felt unhappily, in this country. Inflation also brings vast fluctuations. Both deflation and inflation make exchanges so uncertain, that they introduce into interna-

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  tional commerce an element of speculation which tends to upset the whole applecart of trade. The evils of both processes are surely much greater than their benefits, and the simple conclusion would seem to be to endeavour to avoid both processes, and adhere to the process of non-flation—a process of neither blowing up nor blowing down. The general case is to endeavour to avoid processes in either direction, and to keep your currency, your credit and exchanges stable by neither deflating nor inflating. But let it be readily admitted that there may be particular circumstances affecting one nation or another which may make it desirable, or even necessary, to proceed either in the direction of reducing the value of the currency or of increasing it. It has ever occurred to me, with such means as have been available to form a judgment, that ours is such a particular case. Ours is a case in which we have not yet been in that happy state that we can absolutely stand pat on non-flation. There is still a process to be carried out. It is still necessary to carry further the process of deflation. That is a hard counsel, as is well known, and one which is very difficult for a nation to carry out. But, still, our case, in comparison with other nations, is no doubt a very exceptional case. We inflated less, I think, than any other nation in the course of the War; we carried the fatal process less far than other nations; we drifted less far than they did away from the gold standard.
  That happy relation of the currency to an equivalence with gold has not departed from us for ever. The nation that can get back to the establishment on a gold basis of its currency has enormous advantages in international trade and commerce. We can get back to it, I believe, and I would suggest a view which is certainly held by some Members of this House, not to say of the Government, that, in course of time, we ought to set before us as an ideal—at present, perhaps, unattainable—the ideal to regain the relation of the pound sterling to the gold pound as equivalents. It is surely unnecessary to dwell upon the immense advantages of the re-establishment of that gold standard. London has been the centre of all those threads of the world's financial business, which, by meeting and being tied together in the City of London,
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  have had an influence greater almost than it is possible to describe upon the creation of the great industrial system of this country. The re-inforcement of London and England and Scotland as the centre of the world's financial aspects is of vital moment to the maintenance of the industries of the country. It is not only the prosperity of the bankers, the financiers and so on that is involved. All through our history, commerce and industry and our financial system, have been inextricably wrapped together, and the one must be secure if the other is to be secure. They can only be secured by the reestablishment in the long run of the equivalence of the pound sterling and the gold pound.
  It has been a matter of great astonishment to those who have been watching the history of finance and commerce since the War that New York has managed to restore the equivalence of its currency in gold, and although London has not yet managed to restore it, nevertheless London has kept the centre of the world's financial business in its own hands, and it has not passed to New York. We hope that will be maintained, but we cannot be sure unless we get back to the gold standard of our currency. Having stated that, as I believe, to be an ideal, to which a further process of deflation can be gradually carried, let me emphasise, in my opinion, as it would have been clear from the speeches I and those associated with me have ventured to make, that it is certainly our belief that that process should be very gradual, and that any rapid forcing of the value of our currency back on to the gold equivalent might very likely do much more harm than good. There is one other consideration, and that is the process of deflation can be carried out in two ways. One is by forcing down the purchasing power of the country till it is nearer to that which is to be purchased. The only measure necessary in this country in order to do that is the redemption of Debt. The advantages of the redemption of Debt, and of its benefits upon credit, have been gone into so fully in this Debate that it would be wasting the time of the House for me to dwell longer on such a matter. Its disadvantages are also obvious. I am not going to re-argue the matter, which has been so fully argued in this

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  House, as to the reduction of taxes and the redemption of Debt in relation to industry.
  I think it will be granted, even by those who are strongest for the redemption of Debt in the first place, that the redemption of Debt is certainly not good in itself. You have to get the money from somewhere, and sooner or later you have to get it out of industry. To keep that money in industry would be a good thing. The point I wish to make is that, besides the redemption of Debt, there is yet another means by which we can secure deflation, and that is at the other end, on the other side of the picture, as it were. One is to reduce the purchasing power in order to get a greater correspondence between that and the things purchased. The other way, of course, is by increasing production. It stands so much to common sense that one almost hesitates to say so, yet the matter does sometimes escape observation. Surely the best way, the most wholesome and the most, advantageous way, to secure the desirable end of deflation is to let your deflation be brought about by the natural processes of the increase of production. You then encounter none of those serious disruptive effects which are produced by deflating from the other end.
  That is what underlies the policy, which has been advocated from these benches, of the reduction of taxation. We believe in the necessity of slowly working down by gradual stages to this further measure of deflation until we have attained a strong and firm basis. But we believe that it can be done by the natural process of the increase of production. Let it not be supposed that in this argument, or in this description of what the state of affairs might be, I am in any way undervaluing the advantages and necessities of Debt redemption. When you venture to say, in the case of one Budget, that too much is being given to Debt redemption, it is immediately put against you that you are against any Debt redemption. In financial matters of this sort there is probably no safety in extremes at either end. It has been argued that the amount of money that has been put to Debt redemption in this country in the course of the past two years, no less than £160,000,000, is excessive. That, I believe, errs on the side of forcing your deflation too much at the top and
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  I believe that it would have been better to have left more of it to fructify in industry, and thus to have achieved deflation at the other end, by increasing goods, the things to be purchased, and not decreasing the currency.
  Whatever hon. Members may think of them, these are important matters. They are matters about which it is essential to know what the general policy of this country is to be. Let me summarise my argument in three statements. First of all, we had better neither deflate nor inflate, but leave things as they are, in order to stabilise the currency and prices and exchanges. In the second place, as regards this country, it is best, as in the long run the ideal to be attained, to carry the process of deflation so much further that you will find the pound sterling in equivalence to the gold pound. But that must be a gradual process. There is the final statement that, as regards the process of deflation, it is best accomplished by the natural process of the increase of production rather than by the artificial process of decreasing your credit and currency. In consequence of that conclusion, it follows that, though it is necessary to put an adequate provision for redemption of debt every year, yet it is equally necessary to make adequate reductions in taxation in order so to refresh industry that it may fill up your deflation from the bottom end. It would be of great interest to the House, and it is of great importance to the Continent of Europe, to know what the Government's views may be of the matter.
  Sir EDWIN STOCKTON: As a representative of one of the most important commercial divisions in this country, I welcome the opportunity of saying a few words in commendation of the Budget. For many years I have had a close association with the Manchester Chamber of Commerce, a body which represents every section of the business community in that city. I do not remember a Budget which has met with such hearty approval as has been accorded to this Budget. I feel sure that hon. Members in every quarter of the House admire the Prime Minister for many reasons. I believe the right hon. Gentleman will go down to history as the Chancellor who introduced a Budget that is destined to be memorable in the annals of this House. The reason why business people heartily approve of

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  the Budget is that the Budget recognises the essential need for Debt redemption. It is essential that everybody, whether a national body or business body or any body associated with the life of the country, should pay its way as it goes along. The Debt reduction policy which the Prime Minister has persevered with will bring about a financial stability which the country needs very badly. By pursuing this policy we are most certainly ensuring a stability which will be greatly for the benefit of the nation.
  It is very easy for a Chancellor of the Exchequer to make himself popular by reducing taxation, but that popularity is very short-lived if it is not based on sound economic principles. The Chancellor has resisted temptations from many sections of the House to reduce taxation, for the simple reason that we cannot afford to do it now. There are many works which no doubt eventually would be for the benefit of the people, but they will have to wait until such time as the country can afford to pay for them. I believe that the Budget will help to revive trade. As a business man, I hold that a revival of trade is the only sure cure for unemployment. There is no more serious problem to-day than that of unemployment, and any man who has a heart at all must feel very deeply for those who are now down and out. Unfortunately, many of these men are men who gave their best to their country during the War. We shall not cure the evil of unemployment by quack remedies. Our friends on the Labour Benches would probably like to bring forward their capital levy proposal as a solution of all these difficulties. I believe that the Labour party are very sincere, and I have the highest respect for them, but I say, conscientiously, that I do not think the Labour Members would bring forward their capital levy scheme if they had had business experience.
  During the time when the so-called War Wealth Levy was being considered by a Committee, and when it appeared that such a scheme might be put into operation, I talked to a Manchester business man who had been to his banker to try to arrange an increased overdraft. I would remind hon. Members of the Labour party that the great bulk of the trade of this country, and especially the export
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  trade, which is largely represented by the commercial area which I have the honour to represent, is worked on the credit system, which means that there must be overdrafts from the banks or something of a similar nature. I remember that on this occasion this business friend of mine went to his bank to get an increased overdraft because he had the prospect of doing a very largely increased trade. The answer of his bank manager was, "I am afraid that instead of increasing your overdraft to enable you to do this increased trade, the probability is that before long we shall have to reduce your overdraft considerably, because you may have to pay a considerable amount under the War Wealth Levy, and that will mean a reduction of your capacity for trade." What would have been the result if that scheme had been adopted? The increased draft would not have been procurable. That would have meant less employment for the workers. It is all very well for hon. Members opposite to say that they can deal with these matters in other ways. We have to get down to the practical issues in regard to trade. It is trade and trade only which will procure employment for the people, and any system which tends to break the confidence which is so essential in trade is a disastrous sytem, and will lead to much worse results for the workers than those which now cause our difficulties.
  We are indebted to the Chancellor of the Exchequer for having reduced the Corporation Profits Tax by half. I hope that next year it will be wiped out entirely. That tax has been condemned by several Chancellors of the Exchequer as a tax which is not satisfactory to the traders or equitable to those who have to pay it. The wiping out of the tax would assist the development of trade. I would have liked to have seen a considerable reduction in, if not the entire withdrawal of, the Entertainments Duty. More especially in regard to sport it has been an unfortunate tax. We want to develop the best ideals of sport, because they are in the best interests of the people. I hope that next year the finances of the country will permit the withdrawal of this tax. I welcome the statement of the Chancellor of the Exchequer that it is the intention of the Government to pursue a policy of rigid economy. It is by the pursuance of rigid economy that we can get our financial position right. It is the duty of

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  every Member of this House, irrespective of party, to support the Government in every attempt to avoid wasteful expenditure and to stop the extravagance which has been going on in many directions. It is not a party question at all. Every Member of the House is pledged to support a policy of rigid economy, and it remains for each of us to fulfil his pledges and so help to make our country financially sound.
  Mr. LEES-SMITH: I do not intend to follow the hon. Member who has just spoken into a discussion on the capital levy, because we are going to have a special opportunity of dealing with that subject in less than three weeks, and I think the hon. Member will then find that we have very much more to say in favour of our proposals than is to be found in what seems to me to be the somewhat obvious and frequently answered objection to which he has given expression this afternoon. When the hon. Member says that this Budget has been received with hearty approval by all sections of the House, it indicates that he cannot have been a very frequent attender at the Budget Debates.
  Sir E. STOCKTON: On a point of Order. I did not say by all sections of the House, but by the commercial community of Manchester.
  Mr. LEES-SMITH: I do not wish contradict the hon. Member, but I think he will find that his statement was much wider than that, and referred to this House. In any case, I do not think the present Financial Secretary to the Treasury had the advantage of listening to all the Budget Debates. I have listened to them all, and it seems to me that the broad case which we have made against the whole scheme on which the Budget is based has not yet been adequately answered from the Treasury Bench. I shall therefore take the liberty of putting before the right hon. Gentleman, once again, our main objections to the general plan of the Budget, and I ask him to bring to them that fresh mind which has been such a relief to this House in the last few weeks and to give us the first answer which we seem likely to get.
  There are two main features in this Budget. There is a reduction of taxation of about £54,000,000 and there is the
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  setting up of what we may now call the Baldwin Sinking Fund to reduce the National Debt by between £40,000,000 and £50,000,000 per year. Let me take, first, that part of the Budget which deals with the reduction of taxation by £54,000,000. The hon. Member who has just spoken referred to unemployment in this country and to the general condition of the people. Our view is that the Government, in making up its minds how it was going to distribute this £54,000,000 between the different sections in this country, rich and poor, ought to have given special consideration to that very class of the community which arouses the sympathy of the hon. Member for the Exchange Division of Manchester (Sir E. Stockton). That class of the community, not only those who are unemployed, but those who are in work as well, are now faced with practically certain degradation in their standard of life. They are now sinking to a level of civilisation sensibly lower than that which we had won before the War. Under these conditions it was the special duty of the Chancellor, in a year of this kind, when he was distributing relief of taxation, to use, at any rate, a substantial portion of it to take off taxes which directly, and without any argument, affect the stamina and health of the great mass of the people. What is the position? In this Budget the Government have not relieved by one shilling taxation on the necessities of life. They say they have done something for the working class. What have they done? They have taken £16,000,000 off the taxation on beer. That is their contribution to the well-being of the working class. In return for that, they have taken no less than £38,000,000 off the Income Tax and Corporation Profits Tax paid mainly by those who are comfortable and fortunate. That means that more than two-thirds of the Budget have gone to those who, whatever difficulties they may be suffering at the moment, have, at any rate, an assured standard of life and a decent level of existence.
  That is why we say, and why we shall continue to say, on every platform that this is a Budget introduced by rich men for rich men, because it is a Budget which leaves the proportion of the total taxation of this country paid by the rich lower than it ever has been since the War came to an end, and leaves the proportion paid by the poor higher than it ever has been

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  since the War came to an end. We go further, and the right hon. Gentleman must not mind if I repeat our case, because I shall put it in a nutshell now. We say that this Budget is inequitable, not only to the working class but to that struggling section of the middle class who come within the lower reaches of the Income Tax. The Budget has taken £26,000,000 off the Income Tax. The question we ask is, how have they distributed that money between the richer and the poorer sections of the Income Tax payer? Broadly, the Income Tax paying class is divided into two groups. There is the group which pays on the full standard rate, representing only one quarter of the total number of Income Tax payers, and there is the less fortunate group, the struggling group of men with £400 or £500 a year and families, who pay at half the standard rate, and who represent three-fourths of the total number. What has the Budget done? It had £26,000,000 to distribute, and of that it has given £23,000,000 to the one-fourth, who are already comfortable and fortunate, and it has given only £3,000,000 to the three-quarters of the Income Tax payers who are at the bottom of the scale.
  Let me show the right hon. Gentleman by broad figures what this means. These are figures which have been elicited by questions which I put down among the unstarred questions in order to get the results. There are 80,000 Super-tax payers in this country at the present moment. In this Budget, through the reduction of Income Tax alone each of those taxpayers is going to receive a sum of £150. There are 28,000 taxpayers in this country with incomes of over £5,000 a year, and out of this reduction of Income Tax each of these taxpayers is going to receive £300 from this Budget. There are nearly 2,000,000 among that three-fourths at the bottom of the scale and the 2,000,000 are going to receive, out of this Budget, a sum of little less than £2 per head. That represents what I may call the philosophy—the unanswerable philosophy—of the numerous Amendments which we have had on the Paper with regard to the Income Tax. Our position is, that we have no objection to the reduction of the Income Tax, but we say that, instead of spending £26,000,000 you should have spent a far smaller sum, and with a fraction of that sum you could have given
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  relief for children, relief for aged relatives, relief to men whose income depends upon precarious personal earnings and, in that way, with a far smaller sum, you could have concentrated your assistance upon those poorer men with family responsibilities, in whose case assistance is most urgently desired.
  I come now to the Government Sinking Fund—that Sinking Fund of which the hon. Member for the Exchange Division of Manchester spoke with such admiration. Our views of it are very different, and I have certain further observations to make beyond those which have been made in the Debates up to the present. The Government sets aside a Sinking Fund of 40,000,000 to £50,000,000 a year in order to pay off a National Debt of nearly £8,000,000,000 and that, as a simple calculation shows, means that if this Sinking Fund has a history which no Sinking Fund has ever had yet, if it is always left intact and never raided but persisted in from generation to generation—if you assume all that is going to happen, then it will take 150 years to pay off the National Debt provided that there are no wars meantime.
  The FINANCIAL SECRETARY to the TREASURY (Sir William Joynson-Hicks): Is the hon. Member calculating on £40,000,000 or £50,000,000?
  Mr. LEES-SMITH: On £40,000,000, rising to £50,000,000 in three years, and remaining at that for the rest of the period of 150 years.
  Mr. A. M. SAMUEL: Is the hon. Member leaving out cumulative compound interest?
  Mr. LEES-SMITH: The hon. Member for Farnham (Mr. A. M. Samuel) asks have I left out cumulative compound interest? Surely that question indicates that he has not made himself acquainted with the whole of the elementary principle upon which the Government Sinking Fund is based. Is he not aware that the Sinking Fund which they have displaced, the Stafford Northcote Sinking Fund, was based on the principle of using interest for the purpose of increasing the Sinking Fund, but that this Sinking Fund is based on the principle of a flat rate, and, although interest may accrue, that interest is not to be used for the purpose of increasing the Sinking Fund. Therefore, I am

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  justified in discussing the Sinking Fund which the Government has established and not some other sinking fund which the hon. Member for Farnham thinks he might establish if he had his way. On the basis of this Sinking Fund it will take 150 years before you have dealt with the National Debt. But this Sinking Fund is being raided already. It is practically being strangled before it has been brought into operation. Throughout these Debates, the hon. Member who has just interposed, has been speaking of a Sinking Fund of £40,000,000 rising to £50,000,000, but further examination shows that the actual reduction of Debt provided for in this Budget, looking at all the obligations which have to be met, is not more than half that sum.
  This arises out of the position created by the obligations we have assumed in the case of the National Savings Certificates and the premiums on the issues of National War Bonds. On the National Savings Certificates there is a cumulative interest. I gather from answers which have been given to questions that this interest now amounts to £65,000,000, which the Government have to meet. In the case of the issues of National War Bonds, these have been issued at 100, and they are to be repaid at 102, 105 and so on, and the premiums for which the Government are responsible on the 31st March next, amount to £35,000,000. The two sums together come to an obligation on the Government of £100,000,000, which will have to be paid, broadly, within the next five years, representing £20,000,000 a year. The Government have made no provision whatever for meeting that obligation in their ordinary Estimates. It is, therefore, a reduction from the amount set aside for the payment of the National Debt, from £40,000,000 to half that sum. That leaves us, after all these discussions, with the ridiculous sum of £20,000,000 a year towards a National Debt of nearly £8,000,000,000. Every time we come back to the same conclusion, that there is no road out of the problem created by the National Debt by the method of the Sinking Fund. I would venture to challenge any hon. or right hon. Gentleman to name a single country which has ever yet paid off its National Debt by means of a Sinking Fund.
  Mr. A. HOPKINSON: Will the hon. Member mention any country in the world which has ever tried to do so?
  Mr. LEES-SMITH: I will ask the hon. Member another question. Will he mention any country which has ever had such a problem to face as we have to-day?
  Mr. HOPKINSON: This country, immediately after the Napoleonic Wars, had a far more difficult problem to face.
  Mr. LEES-SMITH: I entirely dispute that the problem after the Napoleonic Wars was comparable to the problem now, but I do not wish to be led astray from my argument.
  Mr. HOPKINSON: The hon. Member must not object to being interrupted if he challenges Members to give examples, and if he gets examples, he had better realise that it is better to go on to another subject.
  Mr. LEES-SMITH: I think I have dealt with the interruptions with adequate courtesy, and I say that when I am asked whether any country has ever had to pay off its National Debt without a Sinking Fund, I say that no country has ever had such a problem to deal with at this moment. That justifies exceptional remedies, and makes it clear, in our opinion, that nothing but exceptional remedies can meet the exceptional situation. As, however, the hon. Member for Mossley (Mr. Hopkinson) has spoken of the National Debt in the Napoleonic Wars, let me explain exactly what happened then, because it illustrates my argument in regard to the Sinking Fund. The National Debt at that time, in 1817, was £850,000,000, and we set up a Sinking Fund, as a result of which, after a century's operation, the National Debt in 1914 was still £700,000,000. I admit that a part of that National Debt, about £200,000,000, was due to new borrowing, arising out of the Crimean War and the South African War, but if you take that off the £700,000,000, you get the result that after last century, a prosperous century, after a hundred years, we are at this moment still in debt to the extent of £500,000,000 for the Napoleonic Wars. I venture to say that that is a lesson in regard to this present Sinking Fund.
  It seems clear to me that, just as we to-day are paying for the Battle of Waterloo, so, if we depend upon Sinking

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  Funds of this trivial and ludicrous character, centuries hence we shall still be paying for Gallipoli and the Somme. Our argument is this: We say that the Government are attempting the impossible. The hon. Member for the Exchange Division of Manchester said that this was a memorable Budget. It is, because it is the Budget which, for the first time, makes it clear that it is impossible to set up an adequate Sinking Fund to balance your Budget and, at the same time, to reduce taxation. You never will square the circle. You never will solve the problem. We say that that discussion shows that Sinking Funds will not deal with this issue, and we are left at the end of all these discussions with a Capital Levy as the one effective proposal before the country to-day.
  Lieut.-Commander KENWORTHY: I hope the House will excuse me if I break new ground altogether. I wish to confine myself to asking certain questions, which I think are pertinent and important. Let me, first of all, say that on the Budget as a whole I do not share the felicitations of the hon. Member for the Exchange Division of Manchester (Sir E. Stockton), who spoke earlier in the Debate, and I am going to vote for the Amendment to reject the Bill on the Third Reading, but that does not prevent me from stating that I think that, on the particular question that I am going to raise, the record of the present Prime Minister is a good one. I find myself in the somewhat rare position of being able to congratulate the Government on a certain specific act. I refer to the settlement—and I hope it is a final settlement—of the question of the repayment of our Debt to the United States of America. It has not yet been raised on the Budget, but it is of vital importance, and when the right hon. Member for Norwich (Mr. Hilton Young) began one of his numerous perorations in the middle of his speech by saying that a certain subject which he was going to discuss and expound was of tremendous importance to the Budget, I hoped he was going to raise this matter, because I think it is of very great importance in this Budget and in subsequent Budgets. I also think I am right in saying that there has been no authoritative statement yet by the Government as to the settlement that has been arrived at. What information we
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  have is unofficial. I must say that, as far as I have been able to ascertain the facts, and what was the state of American public opinion when the Prime Minister went over there, and the state of American public opinion now, I do not think a better arrangement could very well be come to.
  What exactly is the arrangement made as to the payment to the United States of part of the Debt in United States Government securities at our option? Am I right in saying that we are entitled, if we so prefer, and find it more advantageous, to purchase American Government Stock on the open market, which the American Government are bound to accept at its face value? If that be the case, that may be a most valuable concession from the United States, and at the present moment I believe it has been found possible to make a considerable saving in this year's payments. To-day the prices of some of the American Stocks are as follows:—The Liberty 3½ per cent. Loan is above par, at 100·50; the 41 per cent. Liberty Loan stands at 98·31; and the fourth Liberty Loan, also 4¼ per cent., stands at 98·37. If we can pay off a considerable amount of this year's interest and Sinking Fund in that stock, obviously there is a very considerable saving. That being the case, what- is the intention of the Treasury with regard to savings of this sort? We earmark a certain amount of revenue each year for the payment of interest and, Sinking Fund. I think it is 5 per cent. altogether being 3½ per cent. interest and 1½ per cent. Sinking Fund, I believe, and it varies each subsequent year.
  The PRIME MINISTER (Mr. Baldwin): If the hon. and gallant Member would prefer it, I will give full details in my reply.
  Lieut. - Commander KENWORTHY: Yes. If we can make this saving by purchasing these American Stocks at a discount, obviously there will be a saving in that year. What happens to that saving? Does it go to our own Sinking Fund or to next year's redemption of Debt, or will some unscrupulous and short-sighted Chancellor of the Exchequer be able to raid it and collar the saving of money for current expenditure? I would much like to know what the arrangement is about that. I do not wish to appear to criticise in any way,

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  but I must say that we have a very strong case in America for getting certain substantial reductions in certain directions. When we discuss this very same question with the Government of the French Republic, one of their answers to us is that the price that they paid during the War for certain commodities and munitions bought from us was an inflated price, and that, therefore, there should be a writing down of the debt to some considerable extent. If that be a valid argument, we have exactly the same argument to put to the United States of America. It is notorious that much of those munitions were bought at an artificially inflated price. [An HON. MEMBER: "And were duds when they were bought."] I do not want to rake over that. The fact is that we accepted them, and we have to pay for them, and I am glad to say that there is no question seriously put forward in any part of this House that we have not a moral obligation to pay. The point is, whether we cannot come to some bargain in the matter, and we shall hear from the right hon. Gentleman, I hope, whether this phase of the question was discussed.
  Then there is the question of pegging the exchanges. I think we had to pay very big sums indeed for it, and at one time in pegging the exchanges they rose to nearly the same amount as we were paying for the War. Is not a good deal of the Debt due to that, and did not that very fact of pegging the exchanges give an opening to much speculation and an enormous artificial rise of prices to us in these purchases, not only of munitions but of wheat and other commodities, by the Supreme Economic Council? I do not know whether there is any opening there for bargaining. The point is, at any rate, that I think we have made a good bargain in this matter, in view of the temper of public opinion on the other side of the Atlantic, and I merely ask for enlightenment on these points. The question of the exchange here is of tremendous importance, and when the right hors. Member for Norwich, who, I am sorry to see, has left the House, talks about an inflator, a deflator, and that sort of thing, I think he overlooks the fact that, if we have to repay this Debt and the pound sterling has deteriorated in value against the dollar, it will become a very serious matter for us.
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  I have had worked out some figures, showing that if the dollar goes down to 4.50, when we come to repay large amounts the amount of extra interest and Sinking Fund that will represent is very great indeed, and will mean a very heavy burden upon us. Therefore, that fact should, I think, dictate our financial policy with regard to so-called inflation and deflation, and it is all the more essential that we should get back as soon as possible, in spite of temporary loss, to the gold standard. The fact that we have to repay this Debt should fix our policy in the direction of deflation and getting back as rapidly as possible to a parity value. In fact, I do not think there can be much argument about it.
  Mr. W. GREENWOOD: What proportion of the National Debt—how many thousand millions—is to be paid in the currency of which the hon. and gallant Gentleman is talking?
  6.0 P.M.
  Lieut. - Commander KENWORTHY: About 4,000,000,000 dollars—I think that is the figure; roughly about £1,000,000,000. The hon. Member for Ilford (Mr. Wise) referred to the exchange, and that is a very pertinent matter. He talked about the fall in the exchange in respect to the United States, but he did not mention the fact—which I believe is a fact—that the exchange to some extent at the present time is normal, but that there is a great difference in the bank rate between London and New York. It is a fact that a great many American business houses are borrowing in the City of London at the present time in preference to borrowing in New York, and that is one of the causes which has led to the fall in the the exchange. But that is having another effect. These operations—this dealing in the City—is once more re-establishing Lombard Street as the money market of the world, so, although we are losing on the exchange at the moment, it means that our financial position in London is being strengthened by these means and by the action of these American business houses.
  I just want to ask one or two questions that are apposite in this connection. I do not think that we are justified in discussing this question of the payment of our debt to America by reference to the debts owing to us by the Allies. I always disagreed with the right hon. Gentleman the Member for Carnarvon

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  (Mr. Lloyd George) when he used to hold us out as the only people who were going to pay our debts, when we were not going to be paid, and he rather implied that we were great fools to do so. I think that is altogether a wrong argument. We ought to take this question on its merits, and the debts owing to us by other nations ought not to be mixed up with the question of reparations. I should like to ask the Prime Minister, if he is in a position to do so, and if it is convenient to make any pronouncement at the moment—for I think it is time that the Government gave us some statement as to their point of view—for they are a new Government—in regard to the debts owing to us by our Allies, and particularly by the French Government. This is a delicate question. It ought not to be mixed up with reparations or with the general foreign policy of the country that we have and are going to pursue towards European countries. Debts are a business arrangement. At the same time we have the arrangement made by the Prime Minister with the United States, and by that arrangement we have been put into a certain position of strength in this matter. Although I am concerned to see—quite frankly I say it—the whole of the inter-Allied debts of every country cancelled mutually—for I think that would be a much better way of doing the thing—and also of gradually scaling down reparations to the actual damage, yet at the same time we have a case in regard to these Allied debts, and I think that case ought to be stated by this Government. I believe I am right in saying that we have not had any official statement on that fairly important matter to the people of this country. After all, these debts owing to us by our Allies in certain circumstances are an extremely valuable bargaining security, which may be of great importance to the right hon. Gentleman in the negotiation upon which I hope he will very soon enter.
  As to the general policy of War debt and its repayment, it will be seen in due course whether the payment will bless most the receiver or the payer. Personally, I believe it is going to benefit us more than it is going to benefit the United States of America. It comes down, in the long run, to payment in goods, and at the present moment British goods are getting into the United States
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  in spite of the abnormally high tariff, very largely owing to the work of the Chancellor of the Exchequer before he became Prime Minister. I think it will be found in the long run, over a period of years, that these payments to the United States will really benefit this country more by providing employment and by strengthening our industries. We saw the same thing in the case of the French payments to Germany after the Franco-German War. We remember, or we read, of the great slump in Germany, and I should not, myself, be very much surprised if, before many years have passed, the American Government did not approach us and ask us to stop further payments from this country to the States. It seems to me that we may see a flow of goods which no tariff will be able to keep out. If that be so, we have a lesson to learn, and so have our friends across the Channel, on the whole subject of the repayment of moneys following a war from one country to another.
  Mr. A. M. SAMUEL: I should like, if I may, to deal, though not at great length, with the observations of the right hon. Gentleman the Member for Norwich (Mr. H. Young), and also with certain aspects in the remarks of the hon. and gallant Member for Central Hull (Lieut.-Commander Kenworthy). I should also like to deal with the hon. Member for Keighley (Mr. Lees-Smith), when he asserted that, by reason of what he called the Sinking Fund policy of the Government, we are not getting that relief to which he thinks we are entitled. He also asked for relief for certain classes, quite apart from the economic principle, on the strength of which this Budget was framed by the Treasury. The principles which dominate the Treasury, and ought to do so, were those questioned by the right hon. Gentleman the Member for Norwich. What are those principles? I think that the Treasury has kept particularly in view the policy of cheapening the price of money, as that, by reducing Floating Debt and driving investors to buy long-dated Government Debt at higher capital values, will assist conversion plans. It never forgets that the best way to deal with a situation of this sort is to reduce the value of money charged in the general market to the Government, so that it can, at the first possible opportunity and in

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  good faith, avail itself of the right to convert the 5 per cent. War Loan, and other smaller loans, with this interest cost, and thereby bring down the amount payable in interest. This will result in reduced charges on the taxpayer for interest on War Debt, and reduction of taxation and more money available for trade. That, I think, is the cardinal principle implicit in and borne in the minds of experts at the Treasury, and I agree with the Treasury in this policy in every possible way, and with the Chancellor of the Exchequer in following out this principle leading to Debt conversion.
  The Chancellor of the Exchequer and the Treasury should never forget that we must establish our policy of Debt reduction by Sinking Fund in order to be able to convert the £2,000,000,000 loan and lower the rate of interest as quickly as possible after 1929, while maintaining our contract with the borrowers. I have not had an opportunity of discussing this matter with the Prime Minister at all, but I am positive of this, that as a man who has had long experience of trade balance sheets, he himself would tell us that we not only pay our Debt by means of the Sinking Fund, but by the operation of what is called squeezing out the water by increase of national assets and, by inserting the assets in the national balance sheet, replace the water in our national capital and thus render our ability to find interest charges much easier. The right hon. Gentleman the Member for Norwich, however, has left entirely out of his arguments the necessity and the desire of the Treasury to take every advantage of its legitimate contractual opportunities to lower by conversion the rates of interest on the Debt. Before, however, I deal further with these points, I should like to deal with the point raised by the hon. Member for Keighley who said that no country can pay off its debt by sinking fund only. I agree with the hon. Gentleman that no country has. He quoted the position of the National Debt at the time of Waterloo, which was about £850,000,000, and which had been reduced before the late Great War to £650,000,000. That is true, although we have continuously, steadily, and persistently paid off Debt for 100 years, but have we got no additional assets to represent our pre-War Debt? That £850,000,000 of Debt was incurred in fighting for our freedom and our place in the world. We
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  have, I say, cancelled over and over again that Napoleonic debt by the increased prosperity and wealth of the country, bringing assets to replace the water.
  Mr. LEES-SMITH: It was not Debt?
  Mr. SAMUEL: No, it was not Napoleonic debt in 1914. It was merely the capital account of the cost of building the whole Empire. A good deal of the present Debt of £8,000,000,000 will be represented by assets—production machinery, trade, and other things, as years go on. The old National Debt has been paid over and over again. Let me put the thing personally—though the House, I know, does not like too much of the personal equation introduced. Suppose to-morrow I go to my banker and borrow £6,000 for the purpose of extending my factory. That is a debt. But in the course of three or four years, though I may still have that unpaid money standing on the debit side of my account at my bankers, I have, by the enlarged business and more trade, become worth a good deal more than the £6,000 borrowed. I have replaced my debt by increased earning power enabling me to pay wages and interest to the bank and put the balance into my pocket. That is exactly the position of the country. It does not much matter whether the Debt was £850,000,000 in 1817 and for many years, and £650,000,000 before the War broke out in 1914, we had added over and over again to our assets notwithstanding the Debt. This country was even then the most prosperous in Europe, although the hon. Member for Keighley pleads we had not repaid our debts of 1817. We wiped it out with fresh assets. One of the ancestors of the Junior Member for the City (Mr. Grenfell) and Baring and Ricardo discussed here this same question in 1817 onwards, and some then thought the country was going to rack and ruin because we had a huge Debt; but we bravely, honestly, and consistently endeavoured to keep faith with Debt holders and to pay our debts and to squeeze out the water from our capital account by adding to our national wealth by trade, though that wealth was in the pockets of the people and not of the Treasury. We succeeded.
  Mr. LEES-SMITH: Ricardo in this very House in 1820 proposed a capital levy.
  Mr. SAMUEL: Yes, and the House of Commons was, of course, wise enough not to fall in with the proposal. We certainly succeeded without it, but I do not agree that the definition "capital levy" fits Ricardo's remarks. The right hon. Gentleman the Member for Norwich overlooked the cardinal fact of policy, whether intentionally or unintentionally, or whether or not as a debating point, the necessity for bringing down by conversion the price of money payable as interest on our debts. Getting rid of short dated paper by operation of the Sinking Fund, and the Chancellor of the Exchequer, I think wisely, has reduced the amount of short dated paper thus driving investors to long dated paper, is part, of that policy. The right hon Gentleman overlooked the fact that we have got a wonderful and valuable opportunity in 1929 to pay off or convert, and thus reduce to a lower amount the 5 per cent. interest on no less than £2,000,000,000, besides many millions represented in National War Bonds due in 1927 onwards. This is the point aimed at by the Treasury's policy in this Budget, it dominates the whole structure of this year's Finance Bill, and I am convinced that it is the proper line of action to follow.
  The right hon. Gentleman kept playing upon the words "restoring the pound to the gold basis." What does he mean by that? Does he mean to say that the pound note when exported should be worth its gold value? If so, in relation to what country's exchange? Presumably the United States. On this point, I would like to make this observation with regard to what has been said about the United States exchange. I have never thought that before the War that $4.86 was the result of the interchange of commodities direct, or indirect between our two countries. I am aware that all international exchange is ultimately liquidated by goods. The parity of exchange was never legitimate so far as the United States United Kingdom commodity trade was concerned. The reason why we had an exchange of $4.84, $4.85 and $4.90 was that we had been great moneylenders to North and South America and we received, day in and day out, large sums of interest on the money lent to the United States and Canada and South America for building their railways, and that $4.86 or so to
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  the £ was never based upon commodity trade between the two countries. Our trade minus our loans to the United States never warranted par value of dollar-sterling exchange in pre-War days. We forget that. Also, we forget that we are now not lending much to the United States as in the past. Hence a bad exchange. The hon. and gallant Member for Central Hull stated that it would be advantageous for us to anticipate our payments and buy more American bonds in order to reduce our United States Debt in advance of present needs. I would like to point out that it would not pay us to buy unless to fulfil our contract, if we have to send money over there in advance while exchange stands at $4.58, unless United States bonds are considerably below par. I do not mind if the paper pound rate of exchange against dollars is not half of the value of the gold rate of the dollar, only in so far as it militates against our being able to pay off our Debt to America at an advantageous rate. If the United States can buy paper pounds cheaply, it will help our export trade and injure their export trade. It is for the purposes of repaying our Debt to the United States that we need $4.84 to the £, and for not much else. Why is the right hon. Member for Norwich worrying about the gold value of a pound note, except relating to the American Debt? What else has he in mind? The right hon. Gentleman spoke about the need for restoring the value of the pound to gold point; but he must be very careful how far he allows that argument to take him in relation to deflation, because deflation at any great rate will have a tendency to throw men out of work and cause even riot and bloodshed. To deflate by reduction of debt or currency at an excessive rate is one of the most foolish things in the world to do. Supposing the Prime Minister found an urn in his cupboard containing 8,000 million golden sovereigns and he paid off in gold, our pound notes, or part, if not the whole of our Debt. That is deflation in full. The effect would be that he would ruin every single man in this country. Therefore, the argument about deflation in relation to this Budget is quite fallacious, unless it is qualified by a request that it must be very slow. In this connection

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  I would point to what happened in Sweden during the War. That country ultimately refused to receive any more gold, because it was ruining all her industries and creating an immense amount of distress. But, except perhaps Holland, the United States is the only country where the Bradbury is not worth gold point. Before the War we sent to Argentina about £1,000,000,000 in all, but that brought to us over here a large amount of corn and meat. When you have an exceptionally good harvest at Argentina and other places where we have ventured our savings to develop raw materials, you bring down the price of commodities we purchase from them and the pound note improves in power of purchase.
  Mr. PRINGLE: That is precisely what my right hon. Friend the Member for Norwich (Mr. H. Young) said.
  Mr. SAMUEL: The right hon. Gentleman said we must do all we can to restore that pound note to a gold basis. I say that the flow of abundant food and raw materials as a result of our pre-War investments will now again begin. It was stopped by the War. Abundant supplies will bring down the price of produce. In other words, the purchasing power of the paper pound will be greater and may rise to gold value in the commodity markets of the world. In this country we should not bother so much about buying from America, for we buy our goods where we can get them at the best price for our pound. A large amount of our exchange trouble with the United States will be set right by the increased export from Argentina and South America of foods. If we buy less raw materials from the States owing to Argentina giving us a better price for our paper pound we shall need to buy less United States dollars and release the one way pull on the dollar. This may cause the £ to be worth more dollars and cents, and in that sense restore, partly, the paper pound to a point nearer gold value. Were it not for the United States Debt I would not give a thought to what is otherwise a barren argument in relation to this Bill—the restoration of the pound note to a gold basis—presumably meant by the right hon. Member for Norwich, in its relation to the dollar.
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  The hon. Member for Keighley (Mr. Lees-Smith) made a great point of the £40,000,000 a year Sinking Fund taking 150 years to pay the Debt. There is no accumulative compound interest in this annual Sinking Fund. But although, by the action of accumulative compound interest, Debt repayment would be hastened and the 150 years not be needed, yet if £400,000,000 of 5 per cent. debt are repaid say, by ten years, £20,000,000 a year interest on it is saved to the taxpayer and the Treasury by budgeting for £20,000,000 a year less. Less Debt service reduces taxation by that amount and places the money to work in trade in the taxpayers' hands. The assets then, created by the taxpayer, repay Debt by creating assets and replacing Debt (unrepresented by assets) by wealth. In other words, "We squeeze out the water." The compound interest accumulative effect works in the citizens' hands and not in the Treasury's books. I am aware that these points are too involved to discuss across the Floor of the House, and can only be dealt with effectively in the form of a written article. To deal with this £40,000,000 Sinking Fund in the way suggested by this Bill would have the effect which is claimed for it. It will ultimately and gradually in two ways reduce the cost of interest to the Exchequer for national loans and, in doing so, it relieves the taxpayer. As it relieves the taxpayer so it increases business and, in doing that, it increases assets, and creates wealth in time, so as to cancel the Debt now unrepresented by assets. To reduce taxation needed for Debt service and to replace "water," in the national balance-sheet, by assets of wealth are the foundation of the policy of this Budget; on those foundations rest the material happiness and interests of the whole nation. The Sinking Fund proposals are the mainstay of this policy, and I brush aside petty advantages or disadvantages that form the subject of the speech of the hon. Member for Keighley (Mr. Lees-Smith) and take leave to support the broad policy of Debt reduction by Sinking Fund, which he attacked, because I think it will prove itself to be the policy most likely to help us all.
  Mr. WALLHEAD: The speech we have just listened to indicates the fact that in approaching many of these questions

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  of finance we are regarding these questions from entirely different points of view. I can illustrate this point best by referring to the criticisms of the statement made by the hon. Member for Keighley in regard to the National Debt at the end of the Napoleonic wars. The hon. Member for Farnham (Mr. A. M. Samuel) said that that debt had actually increased our prosperity, and that that was a justification for the establishment of the debt. His argument was the greater the debt the greater the prosperity.
  Mr. SAMUEL: I did not mean that. I said that although it was big it was wiped out by our increased prosperity, and that we were increasing our national wealth in order to meet the burden.
  Mr. WALLHEAD: At any rate, the prosperity referred to by the hon. Member seems to have passed most of the people by. We have had a discussion recently with regard to the condition of the miners, who were in a deplorable state in 1870, and their wages were then much below any commonly accepted standard of decency. Since then the country has become increasingly prosperous, and yet the position of the miners to-day in regard to their pay is worse and below any ordinary human standard of decency, and they have been entirely passed by. The great mass of the people, no matter what their productive power has been, in the main, they have received little more than the cost of subsistence, and therefore prosperity means little or nothing so far as most of the people are concerned. Something has been said about class antagonism. We on this side stand for the assertion of class trouble and class antagonism. There has always been class trouble, and it will continue until classes are abolished entirely, as they ultimately will be. We find complete justification of this argument in the Budget which is now under discussion. I agree with the hon. Member for Keighley (Mr. Lees-Smith) that this is a Budget that lets the rich off lightly and penalises the poor.
  We heard to-day of a Motion for the Adjournment in connection with the strike of the dockers. Those men are on strike, forsooth, because they say that the figures of the cost of living which regulate their wages under the sliding
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  scale agreement fall unfairly, and they are on strike as a protest against a reduction of 1s. per day in wages. Take the burdens they have got to bear. They are taxed at the present moment to pay an enormous amount of interest upon an enormous National Debt. I think it is a fair thing to say that the 5 per cent. interest paid on the National Debt is of more value now than it was three years ago, and that 5 per cent. now is worth at least 7½ or 8½ per cent. as compared with the prices of 1920. I hear of no suggestion whatever that because receivers of interest on the National Debt at 5 per cent. are getting more to-day than formerly, therefore the rate of interest should be reduced. Yet, if it is legitimate to reduce wages, it surely is equally legitimate to reduce the interest on unearned increment—to use a term supplied by your own Chancellors of the Exchequer. Let us remember how the Debt was piled up. Sir George Paish, who was financial adviser to the Treasury in 1916, went to Cardiff to address the Chamber of Commerce there, and he told the members of that body that, because of the peculiar position brought about by the control of shipping, their profits had increased enormously—that they had increased to the extent of hundreds of millions sterling per year. I do not commit myself to his precise words, but I am sure I am quoting the sentiment to which Sir George gave expression when he told the shipowners of Cardiff, whom he was addressing, that they had been able to increase their profits to an enormous extent and that that was not altogether a bad thing, since they had been enabled to lend the money back to the country and thus assist it to carry on the War.
  Mr. GOULD: Do I understand the hon. Member to say that that was due to the control of shipping?
  Mr. WALLHEAD: I have repeated Sir George Paish's statement, and bearing in mind the general conditions which obtained at that time, it would seem that owing to the control of shipping the shipowners of Cardiff had gained a peculiar advantage. That, at any rate, was his statement. He declared that the money had been made, and that it was a good thing because it had been lent back to the Government. It is money made in that way that we are claiming should be

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  called upon to bear the burden. I want to point out what the debt really means when looked at from the point of view of the masses of the working classes. If we have a debt of £8,000,000,000 we have probably 8,000,000 families in England, and the debt represents £1,000 per family. £1,000 at 5 per cent. interest represents £50 per annum, and that £50 must be found by the average family for the payment of interest on the loan. That is how the average worker regards this question, and that is why he is protesting against the unfair distinction that is drawn against him when he is called upon to face continual reductions of wages because of the fall in prices, while the rate of interest to the holders of War Loan remains unchanged. We may be told that members of the working classes receive some of this money and that their organisations have considerable investments in War Loan. We know that. We know also that the total amount so held runs to about £600,000,000 of the £8,000,000,000 of Debt. It has to be borne in mind, therefore, that the total share of the working classes and their organisations in the interest represents but 1/15th of the whole, and the masses, on their productive ability, have to pay the whole of that 1/15th part. I find in this a reason why the condition of the masses of the people is getting correspondingly worse. After all, if 5 per cent. in 1920 has become worth about 8 per cent. in 1923 because of the fall in prices and the increased spending power of money, the increase in the nation's wealth can only come from two causes, either because the productivity of the country is greater or because somebody is getting less. I take it we are not producing more than we were in 1914; indeed the productivity of the country is rather less, looked at from the point of view of quantity, and the output of wealth is less this year than it was in 1914. Therefore, an increased amount is taken by the excessively wealthy people in this country.
  If the increased wealth of this country does not come from increased productivity, it can only come because somebody is going rather shorter than they ought to do. It is to that fact we attribute the continued depression of the wages of the masses of the working people. That is why the miners are complaining. That is why the dockers are on strike. That is
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  why railwaymen are threatened with a reduction of wages under an agreement already entered into, and that is why, generally speaking, the purchasing power of the masses of the people is becoming less: simply because the relatively few wealthy are taking more and more of the nation's wealth as years go by. It is because of these facts that we think the people for whom we specifically speak are not being treated equitably and fairly by this Budget. We hold that there should have been some reduction of the duties on the breakfast table. We believe some attempt should have been made to reduce the tremendous burden our people have to bear. Their wages are becoming less, but taxation remains at the same flat rate, and the proportion they pay out of their wages becomes greater instead of less. It is altogether disproportionate. That is a point which bears particularly hardly on the masses of the people of this country—that in proportion to what they take or what they get from the annual wealth production of this country their taxation is infinitely greater than that of the excessively wealthy and those other sections referred to by the hon. Member for Colne Valley (Mr. Snowden) when he opened the Debate this afternoon. That is a point of view we have to continually press forward, and I think we are justified in claiming on that ground that our people have not been treated as fairly as they ought to have been.
  I shall vote with the utmost pleasure in the world against this Bill, because I think it is iniquitous. It is robbing the children of the poor of education. As I stated the other day, economies are being made at the expense of members of the wreckage—the flotsam and jetsam, of the War. Economies are being made at the expense of the education of our children. Economies are being made as far as the health services are concerned. I think it is disgraceful to cut down the requisite health and social services of this country in order to lessen the Income Tax paid on excessive incomes. The whole thing is disgraceful in the extreme, and I am quite sure, after the exhibition we had yesterday, that it will not lie in the mouths of hon. Members to taunt us with the fact that we who fight so keenly, and sometimes say such hard things when we have in knowledge the condition of the people we specifically

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  represent, are speaking from the point of view of personal greed, or for the preservation of privileges or for the preservation and maintenance of profits. We are fighting our case on broad grounds of common humanity, the alleviation of distress, and the establishment of decent, humane conditions. We are fighting for the preservation of the standard of living of the people of this country. Hon. Members yesterday were brought face to face with the fact that they had a chance of repealing the last bit of the Budget dealing with land values, and their attitude showed exactly that they were fighting, not for the preservation of a decent standard of living, but for the preservation of privilege and power. They proved yesterday that they could be as hard and as bitter as we who fight from an entirely different point of view.
  Sir ARTHUR CHURCHMAN: I think, when we are considering the Finance Bill as a whole, it is desirable that we should be as temperate as possible in what we say about it. If I wanted to criticise the Bill, I should say that it did not encourage thrift, but it did encourage economy. It is very curious that we hear so much about economy and so little about thrift. There is no doubt that thrift is a thing which ought to be encouraged as far as possible, because it is thrift that produces the savings from which largely is drawn the taxation of this country. The hon. and gallant Member for Hull (Lieut.-Commander Kenworthy) referred to the way in which the Chancellor of the Exchequer had dealt with the American debt, and I think the whole House will share in the tribute paid to the right hon. Gentleman for his action in that regard. The hon. and gallant Member also told us that the debt has got to be paid eventually by produce sent from this country to America, although what has been paid already has been paid to a large extent in gold. The hon. and gallant Member for Hull and the right hon. Member for Norwich (Mr. H. Young) expressed a hope that we might soon have our currency restored to a gold basis. I sincerely trust that nothing of the kind will happen. I think it is probably the worst thing that could happen to this country as, indeed, the accumulation of gold in America was probably one of
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  the worst things that ever happened to America.
  Gold has really only been used in the past for the payment of differences. The real exchange between countries has not been gold; it has been commodities and services, and it is only the differences that have been paid in gold. America to-day is in the unfortunate position of having received vast quantities of gold which she is unable to use. If we were to establish a gold basis here, America would be able to ship gold here, but we do not want gold; we want goods. The real fact to-day is that gold is being dug out of the ground in places like South Africa and buried in the ground in the United States, in the vaults of the banks. It is of no very great use. So far as I know, its chief use in America is for dental purposes. I have always noticed that the charming American ladies, whenever they open their mouths, shows us a considerable amount of gold; but they cannot use for dental purposes all the gold that is shipped to America, and the rest is very likely to remain a drug, something which is of very little use.
  I have referred to the question of savings, and now I want to refer to the pegging of the exchange, which was mentioned by the hon. and gallant Member for Hull (Lieut.-Commander Kenworthy). I think he said that this operation, which was carried out during the War, was not altogether a good thing, but the pegging of the exchange during the War kept down the price of war stores and materials which we had to buy from America during the War. It was done, really, by demobilisation of securities, which were nothing more or less than the savings of the people of this country. Therefore, it is very important, as I said at the start, to encourage thrift. It is far more important to encourage thrift than to encourage economy. If I might make a present to any budding Chancellor of the Exchequer in this House, and even to hon. Members on the benches opposite, of a suggestion as to what their future taxation should be, I would say that it would be far better to have a graduated tax on expenditure than a graduated Income Tax, because a graduated tax on expenditure would actually discourage expenditure of a careless and foolish nature, and would encourage thrift and saving. [An HON. MEMBER: "What about trade?"] It would not discourage trade in the least,

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  as far as I can see. The proceeds of trade would still be available, but taxation would then be individual, and an individual who wished to spend money in an extravagant way would have to pay for it, and rightly so, whereas those who wished to save money would gain a certain benefit from doing so, and the country would be benefited also. The money so saved, if invested in Government securities, would have the effect of reducing interest, and so setting free more money for social purposes. If invested in business, it would make for greater employment, and, if invested in securities abroad, it would come back to us in the form of commodities which are greatly needed. I offer that idea, therefore, for what it is worth.
  Mr. HARRIS: We have just heard a very interesting suggestion, but I rather question whether the Prime Minister, if he happens to introduce the next Budget, will be guided by it. At any rate, it is a new canon of finance which I will not follow or criticise. If I may be allowed to do so, I should like to congratulate the Prime Minister on having steered his Budget successfully to its Third Reading. I do not suppose that any man is more glad than he that we have come to the last day of our very lengthy discussions upon it. I believe I am right in saying that he is the first Prime Minister to hold the dual position since Mr. Gladstone, and I think the whole House appreciates the fact that, at a time like this, when foreign affairs are so difficult, when economic problems are so complex, and when he is bearing such great responsibilities, he can find time to come and listen to these long discussions on the Budget.
  We have spent a good many days in criticising the Budget as it was originally introduced, but I am afraid they have not been very profitable. We have made many suggestions, and moved many Amendments, but have not secured many concessions. I think I was successful in getting some slight concession on coffee extract that is re-exported, but, listening for the first time to an ordinary Budget—when I was in the House before it was War time, and we did not have a full discussion—I cannot help feeling that it might be an advantage if we had some change in our procedure. Finance is very complex, and I have been much im-
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  pressed this afternoon, when we have had learned discourses on deflation and inflation, by the difficulty of discussing it effectively in an assembly like the whole House. I know it would be a very serious departure from the precedents of the House if the House were to part with its full control over finance, but although, personally, I have often doubted the wisdom of sending so many Bills upstairs, one of the Bills which I think could be more effectively discussed upstairs is the Finance Bill.
  I think we should be much more effective in our criticisms if we were sitting round a table, having the assistance of expert advisers, in Committee, than we possibly can be in a Committee of the Whole House. We are always faced by the Financial Secretary, hiding behind the natural cover of his expert advisers. If we are going to fulfil really effectively our functions as critics of the Government's financial scheme for the year, I venture to suggest that we should be able to discharge our duties more efficiently in a Standing Committee, each section of the House having picked its Members who take most interest in financial subjects. The House, of course, would still retain its powers of criticising the Bill on Report and on the Third Reading. At any rate, the Budget is very much where it was when it was introduced. The only substantial changes are to the advantage of the landed interest. There has been a substantial concession on assessments, and there is, of course, the concession to those who object to filling up forms when they transfer land. That has given general satisfaction to solicitors and landowners, but I do not think anyone would suggest that it will give any relief to the ordinary taxpayer, or assist our financial position. On the contrary, it was, I think, let out by the Financial Secretary that it is likely to increase the cost of the Valuation Department.
  Sir W. JOYNSON-HICKS: No.
  Mr. HARRIS: One source of information will be dried up. I heard it suggested continually from the opposite side of the House that the Valuation Department would now have to get its information through the ordinary channels, but getting it through those ordinary channels will, on many occasions, entail

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  payment for expert advice, where the information could have been got from these forms when they were filed away.
  Mr. D. HERBERT: Oh, no!
  Mr. HARRIS: I hope I am wrong, but, at any rate, my point still remains good, that the only interest in the country that has got any concession from the Financial Secretary, during the many weeks we have spent over the Finance Bill, is the landed interest. I should like just to refer to the concession with regard to the Beer Duty. The question was raised by my hon. Friend the Member for Bodmin (Mr. Foot) and also by my hon. Friend the Member for Oxford (Mr. F. Gray), as to whether the brewers were giving the whole advantage to the retailers of beer. The Financial Secretary, I think, undertook to look into the matter. There is reason to believe, at any rate in the provinces—I do not think it applies to London—that many small brewers are not giving to the retailers the full advantage of the reduction in tax, according to the private arrangement made between the Chancellor of the Exchequer and the trade.
  Various suggestions have been made for the next Budget, and I should like to make a suggestion with reference to the Tobacco Duty. Nothing has been more remarkable than the enormous dividends which have been declared recently by the Tobacco Trust and the various allied companies. Dividends of 25, 35, and even 40 per cent. have been declared in one form or another, either in bonus shares or ordinary dividends, by the various tobacco companies. It does not seem right, while most industries are suffering from depression, and are having great difficulty in making two ends meet, that the tobacco industry, owing to the fact that it is largely a combine and is producing an article which it is easy to control, is able to show these enormous profits. Tobacco being an article of general consumption, though it is not, perhaps, a necessity, I would suggest that, when next year's Budget comes to be considered, some arrangement might be made whereby the tobacco industry might be asked to contribute a little more towards the taxes, and at the same time relieve the consumer.
  While there has been no improvement in the Budget since it was introduced,
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  there has been no improvement in the general industry of the country, and there has been one very ominous threat of increased expenditure. We had an important statement the other day from the Prime Minister in reference to the Air Force. It is true it was suggested that to commence with the policy would only involve an increased expenditure of some £500,000, but that is likely to grow considerably as the years go on, until it reaches a very substantial sum. That is a very serious contingency to have to face at a time of financial stringency like this. We all know what the cause is. It is the enormous expenditure of our Ally across the Channel. France has set the pace in Air expenditure. I think it is just as well that we should be frank in this matter. France is the main reason why we cannot make substantial reductions in our expenditure. France still remains a great military power, with 600,000 men in the field. She has refused to come into line under the Washington Conference and reduce her expenditure on submarines. It is through the action of France that our expenditure on armaments still remains on a larger scale than before the War, and there seems very little prospect of a reduction.
  7.0 P.M.
  I would go further. I think the Prime Minister is right., with a near neighbour embarking on this immense expenditure, to ask the House to make ample provision for our Air Forces. We have, I think, every reason to complain, because, while France goes on recklessly in her expenditure on armaments, she is ignoring the advice of her friends to economise, and is making no serious attempt to balance her Budget. The French Budget is difficult to follow, but I think I am right in saying that while we are raising, from Income Tax payers, the sum of £319,000,000, the Income Tax payers, the rich men, in France are only asked to find £44,000,000. It is the same in taxation in France in every direction, the cost per head there is £9 12s., while here it is double. It may well be argued that the finances of our neighbour are no concern of ours; that they have to find the money, and can raise it in their own particular way. That is a very sound principle; but while France is going into this reckless extravagance in armaments, while she is

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  not balancing her Budget nor attempting to pay her liabilities, and while she is taxing her people at a very low rate, she is, on the other hand, involving the whole of Europe in unemployment, industrial unrest, disturbed trade, and general economic depression. The present Prime Minister, as his predecessor, has pointed out that we shall never deal with unemployment until we get trade back into its normal channels. That is a truism which I need not elaborate, but while France is following this reckless course, there is no unemployment in France, her factories are working full time, and taxation is low, while in England, even at Midsummer, with all the attempts at reconstruction by three or four Governments, all the palliatives, all the attempts to restore trade, we still have over one million people out of work eating their hearts out, becoming demoralized, and many of them losing the power of again becoming economic units in our industrial system.
  My own feeling, and I believe the feeling of a great number of hon. Members, is that so long as you have this industrial disturbance in Europe, and have trade disturbed, so long must you be prepared to have an unsound financial position, a high Income Tax, high indirect taxes, high taxes on the whole of the people. I would say to my hon. Friends in the Labour party, "You are quite right, the working classes are taxed too high; sugar, tobacco, tea—every tax—is too high. So is Income Tax too high. The real thing is to get a change in policy to bring about international peace; to bring France into line." Our hope is that the Prime Minister will take a strong line. He will have the nation behind him if he, and his Government, take their courage in both hands, and say that this trouble in Germany must come to an end, and that we cannot stand by as spectators, because our people are suffering so much, and because there is so much unemployment. Then he will have a united nation behind him, and will deserve well of the whole country.
  Sir W. JOYNSON-HICKS: Perhaps I may be allowed, at this stage of the Debate, to deal with a few criticisms that have been directed against the Budget. Later on this evening, the Prime Minister will deal with matters particularly raised by the hon. and gallant. Member
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  for Central Hull (Lieut.-Commander Kenworthy) with regard to the payment of our Debt to America, and one or two questions relating to that. There are several questions—I will not say minor questions—which require an answer, namely, in the speeches of the hon. Member for Colne Valley (Mr. Snowden) and the hon. Member for Keighley (Mr. Lees-Smith). Both of them quite frankly told the House that they were opposed to this Budget in toto because they took an entirely different position on the whole taxation question than that taken by the majority at present in power. We knew that. We all know that the hon. Member for Colne Valley has for some years past not concealed his ideas of taxation, and the proposals which he hopes, if ever he should come to occupy this position on this side of the House, he would be able to carry into effect. I am sure that he and the hon. Member for Keighley will forgive me if I say I think they are both a little too apt to assume that what they think must be right, and that we, on this side of the House, are not entitled to hold our own views. I am willing to grant hon. Members opposite the same credit for honesty, for fairness, and for intelligence which I am going to ask them to grant to us.
  If we say we are unable to accept their views as to the incidence of taxation, it is because we, equally honestly, and, I hope, equally intelligently, take an entirely different view of the rights and wrongs of this difficult question. The hon. Member for Colne Valley complained very bitterly of the incidence of taxation; the old question, of course, between direct and indirect taxation, or, as he put it, from his own point of view more clearly, perhaps, between the taxation imposed on the working classes and that imposed on those whom he called the wealthy classes. He will forgive me if I press the point that the working classes are not merely those who earn their living by their hands, but very largely, many of them, would be included in those termed by the hon. Member the wealthy classes. We on this side of the House, and throughout the country—the men who, perhaps, have incomes above the £500 limit, which the hon. Member put as being the differentiating point—are just as much workers. The number of men throughout the country who have entire incomes from investments is very small,

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  compared with the number of those working with their brains, though they may not be, in the same way as some of the followers of the hon. Member opposite, working with their hands.
  The hon. Member complained very bitterly that a great deal—£340,000,000, he said—of the money involved in this Budget goes back to the wealthy classes in the shape of dividends on War Loan. That is true, to some extent. I am not criticising the actual amounts and figures, but the hon. Gentleman really omitted from his calculation to give us the War Pensions, the Old Age Pensions and the National Insurance. He did not include the Unemployment Insurance, the large Education Vote and the Health Services of the country, all of which are paid out of this same Budget. If he added the cost of those to the amount of money expended for the benefit of what he would call the working classes of the country—accepting his definition of them, for the moment, as those who work with their own hands rather than with their heads—he would find that a very much larger proportion of this expenditure goes directly back—I will not say into the pockets—to the benefit of the working classes than he told us in his speech. He complained, also, that the only remission we had made affecting the working classes was in regard to the taxation of beer, and he said that every one of the hon. Members of the Labour party would infinitely have preferred a reduction in the taxation on sugar. That may be so; but that was his definite statement. I am prepared, I will not say to make an equally definite statement, but to express an equally definite opinion, that the whole of the people represented by the 144 Members opposite would not take the same view. I am quite certain that if you polled the whole of the working class vote in this country, they would not prefer a reduction in the taxation on sugar rather than in that on beer.
  Lieut. - Commander KENWORTHY: Have an election!
  Sir W. JOYNSON-HICKS: There is no need for an election yet; not the slightest. I see opposite me an hon. Member who is a constituent of my own. I am quite sure he will agree that the whole of the working classes—still using the same term—are not represented by the Labour
  520
  party opposite. The hon. Member, who is one of my own constituents, knows quite well that in my Division I represent a very vast proportion of the working men in the constituency. In the same way, nearly every hon. Member on these benches represents an almost equal number of working-class votes. [An HON. MEMBER: "More!"] One hon. Member says "more," but I do not want to debate that point. I am perfectly certain that if hon. Members on this side of the House were asked to express an opinion, they would say that their constituents, by a very large majority, preferred the reduction we have made in the Budget in the taxation on beer to a reduction in the taxation on sugar. In any case, both concessions go almost entirely directly into the pockets of the working classes.
  The hon. Member for Colne Valley went on to consider the amount of money devoted to the income on our debts, all of which, he said, goes to the wealthier classes of the country. He left out there, for instance, the sums invested by the industrial insurance companies, who invest enormously in Government securities. The whole of the income there goes direct to the working classes. It goes through the instrumentality and medium of the industrial insurance societies. There are the vast sums of the approved societies; the vast sums invested in War Loan Certificates, by the very large number of working-class investors, and the very considerable sums invested by all the building societies and co-operative societies—all in War Loan. Therefore, it really is not fair to say that all the interest on the War Loan goes direct into the pockets of the wealthier class. A very large proportion goes, directly or indirectly, in improving the well-being—if not directly into the pockets of—of the working class, for whom the hon. Member professes to speak. Then, he made a most extraordinary statement, with reference to the expenditure of the working man. He said, in the first place, that the Income Tax reduction would be good for trade if it went back to trade. He added, however, that it would not go back into investments, but would be spent in luxury, because it was too small to utilise for investments.
  The hon. Member surely knows that what is invested is, each year, the balance over and above the yearly housekeeping

  521
  allowance of the rich man, equally with the poor man, and the balance left over is made larger even by a small reduction of taxation. It is quite true that the rich man may not say, "I have £100 reduction in taxation, I am going to invest that immediately." But, at the end of the year—I do not at all agree that he will at once spend that £100 in luxury—he will find his balance, for the purposes of investment, is £100 more as a result of the reduction of taxation, and that will, to a very large amount, be put into investments for the benefit of the trade and commerce of the country. The hon. Member made a rather astonishing statement when he said that the rich man would spend his reduced taxation in luxury, while the poor man, who spends everything he can afford in food, clothing, etc., keeps trade going. Why are food and clothing, when bought by a workman good for trade, and why are the same things not good for trade when bought by a rich man? If the working man is doing good for trade—I am quoting the hon. Member's own statements here—where are you going to draw the line? When the richer man buys more clothes or more food or motor cars or what not, is not that equally good for trade? I do not want to dive into the very difficult question of how far expenditure is good for trade, but I am taking the position of the hon. Member for Colne Valley himself on the ground that what the working man spends is good for trade, and clearly, if he is right, what the wealthier members of the community spend must be equally good. Then he appealed to me to reduce next year the Inhabited House Duty. It is true that with the permission of the Chancellor of the Exchequer I was able to announce a reduction of the Inhabited House Duty, and the hon. Member was one of those who asked for that reduction. He now wants to clear away the whole of the Inhabited House Duty next year. The real difficulty for the Chancellor of the Exchequer next year, and, indeed, for all Chancellors of the Exchequer every year, is to find a surplus wherewith to remit taxes. Then I was asked in regard to the Entertainment Tax. Attacks were made on that by many hon. Members. In the speeches I made in Committee I have not concealed my view that the Entertainments Duty is not an ideal tax.
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  It was put on for war purposes, and it still brings in a good deal of money, and while we are still under the influence of war taxation it is impossible, at present at all events, to give up the money which is received from that tax, however unpleasant it may be.
  The hon. Member for Keighley (Mr. Lees-Smith) really agreed with his learned leader. The speech he made to a large extent laid down the same broad propositions in regard to taxation as those laid down by the hon. Member for Colne Valley. The hon. Member at least made one statement which was received with cheers from his side of the House, and without any explanation it would possibly leave a very bad taste in the mouth of people to whom it might be made on the public platform. He dealt with the number of people who pay Super-tax, and he told the House there were some 500 people in the country who received, in the reduction of the Income Tax, a sum roughly, on the average, of £300 per head, and that there were some 80,000 people who received a reduction, from the concessions we had made in the Budget, of £150,000, but that there were over 2,000,000 Income Tax payers who on the average only received a reduction of £2 per head. I quite agree that on the face of it that looks rather cruel. The figures are not quite accurate, but they are sufficiently accurate for the purposes of comparison.
  Mr. LEES-SMITH: It is 28,000 people who receive the £300 and not 500. They are the people with more than £5,000 a year.
  Sir W. JOYNSON-HICKS: I am not quite sure the hon. Member is right in saying there are 28,000 who receive over £5,000 a year, but it does not really matter. I think that would bring the number of Super-tax payers up, if he includes the 80,000 who are Super-tax payers also, to too large a figure. But the numbers really are immaterial. The point he made was that there are over 2,000,000 people who received £2 reduction in taxation and a very large number who received from £150 to over £300. What he did not tell the House was that the reduction is directly proportionate to the amount of tax they pay, and that everyone who received a reduction of £300 this year in taxation has already been paying £3,000 a year tax last year, plus £3,000

  523
  Super-tax—that is £6,000 a year actually paid—while the man who only received £2 has only paid £20 a year. That is the real answer. If he had given us those figures there would have been no point in his statement, because the rich and the poor alike receive the reduction, except that the Super-tax payer does not receive a reduction in the same proportion as the non-Super-tax payer does. The Super-tax payer is taxed £3,000 a year, in the higher cases, for Income Tax, plus another £3,000 for Super-tax, but he only gets a reduction on the Income Tax and not on the Super-tax. When the hon. Member makes that speech at street corners, will he mind giving the additional figures I have given? I am sure he will do so because he is always so fair.
  I was asked at Question time about the Entertainments Duty. I am pleased to be able to announce that I am preparing, in conjunction with the Department of Customs, a short circular setting out in plain and I hope intelligible language the position with regard to Entertainments Duty at agricultural and horticultural shows and so forth much on the same lines as the announcement I was able to make the other day. I shall get it out in a couple of days.
  Mr. HURD: Will it be available to Members?
  Sir W. JOYNSON-HICKS: Yes. I will put it on the Table of the House and have copies in the Vote Office. The hon. Member for Colne Valley made a great complaint that we were not doing enough in the way of paying off our debt and improving our financial position. May I trouble the House with a few figures, because when we are dealing with Budget questions figures are essential. The total gross expenditure of the country in the year after the War was £3,146,000,000. Next year, 1919–20, it came down to £2,038,000,000, in 1920–21 £1,330,000,000, 1921–92 £1,164,000,000, last year £968,000,000, and this year £875,000,000. Ever since the Armistice there has been a steady and progressive diminution in the expenditure of the country, and it is only by a diminution in expenditure that you can possibly get a diminution in taxation. I should like to tell the House how the staffs of the Government Departments have been reduced. Since the
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  Armistice they have been reduced by £113,000. In all our Government Departments now we have only £26,000 above the pre-War figure, including 23,500 engaged in the Pensions Department. In other words, we have only 3,000 more men employed in Government Departments of State than in pre-War times. That really shows a determined and definite effort on the part of the Government to get their staffs down to the pre-War level. It is no good the Government trying to reduce their staffs and to reduce expenditure unless the House of Commons joins in helping them. The Prime Minister, in his Budget speech, said:
  "When Chancellors of the Exchequer speak at Budget time about reductions in taxation, they have always the enthusiastic support of the Committee. I want some of that enthusiasm reserved for other occasions, when hon. Members are apt to forget the close connection between expenditure and the taxpayers' burden."—[OFFICIAL REPORT, 16th April, 1923; col. 1736, Vol. 162.]
  I want to warn the House that the closest economy in expenditure is essential in the next two years. In 1924–25 we shall not have any special revenue in all probability, which this year is producing £40,000,000. We shall have three bad years in the Income Tax average and the loss in Income Tax payments owing to the third bad average year and the special income, which will not take place till 1924–25, has to be made up. It is impossible to think that after the efforts we have made to reduce taxation we could possibly ask for an increased Income Tax. The loss must be made good by the sternest efforts of economy in all the Government Departments. The Treasury has asked all the spending Departments to let them have preliminary statements of their Estimates in the course of this month so that no effort shall be spared to reduce them consistent with the safety of the country. But that is no good if hon. Members come here day after day and month after month pressing further expenditure upon the Government unless they realise at the same time that they have to face the inevitable day in April, 1924, when the new Budget has to be brought in and it will have to be balanced either by further taxation, which no one would think of if it could possibly be avoided, or by economies during the current year. [An HON.

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  MEMBER: "Singapore."] Singapore will be £1,000,000 in the course of the current year.
  I am not going into the question raised by the right hon. Gentleman the Member for Norwich (Mr. Young) in regard to deflation and inflation. If I may say so, as a not very expert financier, our position can be summed up in one word. Keep on a level keel. We have from the period of the Armistice to March, 1920, reduced the National Debt by £600,000,000. Since March, 1920, we have paid off £449,000,000. In 1920–21, £51,000,000, in 1921–22, £71,000,000, and in 1922–23, £126,000,000, owing, of course, to the surplus the right hon. Gentleman the Member for Hillhead (Sir R. Horne) had on his Budget. The whole of any surplus we may have on this Budget will go to the reduction of Debt, and will lead immediately to a reduction of taxation. In addition to that we have got rid of all our foreign Debt except that of the United States and certain sums due to Canada, which are approximately balanced. We have paid Japan nearly £20,000,000; Argentina, £20,000,000; Uruguay, £4,500,000; Holland, £3,000,000; Norway, £12,000,000; Sweden, £4,500,000; and Spain a small sum. The Floating Debt has been very considerably reduced. At the date of the Armistice it was nearly £1,500,000,000. To-day it is only just over £800,000,000. That is a record of which any country may well be proud. We are the one country in the world which has tried to pay its way since the Armistice. We have imposed on ourselves dire taxation. No one enjoys taxation. I was very much twitted 10 days ago when, in regard to some question of taxation, I said I hoped taxation could be so imposed that it would be willingly paid by all the taxpayers of the country. That is right; but fun was made of it. After all, the taxpayer is a patriot, whether he pays through direct taxation or indirect taxation. He is a member of the body politic. He is a member of our community. He is just as much interested in the prosperity of the country as those of us who sit in this House, and I repeat what I said. When I give these figures as to the gigantic efforts that we have made—efforts greater than those of any other country in the world, except, perhaps, the United States
  526
  of America—greater than any other country in Europe, to place our finances on a sound foundation, I want to go further and to say that in spite of the fact that some hon. Members opposite may, and, from their point of view, quite honestly, hold different views as to the incidence of taxation, they must realise that they enjoy the benefits which other members of the community enjoy, that they are Britons, and I am sure that they are just as proud as we are of being Britons, and they must rejoice in the efforts that we have made.
  I hope that when the next Budget is produced in April of next year the then Chancellor of the Exchequer will have as good showing as my right hon. Friend the present Prime Minister had when he introduced his Budget, and that that Budget will be carried through as successfully as this one has been. May I, in conclusion, say one word of personal thanks to all the Members of the House who have been so kind and courteous to me during the work of the Committee stage? As everybody knows, I came to the Budget quite new to it, having had no previous experience in financial work, and it would have been quite impossible for me—I say it quite frankly—to have carried the Budget through its stages if I had not had, in the first place, the magnificent kindness and support of my right hon. Friend the Prime Minister and the kindness and courtesy which has been extended to me by every Member of the House.
  Mr. A. V. ALEXANDER: The right hon. Gentleman is becoming increasingly popular. We all appreciate his speeches, but I think he was unwise in the opening part of his speech when he reflected somewhat on Members on this side. I do not say that he was impugning our honesty, but he rather suggested that we sometimes impugned the honesty of hon. Members opposite. I am speaking generally for our party when I say that, though we are often very strong in criticism, we do not desire to impugn the individual honesty of any hon. Member on the other side. Whilst we do cavil very often at the repeated expressions of sympathy which do not seem to carry us very far, we do not mean to say that hon. Members opposite do not honestly believe that their system is better than that which we propose.

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  I should like to reply to some of the points raised by the right hon. Gentleman. In the first place, I will deal with his contention that in our claim for the reduction of indirect taxation we cannot speak with more force than Gentlemen on the other side as to what the workers require. He went on to say that if the workers of the country were polled they would be far more likely to give a vote in favour of the reduction of the tax on beer than for the reduction of the breakfast table taxes. Those of us who are connected, not merely with the workers from the producing point of view, but with consumers' organizations, know that to be an absolute fallacy. The right hon. Gentleman knows that we have 4,500,000 people organised in the co-operative movement, and we meet again and again to discuss matters of this sort, and we are always against the taxation of food, and in favour of the reduction in food taxes, before any question of a tax upon alcoholic liquor should be taken into account. Not only so, but, from my practical experience in our labour and producers' organisations, I am persuaded that the right hon. Gentleman's argument, quite honestly expressed, would be found to be perfectly fallacious.
  With regard to the question as to who gets the benefit from the interest paid upon the War Loan, the right hon. Gentleman suggested that a very much greater proportion of that interest went directly to individual members of the working classes or to their organisations than had been admitted either by the hon. Member for Colne Valley (Mr. Snowden) or the hon. Member for Keighley (Mr. Lees-Smith). He adduced this extraordinary argument, that the great industrial insurance companies had an enormous investment in War Loan, and that the interest in that investment went largely back to the working classes. The right hon. Gentleman has not been long at the Treasury, and I suggest that when he begins to inquire into the matter, and he studies very carefully the report of the Commission presided over by Lord Parmoor with respect to industrial insurance, or when he reads the Debates in this House in the last few months in regard to the Industrial Insurance Bill which his own Government
  528
  has introduced, in order to deal with the way in which the profits of industrial insurance companies are dealt with, and the way in which the profits from their investments have been distributed, he will realise that he is wrong in his statement that the workers largely receive the benefit from these investments. The Prudential Insurance Company have recently paid 62½ per cent., free of tax, on a paid up capital of £1,000,000, less than £10,000 of which was subscribed in cash, and that company holds the biggest block of War Loan of any industrial insurance company in the country. They took out of the Industrial Life Branch £480,000 in 1914, out of a total of £600,000, to distribute to their shareholders. Anybody who has any real knowledge of industrial insurance knows that it has been one of the biggest scandals in the past. The right hon. Gentleman's own Government has placed an Act upon the Statute Book to remove some of the scandals that have existed, and yet he adduces the argument that in regard to the enormous investments of the industrial insurance companies the benefits are going into the pockets of the working classes. If I could persuade him to introduce into the Finance Bill of next year a provision ensuring that the profits of the industrial insurance companies go to the policy-holders, I should be with him all the way.
  The right hon. Gentleman also advanced the extraordinary argument that the richer people of this country in spending their money in luxury business do just as much for employment and trade as is brought about by the expenditure of the great mass of the workers. Surely he ought to know that that is not true. From his knowledge even of elementary books on economics, as well as his experience of trade, he must know that he is wrong. I do not admit that the luxury expenditure of a small class is going to provide the volume of employment for the whole community that will be provided if you have the great mass of industrial workers in receipt of a proper income to maintain a standard of life which will create a demand for commodities from the whole body of people.
  Sir W. JOYNSON-HICKS: I was basing my statement on the argument of the hon. Member for Colne Valley that every reduction of tax to the worker

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  enabled the working man to buy more clothes and food, and that was to the advantage of trade. My argument was that I buy boots, and that is just as much to the advantage of trade as if a working man bought boots. Therefore, if reduction of taxation enables me to indulge in more expenditure on necessaries—I did not mean on luxuries—surely that is for the good of trade. I might say that what is sauce to the working man may be equally sauce to the richer man.
  Mr. ALEXANDER: I was referring to the effect upon the trade of the country of a wider demand for commodities from the whole body of people, and I am persuaded that if you so arrange your national finance, and your distribution of wealth produced by labour applied to capital, that there is a greater demand for commodities right through the great bulk of the population, instead of a demand from a small number, it would be all the better for trade, and you will not have what you find to-day, people starving in the midst of plenty, which is something that we know about in the organisations which we represent. With regard to the incidence of the relief which has been granted to the Income Tax payers in this country, the right hon. Gentleman made certain comments arising out of the remarks of the hon. Member for Keighley. The right hon. Gentleman said that we did not have regard to the fact that the proportion of reduction for the Super-tax payer was in relation to what he had been paying, and that he was entitled to it. Our point is an entirely different one. Our point is that the incidence of the relief for the Income Tax payer is not in accordance with the ability of the Income Tax payer to pay it, and the right hon. Gentleman in taking off part of the charge on Income Tax ought to have had more regard to the great mass of 2,000,000 Income Tax payers who are getting relief of an average of only £2 per year. If he had had regard to their ability to pay, we should have been far more satisfied with what has been done.
  With regard to the right hon. Gentleman's references to the reduction of debt, I recognise the importance of the figures that he gave as to what has been paid off during the last four or five years, but, like his predecessors in office, he failed to remind the House that we have paid off that debt with the aid of the
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  sale of huge quantities of War stores—the sale of huge capital assets. If you take a trial balance between the two, you will find that the Debt has not been reduced by nearly so much as has been realised from the sale of War stores. When he prides himself upon the fact that we have made such great efforts to pay off the Debt—we have made more direct efforts than any other country—he must not forget that that has been largely at the expense of the great mass of industrial workers, and not at the expense of the more fortunate wealth-possessing class. The efforts of this Government and of the previous Government have led to a good deal of unemployment of a character the distressing nature of which is well known to the right hon. Gentleman.
  I wish specially to say a word or two upon a subject which I have very much at heart. That is the question of taxes upon food. In the Committee stage of the Bill I moved a Clause to repeal the whole of the Sugar Duties. I felt after that Debate, without desiring to show any disrespect to the right hon. Gentleman, that no argument has been put up to answer what was said with regard to the Prime Minister's case against the reduction of the Sugar Duty, and I think that the Prime Minister would be showing us courtesy if he would yet reply to the various points put, not only by myself but by others, with regard to the original statement that any reduction in the Sugar Tax this year would be far more likely to go to the American sugar trade than to the actual consumer. But I want particularly to point out that the right hon. Gentleman, in his reply in the Committee stage, made no reference at all to what was said as to the taxes imposed for protective purposes. It is no longer argued that these taxes are not for revenue purposes, but that they are of a discriminating, protective character. You have considerable Preference shown in the duties to the West Indies and you have now protection for the home sugar beet industry.
  I would remind the right hon. Gentleman that we made a present to the West Indian sugar interests in 1902 of £250,000, and that ever since 1920 we have been giving them—one of those things to which the right hon. Gentleman expressed abhorrence when speaking of

  531
  another matter—a concealed subsidy. When we were pleading for a concession in regard to the Legacy Duty for hospitals, the right hon. Gentleman said, "If you want a subsidy, come and ask for it openly. We ought not to do this thing by back-door methods. Do not come to us for a concealed subsidy." I put up a case against the concealed subsidy to West Indian sugar in the Committee stage, and the right hon. Gentleman did not reply. We were asking the other night for a concealed subsidy for the hospitals of less than £200,000 a year. We paid West Indian sugar last year a concealed subsidy of 4s. 2½d. a cwt., which cost the working-class consumers of this country £1,750,000. That had no effect at all in reducing the price of the commodity to the consumer, but it had a directly deterrent effect upon employment in the refining industry of this country.
  The result of the preference given to West Indian sugar has been that an increasing proportion of sugar has been sent from the West Indies to this country for direct consumption and not for refining this country, so that the preference given to the West Indies in this particular matter is actually helping to create unemployment here. It is being argued that we should keep up this preference to help the industry in the West Indies, and give it a chance of getting into a better state of production. But since 1920 up to the present, although there have been slight fluctuations, the production of sugar in the West Indies has declined, taken over the whole period: and what this Budget and previous Budgets since 1920 do is to make grants, out of the pockets of the working-class consumers in this country, to bolster up inefficient methods of production in the West Indies. That is incontrovertible, especially if you accept the facts in relation to the production of sugar in Cuba.
  If the planters and growers in the West Indies would only put their house in order, and adopt the same methods that have been adopted in other centres of sugar production during the last 20 years, there would be no need to give them any help of that kind. I would ask the right hon. Gentleman to consider between now and the next Budget the
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  question of the unemployment created in the refining industry of this country. The preference given to West Indian sugar should never have been given to sugar intended for direct consumption. If there is to be preference given at all it should only be in respect of raw sugar, say sugar of a polarisation of 97 degrees or an analysis of 94 degrees, so that it would not directly interfere with employment in the refining industry in this country. The right hon. Gentleman should also consider the total repeal of the preference on home-produced beet sugar. The position is that in the case of the two factories at Kelham and Cantley you are giving a rebate which amounts to a subsidy of £25 13s. 4d. on every ton of sugar produced there. Yet not one penny of that goes to reduce the price to the consumer.
  Mr. HURD: It creates an industry.
  Mr. ALEXANDER: It may create a small amount of employment on the land and a small amount of employment in the factory, but for every worker employed in the industry there are probably two workers thrown out of employment elsewhere, by subsidising an industry of this character. Its position is almost similar to that of the sugar tariffs in America. The other day I was reading in the "New York World":
  "A million women of the United States of America to petition the President to exercise his prerogative to reduce the tariffs on sugar as being the only means of reducing the price to the American consumer."
  The editorial comment on that point the same day is:
  "The beet sugar interests"—
  that is, the sugar produced in America as against the Cuban imports—
  "are getting the prosperity they bargained for under the tariff, and if consumers are pinched by the higher cost of living, that is their look out."
  That is about all that the beet sugar interests in this country care for the interests of the general consumer. The right hon. Gentleman also omitted to reply to the point that the present price of sugar is affecting adversely employment in trades in which sugar plays a large part in manufacture. Right through the trades in which sugar is used there is an enormous amount of unemployment. I cannot help feeling that the Prime Minister has not given sufficient consideration to this point. Not only is it causing unem-

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  ployment in factories, but it is having a very serious effect in regard to fruit growers. If sugar cannot be obtained at a cheaper rate than that at which it is sold to-day, people using it in manufactures and people wanting to make jam are not going to supply anything like as good a market for the fruit growers of this country as we would desire. I would direct attention to a paragraph in the Report of the Linlithgow Committee on agricultural profits on that very point.
  Mr. HURD: That is almost all the more reason for creating a home industry.
  Mr. ALEXANDER: My hon. Friend knows my views on that point. He does not want me to say the same thing over again. On the general position we submit that the worker in the country generally has been very unfairly treated in this Budget, and that the case in regard to sugar is unanswerable. The Prime Minister, in introducing his Budget, said that he would very much like to reduce the tax upon sugar. When it was first introduced in 1901 a former very able Conservative Chancellor of the Exchequer (Sir Michael Hicks-Beach) said that it was very necessary that the labouring classes of the country should be taught through such a tax that they had to pay their share in proportion for the cost of war, and that it was necessary to teach the labouring classes that in the true interests of justice and economy. We have begun to take a different view in recent years in this country. It is not the labouring classes who have caused war during the last few decades, but the conflicting commercial interests in various countries. The Chancellor of the Exchequer who introduced this tax originally admitted by his statement that it pressed chiefly upon the labouring classes of the country.
  That is what is happening to-day. It is pressing upon them at a time when their standard of life and comfort has been reduced by economic pressure, such as has not been experienced by them for the last 50 years, and at a time when there has been a reduction of wages to the extent of £700,000,000 a year, and yet when we make a plain proposition for relief from the burden in that direction we get no satisfaction. While it is too late to remove the official hardheartedness of the Budget this year, I
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  do urge, having dealt with the direct taxpayer by taking off last year one-sixth of the Income Tax, and this time taking off half as much again, and by giving 50 per cent. reduction in the Corporation Profits Tax, that even if there is a Conservative Chancellor of the Exchequer next year he should deal with this matter in the next Budget to relieve the working-class consumers of this country, especially in view of the fact that in many ways the Conservative and the late Coalition Government have, by their policy, upheld the various interests in the country which have successfully endeavoured to reduce the standard of life and the wages of the workers generally.
  8.0 P.M.
  Mr. GOULD: I do not propose to follow the hon. Member who has just sat down with regard to the sugar question. I am not indebted very much to the right hon. Gentleman, inasmuch as he squashed my Amendments both in the Report and the Committee stage, but I am deeply grateful to him for the courtesy, kindness and consideration which he has shown to me and, I believe, also to many other Members of this House in discussing different matters which we considered of vital importance, and in explaining frankly why he was not able to accept our suggestions, Personally, I am deeply grateful to him, and not only to the right hon. Gentleman, but to the much-abused officials in the Inland Revenue Department, who have shown a great deal of consideration and kindness in making matters clear, and who, after all said and done, get very little consideration, although placed in a position of difficulty by the Acts passed by this House, and who do their duty very courteously and well.
  I would not have intervened in this Debate but for the fact that the hon. Member for Merthyr (Mr. Wallhead), speaking earlier in the evening, made a very bitter attack upon what may be termed the industrial class of the community. It almost seems to be a sin and a crime for an hon. Member to get up in this House and to deal with the industrial position. Day after day, on practically all topics, we are submitted to a diatribe and discourse on the other side of the House. We are told quite frankly that this Budget is a rich man's Budget, that everything has been done to make things

  535
  easy for the rich, and that not a single condition of the poor has been alleviated I do not believe the House or the country realises the position in which industry is placed to-day. The burden of taxation on industry is a serious one—far more serious than is realised by hon. Members opposite. For two years, many of the stable industries in this country—I am not referring to coal—have been more or less shut down. The shipbuilding trade for two years has been practically idle. The engineering trade has been brought nearly to the same position. I do not wish to be depressing, but, at the same time, there is very little prospect that the cotton industry is going to be faced with a period of prosperity in the coming winter.
  What is our position in industry? For two years we have been shut down. Last December we got started again. Things happened in Europe which upset the prospects and possibilities of reviving trade. We no sooner got started than we were compelled, practically, to close down Orders which were coming in ceased, and, in the meantime, suffering under the burden of the three years' average, we had to meet the claims of taxation, and pay out of what reserves we had to meet the demands of the Exchequer. Whatever business we undertook to get was simply business to keep the works going. In many cases we undertook to get the business in order to take the unemployed off the streets and to relieve the guardians of the necessity of paying these men, and we put back into industry hundreds of thousands of pounds which we could ill afford to risk. As a result, we find ourselves to-day placed in this position. We get no understanding and no sympathy from the other side of the House. We are held up as the people who are trading for profit, but I can assure the House, right here and now, that I am speaking for a number of big concerns, and I am prepared to put facts and figures before the House that we have undertaken contracts in two particular companies in which I am interested involving nearly one million pounds of expenditure, the bulk of which goes to labour, and there is not £5,000 profit involved in the whole transaction. The State is taxing those companies on the three years' average for an enormous sum of money. The amount which is
  536
  saved to the State by reason of the expenditure of that sum of money, and the employment of some thousands of men, is a very considerable item.
  Is it thought for one moment that the industrialists of this country are so immune from considerations of profit that they are prepared to go on for ever under such conditions risking capital not their own, but the savings of people entrusted to them in industry? The hon. Member for Merthyr made a speech which was excellent propaganda from the point of view of the party which he represents. I can imagine the hon. Member going down to Merthyr Tydvil and telling a mass meeting of miners the same kind of stuff he talked to the House to-day. When he referred to the shipping industry, I happened to be in the House, and I corrected him. Whatever profits we derive in the shipping industry—I have been some years in the House, and it has been anathema maranatha for any hon. Member to stand up and defend the shipping industry—I will say this as a shipowner: It was the shipping industry that saved this country in 1914, and it is to the shipping industry that we owe our position. [An HON. MEMBER: "And the men who took the risks!"] The men took the risks and were well paid, and are well paid to-day, and have had no trouble with their employers.
  Take the position of the shipping industry. We were under control. We received a rate which was fixed by the Government. It is true values appreciated, but whatever appreciation there was from 1914 to 1920, there has been a far greater depreciation of value since 1920, and a greater loss in operations than could have been realised as possible Hon. Members talk about Excess Profits Duty to take some of the profits of shipbuilders. What about an excess loss duty to compensate those who were forced by the Government to buy? No consideration has been given to them at all. There is an obsolescence allowance which has been given to the builders of new ships, but what the House does not realise is that frequently when a ship was lost which was insured under the Government scheme of War Risk Insurance, in most cases before the money was allowed to be collected by the shipowner, he was compelled to give an undertaking that he would build a new ship at the high prices then prevailing and the judgment of a great many shipowners in the country

  537
  was that they would not build until they were compelled. We were compelled and we did it. We can face trouble; we can handle our ships in competition with all the subsidised ships of the other nations of the world; and we do not ask for any help from this Government or any other Government. We can stand upon our own footing and face our difficulties.
  But I am compelled to think that the situation of the industries of this country is far more serious than is realised by this House. Thousands of companies in this country are placed to-day in a position where they could, had they sufficient capital, extend their resources and increase their business, but they are, unfortunately, hampered with large amounts of money due to the Government for Excess Profits Duty. It is hopeless for these companies to expect to be able to go to the banks to borrow money for the purposes of extension, if the banks know that at any moment there may be a demand for Excess Profits Duty arreas, or that the money borrowed from the bank is going to be utilised for the purpose of paying Excess Profits Duty arrears. Take the other side of the case. What possibility is there of any company so situated asking for further capital while they have saddled round their neck a large sum of money due for excess profits arrears? I have in my mind one particular company, with which I do not happen to be connected, but the facts have been given to me. It had £150,000 in liquid assets. It took orders for something like £300,000. It owed £160,000 in Excess Profits Duty. Demand was made upon the company for payment of the full sum. Under the Act of 1922, the Inland Revenue authorities have the right of deciding whether or not a company shall be entitled to take advantage of the five years' system of payment, or whether they shall pay up at once. I must confess they are very reasonable in dealing with the matter. That particular company was placed in this position. It had to decide whether or not it should pay the whole of its excess profits arrears, and should be without capital, or whether it should utilise that money for the purpose of benefiting industry and creating employment by carrying on its works.
  There are thousands of concerns in this country to-day in a similar position, and it is impossible, with the past two or
  538
  three years' record of trading companies who are harassed and burdened with duties of that kind, to expect that those companies are going to the public for additional capital. It is hopeless to think that with a bad record of profits, or no profits, the public will ever subscribe. I am not at all impressed, as some hon. Members opposite seem to be, by the over-subscription from time to time of gilt-edged issues. It is a very bad sign for the country and for industry when gilt-edged investments are the only things which are being picked up by the public. This country was not built up on guaranteed investments or debentures. The industry of this country was built up on the speculative energy and effort of the man who had a little to risk and stake. There is no money available to-day for the ordinary industrial security which has a speculative element, and just so long as we are in a position in this country when the burden of taxation is so heavy as to penalise the efforts of the speculative element in the community, just so long are you going to have a restriction of the development of industry and a continuance of the unemployment we have to-day. If there be one thing from which industry is suffering to-day, it is a lack of capital in industry, and from that more than any other cause is attributable unemployment. I know scores of cases where people are hampered from employing more men, because they cannot get sufficient money to extend their works, or pay their wages, or buy the material essential for the carrying on of their business.
  There is another point. Income Tax has been referred to by the hon. Member for Merthyr as something which seems to be peculiar to one particular section. He referred to the miners. I am not so certain that people getting under £150 a year pay any Income Tax; in fact, I do not think they do. Hon. Members opposite seem to think that big industries get the benefit of any reduction of Income Tax. I am connected with one company with a capital of 1½ millions. It has something like 3,000 shareholders. Hon. Members opposite can realise at once that the average shareholding is very small, and the more so when I say that, probably, four or five people hold from 50 per cent. to 60 per cent. of the capital of that company. Still, the benefits are

  539
  distributed irrespective of the size of the holding, and the big holders get no bigger benefit than the small holders. The hon. Member for Merthyr talked about the Income Tax benefits granted to companies. What is the real position? We are to-day in the unfortunate position that we have to get our additional capital out of our own resources. We cannot go to the public for it. It is only the reduction of national demands upon the companies that makes it possible for us to extend the scope of our industries and to create new avenues of employment. The economies of the Government, added to the economies which we can ourselves exercise, are the only hope which we have.
  The hon. Member for Bethnal Green (Mr. Harris), made a comparison between this country and France and said that, in France, there is no unemployment, and that there everybody seems to be working and having a happy time, with taxation very low. Why does not the hon. Member study his brief before he speaks? He knows as well as I do that we are balancing our Budget; that we are not meeting expenditure out of borrowings, but out of revenue. It is true that we are taxed heavily. Are the French people subject to the same ordeals as we are? Are the French people meeting expenditure by taxation? They are not; they are to-day meeting expenditure by borrowing.
  I noted that the Financial Secretary to the Treasury took credit for the position in which we find ourselves as a result of the great reduction of the Floating Debt. Apparently the right hon. Gentleman is a determined advocate of the policy of deflation. But when deflation is carried to extremes it is highly injurious to the whole trade of the country. In just over three years we have had a reduction of the Floating Debt from £1,500,000,000 to something like £800,000,000. The result is apparent. Inflation can be carried to an extreme which is ruinous to the country's credit, but deflation, on the other hand, can be equally injurious, and can have worse effects internally than inflation. I believe that the policy of the Government in attacking the disease too quickly has been most injurious to industry, has not in the least helped to solve the unemployment problem, and has had a very serious effect upon trade in this country.
  540
  I hope that the Government will not be so ready to take credit to themselves for having reduced the Floating Debt by such a large amount. I hope they will discontinue that policy and that they will have a certain amount of regard for the position of the country generally, by not increasing the Sinking Fund. We are faced with a very serious position during the next three years. The Financial Secretary said that we had three bad years to face for Income Tax. The average is to be very low. I do not wish to see a position created in which, in order to meet our expenditure during those three years, we have to increase taxation. That would have a very serious reflex action on industry generally.
  The hon. Member for Merthyr referred to the fact that a very large percentage of the National Debt interest went to people who certainly did nothing; it was unearned increment. Unearned increment is something which is very largely used as a means of getting a living. It is often deposited with banks as security, and it helps industry. It is called unearned increment because it apparently does not work, but it does work a good deal, as hon. Members would know if they had a real knowledge of industrial concerns. Hon. Members forget one fact. A demand was made by the Government in 1915–16 to holders of foreign securities to give up those securities for the benefit of the nation in order to help to maintain our financial position. The bulk of the money obtained from the sale of those securities was reinvested in National Bonds, in war securities. Suppose that these people had not given up their foreign securities. The rate of interest which would be paid to-day on a great many of the issues would be considerably more than 5 per cent., and the ultimate effect would have been that our credit would have been considerably disturbed, our purchasing power would have been very much less, and we should probably have been in the position of having to pay interest on another £1,000 millions.
  Hon. Members opposite are always prone to talk about the enormous amount of interest which has to be paid on the National Debt. Who got the money of the National Debt? The money was raised for a specific purpose—for carrying on the War. I do not think that I am far wrong in saying that 75 per cent. of it was distributed in wages to the working

  541
  people of this country. It is true that the money came easily and went easily, and we are suffering to-day from the easiness with which high wages could be obtained, and the ease with which money could be raised for War purposes. The money that went to the people of this country in wages was not taken care of; it was dissipated. The experience engendered, not only in the minds of the work people but of every section of the community, a careless disregard for the value of money from which all of us are suffering to-day.
  Mr. LINFIELD: Although I cannot support the Budget as a whole, yet I would like to add my testimony as to the excellent way in which the Financial Secretary has piloted the proposals. When he refused our demands he did so with so much sympathy that we were almost ashamed to have asked for anything, and when he made exceedingly small concessions he did so with such a magnificent gesture that we almost thought we were receiving millions. I think we are all agreed, however, as to the courtesy and ability of the right hon. Gentleman. I wish to offer a few words of commendation for some parts of the Budget. I differ entirely from the last speaker with regard to the Sinking Fund. I think it is one of the soundest parts of the Budget. The last speaker spoke as if it was simply a question of the rate of exchange, but, believe me, it is much more than that. It is not so very long ago since the £ in America was worth about 14s. and along with the reduction of debt which has been going on for some years past the £ has greatly appreciated in value. I do not know the exact amount of the improvement, but it is now nearly at par, and I think that is to the credit of the Government and I hope they will continue as far as they possibly can to make these capital debt reductions. A capital levy has been suggested on this side of the House. I do not think there is anything inherently bad in a capital levy merely because some people allow themselves to be frightened by the mention of the term, but personally I am not in favour of it at the moment. I was however exceedingly surprised when I was in a great industrial centre last week to hear a very large ironmaster express the opinion that he would much prefer a capital levy. I am used to hearing that
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  from the benches on this side of the House, but coming from a large iron-master it gave me furiously to think.
  Mr. RILEY: He is not the only one.
  Mr. LINFIELD: Possibly not, but he is the only one whom I have come across. Not so very long ago, however, there were those on the other side of the House who believed in a Capital Levy. If there had been a Capital Levy immediately after the War and if it had been brought in by hon. Members on the opposite side—even if it were brought in by the Government now—I still do not think it would be a very serious matter.
  Mr. DEPUTY-SPEAKER (Mr. James Hope): I should point out to the hon. Member that on the Third Reading of a Bill the discussion is strictly confined to what is in the Bill rather than what might possibly have been in the Bill.
  Mr. LINFIELD: I apologise, Sir, but I was simply following other speeches which have been made on this particular question. I do not know if I would be in order in giving an illustration, for sometimes one can say by way of illustration what one could not otherwise say while keeping strictly in order. This illustration may refer either to the Capital Levy or excessive taxation. The Plague was once accused of killing 100,000 people, and he said, "I only killed 10,000 and Fear killed the other 90,000." I think the Government are quite right with regard to the reduction of capital Debt, but I also think that in this Budget there is an unfair discrimination against the poor. I was exceedingly surprised to hear the Financial Secretary state that if he were to appeal to his constituency, as between beer and sugar, there would be a vote in favour of beer. I do not think I have ever heard an argument put on such a low level. Surely it is the duty of the Chancellor and of the Government to look at things from a higher level than that. I can imagine many question being put before the public in quite an undesirable and unworthy manner, and yet probably securing a majority. We have known it to happen at elections. I have heard hon. Members opposite accuse hon. Members on this side, and one right hon. Gentleman in particular, of offering 9d. for 4d. The Financial Secretary, however, is quite mistaken. If this question were put baldly before the people of this country,

  543
  and the men were asked whether they would prefer cheaper beer to cheaper tea or sugar, or any of the other necessaries of life, I have a better opinion of the men than the Financial Secretary seems to have as to the way they would vote. At all events, if I may speak for my own constituents, they had this question put before them, and I believe that all over the country, if it were a question between the beer of the men and the food of the women and children, the men's better nature would come to the front, and there would be no doubt whatever as to the result. I can imagine the right hon. Gentleman fighting his constituency on the question as between beer and sugar. I do not know the right hon. Gentleman's constituency, but if the question were put to the country at large, I should have no fear as to the result.
  In this Budget there has not been a fair discrimination. A very large sum has been given by way of relief of Income Tax. I think it was estimated at £26,000,000. A considerable sum has been granted in a reduction of the Beer Duty, and property has come under notice again in connection with the question of assessments. I do not think that is unfair. I think it is quite desirable, but I submit to the Government that they might, with good reason, have made a reduction in the cost of the necessaries of life to the people. I sometimes think we do not fully realise the stress and strain which the poor have to suffer. We hear a great deal about the million or million and a half men out of work, and I have every sympathy with them, but there is another very large class of the community which seems to have escaped notice. There are large numbers of people in this country, some of whom have been pensioned off by their employers and some of whom are living on the proceeds of very small properties—on a few cottages or a few houses. Their income has gone down and the cost of living has gone up. They have no trade unions to look after them and no organised vote, and the result is, I am afraid, that on all sides of the House they are absolutely neglected. They are a very large class. There is no means of numbering them, but I do not think I should be far wrong if I ventured to guess that they number two or three millions of people in this country, who perhaps before the War were fairly com-
  544
  fortable on very small incomes, but who now are living almost on the border line of want and privation. I am sorry the Financial Secretary to the Treasury is not here, but perhaps the Solicitor-General will convey to him that I do not think we ought to ignore that class of people altogether, and I think it is time that some Party took under their care this large number of people. My last word is this: I think one of the means of helping people of this class would be a reduction of the duties on food. The old idea of a free breakfast table was a very fine one. It cannot be brought about all at once, but I hope the Government will give some consideration to this very large class of people, and at a very early date endeavour to reduce the cost of living.
  Mr. D. HERBERT: The hon. Member for Mid Bedfordshire (Mr. Linfield) made some reference to what he called the question of beer versus sugar. May I point out that you cannot quite put it as clearly as that, that a reduction in the Beer Duty and a reduction in the Sugar Duty are things which can be exactly balanced, as if they were very much the same thing? I leave out the question as to whether a reduction in the duty on sugar would have reduced the price to the consumer at all, but may I point out, in justice to the moderate beer-drinking man, who has called so loudly and so long for a reduction in the Beer Duty, and consequently in the price of beer, that he does not drink more beer if the price is reduced.
  Mr. F. HALL: I doubt it.
  Mr. HERBERT: I suggest that a great many do not. I know a very large number of working men whose consumption of beer is as regular as the hour at which they get up in the morning. They do not drink for the sake of drinking. They drink because they regard their glass of beer with their meals as being, I will not say a necessity, but something very like it. What happens from the reduction in the duty on beer, and the reduction in the price of beer?
  Mr. F. HALL: Did the hon. Gentleman notice the question put down asking whether there had been any increase in the consumption of beer in the last two months?
  Mr. HERBERT: I am quite aware of that, and I am aware that the argument in favour of reduction always is that the increase in consumption will be enormous. It does not alter my argument in the least. I do not think the hon. Member will deny that there is a very large number of working men who drink the same quantity of beer pretty regularly, and are not likely to increase it. If he will concede that, the only point I want to make is that with those men it means that the expenditure of the household is reduced by reason of the reduction in the cost of beer, and, the duty on beer being so enormously high as it was, the particular class of man of whom I have been speaking did call for that reduction, first of all, because it was the one which was likely to make the biggest difference in his weekly expenditure. Therefore, for that reason, he and his family got more money to spend on other things. The hon. Member for Mid Bedfordshire, like the hon. Member for Merthyr (Mr. Wallhead) and several others, in the criticisms which they have made as to the way in which relief has been given in taxation, have failed to realise the indirect benefit which comes from reduction of taxation, even to those who are not directly concerned in paying the taxes which are levied. Take the suggestion that the lowering of the Income Tax is simply a boon to the rich. I think that is the most fallacious possible argument, under present circumstances, that could be put forward.
  It must be known to every hon. Member that all over the country there are businesses that are on the verge of having to shut down. The amount of capital which is at the present time unproductive, lying there and paying no dividend, is very large indeed, and the unemployment is large, while wages are not high. It is only by helping industry, and it is only by a relief of the main tax on profits, that is to say, Income Tax, that you can remedy that state of affairs. Never mind out of whose pocket it comes directly. It does not come out of pockets; it comes out of the results of industry, and if you reduce that burden on industry, you are bringing much more capital into active production, you are bringing many more businesses into being, you are improving employment, you are increasing industry, and you are
  546
  making it possible for more men to earn wages, and for those who do earn wages to earn higher wages.
  I do not want to waste too much of the short time left to me on compliments to the Chancellor of the Exchequer and the Financial Secretary, which have been paid by persons from whom they will be of much more value than coming from me, but if my right hon. Friend the Financial Secretary to the Treasury had been here I should have been glad—and I have no doubt the Solicitor-General will report it to him—to express my gratification that a member of the profession to which he and I both have the honour to belong should have been such a great success in his office, and should have achieved a success which, I believe, is due, not only to his own tact and good nature, but also to the training and experience which that profession has given him.
  Sir WILFRID SUGDEN: Question! In spite of it!
  Mr. HERBERT: Having said that, may I ask the Solicitor-General also to pass on to the Financial Secretary to the Treasury a suggestion which I want to make? I hope that even high promotion will not take him out of his present place until the next Budget is through, because I think that he can do a very great deal for us. If he has a chance next year, I want him, in preparing or in assisting to prepare that Budget, to try to keep a few millions in hand in order to get rid of some of those inequalities and harassing incidences of taxation which cause far more irritation than the amount which is at stake. There was one, I think, the other evening. Having been obliged to refuse the Amendment moved by the hon. and learned Member for South West Hull (Mr. Entwistle) in regard to the Estate Duty, when I put in a word after he had declined, the right hon. Gentleman was good enough to assent to my request and to say that he would see if he could do what was asked next year. That is only a specimen of, I should think, 20 cases of hardship and anomalies in the taxing Acts which he must know, from his own experience as a lawyer, as well as I do, cause an amount of irritation and general abuse of the Government which is far in excess of, and far out of

  547
  proportion to, the amount of money involved.
  When we do put down these Amendments—and those of us who support the Government do not like to put down too many—we know that really we cannot press them when the time comes, because the Budget has been prepared on certain lines. Though our suggestions may not cost a lot, yet everyone costs a little, and when a number are put together it means that they really cannot be given. What I do hope is that my right hon. Friend the Financial Secretary will remain in his present position till next Budget. [HON. MEMBERS: "As Chancellor of the Exchequer?"] Yes, or at all events where he is now. I am sure he will be only too glad to get rid of, if only he can do it, some of the things we have mentioned. If he has only some time to consider the matter and time in which to get a little money in hand.
  Mr. RILEY: I want to draw attention to the allocation of the relief which is given by this Finance Bill. It is iniquitous, and when I use that term I do not underestimate, I hope, the patience and geniality which have been displayed by the right hon. Gentleman the Financial Secretary in the conduct of the Bill. I am not unmindful of the carefulness and, I think, the wisdom which has been displayed by the Chancellor in at least making a beginning in some of these matters. When, however, an allocation of this kind is taking place, one should have in mind the burden of taxation borne by the various sections of the community. What are the simple facts of the case? I want to enforce the argument put forward so forcibly this afternoon by the hon. Member for Keighley (Mr. Lees-Smith) as to the incidence of taxation upon the great mass of the community. No one on the other side has attempted to meet the arguments put forward by my hon. Friend—
  Mr. WISE: Oh, yes, the hon. Member for Farnham (Mr. A. M. Samuel).
  Mr. RILEY: That may be, but there did not seem to be too much eagerness to meet the arguments of my hon. Friend. However, what are the broad facts of the case? Under this Bill the relief given to the community in reduction is approxi-
  548
  mately £54,000,000. Of this amount £16,000,000 goes in the cheapening of beer. I would sooner have it on tea, sugar, coffee, and so on. One million five hundred thousand goes to the relief of owners of real property. The 6d. reduction on the Income Tax accounts for £26,000,000, whilst £12,000,000 is utilised in connection with the Corporation Profits Tax. Approximately, then, £38,000,000 goes to the business people. We have in Great Britain about 45,000,000 people. This Bill is supposed to provide for the interests of 45,000,000 people. Yet apart from the £16,000,000 which goes in the reduction of the cost of beer, there are 42,000,000 people out of the 45,000,000 people who receive no benefit whatever. The whole of the £38,000,000 goes to 2,500,000 of the population. I say a Finance Bill of that character is scandalous and disgraceful. Let me pursue that a step further. In addition to the 2,500,000 people relieved by the reduction of the Income Tax there are 80,000 Super-tax payers who get £150 each by way of relief.
  Major CADOGAN: How much do the 2,500,000 contribute to the revenue?
  Mr. RILEY: Whatever these 2½ million people may contribute is made by the 42,000,000 workers. There are 80,000, as I say, who get £150 each, while those who enjoy incomes of over £5,000 a year receive £300. The whole of the remainder benefit to the extent of £2 per head. Side by side with that there is this: That of the 45,000,000 people there are to-day over 1,000,000 unemployed. The majority of these, men with their wives and families, have for the last two years been subjected to falling wages, rising rents, and unemployment pay. Thousands and thousands of married people to-day are living on the dole of £1 per week. If there are four or five children they get a few shillings more, and yet every day these same poor people have to pay all this extra taxation on such articles as sugar. The tax on sugar is 2¾d per lb. which is 11 times more than it was before the War. In one family of six or seven persons no less than 1s. 3d. or 1s. 6d. per week is contributed by that family in taxation on sugar. In face of an instance like that, we are quite justified in saying that a Bill of this character is iniquitous and disgraceful.

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  Last year the same thing happened. The hon. Gentleman who spoke last made the statement that 42,500,000 people in this country got nothing directly from this Bill. It is argued that it comes back to them indirectly. [HON. MEMBERS: "Hear, hear!"] Hon. Members opposite confirm that argument, but I suggest that we would rather have it first hand and not second hand, and spend it in promoting trade by a large spending power on the part of the working classes.
  9.0 P.M.
  Let me meet that argument. It has been said on several occasions in the course of the Debate on this Bill, on the authority of Dr. Stamp, an ex-Government official, that at the outside not more than 2½d. out of every 1s. which goes in relief to the Income Tax payer comes back into industrial undertakings. I ask hon. Members to visualise tens of thousands, nay millions, of British people who for two years now have been subject to falling wages, rising rents, and unemployment, and yet the housewife is faced with taxation upon such articles as sugar, tea, coffee, and cocoa. Even if a boy buys 20 Player's cigarettes, out of 11½d. paid for them 6½d. goes in taxation. Last year, when this matter was being discussed on the Budget introduced by the right hon. Gentleman the Member for Hillhead (Sir R. Horne), and 1s. was being taken off the Income Tax, the very same week a well-known case came before the Courts of Law. It is the case of a well-known British musical composer who as an artist and creator of fine musical operas has a great reputation. When the case came before the Judge it was stated on behalf of the composer that the creditors need have no fear about being paid because under his father's will this composer would enjoy an income of £100,000 a year. The right hon. Gentleman the Member for Hillhead, who was then Chancellor of Exchequer, the very week that statement was made, altered the Income Tax in a way that that particular individual got £5,000 taken off his Income Tax. He was not the owner of a coal mine, or any industrial undertaking, but simply an artist employed in composing musical operas, and in that case how much of that £5,000 comes back to industry? You have £5,000 allowed in this case, but there is nothing allowed for the struggling housewife. Even this year that same individual gets
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  another £2,500 under this Bill. For these reasons I submit that this Bill is entirely iniquitous. May I suggest to the Minister in charge of this Bill that he will press upon his colleagues to have no more Budgets of this kind.
  Last night a very striking phrase came from the right hon. Gentleman the Financial Secretary with regard to the registration of the sale of land Clause, in which he said that the present policy of the country on this question loaded the dice against the subject. What is this Finance Bill doing? Is it not loading the dice against the mother in the home and the child who requires adequate food? Yes, it is loading the dice ten times over. I hope this Budget we are now considering, which follows the lines of last year, is going to be the last Budget which ignores the claims of 43,000,000 people. If we on these benches had in view only our own interests as a party, we should say, "Go on with these Budgets, because they will win scores of seats to us at the next election." The Budget of last year gave us tens of thousands of votes, but we do not want to win seats at the expense of the poor people, and I hope this is the last of these wicked and iniquitous Budgets.
  Sir SYDNEY RUSSELL-WELLS: A well-known writer once besought us to free our minds from cant, and I cannot help thinking that it is a thousand pities that that was not borne in mind by some of those who have intervened in this Debate. We have heard from those benches a great outpouring of indignation because, we are told, it is a rich man's Budget. We have heard also of the extreme iniquity of taxing sugar and tea, and also of the iniquity of the man who drinks beer. Let us examine those statements in the light of cold facts. Tea undoubtedly is an article of inestimable benefit to men and women, and it is argued that it should never be taxed because it is a food. On the other hand, it is said that beer is not a food. What are the real facts? Tea is a pure drug without the slightest food value of any sort or character. It is a drug, pure and simple. Beer on the other hand, while it contains alcohol, also contains food, and the amount of nutriment in a glass of beer is very considerable. It is not in the alcohol, but it is in the other substances of which the beer is composed.

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  The man who drinks a cup of tea is taking a drug pure and simple. The man who drinks a glass of beer, while he is taking something which stimulates him, is also taking food. It is pure cant to say that the man who drinks beer is not a fit and proper member of society. Do not let us put up the tea drinker as a virtuous person and a man who drinks beer in moderation as a reprobate.
  Then I come to sugar. It is said it is extremely iniquitious to tax sugar, and when hon. Members speak of those who have to pay the Sugar Tax we hear a great deal about the struggling widow, the unemployed workman, and the poor woman with three or four children to support. We know all about them, but sugar is not a necessary in any sense. There were many centuries when no sugar was eaten in this country at all. The people depended upon bread, which contains starch that in process of digestion becomes sugar. Sugar is undoubtedly nourishing, but the number of calories in a gramme of sugar is not as great as the number in a gramme of starch. Money spent on buying sugar even at the old price of 2¾d. a lb. does not produce so much nutriment as would be obtained if the money were spent on wheat. Sugar is a luxury which all classes of the community consume.
  We are told that all taxation ought to be direct. It is also said that everything should be put on the back of the Income Tax payer. If everybody paid Income Tax, if everyone who earned a single penny had to contribute a farthing of it to the State, then I would agree that it would be perfectly fair to put the whole burden on the Income Tax payer and to abolish indirect taxation. But what would happen to anyone who proposed to tax everybody? What would happen if a man who earned £1 a week found outside the pay office a tax collector who demanded of him 5s.? The State has to have money, the services of the State have to be paid for, tax collectors have to be employed, and it is only right and proper that every member of the community should pay something towards the support of the State, unless he is in the workhouse and an absolute pauper. It seems to be assumed that those who pay Income Tax pay no indirect taxation. But everybody who pays Income Tax in this
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  country also eats sugar, and consequently has to pay the Sugar Duty. If a man has a much larger income, what does he do? Does anybody spend all his income on himself? The man with the larger income employs servants. He has to buy more sugar for his household, and therefore he pays more Sugar Tax. A person with a wife and two children to maintain consumes so much sugar. The man a little better off with a wife and two children usually employs a servant, and therefore more sugar is consumed in his house. Consequently, indirect taxes are paid by the Income Tax payer just as much as by the man who pays no Income Tax. Indirect taxation is the only way of taxing those who do not pay Income Tax, and it is right and proper that they should be thus taxed.
  Everything should be done, we are told, for the working classes. I firmly believe that those classes do not desire to be designated in the way they are designated by hon. Members opposite. I do not, for one moment, believe that the average workman or mechanic lacks so much self respect that he does not want to contribute anything to the State. During the War a placard appeared in public houses which I am absolutely convinced really expressed the opinion of many men. It represented a man with a tankard of beer in his hand, and a German soldier approaching, and it bore the inscription, "This is what makes my beer a penny more." During the War, when they were paying more for their beer, men believed that they were contributing their pennies towards fighting the enemy. They felt, therefore, that they were doing something for their country. It may be said they ought to have been more high-minded and to have said, "No, our beer costs us more, the Government is making money out of our vices, we will be more exalted and more high-minded, and will forswear beer." There was no necessity for them to take up that position. They were making their contribution towards the expenses of the State in a way which made it easier to bear the burden than it would have been by direct taxation.
  Mr. LEE: Does the hon. Member recollect the advice of the King?
  Sir S. RUSSELL-WELLS: I remember this, that the King advised people not to get drunk, that no one should drink to excess.
  Mr. DEPUTY-SPEAKER: There is an ancient Rule of the House that opinions expressed by His Majesty should not be referred to in Debate.
  Sir S. RUSSELL-WELLS: I was just going to point that out, Sir. We have been told that this Budget does nothing to relieve the sufferings of a large class of people, and that, therefore, it is utterly iniquitous. We have been told that the Budget, in some way or another, I do not know how, ought to find more by way of doles, that it ought to find something for the unemployed. I do not profess to be an old Parliamentary hand. I am a very new Member of this House, but I was always under the impression that the Budget was a method, not of finding doles, but of raising money to meet expenditure which had been decided upon, and I cannot conceive how any Budget could possibly be used to find doles for the unemployed or to improve the lot of those who have no work. The business of the Budget is to get money for the State, and to get it in such a way that it inflicts the least hardship on the community as a whole—not in a way that inflicts the least hardship on any particular class. Personally, I cannot understand why, in this Chamber, we should talk about classes, except in so far as those classes build up the whole nation. I have heard, I regret to say, since I have been in this House, the term "people" used as if it meant a particular class. I, personally, claim to be just as much one of the people as any other Member of this House, and I claim that my fellow-Members on these benches are just as much Members of the people, and also that they are just as much the elected Members of the people. I cannot see, at the present time, why we want to use the word "people," considering that we are the only persons who have the right to claim to represent the people.
  To come back to the question of the Budget and the taxes, the object is to raise money, and, consequently, when the Chancellor of the Exchequer is able to remit some taxation, because his previous Budget has provided more money than he wants, it is no good lessening taxes in the case of those who pay none. You must, when you are going to remit taxation, remit the burden from someone who bears it. A certain hon. Member
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  said that this Budget ought to do something for those who are unemployed and are drawing the dole, but those are the people who are practically paying no taxes at all. How can you remit to a man that which he has not given? You cannot take burdens from people who have not those burdens to bear. When you are going to remit burdens, the proper way to do it is to see on what people's shoulders they now are, and to take off so much indirect taxation and so much direct taxation in fair proportions. You have to see how much money you are raising from direct taxation and how much from indirect. If you find that you are raising two-thirds of the revenue from direct taxation and one-third from indirect, the only just way, if you have, say, £30,000,000 to distribute, is to take off £20,000,000 from the direct taxpayer and £10,000,000 from the indirect taxpayer. You ought to take off the burden in the proportion in which the burden is borne.
  I have been told that this Budget is iniquitous because so much taxation is taken off the Income Tax payers, who only number 2,500,000 people in this country, and that, therefore it is the rich and well-to-do who are favoured by this Budget. But when one comes to look at how the revenue of this country is derived, one finds that those 2,500,000 people have been bearing the burden, and you must take off the burden from the donkey that is loaded, and not from the donkey that has no pack on its back. Again, a most lurid tale was told about a certain gentleman who was said to be a great composer—I do not know who he is—who went through the Bankruptcy Court and had much money; and we are told that what the Chancellor of the Exchequer has done has been to relieve this gentleman of some of his taxes. I am told that he will ultimately have an annual income of £100,000, and he is held up to us as a typical Income Tax payer. That is absolute cant. That is not the typical Income Tax payer of this country. Of the 2,500,000 Income Tax payers, many are members of my own profession. Many of them feel the pinch as I do, and one of the most horrible days in the year for them is the day when they have to scrape together the money to pay their Income Tax. The struggling professional man constitutes a large proportion of the people of this country, and to say that he

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  requires no relief, to say that he is not as deserving of some assistance as the unemployed, is not true. Those are men who have borne the heat of the day. During the War—
  Mr. RILEY: I did not say that he was entitled to no relief, but that he was not entitled to all of it.
  Sir S. RUSSELL-WELLS: If he is not entitled to 6d. in 5s., who is? There are thousands of poor widows who are living on small incomes, from which they have regularly to pay so much in tax. There are dozens of such people whom I know. I will give a case that I am thinking of, that of a man and his wife who were schoolmaster and schoolmistress, who slaved and saved for years, who married late in life, and ultimately retired when they were not fit to do any more work. They invested their savings in a few houses, and on those few houses they had to live. Income Tax and Property Tax weigh very heavily upon them, and any relief that can be given them to enable them to live above the limit of starvation is a very real relief. The Income Tax payers who do not need this relief are very few. No doubt their fortunes are large, but their numbers are very small, and these Income Tax payers to whom I have specially referred are thoroughly entitled to relief as much as any class of the community. It is, surely, fair that those who have contributed the bulk of the taxation, who have borne the bulk of the burden, should have the bulk of the relief, provided that it is given in fair proportion. I maintain that the Chancellor of the Exchequer has struck a very fair proportion between direct and indirect taxation, and has produced a Budget which is just and statesmanlike, which does remove some of the burdens from those who need relief, and which is just not only to those who are in existence now, but also to the generations to come.
  Mr. A. J. BENNETT: I will ask the House to bear with me for a few minutes, and, incidentally, I am glad to see that there are so few Members who have to bear with me, because, apart from the fact that I have no claims to eloquence, the subject with which I propose to deal is rather a technical and I think rather a dull one. I regret the absence of the Chancellor of the Exchequer and of the Financial Secretary, because, while, as I
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  have said, the subject I am dealing with may be a dull one, it is of considerable importance. I refer to the question of double taxation. An hon. Member just touched upon it in a very able speech this afternoon, and I should like to take the matter a little further. I would suggest to the Chancellor of the Exchequer the advisability of appointing an expert committee to go into the whole question of double taxation, and especially with a view to reporting on the advisability of abating Income Tax on incomes derived from British securities or British companies of any description by persons who are not British residents. It may come as a shock to a great many hon. Members that, at a time like this, when the inhabitants of this country are groaning under the burden of excessive taxation, an hon. Member should suggest that relief should be given to the foreigner. If I thought the suggestion I am making would in any way add to the burden of the British Income Tax payer I should be the very last to advocate it, but my own belief is that it would have the opposite effect.
  When we are considering this subject we ought to dismiss any views we may have had previous to the War. At that time, the situation was very different. Vast sums of foreign capital were invested in this country in all forms of British investments. It is quite true that Income Tax was paid on the income arising from those investments, but in those palmy days the Income Tax was a comparatively small one. I was a foreign resident in those days, and I can speak from personal experience. It was well worth my while to pay British Income Tax in order to get the advantage of the stability of British investments and of having my money in companies that were managed and controlled from London. That situation has entirely changed. What it is to-day, I really do not know. In common with hon. Members who have had large business experience, I should be afraid to dogmatise on questions of finance without a full knowledge of my facts, and I admit, quite honestly, that I have not the information that would enable me really to judge of the amount of foreign capital invested in this country to-day. My commonsense tells me, however, that the amount of capital invested permanently in British companies—I

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  make a distinction there between permanent investments and the ordinary floating balance which foreign banks, for their own purposes, keep in this country—must be small.
  After all, what is the situation? Any foreigner or any British resident who lives abroad, and invests in this country, knows that he has to pay 5s., or 4s. 6d. in the £ on any income derived from his investments here. If my premises be correct, it follows that in adopting the suggestion of remitting this taxation, the Chancellor of the Exchequer would not lose any considerable benefit, which he gets to-day. In other words, I do not believe that the Exchequer is getting a large revenue from this source. I admit that if this taxation were remitted, it would have to be in the form of a rebate and, as hon. Members know, that would undoubtedly increase the cost of administration. It would be difficult and expensive, undoubtedly, to go into the large number of claims, but the remission would be an advantage, because it would mean that more foreign capital would come into this country. If the Committee were appointed, I believe the result of an investigation would be to prove that, as things are to-day, the Exchequer gets very little revenue. There is not the slightest doubt, on the other hand, that the trade of this country suffers very gravely from this taxation. Every business man who is a Member of the House will agree that it is an advantage for us to facilitate the influx of foreign capital into this country and that it is bound to help our trade.
  I want to refer to one or two indirect evils which, perhaps, are not so apparent. First of all, there is the fact that, on account of Income Tax being levied on foreign investments in this country, the management of British companies is being taken away from this country, to the country abroad, where the industry is carried on. By so doing Foreign Investors can grade the Tax; its is one of the anomalies our Income Tax Law. I always believe in trying to particularise, especially in regard to something which I know of from personal experience. Take the nitrate of soda industry, in Chile. When I first knew it, it was quite the exception for any of the
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  nitrate companies to be controlled in Chile; they almost always came for their money to this country, and the companies were British companies. The nitrate of soda industry being the staple industry of Chile, the Chileans have latterly invested heavily in it. The result has been that they have acquired control of many of the British companies, and they take away the management to Chile, in order to avoid British Income Tax. In other words, the British Exchequer gets nothing from them. What is the result, as regards British trade? It is quite obvious that when companies are managed and controlled in this country there is a perfectly natural tendency to try to purchase all their requirements in this country. I know, from personal experience, that that no longer applies, when the management is centred in other countries.
  There is another curious effect of this double taxation, that is that it prejudices British investors in foreign countries. At first sight it is not quite apparent, but may I explain, again from personal experience, how it works. Large sums of money have been and continue to be raised in this country for the development, shall we say, of foreign railways. The effect of taxing foreign investors in those companies on the dividend derived from them is that no foreign investor will invest in those securities. Take, for instance, Argentine railways. Vast sums of money have been invested by this country in them. The effect of this taxation is this. Whereas if that taxation did not exist British Argentine Railway Companies' shares would be a favourite invesment for Argentines themselves, as it is to-day practically no Argentine invests in them and the British investor has no local backing at all when there is trouble over say tariffs. That is a serious consideration. When I heard what is happening as regards the Ottoman railways, I could not help thinking that was probably partly the effect of this double taxation. I do not know that I want to argue the point any further, because I am quite convinced that the Prime Minister is as fully alive to its importance as I am.
  I should like to suggest that if the right hon. Gentleman considers it worth while to appoint a Committee to investi-

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  gate the subject of double taxation he might include in the terms of reference the question of the Stamp Duty on foreign loans. It is a subject I have brought forward before. Judging from my own feelings, if there is one prayer the whole House would endorse it would be to be spared on the Third Reading of a Bill the arguments that were used on all the previous stages, but I again ask the right hon. Gentleman to consider the matter. I believe more or less the same arguments apply, though perhaps not to the same extent, to that high Stamp Duty as I have used as regards double taxation. To-day by this 2 per cent. Stamp Duty on foreign loans we are undoubtedly making it far easier for America and other countries to take those loans from us. Anyone who has listened to the Debates on this Bill must realise that the whole question of domestic taxation wants to be revised but domestic taxation, after all, is merely a question of one pocket or another—e.g., which taxpayer in this country is best able to bear the burden. If therefore it is the case that domestic taxation requires modernising, if I may use the word, it is far more necessary as regards taxation that affects foreigners because that, after all involves direct prejudice to the trade of this country. I strongly urge that the time has come when the whole question of double taxation should be taken in hand. We have in this country the greatest experts in finance to be found anywhere in the world, and they might be called in to help the Treasury in deciding on a proper policy.
  Sir WILFRID SUGDEN: There is one phase which has not been touched upon in the Debate, and that is the relationship of the Allies in respect to our taxation, as well also as that of the Dominions. To my mind, both those phases are very important ones. When one considers in respect of our Allies that sums are owing to us, for example, from France of £601,000,000, from Italy £527,000,000, and from lesser States a sum of £96,000,000, and I suppose we may presume these to be good debts—Russia I would not care to put into the same category, but considering these former to be good debts, it appears to me a most important consideration by the Prime Minister as to
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  how these Allies are at present conducting themselves in regard to the interests of this country by their own Budgets and tax proposals as also how they are to repay us such loans. It is a serious consideration in what way this House on all sides shall strengthen the hands of the Prime Minister in the very delicate negotiations that he is conducting with these Allies. I join hands with the hon. Member who deprecated the right of any part of this House to earmark for itself the representation of the "toiling masses." The whole of the House represents the great industrial nation and the whole of the House can speak in respect to the industrials. It is a most important factor and I hope the Prime Minister will utilise the power he possesses (for he has the backing of the country) and also the power the bankers possess in respect to this matter to impress this need of the stabilising influence of the British power of finance in relation to help we give Allies and which calls for a quid pro quo of early repayment of moneys owing by the Allies to this country. We are presently to have an Imperial Conference in which there will be reviewed questions of trade, policy and the relationship between the Mother Country and the Dominions. I think it is a proper consideration that there should be put before the daughter nations of the British Commonwealth the essential necessity, and the picture should be vitalised before them as to the handicap and the hardship of the heavy burden of taxation which the industrial classes are silently bearing and which these children of the daughter nations could further help us to carry as splendidly and well as they helped to carry the burden during the War days. I suggest that there should be representations made at the Imperial Conference, by the Prime Minister and those who are associated with him in the representation of this country, that the daughter nations, who are indebted to us to the extent of £148,000,000, should bear something more of the cost of Imperial and defensive services than they do at the present time.
  Speaking on smaller issues, I would like to plead with the Chancellor of Exchequer for some little consideration in respect of time to pay the taxes which are properly levied upon industry. Take the great cotton industry, which is the largest ex-

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  porting industry in the country, and provides a form and method of equalising the exchange which is not equalled by any other industry in the country. It has been suggested from certain sections opposite that in 1920 and 1921 very large profits were made in the cotton industry. I am prepared to admit that, but I want to bring to the mind of every section of the House the fact that the whole of those profits were put back again into the industry, in order to expand it and to provide reserve funds for dealing with the cost of machinery and material which had doubled itself in some cases, and in other cases had almost trebled themselves. To-day, with the fierce type of competition that prevails in Japan and India with cheap and sweated labour particularly, it would be interesting for hon. Members to study the silent heroism of the workers in the cotton and textile factories of this country. Let it be remembered that the textile trades of this country are organised mainly into limited liability companies, and the majority of the shareholders are employés in the factories. They are sacrificing needs and necessities in order to pay His Majesty's taxes.
  Therefore I suggest that if the Chancellor of the Exchequer finds that he has certain surpluses which in the last Budget were put to the Sinking Fund, and which it is more than probable will occur in this year's Budget, he will bear in mind the need of giving some little extra time more than is allowed by statutory powers at the present time to enable the taxes to be paid in the cotton and textile trades. May I plead in that event for some cancellation of a portion of the taxes? By doing so, he will confer a boon upon those trades in the difficult times through which they are passing, and will help in the under-employment and unemployment now so prevalent in the cotton trade. We do not want to escape any of the burdens which any other trades are carrying, but we do require time in regard to this matter of the payment of taxes. If he can meet us in this matter he will certainly help Lancashire. This Government has already helped Lancashire liberally, in connection with the cotton levy, by accepting the Cotton Industry Bill as a Government Measure and giving facilities for passing it into law. They have helped Lancashire in respect
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  of loans in the Sudan and Egypt, and I now earnestly appeal that they should give some assistance in the way I have indicated.
  Lastly, the international position has a definite bearing upon taxation in this country. Take, for example, sugar. We know distinctly that it is impossible, even if the Prime Minister were to make the special concession that he desires to do, to reduce the price of sugar to the consumer, this by reason of the international control of that article. There, again some good and useful purpose might be served if the Chancellories of Europe and the Finance Minister of the United States, and the international bankers, would see that this staple article of the people's food should not be permitted to be the shuttlecock of speculation by certain illegitimate and improper international speculators. I could instance other items of an international character which directly affect our taxes. The Prime Minister knows, however, that there are other means of dealing with the question of international finance. An example, there is the question of the cost of money. If we support the Prime Minister in regard to this Budget—a brave and sensible Budget—if we support him in regard to his efforts as to stabilising on international relationships, and his efforts which will be made by him with our Allies in regard to the money they owe us, in presenting the proper viewpoint to our children of the Commonwealths overseas, we shall be doing much to make this Budget and the one next year much more equitable and better able to be borne by the working classes of this country.
  Mr. SCRYMGEOUR: I want to emphatically protest against certain features of this Budget. Reference was made by one speaker opposite that the Budget was a scheme for raising money and not a method of giving relief. While I frankly admit that such is the position, I am not going to forget that we once had in Scotland, at any rate, a basis of taxation known colloquially as means and subsistence. That is the one solid, straightforward basis upon which you can do something like justice to the general body of toilers. We cannot at the present time go about without realising, because we see it all around us—we have

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  seen it to-night and all this week on the Terrace of this House—how much there is of the flaunting of wealth and the lavish display of wealth, while, on the other hand, there are those people who have need for what has been termed the dole. If we had not given them what is called the dole, I believe we should have had to face a revolution. Hon. Members opposite, surely, are not going to tell us that the multitude of earnest, anxious men and women who are seeking to secure the opportunity of earning a livelihood are receiving justice, when the financial powers that hon. Members opposite represent are the powers which dictate to the men who sit upon the Front Bench.
  Reference has been made to the shipping business. Hon. Members will remember that the late Prime Minister, the right hon. Member for the Central Division of Glasgow (Mr. Bonar Law), said some years ago that the wealth that was coming in upon him from the ships of which he was a part owner was beyond his calculation.
  Sir WILLIAM RAEBURN: He would not say so now.
  Mr. SCRYMGEOUR: You cannot have it all the time. Another hon. Member told us of the beauty of our system, and the stupendous depth of brain-power that lay behind it. He said, "Suppose you had a thousand million golden sovereigns and handed them over to the Chancellor of the Exchequer, if you were to discharge the debts of this country you would make every man and woman in this country bankrupt." If that is the position, then I should say that the successors of Gilbert and Sullivan have a splendid opportunity of making a new opera. It is most instructive to follow the deliberations, one point after another. Another hon. Member gives a disquisition on his studies regarding beer as compared with tea, and seems to arrive at the conclusion that beer is very much better, which leads us to the conclusion that he sticks to beer more than he does to tea. But we understand that we are not imposing taxation on beer simply because it is a luxury. We realise the difficulties that are linked up with the licensing system. On the question of tea no man will dare to say that a comparison between drinking tea, as
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  a legitimate commodity, as a reasonable provision on the breakfast table, and the results arising therefrom have any relationship to the appalling results which arise from the consumption of beer.
  Captain A. EVANS: Not in moderation.
  Mr. SCRYMGEOUR: When they talk of moderation, it is understood that no man takes beer with the intention of becoming a drunkard, and those who do start are not confined to the poor or middle class, but they include also the aristocrats, and gradually it gains a power of creating a craving for itself until men in different sections of society go down and go under. But on the question of taxation it is sometimes suggested that beer is a legitimate commodity; in fact an essential. Some hon. Gentlemen make the suggestion that it is a food element, though sometimes when you take it you have to obtain sandwiches or something else with it to furnish evidence that there is food accompanying it. But if you take it in the ordinary way as something that is essential, why impose that heavy burden of taxation on a thing which is considered essential for the general body of the public? Why submit people to this hardship?
  10.0 P. M.
  The Financial Secretary to the Treasury suggested that if you put it to the general body of the people to-day the majority would vote for a reduction on beer rather than a reduction on something which is a reasonable provision as a foodstuff. You can hear little or nothing, so far as Scotland is concerned, at a General Election meeting about the reduction of taxation on beer, but you can hear, and do hear, the more so now that you have this vast body of women electors—and I think perhaps that this, would apply as much to England as to Scotland, if not more so—that if you do make a reduction in the tax on beer the man is not going to hand over the difference to the housewife, but instead of doing so will take more beer for himself than he took before the reduction. But when you propose a reduction on tea and sugar you have protest from that side of the House regarding those factors. If you go on to tobacco and then come to the Entertainment Tax, and put them all together, are not these simple requisites an additional provision for amusement? You could not get a

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  representative of the Government to concede anything pertaining to that large body of people who go to the cinemas to get some little relaxation and improvement after their exhausting toil of the day. You could not get the Government to entertain the idea of relieving to some extent the charges which they impose upon those poor people who are struggling to find a little entertainment in the evening, but they give, on the other hand, consideration to the man who if he is, as he says, taxed heavily is able to pay. Any man will pay readily if he is able. I would be delighted to make a handsome contribution to the Government if they give me the same income as some of those people. If you are wallowing in money you do not think anything about handing it out, like the man in the street who hands 1d. to a blind man and does not think anything about it. If you are going to try to deal under the present system with those people whom, in a specific sense, we represent on this side of the House—I grant that you have many work-a-day people voting for representatives on the other side, bra the influences that have been brought to bear on them with Press agencies and other means are very strong, and—
  Major CADOGAN: What about yours?
  Mr. SCRYMGEOUR: That is not so effective, but you have these influences brought to bear on people. You get them swept away. It may be by the idea of the Union Jack or some patriotic conception—you know all the clap-trap that you fellows indulge in. There is no good in trying to forget it when you come here.
  Mr. SPEAKER: I have missed all those remarks. The hon. Member should address the Chair.
  Mr. SCRYMGEOUR: I will endeavour now to keep more to the point. Whether you agree or not, earnest appeals have been made on almost every phase of this subject, and, speaking for myself—and, not being a Member of the Labour party, I think I can speak without prejudice in that respect—Member after Member on this side has shown a capacity for handling particular phases of the subject. It has been a most creditable piece of work. Yet only the most slender response has been made from the Government side. In fact, even a little divergence on the Entertainments Duty arose from the other
  566
  side. It is very hard that, when you have a body of men, whom you are inclined to criticise very strongly on the ground that they are extremists, and so on, carefully and calmly reasoning out their case, and pointing out injustices, no response should be made to their appeals. You cannot dispute that they have a special relationship and association with the workers, and a special experience of all the various subjects with which they deal. Those in the country to-day who are watching those developments cannot but be impressed.
  I, at any rate, feel very deeply about this, and will certainly convey it on every opportunity I have elsewhere. I do not quarrel with the courtesy of the Financial Secretary, and I say that, generally speaking, we can find very excellent courtesy from Members of the other side of the House, just as we claim that is to be found on our side of the House; but when I come down to the concrete fact, there is a stern response. Some hon. Members on the other side are to-day less inclined to camouflage, and show a more daring, audacious" attitude, so that, do what we may on this side of the House, they defend the selfish, aristocratic powers and interests that they have behind them. I cannot get past them. It is there, and you can find that by the procession that takes place on the other side. It is just a case of coming in at the door and asking whether it is "Aye" or "No," and when they find out what it is, they file out. When the Whips are taken off, many a time Members of different parties will give a vote in a different way. Notwithstanding what is happening in the country—strikes, and so forth—they show a gross materialism, an absolutely callous, cold-blooded indifference concerning those struggles. It is not for want of ability, intelligence or capacity on the other side of the House; it is because of the lack of courage, the want of principle in order to lead them to the path that I consider absolutely essential in the interests of the nation at large.
  Mr. AMMON: It is with some diffidence that I rise in a somewhat prominent position on so important an occasion, but I know the usual courtesy of the House will be extended to me, and the Prime Minister has this satisfaction, that he will be pretty certain to get as much time as he wants when he comes to reply. I think

  567
  all of us, irrespective of party, can congratulate the right hon. Gentleman that he has brought his Budget to the last stages, particularly having regard to the fact that he has carried on the dual office of Prime Minister and Chancellor of the Exchequer, and I think he is to be congratulated on the colleague he has found, and the valuable help he has received from the Financial Secretary to the Treasury. All of us, without exception, are willing to bear testimony both to the ability with which he has conducted the Bill, and the courtesy he has shown. We only regret that it was impaired by a little incident a few nights ago which did seem somewhat to detract from it.
  Before dealing with one or two main points of the Finance Bill, I propose to deal with the few points raised by the Financial Secretary to the Treasury when he replied to the discussion a short time ago. He, I think, was under some impression that people on this side of the House claimed an entire monopoly of honesty of conviction with regard to the principles they were presenting to the House. [HON. MEMBERS: "Hear, hear!"] It is nothing of the sort, and those who say, "Hear, hear" in that sort of manner indicate that they lack both the ordinary courtesies extended to the House and fail to appreciate the position. We have never done that. We do admit that they hold their opinions honestly, but we believe wrongly, and that is the only difference. We have held our opinions and expressed them pretty definitely and pretty strongly, and we are prepared all along the line to give credit to the other side for equal honesty in presenting their view. Having said that, I want to point out that we are bound to approach the subject from a different point of view entirely, because, whether we like it or not—and I at once admit that opinions are held honestly and sincerely—they are looked at from two utterly divergent points of view.
  The one point of view was demonstrated excellently last night, when all the forces were rallied in defence of property, as against the general interests of the community. That is the only difference between the two sides of the House. There is no contradiction in terms to say that the people who believe in certain vested interests against the interests of the community can hold those views
  568
  honestly. But those views do bring them into serious conflict with public interests. The right hon. Gentleman went on to show that in a large measure his knowledge of working-class opinion outside is like his economics, somewhat out of date, for he said that if a plebiscite of the electorate of the whole country were taken, he had no doubt there would be a majority cast in favour of the reduction of the Beer Duty as against breakfast table duties. I for one would gladly take up that challenge. I have not the slightest doubt as to what the verdict would be. We have gone a long way from the position of years ago, when you could go to the people and talk of "robbing the poor man of his beer."
  We can speak from our own experience. I happen to represent a typical working-class district, where there is hardly any middle-class at all, and I put up an uncompromising position both at the bye-election and at the last election, that if it were a case of a reduction in the cost of beer or a reduction in the cost of tea and sugar, I would unhesitatingly vote against any reduction of the Beer Duty, and I have already recorded my vote in this House during the stages of this Budget against the reduction of the Beer Duty. When hon. Members opposite talk about their being here in a majority and representing the people, it has to be borne in mind that they are here on a minority vote, as cast by the people over the whole country. The right hon. Gentleman went on to say that, after all, it did not matter who ordered the suit of clothes — whether it was the rich man or the poor man. One would have thought that sort of economics had long since been passed. Surely there is a good deal of difference between a few people ordering surplus suits of clothes and surplus boots, as against the majority of the people having the opportunity of meeting the needs of their lives? The right hon. Gentleman also endeavoured to score a point—when it was stated that a certain number of people had a large share of taxation remitted, whereas a larger number of people had little taxation remitted—by suggesting that those who had the most taxation remitted contributed most to the Exchequer. Surely, there is nothing in that? Has not the matter some relation to income and the amount of surplus wealth these people are receiving, over

  569
  and above what a larger proportion of the community are receiving? We are proud of the way in which the country has tried to reduce the burden of taxation, but it is not unfair to say that those who have borne the heavier share of that reduction have been the working people, for wages have fallen by from £600,000,000 to £700,000,000 a year, while gilt-edged stocks have advanced in value in corresponding measure. That fact cannot be ignored.
  It is as true to say now as at the beginning of this Debate, that the Budget is wholly in the interests of the rich and the possessing classes. That statement can be checked very easily by those who care to examine in detail how the remissions of taxation have been allocated. Reduction of postal charges and telephone rates for the current year account for £1,900,000 and for a full year £2,400,000. The reduction of Income Tax amounts to £19,000,000 for the current year and to £26,000,000 for a full year. Corporation Profits Tax reduction amounts to £2,000,000 for the current year. This all means that for the wealthier section of the community there is an immediate reduction in taxation of £22,900,000. Against that total all that we have to set on the other side is the reduction of the Beer Duty, which amounts to £13,000,000, and the small reductions on table waters and cider, which amount to £160,000 and £90,000 respectively. That is a total of £13,250,000, or £16,875,000 for the whole year, against the much larger amount of reductions granted to the possessing classes. It has to be remembered also that even the reduction in the Beer Duty has to be qualified considerably, for the brewing interests made a profit when the tax was there and they are to make a profit when the tax it taken off. The tax on sugar, an article of food and an important raw material, the taxes on tea, coffee, cocoa, and dried fruits remain. The only relief to the working classes is the £13,000,000 on beer, but £23,000,000 goes to the well-to-do. The remissions of Income Tax, of Corporation Profits Tax, and of postal charges and telephone rates do not affect working people, generally speaking.
  Nor is it out of the way to suggest, judging by the keenness displayed here last night, arising out of something like sharp practice, that the comfortable
  570
  classes aexpect to do pretty well out of the abolition of the Land Values Department. Even as regards the alteration in the Inhabited House Duty—although it is true something like half a million will go to the other side—benefits the landlord class to the extent of one million. Taking the Finance Bill as a whole, the working class are going to fare very badly. How do the Government's supporters defend these proposals? They do so, on the ground that a remission of taxation to the well to do, benefits trade and, therefore, is of advantage to everybody. To find if there is any truth in that argument, one has only to examine what happened last year. Last year's Income Tax was reduced by a shilling in the £, but no one has yet claimed that the small improvement which has taken place in trade has been due to that reduction in the Income Tax. On the other hand, there have been reductions in wages, and we see what is going on at the present moment, in connection with the railways and the condition of affairs prevailing at the London Docks, as a result of cuts which are being made. These account very largely for any improvement which may have taken place, and that improvement has not in any way resulted from the taking away of anything from the well-to-do classes. All the prophecies made last year regarding the results of the Income Tax reduction have come to nothing, and the remission of this year will have no greater effect. The concession made last year simply went into the pockets of the rich, while the burden of the food taxes remained on the poor, and that is the sum and substance of the present Budget, as we see it in its final form.
  The Prime Minister made some capital out of the suggestion that it would reduce debt by something like £40,000,000, and received encomiums in this House on that ground. In a large measure that is an illusory figure, because we have to set off against it the fact that a redemption of War Savings Certificates will absorb something like £13,000,000, while borrowing for postal and telegraphic development will represent £8,500,000. The housing loan works out at something like £75 per year per house, and if we take only 100,000 houses, which will be a very small instalment of what is needed, that will work out at something like £7,500,000.

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  The total amounts to £29,000,000, which is surely a considerable reduction of the £40,000,000 by which it is claimed debt will be reduced. Short loans on the National War Bonds which have to be paid at a premium also have to be taken into account. On the figures as presented there is no hope and no comfort for the mass of the people. The Conservative party have proved, on this occasion, true to their history and to their claim that they stand solely and absolutely for the propertied class; they have used their majority position in this House through the agency of this Finance Bill to consolidate themselves still further, and to take to themselves further increases of wealth. There has as yet been no answer to our criticisms, and there have been no proposals brought forward for the reduction of the great burden of debt other than that advanced by the Labour party, namely, the imposition of a capital levy. [HON. MEMBERS: "Oh!"] That may upset hon. Members opposite, but, in spite of themselves, they will have to face that issue before very long, and we have a right to say, when hon. Members groan at the suggestion of a capital levy: "Give us your alternative to meet the present position of affairs." With the tremendous burden of indebtedness we can go on to the Greek Kalends with Budgets like this, and we shall never make any perceptible inroad on the great burden of national indebtedness. If there is to be any freedom for commerce, and trade once more set flowing, for the mass of the people to get at something like a decent level of living, for some solution of the unemployment problem, then we say it will not be found in any Budgets such as that which is now passing through the House, and there has yet to be an alternative submitted to that put forward by the Labour party, namely, a capital levy.
  The PRIME MINISTER: I should like, with the permission of the House, to deal with one or two matters of detail before I come to what must be the substance of my speech to-night, and that is some account of the proceedings in connection with the funding of the American Debt. I have an opportunity to-night, thanks to the invitation extended to me from the hon. and gallant Member for Central Hull
  572
  (Lieut.-Commander Kenworthy) of making that explanation to the House, which I have been most anxious to do for some time, but which hitherto I have had no opportunity of doing. I should like also to express the pleasure that I feel in the tributes that have been paid from so many quarters of the House to my right hon. Friend the Financial Secretary to the Treasury. I have had to leave the Bill, so far as the House is concerned, almost entirely in his charge, and I have been able to leave it there with every confidence. I wish to thank the hon. Member for South-West Bethnal Green (Mr. Harris) for some kind words he has addressed to me, and I would like to apologise to the House for the comparatively little time I have been able to be here during these Debates, but I have followed them very closely and attended here whenever practicable. I think, perhaps, I might take this opportunity of explaining to the House that I am not receiving any salary as Chancellor of the Exchequer. That will go into the savings of the year, and I hope it will go some way towards paying certain amounts which will be due in consequence of the Sutton Judgment.
  The hon. Member for Mansfield (Mr. Bennett) raised a point of great importance, and that was the question of double Income Tax, a question which has come very much to the front since the War, when an increase of Income Tax has been general in all countries where the tax existed, and in a world in which it seems likely that Income Tax in every country will play a more and more important part. All I have, to say at this moment is that the League of Nations appointed a Committee to investigate this very subject of double Income Tax, and that they recently published a very full and comprehensive Report on it. It is one of the most difficult and complicated questions that financial experts have to consider to-day, and there is a Committee of expert officials, including the Deputy-Chairman of our own Board of Inland Revenue, sitting at present at Geneva considering this Report. I doubt whether they will achieve any results until late in the autumn or early in the winter, but we shall all await with interest and eager anticipation the results of these investigations, and I have no doubt that before very long it may fall either to the lot of

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  some one in my Government or some one in some future Government, to come face to face with this matter and to try and devise legislation to aid the taxpayers in industry in this country.
  The next subject upon which I should like to say a word or two is a subject of which we have heard a good deal during this Debate, and that is sugar. The hon. Member for Hillsborough (Mr. A. V. Alexander) made, perhaps, a not unjustifiable complaint that I had made no further reply to remarks of his in an earlier stage of the proceedings. I should like to assure him that I read his remarks with great interest, and I shall be very glad to say a few words in reply to the different points which he raised. I am sure, however, he will forgive me if I do not dwell upon them at any great length. He and I have both made up our minds on the subject. Unhappily, this year the responsibility is mine. It may be his another year. One question he asked was, "Why should the benefit of the reduction in duty go to—as I think he put it—the American speculator and not to the consumer?" So far as I was able to deal with it in the first Debate I dealt with it, and I really have very little to add to that speech. But I would just repeat this: the whole difficulty, so far as I see it, lies in this, that the margin of sugar production is so small that you get, with that margin, that extraordinary sensitiveness to market conditions which you always find when there is either a shortage, or an equality, or a very small margin; and what I was, and am still—or rather should be still—afraid of had I proposed a reduction in the duty was this: that such reduction by being reflected, as I believe it would have been in a very short period, in prices at home would immeditely have led to an increased demand, which in its turn, having regard to the small margin and the immediate prospect of the sugar crops, would have sent up prices far in excess of anything that would have been warranted by the actual demand itself.
  Nothing that I have heard, or read, or discovered in conversation with experts has caused me to modify my view. It is a source of some satisfaction to me to find, having arrived, according to the best of my judgment, at this conclusion, that my conclusion has been supported
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  generally, so far as I have been able to ascertain, by all that portion of the economic Press which deals with this subject economically, and not politically. The hon. Member complained that the Sugar Duty is now a protective duty on the ground that the excise duty has been removed to aid home-grown sugar production. That is perfectly true. There were reasons for it being done. To my mind the principal object we should have in view, and in every legitimate way we can employ to do it, is to increase the sugar production of the world, because—in my view again—it is only by a considerable increase in sugar production that you will get the chance of getting that surplus which alone will give you more or less constant lower prices. That is one reason. The other reason is this: It was felt during the War that it was of extreme importance for the sake of food, to have sugar grown in this country. But now the War is over, the need for sugar production in this country is not one whit less. For this reason, quite apart from the extension of sugar production in the world, the growers and manufacturers of sugar in this country have an opportunity to-day of building up a large sugar industry in these islands such as they have never had before, and such as they will never have again, if they do not take advantage of the opportunity given to them last year by the Government. The sugar industry is a very important basic agricultural industry, and there is no doubt that among the many steps that were taken to help the great industry of agriculture in pre-War Germany there were no steps that did more to foster it, or to help to increase the wealth of that country, than the building up of the great sugar industry by scientific methods under strict protection, which caused it to become one of the greatest and most profitable industries that the country had. It is an industry which produces what is now almost a necessity of life, and at the same time it gives a large amount of labour of the most useful kind, because it provides people in the country with the work which can be maintained practically throughout the year.
  The third point that was mentioned is that the preference which was given with-

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  in the Empire only acts as a subsidy to the producer, or, in other words, that the consumer does not get very much benefit from it. I think that is true, but again we have to look at this point. I quite admit that some hon. Members may not have the same regard for this point as I have, and it will be open to them, if and when they come into power, to reverse the decisions at which we have arrived. But surely the primary object of preference on sugar was to increase the area of sugar plantation, and increase the growth of sugar throughout the world. As I said before, and may have occasion to say again, it is only when you get a world surplus that you will get constant cheapness. Our whole object at this time with sugar, as with one or two other necessaries of life, is to increase production so that we may be sure of getting a cheap supply and reduce to a minimum the possibility of a shortage being caused by the failure of any considerable crop in any part of the world.
  There is one other most important point which, especially since the War and since the time that we have had to remit such a large amount to the United States of America, is a matter of very vital importance to this country, and it is that we should, so far as we are able by legitimately encouraging the growth of certain products outside the United States, take everything off our exchange that we possibly can. Another point the hon. Member mentioned was that the preference should be confined to sugar which passed through British refineries, and that it should not be given to Empire sugar going direct into consumption. Of course, I do not pretend to be a consistent man myself, and, therefore, inconsistency in others possibly does not cause me much heart burning. Still, that advocates of Free Trade should come down here as strict Protectionists might cause even me a little shock. I do not think the sugar refiners in this country are really in need of that form of protection, because I am informed that 60 per cent. of the Empire sugar is already handled by them. The fifth point raised by the hon. Member had relation to the high prices of sugar which, he said, injured many manufacturing industries. That goes without saying, and if it were possible I should have been only too pleased to reduce the
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  duty. But for the reasons I have given—reasons which I am aware do not commend themselves to every Member of this House—I have been obliged to refuse any concession this year, although I hope the financial position before very long may enable us to do what we should have liked to have done this year.
  I come now to one or two points which were raised by my right hon. Friend the Member for Norwich (Mr. Hilton Young), to which I should like to devote a minute or two. He will, I know, forgive me if I do not enter into a long disquisition on the subject which he raised. He is far more able than I to discuss these matters. I am a mere practical man with, perhaps, but a skin-deep acquaintance with the subject. He asked what the policy of the Government was, whether we were inflationists, or deflationists or, to use his own delicious vintage, "non-flationists." I could not help thinking that a better word than "non-flationist" would be the American word, "mugwump." I think the right policy for this country at the present moment is to do all in our power to keep prices steady and on a level. One of the chief causes of unsettlement in industry, whether it be on the part of those who are trying to get orders for business or whether it be on the part of those who work for a weekly wage, has arisen fundamentally from the fact that we have been living in a world of constantly shifting values. One of the things that has contributed most to the steadier feeling which is more prevalent now than it has been in this country, is that people feel that they are getting down more or less to a stabilised basis of prices. I should set myself strongly against any policy that would tend to disturb that feeling. Whether we shall be able, within a measurable distance of time, to get back to a gold standard, is a matter which at this moment I do not think can be profitably discussed. The time has not yet come for that. There is only one other thing I will say. My right hon. Friend told us—and I agree with him theoretically—that it was a good thing to allow your deflation to take place by a natural process of increased production. But I would remind him that these, after all, are merely words. My right hon. Friend, keen student as he is, has never had to run about looking for orders when orders cannot be got; and you cannot get increased production until you have

  577
  increased consumers. That is the great difficulty and the great trouble of our time. That is what we have to try and find. It may be that we may get a natural process of deflation sooner or later, and no one would be more glad to see it than myself when it comes, but it is not a correction which I see in the immediate future.
  If the House will bear with me, and I will be as brief as I can, I should like to say something about the settlement of the American Debt, and I will try, in the course of my remarks, to answer each point which was put to me by the hon. and gallant Member for Central Hull (Lieut.-Commander Kenworthy). At the end of the War, as I think hon. Members are aware, the United States Treasury held over 4,000,000,000 dollars' worth of British certificates of indebtedness. They were payable on demand in dollars in America, with interest at 5 per cent. per annum accruing. I think I may be permitted to read to the House the provision with which they were endorsed—it is very short:
  "This certificate will be converted by the Government of the United Kingdom of Great Britain and Ireland, if required by the Secretary of the Treasury of the United States of America, at par, with an adjustment of accrued interest, into an equal par amount of Five Per Cent. Convertible Gold Bonds of the Government of the United Kingdom."
  From 1919, through that year to 1920, various tentative negotiations took place, but no definite conclusion was arrived at. On the 9th February of last year, the American Congress passed an Act—and I call the attention of the House to this—which set up the World War Foreign Debt Commission, to deal with questions of funding the various demand obligations which the United States had from the various foreign Governments of the world: and upon this Debt Commission were imposed, by Statute of Congress, two limits—firstly, that the interest of these long-term obligations should not be at a less rate than 4¼ per cent., and, secondly, that the period of maturity should not exceed 25 years. Those were very stringent terms. If you take the maximum rate of interest, and the rate that would be required to provide a sinking fund to extinguish that debt at the end of so short a term, you will find that the total amount to be paid, under these statutory terms, would be something like
  578
  6½ per cent. per annum. In the meantime, our Bonds were running at 5 per cent., the agreed rate until the funding took place.
  The problem I had to face when I went to America was to see whether the Debt Commission could be persuaded to recommend to Congress more favourable terms than those which Congress had made statutory 11 months before, and whether, on that recommendation, Congress would pass the amending legislation necessary to give statutory effect to the recommendation of the Debt Commission. The negotiations, which took about a fortnight, were conducted in a very friendly spirit, and I found a desire on the part of the American Debt Commission to ease the terms of the law under which they had to act, and a disposition to recommend to Congress something more favourable to the debtor than those terms. After discussing many kinds of repayment and going into endless details as to methods of repayment, we finally arrived at a provisional agreement, which was subsequently agreed to by the British Government, that the loan should be one for 62 years, that the rate of interest should be 3 per cent. from 1923 to the end of 1932, and 3½ per cent. after that date for the rest of the term; and that, in addition to that, there should be ½ per cent. for amortisation.
  There were two important points conceded after much discussion—one, that within the first five years, if it should be for our convenience, we might postpone a half-year's payment of interest in any year by funding the amount, instead of paying it, and adding it to the principal; and that, during the term of the loan, we should be able, as the hon. and gallant Member for Central Hull suggested, to buy United States' Government Bonds, issued since 6th April, 1917, such Bonds to be taken at par and accrued interest So that, as the hon. and gallant Member pointed out, at the present moment, when these Bonds can be acquired at a slight discount, it is to our advantage to purchase them for payment, and we have taken advantage of the privilege extended to us. These terms went to Congress, and Congress, as hon. Members are now well aware, confirmed them. Not only did Congress confirm them, but hon. Members may remember, as I remember very well on the introduction of the necessary Bill into Congress, the

  579
  proposals were received with such demonstrations of friendliness to this country and—if I may say—respect for the manner in which this country was dealing with this question, as have never been accorded to any foreign country in the Capitol at Washington.
  Just at this point I may observe that a certain amount is set aside, and will be set aside each year, for these payments to America, and if there happens, through such a medium as the tendering of these Bonds for payment, to be any saving on the amount originally provided, of course, that is a saving on Estimates. A saving on Estimates on any year like the present, when no special provision is made for Supplementary Estimates—because I made the statement that Supplementary Estimates must be met out of savings—such savings, whether from this source or any other, will be most useful.
  The hon. Member also asked whether it was not the case that a large amount of this debt was incurred at inflated prices. That, unfortunately, is only too true, not only of that debt, but of every debt incurred during the War, and that undoubtedly has been one of the great difficulties which has faced the post-War work. But how to estimate what should be allowed, if anything should be allowed, for such inflation I believe it would pass the wit of man to devise, and no such attempt has been made in this case any more than an attempt has been made, so far, in dealing with any debts, internal or external, so far as I am aware, in any part of the world. As to pegging the exchanges, here again during the War so much money was expended in America that it is quite impossible to trace exactly where any particular debit can be found on the other side, hut, speaking generally, I think it would be correct to say that the cost of pegging the exchanges during the War was mainly provided from this side, and, generally speaking, I think it would be true to say that hardly any of the Debt is due to this cause. As a matter of fact, there have been since the War market loans in America amounting to some 500,000,000 dollars, which have been paid off entirely outside the loan which we owe to the Government of the United States of America.
  580
  One further question was asked me about a Clause which was put down at an early stage of the Bill, and subsequently withdrawn. The reason was this. The Clause was one to meet the case to which I have already alluded, where the United States gave us an option, during the first five years of the currency of the Debt, of funding half the interest if we found the burden greater than we could bear. If that half-year's interest were funded there could be no power for funding and issuing bonds for that amount, unless power was got from Parliament. It was to obtain that power that the Clause was put down. Before the Financial Resolution was taken, the Leader of the Labour party inquired, quite properly, whether, at the same time, it would be possible to give the terms which, as he was not aware at the time, were then being negotiated between the British Ambassador at Washington and the United States Treasury. The specific terms which were left for negotiation in America, embodying principles which I had agreed to when I was in America, had not been agreed at the time the Clause was put down, and as we had no intention, in the course of the current year, of taking advantage of the option offered, so there would be no need for the Clause. So I withdrew it, hoping that I or my successor would introduce it next year as a safeguard in case it might be desired to take the option, and long before next year the terms for which the Leader of the Labour party asked will be published—in fact, I hope very much it may be possible to lay them as a White Paper within the next week or two. They were agreed to a fortnight ago, and I have just got the official copy from Washington.
  11.0 P.M.
  With regard to the Allied debts, the position is, as I think I have stated in this House more than once in answer to questions, that those who owed us money owe us money still. In other words, we are the creditor and they are the debtors. The offer which was made in January, and which was not accepted, has left our hands perfectly free to deal with these matters as we may deem best.
  I should like to say a few words, with the permission of the House, about the settlement of the American Debt. Whatever may be said about the terms agreed

  581
  upon, I am convinced of two things. First, that regarding them as business terms they are fair and honest terms, and I have no complaint to make about them. I wish to express, here and now, my sense of gratitude to the members of the American Debt Commission who, the moment that the terms as to interest and bonds were provisionally agreed upon between us, did everything in their power to make the payment of the terms as easy and convenient to us as they were able.
  Secondly, I should like to remind any Member of the House who may have a doubt as to the wisdom of what we did, to remember that had the Debt not been funded we should have been liable to have paid interest at 5 per cent. on the whole sum outstanding. We should have had to pay it year after year until the Debt was funded, and all the time we were paying it we should have paid interest alone, and we should not have been one day nearer the time when we should have been free from the obligation of the principal. Under the scheme adopted, as Members will see when the detailed terms are published, the terms of payment are calculated for each year as between interest and principal, so
  that the repayment of principal begins in the first year with a comparatively small sum, rising year by year as to principal and becoming correspondingly less as to interest until the last year, when the last payment clears off the last amount of principal and frees this country from the last copper of the Debt.
  I believe that the settlement of this question, as I said in America at the time, was the first step towards the settlement of the world problem, and I am convinced of this, that no action that the British Government had ever taken with regard to the United States of America has ever had the same effect as this action has had in America in helping her to understand this country better than she has ever done before, and paving the way for a better understanding between the two countries in the years that are to come, or to make America more willing than she ever had been—as we are willing to-day in regard to her—to work hand in hand wherever any work has to be done for the regeneration of this world.
  Question put, "That the word 'now' stand part of the Question."
  The House divided: Ayes, 249; Noes, 145.

  Division No. 267.]

  AYES.

  [11.5 p.m.

  Agg-Gardner, Sir James Tynte

  Burn, Colonel Sir Charles Rosdew

  Du Pre, Colonel William Baring

  Alexander, E. E. (Leyton, East)

  Burney, Com. (Middx., Uxbridge)

  Edmondson, Major A. J.

  Alexander, Col. M. (Southwark)

  Butcher, Sir John George

  Elliot, Capt. Walter E. (Lanark)

  Amery, Rt. Hon. Leopold C. M. S.

  Butler, J. R. M. (Cambridge Univ.)

  Ellis, R. G.

  Ashley, Lt.-Col. Wilfrid W.

  Butt, Sir Alfred

  England, Lieut.-Colonel A.

  Astbury, Lieut.-Com. Frederick W.

  Button, H. S.

  Erskine, James Malcolm Monteith

  Astor, J. J. (Kent, Dover)

  Cadogan, Major Edward

  Erskine, Lord (Weston-super-Mare)

  Austin, Sir Herbert

  Campion, Lieut.-Colonel W. R.

  Erskine-Bolst, Captain C.

  Baird, Rt. Hon. Sir John Lawrence

  Cautley, Henry Strother

  Eyres-Monsell, Com. Bolton M.

  Baldwin, Rt. Hon. Stanley

  Cayzer, Sir C. (Chester, City)

  Falle, Major Sir Bertram Godfray

  Balfour, George (Hampstead)

  Cecil, Rt. Hon. Sir Evelyn (Aston)

  Fawkes, Major F. H.

  Banbury, Rt. Hon. Sir Frederick G.

  Chadwick, Sir Robert Burton

  Fermor-Hesketh, Major T.

  Barlow, Rt. Hon. Sir Montague

  Chapman, Sir S.

  Flanagan, W. H.

  Barnett, Major Richard W.

  Churchman, Sir Arthur

  Ford, Patrick Johnston

  Barnston, Major Harry

  Clarry, Reginald George

  Foreman, Sir Henry

  Barrie, Sir Charles Coupar (Banff)

  Clayton, G. C.

  Forestier-Walker, L.

  Becker, Harry

  Cobb, Sir Cyril

  Foxcroft, Captain Charles Talbot

  Bell, Lieut.-Col. W. C. H. (Devizes)

  Cockerill, Brigadier-General G. K.

  Fraser, Major Sir Keith

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

  Colfox, Major Wm. Phillips

  Fremantle, Lieut.-Colonel Francis E.

  Bentinck, Lord Henry Cavendish-

  Colvin, Brig.-General Richard Beale

  Furness, G. J.

  Berry, Sir George

  Conway, Sir W. Martin

  Galbraith, J. F. W.

  Betterton, Henry B.

  Cope, Major William

  Ganzoni, Sir John

  Birchall, Major J. Dearman

  Cory, Sir J. H. (Cardiff, South)

  Garland, C. S.

  Blades, Sir George Rowland

  Craig, Captain C. C. (Antrim, South)

  Gaunt, Rear-Admiral Sir Guy R.

  Blundell, F. N.

  Craik, Rt. Hon. Sir Henry

  Gilmour, Lt.-Col. Rt. Hon. Sir John

  Bowyer, Capt. G. E. W.

  Crook, C. W. (East Ham, North)

  Goff, Sir R. Park

  Boyd-Carpenter, Major A.

  Crooke, J. Smedley (Deritend)

  Gould, James C.

  Brass, Captain W.

  Curzon, Captain Viscount

  Greaves-Lord, Walter

  Brassey, Sir Leonard

  Dalziel, Sir D. (Lambeth, Brixton)

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

  Bridgman, Rt. Hon. William Clive

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

  Greenwood, William (Stockport)

  Briggs, Harold

  Davidson, Major-General Sir J. H.

  Grenfell, Edward C. (City of London)

  Brown, Brig.-Gen. Clifton (Newbury,

  Davies, Alfred Thomas (Lincoln)

  Gretton, Colonel John

  Brown, J. W. (Middlesbrough, E.)

  Davies, Thomas (Cirencester)

  Guinness, Lieut.-Col. Hon. W. E.

  Bruford, R.

  Davison, Sir W. H. (Kensington, S.)

  Hacking, Captain Douglas H.

  Bruton, Sir James

  Dawson, Sir Philip

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

  Buckingham, Sir H.

  Dixon, Capt. H. (Belfast, E.)

  Halstead, Major D.

  Buckley, Lieut.-Colonel A.

  Dixon, C. H. (Rutland)

  Hamilton, Sir George C. (Altrincham)

  Hancock, John George

  Lumley, L. R.

  Russell-Wells, Sir Sydney

  Hannon, Patrick Joseph Henry

  Macnaghten, Hon. Sir Malcolm

  Samuel, A. M. (Surrey, Farnham)

  Harrison, F. C.

  McNeill, Ronald (Kent, Canterbury)

  Samuel, Samuel (W'dsworth, Putney)

  Harvey, Major S. E.

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

  Sanders, Rt. Hon. Sir Robert A.

  Hay, Major T. W. (Norfolk, South)

  Manville, Edward

  Sanderson, Sir Frank B.

  Henn, Sir Sydney H.

  Margesson, H. D. R.

  Sandon, Lord

  Hennessy, Major J. R. G.

  Mercer, Colonel H.

  Scott, Sir Leslie (Liverp'l, Exchange)

  Herbert, Dennis (Hertford, Watford)

  Molloy, Major L. G. S.

  Shepperson, E. W.

  Herbert, S. (Scarborough)

  Moore-Brabazon, Lieut.-Col. J. T. C.

  Shipwright, Captain D.

  Hewett, Sir J. P.

  Morrison, Hugh (Wilts, Salisbury)

  Simpson-Hinchliffe, W. A.

  Hiley, Sir Ernest

  Morrison-Bell, Major A. C. (Honiton)

  Skelton, A. N.

  Hoare, Lt.-Col. Rt. Hon. Sir S. J. G.

  Murchison, C. K.

  Somerville, A. A. (Windsor)

  Hogg, Rt. Hon. Sir D. (St. Marylebone)

  Nall, Major Joseph

  Spears, Brig.-Gen. E. L.

  Hohier, Gerald Fitzroy

  Nesbitt, Robert C.

  Stanley, Lord

  Holbrook, Sir Arthur Richard

  Newman, Colonel J. R. P. (Finchley)

  Stewart, Gershom (Wirral)

  Hood, Sir Joseph

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

  Stockton, Sir Edwin Forsyth

  Hopkins, John W. W.

  Newson, Sir Percy Wilson

  Stott, Lt.-Col. W. H.

  Hopkinson, A. (Lancaster, Mossley)

  Newton, Sir D. G. C. (Cambridge)

  Sueter, Rear-Admiral Murray Fraser

  Houfton, John Plowright

  Nicholson, Brig.-Gen. J. (Westminster)

  Sugden, Sir Wilfred H.

  Howard, Capt. D. (Cumberland, N.)

  Nicholson, William G. (Petersfield)

  Sykes, Major-Gen. Sir Frederick H.

  Howard-Bury, Lieut.-Col. C. K.

  Norman, Major Rt. Hon. Sir Henry

  Terrell, Captain R. (Oxford, Henley)

  Hudson, Capt. A.

  Norton-Griffiths, Lieut.-Col. Sir John

  Thompson, Luke (Sunderland)

  Hughes, Collingwood

  Ormsby-Gore, Hon. William

  Thorpe, Captain John Henry

  Hume, G. H.

  Parker, Owen (Kettering)

  Tryon, Rt. Hon. George Clement

  Hume-Williams, Sir W. Ellis

  Pease, William Edwin

  Wallace, Captain E.

  Hunter-Weston, Lt.-Gen. Sir Aylmer

  Pennefather, De Fonblanque

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

  Hurd, Percy A.

  Penny, Frederick George

  Waring, Major Walter

  Hutchison, G. A. C. (Midlothian, N.)

  Percy, Lord Eustace (Hastings)

  Warner, Sir T. Courtenay T.

  Hutchison, W. (Kelvingrove)

  Perkins, Colonel E. K.

  Watson, Capt. J. (Stockton-on-Tees)

  Inskip, Sir Thomas Walker H.

  Perring, William George

  Watts, Dr. T. (Man., Withington)

  Jephcott, A. R.

  Pielou, D. P.

  Wells, S. R.

  Jodrell, Sir Neville Paul

  Pollock, Rt. Hon. Sir Ernest Murray

  Weston, Colonel John Wakefield

  Johnson, Sir L. (Walthamstow, E.)

  Pownall, Lieut.-Colonel Assheton

  Wheler, Col. Granville C. H.

  Jones, G. W. H. (Stoke Newington)

  Raeburn, Sir William H.

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

  Kennedy, Captain M. S. Nigel

  Rankin, Captain James Stuart

  Whitla, Sir William

  Kenyon, Barnet

  Reid, Capt. A. S. C. (Warrington)

  Wilson, Col. M. J. (Richmond)

  King, Captain Henry Douglas

  Rentoul, G. S.

  Windsor-Clive, Lieut.-Colonel George

  Kinloch-Cooke, Sir Clement

  Rhodes, Lieut.-Col. J. P.

  Winterton, Earl

  Lamb, J. Q.

  Richardson, Sir Alex. (Gravesend)

  Wise, Frederick

  Lane-Fox, Lieut.-Colonel G. R.

  Richardson, Lt.-Col. Sir P. (Chertsey)

  Wolmer, Viscount

  Leigh, Sir John (Clapham)

  Roberts, Samuel (Hereford, Hereford)

  Wood, Sir H. K. (Woolwich, West)

  Lloyd, Cyril E. (Dudley)

  Robertson-Despencer, Major (Islgtn, W.)

  Wood, Maj. Sir S. Hill- (High Peak)

  Lloyd-Greame, Rt. Hon. Sir P.

  Robinson, Sir T. (Lancs., Stretford)

  Worthington-Evans, Rt. Hon. Sir L.

  Locker-Lampson, Com. O. (Handsw'th)

  Roundell, Colonel R. F.

  Yerburgh, R. D. T.

  Lorden, John William

  Ruggles-Brise, Major E.

  Lorimer, H. D.

  Russell, Alexander West (Tynemouth)

  TELLERS FOR THE AYES.—

  Lort-Williams, J.

  Russell, William (Bolton)

  Colonel Leslie Wilson and Colonel

  Gibbs.

  NOES.

  Acland, Rt. Hon. Francis Dyke

  Duncan, C.

  Johnstone, Harcourt (Willesden, East)

  Adamson, Rt. Hon. William

  Dunnico, H.

  Jones, Henry Haydn (Merioneth)

  Adamson, W. M. (Staff., Cannock)

  Ede, James Chuter

  Jones, J. J. (West Ham, Silvertown)

  Alexander, A. V. (Sheffield, Hillsbro')

  Edge, Captain Sir William

  Jones, Morgan (Caerphilly)

  Ammon, Charles George

  Edmonds, G.

  Jones, R. T. (Carnarvon)

  Attlee, C. R.

  Edwards, C. (Monmouth, Bedwellty)

  Jowett, F. W. (Bradford, East)

  Barnes, A.

  Entwistle, Major C. F.

  Kenworthy, Lieut.-Commander J. M.

  Batey, Joseph

  Fairbairn, R. R.

  Lansbury, George

  Benn, Captain Wedgwood (Leith)

  Gosling, Harry

  Lawson, John James

  Bennett, A. J. (Mansfield)

  Graham, D. M. (Lanark, Hamilton)

  Leach, W.

  Berkeley, Captain Reginald

  Graham, W. (Edinburgh, Central)

  Lee, F.

  Bonwick, A.

  Greenall, T.

  Lees-Smith, H. B. (Keighley)

  Bowerman, Rt. Hon. Charles W.

  Greenwood, A. (Nelson and Colne)

  Linfield, F. C.

  Broad, F. A.

  Grenfell, D. R. (Glamorgan)

  Lowth, T.

  Bromfield, William

  Groves, T.

  MacDonald, J. R. (Aberavon)

  Brotherton, J.

  Grundy, T. W.

  M'Entee, V. L.

  Brown, James (Ayr and Bute)

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

  McLaren, Andrew

  Buckle, J.

  Hall, G. H. (Merthyr Tydvil)

  Maclean, Nell (Glasgow, Govan)

  Burgess, S.

  Hardie, George D.

  March, S.

  Burnie, Major J. (Bootle)

  Harney, E. A.

  Marshall, Sir Arthur H.

  Buxton, Charles (Accrington)

  Harris, Percy A.

  Martin, F. (Aberd'n & Kinc'dine, E.)

  Buxton, Noel (Norfolk, North)

  Hartshorn, Vernon

  Middleton, G.

  Cape, Thomas

  Hastings, Patrick

  Morel, E. D.

  Chapple, W. A.

  Hay, Captain J. P. (Cathcart)

  Morrison, R. C. (Tottenham, N.)

  Charleton, H. C.

  Hayday, Arthur

  Mosley, Oswald

  Clynes, Rt. Hon. John R.

  Hayes, John Henry (Edge Hill)

  Murnin, H.

  Collins, Sir Godfrey (Greenock)

  Henderson, Rt. Hon. A. (N'castle, E.)

  Murray, R. (Renfrew, Western)

  Collins, Pat (Walsall)

  Herriotts, J.

  O'Grady, Captain James

  Collison, Levi

  Hinds, John

  Oliver, George Harold

  Darbishire, C. W.

  Hirst, G. H.

  Paling, W.

  Davies, J. C. (Denbigh, Denbigh)

  Hutchison, Sir R. (Kirkcaldy)

  Parker, H. (Hanley)

  Davies, Rhys John (Westhoughton)

  Jenkins, W. (Glamorgan, Neath)

  Parkinson, John Allen (Wigan)

  Dudgeon, Major C. R.

  John, William (Rhondda, West)

  Pattinson, S. (Horncastle)

  Duffy, T. Gavan

  Johnston, Thomas (Stirling)

  Phillipps, Vivian

  584

  585

  Ponsonby, Arthur

  Sinclair, Sir A.

  Weir, L. M.

  Potts, John S.

  Sitch, Charles H.

  Welsh, J. C.

  Pringle, W. M. R.

  Smith, T. (Pontefract)

  Westwood, J.

  Richards, R.

  Snell, Harry

  White, H. G. (Birkenhead, E.)

  Riley, Ben

  Snowden, Philip

  Whiteley, W.

  Ritson, J.

  Spencer, George A. (Broxtowe)

  Williams, David (Swansea, E.)

  Robinson, W. C. (York, Elland)

  Stewart, J. (St. Rollox)

  Williams, Dr. J. H. (Llanelly)

  Rose, Frank H.

  Sullivan, J.

  Williams, T. (York, Don Valley)

  Salter, Dr. A.

  Trevelyan, C. P.

  Wilson, C. H. (Sheffield, Attercliffe)

  Scrymgeour, E.

  Wallhead, Richard C.

  Wood, Major M. M. (Aberdeen, C.)

  Sexton, James

  Walsh, Stephen (Lancaster, Ince)

  Wright, W.

  Shakespeare, G. H.

  Warne, G. H.

  Young, Rt. Hon. E. H. (Norwich)

  Shaw, Thomas (Preston)

  Watson, W. M. (Dunfermline)

  Young, Robert (Lancaster, Newton)

  Shinwell, Emanuel

  Watts-Morgan, Lt.-Col. D. (Rhondda)

  Short, Alfred (Wednesbury)

  Webb, Sidney

  TELLERS FOR THE NOES.—

  Mr. T. Griffiths and Mr. Lunn.

  Bill read the Third time, and passed.

  The remaining Orders were read, and postponed.

  FINANCE BILL.

    ADJOURNMENT.
    Resolved, "That this House do now adjourn."—[Colonel Leslie Wilson.]
    Adjourned accordingly at Seventeen Minutes after Eleven o'Clock.

  THAMES AND LEA CONSERVANCIES.
  THAMES AND LEA CONSERVANCIES.
  CRAWLEY AND DISTRICT WATER COMPANY.
  CRAWLEY AND DISTRICT WATER COMPANY.
  NATIONAL HEALTH INSURANCE (VOLUNTARY HOSPITALS).
  NATIONAL HEALTH INSURANCE (VOLUNTARY HOSPITALS).
  SMALL-POX, GLOUCESTER.
  SMALL-POX, GLOUCESTER.
  MARKET TOLLS (FRUIT AND VEGETABLES).
  MARKET TOLLS (FRUIT AND VEGETABLES).
  VAGRANT'S DEATH, LINCOLNSHIRE.
  VAGRANT'S DEATH, LINCOLNSHIRE.
  MILK.
  MILK.
  RAILWAY CONSTRUCTION, EAST AND WEST AFRICA.
  RAILWAY CONSTRUCTION, EAST AND WEST AFRICA.
  DOMINIONS AND CROWN COLONIES (FRANCHISE).
  DOMINIONS AND CROWN COLONIES (FRANCHISE).
  PENSIONS AND ALLOWANCES, INDIA.
  PENSIONS AND ALLOWANCES, INDIA.
  ULPHA SCHOOL, BROUGHTON-IN-FURNESS (INSPECTION).
  ULPHA SCHOOL, BROUGHTON-IN-FURNESS (INSPECTION).
  MERCANTILE MARINE RESERVE (S. O. MARSHALL).
  MERCANTILE MARINE RESERVE (S. O. MARSHALL).
  RUSSIA (PATRIARCH TIKHON).
  RUSSIA (PATRIARCH TIKHON).
  HOPS CULTIVATION (RESTRICTION).
  HOPS CULTIVATION (RESTRICTION).
  ENEMY DEBTS (CONTROLLER'S REPORT).
  ENEMY DEBTS (CONTROLLER'S REPORT).
  TRAFFIC PROBLEM (ROAD SCHEME).
  TRAFFIC PROBLEM (ROAD SCHEME).
  HOUSE PROPERTY (INCOME TAX ASSESSMENTS.)
  HOUSE PROPERTY (INCOME TAX ASSESSMENTS.)
UNEMPLOYMENT.
  BENEFIT.
  BENEFIT.
  EX-SERVICE MEN.
  EX-SERVICE MEN.
  WHITE LEAD CONVENTION.
  WHITE LEAD CONVENTION.
  GOVERNMENT DEPARTMENTS (EX-SERVICE MEN AND WOMEN).
  GOVERNMENT DEPARTMENTS (EX-SERVICE MEN AND WOMEN).
Preamble
The House met at a quarter before four of the clock, The EARL OF DONOUGHMORE on the Woolsack.

JUDICATURE CONSOLIDATION (PROBATE, ETC., DIVISION) BILL. [H.L.]
LORD MUIR MACKENZIE: My Lords, I beg to introduce a Bill to consolidate enactments relating to the jurisdiction of the High Court in Probate, Matrimonial and Admiralty causes and matters; and to move that it be read a first time.
Moved, That the Bill be now read 1a.—(Lord Muir Mackenzie.)
On Question, Bill read 1a, and to be printed.

WEST HARTLEPOOL CORPORATION BILL. [H.L.]
The King's consent signified: Bill read 3a, and passed, and sent to the Commons.
MINISTRY OF HEALTH PROVISIONAL ORDERS (No. 5) BILL.
House in Committee (according to Order) on re-commitment of the Bill: Bill reported without amendment.
MINISTRY OF HEALTH PROVISIONAL ORDER (CALNE WATER) BILL.
House in Committee (according to Order) on re-commitment of the Bill: Bill reported without amendment.

SHAKESPEARE MEMORIAL THEATRE.
LORD ERSKINE LORD ERSKINE rose to call attention to the desirability of assisting the establishment of the national theatre at Stratford-on-Avon for the production of Shakespeare's plays, and to ask His Majesty's Government if they can see their way to afford some financial assistance to this national object.
The noble Lord said: My Lords, the Notice that stands in my name is perhaps of a somewhat novel character, but I hope that what I have to say may be of interest to your Lordships and may also awaken a chord of sympathy in the heart of the Board of Education, to whom I am addressing myself this afternoon. I have not been asked by any of the governors of the Shakespeare Memorial Theatre at Stratford-upon-Avon to champion their cause. I am simply speaking out of the fullness of my heart from the experience I have gained of what the governors and the founders have done for the past forty years in aid of this great scheme, the endowment of the theatre. I should like also to try to show how the country will benefit educationally under this endowment scheme.
May I read a few extracts from a statement which explains the endowment fund scheme in a far better and clearer way than I could hope to explain it?
"The Shakespeare Memorial Association was founded on the initiative of one family in Stratford-upon-Avon on June 29, 1875. This family had a vision of something greater and more lasting than the mere raising of a memorial in bricks and mortar to the master dramatist. Recognising that the drama of Shakespeare was one of the greatest possessions of the English-speaking race they determined to make that possession a living and real force in the world. For that to be possible they knew that there must be a theatre where the Shakespearian drama could be performed for the sake of art alone and without thought of profit. For the fitting presentation of the plays they saw that there must be opportunity for intensive study of Shakespearian lore. Thus they designed to have a library and a gallery of pictures and sculpture of Shakespearian interest. … The generosity of a few Stratford-upon-Avon people together with some outside assistance—valuable in its spirit, though not great in capital amount—made possible the laying of the foundation stone of the Memorial Theatre buildings on April 23, 1877. These were completed in 1879 and a large part of the dream of the founders became reality. The governors were now in possession of a block of buildings suitable for many of their immediate needs. To-day, besides the theatre dedicated to the memory of the poet, the foundation includes a library containing nearly 15,000 volumes of Shakespearian literature, with a spacious reading-room, a gallery of pictures and sculpture of Shakespearian interest, and a lecture hall. …
Great an accomplishment as was the provision of the edifice itself, yet still greater, considering all the difficulties which lack of endownment has entailed, is the work that has since been accomplished there.

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Beginning its work at a time when only a few of the poet's masterpieces were at all frequently performed upon the English stage, the governors have during the last 46 years kept alive the love and study of Shakespearian drama and have restored to the modern theatre the plays which, neglected in the poet's own country, could only be seen performed in the subsidised theatres of Germany. The production of the whole cycle of the poet's historical plays in their chronological order in one week, with their noble and patriotic ardour, has stimulated interest in our English history and national development … To the Memorial Theatre have come some of the greatest British and other actors and actresses of the last fifty years. … Around the festivals have grown up various activities connected with the drama, and not a year passes without lectures, conferences, schools of elocution and dancing, and exhibitions connected with the art of the theatre being held either in the town or in the buildings of the Memorial."
That, I think, is a very strong point in favour of the educational side of this scheme. I have had the pleasure, as I expect a great many of your Lordships have had, of attending these festivals; indeed, I do not think I have missed one for the last twenty-five years. And it is, I maintain, a great pleasure and a great education to be present at these memorial festivals. Not only that, but one meets there many interesting and learned people from all quarters of the globe. One cannot come in contact with these, people without learning something from them, and no doubt they learn something from us as well. This meeting together twice a year of all these people from the distant parts of the Empire and from outside the Empire to compare notes and to learn things from each other is a great educational asset. And it is a cheap form of education too, because if this endowment fund can be once established the festival can be carried on year after year, and carried on even on a finer basis than it is at present. That would be an enormous help to education in this country. The statement from which I have quoted says—
"Almost the whole of the financial burden of this great achievement has been borne by the people of Stratford-upon-Avon and its neighbourhood. "When it is remembered that the entire population of the town is only somewhat over 9,000 and that its public-spirited inhabitants have given money, land, and buildings to the value of £100,000 the result appears amazing. From outside sources only some £20,000 has been contributed. At the present moment a guarantee fund raised by the townspeople is making it possible to continue the festivals. It has
788
been suggested that the corporation should subsidise the Theatre. Even if this were just, and they obtained the necessary powers they could give no adequate assistance for the town is so small that a penny rate would not produce £200 a year. An adequate subsidy would be an impossible burden on the town and, after all, the Memorial belongs not to Stratford-upon-Avon, but to the entire world."
That is the story to-day. Appeals for funds have been addressed to the people of this country and to those of the United States of America, and although certain sums have been received, money is not coming in as fast as could be desired.
I may be told that in due course an endowment fund will be raised and that some wealthy man or men will be found to complete the work that the governors of the Theatre have in view. But in my humble opinion such a scheme as this should not be left entirely to the generosity of private individuals, either here or in America, as has been the case up to the present time. Shakespeare and his works are the proud possession of these Islands, and it is, I venture to think, to the Government of this country that our people should look for that financial assistance that will both advance the honour and glory of our great national dramatist and the cause of education which every man, woman and child should be only too ready to foster and encourage. Again, I may be told that were the Government to help this endowment scheme other theatres might make similar appeals. In my humble opinion there is only one Shakespeare and only one Stratford-upon-Avon, and there is no like festival in any other part of the world. This is, I think, a sufficient answer to that objection.
A letter appeared in The Times on April 23 of this year, in which it was said—
"It is the people of England above all others whose pride it should be to prove to the world that they prize at its full value the greatness of the common heritage. Quietly and patiently this handful of Stratford's citizens have borne the burden and heat of the day. It is time that the load of financial anxiety should be lifted from their shoulders, and their work developed on a stable basis as a National Trust."
In conclusion, I humbly suggest that the Board of Education should be asked to contribute £5,000 towards this endowment fund. If my appeal receives a favourable reply the Government will know that they

789
have helped to create a centre of education that will confer far-reaching and inestimable benefits upon the present and rising generations, and give to Shakespeare and his works that commanding position which the genius of the man entitles him to hold for all time.
LORD STUART OF WORTLEY: My Lords, I desire to advocate on all occasions, especially at the present time, all reasonable and necessary economies. I also admit the complete novelty in our politics of a proposal such as that which has been made to your Lordships by my noble friend who has just sat down. I hope to show your Lordships before I sit down that it is by no means a novelty elsewhere and in other societies which claim to know quite as much about art, whether dramatic, or musical, or other art, as we do here. But I hope that nothing will be said by the Minister who replies to this Question to-day which takes too great advantage of the fact that this is a novel proposal or, on the other hand, negatives entirely the idea that it is a permissible principle to give a subsidy of this kind. This is not merely a matter of economy of material wealth or an inroad upon material savings. The mere fact that this Question is about to be answered by a noble Lord who discharges with great ability the functions of responding not only for the Board of Education but for the Ministry of Health, shows that though there are material assets which are valuable, other which are not less valuable are moral and spiritual assets in the life of a nation.
This subject touches the question of education and, not merely artistic, or literary, or technical education alone. It would help, as some of us think, to impart that civic education which is the root of all our national spirit, our national refinement, our national courage and all those great elements which go to make up the character of which Shakespeare wrote so splendidly nearly 400 years ago. The admissibility of such a subsidy as this flows from a deeper principle still, and that is the principle that in matters of art the commercial and economic principle fails as a test of excellence or a guide to popular taste. You may search the records of Parliament in vain for any but the scantiest allusion in past years to subjects such as this.
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That leads me to say that I believe I am connected with about the only piece of Parliamentary literature which bears upon the subject. Some twenty years ago when I was, comparatively speaking, young and more ardent, in my House of Commons days, there was a discussion going on outside the House on subjects such as this and it occurred to me to move what is called an Address for a return from His Majesty's representatives abroad of all subsidies and grants given either by the State or by municipalities to any form of dramatic, or operatic or musical representation. I persuaded the House of Commons to make an Order for that Return, which eventually materialised in the form of a White Paper which is known as Command Paper No. 1838 of the year 1903. I am glad to see my noble friend Lord Lansdowne in his place, because it brings to my mind the recollection that whereas at that time, in 1903, I was hoping that in my humble person I was going to receive some of the credit of this Return, the fact was that my noble friend's great reputation, enjoying, as he did then, the great office of Secretary of State for Foreign Affairs, attracted to him all the notice of that favourable Press which I hoped was going to be mine. He, no doubt fully conscious of all that was done in his name, sent out circulars to His Majesty's representatives abroad asking for this information. They responded and sent in a whole lot of information, which was issued in the White Paper. As a result he was complimented upon his never-ceasing vigilance in the search for knowledge of that kind. If I did not get all the share of the credit that was due to me on that occasion, no doubt my noble friend Lord Lansdowne gave me no more and no less than he thought was good for art and for this country.
That leads me to remind your Lordships of some of the things that are going on in the way of creating new precedents, continuing existing precedents, and consolidating and confirming old precedents in the matter of grants of this kind elsewhere than in this country. My own connection with this Return is only to be found in obscure entries in the Votes and Proceedings of the House of Commons on March 2, 1903. Assistance of this kind is bound to take one or two of various forms. There are cases of mere exemptions from taxation of theatres. I mention them

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especially because it is not only to the ancient monarchies of the old Courts of Europe that you go for instances of that kind, but you find that sort of thing also in Buenos Aires, in a quite new Republic in Latin America. There are also the gift of State sites, the erection of State buildings at State cost, and the providing of repairs at State cost. There are existing instances of State management with State-chosen directors, which we must assume is on account of the confidence in their skill and taste in the management of dramatic or operatic representations. There is another common form of assistance, and that is the grant of a State indemnification against the deficits which are only too likely to happen in the case of some dramatic representations, and not by any means the least because they are the best representations that can be given.
I am very far from suggesting that I should take your Lordships through the long catalogue of reports which form this White Book, but I will take some of the principal cases. If we go to Central Europe we find that at Vienna an opera house was erected at the cost of the equivalent of £500,000 some time before 1903; at any rate, it was in existence in 1903. Besides that, at Vienna there was the Burg Theatre which seems to have cost the equivalent of £13,700, and was erected like the opera house upon State land. Both these institutions, the Report says, were the property of the Emperor's Treasury, and were maintained and administered by the Lord Chamberlain's Department. In Hungary, on the other hand, at Budapest, large sums were spent on like objects. The opera house and the National Theatre at Budapest alone seem to have cost very close upon £50,000 in the year 1903 in the shape of recurring charges for the representations there.
Now we come to the three most conspicuous cases in Germany. Let us take Munich, Berlin and Dresden. Munich has its National Theatre which is sometimes called the Court and National Theatre. That was built by the State, repaired by the State, and occupied without rent being paid to the State. There is also the Residenz Theatre. That was kept and administered by what was called the Civil List. I
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shall recur to this point directly. In Munich the Civil List gave aggregate subventions equivalent to £12,500 a year, besides making good any deficit which might result from the performances. In Berlin there are two houses, one the Royal Opera, the other the Royal Playhouse. Together they seem to get, or were getting in 1903, no less than the equivalent of £54,000 sterling from what was called the private revenue of the Crown. They were also built on land which was the property of the Prussian State, and the cost of repairs to them was met by the Prussian State.
Besides a long list of municipal aids to provincial theatres, which list of municipal aids covers even large villages, and in the special case of Leipzig shows a financial connection between the municipality and three great theatres, there were in Dresden an opera house, a theatre, and an orchestra, all managed by the King's own director, and costing in subsidies in 1902 an equivalent of £41,000. In addition to the State grants which I have mentioned, help took the form of so-called Royal grants in many of the cities both of Germany and of Austria. There were, in 1902 and 1903, municipal grants from many cities in Austria, Hungary and Germany. I could cite other instances in Germany. There were the Wurtemberg, the Darmstadt, Baden and Weimar theatres and many others, in which the Courts or the taxes or both provided subsidies of the same kind.
I am aware that it may occur to your Lordships to say that these are nothing but survivals from the old Court system in which all art was regarded as little more than a decoration of the Court life, and the only patronage that art got was from the monarchies and the adherents of the monarchies, and that their life rested upon them. You may say that all these subsidised institutions are nothing but a continuation of the old epoch and that the burden still falls in the same place. I dispute that proposition. I say that we do not know what is meant by a Civil List, and it is quite clear that in many cases it is not entirely made of grants from the private revenues of the Crown nor is it clear what you can call private revenues of the Crown in any particular case. But there is an element of contribution from the taxes in many of the instances so that in reality you find

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these great theatres continued by sacrifices at the cost of the taxpayers in part; or at all events, there were in 1903, subsidies of the kind for which my noble friend behind me has asked.
I can quote two other and more conclusive and significant cases. We find that a new State like Belgium, which has not yet existed for a century, has its State and municipal aids to drama and music. There was a good municipal subsidy to a theatre in Sofia in Bulgaria. It had existed for some time. There is a Royal Theatre in Copenhagen, and there is a municipal aid in Denmark, though I admit that it is only given to concerts. Under British tutelage in Egypt I find that, somehow or other, nearly £10,000 a year was being given to drama and music. There was a good municipal Return was made. In Norway a site was given by the State for a theatre, and there were municipal aids in the provinces. I find instances in Rumania, while in Russia there were no less than six theatres, three in St. Petersburg and It had existed for some time. There is three in Moscow, to which some very large sums are mentioned as having been given. In connection with this I may read a passage from the Return which says, dealing with the year 1903—
"In Russia the theatre is looked upon as being on educational institution, and the Government aims at making it within the reach of all. It is possible to visit the opera for 5d., and to see Russian pieces for 3d., and French or German pieces for 9d. or 10 d."
Those are the European cases. There are other cases in Latin America, though I cannot quote a case from the United States of North America.
There is also the still more interesting case of France. In France, however, it falls in the class for Parliamentary grants, in the class of what you may call a modern State organisation, but I must admit that there is in it something of Napoleonic inspiration. I believe that tradition says that even amongst the frightful preoccupations of his stay in Moscow the great Napoleon was actually engaged in looking to the details of the constitution of the Comédie Française. Anyhow, I have here the regulations which affect the constitution of the theatres in Paris and elsewhere in France, in which the State regulates the number of artistes engaged, which means a higher standard of excellence in the representation, and
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also looks to the quality and attainments of those artistes by stipulating that some at least should have received their education at the National Conservatoire. It shows that it is not content with providing these financial links between the State and these artistic representations. So much for foreign precedents. I admit that times then were different, and possibly the constitution of these States was different. It may be some time before we get any information at all as to what is going on now in regard to subsidies of this kind in States which have suffered such frightful trials.
I think the Government will do well not to close the door for ever, or to give any negative answer—I hope they will not do so—except upon purely temporary and opportunist grounds. I said that this is partly educational and partly due to the fact that the commercial principle fails you as a principle in matters of art. When I moved for my Return twenty years ago I remember being told by a leading member of the then Labour Party in the House of Commons, who subsequently received Office under the Crown, that he should certainly not object to a subsidy such as those which I had hinted at in my Motion because he regarded it as a form of technical education of the highest and most valuable kind.
I ask your Lordships to receive the introduction of this subject with favour and to use your influence with the Government in the direction which is indicated by the terms of the Question. If you leave an unrestricted operation to what may be called the commercial and advertising spirit in relation to dramatic art, the prizes and the profits will probably go to the loudest shouters, to the thickest skinned seekers of the thing which is denoted by that base word "publicity," and in the end the highest inspirations and the best productions will probably disappear through starvation and the cause of the best art will surely suffer.
LORD WILLOUGHBY DE BROKE: My Lords, as a Warwickshire man whose home is not very many miles from Shakespeare's birthplace, although, like a great many other Warwickshire men, I have never been inside Shakespeare's birthplace—most of our visitors from elsewhere do themselves and us the honour of going there—I should like to support the appeal which the noble Lord

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has made to the Government. I am not responding for the Government this afternoon, but I can anticipate very fairly what the Government reply will be. My noble friend will receive an exceedingly polite and consoling answer. He will get every consolation except the consolation of a cheque. But in spite of that I associate myself with what Lord Stuart of Wortley has just said, and I feel sure that the Government will not turn down unsympathetically the idea which has been placed before your Lordships.
The noble Lord who introduced the subject has a particular title to speak to your Lordships on such a matter. He is connected with a family who have done perhaps more for Shakespeare- than anybody else in the United Kingdom. There have been at least four generations of the Flower family at Stratford-upon-Avon who have endowed and sustained the theatre there in which Shakespeare's plays have been consistently played. To the single-minded and generous efforts of the Flower family this country really owes a deep debt of gratitude; they have created a cult and a home for Shakespearian performances. My noble friend, I am sure, will agree with me that in his appeal one cannot get away from a consideration of the general arguments for and against a national theatre, and it seems to me that the House of Lords is a very convenient place in which to offer one or two remarks about it. We can do so without any financial responsibility whatever. We shall get the best opinions as to whether we ought to have a national theatre in this country or not; and not the slightest notice will be taken of the debate outside. In that respect it will be highly characteristic of some of the discussions we have had; for instance, the discussion with regard to Socialism.
The question of a national theatre is really a very serious one for the life of this country, and the arguments for and against it can be very briefly stated. If your Lordships will allow me I will try to place before you one or two considerations. To my mind the arguments in favour of a national theatre and a national school of dramatic art are these. If you have a national school of acting and a national theatre, to which the pupils from that school have the right of access after having obtained certain diplomas,
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you give to young actors and actresses the chance of displaying their talents and interpreting the drama of this country; an opportunity which they think, perhaps rightly and perhaps wrongly, they do not possess at the present. You take them away from the caprice or passing humour of the moment, from the choice of the actor manager of the day, and place them in a secure position and enable them to have some sort of opportunity of displaying their art before the British public. At the same time, if you have a national theatre you give yourselves the opportunity of cultivating the national taste and sustaining great national authors of this country, such as Shakespeare. Many of your Lordships are well aware that when the Colonial troops came here at the beginning of the war they were much astonished and aggrieved that in the very capital of England there was no representation at that time of any single one of Shakespeare's plays. At that time Shakespeare's plays were being played to crowded houses in the very country with which we were at war.
Not only would a national theatre give a chance to actors and actresses, but it would also give a chance to the author. I know it is very easy to say: "Why should you subsidise a national institution in order that an author may have a chance of being displayed? Surely he can write a play without any great expense." That is true. You can write a book and produce it, you can paint a picture or create a piece of sculpture, without incurring any very great expense, but you have to do more than merely write a play—I am not speaking as an author myself, because I have never written one, but I know some of their troubles—you have also to go to the expense of getting the play produced. Consequently, the dramatic author does not stand on quite the same level as regards getting his work presented as the author of a book which does not take the dramatic form.
In considering the advantages and disadvantages of a national theatre, we have to ask ourselves (1) whether it is a desirable thing; and (2) whether we can afford it. There are a great many arguments against a national theatre. The subsidised theatres in foreign countries, to which my noble friend Lord Stuart of Wortley referred just now, have from

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time to time been rather severely criticised. It is said that if you start a national school of acting you tend to stereotype a certain class of acting, to preserve gestures and styles of acting which in time become old-fashioned, hidebound, and archaic, with the result that you do not make any real progress. To judge from certain things that one hears, I am not at all sure that human nature behind the scenes in a State-subsidised theatre is not pretty much the same as human nature behind the scenes in any other theatre, and we hear of what, by a euphemism, is called the artistic temperament, which is English for a first-class row, making itself heard behind the scenes of the Comédie Française just as much as that class of temperament tends to make itself felt in a privately-owned theatre in this country.
The other objection which is constantly urged against a national theatre is that we are not a theatrical race. I believe that is not an ill-founded criticism, and perhaps its best justification would be found in the House of Lords this afternoon, where a comparatively small attendance is discussing such a very important matter as the establishment of a national theatre at the very birthplace of our national poet. But surely we cannot be said to be a wholly untheatrical race. We have produced Shakespeare and Sheridan, Garrick and Irving, to take only four names, and in the poet Gay we have produced the author of a play which has the immortal honour of lasting almost as long as, or, I believe, a little longer than, a masterpiece like "Chu Chin Chow"—and, after all, that is not so bad. When it is said of us that we are not a theatrical race, do not your Lordships think that what people really mean is that the English people as a whole do not care about what is known on the Continent as an academy? I think Mr. William Archer, who, as your Lordships are well aware, is one of the leading critics of the theatre, once said that we shrink from idealism. In this country, instead of having an activity subsidised by the State, we prefer to rely upon individual effort and individual achievement.
It was only this morning that I met in the street an actor-manager whose name, which I do not mention, is well known to your Lordships. He has received a distinction from his Sovereign as being one
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of the best actors that we have ever produced and a great authority on the drama. I asked him whether he was aware that this debate was coming on this afternoon. He said that he was. I then asked him what side I was to take on the question of whether one should declare in favour of a national theatre in the abstract, or not. He said: "I was once in favour of a national theatre, and I worked very hard for it indeed, but since I have seen the terrible hash in which all Government-run concerns ended during the war I am beginning to be very doubtful about entrusting the theatre to those same tender mercies."
It has also been said that any good play will stand upon its own merits and is bound to succeed, that all these "mute, inglorious Miltons" who are complaining about never being produced have not really written anything that its worthy of being produced. I am not at all sure whether that is absolutely true, because, to descend from Shakespeare to the author of "Charley's Aunt,' I have no doubt that some of your Lordships are aware that Brandon Thomas, the author of that play—I am speaking without the book, but I know that this is relatively true—had to take that play round London—a play which has run longer, I believe, than any other play except the "Beggar's Opera" and "Chu Chin Chow"—for weeks and even for months before he could find a manager to accept it. It is not at all certain, therefore, that there are not authors of unproduced plays nowadays whose talent we might evoke and exploit by placing it at the disposal of the nation by means of a national theatre.
Looking at the question in the abstract, as one who has taken some interest in the drama and who is himself the owner of a London theatre—though I am not responsible for the productions at that theatre—
A NOBLE LORD: Which theatre is it?
LORD WILLOUGHBY DE BROKE: I will tell you afterwards, my Lords. I will place my box at your disposal whenever your Lordships desire it. In the abstract, I am certainly in favour of what is called a national theatre, and I hope that my noble friend will not appeal in vain for public support. But at the back of it all there is that spectre of the cost. Now that we are discussing

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the subject, it may be interesting to your Lordships to recall that two separate attempts have been made to estimate the cost of a successful national theatre. In the year 1904 the whole question of expense was thoroughly examined by such supreme authorities as Sir Henry Irving, Mr. Henry Arthur Jones, Mr. Pinero—as he then was—and, I think, the late Sir George Alexander, together with all the heads of the dramatic profession, acting in concert with leading critics, such as Mr. William Archer, and an exceedingly interesting book was published. They arrived at the conclusion that you could not sustain a national theatre in this country unless you were prepared to spend at least £70,000 or £80,000 a year That means a capital sum of something like £2,000,000.
Later on, if your Lordships will remember, a very able appeal was made to the nation some few years before the war, when England was really rich, and people could afford, and some of them did afford, to give large subscriptions towards a thing of this kind. I believe that all the trustees for that fund then sought to be raised are now dead, with the exception of the present Lord Lytton, who is now Governor of Bengal. I do not know what has happened to the money which they collected, and they collected a considerable sum, but I expect that the subscribers have already asked for and obtained their money lack at the door. We will let that pass. They asked for at least a sum of half a million, and therefore I am only uttering a platitude when I say that at this time of day, with the general dislike there is of any State-managed concern, with the Income Tax and national taxation generally at the present figures, it is not likely that we shall appeal to the Government with any prospect of success for a State-aided theatre—for a subsidy to the theatre. At the same time, as a Warwickshire man, and as one who has taken great interest in the theatre at Stratford-upon-Avon, I thank Lord Erskine for the way in which he has brought the matter forward, and I trust that this debate will well ventilate the subject and will not have taken place entirely in vain.
THE PARLIAMENTARY SECRETARY OF THE BOARD OF EDUCATION (THE EARL OF ONSLOW): My Lords, I think we
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owe a debt of gratitude to the noble Lord for having raised this Question, because it has produced a very interesting debate on a subject of interest to everybody in this House, and has also elicited two or three very illuminating speeches, from various points of view, from those who are best qualified to speak upon the subject. The noble Lord who asked this Question gave us a very interesting account, for which we are all grateful, of the activities of the society at Stratford-upon-Avon, and I am sure that anything that can be done to assist the objects which he has in view at Stratford-upon-Avon will be welcome to us all. But what he really suggests in this Question is that the Government should undertake a subsidy to the theatre. I think, although perhaps he may differ from me on this point, that that was really recognised by the two noble Lords who succeeded him in the debate.
Now a subsidised theatre, as Lord Willoughby de Broke said, is in this country a new departure altogether. I do not say it is a new departure to subsidise art. We do subsidise art in other ways, such as, for instance, the National Gallery and certain museums, but we never have yet, either nationally or municipally, given a subsidy either to the theatre or the opera, and to do it now would be a new departure. I am well aware that in most other countries this form of subsidy is commonplace. It is regularly done either from the State or from the municipality, but it has not been done in this country, at any rate up to the present moment. I venture to think, although perhaps my noble friend will not quite agree with me, that if the Government were to accede to his request and accord a subsidy to the theatre at Stratford-upon-Avon, it would be quite impossible not to open the whole wide subject of a national subsidy of the theatre.
I think if the theatre at Stratford-upon-Avon were selected for subsidy my noble friend the Lord Chamberlain would receive a great many requests from theatres in London and elsewhere that similar treatment should be accorded to the theatres in London, and also requests from the London playgoing public, because, of course, although I admit all the historical and sentimental value of the theatre at Stratford-upon-Avon, theatres in larger centres are perhaps more convenient.

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I am not going to follow Lord Willoughby de Broke into the argument for or against a national theatre, or a national subsidy, but I would remind your Lordships that this is a new departure, and that the present moment, as Lord Willoughby de Broke foreshadowed in a reference to my probable reply, is not a time in which we really could embark upon new forms of expenditure. Although I am very sorry to give so discouraging an answer to my noble friend, I think your Lordships will agree that it would be impossible really to consider a new avenue of expenditure which this would open up, and therefore I am afraid it will not be possible to entertain the request which he has put forward.
THE LORD ARCHBISHOP OF YORK: My Lords, I have no wish to prolong the discussion, and what I wish to say I will say in a few words. Probably it will be felt difficult to meet the point made by the noble Earl, but I think there are other ways in which public expenditure may assist the objects which the noble Lord who asked this Question has in view. Ultimately, the drama of the country must reflect the public taste, and public taste in dramatic art, as in other forms of art, depends upon the education of the people. There is, at the present moment, as your Lordships know, a most interesting kind of experiment being gone through in our elementary schools, and in many other schools throughout the country, with a view to making the drama an essential and integral part of the public education of the boys and girls of the country. The results that have already been obtained by the use of the drama as an instrument of education are most interesting and promising. Ultimately, if such education is extended, it will, I hope, mean that there will be an increasing number of people, not only in London or in Stratford-upon-Avon, but throughout the country, who have been trained to value good dramatic art for its own sake. If public expenditure is to be used for the purpose of improving the quality of the drama in this country, in my judgment it can be aptly expended both by the State and by the local authorities in encouraging, wherever possible, the development of these experiments of making drama part of the normal curriculum in our secondary and elementary schools.

LEGITIMACY BILL.
Order of the Day for the Second Reading read.
LORD MUIR MACKENZIE: My Lords, your Lordships, yesterday, received with such ready welcome the case of the bastards that I feel encouraged to think you will also give a kindly hearing to the case that I have to present to your Lordships on behalf of the illegitimates. It is at the request of those who successfully piloted this Bill through the House of Commons that. I have undertaken to place it before your Lordships. I dare say that they might have chosen a better exponent, but I know your Lordships will not attribute as defects in the Bill itself any shortcomings of my own. I think that if it had been proposed to me to bring forward a Bill of this kind for the first time in this House, I should have said that I thought such a change in the law ought to be in the hands of the Government, not of a private member. But the case is different now, because this is a Bill which has come up from the other House, where it was very fully considered, and where it passed both the Second and the Third Readings without a Division. I am bound to say that I think there is some disadvantage, not only to myself but to the House, that this question should be debated in the absence of the Lord Chancellor, but I cannot think that your Lordships will consider that the Second Reading ought to be delayed any longer. Your Lordships may have observed that I was in no hurry to put down the Bill for Second Reading, and I think you will agree that it ought not to be postponed too long.
The Bill, so far as I am concerned, is founded upon sympathy for the illegitimates, for those who have come into the world by no fault of their own, and find themselves exposed to neglect and contempt, and, indeed, to all sorts of degradation. There has been, I think, a great change in feeling upon this subject in recent years—over a good many years, in fact, and, as it seems to me, it is a growing feeling. I do not know whether or not high-minded ladies approve of this Bill. I know that some do, and I should hope that there was not general objection in that quarter. I will not trouble your Lordships with figures and statistics bearing upon the Bill. I will only say that those, at any rate, who work

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among the poor are aware of a very strong feeling on this matter. They are led to feel compassion for the sorrows, not only of the illegitimates themselves, but of the parents, who are able to retrieve their mistaken courses, but are not able to do anything for the unfortunate children. The proposition to which I ask your Lordships to adhere by moving the Second Reading is the simple one which is contained in the Title of the Bill: "An Act to amend the law relating to children born out of wedlock."
It seems to me to be impossible to bring about a complete remedy, because there are facts in the case which even an Act of Parliament cannot get over. But certainly a great deal might be done to mitigate the severity of the fate of those who are the subject of this Bill. All that your Lordships are asked to do to-day on the Second Beading of the Bill is explained in these words from Clause 1 (1)—
"Where the parents of an illegitimate person marry or have married one another, … the marriage shall, …"
if the father is domiciled in England, legitimate an illegitimate person
"and such person is in this Act referred to as a 'legitimated person.'"
The greater part of the Bill is occupied with minor points, some of which no doubt are difficult, or at any rate require very careful consideration before being confirmed by this House, but they are not, I venture to say, natters that are involved in the Second Reading. I think that I could not do better than very shortly run through the clauses of the Bill, and your Lordships will see what I mean by drawing that distinction between the Second Reading and the further progress of the Bill.
Clause (1) deals with the legitimation by subsequent marriage of parents. That is, as I have already said, the one question involved on this stage of the Bill. Clause 1 (2) requires particular attention. It was the subject of much marching and counter-marching in another place. I hope it will be well thrashed out here. I will accept whatever is the decision of the House. If the matter were res integra I should have preferred that this subsection were not included. In fact, I cannot help thinking that, if you are to distinguish between illegitimate children, those are in a sadder case who come
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within the class excluded by this subsection than the others. Therefore, it is not an exclusion which I should have favoured, if the Bill had been one of my own. My impression is, however (though I am not quite sure) that it represents the law of Scotland. I do not know whether one of the noble and learned Lords from Scotland is here who would inform me, but I think that that is so. It is, of course, a strong argument in this House that you should conform to a law of which there has been long experience in Scotland, and with which, I think, my countrymen are quite content. A very eminent Scotsman has just left the House, the most rev. Prelate, the Archbishop of York. The Archbishop of Canterbury is not here, but I believe that both those most rev. Primates, like myself, were born and bred in the country where that law prevails, and that their ancestors, like my ancestors, were quite content to live under that law, and nobody has ever wished to depart from it. Therefore that is an argument that may be used in favour of keeping these words.
It must also be said that the matter was very fully debated in the House of Commons, and that the promoters have committed this Bill to me with these words inserted therein on the last occasion. I must, of course, expect that your Lordships will debate that subject, and it certainly does deserve careful consideration. Your Lordships will observe that subsection (3) provides that what is to happen in regard to the succession of property does not follow, as far as this Bill is concerned, upon the provisions of subsection (1). As at present advised, the clause seems to me to be quite right, but I do not know whether I shall remain of that opinion after having heard the debates in your Lordships' House.
Clause 2 deals with the effect of the Bill upon intestacies. If your Lordships will look at the clause you will sec that there are two dates mentioned in it, and I can imagine that there are those amongst your Lordships who will wonder what is the meaning of those dates. The noble and learned Earl on the Front Bench below me [the Earl of Birkenhead] knows very well to what they refer. They refer to the date on which the Law of Property Act, which he passed through this House and which obtained the assent of Parliament, will come into operation,

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and it will be very awkward to deal with many of the subjects of this Bill before that Act becomes the law of the land. That is the meaning of the clause and of the provisions contained therein. I dare say that there are noble Lords who would not follow all the intricacies of Clause 2, and I greatly hope that I shall not be cross-examined too closely upon it by those who do understand it. So far as I am capable of judging, I believe that the clause as it stands is right.
Clause 3 is one with which I need not trouble your Lordships because it deals only with technicalities concerning powers of appointment. Clause 4 is so technical, I think, that I ought not to go into it on this stage of the Bill. Clause 5 is a matter of Inland Revenue. Whether it is right or wrong I do not know, but I dare say some light will be thrown upon it in the course of discussion. Clause 6 is one which will naturally excite some interest in this House because it contains the following subsection:—
"(1) Nothing in this Act shall affect the succession to any dignity or title of honour or render any person capable of succeeding to or transmitting a right to succeed to any such dignity or title."
Somewhere else in the Bill there will be found, I think, a provision which deals with the very difficult question of how far property and titles may become divorced under these provisions. That is a, matter which I shall have to try to deal with if any difficulty is raised in Committee, but at the moment I confess that I should not be prepared to give an opinion to your Lordships that was worth giving.
Clause 7 is an Inland Revenue clause. I trust that it is all right, but I am not at the moment prepared to say anything about it. Clause 8, as your Lordships will see, is a long clause in which provision is made in regard to persons legitimated by extraneous law. I should be very sorry to say much to your Lordships upon that just now. It is a difficult subject, and I shall not say anything about it at all unless at some future stage I understand more about it than I do at the moment. Now I come to the last clause. In subsection (2) of that clause a date is mentioned for which I am not responsible and which, I think, is absolutely hopeless. I have come to the end of that part of what I have to submit to your Lordships. I only wish now to say that the Bill was
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very carefully considered in another place, that it was warmly supported by members of the Government, and, as I have said before, that it passed both Second Reading and Third Reading without a Division.
Perhaps, without being out of order, I may refer to the future course of the Bill in your Lordships' House. There is a temptation when Bills come up from the other House, to try to take them through this House without amendment. If one has the advantage of being able to do that the Bill will, of course, become law without any difficulty; but I would not undertake to ask your Lordships to pass this measure without amendment. As I have said before, there are clauses in it which require very careful consideration. I shall be glad to see them established, with one exception. I shall be glad to see the clauses dealing with the devolution of property accepted, but only accepted because, as the result of your Lordships' careful consideration and the assistance of the noble and learned Viscount, the Lord Chancellor, one can say that they are right. If I may be forgiven for saying so, your Lordships exist to examine Bills that come up from another place, and if you think they really require amendment your Lordships should amend them and stick to your Amendments, and do the other House the honour they deserve of supposing that they will deal with matters that come down to them in a reasonable way and in a manner which is courteous to your Lordships' House.
Then, of course, there comes the question of Committee. If it is a disadvantage not to have the presence of the Lord Chancellor on Second Reading, it is a still greater disadvantage that he should not be here when the Bill is considered in Committee. I hope that I shall receive the approval of your Lordships in not immediately naming a day for Committee, but in waiting not so long as to imperil the Bill by lapse of time but for at least what I might almost call a decent interval to know something of what prospect there is of the noble and learned Viscount being back in the place in which we wish so much to see him. I beg to move that the Bill be now read a second time.
Moved, That the Bill be now read 2a.—(Lord Muir Mackenzie.)
THE EARL OF BIRKENHEAD: My Lords, I share somewhat the regret of the noble Lord that it has not been found possible for the Government to make this a Government Bill and to undertake the responsibility which would have followed upon such adoption. As the noble Lord quite truly said, this Bill received a great deal of support from various members of the Government in another place and, indeed, the members of the Government greatly, and, as I think in one important particular unfortunately, influenced the effect of the proposals. The noble Lord was somewhat unenthusiastic, I thought, as to some of the clauses of the Bill and he was, if I might say so, parcus laudator of the measure which he was to recommend to your Lordships for Second Reading.
I very much hope that he will not postpone unduly the setting down of the Committee stage of the Bill, though he is evidently right in not precipitating that stage of a Bill which, unquestionably, requires both discussion and consideration. In particular, the conveyancing clauses, or the clauses which involve conveyancing questions, have caused me some little anxiety and will, I think, require further examination. But the noble Lord and those with whom he is acting will, I think, be well advised to keep their eyes very closely upon the development of the Session and the time that is available, because if your Lordships are agreed upon the principle of this measure nothing could be more unfortunate than that, by unduly postponing the Committee Stage, the discussions which may become necessary with another place should occupy so much time that there might be a risk of losing the Bill altogether. I should most greatly regret it if this Bill were lost. It seems to introduce far too late in our social history a measure of elementary social justice.
The principle which underlies this Bill is that no child shall suffer because of the transgressions of the moral law by its parents. Let us never lose sight of this principle, because we shall find it, I think, a guide in various difficulties which have arisen elsewhere, and which will certainly re-present themselves for consideration in this House. There can be no other principle, I think, involved in this case. No one, for instance, will say that we are to legitimise children out of consideration
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for the father or the mother I am not concerned here to debate any question of sexual morality, and I gladly evade such an obligation in this connection. If therefore we exclude any consideration at all for the father or mother—I am dealing with the ethical side of it—there remains no other sure guide for legislation of this kind except the paramount interest of the child.
How elementary are the considerations of justice which make it right that that interest should be safeguarded? The child is innocent of all wrong. It comes into the world, in existing circumstances, with everything that can contribute a pathetic, a melancholy disability of shame to its youth and its maturity. The very system under which birth certificates must be produced on recurrent occasions in life, results in each of those occasions being stamped with some fresh stigma of humiliation for one who is completely innocent of any offence either against the law of this country, or the morals of this country. When he is at school in the surroundings of a village (if his lot has been cast among the lowly part of the population in these Islands) or (if he belongs to a section in society which is more happily provided for in means of the world) when he comes to a public school it is known to those before whom his age must be vouched by his birth certificate that the stigma of shame was branded upon him in infancy.
We have passed far in legislative matters, I hope, beyond the precept that the sins of the fathers shall be visited upon the children unto the third and fourth generations. This may, unhappily, still he true in some melancholy physiological matters which exceed the scientific skill of man to alleviate or to cure. It has long since ceased to be the guide or the principle upon which our Legislature depends. I cannot believe that any considerable number of your Lordships—who for so many years, I might, indeed, say for so many generations, have set a high example of progressive thought in these matters to another place—will dissent from the general principle which, so long after it should have been corrected by legislation, is effectively secured by the proposals of the present Bill.
There is, however, one section that was very generally referred to by the noble Lord who moved this Bill, which requires

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a more particular consideration. The point is really, as the noble Lord himself seemed to be aware, one for Committee, but it so dominates in importance any other topic that is raised in the Bill that I think it right, as a preparatory step, to put down an Amendment for the committee stage to alter the proposals of the Bill in their present form and to offer now some explanation of the, point which, in my judgment, will require this correction in Committee and which I shall attempt to amend in Committee. Section 1, subsection (2), in the Bill as originally introduced, was in this form—
"Nothing in this Act shall operate to legitimate a person whose father or mother was married to a third party when the illegitimate person was born."
The effect of that is manifest. Supposing A and B, being unmarried, had an illegitimate child, the benefit of the measure was to be given to that child, on their subsequent marriage, but as the Bill stands there is this limitation upon the benevolence which is shown to the illegitimate child, that if either the father or the mother of the child was married to a third party at the time of the birth of the child the benefits were withheld from the illegitimate.
I do not think that any person who had accepted what was the obvious principle of the Bill could possibly have, made himself responsible for an exception which seems to me at once so barbarous and so entirely out of harmony with the general principle of the proposal, because what does it mean? It means that although we are agreed that the object and the sole justification of this legislative proposal is in the interest of the child, to remove from that child a stigma for which that child has no individual responsibility, nevertheless in certain excepted cases, dependent upon what might almost have been an accident as to whether either the father or the mother was married to a third party at the time of the birth of the child, this protection was to be withdrawn. What conceivable connection has that got with the case of the child we are to benefit? We are not here to distribute either praise or censure to the fathers. We are not here by nice gradations of morality to distinguish between the degrees of blame which we must give respectively to fornication and adultery. Such inquiries are wholly alien to any purpose which we have in
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our minds in dealing with this question. How are you to distinguish between the case of a child in the one instance and in the other?
Suppose that you have before the Legislature two children, each of them, we will suppose, about the age of twenty, each of them illegitimate. One of them says: "I claim the benefit of the Act," and to him the Legislature says: "You are entitled to the benefit of the Act because your father and your mother were neither of them married to another party when you were begotten and when you were born." To the other who comes before the Legislature with individual claims which are indisputably just as strong, because they are identical, you say: "We will give you no relief in comparison with him with whose case we have just dealt. We say you shall still continue to be illegitimate." When he says: "Why in the name of social fairness do you say that?" you answer: "It has nothing whatever to do with you. The decision could not have been influenced, and it is not influenced, by anything that you have suggested or anything that you have done. The distinction is because in our judgment the moral fault was greater which gave you birth." To adopt such a view is, in the first place, to repudiate and to negative the, whole principle upon which these proposals depend, and, if that principle is right, it is to perpetuate an act of utterly indefensible injustice to the child placed in the unhappy circumstances which I have described.
These somewhat obvious considerations did not fail to attract attention in another place. I must trouble your Lordships in a few sentences with the Parliamentary history of this business. The matter was discussed very fully in Standing Committee. These considerations were explained and the result could not for one moment be in doubt, I venture to think, in any rational assembly uninfluenced by official pressure. Accordingly, in Standing Committee this provision, after a full and intelligent discussion, was taken out. The Attorney-General made some observations on that occasion. He pointed out that it is not the case that it is consistent with the law of Scotland. The noble Lord rather founded himself upon a supposed advantage, which I do not fully appreciate, that would attend a complete uniformity between the

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Divorce Law of Scotland and the Divorce Law of this country. That argument leaves me quite cold. We have gone on for several centuries differing profoundly from the Scottish nation in our Divorce Law without exciting any considerable degree of dissatisfaction or protest cither in this country or in Scotland, and I know no reason why those who have attempted from time to time to reform the Divorce Law of this country should be debarred from making a reasonable provision in our own legislation by any reference or appeal to Scottish precedent.
For the Attorney-General that argument does not apply. He says:
"If that be the only reason for the clause I doubt very much whether it effects its object, because I am told by Scottish lawyers that by the law of Scotland it is necessary, in order that the child may become legitimate, that the parents should be free to marry, both at the date of conception and at the date of birth. This clause does not carry that out. A child conceived in adultery and born after divorce would be illegitimised by the law of England, but not by the law of Scotland. If the only argument for that clause is that we want to bring the law of England and Scotland into harmony the clause must be left out."
We have the advantage of the guidance of the Attorney-General. Now we come to the discussion on the Report Stage, on June 15, in the House of Commons, and a very surprising development took place then. The clause was replaced.
No one who has read the Report of the debate in the OFFICIAL REPORT can be under the slightest delusion as to the circumstances in which a clause so illogical and indefensible was restored. It was not restored in obedience to a conviction entertained by any of the speakers who addressed themselves to the arguments which were raised. It was restored in consequence, and solely in consequence, of a most surprising intervention in the debate by the Solicitor-General. I ought to make it plain that we might have been excused for supposing that we had the advantage of the Solicitor-General's support in this matter. The Solicitor-General in an earlier stage of the Bill made an observation in which he said:
"I despair of explaining what complications may ensue if the Bill goes through in its present form in regard to succession to property. … If this Bill goes through a child will be legitimated in England who would not be legitimated in Scotland."
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And the Solicitor-General, on June 15, when the clause was restored, also said:
"If this Amendment be accepted and the words, which were removed in Committee, are put back into the Bill, substantially it will make the law as enacted by this Bill in regard to England what the law is in Scotland."
The Attorney-General finds himself in complete disagreement with the Solicitor-General on this point. The Attorney-General, who is an old friend of mine, has recently stated in the country, a little impolitely I think, to fourteen of his present colleagues, that in the course of the last few months he has been very busy in clearing up Coalition mess. When this admirable task has been completed and the Augean stable cleansed, for the present condition of which fourteen of his colleagues were responsible equally with other malefactors like myself, I hope the learned Attorney-General will find time also to clear up some little discrepancy which appears to exist between himself and the Solicitor-General on a not unimportant matter.
When the clause was restored on the Report Stage the Solicitor-General, entirely forgetting or disregarding what the Attorney-General had said on a previous stage, and also what he himself had previously said, made a very strong and vehement intervention in the debate and said what calamitous consequences would follow unless the clause was restored. I believe I am right in saying that the Solicitor-General on a previous occasion had voted with the majority for removing it. Between the two stages his mind had so completely altered that he who had been in favour of removing the clause when the matter was discussed in Committee, came to the conclusion, on the Report Stage that it would be calamitous to remove it. The reason he gave was that it would establish a difference between the law of Scotland and the law of England, whereas the Attorney-General on an earlier stage said that it was impossible to suppose that the retention of this clause would retain uniformity between the law of England and the law of Scotland.
I shall certainly propose, when the Committee stage is reached, that the decision which should be taken by this House is the decision taken during the Committee stage in another place, and if your Lordships are good enough to accept

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that proposal I cannot doubt that it will be received, and most gratefully received, by the promoters of the Bill. It will be realised how faulty and unsatisfactory was the advice, differing from his earlier view, given by the Minister who intervened. If you take that view you will make the Bill at once more harmonious to its own purpose, more consistent and infinitely more fair and generous to that most unhappy class which it is primarily intended to benefit.
LORD BUCKMASTER: My Lords, I hope the noble Lord who introduced the Bill will forgive me for saying that when I heard his speech I was irresistibly reminded of the old tale which must have cheered many of us in our infancy; I refer to the story of "The Babes in the Wood." It appears that this legislative infant has been entrusted to his care by its parents in another place, and he appears to have abandoned it to your Lordships with an earnest request that you should reverently cover its body with leaves by means of as many Amendments as you think right to introduce. I say nothing of what the promoters may think of the prospects of this Bill if it be amended, as I have no doubt it will be in response to the invitation of the noble Lord. But as he has suggested that in its present form it is either incomprehensible or unpleasant, I shall certainly do my best to bring; my little tribute of leaves and scatter them upon its body. I have the gravest doubt whether in those circumstances the Bill will ever see the light of day, and I would abstain were it not that it is quite certain that it is impossible to expect the same reticence from other members of your Lordships' House.
I regret this, and for this reason. I regard this Bill as one of these measures at which when it becomes law people will look with surprise because of the long and weary time during which it has been brought to birth. It is to me incomprehensible that a civilised community could do the unspeakable wrong of branding with illegitimacy a child born out of wedlock when its parents have married and have desired to do everything that remains in their power to remedy the initial wrong of which they were guilty. The injustice to the child is something that no man can possibly defend, because no one can suggest that the sins of the
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parents are born in the child so that the child should carry like a scapegoat into the wilderness of its life all the errors of which its parents were guilty. From the point of view of the child, therefore, I do not suppose that anyone will doubt that this measure ought to be passed.
But it not only for the sake of the child that I desire to see this Bill become law. It has often seemed to me one of the most unfortunate things in life that you should deny to men and women the opportunity of remedying wrongs of which they have been guilty, and when a man and a woman have been responsible for the birth of an illegitimate child and have, subsequently married, it does seem to me that it is an act of extraordinary cruelty to deny to them the right to receive as a legitimate child into their household the infant that was born before they were married in holy wedlock. I know it will be said that this is one of the things that will encourage immorality. I have heard that argument so many times in connection with so many matters, and my answer to it has been given so frequently in your Lordships' House that I hesitate to repeat it again. I will only say that the people who imagine that acts of immorality are the result of mathematical calculation are utterly ignorant of human nature. That is not the way they arise. A man and a woman do not associate together, with the unfortunate consequence of a child being born, after they have prepared an elaborate balance sheet like that issued by a company, looking at the profit and loss on one side and the other and deciding on which side the balance of advantage lies. I utterly disbelieve that people will abstain from these acts from the fear that the child when born may be illegitimate. They may abstain from the fear that the child will be born, but not from the fear that the child, when born, will suffer as these children must suffer.
I sincerely hope, therefore, that this Bill will receive its Second Reading and that the Amendment which the noble and learned Earl beside me has given evidence of his intention to move will be accepted. I will say no more about that Amendment at present because I intended to put down exactly the same Amendment myself. I trust that when that Amendment comes up it will receive your Lordships' favourable consideration. For the

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moment I will conclude by saying that I hope that this Bill will receive a Second Reading and that when it has passed that stage the noble Lord in charge of it will take some form of tonic which will enable him to fight for the life of this Bill in Committee and to see if it be not possible to secure its passage with something better than an apology for its existence.
THE LORD PRESIDENT OF THE COUNCIL (THE MARQUESS OF SALISBURY): My Lords, I rise because I think it is only respectful to your Lordships that some indication should be given from the Government Bench as to the attitude which His Majesty's Government adopt in respect of this Bill. I have to say at the outset that we as a Government do not take any part in it. As members of your Lordships' House we have, of course, the full privilege of any other noble Lord of expressing our opinion both by word and by vote as to the Second Reading of this Bill and as to any Amendment which may be moved in any subsequent stage. But although I do not speak as a member of the Government in respect of this Bill, I hope the noble and learned Earl opposite will forgive me if I say that I think an elaborate attack upon the Solicitor-General for his conduct in respect of this Bill in another place is not a very convenient course. Strictly speaking, it is out of order, but, of course, we do not enforce those orders, and I have no desire to enforce them. As regards the conduct of the Government as a whole, it is no doubt convenient to refer to their attitude in one House of Parliament or the other as the case may be, but for the purpose of a personal attack as between the Attorney-General and the Solicitor-General I should have thought that the proper place in which to deliver such observations would be the House to which they both belong.
As regards the Bill, speaking only for myself I shall not be desirous of opposing the Second Reading. I think there is a case for a Second Reading, and I think that, in the words used by one of the noble and learned Lords opposite, when two people desire to make good a great wrong which they have committed they ought, so far as is possible, to have the opportunity of doing so. At the same time, I think the burden of proof, as it were, rests upon them as to how far that
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is a reasonable course, having regard to its consequences. People speak as if this were a very simple matter. No one who heard the speech of my noble and learned friend who introduced the Bill into your Lordships' House, no one who follows the tenor of the Bill itself, can fail to be convinced that, far from being simple, it is a very complicated matter. People say we-must get rid of the old idea that the sins of the fathers are visited on the children. You cannot do it. The thing is impossible. No legislation will achieve it, for the broad, hard, stern facts remain, and you have to make up your mind to that. You may mitigate them, as the noble and learned Lord opposite wishes to do and as I think your Lordships will probably wish to do, but you cannot get away from them. You have only to look at the tenor of the clauses of this Bill to realise that you cannot get rid of what is called the slur of illegitimacy merely by passing an Act of Parliament. It will be clear that certain children were born out of wedlock and that certain others were born in wedlock, and as they grow up it will be found, where they both belong to the same family, that the elder children rank below the younger children because of that fact. That appears on the face of the Bill. I merely mention it as an example. You cannot get rid of the facts, and you must make up your mind to them.
If I may venture to say so, I think that the noble and learned Lord who introduced this Bill exercised a very wise discretion when he said that he thought this was pre-eminently a Bill which ought to be scrutinised very carefully in your Lordships' House. We have amongst us men of great wisdom and prudence in matters of this kind, many learned noble Lords whose advice upon such a matter is all-important. I hope that the two noble and learned Lords who spoke will not think me disrespectful if I suggest that when they address themselves to the difficult law surrounding this Bill they will free themselves a little from the strong sentiments which they entertain on subjects of this kind. Naturally, they feel very sorry for people who have done wrong and for the consequences of that wrong. So do we all. But these are very difficult matters which must be approached in the coolest spirit. They must not for a moment allow the sentiment or the pity which they feel to interfere with the cold calmness of their

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legal judgment. I earnestly hope that when we get into Committee they will help us to solve this very difficult question without an appeal to our compassion at every second sentence.
It is a very difficult matter, and we on this side art; specially at a loss, because there is sitting behind us at the present time no noble and learned Lord. We are deprived of the experience and advice of the noble and learned Viscount, the Lord Chancellor. I have said that as a Government we do not take any side in respect of this Bill, but I do think that in turning out good legislation from this House it is of the very highest importance that we should have the guidance of the noble and learned Viscount on the Woolsack. He is occupying the greatest position in the law in England at this moment, and his absence from our deliberations on this occasion seems to me a very great loss. I am glad to say that I have in my pocket a letter which indicates that we may hope that my noble and learned friend will be able to resume his services to this House, and to the country, after the Recess that is about to take place, and that when we reassemble in the autumn he will be found in his accustomed position on the Woolsack. I very much hope that your Lordships will not ask us to proceed to discuss this Bill in Committee until we have the advantage of his presence.
THE EARL OF BIRKENHEAD: But that will be in the autumn.
THE MARQUESS OF SALISBURY: Yes, and I think that is right.
THE EARL OF BIRKENHEAD: Will the noble Marquess explain what are the legal difficulties? Except as to one or two small matters of conveyance, there are no legal difficulties at all.
THE MARQUESS OF SALISBURY: I am not a lawyer, and am incapable of explaining legal difficulties. But I find the Bill extremely complicated, and I heard the impassioned speech by the noble Earl with reference to subsection (2) of the first clause.
THE EARL OF BIRKENHEAD: That is not law, but fact.
THE MARQUESS OF SALISBURY: I stand corrected. The noble and learned
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Earl is a very adequate censor in these matters, but I stand by my judgment that these are matters which ought to be very carefully considered by lawyers, and I venture to think that it would be wise not to press the Bill forward. I have no control over the House, and I am only giving my humble suggestion as a Peer among other Peers, when I suggest that we should agree to the Second Reading of the. Bill, and that afterwards those interested in the matter should confer together, when I hope they will be satisfied that the course which I suggest is the one that they should pursue.
LORD GORELL: My Lords, I agree with one sentence in the speech of the noble Marquess, when he said that this Bill is not a simple Bill, but I do not go so far as to say that because of the difficulties which he sees in it the Committee stage of the Bill must necessarily wait until the Lord Chancellor is present. The noble Marquess distinctly stated that the Government took no part in it, and so far as legal difficulties are concerned there are many noble Lords who, with equal though past judicial experience, are capable of pronouncing upon those difficulties. At the same time it does seem to me that although the principle of the Bill is perfectly simple, there are certain difficulties, at any rate to those who are not trained lawyers, in the application of the Bill, and I confess that I was much relieved by the statement of the noble and learned Lord in charge of the Bill, in which he made it certain that there would be Amendments by referring to the question of the date as being hopeless. That would certainly be one Amendment, and I had anticipated that he would take much the same course as was taken by the noble and learned Lord in charge of the Matrimonial Causes Bill, and tell your Lordships that the measure would be lost if Amendments were moved.
As, however, it is thrown open to amendment by the noble and learned Lord in charge of the Bill, it might be well to point out one or two difficulties which occur to me, not as a trained lawyer. It seemed to me that the noble and learned Earl drew a very touching picture as to discrimination between certain classes, but a large portion of his speech was of wider reference than the reference in this Bill, and the eloquent phrases which he used as to the commiseration

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to be extended to certain children under this Bill could equally be applied to any child born illegitimate, whether the parents subsequently married or not. I imagine that there could be no argument really in favour of Clause 1, subsection (2), other than that it was a deterrent, and to that extent I associate myself with the words of Lord Buckmaster. There must be discrimination, but I hope we shall not keep this subsection in the Bill, and shall have as little discrimination as possible.
I may be wrong in this, but it seems to me that there are two cases of discrimination in the Bill apart from that subsection—namely, in Clause 6, subsection (1), which says:—
"Nothing in this Act shall affect the succession to any dignity or title of honour, or render any person capable of succeeding to or transmitting a right to succeed to any such dignity or title";
and under Clause 4, subsection (4) you cannot separate the devolution of property from a dignity or title of honour, although under Clause 4, subsection (3) a legitimated person would succeed to certain property. There you discriminate between two children in exactly similar circumstances. You might perfectly well have two men in contiguous places in the country, one of whom suffered under the provision of this subsection. He would have succeeded to the property along with the title of honour, but for this discrimination, whereas the other is in exactly the same position as if he had been a legitimate person from the first.
Then there is another in the first subsection of Clause 1. As at present drafted it seems to me that it will have this effect. The Bill is to come into operation on September 1, 1923, and under it any child of parents who subsequently marry becomes legitimated if alive at that date. If he happens to be dead before that date he is not legitimated. It is quite obvious that in all Bills of this kind there must be a date on which it comes into operation, and to make the Bill retrospective would introduce endless complications, but this Bill, if it passes as it is at present drawn, will have this effect, that where you had three children born before the marriage of the parents and one of whom has died before the date for the coming into operation of this Bill
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and the other two are still living, and all of those three children have had children themselves, the children of the child who is dead will be descended from an illegitimate child, but the children of the children who are alive will be descended from a legitimate child.
This, in the times in which we live, will have this definite discrimination, and there are cases which could be quoted. If those three sons, in the period of war through which we have passed, have had this record, that one volunteered for war and was killed, and the other two did not go to the war at all, and now live, the children of the soldier are definitely penalised under this Bill because of the patriotism of their father. I was hoping that there would be an opportunity of putting in an Amendment to meet that particular case. I was afraid that the noble and learned Lord would say that that would destroy his Bill, but, in the circumstances, I hope to have a further opportunity of moving an Amendment to that effect.
LORD PARMOOR: My Lords, I am entirely in accord with the views expressed to your Lordships by the noble and learned Lord who moved the Second Reading. I understand that those views are very much in agreement with the views of the noble Marquess which have just been stated. I imagine that everyone is in favour of the general principle of the Bill. It was discussed as long ago as at the Assize of Northampton, over seven centuries ago, when the Spiritual Peers desired legitimation in these circumstances, and the non-Spiritual Peers objected on the ground that the title to estate would be imperilled by a system of legitimation such as we have in the present Bill. There are many clauses in this Bill which are so complicated that I find great difficulty in understanding them. Lord Muir Mackenzie asked me if I would look through the Bill in order to see whether, in my view, these difficulties did arise. I told him I thought they certainly did, and they are particularly matters with which the Lord Chancellor could deal. They are not matters within my cognisance, but matters of intestacy, devolution of estates, and so on.
I do not think you can deal with this Bill in the haphazard way which has been suggested. We want illegitimate children

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to be rid, as far as can be, of their stain, but I think the Bill is much too wide. I have not had an opportunity of considering Clause 1 (2), and as I have great respect for the opinion of the Solicitor-General, Sir Thomas Inskip, I should very much like to read more carefully than I have been able to do what his views were. But let us consider this. Suppose the mother is married, and after her marriage a child is born. The prima facie assumption is that it is the child of the two people who are married, to which no taint need be attached at all. Is the idea of subsection (2) in the case of this child, which prima facie is a legitimate child, because its parents were married before it was born, to relegate it to the illegitimate ranks, and then try to make it legitimate by Act of Parliament? That appears to me to be the effect of subsection (2). I do not want to speak too positively, because I have not had time to study the matter, and I do not know what Sir Thomas Inskip said; but I entirely agree with the noble and learned Lord who moved the Second Reading of the Bill, and I hope he will carry out his excellent intention of giving adequate time, so that such a complicated Bill may be fully considered.
LORD BUCKMASTER: Assuming that this Bill is postponed until after the Lord Chancellor can resume his place, will the Government adopt the Bill, after it has passed through the House, and secure its passage in another place?
THE MARQUESS OF SALISBURY: I could not answer that question without notice.
LORD BUCKMASTER: Because otherwise the Bill is lost.
THE LORD BISHOP OF NORWICH: My Lords, the last speeches to which we have been listening have made the Bill appear so complicated that there seems to be some doubt as to whether it will be able to remedy the wrong with which it deals without introducing worse wrongs. No one can at this stage, I fancy, prophesy what the upshot may be. At the same time, I was very grateful to Lord Buckmaster when he dealt with the moral side of the question. I know that in earlier speeches it was said that it was
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desirable to leave out that special aspect of the question, but if it is left out in your Lordships' House I feel no doubt that it would be largely canvassed outside, and many of those who would read this debate in its full or in an abbreviated form will be those who will pay great attention to the moral issues involved.
The noble and learned Lord, Lord Buckmaster, explained—and I was very grateful to him for emphasising that point—that those who drive themselves into sin of this kind do not do so with a full and careful calculation of its consequences. I could not myself suppose that we were encouraging sexual sin by removing, so far as is possible, the stain that at present attaches to an illegitimate child. On the contrary, my own view—and it is only my own view, for I do not speak with any authority from the Episcopal Bench—is that, after the intricacies of the Bill have been solved and it is passed, the general effect of the Bill would be rather to encourage marriage on the part of the erring man and woman than to encourage sexual irregularity in the first instance. If that is the case then I think one is entitled to associate oneself with one's whole heart with the words that fell from the noble and learned Lord, Lord Muir Mackenzie, and from the noble Earl, Lord Birkenhead, when he appealed to our compassion.
It is perfectly clear that this Bill, however amended, will never touch the bulk of the illegitimate children in the country. No one would pretend that it would, but if we can, by a compassionate act, help those whom we may attempt to assist, I cannot see that, because the scope of the Bill is as limited as it is, that is any reason for saying that it should be rejected. I myself have been brought in contact with just the sort of things of which the noble and learned Earl, Lord Birkenhead, spoke. As the headmaster of a great school I had to deal with a certain number of those who, in what are popularly called the upper classes, were the sons of irregular unions, and I was immensely struck by the number of the occasions when this disability came up, and the difficulty that one had in passing on such boys to the Universities and elsewhere. It was not as if the stain was once accepted and then let alone, but

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again and again the mud had to be stirred up, and in every case one's pity went out to the innocent victim of the parents' guilt.
I think that the Bill, when amended, will still have a very limited scope, but I believe, on the other hand, that there are many, among the poor and among the rich, who will stand to benefit by this Bill, and if we cannot, as the noble Marquess rightly said, remove all the stigma, and if the facts themselves really constitute the stigma, yet I do believe that a Bill wisely conceived may do very much to reduce the number of occasions on which stones would be thrown at some of the illegitimately born. Therefore, in a spirit of compassion and, as I believe, right compassion, I can see no moral objection to passing this Bill, and I sincerely hope that when it does lie within our power to act with pity and sympathy we may use the opportunity even though its range may not be very widely extended.
VISCOUNT HALDANE: My Lords, I rise not to continue the discussion, but to ask the noble Marquess opposite whether he can get the House out of a difficulty. I have read the Bill and I agree that it is a difficult Bill, and it is made much more difficult because of the very odd way in which the draftsman has put it together. It is, therefore, desirable that we should have the Lord Chancellor on the Woolsack when we have the opportunity of considering it. But if we are to wait until the autumn we shall be placed in this difficulty. Governments have a way of taking up the whole of the time in Autumn Sessions. It is too much, I think, to ask the noble Marquess to tell us that the Government will be responsible for the Bill in the autumn, because he may not wish to do that; but we may ask him to say this. If we assent to the putting off of the Committee Stage until the Lord Chancellor has had an opportunity of looking at the Bill, will he give an undertaking that when the Bill goes back- to the Commons there shall be at least an opportunity of considering the Amendments we have made. I do not ask the noble Marquess to say that at this moment, because he may wish to consult with those who are responsible in another place. But if my noble and learned friend Lord Muir Mackenzie, before putting down a date
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for the Committee Stage, would put a question to the noble Marquess and get from him an answer that is satisfactory, it would very much facilitate matters.
THE MARQUESS OF SALISBURY: My Lords, I can only speak by the leave of your Lordships. I think the request and the observations of the noble and learned Viscount are very reasonable, and I shall be quite prepared to give an answer to this question if the noble and learned Lord will give me an opportunity of consulting my colleagues in another place before I reply. I cannot promise that the answer will be "Yes," but I will give him an answer, and I think it is a very fair course to pursue.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

BRITISH OFFICERS IN INDIA.
LORD RAGLAN: My Lords, I beg to ask the Secretary of State for War whether he will consider the possibility of giving officers of the British Army who have reason to be dissatisfied with the conditions of service in India the option of serving elsewhere? There is only one fact to which I wish to direct the attention of your Lordships, and it is this. The British Government, rightly or wrongly, have decided to give certain allowances to married officers. The Indian Government, rightly or wrongly, have decided not to give those allowances. What that means is that the British Government says, in effect, to these officers: "We think you ought to have 35 s. a day and that is what we shall pay you; but whenever it suits us we shall compel you to serve the Indian Government for 32 s. a day."
The noble Viscount the Secretary of State for India has informed your Lordships that the whole question of pay of the Army in India will be considered next year, and it is possible that these allowances may be increased. But, judging from the state of the Indian finances at the moment and the Report of Lord Inchcape's Committee, it is more likely that they will not be increased. The question which I venture to ask His Majesty's Government is whether the British Government is justified in placing upon the shoulders of the Indian Government

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the entire responsibility in this matter and in compelling its employees to serve that Government for less than they would receive if they were serving their own Government.
THE SECRETARY OF STATE FOR WAR (THE EARL OF DERBY): My Lords, the answer that I have to make to the Question on the Paper is that I am unable to accede to the request.

MATRIMONIAL CAUSES BILL.
House in Committee (according to Order): Bill reported without amendment.
EDUCATION (SCOTLAND) BILL. [H.L.]
Read 3a (according to Order); Privilege Amendments made; Bill passed, and sent to the Commons.

SITTINGS OF PARLIAMENT.
Order of the Day read for the Commons Message to be taken into consideration.
THE MARQUESS OF SALISBURY: My Lords, I beg to make the Motion standing in the name of my noble friend the Leader of the House.
Moved, That this House do concur in the following Resolution communicated by the Commons namely:—"That it is expedient that a Select Committee of the Commons be appointed to join with a Committee of the Lords to consider the desirability of altering the customary period of the Parliamentary Session and the incidental charges necessary thereto."—(The Marquess of Salisbury.)
On Question, Motion agreed to.
Ordered, That a Message be sent to the Commons to acquaint them therewith.
House adjourned at a quarter past six o'clock.

GLASGOW CORPORATION ORDER CONFIRMATION BILL. [H.L.]
Returned from the Commons, agreed to.
GREENOCK CORPORATION BILL.
Committee to meet on Tuesday next.

TEMPERANCE (SCOTLAND) ACT, 1913, AMENDMENT BILL. [H.L.]
Second Reading (which stands appointed for to-morrow) put off to Tuesday the 17th instant.
BIRKENHEAD CORPORATION BILL.
CITY AND SOUTH LONDON RAILWAY BILL.
LONDON ELECTRIC RAILWAY BILL.
WIMBLEDON AND SUTTON RAILWAY BILL.
WEST RIDING OF YORKSHIRE COUNTY COUNCIL (DRAINAGE) BILL.
NOTTINGHAM CORPORATION BILL.
BARNSLEY CORPORATION BILL.
Report from the Committee of Selection that the Earl Beauchamp be proposed to the House as a Member of the Select Committee on the said Bills in the place of the Lord Lamington, and that the Earl Beauchamp be Chairman of the said Committee; read, and agreed to.

PRIVATE LEGISLATION PROCEDURE (SCOTLAND) ACT, 1899.
Report from the Committee of Selection that the Lords following be proposed to the House as members of the panel of Lords to act as Commissioners under the Act, namely:—

L. Oxenfoord (E. Stair);

L. Hamilton of Dalzell;

agreed to; and the said Lords appointed accordingly.