Sitting of 9 February 1927

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

  PRIVATE BILLS [Lords].
  Mr. SPEAKER laid upon the Table Report from one of the Examiners of Petitions for Private Bills, That, in respect of the Bills comprised in the Report laid upon the Table by Mr. SPEAKER as intended to originate in the House of Lords, he has certified that the Standing Orders have been complied with in the following cases, namely:—

  Aberdare Urban District Council.

  Abersoch Water.

  Bedford Corporation.

  Birkenhead Extension.

  Bognor Gas and Electricity.

  Brighton Corporation.

  Bury Corporation.

  Commercial Gas.

  Coventry Corporation.

  Coventry Corporation (Boundary Extension).

  Croydon Corporation.

  Derby Corporation.

  Eastbourne Corporation.

  East Surrey Water.

  Fleetwood Urban District Council.

  Gainsborough Bridge.

  Great Indian Peninsula Railway Annuities.

  Hastings Tramways Company (Trolley Vehicles).

  Hospital of St. Mary the Virgin (Newcastle-upon-Tyne).

  Isle of Wight Water.

  Littlehampton Harbour and Arun Drainage Outfall.

  Liverpool Corporation.

  Maidstone Water.

  Mersey Tunnel (Birkenhead Entrance, Etc.).

  North Metropolitan Electric Power Supply.

  Peterborough Corporation.

  Royal Albert Hall.

  St. Catherine's College, Cambridge (Canonship of Norwich).

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  Salford Corporation.

  Scarborough Gas Company (Consolidation).

  South Staffordshire Mond Gas Company.

  Sunderland Corporation.

  Tyne Improvement.

  Wallasey Corporation.

  Wessex Electricity.

  West Cheshire Water Board.

  Yeadon Waterworks.

  Yorkshire Electric Power.

  And they have certified that the Standing Orders have not been complied with in the following case, namely:—
  Thorne Colliery Railway and Wharf.

  PRIVATE BILL PETITIONS (Standing Orders not complied with),
  Mr. SPEAKER laid upon the Table Report from one of the Examiners of Petitions for Private Bills, That, in the case of the Petition for the following Bill, the Standing Orders have not been complied with, namely:
  London and Home Counties Joint Electricity Authority.
  Report referred to the Select Committee on Standing Orders.

  PRIVATE BILL PETITIONS [Lords] (Standing Orders not complied with),
  Mr. SPEAKER laid upon the Table Report from one of the Examiners of Petitions for Private Bills, That, in the case of the Petition for the following Bill, originating in the Lords, the Standing Orders have not been complied with, namely:
  Thorne Colliery Railway and Wharf [Lords].
  Report referred to the Select Committee on Standing Orders.

  LOCAL LEGISLATION COMMITTEE.
  Ordered, That the Committee of Selection do nominate a Committee, not exceeding Fifteen Members, to be called the Local Legislation Committee, to whom shall be committed all Private Bills promoted by municipal and other local authorities by which it is proposed to create powers relating to Police, Sanitary, or other Local Government Regulations in conflict with, deviation from, or excess of the provisions of the general Law:
  Ordered, That Standing Orders 119, 150, and 173a apply to all such Bills:
  Ordered, That the Committee have power to send for persons, papers, and records:
  Ordered, That Four be the quorum:
  Ordered, That if the Committee shall report to the Committee of Selection that any Clauses of any Bill referred to them (other than Clauses containing Police, Sanitary, or other Local Government Regulations) are such as, having regard to the terms of reference, it is not in their opinion necessary or advisable for them to deal with, the Committee of Selection shall thereupon refer the Bill, to a Select Committee, who shall consider those Clauses and so much of the Preamble a the Bill as relates thereto, and shall determine the expenditure (if any) to be authorised in respect of the parts of the Bill referred to them. That the Committee shall deal with the remaining Clauses of such Bill, and so much of the Preamble as relates thereto, and shall determine the period and mode of repayment of any money authorised by the Select Committee to be borrowed and shall report the whole Bill to the House, stating in their Report what parts of the Bill have been considered by each Committee:
  Ordered, That the Committee have power, if they so determine, to sit as two Committees, and in that event to apportion the Bills referred to the Committee between the two Committees, each of which shall have the full powers of and be subject to the instructions which apply to the undivided Committee, and that Four be the quorum of each of the two Committees.—[Captain Hacking.]

TRADE AND NAVIGATION.
Copy ordered "of Accounts relating to Trade and Navigation of the United Kingdom for each month during the year 1927."—[Sir Philip Cunliffe-Lister.]
ORAL ANSWERS TO QUESTIONS.

  PORTSMOUTH DOCKYARD (DISCHARGES).
  Major Sir BERTRAM FALLE(by Private Notice) asked the First Lord of
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  the Admiralty if he is aware that it has been publicly stated that 800 workmen are to be discharged from His Majesty's Dockyard, Portsmouth, and whether this is correct; and, if so, if it is owing to the transfer of men from Rosyth and Pembroke Dockyards that this reduction is to be made, and if he will consider a special reduction scheme for established men who desire to go on pension before reaching the age of 60 years, such as was authorised in 1922 for the reduction of naval personnel; and if he is aware that the addition of two or three years' service to the period already served would induce many established dockyard men of over 55 years, especially those recently transferred, to take their pension and with s. better chance of getting work outside the yard than when over 60 years of age, and avoid the great reduction of hired man contemplated and the cost to the Insurance Fund?
  The FIRST LORD of the ADMIRALTY (Mr. Bridgeman): The number of men to be discharged from Portsmouth Dockyard is about 600. The necessity for the discharges at Portsmouth is not due to the transfer of men from Rosyth and Pembroke Docks; those transfers were necessitated by the reduction of Rosyth and Pembroke Docks to a care and maintenance basis, and if those yards had not been so reduced it would have been necessary to send to them a proportion of the work which now has to be carried out in the southern dockyards, including Portsmouth. I regret that the suggestion that a special scheme be devised for promoting the premature retirement of established men, with superannuation awards, cannot be entertained.
  Sir B. FALLE: Can the right hon. Gentleman give the reason why it cannot be entertained, considering that the Insurance Fund will be raided to the same amount, or nearly the same amount, as the scheme would cost?
  Mr. BRIDGEMAN: Yes, the Ad miralty have taken that into consideration.
  Major Sir GRANVILLE WHELER: May I ask the right hon. Gentleman whether the 2,000 men which we have seen notified as the total reduction will be spread evenly over all the dockyards?
  Mr. BRIDGEMAN: I do not exactly know what my hon. and gallant Friend would call evenly, but there will be some discharges from Sheerness and there will be a proportion of them from other dockyards: they are not all from Portsmouth.
  Mr. HORE-BELISHA: Is the right hon. Gentleman aware of the great confusion which is being caused at the dockyard towns owing to this policy of the Government, as he indicated when Rosyth and Pembroke were closed that there would not be discharges in the southern yards and that there would be more work for them, and in these circumstances cannot he entertain the suggestion of my hon. and gallant Friend the Member for North Portsmouth (Sir B. Falle) for mitigating the severity- of the discharges and allowing men who are perfectly willing to go to take their pension at an earlier age, and why is that suggestion impracticable?
  Mr. BRIDGEMAN: I said it was for financial reasons that I thought it would be impracticable. I do not know to what the hon. Gentleman is referring when he says I said there would be no discharges. I do not think I ever said anything of the kind.
  Mr. KELLY: In view of the fact that there is a Whitley Council in existence for dealing with problems affecting these yards, will the First Lord of the Admiralty again have this matter of discharges discussed by that Whitley Council?
  Mr. BRIDGEMAN: No. The discharges are in pursuance of the policy which this House desired the Admiralty to endeavour to carry out in the interests of economy.
  Mr. HORE-BELISHA: When the right hon. Gentleman says that he cannot entertain the suggestion of the hon. and gallant Member for North Portsmouth for financial reasons, does he bear in mind the great cost of maintaining these unemployed which falls on the Unemployment Insurance Fund?
  Mr. BRIDGEMAN: Yes, I do, but it is a question of principle. If you are
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  going to have a scheme for adding years of service to men discharged before their time, it could not be limited to a very few. It is one that the Treasury would have to consider with regard to other Departments as well as the Admiralty.
  Mr. HORE-BELISHA: Is the right hon. Gentleman not aware that he followed that principle when he made the discharges from the Navy, and that naval officers were allowed to take their pensions at an earlier date?
  Mr. SPEAKER: That should be debated on the Estimates.

  BALLOT FOR BILLS AND MOTIONS.
  Ordered,
  "That no Bills, other than Government. Bills, be introduced in anticipation of the ballot, and that all Members who desire to ballot, whether for Bills or for Motions for Tuesdays, 15th and 22nd February, and Wednesdays, 16th and 23rd February, do hand in their names at the Table during the sitting of the House on Tuesday, 8th February, or Wednesday, 9th February, and that a copy of the Notice of such Bill or Motion be handed in at the latest during the sitting of the House on Thursday, 10th February:
  Ordered, That the ballot for the precedence of the said Bills and Motions be taken on Thursday, 10th February, at a convenient time and place, to appointed by Mr. Speaker, and that the presentation of Bills on Friday, 11th February; he taken at the commencement of Public Business."—[The Prime Minister.]
  Mr. SPEAKER: In pursuance of the Order just passed by the House, I appoint twelve o'clock noon To-morrow as the time, and No. 10 Committee Room as the place, for taking the Ballot.

BUSINESS OF THE HOUSE (FRIDAY SITTINGS).
Resolved,
"That during the present Session the House do meet on Fridays at Eleven o'Clock, and that Four o'Clock and half-past Four o'Clock be substituted for Five o'Clock and half-past Five o'Clock, respectively, as the hours for the interruption of Business and Adjournment of the House on that day."—[The Prime Minister.]

MESSAGE FROM THE LORDS.
Consolidation Bills,—That they communicate that they have come to the following Resolution, namely: "That it is desirable that all Consolidation Bills in the present Session be referred to a Joint Committee of both Houses of Parliament.
ORDERS OF THE DAY.
  KING'S SPEECH.

    DEBATE ON THE ADDRESS.
    [SECOND DAY.]
    Order read for resuming Adjourned Debate on Question [8th February]:
    "That an humble Address be presented to His Majesty, as followeth:
    "MOST GRACIOUS SOVEREIGN,
    We, Your Majesty's most dutiful and loyal subjects, the Commons of the United Kingdom of Great Britain and Ireland, in Parliament assembled, beg leave to offer our humble thanks to Your Majesty for the Gracious Speech which Your Majesty has addressed to both Houses of Parliament."—[Mr. Oliver Stanley.]
    Question again proposed.
    3.0 p.m.
    Mr. J. H. THOMAS: The Gracious Speech affords the House and the country an opportunity of judging as between the promises of the Government and their anxiety to fulfil those promises. It is generally admitted that, of the many King's Speeches read to this House, very few were so mean and meaningless as the Speech we heard yesterday. The explanation given by the Prime Minister was that the Government's one anxiety in this matter was to prevent the Leader of the Opposition having any material to criticise him upon. That may be a good debating point in the House, but its value in the country is doubtful. The Prime Minister said they were not only a united Cabinet but they were a Cabinet of concrete. I do not know to which part of their anatomy he was directing our attention. Many people would be inclined to say the definition applied to their head and not to their feet. But at all events this united, concrete Cabinet, who find themselves sitting on that side of the House, first, because of the promises they made, and, secondly, because of the use they made of a certain letter, now excuse themselves on the ground that, after all, the country is really tired of legislation. Social reform, is not required, there is no housing problem, no education problem, no factory difficulties—all those things exist merely in the imagination of the people, and what the House of Commons really requires, above everything else, is a complete rest. In fact,
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    the Prime Minister said the justification for the King's Speech was that at the back end of last Session he looked round the House and saw in all parties tired, dejected legislators, and that having looked at them, and then thought of the country, he had come to the conclusion that the best service he could render was to give the Members of the House a rest.
    Therefore, in dealing with the King's Speech the first thing for us to do is to thank the Prime Minister for his solicitude on our behalf. But while the happy picture he gave of his Cabinet may be acceptable to some, let us try to picture the scene last week when the Speech was being drafted. I can quite imagine the Noble Lord the Secretary of State for India, unlikely to be a quiet, docile member of this concrete body, saying "But please remember there is a particular subject that brooks no delay. The last few years I have been pointing out in another place, and persuading the country, that the one essential safeguard of the future is the reform of the House of Lords." In fact he could say to himself, "I have not only burnt my boats, but I have committed the Tory party to it." Then he would ask, "Now, what about me?" The Prime Minister silently says—[Laughter]—quietly says: "Leave that to me. I can explain to the House of Commons, and the House of Lords does not matter so far as you are concerned." Then we have the Home Secretary. He was put up twice last year, not only to defend himself and his Department; on two specific occasions the Home Secretary got up and said: "I am speaking not only for myself, but I am speaking for the Prime Minister, "Clearly, definitely and specifically, both on the Factories Bill and the Franchise Bill, he committed the Prime Minister and the Government to legislation. [An HON. MEMBER: "This year?"] Yes, this year. I am glad the interruption took place. I am quite sure it was an interruption born of ignorance. Quite clearly and specifically he said: "So far as the franchise is concerned, our procedure is to set up a Committee and to introduce legislation, so that the necessary steps will be taken to give effect to it." That was the clear, specific statement of the Home Secretary, which pledged the Prime Minister. When yesterday my right hon. Friend asked for a clear and specific answer to that promise the Prime

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    Minister adopted the very convenient method of forgetting it, or saying nothing about it.
    I ask the House to think of this concrete, united Cabinet with, first, the Secretary of State for India, then the Home Secretary and then the Minister of Labour suddenly jumping in. The Minister of Labour would say "But some one on the other side may remember what I said." The Minister of Labour got up in this House and said "The Government are very disturbed over the Washington Convention. There are difficulties in the way, we admit, but we are so satisfied that the ratification of that Convention is necessary, we are so satisfied there should be legislation on the Eight Hours Day question, that we are taking the unusual step of inviting representatives of foreign countries to this country to discuss the whole situation." Everyone on this side not only welcomed that announcement but gave every encouragement to secure that the Conference should be a success. We were told officially, and we know it privately, that the one obstacle that had always been made the excuse when ratification was pressed was removed. Those foreign representatives went back to their countries and reported that, so far as the Conference in London was concerned, there had been a satisfactory agreement. Yet from that day to this we have heard nothing more of the ratification of the Convention, and not a word is said, either in the King's Speech or by that concrete, united Cabinet that we heard so much about yesterday.
    And then what about the Minister of Health. Surely he got up in the Cabinet and said something like this, "Now, Mr. Prime Minister, whatever may have been the Secretary of State for India's difficulty about House of Lords Reform—that is only a myth; whatever may be the Home Secretary's difficulty, he is ill, and he is bothered now with Russia, and everybody will forget him; so far as the Minister of Labour is concerned, very few people on our side of the House bother anything about the Convention so far as concerns the Eight Hours question; but so far as I am concerned, last year you put me up to propound a scheme, and carried it by a majority, that robbed the Insurance Fund. A large number of people have not easily
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    forgiven me for that, and certainly they have not forgotten it. Therefore I want to make as much amends for that sin as possible, and I have committed myself to Poor Law reform." Then the Prime Minister, having listened to that united concrete Cabinet, said, "Leave it to me. None of these things bother me. You know perfectly well I have no views on these subjects, and after all, when I tell the House of Commons that the real reason, explanation, and justification for getting all these things lies with the House of Commons the Members of which are too tired to bother about them, it will go down alright, and there will be great cheering from my side and the other side does not matter. As a matter of fact we shall be able to say to the country that we have got a. new cry; we will not bother about the Red Letter at the next election and what we will say is that we have got a new Tory motto and it is Shorter hours for Members of Parliament and longer hours for the miners.'"
    The very curious thing is that it never occurred to the Prime Minister that the argument in favour of shorter hours and less work for legislators could equally be applied to those engaged in industry because he has based his claim in one case on the ground of efficiency, and it never occurred to him that it might equally apply to the other. The Prime Minister practically says, "If we cannot introduce any constructive legislation we can at least complete our reactionary efforts of last year; that is to say, we will introduce legislation which will further curtail the only bargaining power which the workers possess." Whatever else may he said about trade unionism and trade union legislation, whatever may he said of the mistakes made in any trade dispute, no-one can deny that the one and only bargaining power possessed by the working classes to-day is their right of collective bargaining. [An HON. MEMBER: "Who gave it to them?"] I am not dealing with that point, but I am dealing with those who are trying to take that power away from them.
    I want in this matter to ask the House to compare the action of the Government when dealing with the working classes with the way they deal with other interests. I start by saying that there are hon. Members on all sides of this

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    House who want a fair deal, and I know there are many hon. Members who would resent an unfair advantage being taken of anyone. The first question I ask is, Can any hon. Member tell me of any piece of legislation affecting employers where the employers concerned were not consulted and their views obtained in regard to the proposed legislation? When the Compensation Acts were being argued in this House, and when they were going through their various stages, whenever a question of liability cropped up not once but dozens of times Ministers replied, "We have been in consultation with the various interests affected and their views are so and so."
    I do not complain of that; on the contrary, I frankly say it was a wise proceeding. Everyone knows that that is commonsense and business, and it has been done in the past in regard to everything affecting the employers' interests and I quite agree with it. On the other hand, how have the Government proceeded when dealing with this proposed trade union legislation which affects only the working classes? No one can get up and say on behalf of the Government before they decided upon this step, before this united Cabinet made up its mind, before this concrete body came to a final decision, that a solitary representative body of trade unions in this country was consulted as to their views upon such legislation. We have a perfect right to consider those proposals and say whether we agree with them or not, but the Government have no right, in the interests of fair legislation and fair play, to consult only one sectional interest and one side, because that savours of unfair dealing. The Goverment did not consult the trade unionists before coming to their decision about the proposed trade union legislation.
    Mr. SKELTON: What is that decision?
    Mr. THOMAS: I think the hon. Member should be aware that we are now dealing with the King's Speech.
    Mr. SKELTON: I know that, but the King's Speech does not say what the decision of the Government is and that is my point.
    Mr. THOMAS: The King's Speech says that legislation on this subject is contemplated.
    Mr. SKELTON: But it does not state its nature.
    Mr. THOMAS: I will not waste anymore time with these interruptions, but I ask the House to observe that legislation is contemplated and promised in the King's Speech, and the point I wish to make is that when legislation has been promised in the King's Speech in previous years affecting employers those employers wore consulted in regard to the matter. In another part of the King s Speech an appeal is made for peace in industry. I make no apology for my attitude towards this question because I want peace in industry. I am working for peace in industry, and I ask the Government and any employer of labour on the opposite side of the House who knows anything about the psychology, mentality and outlook of the working classes whether he does not realise that to put in the King's Speech a plea for peace in industry, which- is an appeal to both sides, and an appeal so far as a lockout is concerned as well as a strike, to put that appeal in the King's Speech simultaneously with an attempt without consultation of any kind to interfere with the workers' only bargaining power will compel the workers to say, "All your talk about peace is a fraud and humbug." Peace in industry will not be obtained by phrases. If it could be obtained by phrases or pledges, it would have been obtained long ago. It will not be obtained in that way. It is much more likely to be obtained when confidence is established between both sides and all parties. That is the way towards peace in industry—confidence. Can you expect the working classes to have any confidence in a Government giving utterance to these phrases and simultaneously, as I have said, without consultation, immediately proceeding to take steps to cripple the only bargaining power of the workers? You will not only not obtain that desired end, but I go beyond that and say that it will make it more difficult for those of us who believe that peace ought to be obtained.
    Whatever may be said about the trade union movement's mistakes or its abuses, I would be entitled to say that there is no movement, no organisation, that has not made mistakes. I go beyond that and say that there is no movement in this or any other country that is so essentially

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    democratic as the trade union movement is to-day. The curious thing that I would ask Members to observe is this: Last Session, the Session before, and on hundreds of Conservative platforms, we have heard of the abuses in the trade union movement, but what, mainly, were the abuses to which attention was directed? Bills were introduced, and the Prime Minister had to reply to Bills from his own side that the one abuse of all ethers that was standing out was the cruel tyranny in the case of the poor Liberal and Tory trade unionists. That is what I have heard argued from the other side, and it was only when one of your Ministers had to get up and give the sum total in figures of the abuses that had been reported and proved that the case collapsed like a house of cards Here is the best answer, in this Speech. After all the talk, after all the speeches, after all the investigation, the Government who are now dealing with this great evil in the trade union movement, by their own admission are saying in substance that it was all humbug that was talked in that connection. If it was not, then it is for hon. Gentlemen on the other side of the House to ask them why they are limiting it and not dealing with the poor Liberal and Tory trade unionists. That is the answer so far as you are concerned.
    I would put this to the Prime Minister. Assuming, as I do assume, that there never was such a need for trying to find means to avoid industrial conflict, assuming that there is every advantage to be obtained for the workers and for the country by developing methods of conciliation—believing that, as I do, and endeavouring to practise it, does the Prime Minister or any of his colleagues, calmly and dispassionately reviewing the situation, consider that they are making any contribution to this problem? What is our experience of the Government's attitude last year? Whatever may be said about the conduct of the miners' dispute—I have views, and have expressed them publicly, but I have never forgotten, I have never done other than point out that, whatever may be said about the causes or conduct of the general strike, the main responsibility for the general strike rests on those benches. [Interruption.] The time will come when some of the Gentlemen on the other side
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    will have to answer this question: If this was a preconceived and deliberate attempt on the Constitution, why was it that it was the "Daily Mail" incident that was made the excuse for breaking off negotiations? If that be the excuse and the justification for the interference with trade union legislation, then I am content to let those who are prepared to support it stand by their own argument, their conviction and their knowledge of the facts.
    That is the situation so far as the social legislation is concerned, and I would sum it up by saying this, that the Government, having received through varying sections of the Press an intimation that what the country needs is a rest, have interpreted that to mean this: "All our social problems are now solved; all our election promises are being fulfilled; the only thing that is requisite is to get a good, efficient, composite House of Commons by giving them more rest and less labour." Why not abolish the farce entirely by adjourning the House right away? That would be more valuable than humbugging the country in the way you are doing to-day.
    Having dealt with what I call the barren side of the King's Speech, I want to refer to the Chinese situation, and I want to say quite clearly and definitely that, whether it be outside this House or inside, in any public utterance I have made or will make on any question affecting the issue of peace or war, I would apply myself to one object only, and that is to see how far any contribution that one could make to any problem such as that would be a real and genuine contribution to the cause of peace. In other words, whatever views, party or otherwise, there may be, I have no hesitation in saying that, in an issue that affects war and all the hell and horror of war, no party considerations of any kind would blind me to a single-minded desire to make any contribution I could make in the direction of peace and nothing else. It is in that direction that I have spoken, and it is in that direction that I associate myself with every speech made by my right hon. Friend, and every declaration he has made on the subject.
    I start clearly and definitely by first admitting, and not only admitting but frankly saying, that, no matter what

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    Government may be in power, it is the duty of that Government to defend their own nationals. That is not a partisan statement. That is not an obligation on one side of the House alone. That is an obligation and a principle which ought to be, and is in my judgment, recognised on all sides of the House. Therefore, we come at once to the question how that can be accomplished. There will be common agreement at once that there must be, and will be, legitimate differences of opinion, and no one who has spoken on any side of the House with regard to the Chinese question has yet suggested or could suggest that this problem would be solved by force. I do not think anyone would suggest that the Chinese problem is one of a day, or a month, or a year. I go beyond that and say that whether it come in the time of this Government or of any other, sooner or later there was inevitably, and rightly, bound to be a demand on the part of the Chinese people for a change in the old system.
    Recognising that, I would put, this point to the Prime Minister. Can he or can any hon. Member on that side complain of the attitude adopted by anyone on this side? There is much to complain of and there is much I am going to deal with as to the contribution has been made on that side. I have already said any contribution I would endeavour to make will be on the side of peace, and I frankly admit that the speech the Foreign Secretary made at Birmingham was not only one that I subscribe to but one for which I believe the overwhelming mass of the people of the country would pay tribute to him. But reading side by side with that speech the declaration made by Mr. Chen only two days before, no one approaching the problem could look at it and not say, "Here is something that means peace." That is my view, that is the view of the Leader of the Opposition and it is the view of everyone who takes a fair and impartial view of the situation. But the result of that speech and the result of the atmosphere that was created meant that negotiations were being entered into and while they were being conducted although they were temporarily dropped, what were the right hon. Gentleman's colleagues doing? I only say this with regard to what I call the defence force.
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    No one reading the daily Press reports, reading the incidents of the departure of the troops and reading the way in which the whole thing was magnified and boomed would be blamed for calling it not a defence force but an expeditionary force. I do not know whether I should be doing the Foreign Secretary an injustice—whether he would disagree—if I said I cannot conceive of anyone deploring the warlike attitude adopted with regard to the troops more than he himself. At all events the fact remains that this atmosphere was created simultaneously with the right hon. Gentleman's effort for peace.
    Then we had the Colonial Secretary thinking that it was necessary that he should make some contribution towards peace. He was not satisfied with the action of the Foreign Secretary. He said to himself, "After all, the Foreign Secretary does not quite know how to deal with these people," and he made a speech at Birmingham simultaneously with the right hon. Gentleman. He first said:
    "So far as the British Government are concerned the last word has been spoken."
    In an industrial dispute, in an international dispute, in an issue of peace or war, when all parties were asked to come together, to give and take arid to enter into a bargain, are you likely to encourage and help the other side by saying, "Although we invite you to negotiate, please remember that the last word has been said so far as we are concerned"? That is the contribution that was made by the Colonial Secretary. That was not only not an effort towards peace, it was not only unwise and indiscreet but it was contrary to Mr. O'Malley's instructions. When we are lectured, as we were, as to what we were doing, it is very significant and important to point out that the Colonial Secretary spoke in the same city as the Foreign Secretary and neutralised any good effect he might have created. He then went on to deal with the individual. This is what he said:
    "So far as Mr. Chen was concerned the voice was the voice of Esau, but behind it was Jacob Borodin."
    If that is the view of the Government, the united and concrete view, if he was speaking with the authority of the Cabinet, he knew all about this gentleman before, so why negotiate with him at all? You cannot have it both ways.

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    The Foreign Secretary, who had examined his credentials, who knew all about it and was the best judge of the situation, says, "I am satisfied that this gentleman is someone I can negotiate with." Whatever your politics are, I put it to the House that it was not a wise contribution for the Colonial Secretary to say that.
    Of course, the Chancellor of the Exchequer says, "I cannot allow the Colonial Secretary to get away with this. Why should the Colonial Secretary interfere with my special preserves? After all, have I not been a champion of all Russian interests? "But he had to postulate another situation." I am going to Manchester and if many inquiries are made as to what I have said in Manchester before it will be uncomfortable. Therefore I must divert their attention. "It never occurred to him that the issue was peace and war. Oh, no! That did not matter. He says to the Lancashire people," You are suffering. You, the great industrial Lancashire, are suffering. Last year you suffered from Cook; this year you suffer from Chen." I am told that one of the audience said, "Well, thank God, we have always you with us." The same day that the Chancellor of the Exchequer made this utterance; the same day that he was associating with Mr. Cook, the representative with whom the Foreign Minister had chosen to negotiate, we, the Labour party, had sent a communication to China, saying: "One contribution we desire to make is to urge you to sign this agreement." Compare that with the Chancellor of the Exchequer's speech in Manchester. Therefore, no criticism, no blame ought to be directed by the Prime Minister to our contributions in this Chinese difficulty. Rather he ought to ask himself what rebuke is justified of the colleagues I have mentioned.
    Notwithstanding anything that has been done, notwithstanding the indiscretions of the Chancellor of the Exchequer and the Colonial Secretary—[An HON. MEMBER: "And the Labour party!"]For the moment I am dealing with the sins of omission and commission on the Government side of the House, and you will have an opportunity of pointing out the virtues of this side. Notwithstanding
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    what has been done and said, I express what I know is the united view of all hon. Members on this side in saying that we still want peace. We believe that every obstacle and barrier to peace ought to be removed. We have given on the Chinese side what we believe to be good advice, and we ask the Government to see that they give equally good advice. In regard to the absence of social reform in the King's Speech, and the bankruptcy of legislation, we ask the country to judge. With regard to the amendment of trade union law, whatever it may be, we do not think it is justifiable, we think it is unwise, and we will fight it line by line at every stage, and await the verdict with confidence.
    Sir FREDRIC WISE: We have had an amusing speech from the right hon. Member for Derby (Mr. Thomas). As I listened to his speech, especially to the first part, I was sorry that the great musician, Sir Arthur Sullivan, is dead; otherwise I feel confident that he would have engaged the right hon. Gentleman to write his comic operas, instead of the late Mr. Gilbert. The right hon. Gentleman never referred to unemployment or to the trade of this country. He criticised the heads of the Government and called the Government a, concrete Government. I daresay he may be jealous in regard to their concreteness, because I understand that to be concrete you have to be hard and united. Perhaps the right hon. Gentleman is not confident of his own party being united like our concrete party.
    I wish specially to refer to an important passage in His Majesty's Most Gracious Speech from the Throne:
    "There are, I am happy to note, encouraging signs of improvement in the state of trade and industry."
    I am sorry that the right hon. Gentleman did not refer to that part of the King's Speech, and I am also sorry that he is leaving the House. I conclude that he does not attach the same importance to trade and industry as we do on this side. That is the most important paragraph in the whole of His Majesty's Speech. It affects unemployment in the country. It is essential that something should be done with regard to unemployment. At the present time, with 1,300,000 people out of work, it is vitally important that something should be done to endeavour to get

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    these people into work. I realise, of course, that there has been a coal stoppage, which lasted seven months, and that there has been a general strike; but is there not something wrong which requires looking into and remedying, so that there may be some reduction in the volume of unemployment?
    Trade is the life of the nation. Everybody depends upon trade. What we have to remember in this House is that the export trade is the life of the nation. What is our position? Our overseas trade for 1926 was wonderful; it amounted to £2,020,000,000, which was a decrease of 11 per cent. compared with 1925. Considering all the conditions, I think that was wonderful. Our imports in 1926 were down by 5·8 per cent. and our exports were down by 16.1 per cent. The balance of imports over exports was £477,000,000 in 1926 compared with £395,000,000 in 1925, or a difference of £82,000,000. How is this paid for? That is a point the importance of which the House must realise. The balance is paid for by invisible exports, which include commissions, shipping, foreign investments and so on. Our invisible exports have increased, if you compare 1925 with 1926, by £66,000,000, and our trade balance of overseas trade calculated at the end of 1926 shows a debit of £12,000,000 compared to a credit balance of £54,000,000 in 1925. I have been deciphering the importance of these invisible exports. I fully realise, and I am sure the President of the Board of Trade realises the great importance of our invisible exports. The right hon. Gentleman has made estimates and calculations. I contend that the more our invisible exports go up the less employment there is for this country, and in working out the ratio, taking the unit at 15, I contend that if the world trade will continue as it has in 1926 an actual export will employ 15 men whereas an invisible export will only employ one man. If you will take that into consideration and realise that our invisible exports have increased enormously since 1913-1914 you will see one reason why there is this large amount of unemployment. I wish the President of the Board of Trade would investigate these figures and see if the 15 to? to which I have alluded is anywhere near right and whether that is one of the reasons why
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    there is this large amount of unemployment in the country.
    There is another point I want to raise with the President of the Board of Trade which I think requires some investigation. It is in regard to shipping. The last Report of the Suez Canal showed that our shipping was almost as good as ever. The Report was issued last year, and it showed that Britain had 3,099 vessels through the canal with a net tonnage of over 16,000,000 tons compared with the next country, the Dutch, who had only 526 vessels though the canal with a net tonnage of 2,000,000 tons. But what I want to bring to the special attention of the President of the Board of Trade is the Report issued recently on port costs with special reference to the charges for loading and discharging, issued by the Traders' Co-ordinating Committee on Dock Charges. I think the right hon. Member for Hillhead (Sir It. Horne) mentioned this subject last year. This Report has been issued recently and I contend that it should be studied in order to see if certain alterations could be made with regard to our port charges. I will give one or two instances with regard to vessels discharging in these various ports. In the Report itself there is one instance given of a vessel discharging in London 3,918 tons, including 2,896 tons of lumber and general cargo. The vessel discharged it in 14 days, and incurred expenses of £1,913. A similar vessel discharged 4,017 tons, with 1,505 ions of lumber and general cargo, in 10 days in Rotterdam at a cost of £430. There you have a larger vessel discharging its cargo in 10 clays in Rotterdam as compared with 14 days in London, and the cost in Rotterdam was £430 whereas in London it was £1,913.
    Mr. CONNOLLY: What about the facilities given?
    Sir F. WISE: If the hon. Member will study this Report, he will see that one of the complaints is that we want improved equipment and lower costs. That is what I am suggesting, and I think the President of the Board of Trade might investigate this report in order to see whether it is true and whether it does not affect our unemployment. I think such a tremendous increase in the costs must affect unemployment and the whole trade of this country. I realise that last year the coal stoppage might have had something to do with it, but

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    if hon. Members will study this Report they will find that there is something wrong with the shipping trade of this country.
    I feel certain there will be general agreement that the home market, that is the market in this country, was wonderfully good in 1926, and you can generally study your home market by the bankers clearances. In 1925 there was a record in regard to bankers' clearances, and in 1926 there was only a reduction of 1·5 per cent. compared with the record of 1925. Also there were fewer failures in 1926 compared with 1925. These are all important points, as they all show that we are ready to recover our trade as long as we have the opportunity which other nations have. But money and finance are wrapped up in trade, and credit is the mainspring of trade. We live on it. We depend on it, and if our credit is expensive it all affects trade and unemployment in this country. In a commercial sense credit is the promise to pay at a future time for a valuable consideration in the present, and if you take the average of the Treasury Bills for 1925 and compare it with 1926 you will find that in 1925 the average was £4 1s. 11d. as compared with £4 8s. 6d. in 1926. It is wonderful considering the coal stoppage that it was not higher, but at the same time there is an increase and it all affects trade. The bank rate in 1925 was on an average £4. 11s. 6d. whereas last year it was 5 per cent. These are the arteries of finance, all affecting the ultimate result of trade not only in this country but abroad.
    I read the wonderful speech of the Chairman of the Midland Bank (Mr. McKenna) the other day. It is very technical and it requires a great deal of reading, but it was a wonderful speech. He was all for the consideration of our trade, and he compared, more or less, the style of the Bank of England with the Federal Reserve Bank. You cannot really compare the two. The Federal Reserve Bank deals with an immense country nearly the size of Europe, whereas the Bank of England deals with a smaller although just as important country. The Bank of England has responsibilities and deals with such things as a sheltered gold standard and things of that sort, all of which affect
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    the comparison between ourselves and America. I contend that if suggestions alluded to by Mr. McKenna are carried out that you might get a credit expansion and a rise of price level in this country. We do not want an increase in the price level in this country, and I suggest that a possible investigation should be made which would help us to decide what was best for the trade and credit for the country. Although Mr. McKenna's suggestion may be right in regard to trade, I do not agree with him entirely.
    There is another matter which I want to deal with and that is the burden of taxation. This is the main thing that is keeping our unemployed at the number of 1,300,000—this burden of taxation. If you compare the burden of taxation per head of population you will find that in Great Britain it is £15 per head as compared with £6 per head of the population in the United States. That is what is wrong, and until we get some sort of reduction we cannot expect or look with any confidence for a real reduction in the unemployment in this country. It comes to the Government expenditure. I do not want to deal with that this afternoon, but it is a serious matter and it is a matter which I wish the Government would take up with more earnestness. I hate the idea that the National Debt is gradually increasing. People do not seem to realise this. Although the last Conversion Loan was a great success as far as the subscriber is concerned—I would not crab it in any way—yet a few million pounds were added to the National Debt because that loan was issued at 15 per cent. discount It is not business and it is not sound finance.
    4.0 p.m.
    I also wish that the Chancellor of the Exchequer would look into the position of our war debts, and see how they are affecting our trade. It is very rice to receive very large sums of money, but how is that affecting our trade? I wish he would look into the position, because certain conditions which have been regulated perhaps by the Treaty of Versailles or by the Dawes Report may be affecting our trade. We all depend upon trade and live by trade, and it is essential that we should have the conditions that suit this country and not the conditions which may suit countries such as France, the United States, or even Italy. It is dis-

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    appointing to see in international finance that a State like New South Wales should have to go to the United States of America to get a loan of £5,000,000. I think probably we could have carried that loan through a little bit cheaper, but they decided to raise their £5,000,000 in the United States of America. One has to realise that while in the old days trade followed the flag, to-day trade follows the money. In conclusion, may I say that I hope that the President of the Board of Trade will be kind enough to look into what I stated about the invisible exports and about port charges I also hope that the Chancellor of the Exchequer will make an endeavour in future to carry through conversion loans on a rather different basis from what he has done in the past. His Majesty's Gracious Speech gives some little ground for optimism with regard to trade. There is a little blue sky. What we want is blue sky all over. Then we could look forward to these men who have been out of work perhaps months or even years getting employment. I feel that this employment can only be obtained by sound finance.
    Mr. LLOYD GEORGE: The hon. Member who has just sat down always speaks with great interest and authority on the subjects of finance and trade, and, if he will allow me, I should like in the course of the observations that I intend to make to refer to some of the things that he has said. At this stage, I will only say one word about his comment on the arrangement which the Chancellor of the Exchequer is endeavouring to effect in order to exact, some contributions from our debtors abroad. I agree with the hon. Gentleman that in the interests of trade it would have been very much better if all these debts could have been wiped out. I do not think that it helps our business as a great exporting country to have these contributions levied. That is why, in 1922, we proposed to all our former Allies that they should all be wiped out simultaneously. But the hon. Gentleman must realise that from the moment we entered into a funding arrangement to pay our own debt to America, that became almost impossible, and the criticism ought not to be made against the present Chancellor of the Exchequer but against his predecessor. From the moment we undertook to pay £34,000,000 a year to America over a
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    period of some 62 years, we were hound to obtain something from our own debtors. I agree that it would have been better if the proposals of Lord Balfour's Note of 1922 had been carried out and if all these debts could have been wiped out and the nations start with a clean sheet.
    I had thought, when by the Prime Minister's courtesy I first saw a copy of the King's Speech, that a real effort was to be made at last to conform our Parliamentary habits to the more sensible practice of other Parliaments so that we could sit during the winter and spring months and adjourn during the summer months. November and December seem to be more appropriate months for Parliamentary sittings than June and July. The worst speech is less dreary than a November fog, and, on the other hand, the best speech is not as attractive as a Juno or July day outside. Every Parliament in the world except ours arranges its business in such a way that the legislators can enjoy the summer months and recoup and refresh their energies before their autumnal controversy. An effort, as the Prime Minister said, was made once before to achieve this end. It was made, I think, by a Conservative Government. It failed then, and it failed for the same reason that it is going to fail now. There are two reasons. One of them is within the control of the Government and the other, I am afraid, probably is not. The one which is not within the control of the Government is the London season, which I believe comes to an end sometime in July. As long as that is the case, you will not get the same pressure to adjourn in July. The other is the Treasury. I do not now mean the present Chancellor of the Exchequer, but the Treasury. As long as you make your financial year end on the 31st March, you will never be able to achieve this very rational reform in our Parliamentary system. It complicates everything. The Prime Minister, in his speech yesterday, made it quite clear how in his time it affected the whole business of Parliament.
    We do not begin the financial business of the year until some time in April The Chancellor of the Exchequer has got to get his Budget through, and that somehow or other always disturbs the arrangements which Parliamentary Whips attempt to make for the purpose

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    of the curtailment of the Parliamentary Session. I remember a very witty Cabinet Minister—I will not say whether he is present or not—once said that if you had the convenience of Members of Parliament, the interests of Departments, and the whole of the interests of the British Empire at one end of the scale and the 31st March at the other end, the 31st March would win every time. That is so, and until something is done to make our financial year end like the financial year of mast businesses, on the 31st December, you will find it impossible, I think, so to arrange Parliamentary business as to enable us to do this. I was hoping that the Prime Minister would really attempt this reform. It means sacrificing one Parliamentary Session, and, if a Parliamentary Session is to be sacrificed, I would rather it were a Tory Session than any other.
    Sir CLEMENT KINLOCH-COOKE: It will never be a Liberal one.
    Mr. LLOYD GEORGE: The hon. Gentleman must not be too sure. I have seen very great changes in politics in this country, and he and I may see a great many more. At any rate, I was hoping that some effort would be made this year. But, really, when the Prime Minister claimed that the meagreness of his programme was due to a real desire to curtail the Parliamentary Session, I think he was rather presuming upon the gullibility of Parliament. Nothing really is going to be achieved by the shortness of the programme except the saving of the Government from making up their minds on two or three very controversial topics, because what did he say? He talked about the Session coming to an end on the 31st July or the first week of August. Every Parliamentary leader has promised that ever since I remember this House, and I have never known any Parliamentary leader ever succeed in winding up at the time he thought it could be done. It is not going to he done this time unless one or two Bills are dropped. I am very sorry really that that was not attempted.
    The Prime Minister rather congratulated himself upon what he called the concrete unity of the Cabinet. I wish they would not fling that concrete about
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    when China is about, but would leave it to the Foreign Secretary. How has that unity been achieved? That unity has been achieved by postponing every controversial topic with which they promised to deal. They have postponed the House of Lords question; they have postponed the Factory Bill; they have postponed Poor Law reform and transport—all these questions that were going to cause controversy. They have clearly entered into a compromise with regard to trade unionism. That is the way they have succeeded in securing a measure of unity. I with I was quite sure that they had not achieved unity on China by a compromise that has allowed the Foreign Secretary to go on with his very laudable efforts to achieve peace while concessions have been made to others who might take a different view by sending a large force there. I wish I were as sure about that, but I am coming to that matter later on.
    It is true that there is no great legislative task to be undertaken. There is nothing in the King's Speech that indicates that the Government intend to grapple with the real necessities of the country at the present time. The hon. Member for Ilford (Sir F. Wise), in his very able speech, called attention to the anxious position with regard to trade. He rejoiced, as we all do, that there should be even a patch of blue sky woven into the texture of the King's Speech, but unemployment is 150,000 worse than it was last year. The mere fact that you extended the hours o labour in the mines has added that figure according to the Samuel Report. The Government, in their programme for the year, have not given any indications that they are going to tackle any problem that would assist trade in this country. Take the point that was put by the hon. Gentleman, the burdens upon industry. There is no definite promise of economy. I think it is because the Chancellor of the Exchequer does not believe that it is possible for various reasons to effect economy. It may be because of China or it may be some other reason. There is no indication there of an intention to deal with the burden of local taxation, which is undoubtedly crippling industry in the north of England very severely. I trust that opportunity will be afforded for a special debate upon that subject. Therefore I will not dwell upon it now.

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    Take the promise with regard to unemployment. What is it I There is only one way of dealing with unemployment, and that is to find employment. The Government in their programme have indicated that they are going to bring in a Bill for the purpose of amending the Insurance proposals. I am not saying that that is not necessary; it may be quite necessary. That is not grappling with the problem of unemployment. Whatever may happen to trade, even the most sanguine forecast has never indicated such an improvement in our trade that unemployment will be wiped out in one or two or even three years. I sincerely trust that by the end of the year the figures will be considerably reduced. Next year I hope they will improve. The best that anyone can forecast, the best that anyone can hope for, is a steady improvement, and a steady improvement, I think, is more likely to ensure a return to our old normal prosperity than a mere leap upward such as we had in 1821 and 1822 after the Napoleonic Wars. There was then a sudden leap up at the end of about six or seven years, which is just about the stage that we have reached after the great War—there was a sudden leap up, and that was followed by a great crash.
    It is infinitely better to have a steady growth in our trade and steady expansion. But all that means that the problem of unemployment remains with us for some time. The Government ought to tackle not merely the question of Insurance for dealing with those who are out of work, but they ought to deal also with the question of work. Quite frankly, no proposals on any great scale have been put forward since 1921, when there was a great scheme of road construction, which has now been exhausted. Nothing more has been attempted since then. But that was quite inadequate; it was only a beginning. I wish that the Government would think out the possibilities of another scheme for the purpose of providing useful, productive and necessary work for the unemployed.
    Now I come to what is said about agriculture. I cannot help thinking that hon. Members who represent rural constituencies must be dismally disappointed with the terms of the King's Speech. Here we have farmers passing through a
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    very bad time. The president of the Farmers' Union said the other day that there was a steady decline in agriculture. There is no doubt a very steady decline in agricultural production, and an increase in our purchase of goods from abroad. We have had promises from the Government—some of them have been referred to by the right hon. Member for Aberavon (Mr. Ramsay MacDonald)—about credit, which is vital to the working of the agricultural system. There is not a word about that. There were promises about marketing. What is to be done with regard to that? There is complete financial breakdown of the senior partner in agriculture, because of the heavy taxation which has fallen upon it. What is to be done to meet the exigencies of that one fundamental fact in the working of the agricultural system of this country? All that we have is that I hear something is to be done with regard to Ouse drainage, that there is to be an inquiry into drainage, and that there is to be a Bill with regard to the diseases of cattle. Hungry agriculture is to be fed with these lean and scraggy and diseased cattle. The right hon. Gentleman cannot possibly have realised thoroughly what the condition of agriculture is. Otherwise he would have grappled with the problem on a bigger scale. I am sincerely sorry that something more is not being attempted.
    I would like to ask one question before I come to the subject of China. The Home Secretary is not present, but perhaps the Prime Minister will kindly allow someone to answer. There was a promise given by the Home Secretary, a definite promise and not the only definite promise, that a Committee would be set up to consider the question of our electoral system. That would involve the question of the equality of the sexes, and also the question of the representation of minorities in this country. I would like to ask the Prime Minister, or someone who can answer on behalf of the Government, whether it is proposed to set up a Committee this year to deal with these two problems and any other associated problem which may bear upon our electoral representation.
    Now I come to the very urgent problem of the situation in China. May I say, in the first instance, that I personally was very delighted with the line which

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    the Prime Minister took yesterday with regard to China? If I may respectfully say so, I thought that it was admirable in tone and in the handling of the situation. I was very delighted to hear that the Government had definitely made up their mind not only that they would not interfere between the rival forces in China, but that they will not give any help to any of the rival war lords, which means that appeals made by Chang Tso-Lin for financial assistance will not be answered either in cash or in kind, and that we will really be sternly neutral in the quarrels between them. But it does mean a little more than that. I am going to put one or two questions with regard to our position in Shanghai. The Government have information that we have not got. The right hon. Gentleman's course has been one which, I think, will redound not merely to his personal credit as Foreign Secretary, but to the credit of this country. He has honestly and sincerely endeavoured to effect a peaceable settlement of our troubles in China. He has made it clear that he is not going to stand by any indefensible privileges.
    The position which we have taken up in this country is one which was laid down by Lord Balfour at the Washington Conference, and I think it is worth while recording two lines of the declaration which we signed then with eight other Powers. We undertook—this is the first article of the Convention—" to respect the sovereignty, the independence and the territorial and administrative integrity of China." By that I understand the right hon. Gentleman stands. He has made that clear in his December Memorandum. The words are very far-reaching. When you use the word "sovereignty" it is quite incompatible with extra-territorial rights or privileges. I will not say that that promise has been dishonoured, but it has not been redeemed. The right hon. Gentleman is not to blame for that. Amongst other things there is the fact that there have been four Governments since then, and, apart from that, he had to deal with eight or nine other Powers. He has done his very best, as I understand, to secure some sort of co-operation amongst them. That is not a very easy task. If he had proceeded without attempting first of all
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    to secure harmony among them, he would have been open, to criticism. Foreign Powers would have said, "Here is England again trying the isolated action, going behind the backs of France and Germany and Japan in order to curry favour for herself." I honestly cannot say that the time that was occupied by the Foreign Secretary in securing cooperation was wasted: or rather, it was wasted, but through no fault of his.
    There was a very remarkable interview in the "Daily Telegraph" a few weeks ago from a very considerable Shanghai merchant, who is opposed to the concessions. He said that if this had been settled two years ago it could have been settled on much easier terms than those on which we have to settle now. But that is always the case with all these disputes. The Foreign Secretary was bound. I think, to do his best to secure the co-operation of all the eight or nine Powers who signed the Washington Convention; otherwise he would have been liable to the suggestion that England had taken isolated action, and that would have created friction amongst the Powers which would have ended in mischief, if not in China, somewhere else. But there it is. We have to deal with that situation. We are in this position to-day because the Washington Convention of four or five years ago has not materialised and has not been carried out. If it had been carried out all the conditions which are now being demanded by Eugene Chen and others would have been conceded long ago, and you would have had peace and contentment in China.
    But, no doubt at all, the present situation is complicated by the fact that we have been driven to an exhibition of force. It is a serious complication. The responsibility here must necessarily rest with the Government of the day. They were in full possession of all the facts. If there be any real peril—the Government know—to life and property, the Government are bound to act. I think they would have betrayed the trust which is theirs had the Government of this country not taken every step which they are advised is necessary in order to protect life and property—if the facts are such as to justify, to give them a reasonable apprehension of any danger to life and property. I do not know how many

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    British nationals there are at Shanghai. I understand that the Japanese come first and that we are second, and that other nationals are a long way behind. But at any rate, men of our bone and blood and kin number thousands. They have gone there undoubtedly on the strength of treaties and on the strength of the fact that the British Government offers them the necessary protection.
    I do not think the right hon. Gentleman or the Government could have taken the responsibility for evacuation. In this case you have to think not merely of transport. I do not think there will be any difficulty in regard to transport. I am sure the transport could be found, but I think it would be a very serious thing for us in. the East, throughout the whale of the East, if after what has happened at Hankow we had to evacuate the whole of the British population from Shanghai. I do not think, honestly, that the Government could have taken that responsibility, and I think if they had done it they would have delivered a very serious blow at our position throughout the whole of the East. We could not have allowed a repetition of Hankow. I am not criticising Hankow, because the position there was a very different one. You are a long way up the river, and it is very difficult to offer adequate protection there. I am not so foolish as to believe that you can defend the lives of nationals over the whole of that vast country. It would be a very foolish thing to attempt. We have got small scattered villages there, we have got missionaries there, and I am glad to realise that nothing has happened to any of them and that there has been no loss of life anywhere. Hankow is in a very different position, but when you come to Shanghai I cannot help thinking that the Government had to consider very carefully on their responsibility whether it was necessary to send a force there in certain eventualities which might occur. The mere fact that they do not occur will not be a condemnation of the Government for sending a force there. Let us sincerely hope that they do not occur, but the one thing that neither this Government nor any other Government, whether it be Conservative, Labour or Liberal, could possibly face would be the possibility that we had left men of our own flesh and blood to the peril of massacre without offering them all the defence and protection that was in our power. I want
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    to make that clear when I am asking questions, because I want to know certain things. They are not by any means clear from the newspapers. Have the Government decided not to land their troops immediately at Shanghai? I sincerely trust that it will be possible—I am only putting it as far as that—for them not to do so.
    Let me just say one or two things that have caused me rather mixed feelings. It is one thing for us to have a force within reach. It is all very well for Japan to say, "We are not sending troops." They are only about two or three days' steam away—I forget the exact distance, but something of that sort—from Shanghai. We are weeks away, but so long as the force is there within reach we are in a different position. We are then in just as good a position as America who has a force, I believe, not so far away from Shanghai, and as Japan. But there is this which gives me some misgivings. Foreign Powers do not quite take our view in regard to the danger in Shanghai. There was a very remarkable article which I read in the "Temps" yesterday. I will not quote my friend Pertinax," though he is one of the most brilliant of European journalists; but he takes a very strong anti-British line and I do not quote him. But I do quote a paper like the "Temps" which has the reputation of being inspired by the French Foreign Office. They take a very different view in regard to our sending a defence force to China. They say—and I should like to know whether this is true—that the whole of the Consular Corps at Shanghai deprecated the sending of the troops. If that includes our Consul, that is rather a serious factor. I should like to know whether it is the case, because they are directly concerned not merely for their own lives, but for the lives of all the people in their charge, and if they have come to the conclusion at Shanghai, acting on a collective responsibility, that not only is there no danger which would call upon us to land a force there, but that it would really add to the danger to land the force, then that is a very serious factor indeed and it would justify the Government in not taking the troops beyond Hongkong.
    Here is another question I should like to ask: What is the view of the men on

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    the spot? If the right hon. Gentleman tells me that it might in the least interfere with negotiations if he were to give me a direct answer I shall not press for one. But it is rather important to know what is the view of Mr. O'Malley and Sir Miles Lampson with regard to the desirability of sending a force to Shanghai. Do they recommend it? If they do, if they say that the danger is so great that troops must be landed, then it is quite impossible for the Government to take the responsibility of not landing them. On the other hand, if they take a different view, then I think the Government are very wise in not going beyond Hongkong, whatever the cost of demurrage may be.
    Then there is another matter which I should like to know? There must be some military instructions which have been given to our generals. I do not mean any military instructions which would involve disclosing anything which would be of any assistance to those who would be likely to attack them, but I am speaking of military instructions in regard to the limits of military action. This is really very important. I do not know what our position is in regard to the general who is in command at Shanghai. I think his name is Marshal Sun Chuan-Fang. What are the relations there of our military commander to the Commander at Shanghai? I do not know whether his force is in Shanghai. I understand that the present idea is to defend the whole of Shanghai and that it will be quite impossible to defend the settlement without defending the whole. That is a military question which must be left to the men on the spot. But are the forces under the command of this particular Chinese General inside? If so, what are his relations towards us? Are they friendly? Is he one of the Foreign Powers with whom our relations are friendly? If he is outside Shanghai then, if he is beaten, what is the position? Is he to come inside there, inside our barbed wire entanglements and are they to defend him? That is rather important. It is quite impossible to know what is going on.
    I have been following all the newspaper correspondents and the prodigies they have performed with their pen are inconceivable. One day a correspondent
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    with his pen routs the whole of the Cantonese Army and sends it flying away a hundred miles. The next day another correspondent rallies the scattered troops attacks the victorious army and drives them back from Hankow. Nobody really knows what is happening there at all, and I should like to know whether we are in the least involved in protecting the Shanghai general's forces if they are beaten by Eugene Chen's force or whether we are completely neutral and whether we are simply there doing what the Prime Minister called—and I think very rightly—police operations, and protecting the lives and properties of the Europeans and not meddling in the least between the rival factions. It is not any too clear whether this is the case. Nobody seems quite to know what the military position in China is. There is Marshal Chang Tso-lin who I think probably has the best army of the lot and he has marched right down to Hankow. I have no information at all as to whether we have got the same guarantee from him as we have from Mr. Eugene Chen that he will protect lives and property in Hankow. Because we must bear in mind that whatever may be the views of the Chancellor of the Exchequer about Mr. Eugene Chen, Mr. Chen ha-s carried out his undertakings to protect foreign lives and property there quite faithfully.
    Sir C. KINLOCH-COOKE: No, be has not.
    Mr. LLOYD GEORGE: The hon. Member seems to know but I would rather have an answer from somebody on behalf of the Government. So far as our information is concerned, since he took charge at Hankow and gave that undertaking no British lives have been lost and no British property has been destroyed and that is a very material fact when he gives an undertaking in regard to Shanghai.
    There is the real danger of our getting diverted by all this talk about Bolshevist interference and the judgment of the country being deflected by this Red obsession. I really do not know as between the "Reds" and the "See-Reds" which of the two is the most mischievous. I think on the whole the latter. The movement in China 1s not in the least a Bolshevist movement. There is no doubt at all that the Bolshevists do not like the English, and Conservative Ministers

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    have not helped them to like us, and there is no doubt that there is a feeling of half-suppressed antagonism between the Bolshevist Government and our Empire. That is a great misfortune, but we must face it, but the movement in China is not a, Communist or a Bolshevist movement. It is essentially a national movement, and nationalism and Bolshevism do not go very well together, and the Bolshevists themselves will begin to discover that the moment Russian Nationalism begins to wake up. When Russian Nationalism wakes up it will be the end of Bolshevism, just as the rousing of French patriotism in the days of the revolution was the end of Jacobinism.
    The movement in China is essentially nationalist. The educated Chinese is not a Communist: in fact, the Chinese are the only Tories left outside the Liberal Council. I apologise to my right hon. Friend the Leader of the Opposition; I had forgotten him for the moment. But they are not Communists. There is no doubt if the Bolshevists supply them with guns and ammunition, they will take them; but most of the guns and ammunition have not come from the Bolshevists. They have come from Birmingham. I apologise to Birmingham. I mean it has been sold to them very largely by English and American merchants at Shanghai. That is my information. It has come very largely from Shanghai through English and American merchants. The whole of the equipment has by no means come from Bolshevik quarters. It has been going on, not recently, but for years, and these rival factions in China have been largely equipped by British and American merchants who have been dealing in that particular commodity. Both parties have got Russian officers. Chang Tso-Ling's army has got white officers. I have no doubt at all that Eugene Chen has got, on the other hand, officers who have been drawn from the Red Army. I do not know, hut I think it is very likely. But it is not a Bolshevik movement, not the least. I looked at the programme, and it is a very moderate programme. It looks like the remnants of the old Newcastle programme of 1892. He has got at least about 35 years to catch up. There is nothing particularly violent with regard to his proposals, and I am
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    glad that the Foreign Secretary is dealing with them.
    There is propaganda, but do not let us make any mistake. There propaganda on both sides. I wonder whether hon. Gentlemen have read some of the English papers in China. One of them was sent to me by a missionary there. I must not Dive his name, but he sent it to me and said:
    "Read that paper, and you will see why there is all this anti-British feeling in China."
    I am quoting from what he said to me. There was a violent attack upon the Chinese demands, upon the very demands of which the Foreign Secretary has acknowledged the substantial justice. He said to me me that there are thousands, if not scores of thousands of young Chinamen who can read English; these articles are also translated into the Chinese papers, and England is thought to be behind these miserable little rags that are just published here and there along the coast of China. If these papers had been Russian papers edited by Bolshevists, everybody would have said, "Here is Bolshevik propaganda which has been promoted from Moscow." We have nothing whatever to do with these papers. We have no responsibility in the least for them. They are just written by purely irresponsible people but you get that on both sides, and therefore I sincerely trust that all this fear of Bolshevism will not mislead us and poison judgment. This is the sort of talk about the Red danger. If you jab at a colour constantly, that is the way to spread it, and the Home Secretary and the Chancellor of the Exchequer and the rest are doing all the harm in the world by trying to identify this movement in China with Bolshevism. I put this to hon. Members opposite. What is it that the Bolsheviks would like best to happen in China now, assuming that they are against the British Empire—and for the moment there is no doubt that the attitude of Bolshevism is anti-British?
    The CHANCELLOR of the EXCHEQUER (Mr. Churchill): For the moment.
    Mr. LLOYD GEORGE: I am a little older than the right hon. Gentleman, and I remember the party to which he now belongs was very anti-Russian. It was prepared to go to war with Russia

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    solidly, and it very nearly went to war with Russia. In another 20 or 30 years they were at war side by side with Russia, and, when I say for the moment, why should we assume that Russia and ourselves are not going to be ultimately friends. I am perfectly certain this is a development in the history of Russia.
    Mr. CHURCHILL: The right hon. Gentleman did not say Russia: he said Bolshevism.
    Mr. LLOYD GEORGE: Yes, I said Bolshevism; I said Bolshevist Russia, Soviet Russia. Alter all Bolshevist Russia is moving, and anyone who watches what is happening there very closely can see a very great difference between the Bolshevist Russia of three or four or five years ago and the Russia of to-day. It will take time, just as Republican France moved at the end of the eighteenth century. Mr. Pitt then did his very best to persuade the British public not to go to war for that very reason. When you are dealing with revolutionary Governments you are not dealing with anything that is normal, even in diplomatic relations. A revolutionary Government is essentially a propagandist Government. The revolutionary Government at the end of the eighteenth century did its very best, and declared that it was part of its purpose, to overthrow monarchy throughout Europe. Mr. Pitt knew that, but he said "That phase will pass away." Unfortunately public opinion in this country got excited by the horrible outrages in France, and we dashed in and we had 23 years of war. You must wait until the fever subsides, and I say, in spite of what the Chancellor of the Exchequer said in his interruption, that I am not at all despairing. Bolshevist Russia, which is gradually developing in another direction, as it has done with regard to the economic policy, will do the same with regard to its other policies, and it may be possible for us to shake hands.
    I was talking to a very great European the other day, and he said, "How can you expect your trade to be what it was when two vast countries with about one-third the population of the globe are in a state of complete disturbance, and hostile?" Is it not our business to reconcile them gradually? We have no
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    business with their opinions. After 'all, we traded with Czarist Russia; we trade with Italy, although we do not, with the exception of the Chancellor of the Exchequer, approve of that regime. We trade with Spain where there is a military dictatorship. We have no concern with that. What we find in China is that the proportion of the trade of China with the world has gone up since the War, and the proportion of British trade with China has gone down. Our business is trade in China. We have no concern with holding any concessions or territory. Our business is to see that we are not beaten out of the great market of China which may be soon the greatest market of the world, to see that we are not beaten out of those markets by rivals who very cunningly and very craftily are managing somehow to insinuate into the Chinese mind that they are in favour of giving justice, whereas we are sending troops there. From my heart, I support the pacific policy of the Foreign Secretary, and I earnestly trust that he will not allow his colleagues to interfere with a triumph for that policy.
    Captain A. HUDSON: I am very pleased that the Gracious Speech contained so little in the way of forecast of legislation. I feel that this country at the present moment is rather suffering from too much legislation, and the result of that is that you have too little self-reliance. I am frequently being approached by people who ask me why the Government does not legislate on every conceivable subject under the sun, and most of those particular things they could easily put right for themselves if they only had the sense to do it. I hope we shall try to cut down to a very great extent the amount of legislation which is passed through this House. It seems to me that what the Speech lacks in quantity it has in quality. There are one or two most excellent Measures in that Speech, and one that particularly commends itself to me is the forecast of a Leasehold Tenants Bill. I have been written to a great deal about that subject, and I am sure a great many people want such a Bill to come on to the Statute Book.
    I am going to say only one word on that very important subject of China. It seems to me that the Government have taken the only line which any Govern-

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    meat of any party could possibly take. There is an old saying, and a very true one, that there is no use in locking the stable door after the horse has escaped. It seems to me that Shanghai is very like that horse. If the same thing were to happen at Shanghai as happened at Hankow, and we were turned out of the country, probably with a good deal of loss of life, what would be the good of the advice of the Leader of the Opposition to negotiate, negotiate, negotiate, when there was nothing to negotiate about? All we want is to have a, force sufficient to see that we keep what we have got by Treaty until some amendment, honourable to both sides is properly negotiated. The right hon. Gentleman said yesterday that he hated all this talk about war. I entirely agree with him, but I do not think that his party are doing their best to avoid it. As I came to the House to-day, I saw flaming yellow posters on these lines: "The Capitalists want to plunge the country into war. Stop it. Come to our demonstration in Trafalgar Square." That is a mischievous sort of poster to put up. We are just as much entitled to say: "The Labour party want your brothers and sisters in Shanghai to be massacred. Stop it." We have as much right to say that as they have to say that anyone in this country wants to plunge the country into war.
    I want to say one word on trade union legislation, and I think I must have a different copy of the Gracious Speech from that of the right hon. Member for Derby (Mr. Thomas), because he appeared to see in one paragraph of the Speech all sorts of extraordinary things which the Government are going to do in order to break the power of the trade unions. What I see here is simply this:
    "Recent events have made evident the importance of defining and amending the law with reference to industrial disputes. Proposals for this purpose will be laid before you."
    5.0 p.m.
    That very modest statement in His Majesty's Speech will commend itself to the great majority of people in this country. I am certain that the people do not want this House to interfere with the internal affairs of trade unions, but think that they were profoundly shocked by the events of last year and particularly by the General Strike and they look
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    to this Government to ensure that such a thing shall not be possible in the future. Nobody in this House, except the members of the Cabinet, knows what the Government propose to do in the promised Bill, but I hope they will be able to make such a thing as a General Strike absolutely impossible, so that the ordinary citizen will be able to carry on his legitimate trade without being interfered with by trade disputes of the magnitude of that which occurred last May. I also hope that the Measure will deal with the present system of peaceful picketing. I saw something of what is called "peaceful picketing" in Durham during the General Strike, and it struck me as being far from peaceful. In one particular case a car was stopped, overturned and burned. The members of the picket were ultimately arrested, and I am glad to say that they got three months. Their defence was that they were engaged in "peaceful picketing." The type of intimidation which has gone on in the name of picketing, and I refer particularly to mass picketing, is a disgrace to this country and should be dealt with by any Government which happens to be in power. Finally, if unions force their members to break contracts, those anions should be held responsible for their own sin. It seems to me that in some of the cases which came into the Courts in connection with recent unfortunate industrial disputes there has been too much of what we had in the German Army during the War, namely, leading from behind. The officers in the trade unions seemed to stay too much in the background and to push forward the unfortunate rank and file, who are arrested and fined while the unions cannot be touched. I trust that such legislation as is proposed in the King's Speech will follow on those lines.
    I agree that the internal administration of the unions cannot be dealt with by Parliament unless there is universal agreement, including unions themselves and the employers. As far as one can judge the unions themselves are taking up the question of internal administration. Certain unions have definitely decided against, political action. Others have broken away from former associations and have formed new organisations of a more industrial character. I believe that legislation such as I have suggested would not be unpopular but on the

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    contrary would be universally welcomed and would not create industrial strife but rather help the cause of industrial peace. The Leader of the Opposition said he would offer uncompromising hostility to every line and word of such a Bill and I think the right hon. Gentleman the Member for Derby (Mr. Thomas) said the same thing. As they have not the least idea of what will be the actual provisions of the Bill, I think those statements rather give away their case. The position reminds me of the dog barking up the tree when he is not certain that the cat is in it. The Leader of the Opposition spoke about this Government not having a mandate from the country to deal with the trade unions. This question of mandates is one which has been brought up again and again. I would only ask the Labour party if they had any mandate to negotiate a loan on behalf of Russia in their short term of office. That proposal was turned down by a majority of the House but they had no mandate to bring it forward at all.
    The Leader of the Opposition, in his speeches as regards this Government and the country, constantly repeats that the by-elections have shown that the Government have lost the confidence of the country. Having been carefully through the list of Members of this House I find that at the present moment we are exactly one seat down as compared with our strength after that election when, according to hon. Members opposite, we are supposed to have been returned falsely and by fraud. I defy anybody to show me a better record on the part of any Government in this respect. A Government while it is in office is bound to lose votes because it is much easier to priticise than to carry out promises, but this Government has done remarkably well and the fact that they are only one down at this juncture is a remarkable achievement.
    Mr. KELLY: You were not all elected on that issue.
    Captain HUDSON: If we were all elected by fraud and by means of a forged letter I should imagine that when the by-elections came we certainly should not win, but we are holding our own to a remarkable degree. It amuses
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    me to hear hon. Members opposite refer to the party on this side as if we were objecting to industrial peace. There is no party in this country which does better than the Conservative party when there is prosperity in the land. It is a remarkable thing that nearly every Member on the Labour benches represents a seat where, through no fault of their own, numbers of people are out of work and where there is industrial unrest and discontent. When there is prosperity the Conservative party do well. Why on earth therefore shoal it be said that we object to industrial peace in this country? Hon. Members opposite also talk about the Conservative Government causing unemployment. What are the facts? Before the general strike unemployment had dropped. The general strike came and the unemployment figures soared up, but they are falling again now. Then look at what happeued in the coal stoppage. Look at the settlements which could have been made in the early stages, with great advantage to the miners and more important still, to the country. Look at how those opportunities were turned down, Limply because of the folly of a man who called himself "a humble disciple of Lenin." Time and time again the Labour party proved that it is not this Government which is causing unemployment but their folly—or the folly of so many of them—in backing up the? general strike and then allowing the coal stoppage to drag on when settlements could have been made in the early days.
    I believe there are moderate men on both sides of the House who believe in industrial peace. Cannot we declare an armistice in the industrial war? Cannot we ignore the extremists, both those on the extreme left of the Labour party and those on the extreme right of our own party? Cannot we try to work together for one object, namely, to get hack to work those people who are out of work and to bring this country to real prosperity, so that the majority of our fellow countrymen may be contented and all this talk of class war may become a thing of the past? I believe that can be done by men of good will, and I believe there are men of good will both on the benches opposite and on this side. I trust that the unhappy events of last year have shown the utter folly of class war and that we have a much brighter time before us in the future.
    Lieut.-Commander BURNEY: As far as this Debate has progressed, the criticisms of the Government's programme have been divided into two main classes. One of these deals principally with China. On that subject I do not propose to make any observations, beyond stating that I am entirely in agreement with the Government's policy in that respect. The other class of criticism deals with the question of our home and industrial legislation, and in that respect I deplore that more reference has not been made to the state of unemployment in this country, and that there is no constructive Measure proposed in the Government's programme for dealing with this very serious question. During the last seven years this country has been unique among the countries of the world in that we have had continuous and grievous unemployment upon a great scale. I do not mean to say that no other country has had unemployment, but no other country in the world has had unemployment on such a large scale and for so prolonged a period as this country. We appear to be drifting into a very despondent state, as is exemplified by the fact that there is no Government Measure to deal with the problem. A great responsibility rests on the Members of this House, because it is due to their lack of ability to solve this problem that we see 4,000,000 of our people in suffering and with such a hopeless outlook as the unemployed and their dependants must have. For that reason I think this matter should be probed further and for reasons which I propose to develop later on, I venture to think that the time has now arrived when this problem can be dealt with on a wider and more comprehensive basis than has hitherto been attempted.
    I believe there are grounds for thinking that the key to the solution of this problem—and I contend it is not insoluble—lies in the hands of the Government of to-day. If we compare the position of this country with that of the various other countries of the world we find this country in a very unfavourable position. There is no doubt that Great Britain has suffered more from the slump conditions in the world than any other country. America has never been so prosperous. Our Dominions go on from record Budget to record Budget, and France has had to import a million
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    and a-half labourers in order to cope with the work which that country has to perform, and that has been done at a time when in this country we have had a million and a-half unemployed. Another point emerges. All countries experienced unemployment on a great scale about 1920, 1921 when the industrial slump came. The whole world was then engaged in liquidating the industrial and political hopes of the boom period. But after 1921 a great change came over the situation and the divergence between this country and other countries became very wide. In investigating this problem we have to seek an answer to the question why the conditions in Great Britain after 1921 have been so different from the conditions in other countries. The explanation cannot lie in the fact that 40 per cent. of our trade is external. I think we have to accept the position which is to-day taken by many experts that not merely the major cause of our unemployment, but the over-riding and compelling cause which ensures unemployment is the monetary policy which has been carried out in this country.
    If this be so, one may be asked at once how is it that anything that may be done in regard to our internal monetary policy in this country will have any effect with our markets abroad. It may be said, by some, that the after-war impoverishment of Europe and the world has prevented the purchase of our goods and thereby caused our unemployment; that it has nothing to do with what happens in this country; that we, as a great exporting nation, can only obtain our orders if the persons outside this country have the money and capacity to buy our goods; that if more credits are given the more goods there arc produced in this country. It may be at once said: How do we know the position will not be worse and that those credits will not remain frozen credits? I think, however, if the general trade of the world is investigated, the answer to that question is not only simple but complete. As the right hon. Gentleman the Leader of one of the Liberal parties said in his speech, we are losing, relatively to other countries, even in China. Other countries are taking our proportion of trade, and I have here what I think is a very significant analysis of the position.

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    If I take the position in 1921, which was the slump year, and compare the change which has been made since that date with the latest figures available for this country, which are those for the first three months of 1926—and I do not take later figures because thereafter our export figures were necessarily affected by the coal strike and the general strike and other factors of that kind—but in that time the British exports have increased by 12½ per cent., American exports have increased by 40 per cent., Italian exports by 117 per cent., and Canadian exports by 70 per cent. One could give figures for other countries, but I think those are sufficient to prove that the reason for the unemployment in this country is that we are losing relatively to other countries. It is not true to say that our unemployment to-day is caused by the fact that Europe is poor and other countries cannot buy, because the proof of the pudding is in the eating, and other countries are enlarging and increasing their export trade at a very much higher rate than we are, and the proportionate amount which we, in this country, have of export trade as compared with other countries is continually decreasing.
    Therefore, the fact remains that we have still to find out why we have this position, and I think again the answer is simple. Our costs are too high. It must be an accepted fact that if goods can be produced cheaply, the market can be expanded. The market is there, as the figures that I have given prove, and I should like to give an instance of what can be done if three conditions can be satisfied for our firms. One is that there are no industrial disputes in the firms, the second is that, various trade union restrictions and demarcations of trades are removed, and the third is that the necessary credits for finance can be given. For this company, the results of which I have got, for the same number of men employed, the output was increased by 52 per cent., the price of the article was reduced by 38 per cent., the wages were increased by 64 per cent., and the profits were doubled. Does anybody deny that if we could reduce our general costs by some 38 per cent we should be enabled to regain those markets which are gradually being filched away from us by our foreign competitors? What we have
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    to do is to investigate what changes are required to make it possible for these conditions to apply in this country.
    I venture to think, as I said before, that it is the monetary policy which is causing not only the difficulties in the finance of trade, but, as I propose to show, I believe it has psychologically-reacted upon the trade unions and the men employed in such a way that it has actually caused the industrial strife of last year. Let me for a moment look at it from the worker's point of view. Obviously, the only thing the employer can say is this: "If you work longer hours or more efficiently, I shall be able to produce goods at a cheaper price. 1f I can produce goods at a cheaper price, I shall be able to get a bigger market and to sell more of those goods, and in time to come I shall be able to employ more persons." What is the effect on the workman? He looks round and sees that 1,500,000 people are unemployed. He sees, no doubt, the warehouses of his firm full of goods produced at too high a cost and unable to be sold, and he at once says: "If I do that, and produce more goods, I shall probably get the sack, or my mate will get the sack." I believe, myself, that it is this psychological effect on the minds of both the trade union leaders and the workmen as a whole which is almost entirely responsible for inefficient output and for the difficulties which the trade unions raise. Take the question of the demarcation of trades or that of the introduction of more modern labour-saving machinery. Does one suppose that any responsible man, who is a trade union leader, would object to that unless he felt in his heart that by agreeing to it he might put people out of work? If he really thought in his heart that his men were going to get better pay and increased wages, and that more persons were going to get employed, is it not axiomatic almost that, with the commonsense genius of the people of this country, most of the difficulties, which we now encounter with trade unions, would be swept away?
    Let me look at the position from the employer's point of view. Necessarily he is alive to the men's point of view, but what can he do? He knows the Government's policy is continuous deflation and that that means falling prices. He knows that falling prices mean bad trade, and

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    how can he be expected to embark upon a bold and courageous policy of expansion, a policy of increased production He knows that it is only a policy of that kind that can allow these men to give of their best, and he knows he cannot undertake it, and, therefore, I would say this: I believe that the first and fundamental and essential step of any change in our unemployment situation is to remove from the mind of the industrialist, whether it be the employer or the workman, this fear or certainty is it is to-day, of continuous deflation, which means bad trade and slump conditions. That, I think, can only be overcome by action on the part of the Government.
    Take this question of monetary policy. Hitherto all the efforts of persons outside the Treasury and the inner ring of banking circles have been unable to secure even an investigation, much less remedial action, in regard to this matter. At last, however, I feel that a vital change has come upon the situation, and it was referred to by my hon. Friend the Member for Ilford (Sir F. Wise) this afternoon. The solid phalanx of the banking interests has at last been broken by Mr. McKenna, the Chairman of the Midland Bank.
    Mr. McKenna, in a recent speech, definitely said that, in his opinion, there are cogent reasons for suspecting that the financial policy that the Government have pursued in recent years has actually manufactured unemployment by preventing the manufacturer from making goods on a competitive price basis. I, for one, do not think it would be a matter of surprise if an alteration of banking policy had to be forced upon the Treasury and the banking profession from outside. If that be clone, it will only be following the procedure of any change which following been brought about in any other equivalent profession. Let me take the, one that I happen to have served in for a good many years, The Admiralty fought for years and years against the introduction of steam into the British Navy. They said it would destroy the supremacy of the British Navy if steam were introduced. It was the same with the War Office, for even in the late War they fought tooth and nail against the introduction of the tank. With examples like that of what, can happen in a closed profession—
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    because, after all, banking is largely a closed profession, as is the Treasury too —I, for one, should not be surprised if this change had to be forced upon the banking profession from outside, and probably through the agency of this House.
    If I am not detaining the House too long, I should just like briefly to sketch the industrial conditions of this country, analysed upon the basis that Mr. McKenna's views are correct, in so far as actual banking considerations are concerned, and analysed upon the basis that the psychological effect of that monetary policy, as I have attempted to give it, is also correct. Take, for instance, the first coal strike in 1921. [An HON. MEMBER: "Lock-out!"] Well, let me say the first stoppage. I do not think anybody to-day would deny that, that crisis was brought about by the violent deflation policy of that time. Whether it was right or wrong to bring about that deflation policy, I am not discussing. All I say is that it was actually brought about by it. An uneasy and a temporary settlement of our difficulties was made at that time, and it was not until a further violent change was made in our monetary policy that the next crisis arose. That was in 1925, when, by a stroke of the pen, the Chancellor of the Exchequer altered the selling price of the whole of our export trade by 10 per cent. by the introduction of the gold standard.
    The Government were not without warning. Twice the Federation of British Industries went to them and pointed out the deleterious effects of such a violent change. No less an authority than Sir Josiah Stamp, subsequent to that crisis, reported that, in his view, that industrial crisis had been ensured by the action of the Government. They were not even without warnings in this House, and I have here the words of the right hon. Member for Carmarthen (Sir A. Mond), who said, dealing with what he termed the premature return to the gold standard:
    "I am not alone in this view. I have the authority of an expert quite as good as those of the right hon. Gentleman (the Chancellor of the Exchequer)….He views with grave apprehension the step the right hon. Gentleman has taken."—[OFFICIAL REPORT, 4th May, 1925; col. 682, Vol. 183.]

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    I am not attacking the Government's policy in passing that Bill. All I am trying to do is to show to the House how the monetary policy affects the industrial conditions. It does it in two ways, first of all psychologically, as concerning the workman, the employer, the trade union leader; and, secondly, it affects the actual conduct of trade itself. What I view with great apprehension is this, that so long as the Government continue to operate upon the report of the Cunliffe Committee, and do not revise the Bank Charter when the Note issues are amalgamated, we must endure continuous unemployment in this country. Until that change is made all this insurance against unemployment and other expedients is about all the Government can do. I do not believe they have yet grasped the nettle which must be grasped before this problem can be solved.
    This leads me to the consideration of the key of the whole problem. I will confine myself to the views given by Mr. McKenna. I am not a, banking expert or a currency expert, and therefore it would be foolish for me to air my own views. All I can do is to give the views of one whom I believe to be the greatest expert we have. What he points out is that up to 1921 the policies on monetary affairs of this country and America were much the same, but thereafter the divergence became very wide; and in his opinion the divergence in policy since 1921 is amply sufficient to explain the difference in the industrial conditions to-day in America and this country, and to explain the fact why America has no unemployment and we have 1,250,000 unemployed. He points out the reason by comparing the movement of credit, which is where the basis of dissimilarity was. He shows that between 1922 and 1926 the average total deposits of banks which are reporting members of the Federal Reserve Board were increased by £891,000,000, whereas in this country the total deposits were reduced at the same time by no less than £122,000,000. Further, he goes on to say, and I think it is obvious, that by the end of 1921 there were two factors calling for greater credit. One was the factor that each country at that time had 1,500,000 unemployed, and there was the
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    normal increase of population, and that in order to provide work for the mass of the people further credits were required. In Mr. McKenna's own words:
    "An enlargement of credit which in one set of conditions may be inflation, in another is an indispensable accompaniment of trade."
    It seems to me, therefore, that the main question for Members of Parliament is to find our who, in fact, is responsible for our policy. Is it the Government or is it the bankers? As things are to-day, the Bank of England are the sole authority who can alter the amount of money or credit available. The modern practice is such that the Bank of England can operate somewhat independently of the amount of gold, and, therefore, if an alteration of our internal policy were arranged, it would not affect our maintenance of the gold standard for our foreign and international trade. To-day it is the total amount of bank cash which governs the amount of money available for trade.
    Therefore we come to this, I think, that it is the Bank of England who to-day control the unemployment situation. Let us go further and consider whether they are in fact in control, and here I would give the view s of another of the great chairmen of our banks, Mr. Walter Leaf. His conclusions will be of interest to the Labour party, I think, in view of the policy they are proposing. He pointed out that the Joint Stock Banks had been deprived by the State of the control of currency and the power of creating credit, and that that, which was considered by the banks to be the very essence of banking, had been taken away by the Treasury: and that the control of the rate of interest, by which deflation or inflation was managed, had equally been confined to the Bank of England, the Joint Stock Banks having no voice in it whatever. Further, he went on to say:
    "In general the bank recognise that it is their duty to support the policy of the Bank of England,"
    and that they were, therefore, for all practical purposes, as much under control as if they were nationalised. I believe hon. Members opposite want to see banking nationalised. In the opinion of the chairman of this bank, banks are as much under the control of the Government as if they were nationalised.

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    Therefore we come to this, I think, that the Bank of England control our monetary policy and the Government control the Bank of England, first of all by advice and so forth, which, presumably, is generally taken by the Bank of England, and secondly, through the fact that the Bank of England are not free and operate under the Bank Charter Act of 1844, which this House is responsible for keeping in operation, and for which it would necessarily be responsible if it were to amend it. I should like to give Mr. McKenna's view of the Bank Act. To-day we are working under an Act of 1844, and it is now 1927. The majority of the authorities who have studied this question believe that this is what controls the key of our unemployment. This is the view of Mr. McKenna:
    "The present system may have suited conditions in 1844, when Joint Stock Banking was in its infancy, or might conceivably suit conditions to-day, but only as the result of an accident. It has served for 80 years by virtue of its own suspension in times of crisis, the phenomenal supercession of the use of currency by the cheque, and the fortuitous discovery of gold."
    I wonder if a more damning indictment of a nation's monetary policy has ever been made by one of its foremost financial experts. And I would emphasise the necessity for this House to deal with the currency and monetary policy as a first and fundamental step in the solution of our unemployment problem. In my opinion it absolutely controls the whole of the activities of this country, and my charge against the Government, which I hope the one representative on the Treasury Bench will convey to the officials concerned, is that they have not distinguished clearly between an inflationary and a non-inflationary expansion of credit, that they have allowed themselves to be allied to that group of interests which has been ready to sacrifice industry and employment to finance, and that until that policy is changed so long, in my opinion, will the Prime Minister's scheme for peace and good will be impossible of attainment.
    As long as these conditions operate in this country, we shall, I am convinced, have continual industrial trouble, and every year, every week almost, we are losing relatively to America and other
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    countries, and the amount that we shall have eventually to pull up will be, perhaps, more than we can accomplish. Therefore, I make this appeal to the House. This question is not a party question, it transcends party because upon it depends the livelihood of every person. I appeal to hon. Members, and especially to the Leader of the Opposition, to keep this matter continually before the Government, and to demand a thorough inquiry into the whole position. Mr. McKenna has asked for an inquiry, and I am perfectly certain that if Members on all sides of the House will continue to demand a thorough inquiry some step will eventually be taken, because I do not believe that what I would call the orthodox, old-fashioned banker has any real answer to the charges made as to the inefficiency and inadequacy of our present financial policy.
    Mr. MONTAGUE: I agree with the hon. and gallant Member who has just spoken that Mr. McKenna's speech was a remarkable, and even a revolutionary, one from the standpoint of finance and banking in this country. I also agree that we in this country and the banking interests here might do well to consider closely the working of the Federal Reserve Board of America. One of the great difficulties in the way of industrial expansion is the fact that it is possible for the foreign importer to obtain easy and competitive discounts for his bills of exchange, whereas if an industrialist in this country desires to expand it is usually necessary for him to obtain overdrafts at 1 per cent. above bank rate. That places a premium upon imports from foreign countries. Like the hon. and gallant Member, I do not claim to be an authority on finance or banking, but I would like to suggest that, to the lay mind, it seems to be a pretty obvious truism that the reason why it is possible for the foreign importer to obtain easy discount for his hills of exchange is that at the back of those bills there is wealth, there are commodities which have a. definite price, and which are stabilised during the period of these quick discounts; whereas when it is a question of an industrialist in this country expanding, he is up against, and the banking interests themselves are up against, instability of prices over the longer term of credit required; and, therefore, if

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    there is a large expansion of credit for industry it has the danger of becoming inflationary credit.
    I entirely disagree with the hon. and gallant Member in his analysis of the causes of unemployment. Although I admit the importance of considering the financial situation, I think the causes are very much deeper than any question of the manipulation of finance or credit. He spoke about a reduction of costs, and suggested that it was necessary for the workman to increase the number of hours he worked or to increase his efficiency. I would like to know whether it is the opinion of the hon. and gallant Member, or anybody else, that the efficiency of the British workman is lower than that of any other workman in the world It is perfectly true that the product of the American industrialist is higher per economic unit than in this country, but that is not so much a question of increased efficiency; in fact, it is the opposite of increased efficiency. The efficient man, in the old craftsman sense of the word, is not wanted very much in America to-day, because of the higher efficiency of machine production.
    From the standpoint of the workman, it is not true that the whole of industry in America is in a prosperous condition. There are in America large industries and large sections of industries, in which wages are low, compared with the cost of living, and particularly is that the case in Chicago. One cannot envisage American industrial conditions upon the basis of every person in America being an engineer, because every person in America is not an engineer. There are certain industries in which high wages are paid, and, owing to the higher efficiency of machine production and mass organisation it is possible to pay those high wages and at the same time to command high profits and a vastly increased output of goods.
    That is all very well so long as it is confined to a few industries in one country, but you have particularly in this country the competitive element to consider, and when we adopt the same principles, as have been adopted in America, when the industrialists have sense enough to organise not upon the basis of cheap labour or long hours but on the principle
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    of more efficient labour made sound by the greater economy of methods, when that is done by our own industrialists, then we shall be faced with the difficulty of the competitive factor intensified, because high production in America and high production in Britain means ultimately high production everywhere else, and you will have the same problems of chaos, over-production, booms and slumps in industry intensified because Western nations will adopt the policy of high production.
    What are we faced with? What are the industrialists of this country and of Europe faced with? One of the most significant facts of recent months has been the tendency on the part of industrialists and financiers in Europe and America to get together for the purpose of rationing markets and the elimination of international competition, which is going en to a degree which the man in the street does not realise. This elimination of international competition surely raises an entirely different issue. When you come to consider the condition of the workers of this country, when you talk about costs in the light of the competitive factor, you are placing the workers of this country against the underpaid workers of Europe and Asiatic countries as well, and you will not find industrial peace on that basis. The way out is the greater development and the federation of the whole world to secure the elimination of the competitive cement. We are in the position of the capitalist system in the old sense of definite capitalism definitely organised. The capitalist world is realising that, and it is substituting a system of co-operative capitalism because in that they see their only salvation.
    I want to know how the industrialists who see, all that are going to deal with the workers of this country. You can pay even high wages upon a restricted production providing that the result owing to the restriction is that you are able to get big prices. If that is done you are going to intensify the unemployment problem in this country. There is no reason why, with a cooperative world capitalism, you should not realise that there is no limit to the productive power of humanity. You can put all modern methods into operation intensified upon

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    the higher scientific lines and increase the potential power of wealth production, but you cannot do that if you are going to restrict consumption. If the result of it is to manipulate markets for higher profits on the basis of low wages then you cannot get rid of your products because of the lack of the purchasing power of the people.
    Therefore, the only way capital can safeguard itself is upon the co-operative basis. Now that it is admitted that the competitive capitalistic system is a failure, the only basis to do justice to the workers is to make the consumption power balance the production power of the world. If you do that and get together as capitalists are doing to-day, and endeavour to solve this problem upon the basis of the distribution of wealth as well as production, then you should get some practical scheme for peace in industry. On this side we are all out for peace in industry. We are not out to create chaos for its own sake, but in the interest of society at large and the economical development of society it would be fatal to talk about peace unless it is peace at the price of an extended purchasing power for the workers of the community in order to balance the increased productive power of modern machinery and more economic methods.
    Mr. RAINE: A complaint was made yesterday in regard to the King's Speech that there was little or no mention in it of social legislation. On that point, I wish to put a few facts before the House, because I think this question ought to be rightly understood. We all desire to see further steps taken with regard to social legislation, and many of those associated with municipal work think that such legislation is most desirable. On the other hand, it is very necessary that we should see this particular question in its proper perspective. A fortnight ago at a meeting of the members of the Associated Chambers of Commerce of Great Britain which was held in London a resolution was passed calling on the Government not to put forward at the present time any further social legislation.
    At that meeting some startling figures were brought forward which I am sure would appeal to the most ardent social reformer. The speaker to whom I allude pointed out that the social services in
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    Great Britain, including Poor Law, Workmen's Compensation, Old Age Pensions, Health and Unemployment Insurance, cost £3 18s. 6d. per head of the population, whereas in Germany the same services cost £1 17s. 6d. per head of the population or less than half what they cost in this country. The position in France is worse because compared with our cost their proportion is one-sixth, in Belgium it is one-fourteenth and Italy is at the bottom with one twenty-fifth. We all desire to secure the highest possible standard of social services for our people, and I hope Britain will always be ahead of other countries in this respect. Nevertheless, we have to bear in mind that we cannot claim now to be the workshop of the world. We have very serious competitors abroad, and, quite apart from the undoubted advantages these competitors must have in the shape of longer hours and less wages paid to their employés, they also enjoy a great benefit. in regard to their overhead charges.
    Under these circumstances, can you wonder that the manufacturers of this country are imploring the Government not to bring forward any further social legislation at this time. I think there is a general concensus of opinion that the Government have acted wisely in deciding not to introduce any such legislation when England is just trying to hold up its head. There is another point which the manufacturers had in mind when considering this question, and it is that owing to the coal stoppage the amount of Poor Law relief is much higher than usual, and the manufacturers are going to feel the effect of that in the coming fiscal year in the shape of an increased Poor Rate. While we have 1,250,000 people out of work, it is no use suggesting fresh expenditure which would mean only more unemployment, and that would make the state of industry worse than ever. I join with those who have expressed the hope that we may see in the future more good will in industry and that we shall get back quickly to that state of prosperity in trade for which we are all longing.
    I wish to refer now to the suggested reform of Trade Union Law. I speak in no provocative sense, because I desire peace in industry, and I recognise that it is a very thorny subject. I know of nobody except the Communists who desire

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    to break up trade unions, and I have come to the conclusion that trade unionists, whether they be leaders or members of the rank and file, have really got alarmed at the action of extremists within their ranks who have practically captured so many of the trade unions. I am sure those for whom I speak would welcome Government interference in the right direction in order to rid trade unions of the menace of these extremists who are undoubtedly eating into the very vitals of trade unionism. We do not know yet what the Bill will contain, but I feel sure that if all those who are concerned will tackle this question with goodwill, trade unionism in the future will be better able to carry on its legitimate work free from the influence of the noisy minority which has crept into the trade unionist ranks.
    I am sure that no reasonable person on any side of this House will approve of what took place at a demonstration in the Midlands last Sunday, when an hon. Member opposite was howled down and refused a hearing, and yet those who took part in that demonstration were trying to capture the trade union movement. I think that trade unionists are anxious to make themselves secure from the inroads of these extremists. I do not think it is any use denying the fact that, intimidation is going on in certain quarters. I do not say it is going on everywhere, but certainly intimidation is going on in certain quarters. In my constituency last week I listened to a speech at a public meeting, and a gentleman asserted that intimidation was undoubtedly going on, and he gave two illustrations. He said that when the Durham miners voted upon the political levy there were 15,000 voted against it, whereas 1,157 actually claimed exemption. In the case of the general municipal workers, 9,250 voted against it and only 600 claimed exemption. I think that is primâ facie evidence that intimidation is going on. As far as my own constituency is concerned, I have made careful inquiries, and I find that all classes will welcome such legislation as we are going to get in regard to this question, because they believe that it will make for the greater efficiency of trade unionism, give them a new lease of life, and tend towards peace in industry.
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    I should like to refer to one matter which was referred to by the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) who stated that he had been informed that the arms being used in China had been purchased in Birmingham. I am not going to contradict that statement, but I am going to make another which I heard a week to-day at the executive meeting of the Associated Chambers of Commerce, of which I am a member. The statement was not made for publication, but I do not think the gentleman who made it would have done so without good grounds; he is one of the greatest authorities on the question that we can find in the industrial world He stated that he had information that, while the gun and armament manufacturers in Great Britain had loyally carried out the very letter of the agreement that no arms of any kind, or ammunition of any kind, should be sent from this country, every one of the other countries had not stood by the bargain which they made at the same time as Great Britain. I make that statement because, whichever statement is true, we ought to know the facts, and I think I should not allow the statement that has been made to go unchallenged without this statement of the facts from a gentleman who, I believe, knows a lot about the subject.
    Mr. O'NEILL: I wanted, not perhaps so much to follow the hon. Member who has just spoken, as to make a few observations on one or two general matters that are contained in the Gracious Speech from the Throne. First of all, I should like to say a cord about the most laudable desire of the Prime Minister to try and alter the incidence of the Parliamentary Session. He said yesterday that the reason why the Government's programme was so small was that they intended to prorogue Parliament in July or in early August, and commence a new Session again in the following autumn. That is an object which has been attempted, I think, over and over again by different Governments in recent times, but, so far as I know, it has practically never been successful, because the Parliamentary programme has been so over-burdened that it has been found impossible to clear up the legislation so early as July or August. The object of doing it will be, of course, to obtain, in the first place, a longer recess, and I feel

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    that, in these very strenuous times, we are entitled to rather a longer period of leisure, not only, as the Prime Minister put it yesterday, in order that Members may give more time in their constituencies, but also—which is an important point, and a very difficult one to attain now—that they may more fully study the various Blue Books and other Government publications dealing with the policy of the day.
    There has been a mass of legislation since the War. This House has turned out legislation almost as a Roneo machine turns out duplicated letters. It has poured it forth, and one does feel that the time has now come to call a halt, and let us digest the legislation which has recently been passed. Practically every new Bill means the expenditure of more money. It always means the creation of more machinery to carry out its provisions, and that inevitably means the employment of more officials, and, consequently, the expenditure of more Government money. If the Government's hopes are fulfilled, it would then be possible to prorogue Parliament, say, at the end of July or the beginning of August, to start a new Session, I would suggest, well on in November, to carry the Address, and to pass the Second Readings of one or two important Bills, so that, when Parliament met again in the following spring, in February, it would be enabled at once to devote itself to the necessary finance, and the Bills which had just passed their Second Readings could, of course, go straight to Committees upstairs, and thereby the hiatus of time which always exists when we meet first at this time of the year would be very much curtailed.
    There is one practical difficulty about the proposed alteration of the time of the Session, about which, I suppose, the Government have satisfied themselves. I have always been told, and I think it is probably correct, that one of the chief objections to Parliament starting its Session in the autumn is that the Government Departments, owing to the holiday season in July, August and September, would be unable to prepare their Bills and have them ready, and that that has always proved a stumbling-block. There is probably a good deal in that, but in the present instance, and I hope in future Sessions, it will not he so, presumably,
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    because the principal Bills which we are told will be dealt with when the new Session starts in November will be such Bills as the Poor Law Bill and the Factories Bill, which presumably are already in print and have been prepared for some time.
    There is in the King's Speech another point which deserves mention, and which I do not think has yet been mentioned, at any rate when I have been in the House, and that is the question of the change in the title of His Majesty the King. A Bill is to be introduced to carry out the recommendations of the Imperial Conference in that regard. I personally, and, I know, my constituents, and, I believe, not a few other Members of Parliament, at any rate on this side of the House, were rather perturbed at seeing that in the King's new title all mention of the United Kingdom was to be dropped. After all, the United Kingdom is a political entity which we have got to know and to which we have become accustomed for many years, and, although it is true that the old United Kingdom as it formerly existed has ceased to exist owing to the creation of the Irish Free State, at the same time there is still a United Kingdom, and one felt that the dropping of that old and familiar portion of the King's title was to be regretted. However, the Imperial Conference has come to conclusions, which, of course, one would not suggest should be altered. I am, therefore, all the more glad to know that, as the Prime Minister announced towards the end of the last Session of Parliament, it is the intention, in the Bill, to alter also the title of Parliament and to call it in future, not "The Parliament of the United Kingdom of Great Britain and Ireland," as it is now called, because, of course, that is no longer correct, but to call it what is absolutely correct, namely, "The Parliament of the United Kingdom of Great Britain and Northern Ireland," which is to be the new title of Parliament. That being so, my own objection and that of many others to the change in the King's title will be largely allayed, as the old term "United Kingdom" will continue to be used, as it should be, in speaking of the Parliament and the Government of the United Kingdom of Great Britain and Northern Ireland.
    His Majesty's Speech dealt also, and most speakers in the Debate have re-

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    ferred to it, with the question of China. I think that, so far as Chinese questions arc concerned, the Government's policy has been strictly correct and wholly admirable. I have had occasion recently to discuss this question with some of those who are intimately and closely associated and connected with British business in China, and I find that, certainly among, shall I say, the younger and more progressive elements of business life in China, there is a recognition that the time has come when the old Chinese Treaties have got to be modified. There is an awakening in that country of what one may call a desire to free itself from former restrictions, and one is glad to think that among the first people to recognise the necessity for that are a very large section, as I know, of the British business community out there. It will, therefore, be all to the good, I believe, for the business of our nationals in that country in the future, when the Agreement which is now the subject of so much discussion has been finally made and ratified with the Cantonese and also, presumably, the Pekin Governments. One feels that that aspect of the Government's policy is perfectly right and proper, and I do not think there is really anybody in any section of the House who seriously believes that the sending of a force to that country to protect the lives and property of our own nationals out there is anything but a perfectly proper, reasonable and natural thing to have done. That policy, combined with the concurrent policy of negotiation and agreement and willingness to revise existing Treaties, is the only policy which will reach a successful issue on this question. Let us hope that things will not be so bad as some gloomy people forecast, and that there will be no necessity for the employment of any force in order to bring about a reasonable and sensible agreement.
    There is a further point to which some reference has already been made and to which I will add a word. We know quite well that at the bottom of the Chinese difficulty lies to a very considerable extent the hand of Russia. We know that Russian agents are carrying on propaganda, and that naturally causes us once again to consider the question of our diplomatic relations with the Soviet Gov-
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    ernment. The Leader of the Opposition yesterday asked the Prime Minister whether any change was contemplated. I do not know whether it is or not, but I will make one or two general observations with regard to it. First of all, I do not think our disapproval of the methods of the. Russian Government should in itself justify any breach of existing diplomatic relations. In other words, we should be careful not to bring about any break in relations out of what I may call spite or pique or annoyance at what the Russian Government generally is doing and I do not suppose a break in our diplomatic relations would, in itself, affect the propaganda that is going on in China and other foreign countries. Hon. Members opposite say that if we were to break off relations with Russia it would injure our trade and increase unemployment. If that were so, one would hesitate to take any action which would be likely to have that result, but what one would like to know is what really is our trade with Russia. Is it of such great importance that we must bring ourselves to do the unpleasant thing and have diplomatic relations with a Government of which we disapprove in order to foster trade? If that were so, it would at any rate be worth considering, but one wants to know what really is the volume of the trade which is at stake and which it is said is going to he ruined if we break off diplomatic relations.
    Then I have heard it said that if we break off diplomatic relations, it would upset the peace of Eastern Europe. One would like more information as to that. I cannot imagine why it should bring about any change in the peace of Eastern Europe. Those are quite dispassionate arguments which one has to consider before a step of this kind is taken, but it seems to me the strongest argument for breaking off relations lies here at home, where it really is becoming a very vital question. I believe the Labour party will agree, in their hearts at any rate, with what I am going to say now. There is undoubtedly—all the Labour leaders have recognised it—great Communist activity and propaganda going on amidst the workers of this country. Is the severance of diplomatic relations in Russia going to help in regard to that? I should have thought it would, and I should have thought, consequently, that

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    the leaders of the Labour party would welcome it, because is it not a fact that under the cloak of diplomatic relations the Russian Communists are carrying on a great propaganda campaign amongst the workers of this country against peace in industry? We saw it in the industrial happenings of last year.
    Mr. BATEY: Oh, when?
    Mr. O'NEILL: I thought it was generally seen in the industrial happenings of last year. In view of this propaganda, which has become very serious, one would like to know what is the view of the Home Office, whose duty it is to preserve the peace and order of the country, with regard to breaking off diplomatic relations with the Soviet Government. Is there a difference of opinion between the Home Office and the Foreign Office? It seems to me it is largely a question of expediency. We on this side disapprove of the whole principle and constitution of the present Russian Government. I should be prepared to continue the present relationship if it is really going to do us any good and to increase our trade and employment. If it is going to benefit the people of this country at large, I would swallow all my objections to the Russian Soviet system, but I believe the time is coming when we can no longer continue to recognise them, and that feeling has been greatly accelerated recently. I am sure, there are people throughout the country, not hot-heads, not what you may call die-hards, but moderate, sensible, ordinary, British people, who did not hold any very strong view about this before, who are now coming to the conclusion that the time has come when our Government ought to take some more definite action with regard to this question. Our interests are world-wide. The tremendous connection of trade interests which Great Britain has all over the world is amazing. It is a marvellous tribute to the foresight and the energy of those who carried on our trade and commerce in the past. Whether it is China or Portugal where disturbance is now going on—wherever you look in the world you find British interests, British trade and British people living. If the continued efforts of this foreign Government to undermine our influence and our
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    power all over the world arc to be allowed to continue without any attempt on our part to frustrate them, surely we shall sink to a worse pass than we have done even up to now. I sincerely trust that the Government are considering this matter. I can only put it to the House as one who has never before discussed it here, who has not held by any means a strong view about it hitherto but who, like many others, is beginning to think that at last the time has come when something ought to be done.
    Mr. BATEY: Several Members yesterday expressed surprise at the shortness of the King's Speech. My complaint is that it is too long. I wish had not contained the clause threatening to deal with trade unions. I should have thought that, after last year's experience, the Government would have been satisfied with the injury they have done to thousands of trade unionist; without renewing the attack this year. The result of last year's policy is that thousands of workmen are receiving less wages, many are unemployed, and many are receiving Poor Law relief, and surely that should have been sufficient to satisfy the most reactionary Government. It seems that the Government have only learned one lesson from last year's experience. They tell us experience should teach us all useful lessons, but they have only learnt the one lesson that the trade unions are the villains of the piece, that the employers of labour can do no wrong, and that therefore it is the duty of the Government to assist the employers, to put a stronger and a longer whip into their hands so that they can lash the working-classes more severely. There are other lessons which they might have learned and which would have been useful to them if they had learned them. They might have learned the lesson that it is not wise for a Government to help employers with the power and the liberty to lock the workmen out whenever they like. The industrial struggle in 1921 and the struggle of last year were due to the employers claiming to do what they pleased with their own and claiming the right to lock out the men when it pleased them. I wish the Government had learned the lesson that the time has come when they should teach employers of

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    labour that they ought not to be allowed uncontrolled liberty to lock out the workmen whenever they please.
    But there is another lesson the Government might have learned—that employers can be far more unreasonable than workmen can be. The Government had experience of that last year. The Chancellor of the Exchequer almost succeeded in coming to a settlement on one occasion and sent for the coalowners to come round a table and discuss the matter, but they were obstinate and unreasonable. Having had that experience one would have thought before the Government went any further in attempting to deal with trade unions they would have turned their attention to the employers and made some effort to set up machinery which would compel them to be more reasonable in future.
    There is another lesson that the Government might have learned. Last year they put power into the hands of bad employers of labour enabling them to impose intolerable conditions upon workmen. The Government may talk about peace in industry as long as they like, but as long as they put power into the hands of bad employers to impose intolerable conditions upon the workmen, there can be no peace in industry. In my own county of Durham, we have had a bitter experience of the power put into the hands of coalowners last year by the Government. I am glad to say that we have still some good employers in Durham, and I am making no complaint of those good employers, but we have some bad ones: rank bad ones. Those bad employers have done everything they possibly could to degrade and push down our men as far as they could push them down. They have taken the opportunity of destroying the social conditions in our colliery villages. Where we had a second shift of workmen prior to the dispute ceasing work at 4 o'clock, those men now cannot cease work before 9 o'clock at night. That prevents the young men in the villages from attending religious, political or educational classes, and is destroying the whole social life of the villages and making the life of the miner's wife that of a complete drudge from morning until late at night.
    Not only have the Government put power into the hands of these bad em-
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    ployers, enabling them to destroy the social life in our colliery villages, but these employers have victimised our very best men. Some of the best workmen at some of our collieries are victimised today because they were loyal to the Miners' Federation, and stuck out to the last. They cannot get work and there are no signs of their getting work. These bad employers of labour are leaving these men to starve, so far as they are concerned. I wish the Government had learned from last year s industrial dispute the necessity of trying to set up some machinery to prevent disputes. Instead of making a hailer attack upon trade unions, their time would have been far better spent had they set up machinery to prevent disputes. For instance, the Ministry of Labour, which deals with disputes, has no power to deal with disputes in an effective way. All that the Ministry of Labour can do is to set up an industrial court of inquiry, but whatever finding that court of inquiry gives there is no power to force the decision either upon employers or upon workmen. It is waste of money to set up an inquiry under those circumstances. It would have been a wise thing on the part of the Government to have attempted to get the trade unions and the employers round a table for the purpose of discussing machinery in order to avoid lock-outs and such disputes as we had last year.
    That argument applies not only to the Ministry of Labour, but more forcibly to the Mines Department. The Mines Department might as well never exist. It simply exists for the purpose of collecting statistics. It may be useful for that purpose, but it has now power in dealing with our collieries and with mining in this country. It would have been far better had the Government learned the lesson from last year's dispute that the time has come when power might he given to the Mines Department to make it more effective than it is at the present time. The Government must never forget that there is a determination in the minds of working men and the working classes generally to have a decent standard of life. The Government may fight trade unions as much as they please; they may do what they like to help employers of labour; but they will find the working classes are determined

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    to fight for a decent standard of life and that the workers will tight employers of labour and any government that may be in power in order that they may have that decent standard of life.
    There are one or two items which are not included in the King's Speech, which might well have been included. I wish the Government had remembered that the Coal Mines (Minimum Wages) Act requires to be dealt with. The present Minimum Wages Act which was passed in 1912 was only passed for three years until 1915. Since 1915 it has been carried forward year after year. When that Act was passed in 1912 it was never imagined that it would be on the Statute Book for 15 years without being amended. The time has come for amendment. The last few weeks and months have taught us in connection with the, coal mines that it is high time the Minimum Wages Act was amended and brought up to date. We have men in the county of Durham who, since the stoppage have been compelled to work down the mines and face all the dangers of the mine and work hard for a wage of between 2s. and 3s. a day. We have men who, during the first four weeks work after the stoppage, under the present Minimum Wages Act, could not claim the minimum wage, because they had been idle for over six months. The result has been that we have had men who were unable to earn more than 2s. or 3s. per day for the first four weeks after the dispute ended. I believe we have had scores of men in the county of Durham who during the first four weeks after the resumption of work, were compelled to seek Poor Law relief, although they were working every day down the pit, producing coal which was being sold in London and other parts of the country at high prices. These men had to seek Poor Law relief to enable them to live and perform their work.
    Instead of pursuing their reactionary policy of attacking the trade unions of this country, the Government would spend their time better by dealing with the Coal Mines (Minimum Wages) Act. Every day that a man goes down the coal pit he is entitled to a decent wage, and he ought not to be satisfied with 2s. or 3s. a day. There are hon. Members in this House who would not go down a coal mine and work six, seven or eight hours for £5 a day, let alone working down the pit for 2s. or 3s. a day. Just
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    as I believe that the Government would be well employed in amending the Mines (Minimum Wages) Act, I believe they would be well engaged if they turned their attention to the Act which they put upon the Statute Book last year, the Miners (Eight Hours) Act. If instead of pursuing the trade unions they had said, "After last year's experience in regard to the coal mines, and after the way in which the coalowners have dealt with the miners, we are prepared to take steps to rescind the Eight Hours Act." I see the Home Secretary is present. I am glad to see the right hon. Gentleman hack.
    The SECRETARY of STATE for the HOME DEPARTMENT (Sir William Joynson-Hicks): Thank you.
    Mr. BATEY: Instead of attacking the trade unions, the Government had better turn their attention to the position of the miners who are still in gaol. We have men in the mining community who are suffering in prison because of the part they took last year in the mining dispute. We have several local officials in the county of Durham who were sent to prison, in my opinion, wrongfully, and who are still there. These men would never have been sent to prison had it not been for the Emergency Powers Act, and the action of certain colliery owners and managers. I hope the Home Secretary will remember that if he has occasion to bring in another Emergency Powers Bill, he will put; in a new Clause to prevent employers of labour sitting in our local Police Courts and sending men to prison. In our county men were sent to prison without the option of a fine, simply because coal owners and managers of collieries sat upon the Bench. Because those men were sent. to prison, they are now debarred from sitting either on a rural district. council or on a board of guardians. Here is a case where the Home Secretary might very wisely and humanely intervene to prevent these men from losing their seats on boards of guardians or local councils, simply because they were sent to prison by coalowners who sat on the Bench, and who did not give them even the option of a fine. They sent them to prison, and were glad to do so.
    The Government would have been better employed had they turned their attention to the question of unemploy-

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    ment. In my own county, unemployment has been increased because of the action of the Government. The Government passed the Eight Hours Act last year, with the result that to-day in the county of Durham we have no fewer than 50,000 miners unemployed. The Prime Minister said on one occasion that the Government were prepared to give a sum of money for the purpose of removing miners from one part of the country to another. That has gone: there is no mention of it to-day. It is impossible for our men, even if they could get work in another county, to remove there. I have heard of several men who had an offer of work in Kent, but they could not pay the money for the removal from the north of England to Kent. The Government are responsible for an increase of unemployment in the north of England, and they ought to give their attention to the matter and try to solve the unemployment problem, at any rate to the extent of paying for the removal of miners from one part of the country to another. I do not ask the Government to take steps to solve the whole problem of unemployment, because they can never do that. No solution of the problem of unemployment is possible so long as we have the present Government in power. We have bad two years' experience of this Government, and the condition of the working classes is immensely worse than it was when this Government came into power. After this year the condition of the. working-classes will be even worse, and our only consolation is that the eyes of every working man and woman in this country will have been opened by the time this Government goes to the country; and they will sweep it away.
    Mr. CAMPBELL: While agreeing with the most Gracious Speech from the Throne, I feel, with a number of other hon. Members, a little disappointed the House of Lords Reform is not mentioned. I do not wish to deal with that topic to-day, because I desire to draw the special attention of the House to the question of China. I do so, because I can speak with a knowledge of 21 years of the Far East. From the first day I arrived there until I left, I was in very close touch with many Chinese, and have done business with many of them. It is
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    very dangerous that such a topic as this should be discussed and debated in this House, because every speech, especially if it is a little bit on the "Red" side, is sent out to the Far East. As likely as not it is in code, which makes it somewhat difficult to transmit, and then it is translated at the other end, and the people in China are very likely to get a very different view of the opinions of the majority of the people in this House and in this country from what they should get. I say that with an intimate knowledge of the question. I was in the Dutch East Indies during the Boer War. We received a number Dutch telegrams and a number of British telegrams. They did not coincide in the least.
    During the last war I was in the Dutch East Indies, and I received a daily telegram from the Foreign Office which gave us the true facts of the situation. I came to a bargain with the local Dutch paper that if they would give me the benefit of the telegrams they received would translate them for them and would also hand them the Foreign Office telegrams which I received. I hope, therefore, that in to-morrow's debate on China all parties in the House will realise the necessity for a very careful handling of the whole situation. It is perfectly obvious that in the House there will be a variety of views, but I think we should all remember, whether we are Liberals, Socialists or Conservatives, that we are Britishers, and that there are people on the other side of the world who will read the papers and imagine from what they read that there are people in this House who are doing their utmost to put the lives and property of people in China. in jeopardy. That is what will happen if speeches are made which are likely to be carried over to China giving the impression to the Chinese that the people in this country are up against their fellow countrymen in Shanghai. Let us not forget that what happened in Hankow is very different from what can and may happen in Shanghai. You cannot compare Hankow and Shanghai, any more than you can compare Portsmouth and Camberwell. What the British Government are standing for in Shanghai is not what they stood for m Hankow, because it was quite impossible and unnecessary.
    I hope the whole of the country will stand behind the Government, hut I wish

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    to emphasise the very great danger we run in such a delicate question as this in having provocative speeches made in this House which can only do harm to this country and to the whole of the world. Those who are always emphasising the necessity of peace are perhaps the very people who may be the cause of more trouble than we have had already in China. I was pleased to hear what the right hon. Gentleman the leader of the Liberal party said. I agree with a great deal of it. He said that the civil war in China is not a Bolshevik war. I heartily agree with that, but I did not agree with him when he omitted to add that the Bolshevists are taking the opportunity of a civil war in China to cause trouble throughout the whole of that country. If the Foreign Office cares to go through its files they will find hundreds of letters written and signed by myself with regard to the Bolshevist propaganda in the Dutch East Indies. Six or seven years ago I foretold that if the Dutch Government did not take strong action they would eventually suffer for it, and this year we have seen great disturbances in that part of the world.
    What we have to remember is this, that the Government have facts which none of us possess. They have daily telegrams and comunications from people in China who are absolutely non-political. They have the best first-class information from an absolutely non-political source, and as the Government have the benefit of this information I implore hon. Members in the Debate to-morrow—I am saying this purposely—to be very careful in what they say. Let us remember that whatever our politics may be we are Britishers, and that the people who are working in Shanghai are just as white as any of us. They have gone there for trade purposes or as missionaries, and have helped to build up the trade and prosperity of China. They have put in many years of work in the trade, commerce, shipping and banking of China. I have a special reason for talking in this way, because of all the people I have ever dealt with I would rather have commercial dealings with the Chinese than with any other, notwithstanding the fact that I was nearly murdered by them twice and caught typhoid fever in Canton. Still I say that if they were not a yellow race they would be one of the whitest races in the world.
    Mr. CHURCHILL: Throughout the Debate, so far, there is evidently such a general and solid substratum of agreement with the policy of His Majesty's Government that I hardly thought it would be necessary for me to intervene, however briefly, in the course of this afternoon's discussion. But two right hon. Members opposite, who have both held high official position, have made important speeches to us this afternoon, and it might be thought wanting in courtesy on the part of the Government if no answer were made from this bench to the questions they have asked and the arguments they have adduced. I wilt take their speeches in proper order, seriatim, and I begin with the speech of the right hon. Member for Derby (Mr. Thomas). He enjoyed it, and he gave a great deal of satisfaction to his supporters. He also gave our supporters that satisfaction which we always feel in seeing a patriotic representative of labour putting himself right with his extremists by giving the Government a good be-labouring. The right hon. Gentleman drew both on his imagination and on his memory. He said, among other things, that the main responsibility for the general strike of last year rested with the Government. I am not going to argue that at the moment, but it is an interesting question whether on that occasion he was drawing on his memory or on his imagination.
    He then proceeded to give a very vivid picture of the proceedings inside the present Cabinet, which will, I am sure, be very interesting to all its members. Again, I am not sure whether the right hon. Gentleman was drawing upon his imagination or upon his memory. Sometimes these very vivid descriptions of what other people are doing are based on vivid and intimate recollections of what one has seen and experienced oneself, and it may be that the right hon. Gentleman, speaking quite sincerely, in giving the House a portrait of the proceedings inside the Cabinet was, in fact, casting a picturesque but highly-coloured, vivid and even lurid light upon the Cabinet councils of the right hon. Gentleman opposite. Finally, the right hon. Gentleman told us that the policy of the Government, as defined in the King's Speech, might be summed up as shorter hours for Members of Parliament

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    and longer hours for miners. But here the right hon. Gentleman encounters a serious opponent in the person of the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George), who told us that he thought our programme of work for the present Session was so full and serious that he doubted very much whether we should get away, as we hoped, by 1st August without dropping a portion of our programme. I am sure the right hon. Gentleman the Member for Carnarvon Boroughs can speak for himself, for whether he is at the head of the greatest majority ever assembled in this House or whether he is at the head of the smallest possible following he has never begged for any assistance to defend himself from anyone, and especially from the present Front Opposition Bench.
    7.0 p.m.
    As a matter of fact, the Government proposals as outlined by the Prime Minister, have, I think, been generally accepted as very reasonable. I am leaving out questions of controversy; I shall come to them in a minute. It is perfectly clear that the King's Speech which is now under discussion contains ample material to occupy us during the whole of the time up to the end of July. At the same time, so far from shirking work and reducing the labours of Members of the House of Commons, it is contemplated, I think for the third year in succession, to have a meeting of Parliament in November and to make progress in good time with very serious questions which will arise in the next Session, and which we are determined to deal with before the expiration of the present Parliament.
    Mr. W. THORNE: You are in for another two or three years then?
    Mr. CHURCHILL: in being able to look some distance ahead and to make our plans without rest or without haste and to develop our policy step by step and stage by stage, we are undoubtedly in a fortunate position which not every Government which has a heavy responsibility to bear, has been able to enjoy. I think it is a very reasonable thing that, instead of attempting to crowd into the present Session far more legislation than we can get through, we should occupy
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    Parliament fully up to the end of July and then open our main legislation for next year before Christmas.
    That legislation must necessarily constitute the central block of the proposed legislation of the present Parliament. In the first Session we dealt with Widows' and Old Age Pensions. Obviously during next year there is the question of Factory Act Amendment, and, still more, the very large question of Poor Law, to say nothing of those difficult issues in connection with the franchise which must in some manner or another be dealt with by the House. This question of Poor Law is of immense scope and complexity and it would gain nothing from being thrust in an incomplete form before the House during a Session already fully occupied. The work on that Bill is proceeding continuously, and its scope is such and the interests it touches and affects are so numerous that every week between now and the date when the Bill is produced will be needed to perfect the scheme. Moreover—and here I make no new announcement of any kind, of course—the question of Poor Law reform affects intimately the main finances of the country and particularly those relations between national and local finance which are a feature of the highest consequence and lie in the very centre of our domestic policy. I think this is a reasonable arrangement. We have enough to do up to the end of July, and meanwhile our legislation which we have already announced, and which will be introduced in the Autumn Session, will be perfecting, and there will be plenty of work and long hours and overtime and double shifts to satisfy the ardour even of the most ardent or of the latest Parliamentary recruits.
    The right hon. Member for Carnarvon Boroughs in his criticism of the Gracious Speech, told us that there was nothing in it which showed that the Government was ready to grapple with the actual needs. Of course people all differ in the priority to be assigned to actual needs, but there is, I think, no dispute between us that we shall have plenty of work to do. The right hon. Gentleman fell into a very common form of error—which I am sure his own native shrewdness enabled him to detect even at the moment he committed it—of making proposals

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    which involve immense expenditure, and, at the same time deploring the heavy rate of taxation and dwelling on its disastrous effects on agriculture and other industries. He spoke of unemployment and said there was serious unemployment—and God knows it is serious enough!—and that there were 150,000 more unemployed now than at this time last year. Is it wonderful that there are 150,000 more than at this time last year? To my mind, the wonder is that the number is not ten times as great. When one thinks of the disastrous, terrible and pitiful series of events which marked our domestic life last year and the immense injury done to our commerce and productive forces throughout the whole of the country, what one is astonished at is not that there are 150,000 more unemployed than at this time last year, but that the figure has not reached an even far more alarming level. [An HON. MEMBER: "The fruits of a Tory Government!"] To my mind the Government are responsible for everything over which they have control, and, if we had had full and effective control over the deliberations of some other parties, then we should be rightly held blameworthy if the results to-day are not satisfactory.
    The right hon. Gentleman also referred in the course of his remarks on Parliamentary business to the 31st March, and the superstitious valuation attached to that date. As he well knows I have sometimes, I am sorry to say, been drawn into a disrespectful attitude towards that sacred date, but I do trust that he will realise how very critical and dangerous and serious would he any attempt to monkey with the 31st of March. It is not merely a question of throwing out the statistics from one year to another—that might be dealt with—but how do you know, if you altered the 31st of March, you might not conceivably lose the Exchequer a quarter's revenue? At any rate, I should have to be quite sure that his scheme for overthrowing the 31st March not only did not lose the Exchequer a quarter's revenue but actually enabled it to forestall an equal period. When he can assure me of that I can promise him my most cordial support. That is just what we should require to put ourselves in a thoroughly satisfactory position.
    I now come to the remarks of the right hon. Gentleman the Member for Derby
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    on the Trade Unions Bill. He began by telling us—or at least he was not long before he came to the point where he told us—that he would fight it line by Line whatever it was. He said how important it was that the industrial masses of the country should possess, unimpaired, full powers of collective bargaining. There I cordially agree with him. He said "You must not in your legislation" —which he has not yet seen—"take away the powers of collective bargaining from the workers." We have no intention whatever of taking away the power of collective bargaining from the working masses, and included in the power of collective bargaining is undoubtedly the right of striking and the power of conducting a strike in a reasonable and effective manner.
    But when the right hon. Gentleman tells us that we are going to take away the workers' only bargaining power I must ask him one or two questions. Is a general strike—which, whether intentionally or not, is inevitably against the Constitution—a necessary part of the workers' bargaining power in trade methods? [An HON. MEMBER: "Certainly!"] I do not seem to get a very decided answer to that. Is mass intimidation at a works or at a man's home an essential part of the reasonable collective bargaining power of the trade unionists of the country? Let me make it perfectly clear that in asking these questions I am not at all pre-judging the contents of the Government's Bill. They will not be known until it is produced, though no doubt they will be forecasted and surmised about. Let me ask another question. Is collecting money for Socialist candidates from Liberal and Conservative Trade Unionists an essential part of the workers' collective bargaining power? If the answers to all these questions are in the negative —and I gather that that is so from the attitude of hon. Gentlemen opposite—then I say without any hesitation that no proposals that will be put forward by the Government will in any way affect the workers' collective bargaining power.
    The right hon. Gentleman then asked a question with that charming, naive, simplicity with which he so often disarms the most obstinate opposition. He asked, "Why do not you consult the trade unions about this matter of trade union legislation?" Really, what answer does

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    the right hon. Gentleman imagine we should get if we consulted the trade unions upon legislation which they would no doubt say affected their privileges? There is only one answer we should get. I remember it was the fashion in the Army when a court-martial was being held and the prisoner was brought in, that he should be asked if he objected to being tried by the President or to any of those officers who composed the court-martial. On one occasion a prisoner was so insubordinate as to answer, "I object to the whole—lot of you." That is clearly illustrative of the kind of reception which, at this stage, consultation of the trade unions by the Government would meet with. There is, if I may say so, a very serious moral to be drawn from this. It is that the trade unions ought to be free from politics and ought to have the same relations with any Government, ought to occupy the same position as Chambers of Commerce, and ought to endeavour to use their great influence, their legitimate influence, with every Government of every complexion and colour in order to advance the interest of their members; but it is one of the great disadvantages of the present situation that by their leadership the trade unions are so closely intermingled with the fortunes of a political party, that you cannot go to them on a matter of this kind with any expectation of getting an answer suited to the needs of the country; you would only get an answer suited to the fortunes of the party with which they are connected.
    I do not think we should have got very much instruction or guidance at this moment from the great trade unions if we had consulted them. That is no reason why they should not be consulted. On the contrary, if they wish to be consulted, they ought to be consulted, as soon as the Bill has been introduced, and as soon as the Government plans are complete. The Budget of the year is a Measure of the utmost importance and affects the interests of enormous numbers and classes of our fellow countrymen, and no Chancellor ever thinks of consulting anyone beforehand. But the moment the Bill has been introduced the Chancellor of the Exchequer of the day is always ready to consult and to receive deputations and so forth. I say now, on behalf
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    of the Government, having consulted my right hon. Friend explicitly on the point, that as soon as our legislation on this subject has been presented to Parliament, we should welcome an opportunity to discuss the various points in it with responsible representatives of the trade unions—certainly. We seek nothing in this matter except to assert certain broad points of public principle. We desire to assert and affirm those points of public principle by legislation, with the minimum of vexation and inconvenience to the trade unions themselves. That is our policy. [HON. MEMBERS: "That will be too late."] On the contrary, consultations can take place as soon as the proposal has been made and long before it has been decided upon by the House of Commons.
    Now I turn to the subject which is in all our thoughts and has marked all the speeches that have been delivered. I mean the question of the situation in China. I shall not attempt to anticipate the Debate which is to take place tomorrow by going into any question of detail. My right hon. Friend the Secretary of State for Foreign Affairs will be in his place ready to deal, with the plenary and primary authority which belongs to him in this matter on behalf of the Government, with all the issues which are then raised. He will state to the House, as he has already stated to the country, not only the line of policy of the Government, but any points of detail which require exposition at the hands of the Minister who is in special charge of these matters I will now make one or two general observations in relation to this subject. The first is this: That the Government have no reason whatever to complain of the tone and temper of any reference which has been made here, and I understand in another place as well, by members of the Opposition, to the proceedings in China and the policy of the Government. The right hon. Gentleman opposite said here, as elsewhere, without hesitation, that he would not do anything to hamper the policy of the country in any matter where he was satisfied that British life was in danger, and my right hon. Friend below the Gangway used language ever more impressive upon the subject.
    Obviously the Government know that they can count upon a very great measure

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    of support far beyond the limits of their own party, as long as their policy is limited strictly to the safeguarding of British lives and is not perverted or distorted by any ulterior motives or ambitions of any kind. My right hon. Friend the Member for Derby criticised the speech which I made at Manchester. If I may say so, he rather made heavy weather about some of its lighter passages. But I cannot take the view which he expressed, that Mr. Chen would regard as an insult his name being mentioned in the same breath as Mr. Cook's. I do not think he would at all: I firmly believe he would take it as a compliment.
    Mr. KIRKWOOD: Hear, hear!
    Mr. CHURCHILL: I am glad to find an expert authority confirming that view. I will venture to read a very brief quotation from my speech at Manchester, as reported in the "Manchester Guardian." It expresses views which I think will command the assent of hon. Members opposite:
    "There was nothing further from our intention and idea than to be drawn into an adventurous or grasping or ambitious or Byzantine policy in China. All we wanted to do with China was to trade with China, As was well said by Sir Austen Chamberlain, in his speech at Birmingham last week, where the Par East was concerned we were a nation of shopkeepers. We sought nothing in China but to be able to sell to the Chinese goods which they desired to have, and to receive hack in exchange goods which would be useful to ourselves. We regarded the 400,000,000 of Chinese as potential friends and customers. Almost the last thing you wished to do with a potential customer was to shoot him. The last thing you wished was that your potential customer should shoot you. We had shown by the efforts we had made—efforts that could not have been made without very grave heart-searchings and concern—that we were prepared to go to the utmost limit to gratify and dignify the national feeling of the Chinese people. But when it came to mob violence and to the life and property of British subjects, dwelling under the security of Treaties recognised for generations, being violently assailed and menaced, then we were hound, if we wished to maintain the reputation of this country, to take reasonable measures for their protection and defence."
    I am sure the right hon. Gentleman is not going to argue, when a Minister makes a statement of that kind which commands general assent, that the reference which I made in an earlier part of my remarks can possibly be misinter-
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    preted. At any rate, it pays a very poor compliment to Mr. Chen, to whose position and influence hon. Gentlemen opposite attach great importance—possibly exaggerated importance—it is paying him a very poor compliment to imagine that he would allow the discharge of his responsibility towards millions of Chinese to be influenced by a passing allusion of that kind. No one has more reason to be grateful to me for my remarks than the right hon. Gentleman the Leader of the Opposition. They helped him out of one of the most difficult situations in which he has ever been. Last Monday he devoted the greater part of his speech on China to denunciation of the humble individual who now has the honour of addressing the House, and the moment he left off abusing me he was called a scoundrel by his own friends. But after my right hon. Friend had denounced my evil conduct, at the very moment when this speech was made in Manchester the Labour Party was sending a telegram to Mr. Chen strongly advising him to continue negotiations.
    I have no doubt that telegram was extremely well intentioned, but I ask the House whether there is not a certain amount of danger in this dual diplomacy. I am sure that when, for instance, we see Mr. Chen officially saying to our representative, "I have not done this in order to oblige the British Government, but I have done it to please the British Labour party," or when we see him addressing special manifestos to the British people saying how much better it will be for China and Britain and the whole world when the present reactionary British Government is swept away, and when the Labour party rules, I am sure he is being led into making a mistake. I do not think that it helps his affairs or our affairs if that sort of thing takes place. It is very much better that, for good or ill, the responsible Government of the day should be the sole channel by which diplomacy is conducted. To try to build up beneath the ordinary official diplomacy of the country all this worldwide structure of other diplomacy, is undoubtedly to tend to increase those elements of fundamental disagreement which have already made their appearance in our modern life and which it is the duty of every citizen to endeavour to reduce to reasonable limits.

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    My right hon. Friend the Member for Carnarvon Boroughs asked a lot of questions. Were the troops now on their way to China to stop at Hong Kong or to go to Shanghai? What were the views of the Consul-General at Shanghai upon the question of the necessity of troops being sent there? What were the instructions to the British Commander? What were the relations and what would be the relations of our forces with the force of General Sun? What are our relations with General Sun and with Marshal Chang? What is the military situation? The military situation is uncertain and obscure. Not only are there all the hazards of war, which are unknowable and immeasurable, but in addition to the ordinary hazards of battle there are all these possibilities of a large part of one army marching over and joining another army, and of generals who are ordered to attack the enemy, attacking their friends, but apparently in a manner to afford as little loss of life as possible to either party. As I say, the situation is obscure. We cannot pretend, and we do not pretend, to be able to give any decided judgment as to what will happen in the fighting which is proceeding, and which seems likely to develop between the Canton troops and the forces of General Sun in the neighbourhood of Hanchow. It is obvious, however, that much depends on the results of that fighting. We might easily have a situation in which all danger to Shanghai passes away. We might, on the contrary, have a situation at any moment when either the mass of retreating troops of a beaten army came pouring into Shanghai or possibly came pouring in with the victors at their heels.
    No one can tell what will happen. No one here would take any responsibility for what will happen in that fighting or predict about it. It would be folly to do so. We must leave the judgment of the actual danger to British life in Shanghai to our representatives on the spot. We have very good representatives on the spot and we trust them. We have in Sir Miles Lampson, who is not in Shanghai but is in touch with all the developments of the China situation, an administrator and diplomatist whose character and actions have justly won the highest tribute from the right hon. Gentleman opposite who is able to speak
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    from personal knowledge. We have in Sir Reginald Tyrwhitt the Naval Commander in Chief one of the most determined and at the same time one of the most cool and sober-minded officers to be found in the Navy. We must be guided as to the actual movements of troops by the advice which these authorities on the spot give us. We cannot attempt to judge here of the actual situation in Shanghai. As the Prime Minister told the House, if there was no immediate danger to Shanghai we should be quite ready to leave the brigade at Hong Kong, but the matter must be decided entirely on the advice which we receive from our representatives there. But they have been told explicity that their responsibility is limited to the protection of British life. That is their sole responsibility. In that name they are entitled to be and they will be supplied with what troops they need but for no other purpose of any sort or kind. As for any question of our taking sides with either of the Chinese forces, with either North or South, as to our taking sides with General Sun, we absolutely disclaim any such intention. We are only going to look after our own affairs and our own vital affairs in Shanghai. With regard to the different forces that are contending in China, our policy is to offer conciliation to all, to try to get justice and reasonable consideration from them for our own nationals and not to load the scales or to allow any preconceived notions or European prejudices to enter into the matter one way or the other. We cannot possibly judge these matters. They must be settled by the Chinese alone and our policy is to keep clear of all these matters. This subject will of course be unfolded by my right hon. Friend the Foreign Secretary to-morrow.
    There is only one other point which has been raised and to which I would refer before I sit down. My right hon. Friend the Member for Carnarvon Boroughs opened up the question of the attitude of this country towards Russia and towards Bolshevism. The whole of that position was stated last Session by the Foreign Secretary at great length. He then showed that we were under no illusions as to what was taking place and that there was no lack of provocation, but he explained in the most clear manner the reasons why the Government considered

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    that at the present time they should maintain the diplomatic relations which had been established. No new decision has been come to by His Majesty's Government, although obviously these matters call for examination at frequent intervals. When the right hon. Gentleman the Member for Carnarvon Boroughs proceeds to condemn those politicians in this country who dwell upon Red intrigues and the Red menace and so on, there I must part company with him. I served for many years with him in a Government before the Great War, and I think it is right to say that, as far as human ingenuity could go and as far as our resources went, we were not taken unawares. But we were always reproached afterwards, as everyone knows, for not having taken the country into our confidence more and for not having apprised the public of the danger and of the fears which the Government were nursing in their bosoms in secrecy and silence. Take the case of Lord Haldane, who rendered unequalled service at the War Office in devising the effective machinery by which the Expeditionary Force was sent out and by which 14 Divisions of the Territorial Army were organised. No greater war administrator has been at the War Office in our lifetime, but he never recovered his position in the public esteem because it was believed that he formed a very serious view of the intentions not of the German people but of the militarist party in Germany and that he did not fully disclose that view to the public. We are not going to repeat that in another field—I hope a much less tragical field. We believe ourselves to be the object of insidious hostile propaganda in every part of the world, and we are determined that, if this is to continue or at any time come to a head, it shall be encountered by a British public opinion in which the constitutional and patriotic elements are fully apprised of what is taking place; are vigilant, warned, ready for action, and ready to meet danger when it comes.
    Viscountess ASTOR: The right hon. Gentleman the Chancellor of the Exchequer is versatile and is a man of great talents, but in his speech to-night, when he spoke of what lay before the Government he touched very lightly on what he described as "the difficult question of equal franchise." I have no doubt the
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    right hon. Gentleman finds it difficult to face up to this question, which involves an extension of the franchise for women, because he was one of the most violent opponents that the women had in their original fight for the vote. I hope, however, that the Prime Minister and the Home Secretary will remember the very definite pledges which have been given in regard to this question. I myself feel that it is not quite fair to the many women who returned this Government to power that this question of equal franchise should be treated so lightly. The Home Secretary said, on the question of equal rights for men and women at the next election, that there would be no difference in the ages at which men and women would go to the polls at the next election. If the Government mean that, then what does the Chancellor of the Exchequer mean by his reference to "the difficult question of equal franchise"? I hope the Prime Minister will bear In mind that, owing to the Economy Act, we now have only one register every year, and that women, in order to be eligible for an election in 1928, must get on the register by June, 1927. It is no good for the Government to say that there is not going to be an election for two years or for three years. Governments cannot tell when elections are going to take place. So far, I have kept studiously out of all women's movements, trying to keep the Government up to their pledges in these matters, because I believe in the Government, but I must say I am growing a little suspicious. We are talking about freedom, equal rights and justice for Chinamen. What about justice for the women at home? I am all for giving Chinamen what they want, but I feel that the Government are pledged up to the hilt in this matter of the franchise and ought to fulfil their pledges. The Prime Minister, in 1924, said:
    "The Unionist party are in favour of equal political rights for men and women and desire that the question of the extension of the franchise should, if possible, be settled by agreement. With this in view they would, if returned to power, propose that the matter should be referred to a conference of all political parties on the lines of the Ullswater Committee."
    We have never had that Committee. The Home Secretary said that a considered scheme of franchise reform would be brought before the House at a suitable opportunity in the lifetime of the present

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    Parliament. Women know quite well that in all parties there are great sections of men who do not want any extension of the franchise as far as women are concerned. It is no use telling me that any party is unanimous on this question of the women. You have accepted us because you had to do so; but the women of the Unionist Party are depending on these pledges which I have quoted and we know perfectly well that if the Government do not bring the matter forward this Session then, if There is an election before 1928, women will be disfranchised for the purposes of that election. The subject was dealt with yesterday and while I am not accustomed to repeating what other hon. Members have said, perhaps better than I can, I will again point out that owing to the Economy Act, in order that women should vote in an election held at any time before October 1928, it is necessary that the legislation should reach the Statute Book before 1st June, 1927.
    The hon. Member for Leicester (Mr. Pethick-Lawrence) put that point very well yesterday. I ask the Government to remember that we women of the Unionist party have to fight a great battle, there are so many men who say such amazingly stupid things about women in our party. [HON. MEMBERS: "Hear, hear!"] Yes, and the other parties do amazingly stupid things about women. The reason why we need to have factory legislation is because the trade unions have never stood up for women. [HON. MEMBERS: "Oh!"] I do not want, however, to talk from a party point of view and it is a very difficult thing to attack in this House the Government which you have to defend in the country. I would like to get an answer to-night from the Government: Do they mean business or not? Are they going to keep their pledges or are they going to treat this question in the words of the Chancellor of the Exchequer, as "a very difficult question"? Difficult it may be but there is an absolute necessity for this reform. One hears people saying that votes should be given for men and women alike at the age of 25, but that is not possible. You cannot take away what you have given. Why should women, or men either, go into industry at the age of 14 and not get the vote until they are 25?
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    I have no fear at all of trusting even young people with the vote if we go on in the proper way with education, but that is another point.
    Another thing which I should like to say, although I hate saying it, is that I am sorry the Government did not bring in the Factories Bill along with the Trade Union Bill. That would have shown the country that we do care about industrial peace. I would also have liked a Bill for the ratification of the Washington Eight-hour Agreement. It is no use talking about industrial peace and putting forward only the Trade Union Bill. I would do everything possible to take trade unionism out of politics. I do not know whether it is possible to do so or not, but I think the Government would have shown greater wisdom if they had allowed the trade unions and the Labour party to fight among themselves for a little longer, while they brought in their Factories Bill and ratified the Washington Eight-hours Agreement. I think they have shown great lack of vision there. Although their foundations may he of concrete, I think there are some Members of the Government who are lacking in vision as to what the country wants. We know that we are pledged to social reform and equal franchise for women and we want peace in industry. Do not keep us waiting.
    I suppose now it is too late to bring in a Factory Bill, but do not make it so hard for us in the country. People will say to us, "Here you are; you say you want peace in industry, but you are dealing with the most contentious thing in industry and leaving the Factory Bill untouched." As the hon. Member for South Nottingham (Lord H. Cavendish-Bentinck) said last night, people are suffering in industry because certain owners will not bring their factories up to the standard of the best. So far as the Factory Bill is concerned, I am not very happy about small groups in our party and other parties. I think there is a small group who say that the strike has made it impossible, and that, for the sake of business, the longer you keep back the Factory Bill the better. But there has never been a time when biz business has said that it is possible to bring in reform in the factories. There are many of us on the Unionist side who do not feel that way. We are thinking about business

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    when we say that business cannot afford to allow some of the conditions that now exist to go on. There is no man more keen for the welfare of the workers than the Prime Minister, and I would say to him that we cannot afford the sickness that is going on in industry and that every day the Factory Act is postponed you are increasing sickness among the industrial workers.
    I hope the Government are not listening too much to that section of the Party who do not want to give women the vote. The women have got to have the vote. Why should the Government not give it and get the credit for it? Quite apart from being a matter of vision it is poor politics to refuse the vote to women. You will have to give it in the end, and you should give it with a good grace. Women are the best supporters you have got. I can understand hon. Members opposite not wanting an increase in the women's franchise, but I cannot understand the Government taking that view. The women practically put them in, and they will keep them in, but not unless they show an interest in real social reform and keep their pledges. From the point of view of a Member who is deeply interested in social reform, I was bitterly disappointed with the King's Speech, and I think it showed just as great a lack of vision as the Eight Hours Bill, which, thank goodness, I never voted for and which many of us think delayed a settlement of the dispute. [HON. MEMBERS: "Hear, hear!"] Hon. Members opposite cheer that. I know there is a certain section who have said that they hoped the British troops if they fought in China would be defeated.
    Mr. KIRKWOOD: Who said that?
    Viscountess ASTOR: I do not want the cheers of anyone who would say that, although I do want the cheers of hon. Members who are interested in social reform. I can have no faith in that small section of what they call big business, who are fighting against factory reform, and the die-hards, some of whom would never have been here if it had not been for the women's vote.
    Mr. GREENE: It could scarcely be hoped that in the King's Speech any reference would have been found to the Betting Duty, but I would like to refer to that matter. When the Betting Duty was introduced, the Chancellor of the
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    Exchequer told us that it was merely experimental in its present form and that, in the light of future experience, certain alterations were possible. Had there been a reference made to this matter in the King's Speech, it would have been a great comfort to many people.
    I should like to say that I am not opposed to the Betting Duty in principle. Last year I tacitly opposed this particular duty, and my reason for so doing was that I felt it was unjust to cause a certain section of the community to become unpaid tax-collectors while, at the same time, that section was refused the right to use the Law Courts of the land to collect the money due to it. I understand it is possible for a man who is known to be worth just £1,000 to go to 20 different bookmakers within a very short time, and to make a £1,000 bet with each. If his horse wins, that man gets the odds to £1,000, twenty times over, but, on the other hand, if the horse loses, the 20 bookmakers get nothing or at most £1,000. A bookmaker, speaking generally, always pays, but on an occasion like that, when he is welched by a backer, he has absolutely no redress.
    As I have said, I approve in principle of the Betting Duty, and my reason is that I believed that such a tax in some form or another was bound to come, and it has come owing to the courage of the present Chancellor of the Exchequer. It is a tax not on industry but, shall I say, upon pleasure or excitement, and it has been adopted and found practicable in many civilised countries. Believing that that tax was bound to come it occurred to me that it was likely to come in the form of the setting up of the totalisator, which, to my mind, would create a very great injustice. It would deprive men of a very honourable profession of their source of livelihood without compensation, and I welcomed the Betting Duty as a safeguard to these men, as it would prevent the introduction of the totalisator in this country.
    The Duty as imposed has certain objections. I do not wish to refer to those of which we read most in the Press, such as the impossibility of having a tax on turnover. I express no opinion upon that, because in other countries where they have a totalisator the tax is on the turnover and it is at a greater rate

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    than that imposed in this country. I do object to a tax on turnover if that tax cannot be passed on by the bookmaker himself. I wish to make it clear that the small bookmaker, the man who bets in half-crowns, is not in a position to pass the tax on. We have been told by the Chancellor of the Exchequer, I think rightly, that backers really do not bet with the bookmaker but that they bet with each other and that the bookmaker is simply an intermediary who charges, roughly, 3 per cent. for his services. It is impossible for the small bookmaker, betting in half-crowns, to pass on the duty directly. It is impossible for him to charge the backer 2 per cent. on half-a-crown. It has been suggested by the Chancellor of the Exchequer that what he could do is this. Instead of charging the public 3 per cent. for his services, he should charge the public 5 per cent, and pass on 2 per cent, in the form of a tax to the Exchequer. But it is impossible for him to raise his commission, if I may use that expression. The only way he could do it would be to shorten, or, to use the words of the Chancellor of the Exchequer, cramp the odds. But the small bookmaker is not in a position to cramp the odds. He has to offer the same odds as the big bookmaker and the big betting houses in London. The big credit-betting houses and the large bookmakers are the people who fix the price, and, if the small man offers a worse price, he loses his clientele. He cannot cramp his odds or directly pass on the duty, and, in other words, he has to pay the duty himself.
    What does it cost him to pay the duty? We are told that he collects 3 per cent. in the ordinary way of business for his services as bookmaker, and when I say 3 per cent. I mean 3 per cent. on the amount of the stakes accepted. The Government will then come on him for 2 per cent. in the form of a tax; in other words, the small bookmaker will find his income decrease by two-thirds and often his living practically taken away from him. That, to my mind, is a very great injustice. To bring it home to the House more clearly, let me quite a few figures. Take the history of a sum of £20 at a three day race meeting, with six races a day. Every time that money changes hands, which we shall
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    say is eighteen times, 2 per cent. is taken off. The result will be that at the end of the eighteenth race the £20 will have become only £13 18s. 1d. The tax will not be a mere 8s. on the £20, but it will be £6 1s. 11d., and the percentage collected by the Government will not be 2 but 30·48. I think the House will agree that this is harsh and unjustified.
    8.0 p.m.
    The last point I wish to raise is that of the taxation of illegal betting. I think I am right in saying that when this Betting Duty was introduced, Parliament and the nation believed, rightly or wrongly, that illegal betting was not going to be taxed; I know I did; but certain cases have come to my notice where a street bookmaker, when detected, has been fined for his offence of street bookmaking and further he has been penalised by the Treasury for having defrauded the Treasury. To make my mind perfectly clear on the matter I looked at the speeches of the right hon. Gentleman the Chancellor of the Exchequer, and I find that on two occasions he did state that the contingency I have mentioned might happen. During a statement on the Budget proposals in Committee of Ways and Means of 28th April he said:
    "The illegal hook-maker, when detected by the police, will be liable to a revenue penalty in addition to any other penalty which may be inflicted by the magistrates."—[OFFICIAL REPORT, 28th April, 1926; col. 2124, Vol. 194.]
    Again, during the Second Reading of the Finance Bill on 20th May he said:
    "Street betting.…. will be liable, not only to the existing penalties, but to the Customs penalties in addition."—[OFFICIAL REPORT, 20th May, 1926; col. 505, Vol. 196.]
    I am glad to point out that we were not intentionally deceived by the Chancellor of the Exchequer. But now let me read other quotations which I think did deceive Parliament and the country. In the Financial Statement in Committee of Ways and Means of 26th April the right hon. Gentleman said:
    "My object is to tax legal betting only."—[OFFICIAL REPORT, 26th April, 1926; col. 1707, Vol. 194.]
    Again in the same Committee on 28th April he said:
    "I directed the Customs to inquire again and afresh into the question as to whether it was practicable.… to limit the duty.… to that which is legal at

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    the present time.… They reported that there would he no mechanical difficulty."—[OFFICIAL REPORT, 28th April, 1926; col. 2122, Vol. 194.]
    The natural assumption from this, of course, is that he was going to tax legal betting only. On the same occasion later in the day he made a peroration, which is too long to quote, but possibly hon. Members will recall it when I refer them to the words in which he described the wonderful happiness and prosperity of the legal rich bookmaker and the harsh treatment and misery experienced by the poor and illegal bookmaker, and how he finished up by saying that this tax would help to redress the balance between them. Surely that gave this House and the country the impression that the tax was to be on the legal bookmaker only. Again on 10th June during the Committee stage of the Finance Bill he said:
    "All that we are doing is to tax betting which it now legal."—[OFFICIAL REPORT, 10th June, 1926; col. 1821, Vol. 196.]
    Lastly, during the Report stage of the Finance Bill on 15th July he said:
    "Illegal betting we do not touch."
    I think I have quoted sufficient from these speeches to say that I am justified in believing that the country as a whole was under the impression that only the legal bookmaker was to be taxed and not the illegal bookmaker. But what do we find? The illegal bookmaker is taxed, or, if he is not taxed, he is penalised for not paying a tax for which he is not liable. If that is not so, he is being punished twice for the same offence, namely, the offence of street betting. Whichever be the case, the position in which he finds himself is harsh and unjust. The street bookmaker carries on an illegal business, and he is punishable by law, but I submit that he should not be punished twice for the same offence.
    I know the Chancellor of the Exchequer is always as fair as a man can be, and I hope for his favourable consideration of these three points I have endeavoured to bring forward: (1) the injustice of forcing a man to be an unpaid tax collector without allowing him the use of the Courts of the land in which to collect his debts; (2) the unfairness to the small or silver bookmaker in putting him in a position where he has to lose two-thirds of his income; and (3) the anomaly of punishing a man for not paying a tax for which he is not liable.
    Mr. SCRYMGEOUR: I do not intend to follow the special handling of this Betting Duty question to which the hon. Gentleman has directed attention, but I would just say that I had an experience of an ex-service man in receipt of £2 a week pension who had been obliged to reside in a sanatorium and found himself so far recuperated that from the moral point of view he descended to the point of deceiving us with the idea that he was going back to the sanatorium and required 15s. to purchase a garment which was necessary for his return there. As a matter of fact we found out, much to the great sorrow of his wife, that he had been addicted for long to the support of this concern which the hon. Gentleman has mentioned as an honourable business. He got so far down that—
    Mr. GREENE: Does the hon. Member deny that the book-making profession is an honourable profession? It must be, because, even if a man is by nature dishonourable when he joins it, he has to be honourable in the conduct of that business or his reputation would be gone, and therefore his livelihood.
    Mr. SCRYMGEOUR: I am speaking of the results of the business. If it produces results of that kind, I do not recognise it as honourable, and I do not think any honourable man should have anything to do with it. When a man has got down to that extent, he is making straightway to prison, because of deliberate deception in obtaining money by false pretences, and dragging his wife and family into a position like that. But I am thinking first that in the King's Speech there is a marked absence of any intention on the part of the Government to deal with the great necessities of the unemployed people of this country. Instead, there is a reference to the hope that we are going to have industrial peace. Against that hope we are going to have further restrictions, evidently, in the matter of providing benefits for those who are unemployed. Then we are going to have very aggressive interference with the powers of the trade unions, which for generations have been recognised as of the utmost importance to the conducting of affairs squarely and fairly between employers and employed. The reason in the mind of the Government is, apparently, that there are forces which

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    are bent on breaking through the constitutionalism of our country to the detriment and severe damage of the interests of the people at large.
    The Chancellor of the Exchequer to-night has flouted the idea of entering upon any negotiations with the trades unions. We submit that, before this legislation is introduced, there ought to be interviews and negotiations with the trade unions just for the very reason that is in the mind of the Government, that there is a force acting in a very damaging fashion to the interests of the trade union movement. There is no doubt that such is the case. Why not frankly recognise the fact that that movement and that party which is known as the Communist party, is the organisation which ought to be dealt with by the Government, not the legitimate trade unions. Politically, there is, undoubtedly, a very great danger to the Labour party movement of our country because of the prevalence of the Communist party. It is true, also, that the Labour party has so far taken its stand by public declaration and flat refusal to admit affiliation of that force with the Labour party politically. It is also true, however, and I think much to be regretted, that while these declarations are made, thousands of votes in various constituencies, including the constituency which I have the honour to represent, are cast for the Communist party, and the duplicate of those votes cast for the second man whom they favour, and that is the official Labour candidate, whoever he may be. That, undoubtedly, is a dual policy which in this connection ought to be severed at once. When it comes to the industrial situation, while it is true that the Communist force is operating individually by connection with the trade unions and seeking to provide trouble there, it must be acknowledged that the trade unions are seeking to meet that emergency and deal with it effectively.
    I hold that the Government, knowing the position that the Communist party takes up and that its members are definitely committed to given lines of action, having hitherto professed to believe in legitimate trade unionism, and having been obliged to recognise the course of public opinion as being entirely with the trade unions, should, if they were dealing
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    honourably with the situation, leave legitimate trade unionism entirely alone to handle their affairs in the way that I am confident they can do and would do, and should direct their own energies to handling effectively that force which I am confident, if it is not taken in hand properly, will damage the interests of the country. Unfortunately, even those very forces of the Labour party that are inclined to drift in that direction are liable to bring disaster upon the Labour party and the Labour movement generally in the country. But when we find the Government failing to deal with unemployment, with the Chancellor of the Exchequer admitting the great increase in the number of the unemployed and emphasising it to the point of saying that it is a wonder we do not have 10 times more the number of unemployed, I should say it is all the more remarkable that we have no provision, or at any rate no indication of any provision—and we do not suppose there will be—of special schemes or plans to meet the needs of those people who are standing at the Exchanges to-day.
    In the Royal opening of the Session yesterday, we had once more that peculiar assemblage—peculiar in the sense of its contrast with the situation we are endeavouring to visualise now—the flashing gems, the great display of riches, and all the pomp and state, and when we come to contemplate the gaunt look of the man or woman who is eagerly asking the Government for some opportunity to obtain the right to earn his or her daily bread, and when we have, as all of us have in greater or less degree, to attend with them and endeavour to make some impression on the management of the Exchanges to see if anything can be done under the Unemployment Regulations to meet their claims, it is appalling. Once more I want to insist here that, however much we may deplore—and I deplore as much as any man in this House—the fact of the Communist party, there is not the shadow of a doubt that conditions are such as unfortunately to mark the hearts and minds of masses of the people who are undergoing those experiences in a way that no visitation of any member of the Royal Family will meet. The mere passing through Whitechapel of any member of the Royal Family, however gracious he may be, is not any good. It is the Government of the day that is

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    bound, between God and man, to do something substantial. I find, reading only in yesterday's Dundee morning Press, that Sir Henry Maybury, the head official of the Transport Department, is not seeing his way to support this proposition or the other proposition that is being put forward by the Town Council of Dundee, to give a grant here or a grant there, but on some other proposal he says they may be able to give 25 per cent., although they cannot give any guarantee.
    It may be a strange way of linking China with this, but that brings me to the point that it is maintained on the opposite side of the House—and below the Gangway it is emphasised by the Leader of the Liberal party, and in a more guarded fashion, as the Chancellor of the Exchequer was cute enough to point out, it is admitted by the Leader of the Opposition—that we are doing the right thing in providing protection for the people of our country who happen to be in Shanghai, or Hankow, or other parts of China. Now I ask, when the strength of the case for the Government in the despatch of that expedition is that we must defend our people, where is the defence of the people at the Unemployment Exchanges in our own country? They are defenceless, the heads of the Exchanges are helpless, and nothing can be done. There is your beleaguered garrison, and what are all your Army and Navy doing for them? The answer is "Nothing for you." We have the parish council, in similar circumstances, making declarations as to their difficulties and saying, "You may get to the poor house," or something of that kind. Really, we cannot be expected to go on in that fashion. We are reaping as we have sown. We are doing the same in China. We have been exploiting child labour. We have been making money there, as we have done in parts of our Empire, by utilising child labour, by seeking to amass riches to the disadvantage of poor ignorant people.
    That is dishonourable business, and Dr. Davidson, with his long experience of China, put it through as his testimony in the Scots paper in connection with the Churches, a newly published paper, that by the teaching of our missionaries in China Christian education has had its
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    influence so far, but that with that increase of education the Chinaman has begun to study the hypocrisy of the British. The war, as the Doctor points out, showed some of those intellectual Chinese people who came over, and, as one man said to the Doctor: "Well, it looks like this, that if I thought this was civilisation, I would rather have Chinese civilisation than European civilisation." He points out further that the film industry, to which the Government is going to give some attention, has been operating in China, and the very same immoral types of pictures are producing their results over in China, and the Chinese people are saying that we seem to have the morals of monkeys. It is true that you are saying: "Because these things have happened under the different Treaties, we must of necessity deal with the interests that are now established there and endeavour to protect those who are in attendance thereon." And in the case of those who believe in the sequence of things by backing the Government, I can understand their difficulty in getting out of it.
    Last Sunday forenoon I heard Dr. Norwood, of the City Temple, London, speaking in one of the churches of our city. He was telling us in connection with the hazards of war—though we all knew it, it was remarkable for him to be making these declarations, and for them to be made in a large congregation—that during our experience of the hazards of war there was not hatred on the battlefield, but that the hatred was created artificially at home. It was instigated by statesmen, it was instigated by the Press, and it was instigated, he said, by those who occupied the pulpit—God forgive us! What an indictment! This is what we term war. It is got up by falsehood, by tricking people, poor people, unemployed people, suffering people, people who are constantly experiencing the tragedies of life. Oh, if we could only think of that solemn Book which is opened here daily—in the absence of the Government, and, unfortunately, in the absence of the Front Bench of the Opposition. I have heard the suggestion made by one, whom I would not like to quote in his absence, that those leaders were past praying for. That was the observation of one who has a very high influence. You would be surprised if I were to tell you who it was. It was not a member or the Royal

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    Family, for I have never met any of them. Can we not try to think what it means to us to open our proceedings every day with the eternal word of God, and then to sit here listening to the speeches we hear and watching all this stage management in the handling of the business? There is so much unreality about it, so much political poltroonery, "playing the game," as they commonly term it, tending to the degradation of the masses and ignominious failure in handling the situation as it ought to be handled in the interests of the country and the Empire at large.
    In connection with this Chinese question there came back to me the remembrance of the argument used in the House at the time of the general strike. The Prime Minister said the position taken by the Government was this, "Unless you call off that general strike—no negotiations." I say to Mr. Chen, if it is possible for him to know anything about what I am saying, "You are adopting the course that was adopted by the Government of our country. You are saying, 'Take off your forces, take your revolver from my head, and give me a chance, as a reasonable man, of handling negotiations, as I am willing to do.'" I have heard it put forward by representatives of the League of Nations—with which I had a difficulty because I could not get a pronouncement from the League of Nations, and Dr. Norwood seemed unable to make any pronouncement—"Where are we with the League of Nations?' We are in the hazards of war. As you listened to the Chancellor of the Exchequer you could almost hear the first shot fired. It is just as if he were going to the front himself—that may be somewhat deferred. That is the position, If if were correct to say during the general strike, "There can be no negotiations so long as you are trying to drive us," I ask, "Why are the British Government pouring out troops to China?."
    I can read in our own local daily Press the sort of thing the compositors have been familiar with since the General Strike. The owner of the paper evidently thinks he has not only to manage Dundee but China as well. The editor is instructed to say to Mr. Chen, "You must sign." What an abject farce! There are 448,000,000 of people in China. The answer of the League of Nations is,
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    "How could we arrive at any finding or endeavour to enter upon negotiations when there are different forces contending with each other?" The reply to that is, "Why do the Government manage to conduct negotiations with Mr. Chen?" Why is it that since 1921 no attempt has been made to get the League of Nations to face the fact that at Washington the nations were endeavouring to agree upon, and to some extent had actually agreed upon, the steps to be taken. We have only just managed to get out of one bloody catastrophe, and it is deplorable to think that the present situation is the net outcome of things at the beginning of the third year of a powerful Tory Government. They are presenting a. scanty programme, with the intimation that something may be done in regard to agriculture or that there may be this, that and the other. Any kind of shadow, any kind of film kill do—already they are tired of the House, and no doubt they would prefer, under the leadership of the Chancellor of the Exchequer, to have a Mussolini and to dispense with the House altogether. Though His Majesty has delivered His Gracious message, we know on whose behalf he has done so, and who rare responsible, in the political sense; but there is a higher Court than that. There is a Court at which you and I must one day give account. We have to remember that all our partisanship, all our Collectivism, all our Churchism, and everything else, comes back to this—individual responsibility. For the spirit that God gave me and for the spirit that God gave you, He will one day call us to an account of our stewardship. God help us!
    Mr. WEST RUSSELL: I am sure the hon. Gentleman who has just spoken will acquit me of any discourtesy if I do not follow him in his speech. I always listen to him with great pleasure, and, however much some of us may disagree with his views, we never question for a moment the earnestneess with which he expresses them. The first two days of a new Session, according to a tradition which is generally observed, have a character of their own. It is to-morrow that the real work of the Session begins. Then the mind of the House will be directed more particularly to the matters raised in the Gracious Speech from the Throne. On these two days battle is not anticipated as a rule; generally speaking,

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    matters of controversy are avoided, and the opportunity is taken of putting questions to the Goverment in order to elicit information with regard to legislation that is contemplated or to seek an explanation concerning legislation that may have been expected but has been omitted, doubtless for a good reason.
    I rise to ask one or two questions upon a matter which is undoubtedly of grave national interest at this moment. It does not appear in the Gracious Speech, and I know it is a matter exercising the minds of many hon. Members of this House, especially those who represent constituencies of a similar character to that which I represent in this House. But before I put those questions, perhaps the House will bear with me while I venture to make one or two observations of a more or less general character upon the Gracious Speech. There is at least one feature which has been commented upon from both sides of the House, and a feature to which considerable attention has been given in the Press throughout the country—I refer to the brevity of the Speech. There are some who regard that as a fault and there are others, of whom I am one, who regard brevity as one of its great merits. Of course, it depends altogether, it seems to me, upon the side of the House upon which one happens to sit. At any rate, it cannot be said that in this instance the Government are making a y attempt to obscure their real purpose, or to hide their intentions in many words. We are beginning the Session with the minimum of words, and I hope at the end of the Session there will be the maximum of achievement. It is an excellent ideal the first part of which has been carried out very successfully in this Graci is Speech. The brevity of the Speech suggests that the Government intend this, Session, at any rate, to give the country a rest from legislation such as that to winch we have been subjected during the past few years. I am perfectly certain that that will be welcomed throughout the country.
    There are, of course, many elements and many factors entering into the position, industrially and otherwise, as we find it in the country. I have good reason to know that the legislation of recent years, which has been far too plentiful, has been a very disturbing and
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    unsettling element with many of those who have been responsible for the conduct of our industries, and upon whom at the present time there is laid the heavy responsibility of getting our industrial affairs back into a much more prosperous state. At any rate they will welcome this rest, if only for a, Session for these reasons, and also for the reason that legislation is always costly. While it is not specifically mentioned in the Gracious Speech, I do hope that the resolve of the Government to refrain from legislation to the degree and extent of former years is one other indication that the Government are determined to pursue economy wherever it is possible, for without it, it is quite impossible for the financial position of our country to be again restored. While many of us fully appreciate the importance and the urgency of such Measures as Poor Law reform and the Factories Bill, in the circumstances I think it will be generally agreed that the Government has been wise in postponing those Measures until the Autumn Session in order that the country may get back again into an easy steady stride, undisturbed by the hectic legislation of recent years.
    With regard to the legislation that is contemplated dealing with the Trade Disputes Act, I am aware that hon. Members opposite dislike such legislation. I have the honour to represent in this House a constituency which is purely and simply industrial. I claim to be returned to this House by as large a proportion of members of trade unions as any other Members sitting either on this or the opposite side of the House, and I am perfectly convinced that if the Government postpone any longer dealing with the anomalies of trade union law, at least my chances in that industrial constituency of retaining the confidence of my trade union supporters would be practically gone. I go forward much more confidently with the next General Election in view, knowing that the legislation that is contemplated by this Government is such that it will enlist to an even greater extent the vast number of trade unionists throughout the country who are demanding, crying for legislation which is not, as some hon. Members, at any rate on the other side, suggest, legislation which is contemplated for the purpose of shackling the trade

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    unions, but for legislation such as is urgently needed to unshackle many men who at the present moment are labouring under the tyranny of certain unions.
    My real object in rising to-night was to ask one or two questions as to what really are the purpose and intention of the Government with regard to areas such as that in which my constituency is, that is to say, necessitous areas. I rather imagine it was hoped that the reform of the Poor Law was in some way likely to bring about a state of affairs much more satisfactory from the point of view of those areas. I find that in a place like Tynemouth, after the experience of these past few months, the people, and especially those who are responsible for the conduct of local government there, are quite at a loss to know how to proceed, in view of the terrific burdens which at the present moment rest, not only upon the industries, but upon individual ratepayers, if an industrial recovery is really to be brought about in places such as Tyneside, where you have the great basic industries—industries like that of shipbuilding, for example, which has been carried on during these past years with enormous handicaps. At the present moment, when there is at least some chance of their recovering some of that prosperity which they enjoyed in days gone by, the burden of rates is so overwhelming that, while some have already gone under, even the best of them are finding it almost impossible to overcome this burden.
    It is not only in the industries. We find it among shopkeepers and private householders also, for the increase in the past year alone has been no less than 5s. in the £. After this great strike they find that it is really they, who can so ill afford it, upon whom the burden of that disastrous affair is falling at the present moment, and they ask what the Government are proposing to do, not only to ameliorate their present condition and take from them something of the burdens under which they are labouring, but also to render impossible the state of affairs which we find in these areas, and which has been caused to a very large extent, or, at any rate, has been very considerably aggravated by the recent strike. I hope that in due time
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    something will be said from this Front Bench to reassure area as such as those to which I refer, that the Government have decided, or are about to decide, upon some immediate support for the present position, and also to give some guarantee that areas of that kind will be protected from the results of a strike such as they are struggling under at this present moment.
    Mr. NAYLOR: if I had had no previous intention of speaking, I think the remarks of the hon. Member who has just sat down would have tempted me to intervene. May I, however, first congratulate him on holding the Conservative bridge whence nearly all but, he have fled, even though the captains and the kings of the Front Bench have long since departed? The remarks of the hon. Member, in describing His Majesty's Gracious Speech as commendably brief, seem to indicate that the hon. Member's impression of a legislative programme is estimated, not upon what the Speech contains, but upon what is not there. I presume that had the Speech contained even less than it does—and it could not contain much less in the way of social reform Measures—the hon. Member would have been still more pleased. May I be permitted to say that I look upon Hip Majesty's Gracious Speech as deriving its chief importance, not from what it contains, but from what is left out?
    I should like to have, seen many more legislative proposals than are contained in the Speech. The hon. Member has just said he is glad of the prospect of an end coming to all this hectic legislation. That is a variation of the Prime Minister's speech of yesterday which I do not think he would approve. He said it was the House aril the Members of the House who wanted a rest. Now the hon. Member says it is the country that wants the rest. I leave it to Mr. Deputy-Speaker to bear witness that it has been left to a Member of the Conservative party to say the country requires a rest from the hectic legislation of two years of Tory Government. I regret that there are no Ministers present to listen to what is, in effect a most caustic comment on the Gracious Speech.
    Dealing first with what is probably the most conscientious suggestion contained in the Speech, may I join issue with the hon. Member in his statement concerning the necessity for trade union legislation

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    of a restrictive kind. The Chancellor of the Exchequer to-day gave us a little insight as to what is in the mind of the Government, but it was quite evident from the little that he said that they had not yet made up their mind as to the lines their proposals are to take. The right hon. Gentleman referred to peaceful persuasion and the connection with it of mass picketing. Surely the Government are not going to waste Parliamentary time in bringing up a Bill merely to enforce a law which is already on the Statute Book and which would easily protect any individual citizen from the effects of mass picketing if there were any attempt to bring force to bear. The Trade Union Acts are quite clear in that respect. Peaceful persuasion only is allowed. Pickets may speak to a man or woman who contemplates entering a factory where a, dispute is in progress, and any attempt to bring force to bear can be dealt with by the police without a warrant and merely on the fact that there is an attempt to bring physical force or pressure to bear upon men seeking to go to their work against the will of the pickets.
    The Chancellor of the Exchequer made one other reference to the Government's intentions, and that was as to the necessity for protecting members of trade unions who profess the Liberal or the Conservative faith. As one who has to administer the Trade Union Acts in his own union and has some knowledge of what takes place in other unions, I can say most definitely that legislation is not needed to protect the interests of members of those two political parties. The Trade Union Acts are strict. They place in the hands of the chief registrar such absolute powers of supervision and protection as would enable any individual Liberal or Conservative member of a trade union to be absolutely secure in his political opinions without the fear of any kind of victimisation. I am not saying it is impossible for abuse to creep in in certain instances. In every department of human effort there is bound to be someone ready to abuse the privileges conferred upon him. But we do not legislate for the purpose of meeting exceptions. We legislate to deal with serious questions and serious difficulties. The protection afforded by the Acts as they stand is quite sufficient for any Liberal or Conservative member.
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    9.0 p.m.
    May I remind the House what the procedure is. A trade union under the present Acts cannot engage in political action at all unless it adopts certain rules for political action which are actually drawn up for the union by the Chief Registrar himself, and it is very little that a trade union official can do with those model rules except adapt them to the constitution of his own Union. In those rules it is specifically stated that if, for any reason of political conscience, a member of a trade union, because he may be a Liberal or a Conservative, desires to contract out of the Act, he has the simple remedy in his own hands. All he has to do is to send in a written statement that he is unwilling to contribute to the political fund of the union, and if he has done that he has satisfied the law, and no trade union official has the power to upset the law out must carry it out to the very letter. If he does not do so, what happens? Under the Act a member has the right to appeal to the Chief Registrar, who can compel the trade union official to confer upon that member, if he maintains his case, the right that he is supposed to enjoy under the Act, and the Chief Registrar's decision stands even before the decision of a Court of law, as recently happened where a member of a trade union lost his case because he had appealed to the Chief Registrar, who gave him the decision for which he asked. He was not satisfied with that decision, and took it to the Court, and the Court non-suited him because he had the decision of the Chief Registrar, which was his security under the Act.
    What is the proposal we are led to expect is to be made by the Government in this matter of the political contribution? We had a Private Member's Bill before the House quite recently, and no doubt the Government will endeavour to, impinge upon their proposals that one point of allowing members of a trade union not to contract out as they do now, but to contract in—an entirely new principle of legislation. What happens in that event? First of all the union will have to take a ballot as to whether or not it will engage in political action, whether it will form a political fund, and whether it will ask its members to contribute for political purposes. A ballot will be

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    taken. Let us assume that the ballot results in a large majority being in favour of political action and political contributions. The members, by a majority, will have decided that political action from their point of view is desirable. If the Government intend to introduce the principle of contracting-in, it means that the officials or the executive of the union cannot operate a decision already reached in conformity with the rules and secured by ballot by an affirmative vote given in favour of political action. Of what use is it taking a ballot and confirming a principle or a course of action if, immediately after, we are to be restricted by an Act of Parliament which prevents us from putting that vote into operation? Having decided that the union shall take political action we shall have to vote again, if there is to be contracting-in. We shall again have to snake application to the union executive for the purpose of securing the right of paying towards the political fund.
    That is an entire reversal of the legislative principle. It puts the onus upon members of trade unions of saying, "Yes," twice to one question. First of all, they have to vote by majority in favour of a proposal to engage in political work and to pay to the political fund, and having done that they have to express in writing—in all probability it may be enacted in that way—their desire, over and above the vote already given, to engage as individual members in the political work of the union. If that is to be the kind of legislation proposed, it will be unfair to a movement which, with all its faults, and after all the criticism to which it has been subjected in all the years, has shown itself to be a solid, well-managed movement, designed for one main purpose, and that is the betterment of the conditions of the working people of this country, in which aim it has been successful and which success would not have been achieved had not men and women combined for the purpose of improving their position. I hope the Government w ill look well into this question before they engage in legislation afresh. I am quite certain that when they come to sit down to consider the details of their proposals—I am quite confident they have not done it yet, otherwise the Chancellor of the Exchequer would have
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    been a little more detailed in his explanation of the Government's intentions—they will find that they have set themselves a very difficult task and one in which, whatever they produce, they will please no one, neither their friends nor their foes.
    So much for what the Speech contains. What about some of the questions of which the Speech makes no mention? I come from a district which is expecting the Government to make some proposal for remedying the great overcrowding that exists in our industrial centres. The Government assume that the Housing Acts are doing everything that is required in that respect, but may I point out that that is not a fact, and that in the Division which I represent there is as much, if not more, overcrowding to-day than ever before, in spite of all the new houses that have been put up outside London and in other parts of the country. As far as we can see, there is not likely to be any improvement of these special overcrowded conditions in the great industrial centres as a result of new houses being built outside London. I do not want to enter into the details of that question, which has been discussed so many times in this House. I merely mention it as one of the important omissions on the part of the Government in presenting the Gracious Speech to this House.
    I want to endorse what has been said in regard to another important omission, and that is the position of the Government with regard to the extension of the franchise to women from 21 to 30 years of age. We have been speaking about equality for a good many years now, and one would have thought that at this time the Government would have come forward with some proposals on this question. They have promised the House, time and time again, that the matter is worthy of consideration, and that they are hoping some day to promote a conference that will enable the question to be discussed in all its bearings. It is a very simple question. It is not one that requires very much discussion in detail Here we are faced with the fact that young women from 21 to 30 years of age have not the same equality in the matter of voting as young men of the same age. It would be quite a simple proposition, if the Government were sincere in their desire to extend the franchise, to bring

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    a short Bill before the House, which could be passed almost without serious discussion, and could be made law in a very short time. It will be quoted against the Government if they resign office two years hence and this long-expected measure of reform has not been passed through this House. The Government should be warned that if they do not do it, the next. Government is likely to do it.
    One further question to which no reference was made in the King's Speech is that of unemployment. The question of industrial insurance is mentioned, which is an indication that the Government would rather deal with the insurance aspects of unemployment than with the evil itself. I was first returned to this House in 1922, and the number of unemployed men and women was very much the same then as it is now. On the Government side of the House in 1922 there was a Coalition Minister, and the question of unemployment came up then very much as it might come up in this present Parliament. What was the attitude of the Government then? They were saying in 1922, as they had said years before and as they are now saying in the Gracious Speech, that they were hoping there would soon be a trade improvement. From 1922 to 1927 is a period of five years, and each year in succession we have had a repetition of the hope that trade will improve. Without going into the details of the unemployment question, I submit that it is the duty of any Government after a long period of excessive unemployment to bring to this House proposals that will have the effect of reducing unemployment. Hon. Members opposite speak of economy, and even economy at the expense of the unemployed, but the truest economy in any State is, surely, healthy, happy and fully-employed men and women. We do not want these doles; we would much rather have work, and it is the business of the Government to see that work is provided for every man and woman. I hope that the solitary member of the Government who has honoured me by remaining during the whole of my somewhat discursive speech will at least pay some attention to the well-intentioned advice offered in all sincerity which I have been privileged to give.
    Sir GERALD STRICKLAND: I have much sympathy with the aspect of the trade union question brought before the House in a most interesting speech by the hon. Member for Dundee (Mr. Scrymgeour), but with some modifications. He has put before the House the world-wide aspect of that question, particularly in reference to communities where the British race is developing the resources of the workers, and he dealt particularly with the case of China. It may be interesting to the House to follow the same line of argument a little further, and consider the Chinese features of the problem in reference to Australia and other parts of the British Empire where the developments are in marked contrast to others, but which, at the same time, help us to arrive at modifications of conclusions in this country where very different social and economic conditions prevail from those in China. I do not know whether the hon. Member for Dundee has been in China, but I can assure him that the trade union question there cannot be approached from a distance so easily as he appears to think. In dealing with this question, so far as it relates to Shanghai, the hon. Member must realise that Shanghai, while it is in China is not of China. Shanghai is the most marvellous development of independent municipal administration the world has seen, and if we refer to the collection of curious examples of the experiments of Government as given in Aristotle's "Politics," none equals the marvellous achievement of government as it exists in the concession in Shanghai. It is international; it is a sovereignty within a sovereignty. It is democratic in its organisation, and in its aims. Its spirit is commercial and may perhaps be compared to the incentive which created the British factory in Bombay, in the olden days, or the world-wide factories and settlements of the Phœnicians. But just go outside Shanghai and you have real China. In real China it is not a question of the rates of wages; it is not a question of the standard of comfort. It is a question of the possibility of living at all, so congested is the population, so low is the standard of life and so terrible is the struggle for life at all. There are no bank holidays, no Sundays. It is not a, question of the standard of life, but a

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    question of the possibility of living, and when we talk of trade union principles and the standard of life, of the Chinese worker, we should know exactly what the conditions are and how little we can learn by making parallels therewith.
    Contrast that with Australia. In Australia every genuine hard-working labourer is a capitalist in the making. As Governor of an Australian State, I have seen this happen. The State offered land at 10s. per acre with 20 years in which to pay the money. A railway porter took up 1,000 acres of land and in the first year he scratched the soil and took a crop worth £2,000. Therefore, I am justified in suggesting that in that country, where the population is very far from being adequate, where the resources of nature are unexploited, that the experiments of Socialism are paid for, not by the so-called capitalist, but by the development of the unexploited resources of nature, paid for by the "unearned increment" taxed for the purpose and not by spoliation of the results of self denial which we call "capital" and which create and maintain the wages fund that keep labour prosperous. In Australia there is a great contrast, between the trade union question, and the way it has been discussed on the Chinese basis. But what I wish to draw attention to particularly is that there are many Members on this side of the House who are enthusiastic about Empire development and are Imperialistic to the extent that they make its possibilities the object of their lives. These Imperialists have a great deal of sympathy with the trade union movement in as far as it can be utilised and guided on true trade union principles, not distorted or side tracked. In sound trade unionism there is a great deal that can help and add to the opportunity and the comfort of British colonists and to the development of British culture, British ideas, British freedom and British love of equality of opportunty based on the trade union system.
    As an example of the reality of that sympathy I would ask the hon. Member for Dundee to remember that the Secretary of State for the Colonies recently drafted a constitution for a small island known as Malta, an island which has lately furnished opportunities for a close study on the spot of trade union claims
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    by a Parliamentary Delegation upon which Labour was very strongly and very intelligently represented. What did the Secretary of State for the Colonies do in establishing in the Constitution of Malta the dyarchy under the new system as regards the Second Chamber—I will not call it an Upper House, but a less numerous House mid certainly an experiment in the bicameral system—in order to provide in the Malta Senate a counterweight to the necessary acknowledgment that Malta is geographically and racially a stepping stone between East and West, and also between modern civilisation and the stone age? In the New Constitution the Secretary of State laid down that in the Upper House of the Malta Parliament should contain as a counterpoise to the representation of the Church, to which two seats were given—because with power responsibility should go—and to the representation of the hereditary rights of the local nobility, provided for the election of two representatives of the Trade Union Council.
    When that has been done by the Leaders on this side of the House, I think it would he entirely out of place to argue that there is no sympathy and even hostility, as some of my hon. Friends opposite suggest, on this side of the House for the trade union movement as such. The Trade Union Council is officially represented in Malta, and I am engaged upon general principles on this side of the House as representing an English constituency to support the rights for which the Crown is the custodian in giving effect to what the Crown has given in the way of recognising the useful side of trade unionism in Empire development.
    Now I wish to go to China for a moment. China is so eminently conservative outside Shanghai and the international settlements that there is no possibility of living at all—[HON. MEMBERS: "Oh!"]. There is no possibility of living at all on the part of any trade union movement. China is so conservative that it would be destroyed anywhere outside the protection of the British flag. The present disturbances in China and their democratic aspects have as superficial a relation to the life of China as the froth on the top of a pint pot of beer-China is so conservative that it has

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    destroyed and it will destroy any attempt at any development of trade unionism except where the British flag protects it.
    I think one of my hon. Friends opposite who has recently been to Malta as a member of the Parliamentary delegation, will agree with me, in regard to the British flag and the authority of the Secretary of State for the Colonies so far as he represents the Crown, that he represents it in such a manner as precludes him from interfering in any way in local affairs or in any question concerning the Government of Malta which is not strictly restricted to that side of Government which is known as the Imperial side of the dyarchy, and that there is as strong a duty on the part of the Secretary of State to support what has been granted to the trade union movement in Malta as the protection which the British flag gives to trade unionism in China wherever it is possible.
    I am sure my hon. Friend opposite will bear me out in saying that the extremely conservative and anti-progressive elements in Malta have shown an aggressiveness against the trade union movement which has transcended local politics and has gone beyond the stage where it interferes with the prerogative of the Crown in maintaining the privileges which have been granted to trade unionism. I shall be most careful to make no remarks which can, even on the very strictest construction of constitutional lawyers—who have not perhaps studied constitutions outside this country—can be cavilled at in any way as suggesting that I am interfering in this House with the local Parliament of Malta.
    I am only going to say a very few words with regard to a point which has been admitted in this House by the Secretary of State for the Colonies not once, but twice or three times, to be his concern and responsibility. I refer to the question which was submitted by the Secretary of State for the Colonies to the Law Officers of the Crown and which upon the decision of those Law Officers, it became his duty as representing the Crown to uphold throughout the Empire as the safeguarder of the franchise which has been given. The grant of representation to trade unionism in Malta was obviously an entirely new introduction into the mentality of that country. The
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    modern development of ideas of English freedom and liberty were entirely new and very distasteful to those whose mentality was opposite and a movement has been on foot which has entirely suspended the enjoyment of those concessions and for more than two years there has been no representation of the Trade Union Council in Malta and I say that the Secretary of State as the custodian of the constitutional grant is responsible for seeing that this suspension of that grant is brought to an end.
    Notice taken that 40 Members were not present; House counted; and 40 Members being present—
    Sir G. STRICKLAND: I hope that the few remarks I have made will show that there are on this side of the House those of us who consider that the British Empire is so important that every organisation should be guided in useful channels and have sympathy with the recognition of the trade union movement. If, however, we are to gather lessons from the development of these movements elsewhere, and if we are to follow the line of thought of the hon. Member for Dundee (Mr. Scrymgeour) in studying what has happened in China and other parts of the world, I really do think that the less the trade union movement is connected with politics, the better for its original and essential feature, namely the improvement of wages and conditions of life by facilitating collective bargaining and higher standards of education. If one were to follow the Australian method of State contributions to all that are absolutely non-politically connected with the development of the country, I think there would be an end to much of the difficulty and trouble and misunderstanding that exist.
    Mr. T. WILLIAMS: I am lather doubtful even now what is the point that the hon. Member who has just spoken intended to make when he endeavoured to impute that the Conservative Government here, rather than be hostile to trade unionism, have given representation to trade unionists in some parts of the Empire. Later he told us that the worst thing that the trade unionists can do is in any way to ally themselves with any political party, and that to do so would be to desert their original function. That seems to me to be rather a contradiction

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    in terms. If I have not mis-interpreted the action of various Conservative Governments where action has been taken with regard to trade unions, I would say that they have not been too kindly disposed towards them, and that they have given them representation on any particular body only when to do so has made it possible for the same Government to give a much larger representation to other bodies. I do not think I would be justified in following the last speaker to the island of Malta, or in dealing with the local politics of that island, for that would be beyond the scope of this honourable House. Consequently, much as I feel that I would like to make some observations on certain domestic matters there, because of the wonderful hospitality I have recently enjoyed, I feel that I am morally obliged to forfeit the pleasure of making mention of the subject because I would be ruled out of order.
    The hon. Member who has just spoken told us something about the marvellous Government of Shanghai, and he moved from there to Australia. He referred to the trade union activities in Australia and the wonderful results achieved by certain individuals who started almost over night. He told us something about the individual who started with 200 acres of land and at the end of the year found himself with £2,000 profit. That is a very remarkable result. It is all so foreign to me and so impossible of understanding that I really do not appreciate what the hon. Member's ideas are or what it was that he was suggesting to the House. What does seem clear to all of us on the Labour Benches is that in this Chinese problem there is a very real difficulty to which all sections of the House ought to be applying their minds. The Chancellor of the Exchequer said that no one could withhold support from any Government which was acting strictly in the interest of British lives. Even the Chancellor of the Exchequer seemed to forget that there are also Chinese lives that need the protection of some body of people.
    During the past few days I have been reading of some of the causes that led to the present dispute, and it seems to me that the Chinese people not only have had ample justification for the present disturbance, but I am rather amazed
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    to find that they have tolerated their industrial conditions so long without causing considerably more trouble than has been caused up to the present. I have read a speech which was delivered by a representative of the Young Women's Christian Association, one who had been in China and had acted as a sort of inspector, had travelled to the various factories and workshops, and had seen the little boys and girls at work—children of five, seven or eight years of age, earning from 2d. a day and working 12 hours per day. I wondered, when listening to the speech of the Chancellor of the Exchequer, whether the right hon. Gentleman or the Government as a whole ever gave a single thought to the lives of Chinese men, women and children.
    Sir G. STRICKLAND: May I ask what is the value of 2d. a day in China., in a country where the standard of living is such that 30 years ago for 200 dollars a murderer of wealth could hire a coolie to have his head cut off instead?
    Mr. WILLIAMS: I have not been to China, and as I do not understand the relative values of money I could not give a definite reply to the question; but I am convinced that 2d. a day for child labour does not reflect credit either on the British Government or on those who employ these children in any part of China. If that be the cause of industrial disturbances and of the Nationalist movement which has brought about the excitement in China, I say that the British Government could have anticipated the trouble and could have prevented not only the Nationalist movement but any sort of danger to the lives of British people resident in Shanghai or any other part of China. As I read the Gracious Speech from the Theme it seemed to me that two phrases which referred to foreign affairs were scarcely consistent. It is suggested that His Majesty's relations with foreign countries are extremely friendly. But in the same paragraph reference is made to the mob of Chinese. My experience is that mobs come together only when they have been inspired by injustices, or by general discontent maturing when they fail to get any sort of redress after many years. It is not the Chinese mob that ought to be referred to in hostile terms, but the people who are responsible for the conditions which create the mob's difficulties.

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    When in this House the Chancellor of the Exchequer or the Foreign Secretary or even the Prime Minister speaks so glibly about English lives and the necessity for preserving them, I suggest that they might very well pay a little more attention to the Chinese lives that are destroyed so frequently and with so little consideration by British capitalists, who are content to exploit men, women and children in any part of the world. Moreover, I suggest that the sending of the troops to China probably constitutes a bigger menace to the lives of British residents in Shanghai than the so-called mobs of Chinese people. The Chinese, after all, are only seeking redress for their industrial troubles. They are seeking to establish a nationalist government which will do justice to them and act more generously towards the Chinese workers than the British have been doing. I think it is a movement which we ought to encourage instead of attempting to discourage it. It is only when the Chinese people succeed in improving their general standard of life, and when they can exact bigger wages and a greater spending power that they can become better customers for Great Britain. We should benefit industrially, and the Chinese people would enjoy a higher standard of life, and they would be much more useful in the world's commerce than they possibly can be on the miserable standards which they have today. It is now 9.45 o'clock, and I understand some arrangement has been made whereby another speaker is to "take the floor" at this moment. I have filled in this small breach and have made some reference to the speech of the hon. Member for Lancaster. I am content to leave the question of the Trade Union Council and its representation in the Malta Assembly to some future date, when, perhaps, we can deal with it definitely and in such a way as to give to the workers of Malta that representation to which they are entitled in the councils of that august assembly. So long as the nobility, the chamber of commerce, the University under-graduates and the representatives of the Bishops demand representation, so should the trade unions demand representation, and so will they in future.
    Sir G. STRICKLAND: According to law.
    Mr. WILLIAMS: According to existing law and existing arrangements. On some other occasion, when it, is more opportune, I hope we may be able to deal with that problem in the presence of the Secretary of State for the Colonies, who can give us the benefit of his understanding of the matter.
    Major Sir HERBERT CAYZER: I desire to deal purely with certain industrial and trade matters not from any partisan standpoint. This country stands first and foremost on its trade. It is on maintaining our export trade that our existence depends. Anything which is going to interfere with our trade in the British Empire or in foreign countries is bound to have a very bad effect upon this country. The Gracious Speech mentions that a relations with foreign Powers continue to be friendly." I can only imagine, either that Russia is not looked upon as a foreign Power or that, by some chance, Russia has been overlooked altogether. To say that Russian relations with this country are friendly is going a long way. If there is friendliness it is very one-sided, and it is mostly on the side of this country that the friendship exists. The Leader of the Opposition said he hoped we would get much closer to Russia than we have been. I am quite willing to agree. We want closer relationship with foreign countries, provided it is mutual friendship and provided those countries are willing to respect their agreements with this country. The Leader of the Liberal party, or at any rate the right hon. Gentleman who is, I think, its Leader at the present time, spoke in very much the same way as the Leader of the Opposition, but towards the end of his speech said there was a "half-suppressed antagonism" on the part of Russia against this country. It is rather amusing to hear the term "half-suppressed" when the leaders of the Soviet Government have been declaring their open antagonism to this country and their intention of smashing not only the trade of this coutry but the British Empire. [HON. MEMBERS: "When?"] It seems to me there is not much half suppression about that.
    Mr. TAYLOR: What is the evidence of it?
    Sir H. CAYZER: It appears to be the deliberate policy of the Soviet Government. Why is it their deliberate policy? Obviously, they have come to the conclusion that the one country which stands as a bulwark between them and the Bolshevising of the world is Great Britain. If they want to effect a world revolution and impose the theories of Bolshevism throughout the world, they have first to smash the British Empire. Some fear has been expressed that if we break off trade relations with Russia, we may be doing a great hurt to British trade. I speak purely as a trader. I have been connected all my life with basic industries—iron, coal, steel and shipping—and, naturally, I would not support any policy which is going to have a bad effect on the trade of this country. But if we did consider it necessary to take this step in regard to Russia, we have only to look at the case of America. America, from the first, refused to have anything to do with the recognition of the Soviet Government. Has American trade suffered? Before the War, America was selling less than half the amount of goods to Russia that this country was selling. To-day, she is selling double the amount of goods to Russia that we are selling. So that our recognition of the Soviet Government has done us no good, and the refusal of the American Government to recognise the Soviet Government has done them no harm. On the other hand, if we broke off trade relations with Russia, the Russians would stand to lose a great deal more than this country. The trade returns were published the other day and I think I am right in saying that Russia sells to this country goods to more than four times the value of the goods that we sell to Russia. Therefore any strained relations between this country and Russia are going to hurt the Russians more than ourselves.
    Mr. KIRKWOOD: We do not want to hurt anybody surely?
    Sir H. CAYZER: We do not want to hurt the Russians, but we want them to hold to their agreement. Mr. Leslie Urquhart is at the head of companies which have, probably, a larger trade interest in Russia than any other companies in this country. I believe last year he was opposed to breaking with Russia, but I daresay hon. Members
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    opposite have received, as I have received postcards, in which he asks the Government to break off relations with Russia until they pay British claimants and substantiate their agreements with this country. We do not want to get adrift with any country, but we do ask other countries to respect their agreements with us. It would do the trade of this country far more good if we were to clear out the agitators and the people over here who, under the guise of coming over in the Embassy and doing trade, are merely coming over here for propaganda purposes. They are doing more harm to British workmen and our industries than if we cleared them out and said "Until you recognise by the agreement that we respect each other's trade and will not use propaganda against each other, you must clear out of this country." We have only got to take the coal strike. Mr. Cook told us that they received over £1,000,000 from Soviet Russia.
    Mr. BATEY: I wish it, had been £10,000,000.
    10 0.p.m.
    Sir H. CAYZER: Yes, I daresay, because it would prolong the coal strike. I believe it did prolong it! It did not do any good to any of us, and we do not want any foreign Pc giver interfering with our trade and industry. Let us look after that ourselves. We had an Australian shipping strike. It was not a real strike, but purely directed against British ships. Mr. Havelock Wilson, one of the greatest trade union leaders, stated that the Bolshevists have been waging war against British shipping for nine years, and he was quite right. That strike in Australia was another instance of Bolshevist propaganda. The same thing is happening in China. There is no doubt this boycott in China, and the trouble there, are largely the result of Bolshevist influence. British gods are boycotted, whereas other countries' goods are not. Now just two words about trade unions. Trade unions in the past have done an immense amount of good, and I believe and hope they will do an immense amount of good in the future. There is no doubt abuses have crept in and reform is necessary. I should prefer, as I believe every one of us would, that that reform should come from within. But can that reform come from within? I am rather afraid there is a certain amount of Bolshevist

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    influence in the trade union movement, and, therefore, it appears to me to be imperative that the Government should take a hand and try to help the trade union movement to reform itself. I would like to see the general strike made illegal, and I should like to see freedom for every Britisher and every Englishman. Why should not a trade union member have full liberty and freedom like every other Englishman? At present he has not got that. Many hundreds of men would have been glad to go back to work, but they dare not because they knew they might lose their benefits. Therefore, I think it it is essential that the Government should try to reform some of the abuses in the trade union movement. From an industrial point of view I believe it is necessary. If we want to preserve the prestige of this country, not only at home but throughout the Empire, we should tell the Soviet Government that, unless they can respect their trade agreements with this country, we shall have to give them notice to quit.
    Mr. SNOWDEN: The hon. Gentleman who has just, sat down has entertained the House with a speech which has afforded considerable enjoyment to my hon. Friends behind. He dealt with a very inflammable topic and he will, perhaps, excuse me if I do not follow him in that subject to-night, for I see that some of his hon. Friends have put down on the Paper an Amendment upon the lines that he has been advocating in his speech. There, therefore, may be an opportunity of discussing that question at greater length. At the end of a two days' debate it is difficult, if not impossible, to introduce any new topic or even to impart any originality into any subject which has already been discussed. I shall therefore confine my observations to trying to summarise the criticisms which have been made from this side of the House on the King's Speech which was submitted to the House yesterday. It is difficult to know whether the Chancellor of the Exchequer was pleased or disappointed with the course of the debate. He described it as a lamb-like discussion. The Chancellor of the Exchequer is a past master in all the platitudes of debate and he adopted the not unfamiliar argument of minimising the importance and the force of the
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    opposition which he had to face. I wonder—
    Mr. SEXTON: On a point of Order. May I be permitted to call attention to the lamentable want of courtesy on the part of the gentlemen of England when an ex-Cabinet Minister gets up?
    Mr. SNOWDEN: I am quite sure it is not necessary. The right hon. Gentleman (Mr. Churchill) apologised for his absence when I rose. I am quite sure he has come into the House at the earliest possible moment.
    Mr. CHURCHILL: Yes, I came at the moment that I heard that the right hon. Gentleman was speaking.
    Mr. SNOWDEN: I was saying a moment ago that I was not sure whether the Chancellor of the Exchequer was pleased or disappointed with the course of the two days' debate, and that be had described it as lamblike in its effect. Therefore I might assume that he would have preferred it had it been more boisterous and lamblike in its character. The Chancellor of the Exchequer, I was just saying when he entered the House, had adopted the quite familiar debating tactics of trying to minimise the importance of the criticism which had been put forward in the course of the debate. He spoke of the unanimity with which the proposals of the Government had been received. Well, if the right hon. Gentleman regards the speech of my right hon. Friend the Leader of the Opposition and the speech of my right hon. Friend the Member for Derby (Mr. Thomas) as being in support of the Government, I think that his view will be changed and his mind disabused before we get to the end of the Session upon which we have now entered. The Chancellor of the Exchequer devoted a considerable part of his speech to the attempt to reply to the observations of my right hon. Friend the Member for Derby. The Chancellor of the Exchequer said that my right hon. Friend had evidently enjoyed himself during the delivery of that speech. We had in that observation by the Chancellor of the Exchequer an indication of what he regards as the purpose of speech. The purpose of speech, is, according to him, not to advance reasonable argument, not to meet the criticism of his opponents, but to provide entertainment and

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    enjoyment for the man who listens to his speech, and I think that is very evident in the orations which fall from him. That may be quite satisfactory to the person who delivers the speech, but it is not a very substantial contribution to debate. The Chancellor of the Exchequer somewhat gibed at the reference which my right hon. Friend made to the lack of unity within the Cabinet. The Chancellor of the Exchequer wondered whether my right hon. Friend had been drawing from his own experience. I can assure the Chancellor of the Exchequer that we were perfectly harmonious. We had not the prototype of the Chancellor of the Exchequer or of the Secretary of State for India within the Cabinet. Had that been the case perhaps our deliberations would not have been quite so harmonious, but it was not necessary for my right hon. Friend to draw upon his imagination, because, before the end of the speech of the Chancellor of the Exchequer, we had an occular illustration of the harmony which prevails within the Cabinet. I am sure it would be to the intense entertainment of the House if the Chancellor of the Exchequer would repeat what his right hon. Friend the Foreign Secretary said to him at the conclusion of his speech.
    A great part of the time of this Debate has been taken up by references to the unfortunate situation in China. Tomorrow is to be wholly devoted to discussion of that situation upon a specific Motion put down by our Party, and I shall, therefore, to-night say no more upon that than that I wholly associate myself with what was said by my right hon. Friend (Mr. MacDonald) yesterday and by my right hon. Friend the Member for Derby and further to express the hope that the negotiations which have been resumed at Hankow may speedily be consumated in a friendly mutual agreement and good will which will place the relations of the two countries upon a permanent and satisfactory footing. The King s Speech has been criticised by many of my hon. Friends, not merely on the ground of what it contains, but of what it omits. The King's Speech is the legislative programme of the Session, and the legislative programme of the Session cannot be altogether dissociated from the general programme of a succession of
    244
    Parliamentary Sessions under one Government. The programme of one Parliamentary Session ought to be a part of the redemption of the election pledges of the Government, and I want just for a moment to deal with that particular aspect of the question, the relation of the legislative programme of this Session to the accomplishment of the programme to which the Government was pledged at the last General Election. I gather from what the Chancellor of the Exchequer said this evening that we are not to anticipate more than one further Session after this year. The Chancellor of the Exchequer spoke of the tremendous legislation which Parliament will be asked to deal with next year, and I assume, therefore, that the King's Speech of next year will partake much less of the character of a King's Speech, and of the legislative programme of the Session, than of the character of an Election Manifesto. I can assure the right hon. Gentleman and his colleagues that it will take a great deal more than the legislative programme referred to by the Chancellor of the Exchequer, the reform of the Poor Law and perhaps the Factories Bill, to redeem the prestige of the Government and to induce the country to give them a further tenure of office.
    This King's Speech is a confession of the intellectual bankruptcy of this Government. What were the pledges, the very definite pledges that were given to the country by the Leader of the Tory party at the last General Election? The first one was economy, the second was unemployment, the third was education, the fourth was agriculture, and the fifth was a pledge to do something to stop the scandalous profiteering in food. Now we are entering upon the third Session of this Parliament, and there is not in this King's Speech one proposal which goes to the redemption of a single one of those pledges. What is the record of the last two years in regard to the redemption of those election pledges? Take the department for which the right hon. Gentleman is responsible; that is, economy. My hon. Friends behind me, as I have said, have repeatedly criticised this Speech on the ground of its omissions, but I think the most remarkable omission from the Speech is the omission of a statement which has been made in both of the previous King's Speeches intro-

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    duced by this Government, namely, on the question of national economy. There is not a single word in the King's Speech on that point. Yet two years ago, and with greater emphasis last year, the King's Speech stated that it was an essential condition of the restoration of trade and industry that there should be a substantial reduction of national expenditure and a reduction of national taxation. I suppose the reason why there is no mention or repetition of that statement in the King's Speech this year is that the Chancellor of the Exchequer himself, after such a colossal failure, had not sufficient cheek and impudence to father such a proposal again.
    How far has that pledge of national economy been redeemed? The Chancellor of the Exchequer is facing this year £30,000,000 more expenditure than that of the year before he took office, and the right hon. Gentleman promised a reduction of 10,000,000 a year ! Not only has he raised national expenditure by that huge figure, but it has had its repercussions upon national credit, and in two years' time, according to a statement recently made by the hon. Member for Ilford (Sir F. Wise), a supporter of the Chancellor of the Exchequer, the financial policy of the Chancellor of the Exchequer has degraded national credit from a 4½ per cent. rate to a 5 per cent, rate. The hon. Member for Ilford nods approval. In the course of his speech this afternoon the hon. Member referred to the rate at which Treasury Bills are being renewed to-day, and contrasted it with the figure of 12 months ago. The hon. Member might have gone much further. He might have contrasted the rate at which the Chancellor of the Exchequer is now compelled to renew his Treasury Bills with the rate at which they were renewed during 1924, when our party were responsible. In that year we renewed Treasury Bills at an average rate of about £3 11s. Last year it was more than 1 per cent. above that figure.
    The right hon. Gentleman is faced with the necessity of effecting a huge debt conversion. The day and night consideration for the last two or three years of a Chancellor of the Exchequer having that problem facing him ought to have been the reduction of the rate of interest and the strengthening of the national credit. A few weeks ago the Chancellor
    246
    of the Exchequer promoted a small Conversion Loan, and in order to get it at a rate of £4 14s. 4d. he had to accompany it by stunt inducements which were a. disgrace to any reputable financier. The hon. Member for Ilford referred to a practice which has been adopted not merely by the right hon. Gentleman, but was begun by the present Foreign Minister, of issuing public loans of conversion at a figure much below par. The 3½ per cent. loan was issued by the then Chancellor of the Exchequer at 65—
    Sir F. WISE: 62.
    Mr. SNOWDEN:—thereby nearly doubling, not merely the nominal but, ultimately, the actual amount of the debt. Two years ago, when we were in office, we carried out a conversion at par at £4 12s., and with no, shall I call it, premium liability attached to it, The Chancellor of the Exchequer in the last few weeks has not been able to convert, even with the attraction of redemption within the next two or three years at a huge premium, at less than £4 14s. 4d.
    Mr. CHURCHILL: Whose fault is that?
    Mr. SNOWDEN: it is the fault of the right hon. Gentleman and his associates.
    Mr. CHURCHILL: Did I organise the General Strike?
    Mr. SNOWDEN: If the Government had had the courage and the capacity to deal with the coal situation then none of the disastrous financial consequences which have followed would have resulted. We, certainly, are not going to accept for a single moment, neither are we going to tolerate, the excuse of the Chancellor of the Exchequer that the financial embarrassments by which he is faced are due to that unfortunate industrial dispute. Take the question of debt funding. There is a reference to the funding of the Portuguese Debt, in which we have another illustration of the magnanimity of the Chancellor of the Exchequer at the expense of the taxpayers of this country. What does this mean? The right hon. Gentleman has offered to let them off with a lump sum payment of £5,500,000, or annual payments spread over a period of 62 years, which will only repay the capital sum, leaving the taxpayers of this country to make up that

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    difference over a period of 62 years. The Chancellor of the Exchequer has now made three debt funding arrangements, and that with France has not yet been ratified. There was the French and Italian Debt, and now there is the Portuguese Debt. I think this fact ought to to be driven into the heads of every taxpayer in this country. If the right hon. Gentleman gets from Italy, France and Portugal the maximum sums under these agreements, they will be paying about £17,600,000 a year, and for two generations the taxpayers of this country will have to make up the difference to the extent of nearly £40,000,000 a year. That, I suppose, is the redemption of the economy pledge which was made by the right hon. Gentleman.
    Take unemployment. If there is one thing more than another to which the Government was pledged it was to deal with the question of unemployment. We were taunted that we had failed to deal with that problem, but the figures of registered unemployment fell very considerably during the time the Labour party was in office. In each of the last two King's Speeches statements have been made that the Government were constantly considering this question of unemployment; in fact, they said that their hearts bled at the picture of so large a number of men who were willing to work, and were unable to obtain employment. The party opposite told the country at the last election that they had a positive remedy for unemployment. [HON. MEMBERS: "No!"] As a matter of fact, that statement was put in large capital letters, and what is the use of hon. Members opposite denying that fact? The official leaflet issued by the National Unionist Association has been placed upon the Table. It might have been a quotation from something said by the Labour party, but at any rate the Government accepted it as their promise and pledge. Not only did the party opposite say that they had a positive remedy for unemployment, but they went on to say what it was, and they stated that it was the restoration of the trade and commerce of the country. What have the Government done in that respect? The number of unemployed today, as stated by the Chancellor of the
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    Exchequer, is 150,000 more than it was 12 months ago.
    What is the state of our export trade? We were told that the positive remedy for unemployment was the restoration of our trade. In the King's Speech there has been inserted a paragraph in which the Government once more express the belief that there are signs of a revival of trade. If trade is reviving, no thanks are due to the Government, because the Government have done everything they possibly could to increase the burdens upon industry and to prevent the revival of trade. If there is a revival of trade, it is due to the fact that there has been some approach to more stable conditions on the Continent of Europe. What do the Government propose? Look at the King's Speech, and tell me what they are doing to redeem their election pledge to give effect to their positive remedy for unemployment. They admit the hopelessness of being able to provide more employment by confining what they have to say upon that matter to dealing with the question of Unemployment Insurance. Not many Members of the House, I regret to say, were here an hour ago when my hon. Friend the. Member for South-East Southwark (Mr. Naylor) dealt with that, and I entirely agree with what he said.
    I have been associated for nearly 40 years with unemployment agitations by the Labour and Socialist parties of this country, and we have always demanded maintenance or work, but we have always laid the emphasis upon work. I think it is a perfect disgrace to the country that during the last five or six years we have spent. I suppose, £500,000,000 in paying men for being out of work, instead of using our expenditure to employ them usefully, to create work, so that they could live in honourable comfort and have the satisfaction of knowing that they were earning it by their work. So lone, however, as there is unemployment, we must have an adequate system of maintenance for those who may be unable to get work. Therefore, if the Government's promised Unemployment Insurance scheme improves the conditions in that respect, I am quite sure I may say, in the name of every one of my colleagues, that we shall give such a Measure our support. Our criticism is as to the lack of constructive proposals for dealing with unemployment.

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    There is not, I say, any direct reference in the King's Speech to proposals which will increase work, unless it be that paragraph which indicates that legislation is to be introduced to change the style and title of the Sovereign; but it may be that they are bringing forward their proposals in regard to British films as part of their solution of the unemployment problem. I have said, and I repeat it, and I defy contradiction, that the Government have not done one thing to increase the volume of employment in this country. Their safeguarding proposals were put forward as having that purpose; what has been the result? In three out of four of them there has been a considerable decline in the volume of trade; in practically all there has been a decline of exports, and a large re-export trade has been practically killed.
    Mr. REMER: What about the Silk Duties?
    Mr. SNOWDEN: I have already stated that it is in three out of four. I cannot, of course, deal with the matter to-night, but we shall have opportunities of dealing with it more fully. In all of them, however, without a single exception—
    Mr. CHURCHILL: Which is the fourth?
    Mr. SNOWDEN: It is a debatable point whether there has been a decline of employment in the lace industry or not. I would refer the Chancellor of the Exchequer to an important article published in the commercial supplement of the "Nottingham Guardian" about the beginning of this year, in which the figures of the lace trade were analysed. It appeared to me from those figures that there had been a decline in the volume of employment. I have been in communication with the writer and he is not able to give me any proof that that is the conclusion to be derived from examination of the figures. I did not include the lace industry when I said three out of four showed a decline in the volume of employment.
    Take agriculture. Every Tory Member of the House has been repeating in his platform speeches a remark I made last year, I think in a Debate dealing with farmers' Income Tax. I said the agricultural interest had always been re-
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    garded as the pampered darlings of the Tory party. Whatever amount of truth there may have been in that, I do not think it applies to-day, because 1 cannot imagine that there can be any agriculturists in the country who can be grateful to the Government for what they have done in the past two years. We had a White Paper issued, I suppose as a. counter blast to other land reform programmes which have been put forward, setting forth the Government's agricultural policy. One of the main points there was the granting of agricultural credits. That was promised in the King's Speech two years ago. Where is it now? There has been nothing done, and the Prime Minister told us yesterday that the Bills relating to agriculture which the Government were presenting would be very small in their nature. I suppose what they will amount to will be the granting of public money for draining the landlords' private land and thereby enhancing its value.
    Mr. DIXEY: Why not?
    Mr. SNOWDEN: There speaks a true Tory. Why not? Take education. There was a very definite pledge at the last Election that the staffing of our public schools was to be improved, and the size of the classes reduced. What have the Government done? I see not a single word in the speech about education. All they have done has been to issue a couple of circulars calling upon local education authorities to reduce their expenditure on education, and when those circulars met with universal hostility from all who are interested in education, they were withdrawn. But the Government took power to do the same thing in their Economy Bill of last year.
    Mr. CHURCHILL: The right hon. Gentleman ought not to omit the statement that we are providing a substantially larger sum for education than was provided under his administration.
    Mr. SNOWDEN: That is no new point and it has been answered a hundred times. It is not the expenditure which has been sanctioned by this Government, but it is the accumulation of reforms to which they were committed by their predecessors. In regard to food prices, what have they done? It is true that the Minister appointed a Royal Commission

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    which made certain recommendations. They asked for the appointment of a permanent, Food Council which would have real powers. The Prime Minister did not carry out the recommendation of the Committee. Instead, he appointed a dummy board, which has no power, no authority and has had no effect whatever. The price of food is as high or higher to-day than it was when the, Government took office two years ago. That is something of the redemption of the pledges of the Government. The Chancellor of the Exchequer made other pledges to-day. Who attaches the least importance to-day to any pledge which is made either by the Government collectively or by Ministers individually? My right hon. Friend the leader of the Opposition, yesterday, quoted pledges given in more definite language than I ever remember to have known in connection with any political pledge, in regard to the Factories Bill and the Franchise Bill. The Prime Minister never referred to the Franchise Bill in his speech yesterday. He spent most of his time, in dealing with that particular point of my right hon. Friend's speech, in talking about the Poor Law. He said that the Poor Law Bill raised so many important and delicate questions that it was impossible for the Government to prepare a Measure for submission to the House of Commons this Session. Oh! Is it not nearly two years since the Minister of Health submitted his draft proposals to the local authorities. The present Prime Minister, when we were in office, in criticising our Minister of Labour said that our schemes for dealing with unemployment were like the gestation of an elephant, which took about three years. Similes are a little like chickens—they conic home to roost.
    What about the Factories Bill? The Factories Bill has been in preparation during three successive Governments. It was found in draft when we took office. We made amendments to it. My right hon. Friend pointed out yesterday another pledge, possibly more binding and more definite, which was given by the Home Secretary, that the Bill would be dealt with this year. Why has that not been done? We all know why. It is not for want of time: it is because the Federation of British Industries and the Cham-
    252
    bers of Commerce have united in making representations to the Government and, as usual, the Government have surrendered to their masters. Take the Franchise Bill and what the Home Secretary said. The Prime Minister never said one word about the Franchise Bill yesterday. What did the Chancellor of the Exchequer say? I do not know whether he was speaking for himself alone, because the Chancellor of the Exchequer is not in all circumstances and in all conditions a respecter of the doctrine of Cabinet responsibility. The Chancellor of the Exchequer, this afternoon, indicated that this Bill may be introduced next year. That was not the pledge of the Home Secretary. A Committee was to be appointed, and it was to be appointed last year and a Bill introduced this year. Now we are to have a General Election, so I gather from the Chancellor of the Exchequer, in the beginning of 1929—
    Mr. CHURCHILL: I do not want the right hon. Gentleman to be misled by any statement made I y me having the slightest reference to the duration of the present Parliament. So far as the particular question is concerned, the question of the franchise for women, all I said was that this was one of the great difficult questions which would have to be dealt with by the House during the present Parliament.
    Mr. SNOWDEN: It has to be dealt with during the next Session. I never for a single moment wished to convey the impression that tin Chancellor of the Exchequer had said n definite terms that we were to have a General Election at the beginning of 1929. What I said was that in his remarks he confined himself entirely to the programme for next year, and from that it was natural to assume that he had no legislative programme beyond the programme for next year. But it would not he possible for the Government to redeem their pledge in regard to this franchise measure. If we are to have a General Election, it must come in 1929, either at the beginning or the end. I can believe anything of this Government. A Government which will remain in office now, conscious of the fact that they never had any right to be in office, and conscious of the fact that if the country could have its way they would be turned out to-morrow, a

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    Government which has so little regard for popular opinion, may very likely stay in office until the last day the Act will permit.
    I want to say a word or two about the Bill dealing with trade union matters. I am not going to argue this question. The point I want to raise is this, whether trade union law needs reform or not.—I am expressing no opinion at all about it—I can imagine no time more unsuited to deal with it. I can imagine no act on the part of the Government more provocative and one that will lead to more disastrous results, than the intention of the Government to raise this issue now. Does the Chancellor of the Exchequer remember what happened in 1906? He was in Parliament in 1906. Does he remember that we could put the whole of the Tory party in that Parliament on half the Labour benches? He does. With his gift of prophecy he had changed his party a year or two before 1906. I wonder if the right hon. Gentleman remembers what, was the main factor that contributed to the overwhelming defeat of the Tory party at that election and the return of a large Labour group for the first time. It was the Taff Vale decision, and it is the reversal of that decision which this Government are now going to revise. If we were concerned purely with the political interests of our party we should welcome the proposal. We shall not lose by it. There was an interjection made during the right hon. Gentleman's speech which I do not think he overheard or which he did not understand. I can tell him this. There are the serried hordes behind him. They will pass their Bill, but it will be a short-lived triumph. It will be repealed in the first Session of the next Parliament.
    My right hon. Friend the Leader of the Opposition said yesterday that he was in favour of industrial peace and I was pained to hear the ironical cheers which came from the benches opposite. It is that spirit and the spirit which showed itself in several other speeches made from that side which really explains the cause of industrial unrest. It is this antagonism and an antagonism which is largely based on distrust. I am convinced of this, that there is a widespread feeling, for which I think there is some foundation, among the working classes of
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    to-day that there is a conspiracy on the part of the employers to lower their wages and to lengthen their hours of labour. Whether that be true or not, does not matter so far as the effect of this proposed legislation is concerned, because its effect will be to confirm that suspicion and to make the working people believe that the Government are aiding the employers to deprive the trade unionists and workers of this country of their only protection, the essential weapon of defence, preparatory to a wholesale attack on their wages and their standard of life.
    That is why I think the Government are taking a mad course in proposing this legislation. Why cannot they listen to the sane and sober people in their ranks—men like the noble Lord the Member for South Nottingham (Lord H. Cavendish-Bentinck) who represents the best side of their party. [An HON. MEMBER: "Only one."] I should be sorry indeed to feel that he was the only man who can take a commonsense view of important national questions. The present Prime Minister came into office with great opportunities. For some reason or other he was believed to be an honest man, and as he himself said in reply to my right hon. Friend just before Christmas, there was a large number of members of his own party who were earnest in their desire for social reform. I believe they were, and they were looking to the present Prime Minister to carry out the policy of Disraeli and to make the Tory party into a Social Reform party. Those hopes have been dispelled. [HON. MEMBERS: "No!"] The prestige of the Prime Minister has been destroyed, and as every by-election has shown and as the three Labour, victories which will be won within the next few weeks will emphasise that is the opinion of the country too. From one point of view I would like the Government to continue in office, because the longer the day of judgment is delayed the more overwhelming will be the condemnation.
    In regard to the Trade Union Bill, the Chancellor of the Exchequer this afternoon indicated what, in his opinion, ought to be done in the way of trade union reform, as he called it. The general strike was to be declared illegal, and the question of the political levy was to be dealt with. He said he was

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    not outlining the Bill, but was expressing his own mind. It was a repetition of the right hon. Gentleman's speech in Manchester last week. He said just the same thing there. It was an attack on the political activities of trade unions. I shall watch carefully to see whether or not this appears in the Government's Bill. If It does not we shall know that the right hon. Gentleman has been, defeated in this harmonious Cabinet. I do not attribute these failures of which I have been speaking to a large measure of original sin possessed by Members of the Government. I rather attribute them to their incompetence and incapacity. I have seen seven or eight Governments sit upon those Benches, and I have never seen one as incompetent as this Government. When that Bench is full, I am reminded of two things. I am reminded of the right hon. Gentleman's description of ourselves as "Softies" and "Fat-
    256
    heads." I would never use such an expression about the right hon. Gentleman and his colleagues. I think it is sufficient to look at them. The other thought that comes to my mind is this—paraphrasing Dryden:
    "The things themselves are neither wonderful nor rare,
    The wonder is how the devil they got there."
    Motion made, and Question, "That the Debate be now adjourned" put, and agreed to.—[Major Sir George Hennessy.]
    Debate to be resumed to-morrow.

ADJOURNMENT.
Resolved "That this House do now adjourn.—[Major Sir George Hennessy.]
Adjourned accordingly at Two Minutes before Eleven o'Clock.

  SWINE FEVER, LINDSEY.
  SWINE FEVER, LINDSEY.
Preamble
The House met at a quarter before four of the clock, The EARL OF DONOUGHMORE on the Woolsack.
VISCOUNT SUMNER.
The Rt. Hon. John Andrew Baron Sumner, G.C.B., Lord of Appeal in Ordinary, having been created Viscount Sumner of Ibstone, in the County of Buckingham—Was (in the usual manner) introduced.

POOR LAW BILL. [H.L.]
VISCOUNT GAGE: My Lords, I beg leave to present a Bill to consolidate the enactments relating to the relief of the poor in England and Wales; and to move that it be read a first time.
Moved, That the Bill be now read 1a.—(Viscount Gage.)
On Question, Bill read 1a, and to be printed.

CHINA.
LORD PARMOOR LORD PARMOOR rose to ask His Majesty's Government whether they have any information to give the House on the position in China; and to move for Papers. The noble and learned Lord said: My Lords, I make no apology for rising to call your Lordships' attention to China, although I have twice done so recently, because the events as they stand at the present time raise matters of momentous gravity. Not only is it a matter of momentous gravity to have peace and conciliation, which I hope we shall have between this country and China, but unless peace is obtained—and I do not say this with any thought that it will not be obtained—it might affect over a large area the great interests of this country as between East and West. Our traditions and history show that no other country has taken so large a part in this wider sphere as Great Britain and I sincerely hope, as one who is zealous for the national honour, that in the future, as on some occasions in the past, we shall stand in the front rank in favour
48
of bringing about a better understanding between the civilisations of the East and West in order that they may influence one another and work together for their common benefit.
Peace with China is absolutely essential to the industrial prosperity of this country. I do not think that the noble Earl [the Earl of Balfour] or anyone else is likely to deny that premiss. The last time I addressed your Lordships on this question I gave statistics from lately published reports which showed the effects upon our trade even of uncertainty in the Chinese position. But no peace would be of avail unless it were not only a peace logically sound but also a peace which appeals to and evokes the good feeling of China. I remember that when the noble Earl spoke last he dwelt not only on the necessity of good will for China but also on the necessity of obtaining good will from China. In Lancashire particularly there would be widespread industrial disaster if our market in China were permanently either interfered with or curtailed. And whatever provisions may be indicated in His Majesty's gracious Speech for encouraging the prosperity of industry in this country, I think it is quite certain that there is no matter of greater importance than the maintenance and extension of our great foreign market in China, both for our general prosperity and in order to keep away as far as we possibly can what is undoubtedly the curse of unemployment in this country.
So far I am glad to know that, although temporarily there was some break in the negotiations that are being carried on by that eminent Counsellor of Legation, Mr. O'Malley, and Mr. Chen in Hankow, there has not been a permanent breach, and one question I would ask the noble Earl arises out of what was said in the House of Commons last night. If I understand rightly, already at the present time those negotiations have been resumed which we were told had so nearly been brought to a successful issue when they were broken off under conditions of which we know, and to which I propose shortly to refer. I admit I place great faith in the knowledge, tact, and skill both of Sir Miles Lampson and of Mr. O'Malley, and I think they have this great advantage—at least, one of them has; I am not quite sure about the history

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of the other, although he has always occupied a great position in the Foreign Office—one of them at any rate, from his own experience and the length of his residence in China, understands the mentality and the psychological outlook of the Chinese at the present time.
I want to say only a word or two on what is a very important topic, although it has already been largely discussed. I yield to no one in my desire that any British resident abroad should have a full measure of protection from the British Government. I think that that was emphasised by the Leader of the Opposition in another place last night, and it was certainly emphasised in language with which I entirely concur by my noble and learned friend Viscount Haldane. I hope that no prejudice will be raised on this subject if and when we criticise, if we have to criticise, the methods and means by which that protection is sought to be given. First of all, upon this point, I should like to read two passages from the speech made by the Foreign Secretary at Birmingham. He said:—
"I am far from saying or wishing you to think that the threat of bloodshed and massacre hangs over Shanghai. I hope and believe that it does not."
Therefore, apparently—I am only taking the words for what they mean, and I think rightly—he had no fear of any immediate massacre of British subjects or of bloodshed in what we know as the International Settlement at Shanghai. I may be wrong, but I understand that the object of the troops was to protect the International Settlement. The other Concession, the French Concession, I have not seen mentioned. As I shall have to point out presently in dealing with certain details, although our interest in the International Settlement is large there are other countries who also have a large interest in it, and between whom and us it would have been wise, I think, to have taken joint action, assuming there is any threatening of life or property in that Settlement.
I also agree with what the noble and learned Viscount said last night, that it was most unfortunate and unwise to send out the troops—I will not use the word expedition; that is said to be a term of prejudice—to send out the troops and ships in the manner and under the conditions under which they were sent. We
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have not to consider the effect of an act of this kind on English thought and English opinion, but we have to consider its effect on Chinese thought and Chinese opinion. I hear on all sides—I admit I have a good deal of information from the missionary side—that it is through the vernacular Press in China alone that Chinese opinion is informed upon matters of this kind, and that the Chinese take little or no notice of statements of intentions but turn their attention merely to actions and effects which in reality take place. Last night a very important Cabinet. Minute, I understand, was read in the other House by the Prime Minister. I was delighted personally when I read that Minute. As far as I understand it in summary it means this. It is no good reading through the whole Minute again, but the summary I propose to give is what I understand to be the true meaning of the Minute as a whole. It is this: that the troops will not be disembarked at Shanghai, will not in fact proceed beyond Hong-kong, unless and until the British representatives on the spot consider their actual presence in Shanghai necessary for the protection of life.
I understand that that, in substance, is the attitude taken by the Americans, who, of course, are interested in an International Settlement. I do not say they are interested just as we are but they are largely interested in it and they do not think it necessary either to send or despatch special troops to Shanghai. What they did was to despatch troops to a position within reach of Shanghai. I hope myself that the troops will never go beyond Hong Kong. I believe that would give the best chance in every way of true peace and conciliation and when the time comes and it is found that there is no threat to British citizens abroad or to their lives I hope that at the earliest possible moment the troops may be recalled altogether. I have put my view—I think I may say our view—which is quite clear on this question. I want to make it clear for this reason. It is obvious that prejudicial statements may be made on the basis that we are not sufficiently concerned with the lives and safety of British subjects. I do not believe there is a word of truth in an allegation of that kind. I think it would be cowardly on our part, although we know that such an allegation may be made, if we did not state our view that, it is unfortunate

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that the troops were sent as and when they started from this country, that we do rejoice (because it makes a great difference) that they are not for the present to go beyond Hong-kong, and that we hope in the cause of peace and conciliation it may soon be possible to recall them altogether.
I want next to say a word or two about the nature and quality of the disputes which have arisen between this country and the Cantonese—that is perhaps the most correct way of putting it—or between this country and China. In old days Concession Settlements and extraterritorial rights were all given for one cause—namely, to favour and encourage industrial intercourse between our country and China. I think the first of the Chinese Treaties which gave the extra-territorial rights was the one in 1842 or thereabouts, and an extension to a large number of other places and ports took place about the year 1857 or 1858. But since that time the whole outlook of the civilized world has altered in regard to these extra-territorial rights and rights which are claimed in Concessions and Settlements. At the present time, with the exception of Persia, I do not think there is any really independent country other than China where they still subsist. They were given up in Turkey as long ago as the end of last century; they were surrendered in Japan, although in the first instance the extra-territorial rights granted by Japan were not granted until the year 1858, after similar grants had been given from China to this country.
I want to say quite frankly and without any hesitation that in my view the Chinese or the Cantonese are fully justified in saying that the time has come when they are entitled as a sovereign independent people to have full jurisdiction over foreigners to whatever country they belong. I do not say that without bearing in mind—I have said the same thing before but I emphasise it now—that they are not justified in enunciating this right now and at once. There must be an interim time, there must be an interim arrangement, but the interim time and the interim arrangement ought to be adjusted on the basis that we recognise that their claim is just and ought to be allowed as soon as the conditions have been provided.
If I may refer to a saying of the late Marquess of Salisbury, I have read of his saying that there is no commoner error in politics than sticking to the carcases of dead policies. He had a great power of phraseology and was also a great peace-loving Foreign Minister. I want to know whether the present Government are sticking to the carcases of the dead policies of Concessions and extra-territorial rights, or whether they have dropped what was called by the late Marquess of Salisbury the commonest of political errors and have made up their minds that the time has come when a change ought to be sanctioned. Again, let me say quite frankly—I do not want to be misunderstood in a matter of this kind—that of course there must be an interim time and of course there must be an interim arrangement. No one can suggest that we can turn from one system to another in a single day and this is one of the reasons why, when I come to a later part of my speech, I shall suggest that a matter of this kind can only be settled after full consideration in a judicial atmosphere, or at any rate in a quiet atmosphere. That being so, and if the Cantonese or other Chinese interested were satisfied that we will concede their full rights as soon as interim arrangements can be made and sufficient time has passed, I think we should have gone a long way in the direction of arrangement and conciliation.
Only a day or two ago there was issued a very important document, the Report of the Commission on Extra-territoriality in China. It is a very full history but a very complicated one. I have read it through two or three times with what perhaps the noble Earl will call a meticulous legal mind. He does not like accuracy in the legal mind. But having read it through with what care I could two or three times I still find difficulty in appreciating all that is contained in this Report. There is, however, one matter which comes out quite clearly from it. The conditions to be settled are extremely difficult and complicated. There are various steps which have to be taken before you can arrive at a final conclusion. Amongst other things you have to consider the whole Chinese judicial system and whether it can be fairly trusted in these great commercial transactions. To a great extent

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that is true, but, of course, with reservations.
At the end of the Report the Chinese Commissioner who signed it said he disagreed with it. That is only, I suppose, the fashion of dealing with matters of this kind. He said this:
"A fundamental readjustment of China's relations with the Powers is therefore necessary for ensuring mutual confidence and understanding in the interests of all concerned."
I think that is perfectly true. I know that the noble Earl who is going to reply was much interested in the Washington Convention of 1921. This was a Commission appointed in accordance with the recommendation of that Conference. It has, so far as I know, only just reported. At any rate the Report was only published two or three days ago. Although there is an explanation that at some former time an incomplete Report has been issued, I at any rate never saw that incomplete Report, whenever it was issued.
There are one or two statistics in this Report which it is valuable that we should bear in mind. I am not going to trouble you with many, but there are one or two I should like to give as to the number of foreigners and foreign firms in China, because it is necessary to see what the international interest is when we are dealing with an International Settlement. The figures are on page 25. The first table gives the relative number of foreigners resident in China who have the benefit of extra-territorial rights. They eliminate some of the smaller countries, but taking the larger countries you have this result: of the five extraterritorial Powers specifically mentioned—Japan, Great Britain, America, Portugal and France—87·4 per cent. are Japanese (the larger part of whom are in Manchuria and probably not immediately so much interested), 6 per cent. are British, 3·8 per cent. are American, 1·4 per cent. are Portuguese and 1·2 per cent. are French. Therefore, as regards the international position in Shanghai it seems to me an unwise policy always to be putting forward the British to bear the brunt of what I may call the anti-foreign feeling there. It is particularly detrimental to our trade and we ought in these international matters to take our position with the rest.
Then I will quote the number of persons. I will only take two countries. There are 15,247 Britishers—that is in all the extra-territorial places—and 218,351 Japanese. As regards the number of firms, whereas we have 718, the Japanese have 4,708. Then Table II gives the population of the various nationalities which have no extra-territorial rights at all. There are two far ahead of any others. One country is Germany with 3,000 odd persons and 318 firms; the other is Russia with 79,000 odd persons and 932 firms. That shows two things. It shows, first of all, that those traders who have not the benefit of extra-territorial rights have not suffered. On the contrary we are told that Germany, whom we sought to deprive of these rights by way of penalty, has obtained an advantage. I am told again—my chief information on this subject comes from Sir Charles Addis, and I know of no better source except, of course, the sources that are open to the Government—that the amount of interference with foreigners has been comparatively small, though Hankow is a great exception, and that the foreigners who are not protected by extra-territorial rights have not only not suffered but have gained a considerable advantage. They are more popular and they appear to the Chinese to have assented to what they consider to be the true outcome of their new national consciousness, which, as we know, has expanded very largely since the period of the War.
I see that the noble Viscount, Lord Cecil of Chelwood, has this document before him. If he will look at page 101—and this is an important point—he will see that our rights in Shanghai and, in fact, throughout all the extra-territorial places to which we have access in China, are now regulated under the China Order in Council, 1925, made under the Foreign Jurisdiction Act, 1890, and the nature of the Code will be realised from the fact that it contains 236 articles. I mention that point for this reason. Although various countries have extra-territorial rights, they do not all exercise these rights under the same provisions. I think that the Act of 1890 enables us to make the same provisions as we should have been able to make in the case of conquest, and I am perfectly certain that

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anybody who takes the trouble to study the Order will be surprised to see how far it goes.
The next point upon which I want to say a word concerns Russia. I say quite frankly that I believe that the position and influence of Russia have been very much exaggerated. I do not know what information the Government has obtained but I hear from sources of a very trustworthy character—I will quote one or two in a rnoment—that the nature and temperament of a Chinaman do not tend in the direction of Bolshevism. I will give one authority, which I am sure everyone in your Lordships' House will agree is a great authority. The authority that I want to quote is that of Sir Charles Addis. Sir Charles Addis was, or is—I looked at his qualifications in Who's Who of a year or two ago—Chairman of the London Committee of the Hong-kong and Shanghai Bank, Director of the Peninsular and Oriental Steam Navigation Company, of the Eastern Telegraph Company, of the British and Chinese Corporation, and of the Chinese Central Railways; in fact, he is a business and commercial man who has had wider experience and, I should think, longer residence in the East than any other commercial man that I have had the advantage of coming across.
He was speaking the other night at a purely non-political meeting on China. He began his speech by reiterating the phrase that he had used before, and which I think was afterwards used by the noble Earl, and referred to patient conciliation. What does he say about Russia? This is not my statement, which of course would carry no weight, but that of Sir Charles Addis, who said:
"If every Russian in China were thrown into the Yellow Sea it would not affect the national movement, which exists as part of a great world movement."
This is the opinion of a man who, beyond all others, has a knowledge of China, and especially of commercial matters in China. He says that if the Bolsheviks were all thrown into the Yellow Sea it would not affect the national movement in China, which depends on other considerations. I should like to add that I think that this view is strongly confirmed by the fact that the nature, outlook and character of the Chinese is not in any
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respect Bolshevist, which I suppose ought to be a delight to all noble Lords on the other side. I am certainly not a Bolshevik myself, and I do not believe that any mass of Chinamen are.
I have also had an opportunity of obtaining the views of the Principal of Haverford college who had been for some mouths in China. He is an American whom I knew very well. I need not mention his name, but he is a well-known literary man and was on his way back to New York. I understand that he had gone to China in order to obtain information for the American Government. He ridiculed the notion that the Bolsheviks were influencing the Chinese in any sense or altering their anti-Bolshevist attitude, which is of the essence of their national character. I read exactly the same view the other day in a document from a well-known missionary, who, he tells me, has sent the document to an official of the Foreign Office whom he well knows, again ridiculing this view. Whatever the difficulties might be, he said that they did not arise from Russian influence.
I should like at this point to give just two quotations from the Christian missionaries. I regard the Christians and missionaries in China as essential factors in promoting peace and conciliation, and I entirely join issue with the statement, made by one who is no doubt a great Western trading magnate, criticising what they have done. I believe that they have been a great and beneficent factor in promoting peace and conciliation. I will read one paragraph from the latest statement of the National Christian Council of China on international relations. This Council does not consist entirely of British, but largely of Chinese. It is an international body, and this is the statement:—
"The Christian Church and Christian missions should preach the gospel and perform Christian services in China upon the basis of religious liberty freely accorded by the Republic of China and all provisions in the Treaties with foreign countries for special privileges for the Churches or missions should be removed."
That has been their attitude throughout, but that was a considered resolution after a series of conferences, and everyone will sympathise and think they have done right because they feel it is in accordance with what I may call the Christian spirit in China.
In the same way I have here one other extract from a conference of Chinese and foreign Christians in Shanghai itself on January 12. They say:—
"This is the Revolution of the people's mind. It has excesses—every revolution has—and no one can as yet gauge them against the permanent gains, but we beg of you to have, as much as in you lies, patience and faith in this tremendous change, in which we, with all our hearts and minds, believe."
That is the message they sent home. I know there is a tendency nowadays to consider any one who appeals to the Christian spirit in practice as an idealist. I regard that as a great compliment; I do not think anything is done without idealism. At the same time when you come to practical action you have to consider the practical method and the best way of proceeding.
There is one other point which I desire to make. If conciliation and patience fail, what is the best thing to do? I am, as I have stated, one who does not believe in the use of force or coercion antagonistic to the Chinese feeling and the Chinese spirit. In the King's Speech there is a reference which I cordially welcome to the League of Nations. I will quote something which was said by the noble Viscount in a moment, but I often wonder why this side of the question has not been further developed. Your Lordships are aware that the matters to which I am now going to refer are not matters of choice but obligations, Treaty obligations, which we have undertaken. I remember that when I was at Geneva some question was raised as to whether Great Britain could be trusted to fulfil all her obligations to the League. I refused to discuss the question at all. I said that of course we would. I would not allow even the suggestion that we would not carry out the Treaty obligations which we had undertaken. I wish to emphasise the fact that these are Treaty obligations. I have not got their exact text here, but I think I can quote accurately, and if I do not I shall be easily corrected. The obligation is this. Members of the League—and China and ourselves are Members of the League—agree to refer matters likely to lead to dispute either to arbitration (because there is no compulsion as regards arbitration) or to the League Council for report and inquiry.
Now there is not the slightest doubt—at least I do not think there is—that, if conditions in China were normal, this matter must, as a matter of obligation, have gone to the League for decision. It is not a matter of choice nor a question of whether we like the League or not. There is the obligation and we should be unable to escape it. That has been pointed out more than once and with great force by the noble Earl. He said that matters of this kind would be all very well if you had a centralised Government, but the conditions in China did not allow of the operation of obligations of this character at the present time. I want to answer that question in two ways. First of all I want to say that, so far as Geneva is concerned, China has been recognised as a Member by the accredited machinery, her delegate has been accepted, and she has become a Member. In those circumstances, not only are we entitled to refer the matter to the League, but we are under an obligation to do so and it is quite clear, to my mind, that there would be no technical reason whatever which would prevent the whole matter being thoroughly discussed under those conditions.
But it is not necessary for me to rely upon that method. I am one of those who desire in matters of this kind to find means of conciliation. A short time ago I did make a suggestion that the powers of the League had not been adequately considered. Shortly after that the noble Viscount, Lord Cecil, made a speech in reply, and I have here a verbatim copy of what he said. Let me read this to the House in order to show what weight ought to be given to an opinion of his. He said, talking of the proposal I made—
"No one would desire more than I that the troubles in China should be removed to the calm and judicial atmosphere of the League of Nations, but the only hope of bringing the matter before the League would be if the Cantonese were to desire it. In that case, whether the Cantonese represented a Government or not, the British Government would be only too glad to get the matter transferred to an atmosphere where a real settlement might be arrived at."
I do not think it is only the British Government. Everyone, who cares for League policy and for peace, would be only too glad if a matter of this kind, instead of raising friction and trouble,

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a technical matter, a matter of detail which requires careful adjustment, should be referred to an atmosphere where a real settlement might be arrived at. The condition which he mentioned is the assent of the Cantonese. I have given my reasons for thinking there is an alternative method. I do not care about that. I want to take his own statement and I will ask the noble Earl this. Have any steps been taken to ascertain whether the Cantonese are willing that this matter should go—
THE LORD PRESIDENT OF THE COUNCIL (THE EARL OF BALFOUR): Would the noble Lord tell me exactly what matter he means?
LORD PARMOOR: The matter in dispute.
THE EARL OF BALFOUR: What is that?
LORD PARMOOR: The matter in dispute as regards Settlements, Concessions, extra-territorial rights—
THE EARL OF BALFOUR: Those are not in dispute.
LORD PARMOOR: All those matters outstanding that are not settled. Of course if they are not settled conciliation is better than nothing. No one will suggest that the League of Nations should not support conciliation. Supposing you were to ask the Cantonese whether they are willing that all these difficulties should be settled? That is the question. Let me read again part of the quotation I have given:—
"In that case, whether the Cantonese represented a Government or not"—
that is taking away the difficulty with regard to a centralised Government—
"the British Government would be only too glad to get the matter transferred to an atmosphere where a real settlement might be arrived at."
Everyone would desire that. I am not going into any technical questions; I do not desire to do so. We all want a real settlement, and we all want it in what the noble Viscount refers to as the quiet and judicial atmosphere of the League at Geneva. It may be that the Cantonese will say "No," but at any rate we shall put ourselves in the right by making the suggestion.
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The only other suggestion made against going to the League—I think it was made here by the noble Viscount, Lord Grey of Fallodon—was that there would be some difficulty from Russia. No difficulty could arise in that way at all. It would be a monstrous proposition if, in addition to all the other evils attributed to Russia, she should have the power of preventing settlement by the League of a matter of this kind, if otherwise it can be sent for settlement to Geneva. I do not think any one who knows anything of League procedure or League methods can entertain that suggestion for a moment. Those are the questions which I wanted to ask, and that is what I wanted to say.
It comes to this. We must have peace and conciliation. It is ruin for a great industrial country like ours not to have free and fair access to the Chinese markets. The matters in question are matters capable of settlement. These extra-territorial rights, how far they should be maintained, how far they should be given up, are necessarily matters of detailed consideration and detailed settlement, and if we start, as I hope we do, from the point of view that fundamentally the Chinese claim is just, although you would spread the adjustment over a period of time, I sincerely hope that agreement may be made, but if it cannot be made the matter should be sent to the quiet and judicial atmosphere of Geneva. I beg to move for Papers.
THE EARL OF BALFOUR: My Lords, I must begin by congratulating the noble and learned Lord who has just sat down upon the fact that neither he in this House, nor the Leader of the Opposition in this House, nor, as I understand, the Leader of his Party in the other House, has given the least encouragement to the preposterous notion that our despatch of troops to the Far East, whether wise or unwise, whether mistaken or not mistaken, had anything to do with some crazy scheme of Imperialism or of territorial conquest in that country. That is only what I should have expected of them. With all their criticism of His Majesty's Government, they have abstained from the extremer follies which have been exhibited in certain parts of the country.
Of course the very idea is absurd. There never was the least foundation for it. There never was the least suggestion

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that the Government contemplated it. No sane man ever thought that an aggressive policy in China could be, or would be, carried out by any Government in this country, whatever the complexion of that Government's politics might be. No sane man ever supposed that the sort of force we have sent out to China, even if it was under the directions of a most insane and most unscrupulous Government at home, was the kind of force that could ever effect the sort of military operations a disordered vision of which has been dangled before—I will not say the deluded people, because I think our people never were deluded—but before a public which it was hoped would be sympathetic to these attacks.
I am not surprised but very glad that no responsible statesman in this House or anywhere else has given any countenance to these preposterous notions. But the Opposition have done what they are perfectly entitled to do, and the noble Lord has done what he is perfectly entitled to do, which is to explain that however little the Government were open to the charge of being criminal lunatics, they nevertheless had not shown the degree of wisdom which he had hoped and apparently still hopes we shall be able to show to his satisfaction. I do not think the exact position has really been made clear by the noble Lord to the House, and I am not quite sure that he thoroughly appreciated it himself. If noble Lords want really to understand exactly how the Eastern position stands at the present time, and how the difficulties have arisen with which we, and not we alone but the Chinese and fourteen or fifteen other Powers, are now struggling in China, they must go back to the Washington Conference and the events which have succeeded that Conference.
I was really surprised at the various insinuations or suggestions made by the noble Lord, in which he appears to think that we have been backward in our desire to bring our Treaty arrangements with China up to a modern standard. He is entirely mistaken, and the whole history of the Washington Conference is there to show that he is entirely mistaken. In the Washington Conference, with the full assent of the Chinese Government—for then there was a Chinese Government,
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which there is not now—arrangements were made for dealing by negotiation and by Treaty with the chief grievances which the Chinese felt. There was great sympathy shown with China by all the Powers, and not least by this country, of which it so happened that I was at the time the representative in Washington. We made no secret of our desire to treat China as a State belonging to the modern world, and not to the world of fifty or sixty years ago. We made no secret of our desire to modify the Treaties under which the amount of Customs Duties was limited. We made no secret of our desire to modify the extra-territoriality and to bring that, again up to date.
There was unanimity on these points, but what prevented that unanimity coming to a fruitful and successful result? The Treaty of Washington contained a provision, a natural and proper provision, that it should take effect within six months, I think, of the ratification of the Treaty. Unfortunately the Treaty was not ratified for a much longer period than anybody at the time when it was made for a moment thought, was possible. The British Government was not responsible for this delay, but when you are dealing with fifteen or sixteen Powers causes of delay are very apt to arise and are very difficult to get over with rapidity. Delay did occur, a most unfortunate delay as it turns out, so that when the Treaty was ratified, and when the Powers were prepared to deal with the situation contemplated at Washington, the Chinese Government was in process of dissolution, and long before any decision was arrived at by the assembled Powers the Chinese Government had altogether vanished. There was no central Chinese Government, there was no single authority with whom we could deal, just as there is now no single authority with which the League of Nations, however well intentioned, could deal.
That was a situation sufficiently difficult in itself, but it was complicated, and most seriously complicated, by the fact that not only had the Chinese Government, the central authoritative Chinese Government, vanished altogether from the scene, but that—I was going to say its place had been taken but that would be an inaccurate phrase—but that

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all that appeared in its place was six independent Generals, War Lords, each with his own following, each animated by his own separate motives and not any of them, so far as I can discover, animated by any single political or national difference, and at all events sufficiently divided to be fighting with each other, collecting their troops independently, pursuing a wholly independent policy, and offering no single body with whom it was possible for any foreign Power to negotiate. You could negotiate with this General, in which case you probably infuriated the other General, but you could not find any central authority of any sort with whom to negotiate.
That was a very great political difficulty. It was complicated by the fact that this political difficulty was associated with disorders, with danger to foreigners, with an agitation against the whole foreign community, with a special agitation directed against this country, without the smallest ground or reason; and the inter-action of all these causes—the inter-action of the fact that there was no central Government, that the government was divided among these six independent Generals, and that there was no possibility of negotiating with any single unity at all, and that if you negotiated with one you quarrelled with another—produced a situation with which I do not believe that any British Foreign Minister has ever been face to face before. I do not believe the Foreign Secretary of this country has ever had to deal with a situation so complicated, so difficult, and so totally without precedent, as far as I am aware, in history.
You might say that the proper way to deal with that was to exercise the long patience which is very desirable in many walks of life, and probably is never more desirable than when you are dealing with an Oriental nation of the temperament of the Chinese. I am quite sure the Government would have been only too delighted to exercise all the patience possible if the interests for which we were immediately responsible had not been threatened—I am putting it too mildly—had not been attacked, if we had not had brought before us in the most unmistakable way that we were face to face not merely with a diplomatic difficulty of unprecedented character and of almost impossible complexity, but with what was
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much more directly our immediate duty, which was to protect as far as possible the lives and the property of our own citizens.
Now, what is the complaint made by noble Lords opposite and by hon. gentlemen in another place? That we have been indiscreet, reckless, and wholly ill-advised in sending out a defensive force to the Far East. Very strong language has been used about that proceeding by some. The noble Lord opposite, I think, has been very moderate in his language, and has not accused us of crime, but only of folly. We are grateful for the nuance. But what course would noble Lords opposite have pursued had they been in power? Here you have at Shanghai an immense community, a community so large that I am informed that the idea of removing it from the sphere of danger, as we have had unfortunately to remove large numbers of our fellow-citizens in more remote parts of China, is wholly out of the question; so that if that idea had been pursued the result would have been that the persons removed from Shanghai would have been removed from any danger to life and limb, but they would probably have seen vast pecuniary interests, which had been lawfully built up under Treaty generation after generation, to which they had an absolute right under International Law—we should have seen all those things subject to the looting of a mob, or the more systematic robbery of getter constituted authorities, and we should have been completely helpless, not because we should have been lacking in good will but because our troops would have been thousands of miles away.
The only possible course to avoid that danger, if it was a danger—I will come to that in a moment—was to send troops to the Far East, and that we decided to do What the troops when they reached within a relatively small distance of the scene of danger should do we felt should be left to those on the spot, who could judge far better than we could what the danger was and how that danger must best be parried. Our main duty was to get the troops within reach of the possible scene of disaster in the interest, I think, of China itself and of the fifteen other Powers, but certainly in our own interests, which we were bound to safeguard.

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It is quite true that noble Lords may say this is provocative, this is likely to result in the very kind of danger you wish to avoid. Do not suppose that I think I know enough about China to assert for one moment that no such danger exists. When you are dealing with chaos accepted laws have no effect; you cannot argue from precedent; risks must be taken. One authority says; "You had much better not have sent troops, because you will raise dangers which otherwise would have lain quiescent," and that authority may be right. A second authority says: "Remember the danger that you fear may come upon you at the shortest notice and unless you have troops available at the shortest notice you may see yourselves and those for whom you are responsible suffer incalculable and irreparable wrong."
Perhaps it may be asked, on the other side: But why do you suppose that there is any danger to Shanghai? Why do you think that these six Chinese Generals will not consent to fight out their quarrels, whatever those quarrels may be, without interfering with foreigners? I should have been myself very glad to think that there was any possibility of foreign interests remaining untouched. But we had Hankow before us. What was the situation in Hankow? The situation there was as at Shanghai. There was a great British trading community—not nearly so great as at Shanghai, I admit, but very important—there by right, there to the advantage of China, I believe, as well as of themselves, carrying on legitimate trade under Treaty for the mutual benefit of the East and the West, doing no harm to anybody, threatening no Chinese institutions, not a menace to any single Chinese individual, but a benefit, and wholly a benefit. Hankow comes within the sphere of the Southern Government—the Canton Government. They had an Army there, It was their duty—a duty which I do not think they have ever denied, but at any rate whether they denied it or not it is quite clear it was their duty—dealing with matters within their area, to prevent an assault by a violent mob upon the British Concession. The British Concession was saved from absolute disaster by the courage and by the self-control and the moderation of the sailors who had been landed to defend it.
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Those who are best informed hold the opinion that that attack was not a wholly spontaneous ebullition on the part of a mob, but that it was engineered in obedience to a wider and more sinister design by those who were carrying on, avowedly, openly, cynically carrying on, the most violent propaganda against Britain. The Canton Government had troops within reach. Those troops could have stopped that attack. They did not stop it and, against overwhelming forces and to avoid disasters even greater than those which occurred, the British authorities removed all the women and children from our Hankow Residency and the men were, if I remember rightly, packed in a building that was more or less defensible. Some of the best observers of Chinese affairs tell us that if the resistance of the British had been carried further, if firing had taken place, firing against a mob of overwhelming numbers which had, I will not say the support, but the sympathy of the troops belonging to the Southern Government, who were looking on—if firing had taken place the Residency and the Concession would have been swept from end to end and incalculable damage, horrible disaster would have fallen upon the British community.
I hope I have not exaggerated what happened at Hankow. I believe I have stated it with accuracy and I trust, with moderation. With that example before us were we justified in sending no troops within protective distance, as I may call it, of Shanghai? I believe that in those circumstances, had any disaster occurred at Shanghai at all comparable with that which did occur at Hankow under the same inspiration and carried out by the same people, we should have stood not merely before our countrymen of the present time but before the bar of history as having been grossly neglectful of the most obvious duties that fall upon a Government.
We took the course we did quite conscious that when you are dealing with a country in the chaotic condition of China, with no responsible Government, divided, as I have said, among these various War Lords, who themselves are divided by mutual jealousies—when you are dealing with a community like that there are always objections to any course you may take in such circumstances You are not dealing with plain and simple

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issues. It is always possible to say: "Well, had you not better take a little more risk by not sending troops or take a different kind of risk? Would it not have been better to do this than to do that?" I think in those difficulties you are bound to take the plain and simple course of duty. You cannot finesse. You can so subtly balance opposing arguments that you finally end by doing nothing. We were bound to act and I do not see how we could have acted with less provocation to China. I do not see how we could have acted more obviously in good faith than we did. What the future may be I know not, but I do say that we have done our best, facing the difficulties, facing the dangers and believing, however inconvenient it may be and however anxiously we may look to the future, that we could have done no less and been worthy of the responsibilities with which we have been entrusted by the Country.
The difficulty of the situation, as I hope I have explained to your Lordships, is that we have this extraordinary combination of chaos within the country and the attempt to carry out a very complicated series of diplomatic transactions which are intended to, and I hope ultimately will, relieve China of burdens or of provisions of which we all wish to relieve her. Some people might think that, though we were amply justified in saying, as we did say at Washington, that our wish is to negotiate with China for the revision of the Treaties, so long as China does not exist as a single State, so long as this chaos lasts we must put all this series of reforms on one side and leave commercial relations between ourselves and China untouched. I think there would have been an excuse for taking that course, an ample excuse for taking that course, but it was not the course we took. So anxious were His Majesty's Government to proceed as far as possible with the Washington policy that we have been, as everybody knows, negotiating to make changes in the Treaty system on the most generous terms.
The noble Lord who initiated this debate certainly never suggested that the proposals that have been made in public by the British Government were otherwise than generous, nor that the unilateral arrangements which are the only ones we can carry out by ourselves
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were not framed on the most generous scale. I do not know that we have received much gratitude from the Southern, the Cantonese Government. So far as my recollection serves the most obvious result of our offer was that the Cantonese said: "Well, but this offer will benefit the War Lord in the North. It will give him money. It will give us, the Cantonese, money, of course, but it will also give General Chang money. We strongly object to any justice for China which gives money to General Chang." That is what it came to and that is their attitude at this moment. How can you deal broadly and generally with a State in that condition? We still mean to do it. We are not deflected from our policy. We are most anxious to come to an equitable arrangement with any part of China with which we can have dealings. But do not suppose that it is an easy task when the different parts of China object to the benefits which they ask for themselves being given to the others. Among the many difficulties with which the Foreign Secretary has to deal surely that is not the least. No reference was made to that condition of things by the noble Lord opposite. He has not touched upon it at all.
LORD PARMOOR: What I did say was that the noble Earl had expressed those difficulties in a former speech. I was not questioning them and I did not think it was necessary to go into them.
THE EARL OF BALFOUR: I do not quarrel with the noble Lord for not having replied to a speech which I made to your Lordships some months ago.
LORD PARMOOR: I did not reply to it. I assented to it.
THE EARL OF BALFOUR: The noble Lord did not survey this situation. What I complain of is that he did not seem to see what the difficulties were, what the inevitable difficulties were, difficulties not due to our creation, not due to any single action of the Government from 1921 when the Washington Conference opened down to the moment at which I am speaking. Throughout that period, without wavering and without failing, successive Governments—certainly any Government with which I have been connected and I believe the Government with which noble Lords

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opposite were connected—have been most anxious to carry out the spirit of the Washington Conference, and at this moment we still desire and are still actively engaged in trying to carry out such unilateral arrangements as can be made without a regular revision of Treaties.
I do not think I am really qualified to deal with that part of the noble Lord's speech in which he discussed the relations of Russia to Chinese events. He spent a good deal of time—I do not think he misspent it—in saying that the Chinese were fundamentally anti-Bolshevist and that there was nothing in the Chinese temperament, character, history or institutions which suggested for a moment that they would adopt any of the political and economic adventures in which the Bolshevist Government indulge. He argued from that that the Bolsheviks had nothing to do—or nothing, so far as we are concerned, that matters—with our difficulties in China. I do not think, whether his premises are true or not, that his conclusion follows from them. I am rather inclined myself—though I do not rate my own opinion on the subject very highly—to think that the noble Lord was right when he said that whatever may happen to China you never will have a Soviet Republic there. I think he is probably correct. But that does not mean that the Cantonese Government, or some War Lord who thinks be can get advantage out of Russia, will not take advantage of any help which either Russian military advice, Russian diplomatic advice, Russian money, or the supply of Russian arms will give him. I am not at all sure that even a War Lord in China may not have something to learn in regard to methods of propaganda which he had not fully grasped before. At all events I think I see signs in a good deal that goes on in China of a skilful manipulation of mob violence which may not perhaps be wholly of Chinese origin. So that I am not at all moved by the noble Lord's view that China is not going to be a collection of Soviet Republics.
I put that on one side and I come to the last part of the noble Lord's speech. I think I have dealt with all the rest of it. I come to the last part of the noble Lord's speech in which he advises us to bring in the League of Nations in connection with all these Chinese difficulties. I need
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hardly tell your Lordships that on this Bench we are as anxious as any people can be to use the League of Nations for all it is worth in smoothing international difficulties. My noble friend near me and I have been even more intimately connected, or at any rate connected for a longer period, with the League of Nations than the noble Lord opposite who spoke with authority as having been himself at Geneva. This House may rest assured that the Government will lose no opportunity in any circumstances of bringing in the League of Nations to deal with any international difficulty which presents itself to them or to any of their friends and Allies. The noble Lord quoted an Article from the Constitution of the League of Nations, but I did not quite clearly make out what were the questions that he thought could be brought before the League.
LORD PARMOOR: I thought I explained that. I referred to the matters in dispute, but what I read was a statement of Viscount Cecil of Chelwood. I had not the Constitution of the League of Nations by me, and I read nothing from it.
THE EARL OF BALFOUR: I should so much like to know what the questions are that are in dispute. The dispute if I made my meaning clear to your Lordships, belongs to the other branch of the obligations that meet us in the East, to the branch that simply concerns the preserving of the rights and lives and property of our own fellow subjects. I put that altogether on one side. There is no quarrel about that with which the League of Nations either could or would deal. What other quarrel is there? There is, no doubt, a good deal of discussion about the Treaties to which reference is so constantly and so properly made in these debates. But we are in the very forefront of those who wish to revise those Treaties. This country, if I may say so, has been demanding the revision of those Treaties. There can be no controversy on the broad principle between us and any Party in China. The only controversy that has so far arisen between us and any Party in China, as I have reminded your Lordships, is due to the fact that the South does not wish the privileges that we are ready to give to it to be extended to the North. I do not suppose that this is a

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question that the noble Lord would desire to be brought before the League of Nations, and I should think that, if it were, the League of Nations would make short work of it.
Do not let it be supposed that we are not anxious to do everything that we can do to make the League of Nations acquainted with the case and, if they have any advice to offer us, to find out what it is and to take our part in any work of pacification that the League of Nations may take in hand. We have actually sent off a document which I have in my hand. It is dated yesterday. I have not had time to consult, with the Foreign Secretary, but I have not the least doubt that it will be made public immediately.
LORD PARMOOR: It has not been made public yet?
THE CHANCELLOR OF THE DUCHY OF LANCASTER (VISCOUNT CECIL OF CHELWOOD): It is dated only yesterday.
THE EARL OF BALFOUR: It is a document sent to Sir Eric Drummond, Secretary of the League of Nations, and I may perhaps read the last sentence. Two pages are occupied in explaining the situation. I have not read them in their last form, and I know only the general principles. My noble friend put the document into my hand just now. It is the last sentence that perhaps the House will allow me to read. It runs:—
"In any case His Majesty's Government have felt it right to make this communication to the League of Nations—"
that is, a communication as to the general situation—
"so that its members may have before them a full statement of His Majesty's Government's policy in China and may understand how completely it is in accord both with the letter and the spirit of the Covenant. His Majesty's Government deeply regret that there does not appear to be any way in which the assistance of the League in the settlement of the difficulties in China can be sought at present. But, if any opportunity should arise of invoking the good offices of the League, His Majesty's Government will gladly avail themselves of it."
I hope that this extract, which represents the spirit of the document, though of course there is much in the document besides that declaration of the policy of
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His Majesty's Government, will satisfy even so ardent a supporter of the work of the League as the noble and learned Lord to whom I have been replying. I do not recall any point that he raised with which I have not to the best of my ability attempted to deal, and I hope that your Lordships will endorse the policy of His Majesty's Government by a unanimous vote on this occasion.
THE MARQUESS OF READING: My Lords, I intervene in this debate only for a few moments, and mainly because I think it undesirable that it should come to an end without an expression of opinion from the Party to which I belong and, if your Lordships will permit me to add, the opinion I personally hold, having regard to the advantages of experience I have had in the East. I am sure that your Lordships will be grateful to the noble Earl for the explanation he has now given and for the exposition of the policy of His Majesty's Government. I desire to say for myself, and I believe I speak also with the full support of the members of my Party, that I give uncompromising and unhesitating support to what the noble Earl has said. I cannot conceive that there should be any Party division of opinion on this subject, or that any different views should be held by my noble friends on the Front Opposition Bench. I had not the advantage of hearing the beginning of my noble and learned friend's speech in initiating the debate, and accordingly I cannot deal with his points save as I have gathered them from the answers that were given by the noble Earl.
I felt some satisfaction in answering a question I put to myself as the noble Earl proceeded with his speech, because I found myself in agreement with him upon all points and I wondered whether it was the charm of the exposition, the felicity of the argument, that had brought me to my conclusions. I am glad to say that I had no doubt as to the answer, because I came to the House this afternoon with the intention of giving the support I have just expressed; but it is nevertheless a satisfaction to have the benefit of the knowledge, derived from special sources not open to us all, and also of the accumulated wisdom and ripe experience

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of the noble Earl in matters of this character. I confess that, looking at the problems that have confronted the Government, I have asked myself many times, not only during the last months but far earlier, indeed for years, what, attitude His Majesty's Government could take, and I doubt very much whether there is any one of your Lordships who could have suggested any action other than that which has been taken for the purpose of protecting the lives and property of British subjects at Shanghai and, may it also be added, not only for the protection of British lives, for the action taken by His Majesty's Government has set an example which other nations may perhaps be slow to follow but of which they will be very quick to avail themselves in the hour of need.
Nothing impressed me more than the noble Earl's observation that the troops have been sent within a protective distance of Shanghai and that the use to be made of them must be determined in the main—not entirely, no doubt—by the man on the spot. No truer word has been uttered in this connection. It is easy to sit at home and criticise. It is not difficult to express philosophic doubts, but for the man on the spot it is a very grave matter. If the need comes, and he knows not at what moment it may come—it may come like a thief in the night, it may come by some sudden explosion of temper—and he is called upon to face a situation which I shall not describe but which your Lordships can very easily picture, it is only if the man on the spot knows that he has forces he can use at the time for the purpose of protection that he can feel reasonably secure in his mind and in his judgment.
A man on the spot could never sleep at Might in a situation such as he might see at Shanghai after what had taken place at Hankow unless he knew he could depend on His Majesty's Government, no matter of what Party it might be composed. No other Government could have taken a different action. It might have been a little slower or it might have been a little quicker. There was no other possible action to be, taken than that of taking steps to protect the lives and property of our own people in Shanghai. It does not need elaboration in detail to explain to your Lordships what Shanghai really means, a place far more important
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and of course for more exposed than Hankow, because of the greater number of European inhabitants and of the far greater accumulation of property. If I might be permitted to add one word it would be of admiration for the restraint exercised at a time of great provocation and by men from whom perhaps one might not quite so readily have expected it. It was a position of great danger if they had taken a step which would have been a, natural step, but they did not, with the result that the situation was to some extent saved.
There is nothing which has fallen from the noble Earl but has my whole-hearted acceptance. I am glad that, whatever divisions there may be between us on home affairs, natural divisions arising from different views and perhaps even from different methods of education and of thought, there is no division, fortunately, on a subject of this character. No fault can be found, or could be found by the roost captious critic, in my opinion, in the observations which fell from the noble Earl to-day. He spoke, if I may be permitted to say so, in terms of great restraint and has explained to us the decision of the British Government, which I whole-heartedly believe will have the support of the whole country.
LORD PARMOOR: My Lords, it is quite obvious that the noble Marquess was not here throughout the debate. If he had been I am sure he could not have misinterpreted as he did. In answer to the noble Earl I only wish to refer to two matters. I recognise his courtesy and acknowledge the information he has given. I understood, however, and I would like to know if I was under a misapprehension, that it was not until the Minute was read by the Prime Minister in the other House that the determination had been come to that the troops were only to be within a protective distance and not to go to Shanghai itself. As to the other point let me say this. If we have taken the attitude towards the League of Nations and the Council which he is now suggesting—and I think assistance of the most valuable kind can be had from that quarter—a great deal at any rate of my criticism would never have been necessary at all. My view was that it ought to have been done long ago.
THE EARL OF BALFOUR: The view of His Majesty's Government about the protective force is that having gone to the Far East it should be under the authority of the man or the Admiral on the spot. For anything I know to the contrary it may have gone on to Shanghai already; there is a rumour to that effect.
LORD PARMOOR: I do not take any objection to the responsibility of the person in charge. I do not see how else you can deal with it, but what I understood was that, so far as the Government were concerned, the place which they contemplated as the terminus for the troops was Shanghai in the first instance. What I think they have most rightly done is that, instead of sending them to Shanghai, they have now determined that in the first instance they should go to Hong-kong, subject of course to the responsibility of the Generals and commanders on the spot. I entirely agree that it is impossible to put the immediate responsibility in any other hands than those of the man on the spot. I am much obliged for the answer the noble Earl has given and I do not feel it necessary to ask for Papers.
Motion, by leave, withdrawn.

CONSOLIDATION BILLS.
LORD MUIR MACKENZIE: My Lords, I beg to move the Motion which stands
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on the Paper in my name. It is in common form and is so moved in various Sessions. I think that the work done by the Committee on Consolidation Bills has been recognised to be of great value.
Moved to resolve, That it is desirable that all Consolidation Bills in the present Session be referred to a Joint Committee of both Houses of Parliament.—(Lord Muir Mackenzie.)
On Question, Motion agreed to.
Ordered, That a Message be sent to the Commons to communicate this Resolution, and to desire their concurrence.

BUSINESS OF THE HOUSE.
THE LORD PRIVY SEAL (THE MARQUESS OF SALISBURY): My Lords, I understand that there is no business upon the Paper for to-morrow and therefore I shall not venture to suggest that your Lordships should meet then, but there is business for Tuesday. It does not appear on the Paper yet, but it will appear. In those circumstances I beg to move that the House do now adjourn, except for Judicial Business, until Tuesday.
Moved accordingly, and, on Question, Motion agreed to.
House adjourned at ten minutes before six o'clock.