Sitting of 26 May 1927

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

PRIVATE BUSINESS.
Stoke-on-Trent Corporation (Gas) Bill,
Lords Amendments considered, and agreed to.

NEW WRIT.
For the County of Wilts (Westbury Division), in the room of Captain WALTER WILLIAM SHAW, deceased,—[Colonel Gibbs.]
ORAL ANSWERS TO QUESTIONS.
  NAVAL AND MILITARY PENSIONS AND GRANTS.

    FINAL AWARDS.
    Major COHENasked the Minister of Pensions whether he will inform the House as to the number of final awards reviewed under the correction of errors scheme (Circular 30) from the 1st January to 30th April, 1927; and the number of such cases that have resulted in increased assessment of pension?
    The MINISTER of PENSIONS (Major Tryon): Records are not kept in precise monthly periods, but approximately 600 cases were dealt with by way of further grants under special sanction during the period referred to. Of these, however, not more than half are additional to the figures which I give to the hon. Member of the Elland Division in my reply of 22nd March, of which I am sending my hon. and gallant Friend a copy.

    SEVEN YEARS' LIMIT (GRANTS).
    Major COHENasked the Minister of Pensions the total number of pensions
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    granted to officers and men where the first claim to pension was submitted outside the statutory time limit of seven years?
    Major TRYON: In some 80 cases of the kind referred to a grant has been made.
    Mr. BECKETT: Can the right hon. Gentleman tell us the total number of claims?
    Major TRYON: No, Sir, we have not a record of the number of claims.

    TWO-SEATER TAXI-CABS.
    Colonel DAYasked the Secretary of State for the Home Department the dates when the plans for two-seater taximeter cabs were finally approved by the Metropolitan police department and the Home Office; and will he state whether he has taken any action to cancel the order permitting two-seater taximeter cabs to be licensed?
    The SECRETARY of STATE for the HOME DEPARTMENT (Sir William Joynson-Hicks): The conditions of fitness laid down for two-seater cabs were approved on 16th April, 1926. Three types of two-seater cabs have been approved by the Commissioner. In one of these cases the vehicle was last presented for inspection on 1st April, and approved subject to minor defects being rectified. It is expected to be finally presented for licensing in a few days. In the other two cases the type was approved on 10th June and 20th October last respectively, but up to the present the vehicles have not been presented for licensing. With regard to the last paragraph of the question, I would refer the hon. Member to my reply of 16th instant.
    Colonel DAY: Can the right hon. Gentleman say whether the statement made so persistently by the cab drivers that he promised to cancel the order for the two-seater cabs is untrue?
    Sir W. JOYNSON-HICKS: I have repeatedly said in the House that that statement is not correct.
    Lieut.-Colonel HOWARD-BURY: Is the right hon. Gentleman aware that these two-seater cabs are far more

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    economical to run and take up less space in the streets?
    Sir W. JOYNSON-HICKS: Yes, that is one of the reasons why I have promised to license them.

    LICENSED PREMISES (DISINTERESTED MANAGEMENT).
    Brigadier - General CHARTERISasked the Home Secretary whether he proposes to take any action with regard to the recommendations contained in the Report of the Southborough Committee on the disinterested management of public houses; and whether, seeing that the Report points out that the State scheme includes features which licensing benches in many parts of the country would be slow to follow, he will be prepared, to bring the State scheme, if continued, under the full control of the licensing benches concerned?
    Sir W. JOYNSON-HICKS: As I stated on Tuesday, the Government have not yet had an opportunity of considering this Report.
    Viscountess ASTOR: Is it not a fact that the Carlisle Committee stated that the chief feature of this Carlisle experiment was the existence of a monopoly over the whole city, and will the Government bear that in mind when they look into the question?
    Sir W. JOYNSON-HICKS: All relevant considerations will be taken into account.
    Mr. BUCHANAN: Is the right hon. Gentleman aware that this thing that he calls a Report is no report at all?
    Mr. MACQUISTEN: Will the right hon. Gentleman take the opportunity of consulting some of the customers of these Carlisle houses; and is he aware that the institution of State control is extraordinarily unpopular?
    Viscountess ASTOR: Oh! Ask Carlisle.
    Mr. FERGUS GRAHAMasked the Home Secretary whether he proposes to publish the evidence laid before the Southborough Committee with regard to the disinterested management of public houses?
    Sir W. JOYNSON-HICKS: The general effect of the evidence heard by this Committee is given in their Report. I do not think that the heavy expenditure which would be involved by printing and publishing the evidence would be justified, in view of the need for public economy at the present time.
    Brigadier-General CHARTERIS: Does not this evidence, in fact, disclose that in some of the areas affected a, vast majority of the people are strongly against the system of State control?
    Sir W. JOYNSON-HICKS: Some of it undoubtedly goes one way and some another, and I suppose that accounts for the somewhat ambiguous Report presented by the Committee.
    Viscountess ASTOR: Is it not a fact that some members of the Committee attended very seldom? [HON. MEMBERS: "Order!"]

    TAXIMETERS.
    Mr. H. WILLIAMSasked the Home Secretary when taximeter cabs in London will be provided with meters showing the correct fares?
    Sir W. JOYNSON-HICKS: Six types of taximeters have been submitted for approval and, as far as police requirements are concerned, are satisfactory. These type taximeters are at present in the hands of the National Physical Laboratory for the necessary tests before they can be certified as fit for use. It cannot be definitely stated when the new meters will be available for distribution to taxicab proprietors.
    Colonel DAY: Will the right hon. Gentleman consider the question of having the figures on the taximeters black on white or white on black, so that they can be read easily at nighttime, as the yellow figures cannot be seen?
    Lieut.-Colonel HOWARD-BURY: Will the right hon. Gentleman see that the new taximeters are more legible, and especially that they are better lighted at night-time?
    Sir W. JOYNSON-HICKS: Yes; after a question on this subject which was put in the House a month ago I communicated with the Commissioner of Police and asked him to pay special attention to this point.
    Mr. MACQUISTEN: Has the right hon. Gentleman not taken advice from the Colonies? Is he aware that in Canada the taximeter figures are inside the cab and they are visible, and visible from the outside also, so that people can see them at once without having to peer through a glass screen?

    ALCOHOLIC LIQUORS (HOURS OF SALE).
    Mr. RHYSasked the Home Secretary (1) whether the Government propose, during the life of the present Parliament, to grant facilities for the passage into law of proposals for the compulsory fixing of the terminal hour for the sale of intoxicating liquor in public houses;
    (2) whether, in view of the growing discontent of the public and the licensed trade, the Government propose to favourably consider the introduction of legislation restoring the privileges of the bona fide traveller?
    Sir W. JOYNSON-HICKS: I will answer these questions together. These points, with others, will have to be considered in connection with any general review of licensing questions, and I cannot make any statement at present.
    Mr. RHYS: Is it the intention of the Government to undertake any review of the licensing question this Session?
    Sir W. JOYNSON-HICKS: There is no possibility of any legislation on the licensing question this Session.
    Mr. SCRYMGEOUR: Would there not be a danger, in the introduction of such legislation, of taking away the privileges of the bona fide traveller?
    Lieut. - Colonel Sir FREDERICK HALL: Can something be done to make the closing hours in London uniform?
    Lieut.-Colonel HOWARD-BURY: Is the right hon. Gentleman aware that the public are getting very tired of this grandmotherly legislation.
    Viscountess ASTOR: No.
    Mr. KIRKWOOD: It is quite evident, Mr. Speaker, that the hon. and gallant Member for Chelmsford (Lieut.-Colonel Howard-Bury) is put up by the Home Secretary to put these questions.

    CLUBS.
    Mr. CECIL WILSONasked the Home Secretary in how many cases during the past 10 years licensed premises have been removed from the register and have subsequently been occupied as registered clubs?
    Sir W. JOYNSON-HICKS: I regret that I do not possess this information. All available information is given in the Annual Volumes of Licensing Statistics, from which it appears that in the 10 years between January, 1916, and January, 1925, on-licensed premises decreased by 5,469 and clubs increased by 3,260.
    Mr. C. WILSONasked the Home Secretary whether he can state for the past 10 years the number of clubs struck off the registers; the offences for which they were struck off; the number of individuals convicted; and the amount of the fines imposed?
    Sir W. JOYNSON-HICKS: I regret that the information asked for in the second and fourth items of this question is not available. Information as to the other two items is shown in the Annual Volumes of Licensing Statistics, to which I would refer the hon. Member.
    Mr. BECKETT: Do the figures not show that clubs are an advantage in this respect over the ordinary public houses?
    Viscountess ASTOR: Is it not true very often that when you shut up a public house a good many clubs are at once opened?
    Mr. BECKETT: Why not?
    Viscountess ASTOR: Why?
    Sir W. JOYNSON-HICKS: I do not think the figures I have given show that to be the case.
    Lieut.-Commander KENWORTHY: Is it not a fact that the police in nearly all districts of England are satisfied that the general conduct of working men's clubs is of a very high level indeed?
    Sir W. JOYNSON-HICKS: There is no evidence to the contrary at all.
    Mr. W. THORNE: Does the Home Secretary remember that the Kit-Cat Club was one of those struck off the

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    register, and that Lord Birkenhead was found in that club when they were "pinched"?
    Mr. BUCHANAN: Is the right hon. Gentleman aware that local authorities prefer the open public house, under supervision, to clubs, which are outside supervision?

    ST. DUNSTAN'S HOME FOR THE BLIND (FLAG DAY).
    Mr. DALTONasked the Home Secretary whether he is aware that the Comptroller of the London County Council reported to his council, on the 18th March, 1927, that the total income of St. Dunstan's for the year ending 31st March, 1926, was £258,053; that the amount of excess of income over expenditure was £30,222; that the amount of the surplus of assets over liabilities was £1,022,091; that the daily average training complement for 1924–25 and 1925–26 was 60·9 and 86·7, respectively; that the cost per head during these periods was £820 and £688, respectively; and that the daily average training complement in the year commencing 1st October, 1927, is estimated to be only 14; and if he will explain why, in spite of this information, which was passed on to the Commissioner of Police for the Metropolis, permission was accorded to hold a flag day in order to provide them with further income?
    Sir W. JOYNSON-HICKS: My attention has not hitherto been called to the particulars set out in the question, and I have no jurisdiction in regard to the administration of this charity. With reference to the last part of the question, the Commissioner informs me that, as he did not receive the information from the London County Council until a, few weeks before the day fixed for the collection for which all arrangements had been made by the charity, he did not in the circumstances feel justified in withholding his permit.
    Mr. DALTON: In view of these facts, and in view of the very small proportion of the money subscribed by the public for the benefit of the blind which actually reaches them, and the large proportion expended in wasteful administration and other expenses, does not the right hon.
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    Gentleman think it desirable to have some official inquiry into the overlapping of these charities?
    Sir W. JOYNSON-HICKS: There has been an inquiry. I set up a strong Committee a year ago, and their Report is now under my consideration.
    Captain FRASER: Is my right hon. Friend aware that the facts in the question are not all the facts, and that some of the statements are inaccurate, and that the expenditure of this particular charity on administration is only 7 per cent. of the total income?
    Sir W. JOYNSON-HICKS: I am glad to hear the statements of my hon. and gallant Friend. I do not want the House to assume for one moment that I accept any of the figures. It is quite impossible for me to be responsible for them.
    Mr. BECKETT: Has the attention of the Committee been called to excessive expenditure for political purposes?
    Mr. H. WILLIAMS: Is the right hon. Gentleman aware that the chairman of St. Dunstan's is a Member of this House, and is unpaid?

    P. P. DIAKONOFF.
    Mr. T. KENNEDYasked the Home Secretary if he is now able to state the result of any inquiries into the allegations made to him regarding the visit to this country of a Russian named Diakonoff; and if he proposes to take any action in the matter?
    Sir W. JOYNSON-HICKS: My inquiries are not yet complete, and I shall be glad if the hon. Member will repeat his question to-day week.

    SPECIAL CONSTABULARY, LEATHERHEAD (SUNDAY TRAFFIC DUTY).
    Mr. HAYESasked the Home Secretary whether he is aware that members of the special constabulary at Leather-head are being called upon to perform ordinary traffic duty on Sundays; and whether such employment is in accordance with the special constabulary Regulations?
    Sir W. JOYNSON-HICKS: I am aware that members of the Surrey Special Constabulary

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    have been employed to assist the police in controlling the very heavy traffic passing through Leatherhead on Sundays, but I am informed that only those who have volunteered for the duty are so employed. I have no reason to think that such employment infringes any Regulations.
    Mr. HAYES: May I ask, in case a special constable expressed his disapproval of this Sunday duty, whether it would be accepted in the sense that it would not be contrary to discipline?
    Sir W. JOYNSON-HICKS: May I put it in this way. I have seen this matter referred to in the Press, and if there is any real feeling with regard to this voluntary duty I will cause personal inquiries to be made into it.
    Colonel DAY: Is it not a fact that special constables in other parts of the country are also called upon to do Sunday duty?
    Major Sir GRANVILLE WHELER: Has the Home Secretary taken into account the fact of the extraordinarily heavy increase in the burdens, especially on the county police, due to the increased amount of road traffic?
    Sir W. JOYNSON-HICKS: No one is more aware than I am both of the enormous increase in the traffic in the counties and in London, and the very heavy burden that is thrown on the police.
    Sir F. HALL: Could the right hon. Gentleman not approach the Treasury to see if they can get some portion of the surplus of the Road Fund to help to meet these heavy expenses?
    Lieut.-Colonel HOWARD-BURY: Would there not be a saving if police traps for motorists were discontinued?

    OFFICIAL SECRETS ACT.
    Mr. DALTONasked the Home Secretary whether his attention has been drawn to the ease of an ex-naval officer who, after some months in private employment, was sentenced to imprisonment under the Official Secrets Act for being in possession of the secret and confidential designs of a British submarine; and whether he has any information which would lead him to believe that any
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    British firm, or any of its employees, is in possession of documents or designs contrary to the provisions of the Official Secrets Act?
    Sir W. JOYNSON-HICKS: The hon. Member is mistaken in supposing that there has been a conviction followed by sentence. The accused has not yet been tried, and I cannot say anything about the case while it is sub judice.

    PRISON VISITORS.
    Lord HENRY CAVENDISH-BENTINCKasked the Home Secretary how many prison visitors are at present attached to the local and convict prisons, respectively, in England and Wales; what prisons, if any, have no regular prison visitors; whether the introduction of authorised prison visitors has proved beneficial; whether the services of additional prison visitors are desired; and, if so, what are the main qualifications required of such visitors?
    Sir W. JOYNSON-HICKS: The number of persons appointed to visit prisoners in local prisons, and in those convict prisons which are combined with other establishments, is approximately 600. It has not been found necessary to make such appointments at the separate convict prisons at Dartmoor and Parkhurst. There is a sufficient number of visitors; vacancies however constantly arise and are filled by the Prison Commissioners on the recommendation of the governor and visiting committee of the prison. There is no shortage of volunteers for this form of voluntary social work, the results of which have been generally satisfactory. The main qualifications required are of a personal kind, such as common sense, good judgment, knowledge of the world and interest in the work.

    SEARCH WARRANTS.
    Mr. JOHNSTONasked the Home Secretary whether in the execution of a search warrant, it is the practice to secure to the owner or occupier of the premises or the person implicated the attendance of a representative to witness the search, or whether the search is conducted in the presence of a representative of the magistrate who grants the warrant; and, if

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    not, can he state what protection is afforded to a person in such circumstances?
    Sir W. JOYNSON-HICKS: In the Metropolitan Police District the general practice in executing search warrants, which are of several kinds, is for the police officer in charge of the matter to ask for the occupier or other person responsible for the premises and acquaint him with the terms of the warrant. No representative either of the owner or occupier of the premises or of the magistrate is required to be present. I do not understand what protection the hon. Member suggests is required in such cases.
    Mr. JOHNSTON: In view of the fact that the Home Secretary's predecessor in office in March, 1921, admitted at that Box that the special branch at Scotland Yard had been engaged in the production and distribution of a forged copy of the "Pravda," does he not think it advisable that in the recent search that took place every precaution should have been taken by his Department to have had a neutral person present at the search?
    Sir W. JOYNSON-HICKS: The hon. Member gave me no notice of this supplementary question. With every desire to remember my predecessor's words, I am unable to remember all that he said in this House, and I have no recollection of the statement referred to.
    Mr. JOHNSTON: If I show the right hon. Gentleman a forged copy of the "Pravda"—I have one in my hand—would he be prepared in future to see that in searches of this nature a neutral person shall be present at the search?
    Sir W. JOYNSON-HICKS: It may be that the hon. Member has a copy of a forged document in his possession. Of that I know nothing, but I am not satisfied that my predecessor in office admitted that Scotland Yard had produced a forged document, and I should require to be satisfied about that.
    Mr. JOHNSTON: In view of the Debate that is to take place in this House this afternoon, will the right hon. Gentleman, before he speaks, turn up the admission made by Mr. Shortt who was
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    his predecessor in office in March, 1921, and read the admissions that were then made?
    Sir W. JOYNSON-HICKS: If the hon. Member will give me the reference to the OFFICIAL REPORT I will look it up.
    Mr. BECKETT: Were the terms of the original reply as to the production of the warrant observed in the case of the Arcos search?
    Sir W. JOYNSON-HICKS: I think that is a matter which can be argued better in the Debate this afternoon.
    Mr. HURD: Is it not desirable, in the interests of the House, that notice should be given of questions of this sort, so that due inquiries can be made before statements are made of this nature on the Floor of the House?
    Mr. SPEAKER: That is a matter which is not within my control.

  EDUCATION.

    OPEN-AIR SCHOOLS.
    Colonel DAYasked the President of the Board of Education if there are any open-air schools at present being built; can he give their location; and if his approval has been obtained for these buildings?
    The PARLIAMENTARY SECRETARY to the BOARD of EDUCATION (Duchess of Atholl): Plans have been approved for new open-air schools in IIford, Leyton, Huddersfield, London (Bermondsey, Highgate, and Stepney), Cambridge, Bolton, Stretford, Portsmouth, and Broadstairs. These schools are, so far as I am aware, in course of erection. Proposals have been generally approved for new open-air schools at Ipswich, Dewsbury, Manchester, Sheffield, Smethwick, St. Helen's, and Cardiff; in these cases the plans of the buildings are now under consideration.
    Colonel DAY: Have any complaints been received about applications being refused?
    Duchess of ATHOLL: I cannot answer that question without notice.

    PUBLICATIONS.
    Mr. HARRISasked the President of the Board of Education whether the

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    Board has considered the possibility of issuing in a convenient form, similar to that of the special reports on educational subjects, the regulations, administrative memoranda, reports, and circulars issued by the Board; and whether it is contemplated re-issuing the volume of Suggestions for Teachers?
    Duchess of ATHOLL: The Board have under consideration the question of the most convenient form in which reports, etc., upon educational subjects might be published, but my right hon. Friend does not think that their regulations, administrative memoranda, and circulars would lend themselves to exactly similar treatment. The latter are already issued in numbered series and, as the hon. Member may be aware, a, revision and renumbering of the grant regulations was undertaken last year. A revised edition of the Suggestions for Teachers will be issued very shortly.

    SECONDARY SCHOOLS EXAMINATION COUNCIL.
    Mr. HARRISasked the President of the Board of Education what is the constitution of the secondary schools examination council; have the regulations for secondary schools, requiring that pupils shall be entered for a first examination as members of a form, been submitted to this council; and, if so, has the council made any representations to the Board on the subject?
    Duchess of ATHOLL: The secondary schools examination council is constituted as follows:—The chairman and the honorary secretary nominated by the president of the board; ten representatives nominated by the examining bodies; six by the teachers' registration council; and five by the associations of local authorities. In addition, inspectors of the board attend the meetings of the council as assessors. The answer to the second part of the question is in the negative, and, therefore, the third part does not arise.

    TEACHING ESTABLISHMENTS.
    Mr. HARRISasked the President of the Board of Education whether he is now in a position to state the total of the approved teaching establishments, elementary schools, of local education
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    authorities for the year 1927–28; and what are the comparable figures of the approved establishment for 1926?
    Duchess of ATHOLL: My right hon. Friend has nothing at present to add to the reply given by him on the 12th May to my hon. Friend the Member for North-West Camberwell (Mr. Campbell), a copy of which I am sending the hon. Member.

  HOUSING.

    SUBSIDY, LONDON.
    Colonel DAYasked the Minister of Health what will be the approximate Government subsidy granted to the London County Council for housing schemes in the current year; and the number of houses it is proposed to erect under this subsidy scheme?
    The PARLIAMENTARY SECRETARY to the MINISTRY of HEALTH (Sir Kingsley Wood): The London County Council will receive the appropriate Exchequer contribution under the Housing Act, 1923, and the Housing (Financial Provisions) Act, 1924, for each house erected by them and by private enterprise with their assistance, and it is anticipated that about 9,000 such houses will be completed during the financial year. In addition, it is expected that during the year about 900 tenement dwellings for rehousing, in connection with Improvement Schemes under the Housing Act, 1923, will be erected by the Council, in respect of which the Exchequer contribution will be one-half of the estimated average annual loss incurred. It is estimated that the total payments to be made to the Council in the financial year 1927–28, on account of all Housing Schemes undertaken since 1919 (including schemes of the Metropolitan Boroughs under the Housing Act, 1919), will amount, approximately to £570,000.
    Colonel DAY: Is that a larger or a smaller amount than in the previous year?
    Sir K. WOOD: It is anticipated that, approximately, £100,000 more will be spent in London on housing this year than last year.

    MORTGAGES (LOCAL COUNCILLORS).
    Mr. T. WILLIAMSasked the Minister of Health whether he has received any

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    communication from the Conisborough Urban District Council relating to the disqualification of a councillor from voting or speaking as such providing he has received a subsidy and an advance on mortgage under the Housing Act, 1923; and, if so, will he state the nature of his reply and what action he intends to take to remove any doubt that may exist by virtue of Section 46 of the Local Government Act, 1894?
    Sir K. WOOD: My right hon. Friend has received the communication mentioned, and is sending the hon. Member a copy of his reply. He cannot promise at the present time to introduce legislation to amend the Act of 1894 in this particular.
    Mr. WILLIAMS: Ought not this anomaly to be removed at the earliest possible moment, since it is giving rise, not only to doubt, but very possibly to illegality in such circumstances as are indicated in this question, and does not the hon. Gentleman think that a short Measure could be introduced to remove this doubt?
    Sir K. WOOD: There are many differences of opinion on this question. I do not see any prospect of Parliamentary time being available for this purpose.
    Mr. R. MORRISON: In view of the great importance of this question to people serving on local authorities, could the hon. Gentleman agree to the statement, which he proposes to send to my hon. Friend, being published in the OFFICIAL REPORT, in order that the public may know exactly what the position is with regard to a person serving on a local authority who has purchased his house by means of money advanced by the local council of which he is a member?
    Sir K. WOOD: I do not think the hon. Member appreciates that the reply, of which I have undertaken to furnish a copy, deals with a particular case. I think that, so far as the facts generally are concerned, the law on the subject is perfectly well known.
    Mr. A. HOPKINSON: Will the hon. Gentleman tell us if it is perfectly legal and proper for a member of a local authority in such circumstances to buy a house from a builder and for the builder to draw the subsidy?
    Sir K. WOOD: I should like to have notice of a question like that.
    Mr. H. WILLIAMS: Has the matter been tested in the Courts?
    Sir K WOOD: I could not say.
    Mr. T. WILLIAMS: Will the hon. Gentleman consult the Prime Minister, and ask him whether facilities could be afforded for a private Member's Bill?
    Sir K. WOOD: I must ask the hon. Gentleman himself to address a question to the Prime Minister.

    CONTRIBUTORY PENSIONS ACT.
    Mr. ROBINSONasked the Minister of Health if the crippled or invalid husband of an insured woman is granted a pension at 65 under the Widows', Orphans' and Old Age Contributory Pensions Act; and whether any pension can be granted to a crippled husband who has been maintained by his wife for 30 years, the wife having paid insurance since the inception of National Health Insurance and being at present an insured person eligible for pension in January, 1928?
    Sir K. WOOD: The answer to both parts of the question is in the negative. I may point out that a woman's contribution is only 4½d. per week, as against a contribution of 9d. paid by a man, and it is natural, therefore, that the benefits derived from a woman's insurance should be less than in the case of a man.
    Mr. ROBINSONasked the Minister of Health whether an insured person aged 70 or more, in receipt of an old age pension, should use form O.A.P. 101 when applying for a pension in respect of his wife aged 65 or over?
    Sir K. WOOD: The hon. Member would appear to be under a misapprehension. In the circumstances indicated in the question, the wife would not become entitled to a pension in right of her husband's insurance until she reached the age of 70.
    Mr. ROBINSONasked the Minister of Health if the information given by pensioners on form O.A.P. 101 will be treated as confidential; if his attention

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    has been drawn to the disquiet among working men and women by Questions 9 and 10, asking for the present occupation and name and address of employer; and whether he will have these questions removed from future issues of the form as many workpeople fear that they may lose their employment if the employer is aware that they are 65 years of age?
    Sir K. WOOD: The purpose of the questions referred to is to obtain information to determine whether title to pension is established in cases where for any reason the insurance particulars are defective. They cannot, therefore, be omitted, but the information thus obtained is treated as confidential, except where it is necessary to use it in order to establish the applicant's title.
    Mr. KELLY (for Mr. ROBERT YOUNG)asked the Minister of Health whether a person who was an insured person at the introduction of the Widows', Orphans' and Old Age Contributory Pensions Act, and whose salary subsequently rose above the £250 maximum as laid down in the Act, and had not 104 contributions to his credit since the date of his last entry into insurance, will be considered as entitled to transfer to the voluntary contributors' section if he can show a total of more than 104 contributions, not necessarily consecutive, compulsorily paid under the National Health Insurance Act; and, if not, whether he is prepared, on behalf of the Government, to introduce legislation to enable such persons to become voluntary contributors?
    Sir K. WOOD: The reply to the first part of the question is in the negative. As regards the second part, my right hon. Friend would point out that the recent Royal Commission on National Health Insurance recommended that no change should be made as regards the title to voluntary insurance, one of the conditions for which is that there must have been 104 weeks of insurable employment in a period of continuous insurance. My right hon. Friend has no reason to differ from the conclusion of the Commissioners in this respect and he cannot undertake to introduce legislation which would admit to voluntary insurance persons who do not satisfy this condition.

    WHOLEMEAL AND WHITE FLOUR.
    Rear-Admiral BEAMISHasked the Minister of Health whether his attention has been drawn to a manifesto issued recently by a number of medical men and scientists concerning the relative merits of wholemeal flour and white flour; and whether the Ministry is in possession of authoritative information as to the purity the wholesomeness of white bread?
    Sir K. WOOD: My right hon. Friend has seen the document in question. He is sending my hon. and gallant Friend a copy of a Report issued by the Ministry, expressing some views on this subject.
    Rear-Admiral BEAMISH: Could my hon. Friend say whether the Ministry are in agreement with the views expressed in the document that has been published?
    Sir K. WOOD: The subject is a very complex one, and I would prefer that my hon. and gallant Friend should first read the Report, and then, perhaps, put down another question.
    Colonel DAY: Cannot the hon. Gentleman say whether the Ministry are in agreement with the views that have been expressed, so that the House may know?
    Sir K. WOOD: I do not think the hon. Member can have heard my reply. This matter is very complex. The Report is a Ministry of Health Report, which is available if hon. Members desire to see it.
    Dr. SALTER: Is that Report available for publication?
    Sir K. WOOD: It is a Report of the Ministry. I can let my hon. Friend see it if he so desires, but I do not think there is any question about it.

    POOR LAW RELIEF, WEST HAM.
    Mr. W. THORNEasked the Minister of Health if he is aware that the West Ham Poor Law Commissioners have decided to reduce the scale of relief by 10 per cent; that hardship will be inflicted on poor people and old age pensioners in consequence; that the scale of relief operating in West Ham is lower than that paid in the city of Birmingham; and if he will take any action in the matter?
    Sir K. WOOD: My right hon. Friend is informed that the West Ham Guardians have reduced the scale of relief by 10 per cent. in the case only of persons who are able-bodied and perfectly fit for work. Most, if not all, of these have been in receipt of relief for several years. Further, all the cases in which the reduction is likely to effect hardship are to be referred to the guardians themselves for consideration and decision. Old age pensioners and the poor other than the able-bodied poor are not affected. The scale in force in Birmingham is in certain respects somewhat higher than that used in West Ham, but the application of scales of relief is subject to so many qualifications that my right hon. Friend does not think that any useful comparison can be made. My right hon. Friend sees no reason for taking action.
    Mr. THORNE: Is the hon. Gentleman aware that, when this 10 per cent. cut comes into operation, it will mean that a man and his wife with six children will get 26s. a week, and is the hon. Gentleman aware that the worst form of cruelty is by starvation?
    Sir K. WOOD: I think the hon. Member has overlooked that part of my reply in which I said that any cases in which the reduction is likely to effect hardship are referred to the guardians themselves for consideration.
    Mr. THORNE: Of course, but they will get no redress.
    Sir K. WOOD: That is not the case at all. The administration of the guardians in West Ham has, I think, met with general approval.
    Mr. THORNE: Is the hon. Gentleman aware that the Minister of Health has stated over and over again that, so far as the Commissioners at West Ham are concerned, he has no control over them at all, and they can do just what they like?
    Sir K. WOOD: That is no reason why we should not express approval of their action.

    SMALL-POX.
    Mr. WEST RUSSELLasked the Minister of Health whether his attention has been called to an outbreak of smallpox in Northumberland; whether he can
    2164
    state the number of cases notified up to date and the areas chiefly affected; whether or not the epidemic is on the increase; whether he is satisfied that the local authorities have powers sufficient to cope with the position and that these powers are being exercised; and whether the source of infection has been traced?
    Sir K. WOOD: Small-pox has been prevalent in Northumberland since 1924. The total number of notified cases, up to the end of last week, is approximately 2,300, The areas chiefly affected have been Ashington, Bedlingtonshire, Newcastle-on-Tyne, Morpeth, Prudhoe and Tynemouth. The number of cases in the county shows no signs of diminution at present. My right hon. Friend is of opinion that the local authorities have all necessary powers if adequate use is made by the public of the facilities provided for free vaccination, and is advised that these powers are being exercised. He is unable to state the original source of infection.
    Mr. BECKETT: Is it not a fact that in the great majority of cases the people who have been infected with this disease have been vaccinated, that the disease is extremely mild, and that there is a great divergence of medical opinion as to whether it is small-pox or not?
    Sir K. WOOD: No, Sir, I should not like the House to understand that that was the view of my Department. In a number of cases in which vaccination has been ineffective it had been done many years ago. My right hon. Friend would like hon. Members and the public to know that in his belief the most effective measure is to make free use of the public vaccination which is available.
    Sir NICHOLAS GRATTAN-DOYLE: Can my hon. Friend say how many of the cases he has mentioned were vaccinated, and how many were not?
    Sir K. WOOD: If my hon. Friend will put down a question, I will get the information for him.
    Mr. BECKETT: Can the hon. Gentleman say whether there is any evidence, other than the Minister's opinion, that vaccination is useful?
    Dr. SALTER: Is the Department satisfied that the extremely mild disease which is prevalent in Northumberland and Durham

    2165
    is the same disease as that which was recently so very fatal in the neighbourhood of Hendon?
    Sir K. WOOD: My Department are certainly satisfied that this disease is small-pox, and that the best preventive is for people to avail themselves of the facilities for vaccination.

    CO-OPERATIVE SOCIETIES.
    Sir BASIL PETOasked the Chancellor of the Exchequer whether his attention has been called to the rapid absorption by the co-operative societies of businesses established under private enterprise, and particularly the recent purchase of the business of a provision merchant, including 52 branches in Liverpool and Birkenhead; and whether he intends to take any steps to meet the diminution of revenue which arises from these transfers to co-operative societies, which continuously diminish the area of Income Tax collection?
    The CHANCELLOR of the EXCHEQUER (Mr. Churchill): I have heard of the transaction to which my hon. Friend refers. In reply to the second part of the question, I would invite my hon. Friend's attention to the replies which I gave on the subject of the taxation of co-operative societies to the hon. and gallant Member for Chelmsford (Lieut.-Colonel Howard-Bury) on the 17th February and the 1st March last. I am sending my hon. Friend a copy of those replies.
    Sir B. PETO: Does not my right hon. Friend think that a new situation arises when he sees, as he does in the case referred to in these questions, that the area of taxable income is diminishing year by year, and that a greater burden is thus being imposed upon those who pay Income Tax?
    Mr. CHURCHILL: I know that there is a great deal of anxiety about this question, both in this House and outdoors, but, having investigated it very carefully, I am of opinion that that anxiety is largely unfounded. I cannot attempt to deal with the matter at Question Time, but if in the course of the various financial Debates the matter were raised, it would be my duty to lay before the
    2166
    House the view which I have reached, after most careful examination of the subject.
    Mr. KIRKWOOD—
    Mr. SPEAKER: We must not debate the matter now.

  GOVERNMENT DEPARTMENTS.

    PAYMENT OF SALARIES.
    Mr. ERNEST BROWNasked the Financial Secretary to the Treasury whether he will inaugurate a uniform method throughout the service of the payment of the salaries of all officers established as the result of the Lytton and Southborough examinations; whether he can see his way to abolish the present practice of paying such salaries at the monthly rate of 8 per cent. to the nearest £1 below; and whether he will consider the desirability of substituting payment at the rate of one-twelfth of the annual salary each month?
    The FINANCIAL SECRETARY to the TREASURY (Mr. Ronald McNeill): Two systems are at present in force in Civil Departments generally for paying monthly advances of salary in the first two months of each quarter. One system is that indicated by the hon. Member. Under the other system, monthly advances are calculated to the nearest £ below one-third of the net quarterly amount payable, after all necessary deductions for Income Tax, insurance, etc., have been made. Heads of Departments are free to choose between these two systems, provided that whichever system is chosen is adopted uniformly throughout the Department. In practice, these systems differ little from the system suggested by the hon. Member, and I see no reason to fetter the discretion of heads of Departments by a definite limitation to the arrangement proposed by the hon. Member.

    OFFICE OF WORKS (ARCHITECT'S PRIVATE COMMISSIONS).
    Mr. R. MORRISONasked the Under-Secretary of State for the Home Department, as representing the First Commissioner of Works, whether any of the chief architects in the Commissioner's Department accept commissions in their professional capacity from individual persons or private firms; and, if so,

    2167
    whether he will take steps to prevent these civil servants from engaging in private practice in the future?
    Captain HACKING (for The FIRST COMMISSIONER of WORKS): The reply to the first part of the question is in the affirmative; in reply to the second part of the question, the First Commissioner is not prepared to prohibit such work entirely as he considers that the interests of the Department are sufficiently safeguarded by the fact that the acceptance of such commissions is only allowed on the express conditions that:

    (1) The work must not be undertaken during official hours.

    (2) Name plates must not be fixed on outside offices or private residences.

    (3) The use of official premises in connection with private business is not allowed on any conditions, even after official hours;

    and on the clear understanding that they must not interfere with the proper execution of Departmental duties.
    Mr. MORRISON: Does not the hon. and gallant Gentleman think it would be far better if the Government would pay some attention to the curtailing of this practice of civil servants accepting large commissions from private enterprise—that it would be better for the Government to pay some attention to stopping this practice rather than interfering with the trade union activities of civil servants?
    Mr. A. HOPKINSON: Is the hon. and gallant Gentleman of opinion that an architect carrying out a contract of one or two million pounds can devote his proper attention to his duties as a civil servant.
    Captain HACKING: If it were the opinion of my right hon. Friend that he was not able to perform his duties to the Government, he would not be allowed to accept these commissions.
    Mr. HOPKINSON: Is the Chemical Trust to have the use of any civil servant it wants?
    Captain HACKING: It is very difficult to curtail a man's duties when they are carried out in his own private time. We really have no right to interfere with the private time of any individual.
    Mr. HOPKINSON: Is that principle to apply to all civil servants?
    Mr. MORRISON: Does the hon. and Gallant Gentleman think that an architect who is a full-time employé of the Government has sufficient spare time to undertake the architectural work for a million pounds contract?
    Captain HACKING: Yes, Sir, I do.

  AGRICULTURE.

    CREDITS.
    Mr. WELLSasked the Financial Secretary to the Treasury if he is prepared to make further advances to the agricultural credits account of the Public Works Loan Board, in accordance with the Agricultural Credits Act, 1923, to enable the Board to advance loans in those cases that have been approved?
    Mr. McNEILL: The limit fixed for advances is £5,000,000, and I understand that this will be sufficient to enable the Public Works Loan Board to advance loans in those cases which they have approved.

    OUSE DRAINAGE.
    Mr. WELLSasked the Minister of Agriculture what steps have been taken by the Ouse Drainage Board in the carrying out of the necessary works to deal with the danger of serious inundation, as reported by the Ouse Commission when they issued a warning of the danger of delay?
    Major Sir HARRY BARNSTON (Controller of the Household): I have been asked to reply. The Ouse Drainage Board are endeavouring to carry out their duties so far as their resources will allow, and considerable works of improvement are being carried out in different parts of the district. As stated, however, in the Report of the Ouse Commission, it is impossible for the land in the district to bear the burden of the works which the Commission reported to be necessary, without Government financial assistance. The Ouse Drainage Bill, which has been read a First time in this House, accordingly includes proposals for a grant from the Exchequer towards the cost of the works recommended by the Commission.
    Mr. WELLS: Has the hon. Baronet had an up-to-date report on the actual position to-day in the are?
    Sir H. BARNSTON: I will see what can be done.

    FARMERS (LOANS).
    Sir ROBERT THOMASasked the Minister of Agriculture if his attention has been drawn to the present distress among those farmers who during the War bought their own farms with money borrowed at a high rate of interest, which has had in some cases an effect equivalent to trebling their rents; and whether he will consider the feasibility of giving relief to such cases by means of Government loans at a low rate of interest?
    Sir H. BARNSTON: Provision was made in Section 1 of the Agricultural Credits Act, 1923, for loans to farmers who bought their farms during the period from 1917 to 1921, when the Corn Production Act was in operation. The Government are now considering what facilities for long-term credit can be made available to farmers generally.
    Mr. THURTLE: Would it not be more just if the landowners who received an excessive price for their land were made to disgorge a certain amount of that money?
    Sir H. BARNSTON: It was sold in the usual way.

    CREDIT BANKS.
    Sir R. THOMASasked the Minister of Agriculture whether, in view of the proposals in favour of applying the Safeguarding of Industries Act to agriculture, he will give prior consideration to the establishment of a system of agricultural credit banks?
    Sir H. BARNSTON: Articles of food and drink are already specifically excluded from the Safeguarding of Industries procedure and the Government are not proposing to make any alteration in that respect. My right hon. Friend is at present giving active consideration to the provision of credit facilities for agriculture.

    BRITISH INDUSTRIES FAIR.
    Lieut.-Commander KENWORTHYasked the President of the Board of Trade whether it is proposed to hold the British Industries Fair in provincial cities other than Birmingham in future years?
    The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Sir Burton Chadwick): No, Sir. The Committee appointed by the Board of Trade in 1921 to consider the best policy to be adopted in respect of British Industries Fairs, were opposed to new sections of the Fair being initiated in other provincial centres, and favoured its continued concentration in London and Birmingham.
    Lieut. - Commander KENWORTHY: The hon. Gentleman has not quite understood the purport of the question. I do not propose an additional section, but an alternative to Birmingham. Is Birmingham to have a monopoly of these fairs for all time?
    Sir B. CHADWICK: That was considered by the Committee to which I have referred, and they decided that if any fair outside London was desirable at all, Birmingham was probably the best centre in which to hold it, largely because it can be reached in a day from London.
    Lieut. - Commander KENWORTHY: Are we to understand from that answer that the spending of money voted by this House is to be governed for all time by the recommendation of this ad hoc Committee?
    Sir B. CHADWICK: I think the Committee has been very successful in its results.
    Sir HARRY BRITTAIN: As it has been announced on more than one occasion that both these fairs have proved great successes, is there any reason why the North of England should not have a chance of a third fair?
    Mr. KIRKWOOD: Seeing that Glasgow has just finished building a beautiful hall for exhibition purposes, would not the hon. Gentleman consider that it might go to Glasgow?

  RUSSIA.

    BRITISH MISSION (WITHDRAWAL).
    Lieut.-Commander KENWORTHYasked the Prime Minister whether it is proposed to withdraw the British Consular Officers from Russia as well as His Majesty's Chargé d'Affaires; and what Government remaining in official relations with the Russian Government will be invited to take charge of British interests in Russia?
    The PRIME MINISTER (Mr. Baldwin): Mr. Preston at Leningrad and Mr. Paton at Vladivostok are not Consular Officers. They are attached to the British Mission at Moscow and will be withdrawn simultaneously with that Mission. The point raised in the latter part of the question is still under consideration.
    Lieut.-Commander KENWORTHY: Am I to understand that after the withdrawal of that Mission, there will be no Consular offices at all in Russia, and is the right hon. Gentleman aware that our fishermen are fishing in Russian waters and our ships visit Russian ports, and who is to look after them?
    The PRIME MINISTER: Perhaps the hon. and gallant Gentleman will put any further questions to the Foreign Office.
    Lieut.-Commander KENWORTHY: But has the right hon. Gentleman considered that at all?
    Mr. H. WILLIAMS: Are our ships allowed to fish in Russian territorial waters?
    Mr. G. PETO: Have not all British interests in Russia been confiscated by the Bolshevists many years ago?

    TRADING ORGANISATIONS (GREAT BRITAIN).
    Lieut.-Commander KENWORTHYasked the Prime Minister if he has information as to the different trading organisations and companies in this country representing the Russian Government or Russian State Departments; if so, whether he can give the list to the House; and which of these are to be allowed to remain in the event of the Trade Agreement with Russia being abrogated?
    The PRIME MINISTER: Yes, Sir; His Majesty's Government are in
    2172
    possession of a list of Soviet trading organisations in the United Kingdom, but I do not think that any useful purpose would be served by communicating this list, which is rather a long one, to the House. The point raised in the last part of the question is under discussion with the Secretary of State for Home Affairs.

    DEBATE (GOVERNMENT WHIPS).
    Captain GARRO-JONESasked the Prime Minister whether, in view of his intention to base the Government's immediate policy in relation to the Russian Government on the decision of the House of Commons this day, he will state whether the relevant vote will be free and not subject to the influence of the Government Whips?
    The PRIME MINISTER: No, Sir.
    Captain GARRO-JONES: Quite apart from the merits of the primary question in dispute, would it not be a more influential decision and one differing from the decision of the Executive if the matter were left to a free vote of the House?
    The PRIME MINISTER: In a matter of Government policy it is customary to put on the Government Whips.
    Lieut.-Colonel Sir GODFREY DALRYMPLE-WHITE: Is it not a fact that whether the Whips are, on or off will make no difference to the result?

    BRITISH DIPLOMATIC VISAS.
    Sir F. HALLasked the Secretary of State for Foreign Affairs how many diplomatic passports have been issued to the wives or other relatives of members of the Soviet delegation in this country; and whether such passports carry with them any diplomatic privileges?
    The SECRETARY of STATE for FOREIGN AFFAIRS (Sir Austen Chamberlain): No diplomatic passports have been issued by His Majesty's Government either to members of the Soviet diplomatic mission or the Soviet trade delegation in this country. If my hon. and gallant Friend has in mind diplomatic visas, these have been issued to six of the wives of members of the staff of the Soviet diplomatic mission; these ladies are entitled to diplomatic privilege irrespective of whether diplomatic passports are issued to them by their own Government or not.

    WASHINGTON EIGHT-HOUR CONVENTION.
    Mr. W. THORNEasked the Prime Minister if he is aware that the French Chamber have passed the Bill for the ratification of the Washington Eight-Hour Day Convention with the proviso, inserted by the Senate, that the Convention should only take effect after ratification by Germany and Britain; and if he can state whether it is now the intention of the Government to pursue a similar course?
    The PARLIAMENTARY SECRETARY to the MINISTRY of LABOUR (Mr. Betterton): I have been asked to reply. The answer to the first part of the question is in the affirmative. With regard to the second part of the question, I regret that I am not able at present to add anything to the reply given to the hon. Member for the Sutton Division on 19th May.
    Mr. THORNE: Does the hon. Gentleman think he will be able to give any definite reply in the next two or three months?
    Mr. BETTERTON: The hon. Member can repeat the question at any time. At present I can add nothing to the answer I have given.
    Mr. THORNE: Is the hon. Gentleman not aware that the Convention has been ratified by the other countries but, in consequence of the inaction of our Government, cannot be put into operation?

    IRISH LIGHTS SERVICE.
    Mr. KELLYasked the President of the Board of Trade whether he will see that the superannuated employés of the Irish lights service whose transfer has not yet taken effect receive the same benefit as the transferred civil servants by the recent decision of the Judicial Committee of the Privy Council?
    Sir B. CHADWICK: The question of the superannuation terms to be granted to employés in the Irish lights service, when that service is transferred to the Free State Government, will be considered in due course.
    Mr. KELLY: In view of the fact that the Treaty has not been implemented up
    2174
    to now, and many of these men are approaching superannuation age, what steps are being taken to satisfy them that they will receive what they are entitled to when they reach that age?
    Sir B. CHADWICK: The transfer of the administration of the Irish lights is the subject of negotiation between the British and Free State Governments, and I can only repeat that the matter will have consideration.
    Mr. KELLY: When was the last negotiation between this Government and the Irish Free State with regard to this question?
    Sir B. CHADWICK: I could not say without notice.
    Mr. KELLYasked the President of the Board of Trade whether he will give some information as to the approximate date when the negotiations and transfer of the Irish lighthouse service is likely to be concluded by His Majesty's Government and that of the Free State?
    Sir B. CHADWICK: I am afraid that I cannot give any indication as to the approximate date when the negotiations to which the hon. Members refers are likely to be concluded.
    Mr. KELLY: Which body has to be approached this time with regard to the conditions of these men? Have we to approach the Board of Trade, Trinity House, or the Irish Free State?
    Sir B. CHADWICK: The Irish Lights Commissioners.
    Mr. KELLY: In view of the fact that the Irish Lights Commissioners have this matter in hand, how does the hon. Member justify the reply he is now making?
    Mr. SPEAKER: That is a matter which should come within the realm of Debate.

    MOTOR VEHICLES (TAXATION).
    Mr. T. WILLIAMSasked the Financial Secretary to the Treasury how many motor vehicles owned by local authorities and used almost exclusively on their own roads had the basis of taxation changed subsequent to the passing of the Finance Act, 1926; and what was the difference in the revenue from this source for a full year?
    The MINISTER of TRANSPORT (Colonel Ashley): I have been asked to answer this question. It is not possible to give the information asked for by the hon. Member, as the licensing authorities keep no separate record of the vehicles owned by local authorities.

    BRITISH CELANESE COMPANY (GOVERNMENT REPRESENTATIVE).
    Mr. E. BROWNasked the President of the Board of Trade if there is a Government representative on the board of directors of the British Celanese Company; and, if so, who he is, when he was appointed, and the terms of his appointment?
    Mr. McNEILL: The Government representative on the board of directors of the British Celanese Company is Sir Philip G. Henriques. He was appointed with the ordinary powers of a director on 28th February, 1920, and cannot be removed without the consent of the Government so long as the Government holds not less than 250,000 preference shares.
    Mr. BROWN: Was this gentleman Chairman of the Committee on the Pottery Tax?
    Captain GARRO-JONES: Is the right hon. Gentleman aware that this same gentleman, the Government nominee on the board of directors of this company, was chairman of the Committee of Inquiry into the application of the Pottery Tax, and does he not think—
    Mr. SPEAKER: I should like to see this question before it is put.

    DEVONPORT DOCKYARD (DISCHARGES).
    Mr. HORE-BELISHAasked the Minister of Labour whether, in the event of further discharges from His Majesty's Dockyard, Devonport, he will consider, in conjunction with the Admiralty, the possibility of making some special provision for those men thrown out of employment?
    Mr. BETTERTON: I am afraid I cannot promise in advance to make special provision for a case which has not yet arisen.

  UNEMPLOYMENT.

    INSURANCE (BLANESBURGH REPORT).
    Mr. STEPHENasked the Minister of Labour if he is now in a position to state whether an Unemployment Insurance Bill, based on the Report of the Blanesburgh Committee, will be proceeded with this Session?
    Mr. BETTERTON: I regret that I am still unable to give the hon. Member a definite answer. I will do so as soon as is possible.
    Mr. STEPHEN: Will it be of any use to put the question down next week?
    Mr. BETTERTON: Yes: Will the hon. Gentleman repeat his question on this day week.

    BENEFIT PAYMENTS.
    Mr. STEPHENasked the Minister of Labour the amount of unemployment benefit which has been paid in the first three months of this year?
    Mr. BETTERTON: The amounts of unemployment benefit paid during the first three months of 1927 were approximately as follow:

    £

    January, 1927

    …

    …

    3,980,000

    February, 1927

    …

    …

    3,450,000

    March, 1927

    …

    …

    3,260,000

    HOUSES OF PARLIAMENT (STANCLIFFE STONE).
    Sir B. PETOasked the Under-Secretary of State for the Home Department, as representing the First Commissioner of Works whether the First Commissioner of Works will publish in the form of a White Paper the opinions of the profession of architects and of the builders and masons with regard to the policy of patching the Houses of Parliament with Stancliffe stone or refacing them with Portland stone when he has concluded his inquiries?
    Captain HACKING: My right hon. Friend will consider the possibility of publishing in some form the result of his inquiries. I would point out that there may be some diffidence on the part of the individuals concerned regarding the publication of their views.

    BROADCASTING PROGRAMMES (EMPIRE TRANSMISSION).
    Captain FRASERasked the Postmaster-General if the Government will make a grant to the British Broadcasting Corporation to enable them to establish and maintain a short-wave wireless transmitter to relay existing programmes to the Empire or parts of the Empire in order that such a project may be proceeded with immediately without hindering the development of the corporation's new British scheme of distribution?
    The ASSISTANT POSTMASTER-GENERAL (Viscount Wolmer): The British Broadcasting Corporation have been given authority to conduct experiments in short-wave transmission, and I understand that it is their intention to carry out these experiments before putting forward any proposals for a service to distant countries. The incidence of the cost of such a service, if it should be found to be practicable, will be a matter for settlement between the corporation and the Dominions and Colonies concerned.
    Colonel DAY: Can the Noble Lord say where the station will be erected, if it is found practicable?
    Viscount WOLMER: No, Sir, not without notice.

    SOUTH AFRICAN WIRELESS BEAM STATION.
    Captain FRASERasked the Postmaster-General (1) when the wireless beam station for communication with South Africa will be handed over to the Post Office; and if he anticipates that during the first few months after his Department takes it over there will be enough traffic to keep it occupied for 100 per cent. of its working time;
    (2) if His Majesty's Government will negotiate with His Majesty's South African Government and the companies concerned an arrangement whereby the South African beam station may be used for experiments with the object of placing British Broadcasting Corporation programmes at the disposal of South African listeners?
    Viscount WOLMER: I will answer these questions together. The beam stations for communication with South
    2178
    Africa are expected to be ready for the official tests in the course of the next few weeks. If the tests are successful, the stations will be taken over by the Post Office and a wireless telegraph service with South Africa will be opened. It is impossible at this stage to say whether the stations will be fully occupied with telegraph traffic, but it seems doubtful whether a directional station is likely to be as suitable for purposes of Imperial broadcasts as a station capable of transmitting in all directions.

    SECRET SERVICE AGENTS.
    Miss WILKINSONasked the Secretary of State for Foreign Affairs whether any Governments, other than the Russian Government, are known to have secret service agents operating in this country?
    Sir A. CHAMBERLAIN: I must respectfully decline to answer this question. It would not be in the public interest to make any statement on this, subject.
    Mr. THURTLE: Is the right hon. Gentleman aware that we can draw our own deductions from his statement?

    FOREIGN GOVERNMENTS (ACCREDITED AGENTS).
    Miss WILKINSONasked the Secretary of State for Foreign Affairs how many accredited agents the German, Italian, French, and Spanish Governments, respectively, have in this country?
    Sir A. CHAMBERLAIN: Germany, Italy, France and Spain are represented in this country by ambassadors. These are the only accredited agents of those countries.
    Miss WILKINSON: Can the right hon. Gentleman give any information as to the number of staff allowed to each?
    Sir A. CHAMBERLAIN: Oh, yes. If the hon. Lady wishes to know that, I can give it with notice. The only accredited agents about whom she asks are the ambassadors, and I think, by the way, I did give the information to the House some time ago.

    NAVAL OFFICER WRITERS (PROMOTION).
    Sir BERTRAM FALLEasked the First Lord of the Admiralty the determining factors governing the order in which chief petty officer writers are promoted to warrant rank?
    The FINANCIAL SECRETARY to the ADMIRALTY (Lieut.-Colonel Headlam): I would refer my hon. and gallant Friend to my reply of the 2nd May (OFFICIAL, REPORT, columns 1308–9).
    Sir B. FALLE: Is the hon. and gallant Member aware that the reply gave me no information at all?
    Lieut.-Colonel HEADLAM: I am afraid that there is nothing I can say to give any further information.

    SUNDAY TRADING.
    Sir R. THOMASasked the Home Secretary whether he will consider the desirability at an early date of introducing legislation to check the growth of Sunday trading; and whether his attention has been drawn to a resolution to that effect by the National Chamber of Trade, at Buxton, on Monday, 16th May?
    Sir W. JOYNSON-HICKS: I have seen the resolutions adopted by the National Chamber; but, as I have pointed out in replies to previous questions on the subject, the question is a highly controversial one, and I see little prospect at present of any Government legislation on the subject.
    Mr. R. MORRISON: In view of the fact that there is little prospect of time being available for legislation, will the right hon. Gentleman consider the advisability of setting up a Committee to go into the question of the ramifications of Sunday trading?
    Sir W. JOYNSON-HICKS: There is a Committee sitting on a somewhat cognate subject, and I think we might wait for their Report.

    EMPIRE MARKETING BOARD (FRUIT).
    Sir COOPER RAWSONasked the Secretary of State for Dominion Affairs whether he will recommend the Empire Marketing Board to include in their
    2180
    advertisements particulars of such fruits from our Dominions, Colonies and Protectorates as may be in season from time to time?
    The UNDER-SECRETARY of STATE for the COLONIES (Mr. Ormsby-Gore): I am glad to be able to inform my hon. Friend that the Empire Marketing Board are adopting the course which he suggests in a series of advertisements which will now be appearing very shortly in the public Press. The series will include home and oversea produce.
    Sir C. RAWSONasked the Secretary of State for Dominion Affairs whether it would be possible to publish in the advertisements of the Empire Marketing Board, for the better information of retailers, the names and addresses of the shippers of fruits and other perishable seasonable goods from overseas?
    Mr. ORMSBY-GORE: It is the present policy of the Empire Marketing Board to confine itself, in the main, to advertising of a general character and thus to provide a background against which individual Governments or firms can make known the particular products in which they are interested. I am, however, aware of the desire of many retailers for the detailed information to which my hon. Friend refers, and I am already exploring the best way of meeting their needs.
    Viscountess ASTOR: Would it not be a good idea to have an Empire fruit stall for Empire fruit in the House of Commons?
    Mr. SPEAKER: That does not arise out of the question.
    Lieut.-Commander KENWORTHY: When the hon. Member is considering the question of the shippers' names being included, will he consult the Chambers of Commerce of Hull and Liverpool as well as the London Authority, as those are the three great ports?
    Mr. KIRKWOOD: What about Glasgow?
    HON. MEMBERS: Cardiff.
    Mr. ORMSBY-GORE: The special Fruit Committee, on which there are members of the trade closely in touch with shipping interests, are consulted before any action is taken.

    OIL (IMPORT'S FROM RUSSIA).
    Mr. GILLETTasked the President of the Board of Trade the amount of oil received in this country from Russia during the last six months, and the figures for a similar period during the previous year?
    Sir NICHOLAS GRATTAN-DOYLE: Before this question is answered, may I ask whether the Russian oil referred to is not the oil that was stolen?
    Mr. SPEAKER: I must see that question before I allow it to be put.
    Sir B. CHADWICK: Imports of refined petroleum consigned from Russia amounted to 62·5 million gallons in the six months ended April, 1927, and to 31·3 million gallons in the six months ended April, 1926. Imports of crude petroleum from Russia were negligible in both periods.
    Mr. HAYES: Is the hon. Member aware that the Liverpool City Council, on which the dominant party is Conservative, have bought considerable quantities of Russian oil products, and have declined to listen to the ravings of the "Clear-out-the-Reds" movement?
    Sir N. GRATTAN-DOYLE: May I ask for an answer to my question, whether this is not stolen oil?
    Mr. SPEAKER: I should like to see that question before it is asked.
    Sir F. HALL: We do not want to buy stolen property.

BUSINESS OF THE HOUSE.

  WHITSUNTIDE RECESS.
  Mr. CLYNES: May I ask the Prime Minister to announce the business for next week?
  The PRIME MINISTER: Monday, Tuesday, Wednesday, will be the 8th to the 10th Allotted Days inclusive of the Committee stage of the Trade Disputes and Trade Unions Bill, and, if time permit, we shall take other Orders on the Paper.
  On Thursday, there will be the Motion for the Whitsuntide Adjournment until Monday, 13th June.
  Mr. PETHICK-LAWRENCE: Can the Prime Minister say what business will be taken on Monday, the 13th June?
  The PRIME MINISTER: It will probably be the 11th Allotted Day of the Trade Disputes and Trade Unions Bill.
  Ordered,
  "That the Motion relating to Russo-British Relations have precedence this day of the business of Supply,"—[The Prime Minister.]

  STRANGERS GALLERY.
  Mr. LUNN: May I put a question to you, Mr. Speaker, of some concern to many Members of this House? There are numbers of people in the Lobby who have tickets and cannot get into the Gallery. Most Members have been pestered with demands for tickets, as always happens when there is an important Debate. The front seat in the Gallery is usually vacant until four o'clock, and I should like to know if there is some reason for reserving that front seat. Is there some idea of priority for particular strangers? Is there a class basis in regard to the allocation of seats in the Members' Gallery?
  Mr. SPEAKER: Not at all. The seats to which the hon. Member refers are on special occasions reserved for the Press.
  Lieut.-Commander KENWORTHY: The Colonial Press.
  Mr. SPEAKER: The foreign and Colonial Press, who are not always able to be accommodated. There is no question of priority for other persons at all.
  Mr. ALBERY: Would it not be entirely misleading to the constituents of hon. Members if their applications for tickets are allowed to be described as "pestering"?
  Mr. MAXTON: On occasions like this, when great public interest is aroused, would it be possible to transfer the sittings of the House to a place like the Coliseum?
  Mr. SPEAKER: That suggestion would require more consideration than I am able to give it now.

  BILLS REPORTED.
  Bolton and Kingston-upon-Hull Provisional Order Bill,
  Reported, without Amendment [Provisonal Order confirmed]; Report to lie upon the Table.
  Bill to be read the Third time Tomorrow.
  Cardiff Corporation Tramways Provisional Order Bill,
  Reported, with Amendments; [Provisional Order confirmed]; Report to lie upon the Table, and to be printed.
  Bill, as amended, to be considered To-morrow.
  North British and Mercantile Insurance Company, Limited, Bill [Lords].
  Reported, without Amendment; Report to lie upon the Table.
  Bill to be read the Third time.
  Scottish Provident Institution Bill [Lords],
  Reported, without Amendment; Report to lie upon the Table.
  Bill to be read the Third time.

  MESSAGE FROM THE LORDS.
  That they have passed a Bill, intituled, "An Act to provide for the transfer to the East Surrey Water Company of the undertaking of the Leatherhead and District Waterworks Company; to extend the area of supply of the East Surrey Water Company and authorise them to raise additional copital; and for other purposes." [East Surrey Water Bill [Lords.]
  Also a Bill, intituled, "An Act to substitute for the Commissioners of the port of Arundel and harbour of Littlehampton a new harbour board and to transfer the harbour undertaking to them; to change the name of the harbour; to empower the West Sussex County Council to raise sums of money and to pay such sums to the harbour board; to provide for contributions by local and other contributing authorities; to amend The West Sussex County Council (Bridges) Act, 1918; and for other purposes." [Littlehampton Harbour and Arun Drainage Outfall Bill [Lords.]
  Also a Bill, intituled, "An Act for incorporating and conferring powers on the Wessex Electricity Company; and for other purposes." [Wessex Electricity Bill [Lords.]
  And also, a Bill, intituled "An Act to extend the boundaries of the city of Liverpool; to authorise the Corporation of that city to construct new streets, additional tramways, and other works; to confer further powers upon them with respect to their tramways, waterworks, and electricity undertakings; to make better provision for the health, local government, and finance of the city; to provide for the disuse and deconsecration of the Chapel of the Liverpool School for the Indigent Blind; to empower the Mersey Docks and Harbour Board to contribute towards the cost of a new arterial road between Liverpool and East Lancashire; and for other purposes." [Liverpool Corporation Bill [Lords.]
  East Surrey Water Bill [Lords],
  Littlehampton Harbour and Arun Drainage Outfall Bill [Lords],
  Wessex Electricity Bill [Lords],
  Liverpool Corporation Bill Lords],
  Read the First time; and referred to the Examiners of Petitions for Private Bills.

  COLONIAL PROBATES (PROTECTED STATES AND MANDATED TERRITORIES BILL [Lords].
  Read the First time; to be read a Second time upon Monday next, and to be printed. [Bill 145.]
ORDERS OF THE DAY.

  RUSSO-BRITISH RELATIONS.
  Mr. CLYNES: I beg to move,
  "That, having heard the statement of the Prime Minister, this House is of opinion that the termination of the Trade Agreement with Russia and the severance of diplomatic relations would have serious international consequences and close a promising avenue to the restoration of trade and industry, and is, therefore, a policy to which the country ought not to be committed until a Report of a Select Committee, based upon an examination of all relevant documents and a full inquiry into the facts, has been submitted to this House."
  The first part of the Motion contains language which is but a repetition of utterances in this House and in another place of Ministers who have had to approach this question in the course of former Debates. We declare in the Motion that the termination of the Trade Agreement with Russia and the severance of diplomatic relations will have serious international consequences, and close a promising avenue to the restoration of trade and industry. It is unnecessary that I should remind the House by a quotation of the last occasion on which the Foreign Secretary spoke on the subject of Russian relations, but I can recall clearly the eloquence, the feeling, and the persuasiveness, with which he presented the view that the severance of our relations with Russia would be harmful in the extreme, not only from the standpoint of our internal interests, but particularly in relation to the future peace of Europe. In, perhaps, even stronger language, Lord Balfour in another place has committed himself and the Government to the same point of view. We are entitled to ask, in what way will our internal trade and the peace of Europe remain unaffected by a reversal of the policy to which the Government is now committed? Reversals in the case of this Government have ceased to be a surprise to us.
  I understand the view of the Government to be that in this matter Russia is in the dock. We accept that position, but we demand that Russia must not be condemned without trial. We refuse to assume either the guilt or the innocence of Russia, and our Motion declares that, as far as there may be evidence suitable
  2196
  to submit to the test and examination of an appropriate committee, that evidence should be examined, and a verdict given after adequate inquiry. It is the common practice in Britain not to asume guilt until adequate proof has been offered and accepted, and our view is that a decision so grave as this, affecting internal and external affairs, should not take effect until there has been an impartial and sufficient inquiry into the charges alleged against the Soviet Government. [Laughter.] Even hon. Members opposite should for the moment restrain themselves, and not mock at the idea of trying to find the truth. It was not found in Arcos. It was sought for, and every weapon and implement available for wall-breaking and safe-smashing purposes was used to a futile end.
  There can be no doubt that there is some Communistic propaganda, not only in this country, but in other parts of the Empire. The party which suffers most from that Communistic propaganda is the Labour party. By every line and course open to us, by word and action, we have repudiated Communistic purposes, Communistic policy and Communistic methods. They are not eligible for association with us, and we decline to act with them in regard to our public and political affairs. We resent and would denounce any proven breach on the part of the Russian Government of any agreement or understanding reached between the two coutries. We will not excuse wrong-doing, and we demand on the part of the Government that their pledge should be binding and honourably observed. In the course we are taking this afternoon we have no partisan motive; the Labour party can reap no political advantage from the course we are taking. [Laughter.] I interpret that laughter to mean that hon. Gentlemen opposite are conscious that they can reap some advantage, and that reinforces the suspicion we have that their motive in this matter is wholly political, and in no sense dictated by consideration of national or international well-being. I repeat that our actions are not determined by consideration of expediency.
  We move this Motion because we are honestly convinced that the allegations made by the Government should be probed, and that the truth should be revealed by a proper and effective inquiry. It would appear, as the raid itself was

  2197
  so obviously a failure in serving its purpose, that it has to be justified in the eyes of the country. We understood that the Home Secretary had positive reason to believe a certain document had been stolen, and had been, or was, in the possession of a certain person. We ask, how is it that neither the thief nor the spy was arrested? Why was no one arraigned? If it was known so positively that this document had been stolen and was in the possession of certain persons or person, why was not the step taken of bringing that person to trial? The theft of a Government document is in itself an offence, and if the Government came so near being able absolutely to identify the thief, one would have thought that the person would have been arrested at least on suspicion, and the necessary steps taken to prove the charge against him. But that would not fit in with the Tory mind. Something more dramatic had to be done, and, accordingly, we have had the lurid statement from the Prime Minister. In one part of it he emphasised the offences of a man named Koling. I should like, therefore, to direct the attention of the Prime Minister to what, I think, is a temperate and reasonable reply which appears in the Press this morning, issued by the representative of Arcos. In that reply the Russian representative says:
  "It is possible that Koling has acted against the strict rules issued to the members of the Soviet organisations in this country by the Embassy and the Trade Delegation not to engage in political activities. It stands to reason that it is not always possible to know beforehand whether or not an employé will obey the instructions issued, but any case of disobedience is dealt with immediately, and had the attention of the Trade Delegation been drawn to the allegations made in this case it would have been similarly dealt with.
  The Trade Agreement, in any ease, contained no clause which makes the Trade Delegation responsible for the contents of the pockets of its employés, any more than the Trade Delegation can be made responsible for the personal views and activities of such members of its staff as happen to be admirers of the Morning Post' or the Daily Mail.'"
  4.0 p.m.
  I suggest that that is an answer reinforcing the appeal we make for an inquiry and our reply to the laughter of hon. Members opposite is that if it is so easy to prove the guilt of these alleged offenders, why not arraign them in the proper way? Why should the Government limit
  2198
  itself to suspicion, or opinions, or beliefs, when it has this offered opportunity of absolutely proving the guilt of those said to be in the wrong? I asked the Prime Minister in the course of Question Time on Tuesday whether, before the Cabinet decision was reached, any representations had been made to the Trade Delegation or any steps taken to arrange some conference or discussion on the alleged offences. The answer was in the negative. While the Trade Agreement provides that in the event of infringement either party is free from the obligations of that agreement, it contains also this provision:
  "It, is agreed that before taking any action inconsistent with the agreement, the aggrieved party shall give the other party a reasonable opportunity of furnishing an explanation or remedying the default."
  That course was not taken. In secret the Government reached its decision first, without reference to this provision in the Agreement, without making any representations to the Trade Delegation. The Government announced that unless that decision was reversed by the House, effect would be given it. Evidently from the Prime Minister's answer to a question earlier to-day, what he meant by reference to the House was a reference to the tied Tory party which is not to be allowed any freedom and will have to respond to the party whip when it is cracked. I say that in a matter so serious and of such international importance as this the Prime Minister ought not to rely on suspicion, nor on conclusions—he ought not merely to have reasons to believe. Those are the phrases found in the statement which he read on Tuesday. He ought to have proof that will carry conviction not only in this House, regardless of party, but also in the country itself. The methods being followed by the Government are in themselves the closest possible imitation of the Communist method. They are giving to the Communists again one of the finest world advertisements free that they could desire. They are taking a course which cannot defeat propaganda. The policy of the Government will strengthen the propaganda. It will leave astute propagandists even more free, and they will be able to carry on their work with less of a sense of responsibility and with perhaps even greater effect in this or any other country. I present those arguments,

  2199
  believing that there is a case for investigation, and that so solemn a step as this ought not to be taken without the proof we demand.
  We are immensely concerned in this matter from the standpoint of work, trade relations, and the improvement of business. We say that the class which in a special degree we may justly claim to represent—[An HON. MEMBER: "Why?"]—being the class which fights for its country in time of war and being the class which works for its country in time of peace—we feel deeply concerned at the evil industrial consequences that will follow from this step. I remember a few days after the Great War broke out there was a most egregious and pathetic plea made by representative business men here in the City of London to go on with business as usual—never mind the War—and in a similar way that plea was repeated by the Prime Minister on Thursday when he indicated that in spite of this political severance steps would be taken whereby legitimate trade could be conducted in the usual manner. I can assure the Prime Minister that business men have been intensely busy in the last day or two in endeavours to find out how the Prime Minister can make that assurance good. I should like to have some statement made in the interest of trade which might be, at least, some consolation for men in business, as to how they may hope that trade may be in a normal condition when these extreme measures take effect. [An HON. MEMBER: "What about America?"] What about America? The answer is simple enough; it is this, that unlike ourselves, though America has not officially recognised Russia, she helped to feed her instead of fighting her. Immense sums of money were conveyed from America to Russia.
  Viscountess ASTOR: And some from England.
  Mr. CLYNES: Russian agents have had far freer access to American territory for business purposes than they have had here, and by an interchange of friendliness and the exercise of greater common sense, America stands very much higher than Britain in the regard of the Russian people.
  We have regarded the Prime Minister as having, among many attributes and
  2200
  qualities, some qualifications as a business man. He will therefore know that business is in a very large degree a matter of credit and that credit is a matter of confidence. That confidence is valueless unless you have freedom of movement among the agents and representatives—
  Sir COOPER RAWSON: And unless they pay their debts.
  Mr. CLYNES:—and therefore we regard as an impossibility that if these diplomatic measures are taken trade should proceed as if nothing had happened between the two countries. You cannot treat a nation as an outcast and freely denounce it from party platforms as dishonest, and then expect that trade will thrive between the two countries. Some questions have been answered in the earlier part of the week regarding a sum of credit amounting to £10,000,000, and in view of the statement of the Foreign Secretary I would like to say that I know, as a matter of fact, that arrangements for the advance of £10,000,000 worth of credit were nearing a stage of completion when the raid took place. There are those in this House who are not ignorant on that point.
  Sir EDMUND TURTON: May I ask the right hon. Gentleman whether he has knowledge of the so-called arrangements to which he has just referred?
  Lieut.-Colonel HENEAGE: Will the right hon. Gentleman say from where he got that information?
  Mr. CLYNES: I, of course, have no knowledge of the details leading up to the transaction, but I have knowledge of the fact that such a transaction was nearing the stage of completion when the raid began.
  Sir E. TURTON: Will the right hon. Gentleman be willing to allow me to state for the benefit of the House exactly the position to which he refers?
  Mr. CLYNES: I am quite willing to permit the hon. Member to make a statement now or in the course of debate.
  Sir E. TURTON: I am much obliged to the right hon. Member. [Interruption.]
  Mr. WALLHEAD: We are not having it.
  Mr. CLYNES: Evidently the House prefers that I should proceed. [An HON. MEMBERS: "You cannot face the facts!"] Well, then, I say that on the eve of the raid an agreement was in process by which the Midland Bank was to finance orders through the Soviet Trade Organisations; whose orders, of course, to be placed in Great Britain, to the extent of some £10,000,000. This, I am informed, was repudiated officially by the Midland Bank immediately on receipt of news of the raid.
  Sir E. TURTON: On a point of Order.
  Mr. SPEAKER: It cannot be a point of Order. The hon. Member had better give the information in debate.
  Mr. CLYNES: So far had that agreement gone, and so ripe was the understanding in relation to it, that I have here a, list showing the different classes of work in which that £10,000,000 would have been spent. It is as follows: Machine tools, £800,000; textile equipment, £2,100,000; electrical equipment, £2,500,000; instruments, £500,000—[Interruption and an HON. MEMBER: "Do not you want the trade!"]—equipment for the oil industry, £2,000,000; mining industry equipment, £750,000; tools, £500,000; wire, £200,000; railway equipment, £1,000,000 agricultural machinery, £200,000. These figures make up a total slightly in excess of £10,000,000, but they are estimates. They have been submitted as round figures by those who were parties to the arrangement. All these orders have necessarily been stopped because of the raid. [HON. MEMBERS: "Orders?"] It is not necessary, I think, that I should try to explain the meaning of every word to hon. Members; I can assume a certain degree of intelligence on their part. I say that this prospect of employment in terms of £10,000,000 has been utterly destroyed by the Government policy.
  I do not know if hon. Gentlemen opposite have seen a statement this morning, in terms of the very greatest fear, by the President of the Manchester Chamber of Commerce. He does not speak as a partisan. He is not concerned with political quarrels, but he is conscious of the ruinous nature of the course which the Government propose to take, and he so expresses himself. Similarly it will be found, from a report which appears
  2202
  in the "Manchester Guardian," that the great firm of Platt Brothers, of Oldham, a firm which I happen to know well, and which employs some 10,000 workpeople, has communicated its fears in this respect. Indeed, I saw a representative of that firm in this House only to-day, and he has come to London feeling certain that the consequences of this policy and, he has said in a message, that it will be the cause of most serious unemployment in the town of Oldham. Mr. Gilbert Vyle, President of the Association of British Chambers of Commerce in his presidential address on 28th April this year, stated that a contract placed in this country for £100,000 would, on the average, provide work for a whole year for 560 men at an average wage of about £3 per week. The orders that would have followed upon the use of the credits to which I have referred would have provided work for 56,000 men, mainly in the engineering and metal trades for a whole year and, as the House knows, those are trades which are more in need of orders than any others.
  Perhaps the right hon. Gentleman the Chancellor of the Exchequer will be interested in a statement from a constituent of his, Mr. Golightly, who is not a man of Labour politics, but is a director of the Co-operative Wholesale Society. He has recently expressed himself in a public speech deploring the raid and dreading its consequences upon the very extensive business which the co-operative societies do with Russia in respect of many and different articles. He says, referring to the operations of the Russo-British Grain Export Company, of which he is a director representing the Cooperative Wholesale Society, that the business had many credits, that it was initiated by a clear credit of £850,000, and that in some cases debts have been cleared off a month before the specified time. I think that is weighty evidence from business and manufacturing quarters as to what are certain to be the consequences of this policy. Our industrial position is not such that we can airily afford to thrust back any potential customer, or to take any line of policy that will remove still further from us this immense market of 140,000,000 people. On Tuesday I asked the Prime Minister, in view of the seriousness of the Government policy, to afford the House such

  2203
  documentary evidence as they could provide in due time for this Debate and a few hours ago I was able to secure what is called a White Paper. I think it might be more aptly described as a bright, diverting, comic publication, for which I did not think any Government in the world would have become responsible. When I pressed for documentary evidence, the Prime Minister replied in these words:
  "We will do the best we can to produce something."£[OFFICIAL REPORT, 24th May, 1927; col. 1859, Vol. 206.]
  [HON. MEMBERS: "Read on!"] The right hon. Gentleman's words appear in the OFFICIAL REPORT and any hon. Member may read them for himself. If the Prime Minister requires any defence in respect of that quotation, he himself is able to give it. I find in this publication some fuller details about these propagandist missionary Communist sailors, and one must be moved by these details when they learn the type of man with which this country has to deal in this matter.
  "Segal, steward … appointed by Burns, some sort of fellow as Quass, dismissed at the request of the crew.
  Drank heavily, and did not work on the next day."
  Then there is Adams—not Bill Adams, but "the" Adams.
  "Adams, stoker. A good orator but a bad stoker and a slacker. The other stokers had to do his work for him."
  Well, we knew that the Government have been in a state of fear, but we did not think they would become so frightened of a few tipsy sailors as this precious White Paper reveals them to be. The real truth is, as claimed boldly and prominently in that section of the Press which supports the Government, that the announcement of this policy is the first fruits of a long campaign. Strained relations between the two countries did not begin in 1927; they began in 1917 and our hostility—the hostility of the Tory party particularly—towards Russia has been undisguised. Those who complain of Russian interference in our affairs were the first to interfere in Russian affairs, and they interfered not through the medium of propaganda or pamphlet or meeting, but through the instrument of invading armies, and by means of every material war agency that could be provided.
  2204
  Wars, as history shows throughout the ages, produce revolutions as their offspring, and the Russian revolution has become the most eventful, far-reaching and most controversial outcome of the Great War. We ought not to forget that in the course of that war Russia was not our enemy but our ally, and while this is not the moment to think of discussing the phases of the revolution, it is a moment for saying that the present Russian Government is the Government which the people of Russia accept. [How. MEMBERS: "No!"] That is shown by the fact that it exists, and the fact that the Tory party fears it is ample proof of its existence. It has outlasted every other Government in Europe since the end of the War, and it will outlast this Government. I am entitled to put this pertinent question. If the Government of Russia had continued to be aristocratic and plutocratic instead of representing Communist doctrines, would the attitude of His Majesty's Government towards it have been the same as the attitude which they are now adopting? We move this Motion with as great concern for the composure and welfare of our country as anybody can entertain in any part of the House, but we will not take sides for a policy, whether that policy be right or wrong—[Laughter.] If hon. Gentlemen cannot argue, they can laugh, and their laughter is an indication that they do side with a policy whether it be right or wrong. We press for this inquiry, convinced that no good results could accrue to our interests from the application of the Government's decision, and believing that in respect of propaganda and internal national interests, the effort to thwart Communist doctrine by this process would be utterly futile, and extremely harmful to British interests.
  The SECRETARY of STATE for FOREIGN AFFAIRS (Sir Austen Chamberlain): I must be permitted to express my regret that the Leader of the Opposition is unavoidably prevented from being present in his place to-day. Every Member on this side of the House will regret, as much as those who are more immediately associated with him politically, that ill-health should keep him away, and I am particularly sorry, as I should have liked him, as one who has held the high office that I now hold, to have listened

  2205
  to the discussion to-day, and because, even in his absence, I cannot avoid all reference to what he has said and written. The right hon. Member for Platting (Mr. Clynes) has moved a Motion which may be said to
  "Hint a fault, and hesitate dislike,"
  but which shows that he felt it necessary to walk delicately on the path which he has to tread. I am only sorry that the right hon. Gentleman, in the middle passages of his discourse, a little forgot the caution of his opening and made himself the apologist for a Government which cannot be excused. I also regret that the Leader of the Opposition, without waiting for the presentation of any evidence, should, if the ordinary sources of information are correct, have committed himself to a condemnation of the policy of His Majesty's Government from overseas, or from the sea, without having any idea of the grounds upon which that action was taken. I observe, from these same organs of the Press, that the Government of the Dominion of Canada, having taken into consideration the statement made and the evidence produced by my right hon. Friend the other day, have decided, like His Majesty's Government, to terminate the Trade Agreement. The right hon. Gentleman has expressed great concern as to the effects of our action upon trade. The foreign trade of Russia is not the expression of ordinary commercial activities and economic forces. It is, in part, the result of necessity.
  Mr. TAYLOR: So is ours.
  Sir A. CHAMBERLAIN: Then there is no reason to interrupt. It is partly the result of necessity, and largely an instrument of policy. The right hon. Gentleman has produced to the House information as to the £10,000,000 of trade—or was it of credit?—which was or was not agreed to be given shortly to facilitate trade with this country. I think it is more than a year ago that M. Rakovski came to talk to me, not of £10,000,000, but of many more millions of trade.
  Mr. TAYLOR: Was it not Sir Allan Smith?
  Sir A. CHAMBERLAIN: No, it was M. Rakovski, who announced to me that he was then in the position, and had the resources, to place these large orders. I begged him not to tell me where or how
  2206
  he intended to place them, as the Soviet Government were apt to attribute to my malign influence any difficulties that they met in their operations. What became of all those millions? When they were no longer required as an instrument of policy, they vanished into space, and no orders were ever placed. But trade is not dependent upon the Trade Agreement; trade is not dependent upon diplomatic representation. The United States of America have done about as much trade with Soviet Russia as we have. [An HON. MEMBER: "More!"] About as much as we have. Never, from first to last, have they been willing to accord recognition to the Soviet Government. Never, from first to last, have they admitted a trade delegation of the kind which we have had here.
  Lieut.-Commander KENWORTHY: There is a trade delegation in New York.
  Sir A. CHAMBERLAIN: There is not a trade delegation of the kind which we have had here. If the hon. and gallant Member will wait to contradict me until he finds me in the wrong, he will interrupt me less often. And yet the right hon. Gentleman says that the result of this refusal of the Americans to recognise the Soviet Government or to give a privileged position to a trade delegation is that America stands higher than we do in the estimation of the Russian people. For trade, for legitimate trade, His Majesty's Government are prepared to give all necessary facilities. Arcos may go on, Russian representatives may work in Arcos, but henceforth they enjoy no special privileges; they are subject to the law of the land in which they live; they are not to be permitted to continue the illicit activities which have been pursued alike by the delegation and by the Soviet Mission in this country. The right hon. Gentleman affected to make light of the papers which we have published. He quoted, I think, from this morning's Press, the statement by M. Rosengolz that Koling might have acted against the strict rules of the Trade Delegation, but that if their attention had been called by us to his improper activities, he would at once have been discharged or called to order; and the right hon. Gentleman seemed to accept that statement as a satisfactory answer to the facts disclosed by my right

  2207
  hon. Friend the Prime Minister the other day. Why, from whom does this answer come? From the man who, as is shown by the telegram of 1st April, was himself infringing, not merely the strict rules which the Soviet Government impose upon their trade agents, but the ordinary courtesies and decencies of international relations.
  The right hon. Gentleman and his party ask that the House should demand a Select Committee, and that to that Select Committee the Government should bring all the information in their possession. The Government are not prepared to accept that proposal. The right hon. Gentleman the Leader of the Opposition taught us how such a proposal for an inquiry should be treated. He described it as a Vote of Censure, and he said that if such a Motion were carried he would take the steps which it was his duty to take. We will not accept that Vote of Censure from the benches opposite. We ask from the House a clear expression of their confidence and approval, and if we do not obtain it we, too, shall know what steps it is our duty to take. There is, of course, a great mass of information in the possession of His Majesty's Government, derived from many sources, extending over a long period, out of which we have produced only one or two documents in the Paper which we have laid before the House. We are content to rest upon the information which we have disclosed. We think it unnecessary to produce any more of this information now, and, since it is unnecessary, we think it is undesirable to do it.
  But I will give the House some indication of the kind of material that there is. The House may have observed that the other day there was an attempted demonstration, which assumed only insignificant proportions, in front of the British Embassy in Washington. That may not be unconnected with a message from the Commissariat of Foreign Affairs at Moscow to agents abroad, of 9th April, in which he said:
  "It is absolutely imperative to organise in the shortest possible space of time meetings against England and to demonstrate where possible in front of British Embassies and Legations."
  The information in our possession shows that continuously, without ceasing, in
  2208
  every quarter of the world where the elements of trouble exist, the Soviet Government have sought to take advantage of those elements, to increase the unrest, and to create trouble, above all in those places where British interests could be affected, and so obstruct British trade. It shows that those activities were caried on, not merely abroad, not merely in Asia, but in this country. It shows us that the Zinoviev letter was not the only or the last document. It shows us the baleful part which, throughout the troubles in China, Soviet diplomacy and Soviet agents have played in that country.
  I take China as an illustration. Bolshevist activity in China dates back at least as far as 1923. In January of that year, we know that the Executive Committee of the Third International sent instructions to the Central Committee of the Chinese Communist party
  "to exercise their forces for the purpose of striking a heavy and well-aimed blow against the Imperialism of the foreign Powers."
  We know that they complained that the Communist party in China was devoting insufficient attention to sabotage in foreign enterprises, factories, and works, and that they complained that such a position could hardly be considered normal. In 1924, the Soviet Government established diplomatic relations with China, and M. Karakhan was appointed as Soviet Ambassador at Peking. Instructions from Moscow authorised him to assist in the organisation of methodical agitation and public demonstrations of protest against foreign intervention. On 7th November, at an official banquet, the Soviet Ambassador exhorted the Chinese Government to tear up the treaties between China and foreign Powers. If we come to Shanghai, we know that Rusian money was not alien to the disturbances there. The riot at Shanghai, which originated in an incident in a Japanese mill, took place on 30th May, 1925. On the 11th of that month Karakhan had sent orders to the local committee in Shanghai to enter immediately into close contact with the workmen and their organisation, causing strikes in the Japanese factories and playing an active part among the workmen so that they should not return to work until they received from the manufacturers

  2209
  the satisfaction they demanded. They were instructed to incite the working masses and to report to Karakhan the results of their efforts.
  This intervention, these incitements, were not confined to Shanghai. Encouraged by the result of their work there, they took up the work in Canton. On 6th June of the same year the Communist International notified the Kuo Min-tang of large sums of money which they were sending to conduct a militant campaign against Anglo-Japanese Imperialism. This was accompanied by an order to the effect that it was important, in conducting the struggle against Anglo-Japanese relations, to avoid as far as possible encounters with the American, Italian and French residents; it was desirable that the national indignation against the missionary schools should he made use of for dismissing all missionaries as being the real servants and guardians of Imperialism. The result of this agitation was the firing on the English and French Concessions by a procession of demonstrators, which included cadets from the Russian Training Military Academy; the incitement to fire, the order to fire, were almost certainly given by Russians.
  Mr. TAYLOR: On a point of Order. Several Members sitting around me are not certain whether the Secretary for Foreign Affairs is quoting from a document or whether he is making a speech, and we would like to know before the right hon. Gentleman proceeds further.
  Sir A. CHAMBERLAIN: Every document from which I quote I shall lay upon the Table. I am not now quoting from a. document. I am consulting a memomorandum which refreshes my memory as to the nature of the information that we have had in our possession. The connection of the Soviet Government with these intrigues was well known to everyone in China. It was definitely proved at the time of the arrest at Hong Kong, in June, 1925, of a Soviet citizen officially described in his passport as being at the disposal of the Soviet Embassy. He was carrying a certificate issued on 16th June by the Soviet Agitation Department in Shanghai, ordering him to proceed to Canton for the purpose of organising strikes. When he came up for trial the physician of the Soviet Consul-General at Shanghai attempted
  2210
  to bribe the Russian constable of the municipal police to declare that he had forged the certificate. The physician was arrested in the act of trying to hand over 10,000 dollars to the constable. He was remanded on bail, but preferred to forfeit his bail, and absconded.
  I do not propose to carry the story further. This is the class of information, well established, which has been in the possession of His Majesty's Government, much of it for a long time and some of it for only a short time. What does it all show? It shows that the conditions on which alone the Trade Agreement was signed, upon which every succeeding Government without exception has insisted, have been systematically and continuously broken by the other party to the Agreement. The information we have laid shows that privileges accorded to the Trade Delegation were abused, that Soviet House was the seat, not only—I think I might almost say not chiefly—of trading activities, but of political propaganda and anti-British agitation. It shows that the Soviet Mission at Chesham House was engaged in similar activities, a breach of the comity of nations and an abuse of the diplomatic privileges accorded to them; and it shows that both these organs were acting under the instructions and in the spirit of a Government which was pursuing the same hostile policy to the Government with which it professed to be in friendly relations, in every part of the world.
  I must, in order to bring home to the House the gravity of this action, recall what has passed between the two Governments. I begin with the Trade Agreement itself. It set forth that the Agreement was subject to the fulfilment of the following conditions:
  "That each party refrains from hostile action or undertakings against the other and from conducting outside of its own borders any official propaganda direct or indirect against the institutions of the British Empire or the Russian Soviet Republic, respectively;"
  and it went on to declare that it was understood that the term "conducting any official propaganda," included the giving by either party of assistance or encouragement to any propaganda conducted outside its own borders. That document was signed on 16th March, 1921. Within six months the Government, of the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George),

  2211
  who had signed the Agreement, found it necessary to address a Note to the Soviet Government, of which this is an extract. The Note is dated 7th September:
  "On the above review of the history of the last five months, it is abundantly clear that the conditions on which His Majesty's Government undertook to renew relations with Soviet Russia by the conclusion of the Trade Agreement remain unfulfilled. In spite of all the professions of good faith on the part of the Soviet Government, there have been unabated indications of bitter hostility towards this country and its Dominions and Dependencies. Even apart from the specific considerations to which it is pledged, it seems utterly to have failed to grasp the elementary principles which ordinarily underlie the relations between Governments professedly at amity with one another and naturally jealous of any attack on their own particular institutions. It still appears quite incapable of realising that a constant flow of inflammatory invective delivered by its leading representatives against the existing institutions of this country is an absolute barrier to the renewal of correct relations, and that actual hostile activities by its agents must necessarily prompt the belief that its desire for such relations is insincere.
  "His Majesty's Government have long been loth to believe that the Soviet Government was not as anxious as they themselves to create a more favourable atmosphere than previously existed, in which Anglo-Russian relations could be gradually cultivated till they finally became entirely normal. It has been their sincere desire that the Trade Agreement should not only be carried out, but should be the prelude to better relations between the Governments and peoples of the two countries. Such a future is, however, incapable of realisation if the conditions which have been described in this Note are to continue; and His Majesty's Government must ask for a definite assurance that the Soviet Government will cause these activities, which constitute breaches of the Trade Agreement, to cease."
  What was the reply? The reply was that a cursory glance over the document was sufficient to enable the People's Commissary for Foreign Affairs to state to Mr. Hodgson that the charges contained in the Note were either unfounded or based on false information and forgeries. So early did the Soviet Government decide on the line of its defence! The Government of the right hon. Member for Carnarvon replied:
  "His Majesty's Government have not made these charges without a prolonged and careful investigation in each case into the sources of their information—sources which it is necessarily impossible in many cases to disclose. They see no reason to recede from
  2212
  or even to qualify a single one of these charges now."
  That was dated 2nd November, 1921, being the first formal complaint made, and made within six months of the signature of the Agreement.
  I pass to 1923, when the Government of that day were obliged to take up the matter again. They said on 29th May, 1923:
  "There remains the all-important question of hostile propaganda carried on by the Soviet Government against the British Empire and British institutions in general. His Majesty's Government cannot conceal their surprise and disappointment that on this point the Russian Note gives no satisfaction whatever. Yet it is on the continuation or the cessation of these activities that the fate of the Trade Agreement depends. It cannot be too emphatically impressed on the Soviet Government that it was the pledge given by it that propaganda would cease—a pledge which is embodied in the text of the Trade Agreement—that rendered the conclusion of that agreement possible, and that the observance of this pledge was and remains an essential condition of it."
  They accordingly proposed a new formula to cover the case. It was in these terms:
  5.0 p.m.
  "The Soviet Government, acting on behalf of itself and of all associated and federated Governments, reiterates the pledges contained in the Russian Trade Agreement of 16th March, 1921, which were as follows: To refrain from hostile action or undertakings against Great Britain, and from conducting outside of its borders any official propaganda direct or indirect against the institutions of the British Empire, and more particularly to refrain from any attempt by military or diplomatic or any other form of action or propaganda to encourage any of the peoples of Asia in any form of hostile action against British interests or the British Empire, especially in India and in the Independent State of Afghanistan."
  It then, proceeds:
  "In view of complaints which have been made, the Soviet Government undertakes not to support with funds or in any other form persons or bodies or agencies or institutions whose aim is to spread discontent or to foment rebellion in any part of the British Empire, including therein all British protectorates, British protected states and territories subject to a British mandate, and to impress upon its officers and officials the full and continuous observance of these conditions."
  The Soviet Government said that that was an extension of their previous pledge; but they undertook it solemnly and promised its observance. I come now to the Note which was addressed to

  2213
  M. Rakovski by the right hon. Gentleman the Leader of the Opposition when he was Secretary of State and Prime Minister. I quote it not for the purpose of entering into any argument about the Zinoviev letter. The information in the possession of His Majesty's Government as to the authenticity of that letter was, as the House knows examined carefully by a Cabinet Committee, including, besides the late Lord Curzon and myself, the Lord Chancellor, Lord Birkenhead and Lord Cecil, who is also a trained lawyer, and it was the opinion of every member of that Committee that the information in possession of His Majesty's Government proved up to the hilt the authenticity of the document, from its inception in Russia to its delivery in London.
  Mr. CLYNES: May I put a question to the right hon. Gentleman on that point? I understand the right hon. Gentleman was referring to a document. Has he ever seen the original document, or did the Cabinet Committee in question only have before it copies of the document?
  Sir A. CHAMBERLAIN: It has been already stated that we did not see the original document. I refer to this matter because it proves the view which the right hon. Gentleman the Leader of the Opposition took at that time, when he had less information in his possession in proof of its authenticity than subsequently came into our possession. I refer to it for the statement of principle which he lays down as to what the British Government will or will not tolerate, and what are the conditions of diplomatic relations. Let me add that, whether the right hon. Gentleman intended this Note to be published at the time at which it was published, or whether he did not, is also irrelevant. The words which I am going to quote are words which were written in his own hands and which therefore, express his own view. They are as follow:
  "No one who understands the constitution and the relationships of the Communist International will doubt its intimate connection and contact with the Soviet Government. No Government will ever tolerate an arrangement with a foreign Government by which the latter is in formal diplomatic relations of a correct kind with it, whilst at the same time a propagandist body organically connected with that foreign Government encourages and even orders subjects
  2214
  of the former to plot and plan revolution for its overthrow."
  The Note goes on to recall the previous undertakings which had been given and the fact that the Soviet Government had just signed with the British Government of that day a new undertaking, and it says:
  "His Majesty's Government mean that these undertakings shall be carried out both in the letter and in the spirit, and it cannot accept the contention that whilst the Soviet Government undertakes obligations, a political body, as powerful as itself, is to be allowed to conduct a propaganda and support it with money, which is in direct violation of the official agreement. The Soviet Government either has or has not the power to make such agreements. If it has the power, it is its duty to carry them out and see that the other parties are not deceived. If it has not this power, and if responsibilities which belong to the State ill other countries are in Russia in the keeping of private and irresponsible bodies, the Soviet Government ought not to make agreements which it knows it cannot carry out."
  I have quoted from this document a statement of the policy of the right hon. Gentleman. I will only add that that which in his letter he was charging against the body for which the Soviet Government then and since has continued to disclaim responsibility—I charge it not only against that body and through that body against the Soviet Government, but directly against the Soviet Government and its representatives. The reply of the Soviet Government was of the usual kind. They replied that the letter was a forgery in terms which my predecessor very properly refused to accept.
  Mr. WALLHEAD: We still believe it was a forgery.
  Sir A. CHAMBERLAIN: The hon. Member, I think, is mistaken. They do not believe it to be a forgery, but they wish him to believe it.
  At that point I became responsible for the conduct of foreign relations. I have had a series of interviews with the different Soviet Chargés d'Affaires, and I am prepared to present to the House the despatches in which these interviews are recorded. I think in every one I have warned the Soviet Chargé d'Affaires of our knowledge of these breaches of the Trade Agreement, and I have warned him of the consequences. I do not propose to read them all now, but I will read one or two. On the 1st April, 1925,

  2215
  in reply to a suggestion which he made for a general discussion of our relations, I replied that I saw little use in entering into such general discussions as long as I was under the impression, from which I could not at present escape, that the political obligations embodied in the Trade Agreement were not being fulfilled, and that the influence of the Soviet Government or of the Communist International, whose activities I could not dissociate from those of that Government, was continuously being employed in an unfriendly spirit to British interests. M. Rakovski replied that I could not expect the Soviet Government to renounce its principles. He said that it had its own principles as we had ours, and neither of us could be expected to change them to oblige the other Power. I observed that that was all very well, but that it did not meet my point. Nothing in the principles of the British Government obliged them to adopt an unfriendly attitude to Russia in other parts of the world. If he was under the impression that I had been engaged at Rome or at Geneva in an effort to form an anti-Soviet union, as I had seen suggested in the Russian Press, I might tell him at once that there was not a word of truth in that suggestion. We were sufficiently strong in our own strength to protect our interests, and we had no idea of embarking on any such international campaign but the Soviet Government appeared to act differently. Did he mean that their principles rendered it necessary for them to encourage anti-British feeling in eastern States, or even within the British Empire? If so, it was quite useless for us to enter upon such an examination as he had suggested. I instanced the conduct of the Soviet Ambassador in Peking, and he said that M. Karakhan had perhaps been indiscreet and would amend his ways in future. On 5th November, 1925, I repeated to M. Rakovski what I had said to him before, that I could not enter into any discussion for new engagements while old engagements were not observed. I said that what was needed to improve our relations was a cessation of these hostile activities on the part not only of the Soviet Government but of the Third International. I once more repeated my warning on 13th July of last year in a conversation with M. Rosengolz. I
  2216
  quoted the earlier warning which I had given to M. Rakovski and I said that those remarks were equally true on that day. I was unable to absolve the Soviet Government from responsibility for the action of the Communist International, and said that upon this point His Majesty's Government took exactly the same view as that expressed by Mr. Ramsay MacDonald in his Note on the Zinoviev letter. M. Rosengolz spoke of the difficulties that existed between us in the Far and Near East having become less. In that connection I would recall to the House the sketch of Soviet activities in China which I gave earlier, covering the very period with which these words were concerned. He said that, as to what I had said about the Communist International, it was impossible for the Soviet Government to control its activities or interfere with its liberty. It would be contrary to freedom as understood in Soviet Russia. Finally, the House remembers the Note which I addressed to the Soviet Government on 23rd February last. I said in the course of that Note:
  "His Majesty's Government are not concerned with the domestic affairs of Russia, nor with its form of government. All they require is that that Government should refrain from interference with purely British concerns and abstain from hostile action or propaganda against British subjects. But they consider it necessary to warn the Union of Soviet Socialist Republics in the gravest terms that there are limits beyond which it is dangerous to drive public opinion in the country, and that a continuance of such acts as are here complained of must sooner or later render inevitable the abrogation of the Trade Agreement the stipulations of which have been so flagrantly violated, and even the severance of ordinary diplomatic relations."
  In the face of all those grave and serious warnings the Soviet Government and their agents continued the activities of which we complain. They have had fair notice. It was given to them many times over, and formally in my Note of 23rd February. Within five weeks of the dispatch of that note M. Rosengolz, to whom it was addressed, was telegraphing to his Government for material with which to conduct a political agitation in this country against His Majesty's Government's policy in China.
  Mr. TAYLOR: He denied that. I want to know what evidence the right hon. Gentleman has.
  Sir A. CHAMBERLAIN: M. Rosengolz may deny it. I think his denial was confined to the statement that no such telegram had been sent "en clair." The right hon. Gentleman has recalled the words I used earlier this year, or in a previous Debate, when I was seeking, in spite of all that had happened, to preserve diplomatic relations in the hope that by the exercise of patience and forbearance, as the Prime Minister said, probably unparalleled in the relations of two countries. He quoted the words which I used when I urged that we should not break away, and he asks "Why break now?" I think the real question would be "Why not before?" With all this information before us, with these constant and flagrant breaches of the understanding and of diplomatic courtesy and friendly relationships, why not have severed these relations long ago? If we had thought only of British interests, if we had thought only of our own protection, we should have done so. If I pleaded with earnestness, with passion, to the House not to force a decision upon us, but to give the Soviet Government yet another and another chance to mend their ways and to realise the hopes that my right hon. Friend the Member for Carnarvon Boroughs entertained when the Agreement was first signed, and which the right hon. Gentleman the Member for Platting entertained when they recognised the Soviet Government—if I did all that, if in pleading so I used exaggerated language, do not blame me for it. At least it shows how honest was my endeavour and how long and how patiently I pursued it. His Majesty's Government have in the two and a half years for which they have been responsible pursued their policy of peace in every part of the world. They have co-operated with all who would co-operate with them. They have loyally supported the League of Nations; have helped to add to its authority and to lend it strength. We submitted our own quarrel to the arbitration of the League, and concurred in that decision in the interests of peace. We made in fact a further concession than that which had been required of us.
  So, too, at Locarno we set ourselves to work, in collaboration with the Powers who met there, to turn over a new page of history, to try to lay the basis for a reconciliation between those who shortly
  2218
  before had been enemies in arms and even up to that moment were still enemies, though no longer in arms. In all these matters, in our pursuit of peace in every sphere, in our co-operation with the League, and in our partnership at Locarno, there has been but one Government which has refused to co-operate, there has been but one Government which has not merely looked askance at this work of pacification and reconciliation but has sought to hinder it, a Government which is as hostile to the League of Nations and all the League stands for as it is hostile to the other great league of peace, the British Empire. Still we strove, still we continued relations which had become a hollow sham. At last we felt it necessary not to confine ourselves to the spoken warnings which I had uttered again and again, but once more to repeat in solemn form our words of protest and of warning. The Soviet Government have paid no attention to those words of warning. They have shown that they are incorrigible. We have practised forbearance till forbearance was out-worn. We have pushed patience to the point at which further persistence in it would be weakness or acquiescence in dupery. We have even now not sought to engage the action of any other Powers or to embarrass them with what are our problems and our difficulties. But His Majesty's Government can no longer take the responsibility of maintaining diplomatic relations which, so conducted and so abused, are not an instrument of peace but a fresh and continual source of irritation and danger, and in asking from the House a clear and unmistakeable, expression of its approval we have no doubt that the House will give it.
  Mr. LLOYD GEORGE: I would like to associate myself with what fell from my right hon. Friend about his expression of regret at the fact that the dangerous illness which the Leader of the Opposition has passed through has not enabled him to take part in this discussion. My right hon. Friend the Member for Hill-head (Sir R. Horne) and I were responsible for negotiating the Trade Agreement which is now coming to an end, and, therefore, I trust the House will permit me to state my views with regard to the wisdom or otherwise of the termination of that Agreement.

  2219
  There are three questions which the House of Commons and the country have to consider. I am afraid the Cabinet did not consider them altogether before they committed themselves to this policy. The first is, whether there is sufficient evidence to justify a break if it is desirable; the second is, whether it is desirable at this stage that strong action should be taken; and the third is, whether the Government have not gone too far, even if that were conceded. With regard to the question of whether there is sufficient evidence to warrant a break, if it were desirable to have a rupture between two of the greatest nations in the world, I say at once I think the evidence is sufficient. Quite frankly, looking over the last five or six years, and having regard to the conditions of the Trade Agreement negotiated by my right hon. Friend and myself, I must frankly admit that the Soviet Government have not kept faith. The right hon. Gentleman the Secretary of State has quoted our dispatch of 1921. That demonstrated clearly that within six months after this solmen engagement had been entered into it was being infringed. I have no doubt about the evidence, none.
  It is no use talking about forgeries. Those of us who know how the evidence comes in, and I quite understand it is impossible for the Government altogether to give away all the methods by which information is obtained. [HON. MEMBERS: "Why?"] I know perfectly well that a similar answer was given to me by M. Kameneff when I had the actual documents signed by themselves in my possession. I have it in my possession at the present moment, and I have refreshed my memory by looking at it within the last couple of days. My right hon. Friend saw it just as well as I did. M. Kameneff denied it, and I had to request him to leave the country, which he promptly did. I have no doubt at all about the evidence. The evidence was in the possession of the late Prime Minister, the head of the Labour Government. He knows just as well as we do what that evidence is. I have no doubt there was evidence in 1923, and I could guess what the evidence is. It is evidence which every Government must consider for its security and effectiveness. I want to state my view quite
  2220
  frankly. With regard to the evidence, I am not as troubled as some of my hon. Friends. The Soviet Government have not acted honourably in regard to the Trade Agreement. Personally, I am in favour, and so is the Foreign Secretary, of making considerable allowances for the difficulties of a revolutionary Government. They are very considerable, and a revolutionary Government does not govern under the same conditions as old-established Governments. They are not established, and they do not acquire the same habits of order, and they have very great difficulties, undoubtedly, with the people behind them. In making allowances for all that, and still I say the Russians have not kept faith with us.
  I want to come to the question of the wisdom of the action of the Government, but I must state frankly my view with regard to the proceedings of the Soviet Government, and that is only fair. In regard to the Trade Agreement, the conduct of the Soviet Government has too often looked like a clumsy attempt to reconcile a genuine desire to have every advantage of peace with the greatest Empire in the world, with an equally genuine desire to have the satisfaction of witnessing its overthrow. It would not be fair, and it would not be honest, with all I know about the evidence, and the knowledge that assists me to examine the evidence in the possession of the Government now, to the hon. Members whom I represent if I did not state quite frankly that I certainly could not vote for any resolution which does not express unmistakeable reprobation of the continuous breaches of an honourable agreement entered into between the Soviet Government and this country. That would have to be an essential part of any resolution to which I could give my support.
  I agree that there has been a great deal of patience—I think wise patience. I think, quite honestly, that the case for this particular note is the weakest of all cases that have been made up to the present. There is evidence of interference, but I agree with the opinion of a Conservative newspaper in Germany which stated that they were rather surprised the Government should have thought it necessary to take such very strong action upon these particular infringements. I asked the Prime Minister the other day

  2221
  to print in full one of the documents upon which he seems to rely, and the effect of that document seems to me to be that it gives too much the impression of straining to make out a case. It is really rather a ridiculous document. It is an extravanganza of incredible nonsense, and I am amazed at some of the statements which have been put into a brief of that kind. My right hon. Friend has already quoted one or two passages from it, and I will quote one or two more, because they are very interesting. It is the general complaint that the Communist party have planted upon the Soviet ships all the rotten and drunken sailors on whom they can lay their hands. Here are a few quotations:
  "Adams, stoker. A good orator but a bad stoker and a slacker.
  Ramsay, not a sailor.
  Comrade Glushchenko called us damned lazy swine."
  Hon. Members will not be surprised to find that afterwards
  "The relations of Glushchenko with the other members of the R.K.P. were exceedingly strained from this time on."
  I do not think we have ever got so far as that in our public conduct, at any rate. I think, on the whole, the only really valuable part of this document is where the right hon. Gentleman points out the difficulty he has in diplomatic relations between England and the Soviet Government. I think there was a certain air of restriction in that respect, but when you come to the method of propaganda, when you hear talk about training negroes to convert British sailors, I believe the physical evidence of the argument would not be as clear in a case of that kind as it should be. I think that kind of evidence rather weakens the whole case.
  I should like to ask the Foreign Secretary something about another document which I, also, have in mind which I thought was a very important document, and that was in regard to the communications about Borodin. I must say that that impressed me because I had heard assurances that Borodin was really a private citizen and was not a representative of the Government, and that he was no more than Mr. Tom Mann who has gone there of his own accord and General Sutton. I attached very great importance to the statement made by the Prime Minister that this was not true. I should
  2222
  like to know now, because it is not apparent on the face of this White Paper who signed the letter on page 29 of the White Paper. In all the documents with which I dealt the telegrams were signed either by Tchitcherin or Kameneff or whoever it might be who sent the despatch from Moscow. What I want to make clear is that this is not something which comes from a political organisation in Moscow, because undoubtedly Borodin was associated with some Communist organisation in Moscow, and he went there on their behalf. Does it mean that the document emanated from the Soviet Foreign Office?
  Sir A. CHAMBERLAIN: From the Commissariat of Foreign Affairs, and that is the Foreign Office.
  Mr. LLOYD GEORGE: Was there any signature attached? In other telegrams the name is given when it comes from the Commissariat.
  Sir A. CHAMBERLAIN: That may be so in particular cases.
  Mr. LLOYD GEORGE: Now I come to the question of the action taken by the Government after the raid. Whether that was desirable or not is another thing, but I think the raid forced the hands of the Government, and it, was essential, probably, that they should take some action. The question which I am going to put to the House is as to whether the particular action the Government have taken is a wise one. The Government have not considered the action which they have taken under those conditions of calm which are necessary before committing themselves to a policy of such far-reaching importance as the present one. I think the Foreign Secretary has had his hands forced in regard to this breach of relations. I think that is quite evident. If I may say so, I do not think the Foreign Secretary spoke with the same fervour to-day as he did when he was defending the policy of Locarno. In my judgment, I do not think the Foreign Secretary came to the conclusion before the Home Secretary acted that the time had arrived to have a rupture with Soviet Russia. I think that is rather important, and, if I may say so, I think he was right, and I do not think the time was well chosen.

  2223
  As a matter of fact, the Communist efforts in China have been defeated, and the Government in Russia is undoubtedly the most moderate that we have had up to the present time. I do not know how many Members of this House have read an article in the "Statist" of last week or the preceding week, giving an account of proceedings in Moscow. It stated that Zinovieff had been dismissed by the Stalin Government, and there was a fight going on between the Stalin and the Rykoff Governments and the Zinovieff and Trotsky combination. They have been beaten, the Zinovieff deputy has been driven out and a great conflict is going on. On the whole, the moderate element are getting stronger and stronger in Russia. Now and again the others are strong enough to force that Government into indiscretions, but, after all, the Soviet Government is not the only Government where hot-headed and indiscreet members force the hands of wiser ones.
  The only difference is that in Moscow, undoubtedly, the saner elements are getting stronger and stronger, and they are getting a firmer hand on the situation. Here it is exactly the opposite. You had in China the fact that the leader of the Cantonese forces had thrown over the Russian Communists. He had given the clearest proof of good faith by decapitating 100 Communists. It was recognised in Moscow as a complete defeat. The passages quoted in the "Times" and other newspapers from the "Pravda" and the "Izvestia," which appeared in this country were just explanations of that defeat and condemnations of those who brought it upon the Russian policy. There is a defeat for Communism at the present moment in China. I am perfectly certain, therefore, that the right hon. Gentleman would not have chosen this particular moment if his hand had not been forced by his more hot-headed colleague, the Home Secretary, It is very unfortunate that the foreign policy of this country should have been dictated by the Home Office, and not by the Foreign Office, in the most important diplomatic act since the War. Let us examine a little more closely what has been done. I may be asked, "What would you have done?" I am going to answer that. I agree that, once the hands of the Foreign Office and of the Prime Minister were forced by the
  2224
  action of the Home Office, once you had called the attention, not merely of this country, but of the whole of Europe, by a most dramatic act, to what you were doing, you were bound to do something if you discovered anything. [Interruption.] If you discovered anything, you were bound to do it. You did not discover what you sought, but you were bound to take some action. The Government would have looked very foolish if they had not. They would have been taunted with feebleness, and there is no Government that can stand that charge less than the Government that merits it. They were bound to take some action, but they need not have gone to the extreme limit to which they have gone now.
  What could they have done short of that? I would point out two or three things that could have been done to emphasise the displeasure of this country with the constant breaches of agreement by the Soviet Government, and I say emphatically that, before you ruptured diplomatic relations altogether, those steps ought to have been taken first. What are they? First of all, we ought to have kept the Trade Agreement ourselves before we broke off relations with Russia on the ground of their infringement of it. For instance, one of the Clauses of the Trade Agreement is that, if there is any complaint, you must communicate with the other party and give them an opportunity of explaining. [Interruption.] That was not done in this particular instance. When you are bringing a fresh charge, it is not enough to say that you gave an opportunity to answer other charges beforehand. Every other charge that was brought forward, in 1921, in 1923, in 1924, in 1927—in every case where specific charges were made, we kept the Trade Agreement ourselves by giving an opportunity to the others to afford an explanation. We made the mistake of not doing so on this occasion. If I am asked, "What would you have done?" I should first of all suggest that there was one step that this Government could have taken, which they have taken, but they have gone beyond it. If they had said, "We will withdraw the special privileges of the Trade Agreement in Clauses 4, 5 and 6; we will place the trading of Russia on exactly the same footing as the trading of any other foreign community, with no special privileges, no special immunity, no 3 kilograms

  2225
  of secret and sealed documents, no particular protection for the man who is at the head of Arcos"—that is one step that they could have taken. There is another step—
  Sir A. CHAMBERLAIN: That is exactly what we did do.
  Mr. LLOYD GEORGE: That is right. I am coming now to the second. They might have said that the men who had been guilty of these breaches of the agreement, who had been found with documents in their possession that were a gross infringement of the Trade Agreement, must be instantly deported. If there was any case where there was espionage such as that which has been suggested by the Prime Minister, then, if the evidence was complete, there ought to have been prosecutions. I should have gone beyond that. I should have said to the head of the Trading Delegation, who was responsible for the discipline of his office, who was responsible for seeing that the conditions under which the office was conducted were in conformity with the Agreement entered into with a Power in whose capital the Delegation was conducting its affairs—I should have said to him. "You have failed in controlling your office, and you also must go." I should certainly have taken those three steps if it were necessary, but I think it is one of the gravest things that have been done in this country, short of embarking upon war, to rupture diplomatic relations with a Power with a population of 100,000,000, occupying an enormous tract of territory in Europe and in Asia, and coming in contact with us at so many points. I think it was one of the riskiest and most hazardous decisions ever taken by a Government, and before they took that—[Interruption.] Hon. Members must really listen to the case I am putting, because I can assure them that I am putting it after a good deal of experience of these matters, and after very grave thought as to the line which ought to be taken. I have not shirked in the least the question of evidence; I have not shirked in the least the question of taking strong action: but I say that, before you took that final step, you ought to have taken two or three other steps which you could have taken without a complete rupture of relations.
  2226
  I am going to give my reasons. A good deal has been said about a quotation from the Foreign Secretary of what he said. Sir George Cornwall Lewis, whenever he had a brilliant or daring plan put before him, always asked one question—"What is your object?" I ask the same question here—"What is your object in rupturing relations?" I can understand your object in saying, "We cannot give special immunity to Arcos; we have discovered these documents there; we will give them no more immunity." I can understand your deporting everybody who has been engaged in infringing the Agreement. I can understand your deporting the man who, although you could not bring it home to him personally, was responsible for controlling that office. But what is your object in complete rupture? Is the object to diminish propaganda? You have doubled and intensified it. [Interruption.] Does anyone doubt that? [HON. MEMERS: "Yes!"] All I can say is that it is only those who know absolutely nothing as to what was taking place before the Trade Agreement was entered into; and I am going to give some particulars to the House of what was happening before 1921, when the Agreement was entered into. If hon. Members imagine that the propaganda cannot be intensified and doubled and redoubled, they do not know what was taking place before. Is your object to prevent action by Soviet agents which embarrasses us in Asia? Does that stop it? It will make it worse than ever. It was worse before the Trade Agreement. Is your object to promote trade in a country that has a million unemployed? I do not know how much trade will be done after this, but I am certain it will be less. What is the object? My right hon. Friend quoted from the Foreign Secretary. There is an even more remarkable quotation from a speech of the most experienced member of the present Government, and, in my personal opinion, without any reflection upon any of them, and I think they will probably admit it, on the whole the wisest—Lord Balfour. When it was proposed in 1926 to take exactly the same step as the Government have been rushed into to-day, upon evidence just as convincing, just as overwhelming, and I think just as unchallengeable—because I have not challenged the evidence at all—what did

  2227
  he say? I make no apology for reading it to the House, because it is so utterly apt. In June, 1926, he said:
  "I am not at all sure that we ought ever to have gone into relations with Russia."
  [HON. MEMBERS: "Hear, hear!"] Very well; let us see whether hon. Members will cheer the next:
  "But there is a great difference between breaking off relations and not entering into them, because the first of these two operations produces disturbances which may go far beyond the confines either of Russia or of this country. The whole of the industrial, financial and economic world, on this side of the Atlantic at all events, is in a most sensitive and embarrassed condition. Nobody doubts that it is in a condition under which it would be the height of rashness, except for a really serious gain to introduce a new disturbing element. I do not see what would be gained at the present time by breaking off relations with Russia. That carries with it obvious dangers. Does it carry with it any obvious advantages? If it does, I fail to see them."
  Then he goes on to say:
  "It may give you the excitement at the moment of some effective proceeding; it is utterly inefficient."
  He goes on to point out—I do not want to weary the House with the whole quotation—that in his judgment, as he repeats, there is no advantage to be gained by rupture, but there are many disadvantages, in the condition of Europe.
  Mr. ERSKINE: That was a year ago.
  6.0p.m.
  Mr. LLOYD GEORGE: That was in June, 1926. There was the same evidence, and stronger evidence, at that time—[Interruption]. We knew exactly what was going on in China. Borodin was there. The English papers were full of his activities in stirring up anti-foreign and anti-British attacks the whole time. It was the same case. I ask, what will be gained by rupture? Have we gained nothing by diplomatic relations? I say emphatically "Yes!" Can we derive any advantage from a rupture. I say emphatically "No!" I listened to the Foreign Secretary with great care. He did not point out a single advantage which would be gained to this country by rupture. The question of trade has been rather scoffed at. The Anglo-Russian Chamber of Commerce, in which you have about 300 British firms enrolled, gave the trade we
  2228
  have done with Russia during the last five or six years. It came altogether to about £180,000,000. There were about £20,000,000 worth of textiles and £11,000,000 worth of machinery ordered in this country. I do not know the details of the £10,000,000 transaction. I have heard that it is not a guarantee to Russia but to the traders here who are supplying goods to Russia. I understand that is upon actual orders which have been given and for the purpose of furnishing long credits to enable these goods to be supplied to Russia. [HON. MEMBERS: "No!'] There is an hon. Member over there who knows, and can correct me if I am wrong.
  Sir E. TURTON: I am much obliged to the right hon. Gentleman, and I should also like to thank the Leader of the Opposition for his courtesy in attempting to allow me to give an explanation, which was frustrated by the hon. Members who sit behind him. I propose to read exactly what the terms of the loan are. The arrangement between the Midland Bank and the Russian Trade Delegation contemplated orders being given in this country for machinery and plant by the Soviet trading organisations up to an amount of £10,000,000. Any proposed contract that was to come under the arrangement was to be submitted for approval by the bank. The terms of any such contract were to include payment of a substantial percentage of the cost before delivery, and bills being given extending over a period of three years and six months for the balance. A deposit was to be lodged with the Midland Bank by the Soviet organisations of a substantial percentage of the amount due on the bills, and a lien on the deposit was to be held by the bank as long as the bills were outstanding. The bank undertook to discount these bills at the ordinary trade rate, retaining a right of recourse against the British contractor in the event of default on the part of the Soviet organisations. No contract has, in fact, been submitted for the approval of the Midland Bank, and, consequently, no agreement has yet come into being. It should be noted that no agreement could come into being until after the approval by the Midland Bank, and the bank is entitled to take all circumstances into account before giving its approval. The statement that a credit of

  2229
  £10,000,000 was given by the Midland Bank to the Soviet trading organisations was wholly unwarranted. In any circumstances, the trade organisations were obliged to find, before delivery of the goods, a considerable part of the purchase price either in direct payment to the contractor, or by the placing of a deposit with the Midland Bank.
  Mr. LLOYD GEORGE: I am obliged to the hon. Gentleman for giving us that very full information. It is substantially what I had heard from traders. It was rather on their guarantee than on the guarantee of the Soviet Government. A number of traders came together. I know of some orders. I know of an order for £750,000. I know perfectly well that that could not have been submitted to the bank, because it was only on the Wednesday before the raid that the negotiations came to an end, and it would be impossible to submit it to the bank, but the traders had discussed it with the Soviet bodies. The orders had been discussed and arranged, and the next step would have been to submit these documents to the bank. The bank was not implicated in the least up to the present moment. But there is the fact that there was an arrangement for giving orders for £10,000,000 of British goods, which would mean about £5,000,000 of wages in an industry which is suffering probably worse than almost any other industry, and that is a most valuable interruption.
  But that is not all. There is no doubt at all that it would be an increasing trade. Russia is the greatest undeveloped country in the world and, whatever may be said about the Soviet Government, they are undoubtedly concentrating upon economic development. They are giving orders for machinery for production and for textiles. That would have increased. They have increased year by year their production until they have very nearly come to the level of pre-War, and we have quarrelled with that Government at a moment when we were negotiating an order of £10,000,000 and an arrangement had been made for credit. The right hon. Gentleman said, "Why should you lose that trade?" Does he imagine that the Midland Bank, or these traders, will carry out this arrangement for £10,000,000 with a country where there
  2230
  is a diplomatic rupture? What bank can he find which will even look at it? That transaction has gone. How many traders will carry on when there is a quarrel? It is no use citing the case of America. The answer is the one given by Lord Balfour. There is a great difference between breaking relations after you have begun them and never having started them. You have turned out the Soviet representative, charging him with falsehood. You charge the Foreign Secretary with falsehood. There is a quarrel. There is a rupture. Does anyone imagine that trade with Great Britain will be considered in the same light as trade with America after that? Anyone who does that knows nothing of human nature, and there is just about as much human nature in Russia as there is in this country. With regard to America, we were bound here to enter into some sort of diplomatic relations, because America had never been engaged in war with Soviet Russia. We were bound to make it up formally in some shape or other. But having done so, we brought it to an end, and I am wondering whether it was worth while.
  The right hon. Gentleman has presented a case to the House and the Prime Minister has presented a case to the House. They are very deplorable. I am not defending them. On the contrary, I am condemning them. But they must not imagine that the Soviet Republic is the only country that is guilty of these offences. What is the first charge brought by the Prime Minister in his document? It is espionage for the purpose of obtaining information about our Army and Navy. Are we not doing that? If the War Office and the Admiralty and the Air Force are not obtaining by every means every information about what is being done in other countries, they are neglecting the security of this country. Foreign Secretaries know nothing about it. It is not their business, but it is our business to get information. Foreign Governments are getting information about whatever is happening here. As a matter of fact, when the Great War broke out there were no secrets with regard to the machinery of the enemies we fought that we did not know. We knew the number of ships, we knew their guns, we knew their calibre. We knew even

  2231
  their spies and could have laid our hands on them at any moment, and we did so at the right moment when it suited us. These things cannot be done in one country without the Government knowing it. All the same, it is the business of Governments to find out exactly what is being done about armaments in every part of the world. It is their business to do it. If the Soviet Government are doing it they are offending in common with every other Government in friendly relations with us in the world. As a matter of fact even when you come to lying diplomacy, it did not begin with Litvinov. Queen Victoria called attention to the same thing in her letters with regard to Russia in 1878, when she said, "You never can believe the Russians". What about the famous speech of the right hon. Gentleman's distinguished father, when the Foreign Minister of the Czarist regimé lied about Port Arthur and said the Russians did not intend to go there, and went there? He made a speech in which he said, "If you sup with the devil you must have a long spoon."
  Sir A. CHAMBERLAIN: I should prefer not to sup.
  Mr. LLOYD GEORGE: I agree! He was wise enough never to have proposed a rupture of diplomatic relations with that country.
  Mr. MACQUISTEN: It was about the Kaiser.
  Mr. LLOYD GEORGE: It was about Russia, and the right hon. Gentleman knows it very well. There have been charges about propaganda. The Russian Government conducted a propaganda here between 1876 and 1878, and everyone knows now how their agents went about. They were even in high society at that time. There are extraordinary stories which are quite well known about their activities on that occasion. It is the old story. As for employing agents to stir up trouble, that is not a new experience of Governments to bring pressure upon others. One of the great speeches delivered by Disraeli in this House was the attack upon the Whig Foreign Secretary because they had sent agents to the Black Sea intriguing against Russia, with the result that Russia retaliated by sending agents
  2232
  against us. One of the reasons for the Entente was to put an end to proceedings of that kind. Fashoda was not an official incident, but was repudiated at the time, and the Entente undoubtedly removed things of that kind. These are things which have undoubtedly happened in the past. It has been taken as a reason for remonstrance, for taking strong action, but never for diplomatic rupture in the past. The right hon. Gentleman has, in my judgment, taken a very ill-considered and a very rash action. He has done it at a time when, undoubtedly, it was slowing down. I do not know whether the right hon. Gentleman has seen the documents which appeared in the "Daily News" this morning—I do not know from where the documents came—implicating Soviet Russia in activities in China. I have no doubt at all it shows that the Russians were fairly active. What is the complaint that is made there by the Chinese Communists? That they can never get an answer from Moscow. They can get nothing from them. They only sent 700 rifles. They only spent 20,000 dollars. That is not what a country with which you have a diplomatic rupture can do. It is a complaint that they are stingy and slow, which means that the Stalin Government and the moderate elements in that Government were gradually restraining the activities of those people who were provocative and making mischief for us.
  I ask the right hon. Gentleman and the Government—they have broken with Russia—have they considered how they are going to resume? They can only resume upon the word of the Russian Government. For what are they waiting? Are they waiting for the Romanoffs? We waited for 25 years for the Bourbons, and, meanwhile, there was a devastated Europe. For whom are you waiting to give you a word? Mr. Tchitcherin? You cannot take him; he has signed these documents, and is broken and has failed. Mr. Litvinoff's signature you cannot take. Stalin's signature you cannot take. Trotsky you certainly cannot. You cannot be looking to Zinovieff. Whose word in Russia are you going to take in order to resume negotiations? [An HON. MEMBER: "Kenworthy!"] It is no laughing matter. The hon. Gentleman knows very little about these matters. He seems to think it is a matter for merriment.

  2233
  If he reads the speech of Lord Balfour and the speech of the Foreign Secretary at the same time, when he points out that a rupture of negotiations will embarrass Europe, he will realise that it is a case, at any rate, to be considered with the gravity becoming this great House of Commons. I ask him again, whose word will they take? The fact of the matter is, it is not a miscalculation. There was no calculation at all. I think they slipped into it without consideration. It is a mess into which they have got, and a serious one. [An HON. MEMBER: "Not as bad as you got into!"] That is an unworthy observation, which I do not think I merit from the part I have played in this country. I am honestly concerned for the interests of this country, and I say it is a serious mess.
  I remember diplomatic relations being broken with a small State. My right hon. Friend the Chancellor of the Exchequer was a member of that Government. We broke diplomatic relations with a very small country, Serbia. There appeared to be complete justification. Everybody in the House and in the country were rather pleased with it. We found that it was impossible to keep it up, and with the same Government, the same people, the same assassins, as we called them then, we had to make terms and to send our ambassadors, and the same people were our allies afterwards in 1914. Breaking diplomatic relations, cutting off the wires of a great country, is a serious business. You cannot treat is as if everything were going on exactly as it did before. It will not. In my judgment, the thing you are thinking about would be infinitely worse. There were 24 Powers that had recognised Russia, following, undoubtedly, our lead—24 Powers, friends of ours, allies of our. France to-day has proclaimed openly, officially that it makes no difference to her. We shall be completely isolated in this respect in a Europe which is full of trouble. Nobody knows that better than the Foreign Secretary, and he has been doing his very best to try to secure a pacific Europe.
  What is the trouble in Europe to-day? Immediately after the War the danger was Communism. The danger to-day is an aggressive nationalism. It is the trouble which you get in Italy and South-Eastern Europe. It is the trouble which
  2234
  you get in the Balkans. It is the trouble which you have got on the Eastern Frontier of Germany, where there is a much more powerful party than the Communist party in favour of aggressive action. That is the trouble to-day, and into this troubled Europe—I am quoting the language of the Foreign Secretary, and the language of Lord Balfour—you throw this stone, this bone of contention. It is a leap in the dark and a leap into a whirlpool
  Mr. RENTOUL: I beg to move, in line 1, to leave out from the word "That" to the end of the Question, and to add instead thereof the words
  "this House, while appreciating the long forbearance of His Majesty's Government and their many efforts to maintain friendly diplomatic relations with the Soviet Republics in the face of acute provocation, applauds their decision to withdraw the diplomatic privileges which have been so gravely abused, whilst at the same time putting no obstacle in the way of legitimate trading relations with Russia."
  No one would be inclined to disagree with the right hon. Gentleman who has just spoken in emphasising the gravity of the situation. There will be only one opinion on this side of the House, at any rate, and, I believe, in circles outside this House, as to the extraordinarily unhelpful character of the speech we have just heard.
  Mr. WALLHEAD: Why should he help you?
  Mr. RENTOUL: I was not using the word "unhelpful" from the party point of view, but from the point of view of the country. In a, Debate of this kind it is, of course, highly desirable that as many different points of view should be expressed as possible, and, therefore, I for one certainly do not intend to trespass on the time of the House for very long. In view of the terms of the Motion that has been moved by the Opposition, some hon. Friends of mine and I felt that it was not only desirable but essential that an Amendment should be tabled which would more accurately and truly express our opinions and, what we believe to be, the view, not only of the majority of this House, but of the overwhelming majority of our fellow-countrymen. I must confess that the attitude of some hon. Members opposite in regard to these questions of foreign policy, and particularly in regard to Russia, is a matter of

  2235
  genuine and unfailing surprise and regret to many of us on this side of the House. Whenever any dispute arises between this and another country it is indeed difficult to understand why hon. Members are always so ready to accept without question the assurances and statements of foreign spokesmen, and are so suspicious of the good faith of our own, are so ready to suggest that their own fellow-countrymen have been guilty of every kind of disgraceful and even criminal conduct, and should be so unwilling to do anything to enable us, no matter how acute our domestic troubles may be, at any rate, to present a united front in the face of the world.
  Let me give one illustration in passing. The right hon. Gentleman the Member for Platting (Mr. Clynes) suggested that the Government were willing to condemn without trial and without affording an opportunity for the prisoner to bring forward his defence. I wonder if he himself always acts up to that admirable maxim, because I notice that only last Saturday, when speaking at Manchester, the right hon. Gentleman is reported to have used these words:
  "The Government have done good work in the matter of forgery. Evidently the Tory party can reap greater profits from forged documents, etc."
  Either that means what it says, or it does not. If it is intended to be taken literally, then, I say, it is an utterly indefensible suggestion to be made by any responsible statesman. If, on the other hand, it is not intended to be taken literally, I think the country, at any rate, has a right to expect that the right hon. Gentleman will speak with a greater sense of responsibility and not indulge in oratorical hyperbole of that kind.
  There was a statement in his speech with which every one of us, I think, would be in entire agreement when he announced that the truth was not found in Arcos. One has heard of Truth being found at the bottom of a well, but certainly the last place I should look for the truth would be in the subterranean chambers of Arcos. So far from recording or suggesting that the action of the Government is precipitate, this Amendment seeks to emphasise three main points. The first point is the unexampled patience of the Government in the face
  2236
  of acute, long-continued and persistent provocation. The second is, the unprecedented abuse by official Soviet representatives of their diplomatic privileges. Thirdly, it intends to emphasise the entire readiness of His Majesty's Government, both in the past and in the future, to carry on legitimate and bona fide commercial and trading relations with Russia, provided, of course, that the necessary basis of good faith and fair dealing can be established.
  The Amendment also upholds the decision of the Government as being the only course consistent with the prestige and self-respect of this country, in the face of a bitter and relentless foe. Does anyone deny that the provocation that we have received has been acute, or that the patience manifested by the Government has been altogether exceptional? The only justification for the Trade Agreement of 1921 was a sincere desire to create a better understanding and closer relationship between this country and Russia; but so unsatisfactory were matters, even from the start, and even within a few months of the signing of that Agreement, that a further solemn undertaking had been entered into—it has already been referred to, and I need not trouble the House with it—in which each party to the Agreement pledged themselves to refrain from indulging in hostile acts of propaganda. There have been warnings and protests innumerable as to the breach of those undertakings addressed to the Soviet Government by every Government since the Agreement of 1921, including the Socialist Government. Innumerable instances could be given. One might remind the House of the money that was proposed to be sent from Russia to this country during the general strike, and for which a special authorisation for transfer was obtained from the Soviet Commissariat of Finance, in spite of the fact that his attention had been called to the illegal nature of what was taking place in this country at that time.
  Then there were the large sums of money which were sent here during the coal strike. The suggestion is made that that did not come from the Soviet Government, but was simply animated by the desire to alleviate the sufferings of the men out on strike. Do hon. Members really believe that that money which was

  2237
  sent during the coal dispute of last year was sent from purely disinterested motives, and not with a desire to create political difficulties in this country? In addition to that, there was the bitter anti-British campaign in China, which was instigated and fomented by the Bolshevik Government through the notorious Borodin and others? No one has condemned in more emphatic terms the action that was taken there than the right hon. Member for Colne Valley (Mr. Snowden). His speeches and writings have been frequently quoted, and I only desire to give the House one short extract, taken from an article in the "Daily News" on the 29th January of this year. The right hon. Gentleman said in that article:
  "The violently anti-British character of the rising in China is largely due to Bolshevist inspiration. The Soviet Press claims credit for having provoked the trouble there. A resolution recently passed by the Executive of the Communist Internationale called upon the Communists in the country to concentrate upon support of a world revolution in Britain and China. Wherever there is a prospect of stirring up trouble, they, the Bolshevists, are there."
  Mr. MAXTON: What is the source of that quotation?
  Mr. RENTOUL: It is a quotation from an article written by the right hon. Member for Colne Valley. Those being the right hon. Gentleman's views, the only suggestion that he is able to put forward at this juncture is that this matter should be submitted to a Select Committee. All the protests that have been made have been treated with absolute contempt. The Prime Minister's statement to the House the other day called attention to their direct complicity in the disappearance of secret documents. There is a very real distinction to be drawn between the activities of a secret service, which is a recognised and necessary part of the organisation of any country and of every country, and the breach of a solemn undertaking and of diplomatic privileges by the use of what is ostensibly an ordinary peaceful trade organisation, for the purpose of collecting military information. A further serious point in The Prime Minister's statement called attention to the action of the Soviet Chargé d'Affaires in soliciting information about affairs in China in order to use it for political purposes here.
  2238
  A certain amount of scorn has, apparently, been directed by hon. Members opposite against the White Paper that has been issued. I doubt whether the people outside this House will quite share the view of hon. Members opposite in regard to it. They will, no doubt, have an opportunity of reading it, through the medium of the Press. I only refer to it for the purpose of reminding the House of the very last document which is included in the White Paper, which is a telegram from the Soviet Chargé d' Affaires in London, to the Commissariat of Foreign Affaires in Moscow, dated the 18th of the present month. That telegram says:
  "Among a number of rumours as to the nature of the missing document, there is also a supposition that it relates to the aerial bombardment of—."
  The name of the place is left out.
  "I consider it expedient for you to publish as a rumour a statement that it refers to the aerial bombardment of a certain European capital."
  What is the meaning of that? It is a direct and deliberate attempt on the part of the official representative of the Soviet Government in this country to encourage his own Minister of Foreign Affairs to try to embroil this country in possible hostility or, at any rate, unfriendly relations, with some other country, by suggesting that we were preparing in advance for the aerial bombardment of one of their cities. If that document stood alone, whether it is taken in conjunction with what happened previously or not, it would be sufficient to justify the action of the Government. In view of all these facts, is it really suggested that we should now refer this matter to a Select Committee, in order to ascertain whether the Government are telling the truth or are engaged in a criminal conspiracy to present to this House and the world documents which are, in point of fact, forgeries?
  Mr. JAMES HUDSON: You have done it once, and you will do it again.
  Mr. RENTOUL: That being the suggestion, all I would say in regard to the proposal to submit this matter to a Select Committee, that a more inappropriate, inadequate, unjustifiable and insulting proposal it would be difficult to conceive. The main argument, and the only substantial argument, that has been advanced

  2239
  against the decision of the Government with regard to the breach of relations with Russia, is the alleged injury that it is likely to do to our trade. If it were true that it will do great injury to our trade, it would be a serious but by no means a conclusive argument, because trading between countries is very similar to trading between individuals. You may have satisfactory commercial relations with a particular individual, provided he meets his obligations promptly, although you do not possess a very high opinion of his moral character. But no matter how promptly he meets his obligations, you cannot have satisfactory trading or any other relations with him if you are convinced that he is endeavouring to set fire to your house or to do you some grievous bodily harm.
  What are the facts with regard to our trade with Russia? I should be very reluctant to quote figures to the House, and I do not propose to do so except for the purpose of showing what is the general situation in regard to this matter. In 1920, before the Trade Agreement was entered into, our imports from Russia were, in round figures, £33,000,000, and our exports to Russia £16,000,000. In 1925, several years after the signing of the Trade Agreement, the imports from Russia were £25,000,000 and the exports £7,000,000. During the years 1920 to 1925 our imports from Russia exceeded our exports and re-exports to Russia by about £39,000,000. What do these figures show? Surely, they show that the Trade Agreement, as such, has a very little effect on the trade carried on between this country and Russia. Consequently, from the trading point of view we are infinitely more important to Russia than she is to us and except in so far as the Bolshevik Government are willing, for political reasons, to cut off their nose to spite their face, I do not believe the suggestion that they will find it economically possible, from their own point of view, to refuse to obtain from us the goods which in many instances we alone are in a position to supply.
  Mr. TAYLOR: Do the figures quoted by the hon. Member include shipping, insurance and freight?
  Mr. RENTOUL: I do not think they do. They are the figures which have
  2240
  been quoted previously in this House, which have been given in reply to questions as to imports and exports.
  Colonel GRETTON: Do the figures of exports from this country to Russia include merely manufactures or raw materials and re-exports?
  Mr. RENTOUL: They include re-exports as well. I am only quoting these figures to show the general proportions, for comparison, of the trade coming into this country from Russia and the benefit that our trade is to Russia. No one on this side of the House nor anywhere else, I suppose, would be foolish enough to deny the enormous potential importance of the Russian market, or its vast resources. I have a very special reason, as representing a fishing constituency, to appreciate the importance of the Russian market, and certainly I would welcome the suggestion that no obstacle will be placed in the way of legitimate trade between this country and Russia. I believe that the political outlook in Russia as it exists at the present time is bound to be a passing phase. Whether it lasts a short time or a long time, so long as and as soon as Russia is willing to accept the ordinary principles of fair dealing between nations, it is made perfectly clear that there can be and will be no obstacle placed in the way of any legitimate trading connection between the two countries. But until that happens, there cannot be such satisfactory relations. For all these reasons, and having regard to the history of the past few years, I believe the action of the Government in definitely and firmly refusing any longer to accord diplomatic privileges where they have been so grossly abused, and in refusing any longer to tolerate a secret and open campaign of treachery and deceit being carried on in our midst, and with the connivance of the accredited representative of a nominally friendly Power, is one that will commend itself to the overwhelming majority of our people, as well as to the judgment of this House.
  Captain ARTHUR HOPE: I beg to second the Amendment.
  Every hon. Member, I think, realises the seriousness of the step which the Government have taken. I do not wish to rake over the ashes of the past, and I am not one of those who disapproved

  2241
  of the original agreement which was made by the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) and the right hon. Gentleman the Member for Hillhead (Sir R. Horne) in 1921. When the trade agreement was first signed it was perfectly right for us to try to get on better terms with Russia, and in order to do so we gave a slightly preferential treatment to a completely new form of government which up to that time was unknown in the history of the world. There were many objections to treating Russia as you would treat any other country. At the time this experiment was made the Coalition Government were certainly right. But we have to think, not of what was right in 1921, but what is right in 1927. We entered into the trade agreement with a genuine desire to improve the relations between Russia and this country. We also desired to benefit our own traders, and we placed no obstacle whatever in the way of Russia trying to benefit her own people.
  What has the Trade Delegation been doing all this time? I admit there has been a certain amount of legitimate trade, but it has not been proved that the trade between the two countries has been more or less because of the existence of the Trade Delegation in this country. This Trade Delegation, however, has been suspected for a long time, and rightly suspected, of using its privileges for purposes other than those of trade. It may be said perfectly logically and candidly, that if the Government have known this for some time why have they not acted before; if it has been known that the Soviet Embassy at Chesham House has been the centre of intrigues not only in this country but in the British Empire, why did not the Government act before? I think the reason why they did not is a perfectly justifiable one. They wanted to make this experiment, started in 1921, a success and to give what is, perhaps, an unreasonable latitude to the Soviet Government in an endeavour to bring them to their senses.
  What has been the result of all appeals for a better sense of decency on the part of the Soviet Government? What has been the result of all our exhortations and remonstrances? What has been the answer to the very serious letter written by the Foreign Secretary only last February? They have all had the same
  2242
  effect. Every time we have been smitten on the one cheek and have turned the other cheek they have smacked us on that cheek even harder. The Foreign Secretary's cheeks must be absolutely raw by this time by the smacks he has had from the Soviet Government. What is going to be the effect of a rupture with Russia? We are told that is going to drive the propaganda, which admittedly exists in Soviet House and Chesham House, underground. That may be so, but if it be so, and even if the propaganda be worse than it has been, we shall have the knowledge that we are acting in a perfectly logical and honourable way and are not deliberately encouraging people to come to this country and after they get here intrigue against our interests. In future, Russians will be allowed to come here and trade on exactly the same terms as any French or German trading company. There is nothing which destroys the liberty of an individual Russian to trade with an individual Englishman. Every Russian will be put on an equality with, other nationals.
  Surely there has been a great deal of false sentiment about Russia in the mind of the Labour party. Suppose an Italian company had been proved to be carrying on these intrigues in this country in favour of the Fascists. Suppose an Italian company had been raided and Fascist intrigues had been discovered. I do not say that the Italian Chargé d'Affaires would have come to the Rouse of Commons and asked the Deputy Leader what he was going to do; I do not think the whole of the Labour party would have risen in wrath and demanded why the Government took this unprecedented step. I think such action would have been welcomed by hon. Members opposite. When I first came into this House the hon. Member for Silvertown (Mr. J. Jones) made a speech in which he said, "Why all this talk about Holy Russia? I am tired of Russia". We are quite willing to recognise Russia as a country different from our own, but we want them to carry on in their own country and not interfere with Great Britain.
  I welcome the decision of the Government to put the Russian Trade Delegation out of the country, to close the Russian Embassy and treat Russians in the same way as we treat all other

  2243
  foreigners. We must destroy this image of Holy Russia. They are no better and no worse than other people, and certainly they are no better than our own people. I am convinced that when the Trade Delegation has been removed and the Russian Embassy closed there will be no one in this country who will be one penny the worse off on account of lack of trade, and it will give enormous satisfaction to every decent-minded man and woman in this country to know that we are treating Russia as she deserves, in not continuing a preferential treatment which she has so grossly abused.
  Mr. MAXTON: I am always interested by the way in which junior Members on the Government Benches usually interlard their speeches on every subject before the House with little homilies to hon. Members sitting on these benches as to how they should conduct themselves. It entered partly into the speech of the hon. Member who has just sat down, but not to the same extent as in that of the Mover of the Amendment. He suggests to us that hon. Members on these benches are always prepared to believe every other country rather than their own. [HON. MEMBERS: "Hear, hear!"] Apparently, there is a widespread approval for that point of view. I know it is a popular platform point, but whether it has any truth in it or not is another matter. After all, a country has no voice, it does not speak, and when I get a report from an avowed enemy of the Labour movement, whether it is in Russia or China or India, I do not believe that statement because it is made by an Englishman. I want to hear the views of accredited representatives of working-class opinion in these various countries, and hon. Members can take it from me—I do not speak for anyone but myself—that I would rather believe a man holding my own political opinions on political questions, whether he is a Russian, an Italian or a South African, than believe the word of a political opponent, even supposing he is of British nationality.
  I am prepared to take the word of hon. Members opposite about dogs or motor cars, about food and wines—I do not say that I should follow their example—but on a matter of political importance and
  2244
  certainly on a matter as between the capitalist classes and the working classes, I would go to Members of my own faith and not to right hon. and hon. Gentlemen opposite. I hope that is not being heretical and unpatriotic. My local patriotism and that of my hon. Friends around me has been so obtrusive in this House that hon. Members opposite are now objecting to it. I love my country and the particular bit of it which I represent. I love the people round about me. I know them. I know whether they are worthy of my affection, and they know whether I am worthy of theirs. That is more than hon. Members opposite can say. [HON. MEMBERS: "No!"] Do hon. Members opposite suggest that their social relations with their constituents are the same as my social relations with my constituents?
  Viscountess ASTOR: Yes.
  Mr. MAXTON: You do not live in the same kind of house. I know you sometimes take your constituents to your house and walk them through the premises, but your relationship with your constituents is not the same as the relationship which exists between a working-class representative and the working classes.
  Mr. MACQUISTEN: You are a professional gentleman, not a working-class man.
  7.0 p.m.
  Mr. MAXTON: The hon. and learned Member is trying to be polite, but, candidly, he is merely being offensive. I have thought it necessary to say this in response to the views put forward by hon. Members opposite; but it is not my main purpose in rising. We are putting forward a Motion for an inquiry into the whole matter which has led to the present rupture. The noticeable thing of the Debate is that never once during the Foreign Secretary's statement did the right hon. Gentleman make any single reference to the document that was the excuse for the raid upon Arcos and the Russian Trade Delegation, and which in turn is the excuse for breaking the Trade Agreement with Russia. I hope there is going to be an opportunity for the House of Commons to find out something about this precious War Office document that was the beginning of all the trouble. If we are not going to have

  2245
  an inquiry we should have some explanation as to how it was possible to take this document, which the right hon. Gentleman told us had been attempted twice before, certainly more than once—a document vital to the nation's safety—from the archives of the War Office, which, presumably, has the right to call upon the whole British Army for its defence, which has locks and bolts, a responsible Minister at its head and responsible officials in charge of its various departments. Yet at the third time, some unknown person, whose name is not disclosed, is able to take this document away and the Home Secretary and the Government who could not prevent its disappearance, come to this House and tell us that they have got first-class, reliable and unchallengeable evidence that it was in the Arcos premises. Who is going to believe that but a fool or a blithering idiot? I hope that that fact alone will justify the Government in acceding to the request from these benches for the full inquiry into the whole circumstances of the case.
  Then they proceed from the abortive raid for the lost War Office document, and they produce a White Paper, which, the suggestion is made, was built up on the evidence secured in the raid on the Arcos premises. That was the suggestion, but an examination of the documents shows that the big proportion of the material has nothing whatever to do with the Arcos raid, and is absolutely unsubstantiated, except in the way that the Foreign Secretary accepts and the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) accepts—that there are in this country, and in foreign countries acting for this country, a number of agents whose names cannot be revealed, who are pursuing one of the most dishonest and dirty trades in which a man could engage, and that their word is to be taken, the word of professional paid liars, to justify this House and this Government in making a, complete rupture with a country with whom relations during the last few years have been reasonably good, as far as trade and commerce are concerned. [HON. MEMBERS: "No."] As far as I know, the relations between the commercialists of Russia and of this country have been perfectly good. The politicians of Russia and those of Britain
  2246
  have had a whole lot of disputes. Even Labour politicians have had disputes and quarrels with the Labour Socialist politicians of Russia, but, as far as I know, there have been no quarrels between the people who were carrying on business in this country and the representatives of the Russian business community.
  Sir W. LANE MITCHELL: There is no Russian business community.
  Mr. MAXTON: I sometimes get angry, and when the hon. Member starts to stand up for the best things in British commercial life, I begin to get seriously annoyed.
  Sir W. LANE MITCHELL: My only point is that the foreign trade of Russia has been with the Russian Government, and there are no Russian commercialists at all.
  Mr. MAXTON: The hon. Member does not merely disclose his lack of knowledge of Parliamentary affairs which is always obvious, but he also discloses his complete lack of knowledge of commercial affairs in Russia. I thought he knew something of business matters, but this proves he does not. I have in my hand a statement by the Russo-British Chamber of Commerce. [HON. MEMBERS: "Oh!"] Does it not exist? It is presumably not acceptable to hon. Members opposite. It is acceptable to those who have established post-revolution relations, but very inacceptable to those who are merely worrying about debts incurred by the Czarist Government. That is really why this dispute is still in existence. Those are the people who want to let debts dominate the future, but others want to start with a clean sheet. Not a single Russian peasant or a single member of the Russian working classes incurred those debts. If there are debts in Russia, it was not the Russian working class who incurred them. I only raise the question of the Russo-British Chamber of Commerce to indicate to my hon. Friends below the Gangway that while I know that a huge proportion of Russian trade, productive and distributive, is under the control of the State, yet everyone knows that they have in the Soviet Government developed a whole lot of private enterprises and encouraged British business men to engage in enterprises of one kind or another. Is that questioned?
  Mr. SPEAKER: If the hon Member's remarks are addressed to the Chair, it will tend to the better conduct of the Debate.
  Mr. MAXTON: The point is that this trade, which has been carried on in a perfectly friendly way between the persons who have actually engaged in it, is to be put a stop to because, presumably, certain Russians have carried on Communist propaganda, and because they have broken an honourable agreement that was entered into not to engage in any espionage or other work of that sort. I am at a loss to understand the nature of this Trade Agreement. It was not, if I understand it aright, a unilateral agreement. If I read the position correctly, at the same time as the Russians gave us certain undertakings as to their conduct and the conduct of their representatives, by the very same Agreement we gave exactly the same guarantees to the Russians. The Foreign Secretary to-day told us he had the most complete and convincing evidence that the Zinovieff letter was not a forgery, and that he had that evidence right from its production at Moscow to this end. What does that mean? I was on a small committee representing this party which investigated, with much less power at our command than the Government has, the whole of the processes of the Zinovieff letter. I came to a different conclusion from that of the right hon. Gentleman, but I came to this very definite conclusion—and it stuck out all over the place—that you could get to a certain point in your investigations, and then you came up against the spy whose life, identity and everything else must be protected at all costs.
  The evidence on which the right hon. Gentleman founds himself, in declaring the Zinovieff letter is a genuine document produced in Moscow, is evidence supplied to him by a paid spy of the British Government, acting in Russia during the period when we were under an honourable understanding to take no action of that sort. I know there will be some fine shades of distinction drawn. I know in this House it is not correct for me to call the Home Secretary a liar, but I may perfectly legitimately find any beautiful periphrase to carry out the same idea. That is order in the
  2248
  House of Commons, and that is exactly the position as I see it in the world of foreign diplomacy—that you must use the proper language. I notice the Foreign Secretary, in describing his interview with M. Rosengolz, said that, in reply to a certain question that he put to him, he shrugged his shoulders. That is a most useful diplomatic weapon. If the Russians had only learned to shrug their shoulders, and had learned the correct phraseology, and if they had only learned to speak with two tongues and leave no evidence in writing behind, then Russia would have committed no fault.
  When an hon. Member on these benches the other week, with the purpose, I have no doubt, of casting discredit on the Soviet Government, asked the Minister of War about the production of poison gas in Soviet factories, hon. Members will remember that the Minister of War in reply gave very great particulars, and told us that probably Russia was the biggest producer of poison gas in the whole world. I emerged from my obscurity for the moment, and asked if he would disclose the source of his information. He said, "No, decidedly not," and I fell back with a thud into the obscurity from which I had emerged. Where was that information got? It applied to the current period. Where was it got? Why should we start now in these days, when the whole of our past history can be read, and say, "Stand off; we are better than that." If hon. Members read through the whole history if this country, at any given moment we never did these things, but 20 years afterwards the persons who did them have in a book told the whole of the country how it was done. We are doing it now. When I came to this House I believe I was as innocent as the Russians, and as simple and as honest, and with the same absolute religious fervour in my heart to help to set the working classes free. I believe it had stopped, and that it only existed in the pages of fiction, such as Edgar Wallace, Phillips Oppenheim and William Le Queux. But here we find it to-day all round about us, and each Foreign. Secretary and each head of a Department in succession is prepared to live on these lines.
  Let me leave the House under no delusions. My sympathies are absolutely

  2249
  with the ultimate aims and objects of the Russian Soviet Government. Make no doubt about it, that if their powers of propaganda in this country have been injured in any way by this attack on the part of the British Government, I will do my personal best to make up for it. I believe that the capitalist system of society makes for nothing but poverty and degradation. I believe that before there is a possibility of world peace, of world comfort, of world security, capitalism has to be overthrown in every country in the world. I believe that most profoundly and most sincerely, and I will work for it with all the power I possess. But the fact that these men stand for a different social order, the fact that they push their propaganda for that new social order in every corner of the globe, just as Great Britain preaches British Imperialism in every corner of the world, does not justify this action. You talk about Borodin here to-day. It reminds one of the way in which we were supposed to tremble when we heard the names "Kruger" or "Napoleon." Right throughout history there was always a bogey. You talk about Borodin and his pro-Russian propaganda in China. Every week since the trouble began in China I have had sent to me a publication in English which contains nothing but English capitalist propaganda. The idea in the minds of hon. Gentlemen opposite is that a capitalist Government, an established Government, may do all these things because capitalism is the dominant economic system throughout the world, but that a working-class Government, a Socialist Government, is not to be permitted to propagate its doctrines in every part of the world. I hope one of the results of this break will be that the Russian people, having been rebuffed by one of the most responsible Governments throughout the world—
  Lieut.-Commander KENWORTHY: Not a responsible Government.
  Mr. MAXTON: No one but the hon. and gallant Gentleman would have noticed my slip of the tongue. I should have said one of the Governments of one of the most responsible countries in the world has rebuffed them and insulted them as that Government would not dare to do in the case of any capitalist country. Every detail of diplomatic etiquette
  2250
  would have been met if it had been Germany or if it had been Italy, but here it is a matter of dealing with a body of working people. Yes, and this is the etiquette in their case. Any treatment is good enough for them. They can be treated like dirt. After all, the one serious charge which you can bring against the Russian Government, and I am prepared to bring it against them, is that as the first working-class Government to achieve effective power in the world they ought to have said, "We have finished with all the dirty, lying diplomacy that has marked capitalist government; we are going to lead a life that is open and clear."[Laughter.] Yes, hon. Members opposite think that is impossible. A right hon. Gentleman opposite and the right hon. Gentleman the Foreign Secretary both said it was impossible. I do not believe it is. I believe straight, open honesty is sufficient to manage the affairs either of an individual or of a nation. The straighter, the more open, the more honest, and the more downright the man or the nation is the better for that man or that nation. Again I say that the big fault of the Soviet Government of Russia was their attempt to copy the diplomatic methods that had been set up as the established custom by the Csarist Government which they succeeded and the British and other Governments with which they came into contact.
  One other thing I will say to them here and now. I do not place the same reliance as they do, and as the Csarist Government did, and as the British Government do, upon force and violence as a medium of achieving great ends. Some of my hon. Friends on these benches can applaud that statement, but none of the hon. Members opposite can do so. They believe that if a, nation has objects which it believes to be right and worthy—it to be the judge—it has then a perfect right to pursue the achievement of those objects by armed violence and by murder and death. [An HON, MEMBER: "That is what the Soviet does."] That is what the Soviet does. They took it from you. Hon. and right hon. Members opposite have risen time and again to prove that, much as they would like to abolish war, it is impossible to do so. I hope that is not true and I believe that the Soviet

  2251
  Government of Russia might have played a big part in teaching the world that violence and force are unnecessary.
  Mr. MACQUISTEN: Why the Red Army then?
  Mr. MAXTON: Because they found themselves ringed round by force, and they said that the only reply to force was force. I question that. I hope, as I say, that one of the effects of this rebuff by a capitalist Government will be that the Communists of Russia will turn to the international working class and say to the Labour and Socialist International, "We are going to place our force, our power, our zeal, our knowledge, our skill into the common pool of Labour and Socialist international thought." I hope my right hon. Friends here on this side, who have resisted any suggestion that Russia should be admitted to full standing in the Labour and Socialist international, will seize this opportunity of making the way easy, so that we will have represented in our Labour and Socialist movement every angle of working-class thought, so that every theory of Socialist and working-class tactics will be put into the common pool, not in order that the Russian Communist theory may dominate, or that my particular views may dominate, but in order that there may be throughout the world a working class absolutely united to face a developing world capitalism, which knows nothing about patriotism at all, which cares little about country and a tremendous lot about profits. In that way we can have a working class united throughout the whole world to resist the determined and vicious attacks that are made by capitalism upon the miserable standard of life which the workers have been able to secure up to now.
  I hope I am not doing the right hon. Gentleman an injustice—I do not believe I can do so—when I say that I believe the deciding factor in making this break was the fact that the Russian people sent money to help the miners who were out last year. Nothing else has happened since Earl Balfour made his speech. Nothing else has happened since the Marquis of Salisbury made his speech. Nothing has happened since the right hon. Gentleman himself made his speech except that the Russian people showed
  2252
  their desire to help the miners against the Government of this country. I hope that the Government will depart from this position. I do not see the Foreign Secretary being urged against his will into a line of conduct of which he personally does not approve. I believe that in this matter the Government are expressing Conservative opinion in this country. It is of a piece with their anti-trade union legislation. It is of a piece with everything they have been doing in recent months. It is of a piece with their projected legislation against the unemployed. Having come into effective power in this country, having found industrial unrest widespread throughout the land, they said, "We will not attempt to get down to the causes of industrial unrest; we will not attempt to cure unemployment." That actually has been said from the benches opposite. We have been told that that is not the work of a Government. Hon. Members have said they will not attempt to improve wages because that is not the work of a Government; that they will not attempt to give people a decent education. In short, they say, "We will not attempt to remedy any of the causes of industrial unrest but we will try to smash every bit of machinery, here or abroad, through which industrial unrest presently finds expression."
  I do not claim to be a statesman. I am an agitator. That is the role I try to fill and the role I want to fill, but I ask the statesmen if it is statesmanship to ignore the festering sores of our nation and wherever they find a man, or a body of men, or an organisation, giving expression to discontent or pointing out the evils of our social system, to bring forward some device, some legal machinery, some judicial machinery, or use some diplomatic weapon, to stifle the expression of that discontent for which there is only too just reason. I say that is not facing the responsibilities of a responsible Government. It is putting one's head into the sand and refusing to see the things that are there. I have absolutely no doubt that this is only staving off the day of reckoning because the working class of this country, with or without Russian stimulation and inspiration, will not submit to the poverty and degradation which the Tory Government seem determined to impose on them to-day.
  Commander OLIVER LOCKER-LAMPSON: After listening to the speech of the hon. Member for Bridgeton (Mr. Maxton), I feel myself a wholly unrepentant advocate of the raid upon Arcos. I approve of that raid and I wish to congratulate my right hon. Friend the Home Secretary upon his courageous and forceful visitation of the pirates' premises last week. We have all heard of the anonymous gentleman with a duster I thought perhaps the Home Secretary was the gentleman with a duster, but if he is not that then at least he is the gentleman with the dust pan, and he has succeeded in making a most effective spring cleaning and in getting rid of much rubbish. He has in effect stamped out the red rot which promised to spread everywhere and to ruin us. Indeed, there is only one element about the raid on Arcos which can be considered as in any degree mistaken, and that is, that the raid did not come sooner. If only it had come a little sooner it might have been in time to reveal vital documents which were burned; it might have been in time to disclose damning papers which have since been destroyed.
  Mr. WALLHEAD: In short, they have not got enough to justify the raid now.
  Commander LOCKER-LAMPSON: If they have not got enough, what becomes of the argument that they are forgeries? On the face of it those documents are honest and justify the exclusion from this country of those who have been the agents of the Soviet. We have long suspected that the mystery house of Arcos was a nest of pestilential propaganda and a centre of septic intrigue but even those of us who suspected Arcos most never anticipated a conspiracy so calculated as that which is now revealed, we never dreamed that beneath the blessing of British recognition a friendly State would have dug itself in and would have mined and countermined to our destruction. We would never have thought that they would succeed in installing themselves in our peaceful city ready to do us irreparable damage. The discovery of this warren in the heart of peaceful London explodes for ever the fetish of Soviet affection for England, and it justifies straight away the exclusion from England of the false friends who betrayed us. We ought never to have recognised the Soviet at all. We did it under a Labour
  2254
  Government. [An HON. MEMBER: "No!"] The Labour Government gave diplomatic, recognition to Russia on the top of other recognitions which had been given by the Coalition. In my opinion, we should never have given Soviet Russia diplomatic recognition unconditionally. We should not have granted a fraudulent Caucus of Commissars in Russia that great privilege free. We should never have parted with this priceless boon until the Soviet had first of all owned up for all the wrongs it had done and paid up for all its thefts of the poor people as well as of the rich. Now, thank God, we have at last got back in our grip the weapon of recognition, and with it we must insist on reparations first and reparations in full before any Reds return to England. How foolishly, how madly generous we have been to the Soviet in the past. Twice over we have admitted their emissaries to share with honoured guests the amenities of British diplomacy. We have seen our Trade Agreement riddled through and through until it was just a leaking sieve of breaches, and we have found ourselves made the target of a vendetta incomparably vile because it sought to embroil us with all those subject races which it has been our ambition to exalt and not to abase. What has been the answer of His Majesty's Government to these assaults in the past In the name of peace we have allowed a perfidious associate persistently to wage war. We have pleaded moderation and have fed the Bolshevist bear, when he growled, with buns. We had far better have given him the knout or the boot. He would have understood them a great deal better For no kind words or generosity have ever melted that heart of hate. Courtesy and chivalry are springs of emotion which cannot be found in the catalogue of Marxian emotions.
  Never for one moment has our policy made the Soviet relent or repent. Never have our actions and our moderation induced the Soviet for a single second to show the slightest tremor of pity, sorrow, or contrition. So that we may honestly say to-day that our policy of moderation has been a failure and a dangerous failure, because we have been left entirely defenceless in face of a foe fully armed. The only answer of the Soviet to all our forbearance has been to single out the British Empire for attack. Our diplomacy, fresh from the triumphs of

  2255
  Locarno, begged that we should not break with Moscow, and urged the instability of the European equilibrium. But it seems to be forgotten that after all, this is not a European question only. In the main it is an Imperial issue. For these islands are barely a part of the Continent at all, and although our heritage consist of one-quarter of the globe, hardly one single acre lies in Europe. Our heritage which covers this vast territory consists of spaces peopled by subject races. And this Empire in its ordered tranquillity is the greatest bulwark against Bolshevism left in the world. But also in the semi-civilisation of some of its communities it presents a field of operation ready and ripe at any moment for the manure of Moscow. When we look at the documents which have been found at Arcos we find revealed the value to these propagandists of incompletely educated and backward peoples. "The choice of men"—for the Communist agitation—"should be carefully made, preference being given to negroes and Hindoos," and so on. I think that is a clearer revelation of the purposes of the Soviet than is to be found in any other document. The general strike, which people omit to mention now, was after all a recognised preliminary to revolution, and it was followed by the longest lock-out in the annals of our country, which was subsidised, not by private individuals in Russia, but by the State. Indeed, I would ask: Where and when have we ever been free from molestation? There is not an outpost of the Empire so remote that it cannot be reached by the long arm of alien anarchy. There is not a centre of unrest in England too insignificant for Moscow's malevolent benevolence. During the past year, quite apart from major commitments, Moscow has spent over £50,000 on organisation in England for subversive purposes. The Communist party in England to-day would not exist for one month if you turned off the tap in Moscow, and in return, let it be remembered that the Communist State in Russia, enthroned and strong though it be there now, could not continue and will not continue if we do our duty to-night and throw out Russian recognition. Indeed, it can be said that British recognition alone has kept that monstrous idol upon its legs. This
  2256
  Debate therefore is historic. For if we do our duty to-night Bolshevism as a world force is doomed. The Government's patience in the past years has been not only magnanimous but magnificent. And their resolution and courage in cutting the cable to-day justify and explain their forbearance in the past. They recognise that no longer can a proud people tolerate the shame of bondage to a State of slaves. They have cut us free. Long may we remain masters of our liberty.
  Mr. PONSONBY: If there is any hon. Member in this House who is justified in being cheerful and congratulating himself to-day it certainly is the hon. and gallant Member for Handsworth (Commander Locker-Lampson). That, I think, accounts for what I might call a little bit of the Albert Hall tone which came into many of his remarks. The hon. and gallant Member's views on this question are well known, for he has circularised people with great diligence.
  Commander LOCKER-LAMPSON: And with great success.
  Mr. PONSONBY: I congratulate him on the successful way in which he has managed to drive the Government before him. I am rather afraid that we do not realise here the gravity of the step that has been taken. It is a precipitate step and I cannot help feeling that if there is a man in this House who regrets it, he is the Secretary of State for Foreign Affairs. I cannot believe that the right hon. Gentleman rejoices, as do hon. Members behind him, over a step of this sort, because his arguments when this question was last before the House were some of the strongest against a breach. There are so many great issues involved that it is difficult in the course of a short speech to cover them all. I want to say a few words about the trade effects, because hon. Members opposite are saying that this will make no sort of difference to trade, that Arcos can continue with its activities, and that we need have no fear as to the results. When the Labour party was in office in 1924, I had occasion to come in contact with a great many people who wanted to trade with Russia, a great many gentlemen who were talking in millions and were ready to open out commercial relations. The one thing that made them hesitate every time was the political relations between the two countries If they could be

  2257
  assured that recognition, that normal relations and commercial treaties existed between the two countries, they were ready to go on. Now that you have made a deliberate breach and have tension between the two countries, it is absurd to suppose that trade can be conducted in the same way.
  I am not going for one moment to defend the existence of propaganda in this country. I have had occasion to say so more than once. My object now is to examine what this propaganda amounts to. These charges that are brought against the Soviet Government, in the Prime Minister's statement and in the White Paper, are three. The first is that propaganda has been carried on in this country against us. The other charges are that spies have been used in order to remove documents from Government offices and that M. Rosengolz, the Soviet Chargeé d'Affaires, has lied. With regard to the spies and the lying, I do not think it is a charge that we can bring against the Russian representative any more than against any other diplomatic representative in Europe or the world. The Secret Service is supposed to be something that we ought not to talk about in this House. It is not out of order to talk about the Secret Service, and I do not see why I should not talk about it. It is about time we did say something about the Secret Service. I have no respect for dirt, even in high places. What I object to more than dirt is the hypocrisy which pretends that we are so pure, that we do not indulge in any of these methods. During war time, all this is recognised as something that is part and parcel of the war machine. You then have lies and you have propaganda, and you have atrocity factories; you have letter opening and you have forgery—a Department for forgery and a Department for faking photographs, and all that sort of thing, and each country has them.
  In war-time in the Secret Service you get a type of man who, because it is said he is doing a patriotic duty, is certainly a better type. The question is how much of this exists in peace time? The work is not all shut down. A great deal of it still exists, but it is a very different type of man who serves, a man who is quite capable of serving two masters, a man whose sense of honour is wholly different
  2258
  from what we understand by honour. This goes on, as we see by this document which has been produced. The right official phrase to use is that, "A document has come into our possession." We are complaining of Mr. Rosengolz lying, and of this getting of documents out of the official archives of this country. We do the same thing, though we are not supposed to mention it. There is always a look of pained piety on the faces of right hon. Gentlemen opposite if one mentions the subject, but I really think it ought to be dealt with.
  I may be asked, why it was not dealt with in 1924 when Labour was in office? I was in a subordinate position in 1924, and it is part of the etiquette of the Secret Service that Under-Secretaries are never told about it. It reminds me of undesirable conversations in a private school, which are kept to the elder boys and the younger boys are not supposed to know anything about them. When I mentioned the Secret Service, the officials, the most genial of them, used to become rigid. I was not allowed to know, and even when we got to the verge of that awful mud-bath which surrounded the Zinoviev letter, I was never allowed to come in, and I am glad it was so. But we must really face the fact, when we are getting on our high moral horse, that forgery, theft, lying, bribery and corruption exist in every Foreign Office and every Chancellory throughout the world. The recognised official attitude is to put on a mask of impassable piety, which means that you ignore the whole thing. Of course you must. This weapon is used during war because it is valuable. It is used during so-called peace because peace is used for making preparations for the next war. You have to do it; you cannot get away from it.
  Mr. ROY WILSON: Do I understand the hon. Member to mean that His Majesty's accredited representatives abroad have engaged or would engage in the same sort of propaganda as the Soviet Chargeé d'Affaires has been charged with here?
  Mr. PONSONBY: I say that according to the recognised moral code our representatives abroad would be neglectful in their duty if they were not finding out secrets from the archives of those countries.
  Sir A. CHAMBERLAIN: The hon. Gentleman is mistaken in the statement which he makes. It is no part of the duty—nor would it be permitted—of any of our representatives abroad to act in that manner.
  Mr. PONSONBY: As the right hon. Gentleman challenges me, I say that I have during my career seen a document which was taken from the archives of a foreign country. I have also travelled with a spy and heard what he had to say. He travelled with me because he wanted to get information from me, and he also wanted to get from me the despatches that I carried. The more friendly he became, the more tightly I had to cling to the despatches. He was on a mission to this country in order to get a newspaper to take up the cause of a particular foreign Government that he was supporting. Let us look at this White Paper. On page 29 there is an extract from a telegram sent from Moscow to the Soviet representative at Peking. It is dated 12th November, 1926, and is without a signature. It was sent by the Commissariat of Foreign Affairs in Moscow; therefore it was in Russian. It was received in Peking. It was in Russian figures when received in Peking. There is a department to check anything that is received in Peking. So the Russian figures were translated into Chinese. It really does make one hesitate, as we are facing what may be great trouble in future, when we have presented to us a White Paper with the flimsiest possible evidence and with nothing on which you would condemn a British citizen in an ordinary Court of Justice.
  8.0 p.m.
  I know it is supposed to be the recognised way of doing business, but it is not one that appeals to the British sense of honour. The practice has, of course, gone on for many years. We have only to remember the Zinoviev letter. When you are dealing with spies you cannot tell that they are not playing a double game; you do not know whether they are lying or not. I have heard it said by people of far longer experience of official life than I have had, that they consider the Secret Service in time of peace is a nuisance, is unreliable, and ought to be abolished. The lying and spying is not done away with by a denial; we ought not to bring this charge against
  2260
  a foreign representative here when we know that a similar charge can be brought against us in many directions.
  Now I come to a question of propaganda. I listened to the Prime Minister's speech very intently, and I was very interested in it. When he came to that moment when the police entered the locked room and went down in the cellar and there was a struggle and then a paper was dropped, we all held our breath wondering what this paper contained; wondering whether it was a bomb which was to be placed in 10, Downing Street, or Buckingham Palace, or whether it was some fearful revelation, but at last it turned out to be a set of bogus addresses. Sufficient ridicule has been poured upon the agitation and the training of agitators on board ship. Then there were some documents about directions to Communists. It is all very well to start a raid. The Home Secretary took the matter into his own hands. The Criminal Investigation Department have a special department, and they wanted to justify their existence. As for plots, I met a man about a fortnight ago who was an accredited representative of Signor Mussolini and he was the secretary of a Fascist organisation. He is pursuing his propaganda here, and has great hopes of the British middle-classes. I say that he is as great a fool as those Bolshevists who think that they are going to convert us to Communism. But I would not for a moment show up this man and make him an excuse for breaking off diplomatic relations. But the Criminal Investigation Department find the sort of plots that the Government want, and they find in the present Home Secretary a man who delights in plots and who wants to go off with his machinery and raid offices.
  The Criminal Investigation Department is not quite reliable. I wish the Home Secretary were here, because this really would interest him more than it interests the Secretary of State for Foreign Affairs. It is an incident which happened in March, 1921, and it shows that the Secret Service, the Criminal Investigation Department, the Head of the Intelligence Department, and all the rest of it, do not always act in conformity with the high moral tone which is adopted when they are quoted. The whole story is really contained in an answer which the Home Secretary of that day gave on

  2261
  3rd March, 1921. I think it was referred to by the hon. Gentleman the Member for Dundee (Mr. Johnston) in a question today. Some copies of the "Pravda" were forged in this country. Unfortunately, the British printer left his mark along the bottom. The head of the Criminal Investigation Department, then Sir Basil Thomson, got hold of those copies and got a machine which out off the margin and cut off the name of the British printer. He then had those copies sent abroad, knowing of course that they were forgeries, and then the Home Secretary of the day in reply to a question said:
  "The matter is one of which I had no knowledge until a day or two ago. I find on inquiry that the facts are these. In Russia no newspapers are allowed except the official organs of the Soviet Government, which give a wholly false and misleading account of affairs and opinion in this and other foreign countries. Some Russians in this country were anxious to supply their fellow-countrymen with a true statement of the facts, and the only way they could do this was by printing in this country and circulating in Russia an imitation of the official 'Pravda', the only paper allowed by the Soviet Government to circulate to the public. They communicated in this matter with the Director of Intelligence"—
  that was Sir Basil Thomson—
  "and he assisted them to the extent of arranging for the removal of the English printer's name from the news-sheets and for their being forwarded to an address in one of the countries bordering on Russia. This was all that he did. I think his action was indiscreet, and had he referred to me I would not have sanctioned it; but it should be clearly understood that the paper was not propagandist except in so far as a statement of the true facts in propaganda, that there was no collaboration by the police in its production and that no public money was expended."—[OFFICIAL REPORT, 3rd March, 1921; cols. 2043–4, Vol. 138.)
  That shows the so-called reliability of this Department which goes and finds out these things and produces documents which can be used as a basis for a rupture of international relations. I am perfectly certain that the Foreign Secretary regrets this escapade of the Home Secretary more than anybody in the House.
  Sir A. CHAMBERLAIN: He was good enough to consult me before the warrant was applied for.
  Mr. PONSONBY: I am sorry to hear that. I had hoped that the Foreign Secretary had not lent himself to any
  2262
  such proceeding, because we all admit that he has a most difficult task, and there was some slight prospect of things getting better even in regard to Soviet Russia. They have joined in the Economic Conference recently, and there was a prospect of their joining in the Disarmament Conference in the autumn, and that in itself would have been hopeful. I remember that it was about 18 months or two years ago when we had a Debate on this subject of trying to pick up the threads and of coming to terms with the Soviet Government. The right hon. Gentleman turned it down very firmly then as he has ever since. I said at the time that it was forcing Russia into Asia, where she would make trouble. I remember very well the right hon. Gentleman, with a dramatic gesture, his arms over head, telling me that I was talking nonsense. I do not think he thinks that to-day.
  Sir A. CHAMBERLAIN: I remain of the same opinion, after listening to the hon. Gentleman.
  Mr. PONSONBY: The right hon. Gentleman always talks to anybody in this House in any subordinate position in that manner. The right hon. Gentleman accused me of talking nonsense, and he has formed the greater part of his indictment on the conduct of the Bolshevist in China, so that he cannot be of the same opinion in regard to that expression that he is now. I do say once again, as I have said often before, that the hostility of the Soviet Government towards us results from the policy of His Majesty's Government ever since 1917—of successive Conservative Governments. I do not think that those who so madly attacked the Soviet Government and the Russians could realise how deeply they resented the intervention, policy of 1917 to 1920. I do not think they realise how after that the Russians have been anxious to renew relations, and when in 1924 treaties were signed and the Labour Government fell, they were ready to take up again with the Conservative Government who succeeded us the threads and try to come to some form of an agreement. Instead of the right hon. Gentleman in those days saying, "We cannot subscribe to this and that clause in the treaties that you have signed; we disagree with this and

  2263
  that method; but we shall be prepared to explain our attitude in this respect and to try to come to an understanding," he adopted another method. If he had adopted the method I have suggested, by this time, there is no question about it, relations would have been renewed, and you would have prevented this hostile attitude and the propaganda which has gone on. Instead of that, time after time the right hon. Gentleman turned them down, while his supporters in the country were abusing them in unmeasured language. It really is not surprising that they have taken up a hostile attitude.
  But we come now to this very grave step, and I do want to ask that we should be told, before the Debate is over, what is to be gained from it. I think the best thing that was said about it was said by the Foreign Secretary about a year ago, when he said that a breach would give us no weapon for fighting disorder or disloyalty or revolution within our borders; that it would create division where we sought union, that it would increase uncertainty, increase fears, increase instability in European conditions, which was and ought to be our chief object to remove. I do not think that there are any grounds which exist to-day which make those words less true than they were when they were uttered a year ago. I know the grounds on which this very grave step is taken, and I think the Government will regret it. I do not understand how they will ever bring themselves to renew relations with this Government of Russia; this Government that has withstood civil war, intervention from outside, famine and debt, and is still there in the saddle. However much we may say we dislike it, it is ridiculous to suppose that we can ignore this vast nation; that we can set it aside and say it does not matter; that we can repeatedly insult it and then think that the world will get on better without it. All our history, as our statesmen know, shows that we cannot get on without Russia. I believe future generations will look back on this day and point to it as the beginning of fresh confusion, renewed animosities, and, perhaps, eventual war. The Government have been ill-advised to put back the hands of the clock. The action, taken in anger and without forethought, will be regretted
  2264
  them, and it may have consequences in future that will be more disastrous than we can appreciate at the present time.
  Mr. ROY WILSON: I had not intended to take any part in this Debate, but as a Member of this House who has had the privilege of meeting our diplomatic representatives abroad I want to take the very earliest opportunity of saying how amazed I am at the speech of the hon. Gentleman who has just sat down, and the libellous remarks he has made upon our representatives in various parts of the world. In reply to a question I put to him in the course of his speech, he clearly stated that it was his opinion, and it was within his own knowledge, that our accredited representatives abroad, our ambassadors or our chargés d'affaires, indulged in the same sort of lying propaganda which has been disclosed in this White Paper, and which, quite clearly, has been proved against the chargé d'affaires of the Soviet Republic in this country.
  HON. MEMBERS: He did not say so.
  Mr. PONSONBY: I am sure the hon. Member does not wish to misrepresent me. I never said that our representatives abroad were carrying on propaganda. I said that in the course of their duties they used the methods I described, and everybody knows it.
  Mr. WILSON: I am afraid the hon. Member has made the position even worse still, because the methods which he told us were adopted by our representatives abroad were methods of the forger and liar, and exactly the same sort of methods as have been adopted by the chargé d'affaires of the Soviet Republic in this country; and I want to say deliberately that I, for one, most deeply resent that insinuation, and that I am surprised that it should come from a gentleman who has occupied, as the hon. Member has, the responsible position of Under-Secretary of State for Foreign Affairs in the Labour Government. I am quite certain that his speech, if it is reported in the country, and I hope sincerely it will not be reported, will be as bitterly resented—
  Dr. SALTER: We shall repeat it, you need not worry.
  Mr. WILSON:—as it is in this House.
  Mr. PONSONBY: May I ask the hon. Member if he heard the speech of the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George), who said exactly the same thing?
  Mr. WILSON: I heard the speech of the right hon. Gentleman and I heard the speech of the hon. Member who has just sat down, and it is his speech to which I am objecting. It is a speech which I am certain every decent-minded man in this country will resent.
  Mr. STEPHEN: Because it is the truth.
  Mr. WILSON: Because it is a gross reflection upon men who are serving the British Empire in important positions abroad.
  Mr. T. WILLIAMS: Before the hon. Member gives us any more adjectives, I would like to ask him if he will tell us where that £446,000 goes which is spent each year on the Secret Service? We can never get to know from Ministers how this money is spent.
  Mr. WILSON: Wherever the money may be spent I am certain it is not spent—
  HON. MEMBERS: "How do you know?"
  Mr. DEPUTY-SPEAKER (Captain FitzRoy): This Debate cannot possibly be carried on if one hon. Member is not to be allowed to answer another.
  Mr. WILSON: However that money may be spent, I am certain it is not spent in paying His Majesty's representatives abroad to indulge in lying propaganda.
  Mr. WALLHEAD: We never said it was.
  Mr. WILSON: I should like to say a word upon some remarks made in the course of this afternoon, and indeed on other occasions, about trade with Russia and the seriousness, as some hon. Members seem to regard it, of this break in our relations with Russia from the commercial point of view. The right hon. Member for Platting (Mr. Clynes) said, what is after all nothing more than a platitude, that business is a matter of
  2266
  credit and credit is a matter of confidence. That is perfectly true. I am afraid a large number of hon. Members do not realise that the business community in this country who have been doing business with Russia during the last few years have been under no illusions whatsoever as to the risks they ran in the business transactions they had with that country.
  Mr. W. THORNE: Have they all been paid?
  Mr. WILSON: The position in regard to business transactions with Russia during the last few years has been this. No bank in this country would be foolish enough to advance one single pound on the security of the promise of any Russian trading organisation in Russia. Any money advanced in this country—this should be clearly understood by the House—any money advanced in connection with shipments to Russia has been advanced on the standing and credit of the customer in England. It was made perfectly clear by the hon. Member who was evidently speaking on behalf of the Midland Bank this afternoon that in all these transactions involving so-called credit with Russia the paramount and first condition has been that a substantial deposit has been put down in cash in England before the business transaction has been, entered into, and the risk thereafter is the risk of the shipper or the merchant at this end who is sending his goods to Russia. [Interruption.] I do not intend to give way. I have given way on several occasions. If a business firm at this end is willing to take certain risks in these transactions, the position of the banks is simply this—it cannot be repeated too often—that if the, standing of the customer here warrants an advance in connection with that transaction, that advance is made by the bank with a total disregard of the party on the other side who is receiving the goods.
  Mr A. V. ALEXANDER: Does that apply to all?
  Mr. WILSON: I am speaking on this subject with a certain amount of knowledge—
  Mr. ALEXANDER: Some of us have knowledge, too.
  Mr. WILSON: —and if that is the position—and broadly it is the position—

  2267
  there is no reason to apprehend that because of this rupture in our relations business transactions with Russia must necessarily come to an end. There are people in this country willing to take the risk of sending goods out to Russia, and the same procedure will be followed as has been followed in the last few years. I myself see no reason to apprehend any serious interference with any legitimate business transaction which business firms in this country may desire to undertake with Russia on the same terms and conditions as they have undertaken them in the past.
  Miss LAWRENCE: I would like to ask how the hon. Member who has just sat down imagines that we got hold of the documents referred to on page 31 of the White Paper. Those are private communications from the Soviet Chargé d'Affaires in London to the Commissariat for Foreign Affairs in Moscow. Did they come from the Foreign Office, and, if not, how did we get hold of them?
  Mr. ROY WILSON: That question does not really arise, but wherever those documents came from they did not come from our Ambassador.
  HON. MEMBERS: How do you know?
  Miss LAWRENCE: I suppose our own Secret Service is just as bad as any other Secret Service. I would like the representative of the Government who is going to reply to tell the House how the Foreign Office got possession of this private correspondence between London and Moscow. Did M. Rosengolz hand it over or did we pay somebody for it? Or did we tap the telegraph wire? It must have been by one or other of those methods. It is idle to pretend that all Governments do not employ a Secret Service. I want to say a few words on the general question. I think the step we have taken this week is a very serious one. No one can deny that it will be bad for our trade. No one can deny—indeed, the Foreign Secretary has stated—that the consequences of this step in Europe will be very disastrous. The two criteria by which our diplomacy must be judged is our success in promoting the cause of peace and our success in forwarding the interests of our manufacturers. I think on this occasion we have a right to examine what is the case for
  2268
  the Government. We have been told by the supporters of the Government that it was impossible to do otherwise than what the Government have done, because "patience had been pushed to the breaking point," and the Government, for the sake of the honour and safety of the country, could not have adopted any other policy. I hold no particular brief for the Russian Government, but I believe that the main motive of the foreign policy of Russia is based on fear, that it is fear which makes Russia so bad a neighbour; and that if Russia were given a sense of security, her need for peace is so great and her need for material things and trade is so great, that with a little good will it would be quite easy to establish amicable relations with Russia.
  When one looks back over the history of Russia, it is clear that the present state of things has not happened all at once. I said in the Press three years ago that two currents of opinion were even then clearly perceptible. On the one side were those who pinned their faith to the world revolution; on the other were those who put first the development of their own country. The one repeated continually what Lenin had said in 1917, that the very existence of the Soviet State depended on convulsions in other countries; and that was more than a plausible opinion at that time; for everyone can see that if the Kaiser had had a free hand at the time of the peace of Brest Litovsk, there would have been no Bolshevik Government now in Russia. The other perceived that the world was settling—for that is what the Russians mean when they speak of the "partial stabilisation of capitalism"—and asserted that, given freedom from intervention they had all that was necessary to establish a Socialist State in Russia. And this year these two schools of thought came to an open clash. For those resounding quarrels between the Government and the Opposition were about this very thing—the doctrine of the world revolution. Trotsky, Kameneff and Zinovieff, in repeated and lengthy speeches, put forward their point of view of the necessity of the world revolution against the policy of Stalin and Bukharin. Trotsky, Kameneff and Zinovieff lost. They were hopelessly beaten; they were disgraced, and removed from high office to subordinate positions; and so little

  2269
  was this understood or noticed in England, that actually in our Note, a speech of Kameneff, the last despairing effort of a member of the Opposition, was quoted against the Soviet Government. Bukharin and Stalin won; and the Communist party of Russia adopted the new formula—that Russia possessed all that was sufficient to construct a Socialist State.
  That was a new orientation of Russian politics that the Communist party adopted, and it was an entirely new formula. But how was this new departure not in our scale? The Chancellor of the Exchequer gave an extraordinary example of patience and forbearance. So did Lord Birkenhead, and so did other members of the Cabinet. I will not read their speeches; but I will quote a line or two from the speech of the Chancellor of the Exchequer at the Alexandra Palace on the 19th June, when, speaking of the Bolshevists, he called them "these miscreants who had ruined their country". He spoke of Russia as an "ignorant slave State." He said that "they thought the same sort of stuff with which they bamboozled their moujiks would suit us". And Lord Birkenhead gave a similar exhibition of patience and forbearance in his notorious "swollen frogs" speech. I know that the Foreign Secretary during the whole of the time was preaching peace and forbearance, and so forth. But the whole of Europe saw that the Cabinet was not behind him, because the stronger members of the Cabinet were using this kind of talk, and the Cabinet were so far disunited that they were unable to prevent the amateur diplomacy of the Chancellor of the Exchequer, and the drums of the Chancellor of the Exchequer drowned the voice of the Foreign Secretary. The effect upon Russia was very clear. I do not want to quote many Russian speeches, but I draw the attention of the House to the speeches made by Bukharin and Voroshiloff last January. Voroshiloff devoted a big speech to showing that intervention was certain—that it would be unexpected. And he said that if Russia has peace now
  "the whole business comes to this, that up to this moment the circumstances are not sufficiently favourable for them to fall upon us. The consciousness of the absolute necessity of a conflict with us is demonstrated
  2270
  not only by certain happenings in England but in her official utterances. They are only waiting for favourable circumstances".
  Bukharin developed the same train of argument in his speech, and so did other Russian statesmen. I know that our Foreign Office said, and I believe they said perfectly sincerely, that no encirclement and no intervention was intended. But the Foreign Secretary knows that it is not only reasonable fears that are dangerous to the peace of the world, but that suspicion and fear of that kind, whether well founded or not, is one of the most dangerous factors in European politics. The business of diplomacy is to dissipate those nightmares, and the more groundless they are the more easily they can be dissipated. It is a desperately dangerous thing for the world, for Europe and for Asia, that responsible Russian statesmen should think and declare that every misfortune which happened to our country was something which would at any rate secure so many more months of peace for Soviet Russia.
  What I complain about is that nothing was done to dissipate that feeling. There followed no ordinary diplomatic conversations. There followed the Note, and I do not think that the Press has ever done justice, or that this House has ever done justice, to the Note. I pass over what I have just mentioned, that the speech of a beaten Member of the Opposition was used as an argument, but never before has a collection of newspaper articles appeared in a serious document. It would be an odd precedent to follow if every Government in Europe could complain to the Foreign Secretary of anything that appeared in our Press. I cannot, however, resist mentioning the caricature, because to put a caricature into a Note is so absurd as to be obvious evidence of trying to make a quarrel. We have heard the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) speak to-night. I wonder how busy the Foreign Office would have been if they had had to write letters every time he was caricatured. I am no admirer of the foreign policy of the right hon. Gentleman, but at any rate he never did that; he never called in the dignity of England as a sort of cover for his own personal feelings.
  But bad as the Note was, and it stood unparalleled in the annals of diplomacy,

  2271
  what was worse than the Note was the silence that followed. There were no conversations about any of the complaints in the Note; in fact, the Note itself stated that the Government did not propose to enter into controversy with the Soviet Government; and from that time to this silence reigned. There was no intercourse; there was not the fulfilment of that Clause of the Trade Agreement which has already been alluded to, that there should be conversations on every subject. Instead of that, we had a hostile, menacing silence until the raid came. I am aware that on this occasion I ought not to speak for long, and I do not want to go through again what has been said about the raid, but I do say that I deprecate as much as anybody can the fact that the officials of Arcos should have used the safety of their position for the purposes of propaganda. I think that that is a very serious thing, a very wrong thing, and a thing well worthy of complaint. As to the rest of the White Paper, what is there in it? There is a telegram from Peking, which I suppose rests on the authority of Chang Tso-lin's policeman, and I cannot attach any importance to that. For the rest, there is not enough to whip a cat with. I am pleased to see how innocent were the intercepted telegrams. I am not going to dilate upon that, because better speakers than I have done so, but I do ask the House to look at the consequences in Russia; the consequences to trade, and the consequences in Europe. The Foreign Secretary knows and has spoken of the repercussions in Europe. I am quite sure that, as far as Russia is concerned, we have strengthened every bad and dangerous element, and have weakened the influence of every moderate statesman, in Russia.
  With regard to our own country, which, after all, comes first, the effect of this week's work will be felt outside every relieving office and every Employment Exchange in England. The Government have done more harm to our trade and industry than one could have believed possible. I was looking at the Chinese figures, and saw how their policy there had, brought our trade down, and how every country in the world, from Norway to Japan, was joyfully profiting by our
  2272
  efforts. As it was in China, so will it be in Russia. Those are the only two great undeveloped markets of the world that are left. In Russia, as in China, the nations of the world will be profiting at our expense. Their Governments will be looking on benevolently and with disguised pleasure at our loss of trade, and the increased trade of their own nationals. That is what our Government has done, and I think that, when history comes to be written, people will look at the utterances of the Foreign Secretary, and his obvious sincerity, they will look at his actions, and they will write him down as a statesman who, by his weakness, did more harm to his country than the wickedness of a strong man could have done.
  Lieut.-Colonel MOORE: It requires some little courage to intervene in this Debate, but it seems to me that those who have spoken have spoken either from too much or from too little knowledge, and that that fact rather tends to exaggerate the language. Therefore, I think that perhaps, as I occupy a position somewhat midway between complete ignorance and complete knowledge I might perhaps find a few remarks that would justify my speaking in the House to-night. My knowledge was considerably added to by the statement of the Prime Minister last Tuesday, and I think the whole House, including hon. Gentlemen opposite, will agree with me that, after the Arcos raid, and in view of the statements which the Prime Minister made, and the statements which the Foreign Secretary made this afternoon, there was no option for the Government but to break off diplomatic relations, and to teach the Russian Soviet leaders a well-earned lesson. I say "the whole House" advisedly, because, even in spite of this Motion which has been framed by the Opposition party the opposition which they have developed is exactly the same opposition as they developed to the Trade Union Bill, which was an opposition developed before they knew what they were opposing. Therefore, it was obviously a manufactured, spurious and ungenuine opposition. That, I am sorry to say, is the average type of opposition offered by His Majesty's Opposition, and is somewhat symbolic of their crudity of thought.

  2273
  Judging by the attitude of some of the speakers who have preceded me, there seems to be a certain confusion of thought. Some hon. Gentlemen on the opposite side of the House appear to think that the Russian form of Government, Russian industrial conditions, and Russian social life, are the best in the world. Some of us on this side of the House can see no good whatsoever in the Russia of to-day; in fact, wherever we look, we see the red hand of Moscow threatening us on every side of the world. Wherever our policy is not popular, wherever our national characteristics are not particularly popular, we comfort ourselves by the thought that it is the Communist menace in a new guise. If I might say so, I think that both of those ideas and both of those conceptions of the situation are somewhat exaggerated, and it is with that in view that I would like to put my idea of the situation before the House to-night. To start with, Russia is not perfect, as some of our Friends opposite would have us believe. She is far from perfect. She is suffering from a Government whose prestige is still staggering under the weight of its crimes against humanity. She has a people who still view those crimes with horror and loathing, and are slow and unwilling to give loyalty or honour to the rulers who are responsible for them. But revolutions are bloody things, especially when they follow as an avalanche on an unsuccessful war. The people of Russia are not happy in spite of their free seats at the theatre and in spite of the consistent and insidious propaganda of the Government to convince them that they are. They are not happy because they are not free. The country is not prosperous but undoubtedly it is potentially so, and what is still more important to know, the standard of life, which has been so often mentioned in the Socialist papers, is not anything like comparable with the standard of life of the same section of the community in this country.
  That is a word on the Opposition views of Russia. Now I come to the views expressed by some Members on my own side of the House. Consider that vast country, extending from Minsk to Vladivostok, from Murmansk to Baku, with a population of 150,000,000 people covering 12,000,000 square miles embracing countries and peoples who are ignorant of
  2274
  other countries and peoples acknowledging the same central authority, consider the vast machinery necessary to administer that country. Consider the intricacy of the machine, consider the volume of labour employed in the government of such a country, then consider as to the improbability of those engaged in the administration of that country finding time also to engage in meticulous and world-wide activities against all capitalist countries. To my mind it is assuming an omniscience and an omnipotence which no human organisation is capable of, and certainly not the Soviet Government. That they do intrigue and are intriguing is admitted. It is obvious from the statement of the Prime Minister and from the White Paper. But when has Russia not intrigued? I daresay if the archives of the Foreign Office were searched, we should find as destructive conspiracies as appeared the other day. It is an inherent characteristic of the Russian people to conspire and intrigue, and it is only by understanding that inherent characteristic that we can ever understand the Russian problem. Because we break off relations with Russia—and I fully support the Government in their action in that point—it does not mean that the Russian problem is solved. It does not mean that the Russian question is finished with. It merely means that the job has got more difficult and the Foreign Secretary's job is rendered more difficult. [HON. MEMBERS: "Why support it?"] Because there is every justification to support it on the information given us by the Foreign Secretary and by the Prime Minister. It is obviously time to teach the Russian leaders a lesson and to teach them that the time has come when they have to disown and disavow Communism.
  I should like to draw attention to another question which must be considered when dealing with a problem of Russia and that is the question underlying all Russian difficulties, the question of Communism. Communism is stated, by its misguided theoretical, doctrinaire adherents to be based on the teaching of the Scriptures. No doubt the communal theory of service was originally a very fine one, and no doubt it could be applied to a State which had reached the period of the millennium, but we have not reached the period of the millennium, and therefore, Communism, even as a, theory, is not yet ready for fruition. But, in

  2275
  addition to that, the adherents of Communism have so lost the sense of Christianity that we have now got Communism not a theory of service but a disease that threatens to wreck the very life of this country and other countries in which it takes root. That disease, as we know, has been fostered in Russia by a group of unqualified practitioners which would have us believe that you must first destroy the body and, having accomplished its destruction, breathe fresh life into it and produce a being of your own design. What an utter fallacy! But that is the theory of the followers and adherents and exponents of modern day Communism. Although a disease may attack a healthy body, it is generally assumed that the body must provide a fertile soil and must be physically debilitated if the disease is going to have any fair show of success or afford any danger. Following that theory, let us examine the Russia of 1917. Where was a body more diseased? Where was a soil more fertile? An unsuccessful war had worn out the moral of the people. The spirit of the people by constant and insidious propaganda, by German propaganda, has been turned against its own Government. The people were beginning to lose their faith in authority. They had heard so much, and probably justifiably, about its lack of patriotism that they have come to believe that the Government was not fit to be trusted.
  That was the attitude of mind on which this disease, which had been fostered in the back streets of Leningrad, New York, London and Geneva by Lenin and his various comrades, seized. For four years it flourished and grew, and in 1921 it was given its real death blow by its chief author, Lenin, for there is no doubt in my mind that by the introduction of this new economic policy, Lenin showed that he recognised that the half-way house towards capitalism, towards private enterprise, towards individual effort must be reached, and he also recognised that Communism was a failure and offered no possible foundation for the construction of a new heaven and a new earth, and though in theory it might still be preached, as a practical policy it was dead, and its moribund condition was recognised even by its own initiators. Unfortunately, however, the slogans by which these leaders of Russian Communism
  2276
  had built their little phalanx around them, and by which they had obtained power, still existed, and until they get the courage to openly disavow Communism, until they have the courage to come into the open and say, "We were wrong, and these cries of down with bourgeoisie, down with capitalism, were leading the people into the wrong path", Communism will and must remain part of the Russian national programme. It is up to us to kill it. There are two ways of killing even the theory of Russian Communism. One is by a policy of isolation from Western thought, Western society and Western capital, and the other is by a policy of infiltration and permeation by Western ideas of morality and commercial good will. I think the Government are right in the attitude they have taken up. We have by our action to-night declared for the former. We have adopted the policy of isolation. The fault for our adoption of that policy lies with the Soviet Government themselves. The other method of infiltration we have left to our foreign competitors on the Continent, who will no doubt take every means they can to secure the trade which I think we, for the time being, will undoubtedly lose.
  9.0 p.m.
  I regard Communism as a disease If you will just follow my theory as regards Europe, you will find that my statements are borne out. That disease, while it was living, active and developing—for it is a contagious, even an infectious disease—shed its bacillus which attacked everybody whenever the soil was fertile. It attacked Italy, Prance and Germany, and in each case the various attributes and qualifications of the country killed Communism in its midst. In Italy, the very violence of the disease created its own reaction. The virus has provided its own serum, and so we see the whole country seduced for the moment by the very antithesis of Communism—Faseism. In France it was up against forces stronger than itself, and in this case the forces were thrift and patriotism, and Communism died. In Germany—where was there more fit and proper soil for the disease? Its people were disgruntled, it had been crushed militarily, it had been destroyed, temporarily at any rate, economically, it had been overturned socially. But the disease did not reckon with the inherent sanity of the German people, and it was that sanity

  2277
  which in 1921, when the great "putsch" was tried, killed it. The German people eliminated Communism from Germany for all time. Then we come to our own country. Again the body was diseased, the soil was ripe. Millions of men workless, houses unobtainable, trade at a standstill, soldiers back from the War who had been promised Elysium and had found only the "dole", a Government—I am talking of the period 1921–more concerned with its future majority than for its existing minority. This was a very fertile soil for the disease, but unfortunately the soil was not reckoned with. The soil was the character of the British people. It was the inherent loyalty, self-reliance and self-dependence of the British people that killed Communism in this country. If we have any chance even of a tithe of the prosperity we are entitled to, Communism as an active force will be dead for ever in Great Britain. Have any of the hon. Members opposite any doubts on the subject as to whether Communism, is a danger or not. We have our Mr. Cooks, and I feel confident that with a strong Conservative Government and a courageous Home Seeretary—[Interruption]—and with a loyal police force, hon. Gentlemen opposite may sleep comfortably in their beds, and need not fear that the machinations of some of their friends to which I refer will ever disturb their night's rest. We have to recognise that there are still in the Soviet Government exponents, and very active exponents, of the Communist theories. We have to remember that these exponents are Working hard, day and night, to try to seduce the moderate element of Russian official opinion. We, as supporters of the Conservative Government, have got to ensure that these extremists, these extreme theorists and revolutionaries, are taught a definite lesson, such as we are teaching them to-night and which will drive it into rather obtuse heads that Britain is not going to stand any interference with her domestic or Imperial concerns. I would like to plead with the Government to consider, if possible, their action in regard to the Trade Agreement. The point to remember is, what do we gain by breaking the Trade Agreement, and what do we lose by it? What we gain is problematical. No one can tell, only time will show. What do we lose? I cannot,
  2278
  at the present time, tell what we lose. I have an unhappy suspicion of what we may lose. We may lose a growing trade and hand it over to others. I saw in the papers the other day that the American had cabled to Arcos or the Russian Trade Delegation within two hours of the Arcos raid, endeavouring to secure the trade which is going to be given, or was promised—which is a very different thing—under the Midland Bank scheme. [An HON. MEMBERS: "We would never have got it."] My hon. Friend says we would never have got it, and judging from what the Foreign Secretary said this afternoon, it is more than probable we would never have got it. I understand the Americans were on the job in an endeavour to secure that trade within a few hours of the Arcos raid, and that shows we have to watch the very serious competition from abroad.
  What is that trade? From 1920 to 1926 the purchases by Russia in Great Britain were £82,000,000 with another £13,000,000 in insurance, freights, warehousing, etc. The purchases from Russia by us were £86,000,000—a total trade of £170,000,000. That is not a sum which in our present economic position we can lightly disregard. Another point is, we may lose, I think, an increasing economic stability in Europe. Without commercial co-operation from European countries and from us there is no doubt that Russia will recover but it will be a very slow recovery, and for the moment I think it is probable that it is we who will feel the draught, we who will lose the markets, and the trade, and our Chancellor of the Exchequer will lose Income Tax receipts. The trade that we can do with Russia is a complementary trade. They want from us machinery, rolling stock, and textiles—just the things to set our depressed industries on their feet. We want from them wheat, timber, and the various raw materials. I feel that the Government have studied the position so carefully and so considerately that they would not take their present action unless it is an absolute necessity. If we remove the Trade Agreement, it seems to me that we remove the one link that enables our merchants to deal with Russia. It removes a bridge, however slender, by which trade can be induced to flow into this country and flow out of it to Russia, and I do ask the Government to give their serious consideration to that one point. By all means recast the Trade Agreement, remove

  2279
  from it those silly, stupid and unnecessary diplomatic privileges that should never have been put into it. Purge it, as we are purging the trade union movement from its political implications and obligations, and, as we are handing the trade unionism back to the trade unionists of this country as a charter of liberty, let us so purge and clarify the Trade Agreement with Russia and hand it back to our traders as a free and unrestricted charter of trade.
  The Government have absolutely done the right thing in breaking off diplomatic relations, and they have done the right thing in teaching the revolutionaries of Russia that we will not allow or tolerate interference with our domestic concerns or with our Empire; but when they have learnt that lesson, or when their people have forced them to learn it, I ask the Government to show that same breadth of view and that same patriotism that they have shown in the past, and to receive back that vast country into the comity of nations and so take an action which I am sure will react very greatly on the peace and security of the world.
  Mr. TAYLOR: The hon. and gallant Member who has just sat down devoted the latter part of his speech to a, recital of facts and a statement of arguments that ought to lead him into the Lobby against the Government.
  Lieut.-Colonel MOORE: No.
  Mr. TAYLOR: It is refreshing to bear that some of the economic realities of the situation are realised on the opposite side of the House. The question that I want to put to the Government is this: What has happened since the Debate on the 3rd March to make the Government take the drastic step of ending both the Trade Agreement and diplomatic relations? Certainly, nothing that has been published in the ludicrous White Paper which has been issued to-day can be urged as a sufficiently substantial reason for proceeding to the extremity on which the Government have decided. It is usual when this stage is reached that it should be considered the preliminary to an outbreak of war, and probably with any other Government in the world such a step would naturally result from the course which the Government have taken. In any case, their action has produced a
  2280
  situation which cannot be left very long where it is. I would urge that the Government, determined no doubt to break off relations, will proceed from that to face the problem with a view not to allowing the two countries to drift into war but with a view to negotiating a new Treaty, which will provide for clearing up of the misunderstandings between the two countries and creating those stable conditions of political certainty and political goodwill which are the essential conditions for trade with Russia or with any other country.
  I took the opportunity last week-end when I was visiting my constituency to intimate to the responsible heads of our local engineering industries, which employ several thousands of men, my fears that the Government might decide to take the course which they are now taking, and I asked those gentlemen whether I might state with authority their views in relation to any such proposals. At this point, I would like to explain that before the War, for three or four months every year our working population were maintained by the manufacture of goods, mainly agricultural machinery, oil engines and engineering products of various kinds, which found their market in Russia. Unfortunately, owing to the dislocation created by the War and owing to political uncertainty, monetary instability and a number of other conditions, the trade almost disappeared, until the Trade Agreement was signed. Since the signing of the Trade Agreement, we have had a very considerable volume of business with Russia, to the mutual benefit of Russia and the local community which depends upon those engineering works. The payment for those orders has been prompt. It is a business that has been growing and expanding, and at the present time not only have we substantial contracts in hand but we are in negotiation for the biggest orders that we have negotiated about since the days before the War.
  I asked these gentlemen, who were not members of the Labour party but business men responsible for the control of great industries: "What would your view be on the proposal to break off relations with Russia"? They said, "We should regard it as a very grave disaster". One of them told me that I could state on his authority to the House

  2281
  of Commons that in his firm alone this will mean scores of thousands of pounds a year less in wages. It will mean an addition of hundreds of men to the unemployment list, more doles and more burdens on local industries, thus penalising them from competing successfully with their competitors. This break, they tell me, has come just at the moment when the conditions for developing the Russian market, which appears to be the only market favourable for the extension of our trade so far as that community is concerned, had a much more hopeful outlook than at any time since the signing of the Trade Agreement. We, in Lincoln, have for a long time been trying to overcome the difficulty with regard to financing Anglo-Russian trade.
  We were delighted when we heard that negotiations were going on, under the guidance of responsible men like Sir Allan Smith, to provide for long-term credit operations, because you cannot sell heavy machinery involving a great capital outlay unless you have some system of long-term credit by which to enable an undeveloped country to pay. The hon. Member for Lichfield (Mr. Roy Wilson) expressed some opinions about the methods of financing Anglo-Russian trade and spoke of the proportion that had been demanded as a deposit for long-term business. If the statements he made mean anything at all, they are a substantial argument for the kind of proposal that was embodied in the credit arrangements which Sir Allan Smith and others negotiated with financiers belonging to the London City and Midland Bank. Under the terms of this arrangement, instead of there being an unreasonably high proportion of deposit demanded, only 10 per cent. was to be demanded with the order, and the rest was spread over a sufficient number of years to allow of the possibility of substantially developing the trade.
  The Foreign Secretary this afternoon made a statement with regard to some conversations he has had with Mr. Rosengolz and Mr. Rakovsky. Mr. Rakovsky, he said, had talked to him about millions of pounds' worth of trade, and the Foreign Secretary asked: Where are those millions of pounds' worth of trade? Many of them have gone to Germany under the credit scheme which the German Government, in association with
  2282
  the German manufacturers, have arranged. Here are some of the orders that have actually been placed in Germany during the last year. The Soviet metal industry has placed orders for equipment and machinery to the value, approximately, of £5,000,000. The oil industry has placed orders in Germany to the value of about £2,000,000; the coal industry orders to approximately the value of £2,000,000; the electrical industry £2,000,000; the paper industry £2,000,000; the textile industry £600,000; the chemical industry £600,000; the timber industry £100,000; railways £1,000,000 and shipping £600,000. Those orders could and would have been attracted to Great Britain had it not been for the general attitude of the Government towards the Russian problem.
  Time after time since the signing of the Trade Agreement, and since the assembly of this Parliament, the Foreign Secretary and the Under-Secretary, the Prime Minister and other Members of the Cabinet, have been pressed to state definitely the terms on which they would be prepared to enter into negotiations with Russia for the purpose of clearing up all outstanding difficulties. We have had nothing but vague generalities, and a flat refusal to state any conditions which were acceptable to the British Government as a basis for re-opening negotiations. One would naturally assume that after a Treaty has been negotiated by a previous Government that they way to start your negotiations would be for the British Government to lay down its views as to which portions of the Treaty were unacceptable from their point of view. We know the Government took exception to the loan and to the portion of the Treaty which defines the rights of nationals in each other's courts, as well as those portions that deal with questions purely of trade and commerce, and the conditions without which you cannot have successful business operations between two countries. The Government have consistently and persistently refused to define their position or make any contribution whatever towards a final solution of this problem, and we cannot but believe that the crisis which has now come has not been the result of any discovery arising out of this raid, but that the raid is merely an excuse by which the Government seek to cover up the step it has taken as a result of the pressure of those

  2283
  influences in the Cabinet which are incapable of thinking intelligently or reasonably about the question of Anglo-Russian relations.
  The Prime Minister said that he was prepared to give all reasonable facilities for the development of trade, and suggested that Arcos could remain here and carry on its business. That is merely political deception in order to deceive the country. The Prime Minister knows perfectly well, and the Cabinet knows perfectly well, that it is impossible to conduct Anglo-Russian trade successfully when you have broken off negotiations and destroyed the principles of the Trade Agreement. Russia is the one country in the world where you have a State monopoly of imports and exports, and, therefore, the Russian representatives represent not individual profit seekers but the State, and must be given, if you want to do business with them, suitable conditions to allow that business to be developed. Before the signing of the Trade Agreement a cargo of Soviet timber, or timber from Russia, came over to Great Britain, and the original owners, the pre-War owners of the particular firm from which that timber was shipped, took action in the British Courts claiming that the timber belonged to them. Mr. Justice Roche, who dealt with the case, held that as the British Government had not recognised the Russian Government, that the Russian decree of nationalisation had no legal effect in British Courts. [HON. MEMBERS: "No, no!"] I am speaking of Mr. Justice Roche's verdict, and if hon. Members will allow me to proceed I was going to say that the case was taken to the Court of Appeal, but before a final judgment was given the Trade Agreement, if it had not been actually signed, was being proceeded with.
  Sir W. MITCHELL: No, no.
  Mr. TAYLOR: Perhaps the hon. Member will state the facts.
  Sir W. MITCHELL: The facts are that this cargo arrived at Newcastle, and the buyer there found that it was his own timber, bearing his own stamp on it, and he raised an action in the Courts. Mr. Justice Roche held that the Soviet Government was a Sovereign Power within its own jurisdiction and had
  2284
  passed a law commandeering everything in the country, and that that law held good even here.
  Mr. TAYLOR: I know that was the final decision, but the point is that without diplomatic relations it is impossible for business to take its ordinary course. You cannot have long term credit business unless you have stable political relations, and anybody who has anything to do with commerce knows that if the political conditions between two countries are strained, or there is any great uncertainty, that it at once operates against the development of trade between the two countries. If it is not too late I hope the Government will reconsider their decision, or, if they cannot reconsider it, that they will not admit this nonpossumus attitude and will at once take the Russian problem as it stands and try to negotiate a full and a complete agreement between the two countries. Russia has never repudiated the principle of meeting her trade debts and there is no earthly reason why, if the British Government were willing to make their contribution, the relationships between the two countries should not be straightened out and we could then get down to economic collaboration and the development of good will between the two countries.
  Sir ROBERT HORNE: The hon. Gentleman who has just sat down has shown a certain amount of acquired information on the subject of trade with Russia. I am in a position to speak at first hand, because I have not only been one of those who assiduously during the last few years have been endeavouring to assist trade with Russia on the part of British companies with which I have a connection, but I was also intimately connected with a company in which I induced several people to put large sums of money and whose whole business was trade with Russia. If my hon. Friend thinks trade with Russia is as easy a proposition as he has told the House to-night, then from my personal experience I venture to tell him he is entirely mistaken.
  Mr. TAYLOR: You do not know all. You only know your own experience.
  Sir R. HORNE: It is a company that represented a great variety of trades in order to push their business in Russia.

  2285
  I ask the House to believe that trading with Russia is not so easy a proposition as the hon. Member professes for the very reason he gives. The Government is the bottle-neck of all the trade. It is the exporter as well as the importer. It is impossible, and they will find that increasingly difficult as time goes on, to conduct a business of a great nation through a Government Department. I pass from that, on which I can speak with personal knowledge and which is unchallengeable, to the more important aspects raised in the course of the Debate to-day. My right hon. Friend the Member for Carnarvon Boroughs (Mr. Lloyd George) and I were associated in signing the Trade Agreement in 1921. The great difference between my right hon. Friend and myself to-day is that his illusions have survived longer than mine. He made a very weighty and a very grave speech, which deserves the serious consideration of the House, because of the long experience which the right hon. Gentleman has had, experience which is unsurpassed—if indeed it is equaled—by that of any Member of this House. He warned the Government that they were embarking upon a very serious act in this breaking-off relations with Russia. I have no desire for a moment to minimise the gravity of the action which the Government have decided to take I am perfectly certain His Majesty's Ministers have not entered upon this course of conduct without the gravest deliberation and the greatest possible reluctance.
  The speech of the right hon. Gentleman was impressive in many respects, but there was on part of it which, I confess, somewhat surprised me and which I greatly regretted. He indicated that while he agreed on the evidence, which he accepted without question, that the action of the Government was justified, yet at the same time he gravely questioned whether the action taken was desirable. In connection with the first part of that position, he stated from his own experience that Russia had perpetually broken faith with this country upon the Trade Agreement, to which he had been a party. At a latter part of his speech he, as I think unfortunately, began to condone and excuse many acts upon the part of the Russian Government as being comparable with other things which have taken place in other countries at different
  2286
  points of time. I regretted that he should have done that because one knows what will happen. That part of his speech will be taken from its setting and published all over Russia as a justification of the course of conduct in which the Russian Government has been engaged. I am perfectly certain that the right hon. Gentleman would be the first to disavow that interpretation, but when you are using language, which is going to be quoted among people such as we know the Russian propagandists to be, it is perfectly certain it will have an importance which was never intended in this House.
  The main assumption upon which my right hon. Friend's speech proceeded was that the Foreign Secretary had been coerced by more impulsive and obstreperous colleagues into the action that had been taken. He said he was going to give some evidence to that effect, but, although I listened very carefully, I could find nothing at all in his speech which justified the assumption upon which his whole speech was based. If I might recall for a moment the last Debate we had on this subject, it may be remembered that I pointed out at the time that the Note which the Foreign Secretary had addressed to Russia was one of the sternest and gravest character, that it was intended as an ultimatum, and my right hon. Friend assented to that proposition at the time. It was inevitable that if this course of conduct was continued the Foreign Secretary would be compelled by the force of circumstances to take the action which he has now taken. My right hon. Friend was mainly concerned with proving that this was a very inexpedient action to take. He said that conditions of things in China were involving at the present time a defeat of the Bolsheviks, that we were seeing the ruin of the Bolshevist cause, and that this was the last moment of time we should have selected for taking such action in this country. But if my right hon. Friend was right in his contention there never would come any time at which action should be taken. If the circumstances are not now, after six years, enough to justify what has been done, how long are we to wait and submit to the contumely with which we are attacked by the Russian Government?

  2287
  It is perfectly clear that his speech could only have the result, if it proved successful, that Russia would be assured she could take any action she liked in connection with her relations to us, that she could act as she chose in any part of the world, that she could be as hostile as she chose and that the British people would never take any action. I regard that as an impossible position to take up. Not only so, but the very fact that Bolshevism is now receiving its first reverse seems to me a very good reason for our taking action here at the same time. The combined results of their failure in China and the action which we now take after a long period of tolerance and patience may, as I anticipate, be enough to convince the Russian people at last that this perpetual attack upon the civilised nations of the world is going to be a permanent failure and that so long as she indulges in it she is not going to succeed in the comity of nations.
  The right hon. Gentleman, like the hon. Gentleman who has just sat down, addressed himself in particular to the losses we would suffer in our trade in taking this action. My right hon. Friend and I are, I think, convicted of being very bad prophets in connection with trade with Russia. We both prophesied a very great development of trade with Russia as a result of the agreement of 1921 and we have both been proved entirely wrong. The only thing is that because I am less important and cannot use such picturesque language as my right hon Friend, my predictions have not been remembered as his have been. I think so long as this question is discussed, somebody will refer to "the bursting corn bins" and that expression will remain a permanent sympton of his failure to prophesy correctly. There is then the matter of this £10,000,000 credit. I have so often been confronted with cases in which Russia was going to place large orders in this country, if only sufficient credits were given, that I feel very doubtful indeed as to what the ultimate result of this credit would have been. It had to escape many difficulties before any actual contract was made. It has been revealed to us that there has been no contract at all yet made under this supposed credit and that there would have to be scrutiny by the bank of each individual credit and a deposit made by the Russian Government
  2288
  before anything could be done. It is asking too much to ask us to believe that the country has lost £10,000,000 worth of orders this year because we have taken this particular action.
  What did all our manufactures shipped to Russia amount to last year? To less than £6,000,000, and I ask the House to address its attention to the character of our trade with Russia. Speeches are constantly being made as to the amount of employment which our people are to obtain by keeping in touch with Russia in the way we have been doing and figures are used of composite trade as if they all represented the employment of people in the factories of this country. It is a complete fallacy. Last year we shipped to Russia of our own manufactures something like £5,800,000 worth. We shipped of other people's manufactures, we being mere entrepreneurs in the matter, £14,000,000 worth, but all the employment that was given to this country is represented by something less than £6,000,000 sterling. [HON. MEMBERS: "What about the docks?"] I stand upon the figures which I give. I am talking about employment in factories. I agree that the merchanting of the other £14,000,000 worth meant a certain amount of employment but not employment in the factories. These other goods were manufactured in other countries and this country was the conduit by which they proceeded to Russia. So far as our own employment is concerned, less than £6,000,000 represents the total. On the other hand, what did we do for Russia? We bought from Russia £23,900,000 worth of their goods. Who benefits on that balance of trade? The fact is that we were buying from Russia a sufficient amount of goods to supply them with money to buy goods from other countries. The difference between the £6,000,000 and the £24,000,000 is represented by goods which they purchased in other countries, including at least one country which never has entered into any terms of friendship with them at all. I mean the United States.
  The United States sent Russia last year, as a contrast to our £6,000,000 worth, £11,000,000 worth of their manufactures, in spite of the fact that not only have they refused to recognise Russia but have treated Russia with contumely. There is at least one Member

  2289
  on the Opposition benches who will recall the language used in America with regard to Russia. The hon. Member for the Forest of Dean (Mr. Purcell) was in America when I was there, about 18 months ago, asking the trade unions of America to make contact with the trade unions of Russia. I do not suppose in the history of this country there ever has been an envoy from Britain treated with so much contumely as he was by his fellow trade unionists of America and none has ever been sent away with so much contempt ringing in his ears. The fact is that while America despises Russian methods and contemns every single element of Russia's creed, at the same time the Russians recognise a strong Power which cares nothing for what they say and they go hat in hand to America obsequiously to get the benefits that America can afford.
  So far from thinking that this action of the Government is going to decrease our trade with Russia, I think Russia will find it inevitable that she shall trade with us. Where is she going to find the market for the £24,000,000 worth which we took last year? It represents the raw materials of her country; it is her timber, her cereals, her bristles, her oil; where is she going to find so ready a market as Great Britain? My contention to this House, having some little knowledge of trade, is that Russia cannot fail to trade with this country. She may, in order to show some sort of resentment in the immediate future, make some kind of ostentatious display of either withdrawing her orders or refusing to give us others, but it is inevitable from the position in which she lies geographically, that her trade with Britain must increase as she develops and that we shall not suffer from any action of this kind.
  Mr. OLIVER: Your last prediction was wrong.
  Sir R. HORNE: After all, it is my prophecy, and everyone should have the courage of his predictions and I venture to give the House that one. I wish to advert for a moment to the Motion which has been moved from the Labour Benches. It is proposed that we should have a further inquiry into these matters. What is any further inquiry going to produce? We have had a speech from my right hon. Friend the Member for Carnarvon Boroughs who showed no favour to the
  2290
  Government in the action they have taken but at the same time he told the House with the full authority of his experience, that there was no doubt about the evidence and that he himself in his own time had had evidence in his hand, even more remarkable than that which the Government put before the House two days ago. My right hon. Friend the Member for Colne Valley (Mr. Snowden) in terms as severe as any that have come from the mouths of Ministers, has expressed his view of the Russian propaganda against Britain. He has no doubt in his own mind that they are perpetually working against us and perpetually violating the stipulations of the Trade Agreement. My right hon. Friend nods his head. Therefore, we require no further inquiry.
  What, then, are we to do? Are we to go on suffering these insults? I know what the right hon. Gentleman's proposition is. He says we ought to sit down round a table. There have been many discussions with the Russians. There was a discussion which my right hon. Friend the Member for Carnarvon Boroughs entered upon very hopefully in the year 1922 at Genoa, which lasted for many weeks and arrived at nothing. If I were asked to point to the time at which my might hon. Friend began to lose his prestige in Europe, it was when the Russians defeated him in those negotiations. The Labour Government spent a long and weary time trying to arrive at some result with Russia, which they put in the form of a Treaty. What did it involve? It was that this great country of Russia, which regards capitalism as a crime and a capitalist as a man to be assassinated, came here to ask for the loan of some of our capital, and they were not going to do anything for us in any shape or form unless they got that guarantee of a loan. It was the prime stipulation upon which everything depended. As I say, how long can we be expected to suffer these insults and injuries throughout the world? Russia to-day is working everywhere for the upsetting of all recognised institutions.
  There was here only the other day one of the most distinguished American journalists who gave a lecture on his experiences in Mexico, from which he had just returned, and he revealed to us the fact that in Mexico the conditions of

  2291
  discord which at present exist are exactly similar to those which exist in China, and that they are operated by exactly the same machine from Moscow as is already trying to do devastation in China. They are at work, as we know, in Afghanistan, and they are everywhere trying to create this world revolution, as they call it. In my view, so long as we allow them to continue in this country carrying out their schemes here, and so long as we fail to put a stop to their perfidies, we shall have the degradation of the relations between the nations. The Russians to-day are poisoning international life. They are like noxious germs, which settle upon the scars of the world and turn them all into festering sores. We may be a healthy people, we may be a strong people—although in some respects to-day our vitality is not too high—but I think it is incumbent upon us, for the sake of the health of the body politic, that we shall clear out these danger spots from our system.
  Mr. ARTHUR HENDERSON: The right hon. Member for Hillhead (Sir R. Horne), who has just resumed his seat, began his speech by reminding the House that some years ago he had made a prediction that had never been fulfilled, yet he was bold enough to close his speech by making another. I hope the second is not as unfortunate as the first. With regard to the suggestion that the Russians will continue to send their exports here, I think there is no one in this House who would not welcome them. We are not going to lose, are we, if they send their exports here? What we shall deplore is that we have not any exports to send to them in return, for the simple reason that we shall not have their orders—[HON. MEMBERS: "What about Free Trade?"] They will pay for them as they pay now, because the right hon. Gentleman told us that the balance of trade was very much against them, inasmuch as their exports from Russia were very much greater than their imports from here.
  Before I say anything in regard either to the Motion or to the Amendment before the House, I would like to make a brief reference to another Amendment that I see on the Order Paper, and I think I should be allowing the position to continue to be misrepresented if I were
  2292
  silent in this Debate with such an Amendment on the Paper. I find in this Amendment, that has not been moved, these words:
  "and further expresses its strong condemnation of the unconstitutional conduct of … the right hon. the Member for Burnley in receiving diplomatic representations from a foreign Government."
  I should have thought that, before horn Members ventured to place upon the Order Paper, in their names, such a condemnation of a colleague in this House, they would, at any rate, have made an effort to ascertain the facts of the position.
  Sir BASIL PETO: We asked for them at Question Time, and got no answer.
  Mr. HENDERSON: Question time is not the time to try to settle accounts of this description, but I am not afraid to state the entire position, and I hope the House will bear with me if I attempt to do so. On the night of the raid, I think it was two or three minutes after eight o'clock, I walked from the House across the Lobby to my room and was met there by a couple of gentlemen, one being the Chargé d'Affaires of the Soviet Government. It was at once said that he desired to speak. I then asked him to come into the room, and we sat down together. I had not been two minutes in the room before the right hon. Member for Platting (Mr. Clynes) came in on other business, and I asked him if he would remain and hear the statement that was just beginning. The statement was that a raid had been begun in connection with the premises of Arcos, Limited, and that he was afraid it would extend to the Trade Delegation. He said he had done everything in his power to get into touch with the Foreign Secretary—and I think the Foreign Secretary yesterday admitted that he left the office at about seven o'clock, and this was about eight o'clock, as I have already said—or with any official at the Foreign Office, and he had failed to do so. He then said that, as they had had no warning about this raid—[Laughter]—I think I shall be able to show that, as the raid was covering the Trade Delegation, they were certainly entitled to be treated differently from the way in which they were treated—and as they could get no information from and no contact with the Foreign Office, he merely came down, not

  2293
  to make diplomatic representations, but to make a statement about the conduct of the Home Secretary, who had initiated the raid. As a result, we put the question that was answered on the following day.
  If that is carrying on, as the Amendment referred to says, "unconstitutional conduct," may I say that I always thought it was the duty of a politician and a gentleman, if someone wished to make a, statement to him, to treat that person as a gentleman until he was found out to be a rogue? Having made that personal statement, I would like to refer to the speech made by the right hon. Gentleman the Secretary for Foreign Affairs this afternoon. I was very much impressed by the fact that the right hon. Gentleman, though he was delivering the speech, had his heart behind an entirely different policy. That was not to be wondered at, having regard to the repeated statements that he has made in this House in support of a policy entirely contrary to that to which we listened to-day. The first observation I wish to make with regard to the speech is this. The right hon. Gentleman said that the Motion moved by my right hon. Friend the Member for Platting (Mr. Clynes) was a Vote of Censure, that the Government would not accept that Vote of Censure, and he gave as his reason that the Opposition had told them what attitude they ought to take up towards any request for an inquiry. This, as the House well knows, referred to the Campbell case. I should have thought that that was not an illustration that should be brought up with the intention of following it; I should have thought, having regard to all that took place afterwards, that it was a case of being warned against it as showing how not to do it.
  But I would like to make another remark with regard to this question of inquiry. I remember a Motion being moved last Session—I think I moved it myself—with regard to the question of Ministers and contracts. The Prime Minister, when replying on the Motion, said that the idea of an inquiry nobody could very well take exception to, but in the opening lines of the Motion moved from these benches there was a reference to the right hon. Gentleman the Minister of Health, and because of that reference
  2294
  being there, he could not in any way support the proposed inquiry. It cannot be said in this case that the Motion that has been moved by the right hon. Member for Platting refers to any particular Minister. I cannot see any such word of condemnation, and, having regard to the very important issues that are raised by the Motion, one would have thought that an inquiry was the most reasonable course to adopt. As for making this an exact parallel with the Campbell case, may I say that the Campbell case was merely a domestic issue? This is not a domestic issue; this is an international issue. Moreover, I ought to remind the House that in that particular case, it was perfectly clear, owing to our minority position, that we would have had a majority of the members of the Committee of Inquiry against us from the beginning. In the present instance, with such a proportion of supporters as the Prime Minister has behind him, the Government would have been able to place on the Committee of Inquiry a very considerable majority of their own Members.
  Sir A. CHAMBERLAIN: Hear, hear!
  Mr. HENDERSON: I am putting the position quite clearly. The Government would have had on the Committee a majority of members.
  Sir A. CHAMBERLAIN: Would the right hon. Gentleman accept implicitly the decision of that tribunal?
  Mr. HENDERSON: You would have to wait and see about that. The right, hon. Gentleman has been too long in this House to expect me to accept in advance the decision of a majority of a Committee who are against us from the start. [HON. MEMBERS: "Why ask for it?"] No one knows better than the right hon. Gentleman that that is not the issue. The issue is, would the inquiry have illustrated questions and points and issues that have not been made clear, not even in this Debate, with the assistance of the speech which the right hon. Gentleman himself delivered? It is not a Campbell case, in my opinion. The fact is that the Government are afraid to bring some of the questions into the light. The right hon. Gentleman will pardon me for saying so, but I think the real issue is that something had to be done; a raid had been entered upon and carried out in a way

  2295
  that could be very severely criticised, and the Government, having failed to find what they were looking for, had to divert public attention from the failure of the raid, and they now propose to do it in this way. But this policy, for which the Government has made itself responsible, is the more remarkable—I might go so far as to say is the more incredible—in view of the fact that this was not the only course left open to them.
  10.0 p.m.
  I am sure the right hon. Gentleman knows full well that only the Charge d'Affaires, of all the people employed at Chesham. House, by the Trade Delegation, or Arcos, has any really serious diplomatic privileges. Therefore I am right in saying that the Government could have prosecuted any single member of the staff who was suspected of doing a thing that was wrong. They could have proceeded against them in the Courts, the visas of every individual on the staff could have been withdrawn, and all of them would have been compelled to return to Russia. If the Government did not wish to proceed against the Charge d'Affaires, if they had no complaint against him as an official, they could have appealed to the Russian Government to say that all these men had to be brought back to Russia because they were violating the conditions upon which they were allowed to be in this country. It seems to me that the Foreign Office on the one hand and the police authorities on the other had an alternative policy that they could have put into operation without running all the risk that they are running. Notwithstanding the speech made by the right hon. Gentleman the Member for Hillhead on the trade issue, I am quite satisfied that the Government are taking a considerable risk in regard to the trade of our country. The Foreign Secretary told us that they had a great mass of information, gathered over a considerable period, but he would only select two documents. Why two documents? Surely the issue that is being debated is of such importance that, if he has more documents, they ought to have been produced. Are we to understand that the two documents were the cream of the whole? If they were, the cream was not very far from sour milk. I am not to be persuaded that it was a printing impossibility to have placed a
  2296
  number of these documents in the White Paper. I think the Home Secretary, who is to follow me, might give the House a little information as to why, if they have all these important documents, they were not produced in the Debate, and why, if they were not produced in the Debate, they were not included in the White Paper? I have a theory, although I may be wrong—but once bitten, twice shy—that they may see the light of day at the next General Election. The Foreign Secretary seems to be rather angry with some of us for daring to suggest that some of the methods of which he complains are occasionally followed by our awn Government. I do not think that the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) exaggerated the position. He is dealing with what those of us who have been associated with Governments in the past all know. I have been associated with the right hon. Gentleman in Governments under various names, and I am prepared to say that a certain number of things go on.
  What is so unfortunate in our own country is that we are such hypocrits. We Britishers are the Simon Pures of international life. Everybody can do the thing that is wrong, but we can do no wrong. Let me give an illustration of what I mean. I remember, some years after the War, some of us who had done our little best in the great crisis—[Laughter]—I repeat some of us who had done our best, and I think no one will be prepared to admit that sooner than the right hon. Gentleman the Foreign Secretary—I remember that in 1919 we had a little experience of what could be done under a British Government. Some Members of this House were participating in a conference in Switzerland. I had been responsible for organising that conference, and one Saturday morning one of the Bernese police came into the office and said, "Here are some papers; they all pertain to your conference". I looked at them and I saw at once they were very full of interest. He said, "We have got some more at the police office; would you like to see them"? I said, "Certainly," and he brought them. Would you believe it that they were reports by a spy representing our own Government, who was sent to spy on the delegates at that conference,

  2297
  including some Members of this House? I read those reports, and I think the best way in which I could describe them would be to say that they were a lot of tosh. But they were very expensive tosh. The spy was writing to Scotland Yard and to the head detective in the Hotel Majestic. The right hon. Gentleman the Member for Hillhead (Sir R. Horne) will remember that hotel where the work of the Peace Conference was carried on, and in all his letters this spy was pleading for more money. The point is obvious to those who want to see it. It was a case of our doing, as a Government, through one of our Departments, the very thing about which we complain so much against the Russian Government.
  What is the burden of the complaint to which we have had to listen not only in the speeches against the Motion but also in the speeches in favour of the Amendment? It is that there is a certain amount of propaganda being carried on in this country, in Europe and in Asia, anywhere, I suppose, where it can be carried on, as we are told, against this country and against the present Government. I do not hink that any of us on these benches is prepared to question that that propaganda is carried on. I hope it is not supposed that we on these benches are prepared to justify that propaganda. We know, probably better than almost anybody on the other side, what active propagandists the Communists can be. We have had to deal with them in connection with our own movement, so that the question of propaganda, as far as the Soviet Government is concerned and Communists in this country are concerned, is no new matter to us. But are we to be told that this in itself, however provocative it may be—and the right hon. Gentleman the Foreign Secretary has spoken of the great irritation to which he and his Department have been subjected—is sufficient to justify the very serious step that we are being asked to take? If this was really a matter of propaganda in this country, it would not matter.
  Vice-Admiral Sir REGINALD HALL: It is against the Agreement.
  Mr. HENDERSON: Yes, I am prepared to admit that, and I do not justify it, but that is not the point. I am trying
  2298
  to show the difference between propaganda in our own country and propaganda in other countries. That is the most serious aspect of it. Do the Government believe that the propaganda either at home or abroad is going to be lessened as a result of this step to be taken to-night? In my opinion, that propaganda will become more intensified, and I believe I will not be exaggerating in the slightest degree if I say that it will become more dangerous. The right hon. Gentleman the Foreign Secretary more than once has pointed out the very serious effect that a break with Russia would have, not only upon diplomatic relations in other parts of the world, but which it might possibly have upon the peace of the world itself. That is one of the things about which many of us are most apprehensive, and I venture to say the Government will find that the statement which has been made by the Foreign Secretary is true:
  "If we break off diplomatic relations with Russia, we should not only introduce a new and disturbing element into British domestic policy but we should introduce a new and disturbing issue in Europe itself."
  My final word is this. I believe we are making a profound mistake. With nearly 1,000,000 unemployed, how can any Member of this House face the new situation with equanimity? I believe, as I have already said, that the inevitable result of the change which the Government are making, of the break to which the carrying of this Resolution will lead, must inevitably bring about an increase of propaganda and a lessening of our trade, and a reduction of our trade means that the position of our unemployed difficult as it is already even still more difficult. I have no hesitation in saying that in years to come it will be demonstrated that this was one of the most unfortunate acts for which any Government have made themselves responsible in recent times.
  The SECRETARY of STATE for the HOME DEPARTMENT (Sir William Joynson-Hicks): At last we are getting near, in fact we have reached the end of the challenges which have been made against the action of the Government in regard to what is called the raid on Arcos. It seems to have been thought, even by the right hon. Gentleman the Member for Burnley (Mr. A. Henderson), that it was a temporary aberration on the

  2299
  part of one Member of the Government, a mere sudden idea that came into his head, on which one forthwith launched proceedings and searched the building of Arcos in which was situated the Russian Trade Delegation, done without any consultation with his colleagues and without his having had in his possession for months and months past information which caused him, and indeed the whole Government, to realise that the position vis-a-vis the Russian Trade Delegation and the Soviet representative in this country was as unsatisfactory as it was at the time when the present Leader of the Opposition was Foreign Secretary and Prime Minister. I want the House to realise that this was no mere sudden effort on the part of the Home Secretary. From time to time information had come into the possession of the Government. For instance, owing to the courtesy of my right hon. Friend the Foreign Secretary, I had seen the telegrams which have been read in the House and were included in the Prime Minister's statement a few days ago and some of which are printed in the White Paper. They were known to the Government, and they were known, also, to myself; but more than that was known by the Government.
  I want to say a word about it, because the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) has made certain accusations with regard to the conduct of our own country in spying. He has made a speech here which certainly can do very little good to the country as a whole. I want to tell the House that there were spy organisations in this country on behalf of Russia, organisations which it was the duty of the Home Secretary to be aware of, and which he was aware of, for many months before this raid took place. It may be that the right hon. Member for Carnarvon Boroughs is entitled to say, certainly when he was Prime Minister, that England had spies abroad. May I differentiate between the spy and the spy? It is one thing for a Government to send spies to a country, but it is quite another thing for a trade delegation, visiting and working in a country friendly to itself with a trade mission and a diplomatic mission, under a Chargé d'Affaires, to themselves become an elaborate centre of an elaborate spy organisation. That is exactly what took
  2300
  place here. I see no reason why I should not tell the House something, at all events, of its activities, which were not merely the activities of foreign spies imported from a foreign country, but they were spies in the closest touch with our Empire, and they had a Trade Delegation far more elaborate in its organisation and more numerous than I have been able to discover was the case in any other country in the world.
  Nothing of the kind has existed before in England since I have been Home Secretary. I do not deny that from time to time some country may send an agent over here to find out some particular things with regard to a particular munition of war which is kept secret in this country. That is the kind of thing all countries have to take the risk of, but it is quite different when a trade delegation comes over here for a different purpose, and has a complete organisation in touch with itself endeavouring to find out every single question of importance with regard to the Navy, Army and the Air Force of this country. [An HON. MEMBER: "Where is your proof?"] There was a distinct, spying organisation. I want to be perfectly frank about this matter, because after to-night, after the effect which will be given to the decision of the House to-night, I have every reason to hope that the spy system of the Russian Government and the Russian Trade Delegation will be broken up once and for all. Certain members of this organisation have been traced in all our military and naval centres, and at Aldershot and Portsmouth, in particular.
  Some people may think that the organisation of Great Britain is faulty as regards the Secret Service, and the hon. and gallant Member for Central Hull (Lieut.-Commander Kenworthy) referred to this point and said that Russia had the best in the world. At any rate, the Secret Service of Great Britain is not so bad, after all. I happen to have in my possession not merely the names but the addresses of most of those spies. They have been traced in their nefarious plans. I have also in my possession a considerable number of the questionnaires which they have used, and which they have given to various people connected with the armed forces of this country to try to find out particular Information

  2301
  in regard to the particular objects which are very rightly kept secret by our different Services.
  Lieut. - Commander KENWORTHY: Why did you not prosecute them?
  Sir W. JOYNSON-HICKS: The right hon. Gentleman the Member for Carnarvon Boroughs gave one answer to that question. He told us that he knew, when the Great War broke out, who the spies were, and what they were doing, and he could put his hand upon them at any moment; and I know—I have been waiting very patiently—who they are, where they are, what they have been doing: and now they have been traced completely and directly to this friendly delegation. I am in a position to give the House one or two points on which they have been endeavouring to get information.
  Lieut. - Commander KENWORTHY: Have any arrests been made?
  Sir W. JOYNSON-HICKS: No arrests have been made—
  Lieut. - Commander KENWORTHY: Why not?
  Sir W. JOYNSON-HICKS: The right hon. Gentleman the Member for Carnarvon Boroughs explained why no arrests have been made up to the present moment. One of their principal points was to find out our listening arrangements with regard to aeroplanes, and the air cooling of our engines in our aeroplanes; the plans of our new destroyers are being sought for, and also the plans of the directional wireless in our ships of war, the method of installing the same, and the plans of our internal combustion engines. They wanted to get—they have not got them yet, and I do not think they will—the plans of our two latest warships. I have had made out for me a list of all these things which this friendly Government, working through this friendly Trade Delegation, has been endeavouring to get by what I do not hesitate to describe as one of the most complete and one of the most nefarious spy systems that it has ever been my lot to meet.
  Mr. MACKINDER: Are there any others?
  Sir W. JOYNSON-HICKS: There is no other trade delegation in this country,
  2302
  and, so far as I know, there is no foreign Embassy in this country which has degraded itself in the manner in which that of Russia has.
  Mr. THURTLE: Are there any other agents?
  Sir W. JOYNSON-HICKS: The hon. Member is entitled to ask me that question, and I am entitled to answer it in this way: There is no other country which has anything like a similar spy system in this country to that which Russia had. These telegrams to which I have referred, and this information, were known to His Majesty's Government. Then another thing occurred. This particular document, of which we have heard so much, and with regard to which I have been challenged this afternoon, was found to be missing from the Government service. It was an important document; it was a document of a secret character; it was a document the information contained in which would undoubtedly have been useful to any foreign Power that got hold of it. I have been asked why I authorised the raid to take place on Arcos. I will tell the House. Information was brought to me, by direction of the Secretary of State for War, in my room here, late on the afternoon of the 11th May. The information was that the document had been missing. But there was more than that. I had then, and I have now, in my possession, a photographic copy of that document produced in the Arcos building. What was I to do in the face of that information? Supposing I had taken no notice of it at all. What would the House have said to me if I had not taken the powers that are vested in me to protect the interests of the country? It has been suggested by the right hon. Gentleman the Member for Carnarvon Boroughs that I dashed into this matter without consultation with my colleagues. I did nothing of the kind. I saw the Prime Minister and consulted with him, and at his request, having received his assent to the course I proposed to adopt, I went and saw the Foreign Secretary. He stated that fact to-day. He said: "Supposing you had this document brought to you as Home Secretary with the information that it had been produced in any business house in London entirely unconnected with Russia, would you have caused a search to be made?" I said emphatically,

  2303
  "Certainly I should". The question of the nationality of the company or the shareholders in the company where this document was created had nothing whatever to do with it. My right hon. Friend said, laconically: "Very well then, raid it." We have got into the habit of using the word "raid" largely because hon. Members opposite have used it from time to time. The correct word is "search."
  Mr. WALLHEAD: The right hon. Gentleman did not effectively search. He made no provision for effective search, because he did not take women searchers.
  Sir W. JOYNSON-HICKS: That is a new ground of complaint against me, that the search was not sufficiently effective. I authorised an application to be made to the magistrate and, upon sworn testimony, he was convinced that this was a case for a search and he granted the warrant under which the search was made. I thought perhaps I should have been challenged as to the method in which that search was conducted. Certainly complaints have been made outside the House as to the conduct of the police. I am very glad that no Member of the House has repeated the statements which have been published in a certain document in regard to the police in the form of an affidavit, or sworn declaration, in particular by two of the men who were found in the building. In case any one should have any idea that there is any truth in the allegation of cruelty such as would be unworthy of the police in any country, and certainly unworthy of the police in this country, I should like to say that immediately I saw that document I sent for the actual police who were concerned in the raid in this room No. 5 where these two men who made the sworn statement were. I personally examined and cross-examined the police and I am perfectly satisfied that no more violence was used than had to be used when these two ruffians deliberately resisted the police in the execution of their duty and fought and kicked until they were overcome. The police, in executing a search by order of the Court, cannot be resisted. In fact, the warrant orders them to use such force as is necessary to complete their search. They gave no insults and they searched no women throughout the whole proceedings.
  Viscountess ASTOR: They ought to have done.
  Sir W. JOYNSON-HICKS: No, I am quite satisfied it is wise that they should not do it. Even if the documents I referred to had been taken out of the building by a woman, personally I would almost as soon that that should have been done as that a large number of women, some of them English women carrying on their work legitimately, should have been searched. I do not think for a moment that was the case. I think the document had left Arcos some days at all events before the search took place. Remember that curious telegram from the Chargé d'Affaires a month before the search took place. He was a shrewd man. There was no idea in the mind of the Government at that time that any search would be made. We had not in our possession anything like the evidence which would have authorised it, and yet the Chargé d'Affaires, from Chesham House, sent that remarkable telegram to his own Government in Moscow suggesting that there might be a raid—he did not think there would be—and, in particular, advising the Russian Government to suspend for a time forwarding by post documents to friends, neighbours and so forth from London to Moscow, and vice versa. Why was that telegram sent? We have had no explanation. I do not know whether M. Rosengolz, when he did the leaders of the party opposite the honour to call upon them at the House of Commons, told them why he had sent that remarkable telegram. There could have been only one reason for it. M. Rosengolz knew perfectly well that there were incriminating documents passing to and fro between Moscow and London—some of them in the Soviet bag—and that these documents had better be suspended in the near future, probably because he knew of the existence of this particular document. He knew, as he foreshadowed in the telegram, that a search might be made, and so he said, "Stop for the time being sending any documents of this character between London and Moscow."
  No wonder our search was not wholly successful. No wonder we did not find as many documents as we thought would be possible. But we found one document of even greater importance than the one for which we were searching; it was a

  2305
  human document. It was Anton Miller, one of the men whom we had known for a couple of years as one of the leaders of the Russian spy organisation, in the very closest touch with the actual leader of it, staying with him at his house for weeks at a time. Anton Miller was found as the cipher clerk right in the heart of Arcos. I am going to ask hon. Members opposite what they have got to say concerning that particular "document". What would they do? What would the right hon. Gentleman the Member for Aberavon (Mr. R. MacDonald) have done if he had been Prime Minister at this time, if he had known as fully as His Majesty's Government know what had been going on in this matter. Can we not realise from the dispatch which the right hon. Gentleman the Member for Aberavon sent the Soviet Government in 1924 what course he would have taken? The right hon. Gentleman was not mealy-mouthed in dealing with the Soviet Government. He knew the terms of the Trade Agreement. It was he and his Government who had entered into diplomatic relationship with the Russian Government. I expect he was hurt in his feelings when he found out that they were carrying on this propaganda in our country directly in the face of the terms of the Trade Agreement.
  I have been dealing up to this moment with espionage, but propaganda is directly contrary to the Trade Agreement. Propaganda was carried on. It is admitted that propaganda was carried on, and admitted by the right hon. Gentleman the Member for Carnarvon Boroughs that the evidence justified up to the hilt the action of the Government in this matter. I am very largely relieved in having to make a case by these admissions, particularly of the right hon. Gentleman the Member for Carnarvon Boroughs. He queried the consequences of our action but as to the evidence upon which our action was based he told the House—a less crowded House than it is at the present moment—that he was satisfied that the evidence was complete and conclusive.
  What did the right hon. Gentleman the Member for Aberavon do when he found this thing being done? The Foreign Secretary quoted him this afternoon, and I would like to quote him again, because these are words—the Cabinet has
  2306
  seen the actual document—which were inserted by the right hon. Gentleman in the Foreign Office draft, in his own handwriting:
  "No Government"—
  this was in 1924—
  "will ever tolerate an arrangement with a foreign Government by which the latter is in formal diplomatic relations of a correct kind with it, whilst at the same time a propagandist body, organically connected with that foreign Government encourages and even orders the subjects of the former to plot and plan revolution for its overthrow."
  That is from the Leader of the Opposition. The only difference between the position in 1924 and the position to-day is that we know now that the propaganda comes directly from the emissaries of the Government itself, and not merely from the Third International. Had the right hon. Gentleman the Member for Aberavon been Foreign Secretary to-day, he would have concurred in the dispatches we sent a few months ago to Russia, and I am not at all sure that he would not have concurred, knowing what we know, in the decision and action which we have decided to take.
  Mr. R. MORRISON: I am sure the House has been waiting to hear what the right hon. Gentleman proposes to do with the human document.
  Sir W. JOYNSON-HICKS: Will the hon. Member leave the human document to me? I do not think it is desirable that I should announce what will be done. The conduct of the Government has not yet been approved by the House of Commons. The despatch has not yet been sent to the Chargé d'Affaires which will be sent to him to-morrow if the House passes the Amendment, as I hope it will. After that, the Home Secretary will be in a position to decide what course he intends to take in the other matter. I want to ask the acting Leader of the Opposition, the right hon. Member for Platting (Mr. Clynes) a question which I think is a fair one. There was not much that I have to complain of in his speech to-day. Never did a man carry a bomb more gingerly than he did. I expected to be blown up at any moment, but he carried the bomb so gently that there was no chance of its exploding. But he is a little more explosive when he gets on to a public platform, and when

  2307
  he goes to his own town of Manchester. I want to call attention to a statement which he made there, referring to the raid on Arcos. I am quoting from the "Times" of the 23rd May. He said:
  "The Government have done good work in the matter of forgery."
  That might do for the Back Benches, but it is hardly the kind of speech for a Leader of the Opposition.
  Mr. MAXTON: These are surely new standards of conduct for Front Benchers.
  Mr. GREENALL: He ought to have said, "Fire, and be damned!"
  Sir W. JOYNSON-HICKS: I pass over the next sentence, which is a reference to myself, and take the following. It is:
  "The evidence is that the Tory party would reap greater benefit from forged documents than from trying to find them."
  I ask him, quite frankly, what does he mean? [Interruption.]
  Mr. CLYNES: I mean precisely what I say, and what I said has been further confirmed by the admission of the right hon. Gentleman, the Foreign Secretary, in his speech to-day, in which he said that the Cabinet Committee which dealt with the matter of the Red Letter had never seen the original, and had only had copies to deal with. I am further convinced that that letter was a forgery; but great electoral profit was reaped by the Tory party from it. [Interruption.]
  Sir W. JOYNSON-HICKS: I can only say that I congratulate the right hon. Gentleman on having the courage to say in this House what he said at Manchester. [Interruption.]
  Mr. CLYNES: If the right hon. Gentleman has any further congratulations to extend, let him extend them to the Prime Minister on the mendacity of the language he has used in the letter he has sent to the Conservative candidate at Bosworth. [Interruption.]
  Sir W. JOYNSON-HICKS: If the right hon. Gentleman would like to make any more remarks of that character I will gladly give way to him. [Interruption.] Perhaps the House will now allow me to return to the speech of the right hon. Gentleman the Member for Carnarvon Boroughs. [Interruption.] I have already said that the right hon.
  2308
  Gentleman considers the evidence sufficient but objects to the course which the Government have taken. I have dealt with his accusation that the hands of the Government were forced by the Home Secretary. This is what the right hon. Gentleman suggests we should have done; that we should have complained of a breach of the Trade Agreement. He complained in 1921, again in 1922. The Opposition Government complained in 1924. We complained in 1925, in 1926, in 1927. How long and how often is the Government of Great Britain to complain of breaches of an agreement? Over and over again we have complained. How many times does the right hon. Gentleman say that we should go on complaining, while the offence is being committed again and doubly committed as the years go on? If the offence had stopped, if the propaganda had stopped—
  Mr. MACKINDER: On a point of Order. Is an hon. Member entitled to suggest that the pay of the Opposition from another Government would stop in such an event?
  Mr. SPEAKER: Certainly not. Hon. Members are making such a noise on my left that they are quite preventing me from hearing anything. If they would keep quiet I think they can trust me to see the proceedings are properly conducted.
  Mr. B. SMITH: Further, to that point of Order. There was an offence offered to the hon. and gallant Member for Brentford (Colonel Grant Morden) and he definitely stated in my hearing that the pay of the Opposition from a, foreign Government would stop.
  Mr. SPEAKER: The noise on my left has debarred me from dealing with interruptions of that kind. I must ask hon. Members to be silent to enable me to continue the proper conduct of the House.
  Mr. THURTLE: On a point of Order. Is a director of the Cellulose Company a good judge of these matters?
  Mr. SPEAKER: Order, Order.
  Sir W. JOYNSON-HICKS: I was saying we had made six different complaints.
  Mr. B. SMITH: Since you resumed your seat, Mr. Speaker, the same hon. Member say, "Yes, and I can give the names."
  Mr. SPEAKER: As long as this disorder goes on I am debarred from dealing with things of that kind. Hon. Members must, first of all, keep silent.
  HON. MEMBERS: Withdraw!
  Mr. SPEAKER: Order, order. The Home Secretary.
  Colonel GRANT MORDEN: It is alleged that I made an allegation against the party as a whole. I do withdraw if it is understood in that way, but I did not mean it as against the Opposition as a whole.
  HON. MEMBERS: That is worse.
  Mr. B. SMITH: On a point of Order. The hon. Member said he could give the names of individuals in this party, and he implies that he can still name them.
  Mr. SPEAKER: I am not going to pit my voice against the voices of hon. Members. I have said that I shall not call upon any hon. Member to withdraw, because owing to the noise which was going on it was impossible to hear what was said. Hon. Members must learn to keep silence if they expect to have the protection of the Chair.
  Sir W. JOYNSON-HICKS: I have only a few words to say in conclusion. We have been challenged to appoint a Select Committee to inquire into this matter. This is a matter for which the Government are responsible. It is a matter of direct Government control. If the Government have done wrong it is open to hon. and right hon. Gentlemen opposite to censure us. It is open to the country to censure us. [HON. MEMBERS: "No!") We are responsible for our actions, and we stand by those actions. We make no apology for the course we have adopted. We intend to see that course carried out to its conclusion. I have just one sentence to say in reply to the Opposition, and to the speeches which have been made by the Leaders of the Opposition in this House to-day. On our side of the House, and I believe outside the House, there is a real patriotic endeavour to support Great Britain in these very difficult and troublesome circumstances. I say to the party opposite that until they realise that Great Britain is not always wrong, and that her enemies are not always right, they never will be able to represent this country.
  Question put, "That the words proposed to be left out stand part of the Question."
  The House divided: Ayes, 118; Noes, 367.

  Division No.152.]

  AYES.

  [11.0 p.m.

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

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

  Murnin, H.

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

  Hardle, George D.

  Oliver, George Harold

  Ammon, Charles George

  Hayes, John Henry

  Palln, John Henry

  Attlee, Clement Richard

  Henderson, Right Hon. A. (Burnley)

  Pethick-Lawrence, F. W

  Baker, J. (Wolverhampton, Bilston)

  Henderson, T. (Glasgow)

  Ponsonby, Arthur

  Barker, G. (Monmouth, Abertillery)

  Hirst, G. H.

  Potts, John S.

  Batey, Joseph

  Hirst, W. (Bradford, South)

  Purcell, A. A.

  Beckett, John (Gateshead)

  Hudson, J. H. (Huddersfield)

  Richardson, R. (Houghton-le-Spring)

  Bromfield, William

  Jenkins, W. (Glamorgan, Neath)

  Riley, Ben

  Bromley, J.

  John, William (Rhondda, West)

  Robinson, W. C. (Yorks,W.R.,Elland)

  Buchanan, G.

  Johnston, Thomas (Dundee)

  Saklatvala, Shapuril

  Cape, Thomas

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

  Salter. Dr. Alfred

  Clowes, S.

  Jones, Morgan (Caerphilly)

  Scrymgeour, E.

  Cluse, W. S.

  Jones, T. I. Mardy (Pontypridd)

  Scurr, John

  Clynes, Rt. Hon. John R.

  Kelly, W. T.

  Sexton, James

  Cove, W. G.

  Kennedy, T.

  Shaw, Rt. Hon. Thomas (Preston)

  Dalton, Hugh

  Kenworthy, Lt.-Com. Hon. Joseph M.

  Shiels, Dr. Drummond

  Davies, Evan (Ebbw Vale)

  Kirkwood, D

  Short, Alfred (Wednesbury)

  Davies, Rhys John(Westhoughton)

  Lansbury, George

  Sitch, Charles H.

  Day, Colonel Harry

  Lawrence, Susan

  Smlille, Robert

  Dennison, R.

  Lawson, John James

  Smith, Ben (Barmondsey, Rotherhithe)

  Duncan, C.

  Lee, F.

  Smith, H. B. Lees. (Kelghley)

  Dunnlco, H.

  Lindley, F. W.

  Snell, Harry

  Gardner, J. P.

  Lowth, T.

  Snowden, Rt. Hon. Philip

  Gibbins, Joseph

  Lunn, William

  Stamford, T. W.

  Gosling, Harry

  Mackinder, W.

  Stephen, Campbell

  Graham, Rt. Hon. Wm. (Edin., Cent.)

  MacLaren, Andrew

  Stewart, J. (St. Rollox)

  Greenall, T.

  Mac Neill-Weir, L.

  Sullivan, Joseph

  Greenwood, A. (Nelson and Colne)

  March, S.

  Sutton, J. E.

  Grenfell, D. R. (Glamorgan)

  Maxton, James

  Taylor, R. A.

  Groves, T.

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

  Thorne, W. (West Ham, Plalstow)

  Grundy, T. W.

  Mosley, Oswald

  Thurtle, Ernest

  Tinker, John Joseph

  Webb, Rt. Hon. Sidney

  Williams, Dr. J. H. (Llanelly)

  Townend, A. E.

  Wedgwood, Rt. Hon. Josiah

  Williams, T. (York, Don Valley)

  Trevelyan, Rt. Hon. C. P.

  Wellock, Wilfred

  Wilson, C. H. (Sheffield, Attercliffe)

  Varley, Frank B.

  Welsh, J. C.

  Wilson, R. J. (Jarrow)

  Viant, S. P.

  Westwood, J.

  Wallhead, Richard C.

  Wheatley, Rt. Hon. J.

  TELLERS FOR THE AYES.—

  Walsh, Rt. Hon. Stephen

  Whiteley, W.

  Mr. Allen Parkinson and Mr. Charles

  Watson, W. M. (Dunfermline)

  Wilkinson, Ellen C.

  Edwards.

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

  Williams, David (Swansea, East)

  NOES.

  Acland-Troyte, Lieut.-Colonel

  Churchill, Rt. Hon. Winston Spencer

  Gretton, Colonel Rt. Hon. J.

  Agg-Gardner, Rt. Hon. Sir James T.

  Churchman, Sir Arthur C.

  Grotrian, H. Brent

  Ainsworth, Major Charles

  Clarry, Reginald George

  Guest, Capt. Rt. Hon. F. E. (Bristol, N.)

  Albery, Irving James

  Clayton, G. C.

  Guinness, Rt. Hon. Walter E.

  Alexander, E. E. (Leyton)

  Cobb, Sir Cyril

  Gunston, Captain D. W.

  Allen, J. Sandeman (L'pool. W.Derby)

  Cochrane, Commander Hon. A. D.

  Hacking, Captain Douglas H.

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

  Cohen, Major J. Brunel

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

  Applln, Colonel R. V. K.

  Colfox, Major Wm. Phillips

  Hall, Admiral Sir R. (Eastbourne)

  Apsley, Lord

  Conway, Sir W. Martin

  Hall, Capt. W. D'A. (Brecon & Rad.)

  Astbury, Lieut.-Commander F. W.

  Cope, Major William

  Hammersley, S. S.

  Astor, Mal. Hon. John J.(Kent, Dover)

  Couper, J. B.

  Hanbury, C.

  Astor, Viscountess

  Courtauld, Major J. S.

  Hannon, Patrick Joseph Henry

  Atholl, Duchess of

  Courthope, Colonel Sir G. L.

  Harland, A.

  Atkinson, C.

  Cowan. D. M. (Scottish Universities)

  Harmsworth, Hon. E. C. (Kent)

  Baldwin, Rt. Hon. Stanley

  Craig, Capt. Rt. Hon. C. C. (Antrim)

  Harrison, G. J. C.

  Balfour, George (Hampstead)

  Craig, Ernest (Chester, Crewe)

  Hartington, Marquess of

  Balniel, Lord

  Crawfurd, H. E.

  Harvey, G. (Lambeth, Kennington)

  Barclay-Harvey, C. M.

  Croft, Brigadier-General Sir H.

  Harvey. Major S. E. (Devon, Totnes)

  Barnett, Major Sir Richard

  Crooke, J. Smedley (Deritend)

  Haslam, Henry C.

  Barnston, Major Sir Harry

  Crookshank, Col. C. de W. (Berwick)

  Hawke, John Anthony

  Beamish, Rear-Admiral T. P. H.

  Crookshank,Cpt. H. (Lindsey, Gainsbro)

  Headlam, Lieut.-Colonel C. M.

  Beckett, Sir Gervase (Leeds, N.)

  Cunliffe, Sir Herbert

  Henderson, Capt. R. R. (Oxf'd, Henley)

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

  Curzon, Captain Viscount

  Henderson, Lieut. -Col. V. L. (Bootie)

  Bennett, A. J.

  Dalkeith, Earl of

  Heneage. Lleut.-Col. Arthur P.

  Berry, Sir George

  Daizlel, Sir Davison

  Hennessy, Major sir G. R. J.

  Bethel, A.

  Davidson, J.(Hertt'd, Hemel Hempst'd)

  Herbert, Dennis (Hertford, Watford)

  Betterton, Henry B.

  Davidson, Major-General Sir John H

  Herbert, S.(York, N. R.,Scar, & wh'by)

  Birchall, Major J. Dearman

  Davies, Maj. Geo. F. (Somerset, Yeovil)

  Hilton, Cecil

  Bird, E. R. (Yorks, W. R., Skipton)

  Davies, Dr. Vernon

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

  Bird, Sir R. B. (Wolverhampton, W.)

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

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

  Blades, Sir George Rowland

  Dean, Arthur Wellesley

  Hohler, Sir Gerald Fitzroy

  Boothby, R. J. G.

  Dixey, A. C.

  Holbrook, Sir Arthur Richard

  Bourne, Captain Robert Croft

  Drewe, C.

  Holt, Captain H. P.

  Bowater, Col. Sir T. Vansittart

  Duckworth, John

  Homan, C. W. J.

  Bowyer, Captain G. E. W.

  Eden, Captain Anthony

  Hope, Capt. A. O. J. (Warw'k, Nun.)

  Braithwaite, Major A. N.

  Edmondson, Major A. J.

  Hopkins, J. W. W.

  Brass, Captain W.

  Edwards, J. Hugh (Accrington)

  Hopkinson, Sir A. (Eng. Universities)

  Brassey, Sir Leonard

  Ellis, R. G.

  Hopkinson, A. (Lancaster, Mossley)

  Bridgeman, Rt. Hon. William Cll-s

  Elvedon. Viscount

  Horllck, Lieut.-Colonel J. N.

  Briggs, J. Harold

  England, Colonel A.

  Horne, Rt. Hon. Sir Robert S.

  Briscoe, Richard George

  Erskine, Lord (Somerset, Weston-s.-M.)

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

  Brittain, Sir Harry

  Everard, W. Lindsay

  Hudson, Capt. A. U. M. (Hackney, N.)

  Brocklebank, C. E. R.

  Fairfax, Captain J. G.

  Hume, Sir G. H.

  Brooke, Brigadier-General C. R. I.

  Faile, Sir Bertram G.

  Hume-Williams, Sir W. Ellis

  Broun-Lindsay, Major H.

  Fanshawe, Captain, G. D.

  Hunter-Weston. Lt.-Gen. Sir Aylmer

  Brown, Brig. -Gen. H. C. (Berks, Newb'y)

  Fermoy, Lord

  Huntingfield, Lord

  Buchan, John

  Fielden, E. B.

  Hurd, Percy A.

  Buckingham, Sir H.

  Finburgh, S.

  Hurst, Gerald B.

  Bull, Rt. Hon. Sir William James

  Ford, Sir P. J.

  Iliffe, Sir Edward M.

  Bullock, Captain M.

  Forestier-Walker, Sir L.

  Inskip, Sir Thomas Walker H.

  Burman, J. B.

  Forrest, W.

  Jackson, Sir H. (Wandsworth, Cen'l)

  Burney, Lieut. -Com. Charles D.

  Foster, Sir Harry S.

  Jacob, A. E.

  Burton, Colonel H. W.

  Foxcroft, Captain C. T.

  James, Lieut.-Colonel Hon. Cuthbert

  Butler, Sir Geoffrey

  Fraser, Captain Ian

  Jephcott, A. R.

  Butt, Sir Alfred

  Frece, Sir Walter de

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

  Cadogan, Major Hon. Edward

  Fremantle, Lieut.-Colonel Francis E.

  Joynson-Hicks, Rt. Hon. Sir William

  Caine, Gordon Hall

  Gadle, Lieut.-Col. Anthony

  Kennedy, A. R. (Preston)

  Campbell, E. T.

  Galbraith, J. F. W.

  Kindersley, Major G. M.

  Carver, Major W. H.

  Ganzonl, Sir John

  King, Captain Henry Douglas

  Cassels, J. D.

  Gates, Percy

  Kinloch-Cooke, Sir Clement

  Cautley, Sir Henry S.

  Gault, Lleut.-Col. Andrew Hamilton

  Knox, Sir Alfred

  Cayzer, Sir C. (Chester, City)

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

  Lamb, J. Q.

  Cayzer, Maj. Sir Herbt. R. (Prtsmth,S.)

  Glyn, Major R. G. C.

  Lane Fox, Col. Rt. Hon. George R.

  Cazalet, Captain Victor A.

  Goff, Sir Park

  Leigh, Sir John(Clapham)

  Cecil, Rt. Hon. Sir Evelyn (Aston)

  Gower, Sir Robert

  Lister, Cunliffe, Rt. Hon. Sir Philip

  Chadwick, Sir Robert Burton

  Grace, John

  Little, Dr. E. Graham

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

  Graham, Fergus (Cumberland, N.)

  Livingstone, A. M.

  Chamberlain, Rt. Hon. N. (Ladywood)

  Grant, Sir J. A.

  Lloyd. Cyril E. (Dudley)

  Chapman, Sir S.

  Grattan-Doyle, Sir N.

  Locker-Lampson, G. (Wood Green)

  Charteris, Brigadier-General J.

  Greaves-Lord, Sir Walter

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

  Chilcott, Sir Warden

  Greene, W. P. Crawford

  Looker, Herbert William

  Christie, J. A.

  Greenwood. Rt. Hn. Sir H. (W'th's'w, E)

  Lougher, Lewis

  2312

  2313

  Lucas-Tooth. S'r Hugh Vere

  Power, Sir John Cecil

  Sueter, Rear-Admiral Murray Fraser

  Luce, Maj.-Gen. Sir Richard Harman

  Pownall, Sir Assheton

  Sugden, Sir Wilfrid

  Lumley, L. R.

  Price, Major C. W. M.

  Sykes, Major-Gen. Sir Frederick H.

  Lynn, Sir R. J.

  Radford, E. A.

  Tasker, R. Inigo.

  Macdonald, Sir Murdoch (Inverness)

  Ramsden, E.

  Templeton, W. P.

  Macdonald, Capt. P. D. (I. of W.)

  Rawson, Sir Cooper

  Thom, Lt.-Col. J. G. (Dumbarton)

  McDonnell, Colonel Hon. Angus

  Rees, Sir Beddoe

  Thompson, Luke (Sunderland)

  Maclntyre, Ian

  Reid, D. D. (County Down)

  Thomson, F. C. (Aberdeen, South)

  McLean, Major A.

  Remer, J. R.

  Thomson, Rt. Hon. Sir W. Mitchell.

  Macmillan, Captain H.

  Remnant, Sir James

  Tinne, J. A.

  McNeill, Rt. Hon. Ronald John

  Rentoul, G. S.

  Tryon, Rt. Hon. George Clement

  Macpherson, Rt. Hon. James I.

  Rhys, Hon. C. A. U.

  Turton, Sir Edmund Russborough

  Macquisten, F. A.

  Rice, Sir Frederick

  Vaughan-Morgan, Col. K. P.

  Makins, Brigadier-General E.

  Richardson, Sir P. W. (Sur'y, Ch'ts'y)

  Waddington, R.

  Malone. Major P. B.

  Roberts, E. H. G. (Flint)

  Wallace, Captain D. E.

  Manningham-Buller, Sir Mervyn

  Roberts, Sir Samuel (Hereford)

  Ward, Lt.-Col. A. L. (Kingston-on-Hull)

  Margesson, Captain D.

  Ropner, Major L.

  Warner, Brigadier-General W. W

  Marriott, Sir J. A. R.

  Runciman, Rt. Hon. Walter

  Warrender, Sir Victor

  Mason, Lieut.-Col. Glyn K.

  Russell, Alexander West (Tynemouth)

  Waterhouse, Captain Charles

  Meller, R. J.

  Rye, F. G.

  Watson, Sir F. (Pudsey and Otley)

  Merriman, F. B.

  Salmon, Major I.

  Watson, Rt. Hon. W. (Carlisle)

  Milne, J. S. Wardlaw

  Samuel, Samuel (W'dsworth, Putney)

  Watts, Dr. T.

  Mitchell, W. Foot (Saffron Walden)

  Sandeman, N. Stewart

  Wells, S. R.

  Mitchell, Sir W. Lane (Streatham)

  Sanders, Sir Robert A.

  Wheler, Major Sir Granville C. H.

  Mond, Rt. Hon. Sir Alfred

  Sanderson, Sir Frank

  White, Lieut. -Col. Sir G. Dalrymple-

  Moore, Lieut.-Colonel T. C. R. (Ayr)

  Sandon, Lord

  Williams, A. M. (Cornwall, Northern)

  Moore, Sir Newton J.

  Sassoon, Sir Philip Albert Gustave D.

  Williams, Com. C. (Devon, Torquay)

  Morden, Col. W. Grant

  Savery, S. S.

  Williams, C. P. Denbigh, Wrexham)

  Moreing, Captain A. H.

  Scott, Rt. Hon. Sir Leslie

  Williams, Herbert G.(Reading)

  Morrison H. (Wilts, Salisbury)

  Shaw, R. G. (Yorks, W.R., Sowerby)

  Wilson, Sir C. H. (Leeds, Central)

  Morrison-Bell, Sir Arthur Clive

  Shaw, Lt.-Col. A. D. Mcl. (Renfrew, W.)

  Wilson, M. J. (York, N. R., Richm'd)

  Murchison, Sir Kenneth

  Sheffield, Sir Berkeley

  Wilson, R. R. (Stafford, Lichfield)

  Nall, Colonel Sir Joseph

  Shepperson, E. W.

  Winby, Colonel. L. P.

  Nelson, Sir Frank

  Simms, Dr. John M. (Co. Down)

  Windsor-Clive, Lieut. -Colonel George

  Neville, R. J.

  Sinclair, Col. T. (Queen's Univ., Belf'st.)

  Winterton, Rt. Hon. Earl

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

  Slaney, Major P. Kenyon

  Wise, Sir Fredric

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

  Smith, R. W. (Aberd'n & Kinc'dine, C.)

  Withers, John James

  Nicholson, O. (Westminster)

  Smith-Carington, Neville W.

  Wolmer Viscount

  Nicholson, Col. Rt. Hn. W.G.(Ptrsf'ld.)

  Smithers, Waldron

  Womersley, W. J.

  Nield, Rt. Hon. Sir Herbert

  Somerville, A. A. (Windsor)

  Wood, B. C. (Somerset, Bridgwater)

  Nuttail, Ellis

  Spender-Clay, Colonel H.

  Wood, E. (Chester, staiy'b'ge & Hyde)

  Oakley, T.

  Sprot, Sir Alexander

  Wood, Sir Kingsley (Woolwich, W.)

  O'Connor, T. J. (Bedford, Luton)

  Stanley, Col. Hon. G. F. (Will'sden, E.)

  Wood, Sir S. Hill- (High Peak)

  O'Neill, Major Rt. Hon. Hugh

  Stanley, Lord (Fylde)

  Woodcock, Colonel H. C.

  Oman, Sir Charles William C.

  Stanley, Hon. O. F. G. (Westm'eland)

  Worthington-Evans, Rt. Hon. Sir L.

  Pennefather, Sir John

  Steel, Major Samuel Strang

  Wragg, Herbert

  Penny, Frederick George

  Storry-Deans, R.

  Young, Rt. Hon. Hilton (Norwich)

  Perkins, Colonel E. K.

  Strauss, E. A.

  Perring, Sir William George

  Streatfeild, Captain S. R.

  TELLERS FOR THE NOES.—

  Peto, Sir Basil E. (Devon, Barnstaple)

  Stuart, Crichton-, Lord C.

  Commander B. Eyres Monsell and

  Peto, G. (Somerset, Frome)

  Stuart, Hon. J. (Moray and Nairn)

  Colonel Gibbs.

  Pilcher, G.

  Styles, Captain H. W.

  Question proposed, "That those words be there added."
  Lieut.-Commander KENWORTHY: I beg to—
  It being after Eleven of the Clock, and objection, being taken to further Proceeding, Mr. SPEAKER proceeded to interrupt the business.
  Sir A. CHAMBERLAIN Sir A. CHAMBERLAIN rose in his place, and claimed to move, "That the Question he now put."
  Question put, "That the Question be now put."
  The House divided: Ayes, 359; Noes, 112.

  Division No. 153.]

  AYES.

  [11. 12 p.m.

  Acland-Troyte, Lieut.-Colonel

  Barnett, Major Sir Richard

  Bridgeman, Rt. Hon. William Clive

  Agg-Gardner, Rt. Hon. Sir James T.

  Barnston, Major Sir Harry

  Briggs, J. Harold

  Ainsworth, Major Charles

  Beamish, Rear-Admiral T. P. H.

  Briscoe, Richard George

  Albery, Irving James

  Beckett, Sir Gervase (Leeds, N.)

  Brittain, Sir Harry

  Alexander, E. E. (Leyton)

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

  Brocklebank, C. E. R.

  Allen, J. Sandeman (L'pool, W. Derby)

  Bennett, A. J.

  Brooke, Brigadier-General C. R. I.

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

  Berry, Sir George

  Broun-Lindsay, Major H.

  Applin, Colonel R. V. K.

  Bethel, A.

  Brown, Brig.-Gen. H. C. (Berks, Newb'y)

  Apsley, Lord

  Betterton, Henry B.

  Buchan, John

  Astbury, Lieut.-Commander F. W.

  Birchall, Major J. Dearman

  Buckingham, Sir H.

  Astor, Maj. Hn. John J. (Kent, Dover)

  Bird, E. R. (Yorks, W. R., Skipton)

  Bull, Rt. Hon. Sir William James

  Astor, viscountess

  Bird, Sir R. B. (Wolverhampton, W.)

  Bullock, Captain M.

  Atholl, Duchess of

  Boothby, R. J. G.

  Burman, J. B.

  Atkinson, C.

  Bourne, Captain Robert Croft

  Burney, Lieut.-Com. Charles D.

  Baldwin, Rt. Hon. Stanley

  Bowater, Col. Sir T. Vansittart

  Burton, Colonel H. W.

  Balfour, George (Hampstead)

  Bowyer, Capt. G. E. W.

  Butler, Sir Geoffrey

  Balniel, Lord

  Braithwaite, Major A. N.

  Butt, Sir Alfred

  Barclay-Harvey, C. M

  Brassey, Sir Leonard

  Caine, Gordon Hall

  Campbell, E. T.

  Grattan-Doyle, Sir N.

  McNeill, Rt. Hon. Ronald John

  Carver, Major W. H.

  Greaves-Lord, Sir Walter

  Macpherson, Rt. Hon. James I.

  Cassels, J. D.

  Greene, W. P. Crawford

  Macquisten, F. A.

  Cautley, Sir Henry S.

  Greenwood, Rt.Hn.Sir H. (Wth's'w, E)

  Makins, Brigadier-General E.

  Cayzer, Sir C. (Chester, City)

  Gretton, Colonel Rt. Hon. John

  Malone, Major P. B.

  Cayzer, Maj. Sir Herbt.R.(Prtsmth.S.)

  Grotrian, H. Brent

  Manningham-Buller, Sir Mervyn

  Cazalet, Captain Victor A.

  Guest, Capt. Rt. Hon. F. E. (Bristol, N.)

  Marriott, Sir J. A. R.

  Cecil, Rt. Hon. Sir Evelyn (Aston)

  Guinness, Rt. Hon. Walter E.

  Mason, Lieut. -Col. Glyn K.

  Cecil. Rt. Hon. Lord H. (Ox. Univ.)

  Gunston, Captain D. W.

  Meller, R. J.

  Chadwick, Sir Robert Burton

  Hacking, Captain Douglas H.

  Merriman, F. B.

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

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

  Milne. J. S. Wardlaw-

  Chamberlain, Rt. Hon. N. (Ladywood)

  Hall, Admiral Sir R. (Eastbourne)

  Mitchell, W. Foot (Saffron Walden)

  Chapman, Sir S.

  Hall, Capt. W. D'A. (Brecon & Rad.)

  Mitchell, Sir W. Lane (Streatham)

  Charteris, Brigadier-General J.

  Hammersley. S. S.

  Mond, Rt. Hon. Sir Alfred

  Chilcott, Sir Warden

  Hanbury, C.

  Monsell, Eyres, Com. Rt. Hon. B. M.

  Christie. J. A.

  Hannon, Patrick Joseph Henry

  Moore, Lieut.-Colonel T. C. R. (Ayr)

  Churchill, Rt. Hon. Winston Spencer

  Harland, A.

  Moore, Sir Newton J.

  Churchman, Sir Arthur C.

  Harmsworth, Hon, E. C. (Kent)

  Morden, Col. W. Grant

  Clarry, Reginald George

  Harrison, G. J. C.

  Morrison, H. (Wilts, Salisbury)

  Clayton, G. C.

  Hartington, Marquess of

  Morrison-Bell. Sir Arthur Clive

  Cobb Sir Cyril

  Harvey, G. (Lambeth, Kennington)

  Murchison, Sir Kenneth

  Cochrane, Commander Hon. A. D.

  Harvey, Major S. E. (Devon, Totnes)

  Nall, Colonel Sir Joseph

  Cohen, Major J. Brunel

  Haslam, Henry C.

  Nelson, Sir Frank

  Colfox, Major Wm. Phillips

  Hawke. John Anthony

  Neville, R. J.

  Conway, Sir W. Martin

  Headlam, Lieut.-Colonel C. M.

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

  Cope, Major William

  Henderson, Capt. R. R. (Oxf'd, Henley)

  Nicholson, O. (Westminster)

  Couper, J. B.

  Henderson, Lieut. -Col. V. L. (Bootle)

  Nicholson. Col. Rt. Hn. W.G.(Ptrsf'ld.)

  Courtauld, Major J. S.

  Heneage, Lieut.-Col. Arthur P.

  Nield, Rt. Hon. Sir Herbert

  Courthope, Colonel Sir G. L.

  Hennessy, Major Sir G. R. J.

  Nuttall, Ellis

  Craig, Capt. Rt. Hon. C. C. (Antrim)

  Herbert, Dennis (Hertford, Watford)

  Oakley, T.

  Craig, Ernest(Chester, Crewe)

  Herbert, S.(York, N. R., Scar. & Wh'by)

  O'Connor, T. J. (Bedford, Luton)

  Crawfurd, H. E.

  Hilton, Cecil

  O'Neill, Major Rt. Hon. Hugh

  Croft, Brigadier-General Sir H.

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

  Oman, Sir Charles William C.

  Crooke, J. Smedley(Derltend)

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

  Ormsby-Gore, Rt. Hon. William

  Crookshank, Col. C. de W. (Berwick)

  Hohler, Sir Gerald Fitzroy

  Pennefather, Sir John

  Crookshank, Cpt. H. (Lindsey, Gainsbro)

  Holbrook, Sir Arthur Richard

  Penny, Frederick George

  Cunliffe, Sir Herbert

  Holt, Capt. H. P.

  Perkins, Colonel E. K.

  Curzon, Captain Viscount

  Homan. C. W. J.

  Perring, Sir William George

  Dalkeith, Earl of

  Hope, Capt. A. O. J. (Warw'k, Nun.)

  Peto, Sir Basil E. (Devon, Barnstaple)

  Dalziel, Sir Davison

  Hopkins. J. W. W.

  Peto, G. (Somerset, Frome)

  Davidson, J. (Hertf'd, Hemel Hempst'd)

  Hopkinson, Sir A. (Eng. Universities)

  Pilcher, G.

  Davidson, Major-General Sir J. H.

  Hopkinson. A. (Lancaster, Mossley)

  Power, Sir John Cecil

  Davies, Maj. Geo. F. (Somerset, Yeovil)

  Hore-Belisha, Leslie

  Pownall, Sir Assheton

  Davies, Dr Vernon

  Horlick, Lieut.-Colonel J. N.

  Price, Major C. W. M.

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

  Horne, Rt. Hon. Sir Robert S.

  Radford, E. A.

  Dean, Arthur Wellesley

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

  Ramsden, E.

  Dixey, A. C.

  Hudson, Capt. A. U. M. (Hackney, N.)

  Rawson, Sir Cooper

  Drewe, C.

  Hume, Sir G. H.

  Rees, Sir Beddoe

  Duckworth, John

  Hume-Williams, Sir W. Ellis

  Reid, D. D. (County Down)

  Eden, Captain Anthony

  Hunter-Weston, Lt.-Gen. Sir Aylmer

  Remer, J. R.

  Edmondson, Major A. J.

  Huntingfleid, Lord

  Remnant, Sir James

  Edwards, J. Hugh (Accrington)

  Hurd, Percy A.

  Rentoul, G. S.

  Ellis, R. G.

  Hurst, Gerald B.

  Rhys, Hon. C. A. U.

  Elveden, Viscount

  Itlffe, Sir Edward M.

  Rice, Sir Frederick

  England, Colonel A.

  Inskip, Sir Thomas Walker H.

  Richardson, Sir P. W. (Sur'y, Ch'ts'yr

  Erskine, Lord (Somerset, Weston-S.,M.)

  Jackson, Sir H. (Wandsworth, Cen'l)

  Roberts. E. H. G. (Flint)

  Everard W. Lindsay

  Jacob, A. E.

  Roberts, Sir Samuel (Hereford)

  Fairfax, Captain J. G.

  Jephcott, A. R.

  Russell, Alexander West (Tynemouth)

  Falle, Sir Bertram G.

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

  Rye, F. G.

  Fanshawe, Captain G. D.

  Joynson-Hicks, Rt. Hon. Sir William

  Salmon, Major I.

  Fermoy, Lord

  Kennedy, A. R. (Preston)

  Samuel, Samuel (W'dsworth, Putney)

  Fielden, E. B.

  Kindersley, Major G. M.

  Sandeman, N. Stewart

  Finburgh, S.

  King, Captain Henry Douglas

  Sanders, Sir Robert A.

  Ford, Sir P. J.

  Kinloch-Cooke, Sir Clement

  Sanderson, Sir Frank

  Forestier-Walker, Sir L.

  Knox, Sir Alfred

  Sandon, Lord

  Forrest, W.

  Lamb, J. Q.

  Sassoon, Sir Philip Albert Gustave D.

  Foster, Sir Harry S.

  Lane Fox, Col. Rt. Hon. George R.

  Savery, S. S.

  Foxcroft, Captain C. T.

  Leigh, Sir John(Clapham)

  Scott, Rt. Hon. Sir Leslie

  Fraser, Captain Ian

  Lister, Cunliffe-, Rt. Hon. Sir Philip

  Shaw, R. G. (Yorks, W. R., Sowerby)

  Frece, Sir Walter de

  Little, Dr. E. Graham

  Shaw, Lt.-Col. A. D. Mcl. (Renfrew. W.)

  Fremantle, Lieut.-Colonel Francis E.

  Lloyd, Cyril E. (Dudley)

  Sheffield, Sir Berkeley

  Gadie, Lieut.-Col. Anthony

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

  Shepperson, E. W.

  Galbraith, J. F. W.

  Looker, Herbert William

  Simms. Dr. John M. (Co. Down)

  Ganzoni, Sir John.

  Lougher, Lewis

  Sinclair, Col. T. (Queen's Univ., Belfast)

  Gates, Percy

  Lucas-Tooth, Sir Hugh Vere

  Slaney, Major P. Kenyon

  Gault, Lieut.-Col. Andrew Hamilton

  Luce, Major-Gen. Sir Richard Harman

  Smith, R. W. (Aberd'n & Kinc'dine. C.)

  Gibbs, Col. Rt. Hon. George Abraham

  Lumley, L. R.

  Smith-Carington, Neville W.

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

  Lynn, Sir R. J.

  Smithers, Waldron

  Glyn, Major R. G. C.

  Macdonald, Sir Murdoch (Inverness)

  Spender-Clay, Colonel H

  Goff, Sir Park

  Macdonald, Capt. P. D. (I. of W.)

  Sprot, Sir Alexander

  Gower, Sir Robert

  Mc Donnell, Colonel Hon. Angus

  Stanley, Col. Hon. G. F. (Will'sden, E.)

  Grace, John

  Macintyre, Ian

  Stanley, Hon. O. F. G. (Westm'eland)

  Graham, Fergus(Cumberland, N.)

  McLean, Major A.

  Steel, Major Samuel Strang

  Grant, Sir J. A.

  Macmillan, Captain H.

  Storry-Deans, R.

  2316

  2317

  Strauss, E. A.

  Wallace, Captain D. E.

  Windsor-Clive, Lieut.-Colonel George

  Streatfeild, Captain S. R.

  Ward, Lt.-Col. A. L.(Kingston-on-Hull)

  Winterton, Rt. Hon. Earl

  Stuart, Crichton-, Lord C.

  Warner, Brigadier-General W. W.

  Wise, Sir Fredric

  Stuart, Hon. J. (Moray and Nairn)

  Warrender, Sir Victor

  Withers, John James

  Styles, Captain H. W.

  Waterhouse, Captain Charles

  Wolmer, Viscount

  Sueter, Rear-Admiral Murray Fraser

  Watson, Sir F. (Pudsey and Otley)

  Womersley, W. J.

  Sugden, Sir Wilfrid

  Watson, Rt. Hon W. (Carlisle)

  Wood, B. C. (Somerset, Bridgwater)

  Sykes, Major-Gen. Sir Frederick H.

  Watts, Dr. T.

  Wood, E. (Chest'r, Stalyb'dge & Hyde

  Tasker, R. Inigo.

  Wells, S. R.

  Wood, Sir Kingsley (Woolwich, W.)

  Templeton, W. P.

  Wholer, Major Sir Granville C. H.

  Wood, Sir S. Hill- (High Peak)

  Thom, Lt.-Col. J. G. (Dumbarton)

  White, Lieut.-Colonel G. Dalrymple

  Woodcock, Colonel H. C.

  Thompson, Luke (Sunderland)

  Williams, A. M. (Corewall, Northern)

  Worthington-Evans, Rt. Hon. Sir L.

  Thomson, F. C. (Aberdeen, South)

  Williams, Com. C. (Devon, Torquay)

  Wragg, Herbert

  Thomson, Rt. Hon. Sir W. Mitchell-

  Williams, C. P. (Denbigh, Wrexham)

  Young, Rt. Hon. Hilton (Norwich)

  Tinne, J. A.

  Williams, Herbert G. (Reading)

  Tryon, Rt. Hon. George Clement

  Wilson, Sir C. H. (Leeds, Central)

  TELLERS FOR THE AYES.—

  Turton, Sir Edmund Russborough

  Wilson, M. J. (York, N. R., Richm'd)

  Captain lord Stanley and Captain

  Vaughan-Morgan, Col. K. P.

  Wilson, R. R. (Stafford, Lichfield)

  Margesson.

  Waddington, R.

  Winby, Colonel L. P.

  NOES.

  Adamson, W. M. (Staff. Cannock)

  Jenkins, W. (Glamorgan, Neath)

  Short, Alfred(Wednesbury)

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

  John, William (Rhondda, West)

  Sitch, Charles H.

  Ammon, Charles George

  Johnston, Thomas (Dundee)

  Smille, Robert

  Attlee, Clement Richard

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

  Smith, Ben (Bermondsey, Rotherhithe)

  Baker, J. (Wolverhampton, Bliston)

  Jones, Morgan (Caerphilly)

  Smith, H. B. Lees- (Keighley)

  Barker, G. (Monmouth. Abertillery)

  Jones, T. I. Mardy (Pontypridd)

  Snell, Harry

  Batey, Joseph

  Kelly, W. T.

  Snowden, Rt. Hon. Philip

  Beckett, John (Gateshead)

  Kennedy, T.

  Stamford, T. W.

  Bromfield, William

  Kenworthy. Lt.-Com. Hon. Joseph M.

  Stephen, Campbell

  Bromley, J.

  Kirkwood, D.

  Stewart. J. (St. Rollox)

  Buchanan, G.

  Lansbury, George

  Sullivan, Joseph

  Cape, Thomas

  Lawrence, Susan

  Sutton J. E.

  Clowes, S.

  Lawson, John James

  Taylor, R. A.

  Cluse, W. S.

  Lee, F.

  Thurtle, Ernest

  Clynes, Rt. Hon. John R.

  Lindley, F. W.

  Tinker, John Joseph

  Cove, W. G.

  Lunn, William

  Townend, A. E.

  Dalton, Hugh

  Mackinder, W.

  Trevelyan, Rt. Hon. C. P.

  Davies, Evan (Ebbw Vale)

  MacLaren, Andrew

  Varley Frank B.

  Davies, Rhys John (Westhoughton)

  Mac Neill-Weir, L.

  Viant, S. P.

  Day, Colonel Harry

  March, S.

  Wallhead, Richard C.

  Dennison, R.

  Maxton, James

  Walsh, Rt. Hon. Stephen

  Duncan, C.

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

  Watson, W. M. (Dunfermline)

  Dunnico, H.

  Mosley, Oswald

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

  Gardner, J. P.

  Murnin, H.

  Webb. Rt. Hon. Sidney

  Gibbins, Joseph

  Oliver, George Harold

  WellocK, Wilfred

  Graham, Rt. Hon. Wm. (Edin., Cent.)

  Palln, John Henry

  Welsh J. C.

  Greenall. T.

  Pethick-Lawrence, F. W.

  Westwood, J

  Greenwood, A. (Nelson and Colne)

  Ponsonby, Arthur

  Wheatley Rt. Hon. J.

  Grenfell, D. R. (Glamorgan)

  Potts, John S.

  Whiteley, W.

  Groves, T.

  Purcell, A. A.

  Williams, David (Swansea, East)

  Grundy, T. W.

  Richardson, R. (Houghton-Le-Spring)

  Williams, Dr. J. H. (Llanelly)

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

  Robinson, W. C. (Yorks, W.R., Elland)

  Williams, T. (York, Don Valley)

  Hardie, George D.

  Saklatvala, Shapurji

  Wilson C. H. (Sheffield, Atterclife)

  Hayes, John Henry

  Salter, Dr. Alfred

  Wilson, R. J. (Jarrow)

  Henderson, Right Hon. A. (Burnley)

  Scrymgeour, E.

  Henderson, T. (Glasgow)

  Scurr, John

  TELLERS FOR THE NOES.—

  Hirst, G. H.

  Sexton, James

  Mr. Allen Parkinson and Mr. Charles

  Hirst, W. (Bradford, South)

  Shaw, Rt. Hon. Thomas (Preston)

  Edwards.

  Hudson, J. H. (Huddersfield)

  Shiels, Dr. Drummond

  Question put accordingly, "That those words be there added."
  The House divided: Ayes, 357; Noes, 111.

  Division No. 154.]

  AYES.

  [11.24 p.m.

  Acland-Troyte, Lieut.-Colonel

  Balfour, George(Hampstead)

  Boothby, R. J. G.

  Agg-Gardner, Rt. Hon. Sir James T.

  Balniel, Lord

  Bourne, Captain Robert Croft

  Ainsworth, Major Charles

  Barclay-Harvey, C. M.

  Bowater, Col. Sir T. Vansittart

  Albery, Irving James

  Barnett, Major Sir Richard

  Bowyer, Captain G. E. W.

  Alexander, E. E. (Leyton)

  Barnston, Major Sir Harry

  Braithwaite, Major A. N.

  Allen, J. Sandeman (L'pool, W. Derby)

  Beamish, Rear-Admiral T. P. H.

  Brassey, Sir Leonard

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

  Beckett, Sir Gervase (Leeds, N.)

  Bridgeman, Rt. Hon. William Clive

  Applin, Colonel R. V. K.

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

  Briggs, J. Harold

  Apsley, Lord

  Bennett, A. J.

  Briscoe, Richard George

  Astbury, Lieut.-Commander F. W.

  Berry, Sir George

  Brittain, Sir Harry

  Astor, Maj. Hon. John J. (Kent, Dove)

  Bethel, A.

  Brocklebank, C. E. R.

  Astor, Viscountess

  Betterton, Henry B.

  Brooke, Brigadier-General C. R. I.

  Atholl, Duchess of

  Blrchall, Major J. Dearman

  Broun-Lindsay, Major H.

  Atkinson, C.

  Bird, E. R. (Yorks, W. R., Skipton)

  Brown, Brig.-Gen. H.C. (Berks, Newb'y)

  Baldwin, Rt. Hon. Stanley

  Bird, Sir R. B. (Wolverhampton, W.)

  Buchan, John

  Buckingham, Sir H.

  Gault, Lieut.-Col. Andrew Hamilton

  Lumley, L. R.

  Bull, Rt. Hon. Sir William James

  Gibbs, Col. Rt. Hon. George Abraham

  Lynn, Sir R. J.

  Bullock, Captain M.

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

  Macdonald, Sir Murdoch (Inverness)

  Burman, J. B.

  Glyn, Major R. G. C.

  Macdonald, Capt. P. D. (I. of W.)

  Burney, Lieut.-Com. Charles D.

  Goff, Sir Park

  McDonnell, Colonel Hon. Angus

  Burton, Colonel H. W.

  Gower, Sir Robert

  MacIntyre, Ian

  Butler, Sir Geoffrey

  Grace, John

  McLean, Major A.

  Butt, Sir Alfred

  Graham, Fergus (Cumberland, N.)

  Macmillan, Captain H.

  Cadogan, Major Hon. Edward

  Grant, Sir J. A.

  McNeill, Rt. Hon. Ronald John

  Calne, Gordon Hall

  Grattan-Doyle, Sir N.

  Macpherson, Rt. Hon. James I.

  Campbell, E. T.

  Greaves-Lord, Sir Walter

  Macquisten, F. A.

  Carver, Major W. H.

  Greene, W. P. Crawford

  Makins, Brigadier-General E.

  Cassels, J. D.

  Greenwood, Rt. Hn. Sir H. (W'th's'w, E)

  Malone, Major P. B.

  Cautley, Sir Henry S.

  Gretton, Colonel Rt. Hon. John

  Manningham-Buller, Sir Mervyn

  Cayzer, Sir C. (Chester, City)

  Grotrian, H. Brent

  Margesson, Captain D.

  Cayzer, Maj. Sir Herbt.R.(Prtsmth. S.)

  Guest, Capt. Rt. Hon. F. E. (Bristol, N.)

  Marriott, Sir J. A. R.

  Cazalet, Captain Victor A.

  Guinness, Rt. Hon. Walter E.

  Mason, Lieut.-Col. Glyn K.

  Cecil, Rt. Hon. Sir Evelyn (Aston)

  Gunston, Captain D. W.

  Meller, R. J.

  Cecil, Rt. Hon. Lord H. (Ox. Univ.)

  Hacking, Captain Douglas H.

  Merriman, F. B.

  Chadwick, Sir Robert Burton

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

  Milne, J. S. Wardlaw

  Chamberlain, Rt. Hn. Sir J. A. (Blrm.,W.)

  Hall, Admiral Sir R. (Eastbourne)

  Mitchell, W. Foot (Saffron Walden)

  Chamberlain, Rt. Hon. N. (Ladywood)

  Hall, Capt. W. D'A. (Brecon & Rad.)

  Mitchell, Sir W. Lane (Streatham)

  Chapman, Sir S.

  Hammersley, S. S.

  Mond, Rt. Hon. Sir Alfred

  Charteris, Brigadier-General J.

  Hanbury, C.

  Monsell, Eyres, Com. Rt. Hon. B. M.

  Chilcott, Sir Warden

  Hannon, Patrick Joseph Henry

  Moore, Lieut.-Colonel T. C. R. (Ayr)

  Christie, J. A.

  Harland, A.

  Moore, Sir Newton J.

  Churchill, Rt. Hon. Winston Spencer

  Harmsworth, Hon. E. C. (Kent)

  Morden, Col. W. Grant

  Churchman, Sir Arthur C.

  Harrison, G. J. C.

  Morrison, H. (Wilts, Salisbury)

  Clarry, Reginald George

  Hartington, Marquess of

  Morrison-Bell, Sir Arthur Clive

  Clayton, G. C.

  Harvey, G. (Lambeth, Kennington)

  Murchison, Sir Kenneth

  Cobb, Sir Cyril

  Harvey, Major S. E. (Devon, Totnes)

  Nall, Colonel Sir Joseph

  Cochrane, Commander Hon. A. D.

  Haslam, Henry C.

  Nelson, Sir Frank

  Cohen, Major J. Brunei

  Hawke, John Anthony

  Neville. R. J.

  Colfox, Major Wm. Phillips

  Headlam, Lieut.-Colonel C. M.

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

  Conway, Sir W, Martin

  Henderson, Capt. R. R. (Oxf'd, Henley)

  Nicholson, O. (Westminster)

  Cope, Major William

  Henderson, Lieut.-Col. V. L. (Bootie)

  Nicholson, Col. Rt.Hn.W.G.(Ptrsf'ld.)

  Couper, J. B.

  Heneage. Lieut.-Col. Arthur P.

  Nield, Rt. Hon. Sir Herbert

  Courtauid, Major J. S.

  Hennessy, Major Sir G. R. J.

  Nuttall, Ellis

  Courthope, Colonel Sir G. L.

  Herbert, Dennis(Hertford, Watford)

  Oakley, T.

  Craig, Capt. Rt. Hon. C. C. (Antrim)

  Herbert,S.(York, N.R.,Scar. & Wh'by)

  O'Connor, T. J. (Bedford, Luton)

  Craig, Ernest(Chester, Crewe)

  Hilton, Cecil

  O'Neill, Major Rt. Hon. Hugh

  Croft, Brigadier-General Sir H.

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

  Oman, Sir Charles William C.

  Crooke, J. Smedley (Derltend)

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

  Ormsby-Gore, Rt. Hon. William

  Crookshank, Col. C. de W. (Berwick)

  Hohler, Sir Gerald Fitzroy

  Pennefather, Sir John

  Crookshank, Cpt.H.(Lindsey, Gainsbro)

  Holbrook, Sir Arthur Richard

  Penny, Frederick George

  Cunliffe, Sir Herbert

  Holt, Captain H. P.

  Perkins, Colonel E. K.

  Curzon, Captain viscount

  Homan, C. W. J.

  Perring, Sir William George

  Dalkeith, Earl of

  Hope, Capt. A. O. J. (Warw'k. Nun.)

  Peto, Sir Basil E. (Devon, Barnstaple)

  Dalziel, Sir Davison

  Hopkins, J. W. W.

  Peto, G. (Somerset, Frome)

  Davidson,J.(Hertf'd, Hemel Hempst'd)

  Hopkinson, Sir A. (Eng. Universities)

  Plicher, G.

  Davidson, Major-General Sir J. H.

  Hopkinson, A. (Lancaster, Mossley)

  Power, Sir John Cecil

  Davies, Maj. Geo. F.(Somerset, Yeovil)

  Horlick, Lieut. -Colonel J. N.

  Pownall, Sir Assheton

  Davies, Dr. Vernon

  Horne, Rt. Hon. Sir Robert S.

  Price, Major C. W. M.

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

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

  Radford, E. A.

  Dean, Arthur Wellesley

  Hudson, Capt. A. U. M. (Hackney, N).

  Ramsden, E.

  Dixey, A. C.

  Hume, Sir G. H.

  Rawson, Sir Cooper

  Drewe, C.

  Hume-Williams, Sir W. Ellis

  Rees, Sir Beddoe

  Duckworth John

  Hunter-Weston, Lt.-Gen. Sir Aylmer

  Reid, D. D. (County Down)

  Eden, Captain Anthony

  Huntingfield, Lord

  Remer, J. R.

  Edmondson, Major A. J.

  Hurd, Percy A.

  Remnant, Sir James

  Edwards, J. Hugh (Accrington)

  Hurst, Gerald B.

  Rentoul, G. S.

  Ellis, R. G.

  Ilifte Sir Edward M.

  Rhys, Hon. C. A. U.

  Elveden, Viscount

  Inskip, Sir Thomas Walker H.

  Rice, Sir Frederick

  England, Colonel A.

  Jackson, Sir H. (Wandsworth, Cen'l)

  Richardson, Sir P. W. (Sur'y, Ch'ts'y)

  Erskine, Lord (Somerset, Weston-s.-M.)

  Jacob, A. E.

  Roberts, E. H. G. (Flint)

  Everard, W. Lindsay

  Jephcott, A. R.

  Roberts, Sir Samuel (Hereford)

  Fairfax, Captain J. G.

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

  Russell, Alexander West (Tynemouth)

  Falle, Sir Bertram G.

  Joynson-Hicks, Rt. Hon. Sir William

  Rye, F. G.

  Fanshawe, Captain G. D.

  Kennedy, A. R. (Preston).

  Salmon, Major I.

  Fermoy, Lord

  Kindersley, Major Guy M.

  Samuel. Samuel (W'dsworth, Putney)

  Fielden, E. B.

  King, Captain Henry Douglas

  Sandeman, N. Stewart

  Finburgh, S.

  Kinloch-Cooke, Sir Clement

  Sanders, Sir Robert A.

  Ford Sir P. J.

  Knox, Sir Alfred

  Sanderson, Sir Frank

  Forestier-Walker, Sir L.

  Lamb, J. Q.

  Sandon, Lord

  Forrest, W.

  Lane Fox, Col. Rt. Hon. George R.

  Sassoon, Sir Philip Albert Gustave D.

  Foster, Sir Harry S.

  Leigh, Sir John (Clapham)

  Savery, S. S.

  Foxcroft, Captain C. T.

  Lister, Cunllffe-, Rt. Hon. Sir Philip

  Scott, Rt. Hon. Sir Leslie

  Fraser, Captain Ian

  Little, Dr. E. Graham

  Shaw, R. G. (Yorks, W. R., Sowerby)

  Frece, Sir Walter de

  Lloyd, Cyril E. (Dudley)

  Shaw. Lt.-Col. A. D. Mcl. (Renfrew, W)

  Fremantie, Lieut.-Colonel Francis E.

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

  Sheffield, Sir Berkeley

  Gadle, Lieut.-Col. Anthony

  Looker, Herbert William

  Shepperson, E. W.

  Galbraith, J. F. W.

  Lougher, Lewis

  Simms, Dr. John M. (Co. Down)

  Ganzonl, Sir John

  Lucas-Tooth, Sir Hugh Vere

  Sinclair, Col. T. (Queen's Univ.,Belf'st.)

  Gates Percy

  Luce, Major-Gen. Sir Richard Harman

  Slaney, Major P. Kenyan

  2320

  2321

  Smith, R. W. (Aberd'n & Kinc'dine, C.)

  Thompson, Luke (Sunderland)

  William, Herbert G. (Reading)

  Smith-Carington, Neville W.

  Thomson, Rt. Hon. Sir W. Mitchell-

  Wilson, M. J. (York, N. R., Richm'd)

  Smithers, Waldron

  Tlnne, J. A.

  Wilson, R. R. (Stafford, Lichfield)

  Somerville, A. A. (Windsor)

  Tryon, Rt. Hon. George Clement

  Winby, Colonel L. P.

  Spender-Clay, Colonel H.

  Turton, Sir Edmund Russborough

  Windsor-Clive, Lieut-Colonel George

  Sprot, Sir Alexander

  Vaughan-Morgan, Col. K. P.

  Winterton, Rt. Hon. Earl

  Stanley, Col. Hon. G. F. (Will'sden, E.)

  Waddington, R.

  Wise, Sir Fredric

  Stanley, Hon. O. F. G. (Westm'eland)

  Wallace, Captain D. E.

  Withers, John James

  Steel, Major Samuel Strang

  Ward, Lt.-Col. A. L. (Kingston-on-Hull)

  Wolmer, Viscount

  Storry-Deans, R.

  Warner, Brigadier-General W. W.

  Womersley, W. J.

  Strauss, E, A.

  Warrender, Sir Victor

  Wood, B. C. (Somerset, Bridgwater)

  Streatfeild, Captain S. R.

  Waterhouse, Captain Charles

  Wood, E. (Chest'r, Stalyb'dge & Hyde)

  Stuart, Crichton-, Lord C.

  Watson, Sir F. (Pudsey and Otley)

  Wood, Sir Kingeley (Woolwich, W.)

  Stuart, Hon. J. (Moray and Nairn)

  Watson, Rt. Hon. W. (Carlisle)

  Wood, Sir S. Hill- (High Peak)

  Styles, Captain H. Walter

  Watts, Dr. T.

  Woodcock, Colonel H. C.

  Sueter, Rear-Admiral Murray Fraser

  Wells, S. R.

  Worthington-Evans, Rt. Hon. Sir L.

  Sugden, Sir Wilfrid

  Wheler, Major Sir Granville C. H.

  Wragg, Herbert

  Sykes, Major-Gen. Sir Frederick H.

  White, Lieut.-Colonel G. Dairymple

  Young, Rt. Hon. Hilton (Norwich)

  Tasker, R. Inigo.

  Williams, A. M. (Cornwall, Northern)

  Templeton, W. P.

  Williams, Com. C. (Devon, Torquay)

  TELLERS FOR THE AYES.—

  Thorn, Lt.-Col. J. G. (Dumbarton)

  Williams, C. P. (Denbigh, Wrexham)

  Mr. F. C. Thomson and Captain

  Lord Stanley.

  NOES.

  Adamson, W. M. (Staff, Cannock)

  Jenkins. W. (Glamorgan, Neath)

  Shaw, Rt. Hon. Thomas (Preston)

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

  John, William (Rhondda, West)

  Shiels, Dr. Drummond

  Ammon, Charles George

  Johnston, Thomas (Dundee)

  Short, Alfred (Wednesbury)

  Attlee, Clement Richard

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

  Sitch, Charles H.

  Baker, J. (Wolverhampton, Bilston)

  Jones, Morgan (Caerphilly)

  Smillie, Robert

  Barker, G. (Monmouth, Abertillery)

  Jones, T. I. Mardy (Pontypridd)

  Smith, Ben (Bermondsey, Rotherhithe)

  Batey, Joseph

  Kelly, W. T.

  Smith, H. B. Lees-(Keighley)

  Beckett, John (Gateshead)

  Kennedy, T.

  Snell, Harry

  Bromfield, William

  Kenworthy, Lt.-Com. Hon. Joseph M.

  Snowden, Rt. Hon. Philip

  Bromley, J.

  Kirkwood, D.

  Stamford, T. W.

  Cape, Thomas

  Lansbury, George

  Stephen, Campbell

  Clowes, S.

  Lawrence, Susan

  Stewart, J. (St. Rollox)

  Cluse, W. S.

  Lawson, John James

  Sullivan, Joseph

  Clynes, Ht. Hon. John R.

  Lee, F.

  Sutton, J. E.

  Cove, W. G.

  Lindley, F. W.

  Taylor, R. A.

  Dalton, Hugh

  Lunn, William

  Thurtle, Ernest

  Davies, Evan (Ebbw Vale)

  Mackinder, W.

  Tinker, John Joseph

  Davies, Rhys John (Westhoughton)

  MacLaren, Andrew

  Townend, A. E.

  Day, Colonel Harry

  MacNeill-Weir, L.

  Trevelyan, Rt. Hon. C. P.

  Dennison, R.

  March, S.

  Varley, Frank B.

  Duncan, C.

  Maxton, James

  Viant, S. P.

  Dunnico, H.

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

  Wallhead, Richard C.

  Edwards, C. (Monmouth, Bedwellty)

  Mosley, Oswald

  Walsh, Rt. Hon. Stephen

  Gardner, J. P.

  Murnin, H.

  Watson, W. M. (Dunfermline)

  Gibbins, Joseph

  Oliver, George Harold

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

  Graham, Rt. Hon. Wm. (Edin., Cent.)

  Palin, John Henry

  Webb, Ht. Hon. Sidney

  Greenall, T.

  Parkinson, John Allen (Wigan)

  Wellock, Wilfred

  Greenwood, A. (Nelson and Colne)

  Pethick-Lawrence, F. W

  Welsh, J. C.

  Grentell, D. R. (Glamorgan)

  Ponsonby, Arthur

  Westwood, J.

  Groves, T.

  Potts, John S.

  Wheatley, Rt. Hon. J.

  Grundy, T. W.

  Purcell, A. A.

  Williams, David (Swansea, East)

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

  Richardson, R. (Houghton-le-Spring)

  Williams, Dr. J. H. (Lianelly)

  Hardie, George D.

  Robinson, W. C. (Yorks,W.R., Elland)

  Williams, T. (York, Don Valley)

  Henderson, Rt. Hon. A. (Burnley)

  Saklatvala, Shapurji

  Wilson, C. H. (Sheffield, Attercliffe)

  Henderson, T. (Glasgow)

  Salter, Dr. Alfred

  Wilson, R. J. (Jarrow)

  Hirst, G. H.

  Scrymgeour, E.

  Hirst, W. (Bradford, South)

  Scurr, John

  TELLERS FOR THE NOES.—

  Hudson, J. H. (Huddersfield)

  Sexton, James

  Mr. Hayes and Mr. Whiteley.

  Question put,
  "That this House, while appreciating the long forbearance of His Majesty's Government and their many efforts to maintain friendly diplomatic relations with the Soviet Republics in the face of acute provocation, applauds their decision to withdraw the
  diplomatic privileges which have been so gravely abused, whilst at the same time putting no obstacle in the way of legitimate trading relations with Russia."
  The House divided: Ayes, 346; Noes, 98.

  Division No. 155.]

  AYES.

  [11.36 p.m.

  Acland-Troyte, Lieut.-Colonel

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

  Atholl, Duchess of

  Agg-Gardner, Rt. Hon. Sir James T.

  Applin, Colonel R. V. K.

  Atkinson, C.

  Ainsworth, Major Charles

  Apsley, Lord

  Baldwin, Rt. Hon. Stanley

  Albery, Irving James

  Astbury, Lieut.-Commander F. W.

  Balfour, George (Hampstead)

  Alexander, E. E. (Leyton)

  Astor, Maj. Hn. John J.(Kent, Dover)

  Balniel, Lord

  Allen, J. Sandeman (L'pool.W. Derby)

  Astor, Viscountess

  Barclay-Harvey, C. M.

  Barnett Major Sir Richard

  Edwards, J. Hugh (Accrington)

  Inskip, Sir Thomas Walker H.

  Barnston, Major Sir Harry

  Ellis, R. G.

  Jackson, Sir H. (Wandsworth, Cen'l)

  Beamish, Rear-Admiral T. P. H.

  Elveden, Viscount.

  Jacob, A. E.

  Beckett, Sir Gervase (Leeds, N.)

  England, Colonel A.

  Jephcott, A. R.

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

  Erskine, Lord (Somerset, Weston-s.-M.)

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

  Bennett, A. J.

  Everard, W. Lindsay

  Joynson-Hicks, Rt. Hon. Sir William

  Bethel, A.

  Fairfax, Captain J. G.

  Kennedy, A. R. (Preston)

  Betterton, Henry B.

  Falle, Sir Bertram G.

  Kindersley, Major Guy M.

  Birchall, Major J. Dearman

  Fanshawe, Captain G. D.

  King, Captain Henry Douglas

  Bird, E. R. (Yorks, W. R., Skipton)

  Fermoy, Lord

  Kinloch-Cooke, Sir Clement

  Bird, Sir R. B. (Wolverhampton, W.)

  Fielden, E. B.

  Knox, Sir Alfred

  Boothby, R. J. G.

  Finburgh, S.

  Lamb, J. Q.

  Bourne, Captain Robert Croft

  Ford, Sir P. J.

  Lane Fox, Col. Rt. Hon. George R.

  Bowater, Col. Sir T. Vansittart

  Forestier-Walker, Sir L.

  Leigh, Sir John (Clapham)

  Bowyer. Capt. G. E. W.

  Forrest, W.

  Lister, Cunllffe-. Rt. Hon. Sir Philip

  Braithwaite, Major A. N.

  Foster, Sir Harry S.

  Little, Dr. E. Graham

  Brassey, Sir Leonard

  Foxcroft, Captain C. T.

  Lioyd, Cyril E. (Dudley)

  Bridgeman, Rt. Hon. William Clive

  Fraser, Captain Ian

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

  Briggs, J. Harold

  Frece, Sir Walter de

  Looker, Herbert William

  Briscoe, Richard George

  Fremantle, Lieut.-Col. Francis E.

  Lougher, Lewis

  Brittain, Sir Harry

  Gadie, Lieut. -Col. Anthony

  Lucas-Tooth, Sir Hugh Vere

  Brockiebank, D. E. R.

  Galbraith, J. F. W.

  Luce, Maj.-Gen. Sir Richard Harman

  Brooke, Brigadier-General C. R. I.

  Ganzoni, Sir John

  Lumley, L. R.

  Broun-Lindsay, Major H.

  Gates, Percy

  Lynn, Sir R. J.

  Brown. Brig.-Gen. H. C.(Berks, Newb'y)

  Gault. Lieut.-Col. Andrew Hamilton

  Macdonald, Sir Murdoch (Inverness)

  Buchan, John

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

  Macdonald, Capt. P. D. (I. of W.)

  Buckingham, Sir H.

  Glyn, Major R. G. C.

  McDonnell, Colonel Hon. Angus

  Bull, Rt. Hon. Sir William James

  Goff, Sir Park

  MacIntyre, Ian

  Bullock, Captain M.

  Gower, Sir Robert

  McLean, Major A

  Burman, J. B.

  Grace, John

  Macmillan, Captain H.

  Burney, Lieut.-Com. Charles D.

  Graham, Fergus (Cumberland, N.)

  Mc Neill, Rt. Hon. Ronald John

  Burton, Colonel H. W.

  Grant, Sir J. A.

  Macpherson Rt. Hon. James I.

  Butler, Sir Geoffrey

  Grattan-Doyle, Sir N.

  Macquitsten, F. A.

  Cadogan, Major Hon. Edward

  Greaves-Lord, Sir Walter

  Makins, Brigadier-General E.

  Campbell, E. T.

  Greene, W. P. Crawford

  Malone, Major P. B.

  Carver, Major W. H.

  Gretton, Colonel Rt. Hon. John

  Manningham-Buller, Sir Mervyn

  Cassels, J. D.

  Grotrian, H. Brent

  Margesson, Captain D.

  Cautley, Sir Henry S.

  Guest. Capt. Rt. Hon. F. E. (Bristol, N.)

  Marriott, Sir J. A. R.

  Cayzer, Sir C. (Chester, City)

  Guinness, Rt. Hon. Walter E.

  Mason, Lieut.,Col. Glyn K.

  Cayzer, Maj. Sir Herbt. R. (Prtsmth, S.)

  Gunston, Captain D. W.

  Merriman, F. B.

  Cazalet, Captain Victor A

  Hacking, Captain Douglas H.

  Milne, J. S. Wardlaw-

  Cecll, Rt. Hon. Sir Evelyn (Aston)

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

  Mitchell. W. Foot (Saffron Walden)

  Cecil, Rt. Hon. Lord H. (Ox. Univ.)

  Hall, Admiral Sir R. (Eastbourne)

  Mond. Rt. Hon. Sir Alfred

  Chadwick. Sir Robert Burton

  Hall Capt. W. D' A (Brecon & Rad.)

  Moore, Lieut.-Colonel T. C. R. (Ayr)

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

  Hammersley, S. S.

  Moore. Sir Newton J.

  Chamberlain, Rt. Hon. N. (Ladywood)

  Hanbury, C.

  Morden, Colonel Walter Grant

  Chapman, Sir S.

  Hannon, Patrick Joseph Henry

  Morrison, H. (Wilts, Salisbury)

  Charterls, Brigadier-General J.

  Harland, A.

  Morrison-Bell. Sir Arthur Clive

  Chilcott, Sir Warden

  Harmsworth, Hon. E. C. (Kent)

  Murchison, Sir Kenneth

  Christie. J. A.

  Harrison, G. J. C.

  Nall, Colonel Sir Joseph

  Churchill, Rt. Hon. Winston Spencer

  Hartington, Marquess of

  Neville, R. J.

  Churchman, Sir Arthur C.

  Harvey, G. (Lambeth, Kennington)

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

  Clarry, Reginald George

  Harvey, Major S. E. (Devon, Totnes)

  Nicholson, O. (Westminster)

  Clayton, G. C.

  Haslam, Henry C.

  Nicholson, Col.Rt.Hn.W.G. (Ptrsf'ld.)

  Cobb, Sir Cyril

  Hawke. John Anthony

  Nield, Rt. Hon. Sir Herbert

  Cochrane, Commander Hon. A. D.

  Headlam. Lieut. -Colonel C. M.

  Nuttall, Ellis

  Cohen, Major J. Brunel

  Henderson, Capt. R. R. (Oxf'd, Henley)

  Oakley, T.

  Colfox, Major Wm. Phillips

  Henderson, Lieut. -Col. V. L. (Bootle)

  O'Connor, T. J. (Bedford, Luton)

  Conway. Sir W. Martin

  Heneage, Lieut.-Colonel Arthur P.

  O'Neill, Major Rt. Hon. Hugh

  Cope, Major William

  Hennessy, Major Sir G. R. J.

  Oman, Sir Charles William C.

  Couper, J. B.

  Herbert, Dennis (Hertford. Watford)

  Ormsby-Gore. Rt. Hon. William

  Courtauld, Major J. S.

  Herbert, S. (York, N. R., Scar. & Wh'by)

  Pennefather, Sir John

  Courthope, Colonel Sir G. L.

  Hilton, Cecil

  Penny, Frederick George

  Craig, Capt. Rt. Hon. C. C. (Antrim)

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

  Perkins, Colonel E. K.

  Craig, Ernest (Chester, Crewe)

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

  Perring, Sir William George

  Croft, Brigadier-General Sir H.

  Hohler, Sir Gerald Fitzroy

  Peto, Sir Basil E. (Devon, Barnstaple)

  Crooke, J. Smedley (Derltend)

  Holbrook, Sir Arthur Richard

  Peto, G. (Somerset, Frome)

  Crookshank, Col. C. de W. (Berwick)

  Holt, Captain H. P.

  Pllcher, G.

  Crookshank,Cpt.H.(Lindsey, Gainsbro)

  Homan, C. W.J.

  Power, Sir John Cecil

  Cunliffe, Sir Herbert

  Hope. Capt. A. O. J. (Warw'k, Nun.)

  Pownall, Sir Assheton

  Curzon, Captain Viscount

  Hopkins. J. W. W.

  Price, Major C. W. M.

  Dalkeith, Earl of

  Hopkinson, Sir A. (Eng. Universities)

  Radford, E. A.

  Dalziel, Sir Davison

  Hopkinson, A. (Lancaster, Mossley)

  Ramsden, E.

  Davidson, J. (Hertf'd, Hemel Hempst'd)

  Horlick, Lieut. -Colonel J. N.

  Rawson, Sir Cooper

  Davidson, Major-General Sir J. H.

  Horne, Rt. Hon. Sir Robert S.

  Rees, Sir Beddoe

  Davies, Maj. Geo. F. (Somerset, Yeovil)

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

  Reid, D. D. (County Down)

  Davies, Dr. Vernon

  Hudson, Capt. A. U. M. (Hackney, N.)

  Remer, J. R.

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

  Hume, Sir G. H.

  Rentoul, G. S.

  Dean, Arthur Wellesley

  Hume-Williams, Sir W. Ellis

  Rhys, Hon. C. A. U.

  Dixey, A. C.

  Hunter-Weston, Lt.-Gen. Sir Aylmer

  Rice, Sir Frederick

  Drewe, C.

  Huntingfield, Lord

  Richardson, Sir P. W. (Sur'y, Ch'ts'y)

  Duckworth, John

  Hurd, Percy A.

  Roberts, E. H. G. (Flint)

  Eden, Captain Anthony

  Hurst, Gerald B.

  Roberts, Sir Samuel (Hereford)

  Edmondson, Major A. J.

  Iliffe, Sir Edward M.

  Russell, Alexander West (Tynemouth)

  2324

  2325

  Rye, F. G.

  Storry-Deans, R.

  Wheler, Major Sir Granville C. H.

  Salmon, Major I.

  Strauss, E. A.

  White, Lieut.-Col. Sir G. Dalrymple-

  Samuel, Samuel (W'dsworth, Putney)

  Streatfeild, Captain S. R.

  Williams, Com. C. (Devon, Torquay)

  Sandeman, N. Stewart

  Stuart, Crichton-, Lord C.

  Williams, C. P. (Denbigh, Wrexham)

  Sanders, Sir Robert A.

  Stuart, Hon. J. (Moray and Nairn)

  Williams, Herbert G. (Reading)

  Sanderson, Sir Frank

  Styles, Captain H. Walter

  Wilson, M. J. (York, N. R., Richm'd)

  Sandon, Lord

  Sueter, Rear-Admiral Murray Fraser

  Wilson, R. R. (Stafford, Lichfield)

  Sassoon, Sir Philip Albert Gustave D.

  Sugden, Sir Wilfrid

  Winby, Colonel L. P.

  Savery, S. S.

  Sykes. Major-Gen, Sir Frederick H.

  Windsor-Clive, Lieut.-Colonel George

  Scott, Rt. Hon. Sir Leslie

  Tasker. R. Inigo

  Winterton, Rt. Hon. Earl

  Shaw, R. G. (Yorks, W. R., Sowerby)

  Templeton, W. P.

  Wise, Sir Fredric

  Shaw, Lt.-Col. A. D. Mcl. (Renfrew, W.)

  Thom, Lt.-Col. J. G. (Dumbarton)

  Withers, John James

  Sheffield, Sir Berkeley

  Thompson, Luke (Sunderland)

  Wolmer, Viscount

  Shepperson, E. W.

  Thomson, F. C. (Aberdeen, S.)

  Womersley, W, J.

  Simms, Dr. John M. (Co. Down)

  Thomson, Rt. Hon. Sir W. Mitchell-

  Wood, B. C. (Somerset, Bridgwater)

  Sinclair, Col. T. (Queen's Univ., Belfast)

  Tryon, Rt. Hon. George Clement

  Wood, E. (Chest'r, Stalyb'ge & Hyde)

  Slaney, Major P. Kenyon

  Turton, Sir Edmund Russborough

  Wood, Sir Kingsley (Woolwich, W.).

  Smith, R. W. (Aberd'n & Kinc'dine, C.)

  Vaughan-Morgan, Col. K. P.

  Wood, Sir S. Hill- (High Peak)

  Smith-Carington, Neville W.

  Wallace, Captain D. E.

  Woodcock, Colonel H. C.

  Smithers, Waldron

  Ward, Lt.-Col. A. L. (Kingston-on-Hull)

  Worthington-Evans, Rt. Hon. Sir L.

  Somerville, A. A. (Windsor)

  Warner, Brigadier-General W. W.

  Wragg, Herbert

  Spender-Clay, Colonel H.

  Warrender, Sir Victor

  Young, Rt. Hon. Hilton (Norwich)

  Sprot, Sir Alexander

  Waterhouse, Captain Charles

  Stanley, Col. Hon. G. F. (Will'sden,E.)

  Watson, Sir F. (Pudsey and Otley)

  TELLERS FOR THE AYES.—

  Stanley, Lord (Fylde)

  Watson, Rt. Hon. W. (Carlisle)

  Commander B. Eyres Monsell and

  Stanley, Hon. O. F. G. (Westm'eland)

  Watts, Dr. T.

  Colonel Gibbs.

  Steel, Major Samuel Strang

  Wells, S. R.

  NOES.

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

  John, William (Rhondda. West)

  Scrymgeour, E.

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

  Johnston, Thomas (Dundee)

  Scurr, John

  Ammon, Charles George

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

  Shaw, Rt. Hon. Thomas (Preston)

  Baker, J. (Wolverhampton, Bilston)

  Jones, Morgan (Caerphilly)

  Short, Alfred (Wednesbury)

  Barker, G. (Monmouth, Abertillery)

  Jones, T. I. Mardy (Pontypridd)

  Sitch, Charles H.

  Batey, Joseph

  Kelly, W. T.

  Smith, H. B. Lees- (Keighley)

  Beckett, John (Gateshead)

  Kennedy, T.

  Snell, Harry

  Bromfield, William

  Kenworthy, Lt.-Com. Hon. Joseph M.

  Snowden, Rt. Hon. Philip

  Bromley, J.

  Kirkwood, D.

  Stamford, T. W.

  Cape, Thomas

  Lansbury, George

  Stephen, Campbell

  Clowes, S.

  Lawrence, Susan

  Sullivan, J.

  Dalton, Hugh

  Lawson, John James

  Sutton, J. E.

  Davies, Evan (Ebbw Vale)

  Lee, F.

  Tinker, John Joseph

  Davies, Rhys John (Westhoughton)

  Lindley, F. W.

  Townend, A. E.

  Day, Colonel Harry

  Lunn, William

  Varley, Frank B.

  Dennison, R.

  Mackinder, W.

  Viant, S. P.

  Duncan, C.

  MacLaren, Andrew

  Walsh, Rt. Hon. Stephen

  Dunnico, H.

  MacNeill-Weir, L.

  Watson, W. M. (Dunfermline)

  Edwards, C. (Monmouth, Bedwellty)

  March, S.

  Watts-Morgan Lt Col. D. (Rhondos)

  Gardner, J. P.

  Maxton, James

  Webb, Rt. Hon. Sidney

  Gibbins, Joseph

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

  Wellock, Wilfred

  Graham, Rt. Hon. Wm. (Edin., Cent.)

  Mosley, Oswald

  Welsh, J. C.

  Greenall, T.

  Murnin, H.

  Westwood, J.

  Grenfell, D. R. (Glamorgan)

  Oliver, George Harold

  Wheatley, Rt. Hon. J.

  Groves, T.

  Palln, John Henry

  Whiteley, W.

  Grundy, T. W.

  Parkinson, John Allen (wigan)

  Williams, David (Swansea, E.)

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

  Pethick-Lawrence, F. W.

  Williams, Dr. J. H. (Lianelly)

  Hardie George D.

  Ponsonby, Arthur

  Williams, T. (York, Don Valley)

  Henderson, Right Hon. A. (Burnley)

  Potts, John S.

  Wilson, C. H. (Sheffield, Attercliffe)

  Henderson, T. (Glasgow)

  Purcell. A. A.

  Wilson, R. J. (Jarrow)

  Hirst, G. H.

  Richardson, R. (Ho'ghton-le-Spring)

  Hirst, W. (Bradford, South)

  Robinson, W. C. (Yorks,W.R., Elland)

  TELLERS FOR THE NOES.—

  Hudson, J. H. (Huddersfield)

  Saklatvala. Shapurji

  Mr. B Smith and Mr. Hayes

  Jenkins, W. (Glamorgan, Neath)

  Salter. Dr. Alfred

  Resolved,
  "That this House, while appreciating the long forbearance of His Majesty's Government and their many efforts to maintain friendly diplomatic relations with the Soviet Republics in the face of acute provocation, applauds their decision to withdraw the diplomatic privileges which have been so gravely abused, whilst at the same time putting no obstacle in the way of legitimate trading relations with Russia."
  The remaining Orders were read, and postponed.
  It being after half-past Eleven of the Clock, Mr. SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
  Adjourned at Twelve Minutes before Twelve o'Clock.

  SEXUAL OFFENCES AGAINST YOUNG PERSONS.
  SEXUAL OFFENCES AGAINST YOUNG PERSONS.
  TRADE UNIONS (REGISTRAR GENERAL'S REPORT).
  TRADE UNIONS (REGISTRAR GENERAL'S REPORT).
  TAXI-CAB DRIVERS (CONVICTIONS FOR DRUNKENNESS).
  TAXI-CAB DRIVERS (CONVICTIONS FOR DRUNKENNESS).
  PENSIONS ADMINISTRATION.
  PENSIONS ADMINISTRATION.
ROYAL NAVY.
  INDUSTRIAL GRADES (ESTABLISHMENT).
  INDUSTRIAL GRADES (ESTABLISHMENT).
  DOCKYARD CLERKS (PAY).
  DOCKYARD CLERKS (PAY).
  MECHANICAL TRANSPORT CORPS DEPOT (TECHNICAL POSTS).
  MECHANICAL TRANSPORT CORPS DEPOT (TECHNICAL POSTS).
  SOUTHERN RHODESIA (NATIVE LANDS).
  SOUTHERN RHODESIA (NATIVE LANDS).
  CHINA (MUNITIONS OF WAR).
  CHINA (MUNITIONS OF WAR).
  GOLD EXPORTS (INDIA).
  GOLD EXPORTS (INDIA).
  INCOME TAX AND SUPER-TAX ASSESSMENT.
  INCOME TAX AND SUPER-TAX ASSESSMENT.
  EMPIRE MARKETING.
  EMPIRE MARKETING.
  TOOTING PARISH CHURCH GRAVEYARD.
  TOOTING PARISH CHURCH GRAVEYARD.
  HOUSING (UNFIT HABITATIONS).
  HOUSING (UNFIT HABITATIONS).
POST OFFICE.
  EX-SERVICE MEN, BRISTOL.
  EX-SERVICE MEN, BRISTOL.
  CONTINENTAL TELEPHONE SERVICE.
  CONTINENTAL TELEPHONE SERVICE.
  OUSE DRAINAGE BILL.
  OUSE DRAINAGE BILL.
  RIVER POLLUTION.
  RIVER POLLUTION.
Preamble
The House met at a quarter past four of the clock, The LORD CHANCELLOR on the Woolsack.
EAST SURREY WATER BILL. [H.L.]
Read 3a, and passed, and sent to the Commons.
LITTLEHAMPTON HARBOUR AND ARUN DRAINAGE OUTFALL BILL. [H.L.]
Read 3a, and passed, and sent to the Commons.
WESSEX ELECTRICITY BILL. [H.L.]
Read 3a: Amendments made: Bill passed, and sent to the Commons.

LIVERPOOL CORPORATION BILL. [H.L.]
Read 3a.
Clause 94:
Saving for inclusion of certain lands in Improvement Scheme under Housing Act, 1925.
94. Nothing in this Act shall operate to prevent the Corporation from including in an improvement or reconstruction scheme prepared by them under Part II of the Housing Act, 1925, any of the lands within the limits of deviation shown upon the deposited plans of New Street (No. 1) by this Act authorised and situate between the commencement of the said new street and Fox Street but the provisions of Section 46 of the Housing Act, 1925, as to the assessment of compensation in respect of land included in an improvement or reconstruction scheme and acquired compulsorily shall not apply to land in respect of which notice to treat shall have been served under the powers granted by this Act for the compulsory purchase of lands.
LORD DYNEVOR LORD DYNEVOR moved to omit all words after "compensation" and to insert "shall not apply to any land within the said limits of deviation." The noble Lord said: My Lords, I move an Amendment to this clause because it raises a very big question of principle and one in which the Government are concerned. Under Part III of this Bill the Corporation is authorised to make a new arterial road through Liverpool, and
530
for that purpose to acquire land in the ordinary way. This would be done under the provisions of the Lands Clauses Act, but by Clause 94 the Corporation can acquire some of the land as though under the Housing Act. As originally drawn the Bill provided that if they did so the compensation payable would be governed by Section 46 of the Housing Act of 1925, which was a re-enactment of Section 9 of the Housing Act of 1919.
Now this scheme of compensation has been proved to work most unfairly and unjustly, for the compensation for houses and shops, which in themselves were quite sanitary and in good condition, has been assessed at the value of a bare site, without any allowance for the building or good will. And the question of compensation for good will is one which the Government is very interested in in the Bill now before the House of Commons called the Landlord and Tenant Bill. This valuation as a bare site was made possible, as I said before, by the Housing and Town Planning Act, 1919, brought in by Dr. Addison, the Minister of Health in the Coalition Government. The protest was so strong that he appointed a Departmental Committee to inquire into the grievance and Mr. Neville Chamberlain, the present Minister of Health, was president. In 1921 the Committee reported and used such expressions as these:—
"Owing to the inequity of paying nothing for buildings which in themselves might be unexceptionable but which happen to be within an unhealthy area, it is suggested that the local authority will be deterred from representing areas as unhealthy."
The Report goes on to say:
"The impression left upon our minds after conversation with witnesses in the various towns is that none of them like the procedure under Section 9. Its drastic provisions are considered likely to lead to such inequality and injustice as between individuals as to encounter violent opposition."
Notwithstanding this unanimous Report no remedial legislation has been introduced.
In December, 1925, Mr. Chamberlain consented to receive a deputation from the Land Union. An agreed report of the meeting contained the following statement:
"Mr. Neville Chamberlain, the Minister of Health, intimated that he adhered to the

531
views expressed with regard to Section 9 of the Housing and Town Planning, etc., Act, 1919, in the Report of the Departmental Committee, and in particular expressed his opinion that the reduction of the compensation according to the use proposed to be made of the property was unreasonable and that new legislation was desirable, and he said he would be glad to receive suggestions from the deputation."
Again, in the House of Commons, on November, 25, 1926, in reply to a question by Colonel England as to what steps the Minister of Health was taking with regard to removing the injustices to owners of certain properties in slum areas, the Minister replied:
"I hope to be able to introduce legislation on this subject, but I am unable at present to give any indication of the date of its introduction."
That I take from the OFFICIAL REPORT.
Unfortunately, my attention was only drawn to Clause 94 of this Bill after its Second Reading in your Lordships' House. But I immediately wrote to Mr. Chamberlain drawing his attention to it, as it seemed to me most undesirable that a provision should be put into a Private Bill which he himself felt was an undesirable one in a Public Act of Parliament. In the Committee of your Lordships' House upstairs this clause has been amended, but its present form is most unsatisfactory, for Section 46 of the Housing Act, 1925, still applies, if the corporation wish to take certain lands as part of an improvement scheme under the Housing Act and then subsequently use that land for the new highway and compensate the owners of the latter property under the discredited scale of compensation of Section 46 of the Housing Act, 1925, which was panic legislation passed in 1919 to cope with the housing question at the time. There is no reason for extending this confiscatory legislation to Private Bills, for if this is done we shall have the extraordinary position of the Public Act being in future altered by Mr. Chamberlain, but it might not affect this Bill as the Corporation would have obtained their powers and probably have carried them out. MY Amendment does not interfere with the Corporation carrying out improvements and reconstruction schemes for housing, because naturally I want slums to be swept away. All I say is that where land and houses are taken for this new road the owner should
532
receive ordinary compensation and not be penalised merely by the fact that the recommendations of the Departmental Committee have not been carried out and amending legislation introduced. I beg to move.
Amendment moved:
Clause 94, page 51, line 28, leave out from ("compensation") to end of the clause and insert ("shall not apply to any land within the said limits of deviation").—(Lord Dynevor.)
THE EARL OF CLARENDON: My Lords, I hope that you will allow me to make a few observations in reply to my noble friend, inasmuch as I had the privilege of presiding over the Committee which had to consider the Liverpool Corporation Bill last week. I want to say at the outset that the Committee over which I presided gave the most earnest and careful consideration to the provisions of this Bill, and heard the case both for and against it for some considerable time. The hearing lasted, I think, for rather more than three days, and in addition to hearing the case both for and against the Bill we had the advantage of securing certain information in the course of a conversation with representatives of the Ministry of Health and the Ministry of Transport before we reached our decision.
So far as concerns the clause with which my noble friend has dealt, it really is nothing more than what one might, think, describe as a permissive clause, as it preserves the right to the Corporation to include certain property shown upon the deposited plans in any improvement or reconstruction scheme that they may desire to put into effect under Section 46, Part II, of the Housing Act, 1925. The effect of my noble friend's Amendment would be entirely to destroy the usefulness and effectiveness of this particular clause in the Bill. One of the main objects of the Bill is the construction of the new street to which my noble friend has referred, for the purpose of completing a connection between a point in the centre of the City of Liverpool and the new arterial East Lancashire Road, and that street happens to pass through a certain area which has for some years been under the consideration of the Corporation of Liverpool, for an improvement under that section of the Housing Act to which I have referred.

533
Some point was made when the Committee was hearing this Bill as to why it was necessary to come to Parliament at all, as the Corporation had the right to proceed with any improvement scheme under Part II of the Housing Act of 1925. But I should like to point out that it was made quite clear to us that it was essential for the Corporation to come to Parliament in order to schedule this particular land, so that a complete scheme might be presented to Parliament in regard to the new street. But there was also another reason. It is contemplated by the Corporation that a tramway shall be constructed along this street and it is necessary, in order to do this, that the Corporation should present to Parliament plans of the site which was scheduled for compulsory acquisition. I think that the Committee, in reaching their decision—and I believe that what I am going to say now has the entire Committee's approval—had to be satisfied that this whole question of a town improvement was not an afterthought and that it really had been carefully considered and gone into for some time past.
During the hearing which took place before the Committee we had evidence from the ex-Town Clerk of the Corporation of Liverpool, from the present Town Clerk and from a distinguished member of the Corporation, and I think it was made quite clear to us from the evidence given by those three gentlemen that this question has been under consideration and was in no way an afterthought arising after they had decided to come to Parliament for permission to build this new street and tramway. It may be argued that this question might have been dealt with some time before, but owing to the War that could not be done and the difficulties which exist nowadays in dealing with the demolition of workmen's dwellings for the purposes of a town improvement scheme, and providing the dispossessed tenants with houses in which to live while the improvement scheme is proceeding, are too well known to your Lordships for me to recite them.
With regard to the protection of property owners, I suggest to your Lordships that the Corporation is empowered by law to make use of Part II of the Housing Act of 1925. I do not suppose for a moment any of the Committee deny—nor do I myself—that the existing law
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does operate most inequitably in so far as individual property owners are concerned. My noble friend has quoted a letter written by the Minister of Health which we had the advantage of seeing during the proceedings, and, as has been indicated by my noble friend, the writer not only expressed the view that the Act does operate unfairly but that he is going to do his best in the near future to put it right. The point of view the Committee took was that, the law being what it is, it was no part of the duty of the Committee sitting on this Bill either to refuse the Corporation the right which they had under the existing law, or to do anything in our decision which would prevent the law as it stands to-day from functioning.
I would like, too, to point out that in so far as the rights of individual property owners are concerned the matter does not rest there, for they still have a further court of inquiry before whom they can lay their case. If your Lordships this afternoon give the Liverpool Corporation their Bill, then the Corporation will have to present a memorial to the Ministry of Health and the Ministry of Health will then have to direct that a local inquiry be held. To that local inquiry they will send down an official representative from the Ministry, who will hear the case both for and against the Bill. But the matter does not even rest there, because, after having heard the case both for and against the Bill, this Ministry of Health representative has the right of inspecting personally the property concerned and if, in his opinion, the property has been scheduled as insanitary incorrectly he has the power and the right to alter that decision. I do not suppose anyone would argue that the official sent down from the Ministry of Health to conduct this most important inquiry would be any other than a responsible official fully acquainted with his job and primed with plenty of experience in matters of this kind. He would not be a mere stripling, as was suggested by one of the Counsel appearing for the Petitioners against the Bill. For these reasons I would submit that the rights of property owners, as the law stands to-day, are protected as far as it is possible to protect them.
Before I sit down there is one further point I would like to make. My noble friend will exonerate me of

535
any discourtesy to him when I say that I think he is seeking, by bringing this matter in this way before your Lordships' House when it has already been before a Committee of this House, to set up rather an awkward precedent which I do not think your Lordships would desire to perpetuate. In these circumstances I most respectfully urge your Lordships to refuse to pass the Amendment which stands in the name of my noble friend.
VISCOUNT GAGE: My Lords, on behalf of the Ministry of Health I have very little to add to what the noble Earl who has just spoken has said. The real issue raised by the noble Lord seemed to me to be whether there were sufficient grounds to reverse a decision already arrived at by a Committee of this House. As far as the Minister of Health is concerned, he does not think there is sufficient reason to reverse the decision of the Committee. The question of fairness to the owners under the existing law has been dealt with by the noble Earl, but the further question arises as to the admitted deficiencies which exist in the Housing Act, 1925. The noble Lord has really taken this opportunity of drawing attention, not to any inherent evils in the Liverpool Corporation Bill, but to those that exist in the Housing Act, 1925, and, as he has said, the Minister has admitted they do exist. But I submit it is not right to attempt any Amendment in a particular case. Clearly the same law should apply throughout the country. It would obviously not improve the position if any changes are made which only apply to certain districts; indeed it may be argued that if this practice were once started it might weaken the case of those who wish to amend the law.
It is extremely doubtful whether the clause as it stands in the Bill does more than make the existing law clear. Although it is a legal matter, I am advised that in all probability, if the clause were omitted from the Bill, the position of the Corporation and of the owners in the matter of compensation would be actually the same as it is with the clause inserted. That being so, I do not know whether the noble Lord wishes me to go into the question of the merits of the Housing Act, which is obviously a very large question and one that it is
536
scarcely probable your Lordships would consider as suitable to be gone into now. I can only conclude by reasserting what the noble Earl has already said, that the Committee have heard all the evidence for and against and have come to the conclusion that the clause is to the public advantage as it stands and, therefore, that it would be contrary to the practice of your Lordships, and not in the public interest, to take any action other than confirm the decision which the Committee have reached.
THE CHAIRMAN OF COMMITTEES (THE EARL OF DONOUGHMORE): My Lords, after the very thorough exposition of the case by my three noble friends I do not think it necessary for me to do more than add a few sentences, and I think a few sentences can sum up the position. It is clear now that for several years past the Liverpool Corporation have contemplated dealing with this area under the Housing Acts. They also propose to deal with this area under the scheme in this Bill, that is, for the new arterial road. All the clause says, I think, is that because they desire to deal with it under this Bill they should not at the same time lose their rights under the Housing Acts. That is to say they are not to be forced into the position of possibly having to buy property which is technically insanitary as if it was not insanitary. That seems to me to be only fair to the Corporation.
I should like to pay my tribute to my noble friends and colleagues who listened to this matter while it was argued on both sides for three days. I have, of course, read the proceedings, as I always do in these matters, and I really feel I have nothing more to do than to thank them for the patience they displayed and to say that I should be very sorry if the result of their labours were reversed.
LORD DYNEVOR: My Lords, I should like to be permitted to say that I regret that my Amendment was not received with more favour by the promoters of this Bill, because, had they accepted it, it would have saved a good deal of time and probably expense when the Bill goes to another place. The Bill, as your Lordships are aware, has not yet been before the Committee of the House of Commons. Now I suppose it will go to

537
a Committee of the House of Commons and the whole question can be raised afresh. I shall do nothing further in the matter at the moment and with your permission I will withdraw the Amendment.
Amendment, by leave, withdrawn.
Bill passed, and sent to the Commons.

TENBY ELECTRICITY ORDER, 1927.
  WICK AND DISTRICT ELECTRICITY ORDER, 1927.

    WITTON-LE-WEAR ELECTRICITY ORDER, 1927.
    VISCOUNT GAGE: My Lords, on behalf of my noble friend Viscount Peel, I beg to move the Motion which stands in his name on the Paper.
    Moved, That the Special Orders which were presented on the 3rd instant be approved.—(Viscount Gage.)
    On Question, Motion agreed to.

COMPANIES BILL. [H.L.]
Order of the Day for the House to be put into Committee read.
Moved, That the House do now resolve itself into Committee.—(The Lord Chancellor.)
On Question, Motion agreed to.
House in Committee accordingly:
[The EARL, OF DONOUGHMORE in the Chair.]
Clause 1:
Restriction on registration of companies by certain names.
(2) No company, other than an association which in pursuance of Section twenty of the principal Act is to be registered without the addition of the word "Limited" to its name, shall be registered by a name which contains the words "Chamber of Commerce."
In the case of a company which has been registered by such a name as aforesaid, the notice to be given by the Board of Trade under subsection (4) of the said Section twenty of their intention to revoke the licence granted under the said section shall state that, in the event of the licence being revoked, the company will be struck off the register unless its name is changed to a name which does not contain the words "Chamber of Commerce," and if the licence is revoked in pursuance of the said subsection the registrar shall, unless the name
538
of the company is so changed within six weeks of the date of the revocation of the licence, strike the company off the register, and the company shall thereupon be dissolved:
Provided that the liability of every director, manager, officer and member of the company shall continue and may be enforced as if the company had not been disdissolved.
LORD RIDDELL LORD RIDDELL, Who had given Notice to move, at the end of the first paragraph of subsection (2), to insert "or building society," said: The object of this Amendment is to prevent a company from masquerading as a building society. Parliament has laid down certain rules regarding building societies for the benefit of the small investor and it is undesirable that small investors should imagine that joint stock companies are building societies. There is no desire on the part of the building societies to interfere with joint stock companies in the conduct of building society business. Their only object is to ensure that a joint stock society shall not use the words "building society" in its title, that is to say, a company registered after the date when this Bill comes into operation.
It has been pointed out to me that the Amendment, as framed, is not quite appropriate as it implies that there is a certain class of company which may use these words. It has also been suggested to me that my Amendment should be framed in the following terms:—
"No company shall hereafter be registered under a name of which the words 'building society' form part."
I understand that the Lord Chancellor is prepared to accept an Amendment in these terms and, if I may be permitted to do so, I will substitute an Amendment in the terms which I have just indicated at the end of the clause.
Amendment moved—
Page 2, line 9, after the word ("dissolved") insert ("No company shall hereafter be registered under a name of which the words 'building society' form part").—(Lord Riddell.)
THE LORD CHANCELLOR (VISCOUNT CAVE): I am in sympathy with the object of my noble friend and I am prepared to accept his Amendment.
On Question, Amendment agreed to.
Clause 1, as amended, agreed to.
Clauses 2 and 3 agreed to.
Clause 4
Index of members of company.
4.—(1) Every company shall keep as part of the register of the members of the company an index of the names and addresses of the members and shall, within fourteen days after the date on which any alteration is made in the register, make any necessary alteration in the index.
(2) If a company fails to comply with this section it shall be liable to a fine not exceeding five pounds for every day during which the default continues, and every director, manager, secretary or other officer of the company who knowingly and wilfully authorises or permits the default shall be liable to the like penalty.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, in subsection (1), to omit "as part of the register of the members of the company an index of the names and addresses of the members" and to insert "an index of the names of the members of the company." The noble and learned Viscount said: As this is the first of the Amendments standing on the Paper in my name I should like to say a few words in explanation. My Amendments appear rather formidable on the Paper, but the fact is that we have received in full measure the assistance of experts on this subject. They have been good enough to send us a great number of suggestions and we have endeavoured to meet them so far as it is possible to do so consistently with the Report of the Committee which dealt with the matter. We have in every respect adhered as closely as possible to that Report.
The greater part of the Amendments standing in my name are either drafting Amendments, properly so-called, or technical Amendments which are intended to give a better and closer reflection of the recommendations contained in the Committee's Report. Perhaps I should save the time of the House if on every occasion I stated whether the Amendment is a drafting Amendment or a technical one, and if any noble Lord wishes further explanation of any Amendment I shall, of course, be glad to give it. May I say in reference to the series of Amendments put down to this clause that I think that they can all be taken together. The effect of the first Amendment is that the addresses of members will not be required to be placed in the index. That will save a good deal of trouble and time. The effect of the second Amendment is that a company may keep the index in the
540
form of a card index, which is a device becoming increasingly popular, and I think again that that will be convenient to the company. Then the third subsection is required in order to provide for the inspection of the index as a card index cannot well be described as part of the register.
Amendment moved—
Page 3, line 4, leave out from ("keep") to the second ("and") in line 6, and insert ("an index of the names of the members of the company").—(The Lord Chancellor.)
VISCOUNT HALDANE: What I wish to say a word about is not the technical Amendment before your Lordships but the general statement which has just been made. I think my noble and learned friend was quite right in speaking of this Bill, as in substance he did, as being a highly technical one. It is founded on a Report of the Committee presided over by one of the most eminent lawyers at the Chancery Bar and the work of that Committee was done with great thoroughness. I think it is a Bill which introduces a great many changes which may be found to be of a difficult order to conform to, but they are changes which in principle certainly ought to be made and they are recommended by the very best authorities that can be collected upon the subject. We now learn from the Lord Chancellor that, in addition to that, he has received a number of suggestions from persons of technical knowledge who sent them in and that these have been adopted so far as is consistent with the Report.
Speaking for myself I think that is not only the right course, but the only course that can be taken with a Bill of this kind. We should be here for weeks if we went through the Bill in the minute fashion which would be required to give it full justice, and we should put ourselves to great expenditure of time. I think we may safely leave ourselves in the hands of the Lord Chancellor, who has taken so particular an interest in this matter. I thoroughly approve of the suggestion he has made as to our general attitude towards these Amendments.
EARL RUSSELL: May I ask the noble and learned Viscount whether the word "index" is perfectly clear and unambiguous? I assume that it means an

541
alphabetical index, but it might mean many other things and, as a penalty is attached to this clause, I think it would be well to consider before the Report stage whether it ought to be made clearer. There is a class of company which has only ten or a dozen members, and it would seem rather superfluous to keep a separate alphabetical index of names that could be displayed on one page.
THE LORD CHANCELLOR: I will consider that point.
On Question, Amendment agreed to.
Amendments moved—
Page 3, line 8, after ("register") insert ("of the members")
Page 3, line 9, at end insert as new subsection:
("(2) The index (which may be in the form of a card index) shall in respect of each member contain a sufficient indication to enable the account of that member in the register to be readily found.
(3) Subsection (1) of Section thirty of the principal Act (which relates to the inspection of the register of members) shall have effect as if the index required to be kept by this section were a part of the register of members, and subsection (3) of the said Section thirty shall apply accordingly").—(The Lord Chancellor.)
On Question, Amendments agreed to.
Clause 4, as amended, agreed to.
Clause 5:
Amendment of Section 26 of principal Act.
5. Section twenty-six of the principal Act (which relates to the annual list of the members of a company and the summary to be contained in that list) shall be amended as follows:—
(a) in subsection (2) after the words "the list must state" there shall be inserted the words "the address of the registered office of the company," and the words "or stock" and the words "or amount of stock" shall be omitted therefrom:
Provided that the inclusion in the annual list of a statement as to the registered address of the company shall not be taken to be in satisfaction of the obligation of a company under Section sixty-two of the principal Act to give notice to the registrar of companies of the situation of its registered office and of any change therein;
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, before the proviso in paragraph (a), to insert:—
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"and the following shall be substituted for paragraph (l):—
(l) all such particulars with respect to the persons who at the date of the return are the directors of the company as are under Section seventy-five of the principal Act required to be contained with respect to directors in the register of the directors of a company."
The noble and learned Viscount said: This Amendment is important as part of the co-ordination of the provisions regarding the register of directors and the notification of particulars contained therein which are carried out by Clause 25. The Amendment makes it clear that the annual summary must state the particulars of directors contained in the register, as set out in Clause 25 (1). The remainder of my Amendments to this clause are drafting.
Amendment moved—
Page 3, line 25, at end insert the said words.—(The Lord Chancellor.)
On Question, Amendment agreed to.
Amendments moved—
Page 3, line 33, at end insert:
(" (b) in paragraph (m) of subsection (2) for the words 'debt due from' there shall be substituted the words 'the indebtedness of'")
Page 3, line 36, leave out ("there shall")
Page 3, line 37, leave out from ("company") to ("a") in line 39, and insert ("the list aforesaid to be forwarded to the registrar of companies shall include")
Page 4, line 6, leave out ("by the manager or secretary of the company") and insert ("in the prescribed manner")
Page 4, lines 9 and 10, leave out ("this Act") and insert ("the law as in force at the date of the audit").—(The Lord Chancellor.)
On Question, Amendments agreed to.
Clause 5, as amended, agreed to.
Clause 6 [Annual list of members and summary in case of company not having a share capital]:
THE LORD CHANCELLOR: All my Amendments to this clause are drafting or technical.
Amendments moved—
Page 4, lines 29 and 30, leave out ("since the date of the incorporation of the company") and insert ("during the year ending on the day immediately preceding the said fourteenth day")
Page 4, line 39, after ("the") insert ("persons who at the date of the return are the")
Page 4, line 42, leave out ("in the register of directors") and insert ("with respect to directors in the register of directors of a company")
Page 4, line 42, at end insert:
("Provided that the inclusion in the annual list of a statement as to the registered address of the company shall not be taken to be in satisfaction of the obligation of the company under Section sixty-two of the principal Act to give notice to the registrar of companies of the situation of its registered office and of any change therein.")
Page 4, lines 44 and 45, leave out ("debt due from") and insert ("indebtedness of").—(The Lord Chancellor.)
On Question, Amendments agreed to.
Clause 6, as amended, agreed to.
Clauses 7 to 9 agreed to.
Clause 10:
Amendment of Section 42 of principal Act.
10. The following section shall be substituted for Section forty-two of the principal Act:—
"(1) If a company having a share capital has—
(a) consolidated and divided its share capital into shares of larger amount than its existing shares; or
VISCOUNT BERTIE OF THAME VISCOUNT BERTIE OF THAME moved, in subsection (1) (a), after "larger," to insert "or smaller." The noble Viscount said: As it is more usual to split shares into smaller denominations than to consolidate them into larger amounts, I beg to move the Amendment which stands in my name.
Amendment moved—
Page 7, line 13, after ("larger") insert ("or smaller").—(Viscount Bertie of Thame.)
THE LORD CHANCELLOR: I am advised that this Amendment is not necessary. Clause 10 substitutes a fresh clause for Section 42 of the Act of 1908, and provides that if a company has consolidated, divided, converted, redeemed or cancelled its shares or reconverted its stock, notice must be given to the Registrar of Companies. The consolidation and so on are carried out under Section 41, which also provides that a company may sub-divide its shares into shares of a smaller amount than that fixed by the memorandum, but that the powers conferred by the section with respect to subdivision of shares must be
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exercised by special resolution, which must be forwarded to the Registrar under Section 70 of the principal Act. Accordingly I think that this matter is already provided for.
VISCOUNT BERTIE OF THAME: In that case I beg leave to withdraw my Amendment, but it only shows how bad legislation by reference is.
Amendment, by leave, withdrawn.
Clause 10 agreed to.
Clause 11 [Amendment of s. 44 of principal Act]:
THE LORD CHANCELLOR: My Amendments to this clans are drafting.
Amendments moved—
Page 8, line 8, leave out ("are") and insert ("have been or are to be").
Page 8, line 10, after ("a") insert ("printed or typewritten").—(The Lord Chancellor.)
On Question, Amendments agreed to.
Clause 11, as amended, agreed to.
Clause 12 [Prohibition of provision of financial assistance by company for purchase of its own shares]:
VISCOUNT BERTIE OF THAME VISCOUNT BERTIE OF THAME moved to add to the clause:—
"If a company fails to comply with the provisions of this clause it shall be liable to a fine not exceeding one hundred pounds, and every director, manager, secretary or other officer of the company who knowingly and wilfully authorises or permits the default shall be liable to the like penalty."
The noble Viscount said: It seems to me that it is not much use to direct people to do certain things unless there is a penalty attached in case they fail to do them. I beg to move.
Amendment moved—
Page 8, line 36, at end insert the said words.—(Viscount Bertie of Thame.)
THE LORD CHANCELLOR: The form of this Amendment requires a little consideration. I do not know whether it is possible to amend it now, but I am told that the words "fails to comply with" should read "acts in contravention of" and "clause" should read "section." Subject to those alterations I am prepared to accept the Amendment.
VISCOUNT BERTIE OF THAME: I am obliged to the noble and learned Viscount, and will move the Amendment in the form that he suggests.
Amendment, by leave, withdrawn.
Amendment moved—
Page 8, line 36, at end insert ("If a company acts in contravention of the provisions of this section it shall be liable to a fine not exceeding one hundred pounds, and every director, manager, secretary or other officer of the company who knowingly and wilfully authorises and permits the default shall be liable to the like penalty."—(Viscount Bertie of Thame.)
On Question, Amendment agreed to.
Clause 12, as amended, agreed to.
Clause 13:
Rights of holders of special classes of shares.
13.—(1) If in the case of any company, the share capital of which is divided into different classes of shares, provision is made by the memorandum or articles for anthorising the variation of the rights attached to any class of shares in the company, subject to the consent of any specified proportion of the holders of the issued shares of that class or the sanction of a resolution passed at a separate meeting of the holders of those shares, and in pursuance of the said provision the rights attached to any such class of shares are at any time varied, the holders of not less in the aggregate than fifteen per cent. of the issued shares of that class, being persons who did not consent to, or vote in favour of the resolution for, the variation, may apply to the court to have the variation cancelled, and where any such application is made the variation shall not have effect unless and until it is confirmed by the court.
(2) An application under this section must be made within seven days after the date on which the consent was given or the resolution was passed, as the case may be, and may be made on behalf of the shareholders entitled to make the application by such one or more of their number as they may appoint in writing for the purpose.
(3) On any such application any shareholder of the class in question shall be entitled to be heard, and the court shall, as it thinks fit, either disallow or confirm the variation.
(4) The decision of the court on any such application shall be final.
(5) The company shall within fifteen days after the making of an order by the court on any such application forward a copy of the order to the registrar of companies, and if the company fails to comply with this provision it shall be liable to a fine not exceeding five pounds for every day during which the default continues, and every director, manager, secretary or other officer of the company who knowingly and authorises or permits the default shell be liable to the like penalty.
(6) The expression "variation" in this section includes abrogation and the expression "varied" shall be construed accordingly.
EARL RUSSELL: I should like to ask the noble and learned Viscount for a little information about this clause. As I understand the clause what it provides is that in the case of a company where the shareholders are already members under articles of association or a memorandum which gives the company the right to change the respective rights of various classes of shares by passing resolutions by a particular majority, and where such resolutions are passed in accordance with the articles, then, under certain conditions, shareholders of that class may apply to the Court to have the resolution cancelled that confers the powers as between different classes of shares. I should like to ask the noble and learned Viscount two questions: (1), What is the equitable justification of this? (2), On what conceivable principles could the Court decide whether the resolution as passed by the shareholders shall stand or not? It seems to me that unless some perfectly obvious injustice is involved it would be extraordinary difficult for the Court to know on what principle to intervene. Perhaps the noble and learned Viscount would explain this point, which seems to me a little ambiguous. Firstly, why should it be done? And, secondly, on what ground could the Court come to a conclusion, whether it is right or wrong that this should be done?
THE LORD CHANCELLOR: The effect of the clause is as stated by the noble Earl. It is that where the articles provide for modification and then the shareholders agree to such modification by a proper majority, then those who did not agree may apply to the Court. The object of that is that they may go and get the matter reviewed by the Court. The reason for the proposal is this. It is found that this modification clause is becoming more and more familiar, and it sometimes causes hardship, especially to the class of preference shareholders. It sometimes happens that among the preference shareholders are some who hold a large block of ordinary shares and who stand to gain more by the modification as ordinary shareholders than they stand to lose as preference shareholders. That is rather hard on those who hold preference shares only, and therefore it is thought desirable that this power should be open to review by the Court,

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in order to see whether it fairly gives effect to the claims of different classes of shareholders. Such a power is sometimes exercised by the Court under certain sections of the Act in such matters as amalgamations and therefore they have experience of such matters.
EARL RUSSELL: Might it not be worth while on the Report stage to put in some words giving some indication to the Court of what they should have regard to? The matter is left so entirely at large here that I think the Judge might find himself in a difficulty.
LORD DANESFORT: I should like to support the suggestion of the noble Earl. We are engaged in a rather precarious business, because we are varying a contract entered into by the shareholders, and the Court is given power, on the application of a certain number of shareholders, to modify that contract which has been entered into. I certainly agree with the noble Earl that it would be well to give to the Court some indication of the principle on which it should act in sanctioning such variation.
THE LORD CHANCELLOR: I will look into the matter and if the noble Earl will combine with the noble Lord, Lord Danesfort, and make a proposal, I shall be very much indebted to him.
EARL RUSSELL: The noble and learned Viscount puts a very difficult task upon me.
Clause 13 agreed to.
Clause 14:
Power to issue redeemable preference shares.
14.—(1) Subject to the provisions of this section, a company limited by shares may, if so authorised by its articles, issue preference shares which are, or at the option of the company are to be liable, to be redeemed:
Provided that—

(a) no such shares shall be redeemed except out of profits of the company which would otherwise be available for dividend or out of the proceeds of a fresh issue of shares made for the purposes of the redemption;

(b) no such shares shall be redeemed unless they are fully paid;

(c) where any such shares are redeemed out of profits which would otherwise be available for dividend, there shall be transferred out of those profits to a permanent reserve fund,
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to be called "the capital redemption reserve fund," a sum equal to the amount applied in redeeming the shares, and the provisions of the principal Act relating to the reduction of the share capital of a company shall apply as if the capital redemption reserve fund were paid up share capital of the company.

(2) There shall be included in every balance sheet of a company which has issued redeemable preference shares a statement specifying what part of the issued capital of the company consists of such shares and the date on or before which those shares are, or are to be liable, to be redeemed.
If a company fails to comply with the provisions of this subsection it shall be liable to a fine not exceeding one hundred pounds, and every director, manager, secretary or other officer of the company who knowingly and wilfully authorises or permits the default shall be liable to the like penalty.
(3) Subject to the provisions of this section, the redemption of preference shares thereunder may be effected on such terms and in such manner as may be provided by the articles of the company.
(4) Where in pursuance of this section a company has redeemed any preference shares, it shall have power to issue shares of the like class up to the nominal amount of the redeemed shares as if the redeemed shares had never been issued, and accordingly the share capital of the company shall not for the purposes of any enactments relating to stamp duty be deemed to be increased by the issue of shares in pursuance of this subsection.
THE LORD CHANCELLOR: My first Amendment is drafting.
Amendment moved—
Page 10, line 5, leave out ("out of profits which would otherwise be available for dividend there shall be transferred out of those profits") and insert ("otherwise than out of the proceeds of a fresh issue there shall out of profits which would otherwise have been available for dividend be transferred").—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE EARL OF HALSBURY THE EARL OF HALSBURY moved, in subsection (1) (c), after the last "shall," to insert "'except as hereinafter provided." The noble Earl said: This Amendment must stand or fall by the next Amendment standing in my name, because it is necessary to insert this Amendment in order that the subsequent Amendment shall not be meaningless. Your Lordships will see that Clause 15 deals with redeemable preference shares, and it allows these shares to be issued under certain conditions. If

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your Lordships will also look at page 10, subsection (1), paragraph (c), you will find that it provides:
"where any such shares are redeemed out of profits which would otherwise be available for dividend, there shall be transferred out of those profits to a permanent reserve fund, to be called 'the capital redemption reserve fund,' a sum equal to the amount applied in redeeming the shares, and the provisions of the principal Act relating to the reduction of the share capital of a company shall apply as if the capital redemption reserve fund were paid up share capital of the company."
There is no objection, so far as I am concerned, to that, except that it apparently puts the reserve fund there created in a position that it can never be touched again.
What is going to be the position if the company, for perfectly good and proper reasons, desires to re-issue redeemable preference shares? Surely they ought to be allowed pro tanto the amount they issue, to have the available capital they have put into that reserve fund, and if that is so then this particular Amendment is necessary. I may say one word before formally moving this Amendment, it is this. On, the Second Reading Lord Hunsdon made a remark which affected me very much indeed. He said that one of the bodies who understood the working of the Companies Acts were the City solicitors, and he pointed out that a Committee was sitting of the Incorporated Law Society, and he suggested that the Committee stage should not be taken until they had considered the Bill. That remark put me upon inquiry, and I have found that there is another body even more affected by the Bill, and that is the very large body of chartered accountants. I found that they also had a committee, and it was only after carefully considering the views that they have put before me from their practical point of view that I ventured to put down the Amendments standing in my name. The suggestion of my Amendment is that when a company desires to re-issue redeemable preference shares they should be able to have available for the general purposes of the company what at thy present time would not be open to them because it is made a permanent reserve which can never be touched. I therefore beg to move the first of my Amendments.
Amendment moyed—
Page 10, line 13, after ("shall") insert ("except as hereinafter provided").—(The Earl of Halsbury.)
THE LORD CHANCELLOR: I would have liked to know what is the general view of the House as to this Amendment, for it departs from the general recommendation of the Committee, which, as my noble friend opposite said just now, was composed of very experienced men, including some of the City solicitors. That Committee recommended that the course adopted in the Bill should be taken. If these Amendments are adopted the effect would be to depart from the Report of the Committee by making the capital redemption reserve fund no longer a permanent reserve fund, and under the Amendments it will be possible to use the fund for the general purposes of the company as soon as the redeemed shares have been re-issued. It will also be possible to apply the reserve fund in the issue of fully-paid bonus shares. I feel grave doubt whether I ought to agree to a modification of these carefully thought out proposals of this Committee, and I hope that the noble Earl will not press his Amendments to-day. I know he feels strongly about them, but if he will withdraw them to-day I will have them further considered before the Report Stage.
Amendment, by leave, withdrawn.
THE LORD CHANCELLOR: I have some Amendments to subsection (4) of Clause 14. These Amendments are also upon the clause authorising the redemption and reissue of shares. The object is to enable the company to raise new capital to finance the redemption without losing the protection with regard to Stamp Duties. They are based on the precedent of the Public Utility Companies (Capital Issues) Act, 1920. Any possible evasion of the Stamp Duties is provided against by the words in the new proviso which we propose to add to the subsection.
Amendments moved—
Page 10, line 33, after ("redeemed") insert ("or is about to redeem")
Page 10, line 35, leave out ("redeemed shares as if the redeemed") and insert ("shares redeemed or to be redeemed as if those")
Page 10, line 39, at end, insert:
("Provided that where new shares are issued before the redemption of the old shares, the new shares shall not, so far as

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relates to stamp duty, be deemed to have been issued in pursuance of this subsection unless the old shares are redeemed within one month after the issue of the new shares.")—(The Lord Chancellor.)
On Question, Amendments agreed to.
Clause 14, as amended, agreed to.
Clause 15 [Reduction of capital]:
THE LORD CHANCELLOR: There are two technical Amendments to this clause.
Amendments moved—
Page 11, line 19, after ("not") insert ("as regards any class or any classes of creditors")
Page 11, line 20, after ("relates") insert ("and where the court so directs, the consent of the creditors of that class or those classes to the reduction shall not be required").—(The Lord Chancellor.)
On Question, Amendments agreed to.
Clause 15, as amended, agreed to.
Clause 16 [Amendment of s. 62 of principal Act]:
THE LORD CHANCELLOR: These are also drafting amendments.
Amendments moved—
Page 11, line 31, leave out ("registration") and insert ("incorporation")
Page 11, line 34, leave out ("registration") and insert ("incorporation").—(The Lord Chancellor.)
On Question, Amendments agreed to.
Clause 16, as amended, agreed to.
Clause 17 agreed to.
Clause 18:
Amendment of s. 66 of principal Act.
(d) At the end of subsection (5) there shall be inserted the following new subsections:—
"(6) Any reasonable expenses incurred by the requisitionists by reason of the failure of the directors to convene a meeting shall be repaid to the requisitionists by the company.
THE LORD CHANCELLOR: This is another drafting Amendment.
Amendment moved—
Page 12, line 38, leave out ("power") and insert ("rights").—(The Lord Chancellor.)
On Question, Amendment agreed to.
VISCOUNT BERTIE OF THAME VISCOUNT BERTIE OF THAME moved, in the substituted subsection (6), in paragraph (d), to leave out "company" and to insert "directors responsible." The
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noble Viscount said: It is obvious that the company is not at fault, and there-fore I think the directors themselves ought to be made responsible for any reasonable expenses the shareholders are put to.
Amendment moved—
Page 13, line 13, leave out ("company") and insert ("directors responsible").—(Viscount Bertie of Thame.)
THE LORD CHANCELLOR: I am afraid I cannot accept this Amendment. What the noble Viscount proposes is that any reasonable expenses incurred by the requisitionists who desire a meeting to be called and which is not called by the directors shall be repaid by the directors personally. I think that is going too far. We have followed the recommendation of the Committee that the expenses should be paid by the company. The meeting is probably in the interests of the company. It may be that for the purposes of the company it is better not to call a meeting and to get the requisition with drawn. The proposal of the Committee is that the expenses be paid out of the funds of the company, and I think that to provide otherwise would really be too hard on the directors.
VISCOUNT BERTIE OF THAME: I am still of the same opinion, but I will withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 18, as amended, agreed to.
Clause 19:
Amendment of s. 67 of principal Act.
19. The following section shall be substituted for Section sixty-seven of the principal Act (which makes provision with respect to meetings and votes):—
"(1) The following provisions shall have effect in so far as the articles of the company do not make other provision in that behalf:—
(c) two members may call a meeting;
(f) in, the case of a company having a share capital, every member shall have one vote in respect of each share or each ten pounds of stock held by him, and in any other case every member shall have one vote.
THE EARL OF HALSBURY THE EARL OF HALSBURY moved, in subsection (1) (c), after "members" to insert "holding not less than one-tenth of the share capital." The noble Earl

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said: This is the section which deals with calling a meeting, and, as it at present stands, two members may call a meeting. Does it not seem a little strong that two members, perhaps only holding £2 worth of the capital between them, should call a meeting? Surely it would be better to provide that at least they should have some substantial interest in the company.
Amendment moved—
Page 13, after line 39, after ("members") insert the said words.—(The Earl of Halsbury.)
THE LORD CHANCELLOR: I accept the Amendment.
On Question, Amendment agreed to.
THE LORD CHANCELLOR: The next is a drafting Amendment.
Amendment moved—
Page 14, line 1, after ("company") insert ("originally").—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 19, as amended, agreed to.
Clause 20 [Amendment of s. 68 of principal Act]:
Amendments moved—
Page 14, line 28, leave out the first ("company") and insert ("corporation")
Page 14, line 42, leave out ("company") and insert ("corporation")
Page 15, line 8, leave out ("company") and insert ("corporation").—(The Lord Chancellor.)
On Question, Amendments agreed to.
Clause 20, as amended, agreed to.
Clause 21:
Amendment of s. 69 of principal Act.
21. Section sixty-nine of the principal Act (which defines extraordinary resolutions and special resolutions) shall be amended as follows:—
(1) In subsection (1) for the words "entitled to vote as are present" there shall be substituted the words "as, being entitled so to do, vote."
(2)The following shall be substituted for subsection (2):—
"(2) A resolution shall be a special resolution when it has been passed by such a majority as is required for the passing of an extraordinary resolution and at a general meeting of which not lees than fourteen days' notice, specifying the intention to propose the resolution as a special resolution, has been duly given:
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Provided that, if all the members entitled to vote at any such meeting so agree, a resolution may be proposed and passed as a special resolution at a meeting of which less than fourteen days' notice has been given"
(3) In subsection (3) the words "or confirmed" shall cease to have effect.
(4) The following shall be substituted for subsection (4):—
"(4) At any meeting at which an extraordinary resolution or a special resolution is submitted to be passed a poll shall be taken to be effectively demanded, if demanded by three members for the time being entitled according to the articles to vote, or by such other number of members so entitled as under the articles have the right to demand a poll, so however that it shall not be necessary in any case for more than five members to make the demand."
THE LORD CHANCELLOR: This is also a drafting Amendment in the proviso in subsection (2).
Amendment moved—
Page 15, line 28, after ("to") insert ("attend and").—(The Lord Chancellor.)
THE EARL OF HALSBURY: It is not clear what the effect of this is going to be. It looks as if no proxies at all would be accepted, and as, if you had to have a unanimous vote of all the shareholders in the company. The proviso says that "if all the members entitled to vote at any such meeting so agree" a resolution may be proposed, but the Amendment also refers to members entitled "to attend." Therefore it looks as if there has to be a unanimous vote, and no proxies are to be allowed.
THE LORD CHANCELLOR: I think the intention is this, that unless there is to be a special resolution, properly passed at a meeting, all the shareholders must agree, not only those who may turn up at the meeting but those who are entitled to attend and vote, so that you do get a unanimous resolution of all the shareholders if you are going to dispense with the proper formality of passing an extraordinary resolution.
LORD DANESFORT: Would not that make it practically nugatory?
THE LORD CHANCELLOR: No, there are many small companies with quite a few shareholders whom it is not worth while to call together, and they would be quite ready to agree to the matter.
THE EARL OF HALSBURY: May I ask whether proxies are included or not? If they are not included surely it would be nugatory. You might have one member who was abroad, and who could not get there, and unless he was entitled to vote by proxy you would not have unanimity.
THE LORD CHANCELLOR: I think he would be entitled to vote by proxy if the articles so authorised.
LORD BANBURY OF SOUTHAM: Will proxies be permitted?
THE LORD CHANCELLOR: That always depends upon the articles of the company. In most companies they are permitted.
On Question, Amendment agreed to.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, in the substituted subsection (4), after "vote," to insert "or by one member or two members so entitled if he holds or they together hold not less than fifteen per cent. of the issued share capital of the company." The noble and learned Viscount said: It has been pointed out that the clause as it stands might act unfairly on a single member holding a substantial proportion of the shares of the company. Such a member might conceivably hold more shares than all the other shareholders present at the meeting, but would be unable to demand a poll unless two other members should support the demand. It is, therefore, provided that the demand proposed should be effective if it is demanded by one member or two members holding not less than fifteen per cent. of the issued share capital of the company.
Amendment moved—
Page 15, line 41, after ("vote") insert the said words.—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 21, as amended, agreed to.
Clause 22 [Amendment of s. 70 of principal Act]:
THE LORD CHANCELLOR: These Amendments are all drafting.
Amendments moved—
Page 16, line 10, after ("A") insert ("printed or typewritten")
Page 16, lines 12 and 13, leave out ("printed or typewritten and")
Page 16, line 14, at end insert:
("(b) in subsection (3) for the words 'a copy' there shall be substituted the words 'a printed or typewritten copy' and the words 'in print' shall be omitted")
Page 16, line 15, after ("(4)") insert ("the words 'printing or' and")
Page 16, line 16, at end insert:
("(d) in subsection (5) the words 'in print' shall be omitted").—(The Lord Chancellor.)
On Question, Amendments agreed to.
Clause 22, as amended, agreed to.
Clause 23 agreed to.
Clause 24 [Resolutions passed at adjourned meetings]:
THE LORD CHANCELLOR: These are also drafting Amendments.
Amendments moved—
Page 18, line 1, leave out ("A resolution") and insert ("Where after the commencement of this Act a resolution is")
Page 18, line 7, at beginning, insert ("the resolution").—(The Lord Chancellor.)
On Question, Amendments agreed to.
Clause 24, as amended, agreed to.
Clause 25:
Amendment of s. 75 of principal Act.
25. The following shall be substituted for Section seventy-five of the principal Act (which provides for the keeping of a register of the directors of a company):—
"(1) Every company shall keep at its registered office a register of its directors or managers containing with respect to each of them the following particulars, that is to say—

(a) in the case of an individual, his present christian name and surname, any former christian name or surname, his usual residential address, his nationality, and, if that nationality is not the nationality of origin, his nationality of origin, and his business occupation, if any, or, if he has no business occupation but holds any other directorship or directorships, particulars of that directorship or of some one of those directorships; and

(b) in the case of a corporation, its corporate name and registered or principal office.

(2) The company shall, within the periods respectively mentioned in this subsection, send to the registrar of companies a return in the prescribed form containing the particulars specified in the said register and a notification in the prescribed form of any change among its directors or in any of the particulars contained in the register.
For the purposes of this section the period within which the said return is to be sent

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shall be a period of fourteen days from the appointment of the first directors of the company, and the period within which the said notification of a change is to be sent shall be fourteen days from the happening thereof.
(5) In this section the expression 'director' includes any person in accordance with whose directions or instructions the directors of the company are accustomed to act."
EARL RUSSELL EARL RUSSELL moved, in subsection (1) (a) to leave out all words after "any," where that word secondly occurs, to the end of the paragraph. The noble Earl said: These are the particulars which are required to be given in the register about directors, and, after dealing with his name and his nationality they con-chide in this way: "and his business occupation, if any, or, if he has no business occupation but holds any other directorship or directorships, particulars of that directorship or of some one of those directorships." What is the use of those last words, beginning "or if he has no business occupation"? I could understand it if the desire were to show that he had directorships in another twenty or thirty companies, and therefore he could not give much attention to this one, if there were any reason of that sort; but, as I read this paragraph, although he has twenty or thirty other directorships, the requirements of the clause would still be fulfilled if only one directorship were put down. That is how the clause reads. If that is all that it means is it worth having at all? I would move to leave out all the words after "if any" in line 23, subject to anything the noble and learned Viscount has to say. It seems to me that merely to put down that a man has some one directorship does not tell the shareholders anything worth knowing.
Amendment moved—
Page 18, line 23, after ("any") leave out ("or, if he has no business occupation but holds any other directorship or directorships, particulars of that directorship or of some one of those directorships").—(Earl Russell.)
THE LORD CHANCELLOR: I should like to consider this. If a man has no occupation but his real business is to be a director of companies, I rather think that people ought to know that is so in some form or other, and I rather sympathise with what the noble Earl says. It is no use to mention only one of his
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directorships and it may be that all of them ought to be mentioned. If the noble Earl will withdraw his Amendment to-day I will have the matter looked into.
EARL RUSSELL: I will certainly with draw. Merely to mention one of the directorships is camouflage.
LORD RIDDELL: May I ask the Lord Chancellor whether directorship is not a business occupation?
THE LORD CHANCELLOR: It may become so. Taken by itself I think not.
Amendment, by leave, withdrawn.
Amendment moved—
Page 19, lines 3 and 4, leave out ("in general meeting may") and insert ("may by its articles or in general meeting").—(The Lord Chancellor)
On Question, Amendment agreed to.
THE EARL OF HALSBURY THE EARL OF HALSBURY moved to, add to the clause:—
"Provided that nothing in this section shall be deemed to apply to a receiver or to a receiver and manager or to any person who gives advice professionally to the directors of the company."
The noble Earl said: This Amendment has regard to subsection (5) of Clause 25. It is very obvious what subsection (5) is aimed at. It is aimed at the person who really is the power behind the throne, having put a dummy director into a company, and one who is trading and taking no responsibility. It is an obvious evil and it is an evil that was dealt with in the Report. It is a simple evil to conceal, but it is by no means a simple evil to frame words against. For that reason I do not in the least complain of the very wide net that subsection (5) has spread. But I think there are certain matters which undoubtedly neither the Report nor those who framed the Bill meant to bring in and by the Amendment which stands in my name I have attempted to except, and I have asked your Lordships to except, a receiver and manager. Clearly those are not the people aimed at, they are not the power behind the throne in a fraudulent company.
Surely any person who gives advice professionally to the directors of the company is not aimed at. It may be said that in that case the directors might get might, out of it because of subsection (4) which

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says: "who knowingly and wilfully authorises or permits." What about the case of a company which is running a complicated chemical patent or something of that kind? What about the case of the auditors who give technical advice? When you look at the wording of subsection (5) you find that anybody is to be considered a director if he is a person in accordance with whose directions or instructions the directors of a company are accustomed to act. That is very wide. The technical person who is telling them what they have to do with regard to working their patent, or the auditor who gives them advice with regard to their financial position, under this subsection is to be considered, or may be held by the Courts to be considered, a director. Nobody doubts that anybody in that capacity, if guilty of negligence or if guilty of fraudulent misrepresentation, would undoubtedly be liable at Common Law, but this goes much further. This says they are to be deemed to be directors. I ask your Lordships to say that in the three classes I have enumerated, a receiver, a receiver and a manager, and a person who merely gives professional advice to the directors, shall not, because the directors constantly act on that advice, be deemed themselves to be directors. I beg to move.
Amendment moved—
Page 19, line 25, at end insert the said proviso.—(The Earl of Halsbury)
THE LORD CHANCELLOR: There are, I think, two observations to be made on this Amendment. From one point of view it is unnecessary, because in my view the expression "any person in accordance with whose directions or instructions the directors are accustomed to act" does not include a person who merely gives them advice. Directors do not act by the directions or on the instructions of their solicitor or their auditor. Those persons advise them, but do not direct or instruct them. The same applies to a receiver or manager. On the other hand, the Amendment goes too far, because it would exempt from liability a man who was a director but was also a manager or a receiver. Surely if a man is a director he ought to be liable even though he holds some office in which he advises the directors of the company. I think, therefore, the Amendment is un-
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desirable and I hope the noble Earl will not press it.
THE EARL OF HALSBURY: With the greatest respect to the learned Lord Chancellor, subsection (4) is dealing with the offence and with the people who are to be dealt with. The director, manager, secretary or other officer of the company is immediately mentioned and is immediately to be hit. I have no objection to that. Subsection (5), with which I am dealing, hits a person who is not a director but is to be deemed a director, for something that he has done. When you are dealing with a receiver or a receiver and manager he, by his position as a receiver or receiver and manager, has to give directions and constantly is giving directions to the directors and they have to act upon them, but that is not the class of person against whom this section is framed. This section is framed against a person who is really the power behind the throne. I think I am right in saying that is the spirit of the Report and that it was never intended to deal with a person who was appointed receiver or receiver and manager, nor is it intended to deal with a person who merely gives technical advice. Indeed, later on in the Report and in this Bill the position of a director who is appointed for a particular object, such as dealing with technical matters, is dealt with. He is fully exempted from many of the penalties that are attached to people who are responsible for the general direction of the company. I regret that I am unable to withdraw this Amendment.
LORD DANESFORT: May I ask the Lord Chancellor whether my noble friend is right in suggesting that the definition of director in subsection (5) could possibly in any way include a receiver and manager? Take the case of a receiver and manager appointed by the Court. That receiver and manager or receiver, as the case may be, does not act under the directions of the directors nor do the directors act under his direction. He acts under the orders of the Court. I do not know whether such a person as that would come within the description of directors in subsection (5). If he does not then part of this Amendment at any rate would be unnecessary. As regards the rest of it, as to a man

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coming in as a technical adviser and advising the directors, I am not at all sure that it does not require what is suggested by my noble friend.
LORD PARMOOR: I hope the views expressed by the Lord Chancellor will be accepted on both grounds. I do not think these persons who are now to be exempted come within subsection (5) as it stands and, on the other hand, I think it would be inadvisable if a man was a director and also occupied one of these technical posts that he should be exempted. I understand those are the two points Which the Lord Chancellor makes and they seem to me to be conclusive.
LORD BANBURY OF SOUTHAM: This seems to me to be an extremely complicated Bill and therefore any Amendment which makes it clearer should, I venture to say, be accepted. The Amendment of the noble Earl makes it quite clear that any person who acts as receiver or manager or gives advice professionally shall not be included as a director. The Lord Chancellor says that is not necessary because it is already the meaning and interpretation of the Bill, but speaking only as an ordinary layman, I am not at all sure if I were asked to give my opinion on that, that I should think that really was so. Consequently there might be a certain number of people who would take advantage of this to go to law, spend money in bringing an action and then find they had no grounds for their case. I am not quite certain about a receiver because I do not believe a receiver gives directions to directors. I believe a receiver manages the whole thing, but, subject to that, I do think it would be an advantage if some words were put in to make the section quite clear.
A NOBLE LORD: Would the noble and learned Viscount tell us who is referred to in subsection (5)?
THE LORD CHANCELLOR: The person who is sometimes called the power behind the throne. There are many private companies, sometimes called one-man companies, where the directors are really the agents of somebody who stands behind them, whose instructions they have to obey and by whom they may be removed. We want to hit that man, who
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is the real person giving instructions. I adhere to my view that these words are unnecessary and would create confusion, but I will promise the noble Earl to look into the matter again and see if we can make an adjustment which will satisfy him without injuring the Bill.
THE EARL OF HALSBURY: I quite accept that and I withdraw my Amendment.
Amendment, by leave, withdrawn.
Clause 25, as amended, agreed to.
Clause 26:
Provisions with, respect to offers of shares or debentures for sale.
26.—(1) Where a company allots or agrees to allot any shares in or debentures of the company with a view to all or any of those shares or debentures being offered for sale to the public, the document by which the offer for sale to the public is made shall for all purposes be deemed to be a prospectus issued by the company, and all enactments and rules of law as to the contents of prospectuses and to liability in respect of statements in and omissions from prospectuses, or otherwise relating to prospectuses, shall, subject to any necessary modifications, apply and have effect accordingly, as if the shares or debentures had been offered to the public for subscription and as if persons accepting the offer in respect of any shares or debentures were subscribers for those shares or debentures, but without prejudice to the liability, if ally, of the persons by whom the offer is made, in respect of mis-statements contained in the document or otherwise in respect thereof.
(4) Where an offer to which this section relates is made by a company the document aforesaid shall be signed by two directors of the company.
VISCOUNT BERTIE OF THAME VISCOUNT BERTIE OF THAME moved, in subsection (1), after the first "debentures," to insert "bonds or similar obligations." The noble Lord said: The object of this Amendment is to bring the wording more in conformity with another clause in which the wording is "the total amount of bonds, debenture stock or similar obligations." If it is right in one place surely it is right in the other.
Amendment moved—
Page 19, line 27, after ("debentures") insert ("bonds or similar obligations").—(Viscount Bertie of Thame.)
THE LORD CHANCELLOR: I think the word "debentures" includes these other forms of obligation. The word

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has a very wide meaning. It means a document which either creates or acknowledges a debt. However, if the noble Viscount wishes the words to be inserted I have no great objection to offer.
On Question, Amendment agreed to.
LORD DANESFORT: May I suggest that as these words have been inserted in line 27 they ought also to be inserted at the end of line 28 where "debentures" occurs again?
VISCOUNT BERTIE OF THAME: That is so. I did send in an Amendment but apparently it got lost.
Amendment moved—
Page 19, line 28, after ("debentures") insert ("bonds or similar obligations").(Viscount Bertie of Thame.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR: The next Amendment on the Paper is a drafting Amendment.
Amendment moved—
Page 19, line 29, leave out the second ("the") and insert ("any").—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR: The next Amendment is technical.
Amendment moved—
Page 20, line 27, leave out subsection (4) and insert:
("(4) Where a person making an offer to which this section relates is a company or a firm, it shall be sufficient if the document aforesaid is signed on behalf of the company or firm by two directors of the company or not less than half of the partners, as the case may be."—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 26, as amended, agreed to.
Clause 27:
Prohibition of issue of application forms for shares or debentures unless accompanied by a proper prospectus.
27.—(1) It shall not be lawful for a company or for any person on behalf of a company or intended company, and whether before or after the formation of the company, to issue to any member of the public or to publish a form of application for, or an invitation to subscribe for or purchase, any of the shares in or debentures of the company unless the form or invitation is accompanied by a prospectus which complies with the requirements of Section eighty-one of the principal Act.
(2) The foregoing subsection shall apply to a form of application for, or an invitation to purchase, any shares or debentures which are offered for sale in such circumstances as are mentioned in the last preceding section of this Act, with the substitution for a prospectus of such a document as is required by that section in connection with such an offer.
(3) If any such form or invitation as aforesaid is issued or published ill contravention of the provisions of this section, every person who is knowingly a party to the issue or publication (including, in any case where the form or invitation relates to any shares in or debentures of a company which has been already formed, the company, and, in the case of such an offer of shares or debentures for sale as is mentioned in the last preceding section, the persons signing, in whatever capacity, the document required by that section) shall be liable to a fine not exceeding five hundred pounds.
THE EARL OF HALSBURY THE EARL OF HALSBURY moved, in subsection (1), to leave out "any member of." The noble Earl said: The clause as drafted would seem to prevent an invitation being sent by the company to its own shareholders or debenture holders. I do not think that that was the intention.
Amendment moved—
Page 20, line 33, leave out ("any member of").—(The Earl of Halsbury.)
THE LORD CHANCELLOR: I think if the noble Earl looks at the next Amendment on the Paper he will see that that alters the form of the clause. If my noble friend wants to move the Amendment he will have to move it to the new clause, but if he likes to leave it over I will consider the matter before Report.
THE EARL OF HALSBURY: I will ask leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved to leave out Clause 27 and insert the following clause:
Prohibition of issue of abridged prospectuses with application forms annexed.
(".—(1) It shall not be lawful, whether before or after the formation of any company, to issue to the public or to any member of the public or to publish in relation to any of the shares in or debentures of the company an abridged prospectus which contains or has annexed to it a form of application for, or an invitation to subscribe for any of those shares or debentures or otherwise to invite subscriptions for any of those shares or debentures by reference to or in connection with an abridged prospectus.
(2) If an abridged prospectus is issued or published or subscriptions for shares or debentures are invited in contravention of the provisions of this section, every person who is knowingly responsible for the issue, publication or invitation (including, in any case where the prospectus relates to shares in or debentures of a company which has been already formed, the company) shall be liable to a fine not exceeding five hundred pounds.
(3) For the purposes of this section the expression 'abridged prospectus' means a prospectus containing only an abridgment or summary of all or some of the matters required by section eighty-one of the principal Act to be stated in a prospectus.")
The noble and learned Viscount said: The clause as it stands in the Bill has been criticised by the Law Society and we are anxious to meet their criticism. I think they are right in this, that perhaps the clause as drafted goes a little beyond the Report of the Committee. The new clause goes back to the Report of the Committee and adopts the phrase suggested by the Law Society "or otherwise to invite subscriptions for any of those shares or debentures by reference to or in connection with an abridged prospectus." I think those words will get rid of any possibility of evasion.
Amendment moved—
Page 20, leave out Clause 27 and insert the said new clause.—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 28:
Amendment of s. 81 of principal Act.
28.—(1) Section eighty-one or the principal Act (which prescribes the particulars which are to be stated in a prospectus) shall be amended as follows:—
(ii) After paragraph (n) of subsection (1) there shall be inserted the following paragraphs:—
(p) if the proceeds, or any part, of the proceeds, of the issue of the shares or debentures are or is to be applied in the purchase of any business, the amount, as certified by the persons by whom the accounts of that business have been audited, of the net profits of the business in respect of each of the three financial years immediately preceding the issue of the prospectus":
(iii) The following shall be inserted at the end of subsection (1):—
"Provided that, in the case of a company which has been carry-
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ing on business, or of a business which has been carried on, for less than three years the prospectus shall state how long the business, of the company, or the business to be acquired, as the case may be, has been carried on, and where the accounts of any such company or business have only been made up in respect of two years or one year, paragraphs (o) and (p) of this subsection shall have effect as if references to two years or one year, as the case may be, were substituted for references to three years:"
(iv) Subsection (6) shall be amended by the insertion after paragraph (b) of the following words: "or, if the non-compliance was in respect of matters which in the opinion of the court dealing with the case were immaterial."
(2) The expression "financial year" in paragraphs (o) and (p) directed by this section to be inserted in subsection (1) of the said section eighty-one means the year in respect of which the accounts of the company or of the business, as the case may be, are made up.
THE LORD CHANCELLOR: The first Amendment in my name is a drafting Amendment.
Amendment moved—
Page 21, line 31, after the second ("in") insert ("respect of").—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR: The next Amendments are also drafting Amendments.
Amendments moved—
Page 21, line 35, after the second ("in") insert ("respect of")
Page 21, line 40, leave out from ("fact") to end of line 43.
Page 22, line 3, after ("applied") insert ("directly or indirectly").—(The Lord Chancellor.)
On Question, Amendments agreed to.
THE EARL OF HALSBURY THE EARL OF HALSBURY moved, in paragraph (p), to leave out "the amount as certified by the persons by whom the accounts of that business have been audited of the net profits" and insert "a report by the auditors of the purchasing company or by accountants specially appointed for the purpose by the purchasing company or by the auditors of the business it is proposed to purchase upon the profits." The noble Earl said: In this subsection as it at present stands the idea is that the certi-

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ficate of the vendor should be taken, and compulsorily taken, by the purchaser. That does not seem to me either convenient or right. In some instances, such as the case of a foreign company, it would be impossible and in many cases it would undoubtedly be extremely inconvenient. My Amendment would mean that the purchaser would be allowed to appoint his own auditor. If it is suggested that by utilising the services of the auditor or the valuer of the vendor money might be saved, that, surely, is a question for the purchaser. If the purchaser chooses to appoint a vendor's auditor let him do so, but at any rate give him a free hand to appoint another if he so desires.
Amendment moved—
Page 22, line 4, leave out from ("business") to the first ("of") in line 7 and insert the said new words.—(The Earl of Halsbury.)
THE LORD CHANCELLOR: I agree with that.
On Question, Amendment agreed to.
LORD HUNSDON OF HUNSDON LORD HUNSDON OF HUNSDON moved, at the end of paragraph (iv) of subsection (1), to insert "or if in the opinion of the same court it was not reasonably practicable to comply with the requirements of this section." The noble Lord said: May I follow the precedent set by the Lord Chancellor and the Earl of Halsbury and say a few words as to the five Amendments standing in my name on this and other clauses? The Parliamentary Committee of the Law Society made a most valuable report on the Bill, with the result that the Government appear to have accepted a large number of their suggestions. Certain of their suggestions, however, were not adopted by the Government, either, I suppose, because they were doubtful about their merits, or because they thought that they should be put forward by private members in this House. The Law Society, therefore, asked me to bring them before your Lordships in their present form. I wish your Lordships to understand that all my Amendments have the authority of the Law Society. Perhaps I may be allowed to add that, though there are many members of your Lordships' House, such as the noble Earl, Lord Halsbury, who are far more fitted for this charge than I, I readily agreed, because time
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pressed and because I was only too willing to help the Law Society in their heavy and disinterested efforts to assist your Lordships' House with expert advice. I hope that I shall have your Lordships' sympathy, if not your support, in arguing legal questions with the Lord Chancellor, especially as I have been left only the questions about which the Law Society were unable to convince him.
This clause deals with the particulars that are to be inserted in the prospectus, and gives discretion to the Court to relieve directors from their liability for non-compliance in respect of matters which, in the opinion of the Court dealing with the case, were immaterial, and I propose to add the words that appear on the Paper. The reason for this Amendment is that it not infrequently-happens in the case of large amalgamations of companies that it is practically-impossible to set out all the details required by the law within the limits of an ordinary prospectus. For instance, there may be a very large number of contracts which may be more or less material where a business is or businesses are being taken over, and it is necessary to set out the name, address and particulars of every person who has sold goods to any of the businesses that are being taken over, as well as particulars of their contracts.
I have in my pocket a prospectus, which I could show to your Lordships, illustrating how confused and difficult these prospectuses are. I have also been given a concrete case which involved the purchase of shares by another company. There were 3,000 shareholders in that company, and it was necessary to set out in the prospectus the name and address of each one of them. Apart from the physical difficulty of putting all these particulars into a prospectus, a great responsibility is placed upon the solicitors and directors, for, where the number of names or contracts is very large, there is a great risk that something that might afterwards he considered material might be omitted, however anxious the parties might be to keep within the law. All this information, since it is legally necessary, must, I suppose, be considered as material, but it is safe to say that nobody ever reads it and it renders the prospectus a long and confusing document. It would seem reasonable, there-

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fore, that the Court should have discretion to authorise non-compliance with the law in such cases.
Amendment moved—
Page 2, line 30, at end insert ("or if in the opinion of the same court it was not reasonably practicable to comply with the requirements of this section").—(Lord Hunsdon of Hunsdon.)
LORD DANESFORT: This is an extremely useful Amendment, and the noble Lord who has moved it has given reasons why it is practically impossible in certain cases to comply rigidly with all the terms of the law as to prospectuses. He proposes that the Court should be given discretion in such cases as this to exempt directors from liability. Of course the Court will not exercise discretion in favour of directors if there is anything in the nature of fraud or negligence or an attempt to deceive the public, but only in cases where it is practically necessary for the purpose of bringing the prospectus before the public. If we trust the Court, as I think we are bound to do, I can see no reason why this Amendment should not be inserted.
THE LORD CHANCELLOR: There is some difficulty about this Amendment. I do not like, I confess, to suggest in an Act of Parliament that it may not be reasonably practicable to comply with it. A good many people would like to think that they could put in a plea of that kind against Acts of Parliament. Accordingly I do not like to accept these words. I would meet my noble friend if I could, and would ask him to consider whether he could suggest some less objectionable wording, referring, for instance, to the multiplicity of detail or the special circumstances of the case. If he can find a form of words which is free from objection, I shall be glad to consider it.
EARL RUSSELL: Perhaps it might be possible to extend the word "immaterial" in some way. I quite agree that you do not want to say in the Act that you do not expect it to be obeyed, but you might bring in some words suggesting that the particulars are voluminous or unimportant, or something of that kind.
Amendment, by leave, withdrawn.
THE LORD CHANCELLOR: My Amendment to this clause is technical.
Amendment moved—
Page 22, line 35, at end insert ("and where by reason of any alteration of the date on which the financial year of the company or business terminates the accounts of the company or business have been made up for a period greater or less than a year, that greater or less period shall for the purpose of the said paragraphs be deemed to be a financial year").—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 28, as amended, agreed to.
Clause 29 [Amendment as to minimum subscription]:
THE LORD CHANCELLOR: My Amendments to this clause are drafting.
Amendments moved—
Page 23, line 3, after ("(cc)") insert ("where shares are offered to the public for subscription")
Page 23, line 5, leave out ("the shares offered to the public") and insert ("those shares").—(The Lord Chancellor.)
On Question, Amendments agreed to.
Clause 29, as amended, agreed to.
Clause 30:
Obligation to file statement in lieu of prospectus.
30.—(1) A company having a share capital which does not issue a prospectus on or with reference to its formation, or which has issued such a prospectus but has not proceeded to allot any of the shares offered to the public for subscription, shall not allot any of its shares or debentures unless at least seven days before the first allotment of either shares or debentures there has been filed with the registrar of companies a statement in lieu of prospectus signed by every person who is named therein as a director or a proposed director of the company or by his agent authorised in writing in a form containing the particulars set out in Part I of the First Schedule to this Act.
THE EARL OF HALSBURY THE EARL OF HALSBURY moved, in subsection (1), to leave out "at least seven days." The noble Earl said: This is a somewhat important matter. It is laid down under Clause 30 that there shall be seven days between the prospectuses being filed and the allotment, and it is quite true that this applies only to
"a company having a share capital which does not issue a prospectus on or in reference to its formation, or which has issued such a prospectus but has not proceeded to allot any of the shares offered to the public for subscription."

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A lot of business, however, is done by companies of that kind, and the effect of not going to allotment for seven days might be a very serious thing. What is to be the position of the underwriters? Are they going to underwrite when they do not know what is going to happen in the next seven days? And, if so, at what sort of premium? Consider the case of a company which, normally speaking, could have gone to allotment two days before the General Strike. Supposing it had to have seven days before it could go to allotment, consider how many withdrawals there would have been. The effect would be that the underwriter would have to take over all the shares, and, if you once begin to interfere with such a business as underwriting the issue of a company, especially when you are dealing with some of the big issuing houses, you are beginning to introduce an entirely new principle.
The only reason that one can suggest is that a good deal was said in some of the newspapers at one time about certain swindles that had taken place at Manchester during the cotton boom. Of course, if people will go and put their money into a company that they have not seen anything about, one cannot legislate for them, and one of the things which strikes one about the Greene Report is the well thought out terms in which it points out that in considering any legislation you have to consider first the existing business of the country and not attempt to interfere with that, and that only as a secondary matter must you try your best to protect fools against themselves. Not one word recommending this moratorium of seven days between the filing of particulars and allotment appears in the Report. For the first time it has appeared in this Bill. Therefore I beg to move that the words "at least seven days" shall be omitted from the clause.
Amendment moved—
Page 24, line 13, leave out ("at least seven days".)—(The Earl of Halsbury.)
THE LORD CHANCELLOR: It is quite true that this matter was not brought to the attention of the Committee, and therefore was not dealt with by them. It has been brought to the attention of the Board of Trade and I think it is worth a little more consideration. It is the fact, as the noble Earl
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has stated, that certain abuses occurred in connection with the floating of cotton companies in Lancashire a little time ago. The object of filing a statement is to enable people who are thinking of taking shares to look at it first. If you impose no interval of time it is possible for the company to file a statement in the morning and go to allotment in the afternoon, and in that case intending subscribers have no chance of inspecting the statement before they have to subscribe for the shares. I think if you are going to require filing at all you ought to allow some reasonable interval. I do not say that the period of seven days should be closely adhered to, and if the noble Earl thinks it should be reduced to a smaller number of days I should be content, but I think it would be dangerous not to interpose some interval between the filing of the statement and the allotment of shares.
EARL RUSSELL: Surely that is not what happens in practice. People do not go in for these speculative cotton mill companies, and so on, with the same care as they buy land, with the advice of a solicitor. They think something good is going and they get in as quickly as they can. Surely people do not go to Somerset House and consult a prospectus there before they invest their money. You have already provided that there shall be no offer of shares without a complete prospectus accompanying it, and I do not think people in practice rely upon particulars filed at Somerset House before investing.
LORD BANBURY OF SOUTHAM: I venture to agree with the Lord Chancellor. Only one objection has been raised to seven days, and that has been raised by the noble Earl. The objection was that a person might withdraw his subscription before the end of seven days and the underwriter would not be relieved of his obligation. On the other hand, there have been a great number of these companies which have issued no prospectus or only a mangled prospectus, which is little short of a scandal. If an underwriter goes in for a company of that sort he is bound to take the risk. If he underwrites the shares of a company of which proper details are not given, and he loses, I should not be

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sorry for him. Therefore I hope that the Lord Chancellor will adhere to the clause as it stands.
THE EARL OF HALSBURY: May 1 say, in answer to Lord Banbury, that the point I was making was not the point that people were underwriting a company which was fraudulent in its inception; but I was pointing out that the underwriter who does not know what the conditions may be at the end of seven days is not taking the same risk as the underwriter who knows what the conditions will be in the next twenty-four hours. It is not a question of fraudulent companies at all. The Lord Chancellor was good enough to say that if I were content to modify my Amendment by making the period a shorter one he might accept it I am perfectly willing to withdraw my Amendment now, if, on consideration, I may bring it up again on the Report stage.
THE LORD CHANCELLOR: Four days?
THE EARL OF HALSBURY: I am not quite certain whether four days would be accepted by the people who know more about the practical working of it than I do myself. I would prefer to take time for consideration.
Amendment, by leave, withdrawn.
Clause 30 agreed to.
Clause 31 agreed to.
Clause 32:
Power to issue shares at a discount.
32.—(1) It shall be lawful for a company, if the following conditions are satisfied, but not otherwise, to issue any shares in the company at a discount:—

(a) Not less than five years must at the date of the issue have elapsed since the date on which the company was entitled to commence business;

(b) If the company has already issued shares of the same class as the shares to be issued—

(i) the market price of the shares of the class which have already been issued must be less than their nominal value; and

(ii) the price at which the shares are issued must not be less than the market price of shares of the class which have already been issued by more than ten per cent. or be less than fifty per cent. of the nominal value of the shares;

(c) If the company has not already issued shares of the same class as the
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shares to be issued, the price at which the new shares are to be issued must not be less than the nominal value of the shares by more than twenty per cent.

(3) In the case of any shares for which there is no market price, the market price of the shares shall for the purposes of this section be deemed to be such price as the auditors of the company, having regard to the financial position of the company, as disclosed to them in the accounts of the company, certify to be the fair market price.
(4) For the purposes of this section the market price of any shares already issued shall be ascertained as at the date of issue of the prospectus inviting subscriptions for the new shares or, if there in no such prospectus, as at the date of the contract to take the new shares.
LORD HUNSDON OF HUNSDON LORD HUNSDON OF HUNSDON moved, in subsection 1 (b) (i), to leave out "be less than" and insert "not exceed." The noble Lord said: This clause makes it lawful to issue shares at a discount in cases where the company has already issued shares of the same class, provided that the issue price is not more than ten per cent. below the market price, or fifty per cent. below the nominal value. It also makes it a condition that "the market price of the shares … must be less than their nominal value." There seems to be no reason for this proviso, for the effect of it would be that if the shares of the company were at par it would not be lawful to issue further shares at 90 per cent. or over; but if the shares were quoted at 99 per cent. it would be lawful to issue further shares at 89 per cent. or over. It would seem clear that whatever objections there may be to issuing shares at a discount, these objections would be less when the shares were quoted at par than when they were quoted below par because the discount would be less. Also if this proviso stands it might not be difficult to put the price of the shares down in the market so as to come within the terms of the Bill.
This Amendment does very little as it merely suggests that the market price of the shares must not exceed their nominal value and the Bill says they must be less than their nominal value. I imagine that the Law Society merely wished to raise this question in order to find out what possible reason there can be for making any statement as to the market price of the shares in this con-

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nection. Mr. Greene's Committee was—I quote their words—"as a whole not prepared to dissent from the findings of the Wrenbury Committee," except in one respect; and Lord Wrenbury's Committee recommended that shares should only be issued at a discount when the company's share capital was at a discount. If I may be allowed to speak for myself I would appeal to the Lord Chancellor to consider whether he could not delete the proviso altogether on the Report stage. It may very well be that with shares at 1 per cent. or 2 per cent. premium it would be impossible to make a successful issue at over 90 per cent. and therefore the effect of the proviso, even with my Amendment, would be, that a company that was doing fairly well and whose shares were a little above par would not be permitted to raise capital by the issue of shares while a company which was doing so badly that it could not issue shares at more than 50 per cent. of their nominal value might do so.
I can understand—and I am very sorry Lord Wrenbury is not here, because I fancy this is his view—that there might be some reason for prohibiting the sale of shares at a discount altogether, but this Bill surrenders any principle that there may be by permitting the sale at 50 per cent. discount. I understand, and I approve of, the proviso in the next subsection that shares shall not be issued at more than 10 per cent. below the market value, but I am quite unable to realise how it can matter whether the market price is below or above par. The people who now can issue shares by this Bill are simply the people the market value of whose shares is below par. The people whose shares are well above par do not need this provision because they can issue at a premium or at par. The only people who are left out and not allowed to raise money by the issue of shares are the people who are doing fairly well and whose shares stand at a slight premium.
Amendment moved—
Page 25, line 5, leave out ("be less than") and insert ("not exceed").—(Lord Hunsdon of Hunsdon.)
LORD DANESFORT: The Amendment as it stands on the Paper is a small one but the principles raised by the noble Lord are rather large. The point raised in the Amendment is simply this.
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According to the provisions of the Bill if the shares stand in the market at ninety-nine, par being 100, the shares can be issued at a discount. If the shares stand in the market at 100 they cannot be issued at a discount. I confess I see no reason for that restriction and I hope that the Lord Chancellor will accept the Amendment.
THE LORD CHANCELLOR: It has long been the law that shares cannot be issued at a discount at all, but it was represented to the Wrenbury Committee and again to the Greene Committee that that Was a restriction which bore rather hardly upon a company whose shares were already at a discount in the market. Both Committees agreed to this. The Wrenbury Committee Report says in reference to issuing at a discount:—
"It should be allowed only when the company's issued share capital is at a discount."
The effect of the Bill is to carry that out. The noble Lord proposes that even when the company's shares are at par, according to the Amendment, or according to his speech even when they are at a premium, the company should still be allowed to issue its shares at a discount. That is going very much further than the Committee and I hope the House will adhere to the view that it is only when the existing shares are at a discount they should be allowed to issue new shares at par. I must resist the Amendment.
LORD HUNSDON OF HUNSDON: The Lord Chancellor has given no reason in answer to my remarks except that the Wrenbury Committee do not like my Amendment. May I read from the Wrenbury Committee's Report a passage which will show the sort of feeling about issuing shares at a discount:—
"There should be a statutory limit to the discount allowable and if the disease is so deep rooted that the statutory limit is not sufficient—"
then something else is to happen. It is not a disease at all. It is an easy and convenient way of raising money and it is allowed to everybody except people whose shares are at par or at 102, and why they should be exempted I do not know. The Law Society asked me to put this Amendment forward in the hope that somebody could be found who could give a reason for the provision in the Bill. With all respect to the Lord Chancellor I do not understand the reasons even now.
THE LORD CHANCELLOR: If the noble Lord will read my speech to-morrow he will see that I did give reasons.
Amendment, by leave, withdrawn.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved to leave out subsections (3) and (4) and insert:—
"(3) For the purposes of this section the market price or any shares already issued shall be taken to be—

(a) the average of the making-up prices of such shares on the London Stock Exchange for the three accounts immediately preceding the date of the issue of the prospectus, or, if there is no such prospectus, the date of the contract to take the new shares; or

(b) if there have not been such making-up prices for the said three accounts, then the price paid on the average for any such shares in respect of which transfers (being transfers for valuable consideration) were registered within the specified period; or

(c) if less than five transfers of such shares were registered within the specified period, then such price as the auditors of the company, having regard to the financial position of the company as disclosed to them in the accounts of the company, certify to be in their opinion the fair value of the shares.

For the purposes of the foregoing provision the expression 'the specified period' means a period of one month terminating three weeks before the date of the issue of the prospectus inviting subscriptions for the new shares, or, if there is no such prospectus, the date of the contract to take the new shares."
The noble and learned Viscount said: This deals with the definition of market price. As the law stands there is no definition of market price except when the shares of a company have no market price, which means, of course, that they have no quotation on the Stock Exchange. The market price where there is a quotation has to be taken as at the date of the issue of the prospectus. There is room there for a certain amount of manipulation in the market price and the object of the Amendment is to remove that by taking the average. The Amendment provides three successive alternatives for the ascertainment of market price—namely, either the making-up price or the price realised on actual transactions during a short period, or, if neither of these is available, then the price which in the auditor's opinion is a fair value. I think it is a useful Amendment to the clause.
Amendment moved—
Page 25, line 32, leave out subsections (3) and (4) and insert the said new subsection.—(The Lord Chancellor.)
EARL RUSSELL: I would point out that paragraph (b) of this Amendment does still leave room for manipulation in the case of a small company. You could have transfers arranged to show any prices you liked.
THE LORD CHANCELLOR: That is true, but I do not think we can get nearer than giving the average.
THE EARL OF HALSBURY, who had given notice to move to omit the last seven words of subsection (3) and to insert "and to any other information and explanations given to them, and they shall report accordingly. Provided always that if the auditors report that they are unable for any reason to form such an opinion the directors of the company shall fix the market price," said: I think that the new subsection (3) really meets the first part of my Amendment entirely because now it has been altered to "certify to be in their opinion the fair value," and I think that is quite sufficient for my purpose down to that point. But the difficulty is, what is to happen if the auditors are unwilling to certify an opinion? You cannot make them do it by law and it may very well be that it would be a very great hardship on a perfectly good company because the auditors would not take the responsibility of saying what in their opinion the market price of the shares ought to be.
Take two examples. Take a company whose big asset is a patent. The directors may have a perfectly good and honest view as to what the value of the patent is, but the auditors may well say: "We are not going to take the responsibility of giving to the public our opinion of what the value of this patent is." Take another case, the case of a company which is doing a very good, honest and proper business but which is a success largely due to a very clever campaign of advertising, the company having a very clever advertisement manager who is really responsible for the success of the company. That may be a perfectly honest and good company, but you are asking auditors to certify their opinion in those two cases of what the shares of the company are worth in

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the market, and it may well be that the auditors will refuse to do so. What is to happen then? Can you get no market price? If you cannot, the suggestion is that the directors are the only people who can. If the directors do it, the public know they are only getting the directors' valuation and not the valuation of the auditors. But if they do not get the valuation of the auditors at all there is a deadlock and you cannot get any further. You certainly cannot compel by law an auditor to put his certificate to an opinion which he is not prepared to put before the public. The object of this Amendment is to get rid of the deadlock that may ma come in a perfectly honest and proper case in which an auditor having a sense of his responsibility says: "I do not care to give any opinion as to what the market price of these shares is."
Amendment to the Amendment moved—
In the proposed new subsection (3) at the end of paragraph (c), insert "Provided always that if the auditors report that they are unable for any reason to form such an opinion the directors of the company shall fix the market price."—(The Earl of Halsbury.)
LORD DANESFORT: I think this proviso is dangerous, sorry as I am to differ from my noble friend. The position is this. Directors want to issue shares at a discount for what they consider their own advantage and the advantage of the company. In order to see whether they can do so, according to the Act of Parliament, the market price has to be fixed. My noble friend says that in the last resort the directors are to fix what is the market price. In other words he gives them a power to fix the market price, makes them the judges of what the market price is when it is already their interest to fix that market price in order to carry out their wishes. In other words, he makes them judges as to the market price in their own cause, which I think is a dangerous thing. Then my noble friend says that in the case supposed, where there have been no transfers or no dealings in the Stock Exchange, there is no way of ascertaining the market price except through the directors. It may be very unfortunate. The company will not collapse and all that will happen will be that they will not be able to issue shares at a discount under the provisions of the
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Act. I think the danger of giving this power to fix the market price is very great.
THE LORD CHANCELLOR: I think it dangerous, too. You are dealing with a case where there is no market price, where there have been no transactions in shares by means of which people can take an average value and where the auditors say: "We really cannot certify the value of the shares." In that case it is proposed to allow the directors who are anxious to make this issue at a discount to fix that value themselves. I do not think it ought to be proceeded with. It seems to me that if you have got that state of things there had better be no issue at a discount at all.
THE EARL OF HALSBURY: By your Lordships' leave I will withdraw the Amendment.
Amendment to the Amendment, by leave, withdrawn.
On Question, original Amendment agreed to.
Clause 32, as amended, agreed to.
Clause 33:
Amendment of s. 89 of principal Act.
33. Section eighty-nine of the principal Act shall be amended as follows:—
(a) Subsection (1) thereof shall cease to have effect so far as it authorises the payment of commission to a person in consideration of his subscribing or agreeing (otherwise than conditionally On the shares not being taken up by any other persons) to subscribe for any shares in a company, and the amount payable to a person in consideration of his agreeing to subscribe conditionally or of his procuring or agreeing to procure subscriptions, whether absolute or conditional, for any shares in a company, shall not in any case exceed an amount equal to ten per cent. of the nominal value of the shares in respect of which there is a conditional agreement to subscribe or in respect of which subscriptions are procured or agreed to be procured:
LORD HUNSDON OF HUNSDON LORD HUNSDON OF HUNSDON moved to leave out paragraph (a) and insert:—
"(a) By inserting at the end of subsection (1) thereof the following proviso:
Provided that the amount payable to a person in consideration of his subscribing or agreeing to subscribe, whether absolutely or conditionally, or of his procuring or agreeing to procure subscriptions, whether

581
absolute or conditional, for any shares in a company shall not in any case exceed an amount equal to ten per cent. of the nominal value of the shares in respect of which there is an agreement to subscribe or in respect of which subscriptions are procured or agreed to be procured."
The noble Lord said: The clause as it stands appears to prohibit the taking of shares firm for a commission and it follows therein a recommendation of Lord Wrenbury's Committee, but it is a change id the existing law and is not, as far as I can see, a recommendation of Mr. Greene's Committee on which this Bill is based. Moreover, taking shares firm is an ordinary and, in my opinion, a reasonable business transaction. Moreover, if this prohibition is maintained it would be perfectly easy to evade it. There is no law which compels the issuing house to allot shares in proportion to the applications, and by private agreement certain persons could be allotted their shares in full. Even if, by law or custom, shares were allotted in proportion to applications, it would be quite easy before closing the lists to increase the application of those who wished to take a definite number of shares. Besides the fact that the prohibition of taking shares firm is not recommended by Mr. Greene's Committee and is an alteration in the existing law, there seem to me to be three objections to the new proposal—(1), that it would stop a reasonable financial transaction; (2), that it would serve no useful purpose; and (3), that it could be easily evaded. And if I am right these would seem to form three rather formidable objections. I beg to move.
Amendment moved:—
Page 26, line 3, leave our paragraph (a) and insert the said paragraph.—(Lord Hunsdon, of Hunsdon)
LORD BANBURY OF SOUTHAM: I am afraid that I do not agree with my noble friend Lord Hunsdon in everything he says. I do agree that in all probability this provision, as it stands, might be evaded, but, on the other hand, I do not think it is right when a prospectus is issued to the public and it is stated in the prospectus that 50,000 shares are to be allotted, that while that is stated in the prospectus, 20,000 of those shares have not only been under-written but have been allotted, so that as a matter of fact the only shares which can be
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divided amongst the public are 30,000 and not 50,000. I do not think that is treating the public fairly. If this is passed and if 50,000 shares are underwritten it is quite possible for the underwriters to put in a separate application for a certain number of shares, and in those circumstances it will be quite possible for the issuing-house to allot to those underwriters and not to allot to a certain number of the public; but it is always in the power of the issuing-house to make their allotments as they think right. My own idea is that it would be far better to leave this provision in and then if the issuing-house think that in certain circumstances they can do certain things let them do them, but do not let us say here that people may ask the public to subscribe to 50,000 shares while, as a matter of fact, they are only being asked to subscribe to 20,000.
THE LORD CHANCELLOR: This Amendment is in the teeth of the recommendation of both Committees. The Wrenbury Committee—and of course Lord Wrenbury has great knowledge and experience in these matters—recommended that the Act of 1908 should be amended so as to exclude commission payable to a person in consideration of his subscribing for shares and to confine the word "commission" to mean either brokerage, which is a payment for services rendered, or underwriting commission, which is a payment for a guarantee given. I think it right to follow the conclusions of the two Committees and do away with commission payable to persons simply for taking the shares. My noble friends behind me seem to think the clause can still be evaded by business men; if they are able to do so, let them try. At all events I think Parliament ought to uphold the rule.
LORD HUNSDON OF HUNSDON: I must have made a mistake in saying Mr. Greene's Committee did not recommend this. I would be much obliged to the noble and learned Viscount if he would call my attention to where they do recommend it.
THE LORD CHANCELLOR: I think the Greene Committee accepted the whole of that part of the Wrenbury Committee's Report. They said they were not prepared to dissent from the findings of the Wrenbury Committee. They made no exceptions.
LORD HUNSDON OF HUNSDON: It does not sound like a very enthusiastic support to say they do not dissent from the findings of the Wrenbury Committee, but as the Lord Chancellor will not accept this Amendment I am afraid I cannot pursue it.
Amendment, by leave, withdrawn.
THE EARL OF HALSBURY THE EARL OF HALSBURY moved, in paragraph (a) after the last "shares, "to insert" over and above the 50 per cent. of the nominal value of the shares referred to in Section 32 (1) (b) (ii)." The noble Earl said: I have put down this Amendment because I thought it the most convenient way of bringing forward a difficulty which I feel. On one reading of this clause, as I understand it, it may mean 50 per cent., and on another reading it may mean 60 per cent. I am not concerned in the least which it should be, but my objection to the clause as it at present stands is that it may be read either way. For that reason I have put down an Amendment making it 60 per cent. I have no objection to it being read the other way as long as it is clear which way it is to be read.
Amendment moved—
Page 26, line 15 after "shares" insert ("over and above the 50 per cent. of the nominal value of the shares referred to in Section 32 (1) (b) (ii)").—(The Earl of Halsbury.)
THE LORD CHANCELLOR: I have no objection in principle to this Amendment, but I think it would be preferable to leave the matter over for the present. I will see that words are put down on Report.
THE EARL OF HALSBURY: In those circumstances I would ask leave to withdraw my Amendment.
Amendment, by leave, withdrawn.
Clause 33 agreed to.
Clause 34:
Accounts.
34.—(1) Every company shall cause to be kept proper books of account with respect to—
(3) The directors of every company shall at some date not later than eighteen months after the incorporation of the company and subsequently once at least in every year lay before the company in general meeting a profit and loss account for the period, in the case of the first account, since the in
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corporation of the company, and, in any other case, since the preceding account, made up to a date not earlier than the date of the meeting by more than nine months, or, in the case of a company carrying on business or having interests abroad, by more than twelve months:
(4) The directors shall cause to be made out in every year, and to be laid before the company in general meeting, a balance sheet made up to a date not earlier than the date of the meeting by more than such period as is allowed in the case of a profit and loss account under the last preceding subsection, and there shall be attached to every such balance sheet a report by the directors with respect to the state of the company's affairs, the amount, if any, which they recommend should be paid by way of dividend, and the amount, if any, which they propose to carry to the reserve fund.
(5) If any person being the director of a company—

(a) fails to take all reasonable steps to secure compliance by the company with the requirements of subsection (1) or subsection (2) of this section, or has by his own wilful act been the cause of any default by the company under either of the said subsections; or

(b) fails to comply with the provisions of subsection (3) or subsection (4) of this section;

he shall, in respect of each offence, he liable on summary conviction to imprisonment for a term not exceeding six months or to a fine not exceeding two hundred pounds:
Provided that a person shall not be sentenced to imprisonment for an offence under this section unless in the opinion of the court dealing with the case, the offence was committed wilfully.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, in subsection (3) after the first "account," to insert "or, in the case of a company not trading for profit, an income and expenditure account." The noble and learned Viscount said: This Amendment and those which follow it are intended to remedy what I think is an omission. The clause provides that the directors shall lay a profit and loss account before the company in general meeting. There are companies, however, which do not trade for profit (such, for instance, as a chamber of commerce) and therefore they have no profit and loss account. In such cases we propose that they should lay an income and expenditure account instead of a profit and loss account.
Amendments moved—
Page 27, line 7, after ("account") insert ("or, in the case of a company not trading for profit, an income and expenditure account").—(The Lord Chancellor.)
On Question, Amendment agreed to.
Amendment moved—
Page 27, line 22, leave out from ("sheet") to ("and") in line 25 and insert ("as at the date to which the profit and loss account, or the income and expenditure account, as the case may be, is made up").—(Lord Chancellor.)
On Question, Amendment agreed to.
THE EARL OF HALSBURYhad on the Paper an Amendment to add to subsection (4): "general reserve or reserve account as shown specifically on the balance sheet". The noble Earl said: The wording of the clause at the present time is "reserve fund." That is not an expression which is very ordinarily used and it may mean many things. It may mean what is generally known as the inner reserve fund of a company, which clearly is not included in this case. What is really meant is the fund that is available after a final balance is struck, which may be paid into general reserve or paid outs as dividend. My Amendment is really a verbal one and makes use of the more common expression instead of one that is not usually used—certainly in accountancy or, I think, in business. I think that perhaps my Amendment ought to be in the form of moving to omit the words "reserve fund" and substituting the words on the Paper.
Amendment moved—
Page 27, line 30, leave out ("reserve fund") and insert ("general reserve or reserve account as shown specifically on the balance sheet").—(The Earl of Halsbury.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, in paragraph (b) of subsection (5), after the word "fails," to insert "to take all reasonable steps." The noble and learned Viscount said: The subsection as it stands proposes a penalty on directors who fail to comply with the provision of former subsections of this clause. It has been pointed out that a director might do his best to comply but might not be able to comply. So it is proposed to put it in the words "fails to take all reasonable, steps."
Amendment moved—
Page 27, line 38, after ("fails") insert ("to take all reasonable steps").—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 34, as amended, agreed to.
Clause 35:
Form of balance sheet.
35.—(1) Every balance sheet of a company shall contain a summary of the share capital of the company, its liabilities and its assets, together with such particulars as are necessary to disclose the general nature of the liabilities and the assets of the company, and to explain how the values of the fixed assets have been arrived at.
(2) There shall be stated under separate headings in the balance sheet—

(a) the preliminary expenses of the company so far as not written off; and

(b) if it is shown as a separate item in or is otherwise ascertainable from the books or papers of the company, the present value of the goodwill as so shown or ascertained.

(4) Where the assets of a company include shares in a subsidiary company or loans made to a subsidiary company, or where the liabilities of a company include any loans from a subsidiary company, the aggregate amounts of those assets (distinguishing shares and loans) and of those loans respectively shall be set out in the balance sheet of the first-mentioned company separately from all its other assets and liabilities.
THE EARL OF HALSBURY THE EARL OF HALSBURY moved, in subsection (2) (b), to leave out "or papers." The noble Earl said: I have put down this Amendment because it seems to me that the word "papers" is very wide and really puts too much upon anybody who has to deal with this matter. "Papers of the company" might refer to anything. They might refer to a letter from some unknown person who simply said that in his opinion something had happened. Surely it is sufficient to say "from the books."
Amendment moved—
Page 29, line 8, leave out ("or papers").—(The Earl of Halsbury.)
THE LORD CHANCELLOR: The position is that good will may be kept out of the books, but it may appear in the contract of purchase. If so, it surely ought to be shown in the account. I agree that "papers" is rather a, wide word, but I find it difficult to suggest anything else which would cover a company which has a figure for good will upon its documents but not in its books.
THE EARL OF HALSBURY: After that expression of the view of the Lord Chancellor I beg leave to withdraw.
Amendment, by leave, withdrawn.
THE LORD CHANCELLOR: The next two Amendments on the Paper are technical.
Amendments moved—
Page 29, line 9, leave out ("value") and insert ("amount")
Page 29, line 11, after ("secured") insert ("otherwise than by operation of law").—(The Lord Chancellor.)
On Question, Amendments agreed to.
THE EARL OF HALSBURY THE EARL OF HALSBURY moved to leave out subsection (4) and insert the following new subsection:—
". Where the assets of a company include shares in a subsidiary company or any indebtedness of a subsidiary company by loans or otherwise the aggregate amount of these assets (distinguishing shares and indebtedness) shall be set out in the balance sheet of such company separately from all its other assets. Where the liabilities of a company include any indebtedness to a subsidiary company (through loans or otherwise) such indebtedness shall be set out in the balance sheet of such company separately from all its other liabilities."
The noble Earl said: The point dealt with here is that when you are dealing with subsidiary companies it is practically impossible to give complete and absolute information as to every profit and loss account of every subsidiary company. That is especially the case when you are dealing with a subsidiary company that may be a foreign company, for instance, or a company that has a business in a Colony. It makes it almost impossible to deal with every profit and loss account and show it in the affairs of the parent company. For that reason I suggest this Amendment, which does impose a considerably less amount of responsibility in that matter. It allows a much broader statement to be given instead of a detailed statement as to every subsidiary company.
Amendment moved—
Page 29, line 16, leave out subsection (4) and insert the said new subsection.—(The Earl of Halsbury.)
THE LORD CHANCELLOR: I think this is not much more than a drafting Amendment and I am prepared to accept it, but I should like to reserve the right to look into the wording of it before Report.
On Question, Amendment agreed to.
VISCOUNT BERTIE OF THAME VISCOUNT BERTIE OF THAME moved at the end of subsection (5), to insert:
"If the directors or other officers of the subsidiary company wilfully and wrongfully
588
withhold such information as the holding company may reasonably require for the purpose of carrying out the provisions of this clause they shall be liable to a fine not exceeding one hundred pounds."
The noble Viscount said: I submit that if directors of subsidiary companies are wilfully and wrongfully withholding information and will not give particulars required of them, they should be made liable. I beg to move this Amendment to provide for such a state of affairs.
Amendment moved—
Page 30, line 13, at end insert the said words.—(Viscount Bertie of Thame.)
THE LORD CHANCELLOR: I think this Amendment is founded upon a misunderstanding. By the clause as drafted, certain information as to the profits of subsidiary companies has to be given in the balance sheet of the holding company, but there is no provision forcing directors of subsidiary companies to give information. Where the subsidiary company is not actually controlled by the holding company, which may only have a minor interest, the directors should not be forced to give information, and it seems to me wrong to put in a provision forcing those directors to give information if otherwise they are not bound by their articles to give it. I hope that the Amendment will not be pressed.
VISCOUNT BERTIE OF THAME: I beg leave to withdraw the Amendment.
Amendment, by leave, withdrawn.
THE LORD CHANCELLOR: My further Amendments to this clause are technical.
Amendments moved—
Page 30, line 24, after ("company") insert ("(not being a company acting as trustee for the holders of debentures in that other company)")
Page 30, line 29, leave out ("within the meaning of this section") and insert ("for the purpose; of this section, and the expression 'subsidiary company' in this section shall be construed accordingly").—(The Lord Chancellor.)
On Question, Amendments agreed to.
Clause 35, as amended, agreed to.
Clause 36 [Rights of members and debenture holders to receive copies of balance sheets and reports of directors and auditors]:
THE LORD CHANCELLOR: My Amendment to this clause is technical.
Amendment moved—
Page 30, lines 30 and 31, leave out ("who is not entitled to receive a copy") and insert ("whether he is or is not entitled to have sent to him copies").—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 36, as amended, agreed to.
Clause 37:
Amendment of s. 92 of principal Act.
37. Section ninety-two of the principal Act (which limits the time for the issue of certificates of shares, etc.) shall be amended as follows:—
(1) For the words "and within two months after the registration of a transfer of any such shares, debentures or debenture stock" there were substituted the words "and within two months after the date on which a transfer of any such shares, debentures or debenture stock (being a transfer duly stamped and otherwise valid, but not including such a transfer as the company is for any reason entitled to refuse to register and does not register) is lodged with the company";
(2) After subsection (1) there shall be inserted the following subsection:—
"(1A) If a company refuses to register transfer of any shares, debentures or debenture stock, the company shall, within two months after the date on which the transfer was lodged with the company, give to the transferor notice of the refusal."
THE LORD CHANCELLOR: My Amendments to this clause are drafting.
Amendments moved—
Page 31, line 12, leave out ("were") and insert ("shall be")
Page 31, line 26, leave out ("give") and insert ("said").—(The Lord Chancellor.)
On Question, Amendments agreed to.
VISCOUNT BERTIE OF THAME VISCOUNT BERTIE OF THAME moved to leave out subsection (1A) in subsection (2) and to insert:
"(1A) A company shall not be entitled to refuse to register a transfer of any fully paid shares, debentures or debenture stock into the name of a British subject, but may refuse to register the transfer of any partly paid shares, debentures or debenture stock and on such refusal shall within two months after the date on which the transfer was lodged with the company give to the transferor notice of the refusal.
If a company unlawfully refuses to register a transfer the transferee may apply to the Court for an order to rectify the register of the company by substituting his name on the books of the company in place of that of the transferor."
The noble Viscount said: This Amendment has regard to the fact that articles of association have sometimes been misused for the purpose of depressing the price of shares, so that directors and their friends get them cheap. I beg to move.
Amendment moved—
Page 31, leave out lines 22 to 27 and insert the said words.—(Viscount Bertie of Thame.)
THE LORD CHANCELLOR: It is very common to find in the articles of private companies a provision enabling directors to refuse to register the transfer of shares to a person of whom they do not approve and I am afraid that it sometimes happens that an unlimited power to transfer is taken advantage of by a person who wants to get into the inner circle and find out the secrets of the company. It is only right that there should be power to refuse, and this Amendment is in conflict with Section 121 of the principal Act, under which one of the essential conditions concerning private companies is that they shall by their articles restrict the right to transfer their shares.
VISCOUNT BERTIE OF THAME: I beg leave to withdraw.
Amendment, by leave, withdrawn.
Clause 37, as amended, agreed to.
Clause 38:
Amendments as to registration of mortgages and charges.
(2) It shall be the duty of a company within six months after the commencement of this Act to send to the registrar of companies for registration the prescribed particulars of any mortgage or charge created before the passing of this Act which would, under the provisions of this section, have been required to be registered if it had been created after the commencement of this Act, and the registrar shall, on payment of the prescribed fee, enter those particulars on the register kept in pursuance of the said Section ninety-three.
If the company fails to comply with the requirements of this subsection, the company and every director, manager, secretary or other officer of the company, or other person who is knowingly a party to the default, shall on conviction be liable to a fine not exceeding fifty pounds for every day during which the default continues, but the failure of the company shall not prejudice any rights which any person in whose favour the mortgage or charge was made may have thereunder.
THE LORD CHANCELLOR: My Amendments to this clause are technical and drafting.
Amendments moved—
Page 32, line 43, leave out ("by the secretary of the company") and insert ("in the prescribed manner").
Page 33, line 6, leave out ("property is acquired by the company") and insert ("acquisition is completed")
Page 33, line 14, after ("Penalty") insert:
("Provided that, if the property is situate, and the mortgage or charge was created outside Great Britain, twenty-one days after the date on which the copy of the instrument could in due course of post, and if dispatched with due diligence have been received in the United Kingdom, shall be substituted for twenty-one days after the completion of the acquisition as the time within which the particulars and the copy of the instrument are to be delivered to the registrar.")
Page 33, lines 18 and 19, leave out ("establishes a") and insert ("has an established")
Page 32, line 20, after ("(2)") insert ("Paragraphs (a) and (c) of subsection (1) of this section shall respectively have effect only in relation to mortgages or charges created, or property acquired, after the commencement of this Act, but")
Page 32, line 20, after ("company insert ("(including a company incorporated outside England which has an established place of business in England)")
Page 32, line 24, leave out ("before the passing of this Act") and insert ("by the company before the commencement of this Act, or of any mortgage or charge to which any property acquired by the company before the commencement of this Act is subject,")
Page 32, line 26, after ("created") insert ("or the property had been acquired").—(The Lord Chancellor.)
On Question, Amendments agreed to.
THE EARL OF HALSBURY THE EARL OF HALSBURY moved, in the second paragraph of subsection (2), to leave out "but" and to insert "provided that," and after "company" to insert "to comply with any of the provisions of this section." The noble Earl said: This is really a drafting matter. My Amendment is to make the paragraph apply not only to subsection (2) but to the whole of the clause in so far as this is possible.
Amendment moved—
Page 33, line 36, leave out ("but") and insert ("provided that") and after ("company") insert ("to comply with any of the provisions of this section").—(The Earl of Halsbury.)
THE LORD CHANCELLOR: I am told that this is not desirable. The subsection as it stands provides that these words shall apply only to matters contained within it, and I think that the noble Earl proposes that they should apply also to matters already subject to Section 93 (1) under which the charge is invalidated. I think that the point is already sufficiently provided for.
THE EARL OF HALSBURY: If the noble and learned Viscount desires it I am willing to withdraw the Amendment.
Amendment, by leave, withdrawn.
Clause 38, as amended, agreed to.
Clause 39 [Amendment of s. 95 of principal Act]:
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, in subsection (1), after "month," to insert "or such longer period as the registrar of companies may allow." The noble and learned Viscount said: I think that this Amendment meets the point which the noble and learned Earl, Lord Halsbury, had intended to raise on this clause.
Amendment moved—
Page 34, line 12, after ("month") insert ("or such longer period as the registrar of companies may allow").—(The Lord Chancellor.)
THE EARL OF HALSBURY: I agree that this meets my point.
On Question, Amendment agreed to
Clause 39, as amended, agreed to.
Clause 40 agreed to.
Clause 41 [Amendment of s. 102 of principal Act]:
THE LORD CHANCELLOR: My Amendments to this clause are technical.
Amendments moved—
Page 35, line 14, after the first ("the") insert ("articles or in the")
Page 35, line 15, after ("certificates") insert ("or in the trust deed or other document securing the debentures or debenture stack").—(The Lord Chancellor.)
On Question, Amendments agreed to.
Clause 41, as amended, agreed to.
Clause 42 agreed to.
Clause 43:
Amendments as to investigations of companies' affairs by inspectors.
43.—(1) Section one hundred and nine of the principal Act (which relates to the investigation of the affairs of companies by

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Board of Trade inspectors) shall be amended as follows:—
(d) There shall be added to the section the following new subsections:—
(8) If where any matter is referred to the Director of Public Prosecutions under this section he considers that the case is one in which a prosecution ought to be instituted and, further, that it is desirable in the public interest that the proceedings in the prosecution should be conducted by him, he shall institute proceedings accordingly, and it shall be the duty of all officers and agents of the company, past and present (other than the defendant in the proceedings), to give to him all assistance in connection with the prosecution which they are reasonably able to give.
For the purposes of this subsection the expression "agents" in relation to a company shall be deemed to include the bankers and solicitors of the company and any persons employed by the company its auditors, whether those persons are or are not officers of the company.
THE EARL OF HALSBUEY THE EARL OF HALSBUEY moved, in subsection (8) in the paragraph defining "agents," to leave out "employed" and to insert "appointed." The noble Earl said: This is a point that may be of some importance later on. It is simply asking that the word should be "appointed" instead of "employed." As your Lordships are aware, there may be some difficulty about the position of the auditor of a company and as to whether he is an officer or not. Apparently he is in some cases and is not in others. A person may be employed as an auditor without being properly appointed to the company, and that is the reason for my Amendment.
Amendment moved—
Page 37, line 22, leave out ("employed") and insert ("appointed").—(The Earl of Halsbury.)
THE LORD CHANCELLOR: This looks like drafting, but I think it is something more. An accountant may be employed by a company but not strictly appointed. I think that the word "employed" was purposely used to cover all those cases.
THE EARL OF HALSBURY: The subsection deals with the agents in relation
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to a company and says that they shall be
"deemed to include the bankers and solicitors of the company and any persons employed by the company as auditors."
They may not be the auditors who have been properly appointed. It may be somebody who has been employed by the company, and surely, whether those persons are or are not officers of the company, if they are merely employed as outside people it is rather dangerous to suggest that they are agents of the company.
THE LORD CHANCELLOR: I do not think it is. Like the bankers and solicitors, they are agents of the company, but that does not make them officers of the company.
THE EARL OF HALSBURY: If the noble and learned Viscount dislikes the Amendment, I shall not press it.
Amendment, by leave, withdrawn.
Clause 43 agreed to.
Clause 44 agreed to.
Clause 45 [Power to acquire shares of shareholders dissenting from scheme or contract approved by majority]:
THE LORD CHANCELLOR: All my Amendments to this clause are technical.
Amendments moved—
Page 38, line 24, leave out ("this") and insert ("the principal")
Page 38, line 25, after ("has") insert ("within four months after the making of the offer in that behalf by the transferee company")
Page 38, lines 28 and 29, leave out ("date on which the scheme or contract was so approved") and insert ("expiration of the said four months")
Page 38, line 29, after ("notice") insert ("in the prescribed manner")
Page 38, line 33, after ("shareholder") insert ("within fourteen days after the date on which the notice was given")
Page 38, line 34, after ("entitled") insert ("and bound")
Page 38, line 37, at end, insert:
("Provided that, where any such scheme or contract has been so approved at any time before the commencement of this Act, the court may by order, on an application made to it by the transferee company within two months after the commencement of this Act, authorise notice to be given under this section at any time within fourteen days after the making of the order, and this section shall apply accordingly except that the terms on which the shares of the dissenting shareholder are to be acquired shall

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be such terms as the court may by the order direct instead of the terms provided by the scheme or contract.")
Page 38, line 38, leave out subsection (2) and insert as new subsections:
("(2) Where a notice has been given by the transferee company under this section and the court has not, on an application made by the dissenting shareholder, ordered to the contrary, the transferee company shall, on the expiration of fourteen days from the date on which the notice has been given, or, if an application to the court by the dissenting shareholder is then pending after that application has been disposed of, transmit a copy of the notice to the transferor company and pay or transfer to the transferor company the amount or other consideration representing the price payable by the transferee company for the shares which by virtue of this section that company is entitled to acquire, and the transferor company shall thereupon register the transferee company as the holder of those shares.
(3) Any sums received by the transferor company under this section shall be paid into a separate account, and any such sums and any other consideration so received shall be held by that company on trust for the several persons entitled to the shares in respect of which the said sums or other consideration were respectively received").—(The Lord Chancellor.)
On Question, Amendments agreed to.
Clause 45, as amended, agreed to.
Clause 46 agreed to.
Clause 47 [Enforcement of duty of company, receiver or liquidator to make returns]:
THE EARL OF HALSBURY: My Amendment is merely to leave out "ten" and insert "fourteen."
Amendment moved—
Page 39, line 21, leave out ("ten") and insert ("fourteen").—(The Earl of Halsbury.)
On Question, Amendment agreed to.
Clause 47, as amended, agreed to.
Clause 48 [Extension of s. 120 of principal Act to certain reorganisations of share capital, etc.]:
THE LORD CHANCELLOR: This is a drafting Amendment.
Amendment moved—
Page 40, line 10, after ("classes") insert ("or by both those methods").—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 48, as amended, agreed to.
Clause 49 [Provisions for facilitating reconstruction and amalgamation of companies]:
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, after subsection (2), to insert:—
"(3) Where an order is made under this section every company in relation to which the order is made shall cause an office copy thereof to be filed with the registrar of companies within seven days after the making of the order, and if a company makes default in complying with the foregoing provision it shall be liable to a fine not exceeding five pounds for every day during which the default continues, and every director, manager, secretary or other officer of the company who knowingly and wilfully authorises or permits the default shall be liable to the like penalty."
The noble and learned Viscount said: This is a mere technicality. Where an order is made by the Court under this clause it is necessary that office copies of the order should be placed on the files kept by the Registrar of Companies.
Amendment moved—
Page 41, line 36, at end, insert the new subsection (3).—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 49, as amended, agreed to.
Clauses 50 to 60 agreed to.
Clause 61:
Amendment as to voluntary winding-up in certain cases.
61.—(1) The following provisions of this section shall have effect in relation to every voluntary winding-up, unless at a meeting of the directors of the company held before the date on which the notices of the meeting at which the resolution for the winding-up of the company is to be proposed are sent out, the directors, or, in the case of a company having more than two directors, at least two of the directors of the company, have made a statutory declaration to the effect that they have made a full inquiry into the affairs of the company, and that having so done they have formed the opinion that the company will be able to pay its debts in full within a period net exceeding six months from the commencement of the liquidation, and unless before the said date the declaration so made has been filed with the registrar of companies.
(6) The creditors at the meeting to be held as aforesaid or at any subsequent meeting, may, if they think fit, appoint a committee of inspection, and if such a committee is appointed the company may, either at the meeting at which the resolution for winding-up the company is passed or at any time subsequently in general meeting, appoint such number of persons as they think fit to act as members of the committee:
Provided that the creditors may, it they think fit, resolve that all or any of the persons so appointed by the company ought not to be members of the committee of inspection, and if the creditors so resolve, the persons mentioned in the resolution shall not, unless the court otherwise directs, be qualified to net as members of the committee, and on any application to the court finder this provision the court may, if it thinks fit, appoint other persons to act as such members in place of the persons mentioned in the resolution.
THE EARL OF HALSBURY THE EARL OF HALSBURY moved to leave out subsection (1). The noble Earl said: Here I am bold enough to move that the whole of subsection (1) be struck out. To begin with it is putting a director in an extraordinary position. It is asking him, when a company is undoubtedly in difficulties, to swear a statutory declaration that the company is in his opinion going to be able to pay its debts in full within six months; but the extraordinary part of this is that if you look at the Wilfrid Greene Report you find that the Report suggests that the law be amended in favour of creditors, and that: it should be made stronger in favour of creditors.
If you look at this section, however, you find that if subsection (1) stands as it is there appears to be a moratorium and the creditors cannot hold a meeting for six months if the directors so desire; and I cannot see why a company going into voluntary liquidation, which after all is something akin to a person making a composition with his creditors, should be entitled to keep its creditors at bay for six months and not allow them to hold meetings, or do anything. That seems to be going straight against the finding of the Wilfrid Greene Report, which was to make the law more in favour of creditors. I beg to mote that subsection (1) be deleted.
Amendment moved—
Page 46, line 12, leave out subsection (1).—(The Earl of Halsbury.)
LORD DANESFORT: I should like to support the noble Earl's Amendment. The subsection seems to give a dangerous power to directors. They naturally want the company to go on, and it gives them power to make a statutory declaration saying they have looked into the matter and have formed the opinion that the company will be able to pay its debts in full. Then there is to be what the noble
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Earl calls a moratorium. I think it is very unfair to creditors that upon the opinion of two directors they are to have their rights, it may be, prejudiced in a way which can never be recovered.
LORD BANBURY OF SOUTHAM: Might not the directors in the six months enter into a business which would result in a loss, and leave a company hitherto solvent at the end insolvent?
THE LORD CHANCELLOR: There is obviously a misunderstanding about this clause. It does not interfere in the least with creditors, or have anything to do with a company going into compulsory liquidation. It is confined entirely to voluntary winding-up and gives a new power to creditors in that event. The Greene Committee said:
"In order to give creditors mere effective control in voluntary liquidations where the company is or is expected to be unable to pay its debts in full, it should be provided that in all cases where the directors …. do not make a statutory declaration that the company is in their opinion able to pay its debts in full within a period not exceeding six months after the commencement of the liquidation, a meeting of creditors shall be summoned by notice issued at the same time as the notices to the shareholders"
and they may take control. It is a new provision adding to the existing rights of creditors, that where a company is not believed to be solvent the creditors may intervene. If subsection (1) was struck out the effect would be that Clause 61 would apply to all voluntary liquidations and not, as proposed, to insolvent companies only. If creditors' rights are in danger they can come in now, but this is a new remedy given to them and I think we ought to follow the recommendation of the Committee.
THE EARL OF HALSBURY: I still do not see why, because two directors choose to swear a statutory declaration that in their opinion the company will be able to pay, these things should happen. Observe this. It is quite obvious to anybody who has had any dealings with the Criminal Law that you could never get a conviction for perjury on such a declaration. It will become more or less like the plaintiff's affidavit under Order 14, but it will keep creditors out for six months, and it is an extraordinary thing to call it in favour of the creditors.
EARL RUSSELL: I think the noble Earl opposite has omitted to notice, what no doubt the Lord Chancellor did not think it necessary to tell us—namely, that the creditor's right of compulsory liquidation is still there.
LORD DANESFORT: Before the matter is finally disposed of I hope the Lord Chancellor will consider this point. He says that this clause gives a new right to creditors. That is presumably a proper right, but this subsection (1) says, in effect, that this just and reasonable right given by subsection (2) shall not be exercised if two directors swear that in their opinion the company is solvent. I should be perfectly ready to accept that if the persons to make the declaration were persons other than directors—if, for instance, the Court on proper evidence said that the company was solvent. Then it would be quite reasonable to say that nothing should be done for six months. Otherwise it does not seem reasonable. Perhaps the Lord Chancellor will consider whether there shall be something more than a declaration by two directors before creditors are deprived of their rights.
LORD HUNSDON OF HUNSDON: The Law Society are very anxious I should say that in their opinion this is a very bad clause, because two directors, if dishonourable people, will not have the slightest difficulty in making a declaration. It is true that the Law Society cannot suggest a better one, but this they think is a very bad clause.
LORD BANBURY OF SOUTHAM: I am not convinced by the arguments of the Lord Chancellor. I do not see why in a company having more than two directors only two can make the declaration. Does it mean that two directors alone without authority from the remaining four, may make this declaration and so stop the winding-up of the company, which the other directors and the shareholders are all anxious to carry out? It may be that those two particular directors have some reason for doing this. My noble friend Lord Hunsdon says it is quite possible it may be a bad reason. I have no acquaintance with the Criminal Law, but apparently Lord Halsbury has not much opinion of the Criminal Law, and thinks it can easily be evaded by a printed form which is apparently applicable to every
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question. In these circumstances I think this clause requires a little further consideration. May I ask the Lord Chancellor whether he would consent to its withdrawal on the understanding that if he finds before the Report stage that it is absolutely necessary to have some clause of this sort it should be restored?
THE EARL OF HALSBURY: In answer to the noble Earl opposite I am quite aware of the powers of the Court under a compulsory winding-up order, but if the noble Earl will look at the Report of the Greene Commission he will see that the Greene Commission was dealing with the question of voluntary winding-up, and it was on that point that they recommended that the powers of the creditors should be strengthened. I have no doubt that he, like everybody on the Committee was well aware of the powers of winding-up, but he was not dealing with that, and the Committee thought proper to report, with regard to voluntary winding-up, that the powers and rights of creditors should be looked after and their powers strengthened. Therefore it seems to me no, answer to say that this is perfectly true, but it does not seem to work very well in a voluntary winding-up.
EARL RUSSELL: I only drew attention to that because the noble Earl said creditors were being deprived of their rights and were being kept at bay. The Report referred to it to show that if creditors were under any apprehension they could not be kept at bay. As I understand this clause, it gives the creditors the new right of nominating a liquidator in a voluntary winding-up That is, I understand, a new right, and the only effect of the first provision is that if the directors of a company are found to be either brave enough or unscrupulous enough to make the statutory declaration asked for, then they do not get this right of nominating the liquidator, but if they are still afraid they still have the remedy of compulsory liquidation. That is how I understand it.
THE LORD CHANCELLOR: I certainly could not agree to hamper in this way every voluntary liquidation. Really, if the Amendment is accepted voluntary liquidation would come to an end, and that is not the object of the Committee or of the Bill Certainly I will accept

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the proposal of the noble Lord, Lord Banbury, and, if this is withdrawn, I will see whether I can in any way find a better plan.
THE EARL OF HALSBURY: Of course, I accept that at once.
LORD BANBURY OF SOUTHAM: At any rate, it should be all the directors, and not two.
THE LORD CHANCELLOR: Well, it says at a board meeting.
Amendment, by leave, withdrawn.
THE EARL OF HALSBURY THE EARL OF HALSBURY moved, in subsection (6), immediately before the proviso, to insert "not exceeding five in number." The noble Earl said: I understand the Lord Chancellor has accepted that.
Amendment moved—
Page 47, line 33, at end insert the said words.—(The Earl of Halsbury.)
On Question, Amendment agreed to.
Clause 61, as amended, agreed to.
Clause 62 [Disclaimer of onerous property:]
THE LORD CHANCELLOR: The next Amendments are drafting.
Amendments moved—
Page 50, lines 14 and 15, leave out ("he may disclaim such property") and insert ("the power under this section of disclaiming the property may be exercised")
Page 50, line 43, leave out ("he") and insert ("the company").—(The Lord Chancellor.)
On Question, Amendments agreed to.
Clause 62, as amended, agreed to.
Clause 63 [Restriction of rights of creditor in execution, or attachment:]
THE LORD CHANCELLOR: This is another drafting Amendment.
Amendment moved—
Page 52, line 40, at end insert:
("(3) In this section and the next following section of this Act the expression 'goods' includes all chattels personal, and the expression 'sheriff' includes any officer charged with the execution of a writ or other process").—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 63, as amended, agreed to.
Clauses 64 to 66 agreed to.
Clause 67:
Offences by officers of companies in liquidation.
67.—(1) If any person, being the past or present officer of a company which at the time of the commission of the offence is being wound up, whether by the court or voluntarily, or is subsequently ordered to be wound up by the court or passes a resolution under Section one hundred and eighty-two of the principal Act authorising the company to be wound up voluntarily—
(c) does not deliver up to the liquidator, or as he directs, all books, documents, papers, and writings in his custody or under his control relating to the property or affairs of the company; or
(m) has within twelve months next before the commencement of the winding-up or at any time thereafter, by any false representation or other fraud, obtained any property for or on behalf of the company on credit and not paid for the same; or
(2) Where any person pawns, pledges or disposes of any property in circumstances which amount to a misdemeanour under paragraph (o) of subsection (1) of this section, every person who takes in pawn or pledge or otherwise receives the property knowing it to be pawned, pledged, or disposed of in such circumstances as aforesaid shall be guilty of a misdemeanour, and on conviction thereof liable to be punished in the same way as if he had received the property knowing it to have been obtained in circumstances amounting to a misdemeanour.
THE LORD CHANCELLOR: Another drafting Amendment.
Amendment moved—
Page 54, line 23, leave out ("the") and insert ("a").—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE EARL OF HALSBURY THE EARL OF HALSBURY moved, in subsection (1) (c), to leave out "relating to the property or affairs of the company," and insert "belonging to the company." The noble Earl said: I understand this Amendment is accepted.
Amendment moved—
Page 55, lines 4 and 5, leave out ("relating to the property or affairs of the company") and insert the said new words.—(The Earl of Halsbury.)
On Question, Amendment agreed to.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, in subsection (1) (c), after "company," to insert "and which he is required by law

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to deliver up." The noble and learned Viscount said: This meets an objection raised to the Bill. The subsection as it stands makes no provision for the possibility of the party in possession of the books having a mortgage or lien on them. I think the Amendment ought to be accepted.
Amendment moved—
Page 55, line 5, after ("company") insert the said words.—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE EARL OF HALSBURY THE EARL OF HALSBURY moved, in subsection (1) (m), to leave out "any false representation or other." The noble Earl said: The question here is of any false representation. That does not quite say whether it is an innocent false representation or a fraudulent representation, and, as I gathered that fraudulent was meant, I thought it better to leave out these words.
Amendment moved—
Page 56, line 12, leave out the said words.—(The Earl of Halsbury.)
THE LORD CHANCELLOR: These are the exact words in the Bankruptcy Act, and it is very undesirable to have a difference between the two Acts.
THE EARL OF HALSBURY: I was not aware of that, and I certainly will withdraw.
Amendment, by leave, withdrawn.
THE LORD CHANCELLOR: The next is a drafting Amendment.
Amendment moved—
Page 56, lines 14 and 15, leave out ("and not paid for the same") and insert ("which the company does not subsequently pay for").—(The Lord Chancellor.)
On Question, Amendment agreed to.
THE EARL OF HALSBURY THE EARL OF HALSBURY had given Notice to move, at the end of the clause, to insert: "Provided that nothing in this section shall be deemed to apply to a receiver or to a receiver and manager or to any person who gives advice professionally to the directors of the company." The noble Earl said: This is exactly the same Amendment as I moved in Clause 25, and the Lord Chancellor said he would consider it before the Report stage, if I would withdraw it. If he will give me the same indulgence here I will do the same.
THE LORD CHANCELLOR: I will consider it.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, at the end of the clause, to insert:—
"(3) For the purposes of this section the expression 'officer' shall include any person occupying the position of a director or in accordance with whose directions or instructions the directors of a company have been accustomed to act."
The noble and learned Viscount said: The object of the Amendment is to make it clear on the face of the Bill that "officer" in subsection (1) includes directors and also those persons occupying the position of a director.
Amendment moved—
Page 57, line 16, at end insert the said subsection.—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 67, as amended, agreed to.
Clause 68 agreed to.
Clause 69:
Provisions with respect to fraudulent trading.
69.—(1) If in the course of a winding-up it appears that any business of the company has been carried on with intent to defraud creditors of the company or creditors of any other person or for any fraudulent purpose, the court, on the application of the official receiver or the liquidator, or any creditor or contributory of the company, may, if it thinks proper so to do, declare that any of the directors, whether past or present, of the company who were responsible for the management of the said business shall be personally responsible, without any limitation of liability, for all or any of the debts or other liabilities of the company as the court may direct.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, in subsection (1), to leave out "responsible for the management of the said business," and to insert "knowingly parties to the carrying on of the business in manner aforesaid." The noble and learned Viscount said: The object here is to prevent directors who are not cognisant of a fraud from being made liable under the subsection.
Amendment moved—
Page 58, lines 9 and 10, leave out ("responsible for the management of the said business") and insert the said new words.—(The Lord Chancellor.)
LORD DANESFORT: Are not the words proposed to be left out really

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better? Is not "knowingly parties," etc., rather too vague? If a man is responsible for the management of the business, of course certain consequences follow, but a man who is "knowingly party" to carrying it on is in a very different position.
THE LORD CHANCELLOR: All directors are responsible for the management of a business, and if the clause is not amended a man would be made liable who really had no knowledge of what had been done, and who ought not to be penalised for it. We desire only to penalise those who are "knowingly parties" to the misfeasance.
On Question, Amendment agreed to.
THE LORD CHANCELLOR: The next Amendments are drafting.
Amendments moved—
Page 58, line 39, leave out from ("section") to ("every") in line 44.
Page 59, lines 1 and 2, leave out ("or to the obtaining of credit")
Page 59, line 17, leave out ("or") and insert ("on").—(The Lord Chancellor.)
On Question, Amendments agreed to.
Clause 69, as amended, agreed to.
Clause 70 agreed to.
Clause 71:
Prosecution of delinquent directors.
(4) If where any matter is reported or referred to the Director of Public Prosecutions under this section he considers that the case is one in which a prosecution ought to be instituted and, further, that it is desirable in the public interest that the proceedings in the prosecution should be conducted by him, he shall institute proceedings accordingly, and it shall be the duty of the liquidator and of every officer and agent of the company past and present (other than the defendant in the proceedings) to give to him all assistance in connection with the prosecution which he is reasonably able to give.
If any person fails or neglects to give assistance in manner required this subsection the court may, on the application of the Director of Public Prosecutions, direct that person to comply with the requirements of this subsection, and where any such application is made with respect to a liquidator the court may, unless it appears that the failure or neglect to comply was due to the liquidator not having in his hands sufficient assets of the company to enable him so to do, direct that the costs of the application shall be borne by the liquidator personally.
For the purposes of this subsection the expression "agent" in relation to a company shall be deemed to include any banker or solicitor of the company and any person employed by the company as auditor, whether that person is or is not an officer of the company.
(5) The Board of Trade, with the consent of the Treasury, may direct that the whole or any part of any costs and expenses properly incurred by the liquidator in proceedings duly brought by him under this section shall be defrayed as expenses incurred by the Board under the principal Act in relation to the winding-up of companies in England, and subsection (3) of section thirteen of the Economy (Miscellaneous Provisions) Act, 1926, shall apply accordingly.
Subject to any direction under this subsection all such casts and expenses as aforesaid shall be payable out of the assets of the company in priority to all other liabilities payable thereout.
VISCOUNT BERTIE OF THAMEhad given Notice to move, in subsection (4), after "banker," to insert "broker." The noble Viscount said: I think the noble and learned Viscount will agree that this is little more than a drafting Amendment. If he does not agree and does not like it, I will not move.
THE LORD CHANCELLOR: I think it is unnecessary.
LORD HUNSDON OF HUNSDON LORD HUNSDON OF HUNSDON moved, at the end of subsection (4), to insert "but nothing in this Act shall oblige any solicitor to supply information which would involve a breach of professional privilege." The noble Lord said: This clause deals with delinquent, directors and it directs that every agent of the company shall give to the Director of Public Prosecutions all assistance in connection with the prosecution which he is reasonably able to give. The word "agent" is defined later on as "any banker or solicitor." The Law Society are very sensitive about this matter, not so much in their own interest as in that of their clients. It would be quite a new departure if clients were not to be able to consult their solicitors freely and without fear. This may not be the intention of the Bill. If it is not there would seem to be no harm in saying so. Therefore I propose to add the words which appear on the Paper.
Amendment moved—
Page 62, line 21, at end insert the said words.—(Lord Hunsdon of Hunsdon.)
LORD DANESFORT: I would suggest that the words might be accepted because, when you are imposing an obligation upon persons to tell the Court any facts which are relevant to the question under consideration it would not be proper, I think, to force the witness into a breach of professional etiquette if he is a solicitor. No doubt that is not intended. I think proper words ought to be put in to relieve solicitors from having to commit a breach of professional etiquette.
LORD PARMOOR: Are we not dealing here with a criminal matter? Would a privilege arise in a criminal matter?
THE LORD CHANCELLOR: I am in sympathy with the general principle underlying this Amendment but I would like to consider it. It only came into my hands this morning. I would be glad if the noble Lord would put it down on Report.
Amendment, by leave, withdrawn.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, after "subsection" in the second paragraph of subsection (5), to insert "and to any mortgages or charges on the assets of the company." The noble and learned Viscount said: This is to prevent the company's liability for costs coming before mortgages or charges on the assets. Of course, they stand first and this is intended to protect them. The next Amendment on the Paper deals with the same matter. I beg to move.
Amendment moved—
Page 62, line 31, after ("subsection") insert ("and to any mortgages or charges on the assets of the company").—(The Lord Chancellor.)
On Question, Amendment agreed to.
Amendment moved—
Page 62, line 33, leave out ("the assets of the company") and insert ("those assets").—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 71, as amended, agreed to.
Clause 72:
Provisions as to liability of directors, etc.
72.—(1) Subject as hereinafter provided, any provision, whether contained in the articles of a company or in any contract with a company or otherwise, for exempting
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any director, manager or other officer of the company from, or indemnifying him against, any liability which by virtue of any rule of law would otherwise attach to him in respect of any negligence, default, breach of duty or breach of trust of which he may be guilty in relation to the company shall be void:
Provided that, in relation to any such provision which is in force at the date of the commencement of this Act, this subsection shall have effect only on the expiration of a period of six months from that date.
(2) Section two hundred and seventy-nine of the principal Act shall apply to the managers and officers of a company as it applies to the directors of a company, and the court in determining in pursuance of that section whether any person ought fairly to be excused for any negligence or breach of trust shall take into consideration all the circumstances connected with his appointment., including the purpose thereof and shall have effect as though for the words "negligence or breach of trust" there were substituted the words "negligence, default, breach of duty or breach of trust".
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, after subsection (1), to insert
"and
(b) Nothing in this subsection shall operate to deprive any person of any exemption or right to be indemnified in respect of anything done or omitted to be done by him while any such provision was in force; and
(c) Notwithstanding anything in this subsection, a company may, in pursuance of any such provision as aforesaid, indemnify any director, manager or other officer of the company against any liability incurred by him in defending any proceedings, whether civil or criminal, in which judgment is given in his favour or in which he is acquitted or in connection with any application under Section two hundred and seventy-nine of the principal Act in which relief is granted to him by the court."
The noble and learned Viscount said: This is a useful Amendment of an important clause dealing with the liability of directors. It prevents a director from contracting out of his liability under the general law for negligence or breach of duty or breach of trust. As regards such contracts which are in operation when the date of the new Act comes into force, a period of six months grace is given under which the director is still protected. It has been suggested that there is some doubt whether the proviso to subsection (1) as it stands might not conceivably be read as meaning that, while a director is protected for six months

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against proceedings, yet after the six months has expired he may be proceeded against in respect of some act of negligence committed at any time before. This was certainly not the intention of the Committee, nor would it be equitable. The new paragraph (b) is designed to set, at rest any possible doubt on the matter.
The new paragraph (c) deals with another point. Under the clause as it stands, a director who is perfectly innocent may be proceeded against by some malicious person and must necessarily take, steps to defend himself. It has been suggested that the alteration of the law will, in the absence of some further provision, offer a direct incentive to men of straw, and others, to take proceedings against directors, knowing well that even though the proceedings should fail the director against whom proceedings are taken will be severely damaged in his pocket by having to pay his own costs, the plaintiff having no money with which to pay. Furthermore, a director, though held to be negligent or guilty of some default, may be granted relief by the Court under Section 279 of the Act of 1908 on the ground that he ought fairly to be excused. As the clause stands the director could not be indemnified by his company. It is clearly equitable that he should be so indemnified, and the new paragraph (c) of the present Amendment makes provision for that.
Amendment moved—
Page 63, line 4, after ("date") insert the said paragraphs.—(The Lord Chancellor.)
On Question, Amendment agreed to.
LORD HUNSDON OF HUNSDON LORD HUNSDON OF HUNSDON moved to leave out subsection (2) and insert as a new subsection:
"(2) Section two hundred and seventy-nine of the principal Act shall be deleted and the following section substituted therefor:—
"If in any proceeding against a director or person occupying the position of director of the company or against any manager, auditor or officer of a company it appears to the court hearing the case that the director, person, manager, auditor or officer is or may be liable for misfeasance, omission, negligence or breach of trust but has acted honestly, that court may relieve him either wholly or partly from his liability on such terms as the court may
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think proper, and any such director, person, manager, auditor or officer may in any circumstances in which he considers that he may have become liable for misfeasance, omission, negligence or breach of trust himself apply to the court for relief under this section. In exercising its discretion under this section the court shall have regard to all material circumstances, including in particular any arrangement or understanding as to the nature or scope of the services to be rendered by the director, person, manager, auditor or officer, whether made before or after his appointment, and the magnitude and nature of the business carried on by the company, and also that directors are appointed to supervise matters of general policy, and not the detailed working out of that policy."
The noble Lord said: This, in the opinion of the Law Society, is a very important and necessary Amendment. Section 279 of the principal Act, which it is desired to amend, gives discretion to the Court in certain cases to relieve the directors and officers of a company from liability. Mr. Harold Brown, of Messrs. Linklaters, the well known firm of solicitors, whose authority on Company Law and procedure is second to none in the City of London, was a member of the Committee on whose Report this Bill is based. Mr. Brown appended to the Report the following note:—
"I have signed the Report, but if it is to be made illegal for directors and auditors and other officers of the company to contract out of their Common Law liability for negligence, in my opinion Section 279 of the Act should be altered so as to give the Court a wider discretion than it has under that section to relieve directors from liability where they have acted honestly."
This Amendment substitutes a new section for Section 279 and is designed to carry out Mr. Brown's recommendation and indeed was, I believe, drafted by him except for the last sentence, to which I will refer later.
The amended clause is mainly designed to extend the exercise of discretion by the Court and reads as follows:—
"If in any proceeding against a director or person occupying the position of director of the company or against any manager, auditor or officer of a company it appears to the court hearing the case that the director, person, manager, auditor or officer is or may be liable for misfeasance, omission, negligence or breach of trust but has acted honestly, that court may relieve him either wholly or partly from his liability on such terms as the court may think proper——"

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Except that the words "misfeasance" and "omission" are substituted for the words "default and breach of duty" and the words "and reasonable" are omitted the Amendment follows the Act up to this point. The remainder of the Amendment, which is new matter, runs as follows:—
"And any such director, person, manager, auditor or officer may in any circumstances in which he considers that he may have become liable for misfeasance, omission, negligence or breach of trust himself apply to the court for relief under this section. In exercising its discretion under this section the court shall have regard to all material circumstances, including in particular any arrangement or understanding as to the nature or scope of the services to be rendered by the director, person, manager, auditor or officer, whether made before or after his appointment, and the magnitude and nature of the business carried on by the company, and also that directors are appointed to supervise matters of general policy, and not the detailed working out of that policy."
Thus the Amendment gives power to any director or officer of a company to clear himself before any charge is made against him so that he shall not lie under any imputation if the company gets into difficulties, even though no direct charge has been brought against him.
The Amendment instructs the Court to have regard to all material circumstances connected with the appointment of a director or other official, such as expert knowledge of some part of the company's business or the value of his connection to the company; and to have regard to the magnitude and nature of the business which may be such that it would be impossible for any one director to be familiar with every part of it; and finally that the Court is to have regard to the fact that directors are appointed to supervise matters of general policy and not the detailed working out of that policy. This last instruction is worded and approved by the Law Society, but the suggestion was mine. I observe that these last words do not appear in the Amendment of my noble friend the Earl of Halsbury but that otherwise his Amendment follows exactly the lines of mine. I may perhaps be allowed to explain that in reading this Bill it appeared to me that the draughtsman had somewhat misconceived the duty of directors. It is not their business to
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attend to all the technical matters mentioned in the Bill. These details are part of the duty of the secretary and officials, and it is the duty of the directors to change the secretary and officials if these details are not attended to properly.
Speaking of the Amendment generally the Law Society feel that the new Bill will impose upon directors and officers a large number of new liabilities which are not very well known or defined; and though under the Bill the Court may grant relief if it is satisfied they have acted honestly and reasonably, acts which may have seemed reasonable at the time to a director who had to come to a rapid decision in the stress of business may seem unreasonable in the light of after events. Therefore, the Law Society think that the words "and reasonably" should be omitted from the Bill so as to enable the Court to consider the granting of relief so long as the director has acted honestly. The Law Society also are opposed to the proposition that directors should not be allowed to contract out of their liabilities unless the very widest power is given to the Court to excuse them if it should see fit to do so. My fear is that in our desire to punish dishonesty we may, if this Amendment is not passed, discourage respectable people from joining the boards of companies and that, in the result, the loss to the community may be greater than the gain.
Amendment moved—
Page 63, lines 5 to 15, leave out subsection (2) and insert the said new subsection.—(Lord Hunsdon of Hunsdon.)
THE EARL OF HALSBURY: May I say one word following the noble Lord who has just sat down? It is hardly by coincidence that the next Amendment of mine is word for word the same, because they were taken clearly from the same source. All I desire to say is that the chartered accountants are in entire agreement with the Law Society in this matter. They feel that the penalties put on directors by this Bill are so serious that every indication ought to be given to the Court that relief can and ought to be given to a director who has honestly carried out his business, even though he may find himself in a difficulty. It ought to be made quite clear to the Court that the power to give relief is properly to be

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exercised and a general idea should be given to the Court as to how its discretion should be used.
LORD GAINFORD: I have been asked to put down Amendments dealing with this subject from the point of view of the manufacturing companies. The speech which has just been delivered very largely expresses their views. On their behalf I propose to put down Amendments to this clause for consideration on Report stage if the Lord Chancellor is not prepared to accept the Amendment which is now moved. Of course, if the Lord Chancellor accepts this Amendment, the Amendments which I propose to put on the Paper may possibly need redrafting, but, as I have not been able to give your Lordships notice of the particular Amendments, I propose to put them down on Report.
LORD DANESFORT: May I say quite briefly that I hope the Lord Chancellor will not accept this Amendment, at any rate as it appear on the Paper. There may be some modification required in the clause, but I think the Amendment goes a great deal too far. To my mind Clause 72 is one of the most important clauses in the Bill. While I have no desire to persecute or to punish directors unduly, I have a certain amount of regard for shareholders. I remember a very remarkable case tried not long ago in one of the Chancery Courts. A claim against the directors for misfeasance was brought by the shareholders. I think it was in a winding-up case but I am not sure about that. It was undoubtedly proved that the directors had been guilty of breach of duty and negligence, in other words of misfeasance. Their defence was that by a contract with the shareholders they were exempted from all liability for misfeasance such as negligence. When they were asked: "How did you make this contract with the shareholders?" their reply was: "The contract is in the articles."
Just think what that means. When a shareholder takes shares in a company it is very unusual indeed, so far as my experience goes, for a man to say: "Before I buy those shares send me a copy of the articles and let me send those articles to my lawyer and see whether there is anything in them which would prejudice my position." Of course he does not do that. The consequence is that when there is a case of
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this kind and directors are exempt from action for misfeasance because of something in the articles, not once in a thousand times, or perhaps ten thousand times, do the shareholders know anything about it. This clause has been properly introduced into the Bill to prevent directors contracting out of liability for misfeasance. The clause, as it stands, in certain cases exempts directors from the result of misfeasance and personally I think the clause goes far enough. I am inclined to think that the clause proposed by my noble friend Lord Hunsdon goes too far. It may be that the clause in the Bill will require some small Amendment, but I should be glad to hear that the Lord Chancellor will not accept this Amendment, because it goes much too far.
THE LORD CHANCELLOR: I shall be glad to consider any Amendment which my noble friend Lord Gainford may put down before Report, but I cannot accept this Amendment as it stands. The matter is rather difficult to follow because the two subsections, the one in the Bill and the one now proposed, are framed in different ways, but the short effect of the Amendment is that, while the existing clause gives power to the Court to grant relief where a director acted honestly and reasonably, my noble friend proposes to leave out the words "and reasonably." Therefore, even if a director acted most unreasonably, if he acted honestly he may get off. We do not think that is right. He asks for relief, but the Court ought to consider, not only whether he is an honest man, but whether he has been reasonable in his action. The second part of the Amendment provides that a director may apply for relief. I am rather inclined towards that proposal, and, if the noble Lord will put down an Amendment dealing with the matter before the Report stage, I will consider it. The third part of the Amendment is contained in the long sentence at the end of it. As the Bill stands, the Court may, if the director has acted reasonably and honestly, give relief, and the Bill adds that the Court may take into account special circumstances connected with the directorship. That means that, if a man is a special expert on one matter and is made a director in order to see to a certain part of the business, that shall be taken into account.

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But the noble Lord's Amendment provides for all kinds of other things. He says that the Court is to have regard "to all material circumstances." Of course they would do that without these words. He goes on to say—
"including in particular any arrangement or understanding as to the nature and scope of the services to be rendered by the director, person, manager, auditor or officer, whether made before or after his appointment"—
that, of course, enables them to protect him after his appointment when they see the trouble coming—
"and the magnitude and nature of the business carried on by the company"—
the City Equitable carried on a very large business—
"and also that directors are appointed to supervise matters of general policy, and not the detailed working of that policy."
That is the excuse that I have often heard made in Court and elsewhere for negligent directors. I cannot accept these words, and I hope that the noble and learned Lord will not press this Amendment, although I will, of course, consider any further propositions he has to make.
THE EARL OF HALSBURY: Although my memory may be at fault I believe that the words used in the Amendment are the same as those used in the Report of the Committee. It was intended that when relief was to be given it should be considered whether the director was appointed for some special reason, and this point was specifically recommended to be taken into consideration when it was to be considered whether or not relief should be given.
THE LORD CHANCELLOR: I have the Report here, and the Bill follows the exact words of the recommendations.
On Question, Amendment negatived.
Clause 72, as amended, agreed to.
Clause 73:
Accounts to contain particulars as to loans to directors, etc.
73.—(1) The accounts which in pursuance of this Act are annually to be laid before every company in general meeting shall contain particulars showing—
(a) the aggregate amount of any loans which during the period to which the accounts relate have been made either by the company or by any other person under
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a guarantee from or on a security provided by the company to the directors of the company, and to any other officers of the company respectively, including any such loans which were repaid during the said period; and
Provided that the foregoing provision shall not apply—
(ii) to a loan made by the company to any employee of the company if the loan does not exceed two thousand pounds and is certified by the directors of the company to have been made in accordance with any practice adopted or about to be adopted by the company with respect to loans to its employees.
VISCOUNT BERTIE OF THAME VISCOUNT BERTIE OF THAME moved, in subsection (1) (a), to leave out "aggregate" and, after "loans," to insert "the security given therefor and the rate of interest paid thereon." The noble Viscount said: I want your Lordships to bear in mind that directors are in some sense trustees, and the ordinary trustee is not allowed to borrow his trust money, however good the security may appear to be. I think it doubtful whether directors ought to be allowed to borrow the company's money at all, but if they do I submit that the fullest information should be given the shareholders of all such transactions.
Amendment moved—
Page 63, line 19, leave out ("aggregate") and after ("loans") insert ("the security given therefor and the rate of interest paid thereon").—(Viscount Bertie of Thame.)
THE LORD CHANCELLOR: I cannot accept the Amendment quite as it stands, but I have some sympathy with what the noble Viscount has said. The Committee recommended that only the aggregate amount of the loans was to be shown in the accounts, but I see no very strong objection to stating the details. Apart from the special case of banks, the practice of borrowing by directors from their companies is one to be discouraged. I do not like the words "security given therefor and the rate of interest paid thereon," because I think they would encumber the accounts too much. I should like to consider the terms of the clause before Report and either ask ray noble friend to put down an Amendment again or else do so myself.
VISCOUNT BERTIE OF THAME: I am much obliged to the noble and learned Viscount, but I must say I am disappointed that he does not see his way to have inserted the security given and interest, paid, as I think it is most important they should be.
Amendment, by leave, withdrawn.
THE EARL OF HALSBURY THE EARL OF HALSBURY moved, at the end of subsection (1), to insert "or to the supply of goods by the company to any director, officer or employee in the ordinary course of business." The noble Earl said: This is a very small point, but it is the custom in industrial concerns to supply goods from a private company to directors and others in the ordinary course of business.
Amendment moved—
Page 63, line 44, after ("employees") insert the said words.—(The Earl of Halsbury.)
THE LORD CHANCELLOR: I am prepared to accept that.
On Question, Amendment agreed to.
VISCOUNT BERTIE OF THAME VISCOUNT BERTIE OF THAME had given Notice to move to insert the following new subsection:—
"() If a company makes default in complying with the provisions of this clause the company and every director, manager, secretary or other officer of the company who knowingly and wilfully authorises or permits the default shall be liable to a fine not exceeding one hundred pounds."
The noble Viscount said: This is merely a penalty provision. But I understand from the Lord Chancellor that it is rendered unnecessary by subsection (2), and do not therefore press it.
THE LORD CHANCELLOR: My Amendment to this clause is drafting.
Amendment moved—
Page 64, line 4, leave out ("to include therein") and insert ("either to include in their report on the balance-sheet of the company or to insert as a note on the accounts").—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 73, as amended, agreed to.
Clause 74:
Statement as to remuneration of directors to be furnished to shareholders.
74.—(1) The directors of a company shall, on a demand in that behalf made to them in writing by members of the company entitled to not less than one-quarter of the
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aggregate number of the votes to which all the members of the company are together entitled, furnish to all the members of the company within a period of one month from the date of the demand a statement, certified as correct by the auditors of the company, showing as respects each of the last three preceding years in respect of which the accounts of the company have been made up the aggregate amount received in that year by way of remuneration or other emoluments by persons being directors of the company, whether as such directors or otherwise in connection with the management of the affairs of the company, including in the case of a person being by virtue of the nomination, whether direct or indirect, of the company a director of any other company any remuneration or other emoluments received by him for his own use as a director of that other company.
(2) In computing for the purpose of this section the amount of any remuneration or emoluments received by any director the, amount actually received by him shall, if the company has paid on his behalf any sum chargeable by way of Income Tax (including Super-tax) in respect of the remuneration or emoluments, be increased by the amount of the sum so paid.
(3) If any person fails to comply with the requirements of this section he shall be liable to a fine of fifty pounds.
EARL RUSSELL: I have certain observations to make on this clause, and I think it might be convenient to the noble and learned Viscount if I make them now, so that he can reply when he moves his first Amendment. This is rather a curious clause. I suppose it is a compromise clause. It provides that in certain circumstances a certain amount, but not the whole, of the information shall be given as to the remuneration received by the directors. I say not the whole information, because it can only be the aggregate amount that is received. Apparently it is not to be set out in the balance sheet what director receives what amount, but only the total amount, which can probably to some extent be gathered from the balance sheet already. Before this can be done a demand has to be made in writing by one quarter of the voting power of the company. That is a very large proportion, and I rather wonder whether it is worth while including this clause in the Bill. It would only be in a case where everybody was at loggerheads in a company that is on its last legs that a hostile demand of that sort, as it would obviously be, would be made by so large a proportion as one quarter of the voting strength.

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The actual remuneration and emoluments of each director could surely be set out quite simply and straightforwardly in the accounts of the company. After all, it is the shareholders' money that he is receiving, and it may interest them, and one knows that it often does interest them, to know how much he is receiving. I know a good many cases of very large sums being received by directors and received by directors of companies unknown to the shareholders. They cannot ascertain it even if they enquire at the general meetings. They are generally put off and not supported by the rest of the meeting. If you are going to leave it to be demanded by one quarter of the members by voting rights you will not get it anyhow. I am not going to move an Amendment now or on Report, but I ask the Lord Chancellor to consider between now and the Report stage whether it is worth while keeping the clause in the Bill in its present form. It seems to be a sort of camouflaged compromise, and I think you should have put in that every report should state fully the directors' remuneration.
LORD GAINFORD: I have handed in an Amendment which I hope will meet the general position and be satisfactory to the Government. My proposal is that you shall omit all the words after "The directors of a company shall" down to "together entitled," and substitute "if required by special resolution of the company so to do." It seems to me to be rather contrary to the ordinary method adopted, and to change the particular proportion of the voting power of the company for a special purpose seems unnecessary. The articles of association are the rules which guide the company, and in every company a special resolution of the company can be passed, so as to meet cases of this kind. I believe that is the right way. I do not know whether the Lord Chancellor is in a position to accept my Amendment at the present moment, but if he would prefer that it should be considered on Report I am prepared to move it then.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved to leave out, after the second "company," in subsection (1), the words "entitled to not less than one quarter of the aggregate number of votes to which all the members of the company are together
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entitled," and to insert "representing at the date of the demand not less than one quarter of the total voting rights of all the members of the company." The noble and learned Viscount said: I cannot prevent the noble Lord from putting his Amendment down on Report, but I do not want to hold out any hope that I can accept an Amendment in the form which he has indicated. It is rather strange that while the noble Earl opposite thinks 25 per cent. too many Lord Gainford would require a three-quarters majority. The effect of that would, I think, be to nullify the clause altogether, because such a majority would be extremely hard to find. This is a compromise, but I object to calling it "camouflaged." It is a perfectly plain and intelligible compromise. The Committee said there was a demand for more information about the remuneration of directors, but on the other hand they did not want any shareholder, or a small number of shareholders, to have the right to require such information to be given, because the disclosure of the remuneration paid, for instance, to managing directors, or by way of commission, or in some other way, might be harmful to the company,
"since cases not infrequently occur of attempts by competitors to induce a managing director to change his employment by offers of higher remuneration, and this practice would no doubt tend to increase if companies were compelled to disclose as a matter of course the remuneration which they pay."
The Committee therefore say:—
"We consider that shareholders representing a substantial portion of the voting power (not the share-holding) should have the right to requisition a certain statement of the remuneration, etc., paid to directors, including managing directors."
They suggested this proportion should be 25 per cent., and that is the figure we have adopted. I think it is not unfair that the information should be given on demand. The clause prevents the demand being made by a small minority of the voting power, but compels information to be given when a quarter of the shareholders by voting power demand it. The Committee thought that was a fair compromise, and there is nothing secret or camouflaged about it.
Amendment moved—
Page 64, line 9, leave out from ("company") to the end of line 11 and insert the said new words.—(The Lord Chancellor.)
EARL RUSSELL: Will the noble and learned Viscount deal with the word "aggregate" in the clause?
THE LORD CHANCELLOR: That is what the Committee suggested should be required—namely, to furnish the total amount, without the details.
EARL RUSSELL: Why?
THE LORD CHANCELLOR: It would be sufficient, they say. I suppose it is to limit the disclosure of the private affairs of the company.
On Question, Amendment agreed to.
THE EARL OF HALSBURY: My next Amendment is, I think, only a drafting Amendment. It is to insert, after "certified as correct," the words "or with such qualifications as may be necessary."
Amendment moved—
Page 64, line 14, after ("correct") insert ("or with such qualifications as may be necessary").—(The Earl of Halsbury.)
THE LORD CHANCELLOR: I agree.
On Question, Amendment agreed to.
Amendments moved—
Page 64, line 21, leave out ("including in the case") and insert ("and there shall in respect")
Page 64, line 24, after ("company") ("be included in the said aggregate amount").—(The Lord Chancellor.)
On Question, Amendments agreed to.
Amendment moved—
Page 64, line 33, leave out ("person") and insert ("director").—(The Earl of Halsbury.)
On Question, Amendment agreed to.
Clause 74, as amended, agreed to.
Clause 75:
Provisions as to assignment of office by directors.
75. If in the case of any company provision is made by the articles or by any agreement entered into between any person and the company for empowering a director or manager of the company to assign his office as such to another person, any assignment of office made in pursuance of the said provision shall, notwithstanding anything to the contrary contained in the said provision, be of no effect unless and until it is approved by a special resolution of the company.
THE EARL OF HALSBURY THE EARL OF HALSBURY moved, after "company," where that word first occurs, to insert "other than a private com-
622
pany." The noble Earl said: This is not a drafting Amendment, but raises the question of the assignment of office by a director. In private companies it is done when a father is a director and he leaves by will the direction of the company to one particular son. The suggestion which I am making is that in the case of a private company there can be no real objection to the assignment of office by a director, although in the case of a public company there is.
Amendment moved—
Page 64, line 36, after ("company") insert ("other than a private company").—(The Earl of Halsbury.)
THE LORD CHANCELLOR: This is a departure from the Committee's recommendation and I hesitate to accept the Amendment. The recommendation of the Committee is quite general, and I would rather not detract from it.
Amendment, by leave, withdrawn.
Clause 75 agreed to.
Clause 76 [Provisions as to undischarged bankrupts acting as directors]:
Amendment moved—
Page 65, line 3, after ("company") insert ("including an unregistered company and a company incorporated outside Great Britain which has an established place of business within Great Britain").—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 76, as amended, agreed to.
Clause 77 [Companies, &c., disqualified for acting as liquidator, auditor or receiver of a company]:
Amendments moved—
Page 65, line 20, leave out ("person other than an individual") and insert ("body corporate (but not including a firm in Scotland)")
Page 65, line 26, leave out ("person who") and insert ("body corporate which").—(The Lord Chancellor.)
On Question, Amendments agreed to.
Clause 77, as amended, agreed to.
Clause 78:
Provisions as to auditors.
(2) The following shall be substituted for subsection (5) of Section one hundred and twelve of the principal Act:—
"(5) Subject as hereinafter provided, the first auditors of the company may be appointed by the directors at

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any time before the first annual general meeting, and auditors so appointed shall hold office until that meeting:
Provided that—

(a) the company in general meeting may remove any such auditors and appoint others in their place; and

(b) if the directors fail to exercise their powers under this subsection, the company in general meeting may appoint the first auditors, and thereupon the said powers of the directors shall cease."

THE EARL OF HALSBURY THE EARL OF HALSBURY moved, in paragraph (a) of the proviso, after "in," where that word first occurs, to insert "special," and after "meeting" to insert "convened for the purpose of which the auditors shall have due notice." The noble Earl said: This is rather an important Amendment, because it is provided in the clause that the company in general meeting may remove the auditors and appoint others in their place. Now the statutory meeting is a general meeting of the company, and before that the auditors who have been used largely by the promoters of the company to get the facts and also to certify in the prospectus may by a snap vote at the meeting be removed and replaced by totally different auditors. My Amendment proposes that that can only be done by special meeting of which the auditors shall have due notice. One cannot quite see that that can be an unreasonable Amendment.
Amendment moved—
Page 66, line 2, after ("in") insert ("special"), and after ("meeting") insert ("convened for the purpose of which the auditors shall have due notice.")—(The Earl of Halsbury.)
THE LORD CHANCELLOR: I am prepared to accept this in principle, but I would like to consider the words.
Amendment, by leave, withdrawn.
Clause 78 agreed to.
Clause 79 agreed to.
Clause 80:
Amendment of s. 274 of principal Act.
(5) Subsection (4) of the said section shall apply to every company incorporated abroad which establishes a place of business in Great Britain whether or not the company uses the word "Limited" as part of its name, and where the liability of the members of a company to which the
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said section applies is limited, notice of that fact shall be stated in legible characters in every prospectus inviting subscriptions for its shares or debentures in Great Britain, in all bill-heads, letter paper, notices, advertisements and other official publications of the company in Great Britain, and shall be affixed on every place where it carries on its business.
THE LORD CHANCELLOR: There are a number of drafting Amendments here.
Amendments moved—
Page 66, line 43, after ("companies") insert ("so incorporated")
Page 67, line 4, leave out ("established") and insert ("incorporated")
Page 67, line 32, leave out ("discontinues a") and insert ("ceases to have any")
Page 67, line 36, leave out ("abroad which establishes a") and insert ("outside Great Britain which has an established").—(The Lord Chancellor.)
On Question, Amendments agreed to.
VISCOUNT BERTIE OF THAME VISCOUNT BERTIE OF THAME moved, in subsection (5), after "limited," where that word secondly occurs, to insert "or is limited subject to any further statutory liability." The noble Viscount said: I do not think it is generally known in this country, not even by some well-known solicitors in the City of London, that in the case of bank and, I think, insurance shares in the Dominions there is what is called a statutory liability attached to the shares beyond their face value in case of liquidation. In Canada it amounts to 100 per cent. and in New Zealand 10 per cent. I think that this liability should be disclosed.
Amendment moved—
Page 67, line 40, after ("limited") insert the said words.—(Viscount Bertie of Thame.)
THE LORD CHANCELLOR: I am afraid I could not accept this. To require a person to state all statutory liabilities is putting a tremendous burden upon him. He may not know what Statutes bind him, especially in foreign countries, and this relates to companies outside Great Britain. The Amendment is also too wide. It requires notice in regard to all sorts of documents.
Amendment, by leave, withdrawn.
Clause 80, as amended, agreed to.
Clause 81 [Further provisions as to companies incorporated abroad]:
THE LORD CHANCELLOR: The first Amendment here is drafting, and the second technical.
Amendments moved—
Page 68, line 18, leave out subsection (2) find insert:
("(2) Every company to which the said Section two hundred and seventy-four applies shall once in every year file with the registrar a balance sheet in such form, and containing such particulars and including such documents, as under the provisions of this Act it would if it had been a company within the meaning of the principal Act, have been required to make out and lay before the company in general meeting.")
Page 68, line 40, after ("companies") insert ("(other than provisions requiring the payment of a fee in respect of the registration of a company)").—(The Lord Chancellor.)
On Question, Amendments agreed to.
Clause 81, as amended, agreed to.
Clause 82 agreed to.
Clause 83 [Exemption of certain documents from stamp duty on winding-up of companies]:
THE LORD CHANCELLOR: The next Amendments are drafting.
Amendments moved—
Page 69, line 11, leave out ("either")
Page 69, line 12, leave out from ("or") to ("section") in line 15 and insert ("is being wound up voluntarily and the winding-up is one to which the provisions of Section sixty-one of this Act apply").(The Lord Chancellor.)
On Question, Amendments agreed to.
Clause 83, as amended, agreed to.
Clause 84 agreed to.
Clause 85:
Restrictions on offering of shares for sale or for subscription.
85.—(1) It shall not be lawful for any person to go from house to house offering shares for subscription or purchase to any member of the public or otherwise by oral solicitation of any kind or in any place to invite or endeavour to induce any member of the public to subscribe for or purchase shares.
(4) The said statement shall contain particulars with respect to the following matters—
(b) the date on which and the country in which the company was incorporated,
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and the, address of its registered or principal office in Great Britain;
(f) the names and addresses of the directors of the company and of any person occupying the position of director of the company;
(5) If any person acts, or incites, causes or procures any person to act, in contravention of this section he shall be liable to a fine not exceeding two hundred pounds, and in the case of a second or subsequent offence to imprisonment for a term not exceeding twelve months or to a fine not exceeding five hundred pounds, or to both such imprisonment and fine.
THE LORD CHANCELLOR THE LORD CHANCELLOR moved, in subsection (1), to insert "the public or" before "any member of the public" and leave out the remaining words of the subsection. The noble and learned Viscount said: This is an important clause. It is the clause which prohibits a person from going from house to house offering shares for subscription or purchase to members of the public or otherwise by solicitation. There has been criticism on the clause, and I want to limit it in any reasonable manner. What I am proposing in this Amendment is to insert "the public" so that it shall cover offers to the public or any member of the public, but to leave out the words about "oral solicitation." I think that would limit the clause to the public or members of the public, and so prevent the criticism based upon the concluding words, which have. I knew, created some anxiety. I hope that these two changes together will put the clause into a form in which it can be accepted.
Amendment moved—
Page 69, line 34, after ("to") insert ("the public or") and leave out from ("public") to the end of line 37.—(The Lord Chancellor.)
LORD HARRIS: Does "house to house" mean "business house" to business house," or merely the domestic house to house?
THE LORD CHANCELLOR: I think it means both. I think most people understand what going from house to house means. I am limiting the clause by this Amendment.
LORD HARRIS: The criticism, I fear, is that this is a very negligently-drawn

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clause, and that there ought to be a definition of the words "house to house," Because they might mean going from business house to business house. I do not know to what extent the omission of the words as proposed by the noble and learned Viscount affects the whole provision. I hope it is sufficient to allay the anxiety of those who think that this is a very dangerous clause, and would involve anyone in conversation with a friend in doing something criminal, without any intention whatever of doing so. I only say that that is the criticism that I have received. Of course, I will wait and see what is the effect of the Lord Chancellor's Amendment, and see whether it is necessary to bring up any proposal on the point.
THE EARL OF HALSBURY: The chartered accountants have considered this section, and in their view the words which the noble and learned Viscount is omitting are exactly the words they wanted to omit, and certainly they would be in complete agreement with this Amendment.
On Question, Amendment agreed to.
VISCOUNT BERTIE OF THAME VISCOUNT BERTIE OF THAME moved, in subsection (4), after paragraph (b), to insert the following new paragraph:—
"() Where the offer or the name of the company states or implies that the company is the owner, lessee, concessionary or licensee of or formed to work mines, oil-bearing lands, timber, rubber, tea or other estates, short particulars of any such property in which the company is interested and of the nature of the company's interest therein and a statement that the opinion of a lawyer practising in the country in which the same is situate has been obtained approving of the title to such interest and the name, address and qualifications of such lawyer and a place in Great Britain at which such opinion or a copy thereof can be inspected.")
The noble Viscount said: This is rather an important Amendment. It often happens that companies formed for the purposes enumerated in this Amendment, and whose shares are hawked about, could not show a good title to the property or interest which they are supposed to possess. This paragraph would not apply to any company which acquires property for the purpose of carrying on a trade. If this paragraph is accepted I will, on Report, move a similar Amendment to cover prospectuses.
Amendment moved—
Page 70, line 30, at end insert the said new paragraph.—(Viscount Bertie of Thame.)
THE LORD CHANCELLOR: I could not accept this. It means that every offer of the shares of a mining company, to put it quite shortly, must contain the particulars of the property and a statement that the opinion of a lawyer practising in the country in which the mine is situated has been obtained proving the title, and a place in Great Britain where the opinion can be inspected. If this were carried out a perfectly reputable outside broker could not possibly offer shares for sale or transfer, because no such broker could obtain the particulars and information required by the Amendment. I am afraid this would put too great a burden upon persons who deal in shares. I could not agree to it.
VISCOUNT BERTIE OF THAME: In these circumstances I will not press it.
Amendment, by leave, withdrawn.
VISCOUNT BERTIE OF THAME VISCOUNT BERTIE OF THAME moved, in subsection (4) (f), after "names", to insert "occupation". The noble Viscount said: I think the occupation should be in.
Amendment moved—
Page 71, line 6, after ("names") insert ("occupation").—(Viscount Bertie of Thame.)
THE LORD CHANCELLOR: The Committee considered very carefully what information should be given, and they recommended that it should be confined to the names and addresses, and one is aware of the difficulty sometimes in knowing the occupation of all the persons who are directors, or in whom shares are vested. I would rather the noble Viscount did not press this.
VISCOUNT BERTIE OF THAME: I will not press it.
Amendment, by leave, withdrawn.
VISCOUNT BERTIE OF THAME VISCOUNT BERTIE OF THAME moved, at the end of subsection (5), to insert "and where such person is not a British subject he may be recommended for deportation as an undesirable alien." The noble Viscount said: I do not think this Amendment requires any argument.

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I feel sure the majority of your Lordships will agree that it is desirable. I beg to move.
Amendment moved—
Page 71, line 36, at end insert the said words.—(Viscount Bertie of Thame.)
THE LORD CHANCELLOR: The position, I think, is this. The clause provides that the penalty for contravention of the section shall be on a first offence a fine not exceeding £200, and on any subsequent offence, imprisonment not exceeding twelve months or a fine not exceeding £500. Where an alien is convicted of an offence which carries imprisonment he can already be deported under the Aliens Act. Therefore for that purpose no legislation is needed. But the effect of this Amendment is that he may be deported where he is only fined for a first offence. I do not in principle object to that, but I think the right place to make that provision is in the Aliens Order. That, I agree, could not be done as the Bill stands without Amendment, but I think that if, on Report, we were to amend the clause by authorising imprisonment even for a first offence then the Aliens Order would apply. I shall be glad if the noble Lord will consider the matter and see a representative of the Home Office. I have no doubt it will be possible to agree. In principle I am with him.
Amendment, by leave, withdrawn.
Amendment moved—
Page 72, line 3, leave out ("this") and insert ("the principal").—(The Lord Chancellor.)
On Question, Amendment agreed to.
Clause 85, as amended, agreed to.
Clauses 86 to 101 agreed to.
VISCOUNT BERTIE OF THAME VISCOUNT BERTIE OF THAME moved, after Clause 101, to insert the following new clause:—
"It shall be unlawful for any person knowingly to publish or directly or indirectly cause to be published a statement affirming or implying that any stock, shares, or securities offered for subscription have been over-subscribed if any such stock, shares or securities has been allotted to an underwriter of any such stock, shares or securities, or any nominee of such underwriter otherwise than pursuant to a firm and unconditional application lodged with the company or its agent not more than two hours after the opening of the subscription list.
If any person acts or incites, causes or procures any person to act in contravention
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of this section he shall be liable to a fine not exceeding one hundred pounds."
The noble Viscount said: the practice has grown up, in cases in which the public do not apply for securities in a public issue which has been underwritten, for the underwriters to apply either by themselves or through nominees for the amount, or perhaps a little more than the amount, which they are informed they will have to take up in any case owing to the abstention of the public from the issue. This enables the interested parties to issue what is really a fictitious statement to the Press that the issue has either been fully or over-subscribed. Tiffs is done to make the public believe that, after all, they have been foolish not to put money into the concern and it enables the underwriters to unload their shares as soon as dealings commence. This new clause would not refuse genuine applications by underwriters nor place them in a less favourable position than the public, because the underwriters know the merits or demerits of the issue certainly sooner and probably better than the public. It would, therefore, be no hardship for them to have to apply within two hours after the opening of the subscription list. I beg to move.
Amendment moved—
Page 78, line 25, at end insert the said new clause.—(Viscount Bertie of Thame.)
THE LORD CHANCELLOR: I would like to accept the noble Viscount's Amendment, as I have accepted others, but I do not think it would be effective when these enormous sums are in question. To impose a fine of £100 is not going to deter any fraudulent person from making some mis-statements as to what has happened. If there is real fraud a man can be got at in other ways, including putting the Criminal Law into operation. I am told it is very doubtful whether this clause would have the desired effect and that in fact very few cases would be dealt with under it. This is a new proposal not in the Committee's Report and I rather deprecate accepting it.
VISCOUNT BERTIE OF THAME: I will not persist in it at this late stage.
Amendment, by leave, withdrawn.
Remaining clauses agreed to.
First Schedule:
THE LORD CHANCELLOR: All my Amendments in the Schedules are drafting.
Amendments moved—
Page 83, line 14, at end insert:—
("Amount (if any) of Shares of £ each." above capital which consists of redeemable preference shares.
The date on or before which these shares are, or are liable to be redeemed.") …
Page 83, leave out lines 25 to 30.—(The Lord Chancellor.)
On Questions, Amendments agreed to.
First Schedule, as amended, agreed to.
Second Schedule:
Amendments moved—
Page 87, line 11, leave out ("(2)") and insert ("(1)").
Page 89, line 27, leave out from ("the") to the end of line 29 and insert ("words 'the company' there shall be inserted the words 'and all floating charges on the undertaking or any property of the company'").
Page 91, line 19, after ("which") insert ("paragraph (b) or") and leave out ("or paragraph (d)")
Page 91, line 38, leave out ("England") and insert ("Scotland")
Page 91, line 40, leave out ("Scotland") and insert ("England").
Page 92, line 34, leave out ("after the word 'accrued'") and insert ("for the word 'before'")
Page 92, line 35, leave out ("inserted") and insert ("substituted")
Page 92, line 39, after ("voluntarily") insert ("before")
Page 92, line 40, after ("case") insert ("before").
Page 94, line 2, leave out ("for") and insert ("before")
Page 94, line 9, leave out ("substituted") and insert ("inserted").—(The Lord Chancellor.)
On Question, Amendments agreed to.
Second Schedule, as amended, agreed to.
Third Schedule:
Amendments moved—
Page 95, line 25, after ("words") insert ("'printing or' and the words").
Page 96, line 17, at end, insert:—
("In subsection (3) of Section one hundred and ninety-two the words 'at
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either of the meetings held for passing and confirming the same.'")
Page 96, leave out lines 29 to 37, and insert ("subsection (3) of Section two hundred and seventy-four").—(The Lord Chancellor.)
On Question, Amendments agreed to.
Third Schedule, as amended, agreed to.

FOREIGN DECORATIONS FOR BRITISH SUBJECTS.
LORD HARRIS: My Lords, I desire to ask His Majesty's Government what procedure is adopted by the Foreign Office when the name of a British subject is submitted for His Majesty's gracious consideration for permission to wear a foreign decoration; and to call attention to a particular case. I am sorry to have had to draw public attention to a case where, it seems to me, one of the British Departments has done something which has brought discredit upon a British subject—a British subject who, as I think I can show your Lordships, has done something very creditable to the British name. The sufferer is a neighbour and friend of mine who before the War was for a good many years working on ethnological and archæological inquiries in Northern Africa and in the southern part of Algeria. He has published important papers on the subject and presented them to the Royal Geographical Society and they have been highly commended. He is himself a Fellow of the Royal Geographical Society of England and of many scientific societies in England, France and Belgium.
This work that he has done in Algeria was considered by high French authorities so valuable that they communicated with the representative of the French nation in this country a desire that he should be permitted to wear the decoration of the Legion of Honour and he was invited by the French Consul-General to attend at the Consular Office in London, so that he was aware that he was being recommended for this distinction. He subsequently discovered here that the gentlemen and officials who were recommending him were the Governor-General of Algeria; M. Doumer, the President at that time of the Senate; M. Honorat, former Minister of Education; M. Marin, the Director of the Trocadero Museum; and also the Director of Pensions. I

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should have thought that those names were sufficient to give some security to the Foreign Office. His name not appearing in The Gazette, his French friends made inquiry of their representative in London and received a reply. It was in French and I asked the Foreign Office to give their translation of the expression used. I have not been able to get any translation from them, but I asked the man himself what he considered the words meant and he said he thought they meant that the Foreign Office did not consider it was any part of their business to support his candidature.
I will cut short that part of the story by saying that in consequence he asked me whether I could do anything. I communicated with Sir Austen Chamberlain and I am glad to say that he has received His Majesty's gracious permission to wear the decoration of the Legion of Honour. That is quite satisfactory, but I submit that it is not satisfactory that it should have happened if not propter hoc at any rate post hoc my request to Sir Austen Chamberlain to have inquiries made as to why this recommendation had been turned down. I never take a matter up publicly until I am dissatisfied with the reply I get from the Department and in this case I am not satisfied with the reply I have received. I have communicated with the Under-Secretary and he is very staunch and loyal in his defence of his Department, but I cannot get from him the reason why it was turned down. All I got was the expression, used more than once in the correspondence, "in consequence of further information" the decision was reversed. I do not know whether the Foreign Office makes out that it has received further information.
As I have said, you have here a very distinguished scientific man and I should have thought it would have been perfectly possible for the Foreign Office to have discovered what his qualifications were. Instead of that a British subject who has brought credit on the British name in a French Colony is subjected to very serious searchings of heart. He thought there must be something against him, whereas in fact he had put in four years' excellent service in the War, for which he was mentioned in Despatches, and had also done important civil work.
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It has caused him great distress of mind, and naturally his friends in France remained under the impression for some weeks, and indeed for some months, that there was something in his career or about his character which would not justify the Foreign Office in supporting this recommendation. I apologise for keeping the noble Earl here so late, but I hope he will be able to give me a satisfactory reply. I have not mentioned my friend's name, because he is a very modest person, and now his character has been vindicated he has no wish to receive any public attention.
THE LORD PRESIDENT OF THE COUNCIL (THE EARL OF BALFOUR): My Lords, as my noble friend has not thought it desirable to mention the name of the gentleman in whose interest he speaks I will imitate his discretion and will not mention it. I can assure him, however, that he is quite wrong in supposing for a moment that any slur was intended to be inflicted upon the gentleman about whom he speaks. There are rules laid down for the wearing of foreign decorations, rules entirely in His Majesty's discretion and laid down by His Majesty's command. These rules require that any recipients of such honours should, as it were, have as justification for them some important service rendered to the Power which gives the Order. This country does not desire that foreign orders should be worn in this country unless the person receiving an Order is one who has really rendered important service to the country which presents him with the Order.
It seems that imperfect information or inadequate information upon that point was given to the Foreign Office. As the case first appeared to the Foreign Office the gentleman to whom my noble friend refers did not seem to have rendered important service to the country which offered him the decoration. That ought not to be interpreted, I think, as a slur upon the gentleman in question. It had nothing whatever to do with his ability or character or the general value to learning, let us say, of the service he had rendered. However that may be, surely he may be now content with knowing that as soon as further information reached the Foreign Office, as soon as they became fully acquainted with all the facts of the case, they reversed their decision. My noble friend's friend is now

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in full possession of all the honours which I have not the slightest doubt he most fully and amply deserves.
If any regret is to be expressed upon the matter I am ready to express it on behalf of the Government. Evidently a mistake was made, but it was made, I am informed, in consequence of the fact that the original information given to the Foreign Office was inadequate to justify under existing rules the wearing of the Order in this country. That has now been put right, and I hope the distinguished gentleman for whom my noble friend
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speaks will now feel that full justice has been done to the services which we now know he rendered to the country which gave him the Order, and which I am quite ready to add are services which do not merely benefit the country which gave him the Order but are of general value to mankind.
LORD HARRIS: With what the noble Earl has said I am sure my friend ought to be amply satisfied.
House adjourned at ten minutes after eight o'clock.

BRISTOL WATER BILL.
Brought from the Commons; read 1a; and referred to the Examiners.
WAR RISKS ASSOCIATIONS (DISTRIBUTION OF RESERVE FUNDS) BILL.
Reported, without amendment.
ABERSOCH WATER BILL. [H.L.]
Reported, with Amendments.
BRIGHTON CORPORATION BILL. [H.L.]
The King's consent signified, and Bill reported from the Select Committee, with Amendments.
SUNDERLAND CORPORATION BILL. [H.L.]
The CHAIRMAN OF COMMITTEES informed the House that the opposition to the Bill was withdrawn: The Orders made on the 2nd of March last and yesterday discharged, and Bill committed for Tuesday next.
BURY ESTATE BILL. [H.L.]
Judges Report on the Petition of Ralph Frederic Bury (referred by Order of this House of the 17th instant) received: Bill presented and read 1a.
HOUSE OF LORDS OFFICES.
First Report from the Select Committee made, to be printed, and to be considered on Tuesday next.

MINISTRY OF HEALTH PROVISIONAL ORDERS CONFIRMATION (No. 6) BILL. [H.L.]
MINISTRY OF HEALTH PROVISIONAL ORDERS CONFIRMATION (No. 7) BILL. [H.L.]
MINISTRY OF HEALTH PROVISIONAL ORDERS CONFIRMATION (No. 8) BILL. [H.L.]
MINISTRY OF HEALTH PROVISIONAL ORDER CONFIRMATION (NEWCASTLE-UNDER-LYME EXTENSION) BILL. [H.L.]
MINISTRY OF HEALTH PROVISIONAL ORDER CONFIRMATION (WOKINGHAM EXTENSION) BILL. [H.L.]
MINISTRY OF HEALTH PROVISIONAL ORDER CONFIRMATION (NEW SARUM EXTENSION) BILL. [H.L.]
MINISTRY OF HEALTH PROVISIONAL ORDER CONFIRMATION (CONWAY EXTENSION) BILL. [H.L.]
Committed for Tuesday next.

MINISTRY OF HEALTH PROVISIONAL ORDER CONFIRMATION (HOVE EXTENSION) BILL. [H.L.]
The CHAIRMAN OF COMMITTEES informed the House that the opposition to the Bill was withdrawn: the Orders made yesterday discharged, and Bill committed: The Committee to meet forthwith.
MINISTRY OF HEALTH PROVISIONAL ORDER CONFIRMATION (HOVE EXTENSION) BILL. [H.L.]
  MINISTRY OF HEALTH PROVISIONAL ORDERS (No. 2) BILL.
  Reported, without amendment, and recommitted to a Committee of the Whole House on Tuesday next.