Sitting of 10 December 1928

Preamble
The House met at a quarter before Three, of the Clock, Mr. SPEAKER in the Chair.
PRIVATE BUSINESS.
  PERTH CORPORATION ORDER CONFIRMATION BILL [Lords].
  Read the Third time, and passed, without Amendment.
ORAL ANSWERS TO QUESTIONS.
  INDIA.

    ARMY OFFICERS (ALLOWANCES).
    Colonel HOWARD-BURYasked the Under-Secretary of State for India whether he is now in a position to communicate the result of his reference to the Government of India on the subject of Burma and Rangoon allowances?
    The UNDER-SECRETARY of STATE for INDIA (Earl Winterton): As I explained in my letter to my hon. and gallant Friend of the 6th June, my Noble Friend is satisfied that the orders at present in force are consistent with the undertaking held to have been given by the Secretary of State in 1919. That being so, the question of increasing the allowances referred to, so far as officers under the control of the Government of India are concerned, falls to be settled by that Government, with whose discretion my Noble Friend is not prepared to interfere.

    DETENUS.
    Mr. THURTLEasked the Undersecretary of State for India the reason why it is not proposed to bring to trial the three Sikhs at present imprisoned in India under Regulation 111 of 1818?
    Earl WINTERTON: As I stated in reply to the hon. Member on the 23rd July last, the reason is that the detention of these men is not intended as a
    1670
    punishment for past offences. Its object is to prevent their pursuing in India the seditious activities in which they are known to have been engaged elsewhere.
    Mr. THURTLE: Do I understand from that reply, that it is now the intention of the Government of India, when it thinks fit, to keep people in prison without a trial—before they are proved guilty?
    Earl WINTERTON: Of the three Sikhs referred to, as I said in my answer of 23rd July, two were deported to India from Shanghai on the expiration of sentences of imprisonment there for possessing seditious matter with intent to distribute and of conspiring to cause disaffection among the King's subjects. They were both extremely dangerous revolutionaries whose presence in Shanghai was a danger to the wellbeing of the inhabitants. In regard to the third man, he took part in very serious seditious activities in Europe.
    Mr. THURTLE: I take it that the Noble Lord admits that that man has never been found guilty?
    Earl WINTERTON: Not in India but it is intended to keep him in prison to prevent him doing the mischief in India which he attempted to do elsewhere.
    Mr. BECKETT: Does the Noble Lord say that these men are dangerous revolutionaries before they have been tried or proved guilty?
    Earl WINTERTON: I say that they were dangerous revolutionaries before, and they are being kept in prison to prevent them doing any mischief.

    ROYAL CORPS OF SIGNALS (QUARTER-MASTERS).
    Dr. DRUMMOND SHIELSasked the Under-Secretary of State for India the practice in filling appointments as quart: r-master in the Royal Corps of Signals, India; whether these appointments are reserved as channels of promotion for qualified warrant officers on the special roster of that corps; and, if not, whether action will be taken to ensure that gentlemen already holding commissioned rank shall not be appointed as quarter-masters in future?
    Earl WINTERTON: The general policy is to give preference to qualified warrant officers on the special roster, except as regards initial supply alone. I am sending the hon. Member a copy of the Army Instruction which explains the position.
    Dr. SHIELS: Is the Noble Lord aware that senior officers are reverting in rank to take these positions and that there is a feeling among warrant officers that their prospects of promotion are suffering in consequence?
    Earl WINTERTON: I do not think that is so. I think, when the hon. Gentleman has read this particular Army instruction, he will regard it as satisfactory. Except in the case of existing officers, who will have certain advantages under the Order in future, these appointments will he given to warrant officers.

  GOLD COAST AND TOGOLAND (IMPORTED SPIRITS).
  Mr. DAYasked the Secretary of State for the Colonies to what extent the duties have lately been raised on the importation of intoxicating liquors to the Gold Coast and Togoland; and whether he has any further information he can give the House with reference to increasing the fees payable for separate licences or reducing the hours of consumption.
  The SECRETARY of STATE for the COLONIES (Mr. Amery): The duties on imported spirits were recently raised from 25s. to 27s. 6d. per gallon. A committee was appointed by the Governor to consider the question of the sale of spirits and has recently made various proposals. I am not aware whether these proposals have been carried into effect and I am in correspondence with the Governor on the subject.
  Mr. DAY: When does the right hon. Gentleman hope to get a reply: and when will he give the House the information?
  Mr. AMERY: The hon. Member had better ask a question later.

  IRAQ (OIL PIPE-LINE).
  Colonel WEDGWOODasked the Secretary of State for the Colonies
  1672
  whether it has yet been settled that the oil pipe-line from Iraq is to dehouch at Haifa?
  Mr. AMERY: No, Sir; so far as I know no decision in the matter has yet been reached by the oil company concerned.
  Colonel WEDGWOOD: Is the question still a subject of discussion between this Government and the French Government or has this point been settled?
  Mr. AMERY: It is not a matter for discussion between Governments. It is a question for the company to consider in its own interests.
  Colonel WEDGWOOD: The company is controlled by the British Government, is it not; and therefore may I ask whether the British Government itself is interested in where this pipe-line debouches?
  Mr. AMERY: The right hon. and gallant Member is mistaken. The company is not controlled in any sense by the British Government.

  STRAITS SETTLEMENTS (MILITARY CONTRIBUTION).
  Sir WILFRID SUGDENasked the Secretary of State for the Colonies if he is now in a position to state that the military contribution of the Straits Settlements will be reduced, in view of their contributions to the naval base, and in nearer proportion to that contributed by other similar overseas Dominions or Colonies?
  Mr. AMERY: I cannot at present add anything to the reply given on the 26th of November to a question by my Noble Friend the Member for Southampton (Lord Apsley).

  UGANDA (BATAKE COMMUNITY).
  Mr. SNELLasked the Secretary of State for the Colonies whether he has received a petition addressed to him on the 18th September, on behaif of the Buganda Kingdom Batake Community, in the Uganda Protectorate, and signed by numerous elders, heads and sub-heads of clans and members of the Batake community; whether he has replied to the

  1673
  petition, if received; and will he cause an inquiry to be made into the grievances alleged in the petition?
  Mr. AMERY: I understand that the petition has arrived by to-day's mail from Uganda, but I have not yet had time to consider it.
  Mr. SNELL: May I put down a question in a week's time?
  Mr. AMERY: Yes.

  PALESTINE (TAXATION).
  Colonel WEDGWOODasked the Secretary of State for the Colonies whether the Palestinian tax known as the werko is still in operation both in rural and in urban areas; and, if not, where it has been abolished?
  Mr. AMERY: So far as I am aware, werko is still levied in rural districts. Under Orders issued by the Officer Administering the Government of Palestine in July last, an urban property tax will be levied in the urban areas of Jerusalem and Jaffa as from the 1st of April next in the place of certain Ottoman taxes including werko.
  Colonel WEDGWOOD: Is the right hon. Gentleman aware that it was proposed to abolish the rural werko and combine it with the new system of collecting tithes; and has that been done?
  Mr. AMERY: I do not think so. I have not looked into it.

  KENYA (NATIVE AUTHORITY AMENDMENT BILL).
  Sir ROBERT HAMILTONasked the Secretary of State for the Colonies whether the Native Authority Amendment Bill, Kenya, has received his sanction; and if a copy of the Bill can be placed in the Library?
  Mr. AMERY: The Ordinance has been passed and the Governor of Kenya has been informed that His Majesty will not be advised to exercise his power of disallowance in regard to it. A copy of the Ordinance will be placed in the Library.
  Mr. RENNIE SMITH: Has the right hon. Gentleman seen statements in the
  1674
  papers concerning this Bill; and will he consider whether the Amendment does not adversely affect the natives concerned?
  Mr. AMERY: I have seen statements in papers, but I am not convinced that it will adversely affect the natives.

  ASHANTI (TRIAL OF EUROPEAN).
  Sir R. HAMILTONasked the Secretary of State for the Colonies whether his attention has been drawn to the recent trial of a European at Kumasi on a charge of murder, whether the trial was held without a jury; and whether it is contemplated amending the existing procedure for the trial of Europeans in Ashanti on a capital charge?
  Mr. AMERY: I have seen certain reports in the Press, and I have been informed by the Governor of the Gold Coast by telegram that a European was charged with murder, sentenced to death and in due course reprieved; but I have not received any detailed information. If the trial was held in Ashanti it would, in accordance with the provisions of the law of Ashanti, take place before a Judge alone without counsel or jury. As regards the last part of the question I am not yet in a position to discuss the question of altering the procedure.
  Mr. J. H. THOMAS: Do I understand that the officer in question has been reprieved?
  Mr. AMERY: Yes.
  Sir R. HAMILTON: Has the right hon. Gentleman considered the question of altering the existing procedure?
  Mr. AMERY: It is a question on which there is a great deal to be said on both sides. We shall certainly go into it carefully.

  TRADE AND COMMERCE.

    EMPIRE MARKETING BOARD.
    Mr. CRAWFURDasked the Secretary of State for Dominion Affairs if any portion of the £1,000,000 voted for the Empire Marketing Board is devoted to the subsidising of lectures held under

    1675
    the auspices of lecturing societies; and, if so, whether the syllabuses of such lectures are first approved by his Department?
    Mr. AMERY: Yes, Sir. A portion of the Empire Marketing Fund is annually so devoted and the outlines of each lecture to be given are considered on behalf of the Empire Marketing Board before any individual lecture is subsidised.
    Mr. CRAWFURD: How will a lecture on "Some Curiosities of Currency" help the sale of Empire goods?
    Mr. AMERY: I am not aware of that particular lecture, but, certainly, care is taken to secure effective lectures which bear on the general policy of the Empire Marketing Board and the campaign has been a great success.
    Mr. CRAWFURD: If I send the right hon. Gentleman an outline of the lecture referred to, will he then answer my supplementary question?
    Mr. AMERY: I shall certainly be glad to see it.
    Mr. RENNIE SMITH: Is there a special committee for dealing with these lectures?
    Mr. AMERY: There is a publicity committee of the Empire Marketing Board which deals with them and an officer of that committee is delegated to look through the synopsis of each lecture.
    Sir NICHOLAS GRATTANDOYLEasked the Secretary of State for Dominion Affairs whether it is proposed to extend the activities of the Empire Marketing Board to the Dominions in order to advocate there the benefits to Dominion trade with Great Britain of purchase of British manufactures?
    Mr. AMERY: I would refer my hon. Friend to the replies given to questions asked by himself and by the hon. Member for Blackpool (Sir W. de Frece) on 14th November, to which there is at present nothing to add.

    SOUTH AFRICA AND GERMANY (TREATY.
    Colonel HOWARD-BURYasked the Secretary of State for Dominion Affairs whether, with regard to the trade treaty between the Union Government of South
    1676
    Africa and Germany, he can state the position as to the extension of existing preferences and, as to the grant of new preferences, as to whether under the most-favoured-nation trade agreements preferences must be given to all countries with which such treaties are concluded?
    Mr. AMERY: The question of the bearing of the treaty on the extension of existing preferences and the grant of new preferences is one for His Majesty's Government in the Union of South Africa. The position, as I understand it, is that in the case of goods which are enumerated in existing Union legislation as those in respect of which preferences are granted to other parts of the British Empire Germany would not be entitled to claim for German goods the benefit either of existing rebates or of any variation which might be made in the rates of rebate. In the case, however, of goods which are not so enumerated, Germany would be entitled, when the treaty comes into force, to claim for German goods the same rates of duty as may be granted to similar goods produced or manufactured in other parts of the Empire. The matter referred to in the second part of the question is also one for consideration by the Union Government, but I understand that there are, in fact, certain treaties with foreign countries in force under which any reduction of duty accorded to German goods can be claimed on behalf of similar goods from the foreign countries in question.
    Colonel HOWARD-BURY: Seeing that under this most-favoured-nation agreement, any other country can obtain an equal preference, does that not to a great extent mean ending all Empire preference; and before this treaty is ratified cannot the right hon. Gentleman make some strong representations with regard to our Empire policy of Empire preference?
    Mr. AMERY: I am afraid my hon. and gallant Friend must have entirely misunderstood my answer. The whole point of my answer was that on the articles enumerated in the South African tariff as enjoying a preference, the preference is in no way affected by the treaty.
    Colonel HOWARD-BURY: It is affected if any extra preference is given.
    Mr. HURD: Is this matter still the subject of conversations between the right hon. Gentleman and the South African Government?
    Mr. AMERY: No further correspondence is taking place.
    Mr. WEDGWOOD BENN: Does the right hon. Gentleman not see the extreme danger to Imperial relations in attempting in this House to dictate South African tariff policy?
    Mr. AMERY: There is no question of that.
    Mr. COUPERasked the Secretary of State for Dominion Affairs whether, in the course of the negotiations for the commercial treaty between the Union of South Africa and Germany, he made any observations regarding the terms of the treaty; if so, whether he will state the nature of those observations; and whether any reference was made to the effect of the treaty on the system of preference duties between this country and South Africa?
    Mr. AMERY: I would invite reference to the reply given on my behalf by my right hon. Friend the Under-Secretary of State for the Colonies to questions in the House on the 4th December.
    Mr. COUPER: Would arty continuation or development of such Treaties between South Africa and Germany or any other foreign country provide for the preference in duties to Great Britain?
    Mr. AMERY: Every Government in the Empire is entitled to pass its own legislation in regard to preference, and the most we are entitled to do is each to draw the other's attention to any aspect of proposed legislation which may affect our interests.
    Mr. SOMERVILLE: In the event of the Treaty being ratified, will any preference that is in future granted to this country by South Africa on articles which are not now getting preference be given equally to Germany?
    Mr. THOMAS: Is it in order to discuss South African tariffs in this House?
    Mr. AMERY: The conduct of the British Government in connection with the matter can, I presume, be raised, and such information as we can give as to
    1678
    what we understand of the effect of the South African tariff, but, as I said, the matter is entirely one for consideration by the Union Government.
    Mr. CRAWFURD: In making any representations on this matter to the Dominions, do we bear in mind the opinion expressed by the representatives of this and all other countries on these matters at Geneva 'and elsewhere?

    EMPIRE BRANDY.
    Mr. HANNONasked the Secretary of state for Dominion Affairs whether his attention has been called to the fact that during the financial year 1927–28 only 2,000 gallons of brandy were imported from Imperial sources in contrast with 580,000 gallons from foreign countries; if any action is being taken, in co-operation with the Governments of Australia and South Africa, to promote the sale of brandy from these Dominions in Great Britain; and if the Empire Marketing Board has taken steps to call attention in particular, to the high quality of brandy produced in the province of the Cape of Good Hope?
    Mr. AMERY: I am aware of the figures quoted, but would point out that the figure of 2,000 gallons does not include the considerable supplies forthcoming from Palestine. The Empire Marketing Board have drawn attention, on suitable opportunities, to the fact that brandy of good quality from several parts of the Empire, including South Africa, is now obtainable in place of brandy from foreign sources.
    Mr. HANNON: May I ask whether, in fact, the Empire Marketing Board has done anything to promote the sale of brandy?
    Mr. AMERY: I may point out that the object of the Empire Marketing Board is not Po push the sale of particular articles, but to familiarise the public in this country with the idea of buying Empire goods rather than buying foreign goods.
    Lieut.-Commander KENWORTHY: Is it a fact that no Empire brandy is obtainable in the leading hotel of Birmingham?

    BRITISH NATIONAL UNION (SOUTH AFRICAN TOUR).
    Mr. HANNONasked the Secretary of State for Dominion Affairs whether

    1679
    his attention has been called to the projected tour of business men from Great Britain to South Africa next year; if it is contemplated to extend any official assistance to promote the success of this mission; and if any communication has been addressed to the Government of South Africa in relation to the arrangements of facilities to enable the members of the touring party to have the fullest opportunity of inspecting the economic situation in South Africa?
    Mr. AMERY: I am aware that the British National Union are organising such a tour to South Africa next year. The proposal seems to me an excellent one, but it is not contemplated that official assistance should be given by His Majesty's Government in Great Britain, nor has any communication been sent to His Majesty's Government in the Union of South Africa on the subject.
    Mr. HANNON: But is not this really a case in which some representations ought to be made to the Government of South Africa to give every possible assistance to this important delegation which is going out next year?
    Mr. AMERY: This is a privately organized delegation, and I have no doubt, like similar delegations organized under the same auspices, it will receive a great deal both of public and private help.

    EXPORT CREDITS.
    Mr. DAYasked the Secretary to the Overseas Trade Department the amount that his Department has had to pay under its guarantee of bills drawn upon importers under the present export credits scheme?
    Mr. DOUGLAS HACKING (Secretary, Overseas Trade Department): Under the present Scheme the Export Credits Guarantee Department has paid £29,083 under its guarantee up to the 1st December. I may add that of this sum £7,566 has already been recovered from the importers concerned and that considerable further recoveries are anticipated.
    Mr. DAY: Can the hon. Gentleman say the nationality of the importers?
    Mr. HACKING: I cannot, without notice.
    Mr. DAY: If I put a question down, will the hon. Gentleman answer it?
    Mr. HACKING: I will do my best, but I cannot promise.
    Mr. MONTAGUE: It was not Russian, was it?

    BRITISH INDUSTRIES FAIR.
    Mr. FORRESTasked the Secretary to the Overseas Trade Department if he will state the acceptances and refusals he has so far received of the Government's invitation to overseas buyers to attend the coming British Industries Fair?
    Sir HARRY BRITTAINasked the Secretary to the Overseas Trade Department whether he can give the House any information with regard to the forthcoming British Industries Fair?
    Mr. HACKING: The prospects for the forthcoming British Industries Fair which will be held in London and Birmingham from February 18th to March 1st next are extremely satisfactory. In London we have received applications from 1,295 British manufacturers for 297,476 square feet. This surpasses the record achieved this year when 257,000 square feet were let. In Birmingham the whole of the available area, 200,720 square feet has been let for some time past and the Birmingham authorities are now forming an open air section. As regards buyers, the situation is equally satisfactory. The number of overseas firms which have informed my Department that they will be represented at the Fair is six times as many as at the corresponding date last year, when only 110 firms had accepted the invitation though the actual number who attended was 1,958. We have to date received 640 acceptances which is a clear indication that the number who will attend the Fair will be considerably in excess of this year's figures.
    Sir H. BRITTAIN: Following upon that very satisfactory information, will the hon. Gentleman consider some time giving the North of England also an opportunity of having a section of this Fair, as well as Birmingham and the Metropolis?
    Mr. HACKING: It is not a very good thing to spread the Fairs up and down the country. If we do that, we find a great deal of difficulty in persuading overseas

    1681
    buyers to attend all the Fairs. It is better that we should concentrate in one or two centres.

    INTERNATIONAL EXHIBITIONS.
    Mr. FORRESTasked the Secretary to the Overseas Trade Department the main outlines of the Convention recently signed in Paris to limit international exhibitions?
    Mr. HACKING: The Convention limits the frequency of long period international exhibitions of a comprehensive character which are officially recognised by the government of the country in which they are held and in which other governments are invited to participate. The Convention provides that in cases where the participating governments are required to erect national pavilions, such exhibitions shall be separated by an interval of at least six years and shall not be held more often than once in 15 years in any one country. Shorter intervals are permitted in the case of exhibitions at which foreign governments are not required to erect national pavilions, and the limitations are still less severe in the case of special exhibitions confined to one branch of industry.
    The Convention regulates the internal organisation of international exhibitions, and provides for the establishment of an international bureau on whose council all the signatory countries will be represented, and whose functions it will be to see that the Convention is duly carried out and to study exhibition questions generally.
    Exhibitions lasting less than three weeks, fine art exhibitions, exhibitions organised by one country in another country as well as purely British Empire exhibitions are specifically excluded from the scope of the Convention.
    The only exhibitions affected are those in which foreign governments are invited through the diplomatic channel to participate by the government of the organising country.
    The Convention will enter into force when it has been ratified by seven governments.
    The text of the Convention will be published at an early date.

    ESTGNIA (IMPORT DITTIES).
    Mr. WARDLAW-MILNEasked the Secretary to the Oversews Trade Depart-
    1682
    ment whether his attention has been called to the effect on British trade with Estonia of the heavy import duties now imposed on our goods by that country; and whether he will make representations to the Government of Estonia with a view to effecting a reduction of the present duties?
    Mr. HACKING: Few complaints have reached me with regard to Estonian Customs Duties, but if my hon. Friend will let me know of any particular eases in which the duties are regarded as excessive, I will consider whether any steps in the direction he suggests can usefully be taken.
    Mr. WARDLAW-MILNE: I am much obliged, but may I ask my hon. Friend if his attention has been drawn to the very heavy duties on fishing tackle and fishing rods for this country, in which there is quite a substantial trade which is very seriously affected by these heavy duties?
    Mr. HACKING: No, I cannot remember that complaints have been received from the fishing tackle or fishing rod industries. Complaints have been received in regard to soap, balata belting, and—if my memory serves me right—elastic suspenders.
    Mr. JAMES HUDSON: Does the hon. Gentleman consider that this nation, which under the present Government is contemplating an increase of import duties here, can make any representations either to this or any other nation?
    Mr. HACKING: We can always make representations to any nation.

    JOHANNESBURG AGRICULTURAL SHOW.
    Mr. HANNONasked the Secretary to the Overseas Trade Department whether his attention has been called to the Johannesburg agricultural show, which is in process of organisation and which will be held next year; if he is aware that a national exhibit of the products of Holland will be displayed on a representative scale at that exhibition and feat an exhibit of French national products is also being prepared for this show; and whether he proposes to take any measure's to ensure that a representative exhibit of British goods shall also be shown on the same occasion?
    Mr. HACKING: I have received from His Majesty's Trade Commissioner in Johannesburg information regarding the Johannesburg Agricultural Show. It is an annual event which is mainly of interest to manufacturers of agricultural machinery. Information regarding last year's show has been communicated to the Agricultural Engineer's Association. A notice was also published in the Board of Trade Journal of 12th July. I have no information as to French or Dutch plans for participation next year.
    Mr. HANNON: Does this mean that my hon. Friend's Department can give no assistance at all to the organisations which exhibit agricultural machinery to be shown at this important exhibition?
    Mr. HACKING: Yes, we give every assistance within our power. We circularise all the people who are directly concerned that this show is going to be held, and in any other way than directly participating as a Government we are anxious to help.

    INDUSTRY (PROFIT-SHARING SCHEMES).
    Sir W. SUGDENasked the Minister of Labour what steps are being taken to organise the various trade unions and employers' federations by his Department in respect to co-partnery, co-partnership, profit sharing, rationalisation of industry, and demarcation of process; and if any industries have applied to him also for collaboration and consideration of these matters with any foreign nations otherwise than by the International Labour Section and the League of Nations?
    The PARLIAMENTARY SECRETARY to the MINISTRY of LABOUR (Mr. Betterton): The adoption of schemes of co-partnership or profit-sharing is a matter for the employers and workers concerned. The Ministry regularly collects information concerning such schemes and this is made available for the use of those who are interested in the subject. Questions relating to demarcation of process are also matters for settlement within the various industries, but the services of the Ministry are always available for assisting in the settlement of any difficulties which may arise. The answer to the last part of the question is in the negative.

  DOMINIONS (DIPLOMATIC REPRESENTATION).
  Mr. THURTLEasked the Secretary of State for Dominion Affairs in what foreign countries the Dominion of South Africa now has its own diplomatic representative?
  Mr. AMERY: No such appointments have up to the present been made.
  Mr. THURTLEasked the Secretary of State for Dominion Affairs in what foreign countries the Dominion of Canada has its own diplomatic representative?
  Mr. AMERY: Canadian Ministers have already been appointed at Washington and Paris, and a similar appointment at Tokyo is, it is understood, in contemplation.

  LAND DRAINAGE.
  Major CARVERasked the Minister of Agriculture whether, in view of the constantly recurring winter floods in the East Riding of Yorkshire and elsewhere in the country, he is now in a position to make any announcement as to the intentions of the Government towards the recommendations in the Report of the Royal Commission on Land Drainage; and, if not, when such an announcement can be expected and remedial work put in hand?
  The MINISTER of AGRICULTURE (Mr. Guinness): The preparation of a Bill to give effect to the recommendations of the Royal Commission on Land Drainage is under consideration, but it is necessary, in the first instance, to carry out a considerable amount of survey work in order to determine the boundaries of the principal catchment areas for which authorities as proposed by the Royal Commission must be constituted. That work is being pressed forward as rapidly as possible, but there is no prospect of legislation being introduced during the present Session. I would point out, however, that existing drainage authorities, and to some extent other local authorities, have considerable powers under the present law for the carrying out of land drainage works.
  Mr. NOEL BUXTON: Does the right hon. Gentleman contemplate any action by the Government previous to the pass-

  1685
  ing of new legislation, as distinguished from action by local authorities?
  Mr. GUINNESS: A question is on the Paper to-day about further schemes in connection with unemployment.
  Mr. W. PALING: Does this Bill include the Bill suggested by the Sub-committee of the Doncaster Drainage Authority?
  Mr. GUINNESS: The Doncaster Bill dealing with a special area will be a private Bill, and notice has already been given.
  Mr. MACPHERSON: In his consideration of this general question, will the right hon. Gentleman give special consideration to the serious flooding in Spey Valley?
  Mr. GUINNESS: I am not responsible for the administration of drainage law in Scotland.
  Mr. MACPHERSON: I know that, but I am asking whether, as the whole question is being discussed by the Cabinet, the right hon. Gentleman will draw the Government's attention to the very serious flooding in Spey Valley?
  Mr. GUINNESS: I will convey that to the Cabinet.
  Mr. HASLAMasked the Minister of Agriculture whether the terms under which the Government grants in respect of land drainage and coast defence will be given have been settled; and whether he has any announcement to make?
  Mr. GUINNESS: The conditions on which these grants will be made have been settled and an explanatory circular will be issued to county councils and drainage authorities very shortly. The object of these grants is to facilitate the transfer of labour from depressed areas as recommended by the Industrial Transference Board, and it will be a condition of any grant that at least 50 per cent. of the labour employed must be obtained through the Employment Exchanges from depressed areas selected by the Ministry of Labour.
  Miss LAWRENCE: Will the Minister place these regulations in the Library, or arrange that they should be printed for the information of Members?
  Mr. GUINNESS: I will see how publication can most conveniently be arranged, but we are, in the first instance, preparing them in a form to invite applications from the local authorities.
  Miss LAWRENCE: Can the form inviting applications be placed as soon as possible in the Library?
  Mr. GUINNESS: There will be a letter to the local authorities. I am in no way suggesting that the House of Commons should have the information withheld, but I am not in a position to commit myself as to the form in which it should be brought to their notice.
  Colonel WEDGWOOD: Has the right hon. Gentleman taken any steps to recover from the landlords whose land is-drained any part of the expenditure?
  Mr. SPEAKER: That question does not arise.
  Mr. HASLAM: In places where there is unemployed labour in the district, will it be necessary to transport it from a distance?
  Mr. GUINNESS: Yes, the whole basis of this scheme is that it should help the transference of labour from those districts where there is excessive unemployment or a lack of employment.
  Colonel WEDGWOOD: May I have an answ3r to my question?
  Mr. GUINNESS: There is no occasion to recover from the ratepayers—
  Mr. SPEAKER: I have ruled out that question.
  Mr. TAYLOR: Does the Circular lay down any conditions with regard to rates of wages and conditions of labour?
  Mr. GUINNESS: I do not think so.

  DOGS (DISTEMPER).
  Mr. CRAWFURDasked the Minister of Agriculture whether the recently discovered anti-distemper vaccine is an effective preventive of that disease; and, if so, whether the Government is prepared to give aid in making its application universal?
  Mr. GUINNESS: I am aware that the "Field" Distemper Research Committee

  1687
  has recently announced that an effective method of vaccinating dogs against distemper has been discovered. I understand that the Committee has offered to assist commercial laboratories or institutions willing to prepare the vaccine and make it available to the public. No public funds are available to assist the preparation or distribution of the vaccine. The Ministry's responsibility in respect of diseases of the dog is confined to diseases, such as rabies, which are communicable to farm livestock or human beings.
  Mr. CRAWFURD: As this vaccine is an effective preventive, does it not mark a very important milestone in the treatment of dogs, and cannot the Government recommend a grant to help to make it universal?
  Mr. GUINNESS: I agree with what the hon. Gentleman says as to the importance of this discovery, but I do not see any necessity for a Government grant, seeing that the discovery has passed the experimental stage, and there is every hope that it will be taken up in the ordinary course by those whose business it is to supply these vaccines.
  Dr. VERNON DAVIES: Is it not a fact that this is the direct result of experiments on dogs?
  Mr. GUINNESSI believe that that is so.

  ALL-ENGLISH ALE.
  Colonel HOWARD-BURYasked the Minister of Agriculture whether his attention has been drawn to the experiments in producing an all-English ale, made with only British ingredients; and whether, in view of the advantage accruing to farmers from the popularising of an all-English ale, the Empire Marketing Board will be requested to give all publicity and encouragement to this new venture?
  Mr. GUINNESS: I would refer my hon. and gallant Friend to the reply which I gave to my hon. Friend the Member for Devizes (Mr. Hurd) on 19th November. I am considering whether any action can usefully be taken in the direction indicated.
  Mr. JOHNSTON: Cannot the right hon. Gentleman take any steps to discourage the repeated incitements, both public and private, to the Empire Marketing Board to allow their organisation to be used for boosting the alcoholic traffic?
  Mr. SCRYMGEOUR: Does not the right hon. Gentleman consider that England's ailing condition is due to this particular trouble?
  Colonel APPLIN: Will the right hon. Gentleman supply some free samples to this House, so that we may judge for ourselves?

  HOUSE OF COMMONS (HARCOURT ROOM).
  Sir H. BRITTAINasked the Under-Secretary of State for the Home Department, as representing the First Commissioner of Works, whether he is aware that there is an obtrusive echo in the Harcourt Room; and whether he will cause experiments to be made by an expert in acoustics to see whether any effective remedy can be applied?
  Lieut.-Commander KENWORTHY: On a point of Order. May I ask your Ruling, Mr. Speaker. I believe that on one or two occasions the occupant of your Chair has ruled that questions of this kind might be put down unstarred so as to save time?
  Mr. SPEAKER: That might lead to a discussion as to whether a great many questions ought to be put down unstarred.
  Captain BOWYER (Lord of the Treasury): The answer to both parts of the question is in the affirmative.
  Captain GARRO-JONES: Is it not a fact that, if hon. Members can hear an echo, and as an echo must be less than the original sound, they are speaking too loudly?

  NAVAL AND MILITARY PENSIONS AND GRANTS.
  Mr. R. MORRISONasked the Minister of Pensions whether he has received a petition from Spenborough War Memorial Fund Trustees, Cleckheaton and Spenborough branch of the British Legion, urging him to give further consideration to the case of Sergeant

  1689
  Charles Brown, Royal Army Service Corps, who is now totally blind and partially deaf; and, if so, if he will say what action he proposes to take?
  The PARLIAMENTARY SECRETARY to the MINISTRY of PENSIONS (Lieut.-Colonel Stanley): My right hon. Friend has received a copy of the petition referred to. The claim made by Mr. Charles Brown in 1923 for defective eyesight was after full consideration rejected by the Ministry and a right of appeal given, of which, however, Mr. Brown failed to take advantage. Subsequent representations in support of his claim have been most fully and sympathetically considered, but my right hon. Friend is advised that there are no grounds for altering the previous decision of the Ministry.

  RHINELAND EVACUATION (TREATY OBLIGATIONS).
  Lieut.-Commander KENWORTHYasked the Secretary of State for Foreign Affairs whether His Majesty's Government still adheres to the declaration by the Governments of the United States of America, Great Britain and France in regard to the occupation of the Rhine provinces, issued as a White Paper, Cmd. 240, of 1919, in which it was declared that the Allied and associated Powers did not insist on making the period of occupation last until the reparation clauses were completely executed?
  Mr. RENNIE SMITHasked the Secretary of State for Foreign Affairs whether, in view of the confusion which has arisen as to the opinion of His Majesty's Government as to Germany's position as of right in relation to the withdrawal of troops from the German Rhineland, and, in particular, arising from the declaration of the Governments of the United States, Great Britain and France on 16th June, 1919, that the Allied and associated Powers did not insist on making the period of occupation last until the reparation clauses were completely executed, he can make a further statement on the matter?
  Sir H. BRITTAIN: On a point of Order. May I ask if at any time there
  1690
  has ever been a time limit, or a limit of the number of questions, which an hon. Member can put?
  Mr. SPEAKER: The limit is three now.
  The UNDER-SECRETARY of STATE for FOREIGN AFFAIRS (Mr. Godfrey Locker-Lampson): I would refer the hon. and gallant Member for Central Hull (Lieut.-Commander Kenworthy) and the hon. Member for Penistone (Mr. Rennie Smith), to the reply given to the question asked on the 5th December by the hon. Member for Shoreditch (Mr. Thurtle), which, with the supplementary replies given at the time, seems to cover their present inquiries very fully. I have nothing to add to the statements then made by my right hon. Friend.
  Lieut.-Commander KENWORTHY: Is the hon. Gentleman aware that my question with reference to the Command Paper has not been dealt with, and will he explain how the opening words of the Command Paper that
  "the Powers do not insist on making the period of occupation last until the Reparation Clauses have been completely executed"
  can possibly be allowed to stand without some fresh declaration from His Majesty's Government?
  Mr. LOCKER-LAMPSON: I think that the hon. and gallant Gentlemen has read the original answer of my right hon. Friend, and, if he carefully looks at all the supplementary answers, he will see that his question is substantially answered.
  Mr. SMITH: Is the hon. Gentleman aware that the lawyers of France and Germany, as well as of this country, have been disputing about this particular matter for years, and that the answer given last week by his chief has given rise to a great amount of confusion; and may I put it to him that the declaration made to Germany in June, 1919, ought to be taken into account in any legal judgment given by us in 1928?
  Mr. LOCKER-LAMPSON: I think that the hon. Gentleman's particular question comes later on. The original question has nothing to do with the legal side of the matter, but with the political side.
  Colonel WEDGWOODasked the Secretary of State for Foreign Affairs

  1691
  whether, irrespective of the legal interpretation of Article 431 of the treaty, he will state the attitude of His Majesty's Government, on the one hand, to the French contention that reparations and evacuation are linked and must be dealt with together and, on the other hand, to the German case that evacuation is independent of any revision of the Dawes scheme?
  Mr. LOCKER-LAMPSON: My right hon. Friend stated on Monday last the views of His Majesty's Government on both the law and the policy applicable to this question. He desires me to say that, it would not in his opinion conduce to good feeling or progress, if he now made such a comparison between his own statement and any statements which may have been made by the representatives of other Governments concerned as is asked for by the hon. and gallant Member. He thinks it much more important to seek a practical solution of any difficulties which stand in the way of evacuation than to discuss points of difference which, important as they are, may be found not to be the determining factors in the decisions which have to be taken.
  Colonel WEDGWOOD: Can the right hon. Gentleman give an answer to a plain question? Do the Government consider the questions of reparation and evacuation linked, or not? All we want is an answer to that plain question. If the Government have not made up their mind as to it, let us know that.
  Mr. LOCKER-LAMPSON: I am sure the right hon. and gallant Member cannot accuse me of not doing my best always to answer any question he puts to me, but I hope that no one will press me on this particular question at the present moment, as conversations are going on between the various Governments, and it really is not in the public interest to add anything to the answer that I have given.
  Mr. THURTLE: Does the right hon. Gentleman know that there would be less disposition on this side to press him on this matter if it were not for the fact that the Foreign Office has for so long been pursuing a policy of slavish subservience to France?
  Captain GARRO-JONES: Is the Minister prepared to lay on the Table, or to answer a question—
  Mr. SPEAKER: Mr. Rennie Smith.

  ARMS TRAFFIC, CHINA (INSURANCE).
  Mr. FOOT MITCHELLasked the Secretary of State for Foreign Affairs whether he can give particulars of any Measures adopted in foreign countries to prevent the insurance of arms to China?
  Mr. LOCKER-LAMPSON: I am informed by the Institute of London Underwriters that in May last they circularised the underwriting associations of the principal markets of the world suggesting that they should enter into a voluntary agreement not to insure consignments of arms and munitions for China, similar to that referred to in my reply to my hon. Friend the Member for South-East Essex (Mr. Looker) on 21st May last. The Institute inform me that such an agreement has been adopted by the underwriting associations of France, Rotterdam, Amsterdam, Greece, Japan, Poland, Switzerland, Yugo-Slavia and the United States of America. The insurance of arms to China is prohibited in Germany by an Act passed on the 30th March last. This Act remains in force until 1st May, 1929, but its period of validity may be extended by ordinance. The agreement has also been adopted by the association of Czechoslovakia for the period of the validity of the German law. Favourable replies have also been received from Austria, Bulgaria, Denmark, Sweden and Turkey, though the associations of those countries have not formally adopted the agreement. Great credit is due to the Institute of London Underwriters for the public service they have performed in bringing about the adoption of this agreement throughout the principal markets of the world, and I am glad to take this opportunity of expressing my high appreciation of their services.

  MARITIME LAW.
  Mr. RENNIE SMITHasked the Secretary of State for Foreign Affairs whether, in view of the signature of the Kellogg Pact, he is in a position to indi-

  1693
  cate the views of His Majesty's Government towards a recodification of maritime law and the question of the so-called freedom of the seas?
  Mr. LOCKER-LAMPSON: His Majesty's Government have been giving their attention to this subject for some time past, but I am not in a position to make any statement on the subject at p resent.
  Mr. SMITH: Is the Under-Secretary aware that Senator Borah raised this question for discussion in the form of a resolution last year, and is proposing to have a further discussion of it this year, and as this matter affects us primarily, could he not press it forward and get some initiative from this country?
  Mr. LOCKER-LAMPSON: I am quite aware of what the hon. Member says, and, as I say, we are giving attention to this subject.
  Captain GARRO-JONES: Will the right hon. Member be prepared to give the House the text of the legal opinion on which the Government relies in taking up its present position?
  Mr. LOCKER-LAMPSON: I must have notice of that question.

  AFGHANISTAN (DISTURBANCES).
  Mr. SANDEMANasked the Secretary of State for Foreign Affairs what steps are being taken to protect British lives and interests in Afghanistan?
  Mr. LOCKER-LAMPSON: His Majesty's Government have no reason at present to believe that any British lives or interests are in danger. They are, however, in constant communication with His Majesty's Minister, who will take all possible steps to secure adequate protection from the Afghan Government.
  Mr. SANDEMAN: Can the right hon. Gentleman give us any idea of the number of British people in Afghanistan?
  Mr. LOCKER-LAMPSON: I believe there are one or two thousand British subjects, but very few English.
  Lieut.-Commander KENWORTHYasked the Secretary of State for Foreign Affairs whether communications have been, at any time during the last few weeks, interrupted with His Majesty's representatives in Kabul; and what is the present situation in Afghanistan?
  Mr. LOCKER-LAMPSON: Communication with His Majesty's Minister is maintained by wireless and has not been interrupted. I understand that the disturbances are confined to the neighbourhood of Jalalabad and Dakka and that negotiations for a settlement are proceeding between representatives of the Afghan Government and the leaders of the Shinwari tribe.

  INTERNATIONAL LABOUR OFFICE.
  Colonel WOODCOCKasked the Minister of Labour the total expenses incurred by British delegates, advisers, and officials, for each of the last five years, in attending the various conferences and meetings of the International Labour Conference?
  Mr. BETTERTON: As the reply contains a table of figures, I will, if I may, circulate it in the OFFICIAL REPORT.
  Colonel WOODCOCK: Will the hon. Gentleman give me the last figure for which. I asked; and, in view of the fact that he has attended this conference, can he tell us whether in his opinion the small results achieved are commensurate with the amount of money spent and also the time that is given to the work?
  Mr. BETTERTON: The figure for which the hon. and gallant Member asked, the figure for 1921, is £1,864.
  Mr. MONTAGUE: Does the Minister of Labour know of any reason why the International Labour Office should be so persistently crabbed by the hon. and gallant Member for Everton (Colonel Woodcock)?
  Colonel WOODCOCK: Will the hon. Gentleman answer the latter part of my supplementary question?
  Following is the reply:
  The total expenses incurred by British delegates, advisers, and officials in attending the various conferences and meetings of the International Labour Conference were:

  Financial Year.

  £

  1923

  …

  …

  …

  1,080

  1924

  …

  …

  …

  2,206

  1925

  …

  …

  …

  1,919

  1926

  …

  …

  …

  1,896

  1927

  …

  …

  …

  1,864

  Colonel WOODCOCKasked the Minister of Labour whether the buildings at Geneva for the International Labour Organisation are completed; what has been their total cost; and what amounts have been contributed by the British Government and the British Dominions?
  Mr. BETTERTON: As the reply includes a number of figures, I will, if I may, circulate it in the OFFICIAL REPORT.
  Following is the reply:
  The buildings at Geneva for the International Labour Organisation were completed in the summer of 1926.
  Up to 31st December, 1927, payments on Building Fund Account amounted to 3,426,169 Swiss francs (approximately £135,851) and were met out of:

  Swiss francs.

  Approx Sterling equivalent.

  (a) A grant from the League of Nations (out of surplus of previous years).

  3,301,388

  £130,904

  (b) Receipts from other sources.

  170,478

  £6.760

  It is not possible to say how much Great Britain, or the other parts of the Empire contribute to the surpluses in question. The contribution of the former to League Funds has averaged about 10 per cent. and of the latter about 15 per cent.
  Colonel WOODCOCKasked the Minister of Labour the equivalent of the amount in sterling of the remuneration of the Director of the International Labour Office; and the equivalent of the sum in sterling paid to him by way of allowance for travelling or entertainment expenses as well as any other payments made to him by way of extras?
  Mr. BETTERTON: The equivalent in sterling of the remuneration of the Director of the International Labour Office is approximately £3,570, and of the sum paid to him by way of personal allowance for entertainment expenses is approximately £1,190. Travelling expenses on the authorised scale are refunded to the Director, as to the rest of the staff, as and when they are necessarily incurred.
  Colonel WOODCOCK: Is the hon. Gentleman aware that the object of putting down these questions is to save the smallest amount of the taxpayers' money from being wasted?

  DISTRESSED AREAS.

    RELIEF EFFORTS (CO-ORDINATION).
    Mr. DAVID GRENFELLasked the Prime Minister whether he will take steps to co-ordinate under Government auspices the various agencies which are taking part in relieving distress and hardship in the depressed industrial areas; and whether the Government will give a grant towards a fund for this purpose?
    Mr. BECKETTasked the Prime Minister whether, in view of the urgent necessity for providing food, boots, and clothes for the children in the necessitous areas and the expressed desire of the Government to encourage voluntary effort, he will consider making an immediate offer to supplement every £1 given from voluntary sources with a £1 Treasury grant?
    The PRIME MINISTER (Mr. Baldwin): The whole matter is under the close consideration of the Government and a, full statement will be made at an early date. I can, however, make the following statement this afternoon. Owing to the increasing number of agencies for the relief of distress in the coalfields, it has become necessary to set up some machinery for their co-ordination. At the same time the Lord Mayor has invited the Government to place at his disposal the staff and office accommodation necessary to deal with the additional work due to the recent expansion in the operations of his fund. The Government have gladly responded to this request and Mr. Noel CurtisBennett, C.V.O., has been appointed as

    1697
    Organising Secretary of the fund. In addition to his duties in connection with the Lord Mayor's Fund, Mr. Curtis-Bennett will also undertake the organisation of a general clearing house of information for the purpose of coordinating the numerous efforts which are now being made to relieve distress in the coalfields. In this work of coordination the Government feel sure that they can rely on the cordial co-operation of all the various relief agencies. Particulars of the new organisation will be announced shortly.
    Mr. THOMAS: Can the Prime Minister answer the latter part of question 45? We all appreciate the benefits of co-ordination, but does the Government intend to make any contribution?
    The PRIME MINISTER: On that particular point I have nothing to add for the present to what I have said in the first part of the answer.
    Mr. BECKETT: Is the right hon. Gentleman aware that it is now, when the winter season is starting, that the need is most urgent? For some three weeks we have been told that consideration is being given to the subject. Can he give us any assurance that the Government will come to a decision in the near future?
    The PRIME MINISTER: I have nothing to add to what I have said.
    Mr. TAYLOR: Can the Prime Minister say why the guardians cannot be given the means by the Government to deal with distress in these areas?
    The PRIME MINISTER: That question does not arise out of the original question, and I should be much obliged if the hon. Member would put it to the appropriate Minister.
    Mr. SHINWELL: What does the right hon. Gentleman mean by "early publication"? Does he mean some time after Christmas?
    The PRIME MINISTER: That is not my conception. Whether it be the hon. Member's, I do not know.
    Mr. PALING: If we put down a question in a week's time, will the right hon. Gentleman be in a position to give an answer?
    The PRIME MINISTER: Indeed, I hope so.
    Mr. BECKETT: What degree of starvation does the right hon. Gentleman think will have to be reached—
    HON. MEMBERS: Order!

    LOCAL AUTHORITIES' SCHEMES.
    Mr. KELLYasked the Minister of Labour the number of local authorities which have prepared schemes and presented them to Government Departments in response to the Circular of 9th November, 1928, on works for the relief of unemployment and the transfer of labour from depressed areas?
    Mr. BETTERTON: Nineteen local authorities have submitted 26 schemes of work for the approval of the Unemployment Grants Committee under the new terms of grant. In addition a number of authorities have made preliminary inquiry regarding schemes they have under consideration.
    Mr. KELLY: Have any of these schemes been put into operation?
    Mr. BETTERTON: I should like notice of that question, but, in view of the fact that the Circular has only been issued about one month, I should think it was very improbable.
    Mr. PALING: Does that mean that every local authority which sends in a scheme in accordance with the Circular will be granted the necessary money?
    Mr. BETTERTON: That is a matter for the Unemployment Grants Committee.
    Mr. PALING: Does that mean that, although the Circular has been sent out, the number of schemes granted will be a very small proportion under the Unemployment Grants Committee?
    Mr. BETTERTON: That I cannot say. It is much too early to say what will be the result.
    Mr. PALING: Is sufficient money available for the schemes which have already been approved?
    Mr. BETTERTON: Yes. There is no question that in regard to any scheme which has been recommended by the Unemployment Grants Committee the necessary money will be forthcoming.
    Mr. TAYLOR: Can the Parliamentary Secretary say how many men have already been provided with work under these schemes?
    Mr. BETTERTON: No, Sir. Not without notice.

    LORD MAYOR'S FUND (TRANSFERRED WORKERS).
    Mr. C. EDWARDSasked the Minister of Labour how much money he has received out of the miners' relief fund towards transferring persons to other places; whether those transferred have to refund the cost of such transfers to the Unemployment Fund; and will he take steps to secure that this charge shall be borne by the State funds so that no more money shall be taken from this source, which has subscribed to relieve families at home?
    Mr. BETTERTON: I presume the hon. Member is referring to the Lord Major's Fund. A sum of £15,350 has been allocated from this Fund for the purpose of making up, in appropriate cases, part of the difference between the initial wages of a boy transferred from a distressed mining area and his living expenses, on condition that the employer also makes an extra payment for this purpose. No refund is asked for. The payments are in accordance with one of the declared objects of the Lord Mayor's Fund.
    Mr. EDWARDS: Since transference is the policy of the Government ought not the money to be found from national funds and not out of this particular fund, which was initiated in order to alleviate destitution and poverty?
    Mr. BETTERTON: The hon. Member seems to be under a misapprehension. In the letters from the last Lord Mayor and the present Lord Mayor the object of the fund was explicitly stated.
    Mr. KELLY: Is the money which is paid for juveniles who are transferred paid to the employers and then paid to the juveniles?
    Mr. BETTERTON: No, it is paid to the juveniles, but some contribution is also made by the employers before any payment is made.
    Mr. PALING: In view of the fact that the Government have not seen their way clear to grant anything to this Fund,
    1700
    is it asking too much that at least they should find the money necessary for the transference of these people?
    Mr. BETTERTON: That is really the same question in another form which was put to the Prime Minister. The objects of the Fund are clearly stated in the letters issued by the last Lord Mayor and the present Lord Mayor.
    Mr. BARR: Is there any fixed proportion laid down as to the amount that will be paid by the employer in these cases?
    Mr. BETTERTON: No, Sir, not that I am aware of.
    Mr. BECKETT: Does the hon. Member think that it is going to help charity if people who have given money know that they are subsidising wages?
    Mr. SHINWELL: Does this mean that this money is to be used for furthering a scheme for which the Government is going to claim credit?

    TRANSFER OF WORKERS.
    Mr. WILLIAM PRESTONasked the Minister of Labour if grants by the unemployment grants committee must be made solely under the conditions laid down in the circular issued to local authorities on 9th November dealing with the transfer of labour from depressed areas; and, if not, whether such grants will be made on the conditions existing prior to the issue of the circular referred to?
    Mr. BETTERTON: The answer to the first part of the question is in the negative; to the second part in the affirmative. I am sending my hon. Friend a copy of the Circular which, I think, makes the position quite clear.

  GOVERNMENT DEPARTMENTS.

    PAYMASTER-GENERAL (SALARY).
    Mr. FOOT MITCHELLasked the Prime Minister whether, in consequence of the recent transfer between the offices of Parliamentary Under-Secretary of State for War and His Majesty's Paymaster-General, a salary has now been attached to the latter office?
    The PRIME MINISTER: It has been decided, as a strictly temporary measure,

    1701
    to attach a salary of £1,500 per annum to the office of His Majesty's Paymaster-General. A Supplementary Estimate will he presented in due course.

    MINISTRY OF LABOUR.
    Mr. LANSBURYasked the Minister of Labour how many clerks and other persons engaged at Employment Exchanges and in other departments connected with the Ministry have worked overtime during the three months ended 7th December, and the number of hours overtime worked by each person each week?
    Mr. BETTERTON: In the three months ended 23rd November, the average weekly number of officers of the Department who worked overtime (other than officers of the Administrative grade and other senior officers at Headquarters for whom statistics are not available) was 2,708. It is not practicable to give the number of hours worked by each officer but the total of such hours of overtime worked was 11,814.
    Mr. LANSBURY: May I ask the hon. Gentleman whether his Department will consult with the Department of the Post Office where a number of women clerks are under notice in order that they may be given this work instead of being discharged and so prevent overtime?
    Mr. BETTERTON: I can assure the hon. Member that it is the definite policy of my Department to engage staff rather than work overtime, and it is only when there is a sudden rush of work that overtime is worked.
    Mr. LANSBURY: Will the Parliamentary Secretary consult with the appropriate department in order to see whether some of these women who are under notice cannot be taken on?
    Mr. BETTERTON: I will certainly inquire whether it would be possible to adopt the suggestion made by the hon. Member where further staff is required.

    MINISTRY OF HEALTH.
    Mr. LANSBURYasked the Minister of Health how many clerks in his Department have worked overtime during the three months ended 7th December, and the number of hours overtime worked by each person each week?
    The PARLIAMENTARY SECRETARY to the MINISTRY of HEALTH (Sir Kingsley Wood): During the period in question, 283 clerks have been employed upon overtime, the number of hours worked amounting in the aggregate to 6,818. Of these clerks, 167 were employed at headquarters, and 116 in provincial offices, where it is frequently impracticable to obviate the need for overtime by the employment of additional staff. The detailed information asked for by the hon. Member, with regard to the number of hours worked by each person each week, involves a very voluminous statement, and I think it would be more convenient if I sent this to the hon. Member.
    Mr. LANSBURY: Will the right hon. Gentleman consult the Financial Secretary to the Treasury and see whether it is not possible to obviate some of this overtime by giving work to the women who are under notice from the Post Office?
    Sir K. WOOD: Of course, I will take what steps can be taken in the matter, but most of this work is of a special character in connection with widows' pensions and in connection with the preparation of local government returns. I will certainly look into the matter and see if anything can be done.

    EMPIRE SETTLEMENT.
    Mr. D. GRENFELLasked the Minister of Labour whether he can estimate the rate of training and despatch of the 1,500 men from South Wales for whom he is making arrangements at Brandon and Claydon; whether there will be any special method of selecting applicants for this scheme; and whether it is proposed that the men when trained will be sent to Dominions other than Canada and Australia?
    Mr. BETTERTON: The duration of training is normally 12 weeks and the First men will sail about the end of March. Applicants can apply either at the Employment Exchanges or through the shipping companies or their agents and before being sent to training must be approved by the Dominion Authorities. The training schemes for overseas settlement apply only to Canada and Australia.

  UNEMPLOYMENT.

    COTTON TEXTILE INDUSTRY.
    Mr. KELLYasked the Minister of Labour whether his Department have prepared an estimate of the number of unemployed in the cotton textile trade, with the cost to the industry?
    Mr. BETTERTON: At 26th November, 1928, the number of insured persons classified as belonging to the cotton textile industry and recorded as unemployed in Great Britain was 69,562, of whom 33,025 were wholly unemployed and 36,537 were temporarily stopped. I do not know what the hon. Member means by the cost to the industry. If he will tell me more precisely what information he wants I will see whether it is available.
    Mr. KELLY: Can the hon. Gentleman state what is the cost to the industry of the payment of unemployment insurance?
    Mr. BETTERTON: That is not what I understood the hon. Member to mean. If that is what he means, I think I can give him the information.
    Mr. KELLY: Will the Parliamentary Secretary also include in his answer the cost of interest which has to be paid to the Treasury for the loans connected with insurance.
    Mr. BETTERTON: If the hon. Member will put down another question stating exactly the information he requires, I will endeavour to give it to him.

    EXCHANGE FACILITIES, DUNDEE.
    Mr. SCRYMGEOURasked the Minister of Labour if he is aware that, at the Dundee office, large numbers of women and children as well as men have often to stand outside during inclement weather conditions; whether there is insufficient accommodation within the building; and, if so, will he be prepared to consider the erection of an enclosed awning under which the queue might obtain shelter adjacent to the entrance?
    Mr. BETTERTON: I have made inquiry and am assured that adequate accommodation exists and that the formation of queues would be avoided if applicants did not attend before their proper time.
    Mr. SCRYMGEOUR: Is the hon. Member aware that representations have been made by business interests in the vicinity and by the working-classes, but the fact remains that these people are still obliged to stand in queues, and will he reconsider the matter?
    Mr. BETTERTON: I can assure the hon. Gentleman that we are most anxious to avoid queues in all circumstances, but the only way of avoiding them is for the applicants to come at the appointed time, and no other method will avoid an evil which we all deplore.
    Mr. SCRYMGEOUR: Can the Parliamentary Secretary give consideration to the fact that under the exigency which occurs from time to time it is necessary to make such provision?
    Mr. BETTERTON: We have considered the matter, and we have come to the conclusion that, instead of helping the situation, our interference might make the position worse, and it might encourage people not to come at the appointed time.

    NINE MILE POINT COLLIERY, MONMOUTH-SHIRE (BENEFIT).
    Mr. C. EDWARDSasked the Minister of Labour if he is aware that about 2,000 men and their dependants are suffering through the stoppage of the Nine Mile Point Colliery, Monmouth-shire; and why no unemployment benefit has been paid since the stoppage took place several weeks ago, the colliery having given notice to the whole of the workmen presumably because the colliery did not pay?
    Mr. BETTERTON: I am inquiring into this matter and will let the hon. Member know the result as soon as possible.
    Sir W. SUGDEN: May I ask my hon. Friend what is the initiative which the Ministry is taking in respect of closer co-operation between employers and employed?
    Mr. BETTERTON: That is really a matter for the employers and the employed themselves, and it might, and probably would, do far more harm than good if the Ministry were to interfere.
    Mr. RENNIE SMITH: In connection with the proposals for the rationalisation of industry, has the Parliamentary

    1705
    Secretary considered the advisability of conferring with the Economic Council of the League of Nations in regard to promoting an eight hours' day throughout the world?
    Mr. BETTERTON: That is another question altogether.

  POST OFFICE.

    TELEPHONE SERVICE, SWANSEA.
    Mr. D. GRENFELLasked the Postmaster-General whether he has received complaints regarding the delay in installing telephones for the use of new subscribers in Swansea, involving months of waiting after an application has been presented; whether he is satisfied that the constructional staff is adequate; and whether the removal of the district office from Swansea to Cardiff is the cause of the delay and inconvenience in the Swansea district?
    The ASSISTANT POSTMASTER-GENERAL (Viscount Wolmer): I am not aware that there has been undue delay in joining up new subscribers in Swansea, and I shall be glad if the hon. Member will give me particulars of the cases to which he refers.

    OVERSEAS TELEPHONE SERVICES.
    Commander BELLAIRSasked the Postmaster-General, in view of the decision to retain the overseas wireless telephone system in Government hands, what is the corresponding policy of His Majesty's Governments in the Irish Free State, Canada, Australia, New Zealand, South Africa, and India?
    Viscount WOLMER: So far as I am aware, South Africa, India, Australia and New Zealand have at present no overseas telephone services, although the British Post Office has proposed experiments with the first three of these Dominions. The overseas telephone services of the Irish Free State are wholly in the hands of the Free State Government, and are conducted by means of submarine cables connecting with the British Post Office telephone system, and so with the Continent of Europe. In Canada, the telephone services are conducted by a number of different Canadian authorities, including some private companies and some Provincial Government telephone sys-
    1706
    tems; their overseas telephone calls are effected via the British post office system, which affords connection with the Continent, of Europe.

  LOCAL GOVERNMENT AND RATING.

    OFFICIALS (SUPERANNUATION).
    Sir EDMUND TURTONasked the Minister of Health whether he has received a communcation from the County Councils Association expressing the opinion that, in view of the difficult position that will be created by the transfer of Poor Law and other pensionable officers in those county areas in which the Local Government and other Officers' Superannuation Act is not in force, the Government should give immediate legislative effect to the recommendation of the Departmental Committee on the superannuation of local government employés that the provisions of that Act should now be made compulsory; and what action he proposes to take in the matter?
    Sir K. WOOD: Yes, Sir. My right hon. Friend has received this communication. As I intimated in a reply to a previous question on the same subject, my right hon. Friend is afraid he could not undertake to load the present Bill with further provisions of the kind suggested, which do not arise out of the Government's proposals. The Bill will deal, my right hon. Friend hopes, satisfactorily with the case of all transferred local government officers.

    FARMERS (RELIEF AND PETROL DUTY).
    Mr. HARDIEasked the Secretary of State for Scotland, wether he is aware that the occupant of Holmhead Farm, Lesmahagow, who runs a one-ton motor lorry, finds that the increase of petrol tax by 4d. is greater by the sum of £8 than the relief under the de-rating scheme, and whether he intends to give consideration to such cases?
    The UNDER-SECRETARY of STATE for SCOTLAND (Major Elliot): As regards the first part of the question, my right hon. Friend has no information. As regards the second part, the answer is in the negative.
    Mr. HARDIE: Is it not the business of the Scottish Office to find out whether this is so or not, and is it not rather a

    1707
    reflection at the beginning, before the Measure is really completed, that people are going to be incapable of checking what is to be their ratio? Are they going to be left in the position of being unable to understand what they are going to get by de-rating? Cannot they make this calculation?
    Major ELLIOT: The hon. Member asked me whether this gentleman had written to the Scottish Office or not. The answer is that he has not.
    Mr. HARDIE: I have not asked that; the question is quite plain. The occupant of this farm requires a one-ton lorry which he uses on 365 days in the year to take milk into the city, and his average consumption of petrol is four gallons per day.
    HON. MEMBERS: Speech!
    Mr. HARDIE: You do not want your Bill to be shown up. The tax on that, at 4d. per gallon—[Interruption.]
    Mr. SPEAKER: This is not the time for a speech.
    Mr. HARDIE: I want to ask if the Scottish Office is ignorant of the fact that the tax of 4d. a gallon on petrol for a one-ton lorry used on 365 days of the year comes to £8 more than he will get from the de-rating on his farm?
    Major ELLIOT: The hon. Member appears to have a great deal of information on the subject, which he is taking this opportunity of imparting.
    Mr. HARDIE: Is it not—[Interruption.] I will come back.

  RATING AND VALUATION ACT.
  Sir W. SUGDENasked the Minister of Health whether, having regard to the general increase in the assessment of property in the new valuation lists or draft valuation lists under the Rating and Valuation Acts and the apprehension on the part of ratepayers that their rates will thereby be materially increased, he will consider the advisability of circularising rating authorities, suggesting the desirability of their taking steps to inform the ratepayers at large that, in so far as the assessments show a general increase in a rating area, there will normally he a proportionate set-off to that increase by the reduction of the rate in the£to
  1708
  be levied on the new assessments; and that the rating authority will endeavour to secure, as far as practicable and to the extent to which they are responsible for expenditure, that the reduction in rates to be levied will be commensurate with the general increase in assessable values?
  Sir K. WOOD: The general position, as stated by my hon. Friend, has already received wide publicity in the Press. If any local authority think it desirable that their ratepayers should be further assured, it is open to them to issue a statement, but my right hon. Friend does not consider that he could properly make any general suggestion in the matter. No doubt my hon. Friend's question will have the effect of bringing the point to the notice of local authorities and the public.
  Mr. PALING: Is it not the case that this has not had the effect of relieving the misapprehension of the ratepayers?
  Sir K. WOOD: Perhaps the hon. Gentleman will assist us in removing that misapprehension?

  CASUALS, ISLEWORTH (ACCOMMODATION).
  Miss LAWRENCEasked the Minister of Health whether he is aware that in the casual ward as Isleworth on 3rd December 110 casuals were received in accommodation provided for 40, and that, in spite of the efforts of the guardians, men were obliged to sleep on a concrete floor without mattresses or bedboards; and what steps he proposes to take to avoid such hardships?
  Sir K. WOOD: My right hon. Friend is aware that these casual wards are at times seriously overcrowded. The extension of the accommodation, and any other means of meeting the problem, present serious difficulties, the interests of more than one union being involved. Certain suggestions for alleviating the present position have already been put to the guardians' officers, and my right hon. Friend is making every effort to ensure an early decision of the main issues involved.
  Miss LAWRENCE: Is the right hon. Gentleman aware that for the past 18 months the Poor Law inspectors have been calling attention to the crowded state of the casual wards?
  Sir K. WOOD: It has been the case for a long period, but undoubtedly there is considerable difficulty. We have recently made some further suggestions. The difficulty, as I daresay the hon. Member knows, is due to the fact that a number of unions are involved, but I hope that the suggestions we have made will at any rate help the matter.
  Mr. ERNEST BROWN: Cannot something be done to obviate sleeping on concrete floors?
  Sir K. WOOD: The case is one of considerable difficulty, but we are making certain suggestions.
  Mr. MONTAGUE: Is it really very difficult for the institutions to have in stock a number of extra mattresses?
  Sir K. WOOD: The difficulty is rather that of overcrowding due to a number of men coming from other parts into this particular area.
  Mr. MONTAGUE: May I have an answer to my question? Is it difficult to have a few extra mattresses?
  Sir K. WOOD: That does not solve the major problem.
  Miss LAWRENCE: Will the right hon. Gentleman communicate with such authorities as the Church Army and the Salvation Army, who can teach them how to do their business?

BUSINESS OF THE HOUSE.
Mr. CLYNES: With regard to the Motion which stands on the Order Paper in the name of the Prime Minister, may I ask the right hon. Gentleman what business the Government intend to take in the event of that Motion being carried?
The PRIME MINISTER: That must depend on the progress which we make in the course of the day.
Motion made, and Question put,
"That the Proceedings on Government Business be exempted, at this day's Sitting, from the provisions of the Standing Order (Sittings of the House)."—[The Prime Minister.]
The, House divided: Ayes, 207; Noes, 98.

Division No. 41.]

AYES.

[4.6 p.m.

Ainsworth, Lieut.-Col. Charles

Cohen, Major J. Brunel

Hannon, Patrick Joseph Henry

Albery, Irving James

Cooper, A. Duff

Hartington, Marquess of

Alexander, E. E. (Leyton)

Cooper, J. B.

Harvey, G. (Lambeth, Kennington)

Allen, Sir J. Sandeman

Courtauld, Major J. S.

Haslam, Henry C.

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

Courthope, Colonel Sir G. L.

Headlam, Lieut.-Colonel C. M.

Applin, Colonel R. V. K.

Craig, Sir Ernest (Chester, Crewe)

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

Apsley, Lord

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

Hilton, Cecil

Ashley, Lt.-Col. Rt. Hon. Wilfrid W.

Crookshank,Cpt.H.(Lindsey, Gainsbro)

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

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

Culverwell, C. T. (Bristol, West)

Holbrook, Sir Arthur Richard

Atkinson, C.

Curzon, captain Viscount

Holt, Capt. H. P.

Baldwin, Rt. Hon. Stanley

Dalkeith, Earl of

Hopkins, J. W. W.

Balniel, Lord

Davies, Dr. Vernon

Hopkinson, A. (Lancaster, Mossley)

Barclay-Harvey C. M.

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

Howard-Bury, Colonel C. K.

Barnett, Major Sir Richard

Dawson, Sir Philip

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

Bellairs, Commander Carlyon

Dean, Arthur Wellesley

Hurd, Percy A.

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

Eden, Captain Anthony

Hurst, Gerald B.

Berry, Sir George

Edmondson, Major A. J.

Iliffe, Sir Edward M.

Betterton, Henry B.

Elliot, Major Walter E.

Inskip, Sir Thomas Walker H.

Birchall, Major J. Dearman

Ellis, R. G.

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

Bourne, Captain Robert Croft

Erskine, James Malcolm Montelth

Kennedy, A, R. (Pirston).

Bowater, Col. S(r T. Vansittart

Fairfax, Captain J. G.

King, Commodore Henry Douglas

Bowyer, Captain G. E. W.

Falle, Sir Bertram G.

Kinloch-Cooke, Sir Clement

Briggs, J. Harold

Fanshawe, Captain G. D.

Lamb, J. O.

Briscoe, Richard George

Fermoy, Lord

Lister, Cunliffe, Rt. Hon. Sir Philip

Brittain, Sir Harry

Fielden, E. B.

Locker-Lampson, Rt. Hon. Godfrey

Brocklebank, C. E. R.

Forrest, W.

Looker, Herbert William

Brooke, Brigadier-General C. R. I.

Foster, Sir Harry S.

Luce, Major-Gen. Sir Richard Harman

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

Fremantle, Lieut.-Colonel Francis E.

Lumley, L. R.

Buckingham, Sir H.

Ganzonl, Sir John

MacAndrew, Major Charles Glen

Bullock, Captain M.

Gates, Percy

Macintyre, Ian

Burton, Colonel H. W.

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

McLean, Major A.

Carver, Major W. H.

Goff, Sir Park

Macmillan, Captain H.

Cautley, Sir Henry S.

Sower, Sir Robert

Macquisten, F. A.

Cayzer Sir C. (Chester, City)

Grant, Sir J. A.

Maltland, A. (Kent, Faversham)

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

Grattan-Doyle, Sir N.

Maitland, Sir Arthur D. Steel-

Cazalet, Captain Victor A.

Grenfell, Edward C. (City of London)

Makins, Brigadier-General E.

Cecil, Rt. Hon. Sir Evelyn (Aston)

Grotrlan, H. Brent

Malone, Major P. B.

Chadwick, Sir Robert Burton

Guinness, Rt. Hon. Walter E.

Manningham-Buller, Sir Mervyn

Chamberlain, Rt. Hon. N. (Ladywood)

Gunston, Captain D. W.

Margesson, Captain D.

Charterls, Brigadier-General J.

Hacking, Douglas H.

Marriott, Sir J. A. R.

Churchman, Sir Arthur C.

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

Merriman, Sir F. Boyd

Clayton, G. C.

Hall, Admiral Sir R. (Eastbourne)

Milne, J. S. Wardlaw-

Cochrane, Commander Hon. A. D.

Hamilton, Sir George

Mitchell, W. Foot (Saffron Walden)

Mitchell, sir W. Lane (Streatham)

Rodd, Rt. Hon. sir James Rennell

Templeton, W. P.

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

Ropner, Major L.

Thomson, F. C. (Aberdeen, South)

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

Ruggles-Brise, Lieut.-Colonel E. A.

Thomson, Rt. Hon. Sir W. Mitchell-

Mcreing, Captain A. H.

Russell, Alexander West (Tynemouth)

Titchfield, Major the Marquess of

Morrison, H. (Wilts, Salisbury)

Salmon, Major I.

Turton, Sir Edmund Russborough

Nelson, Sir Frank

Samuel, A. M. (Surrey, Farnham)

Vaughan-Morgan, Col. K. P.

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

Sandeman, N. Stewart

Wallace, Captain D. E.

Nicholson, O. (Westminster)

Sandon, Lord

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

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

Sassoon, Sir Philip Albert Gustave D.

Warrender, Sir Victor

Nield, Rt. Hon. Sir Herbert

Savery, S. S.

Watson, Rt. Hon. W. (Carlisle)

O'Neill, Major Rt. Hon. Hugh

Sheffield, Sir Berkeley

Wayland, Sir William A.

Ormsby-Gore, Rt. Hon. William

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

Wells, S. R.

Penny, Frederick George

Skelton, A. N.

Williams, Com. C. (Devon, Torquay)

Percy, Lord Eustace (Hastings)

Smith, Louis W. (Sheffield, Hallam)

Williams, Herbert G. (Reading)

Perkins, Colonel E. K.

Smith, R.W.(Aberd'n & Klnc'dlne, C.)

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

Peto, Sir Basil E. (Devon, Barnstaple)

Smithers, Waldron

Wilson, R. R. (Stafford, Lichfield)

Peto, G. (Somerset, Frome)

Somerville, A. A. (Windsor)

Winby, Colonel L. P.

Phillpson, Mabel

Southby, Commander A. R. J

Winterton. Rt. Hon. Earl

Pllcher, G

Spender-Clay, Colonel H.

Wolmer, Viscount

Power, Sir John Cecil

Stanley, Lieut.-Colonel Rt. Hon. G. F.

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

Preston, William

Steel, Major Samuel Strang

Wood, Rt. Hon. Sir Kingsley

Price, Major C. W. M.

Stott, Lieut.-Colonel W. H.

Wood, Sir S. Hill (High Peak)

Ramsden, E.

Stuart, Crichton-, Lord C.

Woodcock, Colonel H. C.

Reid, Capt. Cunningham (Warrington)

Stuart, Hon. J. (Moray and Nairn)

Worthington- Evans, Rt. Hon. Sir L.

Rhys, Hon. C. A. U.

Styles, Captain H. W.

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

Sueter, Rear-Admiral Murray Fraser

TELLERS FOR THE AYES.—

Robinson, Sir T. (Lanes, Stretford)

Sugden, Sir Wilfrid

Major Sir George Hennessy and

Major Sir William Cope.

NOES.

Ammon, Charles George

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

Potts, John S.

Baker, J. (Wolverhampton, Bilston)

Hall, G. H. (Merthyr Tydvil)

Salter, Dr. Alfred

Baker, Walter

Hamilton, Sir R. (Orkney & Shetland)

Scrymgeour, E.

Barker, G. (Monmouth, Abertillery)

Hardle, George D.

Shaw, Rt. Hon. Thomas (Preston)

Barnes, A.

Harney, E. A.

Shepherd, Arthur Lewis

Barr, J.

Harris, Percy A.

Shiels, Dr. Drummond

Batey, Joseph

Hayday, Arthur

Shinwell, E.

Beckett, John (Gateshead)

Henderson, Right Hon. A. (Burnley)

Sinclair, Major Sir A. (Caithness)

Bellamy, A.

Hirst, G. H.

Slesser, Sir Henry H.

Benn, Wedgwood

Hirst W. (Bradford, South)

Smillie, Robert

Bondfield, Margaret

Hudson, J. H. (Huddersfield)

Smith, Ben (Bermondsey, Rotherhithe)

Bowerman, Rt. Hon. Charles W.

Hutchison, Sir Robert (Montrose)

Smith, Rennie (Penistone)

Brown, Ernest (Leith)

John, William (Rhondda, West)

Snell, Harry

Buxton, Rt. Hon. Noel

Johnston, Thomas (Dundee)

Strauss, E. A.

Charleton, H. C.

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

Taylor, R. A.

Cluse, W. S.

Jones, Morgan (Caerphilly)

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

Clynes, Rt. Hon. John R.

Kelly, W. T.

Thorne, W. (West Ham, plaistow)

Cove, W. G.

Kennedy, T.

Thurtle, Ernest

Cowan, D. M. (Scottish Universities)

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

Tinker, John Joseph

Crawfurd, H. E.

Lansbury, George

Tomlinson, R. P.

Davies, Evan (Ebbw Vale)

Lawrence, Susan

Viant, S. P.

Day, Harry

Lee, F.

Wallhead, Richard C.

Dennison, R.

Lunn, William

Warne, G. H.

Dunnlco, H.

Macpherson, Rt. Hon. James I.

Wedgwood, Rt. Hon. Joslah

Evans, Capt. Ernest (Welsh Univer.)

Malone, C. L'Estrange (N'thampton)

Wellock, Wilfred

Gardner, J. P.

March, S.

Westwood, J.

Garro-Jones, Captain G. M.

Montague, Frederick

Wilkinson, Ellen C.

Gillett, George M.

Morris, R. H.

Williams. Dr. J. H. (Llanally)

Gosling, Harry

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

Wilson, C. H. (Sheffield, Attercliffe)

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

Mosley, Sir Oswald

Young, Robert (Lancaster, Newton)

Grenfell, D. R. (Glamorgan)

Paling, W.

Griffith, F. Kingsley

Parkinson, John Allen (Wigan)

TELLERS FOR THE NOES.—

Griffiths, T. (Monmouth, Pontypool)

Pethick-Lawrence, F. W.

Mr. Charles Edwards and Mr.

Grundy, T. W.

Ponsonby, Arthur

Whiteley.

Question put, and agreed to.

SEA FISHERIES BILL,
"to amend the Sea Fisheries Regulation Acts, 1888 to 1894," presented by Mr. Ernest Evans; supported by Mr. Bethel, Mr. Fenby, and Mr. Robert Hudson; to be read a Second time upon Monday next, and to be printed. [Bill 29.]

PRIVILEGE.
Mr. E. C. GRENFELL: I beg to move,
"That the passage in the Evening News' newspaper of Friday last constitutes
1712
a libel on the Chairman of Ways and Means, and is a gross breach of the Privileges of this House."
The passage to which I desire to call the attention of the House, in the "Evening News" newspaper of the 7th December, and which, in my opinion, constitutes a gross breach of the Privileges of this House, is as follows:
"MR. HOPE'S PRUNING.
"Mr. Hope, who as Chairman of Committee will preside over the House when it considers the De-Rating Bill, Clause by Clause, is, in one way, in a happy position.

1713
"With the time-table in operation, and Clauses that must be passed by certain dates, the Committee Chairman cannot help making himself unpopular with the Opposition: it will be his duty to closure debate, to pick out the few from the many Amendments that are to be discussed. This he cannot help, but the Opposition will not fail to make him the subject of attack. But this is Mr. Hope's last year in the Commons; he is not proposing to contest his present seat at Sheffield again; so, whatever he does, cannot be brought against him in an election contest. The Ministry, in fact, is lucky in having a servant who will carry out instructions without a thought of the ballot box."
This imputes to the right hon. Gentleman the Chairman of Ways and Means subservience to the Government and is an implication of partiality which appears to me to be as intolerable as it is unjustified. To call any official of the House a servant of the Government is most offensive. The seriousness of the charge is aggravated by the fact that partiality is insinuated in regard to proceedings which have not yet taken place. As the House knows, the Chairman has to carry out the directions of the House in applying what we call a Guillotine Motion and in selecting Amendments under powers given to him by the Standing Order. This duty is sufficiently onerous and thankless without his exposure to insinuations of unfairness or partiality. I do not want the House to attach undue importance to anything that may be written in a newspaper, but the dignity of the House requires that, if newspapers report our speeches or comment on our proceedings, it shall be done decently.
Admiral Sir REGINALD HALL: I beg to second the Motion.
The PRIME MINISTER (Mr. Baldwin): I was only aware a short time ago that this Motion was going to be moved, and it is obviously an occasion, though not calling for protracted debate, on which the Leader of the House would be expected to say a few words, and my words will be few. We occasionally have experience of these Motions. I do not think anyone in the House likes them, but there are times when the House feels that it is necessary that they should be made. So far as individuals are concerned, few of us mind criticism even of this nature. I think it is very possible to over-estimate the effect of such criticism, but,
1714
on the other hand, we feel, as a House —and I think all parties feel this, for all parties in turn are responsible for the leading of this House, and the Government of the country—that, while few of us would be found to complain of anything that may be said of us individually, we resent criticism on the honour of the Officers of this House, I think for two reasons: Such criticism, of course, tends to lower the estimation of those Officers in the opinion of the outside world, and those Officers are singularly unable to defend themselves.
Objectionable as it may be to make such criticism of Mr. Speaker, a long Parliamentary experience has taught me that it is almost more objectionable, if possible, to make it of those who sit at this Table, because the position of the Chairman and Deputy-Chairman of Ways and Means is a far more difficult one than that of the Speaker. He is not endowed with the ancient traditions that clothe the rank of Speaker, and from that fact—and all who have sat in the Chair at this Table would recognise it—the task is different in essence, and it is more difficult even than that of Mr. Speaker. Then, again, he is always taken from the ranks of the Government side for the time being, and it is more difficult, because of that fact, for the House, at any rate for some time after he begins his work, to divest him of a certain amount of partisan character of which the House so freely divests Mr. Speaker, who goes on generally, irrespective of what Government may be in power, after his first election. I think those are sound observations that I have made and that they will commend themselves certainly to older Members and, I think, to the majority of the Members of this House.
With regard to this particular case, I think there can be little doubt that the insinuation is a peculiarly nasty one. It begins with a statement of fact, I need hardly say incorrectly stated because as, Lord Melbourne—I think it was—said, facts seldom are correctly stated. It begins in the first four or five words with a falsehood, on which is based an insinuation that I think deserves the censure of the House. For myself, I would suggest to the House that we might pass our censure and leave the matter where it is. It is many years since anyone

1715
has been at the Bar of the House. In this case, I understand, that this peccant paragraph was withdrawn in the later editions, which looks as though those responsible for its publication had realised, since they saw it, what was implicit in it. I would take that as sufficient apology for us to-day, without claiming our right of bringing the editor to the Bar. I feel that we should make no doubt about our sense of such an article by accepting the Motion which has been moved by the hon. Member for the City of London.
Mr. CLYNES: I had no knowledge that this question was going to be raised until the offensive paragraph was read to the House a few moments ago. I think the Prime Minister, in his very brief statement, has made out a case for the House expressing its approval of the Motion that has been read from the Chair, and therefore, by a Division if necessary, hon. Members may record their feeling upon a wholly unjust and partial commentary of this kind. If ever an occasion should arise for such an opinion being expressed—I am not now thinking of the present occupant of the Chair—the first and proper place to express it would be within this House itself, and I think the Opposition, whether this or any other, might well be trusted to defend its rights, and the rights of Parliament, against any partial action of that kind. As to the Prime Minister's statement as to how far this matter should be carried, that, I suppose, could be considered and decided by the Committee of Privileges. I am not absolutely certain at the moment as to the course that should be taken, and, accordingly, I would not say anything now to pledge the Opposition as to any next step that might be taken on the question which you Sir, put from the Chair.
Mr. MACPHERSON: I desire to associate myself with the two right hon. Gentlemen who have spoken. Like the right hon. Gentleman who has just sat down, this is the first occasion on which I have heard anything about the matter that has been raised. I agree with every word my right hon. Friend the Prime Minister has said, and, in saying that, I think I am speaking for the whole of
1716
the party with whom I am associated. I think the Prime Minister's suggestion is the right one. This is not the occasion to say anything about the Chairman of Committees, but at this juncture I might be permitted to say that, as far as we are concerned, we have the most unabated confidence in the Chairman of Committees, and, therefore, we support the Resolution.
Mr. SCRYMGEOUR: As an independent Member, having personally perused the reference which has been dealt with by the House so far, I should like to express the view that it is another instance of the Press transgressing to such an extent upon fair consideration of men in public life in discharging onerous duties that when such a proposal is put forward by an hon. Member upon the other side, the House, by supporting it, will be doing justice by itself and by the interests of Members individually, all of whom are rightly entitled to fair and honourable consideration in the discharge of their duties. Therefore, I heartily support the Resolution.
Mr. J. JONES: Seeing that one independent Member of the House has already expressed himself, not claiming to be independent, but only an ordinary Member of this House, who probably has had as much trouble with the Speaker and his assistants as any other hon. Member, I want to say that the real criminal this afternoon has not been brought to book even in the suggestions made. Those who read the ordinary papers day by day know that you may summon a block to the House of Commons, but you never summon the butcher. The real criminal in this case is Lord Rothermere, the modern kingmaker, who can make Governments and unmake them —at least he claims to be able to do so. But you would not ask him to come to the Bar of the House, though you might ask him to the bar. As far as we are concerned, we do not care what he says. When he attacks the Labour party, it is all right, but when he dares to attack the holy of holies it is all wrong. We do not attack hon. Gentlemen and right hon. Gentlemen who occupy those exalted positions, because we hope some day to occupy them ourselves. Therefore, we have great respect for precedents. We admire the gentlemen who occupy those

1717
positions, because up to now they have treated us fairly well, and when the time comes, if ever we should have a row with them, it will be a fair and an open one. We will not stab them in the back. We will not use poisoned daggers, but try to speak plain English under plain conditions.
Therefore, I hope that we shall treat these people with the contempt they deserve, whether they be lords or labourers. After all, the Government of the time, happen to be the representatives of the people, whether we agree with them or not, and while we are carrying on our business, at least we are entitled to free-play and fair-play. Therefore, I say that in any attack upon the officers of this House, whether it be justified as regards Members of Parliament— and every man has a right to criticise the Government of the country if he wants to do so, but he has no right to use dirty weapons—we back benchers— I think I can speak for most of my hon. Friends—associate ourselves with this dignified rebuke. Back and front are united, and when we are both united, who can stand against us?
Resolved,
"That the passage in the 'Evening News' newspaper of Friday last constitutes a libel on the Chairman of Ways and Means, and is a gross breach of the Privileges of this House."

CIVIL ESTIMATES (SUPPLEMENTARY ESTIMATE, 1928).
Estimate presented,—of a further sum required to be voted for the service of the year ending 31st March, 1929 [by Command]; referred to the Committee of Supply, and to be printed.
SELECTION (STANDING COMMITTEES).

  STANDING COMMITTEE A.
  Mr. William Nicholson reported from the Committee of Selection; That they had discharged the following Member from Standing Committee A (added in respect of the Overseas Trade Bill): Mr. Sandeman; and had appointed in substitution: Colonel Howard-Bury.
  Report to lie upon the Table.

ORDERS OF THE DAY.

  IMPERIAL TELEGRAPHS BILL.
  Considered in Committee. [Progress, 7th December.]
  [Mr. DENNIS HERBERT in the Chair.]

  IMPERIAL TELEGRAPHS BILL.

    NEW CLAUSE.—(Interest on dividend on share or loan capital of Communications Company to be limited.)
    The articles of association of the Communications Company shall prohibit the issue of any share or loan capital with interest or dividend exceeding the rate for the time being prescribed by the Treasury. —[Mr. Malone.]
    Brought up, and read the First time.
    Mr. L'ESTRANGE MALONE: I beg to move, "That the Clause be read a Second time."
    This is a very necessary precaution in order to preserve certain privileges of this House of Commons. At various times during the Debate, the representatives of the Government have compared this company to a, public utility society. All that this new Clause does is to put that assertion into a practical form. It has frequently been stated that it is necessary to provide some incentive. I want to remind the Committee exactly what are the financial conditions under which the company will act. According to the White Paper, a standard net revenue of £1,865,000 is going to be paid to the Communications Company. That corresponds to a fixed revenue of 6 per cent. After the 1st April, 1921, 12 per cent. of any increase is going to go to the Government, and the remainder is going to be allocated, 50 per cent. to the company and 50 per cent, to the reduction of rates, or to such other purposes as the Advisory Committee may approve. Surely, when we are paying 6 per cent., that is a sufficient incentive to carry on the business of this company. There is no need for any more. We have all the engineers, all the trained staff, all the electrical experts, all the radio experts possible to conduct this business under the State.
    I suggest that the real cause of this refusal of the Government to make it a properly constituted public utility society is to allow full control to this
    1744
    great combination which is going to have a capital amounting to more than £83,000,000 so that it can rig and manipulate the markets and run the whole thing in its own interest. As an example of what is going on on the Stock Exchange we have only to observe that since this Committee adjourned on Friday the shares of one of the interested concerns in a part of this organisation have gone up by over 100 on the New York Stock Exchange. I suggest that it would be far better, and indeed sufficient, to insert these provisions in the Bill and to allow the Treasury to fix a reasonable rate which might, for the purposes of example, be sufficient at 1 per cent. above the Bank rate.
    The FINANCIAL SECRETARY to the TREASURY (Mr. Arthur Michael Samuel): I think it will be convenient if I say a few words at this stage. I have taken note of what the hon. Gentleman has said, and it seems to me that this is how the Amendment would work. The Amendment would limit the Communications Company to paying interest or dividend within a limit prescribed by the Treasury. But when hon. Gentlemen look at the Report they will see that the Conference, on the contrary, recommended that the capital should be limited to £30,000,000 sterling, but they did not restrict the actual rate of dividend subject, however, to certain important qualifications, namely, that all profits earned over the standard net revenue of £1,865,000—and here I would point out to the hon. Gentleman, if I understand him rightly, that there, is no provision that the sum of £1,865,000 must be paid; it has to be earned first—the qualification to which I have referred is that, after a net revenue of £1,865,000 has been received, 12 per cent. of the surplus must be paid to the State, and half the remainder of the surplus profit must be applied for the benefit of the users.
    Mr. MALONE: How can we be assured that the public will get the other half? There is nothing laid down in the White Paper. It only says that they may do so.
    Mr. SAMUEL: It is the essence of the arrangement. Under the recommendations of the Report which the hon. Gentleman holds in his hands, after 12 per cent. has been paid on the excess of profits over £1,865,000, the remainder is to

    1745
    be divided into two portions—one portion can go to the company, and the other portion is at the disposal of the Advisory Committee, which is composed of representatives of the partner Governments. The Advisory Committee can either claim that rates for services can be reduced or they can say that further facilities shall be given to users, or they may devote the funds to such other purposes as they on behalf of their Governments may think proper.
    Mr. WALLHEAD: Will the hon. Gentleman tell the Committee as to where is the binding instrument to effect this? What does it consist of? As far as this Committee know, we have nothing whatever laid before us and there is nothing but this Report, which, I take it, is not binding upon anybody.
    Mr. SAMUEL: Evidently the hon. Gentleman has not taken part in the early stages of this Debate. An undertaking has been given that that will be laid before the House. Therefore, as the Report now stands, there is in the recommendations an inducement to the company to increase its earnings and to give better services, and no increased dividends can be paid unless the taxpayer and the consumer take their share, as I have already pointed out. The Amendment as it now stands would wreck the scheme. Perhaps that may be the wish of the hon. Gentleman, and therefore a greater reason why I should not be willing to accept it. It would certainly put a clog on progress. To restrict dividends, to offer no reward for enterprise and good management, would be no inducement to make progress. For this reason I would ask the Committee to reject this Amendment.
    Mr. WEDGWOOD BENN: There are one or two questions which I should like to ask the Financial Secretary to the Treasury about the Advisory Committee. Is the Advisory Committee to have power to say to the Communications Company, "You shall do this," or is it merely to be consulted? It is not clear from the White Paper whether the Advisory Committee is to have mandatory powers or advisory powers—[Interruption]. The hon. and gallant Gentleman no doubt knows, perhaps he will tell us. It is advisory!
    Admiral Sir REGINALD HALL: I quote it because the word "advisory" means advisory.
    Mr. BENN: What an advantage it is to have outside assistance in this matter. The hon. Gentleman has just given us to understand that "advisory" means "mandatory." That was the gist of his speech. The City opinion seems to be that the Advisory Committee is only to be advisory. I am inclined to think, judging by the effect of this Bill, that the City opinion is right, and that the Advisory Committee is not going to count for much in the whole business. It is perfectly true that the Communications Company is to share anything over 6 per cent., after a 12 per cent. deduction for the benefit of the taxpayer between rates and dividends—half is given to dividends to encourage private enterprise, and the other half to rates. As we understand it, we are going to set up two monopolies, a monopoly of communications and apparently a monopoly of manufactures.
    As far as I can understand this, the Marconi Company—I am almost unique in the House in this respect, that I am not an expert in these technical wireless matters—but, as far as I can understand it, there is a monopoly of manufactures in the hands of the Marconi Company. The directors of the Communications Company are also going to be directors of the Merger Company which will include the Marconi Company. What can prevent the directors of the Merger Company saying: "We do not want too high a dividend, because, if so, half will have to go to the miserable users of cables. Let us therefore restrict our dividend by charging ourselves a little more in respect, of the company with which we are concerned." Is the committee likely to be advisory or mandatory in a matter of that kind? Perhaps the hon. Gentleman can tell us. We really ought to know some of these things. We believe that these things are in an advanced stage of completion. There was a meeting of a telegraph company —I think of the Western Telegraph Company—when Sir John Denison Pender stated that these documents were in an advanced state of completion. Surely it is not fair when being asked to support this Bill in the House of Commons that we should be told that there is nothing in existence and that we must wait, while the City has this

    1747
    information. It is known that things are in an advanced state, and everyone may see them except the House of Commons.
    There is another point with reference to the company and its powers and its dividends. I asked a question when the thing was first introduced. I imagined that there was a communications company, and I proceeded on that assumption and asked many questions of the Government to try and find out about it. I found that there appeared to be no such thing as a communications company. Of course, they said that it did not exist until they had received the necessary powers to carry out the contract and bring the necessary company into existence. I accepted that as the official explanation, but the Noble Lord representing the Post Office told us on Friday that they had been negotiating. If I can find it, I should like to repeat the passage from the OFFICIAL REPORT. He said:
    "At the present moment the Postmaster-General and the Treasury are carrying on negotiations through the proper channels." [OFFICIAL REPORT, 7th December, 1928; col. 1651, Vol. 223.]
    Surely we are entitled to know something about the proper channels. We asked, first of all, that we should not complete the business until we have had the provisions laid before the House. It was not an unreasonable or an unbusinesslike request. Now we find that negotiations are in fact going forward. It would be much better and would assist Debate if the Postmaster-General would tell us where we stand in the matter. How far is the Communications Company in existence? What terms are being set up, and especially what particular instrument does he intend to use to set up the Advisory Committee, and with what powers does he intend to endow the Advisory Committee? The answer to some of these questions would very much assist the Debate and make towards the rapid progress of the Bill.
    Mr. WILLIAM GRAHAM: I was unavoidably absent from the very interesting proceedings of Friday, but in any case the question which is now before the Committes is largely new—at any rate during the Committee stage—and I certainly think that hon. Members
    1748
    behind are entitled to a rather fuller explanation. The position in connection with this part of the scheme is curious, and, as many of us think, disadvantageous to the public. First of all, in all the Debates that have taken place the Government have never given any clear indication as to how this capital of £30,000,000 for the Communications Company has been reached. All that we have been told up to the present time is contained in the White Paper. On the facts submitted to the Conference in these various details, which have never been accessible to the House, this sum of £30,000,000 is regarded as appropriate for the task of the Communications Company as distinct from the manufacturing and investment side. But the Communications Company is simply a duplication of the merger. The two parts are bound up together. We have not had that information and, as was pointed out on the Second Reading of the Bill, that information is fundamental to the whole future of this scheme, particularly as related to the charges which will fall upon the consumers. In fixing the £30,000,000 we are, for all practical purposes, determining 6 per cent. or the £1,865,000 which is to be of the nature of a form of guarantee or of a promised return under this scheme.
    Let us notice some of the other points in the proposal. Part of the defence of the Government is that they are establishing a public utility undertaking. The House will observe that, first of all, there is this form of promise to the Communications Company and then there are the safeguards of 12 per cent. to the public or the Treasury above the standard revenue, which 12 per cent. is incorporated in part of the terms covering the lease of the Beam wireless, and when you have passed beyond that point, there is distribution as to 50 per cent. to the Communications Company of the additional profit and 50 per cent. to the users in reduced charges. On the face of it, this is a very good proposition so far as the Communications Company is concerned, if we are invited to regard it as a public utility undertaking. Will hon. Members observe the safeguards which have so far emerged. There is to be an advisory committee constituted of representatives of the Governments interested, but only with

    1749
    the power of consultation and withholding assent to increased charges as above those at the date of inception. That is a promise or guarantee for all practical purposes of what is in operation at the inception of the scheme.
    Part of the outside criticism of the plan has turned on the fact that while there is a certain regulation, the return is based on what some of us regard as a generous upward trend. There is no guarantee for the downward tendency with respect to the charges on the consumers. Many people, not of our persuasion, have pointed out that the chances are that the Communications Company may not charge the highest rates, but may fail to charge the lowest which may be possible under the terms of the merger and the company, with the greater efficiency and measure of combination which are involved. From beginning to end of this plan there is no safeguard to the public on that side of the scheme. While we have a difficulty in drawing our Amendments to keep them within the rules of Order, there can be no doubt that the present proposed Clause would go far in the direction which we desire. Accordingly, before we press it to a Division, the very least the Government can do is to indicate plainly, first, how the £30,000,000 has been reached, and, secondly, what protection exists not for the upward tendency of the charges but for the downward tendency which should be possible.
    Mr. SAMUEL: The right hon. Gentleman has assumed that there will be a form of guarantee by the Government with respect to the £1,865,000. There is no such guarantee. The money has to be earned. I will deal with some of the further points pub by the right hon. Gentleman and the hon. Member for North Aberdeen (Mr. Benn). With respect to capitalisation, the proposed capitalisation of the Communications Company will bear a direct relation to the purely communications side of the assets. This arrangement will enable a scheme to be drawn up for the equitable apportionment of the future profits derived solely from communications operations as between the shareholders of the company and the cable and wireless users. This capitalisation has been arrived at by the investigations of two gentlemen who are as well known to
    1750
    the hon. Members opposite as they are to me, who have acted on behalf of the Government, Sir Otto Niemeyer and Sir William McLintock. The hon. Member for North Aberdeen asked me to define what I meant by control by the advisory committee. In the first place, the Communications Company, as will be arranged in accordance with Recommendation 6 of the Conference, will consult the advisory committee.
    "in regard to questions of policy, including any alteration of rates."
    It is further provided that:
    "No increase of rates prevailing at the date of the formation of the Communications Company is to be made except with the assent of the Advisory Committee."
    The Advisory Committee is to be composed of gentlemen nominated by the great sister Dominions and His Majesty's Governments of Great Britain and India. They will represent the users and the Governments concerned. It is further provided that:
    "The Imperial Advisory Committee should have access to all information in the hands of the Communications Company which is necessary to enable it to carry out its duties."
    I would remind hon. Members opposite of the further provision that:
    "the Imperial Advisory Committee should be given absolute powers in regard to any proposed increase to existing rates, and the allocation of the funds which become available for rate reduction, etc."
    There are other recommendations:
    "such as the institution of new services, the discontinuance of any services which become commercially unprofitable, and the general distribution of traffic between alternative routes. For example, in regard to the question last mentioned, it will be desirable that a reasonable proportion of the total cable traffic between Great Britain and Australia and New Zealand should continue to pass over the route by way of Canada, which does not touch foreign territory at any point. It is not possible to prescribe in advance for all such contingencies. They can only be judged in the light of the circumstances obtaining at the tune."
    In addition, there are a number of points of detail which will have to be included in the formal agreement with the companies concerned. Here are three or four of them in black and white:
    "An undertaking on the part of the Communications Company to submit their accounts, if required, to examination on behalf of the Advisory Committee; an

    1751
    undertaking on the part of both the Merger and Communications Companies not to dispose or allow any serious diminution in the control of their communications assets; safeguards against undue preference or excessive payments for apparatus manufactured or patented by the Merger Company; precise terms in regard to the transfer of personnel, etc. Points such as these can only be dealt with fully in a legal document."
    Those are the lines upon which we have acted. I cannot add, I am unable to add anything further, nor would I seek to add a word to the very able, definite and exhaustive recommendations made by the imperial Conference, which are set forth in black and white, which recommendations, it must be borne in mind, have been made by representatives of His Majesty's Government in Great Britain and of the Dominions Governments. If hon. Members opposite will not accept the recommendations as covering pretty exhaustively all the points which they have raised, then it is beyond my power to say more.
    Mr. BENN: I will not press the hon. Member further than is necessary, but we have not had an answer to the question which we have put, namely, by what power is the Advisory Committee to do these things. We have all read the White Paper, and we should not be asking these questions if the White Paper had answered them. The hon. Member has read textually from the White Paper. What we are pressing for is for information as to the exact powers under which the Advisory Committee will act. Take a point which is mentioned on page 2() of the White Paper, the question of the price of apparatus. The hon. Member says that the Advisory Committee will adopt safeguards against undue preference. What safeguards? Can they say that the price is too high? Will they be empowered to say to the communications company: "You are paying too much to yourselves as manufacturers for this apparatus"? Can we have a simple answer to such a question as that?
    It is a great mistake and a very dangerous thing to drag in the names of the Dominions. If there is a matter in which the Dominions are concerned, we on this side of the House would be as careful as anyone else to preserve a proper respect for their independence. To
    1752
    drag in the names of the Dominions on every occasion in order to show the in-competency or worse of those who criticise these recommendations, is not a very decent or Imperial-minded action. The hon. Member's manuscript has been taken from pages 19 and 20. We find on page 19 the statement:
    "It will be desirable that a reasonable proportion of the total cable traffic between Great Britain and Australia and New Zealand should continue to pass over the route by way of Canada."
    That means by the two Imperial Cables. The Advisory Committee, therefore, has to take on the carrying through of the spirit of the old policy of what was called the All-red route. That is, we were to have a cable route entirely on British soil. The Advisory Committee, we are told, according to this document, is to be responsible for seeing that that policy is carried out. But we were told by the Postmaster-General that you cannot be sure of getting messages across unless you have two cables across the Atlantic. That was the reason, I understand, why we purchased the second cable in 1920. The Advisory Committee is to see that this security of transmission through Canada by the Atlantic cables is maintained. It would all sound excellent, if it had not been that one of the Government officials the other day told us that, without waiting for all this nonsense about the Advisory Committee, the gentleman with whom the negotiations are proceeding—I think it was the Noble Lord the Assistant Postmaster-General (Viscount Wolmer) who stated it—have already decided to sell the second cable, or to scrap it. I am not sure whether he said that they had decided to sell it or to scrap it, but, at any rate, they were going to put it out of action. Does the Postmaster-General deny that?
    The POSTMASTER-GENERAL (Sir William Mitchell-Thomson): I said nothing of the kind.
    Mr. BENN: I think it was stated officially from the Government Bench that they had reason to believe that that was the case.
    Sir W. MITCHELL-THOMSON: I did not say that.
    Mr. BENN: Certainly, someone from the Government Bench told us that one

    1753
    of the reasons why they were able to offer this price was that they would not be under the obligation to maintain one of the cables. What a quibble. If they are able to give a good price because they are not taking up the obligation to maintain the cable, where does the Advisory Committee come in? Is the Advisory Committee to see that both cables are kept going, so that there may be the All-red route?
    Sir W. MITCHELL-THOMSON: The hon. Member is completely forgetting that the All-red route may exist by way of cable or by way of cable and wireless. It is, therefore, quite possible that the Communications Company will use, on the one hand, perhaps one of its cables or possibly both—I do not know—with the wireless to Canada as an alternative. There is still your All-red route.
    Mr. BENN: Of course, it is possible to say that. On the other hand, we are told that it is necessary to have two cables because at times wireless is not operative.
    Sir W. MITCHELL-THOMSON: That was in 1920.
    Mr. BENN: Yes, I assume that wireless is not operative at all times. One of the reasons set out in this Report for the maintenance of the cables is to make certain of getting a message through, as there are times when the wireless cannot be relied upon. Whereas the Government had to maintain two cables in order to maintain the All-Red Route the Communications Company will dispose of one of them; and this Advisory Committee is set up to see that they maintain the All-Red Route. Let Ministers harmonise these different statements if they can. The fact is that the Advisory Committee is nothing at all; it is only an essay on a piece of paper. Has any document been drawn up showing what controlling powers they are to have? Is it too much to ask for an answer? It is, of course, open to the Government to say nothing, but the worst possible deduction will be drawn from their silence. The watch-dog is to be the Advisory Committee; the money-maker is to he the Communications Company. The Communications Company, by which the public will in my opinion be grossly exploited in the future, is going to be considered. On the
    1754
    other hand, Sir J. Denison Pender says that the document is far advanced. The document is going forward, but the safeguards are not begun.
    It would be much better if the Government were frank. Give the Committee the draft agreement on the Table of the House. It should have been done long ago. Why not give us the draft document on which the Advisory Committee is to operate? Is the Advisory Committee to have power to say "No"; or is it only to give advice except in the case of the specified power. The specified power is trivial and most perfunctory. They are to have power to say that rates shall not be advanced over the rates which were in force at the time when the Communications Company came into existence. I hope the rates will not be increased. The whole purpose of this scheme is to reduce rates; and the beam service would reduce rates a great deal more than this scheme, if it had been left alone. All that the Advisory Committee can say is that rates shall not he raised beyond the point at which they stood when the Communications Company came into existence. That is the only power they have. The Government ought to answer these questions. They are not unreasonable; and opinion is growing in public circles that there is something behind all this business which will not redound to the public interest.
    Lieut.-Commander KENWORTHY: In answer to the right hon. Member for Central Edinburgh (Mr. W. Graham) the Financial Secretary to the Treasury spoke of a sum of £30,000,000 as the capital of this company. On page 14 of the Report of the Imperial Conference, I see a reference to the capital as being S;53,700,000.
    Mr. BENN: Including manufactures.
    Lieut. - Commander KENWORTHY: Let rue take £30,000,000. I think this company is going to be grossly over-capitalised. It starts with millions of watered capital. Let me give the Committee a few figures. It starts with the following visible assets. They pay for the Imperial cables, in cash, £1,267,000. I am glad t3 see the right hon. Member for Hillhead (Sir R. Horne) in the House at the moment because he has become a great financial magnate. That is what is

    1755
    paid to the Government in cash—£1,267,000. That is the admission of the Postmaster-General, and other Ministers, from whom we have been able to drag information as with a corkscrew.
    The DEPUTY-CHAIRMAN: I have allowed a good deal of latitude on this new Clause, and, although many of these points are relevant when they start, I must ask hon. Members to bear in mind that the Clause we are dealing with now is one merely to provide that the rate of dividend or interest on the capital of the company must be limited. I do not think we can go too far into the capital of other concerns.
    Lieut.-Commander KENWORTHY: I am much obliged by your Ruling, and I will reserve my remarks for a later Amendment.
    Mr. GILLETT: The Financial Secretary to the Treasury, after he had read long extracts from the Report of the Imperial Conference, said that that was all he knew about the whole problem. He then went on to say certain things about the Advisory Committee, but what he said about the Advisory Committee does not coincide with the Report of the Imperial Conference. There is a reference to the Advisory Committee, in the sixth recommendation of the Imperial Conference, and I would draw the attention of the Financial Secretary to the fact that it is divided into two parts. In the first part it says that the Communications Company are to consult the Advisory Committee, and an hon, Member on the back benches opposite has told us what the word "consult" means—that they will simply consult. The Communications Company is to consult on certain matters. The Financial Secretary has told us that the Advisory Committee are to have certain powers; and in the second part of this recommendation the one thing on which the assent of the Advisory Committee must be obtained is definitely stated. If you particularise one thing on which assent is essential, is it not fair to assume that it implies that assent is not essential on other matters? That does not tally with the observations of the Financial Secretary, because he said that the Advisory Committee had practically mandatory powers over the doings of the
    1756
    Communications Company. I challenge him on that statement. I think he is entirely mistaken.
    Many of these companies have accumulated in the past large reserve funds in order to be ready to lay down new cables if necessary for ordinary business purposes. Suppose this new company decides to dispose of these reserves in the form of bonus shares, will the Financial Secretary, who does not wish to know anything more than what is in this Report, tell us whether they would have power to hand over these reserves by way of bonus shares to the shareholders without the assent of the Advisory Committee. That is an important point. One or two of these companies have two or three millions of pounds in reserve and if, on the top of the £30,000,000, these two or three million pounds are going in the form of bonus shares, then the whole balance of the money coming to the users is going to be affected. I should like to know if the Financial Secretary has considered this point and, if he has, perhaps he will give the Committee his reply.
    Mr. WALTER BAKER: I am certain that the Financial Secretary has done his best to enlighten us on this subject and it must be our fault that we have failed to obtain the information we are seeking. The point submitted by the hon. Member for North Aberdeen (Mr. Benn) has not been answered, nor has the point submitted by the hon. Member for Finsbury (Mr. Gillett). The position with regard to this fusion is particularly important so far as Government control of policy is concerned, but it is equally important that there should be adequate financial control. The Bill only deals with certain assets which are to be transferred from the Government to private hands and nothing at all is said as to the future development of the business we are now considering. I believe there is absolutely no limit to the future possibility of these services and, therefore, to transfer them to a private company without taking adequate steps to safeguard the future, not only as regards policy and finance, but as regards new inventions, is directly against the public interest. The source of a great deal of the information in relation to this subject has been the "Daily Mail" and the "Evening News," and I am sure hon. Members will

    1757
    be glad to know that the "Daily Mail" says that a new beam marvel is coming by which power and light will soon be transmitted by wireless. Are we to understand that the future possibilities of this science are to be left to this company without Government control at all? Our view, as expressed in the Amendment, is that it is absolutely essential to lay down the condition that even after the company is in full operation there shall be the most complete control over all new capital issues and over the financial policy to be pursued by the company. The point made by the hon. Member for North Aberdeen with regard to the transactions between the Communications Company and the merger is a point of considerable substance.
    The DEPUTY-CHAIRMAN: I am not quite sure that I ought not to have stopped the hon. Member for North Aberdeen (Mr. Benn) before he reached this point in his speech. I think I am right that the Communications Company with which we are dealing only takes over what are called communication assets, and, under this condition, the capital and reserve funds held by other companies has nothing to do with the. Communications Company.
    5.0 p.m.
    Mr. BAKER: The point I am submitting is entirely connected with the finances of the Communications Company. We know that large reserves, to the extent of £20,000,000, are being left in other hands, but there seems to be no provision made to prevent the Communications Company itself building up large reserves which may be distributed as the hon. Member for North Aberdeen suggested. I do not want to pursue that point unduly, but I must stress as strongly as I can our dissatisfaction at the failure of the Government to deal with what is a strong financial criticism of this Measure. We have repeatedly called attention to the different bases on which the public assets and the private assets are being brought into the company. We have submitted figures and have shown that, whilst the Government assets are coming in at cost less depreciation, the assets of the private company are coming in on the basis of shareholdings.
    The DEPUTY-CHAIRMAN: The hon. Member cannot pursue that point now. It is clear that the question of the price which has to be paid for a particular asset cannot be discussed under this new Clause.
    Mr. BAKER: I bow to your Ruling, of course, and I will endeavour to make a further point that I have in mind, namely, that in the case of this particular company, for national reasons and Imperial reasons, close control should be maintained over not only the issue but the rate of interest or dividend which shall be paid. In the "Times" of 8th December, in the "City Notes," there is a paragraph which seems to sound a note of very grave warning. The paragraph refers to one of the parts of this Communications Company, and says:
    "A special meeting of the Marconi International Marine Communication Company has been summoned for December 14 to consider a special resolution altering the articles of association so as to ensure that the Company shall remain under British control."
    Those are not my words. They are the words of the "Times," in relation to contemplated actions by one of the actors in this Communications Company. The article goes on:
    "The reason for taking action is that recently there has been substantial foreign buying of the shares, and the directors feel that they cannot ignore the possibility of such buying having for its object the placing of the Company under foreign control."
    Can the House of Commons afford to ignore a warning of that kind? There you have a warning published in the financial columns of the leading daily newspaper. You are definitely warned that it is feared that an attempt is being made or may be made to secure control of the capital of this company.
    The DEPUTY-CHAIRMAN: The hon. Member must remember that, the Marconi Company is not a company which is concerned under this Bill.
    Mr. BAKER: With great respect I submit that the Marconi Company, which we are told does not exist, is a company formed to include—
    The DEPUTY-CHAIRMAN: I do not want to misunderstand the hon. Member, nor do I want him to misunderstand me. The Marconi Company, we all know, does

    1759
    exist. If the hon. Member means the Communications Company, he must be careful to say so. I called him to Order for saying something that apparently he does not mean. This Bill and this Clause have nothing whatever to do with the question whether the Marconi Company is controlled by British shareholders or by shareholders of any country in the world.
    Mr. BAKER: Then I shall conclude with another attempt to explain the position as I understand it. The Communications Company is being formed of certain cable and wireless companies—
    The DEPUTY-CHAIRMAN: That is where the hon. Member makes a mistake. These companies only sell certain assets and the companies remain in separate existence uncontrolled by the Communications Company.
    Mr. BAKER: If that is your view and decision, I cannot pursue the point, but as I understand it the directorate of the Communications Company will be the same and though the individual companies may remain—
    The DEPUTY-CHAIRMAN: I think there is a new Clause on the Paper on which the hon. Member can discuss that point. This is a question of the directors of the Communications Company. It has nothing to do with the other company.
    Mr. WALLHEAD: It seems to me that the matter has been stated fairly by my hon. Friend the Member for North Aberdeen (Mr. Benn). The reason for this new Clause arises from the inadequate powers of the Advisory Committee. It It is fair to assume that there will be a fairly large profit on the operations of this new Communications Company, when it is called into existence under the Bill, and that the powers of the Advisory Committee are illusory so far as charges are concerned. I should have thought that the first effect of the establishment of the company would be a reduction of rates—that the service would be made cheaper. In that case the Advisory Committee does not operate at all; it has no power to operate over charges unless there is a proposal to raise them. Surely if the Advisory Committee is to be effective from the public point of view it should be able to advise a reduction
    1760
    of charges without waiting for the Communications Company to take a step in that direction. The Advisory Committee should be able to say "Circumstances have now arisen in the operation of the company of such a kind that prices ought to be reduced." The charges ought then to be lowered without the company being able to manipulate its figures: If the public are to have the confidence that they ought to have in this Advisory Committee, and if the Committee is not to remain a mere illusion, this new Clause ought to be accepted.
    Mr. KELLY: I was hoping that either the Financial Secretary to the Treasury or the Postmaster-General would have replied giving the views of the Government on this new Clause. Although the Financial Secretary spoke for some minutes, in not one syllable did he make any reference to the new Clause. He told us a great deal about the care that we should take not to criticise the Dominion Governments. He told us that the Advisory Committee would have certain powers. But he did not refer to the limitation of those powers. Not once did he give any justification for the Communications Company not having its interest and dividend limited, so that it does not exceed the rate for the time being prescribed by the Treasury. Surely if this Communications Company is so anxious to help this country and the Dominions, it has no concern in getting a, free hand to raise all it can and make all it can out of this particular concern. If the money had been raised by the Government there would have been a limitation imposed by the Treasury. I do not want to be unduly suspicious. I but it does have the appearance that there is something to hide with regard to this transaction. In fact I am asking myself who is behind all this, and I am not at all sure that it does not make one wonder whether there are people concerned with this particular House or the other House who may be behind this transaction. It is the fact that we are not receiving replies from the Government Front Bench, and that makes one feel that there is some suspicion with regard to the whole transaction.
    I do not wish to discuss the Advisory Committee. That Committee is not a safeguard on the point that is raised

    1761
    in the new Clause. As to the point that you, Mr. Deputy-Chairman, put a few moments ago—that the Communications Company is only a Company for the taking over of certain assets—may I remind you that on page 18 of the White Paper there is a reference to these companies to which you referred, the Marconi Company and the others—and the White Paper speaks of them and the boards of the various companies involved, and if the Boards were not identifiable, there would be risk of conflicting policies being pursued by the different entities of the undertaking. Therefore we cannot leave out of account the existence of the companies which were referred to by my hon. Friend the Member for East Bristol (Mr. W. Baker). I ask the Postmaster-General to give us some reason why the Government cannot accept the Amendment. These people in the Communications Company ought to be prepared to accept the limitation that is prescribed by the Treasury. If they are concerned with our having communications that will be of advantage to the Dominions and to this country, they ought to look in that direction rather than in the direction of lining their own pockets.
    Sir HENRY SLESSER: On the Second Reading of the Bill I attempted to give an explanation of certain words in the Bill, which, if interpreted in a certain way, might make this Amendment unnecessary, but I frankly state that, speaking from the point of view of legal interpretation it is absolutely impossible to understand what the Clause proposes to do.
    The DEPUTY-CHAIRMAN: We are not now discussing the Clause in the Bill at all. We are discussing a new Clause, the Second Reading of which has been moved.
    Sir H. SLESSER: I quite appreciate that. I understood the Financial Secretary to the Treasury to say that the new Clause was unnecessary because of certain provisions which are contained in the Report. I am still seeking to understand what the Report has to do with this Bill, and it is on that point that I was referring back to the first Clause of the Bill in order to ask the Committee to consider why this new Clause is or is not necessary. I
    1762
    understand that in the first Clause it is provided that the Board may sell the Pacific Cable undertaking to the Communications Company as from the first day of April, 1928. There is a similar provision in Clause 2 with reference to the West Indian undertaking. That is an absolute power to sell, without any qualification whatever, and what the Committee may or may not recommend is wholly irrelevant. Once you have the consent of the partner Governments to sell, the recommendations of the Committee can have no bearing whatever on the conditions of sale or the articles of association or the limitation of share or loan capital with interest or dividend which is dealt with in the proposed new Clause. Then it is further provided:
    "and if the recommendations aforesaid with respect to the said undertaking are carried into effect, the following provisions shall come into operation."
    There you have two different subject matters dealt with in Clause 1. First there is the absolute and unconditional right of sale. Then you have the word "and," which I take it is used here in a disjunctive and not conjunctive sense. They may sell the undertaking to the Communications Company "and" if the recommendations are carried into effect, certain provisions shall come into operation. Those provisions are not in the Reports quoted to us by the Financial Secretary to the Treasury. As they are the only provisions mentioned in the Clause, it follows that these other things are nothing more than mere pious opinions. The Financial Secretary to the Treasury tried to assure us that our proposal was unnecessary because of these various recommendations, but that is perfectly irrelevant to the question.
    I speak as a lawyer and not as an economist. If this Measure ever comes into a Court of Law, what possible indication is there, in any of its words, that the recommendations and views of the Dominions and all the other matters about which we have heard, will in any way be brought to the attention of any Judge? I should say that if anyone attempted to introduce such irrelevant matter, the Court would at once say, "What has this to do with us? We are not concerned with what these bodies recommended, but with what is in the Measure itself." There being nothing

    1763
    in the Measure to control the sale price, the dividends or anything else, we come forward with this proposal which says quite definitely that the articles of association of the Communications Company shall contain a certain limitation as to dividends. The Financial Secretary says the Government cannot accept that proposal because of something which is not in the Bill.
    Surely it is treating the Committee with some want of respect to try to make us believe at this late hour that there are protections and limitations and other matters in the Bill which we all know by now—as I hope the country knows by now—are not in the Bill. The Bill contains no limitation and affords no protection in this respect and if right hon. Gentlemen opposite oppose our proposal, they ought to oppose it on its merits and not by referring us to recommendations which have no relevancy whatever. I should be out of order if I inquired why none of these recommendations find a place in any of the Schedules of the Bill, but I would submit that in any ordinary Bill dealing with an enabling power to make a contract, the consideration of the contract and the conditions and all those matters are laid down in the Bill. In this Measure there is not the slightest indication of any control or check on this Communications Company at all. The Company itself is not even defined. We do not know whether it is to be a corporation or an un-incorporated society, whether it is to be limited or unlimited.
    The extraordinarily persistent refusal on the part of the Government to give the Committee information; the extraordinary incompetency on the part of the people who prepared the Bill—not the technical draftsmen but the hon. and right hon. Gentlemen opposite—the almost painfully stupid attitude which has been taken up; the refusal to do what is required in regard to every other Bill of the kind—all this I must put down to design. I refuse to believe that the Government are so foolish that they cannot put their intentions into proper legal form and therefore their persistent refusal must be the result of design. Our proposal at least would give some measure of assurance to the public that certain dividends ought not to be ex-
    1764
    ceeded. It may be that it should be done in some other way, but one thing is certain. Mere reference again and again to recommendations which find no expression in the Bill, cannot satisfy what is a fair and reasonable demand. It is proposed to sell public assets and the public are entitled to know what consideration is to be given for those assets and under what conditions the sale is to take place. I am surprised that hon. Members opposite who pride themselves so much on their Imperialism, should sit quietly by and see these public and Imperial assets disposed of without limitation or check to irresponsible private interests.
    Sir W. MITCHELL-THOMSON: The observations of the hon. and learned Gentleman for South-East Leeds (Sir H. Slesser) are more ingenious than convincing, indeed he might properly have made them on the question "That Clause 1 stand part of the Bill," because they were really all directed to the substance and wording of Clause 1 and I question how far I should be in order in replying to them in detail. The capital error into which the hon. and learned Gentleman has fallen and into which he has sought to lead the Committee, arises from the fact that he failed to read the whole of Clause 1. He has not even been wholly communicative to the Committee in what he did read. What he read of Clause 1 suggested to the Committee that the only proviso was the enabling power to sell. Even at the risk of making many vain repetitions I would say again that this is an enabling Bill. The hon. and learned Gentleman said what the Bill did was to enable the sale to be made with the consent of the partner Governments, but there is more than that in it. Why did not the hon. and learned Gentleman read the other words which dispose of the whole case which he has sought to build up. The provision is that the sale may be made
    "with the consent of and on terms approved by, all the partner Governments."
    The hon. and learned Gentleman did not mention the words "and on terms approved by." We have said repeatedly, and at the risk of being out of order I must repeat it, that the terms approved by the partner Governments, in so far as they are approved by His

    1765
    Majesty's Government, and in so far as they become matters to which His Majesty's Government are parties, will, when they are in the form of contracts, be brought before the House of Commons. That will provide for the exercise of powers by the Advisory Committee, and if the hon. and learned Gentleman and other hon. and right hon. Gentlemen opposite dislike those powers, they have their proper remedy, which is to censure His Majesty's Government.
    Sir H. SLESSER: I think the expression "on terms approved by" makes no difference at all. The right hon. Gentleman knows that I was referring to the recommendations which have been mentioned and whether it is "with the consent of" or "on terms approved by" obviously does not matter. But what I want to ask is this. Will he undertake that this Bill shall not come into operation until those terms have been laid on the Table of this House for 40 days and have received the consent of this House?
    Sir W. MITCHELL-THOMSON: How can I undertake a thing of that kind? The hon. and learned Gentleman knows that the whole purpose of the Bill is to enable the Government to enter into contracts. What I have said is that when the contracts are entered into they shall be laid.
    Mr. JAMES HUDSON: Will the Communications Company be able to do what the Assistant Postmaster-General has suggested they might be able to do, namely, allow the Atlantic Cable to go into disuse, without first consulting the Advisory Committee?
    The DEPUTY-CHAIRMAN: As far as the question of the Advisory Committee having any power in relation to the limitation of dividends is concerned, the Advisory Committee is a legitimate subject for discussion at this stage; but where it is a question of the management of the cables, I am afraid the hon. Gentleman cannot discuss it on this new Clause.
    Mr. RENNIE SMITH: We are trying by this new Clause to insert in the Bill a principle which is recommended in the Report itself. The Report lays it down that this company should be a company on public utility lines. The Postmaster-
    1766
    General is inviting the nation to buy a pig in a poke and we should like to know, in these circumstances, what the Government themselves understand by a company which is built on public utility lines. We take the view that one characteristic of a company built on public utility lines is that there should he a reservation as to price—some way of controlling the price at which things are sold. The right hon. Gentleman knows that there is very little power given here with regard to the regulation of price. I submit that there is a very small amount of public restraint possible in that respect and therefore it is all the more important that we should have the second characteristic of a public utility company, namely, restraint on dividends. That matter ought to be specially safeguarded. If the Postmaster-General maintains that the nation must buy this pig in a poke; if the present Government claim that we are to give them 100 per cent. trust at this time of day with regard to this concession, then I should like them to lay down a definition to guide us. What do they understand by a public utility company and how do they relate the characteristics of a public utility company to the proposed Communications Company?
    Mr. W. PALING: I would not have intervened in this discussion but for the failure of the Financial Secretary and the Postmaster-General to answer direct questions put from this side. The Postmaster-General has just accused the ex-Solicitor-General of being more ingenious than convincing, but I am not sure that the remark does not apply to the Postmaster-General himself. I have listened to a great part of these discussions and it appears to me that the Postmaster-General and the Financial Secretary have avoided all the questions put to them. An answer to those questions is due to the Committee, and if no answer is forthcoming, hon. and right hon. Gentlemen opposite should tell us that they do not know and it can go at that. The first question which I would recall is "Can bonus shares be issued?" That was a very distinct question and there has been no attempt to answer it.
    I have some knowledge of what may happen in this connection. In mining, for instance, I understand there may be cases where profits go up so that it

    1767
    becomes dangerous to publish them or people might be asking for better wages and all sorts of things. Accordingly, there is an attempt to hide them by giving bonus shares, thus creating false values but bringing down the rate of dividends. Have the Advisory Committee power to stop that kind of thing? Then I understand that there is to be another company which will supply materials to this Communications Company, but they will really all be part of the same undertaking. If the dividends over and above the figures mentioned in the Bill were rising to such an extent that questions might be asked, would it be possible by raising the price of the materials to bring down the dividends in one company, but give it to themselves in the other company?
    The DEPUTY-CHAIRMAN: That is one of the questions that I have ruled cannot be discussed on this Clause—the question of what are the powers of some other company with which this Communications Company may have to deal.
    Mr. PALING: Then I will leave that point, but I hope the Postmaster-General will answer it when the opportunity occurs. The last thing I will ask is whether the prohibitive power of the Advisory Committee is limited to the paragraph in Recommendation (vi) which says:
    "No increase of rates prevailing at the date of the formation of the Communications Company to be made except with the assent of the Advisory Committee."
    That appears to be a very definite power. Does it mean that in everything else, even though the Advisory Committee may dissent, if the people want to do it they can do it, and that the Advisory Committee has no mandatory power except on this one particular issue?
    Mr. BENN: May I ask the Treasury Bench this question? Can the Communications Company abandon the second cable without the consent of the Advisory Committee?
    The DEPUTY-CHAIRMAN: I do not think that is a question which can be asked on this new Clause. It has been to some extent referred to in a general discussion, but it is not in order here.
    Mr. BENN: Perhaps it will be in order later, but, our difficulty is that the Bill is framed in such a way as to make almost all relevant questions out of order.
    Mr. WALLHEAD: If this company is what the Government claim it to be, namely, a public utility company, how does it become such if its dividends are not limited?
    Question put, "That the Clause be read a Second time."
    The Committee divided: Ayes, 90 Noes, 221.

    Division No. 42.]

    AYES.

    [5.34 p.m.

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

    Griffith, F. Kingsley

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

    Ammon, Charles George

    Griffiths, T. (Monmouth, Pontypool)

    Mosley, Sir Oswald

    Baker, J. (Wolverhampton, Bllston)

    Grundy, T. W.

    Naylor, T. E.

    Baker, Walter

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

    Parkinson, John Allen (Wigan)

    Barker, G. (Monmouth, Abertillery)

    Hall, G. H. (Merthyr Tydvil)

    Pethick-Lawrence, F. W.

    Barr, J.

    Hardle, George D.

    Ponsonby, Arthur

    Batey, Joseph

    Hayday, Arthur

    Potts, John S.

    Beckett, John (Gateshead)

    Henderson, Right Hon. A. (Burnley)

    Richardson, R. (Houghton-le-Spring)

    Bellamy, A.

    Hirst, G. H.

    Salter, Dr. Alfred

    Benn, Wedgwood

    Hirst, W. (Bradford, South)

    Scrymgeour, E.

    Bondfield, Margaret

    Hudson, J. H. (Huddersfield)

    Shaw, Rt. Hon. Thomas (Preston)

    Briant, Frank

    John, William (Rhondda, West)

    Shepherd, Arthur Lewis

    Broad, F. A.

    Johnston, Thomas (Dundee)

    Shiels, Dr. Drummond

    Buxton, Rt. Hon. Noel

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

    Shinwell, E.

    Charleton, H. C.

    Jones, Morgan (Caerphilly)

    Slesser, Sir Henry H.

    Ciuse, W. S.

    Kelly, W. T.

    Smillie, Robert

    Clynes, Rt. Hon. John R.

    Kennedy, T,

    Smith, Ben (Bermondsey, Rotherhithe)

    Cove, W. G.

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

    Smith Rennie (Penistone)

    Davies, Evan (Ebbw Vale)

    Lansbury, George

    Sutton, J. E.

    Day, Harry

    Lawrence, Susan

    Taylor, R. A.

    Dennison, R.

    Lawson, John James

    Thorne, W. (West Ham, Plaistow)

    Edwards, C. (Monmouth, Bedwellty)

    Lee, F.

    Thurtle, Ernest

    Gardner, J. P.

    Lowth, T.

    Tinker, John Joseph

    Garro-Jones, Captain G. M.

    Lunn, William

    Viant, S. P.

    Gillett, George M.

    Malone, C. L'Estrange (N'thampton)

    Wallhead, Richard C.

    Gosling, Harry

    March, S.

    Wedgwood, Rt. Hon. Josiah

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

    Montague, Frederick

    Wellock, Wilfred

    Grenfell, D. R. (Glamorgan)

    Morris, R. H.

    Westwood, J.

    Whiteley, W.

    Wilson, C. H. (Sheffield, Attercliffe)

    TELLERS FOR THE AYES.—

    Wilkinson, Ellen C.

    Windsor, Walter

    Mr. A. Barnes and Mr. Paling.

    Williams, Dr. J. H. (Llanelly)

    Young, Robert (Lancaster, Newton)

    NOES.

    Albery, Irving James

    Fenby, T. D.

    Nield, Rt. Hon. Sir Herbert

    Alexander, E. E. (Leyton)

    Fermoy, Lord

    O'Neill, Major Rt. Hon. Hugh

    Allen, Sir J. Sandeman

    Fielden, E. B.

    Ormsby-Gore, Rt. Hon. William

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

    Forrest, W.

    Pennefather, Sir John

    Applin, Colonel R. V. K.

    Foster, Sir Harry S.

    Penny, Frederick George

    Apsley, Lord

    Foxcroft, Captain C. T.

    Percy, Lord Eustace (Hastings)

    Atkinson, C.

    Fraser, Captain Ian

    Perkins, Colonel E. K.

    Baldwin, Rt. Hon. Stanley

    Fremantle, Lieut.-Colonel Francis E.

    Perring, Sir William George

    Bainlel, Lord

    Ganzoni, Sir John

    Peto, Sir Basil E. (Devon, Barnstaple)

    Barclay-Harvey, C. M.

    Gates, Percy.

    Peto, G. (Somerset, Frome)

    Barnett, Major Sir Richard

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

    Pilditch, Sir Philip

    Bellairs, Commander Carlyon

    Goff, Sir Park

    Power, Sir John Cecil

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

    Grant, Sir J. A.

    Pownall, Sir Assheton

    Bennett, A. J.

    Grattan-Doyle, Sir N.

    Preston, William

    Berry, Sir George

    Greaves-Lord, Sir Walter

    Price, Major C. W. M.

    Bethel, A.

    Grenfell, Edward C. (City of London)

    Ramsden, E.

    Betterton, Henry B.

    Grotrian, H. Brent

    Reid, D. D. (County Down)

    Birchall, Major J. Dearman

    Guinness, Rt. Hon. Walter E.

    Rentoul, G. S.

    Boothby, R. J. G.

    Gunston, Captain D. W.

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

    Bourne, Captain Robert Croft

    Hacking, Douglas H.

    Roberts, E. H. G. (Flint)

    Briggs, J. Harold

    Hall, Admiral Sir R. (Eastbourne)

    Robinson, Sir T. (Lancs., Stretford)

    Briscoe, Richard George

    Hamilton, Sir R. (Orkney & Shetland)

    Rodd, Rt. Hon. Sir James Rennell

    Brittain, Sir Harry

    Hannon, Patrick Joseph Henry

    Ropner, Major L.

    Brocklebank, C. E. R.

    Hartington, Marquess of

    Ruggles-Brise, Lieut.-Colonel E. A.

    Brooke, Brigadier-General C. R. I.

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

    Russell, Alexander West (Tynemouth)

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

    Haslam, Henry C.

    Samuel, A. M. (Surrey, Farnham)

    Brown, Ernest (Leith)

    Headlam, Lieut.-Colonel C. M.

    Sandeman, N. Stewart

    Buchan, John

    Hennessy, Major Sir G. R. J.

    Sandon, Lord

    Buckingham, Sir H.

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

    Savery, S. S.

    Bull, Rt. Hon. Sir William James

    Hilton, Cecil

    Sheffield, Sir Berkeley

    Bullock, Captain M.

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

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

    Burton, Colonel H. W.

    Hohler, Sir Gerald Fitzroy

    Skelton, A. N.

    Carver, Major W. H.

    Hopkins, J. W. W.

    Smith, Louis W. (Sheffield, Hallam)

    Cautley, Sir Henry S.

    Horne, Rt. Hon. Sir Robert S.

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

    Cayzer Sir C. (Chester, City)

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

    Smithers, Waldron

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

    Hume, Sir G. H.

    Somerville, A. A. (Windsor)

    Cazalet, Captain Victor A.

    Hume-Williams, Sir W. Ellis

    Southby, Commander A. R. J.

    Cecil, Rt. Hon. Sir Evelyn (Aston)

    Hunter-Weston, Lt.-Gen Sir Aylmer

    Spender-Clay, Colonel H.

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

    Hurd, Percy A.

    Stanley, Lieut.-Colonel Rt. Hon. G. F.

    Chadwick, Sir Robert Burton

    Hurst, Gerald B.

    Steel, Major Samuel Strang

    Chamberlain, Rt. Hon. N. (Ladywood)

    Hutchison, Sir Robert (Montrose)

    Stott, Lieut.-Colonel W. H.

    Charteris, Brigadier-General J.

    Iliffe, Sir Edward M.

    Strauss, E. A.

    Churchman, Sir Arthur C.

    Inskip, Sir Thomas Walker H.

    Streatfeild, Captain S. R.

    Clayton, G. C.

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

    Stuart, Crichton-, Lord C.

    Cobb, Sir Cyril

    Joynson-Hicks, Rt. Hon. Sir William

    Stuart, Hon. J. (Moray and Nairn)

    Cochrane, Commander Hon. A. D.

    Kennedy, A. R. (Preston)

    Sueter, Rear-Admiral Murray Fraser

    Cockerill, Brig-General Sir George

    Kindersley, Major G. M.

    Tasker, R. Inigo.

    Cohen, Major J Brunel

    King, Commodore Henry Douglas

    Templeton, W. P.

    Cooper, A. Duff

    Kinloch-Cooke, Sir Clement

    Thomson, F. C. (Aberdeen, South)

    Cope, Major Sir William

    Lamb, J. Q.

    Thomson, Rt. Hon. Sir W. Mitchell-

    Couper, J. B.

    Lister, Cunliffe, Rt. Hon. Sir Philip

    Titchfield, Major the Marquess of

    Courtauld, Major J. S.

    Locker-Lampson, Rt. Hon. Godfrey

    Vaughan-Morgan, Col. K. P.

    Cowan, D. M. (Scottish Universities)

    Looker, Herbert William

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

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

    Lucas-Tooth, Sir Hugh Vere

    Warner, Brigadier-General W. W.

    Craig, Sir Ernest (Chester, Crewe)

    Luce, Major-Gen. Sir Richard Harman

    Warrender, Sir Victor

    Crawfurd, H. E.

    Lumley, L. R.

    Watson, Rt. Hon. W. (Carlisle)

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

    MacAndrew, Major Charles Glen

    Watts, Sir Thomas

    Crookshank, Cpt.H. (Lindsey,Gainsbro)

    Macdonald, R. (Glasgow, Cathcart)

    Wayland, Sir William A.

    Culverwell, C. T. (Bristol, West)

    Macintyre, Ian

    Wells, S. R.

    Curzon, Captain Viscount

    McLean, Major A.

    Williams, Com. C. (Devon, Torquay)

    Dalkeith, Earl of

    Macmillan, Captain H.

    Williams, Herbert G. (Reading)

    Davidson, Rt. Hon. J. (Hertford)

    Macquisten, F. A.

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

    Davies, Dr. Vernon

    Maitland, A. (Kent, Faversham)

    Wilson, R. R. (Stafford, Lichfield)

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

    Maitland, Sir Arthur D. Steel-

    Winby, Colonel L. P.

    Dawson, Sir Philip

    Makins, Brigadier-General E.

    Withers, John James

    Dean, Arthur Wellesley

    Margesson, Captain D.

    Wolmer, Viscount

    Eden, Captain Anthony

    Marriott, Sir J. A. R.

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

    Edmondson, Major A. J.

    Merriman, Sir F. Boyd

    Wood, Rt. Hon. Sir Kingsley

    Elliot, Major Walter E.

    Mitchell, W. Foot (Saffron Walden)

    Wood, Sir S. Hill- (High Peak)

    Ellis, R. G.

    Mitchell, Sir W. Lane (Streatham)

    Woodcock, Colonel H. C.

    Erskine, James Malcolm Montelth

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

    Wright, Brig.-General W. D.

    Everard, W. Lindsay

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

    Fairfax, Captain J. G.

    Moreing, Captain A. H.

    TELLERS FOR THE NOES.—

    Faile, Sir Bertram G.

    Morrison, H. (Wilts, Salisbury)

    Captain Bowyer and Captain Wallace.

    Fanshawe, Captain G. D.

    Nicholson, O. (Westminster)

    The DEPUTY-CHAIRMAN: The next proposed new Clause on the Paper—(Communications Company to be incorporated by Royal Charter)—is not in order, because it deals with the Royal Prerogative.
    Mr. MALONE: Will you consider this new Clause if I leave out the word "Royal"?
    The DEPUTY-CHAIRMAN: No, I am afraid not. It would be an alteration in the shadow and not in the substance.

  NEW CLAuss.—(Balance sheet and accounts.)
  The annual balance sheet and accounts of the Communications Company shall be presented to Parliament.—[Mr. Malone.]
  Brought up, and read the First time.
  Mr. MALONE: I beg to move, "That the Clause be read a Second time."
  I am moving this Clause as a very necessary precaution and as a last attempt to try and introduce some safeguards for what is essentially a public service. Once this Bill has passed through the House of Commons to-night, we shall no longer have any control over the different services—
  The DEPUTY-CHAIRMAN: It may be for the convenience of the Committee if I say at once that I allowed rather a lot of latitude in the discussion of the last proposed new Clause, which was one dealing, generally speaking, with control over the finance of the Communications Company, but as the hon. Member has commenced his speech by repeating a phrase which I think I have heard used a great many times in the last few days, I think I ought to say that I cannot allow arguments as to control generally, which have been used at earlier stages of this Debate, except in so far as they come strictly within the actual provisions of the new Clause.
  Mr. MALONE: I quite understand that point. It illustrates the extraordinary difficulty of dealing with this Bill, because so many of its provisions are outside the purview of the House of Commons. In the last two days the Chairman has had to call us to order no fewer than 65 times, and I think that shows, as it has been divided among the different parties taking part in the discussion equally, how very difficult it is
  1772
  to keep within the rules of order. This Clause provides that the House of Commons should have some small control over the financial operations of this new company, and it would make the Postmaster-General somewhat responsible in Parliament for the operations of the company. We do not know yet whether the company exists. We do not know whether it actually is a company or what it is. We have elicited the fact that some body, which may at some future time be called the Communications Company or the Merger Company, has actually bought premises on the Embankment, and we have heard from the Noble Lord the Assistant Postmaster-General that some negotiations, which are not very well defined, have been commenced with some body, whose name has not yet been definitely registered. It makes it very difficult to discuss the matter. We do not know how far these discussions have gone, whether they are only conversations, with whom they are taking place, or whether any written communications have taken place; but this new Clause will allow in the future for this House to watch the conduct of the business of this company. If the last proposed new Clause which I had on the Paper, and which you rightly ruled out of order, had been allowed—
  The DEPUTY-CHAIRMAN: But as it was not, the hon. Member cannot refer to it.
  Mr. MALONE:—the accounts would have been published in the ordinary way, like those of the British Broadcasting Corporation. As it was not allowed, however, we must have a special Clause making provision for the accounts and the balance sheet to be presented annually to Parliament. I am not going to cover ground which has already been covered in previous discussions, but we have a right to press certain points. There are certain aspects of this question which we have raised throughout these Debates, to which we have received no replies, and I make no apology for presenting one point in which I am particularly interested. I want to stop the humbug of the fictitious cable rates, which are due to the illusion that cables and wireless cost more to Hong Kong and to distant stations than to Canada and near-by stations. I have received no

  1773
  reply to that point. The Financial Secretary told us in an earlier part of the Debate that the Advisory Committee would have power to deal with these matters, but they can deal only with proposed increases of rates on rates prevailing at the date of the formation of the Communications Company. They have no power to suggest that diminution of rates should be made. That is a great difference, and I want to get an answer on that point, because cable rates are too high, and based on fictitious assertions. I believe that it is still possible for the Government to take control of overseas rates, and to fix a flat rate to all parts of the Empire. The Colonial Secretary ought to be interested in seeing that this is done, and there is no reason why it should not be done, because those acquainted with the technical side of the matter know that it costs exactly the same to wireless to Hong Kong and Australia as to Canada, and other parts nearer home.
  The second reason for this new Clause which I wish to put forward is an entirely new reason. It is to obviate the danger that these two companies, the Merger Company with £53,000,000 capital, and the Communications Company with £30,000,000 capital, may juggle the profits between themselves. There is nothing to prevent the Communications Company buying more apparatus from the Merger Company, in order to show a small profit on the Communications Company and to keep them within—I was going to say the statutory terms, but there are no statutory terms—to keep them within the ambiguous, undefined terms of the White Paper. They can very well spend their surplus money in buying new equipment from the Merger Company, and putting the profits into that concern. The Advisory Committee have no power to look into this question, and I would like to ask whether the Committee are to have any statutory rights at all. Does the Postmaster-General propose to bring in a small Bill to give the Advisory Committee statutory powers to deal with the accounts and other matters of administration, or are they simply to be advisory?
  The DEPUTY-CHAIRMAN: The hon. Gentleman is asking precisely the same question that was put in the discussion
  1774
  on the last new Clause, and which was answered by the Postmaster-General. Whether the answer was satisfactory has nothing to do with me, but my point is that the question was asked and answered in the Debate, and it cannot be repeated on this Clause.
  Mr. MALONE: I am very sorry, but if we had had a satisfactory reply, there would have been no need to press this point. The third point which I want to raise is the question of British control. It is laid down in the White Paper that British control is to be guaranteed, but we have had no reference to this in the whole course of the Debates.
  The DEPUTY-CHAIRMAN: Will the hon. Gentleman tell me how he proposes to do that by having the annual balance sheet and accounts presented to Parliament?
  Mr. MALONE: We want to know exactly who is controlling the Company, and the fullest possible particulars about the finances. If the Government are not concerned whether British control is to be maintained as one of the constituent factors of the new company, I would point out that only last Friday the Marconi Company issued a notice to their shareholders—
  The DEPUTY-CHAIRMAN: I have already ruled that out of Order.
  Mr. MALONE: I was going to refer to the Marconi notice to the shareholders.
  The DEPUTY-CHAIRMAN: I do not know whether the hon. Gentleman was present, but I ruled that out of Order as a matter that does not come under consideration at all, and cannot be provided for or dealt with in this Bill.
  Mr. MALONE: It is extremely difficult to know exactly what comes within the Bill and what does not. The White Paper says that British control has to be guaranteed, and I am trying to find out how the Government can assure the House that it is to be guaranteed. One of the two big groups concerned is already perturbed about this factor—
  The DEPUTY-CHAIRMAN: The hon. Member is not dealing with the Clause, which contains nothing as to who shall be the shareholders, or whether the control shall be in British hands. He must

  1775
  confine himself to the words in the proposed new Clause, namely, that "the annual balance sheet and accounts of the Communications Company shall be presented to Parliament."
  Mr. MALONE: I am keeping strictly to the new Clause. The reason I want to insert this Clause in the Bill is in order to make quite certain that every year Parliament will have an opportunity of watching how the finances of this company are controlled, and I submit that I am perfectly in order. I would have preferred to have done it by one or other of the new Clauses which have been ruled out of order, or rejected by the Committee, but at this eleventh hour I am trying to ensure some safeguard to the Empire whose services are being sold by the Government. The question of British control, therefore, is the third point about which I should like the Postmaster-General to tell us. I am perturbed about the control of the Merger Company. I believe that the Communications Company and the Merger Company ought to have been controlled by the State, but if that is not done, we ought to have put the wireless under the control of organisations and companies which have had experience in wireless business. What is happening now? I see from the White Paper that the cable companies are to have a controlling influence, and I should like the Postmaster-General, when he tells us how he is going to ensure a British control in the company, whether he is satisfied that the development of wireless technique, radio inventions and so on, are not likely to be kept back because the cable companies, which represent quite different interests, are in the majority on the new concern?
  I would like to congratulate my friends on the Liberal benches on their great support throughout the Bill. The benches below the Gangway have been crowded with absent Liberals throughout the whole of the discussions, and I am sure that those who had anything to do with the old Radical party will look with pride on the fight which they have put up for national interests This new Clause is the last attempt to secure a measure of control over a financial group which will have the handling of over £83,000,000 of capital, the profits
  1776
  from which will be entirely dependent on the lease of the Government wireless services at a mere peppercorn rental, the full facts of which, for unstated reasons, the Government decline to put before the House of Commons.
  Mr. W. BAKER: This new Clause is justified on the simple ground that we cannot have too much light upon the accounts of this company. I would remind the Committee that in the 1901 Act the Pacific Cable Board were compelled to present their accounts to Parliament, and it was not until last year that the Government, in introducing new legislation, took the opportunity to drop the words which made it necessary for the Board to present their accounts to the House. That was a retrograde step, and it should be recovered. I hope that, whatever else the Government may resist, they will see their way clear to accept a Clause which does nothing more than endeavour to throw the light of publicity upon the activities of this company.
  Mr. BENN: On a point of Order. Although my name has been attached to this Clause, I beg to submit that it is out of order, because it refers to "the Communications Company." No terms should be used in a Bill unless they are defined in the Bill, and I cannot find a definition in the Bill. You put the Clause, so I assume that you consider it in order, but I submit that a Clause speaking of "the Communications Company" cannot be in order unless there is somewhere in the Bill a definition of "the Communications Company."
  The DEPUTY-CHAIRMAN: I am afraid that I must rule against the hon. Member here, because there is a Preamble to the Bill, and in the Preamble "the Communications Company" is referred to as "a company to be formed." It is defined, and that definition carries on through the Bill.
  Mr. BENN: Is it competent for the Parliamentary draftsmanship to pass the scrutiny of the Chair when the definitions are to be found only in the Preamble?
  The DEPUTY-CHAIRMAN: I think that this particular case is one that has passed the Chair. The Bill is merely permissive to give power to deal with

  1777
  a body which it is intended should be formed. As it has not been formed, it cannot be more particularly defined.
  Mr. BENN: Is it not a fact that that is a practice confined to private Bill legislation, and is there any precedent for a public Bill being presented with a term not defined in the Bill, but only referred to in the Preamble?
  The DEPUTY-CHAIRMAN: I should be surprised if it is not the case, but I cannot carry it in my mind at the moment. I am satisfied, in any event, that the hon. Member's point is not one on which it is possible to rule this Clause out of order.
  6.0 p.m.
  Sir W. MITCHELL-THOMSON:It will scarcely surprise the Committee to hear that I cannot accept the proposed new Clause. If I could, I would certainly reply to the questions so courteously put to me by the hon. Member, but if I did so I feel that you. Mr. Deputy-Chairman, would be rising in your place to call me to order, and therefore he must excuse me if I do not answer them categorically. He displayed quite candidly to the Committee in one sentence which he used, as did the hon. Member who has just spoken, what is the point of view of hon. Members opposite. They propose this new Clause because they are definitely desirous of securing some Government and Parliamentary control over both administration and finance. That, of course, is almost a direct negative of a question we decided on Second Reading, and I ask the Committee to take the view that this provision is wholly unnecessary. It is really a wholly illusory safeguard so far as throwing light on the finance is concerned. It must be remembered that this company will be a public limited liability company, and therefore subject to all the provisions of the law which apply to other limited liability companies as regards the publication of its report and balance-sheet.
  When hon. Members tell me, as perhaps they will tell me, that this company partakes of the nature of a public utility company, I am compelled to remind them that because a company is a public utility company it does not necessarily follow that its accounts are presented to Parliament; on the contrary, the reverse is the case. The hon. Member has him-
  1778
  self said that Parliament, without a dissentient voice, without even the hon. Member's voice, decided last year that the accounts of the Pacific Cable Board should not be presented to Parliament. The accounts of the Port of London Authority have never been presented to Parliament. Then we were asked: "Why do you not make it like the British Broadcasting Corporation" But their accounts are not presented to Parliament. They reach Parliament because they are presented to me, and I, out of the goodness of my heart, submit them to Parliament; but there is no statutory obligation on the British Broadcasting Corporation to present them to Parliament. The real fact is that the necessary publicity will be secured by the publication of the report and accounts in the ordinary way, but just in case that should not be sufficient there is an extra provision in the Report, which certainly will be taken advantage of, which says that the Advisory Committee shall have power, if they are not entirely satisfied, to ask the Communications Company to submit their accounts and to give them any information which is required, and, if necessary, to submit those accounts for examination on behalf of the Advisory Committee. The position is, therefore, doubly safeguarded.
  Mr. PALING: Have the Advisory Committee any power to deal with the position if they are not satisfied?
  Mr. KELLY: The right hon. Gentleman speaks of the Advisory Committee having the power to call for the accounts to be presented, but he did not say to whom. Does it mean that they may call for them to be presented to themselves? If it is intended to give the Advisory Committee these powers, is it intended that the Advisory Committee shall be mentioned in the articles of association of this new corporation, company or combination, or whatever it is which is to be set up?
  Lieut.-Commander KENWORTHY: May I also point out that, whereas in the Report it says that the Advisory Committee should have access to information in the hands of the Communications Company which is necessary to enable them to carry out their purpose, the Report goes on to say:
  "Such information will, of course, be treated as strictly confidential."

  1779
  That means to say that we are to have no hold of any sort on the company, that we have no right to ask information from the Postmaster-General. The most powerful and wealthy company in the country engaged in commerce or shipping may have a grievance against this company in respect of excessive rates or bad service, and Members of this House will have no means of obtaining redress, no right even to put a question to the Postmaster-General. That is the position in which we are leaving ourselves, and that is the betrayal of the public of this country which has been perpetrated.
  Mr. PALING: In connection with everything that appertains to this question, the Postmaster-General comes back to the fact that there is an Advisory Committee. He says now that there is no necessity for the balance sheet to be presented to Parliament, because the Advisory Committee can call for the accounts and for this, that and the other. But what then? What can the Advisory Committee do if they disagree with the accounts and find they are not strictly what they ought to be? We are told that the Committee "may" do so and so. We want to know what power they have and now is the occasion, I submit, to put again to the Postmaster-General the questions which were put to him on the last occasion. Will he tell us what the Advisory Committee is and what it can do and what it cannot do? Is the power of the Advisory Committee limited to what is stated in that one specific mention made of them in Recommendation number 6 in the Report? I do not think the Deputy-Chairman will stop the right hon. Gentleman from answering. He need not take refuge in that. He is quite at liberty to answer. We have been told that the Advisory Committee can do this, that and the other. Will he tell us what they can do if the accounts submitted to them do not meet with their approval? What power have they to alter the methods which are being followed by the Communications Company? Can they merely advise Parliament? If they are dissatisfied and have no power to make the Communications Company do what they think ought to be done, is the only thing left for them to do to report to the Post-
  1780
  master-General and ask him to do something? If they do that, will he do as much as he has done with every question we have put to him, and that is, take refuge in silence and do nothing?
  Mr. W. GRAHAM: I listened with care to the reply of the Postmaster-General. On closer examination I think the Committee will probably agree that this Clause raises an important point as to Parliamentary control over the financial side of the scheme, in which we retain a certain interest. The Communications Company is to be established to take over certain cables, and, also, the beam wireless undertaking is to be leased to them for 25 years. I entirely agree that we have set up here an outside and a separate organisation, but it is perfectly plain to the Committee that under the lease at least, if not indeed indirectly in other matters, we have retained a quite definite public interest, and, accordingly, it becomes very important for the Committee to see that over the interest which survives it has the appropriate financial control. Is that established in this case?
  Let us relate what is proposed in this scheme with other outside undertakings. There are undertakings like the British Broadcasting Corporation, whose accounts, if I remember correctly, are separately audited. They are presented to the House of Commons—by the courtesy of the right hon. Gentleman, as he has just indicated. There are other accounts, like those of the State-management districts, which are also audited by outside firms of chartered accountants, but which are nevertheless presented to the Public Accounts Committee of this House. As I understand it, they are so presented because Parliament is interested in that scheme to the extent of an advance, as, in my view, Parliament is interested in this scheme—at least in the leasing of the beam wireless service. In those other cases, whether under the formal practice of the Exchequer and Audit Department or by voluntary act of the Department, certain of those accounts do reach the Public Accounts Committee of this House. It is true that it is a retrospective review, but when the Public. Accounts Committee make recommendations it is very difficult for the Government to ignore them for

  1781
  any length of time, and as a rule they are ultimately enforced.
  The Postmaster-General, in resisting our application in this case, indicates that we have here the protection of an Advisory Committee. But that is by no means the complete protection which we deserve in a matter of this kind. In view of the vast interests involved, we are entitled to be put at least in the position which we occupy in respect of the State-management districts. I take it no Member of the House would suggest that, from the point of view of the finance and the commercial interest, this is not a far more important proposition. But yet this House, by specific device, is left with only the vague and rather remote intervention of this Advisory Committee, which may be made after the representations of the Government, but is not brought into strict connection with the financial operations which we here seek to control. That is the essence of this controversy and I suggest to hon. Members in all parts of the House—for this ought not to be a party matter—that we are here embarking on a very dangerous principle in regard to financial control.
  What has been the tendency of recent years? I acknowledge that it has been rather contradictory in character. There is in some quarters a disposition to say that these accounts, as in the case of the State-management districts, or in some other undertakings, relate to outside organisations. We will only look at them generally, if we look at them at all, in the Public Accounts Committee. Directly and indirectly the taxpayers of Great Britain are at the moment committed to enormous obligations, and it is of vital importance that they should have a direct survey and a control, even though it be retrospective. We retain an interest in this scheme. We have no means of direct control, we have only the remote intervention of the Advisory Committee, and to leave things at that is to leave them in an altogether intolerable position.
  Mr. BECKETT: We are all very much disappointed that the Postmaster-General should have turned down this proposed new Clause, and also disappointed as to the terms in which he did it. I should have thought we should have had his most heartfelt sympathy, and that he
  1782
  would have felt very keenly for our position, and would have done his best to see that if we were not to have power to interfere we should at least be allowed to have some little information. Instead of that he sought to make out that the new Clause was quite valueless, and he gave two specific reasons. In the first place, he said the accounts and balance sheet of this company would be published in the way that they are in the case of any ordinary limited liability company, which of course, he must know is no check at all. While sometimes for reasons outside the control of the company their accounts and balance sheet may get undeserved and undesired publicity, there is no guarantee at all unless we take the trouble to search through many files for them that we are ever likely to come across the balance sheet of every public company. The main object of this Clause is to serve as a kind of refresher to the memory, and we hope to the conservance of future Houses of Commons, and point out to them what has been done with the State property which we are giving away in this year 1928.
  The second reason he gave to show why it was unnecessary that the accounts and balance sheet to be submitted annually to the House of Commons was that they would go to an unspecified, unset-up Advisory Committee, though even now we do not know who is going to appoint it, when it is going to be appointed or how it will act. In the past the Government have often been accused and attacked for introducing so much Government by Committees, but on previous occasions, at any rate, they have been able to prove that the Committee they propose was to be appointed by someone. I suggest to the Committee that this is a most moderate new Clause. The Bill does not give the House of Commons any power to interfere with the gentlemen to whom we are making a handsome present, and it does not give us any power over those gentlemen who, under this Bill, will enjoy very large profits and high remuneration. Surely the taxpayer ought to know every year exactly how much the Conservative Government gave away in 1928 under this Bill. I suggest that it would be a very good thing to have an annual reminder by way of the balance sheet and accounts of the very handsome

  1783
  present which was the bequest of the Conservative Government to this company.
  Mr. BENN: The hon. Member opposite who mentioned the Port of London Authority as a case in point was mistaken, because that authority was not set up in the way which is proposed under this Bill. I have looked up the Act of 1908, and I find that the Port of London Authority was set up with a Chairman and Vice-Chairman, and its powers were provided for in the Clauses of the Bill. Moreover, the accounts of the Port of London Authority, although not presented to Parliament, have to be audited in a form approved by the Board of Trade, and certified by an auditor appointed by the Board of Trade. Therefore, we are not without a precedent in this matter. The Government prefer to go back to the days of the South Sea Bubble—
  The CHAIRMAN (Mr. James Hope):—I do not think that is relevant.
  Mr. BENN: But the South Sea Bubble persistently refused to present its accounts to Parliament.
  The CHAIRMAN: I am informed that the South Sea Bubble was a species of financial fever.
  Mr. BENN: I was referring to some of the enterprises which were set up under the influence of that fever. I want to put a question to the Assistant Postmaster-General. I presume that the Advisory Committee will have power to ask for these accounts. What I want to know is, whether that Committee will reveal the accounts to anyone? Perhaps the Secretary of State for Scotland can answer that question. The Advisory Committee will be set up, and the Government representatives will be appointed by the Government. Will those representatives have power to ask for a statement of the accounts, and
  will those accounts be submitted to the Postmaster-General? If I get an answer to that question, I shall be very grateful.
  The ASSISTANT POSTMASTER-GENERAL (Viscount Wolmer): They will report to the Committee.
  Mr. BENN: Then I understand that the Advisory Committee will report to the Government and the Postmaster-General the accounts of these companies?
  Viscount WOLMER: Yes.
  Mr. BENN: Then what possible objection can there be to the Government laying those accounts before the House of Commons? Will the report of those accounts to the Advisory Committee be confidential? I remember that when Lord Cranborne was a Member of this House, Lord Salisbury forbade him to answer Supplementary Questions in this House. There seems to be a sort of ban in operation at the present time, and no one is allowed to answer questions except the Postmaster-General. I notice that the Financial Secretary is making researches in the corner. We know that the Advisory Committee will have power to obtain these accounts, and they will submit them to the Government, but whether they will be confidential or not we do not know. The Government will be in possession of those accounts, and the only question to be decided now is whether the Government, having these accounts in their possession, shall place them at the service of the Members of the House of Commons. Some hon. Members think those accounts should be confidential, and others think that they should he placed before the House of Commons. That is the only issue to be decided by this Motion.
  Question put, "That the Clause be read a Second time."
  The Committee divided: Ayes, 105; Noes, 223.

  Division No. 43.]

  AYES.

  [6.24 p.m.

  Ammon, Charlet George

  Brown, Ernest (Leith)

  Edwards, C. (Monmouth, Bedwellty)

  Baker, J. (Wolverhampton, Bliston)

  Buxton, Rt. Hon. Noel

  Garro-Jones, Captain G. M.

  Baker, Walter

  Charleton, H. C.

  Gillett, George M.

  Barker, G. (Monmouth, Abertillery)

  Cluse, W. S.

  Gosling, Harry

  Barr, J.

  Clynes, Rt. Hon. John R.

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

  Batey, Joseph

  Connolly, M.

  Grenfell, D. R. (Glamorgan)

  Beckett, John (Gateshead)

  Cove, W. G.

  Griffith, F. Kingsley

  Bellamy, A.

  Cowan, D. M. (Scottish Universities)

  Griffiths, T. (Monmouth, Pontypool)

  Benn, Wedgwood

  Davies, Ellis (Denbigh, Denbigh)

  Grundy, T. W.

  Bondfield, Margaret

  Davies. Evan (Ebbw Vale)

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

  Bowerman, Rt. Hon. Charles W.

  Day, Harry

  Hall, G. H. (Merthyr Tydvil)

  Briant, Frank

  Dennison, R.

  Hamilton, Sir R. (Orkney & Shetland)

  Broad, F. A.

  Duncan, C.

  Hardle, George D.

  Harney, E. A.

  Morris, R. H.

  Taylor. R. A.

  Harris, Percy A.

  Mosley, Sir Oswald

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

  Henderson, Rt. Hon. A. (Burnley)

  Naylor, T. E.

  Thorne, W. (West Ham, Pialstow)

  Hirst, G. H.

  Paling, W.

  Thurtle, Ernest

  Hirst, W. (Bradford, South)

  Parkinson, John Allan (Wigan)

  Tinker, John Joseph

  Hudson, J. H. (Huddersfield)

  Pethick-Lawrence, F. W.

  Tomlinson, R. P.

  John, William (Rhondda, West)

  Ponsonby, Arthur

  Townend, A. E.

  Johnston, Thomas (Dundee)

  Potts, John S.

  Viant, S. P.

  Jones, Henry Haydn (Merioneth)

  Richardson, R. (Houghton-le-Spring)

  Wallhead, Richard C.

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

  Ritson, J.

  Walsh, Rt. Hon. Stephen

  Jones, Morgan (Caerphilly)

  Salter, Dr. Alfred

  Webb, Rt. Hon. Sidney

  Kelly, W. T.

  Scrymgeour, E.

  Wedgwood, Rt. Hon. Josiah

  Kennedy, T.

  Scurr, John

  Wellock, Wilfred

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

  Shaw, Rt. Hon. Thomas (Preston)

  Westwood, J.

  Lansbury, George

  Shepherd, Arthur Lewis

  Wilkinson, Ellen C.

  Lawrence, Susan

  Shiels, Dr. Drummond

  Williams, Dr. J. H. (Llanelly)

  Lawson, John James

  Shinwell, E.

  Wilson, C. H. (Sheffield, Attercliffe)

  Lee, F.

  Slesser, Sir Henry H.

  Wilson, R. J. (Jarrow)

  Lowth, T.

  Smillie, Robert

  Windsor, Walter

  Lunn, William

  Smith, Rennie (Penistone)

  Young, Robert (Lancaster, Newton)

  Malone, C. L'Estrange (N'thampton)

  Snell, Harry

  March, S.

  Strauss, E. A.

  TELLERS FOR THE AYES.—

  Montague, Frederick

  Sutton, J. E.

  Mr. Whiteley and Mr. B. Smith.

  NOES.

  Albery, Irving James

  Curzon, Captain Viscount

  Kennedy, A. R. (Preston)

  Alexander, E. E. (Leyton)

  Dalkeith, Earl of

  Kindersley, Major G. M.

  Allen, Sir J. Sandeman

  Davidson, Rt. Hon. J. (Hertford)

  King, Commodore Henry Douglas

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

  Davies, Dr. Vernon

  Kinloch-Cooke, Sir Clement

  Applin, Colonel R. V. K.

  Dawson, Sir Philip

  Lamb, J. Q.

  Apsley, Lord

  Dean, Arthur Wellesley

  Lister, Cunliffe, Rt. Hon. Sir Philip

  Ashley, Lt.-Col. Rt. Hon. Wilfrid W.

  Edmondson, Major A. J.

  Livingstone, A. M.

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

  Elliott, Major Walter E.

  Locker-Lampson, Rt. Hon. Godfrey

  Atkinson, C.

  Ellis. R. G.

  Looker, Herbert William

  Baldwin, Rt. Hon. Stanley

  Erskine, James Malcolm Monteith

  Lucas-Tooth, Sir Hugh Vere

  Bainiel, Lord

  Everard, W. Lindsay

  Luce, Maj. Gen. Sir Richard Harman

  Banks, Sir Reginald Mitchell

  Fairfax, Captain J. G.

  Lumley, L. R.

  Barclay-Harvey, C. M.

  Falle, Sir Bertram G.

  MacAndrew, Major Charies Glen

  Barnett, Major Sir Richard

  Fanshawe, Captain G. D.

  Macdonald, R. (Glasgow, Cathcart)

  Bellairs, Commander Carlyon

  Fenby, T. D.

  MacIntyre, Ian

  Bennett, A. J.

  Fermoy, Lord

  McLean, Major A.

  Berry, Sir George

  Fielden, E. B.

  Macmillan, Captain H.

  Bethel, A

  Ford, Sir P. J.

  Macnaghten, Hon. Sir Malcolm

  Betterton, Henry B.

  Forrest, W.

  Maitland, Sir Arthur D. Steel-

  Birchall, Major J. Dearman

  Foster, Sir Harry S.

  Maitland, A. (Kent, Faversham)

  Boothby. R. J. G.

  Foxcroft, Captain C. T.

  Makins, Brigadier-General E.

  Bourne, Captain Robert Croft

  Fraser, Captain Ian

  Manningham-Buller, Sir Mervyn

  Briggs, J. Harold

  Fremantle, Lieut.-Colonel Francis E.

  Margesson, Captain D.

  Briscoe, Richard George

  Ganzoni, Sir John

  Marriott, Sir J. A. R.

  Brittain, Sir Harry

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

  Merriman, Sir F. Boyd

  Brocklebank, C. E. R.

  Goff, Sir Park

  Milne, J. S. Wardlaw

  Brooke, Brigadier-General C. R. I.

  Grant, Sir J. A.

  Mitchell, W. Foot (Saffron Walden)

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

  Grattan-Doyle, Sir N.

  Mitchell, Sir W. Lane (Streatham)

  Buchan, John

  Greaves-Lord, Sir Walter

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

  Buckingham, Sir H.

  Grenfell, Edward C. (City of London)

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

  Bull, Rt. Hon. Sir William James

  Grotrian, H. Brent

  Moreing, Captain A. H.

  Burton, Colonel H. W.

  Guinness, Rt. Hon. Walter E.

  Morrison, H. (Wilts, Sallsbury)

  Carver, Major W. H.

  Hacking, Douglas H.

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

  Cautley, Sir Henry S.

  Hall, Admiral Sir R. (Eastbourne)

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

  Cayzer Sir C. (Chester, City)

  Hannon, Patrick Joseph Henry

  Nield, Rt. Hon. Sir Herbert

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

  Hartington, Marquess of

  O'Neill, Major Rt. Hon. Hugh

  Cecil, Rt. Hon. Sir Evelyn (Aston)

  Harvey, G. (Lambeth, Kennington)

  Ormsby-Gore, Rt. Hon. William

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

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

  Percy, Lord Eustace (Hastings)

  Chadwick, Sir Robert Burton

  Haslam, Henry C.

  Perkins, Colonel E. K.

  Chamberlain, Rt. Hon. N. (Ladywood)

  Headlam, Lieut.-Colonel C. M.

  Perring, Sir William George

  Charteris, Brigadier-General J.

  Hennessy, Major Sir G. R. J.

  Peto, G. (Somerset, Frome)

  Christie. J. A.

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

  Pilcher, G.

  Churchman. Sir Arthur C.

  Hilton, Cecil

  Pilditch, Sir Philip

  Clarry, Reginald George

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

  Power, Sir John Cecil

  Clayton G. C.

  Hohler, Sir Gerald Fitzroy

  Pownall, Sir Assheton

  Cobb, Sir Cyril

  Holbrook, Sir Arthur Richard

  Preston, William

  Cochrane, Commander Hon. A. D.

  Hopkins. J. W. W.

  Price, Major C. W. M.

  Cockerill, Brig.-General Sir George

  Horne, Rt. Hon. Sir Robert S.

  Ramsden, E.

  Cohen, Major J. Brunei

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

  Reid, D. D. (County Down)

  Cooper, A. Duff

  Hume, Sir G. H.

  Rentoul, G. S.

  Cope, Major Sir William

  Hume-Williams, Sir W. Ellis

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

  Couper, J. B.

  Hunter-Weston, Lt.-Gen. Sir Aylmer

  Roberts, E. H. G. (Flint)

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

  Hurd, Percy A.

  Robinson. Sir T. (Lanes., Stretford)

  Craig, Sir Ernest (Chester, Crewe)

  Hurst, Gerald B.

  Rodd, Rt. Hon. Sir James Rennell

  Croft, Brigadier-General sir H.

  Hutchison, Sir Robert (Montrose)

  Ropner, Major L.

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

  Illffe, Sir Edward M.

  Ruggles-Brise, Lieut.-Colonel E. A.

  Crookshank, Cpt. H. (Lindsey, Cainsbro)

  Inskip, Sir Thomas Walker H.

  Russell, Alexander West (Tynemouth)

  Culverwell, C. T. (Bristol, West)

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

  Samuel, A. M. (Surrey, Farnham)

  1786

  1787

  Samuel, Samuel (W'dsworth, Putney)

  Streatfeild, Captain S. R.

  Watts, Sir Thomas

  Sandeman, N. Stewart

  Stuart, Hon. J. (Moray and Nairn)

  Wayland, Sir William A.

  Sandon, Lord

  Sueter, Rear-Admiral Murray Fraser

  Wells, S. R.

  Savery, S. S

  Sugden, Sir Wilfrid

  Williams, Com. C. (Devon, Torquay)

  Sheffield, Sir Berkeley

  Tasker, R. Inigo.

  Williams, Herbert G. (Reading)

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

  Templeton, W. P.

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

  Skelton, A. N.

  Thomson, F. C. (Aberdeen, South)

  Wilson, R. R. (Stafford, Lichfield)

  Smith, Louis W. (Sheffield, Hallam)

  Thomson, Rt. Hon. Sir W. Mitchell-

  Winby, Colonel L. P.

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

  Titchfield, Major the Marquess of

  Winterton, Rt. Hon. Earl

  Smithers, Waldron

  Turton, Sir Edmund Russborough

  Withers, John James

  Somerville, A. A. (Windsor)

  Vaughan-Morgan, Col. K. P.

  Wolmer, Viscount

  Southby, Commander A. R. J.

  Wallace, Captain D. E.

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

  Spender-Clay, Colonel H.

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

  Wood, Rt. Hon. Sir Kingsley

  Stanley, Lieut.-Colonel Rt. Hon. G. F.

  Warner, Brigadier-General W. W.

  Woodcock, Colonel H. C.

  steel, Major Samuel Strang

  Warrender, Sir Victor

  Wright, Brig.-General W. D.

  Storry-Deans, R.

  Waterhouse, Captain Charies

  Stott, Lieut.-Colonel W. H.

  Watson, Rt. Hon. W. (Carlisle)

  TELLERS FOR THE NOES.—

  Captain Bowyer and Mr. Penny.

  The CHAIRMAN: The next Clause on the Paper—(Majority of directors of Communications Company to be appointed by partner Governments)—impinges on the constitutional practice with regard to Dominion Governments.

  NEW CLAUSE.—(Capital of Communications Company).
  The capital of the Communications Company shall be fixed at twenty million pounds and shall not be increased except with the consent of the Treasury.—[Mr. Gillett.]
  Brought up, and read the First time.
  Mr. GILLETT: I beg to move, "That the Clause be read a Second time."
  This problem of the actual capital of the Communications Company is one of the most important matters coming before this Committee. It is not necessary for me to remind hon. Members that the amount of interest at 6 per cent. is a fixed amount based on the capital, and that, after that amount has been paid, the consumer is to come in. It is, therefore, vital that we should satisfy ourselves that £30,000,000 is a correct figure, because, if the capital should be only £20,000,000, that would mean that to the extent of £600,000 the consumer would be deprived of benefit. I have put down the figure of £20,000,000 simply because I want the Government to prove to me that £30,000,000 is a correct figure. We have no information on this side, and the Committee has not been given any information, that would make it possible for us even to arrive at an estimate, but certain information has been given in regard to the merger. The merger, which in one sense does not come before us, is only important, to my mind, in this respect, that, if the figures for the Communications Company are based upon the merger figures, and if the
  1788
  merger figures are excessive, then the Communications Company's figures may be excessive.
  As we have no figures whatever by which to judge in regard to the Communications Company, while we have figures for the merger, I have turned my mind to the merger figures, in order to see whether we can get from these figures some reasonable estimate, and whether, from that, we may assume that the figures for the Communications Company are reasonable. I understand that what is proposed is that, first of all, there should be an amalgamation of all the different companies concerned, and I have turned to see what the capital is of these different companies which I presume are being dealt with in the merger.
  I find that the Eastern Telegraph Company has a nominal capital of £9,000,000, and it has certain subsidiary companies, namely, the African Direct, the Eastern and South African, the Europe and Azores and the West African Telegraph Company. Their total nominal capital comes to £10,200,000 odd, and then, I suppose, the Indo-European is included, with its £450,000. Then there are the Eastern and the Western Extension Companies, which have a capital of about £9,000,000, and there is the Marconi Company; and, finally, there is the Government interest, which might be represented by the figure that is going to be paid in cash—I understand, roughly about £2,500,000. If we add those together—[Interruption.] I may have over-estimated it by about £1,000,000, but that does not matter very much. I do not know if there are any other companies, and I should be very much obliged if the Postmaster-General would tell me if he knows of any other companies which are going into the merger and which I have

  1789
  not included. If he does, of course my figures would be to some extent vitiated. So far, it seems to me that the nominal capital of the companies included in the merger is somewhere about £22,000,000, leaving out of account any amount paid to the Government.
  Mr. WARDLAW-MILNE: What is the paid-up capital?
  Mr. GILLETT: This is the paid-up capital, namely, £22,000,000. The figure put forward, however, is £53,000,000, and what I should like to know is how the figure of £22,000,000 which I have mentioned becomes £53,000,000. What I have done is to try to value these different shares at their market values—to find what this £22,000,000 of shares would cost if anyone went into the market to buy them to-day.
  Sir W. MITCHELL-THOMSON: Is that the merger?
  Mr. GILLETT: It is the capital of the companies which I believe have gone into the merger. I estimate it at £22,000,000, and now I want to know what that capital is worth at its market value. This is only its face value. As regards the Eastern Company, I estimate that its capital at the market value would be worth about £16,000,000. I have included the ordinary shares and also the debentures and so forth. Then I come to the Marconi Company, in the case of which also my estimate of the market value would be about £16,000,000. Perhaps I am over-valuing it, and that is what I want to do, because I want the figure I arrive at to give full credit to the companies at the highest prices.
  Mr. WARDLAW-MILNE: Would the hon. Member kindly say what he means by "market value"? Is it the market value of the shares, or is he speaking of the assets?
  Mr. GILLETT: I am trying to arrive at what it would cost anyone who went into the market to-day to buy up the whole of these shares at practically the top figures quoted on the Stock Exchange. As I have said, I estimate that, in the case of the Marconi Company, the figure would be about £16,000,000, while in the case of the Associated Companies it would seem to me to be about £1,500,000, and, in the case of the Indo-European, £800,000. I have not been
  1790
  able to obtain any figures for the Eastern and Western Extension Companies, but I have valued their £9,000,000 of capital at £216,000,000. Even if I take all these figures, I only get up to about £51,000,000, on top figures quoted on the Stock Exchange to-day, and I shall be very glad if the Postmaster-General can prove to see that that figure is incorrect. I shall be interested to know. At these inflated values it is only possible to reach £51,000,000, and, if I add the £2,000,000 that is going to be paid to the Government, it still hardly brings the figure up to the £53,000,000 for the merger—
  The CHAIRMAN: If the hon. Member is going to base an argument on these figures for the capital of these companies, I ought to point out that neither this Committee nor the House has anything to do with the question whether the merger company is over-capitalised or not.
  Mr. GILLETT: I am giving these figures with regard to the merger because that is the only way in which we can arrive at the figures for the Communications Company. I should now like to draw attention to the article in the "Times" of the 2nd August on this special aspect of the matter. In that article the "Times" estimates what the profits of the merger would be. I do not think I need weary the Committee by going into all the details, but it is estimated that the income of the merger company might reach approximately £3,200,000, and that the dividends on the 5½ per cent. Preference and "A" ordinary shares would absorb £2,800,000 odd. That would leave about £300,000 to cover expenses, to provide reserves, and to pay dividends on those shares. With regard to the "B" shares, hon. Members who have the Paper before them will remember that the larger amount went to the Marconi Company, and, as far as I can see from the "Times" figures, there is no dividend on these. That confirms my suggestion that the original figures have been over-estimated, and that the capital is too big.
  If the "Times" figures for income are correct, and there is no money for dividend to start with on the ordinary shares, the supposition is that the capital of the merger is too big. If that supposition is correct, and if the merger has been used as the standard upon which the capital of the Communications Com-

  1791
  pany is based, then I say that in all probability the same argument applies to that also. It seems to me that what is going to happen is that the Marconi Company is going to sell that part of its assets which deals with cables and so forth to the Communications Company, and I understand that, in exchange, it is going to receive shares in the Communications Company. The directors of the Communications Company and the directors of the merger are to be the same, and, therefore, as far as control is concerned, the companies will be the same. The one will manage the cables, and the other will manage all these concerns which are in the hands of these different companies which have not actually been taken over by the Communications Company.
  All this would be immaterial if it were not for the question of dividend and the right of the public to benefit. As you, Mr. Hope, have very truly said, the merger is nothing to us, and, if it chooses to put up an enormous capital at the beginning, and if the Marconi shareholders like to go in under those conditions, that is their affair. But it is very serious for this Committee if, in building up our Communications Company, we are putting the capital at millions more than it ought to be. I cannot help thinking, as far as I have studied the figures, that the capital of the Communications Company is far too large, and that it ought to be much smaller; and, if it were smaller, benefit would come to the consumer much more quickly and easily.
  Lieut.-Commander KENWORTHY: I also have been attempting to work out the capitalisation of the Communications Company. My hon. Friend the Member for Finsbury (Mr. Gillett) has a far greater knowledge of banking, capitalisation and so on than I have, and, therefore, it is not surprising that I have come to a different conclusion. I desire to confine myself closely to the Communications Company, because, as my hon. Friend says, if the merger company likes to water its capital to the extent of £10,000,000 or £15,000,000, that is the look-out of the shareholders; so long as we, in taking it over, do not have to buy out the shareholders at the face value
  1792
  of watered shares, it does not very much matter. With regard, however, to the communications company, it is very important, from the point of view of the public, that we should be certain that there is no unnecessary watering of capital. On page 18 of the Conference Report it is suggested that the Communications Company should have a standard net revenue approximating to 6 per cent, on the capital. Where is that money coming from? It can only come from cable and beam wireless charges, and, therefore, if the capital of the Communications Company has too large a face value, up must go the cable rates and the communication rates generally. The case is like that of the railway companies. The railway companies are guaranteed a certain return on their capital, and, on application to the Rates Tribunal, are allowed to put up their rates if they can show that they are being hardly done by at the existing rates. If, therefore, there is water in the capital of the Communications Company, the public, and especially the cable-using public, are being robbed.
  These are my conclusions. I have taken the whole issued capital of the Eastern Extension as £4,752,000, and that of the Eastern Telegraph Company us £9,000,000. I am not sure about the £1,000,000 which represents the capital of the subsidiary companies referred to by my hon. Friend, but I think it is held by the Eastern Telegraph Company, and is, therefore, not new capital. I think they have equivalent shares corresponding to that value in their hooks, and I take their total capital as £9,000,000. It should be noted that the 4 per cent. mortgage debentures of the Eastern Extension Company are quoted, in the current issue of the Stock Exchange Year Book, at 76½. The 3½ per cent. preference of the Eastern Telegraph Company is 60½ and the 4 per cent. debentures are 76½. That is what the public thinks of the actual value. The issued capital of Marconi International Marine is £1,500,000, and of the Marconi Wireless Telegraph Company £4,000,000—a total of £5,500,000. I am not going into the inflated values given in the Stock Exchange boom since the information leaked out prematurely of what the Government meant to do. I am going by the actual share capital. That is £9,252,000 for the

  1793
  two companies. I do not know whether the Indo-European are counted in, so I have left that out.
  Now let us see the other assets of the Communications Company, and the price at which they bought them from the Government: The Atlantic cable, £450,000; the West Indian cables, £300,000; and the Pacific, £517,000. That is the good bargain which the Postmaster-General made. That gives you a cash payment of £1,267,000. My hon. Friend overestimated the assets that would go into this pool. He did not notice that the loan can remain at 3 per cent. They are guaranteed 6 per cent. on capital which is handed over to them by the Government on loan at 3 per cent. That is a pretty little bonus for someone. The total, however, that they can put in legitimately as assets is the amount of the loan and the amount they paid the Government, a total of £2,500,000. I have capitalised the rent of the beam, the initial rent of which is £250,000, at £5,000,000, a total capital, with what they get from the Government, of £7,500,000.
  I dare say there are other things that we do not know about, but this is the information I have gathered from taking part in these Debates and listening with great care to what the Assistant Postmaster-General and the Financial Secretary to the Treasury have told us and such information as we have dragged from other Ministers. That means that, taking the issued capital of the whole of the five interests, added to the amount paid to the Government, with the rent of the beam capitalised, it comes to £26,752,000. I may be wrong—I shall be glad to know I am—but I make it, on a capital of £30,000,000, £3,250,000 of water, to start off with, less £500,000 for the Indo-European. We will suppose the Indo-European does not come in. That makes it £2,750,000 of water. That is in addition to the £30,000 bonus. I await an explanation of that. It is a very serious matter. If there is over-capitalisation, if the whole of the capital of the company is not represented by solid assets, if there is something for goodwill and something for the advantage of amalgamation before those advantages accrue, if there is anything to round off the figure and make it look rather more substantial than it is, this is a most
  1794
  serious matter, because the ordinary cable-using public will have to pay for this water in increased rates. I should have thought the Amendment was very reasonable.
  Let me draw attention to another aspect of it. We are discussing the capitalisation of the Communications Company. I ask hon. Members with business experience to compare the value put upon the assets of the Eastern Telegraph Company, which we are told has been losing money and would have to go into liquidation unless the Government came to its rescue, with what the Government receives for its real assets, its cables, its equipment, its establishments, its instruments, its trained staff, its experience, its cable ships and everything else. On the one hand, as far as I can make out, the better part of £15,000,000. What do the Government get? £1,250,000 in cash.
  The CHAIRMAN: It appears to me that the hon. and gallant Gentleman is reverting to Friday's Debate.
  Lieut. - Commander KENWORTHY: Without reverting to that I should propose, if I am in order, to question what I suggest is the over-capitalisation of the company and the inflated value given to the assets of the Eastern Telegraph Company.
  The CHAIRMAN: The hon. Member for Finsbury (Mr. Gillett) drew a proper distinction between the two things. The one is only relevant as showing whether the Communications Company's capital should be more or less than £30,000,000.
  Lieut.-Commander KENWORTHY: I was trying to show that too much value is being given to the assets in the Communications Company over the real assets brought in by the private company in comparison with what the unhappy Postmaster-General—I use his own description—was able to obtain from the companies for the assets owned by this House. My calculations, owing to lack of information, may be faulty. In that case I want the true facts, but I think we should make absolutely certain before we part from the Bill that the cable-using public will only have to guarantee 6 per cent. interest on capital representing real assets and not gambling values or water

  1795
  or goodwill or any other fictitious value, which Stock Exchange manipulators or astute financiers have been able to place upon it.
  Mr. TOWNEND: I should like to draw attention to one aspect of this question arising from what I believe to be the over-capitalisation of the Communications Company. The whole of the capital for the merger is £53,000,000. The figure submitted in the White Paper to be allocated to the Communications Company is £30,000,000. If, as we suggest in the Amendment, £20,000,000 were to be a more correct figure is not the reaction of the £30,000,000 that is being allocated to the Communications Company going to be detrimental to the interest of what I may call the consumer, because, according to the White Paper, is it not true that after the six per cent. which is anticipated as the result of handing over the beam wireless to the merger is earned, 50 per cent. of the remaining portion of the profit obtained shall be applied in reduction of rates for the services performed? Is it not possible that all the advantage which has been derived from the development of the beam wireless is going to be used for the purpose of bolstering up that other side of the merger which is not included within the Communications Company? We have not had much satisfaction for our requests for the sub—mission of accounts to the House and I want to know from the Postmaster-General what protection there is, in the new form of the scheme, for guaranteeing the benefit arising from the development of beam wireless to the consumer, apart altogether from the other side to which I have referred.
  Sir W. MITCHELL-THOMSON: This new Clause is not merely hopeless from the point of view of finance but would be positively dangerous if it were accepted. It is based on a complete misconception of the position and a complete confusion of ideas. The hon. Members based it upon this hypothesis, that the merger has been used as a standard. The merger has not been used as a standard. There has been a great deal of confusion of ideas on the part of hon. Members opposite. It is true that the capital of the Communications Company is all held by the merger company, but the capital of the merger is a subject for which His
  1796
  Majesty's Government in Great Britain and His Majesty's Governments in the Empire bear no responsibility whatever. More than that, the capital of the merger in itself represents and professes to represent, as these things always do, no more than an allocation of interests between the wireless companies and the cable companies. When the hon. and gallant Gentleman the Member for Central Hull (Lieut.-Commander Kenworthy) speaks of the wholly disproportionate payments which are being made to the cable companies for their assets as compared with the amount received by the Government, he is endeavouring to compare two things that are not comparable.
  Lieut.-Commander KENWORTHY: Obviously.
  7.0 p.m.
  Sir W. MITCHELL-THOMSON: Then why do it? For hours I have sat here and heard Members making this statement. They say: "Why is it that the cable companies are getting more than we are?" The answer is that we are getting cash, and they are getting stock. Let me try at all events to put this point of view. There are two quite distinct ways in which these assets are being dealt with. We are getting hard cash, golden sovereigns, for what we are handing over. For what the cable companies are handing over they are getting stock.
  Lieut. - Commander KENWORTHY: And a guarantee.
  Sir W. MITCHELL-THOMSON: No, I will deal with the question of guarantee in a moment. It does not follow, as hon. Members opposite seem to think, that because you call a share one pound, it is worth one pound. On the contrary, I have often known one pound shares to be worth 6d., and sometimes, though not so often, I have known sixpenny shares to be worth one pound. That is the common experience of all Members of the Committee. I want to impress upon the Committee that we are getting out of this business with the payment of hard cash, whereas what is happening in regard to the merger is the allocation of interests between the cable interests on the one hand and the Marconi people on the other. What is really relevant is the question, which has been practically ignored during the whole of this discussion on this Clause so far, of the standard

  1797
  net revenue and not the question of the capital. That is really important. As to that, I am in a position to tell hon. Members opposite that that has nothing to do with the capitalisation of the merger. The way in which the standard net revenue was worked out was—so I am informed by those responsible for doing it—by two highly-trained financiers, Sir Otto Niemeyer, with his long experience of finance at the Treasury, and Sir William McLintock, with his high standing in the actuarial profession, going most carefully into the question of what was the actual revenue being derived at this moment from the capital assets. They wrote off everything that ought to be written off; they made most liberal discounts; they made allowances for the competition of wireless in the case of the cable companies. Using their judgment with all the facts at their disposal—and they told me there was not a figure they asked for which they did not obtain—they arrived at the estimate of what might reasonably he a standard net revenue of £1,865,000. That was cross-checked by their figures as to capital. Their figures as to capital were arrived at by a somewhat complicated method of deducting the fixed amount of non-communicating assets from the total figures brought into account and taking the balance of those figures.
  The answer to the relevant question asked by the hon. Member as to whether there is any goodwill in the Communications Company is that there is no goodwill, and it follows from what I have said that there is no water. It works out, as is stated in the report, that the return on the capital is 6 per cent. Hon. Members opposite will, however, persist in saying that this is a guaranteed return. It is nothing of the kind. Who guarantees it? Nobody, except the hon. Members opposite. What the Government get is certainly fixed. The Government get their capital payments, their payment of £250,000 in golden sovereigns for the use of these services. They get those whatever happens, but the Communications Company does not get a penny unless it earns it. Nobody guarantees the revenue. It is necessary that I should say that, as all three of the hon. Members who spoke on this new Clause used this phrase about a guaranteed return of 6 per cent.
  Mr. GILLETT: I am sure I never used it, because it never entered my head that this 6 per cent. was guaranteed. What I thought was that the dividend came to 6 per cent. on the capital.
  Sir W. MITCHELL-THOMSON: What the hon. Member said was that the company would get a fixed amount based on capital.
  Mr. GILLETT: What I said was a fixed amount of 6 per cent. based on capital.
  Sir W. MITCHELL-THOMSON: This is the error into which hon. Gentlemen have fallen. The Company have to earn the standard net revenue of £1,865,000. If they earn more than that, then the provision of 12 per cent. and the distribution of 50 per cent. come into operation. Let me point out what would be the effect of this new Clause, or of any Clause on similar lines, if it were carried. The effect of carrying this new Clause in the terms in which it is proposed by the hon. Members opposite would be that the nominal return upon the Capital would be raised from 6 per cent. to something like 9¼ per cent. What would follow from that would be that the nominal return would be 9¼ per cent.
  Lieut.-Commander KENWORTHY: The sates would be higher.
  Sir W. MITCHELL-THOMSON: I seem incapable of explaining to the hon. and gallant Member that the percentage return on capital involved has nothing whatever to do with rates, diminution of rates or increase of rates, or anything of that kind. The only figure relevant in that connection is £1,865,000. Somebody asked me about the issue of bonus shares at an early date, and my reply to that is that it does not really matter whether the Communications Company issue bonus shares or not so long as the standard net revenue is not increased. It would only diminish the nominal net revenue. The figure that affects the Government and the user of the cable services is the figure of £1,865,000, and, for every pound earned over that, the provision of 12 per cent. and the distribution of 50 per cent. come into operation. The effect of this new Clause, if it were carried, would be to increase the nominal return upon the capital involved from 6 per cent. on a capital

  1799
  of £30,000,000 to 9¼ per cent. on the limited capital. The result would be that, whenever there was a question of putting in new capital—and this would be bound to arise sooner or later as fresh discoveries about plant and so on are made—the Communications Company would then be in a position to say that Parliament had ordained by Statute that its proper return upon its capital was 9¼ per cent. and not 6 per cent. That is why I say the new Clause in any form is not only absurd but positively dangerous. Our figure is based upon a direct investigation of figures of proportionate revenue made by the most skilled advisers whom it is possible to obtain and cross-checked by the figures of ascertainable capital. Under those circumstances, I suggest that the Committe would be well advised not to interfere with the figure.
  Mr. W. GRAHAM: The Postmaster-General has been moved to rather more than customary vigour and enthusiasm in his reply to this proposed new Clause. I do not dispute for a moment that there are very great technical and other difficulties in seeking to intervene in the form of this Clause in view of decisions which have already been reached in Committee. But the grave difficulty that we on this side have felt all along, prior to the Second Reading discussion, during the Second Reading discusion, and in Committee stage, is that we have never had access to the exact position of affairs as between the formation and preparation of this merger and the reaction of that merger and all that it involves upon the Communications Company. When it was made perfectly plain that in this House we could not in any way directly or indirectly touch the merger we had of course to concentrate upon what we could do by Amendment as applied to the Communications Company.
  No one who reviews the history of this matter, either in the public Press or in the negotiations which have taken place or so far as has been revealed in debate in this House, will dispute for a moment that the preparations which were made by the merger always had an end in the kind of considerations in this Communications Company which are now under debate. Consequently, the hon. Member for Finsbury (Mr. Gillett) was perfectly
  1800
  accurate in founding his case upon a review of these preparations and pointing out that he was now trying to protect the public by this form of capital limitation. As I have said, the Postmaster-General gets very enthusiastic in opposition to this idea of guarantee. The strict position is that they are the basis of this Communications Company—the communications which are part of the merger together with the Government cables and the lease of the beam wireless. Those may be described as the ingredients of the Communications Company proposition. Until the Postmaster-General spoke, all that we had ever been told in Parliament, in the White Paper, and throughout all these Debates, was that the £30,000,000 of capital now attributable to this Communications Company was appropriate for the purposes for which it was to be used.
  It is quite true that the White Paper said to us that the terms of the fusion had been analysed by Sir Otto Niemeyer and by Sir William McLintock. The fact remains that we have not had that report. We are parting with public property, and that document has never been presented. We have not even had a summary of their views given to Members of this Chamber, though that would be the practice followed in any ordinary business transaction in this country. Without the presentation of the expert opinion in all its details, no proper industrial transaction would proceed. The Postmaster-General takes great exception to the term "guarantee," but it is as well that the Committee and the public should be perfectly clear as to what is happening. I will make this concession to the right hon. Gentleman that, if this prospect held out, to the Communications Company is compared with the form of guarantee given to the railway undertakings under the Act of 1921, there is a marked distinction between them, because in the case of the Railways Act a rates tribunal was set up to fix the rates and charges so as to give those undertakings under efficient working a standard revenue, which is that of 1913, together with certain allowances for capital expenditure. It was of the nature or of the form of a guarantee. I do not put it higher than that; the companies still have the field at their feet. If those

  1801
  railways ran at all, they were bound, taking all the circumstances into account, to approach or to get the guarantees or standard revenue. I do not put it higher than a form of guarantee. The Postmaster-General asks us why we keep calling this a guarantee. I can see it is not a guarantee in the nature of the Railways Act, but certainly you are passing over to this Communications Company a complete field, from which all competition has been excluded, with the complete knowledge that these services must go on. They are not going to stop.
  The Postmaster-General and the Government have indicated to us that we are not dealing here with an ordinary business proposition. It is an out-and-out public utility undertaking, in our view, very inadequately safeguarded and making very substantial contributions to the interests involved. With the lease of the beam wireless and with the Government cables thrown in, we are entitled to say that there is an adequate guarantee that if you are alive and well you cannot fail to get this under the plan which has been evolved. Of course, my hon. Friend has sought to try and protect the revenue by arriving at a more appropriate capitalisation of this undertaking, and that is probably all that is open to us at this stage of the Debate. But I really do ask the House of Commons, and I venture almost to ask the country: Does anyone imagine for a moment that these people, familiar with the merger, or the prospective merger and conditions, were not perfectly well aware of what I would call the developed or later part of the enterprise in which they would be engaged? This £1,865,000 is the standard revenue, and we get only 12 per cent. of the profit above that amount. They then get 50 per cent., the other 50 per cent. being what remains for the taxpayers or the consumers of the service when these very liberal conditions in public utility have been satisfied. Why does the Postmaster-General quarrel about the terms? If you like, I will omit the word "guarantee" altogether and rest the whole case on the facts of this situation, and I say that these facts are an outrage on the British people.
  Mr. MALONE: My hon. Friend who moved this new Clause tried, I think, to find out what was concealed
  1802
  below the mysteriously called Communications Company, or rather the Communications Company that is to be. We have had no elucidation of that fact, and I submit that the Committee have got no further than they were when my hon. Friend moved his new Clause a few minutes ago. Cannot the Postmaster-General answer us in very simple terms, this question. If we turn to page 16, Recommendation (ii), it says:
  "There will also be formed a Communications Company to which the Cable and Marconi Companies will sell … all their Communication assets, and so on.
  Cannot we be told in very simple language, or in a White Paper if it is too difficult, exactly what are these assets? Does the merger which has £53,000,000 worth of capital, include the Communications Company with £30,000,000 capital, or is the £30,000,000 an addition? What I want to know is how much of this £30,000,000 belongs to cables and how much to beam wireless? I believe that for the first time in the whole of the Committee stage I am in order in asking a question about beam wireless. I want to know on the basis of these financial experts who advise the Postmaster-General how much of the £30,000,000 is the capitalised value of the 25 years' lease of the beam wireless? That is a very important point. [An HON. MEMBER: "Nothing."] An lion. Gentleman says "Nothing." He can know very little about this. The revenue to-day, with the beam wireless service in its infancy and hardly developed, amounts to £500,000. I want to know what the Postmaster-General has put down in that capital of £30,000,000 as being the value in respect of beam wireless. That leads me to another question. I want to know what is going to happen when the beam stations, which are only on loan have to be improved and enlarged. Who is going to pay for this? Are they going to be paid for by the Post Office and made subject to a further lease to the Communications Company, or are additions and improvements to be undertaken by the company? Cannot the Postmaster-General answer this very simple question? What are the assets to which the White Paper referred. It is a very simple question. How much are cable assets and how much are beam wireless?
  There is another question which I would like to ask the Postmaster-General. I

  1803
  have in my hands the Donald Report of the Imperial Wireless Telegraphy Committee, Command Paper 2060. On page 40 of that Report is a long list of subsidary communication interests of the Marconi Company. There is the Marconi Wireless Limited of Australia, with £1,000,000 capital; the Marconi International Marine Communications Company, with £1,500,000 capital, and various other companies in Holland, in Montreal, in Madrid, in Peking, in Amsterdam, in Christiania, in Vienna, in Berne, in Brussels, in Warsaw, in Stockholm, in Cape Town, and in Rome. In all these companies the Marconi Company have a communications interest. Are these included in the Communications Company or not?
  Sir W. MITCHELL - THOMSON: Every revenue earning asset of every sort, kind and character is included.
  Mr. WELLOCK: Towards the close of Iris remarks, the Postmaster-General made considerable play out of the fact that, if this new Clause were accepted, it would mean increasing the percentage to be paid to 9¼. I quite agree that that would be so, as the situation now stands, but this new Clause was put down with the idea of eliciting further information. It was our idea—and it would have had to have been completed if this new Clause had been accepted—to reduce the standard dividend from £1,865,000 to a comparable figure of £1,200,000. That was the idea behind the Clause. We want to know how much of that £30,000,000 is to go to the cable companies? That in my opinion is the vital question at issue in this matter. The fact is that all the cables, whether they belonged to the private companies or to the Governments were faced with bankruptcy if they continued to stand on their own. We have to remember from first to last in these discussions that the cable companies themselves came pleading to the Government in order to have their assets brought under a common denominator. They were losing money. Their position is similar to the position of the Government. We have received for a capital cost of over £7,000,000, a matter of £2,500,000 in cash. What is the amount with which these nearly derelict cable companies are being credited in this £30,000.000? This
  1804
  point has not been dealt with, and I sincerely hope that we shall be given the figures on this occasion. The Postmaster-General said that there are no guarantees in regard to this 6 per cent. I agree about that, hut the point is, that there can be no reduction in charges until that 6 per cent. has been paid. That is the vital question.
  We have been told in beautiful language by several Members on the Front Bench that the object of this merger and of this Communications Company is to give the nation cheaper communications. It is obvious that these cheaper communications cannot occur until the 6 per cent. has been paid upon this £30,000,000 of capital. Those of us who have followed these developments realise that the great bulk of the revenue is going to come from beam wireless, and yet we do not know how much capital is actually involved in the beam service. The capital of the Marconi Company is £2,227,000. How much capital is involved in the Government beam services? Is it more than £1,000,000? I doubt if it is more than £1,000,000. Let us say that it is £1,000,000. Thus there will be between £3,000,000 and £4,000,000 of capital involved in that part of the communications which is going to provide the revenue in order to pay 6 per cent. It is for that reason that we say that probably £10,000,000 to the cable companies is ample recompense.
  My hon. and gallant Friend the Member for Central Hull (Lieut.-Commander Kenworthy) suggested in his speech that out of that £30,000,000 there would be a matter of £5,000,000 out of which they would have to pay the revenue to the Government for the loan of the beam. But that is not the case. That £30,000,000 is credited absolutely to the private companies, and they simply pay out of their revenues £250,000 to the Government for the loan of the beam service, and they receive after that 6 per cent. on their entire £30,000,000, and not on £25,000,000. In these circumstances, I assert that the country is being flagrantly robbed in this transaction. The users of communications are not going to get the reductions that would have come to them without any doubt whatever quickly and often if these services had remained as they were, or, certainly if the Government had taken

  1805
  charge of the other services, giving some reasonable sum for them. For these reasons, I very strongly support the new Clause.
  Lieut.-Commander KENWORTHY: I will not detain the Committee for more than a moment or two, but as the Postmaster-General could not see his way to allow me to ask him a question, I want to put it in another way. He tells us that, of course, it is quite true the Government have only received the equivalent of an old song for these cables, but that they get £1,250,000 in cash—hard golden sovereigns, clinking sovereigns. Of course, the poor Eastern Telegraph Companies and associates only get worthless paper, something which may be worth 6d. to-day or a £1 to-morrow. That was the tenor of the right hon. Gentleman's remarks. This worthless paper which these people are to get—I do not know how many millions; we are not allowed to know that, whether it is £9,000,000 or 210,000,000 it is impossible to state—but a very substantial amount of the £30,000,000 that will be in the Communications Company will earn, at any rate, a, dividend on its fixed revenue of 6 per cent. That, I say, is guaranteed.
  It is guaranteed in this way. They have a monopoly of all communications. Anyone who wants to send a cable by submarine cable or by wireless must go to these people. They will have an absolute monopoly and will be able to fix their rates with the illusory check of this Advisory Committee. I say illusory, because we do not know who the Advisory Committee are going to be, what their powers are going to be, or anything else. We do not know anything about them. The Advisory Committee, obviously, will look at the amount of capital that is to earn dividends. Such and such a rate for cables and messages will make 5 per cent.; such and such a rate will make 6 per cent. on the amount of capital. That is why the amount of capital is so tremendously important. Apart from the question about this so-called worthless paper, these stocks will be very valuable, and they will be able to squeeze the working until they get a dividend. Therefore, a capital of £20,000,000 is reasonable, and I hope the Committee will agree that it is reasonable.
  1806
  The Secretary of State for Scotland, when he is driven into a corner, falls back upon the Dominions, and he says to us: "How dare you question this bargain? It is an insult to our colleagues in Canada and Australia." Not so the Postmaster-General. He has more sense of humour. He falls back upon Sir Otto Niemeyer and Sir William McLintock. The Postmaster-General is a business man, which I do not claim to be. Let us say that, as a business man, he wishes to buy a factory from me. I tell him that the accounts have been passed and audited by a respectable firm of accountants and that he must take their word for it. Would he want to see the accounts? Would he want to see their signed report? Of course he would. We are not allowed that privilege. We do not see the report. We have the names of Sir Otto Niemeyer and Sir William McLintock given to us, but what they reported is kept secret from the Committee, and we are asked to hand over these valuable public assets to this unformed company, with its unnamed directorate, and with this illusory safeguard.
  Mr. W. BAKER: I should like to make one final remark with regard to the capital. The capital is important not only because it becomes the standard revenue, but because it has a most important bearing upon the future developments in the wireless world. Earlier to-day I quoted from that well-informed journal the "Daily Mail," to show that certain important technical developments are expected at an early date. I would remind the Committee that the hon. Member for the Abbey Division (Mr. Otho Nicholson), in the first Debate we had on this subject, told us that we were likely to find that the wireless companies would make it possible for the world to transmit its messages by wireless. We have had no guarantee and we have been given no undertaking that there will be adequate control so far as these future developments are concerned. It is most important that we should press the Postmaster-General to the utmost of our ability to reconsider his position or, rather, the Government position towards this particular problem. The fact is that the Postmaster-General does not accept this Report, and he is merely acting as

  1807
  a loyal member of the Government in doing his job here to-day. I do not know how the Postmaster-General can expect us to accept something which he and his Department have already rejected. The capital basis for this new undertaking is absolutely without justification so far as we know. We have had no information and no figures to support it, and it might just as well be £10,000,000 or £100,000,000 as £30,000,000. It is only reasonable courtesy that we should be told exactly how the figure of £30,000,000 has been arrived at, and exactly the value which the Government placed upon their assets. If I do not pursue the matter further, it is not because I am satisfied with the statement of the Government.
  Mr. GILLETT: The more I think about the answer which has been given by the Postmaster-General, the less am I disposed to accept it. When you are thinking of a return on capital, you take a certain amount of capital and then you consider the return which the investor will expect to get. According to the Postmaster-General, the process has been reversed in this case, and a sum of money was fixed which, by a happy chance, was discovered to be 6 per cent. on the capital which has gone into the Communications Company, that is, that part of the capital which has gone from the merger into the Communications Company. Supposing it had not been 6 per cent. but only 3 per cent. Would that have made any difference? Supposing it had not been this happy figure of 6 per cent., would there not have been a difference? It seems to me a most extraordinary plea that the Postmaster-General has put forward, because no one would suggest that these people would have left their capital there unless they were going to get about 6 per cent. It is asking a great deal to expect us to believe that these people investigated a sum of money and then were so fortunate as to bring it out at the actual figure that the ordinary investor expects to get. If they had not brought it out at that figure but only at 3 per cent., they would never have agreed to leave their money in. It is impossible to decide this question unless we consider the return that the persons who own the capital expect to get for their money.
  1808
  That point must have been taken into consideration by those who investigated the question. Then, they must have begun to ask what amount of capital these people considered they were transferring to the Communications Company. We find in the Report the following statement:
  "With this object in view, a standard net revenue, representing approximately 6 per cent. on the capital of that portion of the undertaking which is solely engaged in the conduct of communications."
  How was that figure fixed? We are told that it so happened that this mystic figure was 6 per cent. on the capital. How was that capital arrived at? We are not told. How did it come to be £30,000,000? We are not told, and I gather that the Postmaster-General himself does not know.
  Lieut. - Commander KENWORTHY: Are we not to have an answer from the Postmaster-General, particularly on the point as to what part of the capital is represented by wireless and what part by cables?
  Sir W. MITCHELL-THOMSON: I did not desire to be discourteous but the fact is that there has not been a single point raised which I did not attempt to answer in my previous speech, except the point as to the allocation of the return on capital between the wireless and cable interests. The short answer is, that of the capital of the Communications Company the whole of the £30,000,000 is held by the Merger, and the Merger is nothing more than an allocation of interest. It follows, therefore, that speaking generally and without distinguishing between the different classes of Merger shares, the return on that capital of £30,000,000 is appropriated according to the allocation of shares in the Merger Company, and the of shares in the Merger Company is in the proportion of 17 to 36.
  Lieut.-Commander KENWORTHY: It would appear that the Eastern Telegraph Company's share is 52.6 of the £30,000,000 in respect of their assets, compared with the £1,250,000 received by the Postmaster-General for three systems of Government cables.
  Mr. MALONE: Is not the capitalised value of the present revenue of the Beam system £10,000,000? Taking the revenue

  1809
  at £500,000 a year, the capitalised value is £10,000,000. Is not that so?
  Sir W. MITCHELL-THOMSON: The hon. Member is quoting figures, from which he is drawing his own conclusions; but they are quite unauthorised.
  Mr. WELLOCK: Will the Postmaster-General explain what he means by the proportion of 17 to 36?
  Sir W. MITCHELL-THOMSON: The total capital Of the Merger Company is, as stated in the White Paper, £53,000,000, that is, £17,000,000 for wireless and £36,000,000 for cables.
  Question put, "That the Clause be read a Second time."
  The Committee divided: Ayes, 93; Noes, 237.

  Division No. 44.]

  AYES.

  [7.43 p.m.

  Ammon, Charles George

  Hardle, George D.

  Shlels, Dr. Drummond

  Baker, J. (Wolverhampton, Bilston)

  Henderson, T. (Glasgow)

  Shinwell, E.

  Baker, Walter

  Hirst, G. H.

  Slesser, Sir Henry H.

  Barker, G. (Monmouth, Abertillery)

  Hirst, W. (Bradford, South)

  Smillie, Robert

  Barr, J.

  Hudson, J. H. (Huddersfleld)

  Smith, Ben (Bermondsey, Rotherhithel)

  Batey, Joseph

  John, William (Rhondda, West)

  Smith, Rennle (Penistone)

  Beckett, John (Gateshead)

  Johnston, Thomas (Dundee)

  Snell, Harry

  Bellamy, A.

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

  Snowden, Rt. Hon. Philip

  Bondfield, Margaret

  Jonee, Morgan (Caerphilly)

  Stewart, J. (St. Rollox)

  Bowerman, Rt. Hon. Charles W.

  Kelly, W. T.

  Sutton, J. E.

  Brlant, Frank

  Kennedy, T.

  Taylor, R. A.

  Broad, F. A.

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

  Thorne, W. (West Ham, Plaistow)

  Buxton, Rt. Hon. Noel

  Lansbury, George

  Thurtle, Ernest

  Cape, Thomas

  Lawrence, Susan

  Tinker, John Joseph

  Charleton, H. C.

  Lee, F.

  Townend, A. E.

  Cluse, W. S.

  Lowth, T.

  Trevelyan, Rt. Hon. Sir Charles

  Clynes, Rt. Hon. John R.

  Lunn, William

  Vlant, S. P.

  Connolly, M.

  Malone, C. L'Estrange (N'thampton)

  Wallhead, Richard C.

  Cove, W. G.

  March, S.

  Walsh. Rt. Hon. Stephen

  Day, Harry

  Montague, Frederick

  Watson, W. M. (Dunfermline)

  Dennlson, R.

  Mosley, Sir Oswald

  Webb, Rt. Hon. Sidney

  Duncan, C.

  Parkinson, John Allen (Wigan)

  Wedgwood, Rt. Hon. Josiah

  Edwards, C. (Monmouth, Bedwellty)

  Pethick-Lawrence, F. W.

  Wellock, Wilfred

  Garro-Jones, Captain G. M.

  Ponsonby, Arthur

  Westwood, J.

  Gillett, George M.

  Potts, John S.

  Wilkinson, Ellen C.

  Gosling, Harry

  Richardson, R. (Houghton-le-Spring)

  Wilson, C. H. (Sheffield, Attercllffe)

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

  Ritson, J.

  Wilson. R. J. (Jarrow)

  Grenfell, D. R. (Glamorgan)

  Salter, Dr. Alfred

  Windsor, Walter

  Griffiths, T. (Monmouth, Pontypool)

  Scrymgeour. E.

  Young, Robert (Lancaster, Newton)

  Grundy, T. W.

  Scurr, John

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

  Shaw, Rt. Hon. Thomas (Preston)

  TELLERS FOR THE AYES.—

  Hall, G. H. (Merthyr Tydvil)

  Shepherd, Arthur Lewis

  Mr. Paling and Mr. Whiteley.

  NOES.

  Albery, Irving James

  Bullock, Captain M.

  Culverwell, C. T. (Bristol, West)

  Alexander, E. E. (Leyton)

  Carver. Major W. H.

  Curzon, Captain Viscount

  Allen, Sir J. Sandeman

  Cassels. J. D.

  Dalkeith, Earl of

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

  Cautley, Sir Henry S.

  Davidson, Rt. Hon. J. (Hertford)

  Apsley, Lord

  Cayzer Sir C. (Chester, City)

  Davies, Ellis (Denbigh, Denbigh)

  Ashley, Lt.-Col. Rt. Hon. Wilfrid W.

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

  Davies, Dr. Vernon

  Atholl, Duchess of

  Cazalet, Captain Victor A.

  Dawson, Sir Philip

  Atkinson, C.

  Cecil. Rt. Hon. Sir Evelyn (Aston)

  Dean, Arthur Wellesley

  Baldwin, Rt. Hon. Stanley

  Chadwick, Sir Robert Burton

  Eden, Captain Anthony

  Balfour, George (Hampstead)

  Chamberlain, Rt. Hon. N. (Ladywood)

  Edmondson, Major A. J.

  Balniel, Lord

  Charterls, Brigadier-General J

  Elliot, Major Walter E.

  Banks, Sir Reginald Mitchell

  Christle, J. A.

  Ellis, R. G.

  Barclay-Harvey, C. M.

  Churchman, Sir Arthur C.

  Erskine, James Malcolm Montelth

  Barnett, Major Sir Richard

  Clarry, Reginald George

  Everard, W. Lindsay

  Bellairs, Commander Carlyon

  Clayton, G. C.

  Fairfax, Captain J. G.

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

  Cobb, Sir Cyril

  Falle, Sir Bertram G.

  Bennett, A. J.

  Cochrane, Commander Hon. A. D.

  Fanshawe, Captain G. D.

  Berry, Sir George

  Cockerill, Brig.-General Sir George

  Fenby, T. D.

  Bethel, A.

  Cohen, Major J. Brunei

  Fermoy, Lord

  Betterton, Henry B.

  Colman, N. C. D.

  Flelden, E. B.

  Bevan, S. J.

  Conway, Sir W. Martin

  Ford, Sir P. J.

  Blrchall, Major J. Dearman

  Cooper, A. Duff

  Forestler-Walker, Sir L.

  Bourne, Captain Robert Croft

  Cope, Major Sir William

  Forrest, W.

  Bowyer, Captain G. E. W.

  Couper, J. B.

  Foster, Sir Harry S.

  Briggs, J. Harold

  Courtauld, Major J. S.

  Foxcroft, Captain C. T.

  Brittaln, Sir Harry

  Cowan, D. M. (Scottish Universities)

  Fraser, Captain Ian

  Brocklebank, C. E. R.

  Craig, Sir Ernest (Chester, Crewe)

  Fremantle, Lieut.-Colonel Francis E.

  Brooke, Brigadier-General C. R. J.

  Croft, Brigadier-General Sir H.

  Ganzonl, Sir John

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

  Crooke, J. Smedley (Derltend)

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

  Brown, Erneet (Leith)

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

  Goff, Sir Park

  Bull, Rt. Hon. Sir William James

  Crookshank,Cpt. H.(Lindsey,Gainsbro)

  Grant, Sir J. A.

  Greaves-Lord, Sir Walter

  McLean, Major A.

  Savery, S. S

  Grenfell, Edward C. (City of London).

  Macmillan, Captain H.

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

  Gretton, Colonel Rt. Hon. John

  Maitland, A. (Kent, Faversham)

  Sheffield, Sir Berkeley

  Griffith, F. Kingsley

  Makins, Brigadier-General E.

  Shepperson, E. W.

  Grotrian, H. Brent

  Manningham-Buller, Sir Mervyn

  Skelton, A. N.

  Guinness, Rt. Hon. Walter E.

  Marriott, Sir J. A. R.

  Smith, Louis W. (Sheffield, Hallam)

  Hacking, Douglas H.

  Merriman, Sir F. Boyd

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

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

  Milne, J. S. Wardlw

  Southby, Commander A. R. J.

  Hall, Admiral Sir R. (Eastbourne)

  Mitchell, S. (Lanark. Lanark)

  Spender-Clay, Colonel H.

  Hamilton, Sir George

  Mitchell, W. Foot (Saffron Walden)

  Stanley. Lieut.-Colonel Rt. Hon. G. P.

  Hammersley, S. S.

  Mitchell, Sir W. Lane (Streatham)

  Steel, Major Samuel Strang

  Hanbury, C.

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

  Storry-Deans, R.

  Hannon, Patrick Joseph Henry

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

  Stott, Lieut.-Colonel W. H.

  Hartington, Marquess of

  Moreing, Captain A. H.

  Strauss, E. A.

  Harvey, G. (Lambeth, Kennington)

  Morris, R. H.

  Streatfeild, Captain S. R.

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

  Nelson, Sir Frank

  Stuart, Hon. J. (Moray and Nairn)

  Haslam, Henry C.

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

  Sueter, Rear-Admiral Murray Fraser

  Headlam, Lieut.-Colonel C. M.

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

  Sugden, Sir Wilfrid

  Hennessy, Major Sir G. R. J.

  Nield, Rt. Hon. Sir Herbert

  Tasker, R. Inigo.

  Hilton. Cecil

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

  Templeton, W. P.

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

  O'Neill, Major Rt. Hon. Hugh

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

  Hohler, Sir Gerald Fitzroy

  Ormsby-Gore, Rt. Hon. William

  Thomson, F. C. (Aberdeen, South)

  Holbrook, Sir Arthur Richard

  Pennefather, Sir John

  Thomson, Rt. Hon. Sir W. Mitchell.

  Hopkins, J. W. W.

  Penny, Frederick George

  Titchfield, Major the Marquess of

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

  Percy, Lord Eustace (Hastings)

  Tomlinson, R. P.

  Hume, Sir G. H.

  Perkins, Colonel E. K.

  Turton, Sir Edmund Russborough

  Hume-WiIIiams, Sir W. Ellis

  Perring, Sir William George

  Vaughan-Morgan, Col. K. P.

  Hunter-Weston, Lt.-Gen. Sir Aylmer

  Peto, G. (Somerset, Frome)

  Wallace. Captain D. E.

  Hurd, Percy A.

  Pilcher, G.

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

  Hurst, Gerald B.

  Pllditch, Sir Philip

  Warner, Brigadier-General W. W.

  Illffe, Sir Edward M.

  Power, Sir John Cecil

  Waterhouse, Captain Charles

  Inskip, Sir Thomas Walker H.

  Price, Major C. W. M.

  Watson. Rt. Hon. W. (Carlisle)

  Jones, Sir G. W. H. (Stoke New'gton)

  Ramsden, E.

  Watts, Sir Thomas

  Jones, Henry Haydn (Merioneth)

  Rawson, Sir Cooper

  Wayland, Sir William A.

  Jones, W. N. (Carmarthen)

  Rhys, Hon. C. A. U.

  Wells, S. R.

  Kennedy, A. R. (Preston).

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

  Williams, Com. C. (Devon, Torquay)

  Kindersley, Major Guy M.

  Roberts, E. H. G. (Flint)

  Williams. Herbert G. (Reading)

  King, Commodore Henry Douglas

  Robinson, Sir T. (Lanes., Stretford)

  Wilson, Sir Charles H. (Leeds, Central)

  Lamb, J. Q.

  Rodd, Rt. Hon. Sir James Rennell

  Winby, Colonel L. P.

  Lister, Cunliffe, Rt. Hon. Sir Philip

  Ropner, Major L.

  Winterton, Rt. Hon. Earl

  Livingstone, A. M.

  Ruggles-Brise, Lieut.-Colonel E. A.

  Withers, John James

  Locker-Lampson, Rt. Hon. Godfrey

  Russell, Alexander West (Tynemouth)

  Wolmer, Viscount

  Looker, Herbert William

  Rye, F. G.

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

  Lucas-Tooth, Sir Hugh Vere

  Salmon, Major I.

  Wood, Rt. Hon. Sir Kingsley

  Luce, Maj.-Gen. Sir Richard Harman

  Samuel, A. M. (Surrey, Farnham)

  Woodcock, Colonel H. C.

  Lumley, L. R.

  Samuel. Samuel (W'dsworth, Putney)

  Wright, Brig.-General W. D.

  MacAndrew, Major Charles Glen

  Sandeman, N. Stewart

  McDonnell, Colonel Hon. Angus

  Sanders, Sir Robert A.

  TELLERS FOR THE NOES.—

  Macintyre, Ian

  Sandon, Lord

  Captain Margesson and Sir Victor Warrender.

  NEW CLAUSE.—(Duties of Chairman of Communications Company.)
  The Chairman of the Communications Company shall be approved by His Majesty's Government and shall devote the whole of his time to the service of the company and not undertake any other directions or occupations without the consent of His Majesty's Government.—[Mr. E. C. Grenfell.]
  Brought up, and read the First time.
  Mr. E. C. GRENFELL: I beg to move, "That the Clause be read a Second time."
  This new Clause has been put down in collaboration with the hon. Member for Cambridge University (Mr. Withers). I suppose, roughly speaking, that I might be said to represent the capitalism of money and the hon. Member for Cambridge University the capitalism of brains. Since then two hon. Members opposite, who have already taken considerable part in these discussions, have
  1812
  done us the honour of adding their names to the proposal, thereby completing the trio—the capitalism of intelligentsia. With these three together I hope I may be able to give unprejudiced advice to His Majesty's Government and that there will now be none of that acrimony which has been rather a distinguishing feature of the Debate, and the hon. and gallant Member for Central Hull (Lieut.-Commander Kenworthy) will not wish to make any more use of those opprobrious epithets which he told us he learnt when he was in active service in the Navy. In moving this new Clause let me say that I consider the Government will be deceiving themselves if they believe that they will have any real influence or any real control over the Communications Company and its allied companies by having two directors. I have always been against Government control in any shape over commercial companies, but in

  1813
  view of the fact that in peace, and certainly in war, the Communications Company will be as necessary to the Government as the Army and the Navy, I think the Government should have effective control on at least one member of the board. A few days ago we have heard a criticism of directors, as such, by the Prime Minister; and there is much truth in what he said.
  There are two big companies in which the Government by its holding in capital has an interest, and on account of that interest has appointed directors. In the case of the Suez Canal Company it is true that it is a foreign corporation, but the Government has had and has exercised the right of appointing directors on the board. In the case of the Anglo-Persian Oil Company they also have exercised the right of nominating or approving directors, but in those eases it cannot be said that the nomination of the two directors has made it possible for the Government really to know what is going on in these companies. The conception of a director, merely from his name, is that he directs the company; that he has a large share in appointing people; really, that he knows all about the company. Nothing is more fallacious. A director of most companies is a part-time man who serves the company to the best of his ability by giving advice when asked. No one imagines that the director of a big company, especially when he is one of a board of 22, is fully conversant with all that goes on in the company. In the White Paper it is proposed that the Government should approve of two directors, one of whom is to be the chairman of the Communications Company. If that means anything, it means that the controlling figure in that company, the chairman, will be fully conversant with all that goes on. He is part of the executive; the directors are not. He is head of the executive in that he appoints the executive, and has power of dismissal.
  It is essential in this case that the Government should approve or appoint a chairman of outstanding merit, and I feel sure that they will do so. I have not mentioned the ordinary director or criticised him, nor is there anything in the new Clause about him, but only in today's paper I noticed an advertisement of a very large company which is appeal-
  1814
  ing to the public for capital and on the board of directors is a gentleman appointed by a past Government to the post of director on the Suez Canal Company. In this new company which is appealing for capital that gentleman's qualification to become a director of the Ford Motor Company is that he is labelled as being a director of the Suez Canal Company. What do we judge from it? It is this; that that person who is appointed by the Government to one of the directorships for which they have the right to nominate can use his position, or it is useful to him to use the position of Government director in order to get other positions of emolument. In appointing the chairman I hope and feel sure that the Government will be able to procure the services of an eminent and satisfactory man, but I do think that in a concern of this magnitude they should have the right to the whole time of that gentleman. That is to say, that they should have the power of veto over his taking other appointments, and I do not say that they need be appointments which bring him in more emolument. All through history, as we know, too much has been put on the willing horse. We have only to consider the people who have been advising the Government in this matter, and in all matters of difficulty; whether it is Sir William McLintock, Sir Otto Niemeyer, or Sir Josiah Stamp. Many of these men have overworked themselves for no reward at all under a sense of public duty. When the Government have been in a difficulty it has appointed a Royal Commission or a Select Committee and in every case it will be fond that they have over-worked the willing horse by putting him on these various commissions.
  I hold that as regards this company the Government should be very careful, having appointed a man to see that he does not take on such extra burdens, paid or unpaid, which will diminish his power of exercising absolute supervision over the Communications Company and its allied companies. There is nothing derogatory in suggesting that this eminent gentleman should be to a certain degree restrained. I belong to a firm in the City which has a partnership deed similar to many other deeds, and in that deed it is laid clown that no partner shall do outside work or take other occupations except with the permission of the senior partner

  1815
  or his other partners. It is true that they do take on outside work, gratuitous or paid, but they only do so after consultation with their partners. I also know big corporations with which I have been connected, with many directors, where no director can take any other direction without submitting the offer he has received to the other directors and receiving their assent. There is, therefore, nothing derogatory to the man who is appointed to this high position in asking that for the future he should submit to the Government any proposal he may receive and that the Government should have the right of veto. I hope the Government will consider this point. I do not lay it down as absolutely necessary but I think the Committee would like to see it done.
  Mr. WITHERS: I beg formally to support the Clause. I do not think I need add anything to the words of the Mover.
  8.0 p.m.
  Mr. W. BAKER: I hope that the hon. Member for the City of London (Mr. E. Grenfell), who moved this new Clause, will forgive me for having added my name to it. It was felt that it might be a wise precaution for someone on this side of the Committee to indicate our agreement with a Clause which has emanated from such ad influential quarter. I hardly feel that it is necessary for me to try to strengthen the arguments which have been submitted to the Committee, but there are one or two points of importance to which the attention of the Committee should be drawn. If I understood aright, the hon. Gentleman mentioned that there were to be 22 directors. I do not remember having received that piece of information before.
  Lieut.-Commander KENWORTHY: Yes, from the Secretary of State for Scotland.
  Mr. BAKER: I am sorry that I missed it. It seems to me that the provision in the White Paper regarding the directors is altogether unsatisfactory. I understand that the Government are to have a right to approve two directors, who are to be nominated by the cable companies. Why the cable companies, the persons whose business was in such a dying condition that the merger had to
  1816
  be formed, should be regarded as the predominant partner and should be given the right of nomination, and the Government be compelled to accept their nomination, I am at a loss to understand. In reading the current issue of "The Round Table" I have come across a statement which appears to be made on high authority to the following effect:
  "It is fortunate that the Marconi Company has in the end been able to obtain a position of equality in the directorate of the new company."
  I have no knowledge of having heard that statement made to this Committee, and I shall be glad if the Financial Secretary to the Treasury would state when the House was informed that the Marconi Company had secured a position of equality with other interests, so far as the directorate of the new company is concerned. The Mover of the new Clause referred to the Prime Minister's speech on the subject of directorship. I would like to say that the remarks of the hon. Gentleman were very sympathetically received by my hon. Friends. We believe that the hon. Gentleman put his finger on a very grave social ill, and if by supporting this new Clause we can do even a little to improve the position, this discussion will have been worth while.
  I have another reason for desiring to support the new Clause. There have been many rumours with regard to the identity of the person who was to fill this important position. I have heard the salary put at any figure from £15,000 to 45,000 per annum, and if rumour had any basis in fact and the lucky person were to be the gentleman who is so successful in finding glittering prizes and has just secured a very satisfactory sugar plum, perhaps it is not particularly kind on our part to interfere with his desire to increase his income. Nevertheless, I feel that the original note struck by the hon. Member for City of London is one of the things which should govern this position. This Communications Company will be vital to this nation in the event of war. It will hold the key of the situation probably much more than either the Army or the Navy. In those circumstances, we should be wasting the whole of the money which we spend on preparation and defence, if we pass into private hands that key of the situation. There is an unanswerable case to be met. I should like to see the matter taken a

  1817
  good deal further and much stronger representation of the Government secured on the Board, but if we cannot secure more adequate control we are happy to vote for this new Clause.
  Mr. T. GRIFFITHS: I am very pleased that this Amendment has been moved by the hon. Member for the City of London (Mr. E. Grenfell), and I can assure him that he will get all support from this side if he carries his Motion to a Division. The hon. Gentleman mentioned the speech of the Prime Minister in Glasgow on 22nd November. In case those sitting on the Government Front Bench have not read that speech, I shall read a portion of it to help them to come to a wise decision. Two nights previously, when we were discussing this Bill in the House, I used practically the same language as the Prime Minister, when I described the new revolution that was taking place in industry. The Prime Minister said at Glasgow:
  "We are in the midst to-day of an industrial revolution as important as that which occurred a century ago, but of a very different nature."
  My language was that it was a greater revolution to-day than that of a century ago. The Prime Minister went on, in that speech:
  "The end of it no man can foretell. That resolution means incalculable hardship to the men engaged in industry. I would ask you all to hear that in mind if you are ever tempted to judge harshly of impatience on their part or of wild words. The heavy end of the stick at these times falls always on those least able to bear it. They deserve our sympathy."
  The Premier prophesied that British industry would yet prove the most competent and efficient in the world, though the path was hard. He advised them to call on the youth of the nation and the ability of the nation to help them, and added:
  "This is no time for those who are incompetent whatever their age is."
  He then spoke of parasitical directors battening on industry, and said:
  "The country will never watch with tolerance, at a time when hundreds of thousands are being thrown out of work through no fault of their own through the rationalisation of industry, those who hold positions as managers or directors, or those who allocate to themselves the position of a freehold, who will not for the sake of rationalisation remove themselves unless they be bribed to do so."
  1818
  Those are the words of someone who took a very active part in industry in the early days. I would tender the same advice after 40 years experience of industry. I hope the Government will make sure that they get a capable and experienced man as Chairman of Directors of this Communications Company—a man who will devote all his time to the work. We who have been engaged in industry know that from the directorship right down to the foreman, there are always soft jobs found for the sons of directors or of those who have some cash to spend. They are really not capable; they really have no experience to enable them to conduct industry. We read in the Press the names of directors and we find out the number of directorships held by different people in different industries. We know very well that they are not capable of understanding the coal trade, the iron and steel trade, the machine trade, the cotton trade and other industries, all at the same time.
  Look at the list of directorships held even by Members sitting on the Government side of the House. We find that 106 Members hold 568 directorships. I guarantee that not a single soul of them who owns five or six directorships knows anything about industry at all. The only thing they know is the balance sheet, with the profits and the dividends that they take. Therefore I urge the Government to take the advice of the Prime Minister. Perhaps it will give a lead to other people working in other industries. The Mover of this new Clause is an experienced commercial gentleman who has taken a big part in the business of this country. He knows more of the inner working that I do, for I have never been a director. Think of a certain gentleman whom I know. He gets £50,000 a year for being Chairman of Directors of a certain company. I shall not give his name. He is also a director of 13 subsidiary companies, and of the Suez-Canal. For this gentleman to look after the interests of the big company for which he gets £50,000 a year, and also the Suez Canal, and thirteen subsidiary companies is an impossibility.
  I would impress on the Government that thinking working men in the industries of the country know these things even better than some of the people on the other side, and that is what is caus-

  1819
  ing discontent and disturbance in industry to-day. It is because these people whom the Premier described as living on the fat of the land—these parasites—take far more out of industry than those who are producing. I hope the Government will accept the New Clause. If they fail to do so they will turn down their own Prime Minister and they will prove that they are there to look after vested interests in this House and in the country. If they do accept the proposal they will give a lead to industries in the country, so that in the future we shall find suitable, capable and experienced men devoting their time wholly to the industries in which they are concerned.
  Mr. PETHICK-LAWRENCE: I have not taken any part so far in the discussions on this Bill and I intervene only for a few moments. My object is to ask the Government to consider this New Clause on its merits. My hon. Friends on this side have put down a number of Amendments in all seriousness, and with a view to improving the Bill; but I can quite understand that, coming from the Opposition Benches, those Amendments are looked upon by the Government in a party light. The Government, accordingly, have called upon their supporters to vote solidly against those Amendments. This proposal, however, comes from the Government side of the House, and it carries weight, not only because of the position of the Mover and supporter, but because it represents a great feeling among important people in the City and elsewhere with regard to this Measure. The Financial Secretary to the Treasury cannot deny that the terms of the Bill and the whole of this transaction are regarded with a certain amount of uneasiness, if not misgiving, by people who think about these matters. I hope, therefore, they will not lightly reject this proposal. The hon. Member who spoke last said he hoped that we would go to a Division against the Government on this matter. I hope there will be no Division—not because of the New Clause being allowed to lapse without one, but because the Government will see that this is not a matter in regard to which they can oppose the weighty opinion which favours it. I hope the Government will bow to that view and take a reasonable course,
  1820
  viewing this proposal on its own merits, and having regard to the weight of evidence with which it is supported.
  Mr. MALONE: I wish to support my hon. Friend in urging the Government to consider this New Clause. It has the backing of hon. Members in both of the parties which take an interest in this Measure, and I trust that that consideration will weigh with the Financial Secretary. The proposal is a purely non-party one. I would like to go very much further, as I have frequently said in the course of these Debates, but the Government will not accept the Amendments which we propose and, in those circumstances, I am content to support this New Clause. The Mover, as the representative of the City of London, possibly knows a great deal more than any other hon. Member of this House about the business of the City, and much cannot be added to what he has already said. There is, however, one example in the minds of hon. Members which goes to support the reasons for this proposal. The hon. and gallant Member for Central Hull (Lieut.-Commander Kenworthy) called attention the other day to the Anglo-Persian Oil Company. In that company there are two directors appointed by the British Government. A short time ago the company joined with certain other groups to maintain what some of us considered to be an unnecessarily high price for petroleum spirit. When that situation arose we ascertained by question and answer in this House from the Chancellor of the Exchequer that the two Government directors were absolutely powerless to control the policy of the company.
  That is one example out of many which could be given to substantiate what has been said by the hon. Member for the City of London (Mr. E. C. Grenfell). This new Clause would not be necessary if the Advisory Committee which we have so often discussed, had statutory powers. Indeed had the Government told us something about that Committee it might not be necessary to press this matter at all. If we knew who were going to be on the Committee, how it was going to be elected, from whom it would be selected, there might be less need for this proposal. But the Government as the constitution is at present, cannot even appoint two directors to the

  1821
  Communications Company. They can only express an opinion on two directors already nominated by the cable companies. Can the cable companies withdraw these directors at any time? Are they appointed for the ordinary statutory year, or for any fixed period, or indefinitely? Can the cable companies at any period, to use a vulgar phrase, "give them the sack?" Why are the cable companies nominating these two directors and not the wireless company. This is a wireless concern.
  The DEPUTY-CHAIRMAN: I am not sure whether the hon. Member is in order or not in asking these questions, but I am certain that if the Minister attempts to answer them I shall have to rule him out of order.
  Mr. MALONE: Then I content myself with asking one question relating to this new Clause. Is, or is not, the name of Lord Birkenhead being considered as the chairman of this company?
  Mr. A. M. SAMUEL: Before I address myself to the proposals contained in the new Clause, the hon. Member for East Bristol (Mr. W. Baker) may like me to give him the information for which he asks concerning the proportion of directors. If the hon. Member consults the OFFICIAL REPORT, he will find that on 5th December I answered two questtions put to me by the hon. Member for Hillsborough (Mr. A. V. Alexander) on this subject. I do not know if I am in order in dealing with the matter, but if I am allowed to proceed, I shall repeat the substance of the answer which I gave on that occasion. I referred the hon. Member for Hillsborough to Recommendation IV of the Imperial Conference on page 18 of the White Paper, and I added:
  "It is, I understand, contemplated that there would he at the outset 22 directors. 10 nominated by the wireless group, and 12 by the cable companies. Of the latter, two must he approved by the Government, and excluding the Government directors there will be equal representation."—[OFFICIAL REPORT, 5th December, 1928; col. 1226, Vol. 223.]
  Mr. BAKER: In the article to which I have referred, and which is from an authoritative source, the definite statement is made that the wireless and cable interest have now secured equality on the Board. Is there any official confirmation of that?
  Mr. SAMUEL: I cannot give an opinion on the article, as I have not seen it. I can only say what I have already said in reply to the question of the hon. Member for Hillsborough. In regard to the proposal contained in the new Clause, the hon. Member for the City of London (Mr. E. C. Grenfell) asks that the chairman of the Communications Company shall be approved by His Majesty's Government. I have listened most closely to every word which has fallen from the lips of the hon. Member for the City of London, and from those Members of the Opposition who have spoken on this matter, and I would reply at once to hon. Members on all sides. If hon. Members will look at page 18 of the Report they will find that the general arrangements for the transfer of the services provide that the chairman of the Communications Company must be approved by the Government. These general arrangements, as hon. Members will realise, concern the partner Governments as well as ourselves. It would in such circumstances be inappropriate that the appointment or the conduct of the duties of the chairman should be subject to separate legislation in this House as is now proposed.
  Mr. GRIFFITHS: Why should it not?
  Mr. SAMUEL: There are the partner Governments to be considered. The Government, however, are in full agreements with what is conceived to be the motive and intention of the proposed new Clause. There is no doubt that the business of acting as chairman of the Communications Company will necessarily form the main preoccupation of the holder of that important office. The hon. Member for West Leicester (Mr. Pethick-Lawrence) has asked us to consider the proposed new Clause on its merits. We have gone further, and we declare that we are in full agreement with the motive and intention of the Clause. I hope my hon. Friend the Member for the City of London will be content with that expression of opinion and see his way to withdraw the Clause.
  Mr. GILLETT: I do not think the Financial Secretary to the Treasury does agree entirely with the proposed new Clause, because he said that in the main the chairman would be confined to this work, and we think he should be

  1823
  entirely confined to it. One of the points that I should like to have made if I had been called before the Minister was that it seems most important that this gentleman should be in an entirely impartial position. We know that one great industry, namely, the Press, would have very important relations with this Communications Company, and it is most important that the chairman should not be believed to be connected with any section of the Press or dependent upon it. The same thing applies to certain great business interests, and, therefore, I do not think that the reply of the hon. Member, while it went part of the way, is by any means sufficiently defined
  to satisfy us. I entirely support what was said by the hon. Member for the City of London (Mr. E. C. Grenfell), in his most interesting speech, which brought out some very important points, but I think the reply on behalf of the Government was only partial, and it certainly will not satisfy those of us who sit on this side of the House.
  Mr. E. C. GRENFELL: In view of what the Minister has said, I beg to ask leave to withdraw the Clause.
  HON. MEMBERS: No!
  Question put, "That the Clause be read a Second time."
  The Committee divided: Ayes, 105; Noes, 196.

  Division No. 45.]

  AYES.

  [8.32 p.m.

  Ammon, Charles George

  Hamilton, sir R. (Orkney & Shetland)

  Shaw, Rt. Hon. Thomas (Preston)

  Baker, J. (Wolverhampton, Bilston)

  Hardle, George D.

  Shepherd, Arthur Lewis

  Baker, Walter

  Harris, Percy A.

  Shiels, Dr. Drummond

  Barker, G. (Monmouth, (Abertillery)

  Henderson, T. (Glasgow)

  Shinwell, E.

  Barr. J.

  Hirst, G. H.

  Slesser, Sir Henry H.

  Batey, Joseph

  Hirst. W. (Bradford, South)

  Smillie, Robert

  Bellamy, A.

  Hudson, J. H. (Huddersfield).

  Smith, Ben (Bermondsey, Rotharhithe)

  Berry, Sir George

  John. William (Rhondda, West)

  Smith, Rennle (Penistone)

  Bowerman, Rt. Hon. Charlie W.

  Johnston, Thomas (Dundee)

  Snell, Harry

  Briant, Frank

  Jones, Henry Haydn (Merioneth)

  Snowden, Rt. Hon. Philip

  Broad, F. A

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

  Stewart, J. (St. Rollox)

  Brown, Ernest (Leith)

  Jones, Morgan (Caerphilly)

  Strauss, E. A.

  Buxton, Rt. Hon. Noel

  Jones, W. N. (Carmarthen)

  Sutton, J. E.

  Cape, Thomas

  Kelly, W. T.

  Taylor, R. A.

  Charleton, H. C.

  Kennedy, T.

  Thorne, W, (West Ham, Plaistow)

  Cluse, W. S.

  Lansbury, George

  Tinker, John Joseph

  Clynes, Rt. Hon. John R.

  Lawrence, Susan

  Tomlinson, R. P.

  Connolly, M.

  Lee, F.

  Townend, A. E.

  Conway, Sir W. Martin

  Livingstone, A. M.

  Trevelyan, Rt. Hon. Sir Charles

  Cove, W. G.

  Lowth, T.

  Viant, S. P.

  Cowan, D. M. (Scottish Universities)

  Lunn, William

  Wallhead, Richard C.

  Dalton, Hugh

  Maclean, Neil (Glasgow, Govan)

  Walsh, Rt. Hon. Stephen

  Davies, Ellis (Denbigh, Denbigh)

  MacNeill-Weir, L.

  Watson, W, M. (Dunfermline)

  Dennison, R.

  Malone, C. L'Estrange (N'thampton)

  Webb, Rt. Hon. Sidney

  Duncan, C.

  March, S.

  Wedgwood, Rt. Hon. Josiah

  Fenby, T. D.

  Montague, Frederick

  Wellock, Wilfred

  Garro-Jones, Captain G. M.

  Morris, R. H.

  Westwood, J.

  Gillett, George M.

  Paling, W.

  Whiteley, W.

  Gosling, Harry

  Pethick-Lawrence, F. W.

  Wilkinson, Ellen C.

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

  Ponsonby, Arthur

  Wilson, C. H. (Sheffield, Attercilffe)

  Grentell, D. R. (Glamorgan)

  Potts, John S.

  Wilson, R. J. Narrow)

  Griffith, F. Kingsley

  Richardson, R. (Houghton-le-Spring)

  Windsor, Walter

  Griffiths, T. (Monmouth, Pontypool)

  Ritson, J.

  Young, Robert (Lancaster, Newton)

  Grundy, T. W.

  Salter, Dr. Alfred

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

  Scrymgeour, E.

  TELLERS FOR THE AYES.—

  Hall, G. H. (Merthyr Tydvil)

  Scurr, John

  Mr. Allen Parkinson and Mr. Charles Edwards.

  NOES.

  Albery, Irving James

  Bowyer, Capt. G. E. W.

  Christie, J. A.

  Alexander, E. E. (Leyton)

  Briggs, J. Harold

  Churchman, Sir Arthur C.

  Allen, Sir J. Sandeman

  Brittain, Sir Harry

  Clarry, Reginald George

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

  Brocklebank, C. E. R.

  Clayton, G. C.

  Atkinson, C.

  Brooke, Brigadier-General C. R. I.

  Cobb, Sir Cyril

  Balfour, George (Hampstead)

  Brown, Col. D. C. (N'th'I'd., Hexham)

  Cochrane, Commander Hon. A. D.

  Balniel, Lord

  Bull, Rt. Hon. Sir William James

  Cockerill, Brig.-General Sir George

  Banks, Sir Reginald Mitchell

  Bullock, Captain M.

  Cohen, Major J. Brunel

  Barclay-Harvey, C. M.

  Carver, Major W. H.

  Colman, N. C. D.

  Barnett, Major Sir Richard

  Cassels, J. D.

  Cooper, A. Dun

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

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

  Couper, J. B.

  Bethel, A.

  Cazalet, Captain Victor A.

  Courtauld, Major J. S.

  Bevan, S. J.

  Cecil, Rt. Hon. sir Evelyn (Aston)

  Craig, Sir Ernest (Chester, Crewe)

  Birchall, Major J. Dearman

  Charteris, Brigadier-General J.

  Croft, Brigadier-General Sir H.

  Crooke, J. Smedley (Derltend)

  Hurst, Gerald B.

  Russell, Alexander West (Tynemouth)

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

  Illffe, Sir Edward M.

  Rye, F. G.

  Crookshank, Cpt. H. (Lindsey, Gainsbro)

  Inskip, Sir Thomas Walker H.

  Samuel, A. M. (Surrey, Farnham)

  Culverwell, C. T. (Bristol, West)

  Jones, Sir G. W. H. (Stoke New'gton)

  Samuel, Samuel (W'dsworth, Putney)

  Curzon, Captain Viscount

  Kennedy, A. H. (Preston)

  Sandeman, N. Stewart

  Dalkeith, Earl of

  Kindersley, Major Guy M.

  Sanders, Sir Robert A.

  Davidson, Rt. Hon. J. (Hertford)

  King, Commodore Henry Douglas

  Savery, S. S.

  Davies, Dr. Vernon

  Lister, Cunliffe-, Rt. Hon. Sir Philip

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

  Dawson, Sir Philip

  Little, Dr. E. Graham

  Shepperson, E. W.

  Dean, Arthur Wellesley

  Locker-Lampson, Rt. Hon. Godfrey

  Skelton, A. N.

  Dixey, A. C.

  Looker. Herbert William

  Smith, Louis W. (Sheffield, Hallam)

  Edmondson, Major A. J.

  Lucas-Tooth. Sir Hugh Vere

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

  Elliot, Major Walter E.

  Luce, Maj.-Gen. Sir Richard Harmon

  Southby, Commander A. R. J.

  Ellis, R. G.

  Lumley, L. R.

  Stanley, Lieut.-Colonel Rt. Hon. G. F

  England, Colonel A.

  MacAndrew, Major Charles Glen

  Steel, Major Samuel Strang

  Erskine, James Malcolm Monteith

  McDonnell, Colonel Hon. Angus

  Storry-Deans, R.

  Everard, W. Lindsay

  Macintyre, Ian

  Stott, Lieut.-Colonel W. H.

  Fairfax, Captain J. G.

  McLean, Major A.

  Streatfeild, Captain S. R.

  Falle, Sir Bertram G.

  Macmillan, Captain H.

  Stuart, Crichton-, Lord C.

  Fanshawe, Captain G. D

  Maitland, A. (Kent, Faversham)

  Stuart, Hon. J. (Moray and Nairn)

  Fermoy, Lord

  Makins, Brigadier-General E.

  Sugden, Sir Wilfrid

  Ford, Sir P. J.

  Manningham-Buller, Sir Mervyn

  Tasker, R. Inigo.

  Forestler-Walker, Sir L.

  Margesson, Captain D.

  Templeton, W. P.

  Foster, Sir Harry S.

  Marriott, Sir J. A. R.

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

  Foxcroft, Captain C. T.

  Merriman, Sir F. Boyd

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

  Fraser, Captain Ian

  Milne, J. S. Wardlaw

  Thomson, Rt. Hon Sir W. Mitchell.

  Fremantle, Lieut.-Colonel Francis E.

  Mitchell, S. (Lanark, Lanark)

  Tinne, J. A.

  Ganzoni, Sir John

  Mitchell, W. Foot (Saffron Walden)

  Vaughan-Morgan, Col. K. P.

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

  Mitchell, Sir W. Lane (Streatham)

  Wallace, Captain D. E.

  Goff, Sir Park

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

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

  Gower, Sir Robert

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

  Warner, Brigadier-General W. W.

  Grant, Sir J. A.

  Moreing. Captain A. H.

  Warrender, Sir Victor

  Greaves-Lord, Sir Walter

  Nelson, Sir Frank

  Waterhouse, Captain Charles

  Grotrian, H. Brent

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

  Watson, Rt. Hon. W. (Carlisle)

  Hacking, Douglas H.

  O'Neill, Major Rt. Hon. Hugh

  Watts, Sir Thomas

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

  Ormsby-Gore, Rt. Hon. William

  Wayland. Sir William A.

  Hall, Admiral Sir R. (Eastbourne)

  Pennefather, Sir John

  Wells, S. R.

  Hamilton, Sir George

  Penny, Frederick George

  White, Lieut.-Colonel G. Dairymple

  Hammersley, S. S.

  Percy, Lord Eustace (Hastings)

  Williams, Com. C. (Devon, Torquay)

  Hanbury, C.

  Perkins, Colonel E. K.

  Williams, Herbert G. (Reading)

  Hartington, Marquess of

  Perring, Sir William George

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

  Harvey, G. (Lambeth, Kennington)

  Peto, G. (Somerset, Frome)

  Winby, Colonel L. P.

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

  Pitcher, G.

  Winterton, Rt. Hon. Earl

  Headlam, Lieut.-Colonel C. M.

  Pilditch, Sir Philip

  Wolmer, Viscount

  Hennessy, Major Sir G. R. J.

  Price, Major C. W. M.

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

  Hilton, Cecil

  Ramsden, E.

  Wood, Rt. Hon. Sir Kingsley

  Holbrook, Sir Arthur Richard

  Rawson, sir Cooper

  Woodcock, Colonel H. C.

  Hopkins, J. W. W.

  Rhys, Hon. C. A. U.

  Wright, Brig.-General W. D.

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

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

  Hume, Sir G. H.

  Roberts, E. H. G. (Flint)

  TELLERS FOR THE NOES.—

  Hume-Williams, Sir W. Ellis

  Robinson, Sir T. (Lanes, Stretford)

  Major Sir William Cope and Major

  Hunter-Weston, Lt.-Gen. Sir Aylmer

  Rodd, Rt. Hon. Sir James Rennell

  The Marquess of Titchfield.

  Hurd, Percy A.

  Ropner, Major L.

  Preamble agreed to.
  Bill reported, without Amendment.
  Motion made, and Question proposed,
  "That the Bill be now read the Third time."
  Mr. AMMON: We now come within a short distance of the passing of this Bill on to the Statute Book, and we must make one final attempt to wrest the attention of the Members of the House and of the country to what is happening in this sacrifice—
  Mr. SHINWELL: On a point of Order. May I ask whether, in view of the fact that there does not appear on the Order Paper any reference to the Third Reading, it is in order to proceed with that stage?
  Mr. DEPUTY-SPEAKER (Mr. Dennis Herbert): It is perfectly in order. The Bill appears on the Order Paper, and the Committee stage having been concluded, and the Bill reported without Amendment, it is quite in order to take the Third Reading.
  Mr. SHINWELL: If no reference appears on the Paper to the Third Reading, and if the reference is confined to the Committee stage of the Bill, I submit, with great respect, that this is not the time to proceed with the Third Reading.
  Mr. DEPUTY-SPEAKER: It is the recognised procedure of this House that the Third Reading can be taken when a Bill is reported without Amendment.
  Mr. AMMON: I was saying that this is the last opportunity which we shall

  1827
  have of discussing this Bill before it goes on to the Statute Book, and it is necessary, even if we cannot get Members on the other side of the House to vote for its rejection, that certain things should be said, and should find their place in the records of the House, because they will certainly be required in the immediate future, and should stand in evidence against those who have so betrayed the public in this matter. The difficulties and the importance of the Bill have been shown very largely by the endeavours that my hon. Friends have made to bring out how very much more is implied in the Bill than is represented in its terms. This Bill, after all, is the first link in a very much longer chain which will be forged outside this House, and there will be little or no opportunity for Members then to discuss its implications and bearings. This is the beginning of the handing over of a very large public interest and service to a private capitalist enterprise, a matter without precedent, probably, in the history of this country. It is not unknown for the nation to take over large public concerns and businesses because they have been found to be of public concern and interest, and to run them. It is, however, entirely new—or at any rate a very rare thing—for the Government to hand over great public enterprises in order that they might be exploited by private interests as against the public good.
  It is rather remarkable to observe how history has repeated itself, for in everything concerning the communications of this country, whether they be postal, telegraphic, telephonic or, as in this case, wireless, there has always been a certain amount of wirepulling and suspicion, not to say charges of financial jugglery and bad dealing behind the scenes. I was interested, in turning up the report of this House for as long ago as 1895, to observe how history has repeated itself to a remarkable extent. The father of my hon. Friend the Member for North Aberdeen (Mr. Benn) played a conspicuous part in the Debates on that occasion when the House was concerned with the transfer of the National Telephone Company to the Post Office. It is worth while remarking that the Liberal party were differently constituted then from the Liberal party nowadays, for they stood
  1828
  up for public interest as against private interests, even though it were against their own Government. It is germane to what is happening just now that in March, 1895, Mr. John Williams Benn, afterwards Sir John Williams Benn, moved for an appointment of a Select Committee to consider a draft agreement between the Postmaster-General and the National Telephone Company. The Motion, which was hotly discussed, was carried by this House. There was then precisely the same condition of affairs as has been indicated by my hon. Friend the Member for East Bristol (Mr. W. Baker) in some of the speeches which he has made during the discussions for which he has been chided by hon. Members.
  A good deal of what is known as "rocketing" of shares of the Telephone Company occurred on the Stock Exchange, and the father of the hon. Member for North Aberdeen took very much the same line that has been taken by my hon. Friend the Member for East Bristol and showed the House how the shares had been manipulated and juggled, and how prices soared up when it was seen that something was to be gained at the expense of the Exchequer or the public service. Very much the same sort of discussions took place in the House then as have taken place to-day, and hon. Members on the opposite side of the House then expressed their indignation that any hon. Members should dare to suggest that any such thing could happen. They said "Are we not all honourable men?" The sequel was shown when following the report of the Select Committee, the business was transferred to the State—a reversal of what is happening in this case—because it had fallen into such a condition that it was a crying scandal. When this transaction took place a Conservative Minister said that the whole business was a disgusting financial ramp. That was the verdict given on that occasion, and the Tory party were then, as now, implicated in the handling of a public service. A writer of that day said:
  "Throughout, the Report the Select Committee"—
  that is, the Select Committee which reported in 1898—

  1829
  "suggests that the National Telephone Company does exercise, or is liable to exercise, in a manner contrary to public policy, its power to refuse supply and to give preferential subscription rates."
  That is the very position which the passing of this Bill is going to bring about with regard to the new Communications Company—the power for them so to create a monopoly and to corner this service that they will have a complete hold, and can ignore the larger public interests, which a publicly owned concern is bound to consider. They can run this business as they like, in the interests of a few, as long as they get their margin of profit. All through this Debate it has been consistently pointed out that there is no safeguard whatever in this Bill for the public interest—none whatever. The Communications Company itself is a mythical company. The price to be paid is unknown. None of the safeguards is worth anything. Again and again Ministers have taken refuge behind the White Paper, that is, the Report of the Imperial Conference, and when they have been pressed they have again taken cowardly shelter behind the suggestion that we have been attacking the Dominions or other representatives of the Empire. They know full well that in point of law and in fact that White Paper is worth no more than the paper and print of which it is composed. If any question of legality should ever arise, the Judge will be concerned only with the words of the Bill itself, and the Bill itself has no safeguards whatever in these particular respects.
  Again it is worth noting how history is repeating itself, and it is not inappropriate that I should quote a paragraph from the report of the Select Committee issued in 1898, which report resulted later in the transfer of the National Telephone Company to the State:
  "Under the peculiar conditions (or freedom from conditions) of its licence the Company has an obvious reason for limiting the number of its subscribers. As subscribers upon an exchange increase, the cost of the service increases so much that a point is at last reached at which an increased number of subscribers fails to repay the additional cost. The Company, unlike the Post Office from which it receives its licence, has power to refuse service and thus to pick and choose its subscribers, and thereby to limit their number, and in doing this it is materially assisted by the grant of extensive areas, which afford a wide choice of the most remunerative sub-
  1830
  scribers, and at the same time go far to protect it against competition. As the number of subscribers on an exchange is thus restricted, the number of exchanges within an area must in consequence be increased. The cost of thus sending a message through two or three exchanges and over the junction wires has of course to be paid for by somebody, and it is paid for in the disguised form of a larger annual subscription. Under A scheme of smaller areas than those which have in fact been allotted to the Company the wires which connect such exchanges would in most instances have been Government trunk wires, directly producing a revenue to the Post Office."
  That was the position of the National Telephone Company prior to the service being taken over by the Post Office. That, also, was the position of the cable companies prior to the establishment of the beam wireless system. It is proposed now to hand the whole of these communications back to those companies and we shall no doubt revert to the old condition of affairs, for there is no safeguard to prevent this, at least for 25 years.
  What are the facts we have tried to put before the House? Until the establishment of the beam service the cable companies were running their services at a prohibitive rate. They were not giving the best service, but they had such a complete monopoly that they could afford to do absolutely what they liked. Then came the working of the beam service, after it had been adopted by the Labour Government. The result of that was at once not only to increase the telegraphic and telephonic communications between this country and the Dominions by the beam but immediately to cause a fall in cable rates; and by that method further business was in turn attracted to the cable companies. That business has grown, and the cry the cable companies have now set up is really based on the fact that their restricted and privileged position has been abolished by virtue of the establishment of the beam service. They have so influenced the Government, and other Governments, that at last they have managed to get this affair wholly into their own hands, with the result that we are undoubtedly faced with a reversion to the old condition of affairs.
  Let hon. Members bear in mind—a point which was confirmed by the Secretary of State for the Dominions the other day—that this is not a fight of yesterday, this is not a campaign which began with

  1831
  the introduction of this Bill. This has been going on for the last 17 years, at the very least. The records of the Imperial Conference will show that all along certain interests which will be in the Communications Company and in the merger have seen the possibilities of wireless, and have schemed and intrigued and gone to all sorts of lengths, which have been more freely exposed in some of the Colonial newspapers, in order to get hold of this particular service. Again and again over a period of years, right down to 1923, the imperial Conference has come down on the side of those who say that this service must be nationally owned and nationally controlled. That view has always been maintained, so much so that all the Departments of the State in this country have subscribed to it, and have sent up a resolution to that effect confirming this decision to the Imperial Conference.
  The Postmaster-General told us that certain things had taken place which had caused the Imperial Conference to change its mind. One knows what happens after there has been a good deal of intriguing in all the countries concerned, and, without imputing any connivance on the part of those in this country, one knows the manner in which financial interests work and influence certain affairs and manage to get their own way. After a lapse of years, these people found the Government and others subject to certain pressure, with the result that this Bill has been brought before us. This question has been brought before this House in such a manner as to give to the people's representatives and the country a minimum of information as to what is going to be done in order to make these arrangements operative when these powers have been granted.
  I put it to hon. Members that there seems to have been a tremendous change since years ago this country was concerned about the good name of this House being linked up with a financial ramp. We are all aware of the result of the decision which brought the telephone system over to the State. We all know that the Pacific Cable dealt with in this Bill is really only the shadow, and that the substance is contained in the other services which contain the value which these com-
  1832
  panies hope to secure. Neither this House nor the Postmaster-General has any hold whatever over these companies. I hope hon. Members opposite have observed the significance of the fact that time and again the Post Office have been challenged and told that they are not in agreement with these proposals, and we have not had that statement officially contradicted. But the Post Office is concerned with this matter; that is the department which is responsible, and I think it would be interesting to know what is the real view of the Postmaster-General in regard to this particular business.
  It is no good repeating arguments, but it is worth while noting that one particular organ of public opinion has stated that it was a pity that the Debates on this Bill had been so one-sided, and that it was not a good thing to leave all the arguments to the Opposition. That is not the least grave aspect of this question. In the Press cuttings which I have seen of former Debates on this subject they have come mostly from the syndicated Press, and, generally throughout the country, it is apparent that the same hand has been concerned in issuing those reports giving their own particular impressions of the Debates. To that is going to be added the very grave danger that in addition to the controlling of the Press you are going to place the supplying of news into the hands of a few people. How grave that matter may turn out I will leave to the imagination of hon. Members. This arrangement of things at the present time may be to the advantage of hon. Members opposite, but they may find that it is possible it will be a boomerang which will recoil on their own heads. Powers such as those which are conferred under this Bill can be used to a very great extent in rigging the market for Stock Exchange quotations by unscrupulous people. There are no guarantees in this Bill to protect us against anything of that kind, and those are some of the dangers to which the country is going to be exposed. Therefore, I think I am justified in saying that the opposition which has been put up to this Bill has been none too strong, because we can see its implications and possibilities.
  9.0. p.m.
  By way of an anti-climax, I come down to the point concerning the staffs which

  1833
  Will be transferred. In this, as in other things, no guarantee has been given, and no definite promises have been made. There is no reason whatever why assurances should not have been made part and parcel of this Bill, so that the staffs who will be displaced might have some guarantee as to their position in the future. For that argument we have ample precedents. In the Telephone Transfer Act of 1911 there were certain clauses concerning the right of the transferred staff so far as superannuation and other matters were concerned. If those responsibilities are imposed upon the State when it takes over a private concern, why is it that the State does not demand similar guarantees to those who will be affected by the passage of this Bill. With regard to a guarantee of this kind, we have not been able to get any promise at all, and' there is nothing to show that, when the Communications Company is set going and the merger is completed, these people who entered the service of the State on the expectation that it will be a life service, are not likely to find themselves in very great difficulties. It has always been the practice to give compensation to those who are displaced by changes of this sort.
  I think there ought to be a guarantee to these officers to the effect that if they do not feel inclined to take service with an outside company they should be compensated for the loss of their appointments. I hope we shall get some further satisfaction on these particular points. I will conclude, as I began, by pleading that hon. Members should look at this question as one which transcends all party differences, and involves the integrity and honour of this House as the guardians and custodians of the public service. We are handing over without any guarantee a public service which is not a losing but a successful service, and we are handing it over to the unsuccessful competitors because they have lodged the complaint that their private interests are being injured. The Government are prepared to sacrifice the public weal and the public interest in order that private ends may be served.
  Mr. W. BAKER: When I first introtroduced this subject, my critics referred to my suspicions, and I doubt very much whether anyone would regard the word
  1834
  "suspicion" as being adequate to meet the case at the present moment. I have listened as carefully as I could to what the Government have to say in the very limited defence which has been put forward, and I very much regret to say that it is my considered opinion that the Government have had to cloak their weakness behind a very undignified silence. My hon. Friend who has just spoken has referred to many of the defects in this Bill. I have not had a long experience, and cannot compare this Bill with many others, but it does seem to me that the striking thing about this Measure is what it omits rather than what it contains. Taking the last point which my hon. Friend made, with regard to the staffs, the Assistant-Postmaster-General, towards the end of our deliberations on Friday, said that the staffs employed in connection with this work were civil servants, and, consequently, they had security of status. I believe that it was quite an unintentional mistake which the Noble Lord made, but the fact remains that there are very many men who are not established, who have not the status of civil servants—
  Viscount WOLMER: Only about 50. The Postmaster-General has given his pledge that not one of them will lose his appointment.
  Mr. BAKER: I cannot now refer to the Post Office Estimates, but at the bottom of the page, dealing with cable ships, will be found a note to the effect that a fairly considerable number are being made unestablished as time goes on.
  Viscount WOLMER: The Post Office will still employ cable ships.
  Mr. BAKER: Still, to a much more limited extent. [HON. MEMBERS: "Why?"] No doubt the Assistant-Postmaster-General will tell the House why. In my view, however, the Government should have made provision for the staff before this proposal was placed before the House of Commons. The Government should have made the necessary arrangements for the contracts before this Measure was introduced, and it is altogether unsatisfactory that the House of Commons is compelled to commit, itself in the dark, while the interested private persons are holding their hands

  1835
  until they know exactly in what position they will find themselves. The cable companies, admittedly, found themselves in a difficult position because of the great success of the Government beam stations. It is admitted that the cable companies, having built up enormous cash reserves out of a business which was made possible by large Government subsidies, told the Government that they were unable to continue in business against the Government's beam service, and it is alleged, I know not with what truth, that those fortunate private companies, which had received such large sums of money in subsidies, threatened to sell their undertakings to our most formidable foreign competitor. I regard that sort of conduct as worthy of the most severe and definite condemnation.
  This is what mystifies me. Instead of the Government regarding the action of the cable companies as reprehensible, they have showered every advantage upon those companies in return for the action which was taken. The Postmaster-General told us to-day that the interests in the new concern will be divided in the proportion of 17 wireless to 36 cable. That means that these dying concerns, which threatened to pay off their shareholders and transfer or scrap their plant, are being given the dominant position in this new Communications Company, and that, despite the announcement which I read to-night, and of which the Financial Secretary said he had no knowledge, that the wireless interests have secured 50 per cent. of the control on the directorate, these cable companies will still have a position to which they are not entitled in any possible circumstances.
  Let us look for a moment at the finance of the matter. Going into this fusion are Government cable assets, the Government's wireless assets, the private cable companies' assets, and the private wireless assets. The Government's assets come in at cost less depreciation, which means an extremely low figure. The cable companies' assets come in on the basis of shareholders, and I regard that anomaly as worthy of notice in passing. But, whether the cables be owned by the Government or by the private companies, it is quite certain that that was not the rising side of the business. When, however, we come to the wireless side, while
  1836
  the undertakings again are taken in on the basis of shareholders—in this case a basis which has been greatly inflated by persistent manipulation for some period—those wireless interests, which have a very great and promising future before them, are being placed in a position of parity with the cable companies.
  I consider that it is impossible for any man to foretell the wonderful future that is before the wireless industry. I believe that the quotation which I gave to-day from the "Daily Mail," and the forecasts of the hon. Member for the Abbey Division of Westminster (Mr. Otto Nicholson) with regard to the future of wireless, are no exaggeration. My greatest regret in regard to this Measure is that, so far as one can tell, it gives no eye to the future, it makes no provision for new developments, for new inventions, and for new undertakings; and, if the developments are up to our expectations, the Government are not willing to take the necessary precaution to govern the issue of new capital. The Government have sheltered themselves a great deal, during the course of these Debates, behind the Dominions. I have heard many references to the great Dominions during these discussions; but a very important and influential writer, to whom I will refer again in a moment, writing in the current issue of the "Round Table," says—
  "It remains true that the scheme "—
  that is to say, this scheme—
  "in its essential features, will stand or fall by the decision of the British Parliament."
  That I believe to be the position. I am inclined to think that there has been a great deal of mystery about the origin of this Imperial Conference. It is amazing that the private interests were able to get off the mark so quickly, and to call an Imperial Conference to deal with this problem before, I think it is true to say, any of the four Government beam stations had been in operation for a complete year. The Postmaster-General was able to announce in the House of Commons, on the 19th December, 1927, that the Government proposed to call this Imperial Conference, and on the 21st February the Prime Minister made an announcement in the House with regard to it. It is amazing that it was possible to take such a prompt decision with regard to this matter and to call an Imperial Conference in such haste, having regard to the

  1837
  very short experience that everyone had had with regard to beam stations. The fact is, however, that, before the beam wireless services had had anything like an opportunity of proving to the cable companies how dangerous they were to their business, the interests behind the cable companies—and this, after all, is the burden of my story—were so powerful that they were able to persuade the Government to resort to this method of an Imperial Conference. I believe, as I said in my original speech, that to find the explanation of the present situation we have to look at the linked directorships and the linked companies, banking, financial, electrical, insurance, newspaper; and, when you have examined the way in which the companies concerned shared directors with the most influentia houses in the City of London, and with the most influential newspapers in many places, I think you will begin to get a clue to the problem which confronts us.
  That brings me to one of the influences that it is necessary to mention, because it is not particularly obvious. The report of the Imperial Conference definitely recommended that external telephony should be excluded from the operations of this merger. I sincerely hope it is the policy of the Postmaster-General to resist the demands that are being and will be made to secure that international telephony is transferred to the Communications Company on the ground that the Communications Company are the only people who can do it satisfactorily. It is already being stated that the Postmaster-General cannot undertake this service and cannot conduct it so efficiently as it would be conducted if it were transferred to the other interests and telephony were passed over the beam from the beam stations. I hope that position is going to be resisted, but I am not very hopeful about it, because I believe all these influences, which are so powerful because of the linked relationship between the financial, newspaper and other interests, are operating in such a powerful way that it is almost impossible to keep touch with them. I have here a book called "The Round Table," which professes to be an impartial non-party publication of the highest possible standard, a publication in which men do not sign their names,
  1838
  because of the very high position they hold and because of their impartial attitude towards social problems. I may be mistaken, but I am inclined to think I am correct in my conclusion when I tell the House that the December issue contains a most important article entitled "Imperial Communications," which not only reviews the whole of this problem from the point of view of the Communications Company, but goes on to demand that this problem of external telephony shall be transferred from the Past Office. It says:
  "The last recommendation of the Conference is that the Post Office should be allowed to reserve the right to conduct the external telephone service of Great Britain. This concession to official obstruction may be of political but has no practical justification."
  When I read the "Round Table" I think of certain very nice studious gentlemen, and I am prepared to accept the utterances of the Round Table as coming from such sources, but when I remember that important gentleman who has been referred to in other Debates, who is a director of the company that arranged this merger and is said to have been connected with this movement from its inception, I begin to wonder exactly how far we can rely upon publications of that character even when their general reputation is good. In the "New Statesman" of 31st March, 1921, there was a statement that a writer in the London Press who persistently attacked the English State telephones was working from the office of the American Telegraph and Telephone Company in New York. This is a matter in my view of first-class importance. We are in the position to-day of being not only defeated but very heavily defeated. We may have been wrong in certain unimportant details, but I claim that on the broad principles underlying our opposition we have been right. In bringing my remarks to a, close and ending my opposition to the Measure, because no further opposition is possible, I assure the House that our opposition has been based entirely upon a desire for the public good, and we believe that hon. Members will live m discover that our opposition was justified and that it would have been in the best interests of everyone concerned had a different decision been taken.
  Captain CROOKSHANK: I wish to express the deep resentment, silent though it may have been, that many of us on these benches have felt at the way the Opposition has conducted itself during this Debate. From the innuendoes and accusations which have been flung about one would have supposed that the Bill, instead of being based, as it is, on the very concrete foundation of the unanimous agreement of an Imperial Conference, was founded on a manure heap. It is incredible to hear the statements that have been made by hon. Members opposite. I am certain that, if in two or three months' time they should read again the speeches they have made, they will regret that they have taken the opportunity to insult all sorts of people who could not possibly defend themselves, whereas if they had had any conceivable grounds for making the remarks they did make against His Majesty's Ministers they had a perfectly proper Parliamentary method of doing it. This Measure is one which, to anyone who has read the report of the Conference, is quite clearly a great advance from the Imperial point of view, because we have had representatives of all the Dominions here agreeing, as anyone may see in the final words of the Report, after an exhaustive test of all the factors which, obviously this House has not been able to go into, that the scheme outlined provides the best solution for the problem which we all admit is one of the first importance to this Empire.
  There are only two real points, apart from abuse, in the Opposition case. They are, first of all, the objections with regard to the fact that no contract has been produced for examination by the House, but they would have been the first to complain, quite properly, on constitutional grounds if a contract had been offered by the Government disposing of property before the matter had been before the House. Secondly, there has been a great deal of talk with regard to the price—and certainly some of the speeches that have been made have given us most extraordinary views as to the price at which property should be sold—and complaint because the Postmaster-General himself has not been in a position to tell us what transpired within the Conference. That kind of criticism is quite worthless, because everyone knows that, whether it is a Cabinet Committee
  1840
  or an Imperial Conference Committee, it is impossible for the members to disclose publicly the information that is given in confidence. For that kind of talk to come from the present Opposition is even more fantastic when one remembers that, in the time of their Government, they not only did not disclose to us what occurred within their Cabinet, quite properly, but they omitted, in the case of the Russian Treaty, to keep their own Cabinet informed from hour to hour of what was transpiring within its own counsels. I think all on these benches who have listened and hon. Members below the Gangway who have supported the Measure, have felt deep resentment at the kind of accusation made during the Debate, and we all feel, as the report of the Imperial Wireless and Cable Conference says, that:
  "Our recommendations will, we believe, establish this service on a firm foundation, lead to its development and provide for its administration in a manner well calculated to bring to the communities which it is its function to serve, all the benefit which naturally flow from a rapid, cheap and efficient system of communications."
  It is because we feel that, that we have supported the Measure through all its stages, and we wish it well in future.
  Mr. WELLOCK: In spite of what the hon. and gallant Member for Gains-borough (Captain Crookshank) has said, I must say that what has transpired during these Debates, and the facts which have been produced have certainly done much to create a certain amount of disquiet in my own mind. I say that sincerely, because I am extremely uneasy in regard to the situation as I see it. I have watched events in America and have witnessed the growing power of finance in politics, in education and even in religion, and the more I follow events in my own country, the more I see we are going in the same direction, although I hope we shall never go to the lengths that financial power has gone in America.
  When we come to examine the figures, it may be that we are yet in ignorance—perhaps unavoidably—though I thank the Postmaster-General for having ultimately given us more figures than we had. I believe if he could have given us the figures sooner, he would have done so. Nevertheless, I think it is lamentable that we should have three or four days' Debate on the Second

  1841
  Reading and in the Committee stage of the Bill without being given important figures. We have learned only within the last hour or two that the amount of money allocated to the Cables Company is £20,000,000. The simple facts are that the Government assets in cables, which are extremely valuable, are to be sold for £2,500,000 all told. On the other hand the cables of the private companies are, like our own cables, in a position that is threatened with bankruptcy, and we have also to remember that the cables are coming into the merger on the understanding that the Government beam wireless shall come into their possession. In these circumstances, faced with bankruptcy, as are also the Government assets in cables, the Cables Company are being credited with £20,000,000 of assets, and they are to have the power to draw 6 per cent. on that £20,000,000. I cannot see the justice of that position. As far as I can see, the country is being robbed in regard to this transaction, and I fail to see how we can guarantee to the public a gradual cheapening of the rates of communication under the terms that have been made.
  Furthermore, I deprecate the fact that if we have been asked not to cavil at the agreement that has been made, we have been asked to accept the decision of the Conference simply because that Conference was an Imperial Conference and we had not complete charge of its deliberations. We have our responsibility to the people of this country just as the members of the different Dominion Governments are responsible to their people. I can imagine that when a similar Bill comes before their Parliaments, they will be spoken to as we have been spoken to here. I hope that the Labour Members of those various Parliaments will be as critical in regard to this matter as we have been in this Parliament. I can quite understand that if the position has been brought before those Parliaments by the Minister responsible, he will probably have said that they were helpless, as the decision was an Imperial decision, and probably he will have gone on to say that Great Britain was the "big noise" in the transaction.
  I want to say a word in regard to the directorate and to remind the House of what takes place in the coal industry.
  1842
  The miners are very disquieted in regard to the sale of coal from a parent company to a subsidiary company, which is really the same company acting in another capacity. For example, you have a coal company that sells coal to itself as a by-products company, and it is impossible for the miners to ascertain just what price is being paid for that coal. Are we going to be in a similar position in regard to this directorate which is the same directorate for dual companies? It is the same directorate which will act for the merger as for the Communications Company, and is it not possible under this arrangement; for there to he some lack of control, and for the Communications Company to be in a position to pay much larger sums for its various commodities and requirements than ought to be the case?
  In looking up the report of the Royal Commission which sat in 1917, I find this statement:
  "At no distance date the nationalisation of the private cable companies will become one of the most urgent problems before statesmanship."
  A writer in the Encyclopedia Britannica, dealing with this subject, makes the following statement:
  "It appears difficult, if not impossible, to attain the desired cheapening of cable communications without interfering with the rights of the private companies."
  I think, especially after the Debates of the last, few days, that sooner or later we shall all he brought to the same conclusion to which this writer has come. I, personally, look forward to the time when the country will awaken to the unjust bargain that has been made, as I believe, by the Government. I do not accuse the Government of having acted in any way dishonestly in this matter. That is a suggestion that has never teen in my mind, but what I do feel is that finance in this country is gaining an increasing hold and is gaining more power than many of us like to realise, and is, perhaps, unconsciously exercising much greater influence in various aspects of our national life than many of us desire to see. I feel we have here an example of what capitalism may do. We are faced with this simple fact, that whereas in the future the greater part of the earning power of this Communications Company is to be vested in an amount of capital that can only he represented

  1843
  by about £3,000,000, it will have to produce dividends for inflated capital already in the Marconi Company, and also to provide dividends for the money that belongs to the cable company, in circumstances which ought to be set on one side. In these circumstances, I fail to see how the bargain that is being made can be a success, or can achieve the aims which are desired, namely, a gradual cheapening of the service. Therefore, I oppose the Third Reading of the Bill.
  Mr. SHINWELL: The hon. and gallant Member for Gainsborough (Captain Crookshank) professed to be disturbed by the manner in which the Opposition had stated its case. Of course, he would have stated it much better, and no doubt when he is on these benches after the next General Election, speaking on behalf of the Opposition, he will he able to put up a case in a much more kindly fashion than he appears to think the case has been put up against this proposal. The hon. and gallant Gentleman spoke about innuendos, insults and harsh treatment accorded to the right hon. Gentleman on the Government bench, but there is nothing so harsh, insulting or injurious as the disposal of State property in the circumstances in which this property is to be disposed of. It is much more injurious and insulting to rob the community of future benefits than it is to say alleged unkind things to right hon. Gentlemen and their associates. We are faced in this proposal with a quite simple issue. It is a matter of the disposal of State property. We on this side oppose any proposal of that character on principle. We are opposed to State property of a useful character being sold to private interests. Of course, we recognise at the same time that right hon. Gentlemen and hon. Gentlemen on the other side are prepared to dispose of State property of whatever character. They would sell the Post Office, lock, stock and barrel to-morrow if they could get the price they wanted, and if the opportunities were provided. [HON. MEMBERS: "Hear, hear!"] We have had approving cheers from the other side in response to that suggestion. Nothing can suit us better than those cheers. It is just as well for the community to know that the Tory party are prepared
  1844
  to dispose of communal property to their own friends when it suits their particular purpose. Perhaps hon. Members on the other side had better have restrained themselves, and not have applauded so hastily in view of what the community may have to say about kindred matters at the next political time of asking. At all events, we on this side oppose this proposal, as I say, on broad grounds of principle.
  What is the essential principle that guides us in this matter? As I see it, it is the question of whether important, essential communications of a world-wide character, fundamental and of vital importance to the whole British Empire—and I hope that the right hon. Gentleman the Secretary of State for the Dominions will take notice—are to be retained in the hands of the various Governments, or to be left unfettered and unrestricted in the hands of private interests who have only one primary concern—it is not a principle, but just a concern—and that is to amass private profit. That is the long and short of the question. There has been some talk of the need for restraint, the need for subdued language in this connection. I do not propose to be in the least mealy-mouthed about this matter. There is no occasion for it. In my judgment, it is a mere ramp, nothing more or less. It is a very great scandal. I am not suggesting that right hon. Gentlemen on the Government Bench are implicated in a conspiracy, directly, knowingly, consciously implicated in a conspiracy. I would never think of such a thing, and no one on these benches has made any such suggestion as far as I can gather. What we say is that they have lent themselves to a conspiracy, a financial conspiracy—perhaps not consciously, and perhaps with an element of ignorance—which has not Empire or national needs in view, but merely private ends.
  The hon. and gallant Gentleman the Member for Gainsborough, who came to the assistance of the Government in a somewhat belated fashion, and who broke the silence—a most amazing thing to happen—has based his case against the Opposition on the ground that the Imperial Conference had made recommendations. That is an amazing argument to present at this time in this House. Are we to understand that the

  1845
  Government are always prepared to accept recommendations of an important and representative Conference? Clearly, that question must be replied to in the negative. For the Government in the past four years, since their inception, have unhesitatingly and without reserve, without any qualification whatever, turned down the recommendations of very important Conferences in respect of vital matters concerning the well-being of the whole nation. It is not inappropriate to put on record the fact that a very important Commission known as the Samuel Commission made recommendations in respect of a vital national industry. D, hon. and gallant Gentlemen on the other side or right hon. Gentlemen speaking from the Front Bench say: "An important Conference has made recommendations; therefore we must accept them"? Far from that being the case, they turned up their autocratic and plutocratic noses at these recommendations. It is not for hon. Gentlemen opposite, least of all to come forward at this time and argue, because an important Conference has presented these recommendations, that with out protest, without, opposition we must, forsooth, accept them. The hon. and gallant Gentleman had better take a few weeks' leisure and study the question somewhat more closely, and then he may emerge with a much more reasoned argument in support of this amazing proposal.
  My last point is this. I have not paid the close attention to this Debate that other hon. Gentlemen have done, but I have attended during the discussion occasionally, and I have noted one very peculiar fact—that the right hon. Gentleman the Postmaster-General—I hope he will forgive me for saying it—has been rather subdued. He has not been open. He has not shown the candour which was characteristic of him when he was merely an hon. Member in this House and not sitting on the Front Bench. He has spoken of himself as the unhappy Postmaster-General. We have not sought unhappiness for him. So far as we can gather, it is not of his own making but rather of the making of those who sit beside him on the Front Bench. I am amazed that so courteous a right hon. Gentleman as the Secretary of State for Scotland should do anything to bring displeasure and unhappiness to the heart
  1846
  and mind of the Postmaster-General. That is a fact that must be put on record and emphasised. It is a very strange thing that the right hon. Gentleman could not reveal all that he felt about this proposal. He has not done so, and, therefore, there is an element of mystery attaching to the whole suggestion. That being my view, I desire, in company with other hon. and right hon. Members on the Opposition Benches, to register my strong protest, first, against the disposal, as I believe and as we believe, the unnecessary disposal, of State property to private interests, and the abandonment of our claim to the possession, as we believe the full and necessary possession, of important world communications which are in the interests of every person living within the Empire.
  Mr. HARDIE: In dealing with the Third Reading of the Bill, it is not necessary to go back over the ground which we have covered, and the reasons for the Bill. To-night we have had a demonstration emanating from the other side by the hon. Member for the City of London (Mr. E. C. Grenfell), who moved a new Clause, showing that, at least, one Tory Member thought there was something wrong in what was being done. When I heard the speech of the hon. Member and I recalled his interest in financial affairs, I began to wonder why he had moved the new Clause, because I recalled the speech which he made in 1926 when we were dealing with the Electricity Bill and the Financial Clause which was brought into this House from Committee upstairs. Since the hon. Member's speech I have sought information from outside, and I have discovered that he is a partner in Morgan, Grenfell and Co., which is the London house of J. P. Morgan, of New York. That firm's business seems to be chiefly to finance the General Motor Corporation of America. I have been watching this matter for some time, and I have noticed that there has been keen competition between the General Motor Corporation of America and Henry Ford's motor-car industry. A good many hon. Members will have read from time to time of the great fight that took place in regard to finance between the General Motor Corporation of America and Henry Ford, and the results. Probably, when the hon. Member for the City of London put his New

  1847
  Clause down, he had hopes that it would have been discussed last week, but the persistent opposition to the Bill by the Labour party prevented his New Clause coming on as soon as was anticipated. It was evident to-night that the whole object of his attack was upon Sir John Davis, of the Suez Canal Commission, who was used as the horrible example.
  Mr. SPEAKER: I would remind the hon. Member that we are now on the Third Reading of the Bill, and he must not refer to what happened on an Amendment in the Committee stage.
  Mr. HARDIE: Surely we are entitled on the Third Reading to take a conspectus of the Bill, and I am now dealing with the question of the chairmanship.
  Mr. SPEAKER: On the Third Reading the hon. Member is entitled to refer to what is contained in the Bill and what it is intended to do.
  Mr. HARDIE: What is contained in the Bill, broadly. I am dealing with one point contained in the Bill, that of the directorship. I am now dealing entirely with the point which refers to directorships. The example which was given tonight was used to show the great danger that can come from leaving a man free, when he holds the position of Chairman, to do other things than the work which he was appointed to do. It is in that connection that I am speaking of Sir John Davis, who was used as a horrible example to show why the Government should accept the hon. Member's New Clause. We have discovered that Sir John Davis has been lending his name to the Ford Motor Company's business. Was the New Clause put on the Paper in order that the General Motor Corporation Trust might have a slap at the other concern in this country If it was wrong, as the hon. Member for the City of London said, that a chairman should have other connections; if it was wrong that after being appointed chairman by the Government he should use his influence to do other things, I maintain that it is wrong for an hon. Member of this House to do what the hon. Member for the City of London sought to do to-night. When the hon. Member began his speech I thought that there must be some reason for it, because he has not spoken in this House in a democratic way until tonight.
  Mr. SPEAKER: I must remind the hon. Member that this has nothing what ever to do with the Third Reading of the Bill.
  Mr. HARDIE: I was dealing with the point in relation to the chairmanship, which is the most important thing in the Bill. The Government will carry the Bill with a big majority. It is a combined theft, laying the foundation for a greater continuous robbery by the use of that which belongs to the nation now. We are selling to a company which is not in existence. That shows how far unscrupulous manipulation can go. For these reasons, I oppose the Third Reading of the Bill.
  Mr. GILLETT: I understand that the hon. Member for Gainsborough (Captain Crookshank), complained of the way in which the Opposition have conducted the Debate. His complaint ought to be directed to his own Ministers. For three days, with great ingenuity, right hon. and hon. Members on the Government Front Bench have created in our minds the impression that they were desirous of giving us as little information as possible on any subject. The Secretary of State for Scotland has made one or two speeches during the course of our discussions, but he gave no information. The Postmaster-General has given very little, and the only Member of the Government who has offered information to any extent has been the Assistant Postmaster-General, and he usually gave more than he intended. As an illustration of the way Ministers have answered questions, let me point out that I put a number of questions to the Financial Secretary and all that the hon. Member did in reply was to read a page of the Report of the Royal Commission: a page which I had been reading and upon which I wanted some information. If the Government choose to keep hack information it is not surprising we should think that there is something they want to keep back. With all clue respect, if I had been in charge of a Measure of this kind I should have thrown every possible piece of information on the Table and said "These are the terms upon which we suggest the sale of Government property, these are the reasons, and you can see any of the documents which have brought us to this conclusion." That is the only way in which this House could fairly come to a definite

  1849
  conclusion on the matter. The Government have refused to give this information, and the hon. and gallant Member opposite has only his own leaders to thank for anything that is said on this side of the House.
  We are fully convinced that something is being hidden which we ought to know. I do not suggest that the right hon. Gentleman is trying to swindle, but there is an impression that there is something which we ought to know. When you look into the way the sale has been completed two great facts must be remembered. The first is the price given for Government undertakings and, secondly, the price which the private companies have got. I ask hon. Members opposite to go quietly and carefully into these figures and see what the State has got for the State concerns and then compare it with what the directors have got for their concerns. A million or two million pounds covers all that the Government have obtained. When you look into the terms of which the private company is going to get, a veil is drawn over the proceedings; the deal is shrouded in mystery in order that we may not know what goes to Marconi, where we can understand a high price would be paid for what is a really valuable asset. But this is hidden from us and the impression is left that a large sum of money has gone to the cables. Everything the Financial Secretary said in opening the Debate was to indicate that the cables were played out, they had had their day, that the beam had superseded the cables. If that is so, that is a reason why you should not give a high price for private cables. I can understand that the amalgamation of these concerns brings an added value to everything that goes in, and I agree that you must have an amalgamation, but I do not agree with the reason given by the Secretary of State for the Dominions for not having a public concern.
  10.0. p.m.
  It is impossible to argue what might have happened at the Imperial Conference if there had been a Government representing those who sit on these benches, who would have insisted on control by the State. It is impossible to say what the Dominions would have said, but I feel sure that Australia, where by one share a majority of the shares are owned by the State, would not have
  1850
  offered any strong opposition. I do not attach much importance to the opinion of the Government on that question, because I think His Majesty's Government must be the deciding factor. When you pass from that it comes to this, that the question is decided by His Majesty's Government. It is not our view; that ends that question. Now the Government asks us to agree to the sale of Government property and I say that we are left with an unsatisfied feeling of not knowing what has been paid and feeling convinced that those interested in private concerns have done very well. We are under the impression that the Government has not looked after British interests in cables. I confess that I know little more about the matter even after three or four days' debate than I knew at the beginning. If right hon. Gentlemen opposite are pleased with that then they can congratulate themselves upon it, but as far as the country is concerned, the great mass of working men will think that as that information is refused something is being hidden. That is why the Government have been so foolish in the policy they have pursued.
  Mr. TOWNEND: I only rise to reiterate what has been previously stated by hon. Members on this side of the House, that the most significant factor of the Debate has been the deliberate omission of the Government to reply to questions submitted to them. I have endeavoured to get definite information, which certainly is in the possession of the Government, on two questions, one respecting the control which is vested in the new board, and how it may operate to the detriment of the consumer. The capital over which the merger will be responsible is divided under two heads—£30,000,000 for the Communications Company and £23,000,000 for the manufacturing side. I want to know what control the Government is exercising; and I have become more apprehensive after the new Clause moved by the hon. Member for the City of London (Mr. E. C. Grenfell). Despite all that has been said with regard to the appointment of two directors I think they will have very little weight in the operations of this company once these interests are handed over. The point I am concerned with

  1851
  is how effective the conditions laid down in the White Paper are going to be when the same directors are controlling not only the communications side, but also the manufacturing side; how the division of the profits over and above the 6 per cent. is going to eventuate to the benefit of the consumer in a reduction of rates. By a process of manipulation those who handle capital may be able to divert everything above 6 per cent., which might go to the consumer, to the manufacturing side. What control are the two representatives of the Government on the Board going to exercise to prevent such manipulation? We have had no answer to that, and unless the Government give us some reply we are bound to suspect, despite all assertions to the contrary, that in handing over this tremendously potential wealthy beam wireless we are playing into the hands of the capitalist interests and are being parties to what has been described as a ramp.
  Another point upon which we have had no reply is this. I submitted to the Postmaster-General, and to the Assistant Postmaster-General, a question with regard to the compensation for those who will be disturbed. We had a reply from the Postmaster-General that, as far as the established civil servants were concerned, he was ready to guarantee their security of tenure. He went further and said that, as far as un-established members of the Civil Service were concerned, they would be retained within the Service. But following this merger there is another section of those who may be disturbed, and as to these there was put to the Postmaster-General a question that I repeat to-night. I refer to the staffs connected with the other units in the merger. There are the staffs of the cable companies whose future is likely to be endangered as a result of this combination. What are the Government prepared to do in respect of those sections of the staff who are attached to the various telegraph and cable companies who may be disturbed or dismissed?
  The Postmaster-General is quite entitled to speak on behalf of his staff and to give us an assurance regarding them. It may be that the Secretary of State for Dominion Affairs, when he replies, will say that, while that
  1852
  can apply to the staff of the Postmaster-General, the Government have no part or parcel in what any private enterprise may do as a result of this merger. I suggest, however, that the question of the Government's responsibility to members of private staffs has already been determined. As was said on Friday last, when other mergers have been considered by this House, the Government have imposed upon the parties to the merger the responsibility for compensating anyone who otherwise would have been guaranteed security of tenure. Will the Government give a definite reply on that subject to-night? If contracts are entered into in future they must be entered into with the permission of the Government, and when they are entered into, they should contain a Clause which will offer the same securities or compensation as was offered in the case of the railway servants when the Railways Act was passed, and to other workers when the Electricity Supply Act was passed.
  Lieut.-Commander KENWORTHY: I wish to reinforce what the last speaker has said about the staffs. This is the most extraordinary state of affairs I have seen in this House on a Bill of this kind. I have been here a good many years, and I have seen a great many similar Bills passed. In all cases provision was made for the staffs. The Railways Act, the Electricity Supply Act, and other Acts have each and all contained something relating to the staffs. The Secretary for Scotland and the Postmaster-General are like a man who is trying to persuade a lady to elope. He will promise anything she likes, but he will put nothing in writing. I have always been told that if a case goes to law, the Judge will not allow evidence to be put in of what Ministers have said in this House; they base their judgment only on what is in an Act. Nothing has been put into this Bill on this subject. Does the Secretary of State for Dominion Affairs, who is to reply, think that the promises already given are worth anything at all?
  This is the first Bill on which I have had the pleasurable duty of paying attention to the Secretary of State for Scotland—I not being a Scottish Member—and I understand why some of my Scottish friends are A little wild, politically. The right hon. Gentleman the Secretary

  1853
  for Scotland told us that no effort would be spared to secure a just settlement for the staff. Then the Financial Secretary to the Treasury told us that the Government were determined to do their utmost to adjust an acceptable proposition, and that they intended to do all that lay in their power to see That the transfer was not accompanied by a worsening of the position of the employés. Next we had the Assistant Postmaster-General, who declared that no unestablished man would be displaced and that every established man would preserve his rights. I raised the matter of the cable ships and their crews. I find in the Revenue Department Estimates that there are two cable ships, the "Monarch" and the "Alert," with a large number of men on board-148 altogether—and there is a footnote which says:
  "As many of these crews as possible will be replaced by unestablished staff, at trade rates, as vacancies occur."
  We have had an assurance that these men are to be looked after. Then, I ask, why was nothing put into the Bill about it? I am afraid the reason is—
  Mr. SPEAKER: The hon. and gallant Member says there is nothing in the Bill about it. He cannot now ask for anything to be put into the Bill.
  Lieut.-Commander KENWORTHY: I know that, but I ask the Secretary of State for Dominion Affairs what will be the position of these men when the Bill is passed, and especially what will be the position of the 300 Marconi Company employés If he says that, while the Government can look after civil servants they cannot look after the employés of private companies, I wish to inform him that in 1912 an amalgamation took place between the Western Union Telegraph Company, the Anglo-American Telegraph Company, and the direct United States Cable, and there was a special provision that the staff should not suffer. I think I can show exactly what has happened in the present case. This Conference met, and before, during, and after it, negotiations took place with the representatives of the private cable companies. It was necessary to make a bargain. If you Mr. Speaker, or I, have property to sell, we do not go to the dealer and begin by saying that we are forced to sell this property. That is the worst way of
  1854
  proceeding; but, in this matter, the Government made up their minds and expressed their intention, at all costs, not to adopt the only sensible solution.
  That solution was for the Government, having the beam—financially the most valuable part of the communications of the Empire—and having, I believe, a majority, of the miles of cable, to have taken over the Eastern Telegraph Company and the associated companies at a fair price and to have combined the whole thing into one public corporation managed and controlled by the Post Office. But they allowed it to become known that, at all costs, they intended to hand over the whole thing to private enterprise. That tied their hands from the beginning and they were forced to take the terms which the cable companies dictated. That is my reconstruction of the crime. At the beginning they ought to have had an inquiry into the whole position of the communications, by cable and wireless, instead of this secret Conference at which only picked witnesess—witnesses for the prosecution were called—and no witnesses for the defence were heard. Professor Eccles and other experts who could have been called upon were not called upon, and only directors, managing directors, advising engineers and so forth of the private companies were called. That is why we say that this business is inequitable, unjust and unfair to the community.
  I do not accuse Members of the Government of making anything out of this. I am not so crude as to do that. I do not believe they are, but, if they had been on this side of the House, and we had been on the other side, what would they have said about such a transaction? What did they say before the War over the Marconi business? Do hon. and right hon. Gentlemen forget all about that affair? They were not quite so mealy-mouthed. But there is no question of personal corruption, and there never was any such question. But they looked after their friends. At all costs private enterprise was bolstered up, and the only private interests concerned, the cable companies and the Marconi Company, were allowed to make their own terms. They know how to govern, and how to govern in the interests of their friends—not their personal friends, but the directors and shareholders of the private companies.

  1855
  I hope the Colonial Secretary is not going to follow the example of the Secretary of State for Scotland and fall back on the Dominions saying, "Oh, we must not say anything about this, because the Dominions were a party to it." I wonder if the Secretary of State for Scotland has ever heard Dr. Johnson's definition of patriotism. He always falls back on the Dominions. There is one consolation that I have in this affair, and that is that the way it has been arranged and what went before it have made it far easier for the mischief done to be undone by some future Government. We have a very good precedent for what we will pay for property in the future. The fact that watered capital has been allowed as I think will be acknowledged by all who have heard the discussions—[HON. MEMBERS: "No!"] If £20,000,000 for cables which were losing money is not watered capital, I should like to have some other definition. The fact that watered capital was allowed of will be allowed into this Communications Company cannot blind future Parliaments to what this company actually paid for Government cables, and it is on that basis that we will buy hack the whole thing.
  The SECRETARY of STATE for DOMINION AFFAIRS (Mr. Amery): One of the real difficulties throughout the series of Debates on this Bill has been that the speeches from the benches opposite have been based throughout on misapprehension, and have not had the slightest relation to the facts of the situation. They were delivered, many of them, in an atmosphere of sheer delusion as to the origin of this business, as to the methods of the Government, and as to the actual effect of the Measure before us. One of these misapprehensions, which I should like to remove at the outset, is as to the character of the Bill itself. This is not a Bill to embody all the recommendations of the Imperial Conference. It is an enabling Bill, giving the Government power to sell the Pacific, the West Indian and the Imperial cables when and if all the other conditions recommended by the Report are adequately fulfilled.
  Mr. J. JONES: Why are they not in the Bill?
  Mr. AMERY: Because it is obviously unnecessary to put in a Bill things that are done, not by legislation, but as matters of ordinary administration. Questions of staff and of other matters concerning the transfer will be dealt with in detailed contracts which will, all of them, in so far as they affect this Government, be presented to the House.
  Mr. RENNIE SMITH: When does the right hon. Gentleman propose that the details shall be laid, before the concessions are made or after?
  Mr. AMERY: As soon as the contracts are made. The general policy has been very fully discussed before the House, and it is not a rule that contracts are made in detail by legislation before they are earned out in the ordinary way as administrative acts. Matters such as the constitution of the Advisory Committee which can only be settled after discussion between the Governments concerned obviously could not be put into this Bill. But let me come to the main delusion that has been underlying this Debate. The whole of the arguments addressed to the House have been this, that the Government, hating public ownership, loving private enterprise, bitterly disappointed at the fact that the publicly-owned beam service was competing successfully with the privately-owned cables, were determined before they left office to wreck a successful experiment in public ownership and to hand over, at a wholly inadequate figure, great public assets to their private friends.
  All this talk of ramp, of robbery of the public, all these phrases that we have heard to-night—and what the right hon. Member for Aberavon (Mr. Ramsay MacDonald) said the other day was on the same basis; he said that the cable companies fell upon evil days, that the beam service, owned by the Government, gave the Government possession of the key of the whole situation—the suggestion is throughout these speeches, that in view of that fact, private interests in the cable services, feeling themselves hit, squealed to the Government, and, in the words of the hon. Member for North Camberwell (Mr. Ammon) at last influenced the Government, and of the hon. Member for East Bristol (Mr. W. Baker) actually called the Conference into being. That

  1857
  is a picture which bears not the slightest relation to the facts of the case. In the first instance, the beam services are not Government-owned. Every beam service has two ends, and its success depends on the working of the whole beam service, including both ends, and in every case, while one end of the beam service may have been Government-owned, the other end was privately-owned.
  Mr. W. BAKER: I have heard the Secretary of State for the Dominions make that statement before. Will he explain to the House what took place to prevent Government ownership occurring at both ends of the beam? Will he tell us how the Australian service was controlled, what happened in South Africa, in Canada, in India, and what control existed over the rates?
  Mr. AMERY: I intend to deal briefly with the matters under discussion; I had not intended dealing with any criticism of the action of other Governments in their own sphere of administration. At any rate, the beam service, as a service, is not a Government-owned service. Its success was attributable, not to Government ownership, nor to private ownership, but to the fact that it was a new and efficient development of science. The cable services were not private either. The Eastern Telegraph system was private, but the Pacific cables, the Imperial cables and the West Indian cable were Government-owned, and the cry for help arose, not from the privately-owned cable companies, but from the Government-owned cables. It was because of the competition of the beam with the Pacific cable, in the first instance, that the Government of Canada suggested in November of last year that the Conference should be called together to consider this whole problem. What was the problem which the Conference had to consider? It had to consider the fact that, left to unregulated competition, the beam service by its much greater cheapness might put the cables out of action altogether. On the other hand, the beam service is not to-day in a position, from the point of view either of Imperial defence or of Empire commerce, wholly to replace cables, because of the element of certainty and secrecy in cables which cannot be replaced, and it would have been a disaster to the Empire if the cable
  1858
  services of the Empire had been put out of action, or sold for a song to foreign competitors.
  Mr. BENN: Who proposed to sell them to foreign competitors?
  Mr. AMERY: I hope that I may be allowed to go on. That line was not recommended by the Conference. They looked at other solutions, and they found that none of them would secure either economy, efficiency, or development, and, therefore, they came to the conclusion that the essential thing was to have a single, unified administration, which would get the fullest use out of the beam, and yet should not have any financial interest in putting the cables out of action, but would still carry on the cables and make the best possible use of the two services working together as one system from the point of view, not of financial competition, but of technical efficiency. The hon. Member for East Bristol (Mr. W. Baker) asked why that system could not have been made a State system—that is, I suppose, a system owned by the various States in the Empire, for nobody would suggest that the British Government here should own all the services in the Dominions. The other Governments in the Empire have for some years definitely made no their minds not to run wireless services as Government institutions.
  It is true, as the hon. Member for North Camberwell (Mr. Ammon) said, that the Imperial Conference in 1911 did recommend State-owned wireless stations, and it is true that after the War in 1921 a general resolution to the same effect was passed, with the qualification by Australia that the Commonwealth must decide as to the methods by which she would co-operate. In the following year Australia decided to co-operate through the medium, not of Government ownership and administration, but of a private company, in which the Government held a majority interest, and on the board of which they were represented. The example of Australia was followed by South Africa, by Canada, by India; in each case, and on their own authority, acting within their perfect rights to decide their own manner of dealing with these things, they preferred the method of giving a licence to a private company.

  1859
  By the time the Imperial Conference of 1923 met, the system suggested in 1911 of a chain of State-owned wireless stations had gone by the board; and there was no question at the last Imperial Wireless Conference either of inducing the Governments concerned to go back on their policy and establish a system of State-owned wireless, or of going yet further and buying up for the different States the privately-owned cable companies, many of which, indeed, over a considerable extent of their operations, touch foreign soil and also serve to transmit messages to foreign countries. Therefore, what the Conference recommended was a scheme which, if I may use their own words was
  "(a) to secure as far as possible all the advantages to be derived from unification of direction and operation; (b) at the same time to preserve for the Governments concerned control over any unified undertaking which may be created, so as to safeguard the interests of the public in general and of the cable and wireless users in particular; and (c) to secure these desiderata, at the minimum of cost to the Governments concerned."
  I submit that the scheme which the Conference agreed upon, and which everyone of the Governments represented at the Conference has now accepted does carry out these desiderata. It is not a scheme for the transfer of Government-owned property into private hands—very far from it. While direct Government working is for the time being suspended in the case of the British beam, and while certain cables jointly held by the Governments are being transferred to the new undertaking, on the other hand, a much larger cable system and an equally large beam system are brought under a measure of control to which they have never before been subjected. Therefore, we have got, or shall have when this is carried through, over the whole Empire a system which, while it enjoys the advantages of unity of administration, flexibility and, I believe, the efficiency of private administration, is also going to be under effective Government control and under effective safeguards.
  Hon. and right hon. Gentlemen opposite ignoring the fact that this is purely an enabling Bill, have complained all through that the recommendations of the Report with regard to the Advisory Committee are not put into the Bill. The
  1860
  Bill is not the place, but the Government's intention is undoubtedly to carry out in the very fullest sense those recommendations with regard to the Advisory Committee—that it is to have absolute powers, as the Report recommends, in regard to any proposed increase of existing rates, and also with regard to the allocation of the funds which become available for rate reduction. Those are very large powers indeed. In addition to that, the Report sets forth in great detail, which I need not read at this late hour, a number of things which should be provided for, that is to say, provided for in the contract with the company and provided for in the constitution of the Advisory Committee when the Governments concerned set it up, on which the Advisory Committee have got to be consulted. Hon. Members pressed several times for information on the point as to whether certain cables might be discontinued for purely financial reasons when for reasons of Imperial safety it might be better to retain them. That is expressly referred to in the Report in connection with the Atlantic cables.
  Mr. BENNBut we were told by the Postmaster-General it was going to happen.
  Sir W. MITCHELL-THOMSON: No.
  Mr. AMERY: The Postmaster-General gave some reasons why it was not improbable or impossible that it might happen, but it is also perfectly clear that that is one of the questions on which the opinion of the Advisory Committee will have to be taken, and in connection with which they will carefully weigh how far, under the new system with the cable and the beam in the same hands, it is or is not desirable in the public interest that an old second cable should or should not be discontinued.
  Mr. RENNIE SMITH Mr. RENNIE SMITH rose—
  Mr. AMERY: I really must be allowed to explain the situation as I see it. Those powers having been given definitely to the Advisory Committee, they will be embodied in any contracts with the company before anything is handed over. The Committee will always have behind it the power of the Governments concerned to continue the licences issued to the Communications Company upon which the power of that company to earn any money

  1861
  absolutely depends. I say that the scheme to which the Government are committed, and to which all the other Governments of the Empire are committed, is one which secures effective public control in the matters of interest which concern the public, and it also secures that control over a far wider area than any control that has been exercised before; while, on the other hand, it concedes to private business administration the actual detailed conduct of the scheme. That is the direction in which I thought modern Socialism is tending. That is Government control leaving the actual working in the hands of business corporations.
  There is another misapprehension, and it is the idea that we are conscious or unconscious instruments of a ramp, and that we have made the other Governments of the Empire partners in that ramp. This is accompanied by the idea that we are disposing of Government assets to certain people below their real value, and that we are leasing those assets cheaply to our friends with the result that there has been a vast increase in the value of their shares. Let me give the terms on which the beam wireless has been leased. For the use of the beam service for 25 years without the telephone service the Communications Company have to pay £60,000 down, a royalty of £250,000 a year, and 12 per cent. of all profits made on the whole undertaking above the standard rate laid down by our expert advisers.
  What did the beam system cost? The sum of £240,000 is all that it cost us. Supposing it had been the case that the Government were leasing the beam service from a private company on these terms, what would have been the criticism of hon. Members opposite? They would have said: "Here is something which cost the private capitalist £240,000, And you are proposing to pay £250,000 a year without even getting the telephone rights. You are putting down £60,000 for compensation for the staff, and you are promising 12 per cent, of all profits made above the standard rate." Nothing that has been said would have equalled the language which would have been used by hon. Members opposite. We have been criticised for not securing for the cables which we are disposing of the price actually paid for them when they were new. I hope hon. Members will
  1862
  realise the inconsistency between the two arguments. The whole ease of the Opposition to this Measure has been based upon the value which has been placed upon the beam system. How can you use that argument in regard to the beam system, and in the very next breath say that the cables are still worth what they were worth when they were actually laid down? We believe that we have got very good value indeed—[Interruption]— for the assets that we are either handing over or leasing, and, as far as regards the Pacific Cable, so have the other Governments concerned.
  Now I come to another misapprehension on the score of finance, of which we have heard a good deal at other stages of the discussion. That is that a purely fancy, arbitrary capital value was set down for the Communications Company, and that our advisers said that an interest of 6 per cent ought to be earned on that fancy value, and, therefore, they put down the figure of £1,865,000. That is entirely inverting the order of procedure. Our advisers, Sir Otto Niemeyer and Sir William McLintock, based their figure for standard revenue, in the first instance, entirely on the practical consideration of what the new service could be expected to earn, taking into account the competition of the beam wireless, and putting down not a high figure but a low figure, and for a very good reason, namely, that 50 per cent. of any increase above that figure. After the first 12 per cent. is paid for the beam wireless, is to go to the public, in order to reduce rates or extend services. The standard figure based on that calculation is the whole foundation of the finance, as far as the Government is concerned, and the actual capitalisation, whether of the Communications Company or of the merger company, is only of minor concern, though our advisers did come independently to the conclusion, after examining all the assets of the companies concerned in the merger, that the total value of the Communications Company should be placed at a figure not higher than £30,000,000. That was the only recommendation that they made, and, as the Postmaster-General has explained, if it were put at a lower figure the standard rate of revenue would mean a higher rate of interest than 6 per

  1863
  cent., and that might govern the future raising of money. There is a further misapprehension, as to the relationship of this matter to the speculation that may or may not have been going on outside. That is no concern whatever of the Government, and certainly it is not based upon the undervaluing of the Government assets that are being transferred. If it is based on anything, it is based on the belief that a rationalised, unified system is likely to earn larger profits and to be more efficient than a number of competing systems. But those guesses of uninformed people outside may just as well be wrong as right, [Interruption.] Stocks which are of a high value on one day are very apt to fall on another day.
  Having dealt with these elementary misapprehensions on the situation, I should like to bring the House back to what has in fact been achieved. Here we are dealing with a question of immense complication and immense difficulty, in which every one of the Governments of the Empire has a general interest from the point of view of the development and improvement of imperial communications, and also, in many cases, a special interest as owner or part owner of some part of the services, as well as large and important private interests outside. It was by no means an easy matter, and never could have been an easy matter, to arrive at any sort of agreement between the different Governments. The whole problem was discussed without any conclusion having been previously formed in the mind certainly of this Government or, I think, of any of the Governments concerned, hammering out the whole thing together, working together for months trying to meet each other's difficulties, trying to find some solution which would serve the interests of the great communities represented and the more particular interests of the Governments represented and to secure, above all, efficiency in the conduct of the services, and these Governments have managed to arrive at a unanimous conclusion on a most difficult and complex subject.
  If this had been, not an Imperial Conference meeting in London hut an international conference meeting at Geneva, if a number of Governments not
  1864
  bound by the link of Empire, had been able on some difficult subject to come to an agreement to overcome the difficulties in the way, to meet each other and arrive at a control of a vast system of services in the interest of all the Governments together, while at the same time giving reasonable liberty of action to effective business administration, hon. Members opposite would have welcomed that as the greatest achievement in international co-operation in modern times. I will not put it as high as that, but I do say it is one of the greatest achievements in inter-Imperial co-operation that has ever been arrived at. More than that, it is not only an achievement and an example in Imperial co-operation—and the whole unity of the Empire depends not on any central control but on free co-operation—it is also going to be the finest instrument of future cooperation that we could have found. The whole unity of the Empire and the free constitution upon which it depends rests on efficiency of communication. Not only does the relationship between the Governments depend for defence and policy on efficiency and speed of communication but the mutual understanding of peoples depend on cheap Press services and freedom and cheapness of mutual intercourse, the whole conduct of business depends upon cheap and effective intercourse, and we believe this system we have framed is going to lead to an immense extension and improvement in our cable and wireless services throughout the Empire and to cheapness to the consumer, efficiency and security, and therefore in this Measure we are not dealing with the mere question of selling a Government asset to private interests: we are concerned in a great piece of constructive work strengthening the fabric of the British Empire.
  Mr. J. JONES: It is very remarkable that on some occasions when the Government find themselves in difficulties they call upon ex-members of the Socialist movement. I remember more than 30 years ago hearing the hon. Member who has just spoken—[HON. MEMBERS: "Right Honourable!"]—I hope he is more honourable than right on this occasion—delivering a lecture in favour of public ownership of the essential means of communication.
  Mr. AMERY: I never said that.
  Mr. JONES: Yes, in Liverpool. I was a youngster, and the right hon. Gentleman was not much older than I was. Still, of course, age has not taught him much in the way of wisdom.
  Mr. AMERY: I do not believe I ever delivered a lecture in Liverpool.
  Mr. JONES: I will swear by all my gods that the hon. Member's memory does not serve him aright. I hope that with the rest of his opportunities he will not neglect the possibilities. What are we doing with this Bill? During the War we pooled all our resources, and we said that private interests must be sacrificed to the public need, and that no profit must be made. What have we got in this Bill? The excuse is made by the right hon. Gentleman who has just addressed the House that all the nations composing the British Empire had their little bit to say. We have nothing to say in the matter, but only to deliver the goods. To whom? About the beam wireless service I know nothing whatever. I am not the only Member in this House in this position. We have sat here amazed.
  "and still the wonder grew,
  That one small head could carry all he knew."
  Wireless and that kind of service! What does it all amount to? Private companies have got together. You talk of the Australian Government, the New Zealand Government, the Indian Government and all the other Governments. Who are they? Drop the patriotic idea and what do you find? Private companies ramping at the expense of the various communities. It is going to be made into a private company at 6 per cent. As far as we are concerned it is a 6 per cent. ramp up to now. What will happen when this Bill passes, Heaven only knows. It will be a 20 per cent. ramp, and who will be in it? Will it be confined to Englishmen who are out for profit? Will you prevent international financiers getting control? Is there anything in the Bill which will prevent all the gentlemen who sing "Rule Britannia" in broken English getting control of your new services? Absolutely nothing! [Interruption.] I am an internationalist, and my nose turns up the
  1866
  right way. I want to say quite frankly that this Bill bears the imprint of its authors.
  "For he that hath, to him shall be given, and he that hath not, from him shall be taken even that which he hath."
  Here we have a national service. Who is going to control it? Not the people of Great Britain who began it. It was the nation who started this service for the beam service was started as a national institution. Now what is going to happen to it? Because it has been successful, it has got to be handed over to the tender mercies of private enterprise. Private enterprise means public robbery every time, and all the time. Therefore, we are opposing this Bill on principle. The right hon. Gentleman who has just tried to defend the Government, far from his better self, is now sticking to a brief. Those of us who remember his previous history and some of his colleagues on that bench, know very well that he does not believe what he says. Therefore, believing every word that I say, and feeling everything that I know, since I first heard the right hon. Gentleman speak, I stand against him in this case. The thing is impossible—national assets being sold! Why not sell the Navy? Why not sell all our national assets? This is on the same line of projection.
  Sir CLEMENT KINLOCH-COOKE: Sell the hon. and gallant Member for Central Hull (Lieut.-Commander Kenwortl'y).
  Lieut.-Commander KENWORTHY: You cannot buy me, anyhow.
  Mr. JONES: We will keep the hon. and gallant Member for Central Hull (Lieut.-Commander Kenworthy) as an asset. We will sell the hon. Member as a monstrosity. I, therefore, say that, as far as we are concerned, this Bill bears the imprint of its parents. It bears the imprint of the people who are out to give away the nation. In War-time we were all supposed to make sacrifices on behalf of the, nation. In peace-time they say: "Give away all the assets of the nation to private enterprise. Cent. per cent. has to be our motto." Therefore, in so far as some of us are concerned, we say: "A plague on all your propositions," because they really mean this. In war time the nation is

  1867
  one. All of us are together in one great confraternity. In peace time sell out, give away to the profit-monger. That is what you are doing to-night by passing this Bill. You are handing over one of the greatest possibilities of the future to a private corporation, and there is no justification for the policy. We believe, as far as all of us on these benches are concerned, that this is a scandalous ramp. It is no wonder that you will not give us details as to what this Bill eventually may mean. Companies will be formed immediately this Bill is passed. The Stock Exchange will start to operate. The international financiers will start their operations. Members of this House will find, quite innocently, with tears trickling down their shirt fronts, that they will begin to take part in the scheme of fleecing
  the public, of bleeding the people. If this Bill passes, it will be one of the biggest examples of private capitalism ever supported by a Government pretending to act on behalf of the nation. Therefore, we protest against this robbery of public property on behalf of private companies whom we do not know. We are not told anything about them. We do not know where they come from, and where they go to. We only hope that they will go to one place. We are protesting against this Bill, and wish the authors of it not all that I would like them to have, but just as much punishment as they deserve.
  Question put: "That the Bill be now read the Third time."
  The House divided: Ayes, 235; Noes, 97.

  Division No. 46.]

  AYES.

  [11.1 p.m.

  Albery, Irving James

  Conway, Sir W. Martin

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

  Alexander, E. E. (Leyton)

  Cooper, A. Duff

  Headlam, Lieut.-Colonel C. M.

  Allen, Sir J. Sandeman

  Cope, Major Sir William

  Heneage, Lieut.-Colonel Arthur P.

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

  Couper. J. B.

  Hilton, Cecil

  Applin, Colonel R. V. K.

  Courtauld, Major J. S.

  Holbrook, Sir Arthur Richard

  Aptley, Lord

  Courthope, Colonel Sir G. L.

  Hopkins, J. W. W.

  Ashley Lt.-Col. Rt. Hon. Wilfrid W.

  Cowan, D. M. (Scottish Universities)

  Howard-Bury, Colonel C. K.

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

  Craig, Sir Ernest (Chester, Crewe)

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

  Baldwin, Rt. Hon. Stanley

  Croft, Brigadier-General Sir H.

  Hume, Sir G. H.

  Balfour, George (Hampstead)

  Crooke, J. Smedley (Derltend)

  Hunter-Weston, Lt.-Gen. Sir Aylmer

  Balniel, Lord

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

  Hurd, Percy A.

  Banks, Sir Reginald Mitchell

  Crookshank, Cpt. H. (Lindsey, Gainsbro)

  Illffe, Sir Edward M.

  Barclay-Harvey, C. M.

  Culverwell, C. T. (Bristol, West)

  Inskip, Sir Thomas Walker H.

  Barnett, Major Sir Richard

  Curzon, Captain Viscount

  Jackson, Sir H. (Wandsworth, Cen't)

  Beamish, Rear-Admiral T. P. H.

  Dalkeith, Earl of

  Jones, Sir G. W. H. (Stoke New'gton)

  Bellairs, Commander Carlyon

  Davidson, Rt. Hon. J. (Hertford)

  Jones, Henry Haydn (Merioneth)

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

  Davies, Dr. Vernon

  Kennedy, A. R. (Preston)

  Bentinck, Lord Henry Cavendish-

  Dawson, Sir Philip

  Kindersley, Major G. M.

  Berry, Sir George

  Dean, Arthur Wellosley

  King, Commodore Henry Douglas

  Bethel, A.

  Dixey, A. C.

  Kinioch-Cooke, Sir Clement

  Betterton, Henry B.

  Edmondson, Major A. J.

  Lamb, J. Q.

  Bevan, S. J.

  Elliot, Major Walter E.

  Lister, Cunliffe-, Rt. Hon. Sir Philip

  Birchall, Major J. Dearman

  Ellis, R. G.

  Locker-Lampson, Rt. Hon. Godfrey

  Bourne, Captain Robert Croft

  England, Colonel A.

  Looker, Herbert William

  Bowyer, Capt. G. E. W.

  Erskine, James Malcolm Monteith

  Lucas-Tooth, Sir Hugh Vere

  Briggs, J. Harold

  Everard, W. Lindsay

  Luce, Major-Gen. Sir Richard Harman

  Briscoe, Richard George

  Fairfax, Captain J. G.

  Lumley, L. R.

  Brittain, Sir Harry

  Falle, Sir Bertram G.

  MacAndrew, Major Charles Glen

  Brocklebank, C. E. R.

  Fanshawe, Captain G. D.

  McDonnell. Colonel Hon. Angus

  Brooke, Brigadier-General C. R. I.

  Fenby, T. D.

  Macintyre, Ian

  Brown, Col D. C. (N'th'l'd., Hexham)

  Fermoy, Lord

  McLean, Major A.

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

  Fleiden, E. B.

  Macmillan, Captain H.

  Brown, Ernest (Leith)

  Ford, Sir P. J.

  Macnaghten, Hon. Sir Malcolm

  Bull, Rt. Hon. Sir William James

  Forestier-Walker, Sir L.

  Maitland, A. (Kent, Faversham)

  Bullock, Captain M.

  Forrest, W.

  Makins, Brigadier-General E.

  Caine, Gordon Hall

  Foxcroft, Captain C. T.

  Manningham-Buller, Sir Mervyn

  Carver, Major W. H.

  Fraser, Captain Ian

  Margesson, Captain D.

  Cassels, J. D.

  Fremantle, Lieut-Colonel Francis E.

  Merriman, Sir F. Boyd

  Cayzer, Sir C. (Chester, City)

  Ganzoni, Sir John

  Mitchell, S. (Lanark, Lanark)

  Cazalet, Captain Victor A.

  Gates, Percy

  Mitchell, W. Foot (Saffron Walden)

  Cecil, Rt. Hon. Sir Evelyn (Aston)

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

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

  Chadwick, Sir Robert Burton

  Gower, Sir Robert

  Moore, Sir Newton J.

  Chamberlain, Rt. Hon. N. (Ladywood)

  Grant, Sir J. A.

  Moreing, Captain A. H.

  Charteris, Brigadier-General J.

  Greaves-Lord, Sir Walter

  Mall, Colonel Sir Joseph

  Christie, J. A.

  Grotrian, H. Brent

  Nelson, Sir Frank

  Churchill, Rt. Hon. Winston Spencer

  Gunston, Captain D.

  Neville, Sir Reginald J.

  Clarry, Reginald George

  Hacking, Douglas H.

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

  Clayton, G. C.

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

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

  Cochrane, Commander Hon. A. D.

  Hammersley, S. S.

  O'Neill, Major Rt. Hon. Hugh

  Cockerill, Brig.-General Sir George

  Hanbury, C.

  Ormsby-Gore, Rt. Hon. William

  Collins, Sir Godfrey (Greenock)

  Hannon, Patrick Joseph Henry

  Pennefather, Sir John

  Colman, N. C. D.

  Harvey, G. (Lambeth, Kennington)

  Penny, Frederick George

  Percy, Lord Eustace (Hastings)

  Snaw, Lt.-Col. A.D. McI. (Renfrew, W.)

  Wallace, Captain D. E.

  Perkins, Colonel E. K.

  Sheffield, Sir Berkeley

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

  Perring, Sir William George

  Shepperson, E. W.

  Warner, Brigadier-General W. W.

  Peto, G. (Somerset, Frame)

  Skelton, A. N.

  Warrender, Sir Victor

  Plicher, G.

  Smith, Louis W. (Sheffield, Hallam)

  Waterhouse, Captain Charles

  Power, Sir John Cecil

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

  Watson, Rt. Hon. W. (Carlisle)

  Pownall, Sir Assheton

  Smithers, Waldron

  Watts, Sir Thomas

  Preston, William

  Southby, Commander A. R. J.

  Wayland, Sir William A.

  Price, Major C. W. M.

  Spender-Clay, Colonel H.

  Wells, S. R.

  Raine, Sir Walter

  Stanley, Lieut.-Colonel Rt. Hon. G.F.

  White, Lieut.-Col. Sir G. Dairymple

  Ramsden, E.

  Stanley, Lord (Fylde)

  Williams, Com. C. (Devon, Torquay)

  Rawson, Sir Cooper

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

  Williams, C. P. (Denbigh, Wrexham)

  Rentoul, G. S.

  Steel, Major Samuel Strang

  Williams, Herbert G. (Reading)

  Rhys, Hon. C. A. U.

  Storry-Deans, R.

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

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

  Stott, Lieut.-Colonel W. H.

  Wilson, R. R. (Stafford, Lichfield)

  Rodd, Rt. Hon. Sir James Rennell

  Streatfeild, Captain S. R.

  Winterton, Rt. Hon. Earl

  Ropner, Major L.

  Stuart, Crichton-, Lord C.

  Withers, John James

  Ruggles-Brise, Lieut.-Colonel E. A.

  Stuart, Hon. J, (Moray and Nairn)

  Wolmer, Viscount

  Russell, Alexander West (Tynemouth)

  Sueter, Rear-Admiral Murray Fraser

  Womersley, W. J.

  Rye, F. G.

  Sugden, Sir Wilfrid

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

  Salmon, Major I.

  Tasker, R. Inigo.

  Wood, Rt. Hon. Sir Kingsley

  Samuel, A. M. (Surrey, Farnham)

  Templeton, W. P.

  Woodcock, Colonel H. C.

  Samuel, Samuel (W'dsworth, Putney)

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

  Wright, Brig.-General W. D.

  Sandeman, N. Stewart

  Thomson, F. C. (Aberdeen, South)

  Sanders, Sir Robert A.

  Thornton, Rt. Hon. Sir W. Mitchell-

  TELLERS FOR THE AYES.—

  Sandon, Lord

  Tinne, J. A.

  Commander B. Eyres Monsell and Major Sir George Hennessy.

  Sassoon, Sir Philip Albert Gustave D.

  Titchfield, Major the Marquess of

  Savery, S. S.

  Vaughan-Morgan, Col. K. P.

  NOES.

  Ammon, Charles George

  Hirst, W. (Bradlord, South)

  Shepherd, Arthur Lewis

  Baker, J. (Wolverhampton, Bilston)

  Hudson, J. H. (Huddersfield)

  Shiels, Dr. Drummond

  Baker, Walter

  John, William (Rhondda, West)

  Shinwell, E.

  Barr, J.

  Johnston, Thomas (Dundoe)

  Slesser, Sir Henry H.

  Batey, Joseph

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

  Smillie, Robert

  Bellamy, A.

  Jones, Morgan (Caerphilly)

  Smith, Ben (Bermondsey, Rotherhithe)

  Benn, Wedgwood

  Jones, W. N. (Carmarthen)

  Smith, Rennie (Penistone)

  Bondfield, Margaret

  Kelly, W. T

  Snell, Harry

  Bowerman, Rt. Hon. Charles W.

  Kennedy, T.

  Snowden, Rt. Hon. Philip

  Broad, F. A.

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

  Sutton, J. E.

  Brown, James (Ayr and Bute)

  Lansbury, George

  Taylor, R. A.

  Buxton, Rt. Hon. Noel

  Lawrence, Susan

  Thurtle, Ernest

  Cape, Thomas

  Lawson, John James

  Tinker, John Joseph

  Charleton, H. C.

  Lee, F.

  Tomlinson, R. P.

  Cluse, W. S.

  Lindley, F. W.

  Townend, A. E.

  Connolly, M.

  Lowth, T.

  Trevelyan, Rt. Hon. Sir Charles

  Dalton, Hugh

  Lunn, William

  Viant, S. P.

  Davies, Evan (Ebbw Vale)

  Maclean, Nell (Glasgow, Govan)

  Walsh, Rt. Hon. Stephen

  Day, Harry

  MacNeill-Weir, L.

  Watson, W. M. (Dunfermline)

  Duncan, C.

  Malone, C. L'Estrange (N'thampton)

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

  Garro-Jones, Captain G. M.

  March, S.

  Wellock, Wilfred

  Gillett, George M.

  Montague, Frederick

  Westwood, J

  Gosling, Harry

  Morris, R. H.

  Whiteley, W.

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

  Paling, W.

  Wilkinson, Ellen C.

  Grenfell, D. R. (Glamorgan)

  Pethick-Lawrence, F. W.

  Williams, Dr. J. H. (Lianelly)

  Griffith, F. Kingsley

  Ponsonby, Arthur

  Wilson, C. H. (Sheffield, Attercliffe)

  Griffiths, T. (Monmouth, Pontypool)

  Potts, John S.

  Wilton, R. J. (Jarrow)

  Grundy, T. W.

  Richardson, R. (Houghton-le-Spring)

  Windsor, Walter

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

  Riley, Ben

  Young, Robert (Lancaster, Newton)

  Hall, G. H. (Merthyr Tydvil)

  Ritson, J.

  Hardie, George D.

  Salter, Dr. Alfred

  TELLERS FOR THE NOES.—

  Harney, E. A.

  Scrymgeour, E.

  Mr. Allen Parkinson and Mr. Charles Edwards.

  Henderson, T. (Glasgow)

  Scurr, John

  Hirst, G. H.

  Shaw, Rt. Hon. Thomas (Preston)

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

  Bill accordingly read the Third time, and passed.

SUPERANNUATION (DIPLOMATIC SERVICE) BILL.
Not amended (in the Standing Committee), considered; to be read the Third time upon Friday.
APPELLATE JURISDICTION BILL.
Not amended (in the Standing Committee), considered; to be read the Third time upon Friday.
WESTERN HIGHLANDS AND ISLANDS (TRANSPORT SERVICES) BILL.
Not amended (in the Standing Committee), considered; read the Third time, and passed.

LOCAL GOVERNMENT [MONEY].
Resolution reported,
"That, for the purposes of any Act of the present Session to amend the Law relating to the administration of poor relief, registration of births, deaths, and marriages, highways, town planning, and local government; to grant complete or partial relief from rates in the case of the hereditaments to which the Rating and Valuation (Apportionment) Act, 1928, applies; to discontinue certain grants from the Exchequer, and provide other grants in lieu thereof, and for purposes consequential on the matters aforesaid, it is expedient—
(1) To authorise the payment out of moneys provided by Parliament of such grants and other expenses (including salaries) as are by or by virtue of the said Act made so payable; so, however, that the amount of the General Exchequer Contribution by reference to which the amount of any of the said grants is under the said Act to be calculated shall not in respect of any year exceed the sum of the following amounts:—

(a) an amount equal to the total losses on account of rates of all counties and county boroughs in England and Wales calculated in accordance with the said Act;

(b) an amount equal to the total losses on account of discontinued grants of all counties and county boroughs in England and Wales calculated in accordance with the said Act;

(c) as respects any year in the first period for which the General Exchequer Contribution is fixed the sum of five million pounds, and as respects any year in any subsequent period such sum (not being less than is provided in the said Act) as Parliament may determine;

(2) To authorise the payment out of the Consolidated Fund or the growing produce thereof of such sums as are by the said Act made chargeable thereon for the purposes of—

(a) paying to the Road Fund in respect of each of the years beginning on the first day of April, nineteen hundred and twenty-eight and nineteen hundred and twenty-nine, the sum of five hundred and thirty-six thousand nine hundred and fifty-four pounds and eight shillings;

(b) making advances to the cattle pleuro-pneumonia account of Great Britain;

(c) making payments towards the rates on certain tithe rent-charges and payments in lieu of tithe;

(3) To remit the interest on, and in certain cases part of the principle of, so much of any loan made before the twelfth day of November, nineteen hundred and twenty-eight, by the Minister of Health to a Poor Law authority under Section
1872
three of the Local Authorities (Financial Provisions) Act, 1921, as amended by any subsequent enactment, as shall not have been required by the Minister of Health to be repaid before the first day of April, nineteen hundred and thirty."
Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."
Mr. KENNEDY: I rise to remind those who are responsible for the direction of Government procedure that there was a very clear understanding which I shared—an understanding arrived at by agreement—that this Order was not to be taken to-night.
Mr. ERNEST BROWN: I think that this Resolution ought not to go through, for one very vital reason. It has not escaped the attention of many hon. Members that during the discussion of the finance embodied in this Resolution there was one major issue which was never discussed, and which indeed, from the point of view of the Government Front Bench, has never been raised. I refer to the effect of the Resolution upon the yield of a penny rate through the loss of rates owing to de-rating. I do not intend at this hour to detain the House for more than a few moments, but I ask whether in the next day or two we may expect some facts as to this yield. I beg hon. Members opposite to realise that this is a very big issue, because the general guarantees under the finance of the scheme seem to me to be based on a fallacy. As I see the working of the formula, whatever case may be made out for the factors of the formula as applying the money to be made up for the loss of grants, in so far as they are successful in making up the loss to local authorities they may be unsuccessful in making up for the loss of rates in the very same area.
Many local authorities, in the months preceding the bringing forward of this Resolution claimed that a clean cut should be made between the sums applied to making up the loss of rates and the sums applied to making up for the discontinuance of grants. We are entitled to ask whether the House, before going into Committee on the Bill and before parting with this Resolution can be assured that we shall have some daylight thrown on the effect on the yield of a penny rate. In a town which I

1873
have in mind a penny rate at the moment raises £20,000, but I am assured by the financial authorities there, that after the passing of the Resolution and the Bill, it will only yield £18,400. It will be seen at once that that will be a very serious thing should any new charges come upon the local authority which are not met by the general guarantees in the Bill, or if that local authority should come within the category of the three out of 10 ratepayers, whom the right hon. Gentleman the Minister admits may lose. [Interruption.] If hon. Members interrupt I must take longer to make my point clear. I regard this point as of great importance. The smaller the parish, in my judgment, the more dangerous the loss on the yield of rates. The county, the county borough, the non-county borough, the urban district, the rural district and the parish all lose rates, and if it be an agricultural parish, where nearly all the rates have been remitted through the de-rating of agricultural land and if there should come on that agricultural parish some heavy local charge, bearing purely on the local rates, it may fall with great severity on the remaining ratepayers who are left to pay. I hope that the Minister will guarantee to give us what the Government know by way of illustration—I do not ask for more. As they have given an illustration of the working of the formula on the grant side, some illustration should also be given as to the actual effect on the yield of a penny rate in these various areas.
Mr. BENN: I beg to move, "That the Debate be now adjourned."
It is rather a serious matter, if business is to be conducted by understanding, that a distinct breach of understanding has occurred. The Eleven o'Clock Rule has been suspended, and the Standing Order says that it may be suspended for any specified business. According to the strict reading of the Standing Order, the Government should specify the business. For instance, they should say, what we understood to be the case, that it is suspended for the Appellate Jurisdiction Bill and the Superannuation (Diplomatic Service) Bill but, instead of that, they put in words to the effect that Government business should be exempted. I have more than once raised this point to the Chair, and I have been met by the statement that it was an understanding
1874
between the parties that certain business should be taken; but, if we are to be tricked—because it is nothing less than a trick—in this way, the Government would be at liberty to take every Order on the Paper. It affects every private Member, because unless hon. Members are warned what business is likely to go forward, their rights are likely to be jeopardised at any moment. Therefore, in view of the form of the Motion and seeing that it certainly takes the chief Opposition Whip by surprise, as well as many hon. Members on this side, I move the adjournment of the Debate.
Lieut.-Commander KENWORTHY: I beg to second the Motion.
At the time the business was announced no specific Orders were mentioned by the Prime Minister, who said that the business to be taken by the Government would depend on the progress made. A few minutes before the Orders were read out by the Clerk at the Table I asked the hon. Member for Kirkcaldy Burghs (Mr. T. Kennedy) what business was being taken, as I was interested in this particular matter. My hon. Friend told me that he had arranged that the first four Orders on the Paper should be taken, and that No. 7 Order, the Consolidated Fund (No. 1) Bill, Committee should he taken and the Northern Ireland Land (Money) Resolution. The House would have been up by now and all these four Orders would have been taken if that agreement had been observed. However, I understand now, from signs, that the adjournment Motion is to be accepted.
The PARLIAMENTARY SECRETARY to the TREASURY (Commander Eyres Monsell): The Government have no intention of asking the House to sit late. We have a certain amount of business to conclude by Friday. We did not get through the business, as the right hon. Gentleman knows very well, that we expected to get through last Friday and we have some extra work, therefore, this week. All we have to do is to get the Report of these two Bills. We wish to get them by the end of the week, and I think if the Opposition will give us the Report stages of the Local Government (Money) Resolution and the Local Government (Scotland) (Money) Resolution on Friday we shall be quite content to accept the Motion for the Adjournment.

1875
Otherwise we have to take these Reports some day this week. If we do not take them to-night after 11 we shall have to do so to-morrow or the night after. Hon. Members opposite know quite well that the Report stages of money resolutions are always taken after 11, and the Government are perfectly in order in asking for this to-night. I shall be quite willing, if hon. Members opposite will give an undertaking to let us have these two on Friday, to accept the Motion for the adjournment.
Mr. T. KENNEDY indicated assent.
Debate to be resumed To-morrow.

LAW OF PROPERTY (AMENDMENT) BILL.
Read a Second time. Bill committed to a Committee of the Whole House for To-morrow.—[Mr. Withers.]
The remaining Orders were read, and postponed.

ADJOURNMENT.
Resolved, "That this House do now adjourn."—[Commander Eyres Monsell.]
Adjourned accordingly at Twenty-six minutes after Eleven o'Clock.

LOCAL GOVERNMENT AND RATING.
  CHIEF CONSTABLES, SCOTLAND.
  CHIEF CONSTABLES, SCOTLAND.
  RAILWAY FREIGHT REBATES.
  RAILWAY FREIGHT REBATES.
GOVERNMENT DEPARTMENTS.
  BOARD OF HEALTH (Ex-SERVICE MEN).
  BOARD OF HEALTH (Ex-SERVICE MEN).
  "P" CLASS CLERKS.
  "P" CLASS CLERKS.
  STATIONERY DEPARTMENT (OVERTIME).
  STATIONERY DEPARTMENT (OVERTIME).
  WRITING ASSISTANTS (DUTIES).
  WRITING ASSISTANTS (DUTIES).
  HOUSING, GLASGOW.
  HOUSING, GLASGOW.
  EMPIRE SETTLEMENT.
  EMPIRE SETTLEMENT.
  DEAD SEA SALTS (CONCESSION).
  DEAD SEA SALTS (CONCESSION).
  TAKORADI HARBOUR.
  TAKORADI HARBOUR.
  EMPIRE MARKETING BOARD (TYPEWRITERS).
  EMPIRE MARKETING BOARD (TYPEWRITERS).
  AIR SERVICES (AFRICA).
  AIR SERVICES (AFRICA).
ROYAL NAVY.
  GENERAL MESSING.
  GENERAL MESSING.
  INVALIDED RATINGS.
  INVALIDED RATINGS.
  TUBERCULOSIS (ATTRIBUTABILITY).
  TUBERCULOSIS (ATTRIBUTABILITY).
  STAFF AND SPECIALIST COURSES.
  STAFF AND SPECIALIST COURSES.
  LIEUTENANT-COMMANDERS (Ex-MATE).
  LIEUTENANT-COMMANDERS (Ex-MATE).
  BRITISH INDUSTRIES FAIR.
  BRITISH INDUSTRIES FAIR.
  SMALL-POX (FOREIGN COUNTRIES).
  SMALL-POX (FOREIGN COUNTRIES).
TRANSPORT.
  BRIDGE, RIVER NEATH.
  BRIDGE, RIVER NEATH.
  BOULTHAM LEVEL CROSSING (ACCIDENT).
  BOULTHAM LEVEL CROSSING (ACCIDENT).
  ARTIFICIAL SILK INDUSTRY.
  ARTIFICIAL SILK INDUSTRY.
  STEAMSHIP "VESTRIS" (BOARD OF TRADE INQUIRY).
  STEAMSHIP "VESTRIS" (BOARD OF TRADE INQUIRY).
  LOTTERIES AND WHIST DRIVES (POLICE ACTION).
  LOTTERIES AND WHIST DRIVES (POLICE ACTION).
  INQUESTS, LICENSED PREMISES.
  INQUESTS, LICENSED PREMISES.
  MONMOUTHSHIRE STANDING JOINT COMMITTEE (EXPENDITURE).
  MONMOUTHSHIRE STANDING JOINT COMMITTEE (EXPENDITURE).
  PRISON DIET.
  PRISON DIET.
  INCOME TAX (RUBBER PLANTATION COMPANIES).
  INCOME TAX (RUBBER PLANTATION COMPANIES).
  MONEYLENDERS' LICENCES.
  MONEYLENDERS' LICENCES.
  BRITISH MUSEUM (PRINTED MATTER).
  BRITISH MUSEUM (PRINTED MATTER).
DISTRESSED AREAS.
  MINING RELIEF FUND BALANCES.
  MINING RELIEF FUND BALANCES.
  CHILDREN.
  CHILDREN.
  COAL INDUSTRY (FIVE COUNTIES MARKETING SCHEME).
  COAL INDUSTRY (FIVE COUNTIES MARKETING SCHEME).
  BRITISH ARMY (FILM PRODUCTIONS, ACCIDENTS).
  BRITISH ARMY (FILM PRODUCTIONS, ACCIDENTS).
  NAVY, ARMY AND AIR FORCE INSTITUTE.
  NAVY, ARMY AND AIR FORCE INSTITUTE.
  GUN-BARGE "GOG."
  GUN-BARGE "GOG."
NAVAL AND MILITARY PENSIONS AND GRANTS.
  CONDITIONAL PENSIONS.
  CONDITIONAL PENSIONS.
  DISABILITY.
  DISABILITY.
  UNEMPLOYMENT (BENEFIT DISALLOWED).
  UNEMPLOYMENT (BENEFIT DISALLOWED).
  IRON AND STEEL INDUSTRY (GERMANY).
  IRON AND STEEL INDUSTRY (GERMANY).
  INTERNATIONAL LABOUR CONFERENCE.
  INTERNATIONAL LABOUR CONFERENCE.
  RHINELAND EVACUATION (TREATY OBLIGATIONS).
  RHINELAND EVACUATION (TREATY OBLIGATIONS).
  INDIAN ARMY ORDNANCE CORPS (LEAVE).
  INDIAN ARMY ORDNANCE CORPS (LEAVE).
  TELEPHONE FACILITIES, CLAXBY.
  TELEPHONE FACILITIES, CLAXBY.
Preamble
The House met at a quarter past four of the clock, The LORD CHANCELLOR on the Woolsack.

MOCK AUCTIONS BILL. [H.L.]
LORD GORELL: My Lords, I beg leave to introduce a Bill to amend the law with respect to auctioneers and to prohibit the holding of mock auctions; and to move that it be read a first time.
Moved, That the Bill be now read 1a.—(Lord Gorell.)
On Question, Bill read 1aand to be printed.

PUBLIC WORKS LOANS BILL.
Order of the Day for the Second Reading read.
THE EARL OF PLYMOUTH: My Lords, this is a periodical Bill with which your Lordships are familiar. It does not cover exactly the period of a year but the period until the next Act is passed. We had one Bill in March, 1927, and one in December, 1927. The present Bill authorises the advance of up to £35,000,000 to the Public Works Loans Commissioners for various purposes and it is hoped that it will be sufficient to meet requirements until April, 1930. I do not think that it is necessary for me to trouble your Lordships with a speech but I will try to answer any questions that may be put to me. I beg to move.
Moved, That the Bill be now read 2a.—(The Earl of Plymouth.)
On Question, Bill read 2a, and committed to a Committee of the Whole House.

EXPIRING LAWS CONTINUANCE BILL.
Order of the Day for the House to be put into Committee read.
Moved, That the House do now resolve itself into Committee.—(The Earl of Plymouth.)
On Question, Motion agreed to.
House in Committee accordingly:
[The EARL OF DONOUGHMORE in the Chair.]
Clauses 1 and 2 agreed to.
Schedule:
LOUD PARMOOR LOUD PARMOOR had given Notice to move to leave out from Part I of the Schedule the reference to Section 1 of the Aliens Restriction (Amendment) Act, 1919, which the Bill proposes to continue in force until December 31, 1929. The noble and learned Lord said: I do not intend to move my Amendment to this Bill. I had hoped to have an opportunity, and I tried, to see Lord Desborough. I wanted to ascertain one or two points; I do not wish to make an unnecessary or exaggerated statement. I therefore do not propose to move my Amendment this afternoon.
Schedule agreed to.
Bill reported without amendment.

ARCHITECTS (REGISTRATION) BILL. [H.L.]
Amendments reported (according to Order).
THE LORD PRIVY SEAL (THE MARQUESS OF SALISBURY): When do you propose to take the Third Reading?
THE EARL OF CRAWFORD: To-morrow.

ARTICLE 431 OF THE VERSAILLES TREATY.
LORD PARMOOR LORD PARMOOR rose to call attention to Article 431 of the Versailles Treaty, and to the interpretation placed thereon by the Foreign Secretary; and to move for Papers. The noble and learned Lord said: My Lords, I rise to move for Papers on the question of the interpretation that should be given to Article 431 of the Versailles Treaty and of the interpretation placed thereon by the Foreign Secretary. I think it cannot be doubted that at the present time the interpretation of Article 431 is an extremely crucial matter as regards foreign policies and the general peace, and what I want to submit to your Lordships is this: that the suggested interpretation, which after all is not a legal matter but depends upon the meaning of words, is not anything like a sacro-
454
sanct legal decision, and as soon as it comes to be discussed and considered I think it obviously cannot be sustained. It is not only in reference to the actual words of Article 431 that I make this statement, but there have been concurrent statements or documents dealing with the same point which show, I think, that the somewhat narrow interpretation which the Foreign Secretary was advised to take is not really the true interpretation of this Article.
We all desire one thing; at least I think all English people desire, practically without exception, that the troops shall be withdrawn at the earliest possible moment from the occupied German districts. As long as they are there irritation is sure to be caused, and in addition it is impossible, I think, that the friendly effects of Locarno can be developed if the French, Belgian and British troops still remain in occupation of the Rhine territories. In order that there may be no mistake I will just quote one passage from a speech made by the Foreign Secretary, with which I entirely agree:—
"…I repeat that His Majesty's Government would welcome an early evacuation of the Rhineland by the French, British and Belgian forces, irrespective of the legal right of the ex-Allied Governments to continue their occupation until the expiry of the period fixed by the Treaty."
What I want to add to that statement is that, if the terms of the Treaty are properly understood and appreciated, not only is there that general desire as regards the withdrawal of troops from the occupied areas, but there is an obligation upon us that we should withdraw our troops in the immediate future.
May I for one moment call your attention to the words of Section 431?—
"If before the expiration of the period of fifteen years Germany complies with all the undertakings resulting from the present Treaty, the occupying forces will be withdrawn immediately."
Two interpretations have been suggested as to the conditions on which the occupying forces would be immediately withdrawn. Of course, the whole Article is an Article in favour of Germany and intended to be a, mitigation of the possible period of occupation which is defined in the preceding Articles of Part XIV of the Treaty.
I think it would be convenient if I put in contrast the two interpretations which

455
have been suggested. The interpretation which the Foreign Secretary has said he is advised is the right one, is that the Article only takes effect when Germany has completely executed and discharged the whole of her Reparation obligations. To begin with it is impossible really to think—and as a matter of fact I can show that they have stated the contrary—that the statesmen engaged in drawing up the Treaty of Versailles and who knew that the minimum time fixed for the payment of Reparations was more than thirty years, could have supposed that the Reparations could all be paid up and settled within this period of fifteen years. In other words, if that is the interpretation it was an otiose Article which it would really have been impossible to execute for the advantage of Germany and the German people. The other interpretation, which I suggest is the right one, is this: that it is enough to show that Germany has sufficiently carried out with regularity her undertakings in the matter of current Reparation payments.
I will not say that that is the obvious meaning of Article 431, because I am quite aware that on questions of this kind there is often a difference of opinion as to construction and interpretation. But what I think may have been overlooked is this. When you are dealing with international documents, then by International Law you take a wider basis of construction, and interpretation than is taken by British lawyers in the ordinary construction of our documents and legislative enactments. The difference is that in International Law and in reference to international engagements you try to discover by reference to contemporaneous or other documents or declarations or understandings what the intentions of the parties to the particular Treaty really were. If you apply that test in the present case I think it is quite clear that the intention of the parties, when they signed the Treaty, was not to postpone the date of withdrawal until all the Reparations had been actually paid, but only until after all the undertakings resulting from the Treaty had been complied with.
What are the undertakings resulting from the Treaty? Suppose you come to an arrangement, as was done under the Dawes plan, that the Reparations should
456
be paid regularly and that certain bonds should be deposited by the German Government as security for the carrying out of their obligations, and suppose that all those obligations have been regularly and punctually complied with: I should have thought that naturally then, in accordance with the language of this Article, the occupying forces would be immediately withdrawn. It will not, of course, escape your Lordships' notice that this Article 431 is an obligation between Germany on the one side and certain Allied Powers on the other, and the importance of it is that if the British Government thought that the obligations had been complied with there would be a duty upon us to withdraw our forces of occupation from German territory. This very difficulty—if it is a difficulty—was foreseen a few days before the signing of the Versailles Treaty, and a declaration was made, signed by President Wilson, M. Clemenceau and Mr. Lloyd George, as a declaration by the Governments of the United States of America, France and Great Britain, in regard to the occupation of the Rhine Provinces, which really, I think, puts this matter outside the region of doubt altogether. I am confirmed in that because I see that the other day Mr. Lloyd George, who himself was one of the parties concerned, repudiated entirely what I may call the narrow construction of Article 431 put forward by the Foreign Secretary, and said it was a construction not in accord with the opinions of the parties concerned in drawing up the Versailles Treaty.
This declaration which has been published by command of His Majesty (Cmd. 240) states as follows:—
"The Allied and Associated Powers did not insist on making the period of occupation—"
the very matter dealt with in Article 431—
"last until the Reparation Clauses were completely executed, because they assumed that Germany would be obliged to give every proof of her good will and every necessary guarantee before the end of the fifteen years' time."
Of course, that declaration is absolutely opposed to the construction which the Foreign Secretary has been advised to put upon this Article. As is here expressly stated, Germany is not obliged completely to execute the Reparation

457
Clauses before the end of the fifteen years' term. This document goes on to say:—
"If Germany, at an earlier date, has given proofs of her good will and satisfactory guarantees to secure the fulfilment of her obligations the Allied and Associated Powers concerned will be ready to come to an agreement between themselves for an earlier termination of the period of occupation."
That declaration is a very solemn matter as regards the three Powers concerned.
But it goes a little further than that in its effect upon Germany, although this declaration was in fact never communicated to Germany, because it is stated by French lawyers, who in this opinion have certainly not taken the same view as has now been indicated by the Foreign Secretary, that, although a declaration of this kind on the subject of occupation as between the United States of America, Great Britain and France was not communicated to Germany, yet as a matter of honour under the ordinary practice of international relationships it must be regarded as a binding matter towards Germany in the same sense as if it had been communicated to Germany at the particular time. I do not think it is possible to have any stronger evidence than that if the problem is what was the intention of the Parties by whom this Treaty was drawn up.
At the same time the matter has been discussed, and discussed very often, in France. It has been discussed in his book by M. Andre Tardieu, who took a very strong part as regards the Treaty negotiations and, it is said, in drafting the Treaty as principal assistant to M. Clemenceau. His name is very well known to any one who has taken any interest in international questions so far as France is concerned. This is what is said in M. Andre Tardieu's book upon the Peace negotiations in Paris. He describes a discussion which took place on the meaning of Article 431, the particular Article that we are discussing at the moment. It is stated to have been agreed—that is, agreed between the parties—that the complete and total payment of Germany's Reparations debt was not the condition of withdrawal, but that Germany might, short of this, reassure her debtors by raising loans or by depositing bonds, which he points out has been done. How can you have stronger
458
evidence than that of M. Tardieu and the declaration of the three Governments as to what was the intention when Article 431 was framed?
As I stated before, to give it the interpretation suggested by the Foreign Secretary makes Article 431 of no advantage to Germany whatever. It is utterly impossible, it is unthinkable that Reparations should have been paid right out and settled within such a period as fifteen years. No one has ever suggested or thought of it, and if that interpretation is given to Article 431 it might just as well not have been passed at all. Then there are passages from other French authors which are equally effective, from M. Seydoux amongst others who is a very great authority on these points. But I want to come to more general statements. So far as I know there has never been any authoritative claim made on behalf of the French Government or by French statesmen or lawyers in support of the view of Sir Austen Chamberlain. We must all have noted what appeared in the Press, that those members in France—of course, they do not by any means comprise the whole of the people of France—who in old days were called "Left Bank Rhiners," and who really are keen to maintain troops in the Rhineland Provinces for as long as possible and really do desire it (I do not want to find any fault with them in that way, it is their bona fide desire) were both astonished and delighted—those are the words used—at the interpretation placed on Section 431 by the Foreign Secretary, because in effect it nullified its whole operation as regards the withdrawal of troops from the occupied areas.
It is unnecessary, I think, to build up authorities of this kind, but there are two other points on which I should like to say a word. It may be asked: What is to happen if there is a difference of opinion as regards the construction of Article 431 either as between the Germans and ourselves on the one side or between ourselves and France or Belgium on the other? France really is the only other country. I think it is extremely important that we should realise that if that difference is made a matter of real moment there is a provision in Article 13 of the Covenant of the League of Nations which would allow of a decision upon the principle of arbi-

459
tration. Article 13 of the Covenant of the League of Nations is not compulsory, but it applies to all Members of the League of Nations. France, Germany and Great Britain are, of course, all Members of the League of Nations at the present time. That Article says that if there is a dispute as to the meaning of a Treaty—Article 431 is part of a Treaty—or if there is a question as to whether the conditions have been complied with in order to make certain sections of a Treaty operative, those are matters eminently suitable for the Arbitration Tribunal, in order that they may be settled in a friendly way between the nations concerned. I am not quite sure about France, but so far as Germany is concerned the matter has gone further. Germany has signed the Optional Clause and that makes the reference of such a dispute as this—as to the interpretation of a Treaty or whether the stage has been reached at which a Treaty becomes operative—referable by compulsion for decision by the International Court of Justice. I should hope that these matters might be settled, of course, in the sphere of conciliation and before a dispute has reached the stage at which it requires settlement by an outside authority. But these are suppositions.
I have stated my view and the reasons for it, why Article 431 has a much larger bearing and a much larger operation than was stated in the opinion of the Foreign Secretary. In corroboration of that I have brought forward the views solemnly declared by the parties who were present at the time and who were in a position to know what the intention of the parties really was. That is a consideration which is always allowed to be brought into play in all matters of international opinion. If not, why should not the question be settled by arbitration or by a decision of the International Court? If you really want peace you must use the machinery and methods which the Covenant of the League has prepared for this purpose. You must not put them on one side. You must not try to make a dispute where no dispute, at any rate of a difficult character, ought to arise. There is either the Court of Arbitration or the International Court at The Hague where the question can be settled. That is the acme of peace—to have an alternative
460
way so that questions of this kind shall not arouse prolonged irritation and difficulty.
We should none of us, I think, differ on this point—it is not necessary to emphasise it—that if the Rhine Provinces could be evacuated it would be an enormous step in the direction of general peace, and that so long as, they are not evacuated the true results of Locarno will never be reached. I do not say this in any spirit of hostility to France. The people of this country have none other than the most friendly feelings towards the French people in every possible way, but what is necessary is that all nations should be equally treated, on the same plane, if we are to have any chance of an all-round peace basis for international relations in the future. It is on that ground that I think we ought to consider with great care what the proper interpretation of Article 431 is, and, if there is any doubt about it, I think we should encourage the removal of that doubt. I believe that would result in troops being withdrawn from the occupied territory and a further great step being taken in world peace. I move for Papers.
THE LORD CHANCELLOR (LORD HAILSHAM): My Lords, I have first of all to express to your Lordships' House the regret which I feel that my noble friend Lord Cushendun, who normally speaks on foreign affairs, is unable to be in his place this afternoon, and, consequently, that the responsibility of dealing with the point which has been raised by the noble and learned Lord falls to my lot. Undoubtedly it is the right of everyone of your Lordships to bring before the attention of this House any matter which, on his responsibility, he regards as of importance, and one as to which it is in the public interest that there should be a discussion. Whether any one of your Lordships exercises that right must be a matter for his own discretion and his own conscience; therefore I make no complaint that the noble and learned Lord has seen fit to introduce this Motion this afternoon. But having said that, I should like to add that for my part I cannot conceive what useful purpose can possibly be served by the discussion which he has thought it right to initiate. The Motion is not designed to elicit the views of His Majesty's Government. Your Lordships have only to look at its terms to see that

461
it is to call attention to views already expressed as to the interpretation to be placed upon the Article by the Foreign Secretary. The interpretation is well known. It has been a matter of public discussion and comment, and the object is, therefore, only to raise the discussion upon it.
The question as to that interpretation and its correctness is, as I think all your Lordships must be aware, a matter of acute controversy at this moment between France and Germany. The noble and learned Lord said that France did not contend, or had not contended, for the interpretation which Sir Austen Chamberlain advises is the correct one, but in fact the very first thing said at Geneva when this question was raised by France was that the juridical view expressed by Germany was one which she could not possibly accept. The matter is, therefore, one of acute and direct disagreement between those two Powers. In those circumstances, as the noble and learned Lord has quite accurately stated, His Majesty's Government desire, if possible, to see an agreement reached under which there may be an early evacuation of the Rhineland. We have stated that publicly more than once, and, seeing that there is this direct conflict, of opinion between two of the interested powers, my right honourable friend the Foreign Secretary has been at pains to try and transfer this discussion from the plane of an and legal argument into the more practical sphere of agreement between the interested parties. There is, in fact, a meeting of the Council going on at Lugano—taking place at Lugano instead of Geneva for, I understand, the very reason that the German representative, Herr Stresseman, may be able to attend, and for which Sir Austen Chamberlain departed from this country on Saturday last. Whether his efforts to bring about such an agreement are likely to be furthered by emphasis being placed upon the fact, that he takes the legal view of France and not that of Germany, is a matter upon which your Lordships can form your own opinion.
I emphasise this point, not from any desire to be discourteous to the noble and learned Lord, but because, I regard it as of great importance that foreign countries—to whom of course this discussion will be of interest and who will
462
keenly watch what is said—should realise that the debate has not been raised at the instance of His Majesty's Government and that the fact that we are compelled to embark once more upon this discussion is not due to any desire upon our part to harp upon legal rights and wrongs, but only because our view as to the law has been directly raised and challenged; and at any rate Germany will have the satisfaction of knowing that, although we have again to stress and explain our view as to the law, the noble and learned Lord thinks we are wrong and takes the opposite view. I hope that satisfaction will allay any irritation which they might otherwise be disposed to feel.
The question is a question of law. It turns upon the construction of certain Articles of the Treaty of Versailles. The noble and learned Lord has explained that in his view Treaty construction does not depend upon the narrow limits which are laid down by English lawyers in the construction of English Acts of Parliament, but rests upon broader considerations of contemporary declarations and the like. I do not want to embark upon a discussion as to how far such declarations made, as in this case apparently the noble Lord tells us, by only some of the parties to the Treaty and never communicated to the others—how far such declarations may be useful or admissible. I think the doctrine at any rate may be a dangerous one, and it is not necessary to embark upon it, because, as I shall hope to show your Lordships presently, the declaration which the noble and learned Lord stated to your Lordships bears exactly the opposite construction to that which he seems to put upon it.
But I would like first of all to deal with the Treaty on the lines which any lawyer, in this country at any rate, would regard as the normal lines upon which to deal with it—namely, by seeing what the document itself says, and I would ask your Lordships to bear with me, since the matter is one of great international importance, while I deal very shortly with three or four Articles. Article 431 is one of a series of five Articles which form one section, Section 1 of Part XIV of the Treaty of Versailles. It is part of a group of sections headed "Guarantees: Western Europe." It is necessary to see,

463
therefore, exactly what the other Articles lay down in order that we may quite clearly understand the construction to be put upon the Article under discussion. Article 428 is "a guarantee for the execution of the present Treaty by Germany." The "German territory situated to the west of the Rhine, together with the bridgeheads," is to be "occupied by Allied and Associated troops for a period of fifteen years from the coming into force of the present Treaty." We must begin therefore with the fact that fifteen years' occupation of this Rhineland is prescribed as a guarantee for the execution of the Treaty, and I stress that because of the extraordinary contention which seems to have been suggested outside, and which even receives some colour from the observations of the noble Lord, that the construction which the Foreign Secretary places on Article 431 involves that the troops are to remain in occupation of the Rhineland until the whole of the Reparations have been paid—that is, I think, sixty odd years; I have forgotten the exact number. That is not the result of the construction put upon the Article by the Foreign Secretary.
LORD PARMOOR: May I interrupt for a moment? What I read was the actual construction put upon Article 431 by the Foreign Secretary, not a reference to Article 428. The words I read to the House were the actual construction.
THE LORD CHANCELLOR: I am contending for the actual construction placed upon it by the Foreign Secretary. What I am saying is that the Foreign Secretary never suggested anything so foolish as that under these Articles there was any right to stay in the Rhineland until Reparations had been completely paid, and the reason why he did not do that is that the group of Articles begins with the statement that the occupation is to be for a period of fifteen years, and only fifteen years. Article 431, when we come to it, your Lordships will see explains one circumstance under which the period of fifteen years may be shortened.
LORD PARMOOR: Hear, hear!
THE LORD CHANCELLOR: But we are dealing here with the maximum period to begin with of fifteen years, not a period which is extended to the total payment of the Reparations. Now,
464
Article 428 having said there is to be fifteen years' occupation as a guarantee for the execution of the Treaty, Article 429, the language of which is very important in contrast with that of Article 431, lays down certain conditions under which there will be a gradual and successive evacuation of parts of the Rhineland. The first words of it are very important. They are:—
"If the conditions of the present Treaty are faithfully carried out by Germany, the occupation referred to in Article 428 will be successively restricted as follows…"
Then follows three successive five-year periods at the end of which there will be an evacuation of part of the occupied territory. Your Lordships will observe that that right to partial evacuation by successive quinquennial periods depends upon the faithful carrying out of the conditions of the present Treaty. In other words, Article 429 says that if there is no default by Germany, then by successive quinquennial periods the evacuation is to take place.
Article 430, again an important Article, provides that—
"In case either during the occupation or alter the expiration of the fifteen years referred to above the Reparations Commission find that Germany refuses to observe the whole or part of her obligations under the present Treaty with regard to Reparation, the whole or part of the areas specified in Article 429) will be re-occupied immediately by the Allied and Associated forces."
So your Lordships see, pausing there, that the position so far is this. Under Article 428 there is a fifteen years' occupation of this disputed territory; under Article 429, if there is no default by Germany, there is to be a partial and successive evacuation of the occupied territory at five-year intervals. By Article 430, if there is a subsequent repudiation by Germany of her obligations, there is a right of re-occupation of that part which had been evacuated under Article 429.
Now we come to Article 431. Your Lordships, I hope, will notice the change of language:—
"If before the expiration of the period of fifteen years Germany complies with all the undertakings resulting from the present Treaty, the occupying forces will be withdrawn immediately."
Now your Lordships see at once the contrast between Article 429 and Article 431. Article 429 says that if Germany makes

465
no default but keeps on carrying out her obligations there is to be a successive evacuation. Article 431 says that if Germany fulfils all her undertakings before the fifteen years' period is up then there is to be an immediate evacuation for the reason that there is then nothing left to guarantee: the full undertaking has been fulfilled. There is no provision then for subsequent re-occupation on repudiation, for the excellent reason that, of course, when there is evacuation under Article 431 there has been complete fulfilment. Therefore there is no possibility of subsequent repudiation, and no need to provide for that eventuality.
If your Lordships will allow me I would like now to refer to Article 232 which lays down what the undertaking is with regard to Reparations. In Article 232 we find these words:—
"Germany undertakes that she will make compensation for all damage done to the civilian population…"
and so on. The undertaking, therefore, which Germany has to fulfil in order to secure complete evacuation is that she will make compensation for all damage done, in other words, that she first pays the Reparations. How can it be said that Germany has fulfilled all her undertakings until she has paid the Reparations which she has undertaken to pay? It is just as if you said that it you borrowed money from your banker and gave him security for due repayment, you had then fulfilled your undertaking to pay him back. Any creditor who knew that his debtor claimed that he had fulfilled his undertaking by giving an I.O.U. would, I think, find himself faced with a rather surprising situation. There is all the difference in the world between the provision in Article 429, that in the absence of default there is to be partial successive evacuation, and the provision in Article 431, that if there has been fulfilment of all the undertakings including the undertaking to pay Reparations, then there is to be a complete evacuation of territory which is only held in occupation in order to ensure that the undertakings shall be fulfilled.
Now, my Lords, I should have thought, with all respect to the noble Lord, that the language of these Articles was quite conclusive and quite clear. The noble Lord says Article 431 cannot have the construction which it naturally bears
466
because nobody could have supposed at the time when the Treaty was signed that there was any chance of Germany discharging her Reparation obligations within fifteen years. I venture to think that the noble and learned Lord is quite mistaken. In the first place, when the Treaty of Versailles was negotiated the negotiators must have had present to their minds that, after the war between France and Prussia, there was an arrangement for enormous payments by France to Prussia, that those payments were made before the time stipulated and therefore that France was in a position to say: "I have fulfilled my obligations long before anybody anticipated that I would be able to do so." When one remembers that under this Treaty, by virtue of a clause to which I shall call attention, provision is made that if Germany gives bonds for her payments under Reparations, and those bonds are negotiated, that operates as a discharge of her Reparations obligations, then one sees that it was not at all an impossible eventuality that she might have discharged her obligations with regard to Reparations in much less than fifteen years.
In Part VIII of the Treaty, which refers to Reparations, this provision is found in Annex II, Paragraph 12 (d):—
"In the event of bonds, obligations or other evidence of indebtedness issued by Germany by way of security for or acknowledgment of her Reparation debt being disposed of outright, not by way of pledge, to persons other than the several Governments in whose favour Germany's original Reparation indebtedness was created, an amount of such Reparation indebtedness shall be deemed to be extinguished corresponding to the nominal value of the bonds, etc., so disposed of.…"
In fact, as we know, there have been discussions from time to time as to whether it could not be arranged that Germany should make an issue of bonds to satisfy her Reparation indebtedness, that those bonds should be negotiated on the market and that in that way the Reparations should be realised at a much earlier date. Having that provision in mind, what more natural than that Germany should submit that, as we had been in occupation of her territory for fifteen years as a security for the due performance of her obligations, if by virtue of that provision or by any other means she were able to discharge

467
her Reparation indebtedness before the end of fifteen years, she should not have to wait any longer. That is obvious. Perhaps I should not say that it is obvious, because the noble and learned Lord takes an opposite view, but that is what I should have thought was obviously the natural interpretation.
The noble and learned Lord has referred to contemporary statements in order to show that this natural view is not the true view. I am going to ask your Lordships to look a little move attentively at these declarations and see whether or not the noble and learned Lord is right. First of all, Germany herself made certain observations before signing the Treaty, in protest as to some of the Articles, and in regard to Article 431, on May 29, 1919, Germany said:—
"Germany will be very hard pressed by the form in which guarantors are demanded, because it is impossible for her to discharge her heavy obligations in n short time, so that in accordance with Article 431 the liberation of the German Rhineland from foreign occupation will be postponed for an indefinite time."
That is the German observation of May 29, 1919. Your Lordships will see, therefore, that, before Germany signed this Article, she was perfectly alive to the fact that the interpretation which we adopt as the right one was, in fact, the right one, because she was protesting against the Article on the very ground that she could not discharge the Reparations obligation within fifteen years, and therefore there was no chance of getting the Rhineland back, under Article 431, within that period. If the noble and learned Lord is right, that all that she had to do was to agree to the amount of Reparations and to make no default in the payment of any instalment and that then she could at once claim a complete evacuation, that observation becomes a ridiculous one, because she could do so when she had paid the first, second or third instalment. If the noble and learned Lord is right and the Article only means that she must not have made default, she is in a position to claim complete evacuation the moment the Reparations payments are fixed and before, she had paid any of them, and therefore the question of the discharge of her heavy obligation never arises at all.
But the noble and learned Lord relied on a declaration made by the United
468
States, Great Britain and France in regard to the occupation of the Rhine Provinces on June 16, 1919. I admit that the declaration has some of those elements of obscurity which I, for my part, not infrequently found in declarations signed by Mr. Lloyd George. But I do not think that, even when allowance is made for the signatory, there can be any serious doubt upon this particular point. The declaration is, for relevant purposes, in three parts—the fourth does not, I think, arise in this connection.
LORD PARMOOR: It does not apply.
THE LORD CHANCELLOR: The first part of the declaration says:—
"The Allied and Associated Powers did not insist on making the period of occupation last until the Reparation Clauses were completely executed, because they assumed that Germany would be obliged to give every proof of her good will and every necessary guarantee before the end of the fifteen years' time."
What does that say? It is explaining why it was that they did not insist that the occupation should go on until there had been complete payment of the Reparations, but why it might be for a much shorter period—namely, only fifteen years. Then it goes on:—
"As the cost of occupation involves an equivalent reduction of the amount available for Reparations, the Allied and Associated Powers stipulated, by Article 431 of the Treaty, that"—
your Lordships will mark these words—
"if before the end of the fifteen years' period Germany had fulfilled all her obligations under the Treaty, the troops of occupation should be immediately withdrawn."
Your Lordships will see from this which of the two interpretations which the noble and learned Lord regards as possible, is the one which these three signatories placed upon it. The words are not "if Germany has not made default at any period during the fifteen years," but "if she has fulfilled all her obligations under the Treaty."
The third paragraph is even more conclusive. It runs:—
"If Germany, at an earlier date, hay given proofs of her good will and satisfactory guarantees to assure the fulfilment of her obligations, the Allied and Associated Powers concerned will"—
what?—
"be ready to come to an agreement between themselves for the earlier termination of the period of occupation."

469
If the noble and learned Lord is right, then after Germany had given proofs of her good will and satisfactory guarantees—that is to say, presumably if she had been doing what she had agreed to do—she would have been entitled to claim immediate evacuation under Article 431. That is what the noble and learned Lord says that it means. What these people are saying is, not that, if that happened, Germany would be entitled to get evacuation, but that, if that happened, the three signatories would then be ready to come to an agreement between themselves for the earlier termination of the period of occupation—that is to say, for its termination at a period earlier than that which Germany is entitled to claim.
It really seems hardly necessary to press this argument any further, but let me add one other consideration. If the noble and learned Lord is right, what was the need of Article 429? That Article says that, if Germany is observing all her Treaty obligations, then at the end of five years, she is to get back part of the territory, at the end of another five years, if she still commits no default, another part, and, finally, evacuation at the end of fifteen years. But if the noble and learned Lord is right, there was no need for Article 429, because under Article 431 in that event she was entitled to have complete and immediate evacuation of the whole of the territory, and Article 429 becomes a meaningless addition to the Treaty. I submit that whether you look at the language of the Treaty itself, or at the temporary declarations to which the noble and learned Lord attaches so much importance, you are driven to the same conclusion in either event—namely, that the interpretation placed upon this Article by the Foreign Secretary is obviously and plainly the right one.
Having dealt with the legal aspects, let me now, abandoning the academic and unreal plane upon which the noble Lord wishes to discuss the problem, return to the practical line on which we are endeavouring to deal with it. On that basis we have stated, and therefore I am only repeating what has been already said, that we should like to see evacuation take place as soon as possible. It is no good, of course, for us to evacuate alone. That would only irritate France and would not help Germany,
470
because French troops would at once take over the zone we had evacuated. The only thing to work for is to try and achieve agreement between the occupying Powers, under which arrangements might be made for evacuation at a date earlier than the date for which the Treaty provides. To those negotiations Belgium, which was not a party to the declaration referred to but is one of the occupying Powers, must of course be a party, equally with France, ourselves, Germany, and, I presume, Italy and Japan, who are interested in the evacuation problems. At any rate all those Powers will have a right to be consulted and no doubt will have an opportunity of expressing their views and every endeavour will be made to reach an agreement.
I will only add in conclusion that I most devoutly trust that the discussion forced upon us this afternoon will not have done anything to hamper these negotiations or to prevent their coming to a successful issue, and that nothing I have been obliged to say will make any foreign Power think that we desire to handle this problem from the point of view of legal right alone and not from the point of view of assisting good will and friendliness between the nations involved.
LORD PARMOOR: My Lords, I would like to say a few words in answer to the argument and speech of the noble and learned Lord on the Woolsack. I stated quite clearly, at the outset of my address to your Lordships, that I was in thorough agreement with the last words which the noble Lord on the Woolsack uttered—namely, that we ought to approach this question, not from what I call the narrow legal aspect, but in a spirit of good will and all-round conciliation. There can be no doubt whatever that that is the right spirit, and in that respect I entirely agree with what he says, but I am bound to admit, after listening to his argument upon the question of the interpretation of Article 431, that I was not convinced that the argument which I addressed to your Lordships was not a sound one. On the contrary, it appeared to me that, as soon as one came to analyse what the noble and learned Lord on the Woolsack was saying, he confirmed the view which I put forward.

471
I should like to quote again the actual words of the Foreign Secretary, so that there may be no mistake or any suggestion that I have exaggerated his statement. They were that—
"the concession provided for in Article 431 could only take effect when Germany has completely executed and discharged the whole of her Reparation obligations."
"Has completely executed…the whole of her Reparation obligations!" I do not think, in the first place, that the noble and learned Lord on the Woolsack in any way displaced my argument that that was known at the time as an impossible matter to bring about within the fifteen years' period. I think the noble Lord stated sixty years. I think myself that the time mentioned was thirty years, although I am not now speaking of the alterations made at the time, that the Dawes arrangement came into operation. Let me state in a few words what is the argument of the noble and learned Lord. His argument is based partly, in fact I think mostly, upon the various Articles in Section 1 of Part XIV, which deals with Guarantees in Western Europe, and secondly, with the White Paper or declaration to which I referred. Article 429 is clearly necessary in any case. Article 429 not only provided for the ultimate evacuation of the whole territory, but for three successive evacuations at quinquennial periods. There is nothing of that in Article 431. I do not want to cross-examine the noble and learned Lord on the Woolsack, but I would like to ask him where he finds in Article 431 any indication of the principle in Article 429, of evacuation at quinquennial periods of successive portions of the occupied territory?
THE LORD CHANCELLOR: The noble and learned Lord has not appreciated my argument. I pointed out that under Article 431 it had to be complete evacuation, and that it would be stupid to provide for partial evacuation under Article 429 in the event which, on his argument, entitled to complete evacuation.
LORD PARMOOR: I must apologise. My argument must have been very badly phrased or framed if that is thought to be the result of it; and no doubt it is from what the noble and learned Lord has stated. Article 431 deals with the
472
occupation forces being "withdrawn immediately," Article 429 deals with, I will not say a quite different matter, but with a matter not dealt with in Article 431—namely, the withdrawing of certain portions of troops from occupied territory at successive quinquennial periods—and I cannot see myself what is the basis of his argument if what I regard as the right construction of Article 431 is in the slightest way consistent with what we find in Article 429. And with regard to Article 430, in the case which the noble Lord has pointed out, where, if after the occupied territories have been evacuated something is done by the Germans inconsistent with the terms or obligations of the Treaty, particular portions of the occupied territories may be reoccupied, it seems to me that that has nothing to do with Article 431. Article 431 goes much further, and to this extent, that if the Germans have complied with one condition—whether they have complied may be a question of fact to be determined by arbitration—if they have in truth complied with the condition set out in Article 431 the occupying forces will be immediately withdrawn. I quite agree with what the noble and learned Lord on the Woolsack has said, that this is an extremely important argument so far as Germany is concerned. If there is an obligation that there should be immediate withdrawal that is an obligation binding upon us, quite irrespective of the attitude which France or any other country may adopt. It is an obligation from us to Germany.
When we come to the subsequent matters dealt with in the declaration, there arises the question—obviously a different one—of the obligations of the three occupying Powers in relation to one another. The noble and learned Lord on the Woolsack, of course, knows that at that time the question was raised—in fact, it was settled but for what was done in the United States Senate—of a guarantee by America and Great Britain for the protection of France against an aggressive attitude of Germany on her eastern frontier—very much what was carried out in the Locarno Treaty. What France and Great Britain and America desired to know was what was the nature of the protection which they were prepared to give to France if they were to carry out that obligation. As I say, the

473
obligation never came into force, because the United States Senate would accept neither the Covenant of the League nor the Treaty of Versailles. And that is the importance of it. It is not necessary for me to defend Mr. Lloyd George: if there is any one in this country who is able to defend himself it is Mr. Lloyd George. BUG you cannot put on one side the statement which he made, as one of the signatories of this declaration, that it was intended—and I think rightly—that the withdrawal should not depend on the complete execution of Reparation payments, but on the lesser consideration to which I called attention when I spoke before. It would not, of course, be courteous to your Lordships to re-state that argument, but I am bound to admit I cannot understand in what way it has been displaced by the argument of the noble and learned Lord on the Woolsack.
There was one matter which perhaps I ought not to overlook, and that was a statement made by Germany on May 29, 1919, at a time when Germany was complaining of the harshness of the Treaty, and it was after that date—on June 28—that this declaration was made. There were many statements made at that time, which were intended to be, and were in fact, answers to certain complaints which Germany had made. Before the Treaty
474
was actually signed these representations from Germany were carefully considered, and in some matters there were very important modifications made, particularly on the question of disarmament.
I regret that what appears to me to be a wrong interpretation should be sus-staincd—because I have not in the least altered my opinion. A wrong interpretation is an interpretation which stands directly in the way of the withdrawal of troops from the occupied areas, which is the first foundation, in my opinion, of a general peace in Europe. I beg to thank the noble and learned Lord on the Woolsack for the exhaustive way in which he has dealt with this topic. I do not in any sense feel hurt by his satire—I am afraid I am hardened against that. I think this is a matter which ought to have been discussed, particularly in the House of Lords, which, if we are to maintain our position and our value as a great constitutional body, ought as frankly and as fairly as it can, whatever the differences of opinion may be, to state its views on a Treaty question such as the proper interpretation of Article 431 of the Treaty of Versailles.
Motion, by leave, withdrawn.
House adjourned at twenty-five minutes before six o'clock.

BARONIES OF MONTACUTE AND MONTHERMER.
Report made from the Committee for Privileges:—
BARONY OF MONTACUTE (1299).
1, That the Barony of Montacute is an ancient Barony in fee;
2, That Simon de Montacute, who was summoned to Parliament by a writ, dated 29th December, 28 Edward I. (1299), was entitled to a Barony by Writ descendible to the heirs general of his body;
3, That the said Barony descended to Margaret, Countess of Salisbury, who died in 1541;
4, That the said Margaret, Countess of Salisbury, and Henry Pole, her eldest son, were attainted of high treason by Act of Parliament in 1539;
5, That, but for the said attainders, the said Barony of Montacute would, on the death of the said Henry Pole Lord Montacute, have fallen into abeyance between his two daughters and co-heirs Katherine and Winifred;
6, That the said Katherine married Francis Earl of Huntingdon and left issue, and that her representatives and co-heirs are the following persons—

Edith Maud, Countess of Loudoun,

Elizabeth Frances, wife of John Wynford, Viscount St. Davids,

Lady Flora Anne Rawdon-Hastings,

Cecil Talbot Lord Grey de Ruthyn,

Constantine Mary Joseph Lubienski-Bodenham,

May Flora Amy Kirwan,

Charles Earl of Romney;

7, That the said Winifred married, first, Sir Thomas Hastings, Kt., and, secondly, Sir Thomas Barrington, Kt.; that she left issue by her second husband only and that her representatives and co-heirs are the following persons—

The Petitioner William Selby-Lowndes,

Helen Clara, wife of Henry Mangles Denham;

8, That the said Barony of Montacute would, if the effect of the said attainders be removed, be in abeyance and at His Majesty's disposal.

BARONY OF MONTHERMER (1309).
1, That the Barony of Monthermer is an ancient Barony in fee;
2, That Ralph de Monthermer, who was summoned to Parliament by a writ, dated 26th October, 3 Edward II. (1309), was entitled to a Barony by Writ descendible to the heirs general of his body;
3, That the said Barony descended to Margaret, Countess of Salisbury, who died in 1541;
4, That the said Margaret, Countess of Salisbury, and Henry Pole, her eldest son, were attainted of high treason by Act of Parliament in 1539;
5, That, but for the said attainders, the said Barony of Monthermer would, on the death of the said Margaret, Countess of Salisbury, have fallen into abeyance between the two daughters and co-heirs of the said Henry Pole, namely, Katherine and Winifred;
6, That the said Katherine married Francis Earl of Huntingdon, and that her representatives and co-heirs are the following persons—

Edith Maud, Countess of Loudoun,

Elizabeth Frances, wife of John Wynford, Viscount St. Davids,

Lady Flora Anne Rawdon-Hastings,

Cecil Talbot Lord Grey de Ruthyn,

Constantine Mary Joseph Lubienski-Bodenham,

May Flora Amy Kirwan,

Charles Earl of Romney;

7, That the said Winifred married, first, Sir Thomas Hastings, Kt., and, secondly, Sir Thomas Barrington, Kt.; that she left issue by her second husband only, and that her representatives and coheirs are the following persons—

The Petitioner William Selby-Lowndes;

Helen Clara, wife of Henry Mangles Denham;

8, That the said Barony of Monthermer would, if the effect of the said attainders be removed, be in abeyance and at His Majesty's disposal.
Read, and agreed to; and resolved and adjudged accordingly; and the Resolution and Judgment to be laid before His Majesty by the Lords with White Staves.

BARONY OF POLE OF MONTAGU OR MONTACUTE.
Report made from the Committee for Privileges that the Petitioner Constantine Mary Joseph Lubienski-Bodenham, has failed to show that there was treated any such Barony of Montacute (1357) or Pole of Montagu (1529) as he alleges:
Read, and agreed to; and resolved and adjudged accordingly; and the Resolution and Judgment to be laid before His Majesty by the Lords with White Staves.

BARONIES OF BEAUCHAMP AND MORDAUNT.
1, That the Barony of Beauchamp is an ancient Barony in fee;
2, That it is proved by the Writ of Summons, 1st June in the 37th year of King Edward III. and by other evidence adduced by the Petitioner that Roger Beauchamp, Lord Beauchamp, was summoned to Parliament and sat in Parliament as a Peer of the Realm, and that he was entitled to a Barony by Writ descendible to the heirs general of his body;
3, That the Barony of Mordaunt is an ancient Barony in fee;
4, That it is proved by the Writ of Summons, 27th April in the 28th year of King Henry VIII. and by other evidence adduced by the Petitioner that John Mordaunt, Lord Mordaunt, was summoned to Parliament and sat in Parliament as a Peer of the Realm, and that he was entitled to a Barony by Writ descendible to the heirs general of his body;
5, That the said Barony of Beauchamp and the said Barony of Mordaunt descended to George, 5th Duke of Gordon and 13th Lord Mordaunt, and de jure 20th Lord Beauchamp, who died in the year 1836, when the said Baronies fell into abeyance between his five sisters and co-heirs, namely, Charlotte, Duchess of Richmond; Lady Madelina, wife first of Sir Robert Sinclair, Baronet, and secondly of Charles Fyshe Palmer; Susan, Duchess of Manchester; Louisa, Marchioness Cornwallis; and Georgians, Duchess of Bedford, or their respective heirs;
6, That the co-heirs to the said five sisters of the said Duke of Gordon, as set forth hereafter, are the co-heirs to the Barony of Beauchamp and the Barony of Mordaunt, that is to say:—

(1) of Charlotte, Duchess of Richmond, Charles Henry, 8th Duke of Richmond;

(2) of Madelina, wife first of Sir Robert Sinclair, Baronet, Edith Charlotte Spencer-Smith, Claud Henry Maitland Lennox-Sinclair:

(3) of Susan, Duchess of Manchester, William Angus Drogo, 9th Duke of Manchester;

(4) of Louisa, Marchioness Cornwallis, James Richard Neville Stop-ford (commonly called Viscount Stopford), the Lady Rosemary Alexandra Eliot, the Lady Kathleen Blanche Lily Eliot, Alexander George Gordon Ross;

(5) of Georgiana, Duchess of Bedford, the Petitioner, Thomas Went-worth Russell;

7, That the said Barony of Beauchamp and the said Barony of Mordaunt are now in abeyance and at His Majesty's disposal:
Read and agreed to; and resolved and adjudged accordingly; and the Resolution and Judgment to be laid before His Majesty by the Lords with White Staves.