Sitting of 15 December 1930

Preamble
The House met at a quarter past four of the clock, The LORD CHANCELLOR on the Woolsack.
UNEMPLOYMENT INSURANCE BILL.
Brought from the Commons endorsed with a Certificate from the Speaker that it is a Money Bill within the meaning of the Parliament Act, 1911; read P, and to be printed.

PUBLIC WORKS FACILITIES SCHEME (THORNE AND DISTRICT WATER) CONFIRMATION BILL.
Brought from the Commons; read 1a, and to be printed.
Pursuant to the Public Works Facilities Act, 1930, deemed to have been read 2a and reported from the Committee.
Certificate of the Minister of Health that the requirements made by him under paragraph (a) of subsection (4) of Section 1 of the Act have been complied with in respect of the Thorne and District Water Scheme: Laid before the House (pursuant to the Public Works Facilities Act, 1930) and ordered to lie on the Table.

NORTH CROOK ELECTRICITY ORDER, 1930.
Special Order in respect of part of the urban district of Crook in the County of Durham:
Laid before the House (pursuant to Act) and referred to the Special Orders Committee.

EXPIRING LAWS CONTINUANCE BILL.
THE LORD PRESIDENT OF THE COUNCIL (LORD PARMOOR): My Lords, I move that Standing Order No. XXXIX be considered in order to its being dispensed with. This is a Motion of which I have given Notice.
Moved, That Standing Order. No. XXXIX be considered in order to its being dispensed with.—(Lord Parmoor.)
On Question, Motion agreed to, and ordered accordingly.
Order of the Day for the House to be put into Committee read.
Moved, That the House do now resolve itself into Committee.—(Lord Parmoor.)
On Question, Motion agreed to. House in Committee accordingly:
[The EARL OF DONOUGHMORE in the Chair.]
Clause 1:
Continuance of Acts in Schedule.
1.—(1) The Acts mentioned in Part I of the Schedule to this Act shall, to the extent specified in column three of that Schedule, be continued until the thirty-first day of December, nineteen hundred and thirty-one.
(2) The Acts mentioned in Part II of the Schedule to this Act shall, to the extent specified in column three of that Schedule, he continued in England until the twenty-fifth day of December, nineteen hundred and thirty-one, and in Scotland until the twenty-eighth day of May, nineteen hundred and thirty-two.
VISCOUNT HAILSHAM VISCOUNT HAILSHAM moved, in subsection (1), to leave out "Part I" and insert "Parts I and III." The noble Viscount said: The Amendment which I now move is one of three that stand on the Paper in my name. All three Amendments necessarily hang together. The purpose of them, and the effect of them if they are carried, will be to ensure that a particular Act of Parliament called the Dyestuffs (-Import Regulation) Act, 1920, instead of coming to an end on January 14 next will be continued until December 31, 1931. I think, perhaps, the convenient way of bringing the matter before your Lordships would be for me briefly to recall to the House the facts which led up to the passing of the Act and what is the effect of the provisions of the Act, and then to tell your Lordships what the present position is, so AS to justify the claim which I am putting before the Committee that the Act should continue for another year.
The history of the matter goes back to the middle of the last century, when an English chemist, Mr. Perkin, in collaboration with a gentleman of German extraction but living in England, a Mr. Hofmann, succeeded in discovering for the

537
first, time the secret of making dyes from coal tar. That invention might almost be regarded as the starting point of modern organic chemistry, which is by far the more important branch of chemistry at the present day. Unfortunately we in this country were slow to appreciate the significance of the discovery. The Germans were better alive to its possibilities than we were, and Mr. Perkin and Mr. Hofmann were invited to go to Germany and there to prosecute the development of their discovery. As the result of that foresighted action by the Germans, there was developed in Germany during the latter half of the last century and the early part of the present century an immense dye-making industry which had invested in it many millions of capital, which was year by year making fresh inventions in the whole sphere of aniline dyes and of all coal tar substances, and which had enabled the great German dye-making firms to acquire a practical monopoly of the dye-making trade of the world.
The making of dyes brought in its train the creation of factories which were singularly well adapted for use for munitions purposes in case of war, and your Lordships will remember that, when the, War broke out in 1914, the result of the foresight and energy of the Germans was that they had ready to hand factories fully equipped for the production of high explosives and chemicals of all kinds in great quantities, and they had a trained and skilled staff of chemists ready to assist them in the prosecution of fresh inventions for war purposes; while we, on the other hand, and our Allies with us, were put into a position of the gravest possible embarrassment and, indeed, of danger owing to the absence of such factories and such skilled assistants in our country and in the territory of the allied nations. As the result of that fact, there were passed in Paris a series of Resolutions by all the allied nations, in which, in effect, they came to a common decision that, when the War was over, they would see to it that there should be no risk of the repetition of a similar unpreparedness, and that the dye-making industry should be regarded as a key industry which must be established and protected in the territories of each of them.
As a result of those Resolutions, after the Armistice we in this country sought to carry the Resolutions out by prohibiting the import of dyestuffs under a power which it was thought was possessed in the Customs Act, 1876. After a while, the legality of the prohibition was challenged in the Courts, and a decision was given by the noble and learned Lora who sits on the Woolsack, who was then a Judge of the King's Bench Division, in which it was decided that the prohibition was illegal and that there was no statutory power to make it. The Government felt that this created an impossible situation, and inquiries were made by a Committee, sitting I think under the presidency of the President of the Board of Trade, as the result of which a Bill was introduced in the year 1920 and passed in December of that year. The machinery which the Act adopted was to prohibit the importation of dyestuffs from abroad and then to set up a Licensing Committee, consisting as to five of its members of users of dyes, as to three of them of persons engaged in making dyes and as to the other three of independent people, one of whom was appointed by the Board of Trade and one by the War Office. To this Committee all applications for licences to import dyestuffs were brought, and if the Committee recommended in favour of the application, the President of the Board of Trade granted a licence and that particular foreign dye was imported. The Act was to commence on January 15, 1921, and to continue for a period of ten years, so that it will, in the ordinary course, cease to be law on January 14 next.
Unfortunately there was a gap of nearly a year between the time when, by what is known as the Sankey Judgment, it was decided that the import of dyestuffs could not be prohibited without legislation, and the date when this Act of Parliament took effect. The Germans, with great enterprise and energy, took advantage of that year of grace to pour into this country an enormous quantity of dyes of all kinds. The normal consumption of dyes in this country is something under the value of £3,000,000 in a year. During that twelve months we accumulated stocks of dyestuffs in this country to the value of £7,000,000. In addition to this, between 1920 and 1922 we took, in the form of Reparation payments, something like the

539
value of £2,500,000 of dyes, so that there was imported into this country and available for use here something like three years' supply of dyes when the Act came into force.
The result of this, of course, was that for a long period, at any rate for something over two years after the Act became effective, the dye-makers in this country were struggling against an overwhelming burden of foreign competition which, I think, had certainly not been foreseen by the framers of the Act or by Parliament when it passed it into law. With the certainty, however, of ten years in front of them, the dye-makers set to work to improve their factories and to develop the chemical and research side of the industry, and during the ten years in which the Act has been in force they have made very remarkable strides indeed. In fact, the strides that they have made are so remarkable that, so far as I am able to judge from the debate which took place in another place, the main argument against the continuance of the Act is, not that they have not done well, but that they have done so extraordinarily well that they are no longer in need of any protection.
I do not want to weary the Committee with a number of statistics, but, to give some idea of the change that has taken place owing to the policy of the Act, 1 may mention that before the War more than 80 per cent. of the dyestuffs used in this country were imported from abroad, and of the remaining 20 per cent. more than one half could only be produced by the use of intermediate substances which were themselves imported from abroad; so that in only something under 10 per cent. of the dyestuffs could manufacture take place completely in this country. To-day, of all the dyestuffs used in this country 93 per cent. in volume are produced in this country and the whole of the intermediates for those manufactures are home made. All that is left for the foreigner is the remaining 7 per cent., consisting very largely of comparatively small quantities of a very large number of dyes, many of them dyes which ate either novelties or of some particularly complex type, because the chemists employed by our British dye-makers have concentrated, to begin with at any rate, as I think very wisely, on the production of those dyes for which there is the greatest demand; and I am informed
540
that even of the 7 per cent. at present imported from abroad about one-fifth, it is anticipated, will be manufactured in this country within the next twelve months, assuming that this Act were prolonged for that time. Putting it into figures of weight, I think that before the War our production in this country was something like 9,000,000 lbs. avoirdupois and to-day it is 55,000,000 lbs., and our exports were some 4,000,000 lbs. avoirdupois whereas to-day they are 15,000,000 lbs. avoirdupois.
If one turns to the question of price—because not only is it important to see whether we have developed the production of quantity but also whether the goods which we have produced are being provided at a reasonable price to our own manufacturers—when the Act came into effect at the end of 1920 the average price of dyestuffs was 48. 4d. per lb. Your Lordships will realise that there is infinite variety of price, because some of the novel substances cost more than the more ordinary ones, but the average price was 4s. 4d. per lb. The pre-War price was 18. per lb. To-day the average price of the British made dyes is 1s. 5d. per lb.; that is to say, it is less than a third of what it was when the Act became operative and only just over 40 per cent. above the pre-War price. I think that is a very remarkable achievement on the part of our manufacturers. The facts which I have stated are, I think, beyond dispute. They are mainly extracted from a Report which the Licensing Committee itself made in August of this year, in which they describe the present position and development of the dyestuffs manufacturing industry in this country. It was published as a Command Paper in August last. The Committee, however, while they found those facts as to the present position and development, abstained from making any recommendation with regard to the future, and it is matter of common knowledge that the reason why they abstained from making any recommendation was that they were not employed for that purpose and there was not complete unanimity on the Committee as to what the future ought to be.
The dye-makers, the people who have been responsible for building up this great industry, claim that it must be continued for a time unless we are pre-

541
pared to run the risk of seeing a great deal of the work which has been done thrown away, and of seeing the development which is taking place suddenly arrested. They claim that there are two ways in either of which the foreigner is likely seriously to injure their position if the protection afforded by the Act is not continued for a. while. Besides the Germans, I should remind your Lordships that there are to-day substantial manufactories in the United States. Both in Germany and the United States there la a high protective tariff, which secures to dye-makers in those countries tt4hte monopoly of their own market, and each of those industries in the United States and Germany respectively is in a position to export, and does export, a large quantity of dyes every year. Supposing this British market is turned into an open market in January next, the first thing that may happen is that, there may be a great deal of dumping of American and German products in this country.
It has been said by members of the Socialist Party that they do not know what "dumping" means. Therefore let me explain. What I mean, at any rate, in this connection is the selling in our markets of the surplus production beyond what is required for their own home market at a price far less than the cost of production in this country, and far less indeed than the cost of production in the country of manufacture, in order to increase the total production in that country and so reduce the overhead charges and the cost per ton of production. Your Lordships will appreciate that that process, if it is carried out on any substantial scale, must inevitably mean that the market in the particular article chosen as the subject matter of attack must sooner or later pass into the foreigners' hands. Let me give one example of what happened before the War. There was a dye called, I think, Turkey Red, which was largely used in this country and which was produced for a while by factories set up in this country. The German dye-makers thereupon reduced the price of Turkey Red to 5d. per lb., a price far below the cost of production, with the result that our factories had to give up work; they were dismantled and went out of action. When that object had been achieved the Germans put back the price to 2s. 6d. per
542
lb., and proceeded to make our colour users pay that sum. That is a danger which quite obviously exists if this protection which we at present enjoy—I am not using the word in any tariff or technical sense—be suddenly taken away.
There is another more subtle, and as I am informed more probable, method of attack. Ever year there is produced a number of new dyestuffs, as the industry is pre-eminently a progressive and developing one. Each year there are invented some dyes, which by reason of their excellence of colour, or qualities. for remaining fast., have an advantage over anything previously known. It is quite possible, and indeed probable, that the Germans, for instance, who are peculiarly expert at inventing and producing these novelties—they have had some fifty years start of the rest of the world —will sell their novelties with the condition that the borer of the novelty undertakes to buy the bulk supply of his more ordinary dyes from the same manufacturer. Your Lordships will appreciate that the novelty may be used in comparatively small amounts and at, a high price, and that the same colour user who requires some small quantity of the novelty may, and normally does, require very much larger quantities of the ordinary dyes which are used in every-day practice. And the German condition will he: "If you receive from us our novelties, then you must undertake to take all your supplies of dyes from us, sometimes with the provision that we supply them at the ordinary market price." The effect of-that tie will be of necessity that the colour users in this country will be compelled, if they want to have these novelties and compete on level terms with their foreign competitors, to take the bulk supplies of dyes from the German dye-makers. It will not cost them any more because the German dye-maker will not charge more for his ordinary dyes than the British dye-makers are charging to-day. But the British dye-makers will lose their market, because the Germans will have got the customer by virtue of the tie and the British dye-maker will be largely put out. of action. That, I am informed—and I think your Lordships will agree that it sounds a not improbable theory—is, in practice, a very real danger.
Because of these dangers the dye-makers have asked that the Act shall be

543
extended. In answer to that request there have been representations made by various other bodies. There is in existence a body known as The Colour Users Association—that is to say, an association formed by the people who buy and use dyes—and opinion in that association is very much divided. It is fair that I should say at once that the majority of the Council of the Association desire that the protection shall be withdrawn from the dye-makers and they instructed their President to make that statement at a public meeting, I think in August or September last. But the President, Sir Henry Sutcliffe Smith, in making that statement, went on to say that whereas he made it as the mouthpiece of the Council and in accordance with their instructions, yet he felt bound to add that with his experience and knowledge—and he, after all, is the President of the Association—he took the opposite view and he thought that it was essential for the colour users themselves that the protection to the dye-makers should be continued for a time. I could give your Lordships, if it were necessary, other instances of prominent dye users who have publicly expressed the same view.
There are, I think, three grounds on which it is suggested that the colour users will benefit if the Act be allowed to lapse. First of all it is suggested that the price they are being charged is in some cases too large. I have given your Lordships figures which do not seem to show that there has been any gross excess in price charged. I could, if necessary, give a number of figures to show what a very remarkable reduction in price has been brought about by the ability of British dye-makers to produce particular dyes which formerly were the monopoly of the foreigner. I will give one or two instances. There was a substance known as Brilliant Glacier Blue of which the price in 1926 was no less than 26s. per lb. The British dye-makers discovered how to make it and introduced it on to the market in this country at 16s. per lb—only a little more than half what the Germans had been charging. To-day that dye is being sold by the British dye-makers at 4s. 10 d. per lb., which is one-fifth or one-sixth of what the Germans were charging when they had a monopoly.
Similarly, there was another blue, the Victoria Blue, which was being sold at 13s. 6d. per lb. in 1922. The British dye-makers discovered in 1923 how to make it and to-day they are selling it at 2s. 7½d. per lb., or something under a fifth of what the German price was as long as they had the monopoly. I hope your Lordships will not think that I am criticising the Germans for making these high charges. They were quite right. So long as they had a monopoly there was no reason why they should not make our colour users pay. I am quoting the figures in order to show the benefit to the colour users from taking the longer view of the preservation in this country of an active British dyemaking industry. But I think that any risk of undue exploitation in the matter of price is removed by the undertaking which the dye-makers have given that, where the same dye can be bought from Germany, a licence shall not be refused if the price charged by the British dye-maker is any higher than the price the German dye-maker is charging to his own colour user in Germany. Your Lordships will see that that effectively provides that there shall be no handicap in the matter of price imposed on the colour user in this country, as compared with his competitor in the country in which the dye is made.
A second objection is raised. It is said that in administration delays have been occasioned by reason of the necessity of obtaining a licence, and I think it is fair to say that when this Act first passed, and this Committee was first set up, there were undoubtedly delays—delays which in many cases were very patriotically and loyally borne by the colour users, who in those days, with the memory of the War fresh upon them, were only too glad to co-operate in the working of this Act. But that objection has, think, completely disappeared, and we have it in the Report that of all the licences applied for during the last month which they could take—I think August or September—the average time taken to grant the licence, from the time the application was received, was, in 91 per cent. of the cases, four days. I do not think that your Lordships will think that is an unreasonable time. Finally, it is suggested that the colour users may in some cases be unable to get the newest dyes from Germany. With regard to that

545
I can only tell your Lordships that there has been no evidence produced that I have seen anywhere of that ever having happened, and that one of the best known of them, Dr. James Morton, in the lecture which he gave to the Chemical Society dealing with that point, said he was habitually using the latest novelties in the course of his trade, and that he had never experienced the slightest. difficulty in that regard by reason of the provisions of the Act.
The only other objectors—and very important ones—are the textile trades, or some of them, in Lancashire and Yorkshire. They are not users of these dyes, but they are suppliers of the raw material, the undyed cloths, to the users, and, naturally, anything which would interfere with the colour users' trade would react unfavourably upon them. There is no doubt at all that the textile workers' trade, both in Lancashire and in Yorkshire, is in a very serious state, and requires every assistance which it can be given. That is a fact which I am sure nobody in this House fails to appreciate and to which we all desire to give full weight. But it is not true to say that the depression which exists in those trades is due in any sense to any disparity with regard to dyes. The best way of testing that is by seeing where the falling off in exports has taken place. I have the detailed figures here, but the falling off in the exports of the undyed goods in 1929 as compared with pre-War days, 1013, is roughly 50 per cent., roughly a half, and the falling-off in the fully dyed goods is roughly one-third. So that there has been a greater falling off in the undyed than in the dyed goods. That seems to indicate pretty clearly that it is not any difficulty with regard to the dyeing which has caused the disaster. When one remembers that the total cost of the dyes is something like 1 per cent, or between 1 and 2 per sent. in the case of the fully dyed goods, it is at least unlikely that it is the dyes which are responsible. I thought it right to call your Lordships' attention to those two objections.
On the other side, we have support. apart from the dye-makers themselves, who, after all, are the most vitally interested and who would not be likely to wish to interfere with the textile trades, because not only are they customers in
546
matters of dyes but they are customers in other respects for all sorts of chemical goods which would be very unfavourably affected by anything which reduced their trade: the colour-makers themselves are unanimous in pressing for the extension of the Act. The Federation of British Industries, again not a dye-making or interested body, has passed a resolution which, I suspect, has been circulated to many of your Lordships as it has been to me, in which the executive committee is strongly of opinion that in a matter of such importance from the point of view of national prosperity and security there should have been an impartial inquiry into all the facts of the case before the decision was taken to allow the Dyestuffs Act to lapse in January, and urges on the Government the necessity of extending the Act for such period as may be required to enable a judicial investigation on non-Party lines to be made. The Institute of Chemistry, again not a body which has any axe of its own to grind, has passed a resolution in which it presses on the Government the desirability of extending the period of the operation of the Act on the ground that the research work done by the chemists employed by these dye-makers and the openings which are provided for chemists in the dye-making industry are of such importance that it is vital in the interests of science and in the interests of the chemical industry as a whole in this country that the prolongation shall take place.
There is one other section of the public, and a very important one, which is affected by this Act. I refer to those who are responsible for our defence in time of war. It is a very remarkable fact that, during the debate in another place upon the question of whether this Act should be prolonged or not, the mover of the proposal that it should be prolonged twice challenged the Government to say whether they had consulted their technical advisers on this matter, and, if so, whether the Government had been advised that the Act could safely be allowed to lapse. Although the President of the Board of Trade was interrupted in his speech in order to be reminded that he has not answered the question, he only resorted to a familiar device of the Socialist politician and said that he would come to it in a moment.

547
Although I have read the whole of the speech, I never arrived at that point.
I am sure your Lordships will be interested to hear from the Government in this House whether they have ventured to reach this decision without consulting their technical advisers, and, if not, what advice those technical advisers gave. I ask the question with the more confidence because, as I reminded your Lordships, the War Office itself has a representative on the Licensing Committee, and I should like to know whether he has been consulted and, if he has, what advice he has given to the Government. What is the answer which was made in another place? What, I suppose, will be the answer made here? It was conceded that the industry was a vital one from the point of view of national security and of industrial development. It was conceded that the dangers which I have indicated were stated by the dye-makers and others to exist. All that the Government said In reply was: "We think that this industry is so strong that we do not believe it will be hurt by abolishing the Act."
They were asked: "Supposing that these methods of dumping or of tieing were practised, what would happen then?" and the President of the Board of Trade said, after a long exposition of the impossibility of doing anything but what this Act does, that it was quite impossible for him to say what steps he would take if these disasters occurred. So that the position, as your Lordships see, is that here is an industry of acknowledged vital importance, vitally important to our national security, vitally important to our industrial supremacy and development, vitally important to the whole of our chemical industries, and an industry which, admittedly, can be attacked in the ways which I have indicated to your Lordships and which, if it is attacked in those ways, must be very seriously injured to the great detriment of the nation as a whole. And the Government are proposing to allow this protection to lapse without any inquiry as to the facts, merely because they do not believe that the Germans are going to be so ill-natured (shall we say?) as to endeavour to capture this market or that this industry will not in some way which they do not indicate be able to resist their onslaught. In another place it was
548
suggested that the Act should be prolonged for a period of five years, and I see that there is on the Paper an Amendment to my proposal which puts the same proposition before your Lordships.
THE EARL OF CRAWFORD: I do not mean to move it now.
VISCOUNT HAILSHAM: I am very much obliged to my noble friend Lord Crawford. I was going to deal with that proposal, but what I suggest to your Lordships is that the least that can fairly be done in circumstances such as these is to have that inquiry which so far the Government have obstinately refused to undertake, and to prolong the Act until that inquiry can take place. I am not asking your Lordships' House to judge the question as to whether it is necessary or not to prolong this Act for a period of years. What I am asking your Lordships to say is that, on the facts which I have opened to the House, there is a case for inquiry and that it is not right that this Act shall be allowed to lapse until that inquiry has taken place. I venture to suggest that it is no answer to say: "Well, if it turns out that these disasters ensue, then we shall consider what to do, although at present we have not the faintest idea what we could do."
So far as I can ascertain, the only real inquiry that the Government undertook was to ask the Secretary of State for War, who happens to be Member for a Lancashire constituency. He told the Government, I suppose (because he certainly told the House of Commons) that he knew all about the textile industry and that his constituents expected him to get the Act done away wit h. The value of his testimony is a little discounted by the fact that when the Act was originally introduced into another place ten years ago, the same gentleman, Mr. Shaw, was its most vigorous opponent. He then ventured on prophecy, and he prophesied that the Act would not achieve the purpose for which it was drawn, that it would lead to inefficiency, to unnecessary bureaucracy and to general upset, and that it did not do anything at all to further research or to develop science. The one thing that is admitted on all hands is that that prophecy was in every respect signally wrong. Everyone of the things which Mr. Shaw predicted would

549
not happen has happened, and everything he predicted would happen has not happened; and when I find that result of his wisdom ten years ago, I venture to think it is a little unsatisfactory, because he may have a seat which may be affected by the decision, that the Government, without any inquiry other than ascertaining what Mr. Shaw thought, should determine on this drastic step of allowing the Act to lapse next year.
I have taken up some time, because the matter is of some importance, but at any rate I can make this promise, that I shall not have much to say on either of the other two Amendments. I submit to your Lordships that on the facts which I have outlined I have made out the case for insisting on the inquiry which the Government so far will not undertake. I have made out a case for demanding from the Government an answer to the question which I have put, and I ask your Lordships to say that this Act shall not be allowed to lapse until that inquiry has been undertaken, and the answer has been obtained.
Amendment moved—
Page 1, lino 19, leave out ("Part I") and insert ("Parts I and III.").—(Viscount Hailsham).
LORD PARMOOR: My Lords, I think it would be best if I stated the opinion of the Government now, after the very wide-reaching speech, if I may so call it, of the noble Viscount opposite. When I indicated the other day that this discussion had better be taken at the Committee stage, I mentioned that in the view of the Government, and certainly in my view, the main question involved was a matter of dispute as between the dye-makers and dye users. I think the general answer to the noble Viscount's speech is this, that he has not grappled with the position of the dye users. He referred amongst others to the Secretary of State for War, who stated in round figures that the dye-makers were concerned to the extent of 750,000 persons.
VISCOUNT HAILSHAM: The noble Lord has got the figures wrong; that figure refers to the dye users.
LORD PARMOOR: I meant the dye users, who are estimated at something under 800,000. The point I was making was this. I think there has been ample
550
evidence, ample inquiry, and ample agreement that if this Act is prolonged, as proposed by the noble Viscount, it will be to the disadvantage of the great. textile industries, particularly in Lancashire and Yorkshire. It is no answer whatever to say, on the argument which the noble Viscount has brought forward, that they must go on bearing those disadvantages. That is the vital and essential factor which has determined the decision made by the present Government —Socialist, as the noble Viscount says. Yes, I gladly admit that it is Socialist; it has formed its decision on social services and social duty to the huge population of working people in the textile industries in Lancashire and Yorkshire.
I think the noble Viscount has not understood what the issue is. I do not want to go back into past history. I do not think it is necessary to do so, but there is no doubt about this, that the purpose of the 1920 Act was to establish a dye industry in this country, by excluding all synthetic dyes, organic dyestuffs, colour or colouring matters, and organic intermediate products used in the manufacture of any such dyestuffs, colours, or colouring matters except under licence. I think the noble Viscount was quite right when he said that we are not dealing here with what I might call the ordinary Protection question. What we are dealing with here is a very drastic measure, which goes far beyond any ordinary measure of protection—namely, the absolute prohibition of the import of these synthetic organic dyestuffs into this country except under licence. I shall have to quote from documents of inquiry showing that the licence has been a. great difficulty and drawback in the way of the manufacturers in this country, particularly in regard to new dyestuffs and new patterns—a difficulty in the way of what is called their business of initiative and not merely their current every-day business. The licensing body was a statutory body constituted in the Act itself, and I gladly confirm what the noble Viscount has said that the work of that body has been admirably done. I do not deny that for a moment. On the other hand, there is a consensus of opinion, I understand, that however well it was done the necessity for applying for a licence for these synthetic dyestuffs has been a great interference with the

551
freedom of the business of the manufacturers in Yorkshire and Lancashire, and has to a very considerable degree interfered with the prosperity and expansion of their business.
There is another body to which the noble Viscount did not refer, but which, to my mind, is the most important body of all, and that is the Dyestuff Industry Development Committee. That is not the licensing body. The licensing body is a statutory body constituted under the terms of the Act. The Dyestuff Industry Development Committee is an entirely different body, and I should like to read one passage, at any rate, from its Report, issued in July of the present year. The Report is contained in a Command White Paper. Before I quote it I wish to emphasise that on both sides of the case, as I read the Report of this independent Dyestuff Committee, you get an answer to the arguments of the noble Viscount. The Committee say that the dyestuff industry has been established in accordance with the proposals of the Act of 1920, and that the suggestions of interference need not be regarded either with any fear or with any real apprehension. Let me read a passage upon that point so that I may make the matter quite clear. The passage is from page 4 of the Report, paragraph 13. I ask your Lordships to consider the extreme importance of this Report, which is entirely independent so far as the Government are concerned, having been issued by a Committee composed partly of dye users and partly of dye-makers with, in addition, certain independent members who are either chemists or hold positions of that kind.
What the Committee says is entirely out of accord with the argument of the noble Viscount opposite. This is what the Committee says:—
"At the outset the Committee has no hesitation in saying that the main object of the Act has been achieved."
The main object of the Act was to institute a new industry in this country. No one objects to that. I was going to say that even the extreme Free Trader has always allowed that, as regards the introduction of a new industry into a country, special measures are required. The Report goes on to say that:—
"… a substantial dye-making industry has been built up and maintained by reason of the Act in this country."
552
What they say is—and this is an independent inquiry by a Committee on which there were both dye users and dye-makers —that the industry which was intended to be established has been established. I think the noble and learned Viscount himself showed that in many of the statistics which he gave. They go on to say, in effect, that that industry having been established, it is no longer necessary to maintain it by this system of prohibition and licence and that the Act ought now to come to an end.
VISCOUNT HAILSHAM: Does the noble and learned Lord say that that is in the Report?
LORD PARMOOR: I am going to read the words, and not only will I read the words but I think I can substantiate them. There are so many pages in the Report—
VISCOUNT HAILSHAM: Find that one.
LORD PARMOOR: They say that this industry has been built up and maintained by reason of the Act. Is there any doubt whatever that what the Committee find there is that the purpose of the Act of 1920 has been attained, that the industry which was intended to be built up in this country has been, in fact, built up? And by establishing I mean that the industry has been put in the same position as all other industries of being quite able to meet ordinary competition from abroad. I hope your Lordships will listen to this because the noble and learned Viscount challenged me about it—
"and that the achievement of that object has admittedly laid a serious burden upon the colour-using industries"—
"Admittedly." This was not a Report merely from the colour users; it was from colour users and colour makers, and in this respect they are unanimous. The Report goes on—
"in the high prices which have been charged to them for dyewares during the early years of the operation of the Act"—
A NOBLE LORD: In the early years.
LORD PARMOOR: Whenever the burden came. The Report continues—
"and by some interference with their access to the world's markets for their wares."
Now the difficulty about the access to the world's market for their wares arose in the way the noble and learned Viscount

553
indicated—that is to say, that as regards new dyes, new industries, new inventions for the purpose of dyeing our great textile manufactures in this country, in Lancashire and Yorkshire, it was found to he a great difficulty that they could not have freedom in making their tenders for the production of these new products, first of all because there was uncertainty whether the licence would be granted, and, secondly, because obtaining the licence took time and time is of the greatest value when you are seeking to get the contract at the earliest possible moment. I should like upon this same point to refer to what I understand the noble and learned Viscount had in mind, although no doubt he criticised the words and terms used. The council of the Colour Users Association—he said afterwards there was some alteration in the views of the Chairman, but that is not a matter of importance in this connection—allege that they already have to pay higher prices for special dyes from abroad, and that this prevents them having quick access to new colours for the fashion trade, and places the Lancashire and Yorkshire textile manufacturers at a particular disadvantage in this department of their industry.
Will any one deny that they are the persons concerned who know the effect of the Act of 1920 upon their businesses? Is any one here prepared to deny that they have already to pay higher prices for special dyes from abroad, or is any one here prepared to deny that licence retrictions prevent quick access to new colours for fashion trade and place the Lancashire and Yorkshire textile manufacturers at a particular disadvantage in this department of their industry? It is not necessary in your Lordships' House, or at the present time, to emphasise the importance of not putting our textile manufacturers to any special or artificial disability. The noble and learned Viscount himself said—I have not got the figures by me, but I have no doubt they were perfectly accurate—that as regards undyed stuffs there had been a falling off, I think, of 50 per cent. and as regards dyed stuffs only a falling off to the extent of one-third. I think I am right.
VISCOUNT HAILSHAM: In round figures.
LORD PARMOOR: A falling off of one-third under present conditions is extremely serious. I emphasise again that it is a fact which made it necessary in the opinion of the Government that they should give every relief possible as regards these industries and not prolong these disadvantages which attach to the Act passed in 1920. But let me say quite frankly, in order that I may get the matter beyond all doubt, that in the opinion of the Government, as in the opinion of the Committee to which I have referred, the object of the Act of 1920 has been attained. It has put the dye-makers into a position in which they can compete on equal and fair terms with dyes imported from any place abroad, and it is an entire illusion—at any rate in the view of many who have considered this matter—to suppose that as far as dye-makers are concerned they will he subject to the difficulties which the noble Viscount has pointed out. They are two-fold, as far as I understand him. One is that there is no real difficulty in obtaining new dyes. The difficulty is that inventions are made abroad before similar dyes are made in this country. It is not a question of throwing any doubt on the efficiency and efficacy of the dye-makers. That is not the point. The point is that inventions are in fact made elsewhere and that access to these dyes for new fashions ought to be open without any obstruction or difficulty to the great manufacturing textile industrialists in Lancashire and Yorkshire.
And why not?—if I may pause for a moment to ask that question. They have had for ten years. the advantage of the Act of 1920. No one could demonstrate more clearly than the noble and learned Viscount that they have succeeded in establishing a great dye industry in this country. If that has been done, has not the time arrived when the manufacturers and the dye users ought to have all the advantages possible, considering the difficulties they have to meet in world-competition at the present moment? I do not see what answer is to be made to the proposition I am putting. The only suggested answer is that there may be some difficulty as regards particular new dyes. There may be some difficulty owing to a principle which I know has been established—I recollect a discussion on it in this House, anal I am afraid I was a

555
great opponent of the principle—namely, of not supplying a particular article of which you have a patent or some other monopoly interest, unless at the same time the purchaser takes other commodities which you are willing to sell to him. I agree with the noble and learned Viscount upon that principle, which has long been adopted in this country. I do not believe that there is the least risk worth considering of a system of that kind being introduced against the interests of the dye-makers here. They are a very strong and established body. They have all their works in order, they have the necessary knowledge and experience of manufacture, and they have scientific chemists. I can see no reason whatever why we should fear that in those circumstances we are not capable, with this, as with many other manufactured products, of facing the whole world with success.
There is another point to which I think the noble and learned Viscount attached very little importance, although it seems to me to be very important indeed. I refer to the views of the organisations representing the Lancashire and Yorkshire textile industries, both employers and employed. Their desire is that the Act should lapse, so as to free the industry from such forms of artificial disadvantage as its continuance places upon them. They do not desire to injure the dye-makers. Dye-makers and dye users together form, in a sense, almost a cooperative business. All they desire is that, since the dye-makers have obtained the established position which the Act of 1920 gave them, there should now be no interference, as there has been in the past, with the price, quantity or quality of the dyes necessary in the textile industries to which I have referred. No doubt the noble And learned Viscount has seen the four points which they raise. I suggest that each of them is entitled to much consideration. The first is that the Act has helped to keep the cost of dyeing unduly high, thus affecting orders for the export trade. Can we afford to maintain a system which affects orders for the export trade? Are our textile industries in such a position that they ought to be subjected to a penalty of that kind, at least unless it can be shown that the penalty is really necessary?
556
The second point that the users of dyes raise is that the licensing system causes uncertainty and delay, and sometimes means loss of orders. Of course it does. If you have to wait, when an order has been offered to you, until a licence has been obtained, of course it gives your competitors an opportunity to step in and the order goes to them. They say, in the third place, that the purpose of the Act has already been achieved within the contemplated period of ten years. I do not think that any one can question this for a moment. As the noble Viscount has shown, this is not a question of Protection, but of establishing an industry. Can we deny for one moment that the industry has been thoroughly established at the present time? In the case of any industry, you can always suggest certain weak spots, but that is not the question here.
I have already quoted from the Dyestuffs Development Committee to snow that at the outset the Committee have no hesitation in saying that the main object of the Act has been achieved, and that a substantial dye-making industry has been built up and maintained. That is common ground. I should of course repudiate any notion that, when a large industry has been built up in that way, the Government are not as anxious as any one that its security and prosperity should be maintained and enhanced, as much as that of any industry in the country. No one can have any other desire, whether from a political standpoint or not, than that, in every direction, our industries should be maintained at the highest possible point of expansion, subject only to the condition that each industry must have a fair opportunity. Of all our industries it is most important that the industries of Lancashire and Yorkshire shall not be interfered with. The fourth point made by the users of dyes is that hitherto the burden has fallen in the main on the textile trades and that, if further assistance is needed, it should be a national charge and not in the direction of further extending the prohibitions of the Act of 1920. Surely that is a justifiable attitude from the point of view of the dye-users. I am not suggesting the immediate development of a policy of that kind, because I do not think it is necessary. I think that the industry has

557
been established, and that we have to a wonderful extent succeeded in all that we desired to do when we passed the Act of 1920.
I have here a list of figures showing what has been accomplished under the Act. I agree with the noble and learned Viscount that its success is almost notorious and that it is not necessary to go into detail at this stage. He gave one or two figures, and perhaps he will allow me to do the same, in order to show how entirely I agree with him upon this point. The output of synthetic dyestuffs by our manufacturers has increased from 9,000,000 lbs. in 1913 to 55,000,000 lbs. in 1929. That is a splendid illustration of the success with which this industry has been established; and that is our case. I certainly do not think that the noble Viscount suggested that the dye industry had not been firmly established. There is no industry in the country in reference to which you might not be able to suggest further improvement or further expansion, but in substance, since the passing of the Act, the dye-makers of this country have had a monopoly, under the principle of prohibition, of which they have made admirable use. They have established an industry for which everyone is grateful, but the time has now come when the continuance of the present system should not be allowed, because it is unnecessary and to the detriment of other traders representing very large interests indeed.
One point that I have overlooked is to be found in the final Report of the Balfour Committee on Industry and Trade, which was issued in 1929. The reason why I refer to this is that a system of prohibition and licence is of an exceptional character and certainly ought not to be enlarged beyond the time that is necessary to give an industry a firm establishment. In addition to a large number of points with which I will not trouble your Lordships, they say—this is on page 293 of the Report—
"While we consider that in the circumstances the temporary regulation of imports of dyestuffs was unavoidable, we trust that the Dyestuffs (Import Regulation) Act, which is due to lapse in 1931, will not he continued or renewed beyond the minimum period necessary to achieve its purpose, having regard to the strong objections of principle to the method of prohibition and licensing as a permanent element in commercial policy."
558
There may be a difference between the noble Viscount and myself as to whether a year or two, more or less, might be advantageous, but the general principle is quite clear. We do not in our commercial policy adopt this principle of prohibition and licensing except in certain circumstances and under the exceptional conditions to which the noble Viscount referred.
There is one other matter. The noble Viscount spoke of further inquiry. I think I have shown that there has already been considerable inquiry into these matters, but in addition quite lately a conference was called by the President of the Board of Trade of dyestuff makers and dyestuff users, the parties chiefly concerned, in order that they might advise if any further co-operation could be suggested and give further evidence whether the Act should be renewed or not. The Chairman of that Committee, who was a very well-known man indeed, reported that they had met and could come to no conclusion. There is this difference of opinion between the two bodies, and it is not the least good trying to cover up a distinction of opinion which in fact exists. The Chairman of the Conference reported that it was no good going further in this matter, because they could never come to any determination. You will always find that the dye-makers, like those engaged in any other industry, want an extension of the monopoly in their industry. On the other hand, the dye users could never be convinced that this system of prohibition and licence could do other than increase their difficulties and the cost of the manufactured articles which they desired to export as largely as possible to all the markets of the world.
I agree very largely with the noble Viscount that we have got here a very important issue—the dye user on the one side, the dye maker on the other—and I think the time has come when this change should be made in the interests of the dye user, on the ground that the dye maker has obtained an established position, unquestionably, and that now the dye user should have all the freedom possible, and should not be interfered with either by monopoly or licence, and that on those grounds it is wiser that the Act should be allowed to lapse than that it should be extended for some further period, whether long or short.
THE EARL OF CRAWFORD: My Lords, the Leader of the House criticised the speech of my noble and learned friend below me, on the ground that it was too far-reaching in its character, and he himself desired to define the issue as that between the dye-maker and the dye user. I desire this afternoon not to deal so much with the economic side of these two industries as to point out what has been curiously overlooked in. Lord Parmoor's speech—namely, the importance of the dye industry to British industry as a whole. One great industry after another depends upon the dye industry, and the dye industry is the pivot upon which those other industries infallibly must depend. Lord Parmoor said that the dye industry was firmly established, and that it no longer requires this measure of protection, in the non-technical sense. What a tribute to British energy and resource that in eight years—eight years, mark you—it should have succeeded in establishing a new industry to all intents and purposes in this country. Let me say in passing that the Government ought not to oppose this Amendment, on this ground, that the ten years originally contemplated by the Act have not been conceded to the industry, because the first two years were wasted years, and we have a right to ask that at least one of those years should be given back. Then Lord Par-moor says that the industry has shown no initiative.
LORD PARMOOR: No! What I said was not that. What I said was that from the manufacturers' point of view its initiative was unfair. That is another matter altogether.
THE EARL OF CRAWFORD: I understood Lord Parmoor to say that the dye-makers had not shown sufficient initiative themselves.
LORD PARMOOR: I do not think so. It is not what I intended.
THE EARL OF CRAWFORD: If that is so, there is no difference between us, but if Lord Parmoor had not made his explanation I was going to point out that during the last ten years five great central discoveries have been made in the dye industry, and three of them by chemists in this country. Moreover, I want to know what the grievance really is. Is it a grievance of price? There
560
are only two countries in the world where dyes are cheaper than they are in this country. The amount of the cost of the dye in any suit which any one of your Lordships may wear is insignificant in comparison with the total cost of the suit. Lord Parmoor, besides being Leader of the House, is the best dressed man in the House of Lords, and I have often noticed that he, being a discerning Peer, insists upon having a black cloth of a particular glossiness, which is not only difficult to manufacture but expensive to buy. It is a glossiness and blackness which defies exposure to the weather, and if, having finished the user of his coat, he put it out upon the roof and exposed it to the wind and rain for three months, his coat would not turn green. Yet there is only fifteen pennyworth of dye in his suit, and if the dye had been presented to his tailor for nothing Lord Parmoor would not have paid a penny less for his outfit. What. then, is the grievance? The cost of the dye is adding nothing measureable to the cost of the article, and when, only a few months ago, there was an inquiry into the difficulties of the textile trades not one reputable witness dared to tell us that those difficulties were in any way due to the dye industry. You may read through the whole of that Report, and I defy you to find any phrase which contradicts what I say.
I want, however, to deal less with the economic than with the research and technical side of the chemical aspect of this industry. I say it has been a triumph. We are now training a new generation of students in organic chemistry. We are doing that by an alliance between commerce and science, between theory and practice, between the workshop and the laboratory. Let me ask your Lordships to carry your minds back to the year 1914. Then we were importing from abroad 80 per cent. of our weight requirements of dyestuffs. Now we are producing 93 per cent. for ourselves. The industry then was struggling. It was moribund; I very much doubt if it could have lived for another five years. It was looking back upon the days of our supremacy in the time of Perkin, when nobody in the world could approach us in this industry; and yet, from one cause or another, we had allowed it to die down.

561
Then came the War. The first thing we discovered was that the uniform laid down by the authorities for service, namely, khaki colour, could not be dyed because the dye was unobtainable. We then realised our dependence on the foreigner. And then we realised, what we had not realised quite at once, that we were almost entirely dependent upon Germany. At that moment of crisis our industry found itself defective in plant, in equipment, in personnel, in markets, in experience, in knowledge. Let me illustrate that point by comparing our strength with that of Germany in 1914. Germany at that moment enjoyed 11,000 patents in the dyestuff industry. Our patents numbered 200 only. The patent means the evidence and the possession of acquired knowledge which Germany had built up through our own heedlessness in this country, and I compare that figure with the miserable 200 patents standing to our credit. And yet in spite of that, within ten years of the War we have built up this remarkable industry. But in 1918, at the end of the War, everybody, including our textile people in Lancashire and Yorkshire and elsewhere, said they would never trust again to that kind of extemporisation.
I want to point out to your Lordships, what should have been made more clear in the noble and learned Lord, Lord Parmoor's remarks, that the dyeing industry is emphatically a key industry. Its ramifications are untold. The range of industry which pivots round the manufacture of dyestuffs is incalculable. People who are working in dyestuffs organic chemistry research do not know to-day in what direction some new and remarkable discovery may be made, and some of the most remarkable discoveries in organic science have been made by men working on dyestuffs in industries quite remotely connected with that particular thing. This country, I think, more than ever depends for its industrial and commercial future upon the successful prosecution of industrial research, and industrial research particularly through the agency of organic chemistry.
Let me go through one or two headings of organic chemistry which revolve round the nucleus of dye-making, which radiate from dye-making, and which in the past have been dependent upon dye-making, and in the future must continue
562
to be so dependent. In the first place, explosives. Everybody knows that—nobody better than the War Office at the beginning of the War, when they realised how ill provided we were in the matter of explosives. Owing to the research which had been done by the great firms upon the Rhine in the previous twenty years the scale of German organic chemistry and its power were almost overwhelming. Throughout the War, in spite of our efforts, we never fully regained the initiative. I do not like guess-work, but I am not afraid to hazard this guess, that if in 1914 this country had had the well developed dye works and organic chemistry industry in the Universities, in the laboratories, and in the workshops, that we have got today, we should have brought that War to an end twelve months sooner than we did. So great, so incalculable, so profound was the loss to this country by our folly in 1855 in having allowed this industry to perish. And now, forsooth, because some dye users think that a licence takes four days to obtain, whereas it ought to take three, we are to imperil the continued existence and vitality of this industry. I say it is really playing with a subject of national importance.
Well that is one thing—explosives. Take coal. Coal in my opinion is the greatest raw material in the world. It has a rival in wheat, and it has a rival in rice; but on the whole coal is probably the greatest of the three. Coal tar is the basis of dyes, coal tar is the basis of perfumery, coal tar is the basis of drugs, coal tar is the basis of fuel. Of all raw materials requiring organic chemical research at the present moment coal takes the lead. We have got the best coal in the world, we have got the best coal miners in the world, and in my opinion we have got the best coal managers in the world. If we can only use that raw material to greater advantage we shall recover not only our coal market, but many other markets as well. Dye research work is the most helpful work in analysing the possible uses of coal, and without the research which dyes provide I do not think coal can ever expect to do the work by itself. We want coal research directed by the dye-maker. Does Lord Parmoor follow me in that?
LORD PARMOOR: Perfectly. That certainly will not be interfered with.
THE EARL OF CRAWFORD: Will not be interfered with? Well, if Lord Parmoor interrupts me, why did he not tell us what the opinion of the authorities about explosives was? If at the end of my remarks I have failed to answer a question, I undertake I will try to answer it, if he will. Coal is a solid fuel. Dyestuffs research is going to show us how to find the liquid fuel. It enters into the question of the vitality of rubber and into the question of synthetic ammonia, and the work done at the Badische Werke on the Rhine may affect the whole future of agriculture. And more and more is the dye-making industry becoming the focus from which radiates research into pharmaceutical products. We are making through this dyestuff industry a substantial beginning in the way of research into the public health problem. But research in drugs, like everything else, must be allied with industry. It must have its background, its foundation in industry to be really fruitful. In the case of drugs, the industry is the medical profession; that is the background of therapeutics.
I cannot help thinking that there is a good deal of misconception in authoritative circles on these points. Let me quote a word or two from a speech on December 4 from the President of the Board of Trade on this subject, relating to the fears of what we feel will follow what we consider a premature termination of this Act. Here are the words—
"I make it perfectly clear that it should be the duty of any Government to see that the research is fully safeguarded, either through that particular method"—
that is, the Department of Industrial and Scientific Research—
"or in any other way we can devise."
What naiveté! The doctrinaires of the Board of Trade seem to think that research is conducted by doctrinaires in a University, and that if a trade is knocked out you can go to the Treasury and get £100,000 from them and then turn a tap and get in return £100,000 worth of research. Really, that is not how things are done. Research is not conducted by dreamers in academic groves. It is done by the ambition of the teacher, by the stimulus of the business man, by the
564
desire of a boy or girl to get an appointment. Unless it is living and based upon realities, this research is not going to do for us, under the auspices of the Department of Industrial and Scientific Research, what it is doing to-day from the vitality it gains from industry and from organic science. We are doing this now.
I must refer to one other misconception which is not directly on the educational side but which seems to be very serious indeed. It is a prophecy by the President of the Board of Trade on December 4. He forecasts after this Act has come to an end an agreement between this country and Germany; a deal between British and German producers, even if the Act does not come to an end. The noble and learned Lord who leads the House told us that the Act is coming to an end. If that is so, make no mistake—our industry will be weakened and we shall get the worst of that deal if it comes off. We shall be treating on unfavourable terms, because the industry will be afflicted with uncertainty, with the paralysing uncertainty for instance, with which the Government has afflicted the coal industry.
What would happen? What would be the result of the deal between this country and Germany about markets, I very well know. We should get what, apparently, were valuable concessions as regards the supply and the distribution of dyestuffs. But, rest assured, the research would return to Germany. We should lose this initiative in research. That would go back to the Rhine, and in exchange for the research all the agreements and deals we could make with Germany about foreign markets would be worth nothing. When Mr. Graham contemplates a deal of that kind, not only with equanimity but apparently with favour—at any rate, with approval—I must say that I contemplate such a position with consternation. It would be a blow to education, a blow to industry and a blow to the future development, not merely of dyestuffs and of industries directly dependent upon them, but of various other leading and central industries of this country which want research more than anything else.
I wish I could appeal to Lord Parmoor who, after all, is the appointed guardian of higher learning in this country, who is the recognised protector of our labora-

565
tories and research in our Universities, to revise his judgment, to pay heed, not so much to the economic as to the educational and the research side of this problem, in order that he may really allow us at any rate to have a short respite by prolonging this Act for another year, which I am certain neither he nor his colleagues will ever regret.
THE MARQUESS OE READING: My Lords, it is much to be regretted, I think, that the Government have not seen their way to accept the very modest proposal made by my noble and learned friend Lord Hailsham. The whole course of the argument so far has tended to show that the national importance of the subject under consideration seems to have failed to reach the Government. The debate throughout, and in so far as the noble and learned Lord has replied to the noble and learned Viscount who moved, seemed to me only to illustrate the necessity or some independent and impartial inquiry in order that we might be able to thread our way in the national interest to a solution of what appears to be a difficult problem, and, as has been said quite truly, one which leads to such difference of opinion on both sides.
It is not merely a question of dye-makers and dye users. The whole argument of the noble and learned Leader of the House seemed to me to leave out of consideration the very important matters referred to by the noble and learned Viscount and, if I may say so, very interestingly descanted upon by the noble Earl who has just spoken. Before going further, may I say that I am interested myself in that I happen to be a director of Imperial Chemical Industries. Let me add that I am speaking for myself and not for the Party with which I am generally associated. This is one of those matters upon which I hold a strong view, quite untinged, I believe, by the fact that I happen to be interested in regard to one section. Of all things that we should bear in mind, surely the lessons that we learned in 1914 and after should be remembered by us at this time. The greatest criticism that I think can be made of the speech of the noble and learned Lord, Lord Parmoor, is that he seemed to pay no attention to that part of this discussion which is of far superior importance to the mere question as between the dye-makers and the dye
566
users. I do not intend for one moment to enter into a discussion of the various views that have been put forward, the representations that have been made, the Reports that have been issued, the passages that have been read out in favour and the remarks of the Chairman against. All these observations on both sides serve only to illustrate how important it is that we should have a really clear and impartial ascertainment of the facts.
What is the objection? I have been puzzled, as I listened to the debate, to understand why the Government should be obstinate. If the request was for a five years' prolongation I could understand it, but it is merely asking that it should be postponed for one year in order that there should be an impartial inquiry to ascertain what the true situation is before a conclusion is come to. It really is difficult to understand why the Government remains obstinate. What is the reason? Parliament would not be committed one way or the other. We should know the value of all the pros and cons. The matter would be completely open, and we should have determined once for all what is to he done. If I were inclined to discuss matters of Free Trade or Protection it would not be proper to do so now. It is obvious, as I think the noble Lord the Leader of the House agrees, that that does not enter into this question. Indeed, it was said on no less an authority than Mr. Asquith himself, when this Bill was under discussion originally, that the abstract question of Free Trade and Protection had nothing whatever to do with it. For myself I confess that if it had I should still think that I ought to give my whole consideration to the matter of national importance in determining on which side I should vote.
We have been listening to a speech of considerable importance by the noble Lord. I must, remind him, as he has already been reminded—and I hope that it may have been left to the noble Lord, Lord Arnold, who is going to reply, to give the answer—that he has been asked, what is the opinion of the Services on this question? Has he had time to inquire. If investigation had not been made before Questions were put in another place, there certainly has been

567
every opportunity for the Government to ascertain the answer before the question was asked in this House. Instead of giving the answer the noble Lord the Leader of this House contents himself with quoting relative objections that have been made on the one side or the other by the dye users or the colour makers, and we are left in ignorance as to what the position is. Perhaps we may infer something from the failure to answer the question which has been put on more than one occasion. I wondered rather, when I heard the speech made by the Secretary of State for War in another place, so much dwelt upon by my noble friend the Leader of the House, whether it might not have been as well if the other House could have had an opportunity not only of hearing what the views of his constituents were but also what were the views of the Services of one of which he is the Secretary of State.
Again, I ask, why should not there be an inquiry? Is the Government so averse from inquiries? Is this a Government that has a distaste for Committees? Is it not almost its inevitable answer to every difficulty: "Let us refer it to a Committee." May I remind my noble friend that even on a matter so well ascertained, in part, as the abuses in unemployment insurance, where there was no doubt as to a number of the abuses, the Government did not deal with that but relegated it to a Royal Commission? In dealing with this matter we are not asking for a Royal Commission. All that is demanded is that there should be this independent and impartial inquiry. When I think how important this matter is to the country, leaving aside the great value of the industry in question and its many ramifications, the various subsidiary manufactures and industries that have grown up around it—a key industry, as it has been agreed, and one which led to the introduction of the Bill of 1920—and when, in addition to all that, you have this most important matter of organic chemistry to which reference has been so well made in this debate, I can only think that the Government must have set its mind really to say "No." It seems determined that we should not ascertain the facts. I hope your Lordships will at any rate express your
568
opinions upon this matter in no uncertain way.
LORD CAWLEY: My Lords, I do not often trouble the House with any remarks, but on this occasion I felt that I must say something upon this question. I have been intimately connected with Lancashire and the cotton trade for more than sixty years, a great part of that time in the dyeing industry—not dye-making but dye using. Without in any way priding myself too much on my knowledge, I think I ought to have at least as much knowledge of that industry as any one in this House.
The first thing about this matter that strikes me is that people are under a wrong impression as to the state of the industry before this prohibition came in. They seem to infer that the trade was in a parlous condition. It was nothing of the sort. The history of this dyeing industry is this. It was started in this country by a man named Perkin, assisted by another man named Hofmann. A number of works—they were small works of course at that time—were started. It was a new discovery, and was not taken up to any extent in this country. Englishmen are very slow, and they did not see the advantage of this industry. The Germans did. At that time they were far ahead of us in technical knowledge. Much more so than is the case to-day. As soon as they learned that we had made this discovery they immediately put all their chemists to work upon it, and set their business men to try to get that industry into Germany, and they succeeded.
There was very little opposition. There were only one or two works in Lancashire or elsewhere in this country, and they were bought up or taken over in some way, and practically the whole of the industry was transferred to Germany. As time went on, in order that this monopoly might be opposed, two or three persons—half-a-dozen perhaps altogether—re-started the dye industry in this country. The only two of any consequence were Messrs. Read Holiday, of Halifax, and Mr. Levinstein, of Blackley, Manchester. They made some headway, but the reason they did not make greater strides and get a good deal of this industry back into this country was that our patent laws were so bad. Germany was allowed to take out patents for any

569
discoveries they made without having to work them here. They had hundreds of chemists doing research work, and any new product which they discovered, whether they made use of it or not, they pigeon-holed it, and took out a patent for it.
The consequence was they got patents for almost everything, and when anybody in this country tried to make a colour they had to apply to Germany for a licence, or if they made the colour without that licence, they were sued in the Courts of Law. It therefore became almost impossible for anybody to start colour making in this country. Mr. Levinstein told me: "I could make this place big. I could make a great industry if it was not for the German patent law. They catch you everywhere. They have got the great patent lawyers in England. If I bring a lawsuit I cannot get a barrister of any distinction to take up my case. All the big barristers in England are retained by the German colour people to fight their patent cases in England." The consequence was that Mr. Levinstein and other people could snake no headway at all. This went on, and then came the War. Of course that put an end to all the patent laws, and the Government helped Mr. Levinstein in every way possible, and in one way or another the requirements of the country were fairly well met.
Then it occurred to somebody—I see here the noble Lord who was then President of the Board of Trade; I dare say he can tell me all about it—to start a new company. They were clever enough to get the British Government to prohibit any other dyes coming into the country. I happen to have taken great interest in this matter for many years and I have a copy of the prospectus of the British Dyestuffs Corporation Limited. It says at the beginning:—
"The subscription list will close on or before Wednesday, the 30th day of July, 1919."
Then there is the hoard of directors. The Chairman was Lord Moulton. It goes on to state:—
"His Majesty's Government having given their approval, this Corporation has been formed by arrangement with the Board of Trade to concentrate, extend and expedite the, manufacture of synthetic dyestuffs"
and so on. They state among other things that foreign dyes are prohibited
570
for ten years. Then they go on to give some of the reasons why the public should subscribe. The prospectus says:—
"The production of dyestuffs by the amalgamating companies is at present more than four times their pre-War production, and it is rapidly increasing. The companies now manufacture all the oleum and other acids and also various complicated intermediates required for the manufacture of the companies' finished products."
This was all before prohibition came in. I do not say that speakers try to deceive people, but people are deceived and they think that before prohibition came there was no dyestuffs industry.
We had a big industry. I see in this prospectus a statement that a certificate had been given that the profits in 1916 were £852,000. The profits for the years ended April 30, 1917, and June 30, 1917, were £1,295,000. This thing was practically promoted by the Board of Trade. The prospectus says:
"the purpose of Excess Profits Duty 12 per cent. is now allowed on capital employed in the business of producing synthetic dyestuffs within the United Kingdom."
So they were allowed 12 per cent. before they paid Excess Profits Duty. May I say that my noble friend below me is a director of the Imperial Chemical Industries, and that there are four other directors of the Imperial Chemical industries in this House? Then this prospectus goes on to say that—
"the amalgamated companies employ at present nearly 300 trained chemists and upwards of 6,000 workpeople exclusive of those engaged on constructional work."
I think the highest figure claimed now is 7,000; so considering the time that has elapsed—ten years—the increase is not very great.
There is one other point I should like to mention in regard to this. Everybody makes a great claim now that this prohibition has led to far more chemists being employed. Nothing of the sort. This company employed more chemists than the dyestuffs makers employ now. What the dyestuffs makers have done is not to encourage research and to find billets for young chemists. What they have done is to go on manufacturing in bulk articles on which they can make money. They cannot make money out of pounds of this or pounds of the other. They want to sell tons. That is what they have done. I think Lord Crawford ought to know that, because we know

571
what interest he takes in University research. In 1920 there were 594 men on the technical staff and in 1928—that is the last Report available—there were only 378. What becomes of this claim about research work? There was more research work done before than is done now. The whole thing is propaganda, and never was propaganda more carefully worked. Whoever has done this propaganda has done it very cleverly. Whether it has been by means of letters to newspapers, or small paragraphs in the newspapers, or leading articles in the Daily Mail, this propaganda has been excellently done. Actually the technical research staff in 1920 was 120 and to-day it is only 105. What is the use of talking about the advantage to be got by prohibition? The gravamen of the propaganda is that, if they are not given another year, or if the prohibition is allowed to lapse, there will be dumping, competition and ruin. That is absolute nonsense.
I do not look at this matter from either a Free Trade or a Protectionist point of view, but I will say this: if an association like this, with its raw material at hand—and, as Lord Crawford has said, coal is our great industry—coining principally from the products of our gasworks and with a large market at home, if an association with a capital of £87,000,000 and a Chairman of the calibre of the noble Lord, Lord Melchett, whom we all know, cannot hold its own in this country, no company can. It is goodbye to the trade of Old England. They have their raw material and their market here, and they are really a trust with a capital of £87,000,000, and with five Peers on the directorate. There would have been six if poor Lord Birkenhead had not passed away. My noble friend said that we should acquit him of any desire to speak as a director of the company. It is very difficult for any man to divide his interests if he is a director of a great trust like this. I do not know if he is a Free Trader or not, but it is very difficult for a man, either on one side or on the other, to speak with impartiality. He does not mean to be partial, but if he is a director he is in a fiduciary position. He has to do the best for his shareholders.
This £87,000,000 trust has not as its primary interest research work and tech-
572
nical education. Its primary object is to make money for its shareholders. It is not true to say that the interests of research and the development of dyes are dependent upon this prohibition. In my opinion, the aniline dye industry would have got on very well without this prohibition, which was to last only for ten years and then to lapse. A company was formed with a capital of £10,000,000, to some extent on account of the prohibition, which, however, is due to lapse. I think the industry would have gone on, and would very likely have done better so far as research work goes, without the prohibition, because they would have had to meet competition in bulk colours and would have had to continue research to get fresh colours. As it is, they have this bulk industry with tons of this, that and the other, and it is with this that, they make their money.
My great interest is in Lancashire. I am deeply concerned, as is everybody who knows Lancashire, at the state of trade there. There are 232,000 textile workers amongst the unemployed, and anything that would remotely affect the Lancashire cotton trade deserves the attention of this House. None of us say that the price of dyes will make all the difference, but every little drawback to the cheap production of chemicals makes some difference. Lancashire has to meet the competition of Japan, Germany, Italy and Czecho-Slovakia. Everything, however small, that enhances our costs is a thing to be considered by everybody in the industry, and by this House as well. Two Cabinet Ministers have been to Lancashire to see what they can suggest. Needless to say, they could not do much. I myself should not know what to prescribe. There are two things, however, that they might have noted. The weavers are prohibited by their trade union from working eight looms, as they do in other countries, and they want to make them work two looms only. You can hardly expect people who are very much connected with trade unions to talk about the iniquity of the union in allowing these men to work only two looms.
The overwhelming opinion in Lancashire is that this prohibition enters into the cost of the finished article that we send abroad, in view of the competition of Germany, Italy, Japan, and

573
Czecho-Slovakia and other countries, the results of winch, I am sorry to say, have not been very satisfactory to us. Lancashire people say, and I think with justice: "If you cannot do anything for us, do not hinder us." That is absolutely the position. You can do nothing for the Lancashire trade by continuing the prohibition of aniline dyes but you will do something to hinder the success of the trade. Probably noble Lords who have little connection with trade do not know that the Lancashire trade is carried on in a peculiar way. Everything that enhances the cost affects all the particular units of that trade. There are spinners, who make the raw cotton into yarn; there are weavers, who make this into calico. The dyers and finishers dye it and finish it, the packers pack it up, and as it is going abroad the steamship company has another interest in it. Suppose an order for one thousand pieces of cloth is obtained. If any one of those particular units has to charge more by reason of having to pay more for one of its raw materials, it affects the whole process. The spinners lose, the weavers lose, the dyers lose, the packers lose, and the steamship companies lose the freight, very likely merely because the dyer could not get his dye at the market price. The Lancashire people say that that is not fair.
The idea of the trade being spoilt by dumping is not held by even a director of the Dyers' Association. Mr. Mond, M.P., who is a director of this Association, said that the termination of this Act will not kill the trade, and I think he may be supposed to know the feeling of his other directors in this matter. Of course, the noble and learned Viscount who spoke first said that the dyers sold at world prices. What are world prices? Nobody knows what the world prices are, and in a trade like this it is absolutely unknown. Mr. Mond, in the House of Commons, in advocating the continuance of this Act, said that in any neutral markets where we are subject to competition there is a very fierce fight, and no doubt prices are reduced there. What I would like to ask my noble friend, who knows the technical part of this business, is whether the world price at which the dye-makers are supposed to sell to English buyers is the price at which they and foreign makers sell in the markets
574
abroad, where there is this fearful fight? I do not suppose he will answer that.
How does this trust, with its £87,000,000 of capital and its protected market at home, do its export trade, about which it boasts? It can only do it by selling at a lower price than anyone else, and if it is successful with its export trade in these foreign markets it is rather absurd to say that it cannot hold its own in its own market at home. It is always a danger that when you get a trust like this, with its £87,000,000 of capital, it may use its protected market at home to enable it to be a better competitor with foreign producers abroad. That was done in the case of the German sugar trade. We were having sugar at about 2½d. per lb., while the German consumers had to pay 4d., because of the cartel or trust. I am quite sure that this trust, with its huge capital and its command of raw material, will be able to hold its own. It does not mean to go under, and Mr. Mond, in the House of Commons, said it was not going under. There are fierce fights abroad and they say there are going to be fierce fights here. That may be, but it will not end in this big trust going under.
It is more likely to end in a combine, or some arrangement by which they can still make the big profits with which Lord Melchett was so satisfied. He said that the profits of dyestuff making here were satisfactory and that they were increasing. They are increasing at the expense of the Lancashire trade, and at the expense of a population of 750,000 workers. It comes to this. There are 7,200 men employed in the dye-making industry. I do not want to belittle 7,200 men, but they are as a fleabite compared with the numbers of persons employed by the users of dyes. The wages paid by the dyestuffs makers are infinitesimal in amount as compared with the wages paid by those who use the dyes in their industries. This industry of dye-making will go on, even though this Act comes to an end. I do not say that it was altogether a bad thing to have protection for a limited time, but this dye-making industry is now established and the people concerned naturally have taken care to secure the cream of it. This industry will go on, and it is not fair to Lancashire workers to allow them to be

575
made the victim of a company the Chairman of which says its profits are satisfactory and are still increasing.
LORD NEWTON: My Lords, I will not stand between Lord Arnold and the House for more than a moment. Like many others here this evening, I have been waiting anxiously to hear one of the victims of the alleged burden imposed by the Dyestuffs Act. I have now listened to one of them and having done so I confess that I am not much wiser. I do not understand much more about this alleged burden than I did before the noble Lord spoke. In fact, almost the only fact that I gathered from the noble Lord's speech was that he considered the fact of 7,000 men being thrown into unemployment. to be a mere fleabite, and that apparently he is going to vote against the Amendment of my right hon. friend on the Front Bench. What I should have liked to hear from the noble Lord was some definite information as to the burden which is imposed upon him and his friends under this Act.
LORD CAWLEY: The burden imposed on us is that our competitors are able to buy in a competitive market, and get their dyestuffs cheaper than the dye users here.
LORD NEWTON: I am no nearer understanding the point than I was before. But, as the noble Lord refrains from giving us any information on the subject, perhaps he will allow me to give the information for him. I have studied the figures with regard to this alleged burden, and we have been told in so many words that the whole of the gigantic textile trade is so hampered by this burden that there is a danger of its perishing altogether. As far as I can ascertain the alleged burden practically does not exist at all. Nothing apparently, or hardly anything, costs less than the production of dye in a textile product. My noble friend Lord Crawford drew attention to the wardrobe of the noble and learned Lord opposite, Lord Parmoor, and he made the statement that Lord Parmoor—whom, for some reason or other, he selected as an object of elegance and fashion—paid 15 d. for the dye which was used in his costume. I have absolutely reliable information upon the point that, even with the extortionate prices which are charged by West End
576
tailors, who demand something between £15 and £20 for a suit of clothes, the total cost of the dye does not represent more than 11 d. That, of course, would be a ridiculous example to take, but I take my example from the clothes worn by the ordinary person. I find that, in the case of a blue serge suit, costing three guineas, the cost of the dye amounts only to 3½d. In the case of a shirt and collar the total charge which can be put down to dyes is only ½d., and in the case of three other articles of common attire, that is to say, a tie, a pair of socks, and a brown dyed hat, the total charge for dyeing those three articles only amounts to 1d. Therefore, the charge represented by dyestuffs upon the articles of a man's outfit costing £5 only amounts to 5d.
The noble Lord who spoke last, if he gets his way, and if the Act is not renewed, is in all probability looking forward to a sort of golden age in which the Americans and Germans will be competing with each other as to which can first flood this country with their dumped stock. Even if that takes place, and even if this country is flooded with dumped dyes, does he suppose, innocent-minded though he may be, that he is going to get his dyes for nothing? And how much cheaper will he get his dumped dyes, taking for instance an article worth £5? How much less will he have to pay for his dyes than he does now? I do not think the warmest advocate of dumping has in this case contended that the price would be reduced by even one-half. Therefore it amounts to this, that we are fighting for a question of 2½d., and even that is an exaggeration, because the difference will really be only a question of farthings. And yet we are solemnly told that the prosperity of the gigantic textile trade depends upon this, and that if this particular Act is not removed from the Statute Book it is doomed.
The fact is the case of the dye user is so unconvincing that I absolutely refuse to believe that the opposition to the renewal of this Act is founded upon their attitude. I think we must look to a different explanation, and my own explanation, which I am perfectly certain is correct, is that the proposed lapse of this Act is due to what I hope I may term, without offence, the acid pedantry of the present Chancellor of the Ex-

577
chequer. The present Chancellor of the Exchequer, if I may say so, is a sort of economic Torquemada, and, just as that reactionary, though probably honest, man used to persecute and condemn to death heretics, so the present Chancellor of the Exchequer thinks it necessary to torment and perhaps to terminate particular industries because they do not happen to be conducted according to the view which he holds himself. I believe this to be the real explanation of the Government attitude. And when they protest against the Motion of my noble friend below me I consider for my part that they ought to to be extremely grateful to him. They ought to be grateful to him for offering them a means of escape from the ridiculous position in which they find themselves, and which, I firmly believe, they will be unable to maintain.
THE PAYMASTER-GENERAL (LORD ARNOLD): My Lords, perhaps you will allow me to make a speech, not of long duration, summing up the position from the Government point of view. I cannot help thinking that throughout—and this was the note set by the noble and learned Viscount who opened the debate—too much stress has been laid on the advantages which the extreme protection afforded under this Act to the dyestuffs industry has given to that industry, and not sufficient has been said, despite the last speech, about the undoubted injury to the textile trades of the country. Personally, I felt that the speech of the noble Lord, Lord Cawley, was one of great weight. He has undoubtedly more knowledge of these things than anybody in the House. He has been in this trade all his life, and he bore the testimony which he did. The noble Lord, Lord Newton, says: "Yes, but how much is the cost of the dyes in proportion to the cost of a West-End suit of clothes?" Perhaps the noble Lord is not aware that the main portion of our export trade is in cotton goods, not woollen goods, and that the proportionate cost of dyes in printed cotton cloths is very much higher than he gave us to understand? Moreover, that particular trade—and I am sure the noble Lord, Lord Cawley, will bear me out—is often done on a very, very narrow margin indeed. And therefore it takes quite a minute amount
578
to make the difference between profit and loss.
Undoubtedly this extreme form of protection afforded under the Act of 1920 has been of advantage in developing the dyestuffs industry. That is not surprising. If, for instance, an Act were passed stopping either all, or nearly all, the oranges from coming into the country, I suppose your Lordships in your hothouses would grow more oranges than you do now, and there would be a demand for them. The noble and learned Viscount opposite would then say: "What a splendid Act this is. I used to have three gardeners, now I employ twelve, and yet the Government wants to do away with this Act and cause unemployment." The whole question is, who has to pay for the advantage which is given under this extreme form of Protection, or, indeed, under any form of Protection—for, with great respect to the noble and learned Marquess opposite, whatever Mr. Asquith may have said in 1920, I say that considerations of Protection and Free Trade are involved in this question. Mr. Asquith was speaking at that time on the question of national defence, about which I shall have something to say before I sit down. He was concerned with that and the ten years' experiment to build up the industry which would be of a certain service in matters of national defence. That is what Mr. Asquith was talking about.
THE MARQUESS OF READING: I was quoting also the noble and learned Lord the Leader of the House.
LORD ARNOLD: The noble and learned Lord the Leader of the House does not disagree with what, I say—that there is involved in this the principle of Free Trade and Protection. The noble and learned Lord confirms me. I say that somebody has to pay, and our contention is that in this matter those who are paying are the textile trades of Lancashire and Yorkshire mainly, and, in a small degree also, the consumer here at home. But that is not such a very important matter, although it has its place in the problem. The noble Lord, Lord Cawley, has pointed out that there are 7,200 people now employed in the dye industry, apart from the technical staffs. But in the Lancashire cotton trade and the Yorkshire woollen trade combined there are

579
about 750,000 people employed. Therefore, as a matter of proportion, a little arithmetical calculation would show that there are about 100 times as many persons employed in these trades which we say are being adversely affected by this Act as are employed in the dyestuffs industry itself.
We do not admit that if this Act is discontinued the dyestuffs industry is going to suffer in the way which has been stated. It is really not a matter of controversy that the textile trades have been handicapped. The noble and learned Viscount said that there was not much delay in regard to the licences, and he produced some figures which he seemed to think disposed of the point. I say, and evidence has been adduced, that the licence system is a deterrent. It is a system which has handicapped the traders, and so much so that some traders, probably the small ones who have not a big staff, have given up applying for licences altogether and let the trade go past them, or have got some second best material for their trade. We say that it is a handicap. Noble Lords on the other side have said that prices have come down since 1920. Of course prices have come down the price of everything has come down since 1920. Our point is that had it not been for the Act they would have come down even further, and I do not think that that can be denied.
The noble Earl, Lord Crawford, who made, if he will allow me to say so, as he always does, a most interesting speech, said that if there was all this injury being done, why was nothing done about it in the Cotton Report: no evidence on this point was brought before the Cotton Committee. I think that was not so. I believe that some evidence was brought before it.
THE EARL OF CRAWFORD: I beg your pardon.
LORD ARNOLD: I think the noble Earl, Lord Crawford, will agree with me that the Cotton Inquiry and Report were mainly concerned with big fundamental questions of the organisation and reorganisation of the cotton trade, and that those who were preparing evidence knew or thought they knew that this particular Act was coming to an end almost at once. I think that is a fair reply to him on that point. I should be very
580
sorry to come into controversy with the noble Earl, Lord Crawford. in regard to the greater part of his speech, but I do not think there is any real difference there. After all, if he will allow me to say so, the noble Earl, Lord Crawford, holds one of the most honoured names in Lancashire, and I am sure that he is not unmindful of the difficulties of the cotton trade. We also are very sensible of the difficulties of that trade. You cannot have a situation much worse than that of the cotton trade. In 1913, of cotton coloured printed goods there were exported 2,704,000,000 yards. In the first ten months of this year the exports had fallen to 937,000,000 yards, and taking the whole year, it would be only a little more than that. China used to be the second market of Great Britain in the export of cotton goods. Speaking from memory, I think that in the month of September this year Lancashire exported less cotton goods to China than to Denmark. When the trade has got into that condition, surely we have to be careful about anything which may be done to improve matters.
Then the noble and learned Viscount said that the main falling off has been in the lower end of the trade, the bulk trade. That is true; but there has been a certain amount of falling off in the higher end of the trade, and it seems to me to be a somewhat singular argument to use that because the lower end has suffered the worst, nothing should be done to improve the top end of the trade, which is the most profitable end of the trade and in Lancashire has the most prospect of being successful of any trade, and which as a matter of fact is affected by this Dyestuffs Act. We say as a matter of proportion and of proper perspective that we, as a Government, have to take into consideration the interests of the 750,000 people who are employed in these textile trades. It cannot be denied, despite what the noble and learned Viscount has said, that the textile trades themselves are almost unanimous in condemning this Act. Representation after representation has been made to the Government by employers and by employed, and it really is not a matter which admits of any further dispute. The textile trades, who, presumably, know their own business best, want this Act to come to an end, and they say that if it

581
comes to an end it will help them. That is the position, and that is the governing consideration. We say that noble Lords opposite are entirely wrong in assessing the balance because they are seeking to subordinate the greater to the less.
As regard the dye industry itself, our case is that it can now manage to go on without the Act. A great deal of evidence has been adduced on that point. Indeed, as the noble and learned Marquess opposite knows, the dye industry themselves have given a virtual guarantee of price levels and quality. They have said that if they cannot fulfil these conditions and if they cannot compete successfully with what are called broadly world prices, then let the imported article come in. If that is so, if that is their case (and it is) it very largely disposes of the argument for continued Protection, clearly. We say that the industry is sufficiently well established now to go on, and as to these lurid pictures about the harm which will come from dumping and so forth, speaking for myself they do not alarm me. We have had this kind of thing ever since 1903 and these lugubrious prognostications as a rule do not materialise.
I would like to put this question to the noble and learned Viscount who is going to reply: if the danger is dumping, as he says it is, what will be the essential difference as regards that a year hence from what it is now? What is the good of continuing an Act for another year if dumping from abroad is going to ruin the dye industry. If that is going to be the danger, this kind of protection must presumably, according to noble Lords opposite, go on permanently. Let me put this also to the noble and learned Viscount opposite. In the Safeguarding of Industries Act of 1921, I think it was, special provision was made for testing cases of dumping. Special machinery was provided and a Committee was set up to test cases of dumping or alleged dumping, and they could be brought before this Committee for examination and investigation to see if the eases could be established. As a matter of fact, I believe I am correct in saying that, although that Act was on the Statute Book for many years, only two cases of alleged dumping were brought forward for inquiry, and neither of those two cases was substantiated.
582
What does the noble and learned Viscount mean by dumping? How does he define it? He says that it must be something sold in this country at less than the cost of production in the country of origin. Those, I believe, are almost exactly the words in the Act of 1920 or 1921, which, as a matter of fact, has proved to be a dead letter because, despite all the money which the interests have for this kind of thing, only two cases were brought forward for investigation and they were not substantiated.
We have given good reasons, as we think, my noble leader has given good reasons, and the President of the Board of Trade in another place has given good reasons why we consider that this industry, which is now in a very powerful position, can go on and that the danger of a price-cutting fight is something which need not seriously be taken into account because, if it were indulged in, it would be an extremely serious thing—I am sure the noble Marquess opposite would agree with me here—for the foreign dye-makers who indulged in it. The prospect of success is extremely remote. Indeed, competition has been less keen. But if it were absolutely necessary, if there were some unholy combination to do something which seems, according to noble Lords opposite, to be a systematic unfair attempt to break down the industry here, well, the resources of civilisation would not be exhausted. The situation could then, if necessary, be dealt with.
The noble and learned Viscount opposite said: "Oh, but look at what will happen. The Germans are experts at novelties, and they will sell their novelties perhaps on condition that the buyer undertakes also to buy bulk supplies at the same time from the foreign seller, and therefore the home producer of dyes will be injured." Look at the converse. If that is the danger I can rejoin that there is an equal danger in another way. The foreign dye-makers have, so to say, tolerated—they could not do otherwise—the disabilities which this Act has imposed upon them, because they knew it was only going to last for ten years, and they are expecting it to come to an end. If it is not coming to an end there is nothing to stop them, for instance, saying to some of our buyers: "Very well; then you will not have our novelties at

583
all." That will be a still further blow at the textile trade. That is the kind of danger we have to face.
There is a further point I should like to make which appeals to me as one that calls for some reply. Noble Lords opposite belong to a Party which is constantly condemning interference in industry, and saying that what business needs is to be left alone and not to be interfered with by the Government.
A NOBLE LORD: Hear, hear!
Loan ARNOLD: If that is so, how does the noble Lord who says "Hear, hear" support what is now proposed, because here you have interference of the most extreme form with traders all day and every day. I come now to the question of research and the Service Departments. The noble Earl opposite, Lord Crawford, spoke on this matter, in which he takes a great interest, and the noble Marquess opposite (the Marquess of Reading) was very eloquent on the question, as I understand it, of national defence. He began by saying that the question of this Act was one of such extreme national importance that he was quite convinced that the Government had not really got the right perspective or taken that into account. If it is of that importance I do not see what is going to result merely from postponing the lapsing of the Act by one year. What difference is that going to make to this question of national importance? But we say that we have taken it into account, and that it is because we hold it to be one of national importance that we have taken up the position that we have taken. Our contention is that the dye-making industry will not be injured and therefore that research and the interests of the Service Departments are fully protected.
If, however, that should prove not to be so, the reply of course—and the noble Marquess knows it perfectly well—is that stated by the President of the Board of Trade in another place, that if necessary these things must be secured—that is to say, that research and the needs of the Service Departments must be provided for, and if necessary that must be done in another way. He did not meet the case of doing that at the cost of the textile trades. That is the position of the Government and I think it is a perfectly sound position. The matter of the
584
Service Departments has been taken into consideration.
The noble and learned Viscount opposite pleaded for an investigation. He wants a year for an impartial investigation. We say there has been an investigation—an investigation quite recently by the Dyestuffs Industry Committee—and the Government consider that their action is supported by that investigation. The noble Viscount said they did not make recommendations. They were not asked to make recommendations; they were asked to inquire and report upon the facts. That really was a representative Committee in the sense that it represented all the interests concerned. What does the noble and learned Viscount exactly want investigated? He did not make that clear. He talked vaguely about an investigation. We say that all the facts which are relevant and which really are in point, are known now. You have that Report to which I have referred. The Board of Trade itself has also got a good deal of information which has naturally been used by the Government, and my contention is that no case has been made out for further investigation. In view of the facts which are known the position is fully covered.
I do submit that the Government is on firm ground. This Act of 1920 was passed fur a definite period of ten years. That was the period adjudged necessary to enable the particular industry to be founded. That period has elapsed and the Dyestuffs Development Committee report that they have no hesitation in saying that the main object of the Act has been achieved. The fact that this is so is demonstrated by the amount of dyes now manufactured in this country. It is about nine-tenths of those which are used here, and a considerable export trade has been built up and the dye-makers have stated their ability to compete with the world prices. In those circumstances what case is made out for continuing an extreme form of Protection which was condemned, in effect, by the Balfour Report? The Balfour Committee reached the conclusion that this licence system should be brought to an end at the earliest possible moment. The case of noble Lords opposite has not been made out. It has not been proved that the dye industry will suffer. It has not been proved that

585
dumping might take place in an injurious way. It has not been proved that the interests of research and the Services Departments will suffer. What has been proved is that the export trade will suffer; that the Lancashire and Yorkshire trades will suffer. It has been proved that these trades are almost unanimously against it. In those circumstances I say the Government has done right in saying that the Act must come to an end and in that way is doing something to help—not to a very great extent but something definite to help—those trades which are now stricken, certainly so far as the cotton trade is concerned, almost unto death.
VISCOUNT HAILSHAM: My Lords, at this late hour I do not propose to take more than five or six minutes of your Lordships' time, but, unlike the Government, when I am asked a question I propose to answer it. I was asked by the noble Lord who has just spoken, if there is a danger of dumping what is the good of prolonging the Act for one year? The noble Lord himself gave the answer. I am not proposing that the Act shall be prolonged for one year and no longer. What I am proposing is that the Act shall be prolonged for one year in order that the true facts may be investigated and if, on inquiry, it turns out that the noble Lord is right and there is no danger of dumping, and that the other dangers we fear are imaginary, why then the Act will come to an end in a year; but if it turns out that the dangers are real and that the Government are wrong once more, why then the Act will have to be prolonged for more than a year. It is a foolish argument to say that, because I asked for a year's prolongation in order to make an inquiry, which any independent Government would have made during the last year, therefore I am in some way inconsistent with the view I have suggested that there are dangers. I said that I answered questions and that the Government did not. Three times in this House itself and in the other place they were asked: "Have you had advice from the Services, and, if so, what is it?" Your Lordships will not have failed to notice that the Government have persistently shirked answering that question. The noble Marquess said we are left in
586
doubt. I venture to say we are left in no doubt as to what the advice was, or they would not be afraid to tell us. There is no doubt whatever, I think we can take it as established, that the Government have received advice from the Services that they should continue this Act, and that they are not acting upon their advice in taking this step.
The other side of the argument may be summarised in this way. There are 7,000 people employed in the dye-making industry, and there are 700,000, it is said, in the textile trades; therefore, there are more votes in the textile trades than there are in the dye-making industry. "Therefore, we will believe everything the dye users say and disbelieve everything the dye-makers say. We believe everything the dye users allege." The noble Lord himself said it cannot be denied. Whatever the dye-makers say—of course, that is an illusion. If you believe that everything one side says is true and that everything the other side says is untrue, it is not difficult to reach a decision. The answer we get to the question. whether they have investigated is that everything is to be believed on one side without inquiry, and therefore, it is not necessary that anybody should investigate.
They tell us that there has been investigation and report by the Development Committee and the noble and learned Lord cited paragraph 13 to show that an industry has been established. I said so, and I quoted the Report. But he had forgotten, or he had not read, what appears later in that Report. The same Committee had discussed whether there was need for prolongation and said that that was a matter to be investigated. In paragraphs 112 and 113, which neither of the noble Lords ever referred to, they said in terms:—
"The question now arises whether it would be possible for the industry to carry on that development and maintain its present position without the protection afforded by the Act. There are two possible opinions on this."
Then they go on to say that it ought to be considered and that it ought to be seen whether the users and the dyestuffs manufacturers could agree. They do not agree. The noble and learned Lord says so.
The question which we want investigated is the question which the Com-

587
mittee itself left unanswered—the question which the Government only seek to answer by ignoring the advice they receive from professional advisers and by saying that they do not believe one side and assume everything on the other side is true. The noble Lord seems to imagine that assertion is argument. I assure him that because "I say so-and-so" it does not make it true, even though "it cannot be denied." This is a matter of controversy which needs investigation, and we wish that the country shall have the
Resolved in the negative, and Amendment agreed to accordingly.
Clause 1, as amended, agreed to.
Clause 2 agreed to.
Schedule:
VISCOUNT HAILSHAM: I beg to move to add Part III to the Schedule.
opportunity of knowing the facts because, as the noble and learned Marquess truly said, this is not a matter merely between makers and users. It is a question of national importance and a question which the interests of the nation demand shall he considered.
On Question, Whether the words "Part I" shall stand part of the clause?
Their Lordships divided:—Contents, 14; Not-Contents, 87.

CONTENTS.

Sankey, L. (L. Chancellor.)

Esher, V.

Hay, L. (E. Kinnoull.) [Teller.]

Parmoor, L. (L. President.)

Amulree, L.

Marley, L. [Teller.]

Arnold, L.

Noel-Buxton, L.

De La Warr, E.

Cawley, L.

Passfield, L.

Russell, E.

Dickinson, L.

Ponsonby of Shulbrede, L.

NOT-CONTENTS.

Rutland, D.

Hailsham, V.

Greenwood, L.

Wellington, D.

Hambleden, V.

Hampton, L.

Hereford, V.

Hayter, L.

Bath, M.

Hood, V.

Hylton, L.

Reading, M.

Hutchinson, V. (E. Donoughmore.)

Islington, L.

Zetland, M.

Jessel, L.

Sidmouth, V.

Kenmare, L. (E. Kenmare.)

Abingdon, E.

Ullswater, V.

Kylsant, L.

Balfour, E.

Leigh, L.

Denbigh, E.

Addington, L.

Lovat, L.

Effingham, E.

Alvingham, L.

Luke, L.

Grey, E.

Ampthill, L.

Methuen, L.

Halsbury, E.

Armstrong, L.

Monkswell, L.

Howe, E.

Ashfield, L.

Newton, L.

Iddesleigh, E.

Askwith, L.

Ormonde, L. (M. Ormonde.)

Lauderdale, E.

Auckland, L.

Ponsonby, L. (E. Bess-borough.)

Lindsey, E.

Biddulph, L.

Lucan, E. [Teller.]

Chesham, L.

Queenborough, L.

Midleton, E.

Clanwilliam, L. (E. Clanwilliam.)

Raglan, L.

Onslow, E.

Redesdale, L.

Peel, E.

Clements, L. (E. Leitrim.)

Remnant, L.

Scarbrough, E.

Danesfort, L.

Roundway, L.

Stanhope, E.

Darling, L.

Somerleyton, L.

Vane, E. (M. Londonderry.)

Daryngton, L.

Stonehaven, L.

Wicklow, E.

Desart, L. (E. Desart.)

Strachie, L.

Desborough, L.

Templemore, L.

Allenby of Megiddo, V.

Dynevor, L.

Trenchard, L.

Bertie of Thame, V.

Ebbisham, L.

Weir, L.

Burnham, V.

Fairfax of Cameron, L.

Wemyss, L. (E. Wemyss.)

Chaplin, V.

Faringdon, L.

Wigan, L. (E. Crawford.)

Devonport, V.

Gage, L. (V. Gage.) [Teller.]

Wraxall, L.

FitzAlan of Derwent, V.

On Question, Amendment to insert "Parts I and III" agreed to.

Amendment moved—
Schedule, page 5, after line 11, insert:—
("PART. III.

1.

2.

3.

4.

Session and Chapter.

Short Title.

How far continued.

Amending Acts.

(16)

10 & 11 Geo. 5. c. 77.

The Dyestuffs (Import Regulation)Act, 1920.

The whole Act.")

—

On Question, Amendment agreed to.
Schedule, as amended, agreed to.
Preamble:
Whereas the Acts mentioned in the Schedule to this Act are, in so far as they are in force and are temporary in their duration, limited to expire, as respects those mentioned in Part I of that Schedule, on the thirty-first day of December, nineteen hundred and thirty, and, as respects those mentioned in Part II thereof, in England on the twenty-fifth day of December, nineteen hundred and thirty, and in Scotland on the twenty-eighth day of May, nineteen hundred and thirty-one:
And whereas it is expedient to provide for the continuance, as in this Act mentioned, of those Acts and of the enactments amending or affecting the same:
Be it therefore enacted by the King's most Excellent Majesty, by and with the advice and consent of the Lords Spiritual and Temporal, and Commons, in this pre-
590
sent Parliament assembled, and by the authority of the same, as follows:—
VISCOUNT HAILSHAM: I beg to move the Amendment to add certain words to the first paragraph of the Preamble.
Amendment moved—
Preamble, page 1, line 10, after ("thirty-one") insert ("and as respects that mentioned in Part III thereof on the fourteenth day of January, nineteen hundred and thirty-one").—(Viscount Hailsham.)
On Question, Amendment agreed to.
Preamble, as amended, agreed to.
Then, Standing Order No. XXXIX having been suspended, Amendments reported, Bill read 3a, and passed, and returned to the Commons.
House adjourned at twenty-five minutes past seven o'clock.