Sitting of 28 May 1930

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

PRIVATE BUSINESS.
Newport Corporation (No. 1) Bill (Certified Bill),
Lords Amendments considered, pursuant to the Order of the House of 11th December, and agreed to.
Birkenhead Corporation Bill [Lords],
As amended, considered; An Amendment made; Bill to be read the Third time.
Manchester Corporation (General Powers) (No. 2) Bill,
Sutton Coldfield Corporation Bill [Lords],
As amended, considered; to be read the Third time.
Ministry of Health Provisional Orders (Goole and Oldham) Bill,
Ministry of Health Provisional Order (Hendon Rural) Bill,
Read a Second time, and committed.
LAND DRAINAGE (OUSE) PROVISIONAL ORDER BILL,
"to confirm a Provisional Order under the Land Drainage Acts, 1861 and 1918, amending the Land Drainage (Ouse) Provisional Order Confirmation Act, 1920," presented by Mr. Noel Buxton; read the First time; and referred to the Examiners of Petitions for Private Bills, and to be printed. [Bill 207.]

ORAL ANSWERS TO QUESTIONS.

  CHINESE TURKESTAN.
  Colonel HOWARD-BURYasked the Secretary of State for Foreign Affairs whether His Majesty's Government have considered the appointment of a Consul
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  at Urumchi, in view of the fact that this is the capital of Chinese Turkestan and that there is already a Russian Consul-General there and a large staff?
  The SECRETARY of STATE for FOREIGN AFFAIRS (Mr. Arthur Henderson): No such appointment is proposed at the moment.
  Colonel HOWARD-BURY: Is not the right hon. Gentleman aware that this is an important place, the capital of a very large province, and that, while we have no representative there, Russia has?
  Mr. HENDERSON: Yes, I am aware of that fact. When the matter was considered in 1925, no action was taken.
  Colonel HOWARD-BURY: But have not conditions changed very much since that date?
  Captain CROOKSHANK: Are we also to understand that His Majesty's Government are not represented in Central Nottingham?
  Colonel HOWARD-BURYasked the Secretary of State for Foreign Affairs whether he has any information with regard to attempts to overturn the existing Government of Chinese Turkestan during the past two years; and what is the present position?
  Mr. HENDERSON: Governor Yang, who had held office since the Chinese Revolution of 1911, was assassinated in July, 1928. I have no information as to any attempts to overthrow his successor. The Government of Chinese Turkestan recognises the suzerainty of the National Government of China.
  Colonel HOWARD-BURY: Will not the right hon. Gentleman take some steps to obtain accurate information of what is going on in that Province?
  Mr. HENDERSON: I do not know what the hon. and gallant Member means by "accurate information." We are in touch with our representative.
  Mr. KIRKWOOD: Is it our business to inquire into every little part of the world except our own country? What have we got to do with Turkestan?

  CHINA.

    EXTRA-TERRITORIALITY.
    Sir KINGSLEY WOODasked the Secretary of State for Foreign Affairs whether he can make any statement as to the present position of the negotiations concerning extra-territoriality in China?
    Mr. A. HENDERSON: No conclusion was reached in the conversations which have so far taken place between His Majesty's Minister and the Chinese Minister for Foreign Affairs. More detailed proposals are at present under consideration, which I hope it may be possible to communicate to the Chinese Government before long.
    Sir K. WOOD: Does the right hon. Gentleman intend to proceed with these negotiations when there is no effective Government which can speak for China at the present time?
    Mr. HENDERSON: We are continuing. I am afraid that, if we were to do nothing, a request on other lines would be coming from the right hon. Gentleman.
    Sir K. WOOD: How can the right hon. Gentleman possibly proceed and give away rights affecting British subjects, when there is no Government in China?
    Mr. KIRKWOOD: Do the party opposite want us to do the same thing in China as we have done in India?

    SITUATION.
    Sir K. WOODasked the Secretary of State for Foreign Affairs whether he can state the present position in China; and whether the British authorities have declared certain territory to be unsafe for the residence of British nationals?
    Mr. A. HENDERSON: According to the latest report I have received from His Majesty's Minister in China, the rival forces in the north have, as yet, only engaged in minor hostilities. There are fears of a new attack on Canton by rebel forces. Seriously disturbed conditions appear to prevail in the Central and South-Eastern Provinces, and British missionaries in Honan, Hupei and Kiagsi have been advised to proceed to places of safety.
    Sir K. WOOD: Does not this statement from the right hon. Gentleman confirm
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    firm all the suggestions I made a few minutes ago about the undesirability of entering into negotiations with countries in this state?
    Mr. HENDERSON: No, I do not agree.

  LEAGUE OF NATIONS COVENANT.
  Mr. MANDERasked the Secretary of State for Foreign Affairs if he will state the terms of the formula interpretative of Article 16 of the Covenant of the League of Nations agreed with the French Government during the recent Five-Power Naval Conference?
  Mr. A. HENDERSON: The discussions which took place with the French delegation during the London Naval Conference did not result in any formula interpretative of Article 16 of the Covenant being agreed with the French Government.
  Mr. MANDER: Does not the right hon. Gentleman think the country is entitled to know to what obligations it is committed in the view of the present Government?
  Mr. HENDERSON: Yes, if they had been committed they would have been entitled to know, but, as they have not been committed, there is nothing to inform them about.
  Mr. MANDER: I mean the existing obligations, not new ones?
  Captain EDENasked the Secretary of State for Foreign Affairs whether he will consider the advisability of seeking the approval of Parliament for the consideration of the proposed amendments to the covenants of the League of Nations before a decision is taken on the matter by the Assembly at Geneva?
  Mr. A. HENDERSON: As I stated in a reply to a supplementary question on the 21st of May, the House will have an opportunity of discussing the matter if the proposed amendments to the Covenant are finally approved at the next meeting of the Assembly, in which event they will be brought before the House prior to ratification.
  Captain EDEN: Seeing it is the case that, once the Assembly has agreed to these proposals, this House will have no power to do other than accept or reject

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  them, not being able to amend them, could not we have the discussion on the proposals at a time when it would be possible to amend them?
  Mr. HENDERSON: So far as any obligations rest on this country, the House will have its opportunity by refusing ratification.
  Captain EDEN: Cannot the right hon. Gentleman see that it ought to be possible for the House to make some amendment instead of being limited to acceptance or rejection?
  Mr. HENDERSON: I am afraid, if this House had to fix up amendments, we should get into a sorry mess.
  Captain EDEN: May I ask what has happened to the Prime Minister's Council of State?

  GOVERNMENT DEPARTMENTS.

    DIPLOMATIC, CONSULAR AND COMMERCIAL SERVICES.
    Mr. MANDERasked the Secretary of State for Foreign Affairs if it is the policy of the Government to unify the diplomatic, consular, and commercial diplomatic services, as has been done in Germany, Italy, Spain, Japan, and the United States of America?
    Mr. A. HENDERSON: No such policy is at present under consideration by His Majesty's Government. But, as my hon. Friend informed the hon. Member in reply to a question on the 14th of May, transfers between these services are made from time to time when they are considered to be in the public interest.
    Mr. MANDER: Does not the right hon. Gentleman think the time has come to abolish this survival from olden times?
    Mr. HENDERSON: No, I do not think the time has arrived yet.
    Sir NAIRNE STEWART SANDEMAN: Does not the right hon. Gentleman think that there would have been a great saving through the unifying of the Services?
    Mr. DAY: Was not the Service instituted originally by the Liberals?

    COLONIAL OFFICE.
    Captain PETER MACDONALDasked the Under-Secretary of State for
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    the Colonies whether it is proposed to take any action upon the recommendations contained in the report of the committee on the system of appointment in the Colonial Office and the Colonial services?
    The UNDER-SECRETARY of STATE for the COLONIES (Dr. Drummond Shiels): The recommendations contained in this report are important and far-reaching. They will require careful consideration, and in many cases consultation with the Colonial Governments. In so far, however, as they affect the organisation of the Colonial Office, my Noble Friend the Secretary of State has accepted generally the Committee's recommendations, and proposes to give effect to them in due course as circumstances permit.
    Mr. ORMSBY-GORE: Are we to understand that a Supplementary Estimate will probably be presented for the new staff at the Colonial Office?
    Dr. SHIELS: I should require notice of that question.

  RUSSIA.

    PROPAGANDA.
    Sir K. WOODasked the Secretary of State for Foreign Affairs whether his attention has been called to recent issues of the "Izvestia" and the "Pravda," the organs of the Soviet Government, alleging that this country is supplying Indians with Russian rifles and cartridges for the sole purpose of discovering Moscow's hand in the upheaval which is naturally beginning in India against British oppression, and that if Indian revolutionaries are found bearing Russian arms it will be a plot against the Soviet Government; and whether he is taking any action in the matter?
    Mr. A. HENDERSON: Yes, Sir. My attention has been drawn to the allegation that persons in certain European countries are endeavouring to purchase rifles of Russian manufacture for shipment to India. I am making inquiries into this matter.
    Sir K. WOOD: But, apart from that, is not the spreading of these statements

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    about Great Britain a direct contravention of the Treaty which the Soviet Government entered into?
    Mr. HENDERSON: Until I can satisfy myself that the people who are purchasing or attempting to purchase are acting on behalf of Russia, how can I say that?
    Sir K. WOOD: Does not the right hon. Gentleman understand that these statements are being circulated in the official Government organ? That is the matter to which I am directing attention—not as to whether these matters are true or not, but whether this is not propaganda directly advanced against this country?
    Mr. HENDERSON: If the right hon. Gentleman has any information he can place at my disposal to show that these statements are authorised by the Russian Government, the matter will be fully investigated.
    Sir K. WOOD: Is it not sufficient that the statement should appear in the official organ?
    Mr. ERNEST WINTERTON: Can the right hon. Gentleman inform the House where the rifles and cartridges are coming from to carry on civil war in China?
    Mr. SPEAKER: That question does not arise out of the answer.
    Mr. KIRKWOOD: With your permission—
    Mr. SPEAKER: Mr. Godfrey Locker-Lampson.
    Mr. KIRKWOOD: That makes five supplementary questions for those on the Front Bench opposite.
    Mr. COCKS: On a point of Order. Is it not a rule when newspapers are quoted that the hon. Member putting the question should assure himself as to the accuracy of the quotation. These papers are printed in Russian, and therefore, unless the right hon. Gentleman can read Russian and has seen the papers, has he any right to make these allegations?
    Mr. SPEAKER: I understand that the papers referred to are of a different category from ordinary newspapers.
    Mr. GODFREY LOCKER-LAMPSON: Has the right hon. Gentleman seen the
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    recent standing orders of the Third International instructing their agents to intensify hostile propaganda?
    Mr. HENDERSON: No, my attention has not been called to them.
    Mr. MARJORIBANKSasked the Secretary of State for Foreign Affairs whether he can yet state the nature and personnel of the machinery set up by His Majesty's Government to inquire into soviet propaganda?
    Mr. HENDERSON: I have nothing to add to the answer which I gave to a supplementary question on this subject by the hon. Member on Monday last.
    Mr. MARJORIBANKS: How long is the right hon. Gentleman going to enshroud in mystery this important tribunal which he is about to set up, and when will he be able to tell the House its personnel?
    Mr. HENDERSON: I thought that I indicated on Monday that I did not intend to announce the personnel to the House for the simple reason that the Government are of opinion that it would do its work very much more effectively—and I think that is what bon. Members opposite are looking for—if the Government keep the personnel in their knowledge.
    Mr. MARJORIBANKS rose—
    Mr. SPEAKER: The hon. Member has had a very full answer.

    PROTOCOL.
    Mr. SMITHERSasked the Secretary of State for Foreign Affairs if he can now give the names of those who will form the committees to deal with the various questions under the Protocol of last October with the Soviet Government?
    Mr. A. HENDERSON: The composition of the committee and its sub-committees is at present engaging my attention, but I am not yet in a position to make a statement on the subject.
    Mr. SMITHERS: Arising out of the usual kind of answer which the right hon. Gentleman gives—[Interruption.]
    Mr. HENDERSON: I have nothing to add to the answer which I gave earlier to a supplementary question.

    BRITISH TANKS.
    Captain CROOKSHANKasked the President of the Board of Trade if the Government have sanctioned the export from this country of the tanks which have been ordered by the Russian Government?
    The PRESIDENT of the BOARD of TRADE (Mr. William Graham): Yes, Sir. A licence for the export of 20 12-ton tanks, 20 6-ton tanks and 20 Carden-Loyd light armoured vehicles to Russia, consigned to the Soviet Government, was issued on the 21st March last.
    Captain CROOKSHANK: How does the right hon. Gentleman reconcile the fact that these tanks have to be paid for in cash while the Russian Government require credit for ordinary manufactured articles?
    Mr. GRAHAM: I do not think that any problem of that kind arises. The duty of the Board of Trade is to give this licence. Were it not given this order would be lost to a British firm.
    Sir K. WOOD: Is not this action inconsistent with the policy of the Government?
    Mr. GRAHAM: I can see nothing inconsistent in doing legitimate business.
    Mr. CHURCHILL: Are the Labour Government definitely adopting the position of making profits by the sale of armaments to countries which may be involved in war with their neighbours?
    Mr. GRAHAM: The right hon. Gentleman is under a complete misapprehension. This is a licence granted by the Board of Trade to an order executed by a private firm.
    Mr. KIRKWOOD: Arising out of the question put by the right hon. Member for Epping (Mr. Churchill), I would like to ask how much profit he Made out of supplying the White Army—Wrangle and Company.
    Mr. CHURCHILL rose—
    Mr. SPEAKER: Mr. Arthur Michael Samuel.

  KELLOGG PACT.
  Mr. G. LOCKER-LAMPSONasked the Secretary of State for Foreign Affairs
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  whether, before he agrees to any new sanctions in the event of the breach of the Kellogg Pact by any Power, he will consult the other signatories of the Pact?
  Mr. A. HENDERSON: There is, so far as I am aware, no intention of amending the Pact of Paris, or of incorporating in it any provision for the imposition of sanctions.

  ROYAL NAVY.

    BUILDING PROGRAMME, 1929.
    Lieut.-Commander KENWORTHYasked the First Lord of the Admiralty what will be the total cost of the cruiser, flotilla leader, destroyers and submarines of the original 1929 programme which it is now proposed to proceed with; and whether supplementary estimates for the cost of building these ships are to be presented to Parliament?
    The FIRST LORD of the ADMIRALTY (Mr. A. V. Alexander): The estimated total cost of the cruiser, flotilla leader, four destroyers and three submarines of the 1929 programme is approximately £4,200,000. Provision for expenditure on all these ships except the submarines is included in the Navy Estimates, 1930, and the question of a supplementary estimate in respect of them does not arise. The question of the provision necessary in a supplementary estimate for the expenditure on the submarines is being considered, and an announcement will be made at the appropriate time.
    Sir BERTRAM FALLE: Are the Government going on with their original programme?
    Mr. ALEXANDER: I think I have answered that question many times during the last few weeks.

    HIS MAJESTY'S SHIP "LEANDER."
    Lieut.-Commander KENWORTHYasked the First Lord of the Admiralty what is to be the tonnage of the new cruiser "Leander," to be commenced at Devonport; and whether he can give any further details of this vessel?
    Mr. ALEXANDER: I am not at present prepared to give the precise tonnage or other particulars in regard to this ship. In accordance with the terms of the Treaty of London her guns are to be

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    limited to 6-inch calibre, and it is unlikely she will exceed 7,000 tons standard displacement.
    Lieut. - Commander KENWORTHY: What is the objection to giving the details? Is the right hon. Gentleman not aware that tonnage is given as a general rule when the Estimates are produced, and when the ships are voted upon?
    Mr. ALEXANDER: I have given my hon. and gallant Friend the approximate figures, and I think he will know from experience that no Power gives such information as he has asked for now in regard to new vessels at this stage. There is no objection at all to giving the information a little later, and, if the Naval Treaty is ratified, we must notify within a specified period.
    Lieut. - Commander KENWORTHY: Does the right hon. Gentleman not see that the whole situation has been altered by the Naval Treaty? We are all quite frank and candid now, and give to each other all the information that is necessary.

    DESTROYERS AND SUBMARINES.
    Major ROSSasked the First Lord of the Admiralty if he will state the displacement, speed, and number and calibre of guns in the latest type of destroyer leader building in France; and whether it is proposed to construct in this country vessels of equal power of this class?
    Mr. ALEXANDER: The latest type of flotilla leader building in France has a displacement of 2,440 tons, a designed speed of 36 knots, and carries the following guns, namely:

    Five 5.5 inch.

    One 3-inch anti-aircraft.

    Four 1-pounder anti-aircraft.

    Under Part III of the London Naval Treaty any vessels we might construct of equal power to the above would come within the definition of cruisers. Actually all the cruisers built, building or projected by this country are of greater power than the French flotilla leaders.
    Major ROSS: Is it not the fact that we are in the position either of using our inadequate cruiser replacement tonnage
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    for destroyers, or that our destroyer leaders must be inferior in several particulars to those of the French?
    Mr. ALEXANDER: It is not easy to debate this matter at Question Time. The whole matter turns upon allocation of tonnage by those Powers who adhere to the global system of tonnage instead of by categories.
    Major ROSSasked the First Lord of the Admiralty the anticipated number of destroyer leaders of France and the British Empire, respectively, in 1933?
    Mr. ALEXANDER: Excluding the programmes of the year 1930, the numbers, are as follow:

    France—24.

    British Commonwealth of Nations—16.

    Major ROSS: Are we not by the Treaty in a position of definite and permanent inferiority in this class of vessel as regards numbers as well as type?
    Mr. ALEXANDER: No. As I have already indicated, they are not ships which are strictly comparable. The so-called flotilla leader of France is really a small cruiser, and will be dealt with under the terms of my last supplementary answer.
    Major ROSS: Are we not restricted as to the number of cruisers—
    Mr. SPEAKER: The Minister has already answered that question.
    Commander Sir BOLTON EYRES MONSELL: May I call your attention. Mr. Speaker, to the fact that there are only 64 questions on the Paper, and we find it very difficult to get any information about this Naval Treaty?
    Mr. SPEAKER: The number of questions on the Paper does not justify me in allowing any more supplementaries.
    Major ROSSasked the First Lord of the Admiralty the anticipated number and total tonnage of submarines under 13 years old of France and the British Empire, respectively, in 1933?
    Mr. ALEXANDER: Excluding the programmes of the year 1930, the numbers are as follow:

    France—73, making a total of 68,631 tons.

    British Commonwealth of Nations—32, making a total of 41,269 tons.

    Major ROSS: Does the right hon. Gentleman view with equanimity this 100 per cent. superiority of France in that class of vessel?
    Mr. ALEXANDER: With no more equanimity than the late Government, who allowed the situation to arise.
    Major ROSS: Will the right hon. Gentleman be prepared to advise that further construction beyond that provided for by the Treaty should be envisaged?
    Mr. ALEXANDER: The replacement programme is under the consideration of the Government, and I am quite sure that we shall deal with it in a scientific manner.
    Captain P. MACDONALD: Is it not a fact that a new situation has arisen and that, as a result, France will have a superiority in submarines?
    Lieut.-Colonel HENEAGE: Has the right hon. Gentleman received any communications from the Dominions on this subject?

    HIS MAJESTY'S SHIP "IRON DUKE (LEAVE).
    Sir B. FALLEasked the First Lord of the Admiralty whether he will reconsider the decision that His Majesty's Ship "Iron Duke' is to give leave from Portland owing to there being no accommodation in Portsmouth Harbour, and allow the vessel to proceed to Portsmouth, anchor at Spithead, and give leave from there, observing that to give leave from Portland will entail financial hardship on the ship's company?
    Mr. ALEXANDER: This matter has been given the fullest consideration. It has been thought best in all the circumstances that the "Iron Duke" should give leave from Portland, which is her normal base.
    Sir B. FALLE: Is it not rather hard on the Portsmouth men that they should be shot off at Portland?
    Mr. ALEXANDER: The men are not entirely Portsmouth men, but I should like to inform the hon. Baronet that the commander-in-chief at Portsmouth gave the matter his own personal consideration and I am convinced that if the work of the ship had permitted it, he would have arranged the leave as desired.

    ROYAL MARINE BARRACKS.
    Sir B. FALLEasked the First Lord of the Admiralty if he will state the total number of Royal Marine officers, noncommissioned officers, and other ranks actually accommodated at the Royal Marine Barracks at Eastney, Plymouth, and Chatham; and the maximum number these three depots are each able to accommodate?
    Mr. ALEXANDER: As the answer contains a table of figures, I propose, with the hon. Member's permission, to circulate it in the OFFICIAL REPORT.
    Following is the reply:

    —

    Accommodation Available.

    Numbers Accommodated.

    Chatham R.M. Barracks:

    Officers

    52

    36

    N.C. Officers and Men

    875

    603

    Portsmouth R.M. Barracks:

    R.M. Division:

    Officers

    52

    52

    N.C. Officers and Men

    802

    791*

    R N. School of Music:

    Officers

    2

    2

    N.C. Officers and Men

    358

    312

    Plymouth R.M. Barracks:

    Officers

    51

    47

    N.C. Officers and Men

    925

    732

    * 10 beds vacant in boy buglers room and one married quarter under repair.

    The hon. Member will observe that the numbers accommodated do not include numbers provided for at out-stations to the barracks or on the lodging list.
    Sir B. FALLEasked the First Lord of the Admiralty whether, in view of the fact that only 10,034 Royal Marines are now borne compared with 14,837 in 1921, it is necessary to retain the Royal Marine depot at Deal; if he will state the number of officers, non-commissioned officers, and other Royal Marine ranks now accommodated at Deal; the total number the depot is able to accommodate; and the number of Royal Marine recruits authorised to be entered each week during the current quarter?
    Mr. ALEXANDER: The answer to the first part of the question is in the

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    affirmative. The numbers now accommodated and the accommodation available at Deal are:

    Numbers Accommodated.

    Accommodation Available.

    Officers

    26

    35

    Others

    683

    1,216

    The authorised number of recruits to be entered is 20 per month until the present overbearing, due to a reduction in Vote A, 1930, is worked off, about December, 1930. The normal rate of recruiting would then be 45 per month.

    DOCKYARD ESTABLISHMENT (VACANCIES).
    Mr. MOSESasked the First Lord of the Admiralty whether any decision has yet been made concerning the filling of vacancies on the establishment in His Majesty's dockyards and a departure from the one-in-eight principle now in operation?
    Mr. ALEXANDER: The modification of the rule referred to by my hon. Friend is under consideration, but no decision has yet been reached.

  IRAQ (NEWSPAPERS).
  Mr. W. J. BROWNasked the Under-Secretary of State for the Colonies whether he can give the House any information regarding the suppression of newspapers in Iraq; whether he is aware that the organ of the Nationalist opposition, "Arrafidan," was prevented from appearing at the end of April; whether the Press where the "Fata el Arab" is printed has been closed; and whether any newspapers have voluntarily ceased publication since being officially forbidden to print any criticism of His Majesty's Government?
  Dr. SHIELS: I understand that the Iraq Government in April last suspended the newspapers "Al Rafidan" and "Fata al Iraq" for a period of one month, and "Sadiq al Iraq" sine die, for publishing articles prejudicial to the peace of Iraq. Early this month the newspaper "Al Bilad" was also suspended. I have no information as regards the second part of this question; nor am I aware whether any newspapers have voluntarily ceased publication, or that the Press of Iraq has been officially for
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  bidden to print any criticism of His Majesty's Government. If any such prohibition exists, it is certainly ineffectual in practice, since the Iraq papers continue to criticise the British Government with the utmost freedom.
  Lieut.-Colonel HENEAGE: Has the British Government any responsibility at all for what is published in these papers?
  Dr. SHIELS: So far as I am aware, no.
  Lieut.-Colonel HENEAGE: On a point of Order. As the Minister has no responsibility, was this question in order?
  Mr. SPEAKER: I generally give the hon. Member who puts the question on the Paper the benefit of the doubt.

  CEYLON (INDIAN IMMIGRANT LABOURERS).
  Major GRAHAM POLEasked the Under-Secretary of State for the Colonies if any further progress has been made in putting into effect the requirements in respect of Indian immigrant labourers on the plantations in Ceylon, made by the Government of India and originally embodied in the Medical Wants Ordinance, which was dropped by the Government of Ceylon after its second reading in the Ceylon Legislative Council in 1926?
  Dr. SHIELS: I have no recent information on the subject. The Ceylon Government are being asked to report what progress has been made.
  Major POLEasked the Under-Secretary of State for the Colonies if, in view of the assurance which was given on behalf of the Government of Ceylon to the effect that every assisted Indian immigrant labourer induced to take employment on Ceylon plantations should enjoy equal political status with the other subjects of His Majesty in the Colony, he will say whether it is the intention of His Majesty's Government to guarantee the continuance of this assurance under the proposed constitution as affected by the Stanley-Passfield despatch?
  Dr. SHIELS: The proposed changes do not involve any differentiation in respect of political status between different classes of British subjects.

  PALESTINE (McMAHON CORRESPONDENCE).
  Mr. COCKSasked the Under-Secretary of State for the Colonies whether he is now in a position to make a statement regarding the publication of the McMahon-Hussein correspondence?
  Dr. SHIELS: No, Sir. I am not yet in a position to make any statement.
  Mr. COCKS: When will it be convenient to my hon. Friend for me to repeat this question—this day week, or this day fortnight?
  Dr. SHIELS: I am afraid I could not give a definite date. I would remind my hon. Friend that it is only a fortnight since this matter was raised, which is not very long for a Government Department to take to deal with such a matter; and, in this case, the position is rather complicated because other Government Departments have to be consulted, so my hon. Friend will understand my feeling unable to give a date.

  JAMAICA (KING'S HOUSE).
  Colonel GRETTONasked the Under-Secretary of State for the Colonies whether the King's House in the Old Square, Spanish Town, Jamaica, was insured before it was burnt in 1925; if so, what was the amount of the insurance money; whether it has been paid; and whether it is intended to recondition this building as a fine example of 18th century architecture?
  Dr. SHIELS: I regret that I am unable to supply the information desired by the right hon. and gallant Member in the first three parts of the question. The reports received from the Governor at the time contain no reference to the question of insurance, but it is not usual that Government property should be insured. With regard to the last part of the question, I would refer the right hon. and gallant Member to the answer given by my predecessor to the hon. Member for the English Universities (Sir M. Conway) on 20th November, 1929, of which I am sending him a copy.
  Colonel GRETTON: Will the hon. Gentleman endeavour to obtain this information, which is no doubt available, and answer a question to the same effect if it is put down at a later date?
  Dr. SHIELS: Yes, I shall be very glad to obtain any further information that the right hon. and gallant Gentleman desires, but I wished him to understand from my answer that he might take it for granted that there was no insurance, and, therefore, that there are no funds available from that quarter.
  Mr. ORMSBY-GORE: Arising out of the original answer, are we to understand that no further information or indication of the Governor's views has been received since November last; and has there been no reply to the representations made to the Government that this building ought to be repaired?
  Dr. SHIELS: The matter has been very carefully investigated, and our latest information is to the effect that the remaining parts of the walls are not fit to sustain any structure at all, so that, if the building were to be repaired, these walls would first have to be taken down, and practically a new building would have to be erected, and in that case the argument on historic grounds would fall.

  HONG KONG (MUL-TSAI SYSTEM).
  Mr. PHILIP OLIVERasked the Under-Secretary of State for the Colonies whether seeing that a child, Leung Mee, aged seven years, was sold to Choy Shi, of Kowloon Tong, Hong Kong, for 95 dollars Canton currency, and that this purchase was a criminal act, he can state what, if any, action has been taken against those concerned in the sale and purchase of this child?
  Dr. SHIELS: My Noble Friend has no information of the case, but he will ask the Governor of Hong Kong for a report, and, in the meantime, I would be glad to have any information which the hon.. Member may care to give me.
  Miss PICTON-TURBERVILL: Will the hon. Gentleman lay on the Table papers on the working of the reforms in connection with the mui-tsai system in Hong-Kong?
  Dr. SHIELS: I would inform the hon. Lady that a system of registration has been instituted, the period of which will terminate in July, and we propose, after that date, to examine the whole position, and I shall then be very glad to consider the hon. Lady's suggestion.
  Miss PICTON-TURBERVILL: Are the Government satisfied with the working of these reforms?
  Dr. SHIELS: The reforms have not been completely worked out, but so far as they are going the position is very much improved.
  Lieut.-Colonel HENEAGE: May I ask why slavery is allowed to flourish under a Labour Government?
  Dr. SHIELS: I made no such admission.

  IRISH GRANTS COMMITTEE (REPORT).
  Colonel GRETTONasked the Under-Secretary of State for Dominion Affairs when the report of the Irish Grants Committee will be laid and published?
  The UNDER-SECRETARY of STATE for DOMINION AFFAIRS (Mr. Lunn): As I intimated in reply to a question by the hon. and gallant Member for Howdenshire (Major Carver) on the 5th February, it is not proposed to publish the report of the Irish Grants Committee on its work.
  Colonel GRETTON: As the Government have paid, on the advice of this Committee, very large sums of the taxpayers' money, is not Parliament entitled to a report as to how the money has been expended, and will the Government consider the matter?
  Mr. LUNN: I am quite aware that a large sum of the taxpayers' money was used in this direction, but it was on the understanding that the report which was prepared and submitted would not be published by the Wood Renton Committee. That was my answer to the hon. and gallant Member for Howdenshire in February. The matter was not raised when the Supplementary Estimate was before the House on the 6th March, and it is not intended now to publish the report.

  EMPIRE MARKETING BOARD (FILMS).
  Mr. DAYasked the Under-Secretary of State for Dominion Affairs the total sum spent by the Empire Marketing
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  Board for the production of cinematograph films during the current financial year; and in what manner and by whom the selection is made of the subjects that are filmed?
  Mr. LUNN: The, total sum spent from the Empire Marketing Fund in the current financial year for the production of cinematograph films is £353 14s. Against that expenditure must be set a receipt of £164 0s. 5d., being the Board's share of the rentals of a film produced on their behalf. The net expenditure on film production in the current financial year is therefore £189 13s. 7d. As regards the second part of the question, the subject matter appropriate for the Board's films is discussed by the Board's film Committee in the first instance. The subjects so recommended are then discussed and approved by the Board.
  Mr. DAY: Does the figure which my hon. Friend has given include a portion of the salary of the cinematograph officer who was engaged in producing these films?
  Mr. LUNN: I have given the sum which, since the 31st March, has been expended on the production of cinematograph films, but I cannot say whether or not it embraces the item to which my hon. Friend refers.
  Mr. DAY: Did not my hon. Friend lead the House to believe that a sum of over £2,000 per annum was to be paid to the cinematograph officer in charge of these films, and has that been taken into consideration?
  Mr. LUNN: I do not think I did.
  Captain Sir WILLIAM BRASS: Does not the hon. Gentleman think that that is far too little money to spend for this purpose, and does he not realise that cinema propaganda is the best kind of propaganda for the Empire?
  Mr. LUNN: It is no doubt very good propaganda. The Empire Marketing Board is only beginning to undertake the production of films, and it is willing to extend its operations considerably.
  Sir N. STEWART SANDEMAN: Can the hon. Gentleman say whether these films are made by British companies in British machines?
  Mr. LUNN: I should imagine so, under the Empire Marketing Board.
  Mr. ARTHUR MICHAEL SAMUEL: Does the hon. Gentleman share in the condemnation implied in the question of the hon. Member for Central Southwark (Mr. Day)?

  AVIATION.

    LOW FLYING.
    Mr. DAYasked the Under-Secretary of State for Air whether any action has been taken by his Department during the 12 months ended to the last convenient date against either Royal Air Force or civil pilots for flying at a low altitude or in proximity to persons or dwellings in which unnecessary danger has been caused; and can he give particulars?
    The UNDER-SECRETARY of STATE for AIR (Mr. Montague): Yes, Sir. Action has been taken in a number of cases of this kind during the past 12 months. Such action has taken the form, where Royal Air Force pilots have been concerned, of bringing the alleged offender to trial by court-martial in a really serious case. In other cases pilots have been dealt with summarily under the Air Force Act or other appropriate disciplinary action has been taken against them. Where civil pilots are concerned, the institution of legal proceedings is a matter for the civil police and not for the Air Ministry. Each complaint has, however, been investigated by the Air Ministry and taken up, where the circumstances warranted it, with the owner or pilot of the aircraft concerned, with a view to the prevention of similar cause for complaint in the future.
    Mr. DAY: Have there been any serious complaints?
    Mr. MONTAGUE: I cannot answer with regard to complaints, but there were eight cases in which pilots were tried by court-martial.

    AIRSHIP R 100.
    Dr. MORRIS-JONESasked the Under-Secretary of State for Air whether he will state the nature and cause of the recent damage to R 100 and when she will be able to undertake her proposed cruise to Canada?
    Mr. D. G. SOMERVILLEasked the Under-Secretary of State for Air if he can make any statement as to the result of the trial flight for R 100; whether it has received any damage; and when it is proposed that it should make its flight to Canada?
    Mr. MONTAGUE: The trial flight of R 100 was undertaken mainly to test the new engines installed for the Atlantic flight and the modifications to the outer cover wiring arrangements. The test was quite satisfactory as regards the engines, but on arrival at Cardington it was seen that the tail fairing piece, which is intended to improve the flow of air at the tail of the airship, was buckled, and subsequent inspection showed also that in one bay, behind one of the power cars, the force of the slipstream had damaged the cover and the securing wires and tapes. The failure of the fairing piece is due to its having been built of too light a gauge, and it will now be reconstructed in material of heavier gauge and with additional stiffening. The damage to the outer cover will be remedied by inserting intermediate girders in this bay, a method which has proved successful in other bays where trouble has been experienced. Although the damage was of a minor nature, and those on board the airship were unaware of it, the repair will take a little time, the new material having to be specially manufactured. Consequently, it has been necessary to postpone the flight to Canada until the end of June or beginning of July next.
    Mr. SKELTON: In view of such information as this, will the hon. Gentleman assure the House that no further sums will be spent on these costly and useless machines?
    Mr. MONTAGUE: It is quite impossible for me to assure the House on a matter of policy which has not yet been decided.
    Sir W. BRASS: Can the hon. Gentleman give any idea of the cost of this repair?
    Mr. MONTAGUE: In actual figures, no, but it will be comparatively slight.
    Mr. CHURCHILL: Is it the policy of the Government to go on indefinitely pouring out money for these useless and costly machines?
    Lieut.-Commander KENWORTHY: Was not the original programme for eight of these airships at one time?

  TRANSPORT.

    SEAFORD-NEWHAVEN ROAD.
    Sir WALTER GREAVES-LORDasked the Minister of Transport if he is aware that, notwithstanding the loss of life last December on the Seaford-Newhaven road and the known perils of the road in rough weather, the East Sussex County Council have decided to do nothing to make the road safer; and whether he proposes to take any steps to secure the safety of traffic on this road?
    The MINISTER of TRANSPORT (Mr. Herbert Morrison): I am informed that the East Sussex County Council have decided to extend the existing protection wall and are of opinion that this course is likely to remedy the conditions to which the hon. Member refers. They will, however, review the position again at the end of a year.
    Sir W. GREAVES-LORD: Is the right hon. Gentleman aware that the so-called protection wall is a wooden fence 3 feet high put up in order to prevent waves of some 80 feet to 100 feet coming on to the roadway? Is he also aware that it is not proposed to extend it to the point where the fatality took place last December? Does he not think it would be advisable to transfer some of these grants to a necessary road in order to save life than to expend them on wholly unnecessary and extravagant roads?
    Mr. MORRISON: I cannot answer for the accuracy of the statements of the hon. and learned Gentleman, but the points he mentions will be looked into.

    WESTERN AVENUE.
    Mr. VAUGHANasked the Minister of Transport when work on the further section of the Western Avenue, which he hoped would be commenced early in the current year, will be put in hand?
    Mr. HERBERT MORRISON: So soon as certain negotiations with the Middlesex County Council are completed regarding the exact lay-out to be adopted for the road, I hope that the council will be in a position to invite tenders for the work.
    Captain CROOKSHANK: Will the hon. Gentleman see that the surface of the new road is not as bad as that of some of the existing by-passes?
    Mr. MORRISON: The Ministry of Transport is always improving the condition of the roads.

    FOOTPATH KERBS.
    Mr. VAUGHANasked the Minister of Transport whether, in view of the number of fatal and non-fatal accidents caused by vehicles mounting footpaths, he will only approve such plans for new road and improvement schemes as have the footpath kerbs 8 inches high in order to confine vehicles to the roads, even when skidding occurs?
    Mr. HERBERT MORRISON: I am advised that kerbs 8 inches in height would constitute a source of danger to all road users, and I am not prepared to take the course suggested by my hon. Friend.
    Mr. VAUGHAN: Is the right hon. Gentleman aware that in certain streets in London the kerbs are 8 inches high, and is he also aware that on some of the roads there are 8 miles of kerb of this character?
    Mr. MORRISON: I do not think that at present it would be generally desirable.
    Sir W. BRASS: Is it not a fact that these kerbs actually cause cars to be turned over?
    Mr. MORRISON: That is undoubtedly one of the dangers of a kerb that is unduly high.
    Mr. SKELTON: Is it not also the case that such kerbs yield a comfortable profit to those who supply them?

    NORTH WALES ROADS (LIVESTOCK TRAFFIC).
    Dr. MORRIS-JONESasked the Minister of Health whether he is aware of the aggravation to the congestion of traffic along the North Wales coast roads on bank holidays owing to cattle and other livestock sales; and whether, by legislation or otherwise, he will prohibit such sales being held on Easter Monday, Whit Monday and August bank holiday?
    The PARLIAMENTARY SECRETARY to the MINISTRY of HEALTH (Miss Lawrence): My right hon. Friend has not received any previous representations on this matter. He has no power to take any such action as is suggested in the question, and the difficulty of legislation will be apparent to the hon. Member.
    Dr. MORRIS-JONES: Will the bon. Lady confer with the Minister of Transport with a view to remedying the conditions along this main roadway of the North Wales coast?
    Lieut.-Commander KENWORTHY: How are the farmers to get their living?
    Earl WINTERTON: Will the Minister give an assurance that the agricultural needs of the country will not be sacrificed to holiday traffic? Is she aware that not only in North Wales but all over the country these sales are held on the Friday or Saturday, and the stock frequently travels on the Monday?
    Miss LAWRENCE: My right hon. Friend has no power to deal with the matter. If the hon. Member for Denbigh (Dr. Morris-Jones) desires it, we will confer with the Minister of Transport.
    Earl WINTERTON: Will the Minister give an undertaking that the agricultural interests of the country will not be sacrificed for mere holiday traffic?
    Miss LAWRENCE: I have already explained that the Minister of Health has no power to deal with the matter. If the hon. Gentleman desires information from the Minister of Agriculture perhaps he will put a question on the Paper.

  HYDE PARK CARILLON.
  Captain CROOKSHANKasked the First Commissioner of Works when the carillon now in Hyde Park is to be removed?
  The FIRST COMMISSIONER of WORKS (Mr. Lansbury): I understand that the building at Wellington, New Zealand, on which the carillon is to be permanently erected, will not be ready to receive the carillon as soon as was expected, and I have, therefore, acceded to a request that the carillon be allowed to remain in Hyde Park until September next.
  Rear-Admiral BEAMISH: Will the right hon. Gentleman also arrange to have a lament played for the Labour result in Nottingham?
  Mr. FREEMAN: Will a new carillon be installed when this is removed?
  Mr. LANSBURY: No, Sir.

  TRADE DISPUTES BILL.
  Captain P. MACDONALDasked the Prime Minister when the Trade Disputes Bill will be presented; and whether it is proposed to take the Second Reading before Whitsuntide?
  The PRIME MINISTER (Mr. Ramsay MacDonald): As regards the first part of the question, I can add nothing to what has already been said in reply to questions on this subject. The answer to the second part of the question is in the negative.
  Captain P. MACDONALD: What has become of the definite pledge at the last Election that this would be one of the first Measures introduced by the Government?
  Mr. CHURCHILL: Will the right hon. Gentleman state shortly what is the gist of these various answers that he has previously given on the subject?
  The PRIME MINISTER: Exactly what I have given just now.
  Mr. CHURCHILL: The right hon. Gentleman said he had nothing to add to the various answers he had already given on the subject. I ask him if he could translate that into what he is actually going to do.
  The PRIME MINISTER: That is my consistency.
  Sir LAMING WORTHINGTON-EVANS: Then the formula is that nothing plus nothing is nothing.

  LONDON NAVAL AGREEMENT.
  Mr. HOLFORD KNIGHTasked the Prime Minister whether the rules in Article 22 of the new Naval Treaty of London make provision for the settlement of disputes thereunder arising?
  The PRIME MINISTER: The answer is in the negative.
  Mr. KNIGHT: Is the right hon. Gentleman of opinion that it contributes to international conciliation to leave parties to be judges of their own disputes arising at sea?
  Mr. SPEAKER: That is clearly a matter of opinion.

  WOOL TEXTILE INDUSTRY (DISPUTE).
  Mr. MUFFasked the Prime Minister whether he has received any later information relative to the Yorkshire textile dispute; and whether he is in a position to use his good offices in order to bring about a settlement of the dispute?
  The PRIME MINISTER: I have received further reports from my right hon. Friend the Minister of Labour on the position. I feel that my right hon. Friend has done all that a third party can do up to the present to help both sides to find a basis upon which an amicable settlement could be reached. If, of course, both sides considered that I could render any assistance, my services would be at their disposal.
  Mr. BROOKE: Is the right hon. Gentleman aware that the workers' organisations have officially offered to re-open negotiations on the basis of a 6 per cent. reduction in wages, and that there has been no response, and can anything be done in the matter?
  The PRIME MINISTER: That may be so, but any intervention or any assistance I can give can only be after both sides have asked for it.
  Lieut.-Colonel HENEAGE: The right hon. Gentleman says that he has tried all that is possible. Has he tried Safeguarding?
  Mr. KIRKWOOD: The Prime Minister says that the Minister of Labour and those concerned have done all that they can. Is the Prime Minister aware that yesterday there was rioting in Bradford and that the scene has entirely changed now, that they have arrested people, and that the police have battened down members of the working class whom the Prime Minister is supposed to represent? I want to know what part he is going to play now to stand by the workers in Yorkshire.
  Mr. SPEAKER: The Prime Minister has already answered the question.
  Mr. KIRKWOOD: No, Mr. Speaker. With due deference to you, Sir, the Prime Minister did not reply to my question. My question dealt with an entirely new set of circumstances, which I stated, and which were not in the question put to the Prime Minister. It is all right for the Prime Minister to sit there now and laugh, supported by the Tories, but it is the working classes in Yorkshire for whom I am speaking. [Interruption.]
  Mr. SPEAKER: Order, order. Captain Crookshank!
  Mr. MAXTON: On a point of Order. May I ask you, Mr. Speaker, whether the question of my hon. Friend is not in order, having regard to the fact that new and very alarming changes have taken place in the condition of the dispute, and is it not right that this House should be informed by the Prime Minister as to what steps he proposes to take to deal with this situation?
  Mr. SPEAKER: I have said that that is the question to which the Prime Minister has replied.
  Mr. KIRKWOOD: The Prime Minister did not reply to my question.

  UNEMPLOYMENT (ADMINISTRATION).
  Captain CROOKSHANKasked the Prime Minister what arrangements are being made for carrying out the duties with regard to unemployment hitherto carried out by the Chancellor of the Duchy of Lancaster?
  Mr. BRACKENasked the Prime Minister what arrangements he proposes to make for carrying out the responsibilities regarding unemployment hitherto discharged by the late Chancellor of the Duchy of Lancaster?
  The PRIME MINISTER: I would refer the hon. Members to the answer given on Monday last in reply to a question by the hon. Member for Newcastle, North (Sir N. Grattan-Doyle).
  Sir K. WOOD: Is it proposed that the new occupant of the office shall give the same assistance to the Lord Privy Seal as the previous occupant had done?
  Captain CROOKSHANK: Can the right hon. Gentleman say what he meant in the speech which he made the other day, when he said that he was personally going to take a hand in the matter?
  The PRIME MINISTER: The hon. and gallant Member has not quoted me accurately.

  HISTORIC BUILDINGS (EXPORTATION).
  Mr. LOVAT-FRASERasked the First Commissioner of Works if he is aware of the indignation caused by the transportation of Tudor cottages and other buildings of historical and artistic interest to foreign countries; and whether he will introduce legislation to prevent this process?
  Mr. LANSBURY: If my hon. Friend can give me any details of the cases which he has in mind, I will gladly have them investigated, and consider whether my Department can take suitable action under its existing powers.

  HOUSE OF COMMONS (TERRACE).
  Mr. MANDERasked the First Commissioner of Works if he will consider providing the Terrace with chairs and tables more in keeping with its historic architectural surroundings than are available there at the present time?
  Mr. LANSBURY: In view of the fact that in the near future the Terrace is likely to be the scene of building operations in connection with the repair of the stonework, and as the question of the raising of the level of the river wall is now under consideration, I do not think that the present time is opportune for the consideration of the improvement suggested.
  Mr. MANDER: Does not the right hon. Gentleman feel that much of what is there now is ugly and out of keeping with its unique surroundings, and will he not take steps to put something there which is more appropriate?
  Mr. LANSBURY: If anything has to be done, it will be done after the river wall has been raised and also after the building operations have been carried, out.
  Mr. CHURCHILL: Arising out of the answer of the right hon. Gentleman, will he take care that in these operations no unduly hard manual labour is involved?
  Mr. LANSBURY: I will take very good care to carry the work through, if it is entrusted to me, under the best rationalised conditions, and I will take good care not to attempt to engage the right hon. Gentleman.

  TRADE AND COMMERCE.

    IRON AND STEEL INDUSTRY.
    Mr. A. M. SAMUELasked the President of the Board of Trade whether any hematite or basic furnaces have been damped down during the past two months; the number of furnaces there are available for use on the North-East coast; and how many of them are now in blast?
    Mr. W. GRAHAM: During the months of March and April one basic and two hematite furnaces were "damped down" in the United Kingdom. There are 95 blast furnaces in the North-East Coast district, but some of these are held in reserve and others are under repair. It is not possible to say how many could be in blast at one time, taking into account the blowing capacity of the engines. At the end of April, 1930, there were 39 furnaces in blast in that district.
    Mr. SAMUEL: In view of the answer of the right hon. Gentleman will he take steps to examine the position of the blast furnaces in relation to the 3,900,000 tons of imported foreign iron and steel?
    Mr. GRAHAM: I will look at that point, which, I think, bears upon other questions recently asked by my hon. Friend.
    Mr. SAMUELasked the Secretary to the Overseas Trade Department whether he has yet taken any steps to arrange for the importation into Britain of high-grade iron ore of the Brazilian province of Minas Geraes against mutually arranged shipments to Brazil of British iron and steel manufacturers?
    Mr. GRAHAM: The concession for the development of the iron ore resources to which the hon. Member is no doubt referring is in the hands of a British

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    company, but negotiations regarding the actual operation of the scheme are still proceeding, and it is unlikely that supplies of the ore will be available for some time.
    Mr. SAMUEL: Is not this a matter in which the right hon. Gentleman can take some action by his own personal initiative?
    Mr. GRAHAM: Yes, Sir, but I cannot pronounce on that matter to-day, for the simple reason that negotiations with these companies are proceeding.
    Mr. SAMUEL: Is the right hon. Gentleman not aware that the Americans are taking active steps in this matter?

    COTTON EXPORTS (RUSSIA).
    Mr. A. M. SAMUELasked the Secretary to the Overseas Trade Department the quantities and values of British-made cotton textiles exported to Russia from 1st January to 30th April of this year; and will he ascertain and state if there are on hand orders for an appreciable amount of such goods to be shipped to Russia?
    Mr. W. GRAHAM: Exports of cotton goods of domestic manufacture from the United Kingdom, registered as consigned to the. Soviet Union, during the period from 1st January to 30th April of the present year were as follow: Yarns, 68,600 lbs., of value £16,843; piece goods, 9,300 square yards, of value 1370; and £100 of other cotton manufactures (so far as they are separately recorded, except apparel and embroidery) for which quantities are not recorded.
    I am not in a position to give information as to orders on hand for such goods for shipment to the Soviet Union.
    Mr. SAMUEL: I did not hear the right hon. Gentleman clearly, but I understood him to say that that under £20,000 worth of exports of cotton goods were sent to Russia. If so, will the right hon. Gentleman bear in mind that there are 140,000,000 of people in Russia and that we were promised by his party that Russian trade would do much to put our unemployment right?
    Mr. GRAHAM: The actual figures were £16,843, but in any case this is only one item in our trade with Russia.
    Sir W. BRASS: Does the right hon. Gentleman think that these figures will please Lancashire?

  COMPANIES ACT.
  Dr. VERNON DAVIESasked the President of the Board of Trade what is the specific difficulty which prevents the Board of Trade obtaining from 330 public companies punctual compliance with the Act of Parliament which requires the filing of annual accounts and balance sheets; whether it is shortage of staff or a flaw in the wording of the statutory regulations under the Act or inadequate powers under the Act; and will he take steps to arrange that in future numbers of public companies are not five months in default?
  Mr. W. GRAHAM: I would refer the hon. Member to the full answer which I gave on 6th May to the questions asked on this subject by the hon. Member for Ilford (Sir G. Hamilton) and the hon. and learned Member for East Grinstead (Sir H. Cautley).
  Dr. DAVIES: Will the right hon. Gentleman consult with his right hon. Friend the Chancellor of the Exchequer and ask him if he can spare a few of his Income Tax officials to carry on this work?
  Mr. GRAHAM: No, that is not necessary at all. Within the past few weeks we have got the figure down to 330, and it is still falling.

  BRITISH BROADCASTING CORPORATION (CHAIRMAN).
  Sir N. STEWART SANDEMANasked the Postmaster-General whether he has decided who the new chairman of the British Broadcasting Corporation is to be?
  The ASSISTANT POSTMASTER-GENERAL (Mr. Viant): No, Sir; an appointment has not yet been made.
  Sir N. STEWART SANDEMAN: Can the hon. Member give an assurance that when the appointment comes to be made no political considerations will influence it?
  Mr. CHURCHILL: Can the hon. Member say, or can the Prime Minister say, when we may expect some arrangement to be made which will allow other parties to use the broadcasting, besides the Labour party?
  The PRIME MINISTER: I should have thought that before a question like that was put, of the substance of which I doubt the accuracy, the right hon. Gentleman might have given me notice, in order that I might have been able to reply. I hope the right hon. Gentleman knows that offers have been made to straighten out the whole matter. If it is not straightened out, it is not our fault.
  Mr. CHURCHILL: If I put a question to the Prime Minister next week, will he give a full answer, and explain any deadlock which may have arisen in the negotiations?
  The PRIME MINISTER: If the right hon. Gentleman puts down a question, I shall be glad to give him all the information I have on the subject.

  NAVAL AND MILITARY PENSIONS AND GRANTS.
  Mr. ERNEST BROWNasked the Minister of Pensions the total number of widows and children to whom pensions have been refused on the ground that their husbands and/or fathers whose deaths were due to the War were married after they sustained their war injuries?
  The MINISTER of PENSIONS (Mr. F. O. Roberts): The information required is, I regret, not available for the reasons stated in the answer which I gave on the same subject to the hon. and gallant Member for Chippenham on the 5th instant, of which I am sending the hon. Member a copy.

  STANDING ORDERS.
  Resolution reported from the Select Committee;
  "That, in the case of the Redcross Street Burial Ground (Bristol) Bill [Lords],—Petition for additional Provision, the Standing Orders ought to be dispensed with:—That the parties be permitted to insert their additional Provision if the Committee on the Bill think fit."
  Resolution agreed to.

  INVERGORDON WATER SUPPLY BILL.
  Reported, without Amendment, from the Select Committee, with Minutes of Evidence.
  Report to lie upon the Table, and to be printed.
  Bill, not amended, re-committed to a Committee of the Whole House for Tomorrow.

SELECTION (STANDING COMMITTEES).

  STANDING COMMITTEE D.
  Mr. Frederick Hall reported from the Committee of Selection; That they had discharged the following Member from Standing Committee D: Viscount Wolmer; and had appointed in substitution: Captain Crookshank.
  Mr. Frederick Hall further reported from the Committee; That they had discharged the following Member from Standing Committee D (added in respect of the Consumers' Councils Bill): Mr. Cocks; and had appointed in substitution: Mr. T. Griffiths.
  Reports to lie upon the Table.

ORDERS OF THE DAY.

  SUPPLY.
  [12TH ALLOTTED DAY.]
  Considered in Committee.
  [Mr. DUNNICO in the Chair.]

  SUPPLY.

    PRIVY SEAL OFFICE.
    Motion made, and Question proposed,
    "That a sum not exceeding £14,784, be granted to His Majesty, to complete the sum necessary to defray the Charge which will come in course of payment during the year ending on the 31st day of March, 1931, for the Salaries and Expenses of the Office of the Lord Privy Seal."
    The DEPUTY-CHAIRMAN: It may be for the convenience of the Committee if I indicate broadly the limitations beyond which the debate on this Vote should not trespass. Reference to any administrative action in regard to unemployment as such is in order. Reference to the provision of grants for schemes of work, reference to the Lord Privy Seal's activities with firms, reference to the action of the Lord Privy Seal in approaching the bankers in regard to schemes of work, and the raising of loans are also in order, but all matters which require legislation are strictly out of order.
    Mr. CHURCHILL: On a point of Order. Is not this debate to be the occasion of a statement by a retiring Minister, who, according to usage and practice, has always on the occasion that it has been made been given full and untramelled freedom in regard to the matters which have led to the severance from his colleagues? Will not the fact that such a statement is to be made—a statement which is awaited with much interest by the House generally and by people outside—have the necessary consequence of broadening the scope of the debate relating to the most important problem of unemployment, with all its aspects, so far as it is possible for us to deal with it within the scope of one day, and will not the general convenience and the general wish of the House make it desirable for the Chair to give that latitude which is usually given when the House so desires it in regard to this discussion,
    1318
    instead of the somewhat alarming series of strict limitations which we have just had the pleasure of hearing?
    The DEPUTY-CHAIRMAN: I have taken such advice as is available, and I understand that it has been the longstanding custom of this House that, when a Minister retires, he is entitled to make a personal statement, but, when that personal statement has been made, the retired Minister is entitled only to the privileges exercised by any other Member of this House, and, consequently, in this debate the retired Minister has no privileges other than those shared by any other Member. So far as the discussion is concerned, long-standing custom and long-standing Rules—I think all old Parliamentarians will admit this fact—provide that matters which involve or imply legislation are not allowed to be discussed. This is purely an administrative Vote on the salary of the Lord Privy Seal.
    Mr. CHURCHILL: On the point of Order. In the first case, with great respect, will not a limitation of the kind you have suggested render all discussion upon the treatment of the evil of unemployment, upon the emergency of unemployment, wholly impossible? How, for instance, are we at every stage to know that any proposal which is advocated or discussed trenches over the line between administration and legislation? Would it not result in a completely meaningless debate? The second point is this; has it not long been the custom of the Chair to defer to the general wish of the Committee when it is desired to use a Vote in Supply as a vehicle for a free and general discussion?
    Mr. MAXTON: In the list of things you mentioned, Mr. Deputy-Chairman, as being a subject for discussion you mentioned schemes of work, and I wish to ask how it is possible to consider schemes of work without trenching upon matters which require legislation? We have been informed by the Lord Privy Seal that his great problem in getting on with his administrative work is due to the fact that numerous private Bills are held up by the procedure of the House.
    The LORD PRIVY SEAL (Mr. J. H. Thomas): Your announcement, Mr. Deputy-Chairman, was the first intimation I had as to the scope of the debate.

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    I express no opinion upon it, but I want to make it perfectly clear, lest there should be any misunderstanding outside—I am sure there will be no misunderstanding inside the Committee—that last week I took part in a debate in which the speeches covered the widest possible range and I was quite prepared to do the same to-day. I want to make it perfectly clear that as far as I am concerned I have not been consulted in regard to today's debate.
    Mr. LLOYD GEORGE: May I endorse what has been said from practically every quarter of the Committee, that if the debate is rigidly confined to the matters which you, Mr. Deputy-Chairman, have indicated in your statement that it would render a discussion upon the broad question of unemployment quite futile. Seeing that there is a general feeling in the Committee, it is by no means confined to this side of the House but, as indicated by the Lord Privy Seal, is also felt on the Government side of the Committee, that there should be a full and free discussion would it not be possible for you by the general consent of the Committee to allow a full discussion? I can well understand that if we attempted to debate great land projects, or even Free Trade and Protection, it would not be strictly relevant, but as a survey of the whole problem I hope we shall be allowed full freedom of debate with the general consent of the Committee. I do not challenge in the least the correctness of your decision.
    The DEPUTY-CHAIRMAN: Hon. Members will understand that, as Chairman, I must comply with the Rules of the House, and it is my business to see that they are kept. I have acted strictly in accordance with precedent. The list of subjects I gave was of a broad general character in order to indicate the limits beyond which the debate should not trespass. Hon. Members will recall the many occasions on which an hon. Member has had to be pulled up for attempting to reply to the speeches of other hon. Members, and the result has been that the Chair has been placed in a position of the utmost difficulty. The Chair is always ready to comply with the general wish of the Committee but I hope hon. Members will understand that it is not
    1320
    for me to ascertain the wishes of the Committee without, first of all, indicating the limits of the debate under the Rules observed on these occasions.
    Mr. STANLEY BALDWIN: I beg to move to reduce the Vote by £100.
    There will be gratitude in all parts of the Committee to you, Mr. Deputy-Chairman, for the view you have taken, and it will be agreed also that the doctrine you have laid down is absolutely correct. In debates of this kind, where the Committee has expressed its desire, the Chair has always been good enough to grant a little latitude, and I do not think it has ever led to any abuse. I am sure we shall do our best to keep the debate to the point, although, as the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) has said, in debates of this kind we must wander a little outside the strict terms of the Vote. There is no need to make an excuse for having another debate on unemployment. The Prime Minister, who I understand is to take part in the discussion, speaking with that freedom to which we are all accustomed on the platform, spoke about our nagging at the Lord Privy Seal. If we have been nagging at the Lord Privy Seal, I should like to know what hon. Members opposite did to the Minister of Labour in the last Government. I asked a clerk to take out the number of times the Ministry of Labour Vote was put down during the last Government, and he was still at work on it when I came down to the House. I am not able therefore to give the number, but three or four out of every half a dozen times a Supply Vote was put down we discussed unemployment. We were never able to get a discussion on India because the Ministry of Labour Vote was always put down; unemployment was always debated.
    To-day is a peculiarly fitting day on which to survey the situation. [HON. MEMBERS "Hear, hear!"] My hon. friends are thinking of one thing, quite apposite, and I am thinking of another. I am very fond of anniversaries in the historical sense. This is the anniversary of a, very powerful broadcasting appeal which was made a year ago by the Prime Minister, and we cannot do better at the beginning of this debate than take ourselves back to Newcastle, just a year ago,

    1321
    and look at one or two of the things which were said that night. The Prime Minister said:
    "Our position is perfectly clear."
    Will he say that to-day?
    "Unemployment cannot be cured by relief works, nor by patch work of any kind. We must develop national resources and improve trade so that there will be increased employment; and a tremendous revolution in industry and in power by the use of electricity and petrol. Labour's programme for dealing with unemployment is therefore not a programme of relief works, upon which the capital spent would be mainly lost to the country, but a programme designed to add to the wealth and efficiency of the nation, to give a spur to industry and to open the way to markets."
    The Chancellor of the Exchequer read those beautiful words and was so moved that the icicle fell. A few days later, he said:
    "In our first Session, we shall deal with unemployment and bring relief and hope to the workers of this land."
    I have in my hand also a very powerful appeal, called "Labour's Appeal to the Nation, General Election, 1929," and I extract one sentence from it:
    "When the Labour Government was in office it announced to Parliament schemes of a comprehensive and far-reaching character which it had already begun to put into effect. Immediately afterwards both parties united and defeated the Government. They could not tolerate its continued success."
    4.0 p.m.
    The facts are simple, and this afternoon I want only to look at a few facts, to ask a few questions, and possibly to make a few suggestions. I want to say no more about that appeal to the nation, although I might have a word or two to say later on about that publication "Labour and the Nation." I have a strong suspicion that everyone who cherishes a copy of that book will commit it to the flames lest it might be brought up as evidence against him. I can visualise bibliophiles of the future anxious to secure copies of it as one of the brightest works of fiction published in the period. I do not know whether it is worth reminding the Committee of the unemployment figures. I think it would be kinder not to. We all agree that they are very, very terrible. It has brought about the breaking of every pledge and every implied pledge that was given at the last election, and I believe the failure of the programme was shown by what
    1322
    has recently happened, and what always happens when a Government gets into difficulties, and that is the resignation of a junior Minister.
    I am going to say nothing about that domestic concern. I have been a Prime Minister myself, and I know the difficulties of these cases, and we shall listen with interest to the explanation which' is given. It is an interesting phenomenon, quite apart from the personalities involved. It is one more chapter in the struggle that is going on, and must go on, in the party opposite until one side or the other can assume the superiority and present the party as a united party to the country. For the moment, it only means that a Member of the Government has left the Front Bench party of pledges unredeemed to join the Back Bench party of pledges unredeemable. The struggle which is going on to-day is the struggle between men who have their feet on the ground and men who have their feet in the air. Years ago both parties had their feet in the air. In proportion as they can get their feet on the ground, they will maintain power in this country and may live to win another election. On the other hand, should those whose feet are in the air win over the others, then the prosperity of the party will fly away into space for ever.
    This process is one that we have watched with a good deal of interest. We have admired very much the firm stand which the Government made, and the issue of the struggle so far as we have been able to follow it. Of course, a great many of those who take the same view as the hon. Baronet who has resigned are young and enthusiastic politicians, and I should like to remind them, if I may, as an older politician, and possibly with less enthusiasm, of what a very distinguished American once said. He had a very profound knowledge of politics, and I think some words that he used might well be of interest to the Committee:
    "Nor it don't ask much gumption to pick out a flaw
    In a party whose leaders are loose in the jaw;
    An' so in our own case I eventur' to hint,
    Thet we'd better nut air our perceedins in print,
    Nor pass resserlootions ez long ez your arm
    Thet may, ez things heppen to turn, do us harm;

    1323
    For when you've done all your real meanin' to smother,
    The darned things'll up an' mean sunthin' or 'nether."
    I want to call the attention of the Committee to a very significant, development which has taken place lately, and that is the new excuse that is being put forward for the condition of unemployment. We are told that unemployment is due to world causes. Well, I have one or two observations that should like to make on that, and the first is this: I alluded to "Labour and the Nation," one of the best friends I have. I want to give this quotation to begin with:
    "The Labour party will not be satisfied, as capitalist Governments have hitherto been satisfied, merely with tinkering with unemployment when unemployment occurs. It declines to accept their—(that is my')—placid assumption that in the twentieth century, recurrence of involuntary idleness is still to be regarded as an Act of God."
    In face of that, it is almost blasphemous to suggest that unemployment is due to world causes. I think we are entitled to ask, When did the world causes begin'? They certainly had not begun last August. The Lord Privy Seal told this House that unemployment had not answered all his expectations and his faith that by February it was going to be better than it had been under our Government. Nor had it dawned on the Minister of Labour last November, when the Unemployment Insurance Bill was before the House, and she told us that the Bill was based upon an expectation of 1,200,000 as the figure which could be taken as the basic unemployment figure. It had not dawned on the Chancellor of the Exchequer a week or two ago, because the said then that for the first time the unemployment figures showed a slight reduction, and he declared himself optimistic of the future. I think, in those circumstances, we are entitled to ask, When did these world causes begin, and how long will they operate? An interesting question; and we should very much like to have an answer.
    An interesting feature of the perplexities of the present moment came before my notice quite recently, when the Lord Privy Seal—[Interruption.] There is one further point I wanted to put about world causes. Of course, there are world causes, or there are not. If there are not world causes, then I think your failure is patent to the world. If there
    1324
    are world causes, then you can never use that argument which you are so fond of using, but which has no basis in fact, and that is that you can do all kinds of things if only you had an independent majority. There is nothing that the Government have asked us to do to help unemployment that we have not helped them with. The first demand that the Lord Privy Seal made, almost immediately after the opening of the new Parliament—and we helped him—was to pass business through with all speed as emergency legislation. We have not hesitated to give support in that way to whatever has been brought forward to give assistance in the unemployment position. I do not think that is an argument, that we are not willing to help, or that the Labour party is not in sufficient power to do what it would like. It is not an argument that will convince the country to-day. You have all the help that we can give you.
    We are willing to consider any proposals that you bring forward, but, of course, if it be a fact—and I should not like to deny the fact, now that you all say so—that the causes are world causes, you may throw your hand in. There is nothing more that you can do, whether you have a complete majority or are dependent upon the votes of other parties. The Lord Privy Seal himself is apparently in complete uncertainty, or he would not be asking questions of himself. As recently as the 19th May he used these words:
    "Seeing the figures mounting, and trying to answer the question week after week, I have asked myself, not once, but a thousand times: Is the cause due to any action of the Government"
    Of course, "a thousand times" is only a Celtic figure of speech. I have heard those figures from Celts wherever they have sat in the House. Apparently he has asked that question of himself several times. Then he went on: "If so, no party label or prejudice ought to prevent any Member of the Government or the Government themselves asking: What are we doing that is bringing about this state of affairs?'" Once more he emphasised it:
    "I have asked myself that question a thousand times."—[OFFICIAL REPORT, 19th May, 1930; col. 98, Vol. 239.]
    Truly it may be said that the Lord Privy Seal is in direct apostolic succession from the original doubting Thomas. He has

    1325
    so far failed to answer the question. The answer is, of course, that it is very largely due to the action of the Government. [Interruption.] I beg that hon. Members will treat this matter seriously, as it is an argument which will require answering in the country.
    There are two things that have militated more perhaps than anything against the commercial business and industrial interests of the country. I think that the Coal Mines Bill has done a good deal of harm in destroying confidence, and I think so for two reasons. First, I think there is an apprehension, which I do not share myself, that the Government, having directly interfered with the direction and constitution of one industry, may at any moment interfere with the direction and constitution of another industry. Thereby uncertainty is created. But I think really that the damage done—the psychological damage, if I may borrow that word from the Chancellor of the Exchequer—is this: That at a time when in so much of our competition every farthing almost, in costs, is a matter for grave consideration, the Government quite light-heartedly have passed a Bill which, by their own contention and from the very essence of the case—it would be meaningless if it did not do so—will raise the price of coal, at any rate, let us say, to a great many consumers. That means that for some time to come the coal users of the country in industry have no idea how much more they will have to pay for their coal; the price is uncertain. That makes their costs uncertain, and when trade is bad it is a thing which has much more effect than if trade were brighter and orders were coming along and there were less competition.
    There is another direction in which the Government have undermined public confidence. [Laughter.] I ask hon. Members not to laugh. I will tell them the reason for my belief. The Chancellor of the Exchequer is a man upon whose words the country always hangs—in every Government. People want to know exactly where he stands as a man of finance, and what his schemes are. The difficulty caused by the present Chancellor of the Exchequer is that nobody does know where he really stands. There is uncertainty. I have in my hands a
    1326
    very interesting article which he wrote about five years ago to the "Weekly Dispatch." That article laid great stress on the injury which our industries were suffering from the then rate of taxation, and was written from the point of view of the most orthodox Whig economist that you could possibly conceive. That article led many people to think that in all circumstances he would be the guardian of the strictest economy, and that in no circumstances could there be increased taxation—which, as he explained in that article, falls on industry—so long as he had charge of the national finances.
    But then came the Budget. We had two very contradictory speeches, or rather we could draw two very contradictory tendencies from what he said. There were his observations when he told us that he realised the psychological effect of taxation on industry; and he gave us to understand, at least I understood, that the taxation that had been imposed that year would be the limit for next year too, because he said quite coolly that people wanted to know ahead what their taxation would be. That, if I remember aright, was in the Budget statement. Yet, whether it was that there was thunder on the left, or the mountain began to be in labour, on the Second Reading of the Finance Bill, on 20th May, he said:
    "I am prepared to maintain that, within limits, the taxation on large estates and large incomes is, as I have already said, sound finance and good for the State, and that the limits have not yet been reached. … small doses—reasonable doses—applied at regular intervals, may produce good results, but if the medicine is taken all at once it will kill the patient."—[OFFICIAL REPORT, 20th May, 1930; cols. 362 and 363, Vol. 239.]
    It is not a question of whether these things will obtain good results from his point of view, but whether a, statement like that does or does not imbue the industrial world with confidence. They do not know where they are with the present Chancellor of the Exchequer and uncertainty—as he has said sometimes in powerful speeches, and as everyone has said—is the worst thing for business. The fact is—of course, it is obvious—that the old venerable simile of Jekyll and Hyde could have been used about the Chancellor of the Exchequer, but if anyone has used it, he seems not to have drawn the moral. You remember

    1327
    the story. Hyde ultimately completely swallowed up Jekyll. Jekyll ceased to exist, and what happened to Hyde? Hyde ceased to exist. That is always the end when Hyde swallows up Jekyll.
    The question before us to-day, the question which the Prime Minister will have to answer and the question which the Lord Privy Seal will have to answer is, with the present condition of things what is the Government going to do? It is not an easy question to answer, because the whole situation is again as bad as it was a year ago. And it is far more difficult to deal with. The Government themselves over and over again, in statements in the country last year at the time the promises were made, showed that they had no real faith in palliatives. Nothing but palliatives have been tried. I do not believe that there are any palliatives that can meet the present situation. I do not believe that anything less drastic than Safeguarding will meet the present situation.
    I will state one of the reasons that have made me for so long a Safeguarder—a reason which is getting so strong from the present fiscal evolution in the world that I believe it will carry the country by whomsoever it is brought forward. I absolutely agree, and always have done, that the high tariffs in the world are a great bar to business, but I take the view, which I know is not taken by the bench opposite, that you cannot get these tariffs reduced so long as you leave this one market the only dumping ground in the world. I thought of it so much when the right hon. Gentleman the President of the Board of Trade went to Geneva. How do you get disarmament, which is a very similar problem? I want disarmament in tariffs just as I want disarmament in arms for war. How do you get disarmament in arms for war? By dealing amongst equals. America and ourselves can go into conference and can settle something, but suppose that Switzerland went and made proposals to America to reduce the American Navy. Do you suppose America would do anything? Of course she would not. In the same way I believe that only those who can speak on an equality regarding tariffs can do business. We cannot do that. Our competitors only laugh at us. We can only protest.
    1328
    We asked the President of the Board of Trade whether he had made a protest the other day about certain increased duties in America on lace. I forget what he said, but it really does not matter. If the right hon. Gentleman made protests for the rest of his life nothing would be done. That truth is beginning to dawn on the British electorate, and that is why you have this result at Nottingham. Nottingham is not an ordinary party victory. I was at great pains when at Nottingham to point out that if Nottingham thought fit to speak with a strong voice and to give its views as to whether it was right, particularly at a time like this, that the Safeguarding Duties should be withdrawn, I did not suppose for a moment that it would cause the Government, so far as lace was concerned, to change their decision, but it might make them think and cause them to review their decision when it came to dealing with articles the Safeguarding Duties on which expired later in the year. That evidently is a view which commended itself to Nottingham. No ordinary party victory could have given the extraordinary election figures that we have all seen this afternoon.
    I do hope, for the sake of the country—I can assure the Government that I mean this with all sincerity—that the Government will look at the signs of the times, and that they will quit, if they can, that position of intellectual pride with which people cleave to an old doctrine, and that they will recognise and do something to meet the feeling which is so strong in those industries which have hitherto enjoyed the modicum of Safeguarding given to them, whether it he at Nottingham in lace, or in gloves or tyres or anything else, when the people in the industry, masters and men, want the Duties to remain. The Government are doing a most undemocratic thing when they will not even consider their representations. No, the situation is far too serious to be dealt with, if it ever could be dealt with, by palliatives. For the sake of the home market and the foreign market you must try to pull down the tariffs of the world, which will ultimately strangle you if you do not. You have to go on where the tide takes you and where the country wants you to go, whether you like it or not. You have to safeguard your own home market and develop the markets in your own

    1329
    Empire, which can be developed on the basis of Safeguarding at home.
    The PRIME MINISTER (Mr. Ramsay MacDonald): I must confess that there were one or two parts of the right hon. Gentleman's speech that caused me great surprise, but there was no part of his speech that caused me more surprise than when he sat down. For the last half hour I have been under the delusion that he was delivering an introduction to what he was to say. But having finished his introduction he ceased his speech. He began by telling us that as he has been Prime Minister he understands the resignation of minor Ministers. He then reflected upon certain—shall I say?—divisions in our party, but he concealed from us that, being the Leader of the Tory party, he also understood them. I sympathise with him as much as he sympathised with me, but I do more. I always like to give the Leader of the Opposition the better part of a bargain, and I not only offer him sympathy, but I offer him thanks, because, at any rate, he has given us a suggestion as to how to get out of our difficulties and I might suggest to my hon. Friend the late junior Minister that he and I might adopt the device of a referendum. The right hon. Gentleman then proceeded to pass some interesting remarks about the case that the more recent phase of unemployment is due to world causes and, having made those remarks, he went on to show that the Government as a matter of fact were responsible. He referred to the Coal Bill. I am not going over old ground except to say this—that once again we have heard from the party opposite above the Gangway that they hope to establish prosperity and competitive efficiency in this country on the evil industrial conditions which working miners suffer.
    From that matter the right hon. Gentleman proceeded to the Budget. He forgot to tell us that the greater part of the increase of taxation imposed by my right hon. Friend the Chancellor of the Exchequer was necessitated by the fact that his Government had not paid their bills. I suppose his financial doctrine now is that the country ought to be allowed to live on low taxation without paying its debts. He forgot, when he dealt with the increase in unemployment and the relation between unemployment and my right hon. Friend's Budget, that the
    1330
    Budget was not introduced until 14th April and that months before that date, world causes had been operating against our unemployment figures. Then, when he departed from criticism and produced a positive suggestion—it was only one—he referred to Safeguarding. Once again, apparently, he forgot that in countries which are not only safeguarded, but protected in the good old-fashioned way, the figures of unemployment have gone up more rapidly than the figures of unemployment have gone up here, and have reached totals soaring higher than the totals which our figures show.
    The right hon. Gentleman laid down the familiar, but, I understood, exploded doctrine, that the history of bargaining between one protected country and another showed that such bargaining led to the reduction of tariffs. There is no such moral or conclusion to be drawn from that history. As a matter of fact, if we were discussing that question here, we could bring in again and again cases of tariff bargaining begun amicably, begun with good prospects but ending always with a tariff war. I do not want to indulge in any Celtic imaginative mathematics, but there have been more tariff wars resulting from attempts to lower tariff walls by bargaining, than there have been cases of tariff walls lowered as a result of such bargaining. As far as the example of Nottingham is concerned it is not unfamiliar. There is not a country which has adopted tariffs in any shape or form, but has had elections where the one case was the immediate and special economic interests of the industries that have been benefiting at the expense of the general mass. I congratulate the right hon. Gentleman on his political victory, such as it is, but instead of moralising that the factors which contributed to that political victory are such as should be welcomed, he should realise that they are nothing but the old-fashioned political experiences of logrolling that every protected country has gone through.
    I follow the right hon. Gentleman in this debate because my right hon. Friend the Lord Privy Seal will wind up the debate and will be in a position to reply to the various points of detail which, undoubtedly, will be raised between now and half-past ten o'clock to-night, but I must say this, that my right hon. Friend the

    1331
    Lord Privy Seal has very good reason to complain of the way in which on every conceivable occasion, last week and this week and probably next week, the troubles which he has borne with so much success, become the subject of weekly and, to judge from the speech to which we have just listened, unprofitable debate. What is the position regarding unemployment? There is a difference between the problem of unemployment as it presented itself a year ago, and the problem of unemployment as it presents itself now. Twelve months ago, it was a question of home conditions in relation to a normal foreign market. World consumption was going up, and it was merely a question of how efficient we were to share in and have our just proportion of the world consumption. It was a question of internal equipment, of internal marketing arrangements.
    That is not the problem to-day. The right hon. Gentleman says that it is the advent of this Government which has changed the situation. I will give him Anglo-Saxon figures. Take any country, any industrial country he likes. Take Germany. [HON. MEMBERS: "France."] Really in the discussion of economic problems, hon. Members ought to know the difference between the industrial and social conditions of France and those of countries like Germany, the United States and ourselves. If I am to be delayed in order to explain the industrial character of the population of France and draw the great fundamental distinction which exists between that population and our own or Germany's or that of the United States or that of Japan, then, Mr. Deputy-Chairman, your Ruling will have to be imposed again upon us, so as to limit the scope of the discussion. But in Germany the figures have gone up from something like 1,700,000 to 2,700,000 in 12 months. The United States about a year ago had practically no registered unemployed. The trade unions' unemployment registers were practically nil. To-day, there are anything between 5,000,000 and 6,000,000 unemployed.
    The right hon. Gentleman spoke of putting certain questions to me. May I put a question to him. Are those figures owing to the Labour Government? Is the co-terminous and simultaneous increase of unemployment in Germany, in Japan, in every industrial country that
    1332
    has an industrial population of the same character as ours, and a distribution of industrial enterprise approximately similar to ours—is the enormous increase in the unemployment figures in every one of those countries, from the rising sun to the setting sun, including our own—is that owing to the advent of a Labour Government here or Labour Governments in those countries? It is nothing of the kind. There have been world causes which have knocked the bottom out of prices and every country that depends on export trade has suffered on account of that slump. Moreover, was it owing to the advent of the Labour Government that India got into the position in which it is now? Really the right hon. Gentleman ought to refresh his memory with a few dates.
    Wherever you go, you find that the markets upon which we depend are affected by political causes as well as economic causes, and that, on account of depression of trade in some of the countries upon which we depended very largely for open doors for our population, those doors have had to be closed, and migration has thus ceased altogether, or has been substantially diminished. As far as unemployment is concerned, we are facing to-day a totally new problem and a problem totally different from that which we had to face 12 months ago. Then the problem was comparatively simple. It was insurance, plus normal relief work, plus the re-conditioning of industry in order to make our effectiveness in neutral and foreign markets greater than it was before. My right hon. Friend the Lord Privy Seal has done an enormous amount of work to relieve that situation. When hon. Members speak from both sides as though nothing had been done, may I give a few figures from a paper which has been supplied to me and which I am perfectly certain is accurate. The estimated cost of schemes approved in connection with unemployment has been:

    Classified roads, £33,000,000,

    Unclassified roads, £4,500,000,

    Railways (excluding railway-owned docks), £21,000,000,

    Electricity undertakings, £11,500,000,

    Docks (including railway-owned docks), £7,500,000,

    and so on, and the State is undertaking or assisting large developments which

    1333
    are not included in the above figures. The total is £103,000,000 of money sanctioned and ready for spending, as soon as the schemes come into operation, on the relief of unemployment in this country. In addition to that, we have the normal telephone construction programme of some £10,000,000 a year, we have State-aided houses which the Exchequer subsidises to the extent of over £11,000,000 a year, and afforestation, for which the financial provision for the next 10 years has been increased from £5,500,000 to £9,000,000. All that work, put into operation under the conditions, that money applied to the problem of last year would undoubtedly have reduced the figures upon our unemployment registers well below the million.
    Mr. LLOYD GEORGE: These figures are very important, and we would like to know exactly what they mean. Take the two first figures, which represent far and away the most substantial contribution in the category which the right hon. Gentleman has given us. What is the total for roads?
    The PRIME MINISTER: £38,000,000, approximately.
    Mr. LLOYD GEORGE: The first question is this: Taking the whole of the figures for roads, I should like to know over how many years that money is spread. Is it money to be spent this year, or is it money to be spread over four or five years? The second question I should like to ask is, How much money is granted over and above the normal amount which the right hon. Gentlemen sitting here were granting in respect of the same class of work? Otherwise, we shall not know what is the abnormal programme of the Government.
    The PRIME MINISTER: I confess that I am giving figures supplied by the Departments, as to the detailed estimated cost of the schemes approved in connection with unemployment. Perhaps my right hon. Friend will just allow his questions to be inquired into, and the figures will be supplied by a subsequent speaker. I have not got them myself. I requested figures informing me how the £103,000,000, which is now the allotted figure, the sanctioned figure, for the relief of unemployment upon relief works was made up. Last week the figure of £100,000,000 was given, without details,
    1334
    but these are the classified, categorical figures—£33,000,000 for classified roads, and £4,500,000 for unclassified roads—money available for expenditure.
    Mr. CHURCHILL: Can the right hon. Gentleman tell us if he is including in this special relief work for the aid of the unemployed the normal, ordinary, annual expenditure on loan account of the Post Office for telephones—if those £10,000,000 have been brought in as special relief for unemployment, or are they additional?
    The PRIME MINISTER: Entirely additional to the special programme, I am informed. [Interruption.] Will the Committee allow me? As I say, I asked for these figures from the Departments. I am not the head of the Departments. They supplied them to me with their authority, and Ministers and ex-Ministers know perfectly well that those figures, compiled by the officials of the Departments, may be taken as accurate, and any explanation as to how they are precisely composed is a matter for departmental explanation.
    Mr. CHURCHILL: It is not a question of detail. What we want to know is, What is the extra amount over and above the normal? That is not a question of detail. I can quite understand that the Prime Minister has been supplied with the gross figure, but it is the net extra expenditure which is the only figure that is relevant in this debate.
    The PRIME MINISTER: All that I request is that the ordinary courtesy should be extended to me. I tell the Committee that I have not got those details, and that it happens again and again that Ministers ask the House to allow questions to be postponed for a short time, when they promise that the information asked for will be supplied. The information will be supplied in plenty of time for use in further debate before the day comes to an end. What I base myself upon is this—and no question of detail ought to allow the Committee to have its attention deflected from this—that £103,000,000 is available for expenditure in the relief of the unemployed in the shape of public works, and that afforestation, telephone expenditure, and so on are extra to that and available in addition for further relief.

    1335
    One of the difficulties of the present moment is undoubtedly this, and this is the question that we have to ask ourselves: Can we, in face of this special outburst of unemployment, this special manifestation of unemployment, undertake specially emergency measures to tide it over? That is the question. The right hon. Gentleman asked me if I could tell him when it was going to end. I cannot, but I can tell him this, that every authority who has been consulted is convinced that it is temporary, and that, for the very simple reason that it is caused very largely from the fact that, owing to falling prices, some of which have only just found bottom, demand is being withheld and orders are not being issued; but wastage is taking place by use all the time, and as soon as confidence begins to be established [HON. MEMBERS: "Hear, hear!"]—one of the innocences of hon. Members opposite is that they imagine that they can establish confidence—as confidence is established, then orders will be issued, and with the orders issued we are just as likely to have a period of immediate boom as a very prolonged continuation of the present depression; and the question is, Can we possibly tide over the period from now until then, whenever it happens? I am not at all sure but that we might see whether it is not possible to co-operate in a temporary manner at any rate. In the ordinary permanent influences, right hon. Gentlemen say—Safeguarding and so on—we cannot join them.
    Lieut.-Colonel HENEAGE: Why?
    The PRIME MINISTER: Because it is nonsense.
    Sir WILLIAM DAVISON: The people of Nottingham do not think so, any way.
    The PRIME MINISTER: Whether it is possible to join in expediting business, expediting work, which under normal circumstances is bound to be delayed. Take, for instance, the Standing Orders of this House regarding private Bills of a certain character. It is quite true that my right hon. Friend asked for powers, and received them, and has used them very effectively, and I am not at
    1336
    all sure, in view of the great flood of unemployment that has suddenly welled up, that those powers are sufficiently drastic. But that is not all. We all respect, we all protect, and we all champion our municipal government, and nobody, I believe, would ever think of doing anything to weaken its authority. But within the last three or four months we have had some unfortunate experiences, which could be rectified without doing any damage to the validity and authority of municipal government. We find, for instance, that very fine, very good—admitted by everybody—schemes for local improvements have been accepted by the municipal authorities, have been passed by the municipal authorities, and have had finance put behind them, but owing to a poll of the electorate, they have been turned down. [HON. MEMBERS: "Oh!"] It may be an occasion for a sneer, but we get the case of Hull, we get the case of Leeds, we get the case of Sheffield.
    Hon. Members cannot have it both ways. They cannot criticise my right hon. Friend for having failed to produce the effect of working schemes and not consider with us practical and sane reasons why schemes that have been carried through this House, schemes that have been approved by local authorities, schemes that have been accepted by the representatives of the local authorities, and schemes that have been accepted by the country, have, upon a referendum, been turned down and the whole thing thrown on the scrap heap, with all the expectations which they carried for the unemployed.
    There is another reason. There is nothing that is holding up schemes more than the power of local landlords to prevent development. There is one case that came under my notice the other day, where over 20 owners of land had to be separately negotiated with before the complete scheme could be plotted and planned. I saw another scheme, where two or three local authorities came up against each other. Individual liberty and all that sort of thing are very dear, but with public need put in jeopardy in the way that public need has been put in jeopardy and held up and destroyed within the last 12 months in connection with the schemes that were being put

    1337
    into operation, this Committee ought to consider whether that form of private ownership should stand so effectively as it does against public utility. In regard to the whole question of municipal assistance to schemes, under present circumstances with the extra need that has grown up, the municipalities might be encouraged to do more than they have done, and for the purpose we are going to summon a conference with the representatives of municipal authorities in order to discuss the possibility of an immediate expansion by co-operation between the municipalities and ourselves.
    5.0 p.m.
    There is the question that has arisen again and again of borrowing on a large scale in order to put certain work into operation. Borrowing without a programme is, in the mildest language, absolutely ineffective. If there be a case of programmes being held up, or of programmes that can be put into operation at once being held up for the want of money, we can consider the question of borrowing, but I want to remind the Committee and those who criticise us that the figure of £103,000,000 which I have quoted is very largely borrowing. There are three things regarding borrowing which the Government must take into account. First of all, it may be all very well the day you borrow to find that you are in possession of very expanding resources, but, when the day comes to pay back, you will discover that putting large schemes of public work into operation by borrowing is an expensive operation. I am not saying that borrowing is not necessary; I am not saying—in fact, I say the contrary—that borrowing is not to be resorted to, but borrowing in itself, and apart from a severely practical programme, is not the way to help the unemployed. Further, its effect on credit must be considered, and its best use must also be studied. We have, for instance, Sir Henry Maybury's authority for saying in regard to roads that at the present moment, in addition to what has been sanctioned and provided, it is impossible and undesirable to raise more and to plan for more than £20,000,000 worth of work. Let the Committee be perfectly clear that there will be no schemes held up for want of money. Borrowing will be resorted to, and must
    1338
    be resorted to, but not without restraint and not without careful consideration as to its consequences.
    Then there is the question of pensions. A great deal can be done by an extension of pensions in one shape or another. Pensions applied merely to classes with many features in them may be both wasteful and ineffective. What we want is a complete co-ordination of our pensions schemes and our social insurance schemes, because only in that way can we effectively use the national resources that are available for the social services in all their varied forms. Here, again, with public help, unemployment insurance, extra unemployment pay, old age pensions and so on, the time has come, with the experience that we have had of these varied methods of social help and insurance, to co-ordinate them all in order that the maximum benefit may be received by the population. It will be a great help in dealing with unemployment, because it will enable us to draw from industry old men and women who have earned a pension by their previous work, and who would, if they had a pension which was adequate, enjoy it in a peaceful, comfortable and useful old age.
    A great deal is said about rationalisation. If this country is to maintain its position in the markets of the world, it must produce economically, and one of the most effective and necessary means of producing economically is rationalisation. My right hon. Friend has done a tremendous amount to assist that, but there is a possible flaw: it is that, as you rationalise, so you temporarily increase unemployment. As a matter of fact, the increase in unemployment owing to rationalisation is not so very large when it is carried over a certain number of years, and especially after the industry has been rationalised. I was in a position to say a month or two ago that this question of unemployment as the result of rationalisation was the subject of study by representatives of workmen, trade unions and employers, and we hope very soon to get their considered opinion as to how to deal with the unemployment consequences of rationalisation processes.
    What I say this afternoon is exactly what I said in my broadcast speech. I am obliged to the right hon. Gentleman for reminding me of it. The point of that speech was that piecemeal treatment

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    of unemployment is bound to be ineffective. It has to be dealt with systematically, and, in order to deal with it systematically, we require to have a solid Government backing. The substitute for that in a House like this—[Interruption.] I am sorry that I do not understand the allusion. By a solid Government backing in this House I mean this. On those questions to which I have referred, all large and fundamental questions, all questions of the most pressing national importance, might very well be the subject of co-operative action. The Government cannot ask anybody to deal with Safeguarding, or anything of that sort, but in relation to the present industrial revolution, a revolution which 20 years from now will be looked back upon, and will be seen, with the same meaning attached to it as the industrial revolution which began at the end of the eighteenth century, in these great fundamental, economic changes and problems, apart from the political position of each party, I hope that there will be House of Commons co-operation. If there is not, at any rate it will not be the Government's fault.
    The conditions of our past prosperity are changing; they have already very largely changed. The conditions under which this country grew up economically at the beginning of the last century, and flourished on to the end of that century, have changed very considerably. We have to face these new conditions, and to produce schemes and ideas which will accommodate themselves to the change. We cannot accommodate ourselves to the change by using the old phrases and adopting the old nationalist ideas—Protection on the one hand, or supremely overriding individual enterprise and possession on the other. Organisation, co-operation, rationalisation, and national views, pursued under the conditions of national control, have to be applied if this country is going to flourish in the Twentieth Century as it did in the Nineteenth. I appeal to my hon. Friends around me, and I appeal to the Committee, to remember, in dealing with unemployment, that our unemployment is a feature of our own conditions, and that world unemployment is a feature of world capitalism, which can never be cured until conditions have accommodated themselves to the new industrial
    1340
    and economic facts that have been born within the last quarter of a century. I appeal to my hon. Friends around me and to the Committee to apply those ideas to the treatment, first of all, and then to the solution of the unemployment problem, and, so far as the Government are concerned, that alone is how it is being explored.
    Sir OSWALD MOSLEY rose—
    The DEPUTY-CHAIRMAN: Sir Robert Horne.
    HON. MEMBERS: Mosley!
    Sir ROBERT HORNE: I promise not to detain the Committee for any length of time. I do not propose to make any contribution to the general debate upon unemployment, and I shall not be tempted to follow the Prime Minister in what he has said, beyond this, that great as is my admiration for the Prime Minister in other spheres, after having listened to his speech this afternoon I confess that, with the best will in the world, I can derive very little consolation from the public announcement that the Prime Minister is now devoting himself to a consideration of the unemployment problem. My purpose this afternoon is a very limited one. It is confined to a consideration of a certain portion of the steel trade whose employment will undoubtedly be adversely affected if certain statements made recently by the Chancellor of the Exchequer in this House are allowed to remain unrefuted and are not withdrawn as publicly and emphatically as they were uttered. It is in the interest of our industry that they should be dealt with at once, and I hope the Committee will forgive me for taking this, the earliest opportunity at my disposal, of raising the question. It will be within the recollection of hon. Members that when the Chancellor of the Exchequer was making his concluding speech on the Second Reading of the Finance Bill he made a definite attack upon three steel companies in this country which he mentioned by name. I had better quote his own words from the OFFICIAL REPORT:
    "Instead of putting aside adequate sums to reserves for the purpose indicated by the right hon. Gentleman, companies, in the days of prosperity, have paid away their profits in huge dividends and bonus shares,"

    1341
    and he added that now they are
    "in a condition of lack of equipment, of inefficiency in matériel, so that it is quite impossible for them to compete successfully in the markets of the world."[OFFICIAL REPORT, 20th May, 1930; col. 357, Vol. 239.]
    It is not usual in this House to attack individual firms by name when they are not here to make any reply, and the Chancellor of the Exchequer's argument and purpose could quite well have been served by a general reference to the practice of firms in this country, if he wished to make that animadversion. In the instance in question the firms were three of the most important organisations in this country. They were Baldwins, John Brown and Company, and the Consett Iron Company. The right hon. Gentleman cited a series of figures in order to establish his argument and these figures undoubtedly showed some exuberant profits which, he said, had been paid away when they ought to have been kept in hand as reserves. But the unfortunate thing about the figures was that in every single instance they were entirely inaccurate. I myself ventured to intervene by interruption, and I warned the Chancellor that, as a responsible Minister of the Crown, he ought to be very careful, when he was talking of individual firms, to be correct about his figures. I said that, being personally acquainted with one of them, I knew that what he was saying was in error, but he only waved aside my interruption, made a personal gibe against me, and refused in any way to qualify these very damaging aspersions upon these companies.
    In order that the Committee may clearly understand, and that the industrial world may know, what the truth is, I propose, with the leave of the Committee, to give what the facts are. In quoting what he said were extravagant dividends, the Chancellor of the Exchequer referred first to Baldwins' Limited. He said that in 1918 they had paid a, dividend of 23½ per cent.; the fact was they paid a dividend of 11½ per cent. He said that in 1919 they paid 25 per cent.; the fact was they paid 12½ per cent. He said that in 1920 they paid 25 per cent.; the fact was they paid 12½ per cent. He said that thereafter, in the following years, they were able to pay nothing; the fact was that in 1921 they paid 5 per cent. I wish the Committee to remember, in looking at these figures, that these dividends were paid at a time when the currency was
    1342
    much inflated and when money had not got the value that it had pre-War or has now, that, in fact, these dividends were not worth more than half the nominal figure I have recited to the Committee; and also that at the end of 1920 Baldwins were in this position, that they had in reserves and other accumulated funds a general reserve of £1,750,000.
    I turn now to John Brown and Company. The Chancellor of the Exchequer said of that very well known and famous firm, whose work goes all over the world wherever civilisation is established, that in 1918 they had paid 25 per cent.; in truth, they had paid 12½ per cent. He said that in 1919 they had paid 25 per cent.; in fact they had paid 12½ per cent. He said that in 1920 they had paid 23½ per cent.; in fact they had paid 12½ per cent. He said that thereafter they never were able to pay any dividends. In fact they paid 10 per cent. for 1921 and 5 per cent. for each of the succeeding years up to 1926.
    Next I turn to the Consett Iron Company. The Chancellor said that in 1918 they paid 80 per cent.; in fact, they paid 55 per cent. I quite agree that that is a very large figure, but I think the Committee will acknowledge that they were not entirely unjustified when they know that between 1918 and 1926 this firm had so much accumulated reserves that they were able to spend very nearly £3,000,000 of their own money upon the reconstruction of their works.
    Mr. LAWTHER: Would the right hon. Gentleman say what new capital the Consett Company obtained in that time?
    Sir R. HORNE: The Consett Company obtained no new capital then. They did at that time what the Chancellor of the Exchequer referred to, they distributed some bonus shares, but that is not obtaining new capital, The distribution of bonus shares is not taking anything out of the reserves. It is leaving the reserves where they are until they are in a position to spend them. The distribution of bonus shares does not affect that matter in the slightest degree. [Interruption.] I do not know what the hon. Member is asking, but really he ought to try to understand this matter.
    Mr. LAWTHER: I understand a great deal more about that company than you do.
    Sir R. HORNE: The fact is the Chancellor of the Exchequer based this attack upon figures which, as I have shown to the Committee, are entirely inaccurate. I might leave the matter there and ask that he should explain to the Committee how these awkward and embarrassing figures were given to him, but he went on from those false premises to point a conclusion of the gravest and most serious character, something far, far worse than the citation of erroneous figures, because he went on to say that the result of their action was to put these firms in a position in which they were lacking in matériel and were inefficient. That is a pronouncement, on the sounding board of the House of Commons, to all the purchasing markets of the world, at a time when our steel trade is struggling in the most severe competition with their rivals in Germany, in Belgium and in France, in all of which countries there are lower wage scales, owing to which they are able to produce the articles which they are manufacturing at a cheaper cost than we are in this country. At such a time it is announced to all intending purchasers that these three most famous firms are so lacking in matériel, in efficiency and in equipment that they cannot compete in the markets of the world. Even if that statement had been true it would have been a shocking statement to make in these circumstances. If it had been uttered by some irresponsible private Member it would have been described as a wanton exhibition of mischief, but coming not only from a responsible Minister but from the head of the Department which, above all others, is charged with watching the fortunes of this country, it surely was a most reprehensible example of ill-timed disparagement of important factors in the industry of this country.
    Mr. WEST: Is the right hon. Gentleman aware that Lord Salisbury, in another place, said the same thing two months ago? May I read it?
    Sir R. HORNE: I have only a very short time in which to make this speech, and I will only remind the hon. Member that Lord Salisbury did not mention any single firm, and spoke only about industry in general. He never disparaged any single firm at all.
    Mr. WEST: May I—
    HON. MEMBERS: Sit down!
    Sir R. HORNE: What I am dealing with is an attack upon individual firma in this country. The hon. Member will have an opportunity to reply. I am now going on to other facts with regard to these firms. Is it true that they are in any sense inefficient or lacking in equipment or matériel which otherwise they would have been able to purchase? Take, first of all, the case of Baldwins. The central portion of the Baldwin works, as the hon. and gallant Member opposite knows very well—
    Lieut.-Colonel WATTS-MORGAN: I know it very well.
    Sir R. HORNE: —was built between the end of the War and 1922. It was the last word in steel works at that time. It is constructed on a tidal water frontage, and it has all the most modern devices for bringing raw material straight into the furnaces and getting away the manufactured material at the quickest possible rate. Whenever there was any work to be done there is no doubt at all that it could be most efficiently done at the works of Baldwins. In more recent years they have erected, along with another partner, what I should think is the most modem tinplate works in this country; I do not suppose it would fail to bear comparison with the best tinplate works known in the world. It is with regard to a firm like that that this contemptuous aspersion is made which goes round the world, describing them as incompetent and inefficient. I am not myself familiar with the works of John Brown and Company.
    Mr. KIRKWOOD: I know them, and there is nothing finer in the world.
    Sir R. HORNE: Let me take the case of the Consett Iron Company. Between 1918 and 1926 the Consett Iron Company spent nearly £6,000,000 in completely reconstructing their works. An hon. Member opposite was anxious about some borrowings that they made. They had not £6,000,000; what firm would ordinarily have £6,000,000 of reserves? They did what every other firm in any other part of the world would do. They applied their own reserves, so far as they would go, and they borrowed the rest on debentures from the public. That is one of the reasons why I said on the Second Reading of the Finance Bill that if you

    1345
    take away money by taxation you deplete the source upon which industry depends for reconstruction. The Consett Company have constructed what my hon. Friend opposite, who knows all about the engineering industries, says is one of the very finest steel works in the world. There is no modern device which they believe to be reasonable for the saving of costs which the Consett Iron Company have not adopted. I would venture to say, in the presence of people in the steel trade, that if you eliminate the factor of wages, the Consett Company can make as cheap steel as any firm in Europe, and cheaper than the majority of their rivals. It is upon these three firms that disparagements have been passed by the Chancellor of the Exchequer. It is clear that what the right hon. Gentleman put before the Committee was really a travesty of the truth, and I am sure that he will be anxious to make amends to the companies which he has injured.
    I do not venture to suggest to him in what terms he should make any apology or withdrawal he might propose, but, if anybody outside had made those statements, undoubtedly the law courts would have dealt with them in the most rigorous fashion. I am perfectly sure that the generosity of the right hon. Gentleman's nature will at least have this result that, being in a privileged position in this House, he will be anxious to make his withdrawal as complete as possible. I say to the Committee that the disavowal of the views which he has expressed ought to be such as will bring assurance to everybody's mind that the Chancellor of the Exchequer spoke in ignorance of the truth, and upon impressions which investigations have shown to be absolutely devoid 6f foundation.
    The CHANCELLOR of the EXCHEQUER (Mr. Philip Snowden): I do not rise, of course, to take part in the general debate, but I must at once respond to the concluding appeal of the right hon. Gentleman who very kindly intimated a day or two ago that he was going to raise this question, and I say sincerely that I am very much obliged to him for having done so. First of all, in regard to the figures which I gave as to the dividends of the three companies which I quoted. The information
    1346
    and the figures were obtained from a well-known publication which gives the highest and the lowest quotation of the Stock Exchange over a period of three years with the dividends paid in each year. As soon as my attention was called to the inaccuracy of those figures, I made investigations, and I found that they were quite misleading and incorrect. I referred to the Stock Exchange Year Book, and I extracted the correct figures which are not exactly what the right hon. Gentleman has quoted, but they are sufficiently near to require no comment. I am extremely sorry for the statement that was made, and I repeat that I am under a very great obligation to the right hon. Gentleman for having given me this opportunity of making this correction as publicly as I made the other statement.
    It will be remembered that I quoted those figures, not as casting any particular aspersions on the particular firms, but rather as an illustration of the whole general argument which I was making at the time, namely, that if our big industrial concerns had not distributed so much profit by way of dividends during times of prosperity, but had placed larger sums to reserve, they would have been in a much stronger position when bad times came to face the position. There are a few other points raised by the right hon. Gentleman about which I should like to say a word or two. I have here extracts from speeches made by the directors of some of our greatest iron and steel companies, which are far stronger than anything I said about the inefficiency and lack of equipment of some of our great iron and steel firms, but I will not read them because I do not want to aggravate any misunderstanding or mischief which my remarks might have made.
    I want to make these two points. The very fact that nearly all our great iron and steel companies either have undergone or are undergoing schemes of rationalisation to-day is proof of the fact that they were not in a state of efficient organisation. The other point—and the right hon. Gentleman appeared to attach great importance to it, and I admit that if there were no foundation for it it would be a very serious aspersion upon the iron and steel trade—is that, while talking about the inefficiency of British industry we are advertising the fact to the world

    1347
    and therefore inflicting damage upon the industry. If that be so, then the greatest damage which is being done to British industry to-day is by remarks like those which the Leader of the Opposition made during his speech to-day. The proposal for Safeguarding is being advocated because—and this surely will not be denied—British industry is not able to compete successfully with the foreigner. I have heard the right hon. Gentleman the Member for Hillhead (Sir R. Horne) in this House very often talk about the depressed condition of our industries. Surely, is not that holding up to the world—
    Sir R. HORNE: That is a totally different thing. There are other conditions that go with it, but, when you find firms spending vast sums of money in getting the most modern plant in the world, surely it is a shame to say to the world that those firms are inefficient.
    Mr. SNOWDEN: I said I would not quote extracts from speeches or letters of our leading industrialists, but perhaps now I may change my mind. This is an address delivered quite recently, in November, 1929, by Sir Mark Webster Jenkinson who, I think, is a director of Vickers-Armstrong, and this is what he said:
    "Since rationalisation was first advanced as a solution of our industrial difficulties there have been some amalgamations of individual units but certain works have been closed down, in isolated cases the managements have been merged, but, compared with Germany, practically few industries have taken any active steps to rationalise their productive capacity on a comprehensive and economical basis and to interpret the true meaning of rationalisation. We just 'muddle along,' hopeful that the sun of prosperity will shine again. … but unwilling to recognise that in the direction of merger modernisation, and management of our industrial undertakings lies the road we have to follow if we are to regain a position of pre-eminence in the markets of the world."
    And, again, in a letter in the "Times," in November, 1927, signed "Arthur Cole-gate, Chairman, Robert Heath and Low Moor, Limited":
    "Many sections of the steel industry feel that no permanent improvement can be looked for unless their plant and methods are brought into line with the best practice of America and the Continent. …"
    Sir KINGSLEY WOOD: What about the three firms that you have libelled?
    Mr. SNOWDEN: I have already said that I gave those three instances as illustrating my general argument.
    Mr. MACQUISTEN: And your instances were all wrong.
    Mr. SNOWDEN: I have already said that I hoped my remarks this afternoon, in which I expressed regret for the inaccurate figures, will be as widely circulated as my original statement. And as I rose only to correct and express my regret for the inaccuracy of the figures which I gave on that occasion, I think that it would be best, perhaps, to leave it there.
    Sir O. MOSLEY: In the earlier stages of this debate to-day, to which I will return with the leave of the Committee, we have had from the Prime Minister an exposition of Government policy, and also some of the customary exchanges of debate from two great masters of that art. I do not propose to indulge in any form of dialectics, because I believe the purpose which this Committee desires can best be served if, as directly as possible, I proceed to the actual facts of the great administrative and economic issues which are involved. The Prime Minister, in his speech, pointed out a fact which none can deny, that world conditions have been vastly aggravated since the arrival in power of the present Government, and that no one can suggest that the Government are responsible for those conditions. None can deny that fact, but this I do submit, that the more serious the situation the greater the necessity for action by Government. We must, above all, beware, as the world situation degenerates, that we do not make that situation an excuse for doing less rather than a spur for doing more. That is the only comment on the general situation which I would permit myself before coming to the actual issues involved.
    General surveys of unemployment I have always distrusted, because they are liable to degenerate into generalities which lead us nowhere. If we are to discuss this matter with any relation to realities, we must master the actual, hard details of the administrative problem, and to that problem I desire immediately to proceed. The first issue between the Government and myself arises in the purely administrative sphere of the

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    machinery to be employed in dealing with the problem. I submit to the Committee that, if anyone starts in any business or enterprise, his first consideration must be the creation of a machine by which that business can be conducted; and, when a Government comes into power to deal with unemployment, its first business is the creation of an efficient and effective machine. That machine, in my view, does not to-day exist, and I will say why.
    Under the late Government, the Ministry of Labour, with the assistance of various Cabinet Committees, was, as I understand, responsible for unemployment, and the staff of that office dealt both with the unemployment insurance aspect of the problem and with the provision of work and the reorganisation of industry. The only difference in the administrative procedure under the present Government is that the officials who were dealing with the constructive works side of the problem have been moved from the Ministry of Labour to the Treasury, and have been joined by a small staff gathered from other Departments. The actual central administrative machine is now as follows. An interdepartmental committee composed of the permanent chiefs of all Departments meet at irregular intervals under the chairmanship of the Lord Privy Seal. That is the main machine to secure co-ordination and liaison in the whole great attack upon unemployment. That committee has met nine times since the inception of the Government, and only twice during the present year. To the first two meetings of that committee, I and other advisory unemployment Ministers were not invited, and at those first two meetings every major decision on policy and administration was taken. I am not here to make any complaints, but to analyse the facts, and I suggest that a machine of that nature could not possibly grapple with the problem.
    What was the result? The result was that all initiative tended to come from the Department, instead of from Ministers. I am not here to attack, and I certainly should not dream of making any attack upon, the Civil Service. My admiration for the Civil Service has vastly increased since I have been in office. But to achieve a policy of this nature it is absolutely necessary that the whole initiative
    1350
    and drive should rest in the hands of the Government themselves. The machine which I suggested—it is impossible to describe it in great detail on this occasion—was a central organisation armed with an adequate research and economic advisory department on the one hand, linked to an executive machine composed of some 12 higher officials on the other, operating under the direct control of the Prime Minister and the head of the Civil Service himself, and driving out from that central organisation the energy and initiative of the Government through every Department which had to deal with the problem. It is impossible really to expound such a scheme to the House in detail unless it is seen in the graph form in which I submitted it.
    It is admittedly a complex organisation. I was told that to carry such an organisation into effect would mean a revolution in the machinery of government. My only comment is this. The machinery which I suggested may be right or may be wrong—after a very short administrative experience, it was probably wrong—but this I do suggest, that to grapple with this problem it is necessary to have a revolution in the machinery of government. After all, it was done in the War; there were revolutions in the machinery of government one after the other, until the machine was devised and created by which the job could be done. Unless we treat the unemployment problem as a lesser problem, which I believe to be a fallacious view, we have to have a change in the machinery of government by which we can get that central drive and organisation by which alone this problem can be surmounted.
    That is all that I have to say for the moment upon machinery. May I now proceed to the nature of the problem which confronts us? I have always tried in the House, when speaking from the Treasury Bench, to divide the problem into two essential parts, the long-term reconstruction of the industries of this country, and the short-term programme to bridge the gulf before the fruition of the long-term programme. I think we can all agree, whatever our views upon the permanent re-construction of Britain, that it cannot be done in five minutes. It will be a matter of three years at least, and possibly five years, before you can arrive by long-term measures at an appreciable

    1351
    effect upon the unemployment figures. If that view be agreed to, it is evidently necessary, in addition, to have a short-term programme to deal with unemployment in the interval, which should at the same time contribute to the economic advantage of the country. I will come later to that short-term programme, and to an analysis in detail of the figures which the Prime Minister supplied to the House; but first of all may I address myself to the fundamental problem—the long-term problem—in the solution of which the Government and this House must decide the permanent economic basis of this country in the immediate future.
    The Government throughout have pinned their hopes to rationalisation: For my part, I have always made it perfectly clear that, in my view, rationalisation was necessary and inevitable. It has to come in the modern world. Industries which do not rationalise simply go under. It is agreed among most people that rationalisation is necessary, but do not let us proceed, from our view that rationalisation is necessary, to the easy belief that rationalisation in itself will cure the unemployment problem. It is held, and it was submitted again this afternoon, that although at first rationalisation displaces labour, that very soon it so expands the market open to the industry that the labour displaced is absorbed, and more labour in addition, with the result that ultimately the unemployment problem is solved. The only criterion that we can apply to that belief is the evidence which exists in connection with trades which have already rationalised. I have been at some pains to examine the facts in trades which have at any rate partially rationalised, and I think we can take, as a criterion of a rationalised trade, those trades which, in a relatively short space of time, have greatly increased their production for a profitable market. I applied this criterion to trades of that character—four big groups of trades—and I found, between 1924 and 1929, an average increase in production of over 20 per cent., but an average decline in the insured workers in those trades of over 4 per cent. Over five years you have that immense increase in production—a very great achievement—and over the same long period a steady
    1352
    decline in the employment in those trades, which were ever increasing their efficiency and expanding their markets. It would appear, therefore, on the evidence which exists, that rationalisation in itself is at any rate no short and easy cut to the solution of the unemployment problem.
    There is a further point. The whole emphasis in this matter of rationalisation is thrown by the Government on the export trade. I do not know if that fact will be challenged. The Lord Privy Seal put it very well on the 25th February, when he said:
    "The problem, difficult in some respects, is boiled down to the simple proposition, how can the Government help our export trade?"
    There are many other quotations of Government spokesmen to the same effect. I think it is beyond challenge that the Government believe that by the expansion of export trade through rationalisation our troubles are to be overcome. May we apply the evidence I have just adduced to the expansion of the export trade? The theory is that, if we can restore our export trade, by rationalisation, to its previous position in the markets of the world, we shall absorb our present unemployed. To win back our previous proportion of the export trade of the world means an increase of some £200,000,000 a year in our export trade or 25 per cent. of its present value. Supposing that is achieved by rationalisation, and that the same thing happens in the rationalisation of the export trade that has occurred in industries which have already been rationalised, to achieve that increase of 25 per cent. in our present volume of export trade would, if the same proportions hold good, mean an actual decrease of 5 per cent. in the men employed in those trades.
    Let us set aside all existing evidence, and let us, in examining this problem, take a hypothesis altogether favourable—fantastically favourable—to the theory of the Government. Suppose that in the next four years we can expand our export trade by £200,000,000 a year, not by a rationalisation process which displaces labour, but by an ordinary expansion of world markets which takes more workers on the existing basis. We should, in that event, to achieve that

    1353
    increase of £200,000,000, employ, on the normal basis of production per head at the present time, something like 900,000 additional people. But during the next four years some 1,000,000 persons will be added to the working population, so that at the end of the process we should be back exactly where we began.
    I submit that this hope of recovering our position through an expansion of our export trade is an illusion, and a dangerous illusion; and the sooner the fallacy is realised, the quicker can we devote ourselves to a search for the real remedy. There are innumerable factors beyond those which I have mentioned, militating against any increase of our export trade to that extent. There is the industrialisation of other countries for their own home markets; there is the industrialisation of countries which had no industries at all a few years ago. Take the position of our cotton trade on the Indian market. That market averaged for many years, I believe, according to the figures of the International Labour Office, about 5,600,000,000 yards of cotton a year. That was originally our exclusive market, but to-day India, herself produces 1,000,000,000 yards, while Japan, which formerly only had one five-hundredth part of that Indian market, to-day has one-fifth. The intensified competition all over the world is making more and more illusory the belief that we can again build up in the world that unique position which we occupied many years ago.
    I should be interested to hear if these figures and calculations can be challenged. If they cannot be challenged, we have to face a shift in the whole basis of the economic life of this country. I believe, and have always urged, that it is to the home market that we must look for the solution of our troubles. [HON. MEMBERS: "Hear, hear!"] I may come to a rather different conclusion from hon. Members opposite, but let us march together thus far. If our export trade on its pre-War basis is really no longer possible, we have to turn to the home market. We must always, of course, export sufficient to buy our essential foodstuffs and raw materials, but we need not export enough to build up a favourable trade balance for foreign investment of £100,000,000 a year, or to pay for the import
    1354
    of the so many manufactured luxury articles as to-day come into the country. We have to get away from the belief that the only criterion of British prosperity is how many goods we cam send abroad for foreigners to consume.
    6.0 p.m.
    But whatever may be said for or against the recovery of the swollen export trade that we had before the War, the fact remains that it is most exceedingly difficult ever to restore that condition again, and facts have to be faced if we are to find any outlet for our present production. How can the home market be developed? Hon. Members opposite reply "Tariffs." They remind us, rightly, that Mr. Cobden is dead, but it is very often forgotten that the opponents of Mr. Cobden are dead as well. I believe both laissez faire and Protection are utterly irrelevant to the modern world. After all, what are the facts we have to face? We have to face fluctuations in the price level of basic commodities greater than we dreamt of before the War, for a variety of reasons, partly monetary, but still more, the mergence of great producers' organisations which have turned the struggle into a battle of giants in place of the day-to-day struggles of small merchants before the War. We have the struggle of these great organisations and in the event of the collapse of one of these great organisations in the struggle you have a downward rush in prices, or, in the event of their combination, you have an upward surge in prices which would frustrate and baffle any tariff wall that the wit of man could devise. Tariffs lead to the same fluctuations at higher price levels, while the organised and subsidised dumping that we are likely to meet in the not distant future can go over, or under, if the nation doing it so desires, or if the producers' organisations desire, any tariff barrier that was ever invented.
    I do not want to-night to re-open that old controversy. I believe we can leave it to the ghosts of Cobden and his opponents to continue the discussions of long ago in whatever Elysian fields they frequent. We should get down to thrashing out the merits of the problem to meet the facts of the age in which we live. I have been driven more and more to the conclusion that the system of an import control board, long adopted as the policy

    1355
    of this party in the sphere of agriculture, and wheat in particular, is the only means by which the facts of the modern situation can be met, and many are daily coming to that conclusion. I have been astonished to find, during my period of office, big business men, whose association was altogether with the party opposite, saying that that policy was the only way to meet the agricultural situation. Some of them have advanced the claim that by that policy a price of some 10s. a quarter above the present world price could be given to the English farmer without any increase in the price of bread, and probably a decrease, owing to the savings that could be effected. I had an estimate put to me that 500,000 men could thereby be put on the land. I believe that to be an exaggeration, but I am confident that a good many could be put on the land. It would lead directly to the rationalisation of trades like milling and baking, diverting all the energies of those engaged in those trades from speculation in wheat to the efficiency of their own industrial processes, and by those economies, and economies in freight and insurance, which we can deal with in other and more detailed debates, I believe the basis of a great agricultural policy can be laid.
    I want now to suggest that that policy of controlled imports can and should be extended to other trades, for this reason, that if we are to build up a home market, it must be agreed that this nation must to some extent be insulated from the electric shocks of present world conditions. You cannot build a higher civilisation and a standard of life which can absorb the great force of modern production if you are subject to price fluctuations from the rest of the world which dislocate your industry at every turn, and to the sport of competition from virtually slave conditions in other countries. What prospects have we, except the home market, of absorbing modern production? I have had put up to me so often the theory of the classical economists, which is held by many senior statesmen on all sides, that these things have all happened before. Men's labour has been replaced by machinery, only to be absorbed again later by an expansion of the market. That greater production was absorbed by the gradual raising of wages, by the shortening of hours, and, above all, by an
    1356
    expansion of the overseas market. I once heard it said, "Niggers did not ride bicycles when we were young. They ride bicycles now, and that has given employment." That theory is still held, that sooner or later world recovery will come and our rationalised industries will take advantage of it and so expand our home and overseas market and the problem will be solved. Apart from the effects of rationalisation, which I have already endeavoured to describe, we have to consider this great fact, that since the War there has been a tremendous spring of scientific invention. All through the last century it is true that these things happened, but they happened gradually. You had an adjustment of production to consumption over a long period of time, albeit with considerable suffering to the working-class and considerable dislocation of industry. Now you have this tremendous leap forward in a few years in your productive capacity which has absolutely upset the industrial equilibrium of the world and demands entirely different measures to deal with it.
    A great scientist said to me only a few months ago, "In the last 30 years the scientific and industrial capacity of the world has increased more than it did in the previous 300 years," and rather unkindly he went on to add, "The only minds that have not registered that change are those of the politicians." We have in some respects to plead guilty to that charge, because many still believe that gradual automatic processes, as before the War, are going to absorb the great flood of goods which the modern scientific and industrial machine is throwing on to the markets of the world. That aspect of the problem that we have to consider could be elaborated indefinitely, but I have to pass to other subjects. I only suggest at this stage that there is, in the analysis which I have presented, and which many others have presented, some ground for disbelief in the current view that is now so widely accepted, and if there is any force in this analysis or in these arguments, the attempt to deal with unemployment by an intensification of the export trade is doomed to failure, and the belief that it can be done is a dangerous delusion which diverts the mind of the country from the problems which should be really considered and the things that really matter. But there is no machine of Government to-day

    1357
    thinking out and analysing these things. I had the advantage of very able and devoted civil servants preparing figures and facts for me but I have only been one Minister with a very small staff.
    These things should be the subject of consideration and research by the most powerful economic machine that the country can devise. That is the point of my request at the beginning of my speech for a Government machine for governmental thinking. We have all done our thinking in our various political parties. Governments, officially at any rate, have never done any thinking. It is very difficult to analyse and get at the facts of the modern situation unless you have at your disposal the information and the research which Government Departments alone can supply. That is why it is so essential to have at the centre of things machinery that can undertake that work. What machine to-day is undertaking the great work of reorganising industry? Not the Government at all, but the banks. It is the Governor of the Bank of England who is doing this work. I admit at once that, in any effort of the Government in present conditions, the co-operation of the banks is very necessary and that efforts should be made to secure it, as the Lord Privy Seal has tried to do, but co-operation between the Government and the banks is a very different thing from abdication by the Government in favour of the banks, and we are perilously near that point.
    But, putting aside all questions of general principle and facing purely the practical matter, I make this submission, that the banking machinery of this country is not equipped for the task of reorganising our industrial markets. On the purely practical point, if it was the banking system of Germany, you might say "Yes," because an entirely different practice has been followed by those banks. They have been industrial banks, always interwoven with industry, discovering and promoting new enterprise, putting their skilled, industrial directors on the boards of these new concerns, partners in their losses and in their successes. A vast industrial experience lies behind the German banks. Where is a similar experience in the banking system of this country, which has always repudiated any such conception as something immoral in financial doctrine? What is more, there is this danger. Our banking
    1358
    system has backed many losers. It is committed up to the hilt to many bad debts. As was powerfully brought out in the Balfour Report, industry has often been handicapped, not so much by the strictness of the banks as by ill-timed generosity in the promotion and the bolstering up of inefficiency.
    Have we not to be very careful that this new banking enterprise is not an effort to salvage existing commitments rather than to reorganise the industrial life of the country. In all these facts there is a case for the Government taking a more effective control of the situation. The first duty of the Government is, after all, to govern. The worst thing that can happen to a Government is to assume responsibility without control. After all, the impression has been created in the country that in some way or other the Government is promoting the system and is responsible for the activity of these banking efforts, but effective control is absolutely lacking. Liaison and co-ordination do not exist except in the person of the Lord Privy Seal, and ceaseless as his activities are and hard as he works, no one man can in his own person act in co-ordination between all these diverse and great activities. When you are setting out on an enterprise which means nothing less than the reorganisation of the whole basis of the industrial life of the country, you must have a system. You must, in a word, have a machine, and that machine has not even been created.
    I must now pass from the long-term side of the programme to the short-terra side, and I will be as brief as possible. The Prime Minister this evening described the programme of the Government by which he hoped to provide immediate employment, and he said that that programme now amounted to £103,000,000. When he was asked how many years that programme was spread over he had not the information and could not say, in particular, how many years the £37,000,000 road programme was spread over. As I have been concerned with the details of this programme, possibly I may supply him with the information. The road programme is spread over five years. Its annual amount scarcely exceeds, if at all, the programme of the late Conservative Government. This is one of our major matters of dispute. The only difference is that instead of a one year programme

    1359
    this Government have a five years' programme, and an undertaking was given that if in any one year the revenue of the Road Fund was exceeded, the Treasury would arrange for a carry over by some means which has not been specified. But the actual dimensions of the programme per annum remain scarcely, if at all, in excess of the programme of the Conservative Government, and if that is challenged, then I shall challenge the publication of correspondence between the Minister of Transport and myself relative to my Memorandum, the publication of the Memorandum itself and detailed analyses of the figures which the Minister has never yet answered.
    I want, if I can, to avoid controversy, but if any of my figures are challenged—my figures are not my own—I shall certainly challenge the publication of the official documents involved in order that the House itself may judge who is correct. That £100,000,000 programme as a whole is averaged over much the same period. It is impossible to say with absolute certainty how many years the rest of the programme is averaged over, but it is a great many, and I myself believe it to be not less than a five year programme as a whole. That means an expenditure of some £20,000,000 a year which, on the current computation, would only provide employment on the average for some 80,000 people a year. It is true that that programme will rise to a peak and then decline, and that it is not a steady average, but I very much doubt whether many men in excess of 100,000 will ever be employed by that programme. I very much doubt it, and I would like to see the Lord Privy Seal prove here in detail with facts and figures—I should be delighted if he could—that many more than 100,000 will ever be employed by the programme he is now adopting. I should like to see a detailed analysis in a White Paper, if it can be shown, which I doubt. That, as far as I can analyse it, is the programme of the Government. The greatest increase in that programme is an increase in Unemployment Grants Committee work from some £6,000,000 in the last two years of the late Government to a sum of £30,000,000 under the present Government, a very great increase, which was achieved by big administrative changes which we only got
    1360
    through after a very hard fight. That is the biggest single increase in the programme of the Government.
    May I proceed to advance very briefly the proposals which I submitted to the Government in their broad outline. I claimed that a programme could be adopted at a very small cost, as a budgetary charge—I will deal with the charge later—which would in a relatively short space of time provide work for at least 700,000 to 800,000 people. It was made up in the following way. The emergency retirement pensions plan would provide normal employment for some 280,000; the School Bill, which I am happy to know the Government are carrying through, should result in providing employment for some 150,000; while in constructive works, which I will later describe, I proposed the employment of some 300,000 per annum. I will go through the figures of these three proposals in very swift detail. The retirement pensions plan was an emergency measure offering to industrial workers at present over the age of 60 £1 a week pension, and 10s. a week for the wife, if the man is married, on the condition that within a specified and short time they retire finally from industry. The whole life of the scheme actuarially was only 15 years. I did in addition suggest that if the Government at that time desired another and a permanent scheme giving a pension at 65 might be provided, in respect of which, of course, no charge would fall for some five years.
    Let me to-day deal with the emergency scheme to meet unemployment, with the facts and figures of that scheme and that alone, because the permanent scheme would be a matter for subsequent decision. The emergency scheme suggested a pension of £1 a week for a man and 10s. for the wife. The cost of it in the first year was £21,600,000 falling to some £10,000,000 at the end of five years, and it would be negligible at the end of 15 years. The direct economies to the Exchequer resulting from the reaction of the finance of that scheme upon the last additional contribution of the Exchequer to the Unemployment Insurance Fund reduced the charge from £21,500,000 to £13,000,000. There was an offset in economies in the contribution of the Government to the Unemployment Insurance Fund of some £8,500,000 if

    1361
    the retirement pension scheme was carried, so that the net cost to the Exchequer was £13,000,000 in the first year, and there were other less substantial economies in the Poor Law and other factors of that nature.
    I went further and suggested that it would be right and proper in the case of an emergency scheme of this nature to average the cost of the scheme over the effective life of the scheme. If the cost be averaged over the 15 years of the scheme the cost averages £11,000,000 per annum, and in the first year in which the scheme was introduced you would have a cost to the Exchequer of £11,000,000 and an offset in economy to the Government's latest additional contribution to the Unemployment Insurance Fund of £8,500,000, so that the net extra burden to the Exchequer in the first year amounted to not more than £2,500,000 if the averaging expedient were adopted. This is held to be a very immoral suggestion because it might be necessary to borrow in the first years. But what is borrowed in the first few years is repaid in the later years, and the whole duration of the plan is only 15 years, while it should be unnecessary to borrow at all if the ascending charges of the Budget can be set against the descending charges of the scheme, a very normal transaction, I understand, in balancing a Budget. Anyhow, I claim that if that averaging expedient be adopted the net cost to the Exchequer in the first year need not exceed £2,500,000.
    Sir HERBERT SAMUEL: Does this only apply to people who are 60 now?
    Sir O. MOSLEY: Yes. If those figures are challenged, then I shall challenge the publication of the retirement pensions report and the correspondence between the Government Actuary and myself on those figures. They are not my figures. I have claimed that 280,000 people could be set in normal employment by means of this retirement pensions scheme, and I should have mentioned, to be quite clear on all the figures, that those liable to the scheme, that is, those who would be offered the pension, numbered 677,000, that those who were estimated would accept amounted to 390,000, and that the replacements of those who accepted amounted to 280,000, so that by means
    1362
    of that scheme we should put 280,000 to work. The only figure which I have given which is my own figure is the 280,000 who would be set to work. The official estimate was 230,000. My figure was 280,000 for very detailed reasons which I could not possibly enter under half an hour's exposition. But every other figure which I have given is not of my own calculation. The first item in the emergency programme was the retirement pensions scheme at a cost of £2,500,000. The next item was the raising of the school age, which is estimated to cost £4,500,000. I will not enter into the details of that scheme. It was outside my Department and it is to be discussed to-morrow, and other Ministers and the Rouse as a whole are just as familiar with them.
    Let me proceed to the question of the finance of the large constructive works schemes. I suggest that, apart from slum clearance and land drainage, with which I will only deal briefly in a few moments, a £100,000,000 programme of the Unemployment Grants Committee should be concentrated into three years, and £100,000,000 road programme should be concentrated into the same period. I will come to the administration and the method of handling the programme in a few moments. I will now deal with the finance. The extra £70,000,000 for Unemployment Grants Committee schemes, would, on a more generous basis of grant than that which prevails at present, be an Exchequer charge of about £3,000,000 a year. As for the road scheme, the necessary loan would be raised on the revenue of the Road Fund and no extra Exchequer charge would be incurred at all. Is it so wrong in days of depression to raise a loan on the revenue of the Road Fund for the provision of an emergency programme which in days of prosperity is repaid by a Sinking Fund from the Road Fund? There is nothing novel in the principle. Already the local authorities for the most part borrow large sums to meet their share of local expenditure. Why should not the State do the same in days of depression and repay in days of prosperity? That was the finance and the total finance of the emergency scheme—£2,500,000 for retirement pensions, £4,500,000 for raising the school age and £3,000,000 for the Unemployment Grants Committee, and the raising

    1363
    of the loan for roads carried on the Road Fund. The whole proposal was a budgetary charge of £10,000,000, a £10,000,000 programme by which I believe some 700,000 to 800,000 people could be set to work on emergency measures.
    That is a modest and a limited programme devised for the situation with which we are met. Fantastic rumours were circulated as to its cost, but it is a very limited and moderate programme designed to meet the actual facts of the situation with which we are faced. Of course, everybody must admit that the limits of taxation are very easily reached after several years of deflation. We all know that with such a situation the limits of taxation are easily reached, and that when you reach a certain point flight from the pound and disaster may ensue, but if that £10,000,000 programme had to be set against other charges which we have incurred, and are incurring, and if the number thereby to be set to work exceed 700,000, who would choose between that programme and the other charges? As long ago as last September I begged the Cabinet to make up its mind how much it was prepared to spend on unemployment, how much money it could find, and then allocate the money available according to the best objects which we could discover. As it is, no such system has ever been adopted. Departments have come crowding along, jostling each other with their schemes, and, like bookmakers on the race course, the man who can push the hardest, make the most noise and get through the turnstile first, gets away with the money. It is absolutely necessary to make up our minds in advance in any national reconstruction, what our resources are and how they are to be allocated.
    Now I come to the actuual administrative machinery of these big work plans. I have made the claim that £200,000,000 could be spent, and usefully spent, in Unemployment Grants Committee work, and roads alone, leaving for the moment slums and land drainage. To arrive at an understanding of the administrative machinery which I suggested, it is necessary for me briefly to analyse the relative breakdown of the present machine. We have greatly increased the output of the Unemployment
    1364
    Grants Committee's scheme by the modification of transferred conditions, and practically by that alone. I believe that the present Unemployment Grants Committee schemes could be trebled if we did away with transfer altogether. What happens? In order to maintain transfer you cannot give proper terms to the hard-hit areas of industry. Brighton or a seaside resort to-day can get more favourable financial terms from the Unemployment Grants Committee than the hardest hit mining area in South Wales, and, as a result, those areas, those depressed areas, cannot go ahead with schemes at all. They are burdened with rates, and even if they were prepared to raise fresh money the Ministry of Health would forbid them on financial grounds. Not only the depressed areas, but other areas with over 10 per cent. of unemployment get much less favourable financial terms, and they simply cannot go ahead with their schemes because they cannot put up the enormous share of the cost which falls upon them, while at the same time prosperous areas, with little or no unemployment, can get far more favourable financial terms, the details of which I described in the House of Commons last November.
    What is the official defence of this? The defence is that these areas with under 10 per cent. of unemployment have to accept transfer from other areas. To make them do that they have to be given a premium in the shape of more favourable financial terms, otherwise transfer will appear as an obligation imposed rather than an obligation accepted in return for a reward. Therefore, if the transfer system is kept, the hard-hit areas are bound to get less favourable financial terms than the more prosperous areas. The result of that is that your schemes are hit in both ways. The depressed areas, the hard-hit areas cannot go ahead because the financial assistance is not good enough, and the prosperous areas will not go ahead because with any unemployment of their own they will not take transferred labour from other districts. Therefore, you catch it both ways. You are hit in every direction and your work is broken up and frustrated. What is the defence of all this? We are told that the hard-hit areas are economically dead, that they are finished, and that the only plan is to move the labour out

    1365
    from them. It may be true that those areas will never employ as many people as they did before, but it is a fallacy and overstatement to say that they are dead. Because less people will be employed in South Wales than before, is no reason for allowing its unclassified roads to fall to pieces or to deprive it of the ordinary amenities of financial assistance from the Exchequer which Brighton, Eastbourne or Worthing can obtain from the Exchequer. It is a most extraordinary doctrine.
    Another way in which the Unemployment Grants Committee plans are held up is that the whole concentration is on works of magnitude, great wealthy corporations carrying out vast water schemes, and things of that kind. That is where you get delay and the necessity for Parliamentary powers. If you gave to all the small places more favourable financial terms, spreading your assistance all over Britain and letting them carry out schemes which they can do within their own boundaries, without Parliamentary powers of any kind, then not only would you enormously increase the aggregate of your schemes but you would diffuse and spread your relief all over Britain into every constituency and every town. Therefore, I suggested that transfer should be done away with as far as the Unemployment Grants Committee work was concerned, that the financial terms should be uniform throughout, and that in the depressed areas 100 per cent. grants should be made by the State. We have to face realities. In the depressed areas they cannot put up a penny. Either the work will not be done or the State must pay for it. If the State does not like to make a 100 per cent. grant to the local authorities in those areas, then let the State either do the work itself, employing the local authority as the contractor, or employ an actual contractor, if it must.
    It is no good deluding ourselves that any formulas will get us round the depressed area problem. I was told to announce from that Box, in November, that a formula would be discovered to deal with South Wales. I made that announcement, in accordance with my instructions, but we failed absolutely with the Ministry of Health and the Treasury. They are still hunting for a formula, and they will never find it until
    1366
    they face the reality that a 100 per cent. grant, and that alone, will get a move on in these areas. With these methods and the abolition of transfer I sincerely believe that the increase in work schemes which I have described could be achieved. With regard to transfer, we want, if we can, to draw men from the depressed areas to other parts of the country if and when useful jobs can be found for them and not to draw them away just to put men out of jobs in those areas. The only way to secure the transfer of labour is by national schemes, in which the State either does the work itself or puts up such a large proportion of money that it can impose its own terms. There are only three ways in which that can be done—slum clearance, land drainage and the roads. On slum clearance and land drainage I made this submission. They were right outside my Department, but I asked the Government whether they would consider a more direct intervention on the part of the State, with a view to short-circuiting the local delays. I believe that in such schemes something approximating to a mobile labour corps, under decent conditions of labour and wages, of course, could have been employed to deal with that problem. I make that submission for what it is worth, and proceed to the roads.
    The road programme, as I have said, does not annually exceed the programme of the late Government. If you ask me: "Have you got the latest, the final engineering plans to build £100,000,000 worth of roads in this country?" I say, "No," and I say that it would be a great waste of time if any Department had worked out those plans before we knew if we could go ahead with them or not. I could not do it. My staff, one very able and devoted Treasury official, could not do it. The Ministry of Transport would not do it. I think they properly would not do it until they had settled in principle with the Treasury whether they could go ahead to that limit of money, if they were permitted to do it. If I am asked, "Can you define the administrative methods and procedure by which, in your belief, that achievement can be carried through?" I reply, "Yes," and I will go on to describe that administrative method and procedure, very briefly.
    Our central difficulty in building roads quickly is the relationship of the State

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    and the local authorities. On the one hand, you cannot ride rough-shod, and no one wants to ride rough-shod over the local authorities. On the other hand, the work has to be done. I am one of those who believe that the great main roads of this country should be national concerns, and that it is as much an anachronism to leave these roads in local hands as it would be to leave the railways in local hands. I admit that that raises a large controversy, but I try always to face reality and a practical situation, and I believe you can get round that difficulty and get agreement quickly in this way—leave the question of the nationalised roads until you settle the major question later, when you have to face the whole transport equilibrium of this country, as we have not begun to do. What matters in the building of roads quickly in relation to this problem is not the construction of the roads but the maintenance of the roads. Let the State construct and hand over to the local authority for subsequent maintenance. The local authorities would be something more than human or less than human if they objected very strongly to having their work done for them. This principle has been employed before, and in many cases the local authorities would do the work for you if your grant was anything approaching 100 per cent., or of such generous terms as to make a really tempting offer.
    If you made it clear that this machinery was emergency machinery and formed no part of the permanent relationship between the State and the local authorities, then I believe that, without upsetting the existing relationship, you would get through that emergency programme on the basis of the State constructing and the local authority maintaining, until your whole system was decided upon. But before you launch out on any such programme you have to make up your mind, in broad outline, what the permanent transport equilibrium of this country is to be. On every turn when we want to build roads we are told that it will damage the railways. What is to be the relationship between railway, road and canal in the future? No research, no thinking beyond the Commission—which has been sitting for long, and is to report later
    1368
    —is going on in this country; no examination by Government; not faced up to by Government, and so at every turn your road programme and your immediate unemployment programme is thwarted because it is said any great development of the roads will injure the railways. That matter has to be decided.
    Further, we have to face this fact that to get things done quickly the State has to put up a large share of the cost. If you put up more generous terms under Unemployment Grants Committee work and road work for the emergency programme, and give the local authorities a now-or-never position, and say to them, "Here is your chance to get jobs done which are necessary to do. This is not the permanent problem of unemployment. We are merely bridging the gulf before the fruition of our long-term measures. Directly our permanent reconstruction is achieved this emergency programme will come to an end, at the end of three years or more, and you local authorities will have missed your chance; you will not for ever be getting assistance from the State to do your job." In those circumstances, you would get every local authority coming forward with schemes, if you face them with a "now-or-never" position and urge them forward with machinery of Government, which must be rather similar to the machine of the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) under the National Health Insurance Act, when I believe he had machinery going into every constituency and to every local authority, explaining it and gingering up the locality. Such a machine is needed in this work, because nothing is so astonishing as the ignorance of many local authorities, and even their paid officials, as to the conditions offered by the Government. Have your emergency programme, have your now-or-never position, and then, with a great drive of Government machinery behind it, you will easily treble the work of the Unemployment Grants Committee programme.
    I am coming now to my conclusion. I am sorry to have detained the Committee so long, but it is amazingly difficult to cover such a vast field as this in a short time. We have to face up to this fact, that if men are to be employed on any large scale that employment has to be

    1369
    paid for either by the State or by local authorities. There is a tremendous struggle, an incessant struggle, going on in every Government department to put every penny they can off the taxpayer and on to the ratepayer. What holds up these plans for months is the struggle for these pennies, these minor details. What does it matter? What is the use of shifting the burden from the taxpayer to the ratepayer? What is the use of lifting the burden from the right shoulder to the left? It is the same man who has to carry it, and the economic fact is this, as the Colwyn and every other authoritative inquiry upon the economic side has said, that the burden on the ratepayer is more onerous upon industry than the burden upon the taxpayer. If this burden has to be carried, need we struggle and waste time in deciding whether it is to be carried by the taxpayer or by the ratepayer?
    Further, it must be remembered that to set many men working for a year costs a great deal of money. It costs £1,000,000 to employ 4,000 men at work for a year, and £100,000,000 to employ 400,000 men for a year. Therefore, if you are going to do this work on any large scale large sums of money will have to be raised by the State or local authorities to carry it out. How is it to be raised, out of revenue or out of loan? £100,000,000 out of revenue! Who will suggest it in the present situation? It is 2s. on the Income Tax. It must be raised by loan. If the principle of a big loan is turned down then this kind of work must come to an end. It has been suggested that I advocated the raising of large loans and spending the money afterwards on any programme we could find. Nobody would be so mad as to suggest anything of the kind. This money, under a three years programme, would be raised as and when required to pay for that programme over a period of three years. It is not a question of raising £100,000,000 right away. It would be spread over at least three years, or even longer as there is always a big lag between the work and payment.
    If this loan cannot be raised then unemployment, as an emergency and immediate problem, cannot be dealt with. If we are told that we cannot have the money let us confess defeat honourably and honestly; let us run up the white
    1370
    flag of surrender if we cannot have the money to pay for unemployment. If we are to deal with unemployment then the money, by revenue or by loan, has to be found. I advocate the method of a loan, and in my programme the amount which would fall upon the Exchequer would be the small charge of £10,000,000 a year. I have no doubt that we shall hear from the right hon. Member for Epping (Mr. Churchill) in answer to this latter part of my case, what he has so often described as the Treasury view: the view that any money loans raised by the Government must be taken from other industrial activities and will put out of employment as many men as are put in employment. The right hon. Gentleman in powerful expositions has often put forward that case. How far is that case supported by the present Government? I should like to have the views of the Chancellor of the Exchequer, for every argument with which I have been met seems to support that case. I admit that there is some force in that view in a period of acute deflation. If you are pursuing a deflation policy, restricting the whole basis of credit, there is some force in what is known as the Treasury view, that it is difficult to raise large loans for such purposes as this. The "Financial Times" on 14th April said:
    "The policy of deflation is apparently proceeding apace,"
    and it went on to observe that it was no use having a low bank rate if the whole basis of credit was restricted and charged the Chancellor of the Exchequer in his action in regard to Treasury Bills with a large share of the responsibility. I am not going into that subject on this occasion because there will be other opportunities for doing so, but I agree that if you are pursuing a policy of deflation you are lending force to the Treasury view. Given, however, a financial policy of stabilisation, that Treasury point of view cannot hold water. It would mean that every single new enterprise is going to put as many men out of employment as it will employ. That is a complete absurdity if you pursue that argument to its logical conclusion. If it is true it means that nothing can ever be done by the Government or by Parliament. It means that no Government has any function or any purpose; it is a policy of complete surrender. It has

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    been said rather curiously, in view of the modesty of my programme, that it is the policy of the "red flag." I might reply that what is known as the Treasury view is the policy of the "white" flag. It is a policy of surrender, of negation, by which any policy can be frustrated and blocked in this country.
    Hanging all over that policy is the great conception of conversion. There are two ways of achieving conversion. One through the inherent financial strength of your position, leading to a strengthening of Government credit. The other is by the simple process of deflation to make all industrial investments unprofitable, and drive your investor into Government Securities because he has no other profitable outlet. But there may be another effect of that policy; that the money goes abroad, and then you get the logical effect of that policy suggested by the President of the Board of Trade as the only means of solving our industrial problems, when he said on the 14th May:
    "During the past fortnight alone £16,000,000 of new capital has been authorised or raised for overseas investment, and so I trust the process will continue."
    Why? Why is it so right and proper and desirable that capital should go overseas to equip factories to compete against us, to build roads and railways in the Argentine or in Timbuctoo, to provide employment for people in those countries while it is supposed to shake the whole basis of our financial strength if anyone dares to suggest the raising of money by the Government of this country to provide employment for the people of this country? If those views are passed without examination or challenge the position of this country is serious indeed. In conclusion let me say that the situation which faces us is, of course, very serious. Everybody knows that; and perhaps those who have been in office for a short time know it even better. It is not, I confidently believe, irreparable, but I feel this from the depths of my being, that the days of muddling through are over, that this time we cannot muddle through.
    This nation has to be mobilised and rallied for a tremendous effort, and who can do that except the Government of the day? If that effort is not made we
    1372
    may soon come to crisis, to a real crisis. I do not fear that so much, for this reason, that in a crisis this nation is always at its best. This people knows how to handle a crisis, it cools their heads and steels their nerves. What I fear much more than a sudden crisis is a long, slow, crumbling through the years until we sink to the level of a Spain, a gradual paralysis beneath which all the vigour and energy of this country will succumb. That is a far more dangerous thing, and far more likely to happen unless some effort is made. If the effort is made how relatively easily can disaster be averted. You have in this country resources, skilled craftsmen among the workers, design and technique among the technicians, unknown and unequalled in any other country in the world. What a fantastic assumption it is that a nation which within the lifetime of every one has put forth efforts of energy and vigour unequalled in the history of the world, should succumb before an economic situation such as the present. If the situation is to be overcome, if the great powers of this country are to be rallied and mobilised for a great national effort, then the Government and Parliament must give a lead. I beg the Government tonight to give the vital forces of this country the chance that they await. I beg Parliament to give that lead.
    Mr. LLOYD GEORGE: We have listened to a very remarkable and powerful speech from the hon. Member for Smethwick (Sir O. Mosley). He has put his case with remarkable lucidity and force, and he certainly need not have apologised for the time lie occupied. I am perfectly certain that it is the feeling of every hon. Member that he did not waste any words and that he could not have compressed the case he was bound to put into fewer words. I profoundly agree with his final sentence, and, with such powers as I have, I want to drive that appeal home to the Prime Minister. The proposals of the hon. Member for Smethwick were good in parts. Some of them I found quite palatable; there were others which were a little high. When he came to his long-term programme, I thought I detected some of the heresies which he must have imbibed in the party in which he was brought up. It is perfectly true that his conclusions are different from those of hon. Members above the Gangway, but his fundamental argumeats

    1373
    were the same. As a matter of fact, it was an injudicious mixture of Karl Marx and Lord Rothermere; and no wonder the Lord Privy Seal and the Chancellor of the Exchequer found it difficult to agree in so far as that was concerned. The Lord Privy Seal does not believe in either of them. When he came to his short-term programme, I found myself very much in agreement except in regard to his proposal as to pensions, which I have heard for the first time. I agree that the proposal is very much narrower in its extent than what I have heard from the various rumours that have been circulated. I thought the proposal was to pension everybody over 60, and I was rather pleased. I thought I would have a look in. I understand that he is only going to pension those who are 60 on a given date, and anybody who is not fortunate enough to attain that lucky age before that day will have to go on working while his neighbour is drawing a pension of 30s. a week. But when he came to the cost of it, it was very ingenious. £400,000. Thirty shillings a week. I think it was £13,000,000. [An HON. MEMBER: "£21,000,000."] That is rather low on £400,000 a week, but, still, it gradually disappears. £8,000,000 went here; £5,000,000 went there. It was a beautiful piece of jugglery. He said, "Look at the £21,000,000, and see them now. Just watch. There is £8,000,000 gone. Now £13,000,000." Then there was another little legerdemain. £10,000,000 disappeared, and then—I am not sure whether it was a final one—it disappeared up to £2,500,000. I am not at all sure at the end whether the Chancellor of the Exchequer was not actually making a profit.
    7.0 p.m.
    So, on the whole, I trust that the Government, when they reconsider, as I most earnestly hope they will, the whole position of unemployment, will postpone that particular plan until they have adopted the rest, and until all the rest has been carried out. I think we are piling up too much. I venture to say, and I said this once before in this House that there are things which in themselves appear to be quite good and each of them making a special appeal, and somehow you go up from million to million, until at last, I think the burden will become
    1374
    a perfectly crushing one. I hope that scheme will not commend itself to a sufficient number of hon. Members behind the Government to force them to reconsider it. When you come to the rest of the programme, there are a few things I should like to say to the Prime Minister. I am very glad to hear this debate. I am very glad that he has taken this subject, in hand. I hope he has, because he certainly has not done so up to the present. His knowledge, or lack of knowledge, of those figures shows that up to the present he has not mastered the elements. I am going to make an appeal to him, because no one can put this thing through, however able he may be, except the head of the Government. I am going to recall to him his pledges. Let him believe me, I am not recalling these in order to taunt. I am going to recall them in order to ask him to carry them out categorically, and it is not too late. But it is pretty nearly, when one sees how these figures are mounting up. The problem might soon get out of hand.
    I will recall to the Prime Minister and to the Committee exactly what he promised. In the course of his speech, which, I think, filled even his own supporters with a good deal of despondency and disappointment, in which we fully share, he suggested that the Government would have done things if they were sure of a majority. I would ask the Prime Minister, or anybody who is going to speak to-night, what proposal on unemployment is there that he has ever put forward either in public or in private in the House of Commons that we refused to support? Let us take his programme of the last election. I will take, first of all, the programme which was the basis of all the speeches of the right hon. Gentleman. In that singularly able document called "Labour and the Nation"—an extraordinarily well written and thoughtful document—the whole problem was dealt with as a programme on a transitional basis. The Government never concealed the fact that they were Socialists and believed in nationalisation, in securing all the means of production and distribution. That was not their programme; it was a practical, transitional one, and that word is used.
    I am going to extend an invitation to the Government and hon. Gentlemen behind. There are fundamental differences

    1375
    between them and hon. Gentlemen here, who have never accepted this programme, and I quite well understand their opposing it. That is not the case with hon. Members sitting opposite. I have been re-reading that very remarkable document stating quite clearly the programme a the Labour party to deal with unemployment if they were brought into power. They started with the setting up of machinery: a national economy committee, an unemployment development board, which were to carry out a programme in every item of which we, at any rate, sitting on these benches would be only too glad to support the Government. These are the words:
    "There is no lack of sound schemes, the urgent need for which is generally admited."
    I am entirely of that opinion. Then you have
    "waterlogged land, national drainage schemes, dealing with floods, reclamation, coast erosion, afforestation, the clearance of the slums, the building of satellite towns with their own public buildings"
    and so on. That is not in the Bill introduced by the Government about housing. But, when you come to roads, the part dealing with roads is the most elaborate of the whole of this programme, and I am going to read it.
    "The enormous growth of road transport demands a network of arterial and subsidiary roads, such as were not dreamed of before the days of motor transport. A vast programme lies ahead of us in the building of new roads, the widening and straightening of existing roads and their adaptation to modern needs and the erection and reconstruction of bridges. Such measures must be carried out in conjunction with the regional planning schemes of the Ministry of Health, and with an eye to future economic development. The Government which first takes the lead in developing resources and equipping the modernisation of industry has the right to appeal to other industries."
    Can the Prime Minister point out one of those projects, which contained the whole of the Labour programme for dealing with national development, that he ever asked us to support when we denied support? And I am here now to say to him—because it is the future that matters—that if he carries out that programme, the whole of the Members sitting by me will be only too delighted to assist him and his Government to carry it out. These are not relief works. I am very
    1376
    sorry that the Prime Minister used that word, because he disclaimed the word in all the speeches which he made.
    The PRIME MINISTER: It was a slip.
    Mr. LLOYD GEORGE: Well, I think it must have been. These are works of a national development of the resources of this country. So far did the Government go. When I put forward a programme on behalf of the party which I represent, a programme on the same lines, what was the answer given by the Prime Minister I First of all, this is what the Chancellor of the Exchequer said about the programme:
    "It is a good programme so far as it goes."
    It did not go far enough for him.
    "There is not an item in it to which the Labour Government is not committed."
    Then he went on afterwards to say:
    "Mr. Lloyd George's proposals were admirable in themselves or they would not figure in the Labour programme."
    That was at the beginning of the campaign. The right hon. Gentleman was quite civil in his language then. Afterwards he began to treat me as if I were the right hon. Gentleman the Member for Epping (Mr. Churchill). I thought that was a little hard from an old friend. But here let me give what the Prime Minister said, and this bears upon the question of a loan:
    "To reduce the number of unemployed to its normal level by a carefully devised loan spent upon national development, upon reorganising our transport system and laying down a really first-rate and efficient national system of roads is a policy that we have urged both inside the House and out."
    The PRIME MINISTER: Hear, hear!
    Mr. LLOYD GEORGE: I am glad to have the assent of the right hon. Gentleman. In so far as the programme is concerned, we are only appealing to him now to carry out the programme that we put forward then. Neither the First Commissioner of Works nor he have a right to say either here or outside that if they are impeded in carrying it out it is due to the fact that there is no support from hon. Members sitting around here. I will carry it a little further. What is the position? The first thing the Prime Minister said he would do was to set up a thinking and acting machine, or, as he put it, a thinking and acting

    1377
    brain for the Government. That thinking and acting brain was not set up until February. For 8½ months the Government proceeded without a thinking and acting brain. [Interruption.] There were two things that the Prime Minister proposed to do, and if he challenges me I have the actual quotations here. The first thing he said he would do was to set up something in the nature of an Economic Staff. That, I assume, was done in February, and I am very glad to find that quite a number of those who assisted us in preparing our programme have been incorporated by the Prime Minister in this thinking and acting machine. I will guarantee that the thinking will be very sound.
    But that is not enough. A machine of that kind cannot be an acting machine; it can only be an advisory machine, a deliberative machine. It can examine problems, as has been pointed out—these very searching and penetrating problems. That is the right machine to do the examining. But it cannot act. Therefore, the Prime Minister had to make up his mind to set up some machinery that would act. What is the machine that he is suggesting? I am not putting this forward for criticism, but am simply putting it to him as a point, so that I can ask him to carry out the pledge which he gave before the Election—not here to-day in this House. What was his second pledge? That he would set up something on the analogy of the Committee of Imperial Defence, with the Prime Minister in the Chair. That is vital. I think it would be worth while to read the actual words which the right hon. Gentleman used. He made this statement in Shropshire:
    "So pressing was this problem of unemployment that the Prime Minister ought to make himself responsible as Chairman of a Committee that would have charge of the legislation and administration necessary to deal with it."
    In a speech at Leicester he said:
    "His idea of a Committee was something on the analogy of the Committee of Imperial Defence."
    I am very glad he still agrees. That is very important. The Prime Minister went beyond that, and I think that all the mischief has come from the fact that that vital pledge was never carried out. Up to this hour the Prime Minister clearly has not made himself acquainted with even the elementary details of the problem.
    1378
    When I put that inquiry with regard to the £103,000,000 I had two very simple questions in mind. Over how many years was that money spread, and how much of it was in excess of the money which was being spent by the Opposition when they were in office? He would answer neither question. Yet those questions are vital. Not only so, but the right hon. Gentleman said: "This is not a question for me; you must put that to the Departments." That shows that he departed entirely from the position that he took up before the election—that this was a business which the Prime Minister should undertake as his prime and main function. I ask him to resume the position which he took then.
    I think that the mistake the right hon. Gentleman made was that he promised to take unemployment in hand as his first charge, but went and took another job which, in my judgment, could have been done just as effectively by two members of his Administration. [Interruption.] I say so with some knowledge of what that problem is. I have here another quotation from a speech which the right hon. Gentleman delivered in dealing with Mr. Gibson's appeal about disarmament is Germany. He said: "That is a Foreign Office question." That is what he said before the election. What more did he say? The line which he took with regard to that is very important. He said that in 1924 he held the view that the Foreign Office was part and parcel of the Prime Minister's responsibility. In present circumstances it certainly would not be wrong to say that his chief and immediate concern is unemployment. But the right hon. Gentleman went on, not merely in that speech but in a series of speeches afterwards, to give an undertaking that if he became the head of a Government he would make it his first and supreme job to set up a committee on the analogy of the Committee of Imperial Defence, and that he would preside over it and take charge.
    The PRIME MINISTER: The Committee that was to be set up on the analogy of the Committee of Imperial Defence was not for unemployment. I am Chairman of the Committee, which meets frequently and is doing an enormous amount of work.
    Mr. LLOYD GEORGE: I beg the right hon. Gentleman's pardon. He really has

    1379
    forgotten what he said. The right hon. Gentleman was dealing in these speeches with the problem of unemployment. I can give him the dates of the speeches. It is no use the right hon. Gentleman shaking his head. He cannot deny the pledges which he definitely gave before the election. One speech was in Shropshire. I forget in what division, but I believe he spoke only once in Shropshire. Another speech was at Leicester, and in it he definitely made these statements in reference to unemployment. He was dealing with unemployment, and the committee was to be set up to deal with unemployment. In Leicester he went on to explain, further, that this committee was to be a committee on the analogy of the Committee of Imperial Defence. I hope that the right hon. Gentleman is not going back on that, because I think that the grievous error which he has committed is in not having put that pledge into operation. I am going to ask him that the pledge which he definitely gave he should redeem now. May I give the reasons?
    There is no one who can deal with a problem of this kind except the head of a Government. Why? First of all, he is the only one who has authority. He is the only one who has the right to give directions to other Departments. The Lord Privy Seal is a Minister who has no authority over any other Minister. He has been entrusted with the care of unemployment. But let the Prime Minister think of the Ministries that are concerned with the problem of unemployment. There are the Ministry of Labour, the Board of Trade, the Ministry of Transport, the Ministry of Health, the Overseas Trade Department, the Ministry of Agriculture, the Mines Department and, above all, the Treasury. I would like to see the Lord Privy Seal giving orders to the Chancellor of the Exchequer! There is only one man who is in a position, subject, of course, to the Cabinet, to give directions to co-ordinate the whole of these Departments and to give instructions to them, and that is the head of the Government. It is a problem of co-ordination.
    Take the case of the Minister of Transport, a very able man of great experience. What has he to do? He cannot act without first of all dealing with the local authorities, which means
    1380
    dealing with the Ministry of Health; without dealing with the Treasury, which means the Chancellor of the Exchequer; without dealing with the Lord Privy Seal; without dealing with the Ministry of Labour. He cannot act without consulting four or five other Departments. Therefore, it is vital that you should have some committee that will co-ordinate the whole of these Ministries and co-ordinate the action of the Government in regard to them. I really would like to have the attention of the Prime Minister at this point. It is not often that we get him at these discussions. Those are all very vital questions.
    The right hon. Gentleman said, "I invite the House of Commons to co-operate." What does he mean by "co-operate"? Does he simply mean inviting us to have conversations with him? We shall be very delighted, and it would be very pleasing and very instructive. But sporadic conversations on matters which involve detail and detailed examination are no use. The right hon. Gentleman himself laid down the principle upon which to act, and that is the Committee of Imperial Defence. That Committee was first of all created by Lord Balfour. The right hon. Gentleman has been a member of it, not merely as Prime Minister but when he was not Prime Minister. What happens at that Committee? There are certain permanent members of it. When you are dealing with some specific problem, you call together the Ministers whose departments are affected by that problem, and not merely Ministers but Members of the Opposition. I was invited by the right hon. Gentleman the late Prime Minister; I have been invited by the present Prime Minister, and so has the Leader of the Opposition. Mr. Asquith, Mr. Haldane and Sir Edward Grey, as they were then, were members when the other Government was in power. When Mr. Asquith was Prime Minister, Mr. Balfour, Lord Lansdowne and Lord Esher came there. They were there considering the problems with the Prime Minister and the Ministers and with the help of experts, and in so far as it was necessary, sitting continuously. If the right hon. Gentleman is not going to do that, all this talk about co-operation means nothing.
    If the Government want the assistance of Members of this House, the only way in which they can get effective co-operation

    1381
    is by summoning Members to this new committee and giving them the same facilities as Ministers to see everything that is going on. [Laughter.] I have heard of the loud laugh which bespeaks the vacant mind. These hon. Gentlemen who laugh do not realise that the whole of the War Book, which was so invaluable in the conduct of that terrific national enterprise, was prepared by the Committee of Imperial Defence, which had upon it not merely representatives of the Ministry, but representatives of the Opposition as well. Is it really so ludicrous that a committee of a similar character should be set up, and that the Prime Minister should summon Members of the Opposition to a committee of that character so as to get the benefit of their experience and knowledge? I trust that the right hon. Gentleman will see his way to do so.
    Will regard to loans, I agree with the hon. Gentleman the Member for Smethwick. It is quite impossible to deal with this situation and with this emergency unless you raise a loan—quite impossible—and I am going to urge that that should be done. The Prime Minister, in the speech which I quoted, said that a loan was an essential part of the programme. It must be a loan to enable you, not merely to spread work over five years which will employ at the outside only 80,000 people, but a loan which will enable you to make some impression upon the problem. I know what will be said. I hope that the Chancellor of the Exchequer will not turn this down from apprehension with regard to his Conversion Loan. The Conversion Loan may be a very important matter, but the saving of this country from the evils of unemployment is an even more urgent matter than the Conversion Loan. I am trying to advance these matters, not in a critical but in a helpful spirit, and I hope that the right hon. Gentleman will do what I suggest. We had a computation, made by several of the gentlemen who are now employed by the Prime Minister to examine this problem, which showed that the national savings per year came to £500,000,000. Does the right hon. Gentleman really mean to say that if you raise a loan of £100,000,000 this year, and £100,000,000 next year, for the purpose of dealing with the national emergency, this country could not afford it?
    1382
    If this country were engaged in military operations, does anyone imagine that we could not raise £100,000,000, and many hundreds of millions of pounds? What is the use of saying that we cannot afford to raise £100,000,000 for the purpose of dealing with a problem like this, which is doing infinite damage to this country? No one has used more powerful language than the Lord Privy Seal about the moral damage which is being done to the people who have been unemployed for all these months. Does he really mean to say that when we, in the face of the enemy, could raise hundreds and even thousands of millions we would be ruined if me raised £100,000,000 per annum for two or three years to deal with this emergency? May I point out that we are borrowing now for the Unemployment Fund. Here we are, spending something like £100,000,000 a year upon unemployment. Would it not really be very much better for the credit of this country that we should try to find work for as many people as we possibly can, so long as that work is necessary work? Upon that point, there is no difference of opinion between hon. Gentlemen opposite and hon. Gentlemen sitting here. All these schemes are schemes which we agreed before the Election were necessary, not merely for relief work, but for the purpose of developing the resources of the country. I hope that the Prime Minister will deal with this matter and will take it in hand himself. He said that there were difficulties—difficulties with local authorities, difficulties with landlords. I think if he makes inquiries he will find that, at the present moment, in various Acts of Parliament he has powers which would enable him to deal with most of his difficulties.
    Supposing that he has not. If he says that the powers are inadequate, why did he not ask for powers in time and at the very start? The first duty of the Government in such circumstances was to have taken emergency powers. We realised that when we were considering this problem, and we got some of the ablest lawyers to consider in what respect emergency legislation would be necessary in order to enable our Government to deal with this problem. Have the Government considered that subject? If so, what is the legislation which they require?

    1383
    I hear about the 40 Acts of Parliament that are necessary in order to deal with level crossings. All I can say is that it is a scandal if, in a matter of that kind, you have to ask for 40 little Acts of Parliament and send them all upstairs to Committee and employ lawyers and expert witnesses, and then bring them down here again on the Floor of the House. These small matters are such as ought to be dealt with in a comprehensive Bill. The Government could have dealt with these matters as emergency matters. That does not mean that you would have to incorporate such legislation as part of the permanent machinery of the State. You could treat this problem as an emergency problem.
    At any rate what I am asking the Government is, first, that they should carry out the definite pledges which they gave before the Election. If they carry out the proposals embodied in the Prime Minister's speeches and in "Labour and the Nation" with regard to unemployment, in so far as we are concerned, we shall be only too happy to support them—so that at any rate the right hon. Gentleman cannot complain that there would be no majority in this House. The second point which I want to put to him is this. I agree that this is not a problem which ought to be treated as a party problem. I ask the right hon. Gentleman to make co-operation to which he has invited the House a reality, and he can make it a reality by carrying out the pledge which he has already given to set up a Committee, on the analogy of the Committee of Imperial Defence, on which he would have Members of the Opposition, who would have exactly the same access to papers and documents as Ministers. I ask, in the third place, that he should not shrink from the essential need, the essential condition of every programme of national development, and that is to use the credit of this nation to the full for the purpose of this work of development.
    Lieut.-Commander KENWORTHY: Is the right hon. Gentleman speaking for his party now?
    Mr. LLOYD GEORGE: Certainly. Most decidedly. We are committed as a party to that proposal. I put it forward
    1384
    on behalf of the whole party at the last Election and my recollection is that there was no dissentient voice at any of our conferences, or at our party meetings with regard to that matter. Those three points I am putting with the full assent of the whole of the party. The Government have, undoubtedly, owing to the delay, lost authority. It would have been better for them had they carried emergency legislation immediately after the Election. I agree with the Leader of the Opposition that if they had put forward proposals for emergency powers, then probably the whole House would have accorded them.
    Mr. KIRKWOOD: Did you not threaten that you would put them out immediately they brought forward anything of that kind?
    Mr. LLOYD GEORGE: No. On the contrary, I have always made it perfectly clear on behalf of my hon. Friends and myself that, if the Government were prepared to carry out the proposals which were embodied in the "Labour and the Nation" pamphlet or whatever it is dealing with unemployment—the specific proposals I have mentioned, which are so identical with ours that we were charged with stealing the programme—that certainly we would support any proposals of that kind. The Prime Minister charged me and charged this party. He said we were like wicked gipsies who had stolen his child. We have offered the child back to him and we have offered to help him to nurse it. All I would say to the right hon. Gentleman the Lord Privy Seal is that what we are offering is the Prime Minister's own child. But the Lord Privy Seal says he will have nothing to do with the brat.
    Mr. THOMAS: I will deal later on with the three specific questions which the right hon. Gentleman has put to me, but in order to do so effectively, and to give him a complete answer, I want to know exactly what he means by emergency powers? Is he speaking for his party when he says that they will support the grant of emergency powers to get over difficulties and delays, because I would point out that the first Bill which I introduced asked merely to expedite certain work by six weeks, and a

    1385
    right hon. Gentleman sitting on those benches and speaking for the party below the Gangway—
    Mr. LLOYD GEORGE: If the right hon. Gentleman is going to ask me a question I shall give way, but if he is going to answer my speech, I would point out that he is to make a speech of his own later on.
    Mr. THOMAS: I want to put it to the right hon. Gentleman that from the benches there it was said that we must not take away any Parliamentary rights. Does the right hon. Gentleman now agree on behalf of his party that if emergency legislation is required to deal with railway Bills and docks Bills and all these other Bills he will be prepared to support us? I only want to know that specific point.
    Mr. LLOYD GEORGE: Of course, I do not know the particular Bills to which the right hon. Gentleman is referring and it is unreasonable to ask me, with regard to a Bill which I have never seen, whether I will support it or not [Interruption.] A question has been put to me and I shall answer it. It is a very vital question. We shall support any emergency legislation which will deal with these little obstacles which are impeding the handling of this problem. There are small problems and I have mentioned one of them, namely, that of railway level crossings. I have never said that we would suspend all Parliamentary rights belonging to a railway company or any other company, but any obstacle of a trivial character—[Interrupation.] A railway crossing is a very trivial matter, and the railway crossings are holding up at the present time, I understand, a great many schemes. If the right hon. Gentleman is really trying to find out a basis of agreement, I will answer him. If any legislation of this character is required, that is exactly one of the things that could be considered if the Prime Minister were to set up the Committee which he himself indicated that he was prepared to set up. That would be one of the very first questions that would be considered by a Committee of that character. It is not merely a question of the railway companies. The right hon. Gentleman said there were difficulties with regard to landlords, and when you come up against the landlords, if there are any difficulties, if a dozen or
    1386
    15 landlords can hold up a great scheme for the benefit of a whole community, and if there are not powers existing at the present moment, we should certainly be prepared to support any Measures brought in by the Government to enable them to deal with an obstacle of that kind.
    The PRIME MINISTER: Do I understand my right hon. Friend to say that he would be perfectly content that a Committee should do this civil, unemployment work, upon which he, or one representative or two representatives of his party, should have precisely the same rights of representation as he has at the present moment on the Committee of Imperial Defence?
    Mr. LLOYD GEORGE: Certainly, because—
    The PRIME MINISTER: Does the right hon. Gentleman not remember that as a matter of fact he is not a member of the Committee of Imperial Defence at all, and is only summoned when it suits me, in view of the particular question which is then before the Committee?
    Mr. LLOYD GEORGE: That is exactly what I mean.
    The PRIME MINISTER: I will do better than that.
    Mr. LLOYD GEORGE: The right hon. Gentleman says he will do better. That is more than he has done with the pledges which he has given up to the present. The right hon. Gentleman says that on the Committee of Imperial Defence I am summoned for a particular question, but the particular question upon which we would expect to be consulted here—I and the Members of the Opposition—would be the problem of unemployment. It is no use the right hon. Gentleman shaking his head in that way. If he really means business, it is not to be treated in that way. I want to put this to the right hon. Gentleman, that there is a vast difference between this and the consideration of a preparation for war, where you have got casual meetings now and again with the Committee of Imperial Defence. Supposing you had the Committee of Imperial Defence meeting to consider a problem which was an urgent and a practical one, you would expect whoever was brought in there to be consulted

    1387
    upon the whole problem, upon the whole scheme, and with regard to the whole of the evidence that came before them.
    I put it to the right hon. Gentleman again. It is a question of the spirit in which he is prepared to meet us. I have done my best to make a practical, definite suggestion to extricate this country—I will not say the Government, because that is their business and the business of the party behind them, but to help the Government, as a Member of this House, to extricate this country—from one of the greatest difficulties in which it has ever been placed. I agree with the hon. Member for Smethwick in what he says with regard to the gravity of the problem. I agree absolutely with what he says, that it is all the more grave because you do not get a sort of crisis which is obvious to everybody. It has gone on from year to year. Sometimes it has been 2,500,000, then it has gone down to 1,000,000, then it has gone up to 1,600,000, it is now 1,800,000 or very nearly, and it is going to be over 2,000,000; but the country is getting too accustomed to it. I think, on the whole, it is beginning to get alarmed now, but there is no clean-cut crisis or emergency with which it is confronted, and I appeal to the right hon. Gentleman to act in the spirit of the pledges which he gave before the election, to do his best to redeem those pledges; and if he does, he will get the support at any rate of the hon. Members who are acting with me.
    The UNDER-SECRETARY of STATE for SCOTLAND (Mr. Johnston): With a large part of the comprehensive survey of the position which was put before the Committee by the hon. Member for Smethwick (Sir O. Mosley) I agree, but there are parts of it where, unless I misunderstood him, he rather did himself less than justice, as, for example in his deprecation of the development of export trade. There are large areas in this country where employment depends upon a development of our export trade, and where it is definitely in the national interest that such export trade should be developed. There is the fishing industry. Unless our export trade with Russia in herrings can be developed, there is no prospect of employment for very large
    1388
    numbers of our unemployed in the fishing areas, and the precise reference which the hon. Member for Smethwick made, when dealing with the problem of export trade, to the cycle industry illustrated the danger of pushing his point of view so far as he did. It is precisely the development of our export trade in such matters as cycles which has been one of the most hopeful features of recent years in our Empire trade development; and Coventry and other towns are to-day living upon the very fact that the West African native has been taught to ride a bicycle. I am sure the hon. Member will, upon further consideration, find that his deprecation of the 40 per cent. of our trade which depends upon exports, or at least the development of them, was very unwise indeed.
    There is one other point with which I should like to express some disagreement, and that is when he was dealing with the local authorities. I can conceive of no greater turmoil than would be created in this country than by the ruthless attempt at overriding the powers, the duties, and the privileges of the local administrative bodies in this country. However anxious we may be, for example, to deal with the problem of slum housing and the problem of building new houses, it is an extremely difficult matter indeed for a central Executive, particularly a central Executive elected from one side of partisan politics in this country, to override the wishes of the elected representatives on the local authorities, who are composed for the major part of other political parties, and the mere threat that a Labour Government would seek to override the measures taken by county councils composed entirely of members of political parties represented by the Opposition in this House, would have results which can surely be better imagined than described. What is going to happen with the trade unions, with the skilled workers sent away as a mobile labour force into local government areas against the wishes of the local authority?
    Mr. BUCHANAN: You are doing that now with your transferred men.
    Mr. JOHNSTON: We are not. The hon. Gentleman is wrong. As a matter of fact, when a local authority is not desirous

    1389
    of taking transferred men, there is no power on the part of the central authority to compel a local authority to accept transferred men.
    Mr. BUCHANAN: You are transferring people every day, and you know it.
    Mr. JOHNSTON: It is a matter within the knowledge of every Member of this Committee that it is only when a local authority is willing to accept transferred labour, and a special grant to go with it, that transferred labour is sent into its area, and in no case, so far as I know, has it been possible for the Central Executive, against, the wishes of the local authority, to import labour into their area. Since the time when Keir Hardie championed the cause of the unemployed in this House, the slogan which has crystallised the attitude of the Labour party towards the unemployed has been "Work or maintenance"—work if it could easily and readily be provided; maintenance, and adequate maintenance, if it could not. Time was, and not so very long ago—indeed, until the eve of the War—when the unemployed man had his unemployment ascribed to his own moral fault. He was told commonly, from Press and platform, that his unemployment was due to his thriftlessness or to his shiftlessness, to his drunkenness or to his wastefulness, but no one to-day in this House is so foolish as to make so palpably inadequate and erroneous a diagnosis of unemployment.
    For 10 years, except for a very few days, in one brief period, the unemployment figure in this country has been over 1,000,000, and no one to-day imagines that these unemployed working men and working women are unemployed through any moral fault of their own. [Interruption.] If the hon. Member will be good enough to allow me to state my case in my own way, I shall be obliged to him. Within the ambit of the present method, national and international, of producing and distributing commodities, there is no other method known to me of dealing with the unemployed except providing some of them with what is called relief work, and the others with maintenance. The hon. Member for Smethwick, in his very skilful and elaborate survey, pretended to do no more than to reduce the number of unemployed workmen to what has been called normality. He with his schemes, and every one else with their
    1390
    schemes, pretend to do no more than to diminish in number our unemployed population.
    8.0 p.m.
    The right hon. Member for Bewdley (Mr. S. Baldwin), who opened the debate, made several quotations from speeches delivered by hon. Members on this side of the Committee. I would call the attention of the Committee to a speech which he made as recently as the 8th of this month at Sheffield. He is reported in the "Times" as saying:
    "It is going to be a great problem in the world and a great problem in the course of the next generation too. What is to be done with the surplus output of the mass production which will take place in many countries?"
    That is the question which he asked, and here is how he answered it:
    "We shall have to leave that problem for its solution to those who are responsible when it becomes more acute than it is."
    He boldly faces the problem and then he passes on, and we have heard nothing to-day from the right hon. Gentleman, or indeed, from the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) in the way of a positive suggestion as to how this problem can be dealt with. I leave aside for the moment the question of mere machinery. Production to-day is unregulated. It is unregulated by the necessities of consumers; it is chaotic, and it is a scramble of gluts and shortages here and abroad. I have here a cutting from the Press of the 14th March this year of an item circulated by the Central News, which illustrates clearly the real problem that we have to face. It is headed "Imminent disaster; United States producing too much wheat," and it says:
    "Only a severe failure of the coming wheat crop can save America from a financial disaster of the first magnitude."
    That same economic chaos is now to be found in the production of every alleged civilised country in the world. Farmers have had for two years a good crop of potatoes, with the inevitable result that at Question time day after day hon. Members in all parts of the House who represent agricultural constituencies are asking the Government what they propose to do to save the producers in agriculture from the ruin and bankruptcy which is inevitably produced under the present insane system—
    Major BRAITHWAITE: You allow the low-wage countries to send their goods here.
    Mr. JOHNSTON: The hon. and gallant Gentleman knows perfectly well that the glut of potatoes in this country is due to the splendid harvest; it is due to greater production and to the fact that Providence has sent sun and rain at the right time.
    Mr. BROCKWAY: And low wages.
    Mr. JOHNSTON: It is not due in any way to the question of wages. The last two great harvests are due to Providence, and these bumper crops have depressed prices. The extra quantity of commodities smashed prices, and when prices are smashed, the producers do not get a living. While it is true that competition from low-wage countries in certain commodities lowers prices, it does not so apply to such commodities as I have been discussing. The problem to-day is not the problem of insufficient production; it is how to find markets for the surplus produced in ever increasing ratios by the skill and genius of mankind.
    The figures with which the Lord Privy Seal has had to deal are not only facing him; they are facing the legislatures and industrial leaders in other lands. Mr. J. M. Keynes was quoted last week as saying that the fall of over 20 per cent. in the general price level since 1924 is a first class disaster. The "Economist" says that the price level has fallen 20 per cent. Too much in the world! The Board of Trade Index shows a fall of 16 per cent. in prices. The League of Nations figures show that between 1923 and 1930 there was an increased production of 3 per cent. per annum, a total over seven years of 21 per cent., against an increased population to consume it of only 1 per cent. per annum. The results of that are inevitable. The Empire Marketing Board, whose figures will be accepted by many hon. Gentlemen opposite, put their Statistical Bureau on to the question of British Empire prices. What are the remarkable figures which they produce? Taking the basic figures as 100 in 1925, agricultural prices had fallen in 1928 to 83, and in 1929 to 65.1—fall of 35 per cent. in four years in the buying power of the primary producers in the British Empire. If their prices fall by one-third, and their buying power
    1392
    falls by one-third, the demand for clothes, boots, gramophones, bicycles and for everything else falls.
    Mr. KIRKWOOD: That is an indication of the reduction that has taken place in wages.
    Mr. JOHNSTON: In face of these figures, what is the sense in ascribing to any Government or political party, to any group or individual, the steadily rising figures of unemployment? The figures of unemployment are rising steadily and inevitably, and they will grow worse. Side by side with it, as Sir Henry Strakosh has calculated, during the 25 years to 1929, the fall in prices has meant an actual increase of the burden on the National Debt of no less than £1,300,000,000 sterling.
    Mr. WISE: Why do you not tax that?
    Mr. JOHNSTON: I am not the Chancellor of the Exchequer, and I cannot go into a question of general policy like that. I am putting the fact that side by side with the fall of the purchasing power of the producers there has been a fall in prices which has increased our National Debt by £1,300,000,000. Hon. Gentlemen opposite speak about Safeguarding, Protection or Tariff Reform, or whatever you like to call it. The "Daily Telegraph" one day this week reported that in Germany the unemployed receiving relief on the 15th of the month were 1,953,000, which was 826,000 more than a year ago. Germany has all the benefits of Safeguarding and Protection, and she has a tariff.
    Mr. MOND: Did not the Prime Minister say that there were 2,700,000?
    Major BRAITHWAITE: Did not—
    The CHAIRMAN (Mr. Robert Young): The hon. Member must remember that he had his say on the last occasion.
    Mr. JOHNSTON: In addition to the 1,953,000 men receiving relief in Germany, 800,000, according to the "Daily Telegraph," were receiving no relief. Perhaps many of them were partly employed. At any rate, the total in Germany was nearly 3,000,000—in this land which has all the benefits of Safeguarding, Protection and a tariff. I take another authority, the "Investors' Chronicle." On

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    19th April this year it had a despatch from America headed "Unemployment Sunday." It says:
    "Unemployment Sunday is to be observed throughout the United States on the 27th April. According to the National Unemployment League, there are 6,600,000 out of work."
    And that in a State which has a great internal market with all the benefits of a tariff and Safeguarding. It has also been afflicted with this world collapse in prices, which both Free Trade countries and tariff countries have felt. The "Times," which will be regarded as an authority, said on the 24th of this month:
    "Neither Protectionist nor Free Trade, neither mainly exporting nor mainly importing countries, are immune from unemployment."
    It goes on to say:
    "The percentages of the population unemployed are, in the United States, 4.8; in Germany, 4.4; and in Great Britain, 3.8."
    I am not saying that that is a desirable state of affairs at all, but do let us face the fact that a Safeguarding and tariff system is in itself no cure for unemployment.
    I come to the question whether it is possible greatly to expand the amount of relief work in this country, and under what circumstances it is possible to do it. My view is that the task is too big for any one party harassed by strong opposition to undertake when it is open to all the obstruction and delays inherent in a partisan political struggle. There are local authorities manned, staffed and officered frequently by our opponents. There are areas where not a house has been built; areas where whole villages have been condemned as insanitary; I have one in my mind at the moment, where 432 houses have been condemned by their own medical officer of health as unfit for human habitation and not a solitary new house was built there last year. The Government, through the Department with which I am concerned, have been doing their utmost during the past 12 months to induce that local authority to act—begging them and pressing them, as the Lord Privy Seal reminds me.
    Let me give the Committee an illustration of the difficulties we are up against in this matter. I imagined that one of
    1394
    the easiest methods of providing work for the unemployed in Scotland was to deal with piers and harbours. Many of them are going derelict. In many cases heavy seas have washed away the outer bulwarks, and some are silted up with sand. These piers and harbours are as essential to the future development of our trade and commerce as are public roads. The Lord Privy Seal was sympathetic and friendly and willing to do everything he could, and the Chancellor of the Exchequer was putting no obstacle in the way. What was the first thing my right hon. Friend the Secretary of State for Scotland and myself ran up against? A shortage of marine engineers, if you please. We could not get the plans. We cannot improvise marine engineers having the necessary experience. Those marine engineers we could get told us that they would have to make a prolonged study of the currents round the various piers and harbours with which they were asked to deal. They would have to take soundings, they would have to watch the tides-not the tides alone in one month of the year, but in various months of the year. The delays in getting anything done were appalling. These delays are not due to the fact that the Lord Privy Seal or His Majesty's Government are apathetic. Then, when we had got our plans, when we had got our schemes, we discovered that many of these piers are in the possession of private owners—some few of them in the possession of local authorities. When the question arises whether we should be permitted to take over these piers—take them over without compensation, of course—
    Mr. KIRKWOOD: That is right!
    Mr. JOHNSTON: —and hand them over to the local authorities in a fit condition to conduct the industry of the country, is it so sure that the House of Commons, and another place along the corridor, would give us the necessary, the emergency, powers? Until we can get unemployment and its emergencies regarded as an all-party question in this House; treated as questions were treated in the emergency of the War; obstruction swept away; the pettifogging delays which take place in this House over ordinary legislative proposals abolished; an all-party committee responsible to Parliament, making recommendations to

    1395
    Parliament—unless the House can rise to such a conception of its duties, I do not believe it is possible quickly to expand the area and the scope of relief works in this country. Other expedients for dealing with unemployment have been discussed. The hon. Member for Smeth-wick referred to retiring pensions. I have believed in that plan for years, and I believe in it more strongly now. He also referred to the school-leaving age, a question with which the Government are going to deal. If we can take our aged veterans of industry and their grandchildren out of employment, giving at one end of the scale a better education, as the children of the rich get, and at the other end some little leisure after a lifetime of toil, there may be more opportunity for employment for the able-bodied persons in between those ages.
    The First Commissioner of Works has taken a very active interest in the question of migration. Migration has never been tackled except on an individualistic basis, under a system of giving a man a free passage and dumping him down, not on an alien shore, but dumping him down in a land where, perhaps, he has no friends, where there is no Poor Law, where there is no unemployment benefit, where there is no sickness benefit, where there is nothing to tide him over till he can get on his feet. That is one way of running a migration policy. My right hon. Friend has views and conceptions—I wish they were more widely held—under which we should regard the great undeveloped spaces in the British Empire as an Empire heritage, and places like Peace River would be developed on a large scale and the migrants looked after, at any rate be given their unemployment benefit until such time as they have got their houses over their heads and their crops coming up out of the ground. I was glad to see that my views about retiring pensions were reinforced the other day by Lord Melchett. He said:
    "Apart from the ultimate remedy in rationalisation, the augmenting of pensions for workers over 65, raising the school-leaving age and assisted emigration are the most effective immediate remedies for unemployment."
    I come back to where I began. Everything is impossible unless we are prepared to regard unemployment as we regard
    1396
    the work of the Empire Marketing Board or the Public Accounts Committee or the Local Legislation Committee, or other matters which are regarded as being on a non-party basis. When we were in Opposition on the 4th February, 1926, we made these proposals. On the 8th March, 1927, a late Member of this House, Mr. Greenall, proposed the setting up of such an all-party committee, and I remember being entrusted with the duty of winding up the debate. The Prime Minister himself made the offer on 18th November, 1929, shortly after we took office. The Prime Minister said:
    "As regards an all-party Committee, I should remind the House that when we were in opposition we made such a proposal to our predecessors, who regarded it as impracticable, but if I could see anything which would justify the belief that the parties opposite were prepared to co-operate and that useful results would be obtained always safeguarding the responsibility of the Government, I should be willing to consider representations."—[OFFICIAL REPORT, 18th November, 1929; col. 34, Vol. 232.]
    That is the problem which is before us this afternoon. The right hon. Gentleman made that offer. Since then we are caught more firmly in the grip of poverty clue to falling prices; and the problems have ceased to be national and have become Empire and international problems. This great issue of our unemployed fellow citizens finding useful social and necessary work can only be tackled if we are prepared to regard it from a national and not from a party standpoint. The right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) took a less adequate view of this question, and talked about the Committee of imperial Defence, the details of which I am quite indifferent about. It is a matter for the Lord Privy Seal to deal with. In this connection may I quote the words of Lord Macaulay:
    "When none were for a party, but all were for the State."
    We have our views about public ownership and about social control. Hon. Members opposite disagree with us and take other views, but upon the question of whether we can or ought to provide social and useful and necessary work in the building of houses, the making of roads, the building of bridges, the creation of piers and harbours and work

    1397
    of that kind, we should take a national view, and if we do so we shall be able to find work for a much larger proportion of our fellow citizens.
    Miss LEE: I would like the Under-Secretary to make it clear whether he was referring to a pension scheme as merely an ultimate ideal, or whether there is any hope of a pension scheme being brought forward by the present Government.
    Mr. JOHNSTON: The question of providing pensions is part of our policy. The precise method by which that pledge can be carried out, its precise form and the precise date on which such a Bill can be introduced, are obviously matters upon which I cannot give an answer.
    Mr. LESLIE BOYCE: I am very grateful to you, Mr. Chairman, for giving me the opportunity of saying a few words in this debate, and I would crave the indulgence which the Committee always so generously accords to those who are undergoing the ordeal of addressing it for the first time. The main issue at the General Election was unemployment, and the Government were returned to office largely on the strength of the "unqualified pledge" given in the Election manifesto of the party opposite that they would "deal immediately and practically with this question."
    We on this side have not tried to take unfair advantage of the Government by minimising the effect that world-wide trade depression has had upon the industries of this country. But, during the five months preceding, the Election, the unemployment figures tell steadily and at the rate of 70,000 per month. Since the moment the Government took office, every time the clock bas struck the hour, both day and night, there has been, on the average, 77 more people on the register out of work. It is difficult to conceive that the vast difference between a reduction of 70,000 per month and an actual increase of more than one a minute can be attributed solely, or even mainly, to causes outside the Government's control.
    Last week the Committee had the advantage of hearing from the Lord Privy Seal what the Government have been doing, and what they propose to do, to help our unemployed to find work. He said, in effect, "We have been in office nearly 12 months and it is about nine
    1398
    months since Parliament voted money for my scheme. So far, I have sanctioned expenditure amounting to £95,000,000 which will eventually provide employment for 380,000 people for one year. But it will be only temporary work. At the present time, apart from the railway scheme, the total number of people temporarily employed, both directly and indirectly, as the result of all my schemes is only 100,000." I hope I have not unfairly represented the points I have taken from the right hon. Gentleman's speech. In the whole of his speech there was not one single word about finding permanent employment for anyone.
    What has the right hon. Gentleman done to help our unemployed women? The actual number of unemployed women on 3rd June last year was 209,800. What have the Government done to help those women to find work? Nothing. The actual number of women unemployed to-day is 464,500, which is an increase of 254,700 since the Government took office. What is the Lord Privy Seal proposing to do to help them to find work? He is doing nothing. The right hon. Gentleman is not even proposing Measures to enable them to find work temporarily.
    I find in an article written by the present Prime Minister, which appeared in the "Daily Herald" of the 22nd of April last year, about five weeks before the General Election, this passage:
    "A Labour Government is the only Government which will deal with the problem of unemployment with courageous determination. Labour has the programme; it only needs the power."
    As the Leader of the Opposition and the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) have pointed out not a single measure, introduced by the present Government to deal with this problem, has been rejected by Parliament. Not one. The Government have not been refused power. The Prime Minister said this afternoon that if the Government were to cure unemployment they would need a solid Government backing. The Prime Minister knows perfectly well that the Government have always had more power at their disposal than they have sought. I respectfully submit that the Prime Minister's remark implying that the Goverment needed a solid backing to cure unemployment was not a little ungrateful, not only to those who sit

    1399
    below the Gangway, but also to those who sit on these benches. I find in the Election pamphlet: "Labour's Appeal to the Nation," with reference to unemployment, this statement:
    "Our schemes have been before the country for years."
    What has become of that programme? Where are those schemes? Have we not a right to know? On the date on which the Prime Minister's article appeared in the "Daily Herald," the unemployment figures stood at 1,140,722. Apart altogether from the fact that unemployment has increased by 660,000 since the Government took office, on the Lord Privy Seal's own showing, in his speech last week, the Government, in 12 months, have only succeeded, directly and indirectly, in finding temporary work for 100,000 people. Is that the programme that the Prime Minister had in mind a year ago, when the unemployment figures were standing at more than 1,140,000? Are these schemes, which have so far produced this almost negligible result, the boasted schemes which the party opposite have had before the country for years?
    The Lord Privy Seal has told us that the money which he has sanctioned is to be spent in making the nation more efficient—more efficient in industry, in transport, and in communications. What is the ultimate object of all this efficiency? Presumably it is to enable our industries to sell their goods. But will it do so? Many of our industries—nay, most of them—are efficient already; yet, mere efficiency does not enable them to sell their goods. If we were to sacrifice, not £100,000,000, but £1,000,000,000, on the altar of efficiency, I do not believe that that alone would materially assist us to sell our goods. There is only one thing that can do that, and that is markets. In my view, our industrial problem is essentially and fundamentally one of markets. The plain fact is that we are at our wits' end to find markets, and, once we solve the question of markets, our unemployment difficulties, our industrial and financial difficulties, will quickly disappear—and not before.
    I submit, therefore, to the Committee that we should ask ourselves two questions. The first is, where are we to find the markets in which we can reasonably
    1400
    look for an expansion of our trade; and the second is, what steps can the Government take to assist our industries in obtaining as large a share of those markets as possible? The first and most obvious place to look for markets is at home. At present, we allow competitive foreign manufactures, produced—in some cases within 25 miles of our own shores—under sweated labour conditions which we will not tolerate for a moment in this country, to pour in upon our home market and throw thousands of our own working men and women upon the streets. That is not the way to reduce unemployment; it is asking for more unemployment, and it is no wonder that we are getting it. It is a striking and eloquent commentary on our present fiscal system that the only markets in the world where many of our industries are able to compete on equal terms with their foreign rivals are to be found, not in this country, but in the Dominions, where they enjoy tariff preferences equal to the disadvantages from which they suffer in respect of production costs, taxation and other burdens.
    The Lord Privy Seal advocates rationalisation, and the Prime Minister laid considerable stress on its importance this afternoon. We all agree that rationalisation is necessary in certain of our industries, in order to reduce production costs and thereby to increase our competitive power. The Chancellor of the Exchequer said this afternoon that we on this side of the House only wanted Safeguarding because our industries could not compete successfully in the home market. No amount of rationalisation will enable our industries to compete successfully in the home market against foreign industries which are also rationalised, and which only pay 40, 50, or 60 per cent. of the wages that we pay in this country. No amount of rationalisation will enable our goods to sell successfully against surplus goods of a similar character which are dumped in this country and sold at a price below the cost of production in their country of origin. Moreover, rationalisation is a costly business. Before those engaged in industry embark upon large and expensive schemes of rationalisation, before the bankers advance the money which is necessary to carry out such schemes, it is only natural that they should require to have, as a matter of ordinary commercial prudence, at least, some

    1401
    guarantee, or at all events some reasonable prospect, of a fair return on their money. A safeguarded home market, more than anything else, will give them that security.
    Furthermore, part of the object of rationalisation is to obtain a greater production factor per unit of labour. At the beginning of the process, there is a squeezing out of labour, and a safeguarded home market is necessary if the labour so displaced is to be re-absorbed into the same industry, and more besides. I submit, therefore, that, in respect of the home market, the Government are not doing their duty by the unemployed, or by those who are in work, but who may well be out of it Wore long if the present system is allowed to endure.
    We are told that we must increase our export trade. We all agree upon that. But to where? Where can we look with any real hope of a great expansion of our markets overseas? Certainly not to foreign countries. Our competitive position in foreign countries is not improving; it is steadily and rapidly growing worse. They do not want our goods, except where they are unable to produce similar articles for themselves. The more they acquire the art of making the goods which we make—and which in some cases we have taught the world to make—the more they exclude us from their markets, and the more they impose and batten upon the foolish hospitality of our markets in this country. Rationalisation will not necessarily help us to sell our goods in those foreign countries that make competitive goods. Our industries are not merely up against their local rivals in such markets. They are also up against the foreign Governments which control the tariffs, and which inevitably have the last word.
    If we look across the Atlantic, we see that great economic union of 48 States, the United States of America, all girt about with a high tariff wall in order to keep us and other competitors from entering her market. For several years there has been a great expansion in the production of manufactures in the United States of America—an expansion which has been out of all proportion to the growth of her population, particularly under the restrictions which the United States imposes upon migrants wishing to enter
    1402
    that country. This has resulted, as we see to-day, in over-production and unemployment in many of her industries.
    America is faced, therefore, with the necessity not only of tightening up her markets against us, and the rest of the world, but of building up her markets overseas if she is to maintain her present high standard of living. She is daily becoming a more powerful competitor in the world's markets. Her over-production and her unemployment are not arguments against Safeguarding in this country, as the Prime Minister and the last speaker have suggested. On the contrary, they make it more imperative and more urgent than ever that we should safeguard our home markets. Let us suppose that we were to rationalise the steel industry without safeguarding it. If there was an overspill of, say, 10 per cent. or even 5 per cent. in the steel industry of the United States, and if they were to dump that surplus steel into the only free market in Europe—into Britain, the dust-bin of the world's surplus production—what would be the result? The steel industry of this country would be dead, damned and done for if that were to happen—as well it might.
    In answer to the challenge of the United States of America we see the coming economic union of the Western and Central States of Europe. Last week, the Lord Privy Seal spoke of what he termed his "short range policy," the net result of which so far has been an increase of 660,000 unemployed. Have the Government any long range policy that has due regard to these important economic developments and counter-developments that are taking place in foreign countries? If such an economic group or unit is to be formed in Europe, where does the Government intend that we shall stand? It appears to me that we shall be faced with three alternatives. The first is that of losing our identity in a protected United States-of Europe. The second is that of endeavouring to stand alone between these two gigantic forces that could drive our trade to the wall in every corner of the earth. The third is to face up courageously and boldly to the position and to form, together with the Dominions and the Colonies, a still greater and more powerful unit in a consolidated, economically expanding and self-supporting Empire.

    1403
    If the Committee will forgive a personal reference, I am an Australian and have spent the greater part of my life in the Dominions and Colonies overseas. I know only too well that we Should be, and could be, doing an immensely greater trade with the Dominions than we are doing at the present time. We in this country are mainly responsible for the fact that we are not doing so. I cannot make that point too clear. It is certainly not the desire of the people in the Dominions to give employment to foreign workers while their own kith and kin are walking the streets and looking for jobs in this country. It would be a libel to suggest that the Dominions do not ardently prefer to trade with the Mother Country. That this is so is clearly shown by the way the Dominions have held out their hands to us, by the valuable preferences they have given our trade for upwards of a quarter of a century, by the handsome gesture that was made only the other day in the Canadian Budget, and by the tone of the speeches of the political leaders at the party conferences that are now taking place in Australia.
    I have sat here on more than one occasion and listened while hon. Members opposite and below the Gangway have bewailed the fact that the Dominions are building up their own industries behind a tariff to the detriment of the industries of this country. Much has been said in the House in the past about Australia in this respect. Nothing we may do can prevent Australia from pursuing her natural and legitimate policy of developing her essential secondary industries. On the other hand, I am convinced that much could be done, by negotiating on the basis of mutual preferences, to arrest the increasing development of non-essential and uneconomic industries in the Commonwealth which is taking place partly at the expense of the industries of this country. It is we in this country who for so long have turned our backs on the Dominions in order to extend a fulsome welcome to the ungrateful foreigner, who have driven the Dominions to adopt the policy of fostering their non-essential and uneconomic secondary industries in order to maintain their populations. I firmly believe also that much could be done by negotiation which would enable us to have a larger share of the Australian market
    1404
    in respect of those goods which do not compete with local but with foreign manufactures. What is true of the markets in Australia is, I believe, in large measure equally true of the markets of the other Dominions.
    In conclusion, it is markets we need, and markets we must have if our industries are to have a continuous run with a full load, and if the withering blight of unemployment is to be removed from the land. Great opportunities in the Home market are staring us in the face, the rich and neglected markets of the Empire are beckoning to us from across the seas, and I would appeal to the Government to show more imagination and more courage and not to hesitate to use any instrument, fiscal or otherwise, which will enable our industries to secure the fullest extension of that trade. I am indeed grateful to the Committee for having listened so patiently to what I fear has been a rather long maiden speech.
    Colonel WEDGWOOD: I am glad the debate has not closed without the Committee having an opportunity of listening to the authentic voice of Lord Rothermere, and I congratulate the hon. Member for Macclesfield (Mr. Remer) and the hon. Baronet the Member for Bournemouth (Sir H. Croft) on a new recruit in what will be a very effective trilogy. I would ask the hon. Member who has just spoken, however, to consider whether the manufacturing industries of Australia have at present very much market outside Australia. Remember that one of the dangers of excessive Protection is that you may secure the Home market but lose your foreign markets. What I deprecate, not so much about the hon. Member's speech as about so many other speeches that have been made, is these perpetual gibes at the Lord Privy Seal for not having done what they would do. I think everyone is getting a little tired of making this unemployment issue a sort of personal issue connected with the right hon. Gentleman the Member for Derby (Mr. Thomas). Personally I owe him a great debt of gratitude. There are working at Stoke to-day 500 men in Kerr Stuarts who would have been out of work if it had not been for his personal action. The proof of the pudding is in the eating. Those men, and that works, have been saved by what he has done. It is not a question of the

    1405
    expenditure of Government money. It is the expenditure of a little tact, a little intelligence and a little kindly human feeling for people whose lives risked being ruined. I think we must remember that with all his many faults the right hon. Gentleman the Member for Derby has saved the railway workers of this country. They are safe, and anyone who remembers the condition of the railway workers of this country 30 years ago will realise what he has done for these people. I only wish now he could extend his influence in this way. Of all the occasions on which I have admired the right hon. Gentleman I think that to-day I admire him most of all.
    We have listened to one of the most eloquent and one of the most dangerous speeches I have ever heard in this House. The hon. Member for Smethwick (Sir O. Mosley) has never come so prominently before the House before. He has made a speech to-day, and no one who listened to it can deny that as he spoke he was converting Member after Member in this House to his views. I watched the Liberal party, with the exception of the four strong men from Cornwall. I watched the Conservative party. Man after man was saying to himself: "That is our leader." Even the hon. Member for North Paddington (Mr. Bracken) could hardly contain himself when he found at last a fellow spirit, because this eloquent and convincing speech was packed with every fallacy of the Tariff Reform programme. It is common form among Tariff Reformers to say, "Do not bother about export trade, think about your home market." I can tell hon. Members that the pottery market is not going to get along without an export trade.
    We had the same sort of thing in the hon. Member's reference to the disadvantage of lending money abroad. I think it was the President of the Board of Trade who boasted of the fact that £17,000,000 or £18,000,000 had been voted for loans abroad, and surely every Free Trader must know by now that, if you are lending money abroad you are not sending Bradburys but goods out of the country. We want to send these goods out of the country, and whether money is lent abroad or in Australia, or wherever it is lent, it is equally valuable as far
    1406
    as employing people in this country and producing goods are concerned. The whole difficulty is this. I am not saying this about the hon. Members' speech, because he did not refer to the connection between land and unemployment. The whole gravamen of the speech was that he believes that he can cure unemployment. If he is right, every Member on that bench ought to be with him, and he ought to be Prime Minister instead of resigning. Can you cure unemployment by borrowing money and spending that money on road schemes or unemployment schemes? If you could, the Government would be criminal for not having done it. As a matter of fact, the Lord Privy Seal evidently knows that if you borrow £250,000,000 there will be £250,000,000 less for somebody else to borrow. There is what is called the Treasury view. If it is the Treasury view that two and two make four, it is the true view.
    9.0 p.m.
    Mr. KINGSLEY GRIFFITH: Is four necessarily a fixed quantity?
    Colonel WEDGWOOD: To come down from the heights of Einstein and Oliver Lodge, I am still in the position of believing that two and two make four. I do not see any cure for unemployment by imagining that if you have £500,000,000 of new capital in this country you should take £250,000,000 of that sum and use it for making roads or for unemployment schemes. Obviously, you would have £250,000,000 less for industry to spend. If industries need money they will have to bid higher for it and the bank rate will rise and the whole of the producing industries in this country will be working under the drawback of a high rate of interest. If that is the Treasury view, it is also the view of the ordinary economist.
    Mr. BOOTHBY: To carry it to a logical conclusion, does not the right hon. and gallant Gentleman's argument mean, in that event, that no new industry ought ever to be started?
    Colonel WEDGWOOD: There is another ally. Surely we are entitled to see that when a new industry is started it should be economically sound. I want the industry which is new and useful to be able to borrow money for the industry as cheaply as possible. I want to avoid such new industry having to pay far

    1407
    more for its necessary capital than it has to pay at the present time. I have often mentioned in public meetings that I have a very good cure for unemployment. It is very popular on the Conservative benches. I point out that if everybody would merely subscribe one half-crown and pass it up to the table and let me get away with it I should be able to employ a chauffeur for my motor car, and then there would be one less unemployed. If you take money from the taxpayers or ratepayers of the country and spend it on unemployment schemes or upon new roads, the ratepayer or taxpayer has no money to spend in buying what he wants for his family. And exactly the same number of people are employed; all you have done is to change the character of some of the employment which is going. What is true about rates and taxes is true about borrowed money. You cannot go into the money market and borrow capital without making the remaining capital more expensive for everyone else who wants to use it.
    The right hon. Member for Derby has had the views of my hon. Friend the Member for Smethwick dinned into him, convincingly, as we have heard to-day, for the last year, and he has managed to resist them. I hope that he will go on resisting them. I hope that he will not merely remain sound on his economics, but that he will see sooner or later that the land question is at the root of the unemployment question, and that, if he wishes to have more useful productive work in this country, the simple way is to make it easier and cheaper for labour to apply itself to the land and raw materials.
    I do not wish to amplify that matter to-day. I will merely give the House one example of how I dealt with the unemployment problem in one of our Colonies. It was after the picnic in South Africa, which we used to call a war, before we discovered what a war really was. I stayed in South Africa as resident magistrate of Ermelo, a district as large as Wales. I was the absolute ruler of that district; a Mussolini. I was faced there with the unemployment problem. Men who were discharged from the Army came to look for jobs. There was no dole and no Poor Law. If you could not get work in South Africa
    1408
    you went to gaol, but we had blown up the gaol. The people there have more intelligence, in one respect, than the people of this country, because around every town in South Africa, except Cape Town and Johannesburg, you find town lands. [An HON. MEMBER: "And gaols!"] We had blown up the gaol, but you cannot blow up the land. On the outskirts of Ermelo there were 5,000 acres of town land, suitable for growing vegetables, making bricks and getting coal. I said to the ex-service men; "So long as I rule here you can have three acres each of these lands, out of which you can make bricks and get coal. No one shall charge you anything in rates or royalties, or any suchlike nonsense. Carry on the good work."
    Everybody there was on rations. They solved the housing problem for themselves by fencing off their plots and by using 40 lb. biscuit tins, and putting some corrugated iron on the top. They borrowed picks and shovels, in the dark. As a result, they produced vegetables, bricks and coal. We got cheap vegetable supplies there. The men found work and got for themselves the full reward of their labour. They were not robbed by landholder, capitalist or the State. I did not throw open the town lands only to ex-service men. I said: "Let them all come." That procedure had unpleasant results. All the employers, manufacturers and builders came to see me, with very long faces, and said: "Captain Wedgwood, how do you expect us to make this a land fit for heroes to live in. How do you expect us to reconstruct Ermelo, when the wages of unskilled labour are £1 a day, and the rascals do not do anything for it?" What had happened? Simply this, that every worker in that town was able to look his employer between the eyes and to say: "If you do not give me the wage that I want, I will go and work for myself on the town land." So long as there was that opportunity of working for themselves on the town land, the working classes were free and were able to get for their labour not merely a living wage but the full reward of their labour. Unfortunately, they dethroned me. What could you expect?
    Mr. SKELTON: What happened? Will the right hon. Gentleman repeat it?
    Colonel WEDGWOOD: They dethroned me. They established a town council. They did not approve of ex-Service men on the town lands. There is unemployment in Ermelo to-day. I hope that I have not got away from the point. My point is, that where you have free land, any unemployment is voluntary unemployment. If we got the land of this country, all of it, cheaper than it is to-day so that people did not have to pay so much for the use of it, and if we had land which is not being used at all free for any man to use, our unemployment problem would be solved. If the Government, instead of trying to bolster up inefficient concerns and making roads where no roads are wanted, would try to make the land available for the people of this country, all the primary trades—the building trade, the agricultural trade, the mining and quarrying trades—would get up their raw material more easily, and people would be able to start work. If they had the chance of starting work, when they had done their bit they would pass on the job of completing the production and the distribution of goods and everybody else in the community would benefit, but so long as the people in the primary trades are deprived of the opportunity of starting the work which we all want to see done, not only will they be out of work but everybody else who are affected will suffer. That is why, at the risk of boring the House and being barracked by my own party, I urge the Government, when they have rejected the policy of the hon. Member for Smethwick, to remember that there is another way, and that is to make the land of England available for the people of England.
    Mr. GRANVILLE: I crave the indulgence which the House extends to an hon. Member making his maiden speech. I do not intend to follow the right hon. and gallant Member for Newcastle-under-Lyme (Colonel Wedgwood) in his excursion through South Africa and elsewhere, and his varied arguments. I have intervened because I represent a rural constituency and because I believe that we shall never successfully deal with post-War unemployment in this country until we have tackled the problem of agriculture. Instead of agriculture absorbing a large number of the unemployed, at the present time we have the stream running
    1410
    in the opposite direction, and we have depression and unemployment in the agricultural industry itself. The figures of unemployment in agriculture have been stated in the House during many debates. Of 600,000 male agricultural workers, we had in February something like 40,000 out of work. Since 1921, there has been a reduction in the number employed upon the land of something like 100,000. One hon. Member during a recent debate said that he had 1,000 unemployed agricultural workers in his Division. In my constituency, in one small country town, there are almost 1,000 men out of work, although they are not agricultural workers.
    I submit to the Government and to the Lord Privy Seal that, if they are going to deal with the problem of unemployment, they have to tackle the problem of unemployment in the rural areas, and deal with the distress there. Many of the villages in East Anglia—many of the villages in Suffolk present nothing more nor less than a derelict appearance. I have heard, during the time that I have sat in this House, hon. Members opposite talking about slums. I could show them some of the vilest slums it is possible to see, and those slums are in the heart of rural England. A few weeks ago I called upon a young unemployed agricultural worker in my constituency. He was having his evening meal of potato soup and bread, and around his falling-down, decaying cottage was some of the richest land in Fast Anglia. You cannot expect a country to get post-war prosperity when it allows a condition of affairs such as that to exist.
    The hon. Member for Bridgeton (Mr. Maxton) has said to the Government, in many debates: "If you will guarantee that no man or woman in this country shall starve while there is a Labour Government in office, that is the condition upon which I will give my support to the Government." During the coming summer, in village after village in my constituency, the men, women and children will be dependent on the drainings of the roads and the skimmings of the ponds for their water supply. If the Government would give people in rural areas a good water supply they would be doing something, and I should be prepared to give them my support in such schemes. I remember the Minister of Transport saying in one of our debates

    1411
    on unemployment that he was not referring to the question of the agricultural worker filling up a few potholes on unclassified roads. I hope he has not got a Cockney complex in regard to the question of unclassified roads. They are decaying and crumbling because they were never built for the present-day motor traffic. I hope the Minister of Transport will realise that the problem of unclassified roads in rural areas is a national one. How can you expect young agricultural workers to go on tolerating the social conditions which at present exist? Instead of being absorbed on the land they are migrating to the towns.
    The people in these rural areas do not understand the complications and perplexities of the problems of unemployment, but they do consider that if this House can go on year after year voting vast sums of money for destruction it should, at any rate, tackle the problem of agricultural depression, the provision of rural houses and the improvement of the social conditions in our villages. There are farmers in East Anglia to-day who have not the slightest idea where next week's wages are coming from or where the cheque is coming from to meet the next tithe demand. They are going out of agriculture. They are not only ceasing to employ agricultural workers, which in itself adds to the number of the unemployed, but they are themselves going out of work and will be unemployed. They are seeking other occupations. It is time the Government realised the relation of the problem of unemployment to the problem of agriculture. I know that the Prime Minister has a tremendous number of burdens to bear at the moment, but I understand that he has undertaken to devote his time to this problem. I beg of him to deal with agricultural depression, and if he can hold out some hope for the bad spots of arable cultivation in this country he will not only earn the gratitude of rural Members and their constituents, but will have gone a long way towards dealing with the problem of unemployment.
    I do not quite understand the attitude of some hon. Members above the Gangway on this matter. We have had the problem of unemployment with us for 10 years. We have had over a million unemployed
    1412
    for more than 10 years. They had their opportunity. They had a vast majority of 211 in this House, and they failed to produce any comprehensive scheme to deal with the question. The right hon. Gentleman the Leader of the Opposition is going to do me the honour in a few days' time of announcing his agricultural policy in my constituency. I can assure him that he will get a very excellent reception, because they have arranged for whippet races and all kinds of games, including the game, I suppose, of finding the wicked uncle. But he is two or three years too late. He has had his opportunity. He is going to the rural areas to tell them something about agriculture. Why did he not do it two or three years ago? I want to ask him whether he is in favour of Safeguarding the basic industry of agriculture. I hope he will give me some reply. It is time he made some of these things clear to the House and to the country. There are many voices behind him, but they are the voices of confusion. The right hon. Gentleman will have to make up his mind whether it is to be Nottingham or Fulham; he cannot have both. [HON. MEMBERS: "Yes, he can!"] At any rate, I hope he will put his foot down, as he said at Nottingham, right up to the hilt.
    These debates on unemployment have produced several bogies. There is the Treasury point, of view put forward by the right hon. Member for Epping (Mr. Churchill), there is the Lord Privy Seal's point of view, there is the overproduction and under consumption complex, there is the inherent defects in the capitalist system view, and there is the Safeguarding complex. Hon. Members who sit on the Olympian heights opposite and who sometimes criticise their own Government do so because the Government does not apply the Socialist approach to the problem of unemployment. I put it in all sincerity to those hon. Members, do they sincerely imagine that if they have another 30 or 40 hon. Members of like faith on those benches this House would proceed dispassionately and calmly to Socialism, and to Socialism in another place across the passage? I put it to the hon. Member for West Wolverhampton (Mr. W. J. Brown) who touched the root of the matter when he said that if the Labour Government cannot

    1413
    deal with the question of a particular bank it has a poor chance of dealing with a complicated system of economic production. I suggest to him that Socialism, as far as this Parliament is concerned, is out of court and that we have to deal to-day with the realness of the position. The position of the Lord Privy Seal is at least honest, if hopeless. I believe it was the right hon. Gentleman the Prime Minister who said that this Government were going to think on this subject. One Member of the Government has been thinking, and he has been compelled to resign. To-day he is outside the Government.
    The Liberal party did a little bit of thinking on this problem before the last General Election. As I listened to the speech of the hon. Member for Smethwick (Sir O. Mosley) I felt that he ought not to join his friends on the Olympian heights but the Liberal party. We succeeded in producing what is called the Yellow Book and schemes for unemployment. I believe that these schemes to-day still hold the field. The Liberal party believes that the nation's resources must be used to-day for reconstruction and reorganisation. We believe that the true path to a permanent solution of this problem of unemployment is by increasing the productive wealth of the country, by bringing about a fair distribution of the produced wealth, and increasing the consuming and producing power of the vast masses of our people. That was the Liberal policy for a great many years. Liberal policy said that when you have found work for the unemployed in this country you would see that they were employed under a fiscal system which maintains the highest real wages in the whole of Europe.
    I suggest to the Lord Privy Seal, in conclusion, that this is not the day for timid measures but the day for bold, statesmanlike and bigger measures. It seems to me that the Lord Privy Seal has descended to a kind of Minister for Defence of the Unemployment Figures. If there is to be a Minister for War in the Government, it should be a Minister for war upon poverty, unemployment and depression. I came into this parliament as a new Member, a young man and an optimist. I am still an optimist on this problem. My generation was used for destruction. I believe the nation will
    1414
    compel the use of this House for reconstruction. The Labour Government is about to celebrate its birthday. I appeal to the Prime Minister and I appeal to the party opposite. There are hon. Members who sit above these benches who have seen their party sitting in opposition for more than a decade or a generation. We do not seek the sweets of office, for which our Friends above the Gangway appear to hunger. We do not seek the rare and refreshing fruits of our Friends across the Gangway on the Olympian heights. But we do ask on behalf of the rural unemployed in this country that the second Labour Government shall make a better and bolder attempt to solve this cancer of unemployment.
    Mr. WISE: I should like, on behalf of the Committee, to offer congratulations to the hon. Member who has just spoken, for his very admirable, witty and interesting maiden speech, the more so because the hon. Member comes from my own county, and because he has spoken on a subject to which I attach great importance—agriculture. Also, because with a great deal of what he said, I think his opening sentences and his peroration, I found myself substantially in agreement. We on these benches share his views that it is quite time that unemployment was dealt with, not as a decentralised problem to be left to the tender mercies of local authorities in Suffolk and South Wales, but nationally and with far greater vision.
    We have listened this afternoon to the hon. Member for Smethwich (Sir O. Mosley) in what the Committee will agree was a very exhaustive, eloquent, and effective handling of the whole problem of unemployment. It would certainly be ungrateful on the part of those of us who sit on these benches if we did not welcome, as we do, most of the criticisms which he levelled at the Government and most of the constructive proposals that he made. So far as the former and the latter are concerned we have for many months been making these criticisms and putting forward, but not with the same vigour as he has, proposals which differed very little from those which he advocated this afternoon. We have not done it with all die valuable information of a Government Department behind us, and we hope that the undoubted impression that he has made on the Committee

    1415
    and the country this afternoon will produce its results. He sits on the slopes of the mountain, but I have no doubt that very soon he will be able to come up higher. I found myself in disagreement with him on one or two points. I share entirely his view—after all, it is a view that we constantly put forward from these benches—that it is quite time that attention was concentrated on the home market. The development of the home market is a matter that is well within the competence of the Government, and that is very little affected by those world causes to which he referred.
    I did not agree with the hon. Gentleman in his analysis or in his conclusions about the export market. I think his figures were misleading, and his conclusions therefore went astray. If I understood his argument, because rationalisation to a certain extent has increased production by 20 per cent., and diminished employment by 4 per cent., therefore an increase of the export trade by £200,000,000, because it involves a 25 per cent. increase in the export trade, diminished employment in those trades by 5 per cent. That may be true as an exercise in logic, but it leaves very important factors out of the question. If you increase the export trade by those substantial figures, you are going to increase consumption and, therefore, employment in the coal, electric power and other trades. You are also going to increase consumption in those trades which supply the need of the workers employed in those trades.
    I do not regard the hon. Gentleman's argument as sound or his conclusions as based upon the facts. I do not believe it is impossible to increase our export trade, but I cannot see any signs of hopeful action on the part of the Government in that direction. The Government have constantly said that they look to the export trade to carry the burden of our unemployment. In the opportunities that have come to them of dealing with export problems, they have shown very little signs of doing anything at all. We have had many debates on the Export Credits Act, and on the cotton trade, which, after all, is the worst of all the trades from the point of view of unemployment. It is 11 months since the Government appointed a Committee to examine the problem of the cotton trade. Still we
    1416
    are waiting for an answer, for a report or a constructive policy. When the report of that Committee is produced I should be very interested to know how many hours it has met.
    I entirely agree with the hon. Member for Smethwick that it is absolutely vital, faced as we are by this world crisis, which affects many branches of our export trade, to deal immediately with the internal situation. The raising of the school age and the extension of pensions are the immediate way of dealing with it. I do not believe that a, pension scheme which singles out just those men aged 60 or over who are prepared in the next few months to come out of industry, which leaves out of account the men already 60 or over, or already on the scrap-heap and out of industry and not yet entitled to pension, a scheme which just takes a very limited number of men and leaves men out of its benefits, is either practicable or would be accepted as just or equitable by the working class population. The moral, in the present circumstances, is to extend the pensions scheme as we on these benches have proposed, and as is embodied in "Labour and the Nation," and the rest of the programme of the party.
    I come to the speeches which have beers made from the two Front Benches. The right hon. Member for Bewdley (Mr. S. Baldwin) touched upon a point which was dealt with by the Prime Minister—the special world and other conditions which generally have shaken credit and have caused a bad world slump in trade. The right hon. Member for Bewdley sought to ride off by saying that part of the trouble arose from the uncertainty of prices on account of the duration of the coal crisis and on account of the Coal Mines Bill. If that were any real analysis of the problem, if uncertainty of price were the real cause, he certainly cannot say that it applies to the uncertainty that prevails in regard to every other raw material on which industry depends. The Prime Minister is perfectly right in saying that a world crisis almost unprecedented in its dimensions and devastating in its results afflicts every raw material, every agricultural country. He is perfectly fair in saying that that is a phenomenon which was not anticipated a year ago, but I think he is quite wrong when he seems to

    1417
    leave it at that and assumes that that is a situation which cannot be cured and for which nobody is responsible.
    The fact of the matter is, as many economists are agreed, that the temporary glut of commodities is not due to over-production. There is no more than the normal amount of wool, or wheat, or tin, or rubber, or any other commodity in the world at the moment. The trouble is the natural and necessary result of the policy of deflation, in accordance with the orthodox view of the gold standard currency theory which has been prevailing for the last four or five years. If over a period of years you deliberately restrict credit, it inevitably leads to this sort of crisis. Remember that that policy of deflation has largely been led by the Bank of England, which is still the dominating factor in international banking. But to some extent, at any rate, that policy of the Bank of England can be influenced, if not controlled, by the Government of this country.
    As a matter of fact, we are aware that the International Bank has been set up with a view to dealing with these world currency problems, but we are entitled to blame the Government that they have left that bank entirely outside the control of any public authority or Government in the world: the bankers have been left to continue, if they please, the policy which has landed the whole world, in this last year or two, in a crisis of unparalleled dimensions. If, when the statutes of the bank were under consideration at Geneva last year, the Government had been prepared to take the line that we were entitled to expect them to take, having regard to the definite views of this party in regard to the control of banking—if the Government had taken the line and had brought the operations of that bank in some way under national or international control, half Europe would have followed and it would have been done. The Government took the opposite line, and if the world situation is now as bad as it is the Government cannot get rid of their share of the responsibility.
    The Prime Minister, in dealing with world prices, went on to ask, what can we take as emergency measures to deal with the situation? I confess that when I heard that question I began to hope that a strong and vigorous policy was
    1418
    about to be outlined to us; when he talked of emergency measures I hoped that he was going to indicate that the Government was about to treat this emergency as the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) advised that the Government should treat it. But when I came down to the practical proposal I saw the possibility of direct and drastic action receding. The right hon. Gentleman talked about dealing with the Standing Orders of this House and expediting the passage of private Bills. For months we on these benches have been urging the Government to take in hand the question of Standing Orders procedure. This difficulty should have been foreseen months ago.
    The Prime Minister then referred to the slowness with which local and municipal authorities, many of them manned entirely by our political opponents, are putting into operation or producing the schemes which the Lord Privy Seal is waiting to finance. There, again, his practical proposals for dealing with the situation seemed very inadequate. It is possible that the Lord Privy Seal will go into greater details later on. But what conceivable purpose effectively and immediately will be served by convening conferences of the municipal authorities? As the hon. Member for Smethwick said, what the municipal authorities want is not more adjuration or more talk, but simply cash. They want unemployment to be treated as it ought to be treated—as a national burden, and a much larger share of it to be shouldered by the Treasury and the Chancellor of the Exchequer. Then, finally, the right hon. Gentleman touched upon the question of pensions. Here, as I gathered from a later speech by the Under-Secretary of State for Scotland, we may expect a further elaboration of the proposals of the Government. But so far as the Prime Minister was concerned I gathered that he was not prepared to go beyond some general scheme for co-ordination of the existing pension schemes, ranging from Old Age Pensions and invalidity pensions to unemployment allowances, and I suppose Health Insurance and matters of that sort.
    How long will that inquiry take? It means, inevitably, a Royal Commission. If we may judge by the speed at which

    1419
    other Committees of the Government go, we cannot expect even a report for months, perhaps a year, perhaps two years, much less effective action to deal with the immediate problem. Then the Prime Minister referred to the question of rationalisation. He expressed a view with which I agree and with which the hon. Member for Smethwick would agree—that we cannot stand aside and allow our industries to remain ill-equipped and out of date compared with the industries of other countries. But what in fact have the Government done in that connection so far? The Lord Privy Seal has assisted in the formation of this bankers' trust company in the City. The Bankers Industrial Development Company was set up under the control and direction and initiative of the Bank of England. As the hon. Member for Smethwick said, in the main problems which are affecting the staple industries, one of the chief difficulties up to the present has been the unwillingness of the banks to let go their securities. Banks are interested parties in this matter, and it will be a very slow process if we are to look to the banks to take the initiative in matters which seriously affect their own treasuries, their own pockets and their own securities.
    There is another point. It is perfectly clear that in many of the main industries such as the cotton industry nobody is able to deal with the problem without definite Government authority. There is no other authority which can provide the initiative and leadership in the cotton industry or the woollen industry or, possibly, in the iron and steel industry. To leave this Bankers Corporation to deal with the situation is, I venture to say, just to throw it on one side and to shuffle out of a responsibility which the Government must sooner or later exercise.
    I confess that the Prime Minister's speech very seriously disappointed me, and, I have no doubt, many others on these benches. The speech of the Under-Secretary of State for Scotland gave us a little hope that the Government was prepared to change its policy to some extent. Last week we took the course open to us of registering our protest against the failure of the Government to carry out their duty, as we see it, in
    1420
    regard to unemployment by abstaining from voting. We are in a greater difficulty on that matter this week. We do not want to exchange our Front Bench for the Front Bench opposite. The Front Bench opposite bad their chance and failed. We have no hope that they will succeed in dealing with this urgent problem better in the future than they did in the past.
    I am speaking in this matter for myself, and not for all of my hon. Friends on these benches. Some of them are so hopeless of getting any aggressive action from the Government that they are prepared to continue in the course which they adopted last week. I myself, and some of my hon. Friends, are not at present prepared to take that course. We will not have it said that we deprived the Prime Minister and his colleagues of the opportunity of handling this problem with all their energies and strength now that the Naval Disarmament Conference is out of the way. But I want to say this—that if the Government cannot show greater initiative and drive in handling this problem which is of vital national urgency and difficulty, if they are not prepared to do what the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) urged them to do and to come to the House with their proposals and to throw on the House the responsibility of turning down those proposals, then, as far as we are concerned, we think it is about time that they gave place to somebody else.
    Mr. CHURCHILL: I hope that whatever we may think about the many arguments which have been addressed to us to-day, neither the Government nor the Conservative party will allow themselves to be stampeded by the extremely interested arguments addressed to them from below the Gangway on both sides of the House. In this most grave question of unemployment it is of the utmost importance that we should take wise action, and it is perfectly easy to make a plausible case on any of a dozen proposals—or I might even say, if I were to run the risk of falling into Celtic figures, that a hundred possible cases might be presented, all of which sound extremely well, but which, unless they are related to the major verities and unities of the political and

    1421
    economic life of this country, will only produce more harm than good. There are four main processes by which industry might be stimulated, by which a revival in industry might be forced, or actively promoted. I am not speaking of palliatives, I am not speaking, for instance, of unemployment benefit given to persons who are out of work, nor to pensions schemes for old persons, nor indeed to the stimulation of the activities of municipalities. I only refer to the last mentioned so far as to say that, after a certain point, you will find that you are only paying the municipality 100 per cent. or 50 per cent. for doing what it was going to do anyhow.
    Leaving out palliatives altogether, there are four main processes by which a revival of industry can be stimulated. The first is the policy of a great loan. You borrow several hundred million pounds and spend it on public works which it would not pay to construct in ordinary circumstances, which will certainly not be paying or economic propositions according to the ordinary tests of life, but which, nevertheless, when constructed may some day have some considerable or important capital value to the island. This scheme is very largely associated with the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George), who made such an interesting speech to-day and to whom I shall refer in a few moments.
    The second of these processes is the manipulation of currency. If you can change the pound sterling to something different from what it is, incidentally you make all your calculations on a new basis, and you can work out a rather better set of figures when you call the pound sterling 17s. 6d. or 15s. or 12s. 6d. or even 10s. Very substantial and important changes can be made in the relationship of the various interests in the country and of the various individuals in the country to one another, by the manipulation of currency.
    Those who take that view and who study these matters with great attention are so full of affection for their theories that they think there is no problem which cannot be solved by merely gearing up or gearing down the ratio of gold to commodities. Indeed I must confess that I have been tempted in my time by the idea that if you had an archangel to manage
    1422
    these things—a perfectly trustworthy archangel pursuing these operations over a very long period of time—there might be moments when perhaps by such methods he could just lift a difficult economic situation through a peculiarly embarrassing defile. But that is not the point at the present time.
    The third process is Protection or Safeguarding, or a combination of Protection and Safeguarding, whereby a great stimulus is given to productive industries through the security of their home market. That is a process to which the hon. Gentleman opposite referred with an insistence which rather shocked almost his only friend on these benches, and it is one which, in these modern times, by affording the possibility of mass scientific production, seems to give very great advantages in the dominance of industry.
    Lastly, there is the rather prosaic and simple process of reducing the burdens upon trade and industry. We should all be in favour of that if we knew where we could get the money from. To reduce the burdens upon industry means not only reducing the tax burden on industry, which is now being heavily increased; it means also reducing other burdens, like the transport burden and the distribution burden, which press extremely heavily on industry in this country at the present time. I must avow my partiality for this policy of reduction of burdens. Whatever we may think of the controversial methods, this at any rate is one that, if we could find the money, we would all of us be glad to adopt.
    The late Government, in their de-rating scheme and in the efforts which we made not to add to the taxation of the country, were marching forward on this safe, prudent road of the reduction and mitigation of burdens upon productive industry. Not only were we doing it by the process of reducing rates, but also by the process of reducing freights, on the railways. It is a much better method to reduce freights on the railways than to have a tremendous quarrel with the railwaymen about beating down the standard of life which they have succeeded in establishing. It is far better, if you have to face this question—and undoubtedly our transport charges are much too high—to take the kind of course which we took, by giving what is a virtual

    1423
    subsidy to reduce the cost of transportation. This proved extremely beneficial, although it was applied on a very small scale, and the President of the Board of Trade and other Ministers know perfectly well that highly beneficial results were achieved, especially in South Wales and on the Clyde, by the de-freighting relief given by the late Administration.
    The whole problem is where to get the money from, and I have no hesitation in saying, at the point at which our affairs have arrived, that it is my belief that a wisely extended policy of Safeguarding or of tariffs for revenue on manufactures, particularly on the more highly finished forms of manufacture, would produce, in the easiest possible manner and with the minimum of psychological injury to the nation as a whole, a very substantial revenue; and here I speak entirely for myself. If those revenues were, in a proportion, devoted to a reduction in the transportation charges throughout this country, and if this policy of reducing transportation charges was followed up by a very strict and searching attempt to reduce the distributive charges and the immense margin which exists between the wholesale and the retail seller in this country—if that were dove, it seems to me quite possible that a very large, extended, and combined policy could be presented, which would mean a very marked expansion and stimulus to productive industry in all its forms, and need not necessarily involve the slightest injury to the consumer as such.
    10.0 p.m.
    I have indicated some of the remedies which have to be discussed, and I have indicated my own preference very clearly. Let me come to the right hon. Gentleman the Minister who is charged with the responsibility of this debate. The right hon. Gentleman started badly, because he started handicapped by all the foolish things he had said before he took office and all the vainglorious undertakings that he or his party had made, but I must admit that he was not the worst; in fact, he was one of the least bad. Most of the things of which he delivered himself were far less flagrant than those of others, and I have never myself seen the justice of his having to be the only person to suffer the blame. If the right hon.
    1424
    Gentleman started badly, I am bound to say that I think we all owe him a debt for having, once he saw he could not in any way fulfil the promises that he had made and make good the anticipations that he had created, scrapped the whole lot, with the greatest decision and resolution, and set himself to work, not to throw good money after the bad, not to follow foolish words by foolish acts, but to propound some fairly sound principles.
    First of all, he exposed quite clearly the exaggerations and fraud of the present British unemployment weekly statistics; then he made it quite clear that he would not be a party to foolish stunt plans or great sensational schemes of loans; he made it quite clear that he would not allow the process of rationalisation to be impeded, even though it added to his own difficulties; and, finally, he proclaimed—and this is the lifebelt upon which in the future he is going to get to shore off the seas of history—that the remedy for unemployment could only come through a general revival of the trade and industry of this country.
    I come to the speech of the hon. Member for Smethwick (Sir O. Mosley), a very remarkable speech and admirable in every way. It would be impossible to have given a more compendious account of the intricate matters with which he attempted to deal, but, as the speech proceeded, I asked myself one or two questions. I remembered hearing the late Lord Balfour, when he was leading the House—this is only partially attributable to the hon. Member's speech—criticising some speech and saying that there were in that speech some things that were trite and some things that were true, but that what was true was trite and what was not trite was not true. I would hardly put it as high as that, but, as the hon. Gentleman proceeded, a sort of feeling came over me, Where have I heard all this before? It seems to me that I have heard a great deal of it before; and, of course, it all comes back to the scheme of the right hon. Member for Carnarvon Boroughs, whom I am sorry I do not see in his place. It is only a variant of his scheme—perhaps a less efficient variant of his scheme. [HON. MEMBERS: "No!"] There is a certain difference, I agree. The right hon. Member for Carnarvon Boroughs said, "We can conquer unemployment,"

    1425
    and the hon. Gentleman the Member for Smethwick said, in effect, "I can conquer unemployment," but in principle they are in the same boat, or on the same platform.
    This scheme of a great loan to be spent in all sorts of public works, stimulating the construction of roads of all kinds in this already well-roaded country, this scheme and the finance attaching to it, has been examined in every aspect with extraordinary thoroughness over the last 18 months. The late Government examined it. We turned on all our machinery, and we published the result of our examination. We had the incentive to find some very captivating, large policy on unemployment with which to go to the country, but we did not yield to the temptation. When we found that the scheme did not hold water, and would not stand the intensive examination to which it was subjected within the great Departments of State, and within the organism of the Cabinet, we rejected it. We deliberately took our punishment at the General Election. We were jeered at because we were told that we had no great large scheme for curing unemployment; but by our action we saved ourselves, and the phlegm of my right hon. Friend largely assisted to save us from being in the melancholy position in which some other parties find themselves at the present time.
    The scheme of the right hon. Member for Carnarvon Boroughs and other schemes of this kind were subjected to examination by another Government. You can hardly exaggerate the differences which exist between me and the right hon. Gentleman the Chancellor of the Exchequer; it is well known that we represent entirely different points of view, but I should like to point out that his Government, when they came into power, had a still greater incentive to find an easy and captivating solution of this grim problem. They, too, had an examination of these complicated matters; they went into the whole matter with an intense desire to do the best they could, and with an intense desire to get out of their straits without doing more harm than they could, and, having examined them, they came to the conclusion that it would not be in the interests of the party to embark on the course recommended by the hon. Member for Smethwick or which was recommended
    1426
    by the right hon. Member for Carnarvon Boroughs. I cannot in the few minutes at my disposal go into any of the arguments on the merits, but I ask the Committee to consider that they must be pretty strong arguments when two Governments, so contrasted and so opposite in their point of view, with every desire to find the quickest way forward and the largest form of practical action, have both, one after the other, turned down these projects.
    I am sorry that the right hon. Gentleman the Member for Carnarvon Boroughs is not in his place. I always like to have a Member in his place when I wish to speak about him, but I cannot, for the completeness of the debate, omit a reference to the right hon. Gentleman. I was astonished at the offer which I heard him make to the Prime Minister. We have had to-day a memorable debate, and have assisted at the making, or the attempted making, of history. If I understood the right hon. Member for Carnarvon Boroughs clearly and correctly—and many Members can bear me out—it amounted to this, that he should join a committee as august, as secret, as authoritative as the Committee of Imperial Defence, that he should be given access to every secret of the Government necessary for the discharge of his work, that upon that Committee the should be in consultation with the Prime Minister and other Members of the Government to formulate a policy, or the means of carrying out his own policy, for dealing with the grave problem of unemployment. The precedents which the right hon. Gentleman adduced were perfectly valueless. I am familiar with them. It is true that the late Lord Balfour, after he had retired from all connection with party politics, was invited to joint the Committee of Imperial Defence for the study of the great questions connected with Europe and India. It is also true that on the subject of the Channel Tunnel it is customary to consult the leaders of the parties.
    How can you compare these two instances with the right hon. Member for Carnarvon Boroughs going over and sitting in council with the Prime Minister and his colleagues upon the central matter of party fighting and struggle in this country at the present time? He would not only be a colleague; he would be more than a colleague; he would be a colleague

    1427
    with none of the advantages of responsibility. When anything went right, he would say, "We put that through; it was our suggestion—Codlin's plan." If anything went wrong, he would say, "You know how difficult it is to push this old Labour party along." I am friendly with the Prime Minister, although opposed to him in many ways, and I hope that he will not mind my giving him a piece of advice. I should be very careful, if I were he, before I invited the right hon. Member for Carnarvon Boroughs to come over and take charge of the Labour Government. I am sure that, once he was there, with his great knowledge, his immense drive and his grip of every aspect of the administrative machinery of Government, the best course thereafter for the Prime Minister to adopt would be to make a bargain that he should be permitted to go and sit among the Liberal party, and no doubt he would find himself quite happy.
    I come, in conclusion, to the speech of the Prime Minister. It is quite true, as the right hon. Member for Carnarvon Boroughs has said, that the right hon. Gentleman has not gripped the crude elements of the statistics of this problem. It is no blame to him, for we know that he exhausts himself in the public service, but this unemployment business is such that it must have the first claim on his attention. We know how he has been engaged on other matters, little though I like them, which have had his wholehearted service, and it was obvious from his speech to-day that he has accepted the figures which have been given to him, by the Departments, but it is important to understand how to read them. I remember in the last Budget which I introduced we were spending £100,000,000 a year—and had done so for four years—on stimulating work in defiance of our principles and of Treasury principles, but that is the way things are done. You proclaim a principle, and then see whether you cannot get something on the other side too.
    The hon. Member for Smethwick has been rather hard on his late colleagues. I think he proclaimed a good many rather painful stable secrets when he brutally told us that there was no doubt they were actually spending no more on all this Road Fund business than their predecessors had done, doing what we were so
    1428
    much abused for doing. I am quite sure that if my right hon. Friend the late Prime Minister or I myself had, two years or 18 months ago, recited the figures which the Prime Minister went into action on this afternoon we should have been received with a howl of derision by the benches opposite.
    I think the Prime Minister would be very well advised to take the advice of the right hon. Member for Carnarvon Boroughs and devote himself to this problem of unemployment, in order that he may find every method by which it can be coped with, and also in order that ale may hold off foolish and unwise methods which would hamper the natural revival of trade in this country and aggravate the very evils they are meant to cure. I have tried to indicate a few of the means by which this evil can be approached with a view to its mitigation, and it may well be that there is no one method, that it is to be done through a partial application of many and various remedies harmoniously combined in one systematised policy. Mat may well be the case. I would not exclude anything that would help, so long as it was related harmoniously to the rest of the policy and there were no contradictions, as there often are, between one remedy and the other.
    The Committee know that all these remedies will be ineffective unless the whole scheme is clamped together by a growth and revival of public confidence. Confidence is what is needed now. There is great want of confidence. Great anxiety is felt throughout the country, real apprehension. I have never known a time when there was so much apprehension. There is a feeling that anything that is gained will be taken away, a feeling engendered by the Chancellor of the Exchequer when, in apologising to his extreme left, he had to say, "This Budget is only one dose. A succession of doses like this will enable us to extract the greater part of the capital of the country"—or words to that effect. [Interruption.] Well, a series of doses like this £50,000,000 is what he contemplated. Can you wonder there is deep anxiety? There is also a feeling, and, I must say it quite frankly, perhaps not altogether justified, that with the Socialist regime in Great Britain this island and this Empire are passing

    1429
    through a period of eclipse Which may well be converted into a period of decline.
    There is anxiety abroad, and can we wonder at it! Why should the Government complain? Where is their ground of complaint? Look at all they have said. Look at all they protest they stand for. We know they do not really stand for all that, but look at the way they have proclaimed the nationalisation of the means of production, distribution and exchange, the liquidation of the capitalist system of this country, and so forth; and there is anti-Imperialism in every form. As a matter of fact, they are carrying on in a great many ways with a good deal of sturdy vigour, but can they wonder that anxiety and lack of confidence are caused? They have no theme. The Clyde have a theme. Other parties have a theme, or are developing a theme, but the Government have no theme. They have deluded the masses of their supporters in the country into believing they are about to bring into being some vast, splendid, new world. They have climbed and ensconced themselves upon the structures of Capitalism, and they are shouting to the mob below that they are going to pull them down, while whispering to the bankers and big business that they are going to make them all the stronger. Can they wonder there is confusion and anxiety abroad in the nation; and can they wonder that the electors are showing an increasing reluctance to entrust the task of restoring confidence either to a bankrupt Government or to the eager bidder below the Gangway?
    Mr. THOMAS: I understood that the Amendment before the Committee was one for the reduction of my salary. Having listened to the debate and heard the speeches, I am somewhat in doubt as to whether an increase was being proposed and not a reduction. Whatever else emerges from this debate, there seems to be a general agreement that I have at least earned my "screw." The Committee has been treated during the last twenty minutes to another of those brilliant Parliamentary efforts of the right hon. Gentleman the Member for Epping (Mr. Churchill). Boiled down the right hon. Gentleman practically said, "Now I want to show you exactly how I can demonstrate from this side of
    1430
    the House and shatter everything I said when I was on the other side of the House." The right hon. Gentleman knows, when he accuses me or any other Member of this House of breaking election pledges, that no one in this House could have an easier task than to quote contradictions of the speech which he has just made from previous speeches made by the right hon. Gentleman when he was sitting on the other side of the House.
    Mr. CHURCHILL: Not in the same year.
    Mr. THOMAS: The right hon. Gentleman says, "Not in the same year." That is perfectly true, because he would know that he could not get his object that year, and it would not work. This afternoon the Leader of the Opposition gave as his reason for submitting this Amendment that the Committee was desirous of hearing clearly and definitely not only the reason for the resignation of my hon. Friend, but he said that the Committee was very anxious to know in the struggle that was inevitable who was likely to win. So far as I am concerned, that is exactly the question which I am anxious to put myself. It is quite true that differences were revealed clearly and definitely this afternoon, but it is equally true to say that, while the right hon. Member is anxious to know the result of the contest between my hon. Friend and his friends on the Front Bench, we and the country are equally anxious to know what is likely to be the result of the contest between Lord Beaverbrook and the right hon. Gentleman.
    The right hon. Gentleman quite clearly and definitely stated again this afternoon what was said in the debate last week, that, whatever else is proposed as a remedy for unemployment, he and his party believe that there is no remedy other than Safeguarding. [Interruption.] I am sure that the right hon. Gentleman will not disagree with me when I say that his summary of the whole position, at the conclusion of his speech, amounted to this, that there was no other remedy but Safeguarding. Last week I asked the House this question, and I repeat it to the right hon. Gentleman now. There is only one test to be applied. Are the countries which have already adopted Safeguarding free from the problem that we are suffering from to-day? [Interruption.]

    1431
    I have already given the figures of Germany, Italy and the United States—[An HON. MEMBER: "What about France?"] I am asked, what about France? In the first place, I would answer that there is no comparison between this country, dependent as it is upon an export trade, and France; and, secondly, I would ask, if France is to be used as an illustration, would hon. Gentlemen on the other side urge us to adopt the same financial policy that France has already adopted? It is no use merely quoting France as an illustration unless you are prepared to take the same risks and apply the same methods.
    I would remind the House of a statement of the right hon. Gentleman the Member for Epping in a speech which he delivered last Saturday. Speaking to a great audience, he said that we, the present Government, had encountered the worst economic blizzard in the history of the world. If that be true, what becomes of the statement that this Government is responsible for the present world position? What we have to ask ourselves is, what have we done as a Government to meet this abnormal situation? [HON. MEMBERS "What have you done?"] My hon. Friend availed himself of the Parliamentary opportunity of delivering to the House a magnificent speech, and, if I might pay him a personal tribute, it would be a tribute for having kept quite clear of personalities. I propose to deal with his speech in the same way. It is true, however, that one effect of his speech will be to prevent the asking of any further questions with regard to the publication of the memorandum, because I think be will agree that his speech this afternoon practically dealt in detail with all that was involved in it.
    Sir O. MOSLEY: Not all of it.
    Mr. THOMAS: In the main. Therefore, I want to deal shortly—because the time at my disposal will not allow me to go into them all—with the main points raised by him. What must have struck the House as amazing was that, after an hour's speech pointing out to the House that he had a clear and positive remedy that would at least provide immediate employment for 800,000 people—that is the figure he gave to the House—he said that all this could be accomplished by the
    1432
    mere expenditure of £10,000,000 a year. It is only necessary to examine these figures for a moment to see the absurdity of the suggestion. It does not require an economist, it does not require a financier, it does not require anyone above ordinary, average intelligence to see at a glance that to talk about providing employment for 800,000 people at a cost of £10,000,000 a year is grotesque and absurd. Let me also point out this fact. The difference between the hon. Gentleman and his colleagues was that, having prepared a remedy, he submitted that case, not to a biased tribunal but to colleagues who had been in the business as long as he had.
    Mr. BECKETT: What has that to do with it?
    Mr. THOMAS: I am trying to show that, if there was an opportunity of fairly dealing with that case, surely the tribunal it was submitted to would be the very first to give it a fair and impartial consideration. I go beyond it and say they did give it that consideration. I go beyond it and say on their behalf that they approached the proposal, not only with honesty and with a desire to help, but with a single-minded recognition of the fact that they themselves were as anxious to help the unemployed as he was and, if there could be any remedy suggested, they were quite prepared to face the facts and apply it. What, after all, 5s the charge made? I ask the House and the country to observe the fundamental difference. My hon. Friend said quite clearly and honestly that he refused to believe that we can ever regain our position as an exporting country. In fact he said we may as well abolish any idea of developing the export trade—[Interruption]—as a cure for unemployment.
    Let the Committee observe the situation at the moment. What would the position of any party going to Lancashire and saying to the 32 per cent. of the cotton operatives who are out of work, including 267,000 women, all those people unemployed almost entirely because of the collapse in the export market, "There is no hope for you so far as the export market is concerned." We felt that that was not the right policy. We felt that the only real permanent hope is reconstruction at home,

    1433
    re-equipment at home and rationalisation, which will make the factories more efficient, all with a view to enabling us to compete fairly and squarely and with a fair chance for the export trade in the markets of the world.
    My hon. Friend's statement that the Government have allowed the banks to take charge of the situation is simply not true. I would ask this Committee, as I have asked my hon. Friend, this question. Supposing the Government were to decide that they would undertake the responsibility of the financial reorganisation of firms, over-capitalised as many of them are, so that drastic reorganisation of that capital arrangement is essential, does any sane man assume for a moment that there would not be such political pressure that it would practically be impossible to reorganise them on a fair, equitable and businesslike basis? It does not follow for one moment that as far as we or the Government are concerned we merely assume that we are to stand idly by and allow the banks—to use my hon. Friend's own words—to reorganise industry. I agree with him that that is not the function of the banks. I agree with him that business and industry can be reorganised only by those who are primarily engaged in it and those who know most about it.
    But equally I want to say to the Committee and to my hon. Friend that it is not fair to suggest by speech that his colleagues turned down the pension scheme because they were opposed to the principle of pensions to aged workers. It is true that they turned down his particular scheme, but they turned it down because they believed, and I believe, that nothing could be so absurd and ridiculous as to assume that because of the accident of birth on a given day one person was entitled to draw from the State £1 a week and in the other case, the person who was a day late, should only draw 10s. Everyone knows perfectly well that if we attempted for one moment to apply a principle of that kind it would not be accepted.
    I now come to what was, after all, the real appeal of my hon. Friend and one which found very sympathetic consideration in many parts of this Committee. He said, "I beg the Cabinet to allocate a sum of money amounting, approximately, to £200,000,000," so that we could
    1434
    with the money allocated get on with the job. The right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) seemed to acquiesce in that policy.
    Mr. LLOYD GEORGE indicated assent.
    Mr. THOMAS: I would ask Members of the Committee, if they were running their own businesses with their own money and were dependent upon the success of their business—[An HON. MEMBER: "Or a war!"]—or a war, or running anything on business lines, would not the better plan be, not to say, "Let us go to the market and borrow the money, and then see how we are to spend it," but "Let us have the scheme."[Interruption.] There is a fundamental difference between the two. I am going to challenge anyone to show that schemes have been held up merely because of the lack of finance. The difference between my hon. Friend and myself and the Government on that point is, that it is sheer madness merely to talk of any sum of money, and after you have raised the money to set about to see how you are going to spend it. The business way is to set about finding the scheme, to examine all the proposals, to test them out in the light of practical experience and, when you have done that, to see how you are going to find the money.
    Major Sir ARCHIBALD SINCLAIR: It is time you started doing that.
    Mr. THOMAS: My hon. and gallant Friend says that it is time we started doing that. I want to know from any Member of this House where exactly the £200,000,000 is to be spent. Do you want us to build more factories? Do you want us to build more workshops I Do you want us to build more looms? Boiled down, we are forced absolutely to this one simple issue—the road programme. Can we spend £200,000,000 on a road programme? My hon. Friend meets the situation quite frankly by saying: "I believe that you can, if you will take the responsibility of a full 100 per cent." The right hon. Member for Carnarvon Boroughs seemed to agree with him. Before you make up your minds on that point, I ask you to face the fact that you cannot take the responsibility of breaking down local government in this country. If you are to pay a full 100 per

    1435
    cent., anybody can come along and say: "We will do anything." What would be the net effect of it? What would be the end of it? There would be only one end. The answer that I give to my hon. Friend is, that there has been no difference so far as finding money is concerned. The view that we hold on that matter is one that can be stated in a sentence.
    I agree absolutely with anyone who says: "Can you find any work of a useful character and of a profitable kind, in the sense that it will add to the advantage of the nation? If you can do that, it is far better to spend money on any such schemes than merely to pay money out in unemployment pay." If we are agreed on that, surely we need not quarrel as to whether the money is raised by a loan or is found in the way that we are doing now. Let the Committee observe that there have been a large number of municipal loans during the past three months, as a result of the very powers that we have conferred upon the local authorities, but I must not fail to observe that I have seen as much as 86 per cent. of them left to the underwriters. These factors must be kept in mind by any Government.
    Mr. KEDWARD: What about the Japanese loan?
    Mr. THOMAS: My hon. Friend asks: "What about the Japanese loan?" He knows perfectly well that that was a conversion loan. If he does not know it, I will remind him of the fact, and he will observe the difference between the two. When the question is asked, what have you done as compared with the late Government, my answer is this—the question was put by the right hon. Member for Carnarvon Boroughs—that in the last two years of Conservative administration £16,500,000 was the sum total granted by the Unemployment Grants Committee. Up to this afternoon the total expenditure, that is to say the total amount sanctioned, by this Government is £103,000,000. I will examine for a moment the figures and then answer the question as to what is new money. Railways, £20,000,000, that is all new money; electricity, £11,000,000 all new money; docks £7,000,000, sewerage £5,000,000, loans and development £5,000,000, water
    1436
    undertakings £4,000,000, gas undertakings £1,000,000, land reclamation £1,000,000; and all those are absolutely new money.
    What about the number of men employed. Our figures show that the £40,000,000 of this year is now becoming operative and that 115,000 people are already employed on these schemes. That is the answer to those who say that we have done nothing. The right hon. Gentleman has asked what is the new money on roads. The hon. Member for Smethwick says that there is very little difference, in fact, no difference at all, between our programme and that of the late Government. On classified roads there has been approved £33,000,000, on unclassified roads £4,000,000, and I am officially informed that out of the £33,000,000, £27,000,000 is new money. The difference between us is this, that when we sanctioned a five years programme on classified and unclassified roads we did so because municipalities under the late administration were unable to say what the position would be the next year. We consider that municipalities should be encouraged to look ahead, and that is why we sanctioned a five years programme. We talk as though our roads were the worst in the world. How many hon. Members realise that since 1920 up to the present year on the maintenance and repair of roads we have spent £515,000,000?
    Sir H. SAMUEL: How much of that is maintenance?
    Mr. THOMAS: I can get the figures separated for the right hon. Gentleman. I included the whole cost of maintenance as well—£545,000,000. But before I leave that point, let me tell the Committee something on this question of roads. I have always supported every kind of work that could legitimately be done. I sent for one who is regarded as one of the greatest authorities in this country, Sir Henry Maybury. I asked Sir Henry Maybury, when first I took office, to be my adviser. I said to him, "You can hurry up and give me any schemes you like." What the Prime Minister said this afternoon is Sir Henry Maybury's considered judgment. He was told: "Never mind any previous restrictions, treat unemployment as a paramount issue, consider nothing else, tell us exactly what roads could be undertaken under no

    1437
    difficulties of percentage but, actually on a 100 per cent. basis, taking the full and absolute responsibility." His answer is, of course, in addition to the figures I have already mentioned, £ 20,000,000 in a period of five years.
    Mr. LLOYD GEORGE indicated dissent.
    Mr. THOMAS: If there is such a thing as experts, we are entitled to consult them, and we are entitled to take their views. Now I come to two questions put by the right hon. Gentleman the Member for Carnarvon Boroughs. First, as to whether his party has been responsible for the blocking of any emergency legislation. My answer is, "No." He went on to say that he was prepared to consider any emergency legislation. I am with him. I want to recall to the Committee some important examples. There is the Charing Cross Bridge scheme, of £18,000,000. It was thrown out by a Committee upstairs. Then Swansea Dock, £3,000,000, which was also thrown out by a Committee upstairs. Hull level crossing was mentioned. The Hull Corporation thanked the Government for their generous offer, and unanimously decided that it was a good offer and accepted it. A poll of the ratepayers rejected it.
    Lieut.-Commander KENWORTHY: Will my right hon. Friend excuse me. I have listened most patiently to this about seven times, from the Prime Minister and others. The fact of the matter is that the finance was so ungenerous that the right hon. Gentleman was warned by the Labour Council that there was a danger of the ratepayers refusing. That is what happened.
    Mr. THOMAS: The corporation that negotiated with us accepted the terms, and asked me to send them to the General Manager of the North-Eastern Railway and to help to force a Bill through the House. I agreed to do it. The North-Eastern Railway drafted a Bill, and the ratepayers rejected the scheme. [An HON. MEMBER: "A Tory council!"] I am not concerned in saying whether it was the Tories or Labour, but merely in stating the facts, which are exactly as I stated. I want the right hon. Gentleman to realise the kind of powers necessary to deal with it. So far as we are concerned,
    1438
    we welcome any suggestions that can be gone into. The Prime Minister said that so far as we as a Government were concerned the co-operation would be welcomed of anyone who could contribute anything to a solution of this problem. The right hon. Member for Carnarvon Boroughs said—I am sure he had no ground for the suggestion—that he understood I was the barrier to co-operation.
    Mr. LLOYD GEORGE indicated dissent.
    Mr. THOMAS: The right hon. Gentleman said so in his speech. The OFFICIAL REPORT will show that that is so. I want to make it quite clear that my attitude from the first has been that this job is a nation's work and a nation's responsibility, and I have never for one moment felt that it was my duty to do other than invite the co-operation of anyone and everyone. Where I join issue is in making it quite clear that the responsibility must always be the Government's. I have never been one to run away from that. Therefore I say to the right hon. Gentleman, "Certainly, through the usual channels I hope there will be an opportunity for the three leaders to discuss in what way a contribution can be made to the solution of the problem. Any suggestion will be welcomed and considered, not alone on its merits, but with a genuine desire to see whether anything more can be done than is being done at this moment." That is the spirit in which we accept the suggestion made.
    In conclusion, let me strike a personal note. No one is more sorry than myself that my hon. Friend the Member for Smethwick (Sir O. Mosley) felt compelled by the dictates of conscience to take the course that he has taken. For 12 months, I Nave been battling with this job in most difficult circumstances, not living to-day and forgetting there is a morrow, not believing for one moment that the problem of unemployment is one that can be settled by temporary expedients. I never believed it and never said it, and I do not believe it to-day. But I am entitled to say this: I am up against it. It is not the first time I have been in a crisis. But the more difficult the period the harder I work and the longer I stick to the ship. The more difficult and trying the time the more I felt it was necessary

    1439
    for us all to rally together. That is the spirit in which I approached my job; that is the spirit in which I intend to continue it.
    Question put, "That a sum, not exceeding £14,684, be granted for the said Service."
    The Committee divided: Ayes, 241; Noes, 270.

    Division No. 322.]

    AYES.

    [10.58 p.m.

    Acland-Troyte, Lieut.-Colonel

    Dawson, Sir Philip

    McConnell, Sir Joseph

    Ainsworth, Lieut.-Col. Charles

    Dixey, A. C.

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

    Albery, Irving James

    Dixon, Captain Rt. Hon. Herbert

    Macquisten, F. A.

    Alexander, Sir Wm. (Glasgow, Cent'l)

    Duckworth, G. A. V.

    MacRobert, Rt. Hon. Alexander M.

    Allen, Sir J. Sandeman (Liverp'l., W.)

    Dugdale, Capt. T. L.

    Maitland, A. (Kent, Faversham)

    Allen, Lt.-Col. Sir William (Armagh)

    Eden, Captain Anthony

    Makins, Brigadier-General E.

    Allen, W. E. D. (Belfast, W.)

    Edmondson, Major A. J.

    Margesson, Captain H. D.

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

    Elliot, Major Walter E.

    Marjorlbanks, E. C.

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

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

    Mason, Colonel Glyn K.

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

    Everard, W. Lindsay

    Meller, R. J.

    Astor, Viscountess

    Falle, Sir Bertram G.

    Merriman, Sir F. Boyd

    Atkinson, C.

    Ferguson, Sir John

    Mond, Hon. Henry

    Baillie-Hamilton, Hon. Charles W.

    Fermoy, Lord

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

    Baldwin, Rt. Hon. Stanley (Bewdley)

    Fielden, E. B.

    Morden, Col. W. Grant

    Balfour, George (Hampstead)

    Fison, F. G. Clavering

    Morrison, W. s. (Glos., Cirencester)

    Balfour, Captain H. H. (I. of Thanet)

    Ford, Sir P. J.

    Muirhead, A. J.

    Balniel, Lord

    Forestier-Walker, Sir L.

    Nelson, Sir Frank

    Beamish, Rear-Admiral T. P. H.

    Frece, Sir Walter de

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

    Beaumont, M. W.

    Fremantle, Lieut.-Colonel Francis E.

    Nicholson, O. (Westminster)

    Berry, Sir George

    Galbraith, J. F. W.

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

    Betterton, Sir Henry B.

    Ganzoni, Sir John

    Nield, Rt. Hon. Sir Herbert

    Bevan, S. J. (Holborn)

    Gault, Lieut.-Col. Andrew Hamilton

    Oman, Sir Charles William C.

    Bird, Ernest Roy

    Gibson, C. G. (Pudsey & Otley)

    O'Neill, Sir H.

    Boothby, R. J. G.

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

    Ormsby-Gore, Rt. Hon. William

    Bourne, Captain Robert Croft

    Glyn, Major R. G. C.

    Peake, Capt. Osbert

    Bowater, Col. Sir T. Vansittart

    Gower, Sir Robert

    Penny, Sir George

    Bowyer, Captain Sir George E. W.

    Grace, John

    Peto, Sir Basil E. (Devon, Barnstaple)

    Boyce, H. L.

    Graham, Fergus (Cumberland, N.)

    Pilditch, Sir Philip

    Bracken, B.

    Grattan-Doyle, Sir N.

    Power, Sir John Cecil

    Braithwaite, Major A. N.

    Greaves-Lord, Sir Walter

    Pownall, Sir Assheton

    Brass, Captain Sir William

    Greene, W. P. Crawford

    Preston, Sir Walter Rueben

    Briscoe, Richard George

    Gretton, Colonel Rt. Hon. John

    Purbrick, R.

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

    Gritten, W. G. Howard

    Ramsbotham, H.

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

    Guinness, Rt. Hon. Walter E.

    Rawson, Sir Cooper

    Buchan, John

    Gunston, Captain D. W.

    Reid, David D. (County Down)

    Buckingham, Sir H.

    Hacking, Rt. Hon. Douglas H.

    Remer, John R.

    Bullock, Captain Malcolm

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

    Rentoul, Sir Gervais S.

    Burton, Colonel H. W.

    Hamilton, Sir George (Ilford)

    Reynolds, Col. Sir James

    Butler, R. A.

    Hammersley, S. S.

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

    Butt, Sir Alfred

    Hanbury, C.

    Roberts, Sir Samuel (Ecclesall)

    Cadogan, Major Hon. Edward

    Hannon, Patrick Joseph Henry

    Rodd, Rt. Hon. Sir James Rennell

    Carver, Major W. H.

    Hartington, Marquess of

    Ross, Major Ronald D.

    Castle Stewart, Earl of

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

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

    Cautley, Sir Henry S.

    Haslam, Henry C.

    Russell, Alexander West (Tynemouth)

    Cayzer, Sir C. (Chester, City)

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

    Salmon, Major I.

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

    Heneage, Lieut.-Colonel Arthur P.

    Samuel, A. M. (Surrey, Farnham)

    Cazalet, Captain Victor A.

    Herbert, Sir Dennis (Hertford)

    Samuel, Samuel (W'dsworth, Putney)

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

    Hills, Major Rt. Hon. John Waller

    Sandeman, Sir N. Stewart

    Chadwick, Capt. Sir Robert Burton

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

    Sassoon, Rt. Hon. Sir Philip A. G. D.

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

    Hope, Sir Harry (Forfar)

    Savery, S. S.

    Chamberlain, Rt. Hon. N. (Edgbaston)

    Horne, Rt. Hon. Sir Robert S.

    Shepperson, Sir Ernest Whittome

    Chapman, Sir S.

    Howard-Bury, Colonel C. K.

    Simms, Major-General J.

    Christle, J. A.

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

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

    Churchill, Rt. Hon. Winston Spencer

    Hunter-Weston, Lt.-Gen. Sir Aylmer

    Skelton, A. N.

    Cobb, Sir Cyril

    Hurd, Percy A.

    Smith, Louis W. (Sheffield, Hallam)

    Cohen, Major J. Brunel

    Hurst, Sir Gerald B.

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

    Colfox, Major William Philip

    Iveagh, Countess of

    Smith-Carington. Neville W.

    Colman, N. C. D.

    James, Lieut.-Colonel Hon. Cuthbert

    Smithers, Waldron

    Colville, Major D. J.

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

    Somerset, Thomas

    Courtauld, Major J. S.

    Kindersley, Major G. M.

    Somerville, A. A. (Windsor)

    Courthope, Colonel Sir G. L.

    King, Commodore Rt. Hon. Henry D.

    Somerville, D. G. (Willesden, East)

    Cranborne, Viscount

    Knox, Sir Alfred

    Southby, Commander A. R. J.

    Crichton-Stuart, Lord C.

    Lamb, Sir J. Q.

    Spender-Clay, Colonel H.

    Croft, Brigadier-General Sir H.

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

    Stanley, Lord (Fylde)

    Crookshank, Cpt. H. (Lindsey, Gainsbro)

    Law, Sir Alfred (Derby, High Peak)

    Stanley, Maj. Hon. O. (W'morland)

    Croom-Johnson, R. P.

    Leigh, Sir John (Clapham)

    Steel-Maitland, Rt. Hon. Sir Arthur

    Culverwell, C. T. (Bristol, West)

    Leighton, Major B. E. P.

    Stewart, W. J. (Belfast, South)

    Cunliffe-Lister, Rt. Hon. Sir Philip

    Lewis, Oswald (Colchester)

    Stuart, Hon. J. (Moray and Nairn)

    Dalkeith, Earl of

    Little, Dr. E. Graham

    Sueter, Rear-Admiral M. F.

    Dalrymple-white, Lt.-Col. Sir Godfrey

    Liewellin, Major J. J.

    Thomson, Sir F.

    Davidson, Rt. Hon. J. (Hertford)

    Locker-Lampson, Rt. Hon. Godfrey

    Titchfield, Major the Marquess of

    Davidson, Major-General Sir J. H.

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

    Todd, Capt. A. J.

    Davies, Dr. Vernon

    Long, Major Eric

    Train, J.

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

    Lymington, Viscount

    Tryon, Rt. Hon. George Clement

    Turton, Robert Hugh

    Wells, Sydney R.

    Wood, Rt. Hon. Sir Kingsley

    Vaughan-Morgan, Sir Kenyon

    Williams, Charles (Devon, Torquay)

    Worthington-Evans, Rt. Hon. Sir L.

    Wallace, Capt. D. E. (Hornsey)

    Wilson, G. H. A. (Cambridge U.)

    Wright, Brig.-Gen. W. D. (Tavist'k)

    Ward, Lieut.-Col. Sir A. Lambert

    Windsor-Clive, Lieut.-Colonel George

    Wardlaw-Milne, J. S.

    Whiterton, Rt. Hon. Earl

    TELLERS FOR THE AYES—

    Warrender, Sir Victor

    Withers, Sir John James

    Commander Sir B. Eyres-Monsell

    Waterhouse, Captain Charles

    Wolmer, Rt. Hon. Viscount

    and Major Sir George Hennessy.

    Wayland, Sir William A.

    Womersley, W. J.

    NOES.

    Adamson, Rt. Hon. W. (Fife, West)

    Graham, D. M. (Lanark, Hamilton)

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

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

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

    Mansfield, W.

    Addison, Rt. Hon. Dr. Christopher

    Grenfell, D. R. (Glamorgan)

    March, S.

    Aitchison, Rt. Hon. Craigie M.

    Griffiths, T. (Monmouth, Pontypool)

    Marcus, M.

    Alexander, Rt. Hon. A. V. (Hillsbro')

    Groves, Thomas E.

    Markham, S. F.

    Alpass, J. H.

    Grundy, Thomas W.

    Marley, J.

    Ammon, Charles George

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

    Marshall, Fred

    Angell, Norman

    Hall, G. H. (Merthyr Tydvil)

    Mathers, George

    Arnctt, John

    Hall, Capt. W. P. (Portsmouth, C.)

    Matters, L. W.

    Attlee, Clement Richard

    Hamilton, Mary Agnes (Blackburn)

    Melville, Sir James

    Ayles, Walter

    Harbison, T. J.

    Messer, Fred

    Baker, John (Wolverhampton, Bilston)

    Hardie, George D.

    Middleton, G.

    Baldwin, Oliver (Dudley)

    Hartshorn, Rt. Hon. Vernon

    Mills, J. E.

    Barnes, Alfred John

    Hastings, Dr. Somerville

    Milner, Major J.

    Barr, James

    Haycock, A. W.

    Montague, Frederick

    Batey, Joseph

    Hayday, Arthur

    Morgan Dr. H. B.

    Beckett, John (Camberwell, Peckham)

    Hayes, John Henry

    Morley, Ralph

    Bellamy, Albert

    Henderson, Right Hon. A. (Burnley)

    Morrison, Herbert (Hackney, South)

    Benn, Rt. Hon. Wedgwood

    Henderson, Arthur, Junr, (Cardiff, S.)

    Morrison, Robert C. (Tottenham, N.)

    Bennett, Captain E. N. (Cardiff, Central)

    Henderson, Thomas (Glasgow)

    Mort, D. L.

    Benson, G.

    Henderson, W. W. (Middx., Enfield)

    Moses, J. J. H.

    Bentham, Dr. Ethel

    Herriotts, J.

    Mosley, Lady C. (Stoke-on-Trent)

    Bevan, Aneurin (Ebbw Vale)

    Hirst, G. H. (York W. R. Wentworth)

    Mosley, Sir Oswald (Smethwick)

    Bondfield, Rt. Hon. Margaret

    Hirst, W. (Bradford, South)

    Muff, G.

    Bowen, J. W.

    Hoffman, P. C.

    Naylor, T. E.

    Bowerman, Rt. Hon. Charles W.

    Hollins, A.

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

    Broad, Francis Alfred

    Hopkin, Daniel

    Noel Baker, P. J.

    Bromfield, William

    Horrabin, J. F.

    Oldfield, J. R.

    Bromley, J.

    Hudson, James H. (Huddersfield)

    Oliver, George Harold (Ilkeston)

    Brooke, W.

    Isaacs, George

    Palin, John Henry

    Brothers, M.

    Jenkins, W. (Glamorgan, Neath)

    Paling, Wilfrid

    Brown, C. W. E. (Notts. Mansfield)

    John, William (Rhondda, West)

    Palmer, E. T.

    Brown, W. J. (Wolverhampton, West)

    Johnston, Thomas

    Perry, S. F.

    Burgess, F. G.

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

    Pethick-Lawrence, F. W.

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

    Jones, Morgan (Caerphilly)

    Phillips, Dr. Marion

    Buxton, Rt. Hon. Noel (Norfolk, N.)

    Jones, T. I. Mardy (Pontypridd)

    Picton-Turbervill, Edith

    Caine, Derwent Hall-

    Jowett, Rt. Hon. F. W.

    Pole, Major D. G.

    Cameron, A. G.

    Jowitt, Rt. Hon. Sir W. A.

    Potts, John S.

    Cape, Thomas

    Kelly, W. T.

    Price, M. P.

    Carter, W. (St. Pancras, S. W.)

    Kennedy, Thomas

    Quibell, D. J. K.

    Charleton, H. C.

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

    Richards, R.

    Chater, Daniel

    Kinley, J.

    Richardson, R. (Houghton-le-Sprinq)

    Church, Major A. G.

    Knight, Holford

    Riley, Ben (Dewsbury)

    Clarke, J. S.

    Lang, Gordon

    Riley, F. F. (Stockton-on-Tees)

    Cluse, W. S.

    Lansbury, Rt. Hon. George

    Ritson, J.

    Clynes, Rt. Hon. John R.

    Lathan, G.

    Roberts, Rt. Hon. F. O. (W. Bromwich)

    Cocks, Frederick Seymour.

    Law, Albert (Bolton)

    Romeril, H. G.

    Compton, Joseph

    Law, A. (Rosendale)

    Rosbotham, D. S. T.

    Cove, William G.

    Lawrence, Susan

    Rowson, Guy

    Daggar, George

    Lawson, John James

    Salter, Dr. Alfred

    Dallas, George

    Lawther, W. (Barnard Castle)

    Samuel, H. W. (Swansea, West)

    Dalton, Hugh

    Leach, W.

    Sanders, W. S.

    Davis, Rhys John (Westhoughton)

    Lee, Frank (Derby, N. E.)

    Sandham, E.

    Day, Harry

    Lee, Jennie (Lanark, Northern)

    Sawyer, G. F.

    Denman, Hon. R. D.

    Lees, J.

    Scurr, John

    Devlin, Joseph

    Lewis, T. (Southampton)

    Sexton, James

    Dickson, T.

    Lindley, Fred W.

    Shaw, Rt. Hon. Thomas (Preston)

    Dukes, C.

    Lloyd, C. Ellis

    Shepherd, Arthur Lewis

    Duncan, Charles

    Logan, David Gilbert

    Sherwood, G. H.

    Ede, James Chuter

    Longbottom, A. W.

    Shield, George William

    Edmunds, J. E.

    Longden, F.

    Shiels, Dr. Drummond

    Edwards, E. (Morpeth)

    Lovat-Fraser, J. A.

    Shillaker, J. F.

    Egan, W. H.

    Lowth, Thomas

    Shinwell, E.

    Forgan, Dr. Robert

    Lunn, William

    Short, Alfred (Wednesbury)

    Freeman, Peter

    Macdonald, Gordon (Ince)

    Simmons, C. J.

    Gardner, B. W. (West Ham, Upton)

    MacDonald, Rt. Hon. J. R. (Seaham)

    Sinkinson, George

    Gardner, J. P. (Hammersmith, N.)

    MacDonald, Malcolm (Bassetlaw)

    Sitch, Charles H.

    Gibbins, Joseph

    McElwee, A.

    Smith, Alfred (Sunderland)

    Gibson, H. M. (Lancs, Mossley)

    McEntee, V. L.

    Smith, Ben (Bermondsey, Rotherhithe)

    Gill, T. H.

    McKinlay, A.

    Smith, Frank (Nuneaton)

    Gillett, George M.

    MacLaren, Andrew

    Smith, H. B. Lees- (Keighley)

    Gossling, A. G.

    MacNeill-Weir, L.

    Smith, Rennie (Penistone)

    Gould, F.

    McShane, John James

    Smith, Tom (Pontefract)

    1442

    1443

    Smith, W. R. (Norwich)

    Toole, Joseph

    West, F. R.

    Snell, Harry

    Tout, W. J.

    Westwood, Joseph

    Snowden, Rt. Hon. Philip

    Townend, A. E.

    Whiteley, Wilfrid (Birm., Ladywood)

    Snowden, Thomas (Accrington)

    Trevelyan, Rt. Hon. Sir Charles

    Whiteley, William (Blaydon)

    Sorensen, R.

    Turner, B.

    Wilkinson, Ellen C.

    Stamford, Thomas W.

    Vaughan, D. J.

    Williams, David (Swansea, East)

    Stewart, J. (St. Rollox)

    Viant, S. P.

    Williams, Dr. J. H. (Lianelly)

    Strachey, E. J. St. Loe

    Walkden, A. G.

    Williams, T. (York, Don Valley)

    Strauss, G. R.

    Walker, J.

    Wilson, C. H. (Sheffield, Attercliffe)

    Sullivan, J.

    Wallace, H. W.

    Wilson, J. (Oldham)

    Sutton, J. E.

    Wallhead, Richard C.

    Wilson, R. J. (Jarrow)

    Taylor, R. A. (Lincoln)

    Watkins, F. C.

    Winterton, G. E. (Leicester, Loughb'gh)

    Taylor, W. B. (Norfolk, S. W.)

    Watson, W. M. (Dunfermline)

    Wise, E. F.

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

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

    Wright, W. (Ruthergien)

    Thorne, W. (West Ham, Plaistow)

    Wedgwood, Rt. Hon. Josiah

    Young, R. S. (Islington, North)

    Thurtle, Ernest

    Wellock, Wilfred

    Tillett, Ben

    Welsh, James (Paisley)

    TELLERS FOR THE NOES.—

    Tinker, John Joseph

    Welsh, James C. (Coatbridge)

    Mr. Alien Parkinson and Mr.

    Charles Edwards.

    Original Question again proposed.
    It being after Eleven of the Clock, and objection being taken to further Proceeding, the CHAIRMAN left the Chair to make his Report to the House.
    Committee report Progress; to sit again To-morrow.
    The remaining Orders were read, and postponed.

    ADJOURNMENT.
    Resolved, "That this House do now adjourn."—[Mr. T. Kennedy.]
    Adjourned accordingly at Thirteen Minutes after Eleven o'Clock.

AGRICULTURE.
  WALES.
  WALES.
  ALLOTMENTS.
  ALLOTMENTS.
TRANSPORT.
  CHEAP RAILWAY TICKETS.
  CHEAP RAILWAY TICKETS.
  BY-PASS ROADS, LONDON.
  BY-PASS ROADS, LONDON.
  TRAFFIC CONDITIONS, BLACKHEATH.
  TRAFFIC CONDITIONS, BLACKHEATH.
  WEST INDIES (SUGAR INDUSTRY).
  WEST INDIES (SUGAR INDUSTRY).
  ROYAL AIR FORCE (DISPLAYS).
  ROYAL AIR FORCE (DISPLAYS).
ROYAL NAVY.
  DOCKYARDS (EMPLOYMENT).
  DOCKYARDS (EMPLOYMENT).
  RECRUITING, NORTH-EAST COAST.
  RECRUITING, NORTH-EAST COAST.
  REGENT'S PARK.
  REGENT'S PARK.
TRADE AND COMMERCE.
  AUSTRALIA (SUBSIDIES).
  AUSTRALIA (SUBSIDIES).
  FILMS (IMPORT).
  FILMS (IMPORT).
  AIRCRAFT MANUFACTURE (AMERICAN MISSION).
  AIRCRAFT MANUFACTURE (AMERICAN MISSION).
EDUCATION.
  INSTRUCTION, ELEMENTARY SCHOOLS.
  INSTRUCTION, ELEMENTARY SCHOOLS.
  ADDITIONAL TEACHERS (AVERAGE SALARY).
  ADDITIONAL TEACHERS (AVERAGE SALARY).
  REORGANISATION (EXPENDITURE).
  REORGANISATION (EXPENDITURE).
  HADRIAN'S WALL.
  HADRIAN'S WALL.
  DANZIG AND GDYNIA.
  DANZIG AND GDYNIA.
POST OFFICE.
  TELEGRAMS (TRANSMISSION BY TELEPHONE).
  TELEGRAMS (TRANSMISSION BY TELEPHONE).
  POSTMEN (PENSIONS).
  POSTMEN (PENSIONS).
  CASH-ON-DELIVERY SERVICES.
  CASH-ON-DELIVERY SERVICES.
  AUSTRALIA (RUSSIAN CONSULAR OFFICER).
  AUSTRALIA (RUSSIAN CONSULAR OFFICER).
UNEMPLOYMENT.
  PRIVATE BILL PROCEDURE.
  PRIVATE BILL PROCEDURE.
  STOCKPORT.
  STOCKPORT.
  INCOME TAX (DIVIDENDS, RECLAIM VOUCHERS).
  INCOME TAX (DIVIDENDS, RECLAIM VOUCHERS).
  INTER-ALLIED DEBTS AND REPARATIONS.
  INTER-ALLIED DEBTS AND REPARATIONS.
  CROWN COLONIES (RUSSIAN CITIZENS).
  CROWN COLONIES (RUSSIAN CITIZENS).
Preamble
The House met at a quarter before four of the clock, The LORD CHANCELLOR on the Woolsack.

BUSINESS OF THE HOUSE.
THE MARQUESS OF SALISBURY: My Lords, I am not aware whether the noble and learned Lord the Leader of the House has taken into consideration the circumstances of to-morrow. As your Lordships are aware, a ceremony of deep interest to many of us will take place in Westminster Abbey to-morrow at half-past five, and it may be a little difficult without some re-arrangement to finish your Lordships' business to-morrow afternoon in time to enable those of us who are disposed to attend that ceremony to avail ourselves of the opportunity.
THE LORD PRESIDENT OF THE COUNCIL (LORD PARMOOR): My Lords. I quite appreciate what the noble Marquess has said. No doubt there will be many members of your Lordships' House who will wish to be present at the ceremony in the Abbey to-morrow at half-past five. We could meet to-morrow at half-past three, if that will meet your Lordships' convenience. There is an Appeal Committee to-morrow, but the judicial business will be over before that hour, since the Appeal Committee meets at three o'clock. Perhaps, therefore, I may now give notice to the House that we shall meet to-morrow at half-past three. That will give us the best opportunity of getting through our work before the ceremony in the Abbey.
THE MARQUESS OF SALISBURY: I understand that the consideration of the Commons Amendments to the Mental Treatment Bill is not likely to take very long, and therefore there will practically be only a small Second Reading and two Motions. I imagine that, if we meet at half-past three, that will be early enough.
LORD PARMOOR: I have not sufficient knowledge on that point, but at any rate it is the best that we can do.

MINISTRY OF HEALTH PROVISIONAL ORDERS CONFIRMATION (TORQUAY, WEYMOUTH AND MELCOMBE REGIS) BILL. [H.L.]
LORD MARLEY: My Lords, I beg to introduce a Bill to confirm certain Provisional Orders of the Minister of Health relating to Torquay and Weymouth and Melcombe Regis; and to move that it be read a first time.
Moved, That the Bill be now read 1a.—(Lord Marley.)
On Question, Bill read 1a, to be printed, and referred to the Examiners.

EGMONT ESTATES.
THE LORD CHANCELLOR (LORD SANKEY): My Lords, I beg to move, That leave be given to the Lord Chancellor to produce, pursuant to the request of the Honourable Mr. Justice Bennett, declarations made respectively by the Right Honourable Margaret Walpole on the 21st January, 1842, by the Right Honourable Spencer Horatio Walpole on the 24th August, 1874, and Miss Helena Honora Perceval on the 28th March, 1911, which have been deposited with the Lord Chancellor for and on behalf of the House of Lords in connection with claims to sit and vote in this House made by successive Barons of Lovel and Holland, for the assistance of the said Honourable Mr. Justice Bennett sitting as a Judge of the High Court of Justice (Chancery Division) in a matter entitled "In the matter of the Earl of Egmont's Estate and in the matter of the Settled Land Act, 1925."
As this is a technical legal question of considerable importance, great accuracy of statement is not only desirable but is necessary. I have therefore prepared a short considered opinion which, with your Lordships' permission, I will read, so that there is no possibility of mistake. I thought it right also that on such a matter I should consult my predecessor as to the practice proposed, and I have had the advantage of discussing the matter with Lord Hailsham, who permits me to say he is in agreement with the Resolution.
When a Peer takes by descent, his proper course in order to obtain his Writ is for him to make application to the Lord Chancellor and produce evidence of
1112
his right. Upon the Lord Chancellor being satisfied, the Writ is issued accordingly. There are, therefore, in the custody of the Lord Chancellor a number of documents which have been lodged from time to time by Peers upon making their claim to sit and vote in this House. These documents are in the custody of the Chancellor as Speaker of the House of Lords, to whom the House delegates the duty of issuing a Writ where he is satisfied beyond any reasonable doubt of the justice of the claim. It would not be proper for the Lord Chancellor to part with their possession in any circumstances whatever except upon the authority of the House. I am confirmed in this view by an opinion expressed by my predecessor, Lord Halsbury, in 1884, and am indebted to the Permanent Secretary of the Lord Chancellor, Sir Claud Schuster, for his researches into this matter. Sometimes it happens that, when a Peer makes a claim, evidence which is material is amongst the documents already deposited on a previous claim, and to save labour and expense this evidence on suitable occasions is placed at the disposal of the claimant. The documents, however, not infrequently may contain statements as to the family history of the Peer making the claim or of his collaterals, which would not be furnished if it were not that the claimant and his advisers were satisfied that the statements were regarded as confidential by those in whose hands they were placed.
There is now pending in the Chancery Division an action before the Honourable Mr. Justice Bennett, relating to Teal property, in which the plaintiff styles himself Earl of Egmont. The title of Egmont is an Irish Earldom, and no claim has been put forward by the present Earl to succeed to the English Barony of Lovel and Holland which is held with it, and no question arises in the Chancery action as to the right of the present claimant or any other claimant to the Peerage. I am informed by the learned Judge that it would be of assistance to the Court if there were produced to the Court certain documents deposited with my predecessors on previous claims of successive Earls of Egmont to the Barony of Lovel and Holland. I have satisfied myself that the documents contain no statement which could in any way injure the reputation or be contrary to the interest

1113
of those by or on behalf of whom they were deposited. I am further informed by the learned Judge that the effect of producing them would be to shorten the litigation and to save expense, and that he is anxious, after consideration of all the facts, to see that the plaintiff does not incur any avoidable expense in establishing his claim.
In these circumstances, the question is whether any assistance should be given by the production of these documents. It is, in the first place, clear that I can only produce them if this House authorises me to do so. In the second place, it is clear that I ought not to ask for such an authority, and, in my judgment, your Lordships ought not to grant it, if any possibility of breach of that confidence of which I have spoken would ensue. It may be said that the mere production of a document deposited in such circumstances is a breach of that confidence. I can, however, say that in this particular case the documents appear to be of such a nature that those depositing them, or those on whose behalf they were deposited, if they were alive, would not have objected to their being rendered available for the purpose indicated. They consist of three formal common form affidavits, which I hold in my hand. There remains the further question whether the action which I now ask your Lordships to take can be drawn into a precedent, so as to prejudice the position of those who in future may wish to deposit similar documents. In my view, it should not have that effect. On the contrary, those who deposit such documents will have the assurance that such a step as is now proposed will only be taken after the Lord Chancellor has satisfied himself personally in the premises and has laid the matter formally before your Lordships. I beg to move that the Motion be agreed to.
Moved, That leave be given to the Lord Chancellor to produce, pursuant to the request of the Honourable Mr. Justice Bennett, declarations made respectively by the Right Honourable Margaret Walpole on the 21st January, 1842, by the Right Honourable Spencer Horatio Walpole on the 24th August, 1874, and Miss Helena Honiara Perceval on the 28th March, 1911, which have been deposited with the Lord Chancellor for and on behalf of the House of Lords in connection
1114
with claims to sit and vote in this House made by successive Barons of Lovel and Holland, for the assistance of the said Honourable Mr. Justice Bennett sitting as a Judge of the High Court of Justice (Chancery Division) in a matter entitled "In the matter of the Earl of Egmont's Estate and in the matter of the Settled Land Act, 1925."—(The Lord Chancellor.)
VISCOUNT HAILSHAM: My Lords, the noble and learned Lord on the Woolsack was good enough to mention this matter to me, and. I desire only to say that I am satisfied that the principles which he has laid down are the right principles which ought to guide your Lordships in a matter of this kind. I think it important that they should be stated and clearly understood, so that it shall not be suggested that documents of the character in question in this Motion shall be liable to production hereafter in any circumstances which might conceivably do any harm to anybody interested in the matters referred to in them. The noble and learned Lord on the Woolsack tells your Lordships that he is satisfied that in this particular case the principles are safeguarded, and I have only to say that it seems to me that the Motion is one to which your Lordships might well agree. I am glad to have an opportunity of stating my emphatic concurrence with the principles which the Lord Chancellor has laid down.
THE LORD CHANCELLOR: My Lords, I should like to say that I am very much obliged to my predecessor, Lord Hailsham, for the assistance which he has given to me in this case.
On Question, Motion agreed to, and leave given accordingly.

MINISTRY OF HEALTH PROVISIONAL ORDERS (FYLDE WATER BOARD, OLDHAM AND ROCHDALE) BILL.
Read 2a (according to Order), and committed for to-morrow.
SEA FISHERIES PROVISIONAL ORDER BILL.
Reed 3a (according to Order), and passed.

PUBLIC EXPENDITURE.
LORD MONKSWELL LORD MONKSWELL rose to ask His Majesty's Government whether any considered plan exists for the guidance of successive Governments, laying down the limit beyond which public Expenditure cannot be increased without making resort to inflation inevitable; and to move for Papers. The noble Lord said: My Lords, in times of extreme difficulty the one quality above all others that is required of Governments is foresight. I do not know what secrets may be locked in the bosom of successive Governments of this country. They may be looking ahead and so regulating our finances that the steps they are now taking may be suited for producing the best results in the long run. I hope that it is so, but, if so, it is the most successful practical joke that has ever been played in this or, I should imagine, any other country. It amounts to a complete reversal of all pre-conceived notions, and of all the lessons of history.
I am not one of those who think the label by which the Government of the day is known matters much. All Governments are delegates from the electorate. There is little real difference between the different sets of people whom an unchanged electorate returns to power. The Government at bottom simply reflects the aspirations of the electorate. If the electorate possesses foresight, so will the Government do so; if not, not. At a rough estimate I should say that in the whole of my acquaintance there are perhaps ten people who have a rudimentary glimmering of economics, and I imagine that the experience of most of your Lordships is similar. In these circumstances the probability that any Government returned to power by the present electorate works to such a plan as I have outlined appears remote. I hope with all my heart that it does. But appearances are terribly black. It is not too much to say that appearances suggest a wild scramble in which all political Parties take part to buy votes by the lavish expenditure of public money, and that this system makes all acts of foresight impossible.
The situation, so far as can be seen, is something like this. About sixty years ago the franchise was sufficiently widened to make the votes of people with little or no capital a matter of importance, and
1116
the widening process has gone on so fast that by the beginning of the present century there was an enormous permanent majority of people in this category. Directly this fact was thoroughly realised political Parties began to vie with one another to buy votes by withdrawing money from production by means of direct taxes levied upon the richer classes, whose voting power was insufficient to afford them protection, and spending it non-reproductively in all sorts of ways calculated to appeal to the majority of the electors. Then came the War, which, besides eating up capital on its own account, enormously accelerated the process of the diversion of capital into non-reproductive channels. I am not here expressing any opinion as to whether the way in which this money was spent was good or bad; I am simply calling attention to the facts. To begin with, the money was easily come by, but as demands grew and production, to put it very mildly, failed to keep pace, direct taxes had to be raised to such a point that at the present time we are obviously approaching the limit of what is possible to raise by this means, and little if any more can be squeezed out of them.
It is worth while looking a little closer into this. Direct taxes consist principally of Death Duties, Income Tax, and Super-Tax. We shall be making a generous estimate of the length of human life if we assume that on an average an estate changes hands only once in twenty years. It is now not quite twenty years since Duties on big estates were made so high as to involve the breaking up of a large proportion of the big estates passing by death, and there are still a few left. In a few years the tax gatherers will be going over them for the second time. To suppose that in the meantime a completely new set of big estates has come into existence ready to yield duty on the same scale as those already broken up appears to be out of the question. As to Income Tax and Super-Tax, the noble Lord, Lord Arnold, not long ago informed me that for the last year in which Income Tax was 6s. in the pound the Treasury had at the end of that financial year failed to collect assessments to those two taxes combined amounting to £94,000,000. I will not detain your Lordships by examining the various considerations put forward by the noble Lord to account for

1117
this fact. I should have thought that it bore its explanation on its face.
Now, far from there being any immediate prospect of expenses going down, every political Party, in slightly different language, announces its intention of continuing to increase Expenditure; in fact, under present conditions, they one and all appear to be convinced that not to do this is equivalent to political suicide. Where is the money to come from? Quite clearly, the direct taxes will soon be unable even to continue to produce what they are producing now. Indirect taxes are practically useless for vote catching, and there is no prospect whatever that large additional sums will be collected by means of new indirect taxes. Repudiation of the National Debt? This, in theory, may be done in various ways. The American Debt could no doubt be repudiated to-morrow, but what about the repercussions of such a step What chance would there be of our debtors continuing to pay us? Repudiation of the Internal Debt without previous inflation of our currency? I do not think it need be considered. All avenues are closed except one, and that is inflation. It is inflation that is the nightmare that has induced me to bring this subject before your Lordships, and I think I am doing the Treasury no injustice if I say that I have gathered that they are at least as much terrified of inflation as I am.
I am aware that there are people who think that inflation would be a convenient means of wiping out the National Debt. Germany has done it and survived; France has done it to a somewhat less extent, and has also survived. I believe that any comparison in this respect between this country and France or Germany is completely illusory. Both France and Germany, when they are in a tight place, have the priceless advantage of an agriculture carefully nursed for many generations with the especial object of producing enough food to feed the whole of the population. We have lately heard a good deal of the influx of French people into the towns, but even now half the population live in the country, and there is probably hardly a single Frenchman or Frenchwoman who has not some near relation with a farm, to which he or she could resort at short notice and secure food in return for his or her labour. In this country this resource
1118
simply does not exist. I do not know how near chaos and civil war France and Germany went at the height of their periods of inflation. Clearly they were not very far from it, in spite of the advantages they possessed in the matter of food production.
In two words, what I am afraid of for this country is that we are rushing headlong towards inflation; that, in the circumstances in which we are placed, inflation due to unrestrained public extravagance must become progressive. Inflation will progressively raise the price and restrict the supply of imported food. When scarcity reaches a certain point food riots will break out, law and order will disappear, and there is no obvious reason why Great Britain should not perish in a welter of starvation and civil war. It is with these possibilities in mind that I invite the Government to tell us that plans exist and are consistently followed which, so far as human foresight can perceive, are calculated to render this country secure from such a fate as I have outlined. I beg to move.
LORD BANBURY OF SOUTHAM: My Lords, as I was for many years Member for the City of London may I say a few words in support of the Motion brought forward by the noble Lord. I have preached economy for many years, not only to this Government, but to every Government, and I am sorry to say that I have preached in vain. Probably many of your Lordships have read the book upon England by Mr. Page, who was American Ambassador here some few years ago. There is in that book a very important passage regarding the commerce and prosperity of England and the United States. In that passage Mr. Page says—this was written some years ago—that one of the main causes of the prosperity of England was the fact that for many years she had accumulated savings. He said that America, being a young country, had not had time to accumulate savings, but that when America had had time to accumulate savings so as to be in a somewhat similar position to this country the result would be that America would out-vie this country in prosperity and success. That seems to me to be very true. But what has happened since Mr. Page wrote that? Instead of this country continuing to save it has merely continued to spend;

1119
and saving at the present moment is almost impossible for any class of people.
Your Lordships have probably seen that in answer to a Question in another place the Government stated that where a man had at the present moment an income of £50,000 a year and paid a premium in order to meet the Death Duties on his death, the result was that the amount he had to pay in Income Tax, Super-Tax and premium came to £50,900; so that though he had nominally an income of £50,000 a year he was actually £900 out of pocket. That sort of thing cannot possibly go on. When we remember that if a man has an estate of £1,000,000 the State takes half of it at one blow, it would seem that the result must be that in a very few years there will be nothing to take from the Death Duties and very little from Income Tax and Super-Tax. It must also be remembered that in a debate on the Finance Bill in another place the Chancellor of the Exchequer said—I can hardly believe that his figures are right but as he said so I presume they are—that there are only 50,000 people in this country who pay a full Income Tax. If that is so, what are the prospects for the continuation of the money which is taken from these people? I have not the actual figures before me, but I believe I am right in saying that Income Tax, Super-Tax and Death Duties amount at the present time to something like £350,000,000 a year. I do not vouch that those are accurate figures, but I think they are something like that. That is an enormous sum and it cannot possibly go on.
We all remember the character in one of Dickens's novels—I think it was Mr. Micawber—who said: "Income, 20 s. a week; expenditure, 19 s. 6d. a week; result, happiness. Income, 20 s. a week; expenditure, 20 s. 6d. a week; result, misery." I am not making any attack upon the present Government because I am sorry to say that all Governments during the past ten years have been tarred with the same brush; but that is exactly what the Government are doing now. They are not living on their income; they are living on their capital, and what, apparently, they will not see is that there is no hole in the ground out of which you can dig money and distribute it amongst people. No doubt they are
1120
deserving people. As Mr. Lansbury said, manual labour is a troublesome thing which ought to be avoided, and no doubt they feel that. I do not doubt that I should feel it myself, but we have to face the facts.
There being no hole in the ground out of which we can dig money, where on earth will you get these large sums of money to be distributed in what are called Social Services? I do not wish to enter into any discussion as to whether these so-called Social Services and the enormous Government Departments—too big before the War but enlarged tremendously after the War, whose only object seems to be to harass the unfortunate individual—are good or bad. I simply confine myself to the fact that even if they are good we cannot afford them. There are many things which we should all like to do if we had the money, but if we are prudent people we do not do them. If we do them, the result, as the noble Lord has said, is not inflation but bankruptcy—which may possibly be more or less the same thing because the end of inflation is undoubtedly bankruptcy, or rather the repudiation of your just obligations. In those circumstances, though with very faint hopes of success, because I am certain that the present Government have no plan for economy—that is the last thing they are thinking of at the present moment—but in the hope that my few remarks may influence not only the present Government but noble Lords who usually sit on these Benches, too, some of whom are conspicuous by their absence at the moment, I beg to support the Question of the noble Lord.
LORD MARLEY: My Lords, I have to thank the noble Lord who moved the Motion for his courtesy in writing a letter to me beforehand explaining the line upon which he proposed to address your Lordships on the subject of his Motion. I tried to analyse the exact meaning of his Motion from his letter and I came to the conclusion that, perhaps, the three things he most wanted to know were, first of all, whether there was a plan for the guidance of successive Governments in Expenditure; secondly, whether it was thought that we have reached the limit of national Expenditure; and thirdly, whether any sort of inflation ideas might he expected to occur after that limit of Expenditure

1121
had been reached, if further expenditure were required.
LORD MONKSWELL: You cannot help yourself.
LORD MARLEY: I think I might reassure the House at once by saying that the Government has decided not to repudiate the National Debt. That, no doubt, will be of some interest to noble Lords.
LORD MONKSWELL: How are you going to avoid it? That is what I want to hear.
LORD MARLEY: Perhaps in the course of the very few words I propose to address to your Lordships' House I may be able to reassure the noble Lord. The noble Lord, Lord Banbury, begged for prudence in Government Expenditure. I think he was perhaps right—
LORD BANBURY OF SOUTHAM: I am sure of it.
LORD MARLEY:—especially when one looks at the record of the previous Administration in this connection. Noble Lords who were conspicuous by their absence are now conspicuous by their presence and no doubt they will read in the OFFICIAL REPORT to-morrow what the noble Lord, Lord Banbury, said about them. The Budget now before another place seems to me to be an extraordinarily straightforward one compared with the financial antics of the previous Chancellor of the Exchequer. After all, the Government have made the attempt to pay for the commitments of this country out of direct or indirect taxation, and though it is uncomfortable for all of us to have to pay additional Income Tax or Super-Tax, yet on the whole it is, perhaps, more honest and more honourable to do it that way than to attempt to pay for the cost of running the country by the means used by Mr. Churchill.
I noticed that my right hon. friend the Chancellor of the Exchequer, speaking on Mr. Churchill in another place, said:—
"Mr. Churchill's policy has always been that of the prodigal taking no thought for the morrow. I am convinced that he never expected to face the House of Commons with another Budget. He had got to the end of his resources, and if he had been Chancellor next year (1930), he would have been compelled to impose additional taxation and thus expose his defalcations."
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Those defalcations were very uncomfortable matters, like the £19,000,000 raid on the Road Fund, like the annual raid on National Health Insurance funds amounting to a diminution of national contributions in the neighbourhood of £2,800,000 a year, and the extremely unfortunate cutting down of money available for the Unemployment Insurance Fund in 1925, which, had it been continued to be paid at the rate then in force, would have ensured that the Unemployment Insurance Fund, instead of being in debt to the amount of something like £35,000,000, as it is at the present moment, would have been actually a solvent Fund to-day. The Government amount cut down was something in the neighbourhood, when taking into account Government contributions and employers and employed contributions, of £8,500,000 a year, of which the Government contributions were £5,000,000 a year. This added up during the last five years would have provided enough money to make the Fund solvent at the present time.
Then there is the extremely doubtful method of legislating to-day, and making arrangements to pay, perhaps, to-morrow. The administration of the late Government was somewhat on those lines and about £15,000,000 has to be found this year for a measure which was passed eighteen months or two years ago. The result is that my right hon. friend, the Chancellor of the Exchequer, found himself with a, deficit of £14,500,000 in the present Budget, due to that type of what I might call rather too clever financial jugglery. As a result—and it will interest noble Lords to have this fact recalled to their memory—Mr. Snowden has proposed that in future there shall be no tinkering with the Sinking Fund. To quote his words:—
"…there is one certain method by which all efforts to reduce Debt can be rendered futile, and that is by leaving Budget deficits uncovered…There is still this deficit of £14,500,000 which I have to meet somehow. I cannot disregard it…it is my intention to propose to Parliament an alteration in the law bearing on Budget deficits in general. As things stand, the Chancellor of the Exchequer of the day is under no legal obligation to propose to Parliament that a realised deficit shall be made good. I propose to alter that."
That means that in future we shall have a position arising under which deficits in

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the Sinking Fund must be made good under the law of the country. I think that fact alone is to some extent a measure of prudence and foresight in legislation, and I hope it will meet with the approval of the noble Lord.
There was the question of the meaning of the Expenditure of the country and the noble Lord divided Expenditure into reproductive and non-reproductive Expenditure. I might, perhaps, suggest that a better division would be reproductive Expenditure, what I would venture to call transferred Expenditure, and non-reproductive Expenditure. In reproductive Expenditure I would put services which add to the physical and mental development of our country and its people.
LORD MONKSWELL: I thought you would say that.
LORD MARLEY: I am sure the noble Lord would have been sorry if I had not said that. So, in reproductive Expenditure, I put services such as education, health, housing, agriculture and matters of that type. Then, in transferred Expenditure, I venture to put such things as the Debt services of the country—the Internal Debt services of the country, not Foreign Debt services—old age pensions, and widows pensions, which are merely a transfer of money from the pockets of some into the pockets of others, and it is a system which, personally, I should like to see carried very much further. The Debt services, in point of fact, I believe, do not make such a great difference as is generally thought, because I believe that the payers of taxes which go to pay the interest on the National Debt very largely receive back that money as dividends on their holdings of Government loans. It is an interesting fact—and this will bear out perhaps what the noble Lord, Lord Monkswell, said—that owing to the deflationary policy, not deliberately perhaps but certainly pursued during the last seven or eight years, the proportion of the National Expenditure, of which the National Debt services form a ratio, has been constantly increasing. That is to say, whereas something like eight years ago the National Debt services were only about 25 per cent. of our total Expenditure, the average during the last four years has been in the neighbourhood of 44 or 45 per cent. That
1124
is a sort of fixed sum which cannot be altered, but as the price level falls it bears a larger ratio to our total Expenditure.
Then the third category that I wanted to put forward was what I call the exhaustive category—that is services like the Foreign Debt, the United States Debt, and Defence Services, which now amount to £110,000,000 a year. I suppose the less said about our Foreign Debt settlement the better. It was an extremely unfortunate episode, not at all in the interests of the taxpayers of this country. It was settled on a basis far worse than the similar Debt of France and Italy was settled, and what made the matter far worse was that our settlements of the French and Italian Debts were worse from the taxpayers' point of view than the United States settlement. That is a fact which cannot be lost sight of, and will not be lost sight of, by the taxpayers of this country.
The next point I want to deal with very briefly is the question of whether the limits of the national taxation have been reached. I would remind your Lordships of an extremely interesting Report of a Committee presided over by the noble Lord, Lord Colwyn, on taxation, in which it was pointed out that the proportion of income paid in taxes by the poorest people in this country was considerably higher than the proportion of their income paid in taxes by those possessing a considerably larger income. Let me give the figures. That Committee pointed out that a family with an income of £100 a year paid approximately 12 per cent. of that income in taxation. A family with an income of £500 a year paid only 6 per cent. of that income in taxes. A family with an income of £1,000 a year paid 11 per cent., that is less than the percentage paid by the poorest family, by the £2 a week man. Then, when you get to an income of £2,000, the percentage is 15 per cent. and it goes up to as high as 50 per cent. or more in the case of the largest incomes. It might be as well to remember that while the taxes are very high yet the sum left is still a sufficient one to eke out a precarious existence.
I should very much like to go into the figures quoted by the noble Lord, Lord Banbury, when he instanced the case of the unfortunate man who has £50,000 a

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year but whose taxes and insurances amount to £50,900 leaving him minus £900 to live on. I feel extremely sorry for that unfortunate man, but I have noticed that most people are very pleased to pay as high taxes as possible because, after all, the higher the tax one pays the higher is the income from which the tax is paid. There is no doubt that the policy pursued by the Conservative Government during its four years of office has increased the burden on the poorest people by increasing the amount of indirect taxation. It is quite clear that it is the policy of the present Government to alter, as far as is in their power, that ratio of indirect taxation. Then there is a possibility that we may get a little money by preventing tax evasion.
LORD BANBURY OF SOUTHAM: I am sorry to interrupt the noble Lord, but may I ask, if a man does not smoke or drink and his income is under £200 a year what tax does he pay? He is much better off if he does neither.
LORD MARLEY: If he does not drink or smoke he does not pay any taxes.
Several NOBLE LORDS: Hear, hear.
LORD MARLEY: But his fellow-taxpayers pay more. What I have given is the average.
LORD BANBURY OF SOUTHAM: It is a voluntary payment.
Loan MARLEY: Voluntary or involuntary, it is a tax on the people with incomes of £100 a year. I am not giving my figures. I am giving the figures of the Committee presided over by Lord Colwyn.
LORD BANBURY OF SOUTHAM: If it is voluntary surely it is not taxation.
LORD MARLEY: The point is that if two persons are liable to taxes and one does not drink or smoke and the other does, and the average of the tax is so much, then the one is paying twice as much as the other. I think that must be clear.
VISCOUNT BRENTFORD: He would if he drinks twice as much.
LORD MARLEY: It is the average. To go back to the question of tax avoidance, the Board of Inland Revenue has had to take cognisance of the fact that there is a certain amount of tax avoidance by
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people living abroad. I understand the position is that anybody who lives abroad for under three months of the year avoids paying Income Tax and Surtax in this country.
VISCOUNT BRENTFORD: Not under three months.
LORD MARLEY: I beg pardon. I should have said more than six months. I am told on reliable authority that there are people who watch their diaries very carefully and on the last day of the period when they would become liable they hurry abroad again. I do not know that there is much to be gained from that source. There is also the question of the conversion of estates into private companies. While that is perfectly within the law, yet it is liable to misunderstanding and objection and the Chancellor of the Exchequer proposes legislation to prevent avoidance of Estate Duties on landed estates and investments through the medium of private companies.
Then there is another source from which we may be able to get a considerably greater return from existing taxation. I refer to the possibility of inducing investments in industry in this country, and particularly in the export industries, instead of the money which is available being used for investments abroad. Mr. McKenna told us, in a recent monthly statement from the Midland Bank, that approximately £150,000,000 is now being invested abroad each year. It is the aim of His Majesty's Government that some of that money should be invested in this country in industries largely export in character, so that instead of exporting capital we should export goods made by British workers in this country. An example of that is the Government's Coal Mines Bill, by which we hoped that the industry would be put upon such a prosperous basis that money would be available from the British investor for the coal mining industry to enable the coal mining industry to reorganise itself and so increase its exports abroad instead of exports of capital.
LORD BANBURY OF SOUTHAM: If I had any money to invest I would not put it in a coal mine if the Bill passes.
LORD MARLEY: Well, that is an interesting proposition with which everyone may not be agreed. But the mutilated

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body of that Coal Mines Bill which your Lordships have nearly smothered—
LORD BANBURY OF SOUTHAM: How?
LORD MARLEY: It has been pointed out again and again that there are provisions which the Government consider are of essential importance which were deleted by your Lordships. I am not attacking anybody.
EARL PEEL: Then why are you saying it was mutilated?
LORD MARLEY: It was mutilated.
EARL PEEL: The Amendments were inserted by the opinion of a majority in the House.
LORD MARLEY: It is the opinion of the minority in this House and of the majority in another place that the Bill has been mutilated.
EARL PEEL: That is not what you said.
LORD MARLEY: That is what I say now. It is perfectly clear that the Bill has been mutilated. Finally, I want to remind your Lordships that owing to tax reduction during recent years and owing to the fall in the price level those who have comfortable incomes are considerably better off. I believe it to be a fact that a man with a gross income of £10,000 a year is twice as well off to-day as he was eight years ago.
Several NOBLE LORDS: No.
LORD MARLEY: That is an absolute economic fact susceptible of clear proof. By that I mean that the money available for spending after taxation will buy twice as much to-day as it would have done at the time of the highest inflation period in this country. It will buy twice as much. I believe that to be absolutely susceptible of clear proof. In this connection we have the fact that the yield from taxes has kept up very well. The number of Surtax payers remains constant. The yield from Estate Duties, from Surtax and from the principal sources of taxation remains constant, so that I would suggest that we have not yet arrived at the period when no further taxation is possible, although, fortunately for the peace of mind of noble Lords opposite, we have the
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assurance of the Chancellor of the Exchequer that he believes that no new taxation will be necessary next year.
THE MARQUESS OF SALISBURY: He said that he would not impose any new taxation. That is rather a different proposition.
LORD MARLEY: It is a different proposition; I stand corrected. I gather that the noble Marquess suggests that he said that he hoped that it would not be necessary.
VISCOUNT BERTIE OF THAME: Unless there were unforeseen circumstances.
LORD MARLEY: Unless there were unforeseen circumstances. I am not prepared to say whether there will be unforeseen circumstances or not. That is in the laps of the gods and, for all I know, may be decided to-day in another place. Finally, may I deal for one moment with the question of inflation? I do not quite know whether the noble Lord suggested that inflation was a disease or a medicine.
LORD MONKSWELL: A disease.
LORD MARLEY: As a medicine, of course, it is a possible form of taxation but, on the whole, an undesirable one. I do suggest, however, that the alternative to inflation—namely, the deflationary policy of recent years—has been at least a serious contributory cause of unemployment. I am not going to suggest that this is the deliberate policy of any Government. I believe that it was partly due to a world-shortage of gold. I am told that the world needs an average increase in the gold supply of about 3 per cent. per annum, and I am told that there has been an actual decrease in the amount of gold available. That has resulted in a falling price level and a gradual deflation throughout the world which has at least been partially responsible for the world-wide unemployment problem that is now facing this and other countries. I suggest that this danger of food riots and starvation is not a real one. A well known Socialist writer on this subject, in putting forward that proposition, said:—
"Our capitalist community, unable to support itself with its own hands, will fall back on horse, dogs, cats, rats, blackberries, mushrooms and cannibalism."

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I hope on the whole that we shall be able to avoid these dangers, and that noble Lords will be able to reassure themselves on that matter.
LORD JOICEY: My Lords, the matter that the noble Lord has brought forward in this Question is a very important one so far as this country is concerned. I do not think that either he or my noble friend Lord Banbury will get very much comfort from the reply that has been given by the noble Lord. I think we ought to realise the feeling that exists amongst all commercial people. Depend upon it, the opinion of large commercial concerns and their leaders in this country is a very important one so far as finance is concerned. If you read the speeches delivered at their various meetings, whether of banks or of any other commercial concern, I think you will be satisfied that there is a real and general anxiety with regard to our Expenditure and our financial position. We are undoubtedly drifting into a very serious disaster, and the misfortune is that those who control the taxation and Expenditure of the country do not seem to realise it.
I notice that the noble Lord who has just spoken stated that there was very little doubt that the yield from taxes was increasing. But how long is that going to go on? Death Duties, as we all know, are drawn chiefly from capital and we are spending our capital as if it were revenue. Everybody knows that, when that is done, you affect the income from that capital. There are many other ways in which capital is being expended and treated as revenue. The Chancellor of the Exchequer made a statement the other day that taxation did not affect the industries of the country. Any Chancellor of the Exchequer who snakes a statement of that kind shows clearly that he does not altogether understand the question. If you look at the various large industries that have been accustomed to pay very large sums in Income Tax, such as the coal industry, iron and steel, shipbuilding and ship-owning, most of them, even last year, contributed considerable sums in Income Tax owing to the system of averaging. These large sums are disappearing, and I feel quite sure that we may in the future find that the Revenue upon which Mr. Snowden is depending will not be realised.
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If you take away capital which pro duces revenue, depend upon it you must, affect that revenue, and I think that the Government—and I do not speak only of this Government but of all the Governments that have controlled our Expenditure and taxation—do not yet seem to realise the serious position that we are in. When you consider that there are only 60,000 people who pay these enormous sums in Income Tax and Super Tax, you will find that a large proportion of it has been paid by those industries which at the present moment are practically making nothing, or even losing. I hope that the Government, and in particular the Chancellor of the Exchequer, will give serious thought to the Question that has been so ably brought forward by Lord Monkswell and supported by Lord Banbury. Depend upon it, there is great anxiety among the great financiers of the country that we are drifting into a very serious position.
LORD CUSHENDUN: My Lords, when I came into your Lordship s' House this afternoon nothing was further from my intention than to take ally part in this debate. I read the Question standing in the name of my noble friend Lord Monkswell, and it did not suggest itself to me as a subject in which I should feel called upon to take any part. I should not have done so, but for one or two observations that fell from the noble Lord who spoke for the Government. I followed his speech as closely as I could. My difficulty was to make out where it was relevant to Lord Monkswell's Question. He went into a number of interesting financial matters and laid down certain propositions, but they did not seem to me to have any relation what ever to Lord Monkswell's Question, which asks
"whether any considered plan exists for the guidance of successive Governments, laying down the limit beyond which public expenditure cannot be increased without making resort to inflation inevitable."
The noble Lord has not given any reply, or any attempt at reply, to that Question. It would be a matter of very great interest to hear what the Government had to say in answer to it.
Instead of that, the noble Lord spread himself pretty continuously over the whole financial position, and thought it necessary to make a rather pronounced attack upon the finance of his predecessors. As

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I had the honour of being at the Treasury with my right hon. friend, Mr. Churchill, I feel inclined to say something in repudiation of what has fallen from, the noble Lord. Of course, a matter of this sort is one with which one cannot possibly deal at all fully without preparation of some sort. As I have already explained, I have made no preparation whatever. It is some time since I studied any of the materials which one would have to study to prepare a speech of this sort, and I can only speak from recollection, but I utterly repudiate the language used by the noble Lord with reference to my right hon. friend.
One of his expressions was "Mr. Churchill's financial antics," and then he went on to give one or two illustrations of What he considered to have been "antics." Of course, we had a re-hash of the old accusation about the Road Fund. The raid on the Road Fund was a catch-word on the Benches opposite before and at the last Election. I do not believe that any sober and instructed opinion in this country has at any time regarded what was called the raid on the Road Fund as any improper dealing with the financial situation. After all, let me remind your Lordships what the Road Fund is. To whom did the Road Fund belong? We had accusations of theft. I think the expression was used occasionally, that my right hon friend, Mr. Churchill, had robbed the Road Fund, and that he had committed theft. The Road Fund belonged to the taxpayers of this country. The Road Fund was a Fund with a very large amount standing to the credit of the taxpayers. It had been raised by taxation, and it would have been absurd, in the financial position which obtained two years ago, to have allowed that enormous sum to run on, which could not be used within any immediate future for the benefit of the roads of this country. It would have been absurd not to have used it for the benefit of the taxpayers, as Mr. Churchill did use it.
Then the noble Lord instanced the dealings with the Insurance Fund. Again he brought forward that example to show that Mr. Churchill had dealt with the finances of the country in a hand-to-mouth way and without looking forward to see what was going to happen in the future. As a matter of fact, exactly the contrary is the case with regard to the
1132
Insurance Fund. Mr. Churchill, at the time when he was preparing his last Budget, was fortunate enough to be able to forecast a very considerable decrease in unemployment in this country, and he had only to deal actuarially with the Insurance Fund to determine at what figure of unemployment the Insurance Fund would be paying its way. Unemployment was then falling very rapidly, and there was every hope, which probably would have been realised but for the result of the Election, that unemployment would decrease rapidly in the course of the following year, with the result that the Insurance Fund would be paying its way. As a matter of fact, it was no responsibility of Mr. Churchill's that that did not take place. It was the policy of the noble Lord and his friends, and not that of Mr. Churchill and his friends, that has added 600,000 or 700,000 to the number of the unemployed. That was entirely due to the policy of noble Lords opposite. Therefore, when the noble Lord, in his irrelevant answer to Lord Monkswell, chooses to make this attack upon the finance of Mr. Churchill, I think I am justified as an old colleague of Mr. Churchill in asking leave to repudiate the noble Lord's language and meaning.
The noble Lord expressed in very truthful language what is the policy of the present Government, not in relation to the Question put upon the Paper, but generally. He expressed the policy of the present Government as transferring money from the pockets of some to the pockets of others. That is a very euphemistic way of expressing a policy which might be very much more succinctly described. The noble Lord then reminded us of some findings of the Colwyn Committee. These, again, had no bearing upon the Question addressed to him, but nevertheless were of some interest. The findings which he quoted from the Colwyn Committee's Report I and others have sometimes thought were very good examples of the findings of theoretical financiers in giving an academic opinion.
The noble Lord quoted the statement that the man with £100 or £200 a year paid so much percentage in taxes, and that the man with a larger income paid so much less percentage, and so on. Viewing the matter practically, that is sheer nonsense. How can you tell what

1133
any man or any individual on the average would pay in taxes on a certain income, when his taxable capacity depends entirely, or almost entirely, upon indirect taxation? A man with £100 a year may not need to pay any taxes at all, and a great many of them do not, and therefore to talk about an average is, with great respect to the noble Lord, really absurd, and it is absurd to draw inferences from it, as the Colwyn Committee did. It is quite true that a man with a small income may, if he so chooses, by using dutiable commodities, pay a large part of his income in taxation. It may well be that a man with a much larger income, although he uses dutiable commodities, pays a lower percentage in taxation, but that is not really practical politics, and it has no bearing whatever upon the subject which your Lordships are now discussing.
There was one other statement made by the noble Lord which I do not venture without examination to contradict directly, but which I must say surprised me very much, and about which I am very sceptical. He said that the result of the finance of the last Government was to increase the amount of indirect taxation. I think if the noble Lord will examine the figures again he will find that it is not so. If you take in the Betting Tax as being indirect taxation, it may be that with that tax included his statement would be correct, but considering the amount of reduction which the late Government effected in indirect taxation, through the increase of Imperial Preference and in other ways, too, although it is quite true that the proportion as between direct and indirect taxation may have been altered, and I think was altered, by the late Government, I do not think it is correct to say that the amount of indirect taxation was positively increased by their operations.
The noble Lord finished by quoting an assurance of the Chancellor of the Exchequer—I am not sure whether it was an assurance or merely an expression of opinion—that next year he would not be obliged to put on new taxation. I do not know, as I say, whether that was an assurance or not. If it was an assurance it is not an assurance to which I, at any rate, would attach very much importance. We have had so many assurances, not only from the Chancellor of the Exchequer,
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but from the Government of which he is a distinguished member—assurances which have never been borne out by the facts—that I do not think we need take much comfort to ourselves from any assurance given by the Chancellor of the Exchequer with regard to future taxation; and in any case, even if we could rely upon that, it would not supply us with any intelligible answer to the Motion of the noble Lord.
LORD MELCHETT: My Lords, I think that a few words should be said on one aspect of the case which the noble Lord opposite raised, because in his speech he betrayed that curious muddle-mindedness on financial matters which seems to afflict the present Government in a most extraordinary degree, and which, if continued, is bound to ruin this country. In one part of his speech he announced that the policy of the Government was to transfer money from those who are better off to those who have less; I will not say from the more industrious to the less industrious, or from the more deserving to the less deserving, but he announced that as a policy. Carried far enough, that is the doctrine of Mr. Lenin, which has been carried out so successfully in Russia. And it is, after all, only a question of degree, for when taxation reaches a certain point the difference left is so small a margin that it really does not matter very much whether you take the capital and transfer it to the State, or take so much of the income that there is nothing left. That is a mere matter of machinery. But then the noble Lord went on to say, curiously enough, that the Government were exercised about the export of capital, which, I was surprised to hear him say as a Free Trader, was sent abroad in the form of money. I always understood it was sent in goods.
LORD MARLEY: I said it was invested abroad.
LORD MELCHETT: Investments abroad, I have always been taught, are paid in goods. It is the only economic method by which they can be paid for. Then, carry that a step further. The noble Lord does not seem to realise that the penal taxation of the present Government is forcing all of us to invest abroad, and is making it impossible to find people who will invest money in industries in this country. That

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is taking place on an enormous scale, and is growing, and will grow. The reason is obvious. After all, money invested abroad is not likely to be subject to the predatory operations of a Party which wishes to transfer it—finally, I take it, the whole of it—to the pockets of somebody else. I have been informed by people in the City whose opinion is of great weight that people are now beginning to transfer their property abroad, simply because they no longer think it is safe in this country, quite regardless of whether they get any income from it or not, so that there may be something they may be sure of having. That is not a vague fear but quite a serious statement. People are leaving this country; in fact, you are producing a flight from the pound, just as at one time there was a flight from the mark.
You may say: "If people do not appreciate this heavy taxation, if people who are well off do not care to cut down their standard of living to a much lower standard, and prefer to live in other countries where their money is invested and they are able to enjoy a standard of living to which they are more or less used, they are bad citizens—let them go." But do not at the same time imagine that you are going to encourage people to invest money in industry here, or that you are going to increase the exports of this country, or help the unemployment problem, which is weighing so heavily upon your minds. You cannot confine capital unless you confiscate it. You cannot prevent anybody selling English securities and buying Swiss, French or American securities, and leaving his money in some obscure place by some obscure methods which it is very difficult for even the Inland Revenue authorities to find out, whereby he is enabled to have a decent dinner from time to time.
So you are producing among citizens who have contributed to the revenues of this country the spirit of a tax strike, and that is a spirit that is daily growing. It is no use for noble Lords opposite to think that they can entirely ignore the expressed views of the chairmen of banks and big industrial enterprises in this country, to say that these people do not know what they are talking about, and that either Committees or Treasury officials are infinitely better guides in these matters than those who have to
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bear the burden of industry. I am not saying that as something new. I have protested against our financial policy ever since the War. We have pursued a crazy policy of deflation, a foolish policy of reduction of Debt at a time when we could not afford it. We depressed our industries, ruined our export trade, and had chronic unemployment. That is a financial picture of this country which people hold up as an example to other nations, who, whatever their financial methods have been, all seem to have been more successful than we have been. You cannot get away from the facts, and I am glad to hear that the policy of deflation, at any rate, is no longer going to be pressed as it has been.
But the policy of over-taxation is worse. There is nothing new in all this. If the noble Lord will examine the history of Empires, particularly the fall of the Roman Empire, he will see that over-taxation has been a more potent cause of the ruin of countries than any other single cause you can name. And the reason is obvious. If you make a citizen feel that it is not worth while to continue to make efforts because it is probable that the result of his efforts is taken by the tax-gatherer, he ceases to make the effort. And, after all, it is on the efforts of the citizens that you depend —and in "citizen" I include those who direct finance and industry, without whose energy, brains, and enterprise no industry would be carried on or established. And if those people begin to feel that the amount of taxation they have to pay is in excess of what can reasonably be demanded you are bound to see a decline. That is the verge on which you are standing.
After all, who are the people who have put the money into new industries? The same people whose money is to be taken away apparently, and given to people who will not put money into industry. The dissipation of wealth is very much like the dissipation of a head of water in a waterfall. If you have a hydroelectric scheme and a good head of water, you get, relatively cheaply, a good lot of power; but if that water is spread out into a shallow expanse on the level you get no power at all. It is a degradation of energy. And that is the danger of the theory of the dissipation of wealth. There may be evils in the concentration of

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wealth in a few hands, but in industrial communities there is an enormous advantage for all in that because enterprise is supported by small groups of people who have the money to put down themselves, who do not go to anybody else for it, and who are prepared, if necessary, to lose it if the risk is worth while.
And let the noble Lord ask himself this question: What rate of remuneration would he require on some new capital enterprise the result of which was in doubt if 12 s. 6d. in the pound, should he make a profit, has to be returned to the Treasury, and he only retains 7s. 6d. in the pound of the profits, whereas he may lose the whole of his capital? If he will make that calculation he will see that the return which is required is something so big that you cannot find industries that will yield it. And the result is a growing disinclination to go into new ventures. That is natural. Financiers point out that it is absurd to run these risks because the financial reward cannot possibly be in any way commensurate with the risks which you run. It is a question of heads you lose, tails you lose. And that is one of the dangers which seems not to be apprehended by those who seem to think that it does not matter how much you take away from people who have an income or a capital of a certain size. It does matter. It is not that they cannot still have a grill somewhere and still buy some clothes and still manage to live. That is not the point. It is that the dynamic force which these people represent in every industrial State is broken, and unless you substitute another for it nothing will happen. Speaking seriously, surely it would be much better to proceed to bring about pure nationalisation or the Socialistic State because there would be some big people who would have the financial ability to go on and do something. What you are doing is to bring about financial paralysis, and that is a very serious thing. That, with uncertainty, despair and despondency, is a picture of industry in the City of London at the present day.
The noble Lord talks gaily about the Coal Mines Bill. I should like to hand over to him the task I have had of trying to raise on first-rate debentures some money for collieries at the present time. I assure him that the Coal Mines Bill is the one thing which has killed the
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chance of my ever doing so. If the noble Lord opposite thinks that the Bill is a bull point I should like to take him with me to some underwriters in the City and get their views as to whether they think it is a bull point. It is not a bull point; it is a bear point. For noble Lords to come and tell your, Lordships that a Bill which proposes to increase the cost and practically destroy the profits of the coal industry is a splendid advertisement with which to go to underwriters and the public in order to get an investment in collieries—
LORD MARLEY: It has been difficult to raise money for the coal industry during the last four years; indeed, long before the Coal Mines Bill was thought of.
LORD MELOHETT: It has been very difficult.
LORD MARLEY: The point is that the Coal Mines Bill was brought in in order to put the coal industry on a better basis financially so that money could be raised for the industry.
LORD MELCHETT: The noble Lord seems to me to forget that by the shortening of hours, which has nothing to do with the reorganisation of the coal industry, you will so deprive the industry of profits that, however you reorganise it, it will be worse —
LORD MARLEY: The shortening of hours has nothing to do with the necessity for the reorganisation of the coal industry. That was made clear by an article in The Times.
LORD MELCHETT: The noble Lord was talking about the Coal Mines Bill. If he will take the hours clause out of the Bill he might be right. Is he prepared to do it? Is he prepared to give us even the small Amendment we have asked for?
LORD MARLEY: The Party is not prepared to take the hours clause out, but we are prepared to say that the Bill as originally introduced would have put the industry on a sound financial basis, including the hours.
LORD MELCHETT: The noble Lord knows very little about the coal industry and still less about its financial side. I am giving him not theory but practice. I am inviting him to put those arguments forward in the City to see what answer he will get. It seems to me to be terrible

1139
that the industry of this country is subject to government by people who seem to live entirely in vacuo, who are entirely out of touch with reality either in industry or finance. It is appalling and it is really the most serious thing which we have in front of us. I do not meet one leader of industry, I do not care what industry it is—and I meet dozens of them every day—who does not share the views I am expressing. If noble Lords opposite and their Party really wish to do something serious for this country surely it would be much better for them to consult from time to time some of us who have the interests of the country as much at heart as they have, and who have the advantage of long and trained industrial and financial experience.
Surely, that would lead away from some of these entirely theoretical points and arguments which you always hear advanced; for instance, that heavy direct taxation does not affect industry. I have heard that for years and it is entirely incorrect, as I have pointed out on previous occasions. If, in a limited company, you have very heavy Income Tax, obviously two things can happen; either the amount which you put to reserve is diminished or the amount of the dividend has to be diminished. If you diminish the amount you put to reserve the company suffers in future in regard to renewals of plant and so on. If, on the other hand, you diminish your dividend too much your shares go down and your chances of raising future capital are seriously impeded, if not made impossible. That is a very serious position for a progressive enterprise. All these are theoretical doctrines which I had to read when I was a member of a Government. Probably the same gentlemen hand them out to the present Government to-day—I disagreed with them just as intensely then as I do today—but they never see the point. They say that it does not matter in the least; it is all passed on to the shareholders. That is not true. It is not all passed on to the shareholders. That is why this particular form of taxation, of very heavy Income Tax with no reference paid at all to the actual position, is seriously jeopardising the stability of industry to-day. It is true that these are old points, but they are none the less true for being old, and they really cannot be passed by or
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glossed over with the facile assurances of good intentions which the noble Lord has given us.
I do not admire the present Budget. It is one of the most injurious and worst Budgets the world has ever seen. It imposes heavy taxation in this and that direction without any idea of the economic consequences, and seems to be based on the idea, "I am paying my way, blank the consequences." That is not finance. It is not statesmanship. I agree as little with the idea that it is a good thing to say by law what is to happen to deficits in Budgets. After all, surpluses in Budgets automatically go to Sinking Fund. If you occasionally have a deficit why should it not be allowed to be taken in balance against your surplus of other years? These pedantic methods of dealing with these things are to my mind hampering and choking enterprise and creating difficulties. Besides Mr. Snowden, virtuous as he is, is not paying the deficit off in one year. He is spreading it over three years. So that he is not meeting his obligations in quite the open-handed manner which was referred to by the noble Lord, Lord Marley.
He is also incurring further obligations. The Government are engaged to bring in a new Bill to raise the school age. It is the disadvantage of most of those schemes that their full financial effect will not be felt for four or five years. I do not believe that we can afford some of these very excellent things at the present time. The noble Lord, Lord Monkswell, is right in raising this Question. I am not afraid of inflation. What I am afraid of is that we shall reach a point, among the countries of the world, where, if you do not get tax-reduction, you will never get out of the difficulties you are in to-day; you will never help to solve the unemployment problem that we are all so anxious to solve; and you will merely descend from a higher to a lower pinnacle by a continuous orgy of Expenditure without any regard to the capacity of the country to pay for it.
Loan MONKSWELL: My Lords, may I begin by congratulating the noble Lord who replied for the Government on the courageous, not to say reckless way in which he made the best of a bad case. I am deeply flattered that so many most interesting speeches should have been

1141
made on my Motion. Tongues abler than mine have torn to pieces the courageous efforts of the Government spokesman of which I spoke. I think it is clear from what he said that no plan whatever exists for regulating our finances so that we shall pay our way, and that his answer amounts to saying that we are continuing our merry rush towards bankruptcy. I know that there is much business coming on, and I beg leave to withdraw my Motion.
Motion, by leave, withdrawn.

INDIA.
EARL PEEL EARL PEEL had given Notice that he would ask His Majesty's Government whether they can make a statement on the recent disturbances and illegal activities in India; and move for Papers. The noble Lord said: My Lords, I desire in the words of my Notice, to ask the Government whether they can make a statement on the recent disturbances and illegal activities in India. I had hoped that it would not be necessary for me to bring this matter before your Lordships. I put down this Motion a month ago, and I postponed it for a fortnight. I had hoped that the position in India would be such by now that it would hardly be necessary for me to ask the noble Earl opposite (Earl Russell) to make a statement. Unfortunately, the clouds have not yet lifted. We have had the advantage of discussion in another place. The discussion in another place necessarily ranged over a far wider field than perhaps I shall do this evening. I wish rather, if I may, to concentrate the attention of your Lordships on the disturbances and illegal activities, and only to discuss such points as I think are directly connected with them.
But before I embark upon this investigation, may I make an allusion to two matters? I do not suppose we may have another opportunity for some weeks of discussion on Indian subjects, and I should like, in a word or two, to express my regret that the present head of the India Office, Sir Arthur Hirtzel, after thirty-six years, is leaving his work. I owe a great deal to that gentleman. I have been very closely indeed associated with him, and I know that not only is he a civil servant of the finest type, but he is a man, too, of very sane, very
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strong and very firm judgment, and, if I may say so, a character of very fine quality indeed. I know how many able men there are in that office, but I know, too, that his services and advice will be greatly missed. May I also make a reference, if I may be allowed to do so, to the death of a distinguished ruler in India, the Maharajah of Udaipur? I had the opportunity, only a few months ago, of visiting him, receiving his hospitality, and being struck by the charm of his manners and his old-world grace. Reference has been made to the fact that he was a sportsman, and I recollect I was sitting in a machan with him when, at the age of eighty-four, he was shooting tiger and panther, and I can remember the keenness and zest with which the old gentleman addressed himself to the sport even at that advanced age.
Perhaps I ought now to say not only what I want to do this evening, but what I do not want to do. I do not wish at this stage to raise any of those great constitutional questions with reference to India which we may soon have to discuss. We stand firmly by the Act of 1919, and by the limitations and conditions imposed by that Act. But I wish to pass aside, if I may, constitutional questions. We shall soon have Sir John Simon's Report before us, and we shall have, I am afraid, endless opportunities of discussing it. A great deal of time must be spent in considering these grave questions in a very few months from now. May I say in passing that I think it would be very much better if, in regard to Indian matters, we were not perpetually engaged in discussing constitutional politics, and if we could address ourselves rather more to those questions of economics and hygiene which are so necessary in the present condition of India?
We have to admit that these disturbances and troubles, outrages and riots and murders, have caused very much perturbation and trouble in the minds of many people in this country, and I regret to say that even from day to day fresh occasions of violence seem to arise. In the Press only this morning we see accounts of troubles at Rangoon, Bombay and other places, showing that this era of disturbance has not yet, as many of us had hoped, come to an end. The noble Earl knows that we get a very good picture of different incidents in the

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newspapers, but we should like to have, with all the official weight behind it, the Government's view of the whole picture, and the range and extent of the seriousness which they attach to these events. Everybody knows that we have already granted a very large degree of self-government to India. Everybody knows also how many subjects have been transferred in the Provinces and are managed by Ministers, and what a very large proportion of the Services are manned by Indians, and we have had a very recent example—a painful one so far as Lancashire is concerned—of the extent to which the Indian Government is master in its own house in matters of finance and taxation.
Therefore the attacks of these seditionists—and I wish to make this point very clear—are not merely directed against the British Government. They are directed against their own countrymen who, in so large a measure, co-operate with us—Indians and Englishmen together—in the management and government of India. I would like to regard it from that point of view just as much as from the point of view of whether it is mainly an anti-British movement. All these disturbances, this picketing of the liquor shops, the attempt to boycott foreign cloth and so on, are not only bad things in themselves, but they are tending to raise that ever-present danger in India—communal disturbances and communal riots. I know that many have consoled themselves in the present difficulty by saying that the great community of the Moslems have generally held aloof from these riots and disturbances, or that they have in many cases, for instance, in the case of the Moslems of Sind, condemned, and severely condemned, the fomenters of these disturbances. These people have congratulated us that we have not to meet the processions of nine or ten years ago, when the Khalifate disturbances were at their height., and when, through our relations with Turkey, there were outrages and disturbances during the short-lived union between Moslems and Hindus.
I should suggest, also, there is a grave danger, if you get the communities in this sense ranged against each other, of the rising again of those terrible communal disturbances. There is a danger
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because many of the Moslems, I understand, regard these meetings of the revolutionaries and the seditionists as being an attempt to set up in India a Hindu Raj from which they themselves might be largely excluded. On the other side, there is the danger that, if the communities tend to range themselves on opposite sides, all those moderate sections of Hindu opinion, which would naturally be supporting the Government, are more afraid of expressing their true opinions on this subject because they might be charged with, or anyhow come under the charge of, criticising the community to which they themselves belong. This is caused by the continuance of these disturbances, and what I would suggest is that the fullest support should be given to the Government in India not only to crush these disorders but to bring them to an end as rapidly as possible.
We have all seen and know what a tremendous strain is being thrown on the police and on officials by their long vigils and their exhausting labours, and we know; too, how the Army always dislikes being brought into civil disturbances. Yet it has been necessary to bring in the Army because of the numbers that are being employed in these civil disturbances. We have been able to congratulate ourselves also on the fact that these disturbances were largely confined to the towns. That does not seem very encouraging to those who live in this country, where 80 per cent. of the population live in the towns and 20 per cent. in the country districts, but where you have 80 per cent. living in country districts and 20 per cent. in the towns the picture takes on a very different tone. I would suggest that there is a danger, too, in this active, vigilant and constant propaganda that is going on not only in the towns but, as the noble Earl opposite knows, in the country districts as well. Full reliance has been placed, and there has been justification in placing full reliance, on the loyalty of the Army, but we must not forget that these men come from villages where propaganda is going on and it is difficult to suppose that they cannot be to some extent influenced by what goes on among their friends and relations in those villages.
I would like to ask this question: Are these disturbances isolated, sporadic disturbances or are they connected together

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by a general system, by some superior control? I think until a few weeks ago it was believed that they were to some extent sporadic and unconnected and that they sprang up in different towns where there were centres of disturbance. But I think that the later information that we have had from India shows that that may not be so. Indeed I do not think that in the opinion of the Government that is altogether so. May I refer to a Question answered in another place a few days ago, when it was said that every effort is being made by the Congress by means of propaganda of all kinds and by demonstrations to stimulate anti Government and racial feelings? Now that would seem to suggest that all these disturbances are organised perhaps from a common centre. We see, as it were, a sort of change of venue of disturbance moving from one class of illegality to another, now fomenting strikes, now organising salt raids, now arranging for picketing and the boycotting of foreign goods, or stirring up troubles for instance on the Frontier by such methods as the grossest misrepresentations of the Sarda Act.
Up to now arrests which have been made have been arrests of the leaders in these different disturbances. We have seen Mrs. Naidu, Mr. Tyabji and Jawaharlal Nehru arrested. One after another these leaders are arrested and put into prison. It would seem to indicate a panel of leaders. As soon as one leader is arrested someone else is placed in a position of leadership. That might seem to be almost an endless process. If it be true that these disturbances are really organised from a common centre and if indeed, as is suggested in this information, these working Committees of Congress are Actually sitting together and organising from a common centre these disturbances, I would suggest to the Government whether the time has not come not merely to arrest the leaders in different districts, but to strike at the centre of the disturbances in these Congress Committees.
Several NOBLE LORDS: Hear, hear.
EARL PEEL: That is one suggestion I was going to make. I would remind your Lordships, if it is necessary to remind you, of the new example we have had of the old truism, as I might almost call it,
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in the Government of India of the necessity for strong control and constant vigilance and watchfulness on the part of the rulers of India. How quickly these disorders spring up, how easily disturbances arise as soon as for a moment that strong hand of the ruler is raised! May I give two instances out of those which have recently occurred? I happened to be in Calcutta not long ago and the question was being discussed of allowing to lapse the Bengal Criminal Law Amendment Act. That had been enacted for five years. Those who were discussing it suggested that as no action had been taken under it for some time there seemed no reason why it should be re-enacted. But I heard a different story in other Provinces to the west. There I was told that owing to the existence of this Act in Bengal many of the more ruffianly persons and conspirators had been driven into the Western Provinces and had been very unwelcome inhabitants of those Provinces. It was decided, however, that even though this Ordinance might not be re-enacted, nevertheless it should be indicated that it would be re-enacted if necessary. As the Secretary of State himself has told us, it was only nine days after that Ordinance had lapsed that it became essential, owing to the disturbances, to re-enact it.
The other case to which I wish to refer is the trouble we recently had on the North-West Frontier. When you move up and down that Frontier, when you see the numbers of troops and the aeroplanes, the armed frontier constabulary and the different forms of police and scouts you may be inclined to think that this tremendous machinery of control and repression is unnecessary in an area so apparently peaceful. Yet what do we see? The moment there is any relaxation of authority, the moment this propaganda spreads, you have one of these tribesmen, with his following of 500 or 600 men, advancing and a general idea spreads along the whole Frontier that troubles are in the air and that opportunity for loot is to be given. I think these are two rather signal instances showing the extent to which firm control, and not only firm control but organisation of that control, must be kept and maintained in strong hands.
Another point on which I would like to ask a question of the noble Earl is

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as to the question of propaganda in India. Of course we all know that the Government have passed a very strong Press Act, and I can certainly say from my experience that a Press Act is most essential. Nobody can imagine who has not studied some of these papers in the vernacular Press the vileness and constancy and continuity of misrepresentation and falsehoods in that Press. I know the difficulties of Government propaganda and I have often discussed that subject with those concerned. We are always told that if you have Government propaganda it soon loses force because it is known to be Government propaganda. Nevertheless, I still maintain the view that if more efforts were made continually to set out the Government's view of the action they have taken, whether it was actually believed or not in certain districts, law-abiding persons would be able to know what they had really done. Perhaps this is to some extent opposed, if not to the principle, at least to the habits of our rulers in India and of civil servants in general. Civil servants are accustomed to administer their own offices and not, perhaps, to consider the exact effect of their actions upon the outside world. We have seen that in this country.
I think every honest citizen admits that the last Government was a very fine Government. Why did that Government fall? We were told that it fell simply because it had not been active enough in advertising its own virtues and achievements. I do not bring a similar charge against the present Government. I think perhaps the ratio is inverse in their case. At the same time it is difficult to expect that civil servants will be as active as politicians in understanding the value of propaganda or of bringing home to the people whom they rule the excellence of their own achievements in legislation or administration. I really would suggest to the noble Earl opposite that he might again take up that subject of making it clear to the people, whether by wireless propaganda or through the newspapers or what not, what the Government's view is and the Government's side of what has been done, so as to give answers to these misrepresentations that are pouring out in every newspaper that is still allowed to circulate in India.
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The next point upon which I should like a few words from the noble Earl is this. We have had a picture—fortunately a cheerful one—from the Secretary of State in another place of the state of trade and business in India in the last few years. I think he congratulated India on the fact that their surplus exports had been something like £58,000,000 in the last year, and he described what had gone on in the matter of finance, the balancing of the Budget and so on in the last three or four years. That is very satisfactory, but I should like to know something, if the noble Earl can tell us, about the condition of business now. After all, these facts and figures and pictures deal with the years that are passed, when, if I may say so, others were in control. Personally I do not get very satisfactory pictures of what is going on in India in the matter of trade and business, and I should be very glad if the noble Earl could give us a true picture of the state of business in that country and, if possible, tell us how far he considers that the check to business was due to these illegal activities, boycotts and so on, and how far to the general slump in trade.
I should be very glad if he could answer a further question. I am quite sure that a great deal of this sedition and revolution is indigenous to India itself, but at the same time it bears on its features a great many resemblances to the activities of the Communist International. I have studied and read the speeches of many of these leaders in India and I have been struck by the extraordinary resemblance in phrase, tone and expression to the articles that appear in the Moscow Press. Perhaps this may be rather a delicate subject for me to broach with the noble Earl, but no doubt he has information, and I would ask him, not to disclose any information that he thinks it improper to disclose, but to tell us the extent to which the activities of the seditionists and revolutionaries in India are assisted by money, co-operation or the actual participation of trained revolutionaries in the campaign of disturbance and sedition that is going on in India. I shall be very much obliged if the noble Earl can give us some information on that point.
I have two other observations to make which I think are relevant to this matter. The first regards the bearing of these

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disturbances upon the coming Conference. It has been suggested that these riots and organised sedition are intended to discredit the Conference which, as we all know, is to be called by His Majesty's Government. Incidentally—although I cannot say that I expect to get an answer on this point—the noble Earl may be able to tell us something about the composition of that Conference and whether the Government of India have arrived at any decision as to its numbers or terms of reference. I shall be very glad if the noble Earl can give us that information. I submit to your Lordships that that is an entirely inadequate description of the aims of these persons. They are not only seditionists but also revolutionaries, and their aim is not merely to discredit the coming Conference but definitely to work for the separation of this country from India and the destruction of the British connection.
That element has always been present since the reforms started. I am speaking of the reforms of 1919. Noble Lords will remember that those early Councils were boycotted by the Swarajists. They refused to take part. By not taking part in the Councils that were set up, they wanted to prove, I suppose, to the world at large their capacity for administration and self-government. Then the tune changed and they entered the Councils, but with the definite idea, as they stated, of breaking down those Councils from within. In fact I think one might say that, if only these gentlemen had expended one half the energy that they put into trying to destroy constitutional government in India towards advancing it, India would be much further advanced than she is now on the path of constitutional government. Everybody knows the result upon their minds of the famous Declaration of the Viceroy. Quite a short time after the Declaration was made they came to him and advanced still further impossible demands which they were well aware that the Viceroy could not possibly grant. After that we had those terrible scenes in the Lahore Congress, when fortunately the Congress split and the extremists went off in the direction of complete independence for India.
What I am going to suggest to the noble Earl is that it is really too late and quite useless to attempt any conciliatory action with these gentlemen.
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They have stated quite clearly that they deny our right to legislate for them. They repudiate the Act of 1919, they repudiate the Conference and they deny altogether our claim to deal with India. In those circumstances, of what value could these gentlemen be at the Conference, and under what circumstances could they come to it? They have declared that they repudiate any right on our part or on the part of Parliament to decide what the future Constitution of India is to be. It is obvious that they can hardly, with any sort of self-respect and without throwing over their opinions, come to that Conference. Besides, too, at that Conference they would be absolutely useless, for all they would try to do would be to endeavour to wreck any chance the Conference had of coming to unanimous or successful resolutions. Although I am free to admit that is a difficulty, because of the desirability of getting all the different elements representing Indian points of view at the Conference, I cannot say that I envy the task of the Viceroy who has to make the selection. Nevertheless, although I feel that the absence of these gentlemen will leave the Conference incomplete, it is useless to try to persuade these gentlemen, who are out to promote a system of sedition and revolution, which the Government must use every effort to crush.
I would only say that I want the noble Earl opposite to make the freest possible statement that he can make with regard to the present situation. After all, on the eve of the publication of the Report of the Sir John Simon Commission, and on the eve of the consideration of this great question by the people of this country, I think I am free to say that the people of this country ought to be informed most fully and frankly by His Majesty's Government of the situation which His Majesty's Government have to meet in India at the present time. We have a splendid record in India. I am not ashamed for anyone to study it. It is open to the whole world to consider and study, and I think we are entitled to know the exact and precise facts of the situation now.
This is the last word with which I wish to trouble your Lordships before other speakers address you. I should like to express our sympathy with all our officials in India, from the Viceroy downwards, who are engaged in this anxious

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and troublesome situation. It is very difficult really to appreciate the extent of the continuous strain which is being laid upon them, and I should like specially, if I may, to say one word of sympathy with the police, who, as your Lordships know, are acting constantly under these isolated conditions. They have not been very well considered, and in fact their treatment by many of the Councils in the Provinces has been most discreditable. They have been denied opportunities for improvement in living, pay, etc., and it is a great tribute to them that they have shown such loyalty and courage during the tremendous and fiery ordeal through which they have passed during the last few months. I ask the noble Earl to do what he can to give us a very full and very frank statement on these grave disturbances and seditious happenings.
THE MARQUESS OF READING: My Lords, the last purpose I have in mind in addressing your Lordships, particularly after the speech made by the noble Earl, is in any way to embarrass His Majesty's Government or the Government of India or the Viceroy. Indeed, I feel sure that all your Lordships will agree that at this critical juncture, when the Viceroy and the Government in India are engaged in suppressing the disorder, riots, and illegal activities taking place in various parts of India, we should give our fullest support to those engaged in the administration of India in times of such difficulty. I desire to say for myself that whatever criticism there may have been in some quarters, whatever desire there may be in some quarters now to criticise the Viceroy, I give him my unqualified support. I think it is only right that he should have the fullest confidence not only of the Government but of all in this country who are anxious to see our great Empire in India maintained at the full height of its well being.
I shall occupy your Lordships' time for but a few minutes, because, having formed the view that it is at this moment more desirable to support than to offer criticism, I shall not refer to anything that is past, nor shall I attempt to discuss what may be the outcome of the present agitation, or the result of the publication of the Report of the Simon Commission. It really is impossible for
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us in this House or elsewhere in the country to discuss the question of possible constitutional progress or reform when we have a Commission, appointed by the late Government, which has been labouring incessantly for over two and a half years, has just signed its Report—we are all anxious to see it—and has had opportunity, certainly not vouchsafed to any of us, of hearing all the evidence brought before it and making investigations, even in quarters where there was opposition. The Commissioners have pursued their investigations with the utmost desire to inform Parliament and the country of the situation as they saw it, and are making recommendations which seems to them wise and opportune.
I leave all those questions without further observation. I am content, and indeed I think I am bound, as we all are, to await the publication of the Report of the Simon Commission before dealing with any of these very important problems. The situation at the moment is an anxious one. I hope His Majesty's Government, and the noble and learned Earl who is about to reply, will give us all the information they can. It is essential that in this country we should know the facts, and that nothing should be kept back save what may be absolutely necessary in the public interest. We are dealing with a very serious situation. Disorder, sedition, riots, bloodshed are not unknown, but we have at this moment what is to my mind the most serious aspect of these forms of activities—civil disobedience. When I was in India it was threatened and there was some attempt. I am not making any comparison, or attempting to suggest what should have been done at an earlier moment. I am pointing out this, that while at that moment a bridge had been thrown across the chasm which divided Hindu from Moslem, and to that extent the position was more serious because the Moslems joined with the Hindus in the demonstrations against the Government in 1921 and 1922, that bridge, frail as it was, has disappeared. It led to discussions about the protection to be given to minorities, into which I do not now enter. But that bridge does not exist. The situation is in that respect better. I would venture to say also that in the earlier years to which I have referred the opposition in Congress to Mr.

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Gandhi was very feeble, if it existed at all. There is perhaps more difference of view in India at the present moment among various political Parties than there was then.
What is new, and in my view serious, is that the definite organisation of civil disobedience has been set up. The continued demonstrations of that kind have the effect of sapping the influence of the Government and undermining their authority. One may of course be drawing inferences on somewhat slender evidence, but as I survey the whole situation in India and see the disturbances that have occurred in Bombay, Sholapur, Calcutta, Chittagong, Madras, and elsewhere, the position is a serious one. You have also the disturbances in Peshawar, always a very dangerous place. These were perhaps the most serious of all the disturbances, so far as I can judge. They arose in a Moslem centre, and resulted in no sense from tribal trouble, but because of agitation against the Government. It has been said that it was largely due to the agitation about the Sarda Act, which had been misrepresented among the Moslems—an Act introduced for the purpose of raising the age for marriage and doing away with child marriage, a measure which mostly affected Hindus, but in some form or other was thought to have been directed against, or to have had some evil influence on, the Moslems. So in Peshawar you had this trouble. Again, in the last few days we have had the riots and the killing of Burmans and Indians. That has nothing to do with the Government. It is purely a matter between themselves. The Government is in no sense responsible. To my mind all these phenomena, all these outbreaks of violence show that the authority of the Government, which ought to be supreme and unquestioned, has been undermined by agitation, sedition and propaganda.
I am not in the slightest degree suggesting blame upon anybody. It is a very difficult problem for the Viceroy. He lives in a sense in two different atmospheres. He must always have before him, of course, the vast problem of dealing with a population of 320 million people, of whom 250 millions are in British India. He has to deal with all the reports that come to him from those various places, and he has in the end
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the responsibility for those matters. At the same time he has to keep his attention constantly focussed upon the atmosphere here. He is responsible to Parliament and to the Secretary of State, and he has to steer his course according to the views of His Majesty's Government. In matters of supreme policy, though not in minor matters, he must be in agreement with them. He has attempted, with the highest motives, the greatest sincerity and profound earnestness, to conciliate India so as to avoid the very difficulties which have arisen. Whether he is right or wrong I do not pause to enquire at this moment. He has acted with a far greater knowledge of the situation than at any rate I possess, or I think most of your Lordships can have. Having done that, having announced the round-table Conference when he went back to India, which was thought to be a great step in advance, he nevertheless had nothing but trouble to meet on all hands.
I desire to say that civil disobedience can never be tolerated. It strikes at the very heart of the Government. If it succeeds it is a vital blow, if it manages to survive it has dug the grave of Government in India. I have myself the strongest opinion that in all matters that relate to civil disobedience the Government must put forth all the weapons at its command in order to destroy it and to break it. It must not allow itself, it cannot allow itself to pander to it in any way. It may be easy in India, where the law is different from here, to pass over a seditious speech without enforcing the law. I have done it myself again and again, and other Viceroys have had to do the same. That is very different from dealing with a propaganda which is directed to active interference with the work of Government, which must in the end, if it succeeds, paralyse the Government and destroy it.
I agree with the suggestion of the noble Earl who opened the debate, so far as I followed it, that it is desirable to get at those who are responsible. I am in entire accord. These poor deluded Indians very often understand very little about it; they only have one side put before them, and they are thus roused to fury, particularly in these months which

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are the months of the hot weather before the monsoon, when we all know that the blood is hot and trouble may very easily be caused. Those are the people who ought to be protected. I submit to the Government that the only way effectively to deal with this problem is to go straight at those who are responsible for preaching the doctrine of civil disobedience and doing everything they can to induce the poor ignorant people to act like a rabble. That is what I suggest to the Government, and I hope it will have their support.
Something has been said by my noble friend about trade and business, and he referred to figures which have been given showing prosperity in recent years. Those figures are of little avail at the present day, as must be agreed by anyone who knows the situation. One has only to ask any business man connected with India what the situation now is, and he will tell you that it is seriously affected. I noticed that in the speech made by the Secretary of State he said, perhaps in another connection, that things have improved from January in the view of persons interested in finance, and who understood credit, because they have been able to float a loan and because the Indian Loan stood at a higher figure. I think that is a poor comparison if you wish to ascertain the facts. For the loan that was introduced six per cent. had to be paid in order that it should be floated. If you compare the figures it may be true to say that they are a little better now than in January, but the better comparison is to go back a couple of years and compare the figures at which Indian loans stood then. They were very nearly equal to those of the British Government. Compare them now—I am not saying who is to blame—and there is an indication of what the situation is. If this state of things is to continue Indian prosperity must, of course, go on decreasing very rapidly.
My hope is that something may be done by which we can restore order. After all, it is the primary, the elemental duty of Government to restore and to maintain order. It matters not to what Party the Government belongs. In this country, I think, at least we have this situation—that all Parties are of the same opinion about that. I believe that
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His Majesty's present Government are just as desirous and just as determined to restore and to maintain order as a Conservative or a Liberal Government would be in their place. I desire to give them every support in doing that. I only hope that in anything I may have said to-day, feeling so very strongly about this campaign of civil disobedience, I have not let fall one word which could be a reflection in the slightest degree upon the aims and aspirations of honourable Indians who take part in constitutional agitation. They are entitled, from their point of view, to take such attitude as they think right in order to secure for their country progress which we may think too fast but which they are perfectly justified in pressing upon us by constitutional methods.
Those who have been in India—I see in his place the noble Marquess, Lord Linlithgow, who spent some time there on valuable agricultural investigations and made a very helpful Report—will agree with me, I am perfectly certain, that you cannot travel through the various Provinces of that country without coming into contact with numbers of men—I am speaking now of the educated classes with whom, perhaps, one comes into more direct contact because of the difficulty of language—whom you cannot meet without understanding their view and without sympathising to some extent with it. At the same time you may be perfectly satisfied in your own mind that they are seeking to go much too fast and that they must wait before their view can be made effective. Nevertheless, I desire to pay a tribute to those who are continuing by those means their efforts to make constitutional progress, who deprecate all illegal activities and are anxious that recourse should be had to proper methods. It is my impression that by far the great majority of the Indian people would be of this opinion and would like to have recourse to these means only.
May I say one word regarding the military and police? I have some knowledge of the difficulties encountered by those who are brought constantly into conflict with many thousands of people in narrow thoroughfares, where missiles are thrown by no-

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body knows who, where men may be injured at any moment and nobody knows who is the culprit, and where the strain upon the men is as severe as it can be. Whilst sympathising with them and endorsing what was said by my noble friend Lord Peel, I desire to add that the restraint which both military and police, officers and men, Indians and Europeans, have put upon themselves is most commendable and most exemplary. From all the reports that have been received they have had the greatest difficulties to meet and yet have managed to meet them in a way which has done credit to the Government that presides over them.
I conclude by begging the Government to tell us all that they can so that we may understand what is happening in India at the present moment and so that the people of this country, who have every reason to be proud of what has been done, who know something of the history of India, who looking back over 170 years may be able, it is true, to point to mistakes, nevertheless will be bound to admit, if they are honest and honourable, that Britain has given to India throughout that period not only peace but justice, fidelity to promises and prosperity so far as that could be achieved.
THE MARQUESS OF ZETLAND: My Lords, may I crave the indulgence of your Lordships on this the first occasion on which I have ventured to address you if I say a few words upon the subject about which the noble Earl, Lord Peel, is questioning the Government? May I associate myself most heartily with the tribute which the noble Marquess paid to the Viceroy in the very difficult position in which he finds himself? I doubt whether anyone who has not been through the ordeal of dealing with a situation of this kind in India can conceive of the difficulty of the position of those in authority in that country. Criticisms of the Viceroy on the ground that he has carried a policy of conciliation too far or that he has hesitated too long in striking at those who have exceeded the bounds of constitutional agitation in India, I think are most unfair. It is essential, of course, that order should be restored and respect for the law enforced, but that is not the only aspect of the question.
We have reached a very critical stage in the relations between this country and
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India. The Viceroy and the members of the Government of India are leading figures in a drama of historic importance and of world-wide interest. News of events in India is echoing daily round the whispering galleries of the world. The eyes of the people of two hemispheres are riveted upon the stage. It behoves us, therefore, to do nothing which could give any legitimate ground for the suggestion that in India we are acting arbitrarily or vindictively against the people of that, country. It behoves us to assure ourselves that when in due course we come to the bar of history for judgment we shall stand upon an unassailable foundation of justice and of moral right.
For that reason I think that the Viceroy was right when he agreed during last winter to receive Mr. Gandhi for the purpose of discussing the situation. If he had not done so it would have been immediately broadcasted to the world that out of consideration of his own prestige he had rejected the possibility of an honourable and amicable settlement of our difficulties. I have not the smallest doubt that it would have been sought to lay the responsibility upon him of bringing down upon the people of India all the horrors of civil strife. But if I think the Viceroy was right in that attitude, I did not expect for a moment that the magnanimity would evoke from Mr. Gandhi a similar response, for I am satisfied that Mr. Gandhi is himself so permeated with a false pride of race that he would rather wrest by force a crumb from the British than accept a loaf voluntarily offered.
I am sometimes asked whether Mr. Gandhi is sincere. He poses before the world as the apostle of peace, as the protagonist in a struggle in which the Hindu doctrine of non-violence is pitted against the doctrine that might is right, which is attributed by Mr. Gandhi and his supporters to the people of this country. It has been said of men that by their fruits ye should judge them. A good many years ago, when Mr. Gandhi was starting his campaign in favour of home rule for Indian people, he published a monograph based very largely on the teaching of Tolstoy, of whom he is an enthusiastic disciple, the object of which was to bring into hatred and contempt not merely British rule in India but the whole fabric of western civilisation. The medical

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practitioners of the West, the hospitals of the West, these things were singled out by him for special denunciation as evil things, and things, therefore, which no self-respecting Indian should demean himself by touching. Yet when Mr. Gandhi himself fell ill, when death stared him in the face, it was to this very science of the West that he turned, and it was to the skill of a British surgeon that he owed his life. When I am asked if Mr. Gandhi is sincere, I say, "Let the world judge."
But whether Mr. Gandhi be sincere or whether he be not sincere in his professions of his belief in non-violence, the results of his preaching are not open to doubt. He has gravely undermined the respect for law in India. He has remained wilfully blind to the fact that it is an essential basis of an organised society that the law should be voluntarily respected, and he is apparently oblivious of the fact that the necessity for enforcing respect for law, with which the Government of India are faced to-day, will inevitably present itself in future times to any Indian Government that may come into existence. Mr. Gandhi has sown the whirlwind. Who is it that is going to ride the storm? I think if Mr. Gandhi would ponder upon the threat which was recently made by the Mahomedans of Bengal against the Corporation of Calcutta, a body which is at the present time under the control of Mr. Gandhi's friends and supporters—a threat that they have made that they will enforce their demands against that body by the very methods which Mr. Gandhi is advocating against the British Government—that should give him pause.
The undermining of respect for law is not the only injury that Mr. Gandhi has done to India in his present campaign. At a time when all Parties in this country were ready to view in a spirit of sympathy and generosity any proposals put before them for a further advance of Indians along the road of self-government, he has succeeded in creating in the minds of a great many people in this country grave doubts as to the wisdom of any further concessions being made, and, indeed, in some quarters a demand for a drastic curtailment of the concessions which have been already granted. I do not agree with that demand. I think to put back the hands
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of the clock is wholly impracticable. If you were prepared to burn the Report of the Simon Commission before it is issued, to double or treble or quadruple your Army of occupation in India, and to govern India indefinitely under Martial Law, you might perhaps for a time put back the hands of the clock, but surely to do these things would be a grievous confession of failure, would display us to the world as a people bankrupt in statesmanship, and wholly unworthy of the high trust which has been placed by Providence upon us.
No, I conceive that the duty of the Government is to lend no ear to such counsels of despair, but to go forward steadily and firmly upon the path which has been marked out, not by this Government only, but by all Parties in this country, turning neither to the right hand nor to the left, not allowing themselves to be stampeded by the violence of the agitation in India into making concessions which, upon a consideration of all the factors in the case, are deemed to be too great in the interests of the people of India themselves, or, on the other hand, refusing to make such concessions as the justice of the case may demand. But if that policy is to be successfully pursued, it is clear that the Government in this country and the Government in India must have both the will and the means wherewith to restore order and to ensure respect for the law, and it is precisely upon this point that anyone who has held high administrative office in India finds grounds for some anxiety at the present time.
I do not doubt the will of the Government of India to restore order and to enforce peace. The measures which they have already taken are proof of that. Nor for a moment would I cast any aspersions upon the loyalty of the Indian police. Indeed, knowing as I do from bitter personal experience the pressure which can be and is brought upon Indian police by the boycotting of their families and other measures of that kind, I am amazed at the stoutness which they have shown in carrying out their hateful and their difficult duties up to the present time. But the police force in India is a very slender instrument. In the whole of British India, a country more than twelve times as large as England, Scotland, and Wales, there are less than 200,000 Indian

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constables, one only on the average to every 1,250 of the population. In the Provinces the police force is organised on a district basis. The executive officer in the control of the police of a district is the district superintendent of police, and he, in collaboration with the district magistrate, is charged with the duty of maintaining order within his district.
Within the whole of this area of British India there are only some 260 districts. That means that there are only some 260 superintendents of police, or one to every million of the population. There is in Bengal a district—the district of Mymensingh—an area of six thousand square miles with a population of 4,500,000 of people. You can picture for yourselves the sort of task that devolves upon the district superintendent of police and his slender force in a district of that character when the forces of anarchy are let loose. So I say that if my reading of the situation in India at the present moment is correct, the Government of India will be faced in a steadily increasing degree with the necessity of employing troops, both European and Indian, for the performance of duties which are primarily police duties. Do the Government in India and the Government in this country accept that position? Are they satisfied, if they do that, that there are at the disposal of the authorities in India resources adequate for the purpose? If the noble Earl who is going to reply could give any assurance upon that point I should view the situation in India to-day, not with complacency, but certainly with less anxiety than I do at the present moment.
LORD LLOYD: My Lords, I only desire to say a few words to associate myself with the remarks that have fallen from my noble friend who opened this discussion and from noble Lords who have followed him. Like the noble Marquess who has just preceded me I welcome an opportunity, as one who had to deal in difficult days in 1919 and 1920 with a situation of gravity commensurate with this, of paying my tribute to the marvellous behaviour of the British and Indian police. I think that good will come out of this debate if only it is realised that Governments have done too little for the police in India. There have been deeds of real heroism in Bendi Bazaar and in Jacob's Circle in Bombay which vie with
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many done on more renowned battlefields. I do hope that the words which fall from us in this House may be of some encouragement and cheer to the officers and men in India who are carrying on so gallantly at the present time.
It seems to me that the real gravity of the situation in India lies fundamentally rather less in the actual disturbances of to-day than in the sinister causes of those disturbances. I listened in vain in another place two or three days ago to hear from the lips of the Secretary of State something as to what action the Government are taking in regard to subversive Communist propaganda which we all know perfectly well, and the Government know, is being so openly spread abroad throughout the East, and not only in India, by agencies of the Third International. It is hopeless to blind ourselves to what we know is going on encouraged by the Soviet. The great difference between the situation to-day and that with which we had to deal in 1922, for instance, is that in that year Mr. Gandhi's influence was important over the whole of India. His philosophy and creed were the leading elements in a movement which certainly affected the Hindus. If the same were true to-day, which it is not, his plan of campaign would of course have led to unpremeditated acts of violence, as they did at that time, but there would not have been armed raids of the character that we saw at Chittagong, where armed forces carried out a well-conceived raid with definite objects; nor should we have had such occurrences as at Sholapur, where plans of the most delicate and intricate character were made even to preparing for a skeleton Government locally to carry on.
I do feel that His Majesty's Government ought to tell us to-day how far they really consider that these movements which are going on are organised by the Third International. If I speak plainly on that question it is because I think the time has come for plain speaking on the subject of Soviet propaganda. The Government seem to be under the extraordinary illusion that they can toy with Soviet relations with this country and not feel the effects of it in the East. I have been nearly 27 years in the East on and off and I can assure His Majesty's Government that every

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action they take for recognition of the Soviet Government here has an immediate repercussion all over the East that is a weakening and a danger to our Government.
There is another matter. Like the noble Marquess who spoke just now, I do not propose to touch upon the constitutional subject. I believe that until the Simon Commission's Report is published the less we say on these matters the better, but it is a truism, I think, to say that a plain and clear and well understood policy in times of disturbance and unrest is a powerful weapon always in the hands of the Government. It does seem to me that at this moment it is very difficult indeed for the peoples of India to understand exactly what His Majesty's Government are going to do. We were told by the Prime Minister last autumn that there was no change of policy. We were told by the Secretary of State a few days afterwards that there was a change of policy. The words which I think he used were that the first change that had been made was that of a change of spirit and that the second change was far more important, a change in policy, which in reality is the central object in India and of Indian opinion, and that is the Conference.
I wish to say only two or three words about the Conference. We can scarcely be surprised if there is a good deal of confusion on that question. Let us look back for a moment. First we see the Statutory Commission, which was quite properly set up to implement the policy laid down by the Montagu-Chelmsford Reform Act. That policy comprises both the machinery and the goal of constitutional reform. That is an important point. Then, in order to obtain views representative of Indian opinion, there was set up a Committee of Indian members of the Central and Provincial Councils. In addition to these two bodies the Government have now set up machinery for a round-table Conference. I should like to ask the noble Earl this question. If the purposes of that roundtable Conference are merely advisory, is it not a little difficult, both for us here and for the Indian peoples, to see why the Reports of those Committees of the representatives of the peoples of India mere not held sufficient. Why do you want fresh advice? Is there not
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some good reason for confusion of thought in that the Conference appears to be intended to carry out functions that are already performed?
I have had some evidence of the fact that many people in India are led to the conclusion that the Conference must be intended to have a new and wider function than those that have already been carried out by the machinery in operation. It does appear that you reach an inevitable dilemma: either the Conference is to be merely advisory, in which case it might seem to be superfluous; or it is to have an actual voice in the decision, in which case it is a departure from the present basis of policy which can only be described as being very important in all its implications for the future of the Indian Empire. I hope the noble Earl will make it clear to-day, so far as he can, exactly what the composition and functions of the round-table Conference are going to be.
As I have just said, I do not desire to enter into any discussion of the constitutional position, and if I refer to the Viceroy's Declaration it is only to remind your Lordships that one of the reasons given for that Declaration was the creation of a good atmosphere for the Report of the Statutory Commission. Perhaps I am not a good judge but I confess that I am always a little alarmed, from long experience, when Governments at Whitehall set themselves to create a good atmosphere in the East. I have seen so much of it. Serious concessions, perilous to our trade and prestige, have been made during the last two or three years in the Far East in order to create what is called a good atmosphere. I do not think that very much profit or good has come out of it. We have bartered away a great deal of our position nearer home in Egypt recently in order to create a good atmosphere. I do not know that we have reaped very much advantage out of it.
The noble Earl referred to propaganda. I would reply that I do not think you can set up any very effective machinery for propaganda in India. The best propaganda is the behaviour of the Government itself. That carries weight throughout India, from Comorin to Peshawar, in a few moments. Strong action or weak action is your only propaganda, and you

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need no other. Similarly it seems to me that the best atmosphere for the consideration of the Statutory Commission's Report will be created by the Government restoring law and order as rapidly as they can, and remembering that the masses of the people are more important to us than the consideration of any political views of a minority. I hope that His Majesty's Government will give us to-day some clear account of what they propose to do with regard to outside propaganda in India, because if that interference were disposed of and made clear to the world at large I believe that much trouble in the way of lawlessness and disorder in India would very rapidly disappear.
THE UNDER-SECRETARY OF STATE FOR INDIA (EARL RUSSELL): My Lords, to answer the Question on the Paper I propose first to give your Lordships a short account of the course of the recent disorders. On March 12, your Lordships will recollect, Gandhi set out on his march to the sea, and nothing very much happened in connection with that march until he gave the signal to open defiance of the law by announcing that he had achieved his purpose of breaking the Salt Laws. That was on April 6. On April 7 at Sylhet, in Assam, a disorderly procession had to be dispersed by force. On April 11 the police in Bombay City were stoned and had to make four baton charges, and on April 12 bombs exploded in two Bombay suburban railway stations, fortunately doing little damage. On April 15, following on the conviction there of Sen Gupta and of Jawaharlal Nehru elsewhere there was further serious rioting in Calcutta. Tram drivers were stoned and tramcars burnt. The following day at Karachi a disorderly crowd broke into the city magistrate's court during the trial of six of the chief local leaders of civil disobedience and the police had to fire on the mob. On the night of April 18, at Chittagong in Bengal, there was an armed raid by from 60 to 100 revolutionaries on the police and railway armouries, in which seven persons were murdered and others wounded. On April 27, in Madras, there were serious riots in which the police were compelled to use firearms, while four days earlier there was a serious outbreak in Peshawar City, and on April 24, at Neela in Bengal, not far from Calcutta,
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the police were compelled to fire on rioters who resisted their interference with salt-making.
On May 6 there was a serious outbreak at Delhi, starting with attempts to picket the courts. The Deputy Commissioner and police superintendent were savagely attacked, and troops had to be called out. Later an attack was made on three police lorries and other police coming to their assistance were stoned. On the same day at Howrah, near Calcutta, a party of police who were endeavouring to stop interference with a light railway were stoned and had to fire in self-defence, and a magistrate and police superintendent were attacked by a crowd in their car at a ferry. On the same date also a body of some 500 volunteers attacked a railway police-station at Nadia, in Bengal, owing to the arrest of certain persons who had attacked a newsvendor. On May 7 began the outbreak at Sholapur, in the Bombay Presidency, which necessitated the control of the City by the military and the imposition of Martial Law.
On May 14, at Mymensingh in Bengal, a large hostile crowd attempted to prevent the delivery of excise liquor to vendors and, when their efforts appeared likely to fail, attacked the magistrate, the police and the excise staff with brickbats. Persuasions and warnings and charges by the police failed to secure the dispersal of the mob, which continued to make violent attacks and destroyed excise liquor to a considerable value. Eventually the police, under the orders of the magistrate, had to fire. Some forty Government servants, including the additional district magistrate, the superintendent of police and his assistant, received injuries and one assistant sub-inspector was stabbed. Fifty-three rioters were treated at the hospital of whom one has died. On May 15 began the massed raids on the salt depots at Dharasana, in the Surat district, and Wadala, near Bombay, and on May 21 there was violent resistance to the search of the Bombay Congress offices in consequence of the disregard of the magisterial order prohibiting the publication of a Congress bulletin. On May 18, in the Jhelum district in the Punjab, the police were compelled to fire on rioters at Kala. There were serious riots between Hindus and Mahomedans at Dacca on May 25 and at Rangoon on May 26. The Rangoon

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rioting has resulted in twenty-five deaths reported up to date, though more of the wounded rioters in hospital are expected to succumb to their injuries. Approximately 250 rioters have been treated as in-patients in hospital. These riots were referred to by the noble Earl who asked the Question. Both these riots were communal and not connected with n on-co-operation.
EARL PEEL: In Dacca and Rangoon?
EARL RUSSELL: Yes, in both Dacca and Rangoon. I have so far received only the briefest official report of the disturbances in Bombay City on the night of the 26th, and the morning of the 27th, which resulted in the police again having to fire on the crowds, and I cannot supplement the Press reports on this matter. My latest information is that the situation there is now quiet, and that the casualties are estimated at four killed and thirty-six injured. The chief feature of the campaign against the Salt Laws during the last few days has been a change of tactics in the Bombay Presidency. Technical breaches of the law, which formed the plan of campaign at the start, have now been largely abandoned in favour of mass action. This has been tried at three places—Shiroda, in the south, Wadala, within a few miles of Bombay City, and Dharasana, in Gujarat. The tactics employed have been that large bodies of volunteers try to force their way by weight of numbers into salt works and to steal salt. During the early part of the week attempts on a comparatively small scale were made to obtain entry into the salt works at Wadala, but the number of volunteers in the Congress campaign continued to increase, and on the 21st a crowd estimated at well over 2,000 tried to force their way in. Thanks to the skill and endurance shown by the police, the attempts were unsuccessful, and the timely arrival of troops, by the moral effect of their presence, gave much-needed relief to the police. Apart from particular instances of violence during this phase of the campaign, of which there were several, it is obvious that attempts to force a passage by weight of numbers through a barbed wire fence cannot be described as non-violence.
I will now give your Lordships certain further details which my right hon.
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friend has received regarding the disturbance on the 25th at Gujar Garhi, near Mardan, in the Peshawar district, in the course of which a gallant police officer, Mr. Murphy, lost his life. Early that morning news had been received that six persons from the village of Takkar, two miles west of Takkibhai, whose arrest had been ordered, were walking into Mardan escorted by a crowd of volunteers and villagers. The Assistant Commissioner and assistant superintendent of police, with twenty-five police, who were later reinforced to bring their strength to seventy-five, armed with lathis, blocked the road near Gujar Garhi. Infantry were also there in support. The six persons whom it was intended to arrest surrendered themselves, but the crowd insisted in accompanying them to Mardan gaol. On being informed that this could not be allowed, the crowd settled down on the road and Mr. Murphy, the assistant superintendent of police, after riding through the crowd to investigate possibilities, returned to the Assistant Commissioner and suggested that he might be allowed to disperse the gathering by a charge.
The Assistant Commissioner warned the gathering to disperse, but they asked for time, as they had sent horsemen to Utmanzai for instructions. The crowd was again told to disperse, and after a further interval the police were ordered to charge. Mr. Murphy, who was unarmed, outstripped his men, and was lost in the crowd. The villagers by the roadside joined in with the crowd in throwing volleys of road metal and large stones. The police were driven back immediately through the troops, who advanced, and as the crowd scattered they found the body of Mr. Murphy, who had been murdered by the crowd. I may tell your Lordships that the nature of the injuries and bullet wounds showed that there was no question that it was a deliberate murder. The troops later advanced two miles up the road, but the crowd had scattered, damaging the telegraph lines as they went. The Assistant Commissioner then searched the village of Gujar Ghari and arrested twenty persons who were said to have been seen in the crowd.
Apart from this incident, the internal situation in the North-West Frontier Province had up to the end of last week

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showed some sign of improvement. In Peshawar City normal life is gradually being resumed, and the inhabitants of Kohat City have now generally resolved to abstain from further agitation, the position there being reported as normal. In Bannu City the situation is less satisfactory, but here also there was some improvement during the week. A favourable sign in the Province is that recruiting for additional police, which has been necessitated by the recent events, is proceeding briskly and recruits are coming forward freely. The chief weapon of the anti-Government agitators is now, as it has been all along in this area, the dissemination of false reports, but active steps are being taken to counter these. As your Lordships will be aware, the Government of India have appointed a Committee consisting of two High Court Judges, one of whom is a Mahomedan, to enquire into the disturbances at Peshawar on April 23, and the measures taken to deal with them. The Committee is now sitting and conducting its inquiry.
At the end of last week the Government of India were able to report that the tribal situation in the North-West Frontier was definitely easier. In the Malakand there has been some agitation in Panjkora, and movement of small parties of Utman Khel has been reported from the direction of Bajaur, but all other tribes are quiet. The Spinakawara Mullah, who has great influence with Utman Khel, has apparently decided to hold aloof. On the border of the Peshawar district Badshah Ciul, son of the Haji Turangzai, is still occupying his position, which was bombed at intervals during the week and casualties are believed to have been inflicted. As the presence of hostiles on the district border and the attempts to gather lashkars have disturbing effects on the district, an ultimatum has been delivered to the Halimzai Mohmands that if Haji himself does not withdraw within twenty-four hours action from the air will be taken against the villages where he had established himself. A reply has been received asking for extension of the time limit, as the matter is still under discussion between the Halimzai Mohmands and the Haji. Some Mohmands are reported to have joined the latter, but the tribe as a whole is staunch.
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It was mentioned in last week's report that there was an Afridi lashkar of about 500 at Gandao. This is inactive and will probably disperse. In Waziristan the action taken from the air against the Madda Khel villages in North Waziristan was immediately successful. Twenty Maliks, surendered themselves as hostages, and the terms to be imposed on the tribe for the unprovoked attack on Datta Khel Post will shortly be announced. In Sholapur, where Martial Law has been in force for some days, conditions are reported as fast becoming normal, and the Government hope that it may be shortly possible to discontinue Martial Law. So far as can be judged, it still remains true that the rural classes have been little affected, except in Gujarat, where the situation continues to give cause for anxiety, and broadly speaking, it also appears to be the case that there has been little or no participation by Moslems in actual disturbances, except, of course, in the North-West Frontier Province, where Mahomedans greatly predominate in the population, and where special efforts were made by the Congress organisations, by means largely of wilful misrepresentations of the effect and purpose of the Child Marriage Restraint Act recently passed by the Indian Legislature, to stir up hatred against the Government. For example, it has been said that all young Mahomedan girls will be medically examined by male doctors before marriage, and this palpably absurd statement has apparently been believed.
That, I think, sums up the general information to date as to the disturbances, and gives perhaps a general view of the picture for which the noble Earl asked. It is fair to say, as I have suggested, that the Moslems are not taking part in the civil disobedience movement in any real or extensive sense of the word, and that some of these disturbances were communal disturbances. The noble Earl also spoke of the loyalty of the Army, and I think other speakers mentioned it. I am glad to be able to assure your Lordships that so far as our information goes there is no question, and no doubt whatever, of the loyalty of the Indian Army. Their conduct has been quite exemplary, and I ought not to pass from the subject of these unfortunate incidents, and these riots, without echoing what has been said about the

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Indian police. The Indian police have had a time of difficulty which it is really hard to imagine. They have been exposed for hours together, they have been on duty until exhausted, and have frequently had to stand, pelted by brick-backs, insulted by the crowd, receiving wounds and not firing to protect themselves until absolutely the last moment has made it necessary.
In connection with any incident it cannot honestly be asserted that the Government of India have not shown the utmost limits of patience and forbearance in quelling any disturbance, or have ever resorted to force or the use of firearms until the conditions made it absolutely necessary. But, of course, as some of your Lordships have pointed out, exactly the opposite kind of story is circulated by Congress leaders, and your Lordships can hardly have a better example of that than the extraordinarily garbled, and indeed grossly untruthful, account of the events at Peshawar which was read by an hon. Member in the debate in another place on Monday.
Then the noble Earl asked whether these incidents appeared to be connected, or whether they were under central control. Well, the Government of India can hardly say that they have perfectly definite evidence, but they have enough to give them a shrewd suspicion that there is organisation and direction from behind, that these are not sporadic riots of crowds, but that they are directed riots of crowds, and that there is a definite organisation behind them. Then I think it was the noble Earl who further asked: Is the Government prepared to arrest and to deal with the Congress Committees who incite to these acts? The only answer I can give him on that is that when proof is given that any person is behind these acts no doubt that person will be dealt with; but I cannot at the moment say that we have definite legal evidence or satisfactory evidence as to these things. But the Government of India take the view, which has been already expressed that civil disobedience is a denial of Government, and that civil disobedience must be suppressed, and those who foment it must be dealt with. The noble Earl twice used an expression which I wish to refer to in order to deprecate. He talked about crushing these
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outbursts. I do not like the word "crushing."
EARL PEEL: I think I said "crushing sedition."
EARL RUSSELL: Well, it depends upon what value you give to that word; but your Lordships must remember, as I think another speaker has already pointed out, that probably a very large number of these unruly crowds, and even of these infuriated and brutal mobs who take part in these riots, are really unfortunate and deluded people, who believe, and probably honestly believe, that they are helping the cause of their country in some mysterious way by these disturbances. It is difficult to feel that they are by any means in the same position as people who are consciously seditious and who consciously desire to destroy the Government. They are misled, and really I think one's feeling for them should be more a feeling of pity than the feeling of a desire to crush, in the sense of dealing with them in a vicious or hostile manner.
EARL PEEL: I think that is not quite a fair representation of what I said, because I pointed out that the way to do it was to get hold of the leaders, the organisers. That is what I meant by crushing sedition. I have sympathy with many of these unfortunate people.
EARL RUSSELL: I am very glad to have elicited that explanation, because I am sure it may remove what possibly was a misapprehension. Naturally, the Government of India feel, as I think every member of your Lordships' House would feel, that the very last thing we would wish to do is to be compelled to shoot down our fellow subjects in India. That is a measure which a Government always takes with the utmost reluctance, and only when circumstances make it absolutely necessary, and I repeat that I think both the Viceroy and all the Commissioners of Police and the military have shown very great restraint and really infinite patience in dealing with this very difficult situation. We cannot honestly be accused, I think, of doing anything more than was necessary to preserve immediate law and order.
The very last object with which I refer to these outrages that have taken place is to incite any hostile feeling in your Lordships' minds or in this country

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against India as a whole, or against the Indians as a whole. What the exact psychological state of mind is which led to these demonstrations I find it personally very hard to understand. But, of course, the keeping of law and order, although it is a primary and essential function of Government—you might say it is elementary, and you must start with that: you cannot get on until you have peace and order in a community—is by no means ultimately the most important thing. The most important thing, the Government feel (and I hope your Lordships will agree with them) is to do what is possible to meet anything that is felt as a genuine grievance, and to make any advance that can properly be made. I think it is right to say in that connection that probably all the races in India, including the Moslems and the "untouchables," have a feeling that some advance in self-government would be appreciated, and is desired. They all have a feeling that they might want something, and what the Government desire to do, and the object of the round-table Conference that they propose to hold, is to enable the freest possible expression to be given to that feeling, from whatever quarter it comes, and whatever form it takes, and to ask all the various grades of opinion in India to meet together and to see what practicable proposals can emerge.
That seems to me to be the only proper and statesmanlike course you can offer them, and I should thing no fuller and franker offer has ever been made to any people who say that they want further advance or freedom. You offer them a full and unfettered opportunity of stating whatever it is their wish to do, and of proposing whatever it is they think can be proposed, and of discussing it. And I think that nobody could deny that, with the present Party in power, they would be discussing it with a sympathetic Government. That is the offer that is made, and it is to all of us a matter of very great grief indeed that that offer should be met by this civil disobedience campaign, which really does not deflect us from our purpose, but which does tend to make some of those who otherwise would be prepared to support some of their demands impatient, and which also, unfortunately, has the indirect result, when we take necessary repressive measures,
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of apparently alienating from us at the moment some of the more moderate opinion in India. As I say, I do not understand the psychology of it, and I cannot explain it.
Then, to answer a few more specific questions that were put, I was asked about Government propaganda. The Viceroy has made from time to time certain statements of policy and principles. Perhaps a day-to-day propaganda in the shape of a news sheet or wireless bulletin is what the noble Earl had in mind, and that might or might not be advantageous. But it is perfectly true that it would be known to be Government propaganda, and in the present hostile and suspicious attitude which the Congress people have succeeded in creating it is more than likely, I fear, that it might not be believed, because apparently what they are more ready to believe than the truth is that which is not the truth. But certainly the suggestion of the noble Earl will be remembered.
I was also asked a question as to whether Russia and Moscow were at the back of all this. Well, we always have the sinister figure of Russia in the background. We are quite used to hearing of Moscow, and we know perfectly well that the alleged, the avowed, determination of the Russian Government has, I think, always been to destroy other forms of Government in other countries. That, I think, has never been denied. But I can only say that when we are asked whether we have definite evidence that they are behind this movement in India the answer is that, so far as I know, we have not that evidence. Whether they are or are not behind it is a matter on which evidence later may be obtained, or on which people may have their own suspicions. But if I am asked whether we have definite evidence I can only answer that at present we have not.
The noble Earl also asked a question about the effects on trade—a perfectly legitimate question and one to which the answer is, of course, of importance. But I must point out to him what I think probably would occur to him.
EARL PEEL: The noble Marquess asked the question.
EARL RUSSELL: I have a note that the noble Earl asked what the effect on trade would be.
EARL PEEL: I did.
EARL RUSSELL: And the answer is, of course, that these outbreaks are so recent and this disturbed condition is so recent that it is impossible to give a real estimate of what the effect on trade will be at present. It is sufficiently obvious, of course, that disturbance of trade there must be when you have hartals going on, the compulsory closing of shops, riots in the streets, the boycott of foreign cloth and all that sort of thing. It is obvious that there must be disturbance of trade, but how great that disturbance is and what the figures are, clearly I think we would hardly be able to state for, perhaps, another year.
Then, the noble Marquess, Lord Reading, asked, and said that it was right at this moment, that nothing should be kept back. I can only say that so far as I know the Government have kept nothing back from the public of this country in this matter. I think we have given the country all the information we have, and I think we have taken them fully into our confidence as to the position. I really do not think there is anything kept back, and I hope that the noble Marquess himself does not think there is. I can only say that I know of nothing that has been kept back.
I have already spoken of the behaviour of the police and in conclusion I should like to ask your Lordships to agree with me that the Viceroy, who has been placed in a very difficult position, has behaved with immense patience—
NOBLE LORDS: Hear, hear.
EARL RUSSELL: has really kept his head in a sea of troubles, has done everything he possibly can to be conciliatory, and has done nothing that could at any time be regarded as provocative. I am glad to be able to make this public assurance that he has already been told that he has the complete, the full and the unstinted support of His Majesty's Government and, I am sure I am safe in saying, of your Lordships' House.
NOBLE LORDS: Hear, hear.
EARL PEEL: My Lords, I am much obliged to the noble Earl for his statement. I need not formally withdraw the Motion because I do not think I moved it.
THE LORD CHANCELLOR: The noble Earl did not actually move it.

RAILWAYS (VALUATION OF RATING) BILL.
Amendments reported (according to Order).

BARNSLEY AND DISTRICT TRACTION BILL. [H.L.]
FAVERSHAM OYSTER FISHERY COMPANY BILL. [H.L.]
FALMOUTH WATER BILL. [H.L.]
Commons Amendments considered, and agreed to.
House adjourned at twenty-five minutes past seven o'clock till to-morrow, half past three o'clock.