Sitting of 10 November 1930

Preamble
The House met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.
PRIVATE BUSINESS.
  LONDON AND NORTH EASTERN RAILWAY ORDER CONFIRMATION BILL,
  "to confirm a Provisional Order under the Private Legislation Procedure (Scotland) Act, 1899, relating to the London and North Eastern Railway," presented by Mr. Adamson; read the First time; and ordered (under Section 9 of the Act) to be read a Second time upon Tuesday, 18th November, and to be printed. [Bill 40.]
ORAL ANSWERS TO QUESTIONS.
  INDIA.

    BURMA RAILWAY (TENDERS).
    Mr. ARTHUR MICHAEL SAMUELasked the Secretary of State for India the price quoted in the lowest British tender and the approximate price at which the Hannover Maschinenbau A. G. obtained in August last the order from the Burma Railway for two tank locomotives
    The SECRETARY of STATE for INDIA (Mr. Wedgwood Benn): The contract price of the accepted tender was £6,780. The lowest British tender received was considerably higher. As I mentioned in my reply to the hon. Member on the 3rd instant, I am not willing to quote the figures of unsuccessful tenders.
    Mr. SAMUEL: What is the cause of these goods being too dear for the Indian Government to be able to give the contract to our manufacturers?
    Mr. BENN: That is not a question which arises here.
    Mr. SAMUEL: Does the right hon. Gentleman wish to shunt the responsibility on the High Commission again as last week, instead of looking into the matter himself?
    Mr. BENN: The hon. Gentleman knows that these are matters for the High Commissioner, and if he likes to put a further question down on specific points of detail, I will make inquiries of the High Commissioner.
    Mr. SAMUEL: Does not the right hon. Gentleman remember that he said last week that it was the High Commissioner who had to look into these things; and does he not realise that much unemployment in the heavy engineering trades is due to the dearness of our goods, and that it is the duty of his Department to find out why the goods are so dear that we lose orders?

    ESTIMATES (MILITARY SERVICES).
    Mr. DAYasked the Secretary of State for India whether he can furnish the estimates, for the 12 months ended to the last convenient date, of the total services for army, marine, and air in India; and will he give the sterling equivalent?
    Mr. BENN: If my hon. Friend will refer to the Final Budget Estimates of Expenditure on Military Services for 1930–31, of which there is a copy in the Library, he will find the latest figures on pages 2 and 22.

    CONFERENCE.
    Lieut.-Commander KENWORTHYasked the Secretary of State for India whether it is intended to publish the full correspondence regarding the peace efforts of Sir Tej Bahadur Sapru and Mr. M. Jayakar with certain Congress leaders and His Excellency the Viceroy as a Parliamentary Paper?
    Mr. BENN: I am placing in the Library copies of a statement issued by Sir Tej Bahadur Sapru and Mr. Jayakar on 5th September of the course of their conversations with the Congress leaders.
    Lieut.-Commander KENWORTHY: Does that answer what I ask about the full correspondence; and is the right hon. Gentleman aware that the full correspondence has been published in India

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    with the Viceroy's concurrence? Is that going to be placed in the Library, and how many copies will there be?
    Mr. BENN: I will make as many copies available as will meet the general convenience. I think that the document is that referred to by the hon. and gallant Gentleman.
    Lieut.-Commander KENWORTHY: In view of the importance of the matter, will the right hon. Gentleman make it available to all Members, so that they can see the course of these very important discussions?
    Mr. BENN: If there is any general wish that it should be issued, I will take note of it, and will see what can be done.
    10. Mr. BROCKWAYasked the Secretary of State for India whether the Government is prepared to accept the terms put forward by Mr. Gandhi, Mr. Motilal Nehru, Mr. Jawarhalal Nehru, and other leaders of the Indian National Congress, as a basis of settlement of the Indian constitutional problem, with a view to making the Round-Table Conference representative of Indian opinion
    Mr. BENN: As I have already stated, I will place in the Library a copy of the statement issued by Sir Tej Bahadur Sapru and Mr. Jayakar. It includes letters from His Excellency the Governor-General to which I can add nothing.
    Mr. BROCKWAY: Which of the terms which have been offered by these leaders are unacceptable to His Majesty's Government?
    Mr. BENN: The papers really cover the whole ground, and I think that I had better leave it there.
    Mr. BROCKWAY: Can the right hon. Gentleman indicate which of these terms are not in accordance with the policy of the party which this Government represents?
    Mr. BENN: I cannot do better than say that the matter is reviewed in these documents, which I am publishing.
    Mr. SMITHERS: Exactly what constitutional rights have the gentlemen mentioned in this question to put forward any demands
    Sir SAMUEL HOAREasked the Secretary of State for India whether it is intended to present the Government of India's despatch on constitutional questions to Parliament; and, if so, on what date?
    Mr. BENN: The Government of India's despatch will be made available to members of the round-table Conference and to Members of Parliament on Thursday next.
    Major GRAHAM POLE: May we assume that this despatch represents the views of His Majesty's Government?
    Mr. SPEAKER: That is another question.
    Mr. BENN: I should like to say that His Majesty's Government are publishing the despatch for general information, and that at this stage they are formulating no proposals.

    AFRIDI (ARMS AND ARMAMENT).
    Mr. ALBERYasked the Secretary of State for India whether he can give any information as to the source from which the arms and armament used by the Afridi in recent operations were obtained?
    Mr. BENN: I cannot give precise information; but in recent years supplies of arms have unfortunately been freely available in neighbouring countries, largely as the result of the abandonment or loss of arms during the Great War or in subsequent periods of disturbance, and no doubt the tribesmen have obtained supplies piecemeal from various sources in this way.
    Mr. ALBERY: Has the right hon.Gentleman had any reason to believe that quite modern arms are supplied to the Afridi from a neighbouring source? Has he made inquiries, or does he not think that it is of sufficient importance to inquire into?
    Mr. BENN: The question was very fully considered, and the information that is available has been given in the answer that I have read.

    CONGRESS PARTY.
    Mr. MARJORIBANKSasked the Secretary of State for India whether he has taken any steps to frustrate the

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    threat by the Indian Congress party to set up independent civil and criminal courts?
    Mr. BENN: The authorities in India will exercise their powers to deal with any infringement of the law.
    Mr. MARJORIBANKS: Have any infringements of the law taken place in regard to these particular matters, and has inquiry been made as to what is taking place?
    Mr. BENN: Those are separate questions which should be made the subject of separate notices on the Paper.

    CASUALTIES, NORTHERN FRONTIER.
    Mr. WILLIAM NICHOLSONasked the Secretary of State for India whether there have been any casualties among the British troops on the northern frontier of India during the recent unrest; and, if so, how many and in what regiments?
    Mr. BENN: If the right hon. Member refers to the action now being taken with regard to the Afridis, the reports so far received are that one private of the Sea-forth Highlanders and one non-commissioned officer of the Shropshire Light Infantry have been wounded.

    DIPHTHERIA, KOHAT.
    Colonel HOWARD-BURYasked the Secretary of State for India whether he is aware that diphtheria has been prevalent in Kohat for a year and that the disease has been almost entirely confined to British officers and their families; and whether any steps have been taken to trace the disease to its source and to prevent its future recurrence
    Mr. BENN: I have not received any information on the subject, but will inquire if the hon. and gallant Member so desires.
    Colonel HOWARD-BURY: If the right hon. Gentleman will inquire, I shall be glad, as it has been very bad.

    CINEMATOGRAPH FILMS (CENSORSHIP).
    Captain PETER MACDONALDasked the Secretary of State for India whether he has made any representations to the Government of India with a view to securing the exclusion from India of films calculated or liable to create a false and unsatisfactory impression of the lives and morals of the people of Great Britain?
    Mr. BENN: The censorship of films in India is a matter for the local authorities. I have not had occasion to make any representations.
    Captain MACDONALD: Has the right hon. Gentleman seen the report that films have been shown such as are calculated to disturb the peace in India?
    Mr. BENN: The information that we have was, of course, brought under review in preparing the reply to the hon. and gallant Gentleman.

    AIR-MAIL SERVICE (CALCUTTA-RAGOOON).
    Major POLEasked the Secretary of State for India if he will give information showing the progress that has been made in the preparations for the extension of the air-mail service to Calcutta and Rangoon?
    Mr. BENN: The ground organisation between Karachi and Calcutta is now complete or practically so. Work is in progress on the ground organisation between Calcutta and Rangoon and is expected to be completed by the end of October, 1931.

    SITUATION.
    Major POLEasked the Secretary of State for India if he can make a general statement as to the present state of affairs in India?
    Mr. BENN: I am circulating a statement giving the Government of India s appreciation of the situation to date.
    Following is the statement:

    APPRECIATION OF THE SITUATION BY THE GOVERNMENT OF INDIA UP TO 8TH NOVEMBER, 1930.
    North West Frontier.—The Afridi jirga met at Bagh on the 31st October and deliberations continued till 5th November. The majority of tribesmen who attended are reported to have belonged to Malikdin Khel and Kambar Khel sections. Leading Maliks were apparently absent, but hostile party Elders and government pensioners were represented. The only decision arrived at appears to have been that the Elders should be entrusted with task of effecting a settlement with Government. A letter was subsequently despatched to the Assistant Political Officer by leading Maliks and Elders asking for a further opportunity of discussing a settlement with Government.
    The Haji of Turangzai arrived in Gandab on 30th October, where he remained till the 7th November. Maliks of assured clans were sent to counteract his activities, in which they appear to have been successful as the Haji left Gandab on the 7th without apparently having effected his purpose of embroiling friendly Mohmands with Government. Propaganda is reported to be active amongst Mangals and Zadrans, the object being to stir up further attacks on Kurram. So far, however, efforts of agitators appear to have been unsuccessful.
    Picketing of liquor shops in Peshawar City has been discontinued.
    Internal India.—The provincial reports relating to the second half of October do not show any great change in the situation. In Madras the number of prosecutions is now nominal and there is a steady flow of apologies from those previously convicted. In Bengal the civil disobedience movement shows diminished signs of life except for sporadic manifestations of lawlessness in a few areas where there has been opposition to payment of the Chowkidari tax. There has been some slight interference with census operations. The United Provinces report that some of the leaders recently released from jail are abstaining from open activities which may render them liable to prosecution and, while directing the movement, are leaving defiance of the law largely to women, boys and hired volunteers. There have been fewer meetings and demonstrations and picketing is less evident. The Punjab records the same features and adds that audiences have been smaller. A general improvement in the political situation has been maintained in that province, but the low prices of agricultural produce are a cause of anxiety and depression. The Sikh position remains confused. Since the session of Congress held in Lahore last December the Sikhs have been pressing for inclusion of their colour in the national flag and some sections have made it a condition of co-operation with Congress. The matter has been raised on many occasions during the past 10 months, but Congress have now definitely declined to meet the wishes of the Sikhs at the present time. The party which recently declared in favour of Congress has been attempting to arouse enthusiasm in rural
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    areas by holding a series of meetings, but reports of District Officers show that these efforts have so far met with no success, attendance being very small. Bihar and Orissa reports slow improvement. Picketing is spasmodic and mainly done by small boys, and there has been no difficulty in collection of Chowkidari tax. Discipline in jails is rather better than it was, but still unsatisfactory, and this is true also of Bengal. Two Local Governments report unwillingness on the part of houseowners to lease their premises to Congress organisations.
    There is little to record regarding the civil disobedience movement in the Bombay Presidency during the past week. There has been further defiance of orders of authorities in Bombay City, resulting in clashes with the police. Stone-throwing was started on one occasion which necessitated dispersal by the police and this was followed in turn by persistent stone-throwing from streets and houses. Ten police officers and It men were injured, and the casualties among the crowd are reported to be about 200, the great majority of which are slight.
    During the past fortnight the Delhi police have had important successes in dealing with the terrorist movement; these include the discovery of a very large amount of material which it is believed was intended for manufacture of explosives and which indicates that plans were in preparation for outrages on a large scale. On 1st November a constable effected the arrest of a suspected revolutionary in very gallant circumstances. Although fired on. and brought to his knees by a bullet wound, he continued pursuit and felled assailant with his baton. In Lahore two suspects fired on police but without effect. Police returned fire and both were arrested, one of them subsequently dying of his wounds.
    The effects of the low prices of agricultural produce are becoming more pronounced, while generally the harvest has been good. Cultivators can only dispose of their produce at very unfavourable prices and, in the case of some crops, supply is much in excess of demand. While, therefore, there is no question of famine conditions in the sense of insufficiency of food, there has been a serious contraction in the cash resources of the rural population, with the pros-

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    pect of a further fall involving depreciation in the standard of living. Agricultural depression must seriously affect trade and industry in general and increase unemployment, but reduced cost of food grains is of assistance to certain classes in towns where economic effects are not yet so pronounced as in rural areas. Indeed, in Bombay City, improvement in regard to mill labour is maintained. The boycott of foreign goods does not show any marked change. Cloth is being sold freely in many places by retail dealers who are making considerable profits, but on a smaller turnover. Wholesale dealers are observing Congress ban in some places and ignoring it in others, but there is general reluctance to buy new stocks on a considerable scale, which is partly due to the prospect of poor rural markets for the reasons given above.

    MALWA STATES (OPIUM).
    Major POLEasked the Secretary of State for India the present position regarding the discussions between the Government of India and the Malwa States concerning the preparation of opium in those states and its effect on the internal opium policy of the Government of India?
    Mr. BENN: The Government of India have formulated a scheme for dealing with this matter and are discussing it with the States.

    PRISONERS, MEERUT.
    Mr. HORRABINasked the Secretary of State for India whether every facility is being afforded to the accused in the Meerut conspiracy case for the purposes of the preparation and conduct of their defence: if he is aware that the correspondence of the prisoners with their friends in this country has been interfered with; and whether the freedom formerly allowed to the prisoners as regards correspondence can be restored?
    Mr. BENN: All the usual facilities are being afforded to the accused in the Meerut Conspiracy case for the conduct of their defence. The rules as to their correspondence are those in general application in the Province to persons undergoing trial.
    Mr. HOLFORD KNIGHT: Is the preliminary hearing of this case still proceeding, or has it been suspended?
    Mr. BENN: As far as I am aware, it is proceeding.
    Mr. STEPHEN: Does not the right hon. Gentleman think that this case should be stopped altogether?

  CHINA.

    BRITISH MINISTER.
    Mr. DAYasked the Secretary of State for Foreign Affairs whether arrangements have been made, or are contemplated, for His Majesty's Minister to reside in Nanking; and, if not, will he inform the House exactly what the existing arrangements are?
    The SECRETARY of STATE for FOREIGN AFFAIRS (Mr. Arthur Henderson): I would refer my hon. Friend to the reply returned to the hon. Member for Blackpool (Sir W. de Frece) on the 15th of July last, since when there has been no material change in the position. His Majesty's Minister: visits the capital from time to time, when negotiations on some important question have to be initiated or are approaching the decisive stage. The Counsellor of His Majesty's Legation divides his time between Nanking and Shanghai, and is in constant touch with the members of the National Government.
    Mr. DAY: Is it intended to establish His Majesty's Minister at Nanking?
    Mr. HENDERSON: The answer to that question is the one to which I have called my hon. Friend's attention, and which I gave on the 16th July.

    BRITISH SUBJECTS.
    Captain P. MACDONALDasked the Secretary of State for Foreign Affairs to what extent the lives or property of British subjects have been adversely affected by events in China since the beginning of the Parliamentary Recess; and what steps have been taken to safeguard them?
    Mr. A. HENDERSON: On two occasions during this period there seemed to be some ground for anticipating danger to British lives and property. In July, as a precautionary measure, British subjects were evacuated from Changsha, but were able to return some days later. In August there was a rebel advance to-

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    wards Hankow, and certain British forces were moved to that city, but no loss of life or damage to property, in fact, occurred. Generally speaking, conditions have been somewhat disturbed in the interior; but His Majesty's Minister and Consular Officers are fully alive to the possibilities of the situation.

    BOXER INDEMNITY.
    Mr. GODFREY LOCKER-LAMPSONasked the Secretary of State for Foreign Affairs what is the present position of the negotiations regarding the Boxer indemnity?
    Mr. A. HENDERSON: A settlement of this question was reached in September last, when Notes were exchanged between His Majesty's Minister in China and the Chinese Minister for Foreign Affairs. The correspondence will shortly be published as a White Paper. The settlement is subject to the approval of Parliament, and the requisite Bill will be introduced as soon as time can be found.
    Mr. LOCKER-LAMPSON: Is the statement which has appeared in the Press true that a large sum of money is being handed over to the Chinese for the Canton and Hankow railway against the advice of the advisory committee?
    Mr. HENDERSON: I must have notice of that question.
    Mr. MILLS: Is the Secretary of State aware that the reason fur this cancellation of the Boxer indemnity lay in the voluntary renunciation of it by the Soviet Government seven years ago?
    Mr. A. M. SAMUEL: Is it not a fact that our portion of the Boxer indemnity was earmarked for completing the Canton-Hankow railway, and is the right hon. Gentleman aware that the Chinese have already dismissed the British engineer-in-chief of that railway, Mr. Valpy, and have withheld from him back pay amounting to 36,000 dollars? Will the Foreign Secretary take that into consideration?
    Mr. HENDERSON: I think I must have notice of that question.

    NORTHERN CHINA (GOVERNORSHIP).
    Mr. HANNONasked the Secretary of State for Foreign Affairs if he has any
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    statement to make on the change which has taken place in the Governorship of Northern China?
    Mr. A. HENDERSON: In September, Marshal Chang, the Governor of Manchuria, took over the control of certain districts in North-Western China, including the Peking and Tientsin area. This transfer of control was affected peacefully. The National Government have stated that Marshal Chang is acting in complete accord with them.
    Mr. HANNON: Does this mean that a return to normal conditions in Northern China will be made easier now?
    Mr. HENDERSON: I can give no guarantee about that.

  RUSSIA.

    LENA GOLDFIELDS (ARBITRATION AWARD).
    Mr. ALBERYasked the Secretary of State for Foreign Affairs whether he has now received any reply to the representations made by His Majesty's Ambassador at Moscow concerning the recent arbitration proceedings with the Lena Company?
    Sir WILLIAM DAVISONasked the Secretary of State for Foreign Affairs whether he can now inform the House of the result of the representations made by His Majesty's Ambassador at Moscow to the Russian Soviet Government with regard to their refusal to meet the arbitral award of the 2nd September, amounting to over £12,000,000, in favour of the British company known as Lena Goldfields, Limited?
    Lieut.-Colonel Sir FREDERICK HALLasked the Secretary of State for Foreign Affairs what reply has been received from the Soviet Government to the representations made by his instructions with regard to the carrying out of the decision given in the arbitration proceedings with respect to the Lena Goldfields Company?
    Mr. MARJORIBANKSasked the Secretary of State for Foreign Affairs whether the Soviet Government have officially denied liability in respect of the claim of Lena Goldfields, Limited, against them?
    Mr. A. HENDERSON: His Majesty's Ambassador made his representations on the 2nd November, immediately on his return to Moscow, and no reply has yet been received.
    Mr. ALBERY: Does not the right hon. Gentleman agree that this matter has a big bearing on trade relations with Russia, and should be pressed to an early conclusion; and will he say when I can put a question down again?
    Mr. HENDERSON: I have no objection to the hon. Member putting a question down, and we will do what we can to get a reply, but I am afraid that we cannot do more than we are doing.
    Sir W. DAVISON: Does the right hon. Gentleman realise that every day's delay in settling this matter causes a loss of £1,700 to British shareholders, and does he not see the extreme urgency of getting the matter settled at an early date?
    Mr. HENDERSON: Yes, but I do not know what hon. Members desire me to do in order to force answers to some of the positions which we have to take up.
    Sir F. HALL: Are the Government going to sit down and allow the Soviet Government practically to repudiate their liability and still permit them to have free access to our markets?
    Mr. HENDERSON: I have tried to indicate that we have presented a case to them through our Ambassador. If that is what the hon. and gallant Member calls "sitting still," I am afraid I cannot help him any further.
    Mr. MARJORIBANKS: Has any economic pressure been brought to bear on the Soviet Government

    SOVIET AMBASSADOR.
    Captain CROOKSHANKasked the Secretary of State for Foreign Affairs if he will state how many interviews he has had with the Soviet Ambassador since the latter took up his appointment in London?
    Mr. A. HENDERSON: The answer is in the negative.
    Captain CROOKSHANK: How can the answer be in the negative?
    Mr. HENDERSON: I have nothing further to state.
    Captain CROOKSHANK: Then does that mean that the right hon. Gentleman has never seen the Ambassador at all?
    Sir W. DAVISON: On a point of Order. Surely this is a very fair question to ask the Foreign Minister, and the House would like to know the answer.
    Mr. SPEAKER: The Minister has made his reply.

    EXPORTS.
    Sir KINGSLEY WOODasked the Secretary of State for Foreign Affairs whether be has received any information from the British Ambassador concerning certain decrees of the Soviet Government giving detailed instructions for the manufacture and dumping of a large number of commodities?
    Mr. A. HENDERSON: The answer is in the negative.
    Sir K. WOOD: Having regard to the importance of this matter, will the right hon. Gentleman ask the British Ambassador if he can obtain some information on the subject?
    Mr. HENDERSON: I will take that into consideration.

    PROPAGANDA.
    Mr. MARJORIBANKSasked the Secretary of State for Foreign Affairs whether, before the resumption of diplomatic relations with the Soviet Government, the meaning of the Soviet pledge as to propaganda with regard to the Third International was discussed between the two Governments, either verbally or by written communication?
    Mr. A. HENDERSON: Yes, Sir, as the hon. Member will find by reference to my speech of the 5th of November, 1929.
    Mr. MARJORIBANKS: Is the right hon. Gentleman aware that two months before the formal exchange of ambassadors, "Izvestia,' the official organ of the Soviet Government, said that the right hon. Gentleman had misinterpreted the particular term and that the Soviet Government were not responsible for the action of the Comintern; and may I ask how this mistake could have arisen?
    Mr. HENDERSON: I do not think that question arises out of the answer.

    TRADE CONDITIONS.
    Sir ASSHETON POWNALLasked the Secretary to the Overseas Trade Department whether he is yet in a position to say if an annual report on trade conditions in Russia from our trade commissioner there will be published?
    Mr. GILLETT (Secretary, Overseas Trade Department): While no decision has yet been taken to publish an annual report upon trade conditions in the Union of Soviet Socialist Republics as is done in the case of other countries, I hope that it may be possible, before long, to issue some publication dealing with trade with that country.
    Mr. A. M. SAMUEL: Will the hon. Gentleman allow that publication to include a survey of the currency expansion?
    Mr. GILLETT: It will certainly include all relevant factors.
    Sir A. POWNALL: Can the Secretary to the Overseas Trade Department say why it has not been proposed to issue, in the case of Russia, the same valuable information that we get from our trade commissioners in every other country where we have commissioners?
    Mr. GILLETT: No annual report has been published about Russia since 1915, and then it dealt only with a part of Russia. We are simply following the practice of previous Governments.
    Sir PHILIP CUNLIFFE-LISTER: Now that His Majesty's Government have established special relations with Russia and have special facilities, is not that all the more reason why we should let the country know what is happening?
    Mr. GILLETT: We have treated this matter in the same way as previous Governments have done.

    BRITISH EXPORT CREDITS.
    Mr. DOUGLAS HACKINGasked the Secretary to the Overseas Trade Department whether he will be prepared to place some limit upon the amount of Government risk outstanding at any one time in connection with trading with Russia under the export credits guarantee scheme?
    Mr. GILLETT: No, Sir.
    Mr. HACKING: In view of the fact that we purchase from Russia at least four times as much as she buys from us, is it really necessary to give unlimited credit to that country?
    Sir A. POWNALL: In view of the Lena Goldfields case, could the hon. Gentleman not reconsider this matter, with a view to getting a. more satisfactory solution?
    Mr. GILLETT: I answered a question last week on this subject, and I pointed out that the Advisory Committee have all the facts at their disposal, and I am not prepared to make any change in the present policy.
    Mr. HACKING: Does the hon. Gentleman agree that Russia has very large credits in this country already?
    Mr. GILLETT: Yes, I am aware of it.
    Mr. A. M. SAMUELasked the Secretary to the Overseas Trade Department the average length of the period of credit covered by the guarantees upon the Soviet Government's bills for which His Majesty's Government is liable under the export credits scheme?
    Mr. GILLETT: It is not the practice to give particulars of transactions with individual countries.
    Mr. MILLS: Cannot the hon. Gentleman give the length of the period; and is he aware of the continued unemployment in the Crayford branch of Messrs. Vickers because a sufficient length of credit time cannot be afforded them—at least 600 men?
    Sir P. CUNLIFFE-LISTER: Is not the only reason for not giving particulars of individual transactions to avoid disclosing the details of an individual piece of business; and why cannot the hon. Gentleman give the average length of credit, which cannot possibly disclose any particulars of any individual transaction?
    Mr. GILLETT: There is also the point that details given in regard to the treatment of one country might be compared with another. A similar question might be asked in regard to some other country, and the terms might be better or worse.
    Mr. SAMUEL: Does it mean that the hon. Gentleman wishes to hide the fact that he is giving better treatment to that country than to other countries?
    Mr. GILLETT: The hon. Gentleman is entirely mistaken.

    CONSULAR APPOINTMENTS.
    Mr. MILLSasked the Secretary to the Overseas Trade Department how many consular appointments have been made to the Union of Soviet Socialist Republics of Russia; what is the figure of population in foreign cities which determine appointments; and whether he is aware of the growing consular representation of other countries throughout Russia?
    Mr. GI LLETT: A Consul-General and a Vice-Consul have been appointed at Moscow and a Consul at Leningrad, and, it is hoped, if the Soviet Government agree, to establish consular posts at Archangel, Odessa and Tiflis. Consular representatives are stationed at towns where the nature and importance of British interests are held to require such representation. The question of population is, therefore, a subsidiary consideration. As regards the last part of the question, I am not aware that the consular representation of foreign Powers in the Soviet Union has materially increased of late, but I am asking His Majesty's Ambassador for a report on this subject.

    GAS WARFARE.
    Mr. GRAHAM WHITEasked the Secretary of State for Foreign Affairs if he will give the names of States which have formally pledged themselves, by treaty or otherwise, to abstain in future from the use in war of asphyxiating or poisonous gases or liquids or similar noxious substances; and the names of States, if any, which have further pledged themselves to co-operate in the prevention by international action of the use of such substances in warfare?
    Mr. A. HENDERSON: Twenty-seven States have both signed and ratified the Geneva Protocol of the 17th of June, 1925. Nineteen other States have signed, or otherwise acceded to, this Protocol, but have not yet ratified it. I am circulating the names in the OFFICIAL REPORT. All States bound by the Protocol undertake to exert every effort to induce other States to accede to it.
    Mr. ERNEST BROWN: Is Great Britain included in the list?
    Mr. HENDERSON: Yes, certainly.
    Mr. BROCKWAY: Is it the case that, meanwhile, experiments are still being undertaken under the auspices of the British Government in the preparation of fresh poison gases?
    Mr. HENDERSON: I think I ought to have notice of that question.
    Following are the names:
    The following States have both signed and ratified the Geneva Protocol of 17th June, 1925:

    Austria.

    Belgium.

    United Kingdom of Great Britain and Northern Ireland.

    Canada.

    Australia.

    New Zealand.

    Union of South Africa.

    Irish Free State.

    India.

    China.

    Denmark.

    Egypt.

    Finland.

    France.

    Germany.

    Italy.

    Liberia.

    Persia.

    Poland.

    Portugal.

    Rumania.

    Spain.

    Union of Soviet Socialist Republics

    Sweden.

    Turkey.

    Venezuela.

    Yugoslavia.

    The following have signed, or otherwise acceded, but have not yet ratified:

    Abyssinia.

    United States of America.

    Brazil.

    Bulgaria.

    Chile.

    Czechoslovakia.

    Estonia.

    Greece.

    Japan.

    Latvia.

    Lithuania.

    Luxemburg.

    Netherlands (including the Netherlands Indies, Surinam and Curacao).

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    Nicaragua.

    Norway.

    Salvador.

    Siam.

    Switzerland.

    Uruguay.

    Mr. WHITEasked the Secretary of State for Foreign Affairs whether any and, if so, what steps have been taken to implement the declaration of the Preparatory Commission on Disarmament of the League of Nations, dated May, 1929, regarding the use in war of asphyxiating or poisonous gases and other noxious substances?
    Mr. HENDERSON: The declaration mentioned by the hon. Member forms part of the Draft Disarmament Convention, which was provisionally agreed upon by the Preparatory Disarmament Commission at its meeting in May, 1929. I hope that it will, therefore, be included in the Convention to be drawn up by the Preparatory Commission at its present meeting.

  EGYPT.
  Sir F. HALLasked the Secretary of State for Foreign Affairs if 'he will inform the House what is the present position of the negotiations between this country and Egypt with a view to securing a settlement of the outstanding difficulties between the Governments of the two countries?
  Mr. A. HENDERSON: No negotiations are at present in progress.
  Mr. D. G. SOMERVILLE: Is it the case that the position is an absolute deadlock just now?
  Mr. HENDERSON: I do not know what the hon. Member means by "a deadlock."

  BRAZIL (FOREIGN OBLIGATIONS).
  Mr. HANNONasked the Secretary of State for Foreign Affairs whether all necessary measures have been taken to safeguard British interests in Brazil under the new regime; and if assurances on this matter have been received from the present Brazilian Government?
  Mr. A. HENDERSON: The answer is in the affirmative. The new Brazilian Government have informed His Majesty's
  1304
  Ambassador that they recognise and respect all national engagements contracted abroad, existing treaties with foreign Powers, all public debt contracts in force, and other obligations legally enacted. His Majesty's Ambassador informed the Brazilian Government on the 8th of November that His Majesty's Government consider that the recent a change of government in Brazil in no way affects the diplomatic relations between the two countries.
  Mr. HANNON: Does that mean that the discharge of outstanding obligations in Brazil to investors in this country will be hastened up?
  Mr. HENDERSON: That is my interpretation of the position.
  Mr. MACQUI STEN: Will the right hon. Gentleman consider whether he ought not to send a copy of that resolution to the Soviet Government?

  NAVAL AND MILITARY PENSIONS AND GRANTS.

    INSTITUTIONAL TREATMENT.
    Mr. D. G. SOMERVILLEasked the Minister of Pensions the number of men wounded in the War for whom his Department still provides institutional treatment?
    The MINISTER of PENSIONS (Mr. F. O. Roberts): The average number of disabled ex-service officers and men (apart from cases of mental disease in mental hospitals) for whom my Department is providing institutional treatment, whether for wounds or diseases, is, in round figures, 4,000. The number of cases of wounds requiring treatment cannot be separately stated, but about one-fourth of the whole number are in hospital for surgical treatment.

    WIDOWS' PENSIONS.
    Mr. STEPHENasked the Minister of Pensions the number of pensions which have been reduced in amount owing to the passing of the Widows', Orphans' and Old Age Contributory Pensions Acts of 1925 and of last year, and the weekly saving to the Ministry thereby entailed?
    Mr. ROBERTS: I would refer my hon. Friend to the answer which I gave on the 30th July to the hon. Member for the Gorbals Division of Glasgow (Mr. Buchanan), of which I am sending him a copy.
    Mr. STEPHEN: Will the Minister consider whether he ought not to stop this process of reducing widows' pensions?
    Mr. ROBERTS: If my hon. Friend looks at the answer, he will find, generally speaking, so far from a reduction taking place, that on the two pensions there was an increase.
    Mr. STEPHEN: On the two pensions, yes; but is there any reason, since the widows' pension is given on an insurance basis, why the other pension should be reduced? Is the widow to get no advantage?
    Mr. ROBERTS: I am afraid I cannot add usefully to the answer I have quoted.

    BELLAHOUSTON HOSPITAL.
    Mr. STEPHENasked the Minister of Pensions when he proposes to close down Bellahouston Hospital, Glasgow; and what steps he proposes to take to provide for the large number of ex-service men in Glasgow and the West of Scotland in need of hospital treatment?
    Mr. ROBERTS: After careful consideration I have decided that Bellahouston Hospital cannot justifiably be maintained beyond a date early in the New Year, so that the premises may be banded back to the Red Cross and the necessary reinstatements completed by the date of the expiry of the lease.
    I have arranged with the Committee of Erskine House for the use of that hospital for the type of case at present treated at Bellahouston. The patients will be under the care of the same surgeon as heretofore. I have also made arrangements 'with the Glasgow Royal Infirmary for the immediate admission of any case requiring urgent emergency treatment. All out-patients will be treated at the Glasgow Area Clinic.
    Mr. STEPHEN: Does the right hon. Gentleman not intend to have a hospital in Glasgow to serve the ex-service men in the West of Scotland?
    Mr. ROBERTS: Erskine House, I understand, is in Glasgow. What I have to do is to see that adequate treatment is provided for the men, and I am satisfied that the arrangements made with Erskine House as a general hospital will meet all requirements.
    Mr. STEPHEN: Is the right hon. Gentleman aware that the Ex-Service Men's Association is very strongly against this transfer to Erskine House, which was set up for another purpose altogether.
    Mr. MAXTON: Is the Minister of Pensions aware that Erskine House is a most inaccessible place from Glasgow, and is more particularly difficult for men who have lost limbs or who are crippled in some way. Has the Minister of Pensions visited Erskine House?
    Mr. ROBERTS: I have personally visited Erskine House, and I am not aware of the conditions which have been suggested by the hon. Member for Bridgeton (Mr. Maxton). I am quite willing to look into this aspect.

    ADMINISTRATION.
    Mr. STEPHENasked the Minister of Pensions whether the recommendations of the local medical boards in connection with claims to pensions are always accepted by his medical advisers; and, if not, what steps are taken by the officers at headquarters of the Ministry to obtain personal observation in the cases concerned?
    Mr. ROBERTS: The answer to the first part of the question is in the negative. The function of local Medical Boards is primarily to provide a detailed clinical account of a case, though they may and usually do give the reasons, on the evidence available to them, for any view they may form as to entitlement to pension. Entitlement, however, depends entirely on the medical history and other evidence in the case, and, in assisting the Ministry to determine a claim, medical officers are free to hold or obtain any further medical examination they may find necessary.
    Mr. STEPHEN: Does the right hon. Gentleman not realise that people who do not see the individuals concerned may

    1307
    be turning down people who are fully entitled to pensions, and is he aware of the great dissatisfaction that exists?
    Mr. MILLS: Is the right hon. Gentleman aware that the Fletcher case at Swanscombe, Kent, is one of at least a dozen cases in the same area which is exciting a good deal of comment?
    Mr. ROBERTS: I am willing to look into those cases if they are brought to my notice.
    Mr. SPEAKER: Sir Assheton Pownall.
    Mr. MILLS: May I submit to you Mr. Speaker, that this is a very important point—
    Mr. SPEAKER: The hon. Member must put his question on the Paper. We cannot go into a particular case upon a supplementary question to the question on the paper.

  TRADE AND COMMERCE.

    BRITISH INDUSTRIES FAIR.
    Mr. HACKINGasked the Secretary to the Overseas Trade Department whether he can make any statement regarding the progress made in connection with the British Industries Fair to be held in February next year?
    Mr. GILLETT: The progress made is satisfactory. Of the increased space available this year at Olympia, namely 295,000 square feet, 95 per cent. has been applied for. The arrangements for the Cotton Textile Section at the White City are in the hands of the Joint Committee of Cotton Trade Organisations and are, I understand, being energetically pressed forward. In Birmingham only 500 square feet out of a total of 211,000 square feet is still available.
    Mr. HACKING: Can the hon. Gentleman say what space will be available for the cotton section?
    Mr. GILLETT: I am afraid I cannot answer that question without notice.
    Mr. HACKING: Will it be in the overhead galleries, and not in the main portion of the building?
    Mr. GILLETT: I rather think that the overhead galleries will contain a part of the exhibit.
    Lieut.-Commander KENWORTHY: Has my hon. Friend considered the question of having this fair in Yorkshire?
    Mr. GILLETT: In all these matters we are awaiting the report of the Chelmsford Committee.
    Sir F. HALL: Has the hon. Gentleman considered holding this fair at the Crystal Palace, which belongs to the nation?

    PERSIA.
    Mr. ALBERYasked the Secretary to the Overseas Trade Department whether he can give any information concerning the effect of anti-British propaganda on British trade in Persia and state what steps, if any, have been taken to deal with the situation?
    Mr. GILLETT: The difficulties experienced in trade with Persia by this country are primarily caused by the restriction of foreign exchange transactions, recently introduced by the Persian Government for economic reasons. There is no reason to suppose that these restrictions are the effect of anti-British propaganda. His Majesty's Minister at Teheran has repeatedly made representations to the Persian authorities on behalf of the British firms whose interests are affected. Further, the Vice-Consul at Teheran who previously dealt with Commercial work has recently been appointed Commercial Secretary there and now has his own staff to deal with trade questions.
    Mr. ALBERY: Have any complaints been made about this propaganda?
    Mr. GILLETT: No, Sir. Personally I have not received any.

    EXHIBITIONS.
    Mr. HACKINGasked the Secretary to the Overseas Trade. Department when he expects to publish the report from the Chelmsford Committe in connection with the future policy regarding trade exhibitions?
    Mr. GILLETT: The report has not yet been submitted, and I am accordingly unable to say anything as to publication.

    EXPORT TRADE.
    Sir NICHOLAS GRATTANDOYLEasked the Secretary to the Overseas Trade Department in what countries of the world exports of British products are wholly or mainly admitted duty free;

    1309
    in what countries British products enjoy preferential treatment over other products; and in what countries they are more heavily penalised than those of other nations?
    Mr. GILLETT: I am afraid it is not possible within the limits of a Parliamentary answer to reply in detail, but it may be said generally that only in very few countries are the majority of goods of United Kingdom origin admitted duty free. United Kingdom goods obtain a measure of preference in all the Dominions, in India and in some of the Colonies. There are a few cases in foreign countries where they obtain the benefit of minimum tariff rates which are denied to the goods of some other countries. With regard to the last part of the question, United Kingdom goods obtain most favoured nation treatment throughout the world with few exceptions of any importance.
    Sir N. GRATTAN-DOYLE: Is the Secretary to the Overseas Trade Department. aware that it is very desirable to have the whole of this information, and will he see that it is obtained?
    Mr. GILLETT: If the hon. Member had put this question down for a written answer, I could have given him a fuller reply than is possible across the floor of the House.
    Sir N. GRATTAN-DOYLE: May I repeat my question in the form of a written question?
    Mr. GILLETT.

    OVERSEA INVESTIGATIONS.
    Mr. ROMERILasked the Secretary to the Overseas Trade Department whether the Development Council have met trade groups to discuss the possibility of trade investigations overseas on behalf of particular industries; and whether any such industries have been prepared to co-operate with the council?
    Mr. GILLETT: The Overseas Trade Development Council have met, among other bodies, the Incorporated Federated Associations of Boot and Shoe Manufacturers of Great Britain and Ireland, and, as a result, the latter have appointed Mr. T. W. Smith, Secretary of the Leicester Boot Manufacturers Association, to undertake an investigation in Norway, Sweden,
    1310
    Denmark, Finland and the Netherlands. The Department will co-operate with the Federation, and have appointed for this purpose Mr. M. W. Donald, O.B.E., a senior officer of the Department. The investigators will leave this country on the 15th instant.

  PUBLIC ASSISTANCE (INELIGIBLE PERSONS).
  F. HALLasked the Prime Minister if he Swill consider as to the appointment of a Royal Commission to report on the question of the extent to which needy and deserving classes of persons are ineligible for receiving unemployment benefit, widows' pensions, and other like advantages owing to their failing to comply with certain technical conditions which attach to the payment of these benefits and pensions?
  The CHANCELLOR of the EXCHEQUER (Mr. Philip Snowden): It is the constant endeavour of the Government to secure that our various pensions and insurance schemes operate fairly and with the minimum of hardship and we have already, with the co-operation of the House, made important alterations both in the unemployment insurance scheme and in the contributory pensions scheme to this end. As was announced in the King's Speech, a general inquiry into the unemployment insurance scheme is now to be undertaken and a Committee of the Cabinet has for some time been conducting a wide review of the whole field of pensions and insurance.
  Sir F. HALL: When this matter has been gone into, will the various points referred to in the question be considered, so as to make the law as easy as possible for those outside to understand?
  Mr. SNOWDEN: Certainly.
  Sir K. WOOD: When are the widows in need going to receive pensions?
  Mr. SNOWDEN: I may say, for the information of the right hon. Gentleman, as he appears to be quite ignorant of the fact, that 400,000 or 500,000 widows have received pensions.
  Sir K. WOOD: Is that what the right hon. Gentleman promised?
  Mr. ALPASS: Were not nearly all, if not all, the technical conditions which

  1311
  are preventing persons from receiving these benefits and pensions the creation of the party opposite?
  Sir F. HALL: That is not fair. [Interruption.] It is not fair play.

  ELECTORAL LAW.
  Sir GEORGE PENNYasked the Prime Minister whether any decision has yet been taken as to when the Measure of electoral reform will be submitted to the House; and whether it has been decided if it will be proportional representation or the alternative vote?
  Mr. P. SNOWDEN: The Prime Minister is not yet in a position to make any statement on this subject.
  Sir G. PENNY: Is the Prime Minister aware that the longer he keeps this Measure in cold storage the less attractive it will become to a great many Members of this House?
  Mr. SNOWDEN: The hon. Gentleman is raising the question whether I know what is in the mind of the Prime Minister. I think he had better take an opportunity of putting that question to the Prime Minister himself.
  HON. MEMBERS: He did!
  Sir G. PENNY: I did address my question to the Prime Minister, and I take it that the Leader of the House is replying for him.
  Mr. MARJORIBANKS: Is there disagreement on this matter?
  Sir K. WOOD: Are not they on speaking terms?
  Mr. SNOWDEN: Both our personal and our official relations appear to be much more harmonious than the relations between the leaders of the party opposite.
  Lieut.-Commander KENWORTHY: Cannot my right hon. Friend say something a little warmer than that?

  AGRICULTURE.

    SMALLHOLDINGS (YORKSHIRE).
    Captain DUGDALEasked the Minister of Agriculture what was the profit or loss incurred in respect of the
    1312
    smallholdings in the North Riding of Yorkshire taken over under the provisions of the Land Settlement Act, 1919, during the years 1926 to 1930; and what was the sum, if any, paid by the Exchequer in respect of agreed losses on the same smallholdings during the four years in question?
    The MINISTER of AGRICULTURE (Dr. Addison): As the answer contains a number of figures, I propose, with the hon. and gallant Member's permission, to circulate it in the OFFICIAL REPORT.
    Following is the answer:

    Year

    Annual deficiency shown in the Council's Accounts.

    Agreed amount of Exchequer contribution.

    £

    s.

    d.

    £

    s.

    d

    1926–27

    …

    7,176

    9

    2

    8,202

    13

    3

    1927–28

    …

    7,167

    17

    3

    8,262

    8

    8

    1928–29

    …

    6,926

    15

    10

    8,179

    1

    3

    1929–30

    …

    6,785

    6

    1

    8,000

    13

    9

    The amounts shown in the final column are the amounts agreed to be paid under the terms of the valuation made in accordance with the Land Settlement (Facilities) Acts, 1919 and 1925. In comparing the figures with those in the second column it must be borne in mind that provision has to be made for future expenditure on maintenance and renewal of equipment, the cost of which in the early years is relatively small. It should be stated that the annual deficiency and the Exchequer contribution will diminish as loans arc repaid and that the land purchased by the council for smallholdings by means of loans will eventually become the unencumbered property of the council.

    JAM (FOREIGN FRUIT PULP).
    Colonel HOWARD-BURYasked the Minister of Agriculture whether, seeing that a large proportion of the jam manufactured in this country is made from foreign fruit pulp, he will take steps to see that in future such jam is marked as made from foreign fruit, in the same way as eggs have to be marked with the country of origin?
    Dr. ADDISON: An Order-in-Council similar to the Egg Marking Order could be made, subject to the conditions laid down in the Merchandise Marks Act,

    1313
    1926, in respect of imported jam or of imported fruit pulp which is to be made into jam in this country. The Act provides, however, that "imported goods" does not include goods which have undergone, since importation, any treatment or process resulting in a substantial change in those goods. If, therefore, it was held that the conversion of fruit pulp into jam is a "treatment or process resulting in a substantial change," a Marking Order in respect of imported fruit pulp would not continue to apply to the jam into which it was subsequently made.
    Colonel HOWARD-BURY: Is the right hon. Gentleman aware that a very large part of the jam manufactured is made from this foreign fruit pulp, and that this is killing the home industry at the present time; and can he not take steps to enforce an Order-in-Council, or make a different one, with regard to this particular case?
    Dr. ADDISON: I should be only too delighted to make an Order. The question is whether I could legally make one under the Act passed by the hon. and gallant Member's friends, and I am afraid I cannot.
    Sir WILLIAM MITCHELL-THOMSON: How can the right hon. Gentleman discover whether he can legally make an Order unless he actually makes an Order and has the case tested
    Dr. ADDISON: I am going into the matter, and shall be glad to confer with the right hon. Gentleman, but I am advised by the best advice I can get that it is doubtful whether I could legally make the Order-in-Council required.
    Sir P. CUNLIFFE-LISTER: Is the right hon. Gentleman aware that, in spite of the opposition of himself and his party to the Merchandise Marks Bill, we on this side of the House would be delighted to help him in this matter?
    Dr. ADDISON: It is a pity that the right hon. Gentleman did not hold that view when he passed the Act.
    Sir P. CUNLIFFE-LISTER: Was it not a pity that the right hon. Gentleman's party spent six months in obstructing the Bill?
    Mr. ALPASS: Is it not the fact that there is nothing in the law to prevent firms who are making jam from English fruit from saying so, which would indirectly achieve the object in view?

    HOME-GROWN BARLEY.
    Mr. W. B. TAYLORasked the Minister of Agriculture, in view of the importance of preserving a stabilised and certain market for British-grown barley, if he will approach the brewery and distilling interests in this country with a view to securing an economic price for and the use of home-grown barley?
    Dr. ADDISON: It is not easy to see how I, as Minister of Agriculture, can take action to secure the desirable object of my hon. Friend. The brewing industry has intimated to my Department, on behalf of English brewers, that they are anxious to use as high a proportion as possible of English ingredients, and that they only resort to the use of imported material when such a course is unavoidable. It is to be hoped that this policy will lead to a good demand for homegrown barley of suitable quality.

    SUGAR BEET INDUSTRY.
    Mr. W. B. TAYLORasked the Minister of Agriculture whether, having regard to the present deadlock between factories and growers of sugar beet in relation to future contracts, he will make representations to the factories to retain present prices to the growers in view of the profits already revealed in recent financial returns of the factories concerned?
    Dr. ADDISON: I have no information that a deadlock has arisen in the negotiations between the factories and the growers. It has always been the policy of my Department to refrain from intervention in these negotiations, and I scarcely think that the course suggested by my hon. Friend would be practicable, in view of the principles on which the negotiations are based.
    Mr. TAYLOR: Will the right hon. Gentleman watch this position very closely, because it is remarkably important to the arable areas of East Anglia that a fair price should be supplied, because, if this industry "goes west," I do not know what will happen to the whole industry?
    Dr. ADDISON: My hon. Friend has quite expressed my view, but, as things stand, I do not think I can usefully interfere in these negotiations.
    Mr. de ROTHSCHILD: Will the right hon. Gentleman consider publishing as soon as possible the result of his departmental inquiry into the industry; and, if he cannot publish it now, will he at least give to the National Farmers' Union the benefit of the information he has so far gathered, in order to enable hem to negotiate?
    Dr. ADDISON: Yes, I will consider that suggestion.

    WILTSHIRE COMMITTEE.
    Mr. GOULDasked the Minister of Agriculture if he is aware that upon the cultivation and rent restriction subcommittee of the Wiltshire Agricultural Committee there is only one workers' representative; and, in view of the powers exercised by this committee, will lie take steps to appoint additional workers' representatives?
    Dr. ADDISON: I understand that various matters affecting cultivation and applications for certificates under the Rent Restrictions Acts are dealt with by the General Purposes Sub-Committee of the Wiltshire Agricultural Committee. There are two workers' representatives on this sub-committee, one of whom was appointed by the Agricultural Committee and the other by my predecessor. At present there are no vacancies on the sub-committee, but it will be reconstituted next April, and steps will then be taken to increase the number of workers' representatives among the six members whom I am entitled to appoint to the sub-committee.

    WHEAT QUOTA SYSTEM.
    Captain P. MACDONALDasked the Minister of Agriculture whether he can give the House any information as to the operation and effect of wheat quota systems in those countries where such systems are in operation?
    Dr. ADDISON: As it has proved impossible to collate the information desired by the 'hon. and gallant Member in the time available, I should be obliged if he would repeat his question on Monday next, 17th November.
    Mr. W. B. TAYLOR: Will the right hon. Gentleman consider the possibility of publishing a White Paper containing the information asked for, having regard to its importance to cereal crops?
    Dr. ADDISON: I shall be glad to consider that if it is generally asked for.

    FOOT-AND-MOUTH DISEASE.
    Mr. FREEMANasked the Minister of Agriculture whether the carcases of animals injected with serum poison against foot-and-mouth disease are afterwards considered fit for human consumtion or, if not, what is done with them?
    Dr. ADDISON: Foot-and-mouth disease serum has no deleterious effect on the flesh of an inoculated animal subsequently slaughtered.

  BRITISH MINISTRY, LIMA.
  Major ROSSasked the First Commissioner of Works what progress is being made in the building of the British Ministry at Lima; and whether it will be completed as soon as originally contemplated?
  The FIRST COMMISSIONER of WORKS (Mr. Lansbury): A contract for the building is about to be placed, and it is hoped to start shortly. There has been some delay due to the unexpectedly high tendering for the original scheme, which has now been revised to effect economies.

  ROYAL BOTANIC GARDENS.
  Lieut.-Colonel MOOREasked the First Commissioner of Works whether he has yet come to any decision in regard to the extension of the lease of the Botanic Gardens to the Royal Botanic Society?
  Mr. LANSBURY: It was decided by the late Government that the general policy should be to aim at gradually bringing to an end the private enclosures in the public parks, and that steps should be taken, as leases fall in, to give effect to this policy. It is not proposed to alter that decision.
  Lieut.-Colonel MOORE: Is the right hon. Gentleman aware that the area taken up by the Botanic Gardens is only 19 acres, in comparison with 400 acres that are open to the public?
  Mr. LANSBURY: If it were the only area there would be something in the hon. and gallant Gentleman's argument, but there is a very considerable portion of the park taken up by private enclosures, and it is proposed, as the leases fall in, not to renew them.
  Lieut.-Colonel MOORE: Has the right hon. Gentleman considered any alternative location for the Botanic Gardens and the Botanic Society which will be equally suitable and will offer equal facilities for carrying on the invaluable work of the Society
  Mr. LANSBURY: We have considered all the relevant facts. The Zoological Gardens will not be dealt with in that way.
  Mr. MACQUISTEN: Do not the Botanic Gardens serve a high, scientific purpose for the good of the nation?

  MAGISTRATES, CREWE AND NANTWICH.
  Mr. BOWENasked the Attorney-General whether, in view of the present constitution of the magisterial panels for the borough of Crewe and the petty sessional division of Nantwich, he will recommend the Lord Chancellor to appoint additional magistrates in these areas; and whether the fact that there are no women representatives on the Crewe borough bench has been brought to the attention of the Lord Chancellor?
  The LORD ADVOCATE (Mr. Craigie Aitchison): I have been asked to reply. In reply to the first part of the question, I am informed that the Lord Chancellor has made recent appointments to the Crewe and Nantwich magisterial benches, and that he has no reason to believe that additional appointments are necessary. In reply to the last part of the question, my Noble Friend is aware that no women magistrates have been appointed to the Crewe bench, and the matter will receive his consideration.

  OFFICIAL SECRETS ACT.
  Sir K. WOODasked the Attorney-General if he proposes to take any action under the Official Secrets Act with reference to the publication in the "Daily Herald" newspaper of 23rd October of
  1318
  the contents of a confidential dispatch from the Viceroy to His Majesty's Government?
  The LORD ADVOCATE: I have been asked to reply. My hon. Friend has nothing to add to the answer which I gave to a similar question on the 30th of last month.
  Sir K. WOOD: Why has not a detective from Scotland Yard been sent to the "Daily Herald" office in the same way as the Attorney-General sent to the "Daily Chronicle" office not long ago?
  The LORD ADVOCATE: The right hon. Gentleman is assuming, contrary to the facts, that the circumstances of the two cases are the same. In point of fact, they are vitally different.
  Sir K. WOOD: Has the Attorney-General discovered how this leakage occurred and how it was that the "Daily Herald" was able to publish the contents of this dispatch?
  The LO RD ADVOCATE: The Attorney-General has made the most careful investigation into the whole of the circumstances. The right hon. Gentleman does not appear to appreciate that, before you can take proceedings under the Official Secrets Act, there must, first of all, be a contravention of the Act.
  Sir K. WOOD: How has the Attorney-General found out all the circumstances of the case without sending for the Editor of the "Daily Herald" and cross-examining him?
  Sir N. GRATTAN-DOYLEasked the Attorney-General whether his attention has been called to the publication in a Sunday newspaper of a series of articles by a former high officer of the Metropolitan Police Force; whether he has considered the articles in relation to the Official Secrets Act; and Whether he proposes to take any action in the matter?
  The LORD ADVOCATE: I have been asked to reply. The answer to the first two parts of the question is in the affirmative. In reply to the last part of the question, my hon. Friend does not propose to take any action under the Official Secrets Act.
  Mr. KNIGHT: Is my right hon. Friend aware that this series of articles con-

  1319
  tains extensive references to this person's recent official duties, and will he reconsider the matter?
  The LORD ADVOCATE: All I can say is that the matter has been very fully considered by my hon. Friend in consultation with other Departments. The fact that an official draws upon his official knowledge and experience in writing an article does not necessarily make him guilty of an offence under the Act. All the circumstances have been taken into account and, in this case, they have been very fully considered in consultation with the Home Office on the one hand and the Director of Public Prosecutions on the other.
  Mr. KNIGHT: Am I to understand my right hon. Friend to represent that the disclosure of confidential official information in connection with this man's duties would not constitute an offence under the Statute
  The LORD ADVOCATE: My hon. Friend is not entitled to draw any such conclusion from my answer. What I pointed out was that the mere fact that the person draws on his official knowledge and experience does not necessarily make it an offence under the Act. The whole of the circumstances have to be considered, and they have been considered in this case.
  Mr. MACQUISTEN: Has not the reason for confidentiality expired?

  LAND REGISTRY.
  Mr. CULVERWELLasked the Attorney-General if he will state the average number of days required, during the past 12 months, from the date of the application for registration received by the Land Registry until the date upon which the final documents were delivered to the applicants?
  The LORD ADVOCATE: I have been asked to reply. With the permission of the House, I will circulate this answer, which is in tabulated form, through the OFFICIAL REPORT.
  Following is the answer:
  The average number of days required, where applications for registration are
  1320
  in order under the Land Registration Act and Rules, was as follows:

  —

  Compulsory Areas.

  Non-Compulsory Areas.

  Days.

  Days.

  First Registrations

  5.64

  14

  Dealings with registered land.

  4·07

  7·1

  The above period of 14 days is due to the fact that first registrations in noncompulsory areas are required by the Land Registration Rules to be advertised and a period of not less than 14 days must be given for objections (if any) to the registration to be lodged in the Registry.

  CINEMAS (LABOUR CONDITIONS).
  Colonel HOWARD-BURYasked the Minister of Labour, seeing that there are no regulations dealing with the hours of employment of persons employed as attendants or operators at cinematograph theatres, and in -view of the fact that on 1st August she promised a comprehensive investigation into this matter, whether any steps have yet been taken to hold this investigation, and with what results?
  The PARLIAMENTARY SECRETARY to the MINISTRY of LABOUR (Mr. Lawson): A limited amount of information has been obtained from employers' associations and trade unions. Owing to the widespread character of the industry, preparations for a comprehensive inquiry have taken some time. It is hoped, however, to carry nut the inquiry in the course of the next few weeks.
  Colonel HOWARD-BURY: Is the hon. Gentleman aware that the right hon. Lady promised an immediate comprehensive inquiry and is similar action to be taken as has been taken with regard to solving the unemployment question by putting it off?
  Mr. LAWSON: The hon. and gallant Gentleman will note that I said a limited amount of inquiry had already taken place and certain information was already at our disposal. It is not easy to get information in an industry of this nature.

  UNEMPLOYMENT (STATISTICS).
  72. Sir K. WOODasked the Minister of Labour the number of persons at present directly engaged on work sanctioned by the Government and the cost involved?
  Mr. LAWSON: The number of men directly employed on 26th September, the latest date for which figures are available, on all schemes approved on or after 1st June, 1929, is approximately 72,000. The estimated cost of the works on which these men were employed was £59,500,000.
  Sir K. WOOD: I asked for the number of persons. The hon. Gentleman has told me the number of men. Have no women been directly employed as the result of the Government's efforts?
  Mr. LAWSON: My right hon. Friend gave an answer last week. It is very possible that there are some women employed indirectly, but not directly.
  Mr. D. G. SOMERVILLE: Does the Government anticipate employing any more men on this work
  Sir A. POWNALLasked the Minister of Labour how many individuals were employed on 1st August, 1930, directly and indirectly on schemes of employment initiated by the Government?
  Mr. LAWSON: The number of men directly employed on 25th July, 1930, on all schemes assisted by the Ministry of Transport, the Ministry of Agriculture, and the Unemployment Grants Committee, and approved on or after 1st June, 1929, was 54,396. In addition there were the men directly employed on work authorised under Part I of the Development Act, under the Colonial Development Act, and under the emergency programmes of work put in hand by other Departments, the number of whom cannot be precisely stated. The number of persons indirectly employed is estimated to be about equal to the number of those directly employed.
  Sir A. POWNALLasked the Minister of Labour, of the 160,000 employed directly and indirectly on schemes of employment initiated by the Government, how many are directly and how many indirectly employed?
  Mr. LAWSON: The figure of 160,000 included an allowance for development
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  of schemes during the month of October. As regards the numbers directly and indirectly employed, I would refer the hon. Member to the reply given to the hon. Member for Norwich (Mr. Shakespeare) on 6th November.
  Sir F. HALL: Where did the hon. Gentleman get the figures?
  Mr. LAWSON: From the Department.
  Mr. SHAKESPEARE: Are the men employed under the Road Fund included in his scheme, and, if so, do the Government claim to have initiated the Road Fund
  Mr. LAWSON: I should like to have notice of that question.
  Major COLVILLE: Is not the figure of 160,000 approximately one-eighth of the total number who have become unemployed since the Government took office?

  COMMISSIONS AND COMMITTEES.
  Mr. REMERasked the President of the Board of Trade how many committees have been set up by him since the present Government came into office; what was the cost to the Exchequer; how many Statutory Committees have been sitting; and if he will state the total cost to the Exchequer?
  The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Mr. W. R. Smith): To meet the requirements of the Board of Trade, Department of Overseas Trade, and Mines Department, my right hon. Friend has set up 21 committees, since the present Government came into office, including 13 Statutory Committees. It is not yet possible to state the cost of these committees to the Exchequer, as 11 of the Statutory Committees, appointed under the new Coal Mines Act, have not yet met and others have not completed their sittings, but the total cost to date is approximately £650. During the same period 12 Statutory Committees, 10 of which were previously appointed, have been sitting. The compilation of a statement of the total cost of these Statutory Committees, some of which have been in being for very many years, would involve a disproportionate amount of time and labour.
  Mr. REMER: If I put the question down in a fortnight's time will the hon. Gentleman be able to state the cost of all these committees?
  Mr. SMITH: At the moment it is suggested that the cost of investigation cannot be worked out, but, if the hon. Member will put down his question, I will try to give him an answer.
  Mr. REMERIs it not very important that we should know what is the cost of employing other people to do work which the Government ought to do themselves?
  Mr. SMITH: If the hon. Member will put down a question, I will endeavour to give him an answer.
  Sir P. CUNLIFFE-LISTER: In view of the number of committees which have been appointed, will the hon. Gentleman appoint one more committee as recommended by the Balfour Committee to inquire into the Safeguarding Duties before they are allowed to expire next December?
  Sir G. PENNYasked the Financial Secretary to the Treasury the number of committees set up by the Government since they took office to date; and how many of these have reported?
  The FINANCIAL SECRETARY to the TREASURY (Mr. Pethick-Lawrence)The appointment of 53 commissions and committees has been announced since the present Government took office. Thirteen are standing committees. Of the remainder 14 have issued a report or reports.
  Captain CROOKSHANK: Is the personnel of these committees included in the 160,000 people to whom the Government have given work under their schemes?

  EDUCATION (SPECTACLES).
  Mr. DAYasked the President of the Board of Education the number of children provided with spectacles in England and Wales under the arrangement made by education authorities for the 12 months ended to the last convenient date; and the number of authorities in England and Wales who have not the services of an experienced oculist?
  The PARLIAMENTARY SECRETARY to the BOARD of EDUCATION (Mr. Morgan Jones): Some 140,000 children were provided with spectacles during the year 1929, under arrangements made by education authorities in England and Wales. All local education authorities have the services of an experienced oculist, except the authority for the Isles of Scilly, where the circumstances are, of course, exceptional.
  Mr. DAY: Can my hon. Friend say whether there have been any complaints at all of not providing these children with glasses?
  Mr. JONES: I am not aware of any.
  Mr. MACQUISTEN: Will the hon. Gentleman consider having larger print in school books and then they will need fewer spectacles for children?

  IRISH FREE STATE (SWEEPSTAKE).
  Sir W. DAVISONasked the Chancellor of the Exchequer whether his attention has been called to the sums of money which are leaving this country for investment in the Irish Free State sweepstake; and whether he has in contemplation the issue of premium bonds or other similar device to secure the retention of such moneys in this country?
  Mr. PETHICK - LAWRENCE: The answer to both parts of the question is in the negative.
  Sir W. DAVISON: Is the hon. Gentleman aware that hundreds of thousands of pounds are leaving this country for the Irish Free State in this connection, that a much larger sweepstake is contemplated, and will he not do something to meet the sporting instincts of the country in the way of premium bonds which will be both an investment and a lottery?
  Mr. PETHICK-LAWRENCE: I think that the answer which I have given on behalf of my right hon. Friend deals with both those points.
  Colonel HOWARD-BURY: Is not this a tribute to the sporting instincts of the Irish Free State?

  BILL PRESENTED.
    PERFORMING ANIMALS (REGULATION) BILL,
    "to amend the Performing Animals (Regulation) Act, 1925," presented by Mr. Freeman; supported by Major Graham Pole, Sir Robert Gower, Mr. Foot, Lieut.-Colonel Moore, Mr. LovatFraser, Sir Robert Newman, and Mr. Graham White; to be read a Second time upon Tuesday, 18th November, and to be printed. [Bill 41.]

CUNARD (INSURANCE) AGREEMENT [MONEY].
Considered in Committee under Standing Order No. 71A.
[Mr. ROBERT YOUNG in the Chair].
Motion made, and Question proposed, "That it is expedient,—

(a) To authorise the. Board of Trade to enter into and carry into effect—

(i) an agreement in the terms of a draft agreement which has been settled between the Board and the Cunard Steamship Company, Limited, for the insurance by or on behalf of the Board of two passenger vessels to be built in Great Britain for the Company; and

(ii) agreements supplementing or modifying the agreement aforesaid;

(b) To exempt the agreements aforesaid and any agreements entered into by the Board with persons other than the Company, for the purpose of carrying the agreements aforesaid into effect from certain provisions of the Stamp Act, 1891, and of the Marine Insurance Act, 1906;

(c) To constitute a special fund into which there shall be paid all premiums and other moneys received by the Board by virtue of the agreements aforesaid, and out of which there shall he paid all expenses incurred by the Board by virtue of those agreements, and to provide that, if the special fund is insufficient, the balance of any such expenses shall be charged on the Consolidated Fund;

(d) To authorise the payment into the Exchequer of any moneys received by the Board in diminution of any loss or expenditure in respect of which a payment has been made under the provisions of this Resolution out of the Consolidated Fund;

(e) To provide that, in the event of the Treasury being satisfied that no further moneys will become payable by the Board under the agreements aforesaid, any investments forming part of the special fund (being Government stock) shall he cancelled and the balance of the fund applied in reduction of debt;

(f) To make certain provisions ancillary to the matters aforesaid."—(King's Recommendation signified.)

The PRESIDENT of the BOARD of TRADE (Mr. William Graham): I should like very briefly to remind the Committee of the stages through which a Resolution of this kind has to pass. This Resolution is necessary in order to enable us to make progress with an agreement which it is proposed to enter into between the Board of Trade and the Cunard Steamship Company. The next stage will be the Report stage of the Financial Resolution, and later a Bill will be introduced and will
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pass through the usual stages in the House of Commons. The Bill will include, as a Schedule, the full text of the agreement to which reference is made in the Resolution this afternoon, so that hon. Members will observe that all we are asking the House to do at the moment is to give a Second Reading to a Financial Resolution which is designed to enable us to take those steps. The very fullest opportunities will be forthcoming for considering the text of the agreement itself and I shall be happy, or colleagues on this bench will be happy, to give detailed answers on the particular clauses as they arise in the debate.
The broad purpose of this Resolution is very plain. The Cunard Steamship Company considered laying down two exceptionally large vessels for the Trans-Atlantic trade and it became obvious at once that it would be a matter of difficulty, to put it no higher, to cover the construction and the ordinary marine insurance risks of such a very large proposition in the ordinary market. Within recent times there has been, of course, a great falling off in the numbers of passengers proceeding from Europe or from other foreign countries to the United States of America. In the four years prior to the War approximately 1,200,000 people entered the United States of America every year, and that represented, of course, a very considerable amount of ocean travel, but within recent years the total has fallen to approximately one half, due in part to the quota restriction in the United States, due to some extent to industrial and other depression, but at all events it is a very considerable falling off in the passenger traffic which was available before the War.
We all hope that with an improvement in European and in American conditions the volume of passenger traffic will very considerably increase, and it is certainly of vital importance that the shipping of this country should be in a position to take a part, and, indeed, a leading part, in the recovery when it comes about. To that end the proposal of the Cunard Steamship Company is to lay down two very large vessels in order to make the journey from the American side and from this side every week. That is to do with two specially large vessels the work that is now being done by three

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vessels, and that is, of course, an altogether exceptional type of construction.
According to some statements which have appeared in the Press regarding this proposal, it has been suggested that the Government are really undertaking the insurance of a part of what might 'possibly be regarded as mere luxury enterprise, but the truth is that other leading countries, competitors of ours in the shipping world, have been expending very large sums, either directly or indirectly, in the subsidising of shipping. Moreover, within recent times there have been the achievements of the "Bremen" and "Europa." I do not think there can be other than a general desire in this House and in this country that we should do everything in our power to take a leading place in transatlantic travel. The object is to lay down two ships which, although very large, will, on the basis of that large accommodation and that necessarily high capital cost, justify themselves as an economic proposition, in other words, attain such speed that they can do the journey every week. From that point of view it is not really luxury enterprise in the strict sense of the term, but an effort based on sound economic principles.
We then come to the conditions which confront any Government in this country—I should like to think irrespective of party—in facing an insurance proposition of this kind. I have alluded to the fact that the United States of America are subsidising shipping or have subsidised shipping to a very large extent. On the mail contract alone when the two very large projected ships are in service, the annual subsidy would be probably £700,000 in our currency. When we pass to Europe, we are reminded that Germany has just received a very large sum of money amounting, if I remember rightly, to £15,000,000 from the United States in respect of German ships detained or interned in America during the War. Italy is subsidising shipping, and also certain other European powers. Therefore, we are not confronted with the ordinary state of affairs in which this is left to the free or unassisted competition of private shipping interests. Governments are making these contributions. It is worthy of notice at this stage that we are not asked as a Government for any direct subvention at all.
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No cash payment is involved in this Financial Resolution. It is confined to the insurance of that part of the construction and marine risks, which cannot be absorbed in the ordinary insurance market.
I will endeavour to make the terms relating to the insurance as plain and as clear as a layman in these matters can make them, because I do not profess to have other than a very general knowledge of marine insurance. There is, first of all, the construction risks which have to be undertaken. Those construction risks apply at the moment to one vessel, the first of two possible vessels, which will be laid down at Clydebank. The idea at the moment is that that vessel will cost something between £4,000,000 and £4,500,000. The House will understand that that is merely an estimate, but I have no doubt that it is as correct as an estimate can be. It may be that the actual sum involved will be larger than that amount, but in any event it is expenditure on the construction of that one vessel. It is very much larger than any of the great scale constructions in the past, but I confess I was rather surprised at the initial stages of this plan to learn that the insurance market in this country could not absorb such a large sum of money in insurance.
I thought, in my innocence, that by spreading the risk and by re-insurance it would be possible fully to cover such a proposition, but we have to recognise that it is a very large sum to be centred in one vessel, and, quite apart from the value of the construction as it will pass to the owners when the builders have finished with it, there is the necessary insurance of the very valuable goods and the very valuable wealth which a vessel of this type will normally carry, so that in any case the ordinary market is not able to afford the entire amount of the insurance risk. I am not able to say at the moment what proportion of the £4,500,000 will be absorbed by the ordinary Market, hut according to our information perhaps £2,000,000 to £2,500,000 will be so absorbed, and in that case, as regards the construction risks, the amount falling to the Government to be insured under this scheme will be about £2,000,000. It may be rather more or rather less, but the figures are approximately what I have described. The proposal is that the

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Cunard Steamship Company shall exhaust all the possibilities in the ordinary open market before the Government are called upon to intervene, and it is only after those possibilities have been exhausted and the largest amount of ordinary insurance on the market has been provided that we begin insurance for the purposes of construction.
I trust that this afternoon no large question of principle will be raised, because, strictly speaking, they do not appear in what the Government intend to do. This matter appeals to me as a business proposition designed to secure the construction of one, and I hope two, very large vessels to maintain our place in transatlantic travel and to provide employment for a very large number of men in a depressed industry in one or more shipbuilding yards of this country. In regard to the business proposition, there need be little difference of opinion between us. It is not a matter of the Government entering into competition as regards the actual insurance rates, because the proposal is that when the market has absorbed all that it can absorb as regards construction risks, we are prepared on a premium of 1½ per cent. to cover our part of it. That is the rate that we lay down in the White Paper for the construction, plus 2½ per cent. on that rate, that is in addition to that rate, plus the absence of brokerage so far as the Government side is concerned, the two last conditions being designed to romove any suggestion that there is competition in this scheme as between the Government and the ordinary insurance market.
4.0 p.m.
I am aware that there is certain criticism on the ground that the rate of 1½ per cent. is too low, that it is in fact less than the market rate at the moment, and that in that case the Government might be saddled with a very large part if not the whole of the risk which is involved in the construction. I will pay very close attention to what hon. Members say on that point, but I must warn them that I have taken the very highest and most influential advice at my disposal, from the chairman and deputy-chairman of Lloyds, and I am advised that that is an appropriate rate and that the market, together with the safeguards that I have mentioned, can absorb such
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part as we might anticipate in existing conditions. That will cover the construction risk as regards the first vessel, and the limit of that contribution by the Government is three years as mentioned in the White Paper together with a small addition of 6d. per cent. per month in the terms set forth as applicable to the period beyond three years which might be occupied if the construction is not completed in the time which, I am again advised, is the ordinary practice which is pursued in construction of this description.
I come to one or two of the other features as they arise in this plan. All that I have said up to the present moment relates to the construction of the one vessel, but the Cunard Steamship Company, as the scheme clearly indicates, contemplates the construction of a second vessel. I am not able to say, because it is entirely a matter for the company, when that construction will be undertaken, or where the keel will be laid down; but, in any event, if a second construction is attempted, we take power under this White Paper, or rather under the Resolution and a later Act of Parliament, to cover the second construction, provided always it falls within six years of the passing of this agreement by the House of Commons. I earnestly hope that that will be undertaken and that further employment will be provided for, perhaps, the same if not a larger number of men, and that the scheme will be complete as regards these two propositions for the great purpose of transatlantic travel and competition.
Let me pass to the other side which is the ordinary marine risks, for the lifetime of either the one vessel or the two vessels to be constructed. There no rate is laid down, because, obviously, no rate could be laid down in the White Paper, but the intention of the Government is to cover that part of the marine risk, which is not covered in the ordinary market, at such rates as may be determined as the market rates for the time being plus the 2i per cent. to which I have referred because that 2½ addition runs right through the construction and marine risks, and no one can say, of course, what the lifetime of these vessels may be. It may be 15, 20 or 25 years, but whatever the period the Government would pro-

1353
pose only to cover that part of the marine risk not absorbed by the ordinary market, on the conditions to which I have already referred, and if there was doubt as to what was a fair rate in the ordinary market, then in the agreement, which will be fully set forth in the Schedule to the Bill soon to be introduced, there is provision for a reference to arbitration such as would be accepted, I am sure, at once by any student of this matter. That is the outline of the Government part of this enterprise.
Sir ROBERT HORNE: Do I understand the right hon. Gentleman to say that the reasonable rate with regard to marine risk will be arrived at either by agreement in the market or by arbitration?
Mr. GRAHAM: It will be the ordinary market rate plus the 2½ per cent., but if there is any dispute, any feeling on the part of the company or the Government that there is a difficulty, then that will be covered by reference to arbitration. I was about to turn to certain other features in this Financial Resolution which need not detain us more than a minute or two this afternoon. Hon. Members will observe that there is a reference to the Stamp Act, and also to the Marine Insurance Act, 1906. Later, in terms of the Act and of the agreement, the meaning of these passages will be made perfectly plain, but suffice it for the moment to say that under the Stamp Act approval would not be forthcoming unless the proposition was limited to one year, and that the exemption applies only to the agreements to which I am referring to the Board of Trade contract for such part of the insurance as is covered by the Government, and, of course, that will cover a period of more than one year.
Lieut.-Colonel Sir FREDERICK HALL: May I ask if that is both for the building risk and for the marine risk?
Mr. GRAHAM: The Stamp Duty exemption applies only to the agreements. It does not apply to the policies which are effected through the market. They are subject to the ordinary Stamp Duty charges. It applies only to the main agreement, or supplementary agreement, or other agreements specified in the legislation. This part of the Financial Resolution is necessary in order to
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remove that difficulty of the one year period, because, of course, a longer period will be required. Then as regards the Marine Insurance Act, 1906, there is a reference to exemption from its terms, because, as I understand it, contracts of marine insurance are not admissible unless they contain under that Act of Parliament certain particulars which are set forth in the Act, and if this is an agreement covering quite a long period, these particulars cannot be supplied at this stage, and may not be available until some later stage. So that for the purpose of this Financial Resolution and the coming Act of Parliament, it is necessary to make this provision, but the provision is purely technical in character for the purpose of this scheme, and does not in any way derogate from the scope of the provisions of the Marine Insurance Act, 1906.
May I conclude with a very brief description of the scope of the employment which will be provided under this Resolution? I am advised that the cost of these vessels will be at least £4,000,000 to £4,500,000 each, and if I take the aggregate capital cost at about that figure this afternoon, I find that as regards the construction of the first to be undertaken in the yards of John Brown and Company, Limited, at Clydebank, direct and continuous employment for three years will be provided for at least 3,000 men, and the employment indirectly affected will cover 1,400 to 1,500 men for a period of approximately 2½ years. So that we may say in very round figures that there will be continuous employment for about 5,000 men for a period of approximately three years, and I am further advised that by far the greater part of this large expenditure will be in wages. So that the relief and assistance to the depressed shipyard industry can be appreciated at once by every Member of the Committee. It appears that at least £250,000 will be saved every year in unemployment insurance benefit, which is in itself a very valuable contribution, and, moreover, when we remember that the tonnage under construction in the shipyards of this country has fallen in every quarter during the past year until it is to-day at a very low point—the lowest point for quite a long time—this contribution to Clydebank and, I

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trust, in due course to another area, will be of the very highest value.
I do not think that I need detain the House longer by way of preliminary explanation. When the Bill is introduced and the text of the agreement in the Bill is seen, there are certain legal points which hon. Members, perhaps, may wish to raise, which I have no doubt will be dealt with by my hon. and learned Friend the Attorney-General, and there are one or two financial points, which fall more particularly to the Treasury, on which I should, perhaps, add a sentence or two this afternoon. The premiums under this arrangement will be carried to the Cunard Insurance Fund. Any calls in respect of any part of the risk will be met out of that fund, and, similarly, any salvage or any other money will be paid into the fund in satisfaction of the Treasury's claims, the balance remaining in the fund over a period of construction and beyond that over the ordinary marine risks. There will be set out for the clear information of the House of Commons the precise financial position of this Cunard arrangement, each year on all stages in its career. Not only so, but it will be subject to the audit of the Comptroller and Auditor-General, which brings it before the Public Accounts Committee of the House of Commons.
In that way the safeguards for Parliamentary review are very complete, and, at the end of the day, if there should be any balance in this fund—and I trust there may be a balance—that balance will normally be found in the shape of permanent Government securities which will be applied to the redemption of debt. No one, of course, can forecast this afternoon what the result is likely to be. Sufficient for us the immediate construction, the stimulus, it will give to the employment of a large number of fellowmen in the shipyards, the more effectively it will enable us to compete with foreign countries and the conspicuous part which, I trust, it will also help this country to take in trans-Atlantic travel.
Sir PHILIP CUNLIFFE-LISTER: The President of the Board of Trade has explained the general purpose of the Financial Resolution, and I agree with him that what we are concerned with to-day is not
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the minute details of the agreement, for which he will subsequently ask the authority of Parliament, or the details of the Bill, for we can only be acquainted with them when the Bill comes before us. What the right hon. Gentleman is seeking to-day is a general covering authority for the agreement which he proposes to make, or has made subject to the approval of Parliament. He is seeking the sanction of Parliament for the principle of the agreement, if any principle is involved. I am glad to say that for once I find myself in complete agreement with the right hon. Gentleman for having done what seems to me to be a very practical and business-like thing, which cannot raise any contention on any side of the Committee. It does not seem to me to involve any contentious question at all. It is merely a question whether this is a case in which the Government can conveniently intervene, and are these the proper terms. I think the answer to both questions must be in the affirmative.
The development of shipbuilding has reached a point where it is economically possible to use very large and fast ships, not to make some sensational passage of the Atlantic but as a practical business proposition, and an economical proposition. By building very large and very fast ships you can maintain the regular service which normally takes three vessels, by two ships. That being so, the Cunard Company, having satisfied themselves that it is a practical proposition, with a promptitude which one would expect from a company which has always been in the van of trans-Atlantic passenger service, laid plans to build such vessels. They will not only serve the sound purpose of performing this service and prove of economic value in the future, but they will also during their construction be most valuable in a direct promotion of employment in this country, Having come to their conclusion the Cunard Company found, as indeed they expected to find, a difficulty over the insurance of vessels of such great size during construction and possibly also on subsequent voyages.
There as nothing new in that. Before the War, when vessels were much smaller, there was some difficulty in getting the largest Panama liners completely covered, and there existed a

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form of mutual insurance between the large liners of this country and companies in foreign countries for the creation of an international pool to provide some form of mutual insurance for these ships. Even when dealing with the insurance of these smaller vessels which cost less to construct the covering of one vessel was a matter of some difficulty, and when you get into the region of the figures mentioned by the President of the Board of Trade, £4,500,000, and possibly £5,000,000, the cover you are calling upon the insurance market to maintain in the case of one single hull is a very large risk. The proposal is that the Government, without in any way interfering with the market, should under-write any risk which the market is unable to absorb. Having to satisfy himself and this Committee that the construction of these ships is a matter of immediate importance and also of future importance to this country, and that the terms upon which he proposes to underwrite the unabsorbed balance of the risk, are not unreasonable the right hon. Gentleman has certainly made out a good case for Government assistance.
He has said that he hopes the market will absorb a large proportion of the risk. I hope so too. I hope when the market gets a little more experience that it will take up the whole of the risk, certainly the whole of the risk upon the ships once they are in commission. He has also laid down the very sound principle that, if the Government are asked to take the unabsorbed risk which the market is unable to take, they should charge a larger premium for the unabsorbed risk than the rate at which the insurance for the first part is taken up by the market. I have no doubt that the right hon. Gentleman has satisfied himself that 2 per cent. is probably the right figure, and that he has taken skilled advice on that matter. We are concerned here with the principle on which this agreement is founded; that the Government should come in to help in this matter so far as the market cannot absorb the risk, and that if the Government does come in they should charge a higher premium than the premium which the markets asks for the risk it takes. That is a business-like proposition. It is not unlike the system of export credits, to which all sides of
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the House are committed and have approved in principle; and, as the right hon. Gentleman comes to us with a somewhat similar proposal to-day, which he justifies on general and specific grounds, I hope the Committee without any undue debate will approve the proposals which he has put before us.
Mr. LEIF JONES: I do not rise to oppose or criticise the action of the Government in this matter, which is to facilitate the building of these Cunard ships. The whole Committee will agree that it is exceedingly desirable that they should be built as rapidly as possible, and I take it that the whole object of the Government is to hasten the action of the company and ensure that they shall be laid down without delay. The Resolution runs in this way:
"That it is expedient to authorise the Board of Trade to carry into effect."
I wish the President of the Board of Trade had told us something more as to why it is necessary to come to the rescue of insurance companies in the matter of these Cunard ships. [An HON MEMBER: "They cannot do it!"] If that is so then the case is made out and I support the Government in their action, but it is quite clear that they are taking a very considerable risk. If the insurance market cannot effect this insurance is it not largely a matter of the rate at which it is to be effected? If the Government are prepared to do it at 30s., in spite of whatever may be the market rate, might not the Government be left with the whole of this proposition on their hands? The right hon. Gentleman has told us that he has taken the advice of the Chairman and Vice-Chairman of Lloyds; but has the market been tested? I should like to know what are the prospects of a large amount of the insurance being taken up by the market and how much is likely to be left to the Government before we pass this Financial Resolution. If the rate is fixed so low that the market will not undertake it the Government might be left with the whole of the risk. That is not exactly insurance, because insurance consists in spreading risks over many ships, and if the venture is on one ship only there is a risk of great loss falling on the Government. The real point is this; has the President of the Board of Trade assured himself that the market will take up a considerable part of this insurance or does he anticipate

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that the Government will be left with the whole of the burden on their shoulders. I do not say this in any spirit of hostility or criticism. I wish the Government and the Cunard Company all success in this matter.
Mr. WISE: I do not rise to challenge the purpose or the use of the project which the President of the Board of Trade has laid before the Committee. It is perfectly right, in the present circumstances of the ship-building industry, that the Government should step in here where private enterprise has failed. I want to draw the attention of the Committee to a rather broader aspect of this matter, and it may be more conveniently raised now than at a later stage when no doubt we shall have points to raise on the details of the agreement. This is another of a long succession of cases since the War in which we find that the private organisation of trade and commerce is quite unable to bear the burdens which modern conditions impose. The Government is taking up this insurance because the insurance market is quite unable to grapple with the situation, otherwise there would be no question of the Government coming in. There have been a whole series of such cases since the War. I recall the case of the British Italian Corporation; where the Government came in to finance the development of trade with Italy and if my recollection serves me right the entry of the Government in that particular case was neither satisfactory to the Government nor to the development of British Italian trade. Perhaps a more successful experiment was the Empire Cotton Corporation, which was strongly criticised from these benches. There is also the participation of the British Government in various dye companies.
The CHAIRMAN: Were these insurances?
Mr. WISE: I am raising the general question of the Government's participation in trade.
The CHAIRMAN: We are considering a Money Resolution, and we must confine ourselves to the Resolution before the Committee.
Mr. WISE: I bow to your Ruling. There is a case which exactly illustrates
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my point; and that is the case given by the right hon. Member for Hendon (Sir P. Cunliffe-Lister), the insurance of trade under the Export Credits Act. That is another case in which private enterprise has failed and has been unable to provide the machinery by which trade can proceed in which the Government comes in and assists the credit insurance market to carry the burden and discharge a duty which otherwise it would fail to discharge. I think that that is an exact illustration which is within the narrow interpretation of your Ruling, Mr. Young. On all those occasions, or on many of them, from this party a point of very serious principle was raised. As far as I recollect it was raised on two or three occasions by the right hon. Gentleman who is now the President of the Board of Trade. Certainly he raised it on every occasion when the Trade Facilities Act came before the House. What he said on those occasions was that when the House was asked to provide assistance to private enterprise in discharging the duty which private enterprise could not discharge without the support of the House, the opportunity should be taken of giving the House and the people of the country some quid pro quo, other than that contained in the immediate business bargain, for the assistance that was given. I remember that in regard to the Trade Facilities Acts the right hon. Gentleman definitely urged on the House that the Government in some way or other, as a return for Government assistance, should be given some share in the profits of the enterprise and some participation in its management.
I am quite aware that insurance is only one part of the great enterprise of building and running these ships, but on the other hand there are points on which I think the Government may—shall I say?—bargain for the public advantage in connection with the assistance that is given—points which are not strictly limited to the question whether the rate of premium should be 1½ per cent. plus 2½, or 1¾ or1¼or a small financial detail of that kind. For example, anybody who has crossed the Atlantic knows that these enormous super-liners cater for a very special traffic, for millionaire traffic, for very expensive traffic. Their charges are enormously high. Their accommodation

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is extremely and unnecessarily luxurious. That statement is true of the German and French liners as well as of our own. The unnecessary luxury pushes the charges up to such an extravagant figure as to place them outside the possibility of many business men who ought to cross the ocean much oftener than they do but can afford neither the time involved in travelling by the slower boats nor the extremely high charges of the fast boats. The purpose of these giant liners is to provide very fast vessels, and such possibilities at reasonable rates are as necessary to the small business man or the big business men as to the millionaires who can afford to pay extravagant rates.
The rates which these liners charge for passages are, as is well known, settled, not by competition, but by agreement between the liners. Broadly speaking, the charge per passage and for freight also on the Cunard and other British liners is approximately the same as that on the French, the German, the Italian and other liners crossing the Atlantic. At least I think it is; if I am wrong I shall be corrected. I suggest that the rates charged on these great liners for passages across the Atlantic are much too high, and that here is a favourable opportunity for the right hon. Gentleman, in general line with the principles which he has frequently enunciated in this House, to make State assistance, in an enterprise which would not proceed without such assistance, an excuse and justification for insisting on arrangements which will protect the common interest. The right hon. Gentleman has now an opportunity which does not often occur, of dealing with the enormously powerful interests which are banded together under international agreements and are able to exact from the travelling public and from those who have to send freight across the Atlantic quite extravagant rates. It is just as important to control the rates at which liners convey people from country to country as it is to control the rates charged by railways and by other forms of transport and locomotion in this country.
There is another point as to which I would like to know whether it is not possible to use this opportunity for the satisfaction of general needs. I gather that the period to be allowed for the taking up of the option which apparently the Cunard Company has in regard to the
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second liner, is six years, though I understand it is expected that the first liner will be completed in about three years. Why so long a period? Does the right hon. Gentleman think that the slump will last so long? If he does not, is it not worth while to insist that, if State assistance is to be afforded, the enterprise should be put in hand at a time when it will help much more directly and effectively the serious slump in the shipbuilding industry? We all hope that. long before the end of six years the shipbuilding and other industries will have recovered. It used to be a cardinal feature in all consideration of the unemployment question that it was the special business of the Government to interfere during the periods of cyclical depression. God forbid that the depression should last all this time ! We all hope that it will not. Therefore I urge that it would be reasonable to limit the period to a very much shorter time than six years. Moreover, long 'before the end of six years we may in this House have attached to State assistance such conditions as will achieve the other object to which I have referred in the earlier part of my speech.
I put these points, not because I am against this particular proposal. I think it is perfectly clear that the proposal ought to proceed. We shall, of course, scrutinise more carefully the details when we see them. But this scheme raises a principle of very great importance—a principle which, I am convinced, will come more and more before the House as private enterprise progressively breaks down. There are signs in all directions of that happening. I do not want to enter further into matters of that sort, nor do I want to have quoted against us in later years a precedent which may be very inconvenient.
Sir F. HALL: The hon. Gentleman who has just spoken, if he will allow me to say so, has not really grasped the situation. It is not a question of six years for the construction of the steamer. understood from the President of the Board of Trade that one ship will be laid down now, and in the ordinary course will take three years to construct. The second steamer, if and when it is laid down, will be laid down within some given period of one, two or three years, and in all probability will take a like time to construct.
Mr. WISE: I think I have interpreted the agreement accurately. What I am complaining of is that the second vessel is not to be laid down, or need not be laid down, until the expiration of six years. I want to bring the work forward.
Sir F. HALL: I can only repeat what I have said. The hon. Gentleman asked why the President should not say at once, "The other steamer must be laid down forthwith." This proposal is quite a new feature in regard to shipbuilding. Although I am deadly opposed, in the ordinary course of events, to any Government interfering with trade or commerce, I am not so hidebound that in special circumstances I am not prepared to consider such a proposal, as I do in this ease. We have not to go far back for precedents. In 1914, at the beginning of the Great War, the Government of the day came forward and said that insurance of war risks would be so large that in all probability the market would not be sufficient to cover it. The Government said they would come in and give assistance so that there would not be enormous premiums charged or people would not have to go uninsured. In my experience of the insurance world I have learned something about the insurance market. I say here and now that there never have been ships built in any country at a cost anything like that of the two new Cunarders—if there are to be two.
I take the greatest exception to any suggestion that the Government have come in because private enterprise has failed. There is a certain amount of market for every commodity. Those who know anything about the insurance market know that £2,000,000 is a gigantic amount to be accepted by the market on one specific risk. Suppose that the insurance companies or the underwriters at Lloyds were to say that, whatever the amount of insurance offered, they would take it, irrespective of whether they got an average book. There are at Lloyds something like 1,250 underwriting members. Hon. Members know full well the number of insurance companies of first class standing that there are. If hon. Members go carefully into the matter they will see at once that for the British insurance market the absorption of anylike £2,000,000 or £2,500,000 is a huge
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undertaking. The underwriters cannot afford to make a book on one specific risk. As the right hon. Gentleman said just now, the Government will not be in the position of an ordinary business community.
I congratulate the Government on the attitude they have adopted. They have said that, shipping being in such a bad state, in order that this country may maintain British shipping prestige, "We will come in"; and I hope I am right in stating that they also say, "We will undertake the insurance on similar lines and at rates similar to those of the insurance companies in the open market. We will assume the balance of the insurance, whatever it may be." I can see where the shipowners would be without this assistance. They would be in the position of placing £2,000,000 or £2,500,000 at a rate of per cent. Then people would take a little more at 2 per cent., others a little more at 2½ per cent., and perhaps still more at 3 per cent.. It can he seen that the premiums would he so large as to be absolutely impossible for any shipping concern. In view of the position which the Government took, in regard to War risks, I do not want anyone to say that this is a question of private enterprise having failed and of the Government having to intervene. If hon. Members opposite will excuse me for saying so anyone who makes a suggestion of that kind shows that he has not made himself thoroughly conversant with the position in regard to this matter.
I wish to ask the right hon. Gentleman a question concerning the premium. He has mentioned a rate of I 1½ per cent., plus 2½ per cent. of that rate. That., I understand, is in reference to the construction risk. In the ordinary course, in the insurance market, a premium of 30s. is subject to a brokerage of 5 per cent., and a discount of 10 per cent., and is not plus anything. I wish to know if it is the intention of the Government to accept this risk on all-fours with the practice in the open market, not only on the construction risk but on any subsequent risk, because after the ship has been constructed it is possible that the 12 months' premium for the marine risk may be another 2 per cent. or 2½ per cent. I wish it to be understood that as regards premiums the Government are prepared to accept this risk on the same rates as those which are

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prevailing in the open market and that they will give the same rebates, neither more nor less. I think if the right hon. Gentleman gives the question careful consideration he will see that that is a reasonable proposition. The Government have not come in for the purpose of making any additional profit. They are not taking on some additional risk, but if they do not give the same rebates as those given in the ordinary market, then they will be getting an advantage. I repeat that, opposed as I am to the interference of this or any other Government in private enterprise, yet there are circumstances in which Government assistance is wanted and ought to be given. I congratulate the Government on having taken their courage in both hands in deciding that although this insurance is only for one or two steamers, nevertheless they are going to assist shipping enterprise. IL is not a question of assisting one company, but of assisting shipping enterprise qua shipping enterprise, and of helping to maintain the prestige of British shipping and enabling it to hold its own against foreign competitors.
Mr. ERNEST BROWN: I cannot think that the hon. Member for East Leicester (Mr. Wise) has given such careful attention to this problem as he has given to some others. If he proposes to discuss the question of private enterprise as against nationalisation in the matter of shipping, he will find that there is a great deal to be said against the side for which he has been arguing. In the post-War period the experiments of Governments in Australia and America in this matter did not bear out the hon. Member's general thesis that Governments manage shipping affairs better than private enterprise. If the hon. Member is going to argue that private enterprise is breaking down in this instance, which T do not admit, he will find that there is a very strong case for the other side of the question, based on the experiences of those years. Again, in the suggestion that this company should be asked to build the two ships at once, the hon. Member shows that he has not given That care and thought to this problem which he ought to have given. He certainly has not paid due credit to the Cunard Company for their enterprise in this matter. This is undoubtedly a very great enterprise on the part of the Cunard Company.
Mr. WISE: I do not suggest that they should build the two ships at once. Apparently, a period of three years may elapse between the completion of the first ship and the beginning of the second, and I suggested that that was an unreasonable period.
Mr. BROWN: I do not think that the hon. Member's remarks as reported will bear the construction which he has now given to them. I am responsible for my own hearing and for nobody else's, but that was the construction which I put upon his speech. The whole burden of his remarks was to argue that this construction ought to be "speeded up" and carried out much more rapidly—I will put it in that way. As I have said, this is an amazing enterprise and a great work of construction. It is unprecedented in the history of this or any other country, and any company or any Government would be very unwise not to take the greatest care so as to see that the utmost shall be learned from the construction of one ship before they proceed to lay the keel of the second ship. So far from agreeing with the hon. Member that the Government ought to have made their terms as regards control and other things, I congratulate them on having handled this matter as a pure business proposition without being hidebound by any theory of any kind. I am sure that the majority of the House and the majority of the country will agree as to that point, because they do not hold the view held by the hon. Member for East Leicester that anything which Governments do, in the matter of control and management, must ipso facto be right. We hope that this great enterprise will go forward and that the Resolution which we are now about to pass will be sufficient to enable both ships to be built inside the period specified.
Mr. HARDIE: An attempt has been made by hon. Members opposite to make it appear that there has been no failure of the present system in this case. The system, however, has absolutely failed. The failure of any organisation and any system is evident when it is incapable of dealing with ordinary developments as is the case in this instance. It is quite obvious from all that we have heard this afternoon that, owing to the increase in the size of ships, and all the improvements that have been put into them, the

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commercial side of private enterprise is now incapable of taking the insurance risks. Supposing that this £4,500,000, instead of being concentrated on the construction of one ship were spread over the construction of a number of ships. I can quite imagine the fury of the hon. and gallant Member for Dulwich (Sir F. Hall) in that case, at the idea that the Government should interfere with his private enterprise when the transactions were of that degree and size which enabled him and his friends to deal with them. But the fact is that private enterprise cannot keep pace with scientific invention.
The CHAIRMAN: I can foresee a long discussion on the merits of private enterprise, if we proceed on those lines, but we cannot have such a discussion on this Resolution. This Resolution deals specifically with the question of this insurance in connection with the Cunard Company.
Mr. HARDIE: And with regard to this Cunard insurance the hon. Member for Dulwich pointed out that when the War came our insurance system failed because it was not organised, as an insurance system, to deal with the emergency and the State had to come in behind it.
Mr. LEIF JONES: That was because the War was not the work of private enterprise but the work of Governments.
Mr. HARDIE: The right hon. Gentleman cannot have it both ways. You are acting as one thing or another. If the private enterprise people claim that they are all-capable and that they require no assistance, under any conditions, why, when these emergencies arise, are they not capable of carrying out the insurances just as they do in peace time? The failure to keep pace with shipping developments in the matter of insurance, is an instance of what has taken place in relation to other industrial developments in this country.
The CHAIRMAN: The hon. Member has been long enough in the House to know that when dealing with a Money Resolution we are confined to the terms of the Resolution itself.
Mr. HARDIE: I was going on to refer to what had been done during and after the War in regard to State interference on an insurance basis.
The CHAIRMAN: We are only concerned this afternoon with the particular insurance agreement dealt with in the Resolution.
Mr. HARDIE: Surely if other hon. Members have been allowed to bring in arguments of that kind I should at least have the privilege of replying to them. I had hoped to get an extension of that privilege which has been given to others. Coming as I do from Glasgow where, it is said, one of these ships is to be built, I am interested in this business especially as regards the statement of the President of the Board of Trade in reference to unemployment. While this is essentially a question of insurance, the Government, in taking up this insurance, are trying to help to relieve unemployment and distress. If State insurance is one of the means whereby we are going to do something on a large scale in that direction, surely we can put the argument from these benches that State interference everywhere is bound to be the logical conclusion from the statements which we have heard. We are told that unless the Government stand in and give the security, or the insurance, which is required by the Cunard Company that this work cannot be proceeded with, and we are also told by hon. Members opposite who are in the insurance business that they could not possibly take up such a risk. Between these two statements the argument appears to be plain. Here you have a development in industry which we are anxious to push forward for two reasons—
The CHAIRMAN: We are discussing here a Resolution dealing with this insurance for the Cunard Company, and although at an earlier stage I allowed an hon. Member to introduce the analogy of insurance during the War, we must not proceed to a general discussion.
5.0 p.m.
Mr. HARDIE: From the statement of the President of the Board of Trade it appears that without State help the construction of these ships cannot proceed, not from any want of material or anything of that kind, but because private enterprise fails to provide the insurance which must be provided before the ships can be put on the stocks. All that has been said goes to show that whenever private enterprise insurance breaks down, the State has to interfere. If the State

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does not interfere now, these ships cannot be built. Is not that the position before the Committee? If the Committee fail to give this Vote to-day the Cunard Company cannot go forward with this work because private enterprise is unable to provide the insurance. I think that is quite clear. There are one or two questions which I should like to put to the President of the Board of Trade. We are told that there is to be no cash payment. We are also told that the ship is to take from 2½ to 3 years to build. In regard to the second ship I wish to get this point quite clear. When we fix a period of six years does it follow that the first ship to be built is purely experimental, and that we must wait until that ship has been tried out and has voyaged across the Atlantic before we proceed with the second ship. If that is not the position I would ask if the designers and the constructors of this ship are satisfied that they can do no better, why not go on with the two now instead of one? What is the reason? It cannot be the question of insurance. I want to put the direct question as to whether any part of this work is really in its experimental stage. Do we know whether what is calculated for this ship will be carried through? Do we know that it will get the speed and take the tonnage that it is stated it will carry at that speed?
Sir R. HORNE: I hope the Committee will forgive me if I put before them my estimate of the situation and the way in which I venture to look at it, from the statement made by the President of the Board of Trade. I think, from what he said, there were two prime factors which presented themselves to the consideration of the Government in approaching the subject. In the first place, it is of vital importance to any country which is an island like ours, as it would be to others which have considerable frontages to the sea, to ensure that their ocean transport is adequate to their needs, and from time to time, as a matter of fact, the Government of this country has taken notice of that particular factor in our civilisation and has aided in the construction of ships which were adequate to our ocean-going transport.
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At the present time what. must be brought home to the mind of everybody is that the Germans have succeeded in wresting from us what is called the blue riband of the Atlantic. Prestige is worth something in itself. I am not looking at it from the point of view of fame or of the position which we hold in the world, because I look at it purely from the point of view that prestige stands to bring business, and anyone who knows what is going on on the Atlantic to-day knows the extent to which we are suffering by reason of the fact that we have not got the fastest ships. I have met many people in the past few months who have travelled to America, for the first time in their lives, by something other than a British ship, either by the "Bremen" or the "Europa," for no other reason than this, that it gives them two more days in New York between their journeys, and a business man, I imagine, if he found that he would get two extra days in a city like New York after taking that long journey, would regard it as of prime importance that he should have the longer time.
That undoubtedly is taking a large number of people away from British ships and British lines and inducing them to travel by other lines. We cannot go on in that way and expect to do as well in this country as we have been doing in order to earn those revenues which ultimately produce the revenues upon which the State depends. Accordingly, I can quite well understand the anxiety of the Government to see that when the opportunity offers and a large company is willing to find the finance, it should not be impeded in its efforts to recapture the trade of the Atlantic.
The other point is of even more importance. You have a chance at the present time, when you are spending vast sums of State money in relief works for people who are unemployed, of seeing private enterprise spend large sums of money, which will not only not come as any charge upon the State, but will in the end bring revenue to the State. You are going to succeed in giving 5,000 people employment for three years by a simple guarantee of the insurance upon these ships and you are going to do that without any expenditure upon the part of the State at all, as contemplated at the present time. From every point of view,

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these two objects seem to me to justify the Government taking exceptional action under present conditions. The action is exceptional. If it were not exceptional, I confess that I should not support it, but I think that all the conditions at the present time are of a character that require us to take a different point of view from that which we do in ordinary times.
What is the actual position with regard to these insurances? It starts thus: The Cunard Company contemplate building a vessel which is entirely new in its contrivances, and which passes beyond all previous experience of shipbuilding. It is going to cost a very large sum of money. They have to take measures in advance to see what requires to be done, and necessarily they say to themselves, "We are not going to build this vessel unless we can be certain that when we put her on the water she can he insured, and that the insurance market will be able to take up all the necessary risks." It is going to be three years before that vessel will go into the water, and their information is that the insurance market at the present time is not in a position to say that three years hence they can guarantee that all the insurance of such a ship as that will be provided for, that a single specific body will carry so much risk at that time, three years hence, under conditions which they do not entirely foresee.
But I think the Committee will be making a mistake if it assumes to-day that three years hence that insurance will not be provided. I hope that by that time ways and means will be found by which that insurance will be provided—no man can say—but the Cunard Company require the certainty before they begin to build, and the Government are in a position to give them that certainty. That is all that is being done to-day, and accordingly I think it is a wise action on the part of the Government to provide the kind of conditions which would induce the Cunard Company to go on with the building of the ship at the present time.
Mr. SANDHAM: And turn it into a commercial proposition?
Sir R. HORNE: Certainly.
Mr. SAN D HAM: Which it is not now.
Sir R. HORNE: I do not understand what is meant by saying that it is not a commercial proposition.
Mr. SANDHAM: Because it lacks the insurance.
Sir R. HORNE: But the question is what the insurance market will be prepared to do in three years' time, and you cannot provide that certainty to-day—such a certainty as will justify the expenditure of capital now. With regard to the other case, the insurance of the ships in course of construction, that is a totally different proposition, because a ship at sea carrying all these risks is on a totally different insurance basis from that of a ship in course of construction in a shipyard. I understand, from reading the White Paper with regard to the marine risk, and from what the President of the Board of Trade said, that the Government are going to take up all the insurance that cannot be effected in the market at a reasonable rate, that that reasonable rate is to be determined by what the President of the Board of Trade described as the ordinary market rate, and that if there is a dispute about the ordinary market rate, it is to be decided by arbitration.
It is my belief—I may be wrong, as I have had no opportunity of testing the whole matter—that if such a provision could have been applied to the insurance of the ships in course of construction, the market would have taken up the whole of the insurance risk, but as the President of the Board of Trade has. pointed out, he has fixed a rate of 30s., upon the advice that he has received. But he told us also, in the course of his speech, that there were many people in the market who considered that that was below market rate. Of that, indeed, I am assured. It is, in the view of many people, below the ordinary market rate of to-day, and if the ordinary market rate could have been discovered by some such provision as he means to apply later, I think, giving only my own opinion, it is probable that the great bulk of the risk, if not the whole, would have been taken up by the market. But the 30s. rate is something which has surprised some portion of the market at least.
I do not know what will happen upon the rate which the President of the

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Board of Trade has fixed as the result of his advice. I cannot say whether the insurance companies will be likely to take up the risk at that rate. I am perfectly certain they would be anxious to help under present circumstances, but, of course, they must use their judgment as to whether a risk upon a rate is justified or not. I admit that the President of the Board of Trade would only act upon advice. His advice was got from Lloyds, which, of course, has the highest possible standing and reputation, and I would not for a. moment presume to say, nor would anybody, that it is bad advice, but it is always possible that people do not make the best calculation, or at least a calculation which is justified in the minds of everybody else.
I have no doubt that the President of the Board of Trade found himself in a position in which he had to fix a rate at once in order that this work should be rapidly carried out. I take it that that is the justification in this case for fixing the rate for the insurance upon the building risk instead of leaving it to be fixed in the way in which he will have it done upon the marine risk, and probably he is justified in taking that course in order to get the work expedited and the people employed on the building of this ship. As I say, nobody can tell what the market will do in these circumstances, or how much the Government will be left with, or whether large sums will be supplied from the market or not, but I am perfectly certain that if the market takes up the whole of the risk and relieves the Government of any burden with regard to the construction insurance, it will be because the insurance companies are anxious to do everything that they can to help in getting work into this country at the present time for as many people as possible.
As I say, I am not predicting what may happen. The situation is a difficult one at the moment, and upon the whole matter, so far as I am concerned, I do not place any impediment in the way of the Government at all, hut I hope the President of the Board of Trade can reserve to himself room in which there might be some slight alteration which would induce the market to take up the whole rather than put any burden upon the Government. I hope he will he able to give me an affirmative
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answer to that suggestion. It is not that I am wanting, or that anybody wants, to put any squeeze upon the position—the President may be assured that there is no idea of that kind in anybody's mind—but I hope he has not completely tied himself. In any case, as I say, I would not suggest that the Government have clone anything which is wrong in the circumstances, or that the conditions which they have put before the Committee do not justify their intervention in this matter at the present time.
Lieut.-Commander KENWORTHY: I am sure my right hon. Friend the President of the Board of Trade roust have been astonished by the reception of this proposal to-day. It is not often that I find myself in agreement with the right hon. and learned Member for Hillhead (Sir R. Horne), and still less often am I in agreement with the hon. and gallant Member for Dulwich (Sir F. Hall). Indeed, it is not often that I am in agreement with my hon. Friend the Member for East Leicester (Mr. Wise), who has now gone out of the House. There is complete unanimity in the Committee, and it is only because I want to draw the moral of this that I venture to intervene at all. Here is my right hon. Friend the President of the Board of Trade coming forward with a proposal that the Government should insure these two great liners, in order that they should be built and in order to take men off the Unemployment Insurance Fund and give them work. That is what we have all been urging him to do all these months, and he gets nothing but blessings and praise when he does it. I congratulate him, and I hope the effect will be that he will be able to take further and bolder steps of this excellent nature. There is an overwhelming majority in this House for the credit of the country being used at the present time for the assistance of useful work that will take men off the street corners and out of the Employment Exchanges.
Before I come to the lesson of this extraordinary spirit that we have had displayed on a Monday afternoon, may I ask my right hon. Friend some questions? When my right hon. Friend says in this Motion, "in Great Britain," that, I suppose, does mean Great Britain, and there 'is no question of one of these ships being built in Belfast.
Mr. W. J. STEWART: Why not?
Lieut.-Commander KENWORTHY: I will tell the hon. Member. The hon. Member for Springburn indicated that one was to be built on the Clyde and the other on the Tyne. The reason I object to one of these ships going to Northern Ireland is that the Government of Northern Ireland had retained the Trade Facilities Act; that is the only good thing I know about them. By that means, they have obtained a great many orders for their shipbuilding yards which we have lost, and they have a great advantage over us in that matter. I rather suspect that the credit guarantee which they give under their Trade Facilities Act is really based upon British credit. I wish the shipbuilding yards in my own constituency—
Lieut. - Commander KENWORTHY: It does not, but perhaps I shall be in order in saying it is obvious that, wherever else these great Cunarders can be built, they cannot be built in the smaller shipyards, and I think that those of us who are interested in the small shipyards have a right to draw attention to this fact. There we can build very fine ships of a smaller type. The Atlantic greyhounds of the past received a subsidy from the Admiralty if they were able to do a certain speed, and their decks were straightened in such a way that guns could be mounted on them, and if there were other requirements. Is this subsidy being applied to these ships?
The CHAIRMAN: This Money Resolution deals with insurance, and if there be a question of subsidy, the hon. and gallant Member had better ask it when the agreement comes to be discussed.
Lieut.-Commander KENWORTHY: I ask this question because it affects the insurance. If it is necessary for a ship to have a certain speed and to have certain structural alterations, there must be a higher rate. If I could have information on that matter, as it affects the insurance rates, I should be obliged. It has been mentioned that this is no new thing, and that during the War we entered very largely into the insurance of ships and cargoes. Not only was there
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no loss, but there was a big profit. The Ministry of Food, in their insurance of ships and cargo, made a profit, in spite of the tremendous devastation and terrible losses of ships, of £10,000,000. This £2,000,000 liability here does not alarm me in the least. As it is very often the first step that counts, I hope that this will be a first step to a long step which will lead to a much larger taking of Government risk in insurance matters. Even if there were risks, we have been told by my right hon. Friend that £250,000 each year will be saved on this one transaction alone in unemployment insurance—a remarkable thing. Does not the Committee see that, when my right hon. Friend speaks of the 1,500 men who will be employed for three years, it is an argument for the reintroduction of the Trade Facilities Act, and the introduction of insurance for other ships with which to win the blue riband of the Atlantic? The right hon. Gentleman the Member for Hillhead spoke of national prestige, and how some people went on German ships in order to be able to spend two more days of pleasure in New York—
Sir R. HORNE: The hon. and gallant Gentleman must be fair. It is a question of business men here.
Lieut.-Commander KENWORTHY: I know how they spend their time. National prestige depends on other things besides the winning of the blue riband of the Atlantic. It depends on whether we can find employment for our people, or whether we are going to he held up as an awful example of dwindling industries and unemployed workmen. I would like to see, in addition to help given to these two great liners, help given to the shipbuilding industry in regard to the humbler types of vessels.
The CHAIRMAN: That question does not arise here. The Resolution deals only with the Cunard liners.
Lieut.-Commander KENWORTHY: The Cunard Company have received a special favour. It is a very great company, which has done much for British shipping in the past. I congratulate the company on having been able to persuade the Government to do this thing where other companies, which are up-to-date and have spent enormous sums to equip

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their building yards, have not been able to get similar assistance. The principle of this grant for these two Cunard liners is thoroughly sound, and could be tremendously extended. I am glad that the Committee has received this Resolution with such agreement, and I hope that the next time the hon. and gallant Member for Dulwich is making one of his great orations on certain proposals held by a section of his party, he will remember his remarks here that he objects to any interference by governments with commerce.
Sir HILTON YOUNG: I have no comments to make on the merits of this scheme, but there are two points of financial procedure which require elucidation. The first is that raised by my right hon. Friend the Member for Hillhead (Sir R. Horne). I feel confident that the President of the Board of Trade will realise that there is a strong argument in favour of greater elasticity in fixing the rate of the construction risk. We have heard that fixed rates at a definite figure in the Bill can only be merely prudent. It must not be taken for granted by anybody with a practical acquaintance with the subject, but when real doubt has been expressed, as in this case, the right hon. Gentleman will see that it is more prudent in the final provisions in the Bill to allow elastic machinery for fixing the rates, rather than to fix them at a figure which might prove to create some dislocation in the market.
The second matter on which I should like to ask for an explanation is purely a question of financial procedure upon the Resolution. Paragraph (c) of the Resolution provides that there shall be constituted a special fund into which there shall be paid all premiums and out of which expenses shall be paid. That is, in effect, asking the Committee to short-circuit the Consolidated Fund as regards certain receipts of public moneys; and I am sure that the right hon. Gentleman will agree with me that whenever the Committee are asked to short-circuit the Consolidated Fund in order to allow for payments into and out of a further fund, the Committee should be told of the reasons for that course. It would seem to me prima facie that there are some reasons against this course and in favour of the more orthodox procedure of allowing all the receipts
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to go into the Consolidated Fund, because in effect we are by this procedure constituting one of those special sinking funds which are, as regards the general principles of public finance, usually considered to be undesirable. So on broad principles, in order to avoid a multiplication of funds and sinking funds, it would seem proper to follow the ordinary procedure and allow these payments to go into and out of the Consolidated Fund. There may be a special reason why it is of some advantage that this special fund should be created, but there is a wide principle at stake, and the Committee should be informed of the reasons.
Mr. REID: I would like to call attention to the procedure which is adopted here. The Committee are asked to authorise the President of the Board of Trade to enter into a draft agreement. Except for the meagre information in the White Paper, the Committee know nothing of the contents of the agreement into which they are asked to authorise the President to enter. I understand that when the agreement is entered into, it will be scheduled to a Bill. The Bill, I take it, will confirm an agreement already entered into, and it will be impossible for anyone in the House to discuss it. We have had that point a number of times before. When a document goes into the Schedule to a Bill, it is impossible to move any Amendment to it, so the only recourse the House would have if they did not care for the agreement, would be to reject the Bill. The document cannot be a secret, for if it is going to be scheduled to a Bill, everyone will know of it, and why, when we are asked to authorise the President to enter into an agreement, should it not be circulated It may be that the House would be prepared to authorise the President to enter into the agreement with some modification. It has been suggested that certain points about wages may require further consideration, but how can we consider such points when we have not seen the agreement? This is really not giving the House a proper opportunity for discussion.
Mr. MORLEY: In the course of this discussion the hon. and gallant Member for Dulwich (Sir F. Hall) has confessed that he does not object to State assistance; all that he objects to is State interference. It would be interesting if, on

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some future occasion, he would tell us where State assistance ends and State interference begins. Judging by his speech, I assume that State assistance is all right for an enterprise where no profit is being made; but that if there is any chance of profit then private enterprise ought to have the opportunity. I have one question I would like to ask the President of the Board of Trade. In return for this guarantee, can we get an undertaking from the Cunard Company that decent accommodation will be provided for the crews of these vessels Many large liners sail from my constituency to various ports. The accommodation for their first-class passengers is luxurious, and even palatial—
The CHAIRMAN: If the hon. Member has any question to ask on this matter, he must defer it until Second Reading of the Bill.
Mr. MORLEY: I will postpone my further remarks to the Second Reading of the Bill.
Sir ROBERT ASKE: So far as the details of this proposal have been stated to us, I think they are on sound business lines; but there is one point on which I desire to ask a question, and that is the proposal that the policies are to he exempt from the limitation which applies to all marine insurance policies that they shall not run for more than one year. Since the extent of the Government's obligation will depend on the amount of under-writing accepted by the ordinary market, I wish to know whether this benefit is to be extended to the other persons who will underwrite any part of the risk; because the ordinary provision that a marine policy can cover a risk for a year only is obviously rather irksome in circumstances such as this. Another point on which I would like information is whether it is expected that the limit of six years within which the keel of the second vessel is expected to be laid down is likely to be reached. This financial undertaking on the part of the Government is intended to assist employment, and it is desirable that the period of six years be shortened as much as possible, in order that unemployment, which amounts to 38 per cent, in the shipbuilding industry, may he alleviated as early as possible. I would also like to
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ask whether the Government have made any stipulation as to the places where the keels are to be laid down.
The CHAIRMAN: I have called another hon. Member to task because he wanted to make an appeal for his own constituency, and I must warn the hon. Member that he must not follow that example.
Sir R. ASKE: I bow to your Ruling, Mr. Young, but when the State is undertaking an insurance risk of £4,500,000 I want to make sure that the Minister is taking care where the keels are to be laid down, and to know whether he can give the Committee any indication of the extent—
The CHAIRMAN: The question before us is one of insurance. and we cannot go outside that question.
Mr. W. GRAHAM: I am grateful to hon. and right hon. Members in all parts of the Committee for the remarkable unanimity which has characterised this debate. After some recent debates, it is pleasant to see that there is one proposition which finds almost universal support. Two considerations are prompting me in my reply; one is the desire to be very brief indeed, and the other is that. as many speakers have found it difficult to keep within the four corners of the Financial Resolution, I must not get out of order in trying to reply to them. I will concentrate now on one or two points of importance, giving hon. Members an assurance that when we come to the text of the Bill, in which the actual' agreement will be included, there will bescope for a much fuller explanation than is possible now. Two or three of the speeches, notably those of my right hon. Friend the Member for Camborne (Mr. Leif Jones), the right hon. Member for Hillhead (Sir R. Horne) and the right hon. Member for Sevenoaks (Sir H. Young) turned upon the 1½ per cent. construction risk which is mentioned in the White Paper, and it was suggested that it might he desirable to make that elastic in character. Before I come to that may I say a word in amplification of the explanation which I gave in my introductory speech? We hope the market will absorb a very large part of the insurance—we would be very pleased if it would absorb the whole of the construction risk—but the essential point was put by my

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right hon. Friend opposite when he reminded us that even before the War there was a certain difficulty in getting the market to provide the full cover on very much smaller undertakings. This proposition of £4,500,000 is far in excess of any pre-War proposition. All I can tell the Committee this afternoon, and, indeed, all that I think any Minister in my position could ever tell the Committee, is that I have taken the most competent advice open to me, that of the chairman and the deputy-chairman of Lloyds, and on that information have reached the conclusion that the 1½ per cent. is an appropriate and a reasonable rate for the construction of this vessel—subject to the additions, namely the 2½ per cent. on that rate, the small addition to the I per cent. and the absence of brokerage since otherwise the Government would be accused of entering into competition with the market for the construction now proposed.
My right hon. Friend the Member for Camborne quite properly raised the question of what would happen if, in effect, this proved to be too low, if the rate were say, 2, or something between 1½ and 2; and I made it perfectly plain in my introductory remarks that in that case the Government might be left with the whole of the cover; but I can only repeat that we have no reason to believe that that will be the state of affairs. According to all the information at our disposal the chances are—I do not put them higher than that—that the market will absorb £2,000,000, or whatever the figure is—at all events, a substantial proportion of this construction risk. Beyond that it is impossible to go in any debate on the Resolution. My right hon. Friend the Member for Sevenoaks and another hon. Member raised the question of the position of Parliament in passing this Resolution. I must make the procedure perfectly clear. This Resolution refers to an agreement which has been reached between the Board of Trade and the Cunard Steamship Company. I could not come to the House of Commons with a proposition which was still in the air. I must know exactly what the company is prepared to do, and, on the other hand, I must have the most precise information as to the possible commitments of the Government, and that involves an agreement between the Board of Trade
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and the Cunard Steamship Company. That agreement is presented to Parliament for its assent or rejection. There is no restriction on any hon. Member. It is my duty to present the agreement, which will be included in a Schedule to the Bill, and it is then open to the House to reject that agreement or to modify certain Clauses in the Bill, and particularly the first Clause, which, however, I must point out, might have the effect of making the agreement an impossible proposition.
Sir P. CUNLIFFE-LISTER: May we get one thing clear? There are two ways in which a document of this kind is brought before the House. It can be brought before the House in the way in which a Treaty which requires ratification is submitted—a Treaty which has already been made and which the House, by a one-Clause Bill, confirms or rejects. Here the President of the Board of Trade is coming to the House to seek authority to conclude an agreement the terms of which have been discussed and provisionally agreed between himself and the Cunard Steamship Company. He says to the House: "I propose to enter into this agreement with the Cunard Steamship. Company, and I put the draft of the proposed agreement in a Schedule to my Bill." If ft comes in that form, it will be competent for the House to make any alteration in that agreement, because the Schedule is as much before the House as any Clause in the Bill, but the President would be entitled to say: "If you make that alteration, it is something to which the Cunard Company cannot accede." So far, however, as the competence of the House is concerned, it will be competent for us to make any alteration in the terms of the agreement.
Mr. GRAHAM: I do not differ from the way in which my right hon. Friend has stated the case as to what happens when, the Bill is presented to the House, but I wish to make it perfectly clear that if the conditions were seriously varied that might be the end of the agreement. In that position we leave this I½ per cent. this afternoon, and I can only repeat that that figure has been inserted on the very authoritative advice at our disposal.
The right hon. Gentleman the Member for Sevenoaks raised a point of financial procedure as to why we should take this out of the Consolidated Fund and set it

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aside in a separate Cunard Insurance Fund. On the question of a specific agreement with an outside interest, it is an advantage to have it separate from the general financial statement, because it shows the incomings and the outgoings of the fund, and exposes it in the appropriation account to the essential review of the Comptroller and Auditor-General, and to the attention of the Public Accounts Committee. There are many precedents for these agreements, and I find no difficulty in defending that part of our arrangement. Certain hon. Members have alluded to the period of six years mentioned in the White Paper during which this cover will last. I beg the Committee not to believe that there is anything fixed or final about that period. Plainly we have to have some period during which the offer is open, and if the construction of the first vessel covers three years, it might be suggested that the other period of three years for the second vessel would make up the six years; but I hope that it will not work out in that way.
In reply to a point which was very properly put by the hon. Member for Springburn (Mr. Hardie), as to whether the first construction would be regarded as an experiment, and the trials in the Atlantic or elsewhere would be taken before the second vessel was laid down, I have already informed the House that I have no information as to the beginnings of the second construction. or whether the vessel will be constructed. That is a matter for the company, but I hope and believe that the second construction, provided things work out satisfactorily, will not depend upon experiments, but will begin, at as early a date as possible, and then the other part of this proposition will come into play, namely, the cover supplied by the Government, in so far as the open market does not absorb the amount of insurance which is necessary either for construction or for the longer marine risk. The point raised by my hon. Friend the Member for Southampton (Mr. Morley) as to the conditioning of the vessel, I regret that I could not pronounce upon that, because I do not regard it as within the terms of the Resolution, but I am satisfied that there will be every desire, in a vessel costing £4,500,000, to make it an enterprise which will be worthy of every part of the
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service, and I include in that the passengers who will travel in it, and the very large number which will be necessary to man a vessel of this kind.
I am charged with having made speeches in the past which I should be the last to dispute. I was anxious to avoid questions of controversy, and to concentrate on the purely business proposition. I do not depart in any way from the principles which I have tried to lay down to the House in the past as to the rights which should accrue to the Government in return for contributions which any Government makes at the taxpayers' expense, whether in cash or by the acceptance of a contingent liability, as was the case with the Trade Facilities Act, and as indeed is the case here. But—and this is in reply to my hon. Friend the Member for East Leicester (Mr. Wise)—I think we have driven a bargain which the Government and the community can regard as mutually advantageous. It is clear that, but for this cover, which we are prepared to accept, if it be not overtaken by the ordinary market, this construction, either of one or of two vessels, could not take place.
The Cunard Steamship Company could not undertake so large a financial obligation in the post-War market. It was indicated that it would account for £4,500,000 for a single construction, and we were assured that it would provide work for 5,000 men for from two and a-half to three years, directly or indirectly, in an industry which is under profound depression at the present time. In addition we should save in unemployment benefit some £250,000 a year, and we should preserve the morale and the industrial skill of some of the finest craftsmen in this country. These are real and tangible benefits for the community as a whole. To my Liberal friends, for whom I have always had a tender spot, since the Coal Mines Act, I would say that this State cover is applicable to a great effort as a result of which we shall see one of the giants of ocean travel rise literally in our midst. That, perhaps, will suffice by way of peroration, and I now commend the Resolution to the Committee.
Question put, and agreed to.
Resolution to be reported To-morrow.

ORDERS OF THE DAY.

  SMALL LANDHOLDERS AND AGRICULTURAL HOLDINGS (SCOTLAND) BILL.
  Order for Second Reading read.
  The SECRETARY of STATE for SCOTLAND (Mr. William Adamson): I beg to move, "That the Bill be now read a Second time."
  This is a Measure to amend the Small Landholders (Scotland) Acts, 1886 to 1919, and the Agricultural Holdings (Scotland) Act, 1923. The Bill is drafted in two parts. Part I deals with the amendment of the Small Landholders (Scotland) Acts and Part II deals with the Amendment of the Agricultural Holdings (Scotland) Acts. No fundamental change is made in the structure of the law, but in general the Amendments are designed either to improve the conditions on which land is held for the purposes of agriculture or to remove difficulties which have arisen in the administration of the Agricultural Acts.
  The objects of Part II of this Bill are to afford increased encouragement to tenants to carry out permanent improvements which will enhance the productivity of the holdings for which compensation will be payable at outgo, and to amend the law with regard to agricultural arbitrations. Legislation affecting small holdings in Scotland dates back to 1886, when the Crofters Commission was constituted as the guardian of the highland crofters rights to fair rent, fixity of tenure and compensation for improvements. Power to grant enlargements of holdings was given to the Commission, but was hampered owing to the absence of powers and funds to pay compensation to the landlord and tenant of lands proposed to be used for enlargement. This was the first legislative incursion into the field of land settlement. A growing demand for small holdings and enlargements accompanied the labours of the Crofters Commission and the Congested Districts Board, and the agitation extended to the Lowlands. Other legislation has followed step by step. The land settlement operations of the Crofters Commission and the Congested
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  Districts Board—now the Department of Agriculture for Scotland—can be summed up as follows: The Crofters Commission between 1886 and 1912 was instrumental in providing 4,306 enlargements occupying an area of 72,341 acres. The Congested Districts Board acquired six estates with an area of 84,500 acres on which 388 holdings and 397 enlargements were provided. They also assisted the formation of 252 new holdings and 741 enlargements, occupying an area of 48,500 acres on private property. Since 1912 the Department of Agriculture for Scotland have constituted on private property 1,515 holdings and 1,419 enlargements on an area aggregating 321,254 acres, and 97 estates have been acquired aggregating 330,624 acres on which provision has been made for 1,806 new holdings and 367 enlargements. Since 1886 the State has acquired or made available from private estates an area of 857,219 acres, and has made provision for the constitution of 3,961 new holdings, and 7,230 enlargements of holdings. In other words, 11,191 holdings have been created or improved during that period.
  6.0 p.m.
  Apart from the agricultural aspect of land settlement, there are other considerations to be taken into account it the whole story is to be told. We ought, therefore, to consider the contribution of the Department to the solution of the housing problem in the rural areas, which sometimes attracts less attention than it deserves, and less consideration than housing in congested centres of population. The constitution of holdings on a scheme of land settlement necessitates the provision of new houses or the sub-division of existing farm houses into sometimes two or three separate dwellings, involving adaptation and frequently considerable repairs. Steadings have also to be provided, either by the sub-division of existing farm steadings or by the erection of new buildings, varying from the store accommodation that is suitable for a market gardener to the various accommodation of a stock-raising subject.
  The total numbers of houses and steadings which the Department has erected or improved since 1912 in this way are 3,828 and 1,788, respectively, and the numbers in course of erection or adaptation, or not yet begun but to

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  whose provision the Department is committed, are 1,007 houses, and 446 steadings, making grand totals of 4,835 houses and 2,234 steadings which the Department will have erected, adapted, and improved on the completion of their committed programme. The total estimated initial cost of this housing provision is about £1,500,000. The provision of all this housing has engaged tradesmen in useful work, contributing generally to their welfare as well as to the permanent benefit of the smallholders in the country. The statistics which I have given regarding the houses that have been built are exclusive of the new buildings and improvements which were effected by the Congested Districts Board prior to 1912 at a cost of something like £21,000.
  It may interest the House to know how small is the proportion of the holders who have failed in the cultivation of their holdings. Out of a total of 1,906, only 5.3 per cent. have failed, and this percentage has been steadily decreasing in recent years. These are remarkable figures, and show the great possibilities of land settlement, if our agricultural resources are to be fully developed and work provided for our people. At any rate, I as an individual am satisfied that these improvements in social conditions are very valuable, and ought to be extended to the fullest of our powers and to the full limit of the money available. I am satisfied, too, that the smallholder generally, by the compulsion he is under to specialise and intensify his methods of production, is an agent in the increase of home-grown consumable produce available for food.
  This remarkable development would, in my opinion, have been of far greater value to the smallholder and to the State if two things had been attended to. The first of these are proper transport facilities by road, rail and sea for our people living in those remote parts of the Highlands and Islands. Within the last two Years a considerable amount of work has been done by way of improving the transport facilities, but, much as has been done, much more remains to be done before we shall have provided the transport facilities necessary to assure the economic development of that part of our country. In the second place, we have failed to organise our smallholders on
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  the same co-operative lines on which the smallholders have been organised in Denmark, with the result that they have become an easy prey to the middleman and the profiteer, and thus have secured a smaller proportion of the fruit of their labours than would have been the case if the proper line had been taken. The present Government, however, are taking steps to remedy this through the Marketing Bill, which will be under consideration very shortly. As the House is aware, the Bill of which I am moving the Second Reading to-night, is only a small part of the agricultural programme which the Government intend' to carry through in the course of this Session.
  The value of co-operation has been demonstrated in a remarkable degree in the case of Denmark, as the following figures will show. These figures deal only with similar products to those produced by the smallholders whose conditions will be improved by the operation of this Bill. They consist of meat, dairy produce, poultry and eggs, which in the main are the things that our smallholders produce. In 1928, Denmark sent to this country meat to the value of £25,602,000, dairy produce to the value of £19,389,000, and poultry and eggs to the value of £4,385,000, or a total, for these three articles, of no less than £49,376,000. These imports from Denmark, of these three classes of articles, were, in relation to our home production, no less than 27 per cent., in relation to our total imports no less than 23 per cent., and in relation to our total consumption no less than 13 per cent.
  What is the value of these results? In the Highlands and Islands congestion has been removed—not everywhere, but yet to the real improvement of the conditions in many places. For instance, at Talisker, in Skye, a community of 68 families taken from Harris is now living under conditions which Harris could not afford them. Throughout the Highlands, the security offered by the fundamental Act of 1886, and the sub sequent operations under succeeding Acts, have resulted, not only in giving a larger amount of land to the holder, but in the building of improved houses all over the countryside—houses of a character which was exceptional prior to 1886. In the Lowlands, access to the land has been provided for 1,369 applicants who, without the assistance of the Department

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  of Agriculture for Scotland, could hardly have hoped to attain the standard of independence which a small holding occupied under conditions of security provides for its holder. With very few exceptions, houses—either existing farm houses reconstructed and adapted, or new houses of a. type regrettably uncommon in rural Scotland—have been provided for these holders.
  For these reasons I am anxious that this Bill should be passed. It proposes no revolution in the existing law, but provides improvements which experience has shown to be necessary or desirable for the greater effect of the intentions of the Act. Hon. Members are aware that I have concerned myself intimately with these matters for many years. In my previous term of office, in 1924, I introduced a Measure which it was found impossible to carry through all its stages, a Measure which largely consisted of what is now contained in this Bill, and 1 intend to press to the utmost of my capacity the Bill which I now submit to the House. I hope that it will find a speedy passage to the Statute Book, and that it will secure to the smallholder and the State the benefits of State expenditure in the provision of smallholdings, that it will provide additional safeguards against the dispossession of the genuine smallholder, and that it will still further encourage the provision of decent housing accommodation for a deserving and hard-working section of the community. I will not deal with the Clauses one by one. I leave that to my hon. Friend the Under-Secretary later on. There may be parts of the Bill on which my Scottish colleagues may differ, but these can be discussed in Committee. I believe my colleagues in the Government, like myself, want to see the best possible use made of our agricultural resources. I believe they, like myself, believe that it. is as true to-day as when Goldsmith wrote these words:
  "Ill fares the land, to hastening ills a prey,
  Where wealth accumulates, and men decay;
  Princes and lords may flourish, or may fade;
  A breath can make them, as a breath has made;
  But a bold peasantry, their country's pride,
  When once destroyed, can never be supplied."
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  I hope the Bill will be carried without a Division.
  Sir JOHN GILMOUR: I am sure the right hon. Gentleman's colleagues will not disagree with him when he says that we are all intensely interested in the betterment of smallholders, and indeed of agriculture in Scotland as a whole, but I have listened with the greatest attention to some of the very interesting figures he has given us about the development of small holdings, and I find myself completely at a loss to understand many of the fundamental pressing reasons and arguments with which he introduces the Bill to the House. He has told us that the Under-Secretary is going to deal with this in detail, and he invites us to refrain from intensive criticism until we arrive at the Committee stage. Everyone who has felt it his duty to study the Measure will agree that, whatever other reform may be required in order that individuals may form their opinions with clarity, one thing is really essential, and that is that there should be some codification of the existing law. The Bill, with all its multifarious references to Acts going back over a long period of years, entails an amount of labour and makes it extraordinarily difficult really to grasp what is sought in the Measure. My friends and I will not on this occasion challenge a Division, but we reserve completely our right of criticism, both in Committee and on the further stages of the Bill. Many of the Clauses are recommendations of the Nairne Committee and many, no doubt, are the result of discussions, and, in some measure, of the drafting of our late colleague, Mr. MacRobert, who was Lord Advocate. In so far as they meet the point of view which the Nairne Committee has reported and which we discussed, we do not quarrel with the Bill.
  The second part of the Bill, which the right hon. Gentleman dismissed at the outset of his remarks, deals with very important matters for the larger agricultural community. I want to ask a few questions as to what exactly some of these Clauses imply. I notice that there is a complete alteration of the Schedule under the Act of 1923. Many things are taken out of what was the First Schedule in that Act and are placed in the Second Schedule. The right hon. Gentleman says he wishes to encourage

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  the holders of land to improve the conditions of their farms and of the machinery under which they work. But it is a formidable list in Part II, and, while drainage was formerly included in this—and to that one did not take objection—there are some undertakings here which only require notice to the landlord. These undertakings may of themselves in some cases be entirely beneficial, but they are of such a nature that they may in a great many cases entail very considerable expenditure of capital and will in the end bring upon the landlord claims for compensation. I only say at this stage that we shall be quite ready to discuss the problems of this Schedule. It may be that we may think it desirable that some restriction of the total amount ought to be imposed or, at any rate, that there should he some method of appeal in dealing with these matters.
  In this second part of the Bill, there is an alteration in the method of selecting the arbiters. As I understand it, in the past a panel of arbiters to deal with problems in dispute has been established by the President of the Court of Session and, so far as I know, that panel has been widened and extended from time to time in order to meet the necessary calls upon its personnel. I should like to ask on what grounds the change is now made that that panel shall cease to be nominated by the President of the Court of Session and shall be nominated by the Department of Agriculture. Obviously, it is putting into the hands of the Department a power of appointing a panel whose members in a good many cases may find themselves actually implicated in arbitrations affecting the Department, and, while one would hesitate to suggest that there would he improper appointments made, I still feel that, unless there are grounds of great moment which lead to this change, the House ought to be very certain that it is doing a wise thing; nay, that the Department itself is doing a wise thing in asking for this change.
  Turning back to the first part of the Bill, I want to ask a question. The right hon. Gentleman made a good deal of the desirability of increasing the assistance that should be given for the development of these smallholdings. I do not observe that there is any proposal to take fresh
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  money, and, if there is to be an extension, as there is, of the powers of expenditure upon building, I assume that no fresh money is being taken for that but only already voted sums under Parliamentary sanction. If that be so, may I ask what exactly is meant by Subsections (3) and (4) of Clause 1. It seems to me that Sub-section (3) is establishing something that is new, and I am not quite certain why it should be desired. I can see that Sub-section (4) may be necessary in order to deal with arrangements made in the past as to loans, but I am a little doubtful as to the exact meaning of Sub-section (3), and I should be glad to have some explanation of it. With regard to Clause 2, I make no objection to the acquisition of knowledge from the proprietors as to leases, but I take some exception both as to the time that is given and as to the necessity of making the question practically a criminal one if it is not given within that period of time.
  I pass on to what, in my judgment, is one of the most important Clauses, Clause 8—"Amendment of provisions as to resumption of holdings." This matter has been raised from time to time and has been considerably discussed. I am also clear in my own mind that the number of cases of hardship arising under this point are comparatively few and that they are not increasing. It is a direct alteration of the rights of property holding, and, if I am right in that, there must be some very strong justification for altering the rights of property holding. I think such cases of hardship as may have arisen could very well have been dealt with less by this direct and wholesale method than by reverting to what was the practice under the 1886 Act. Such justification as there might be for claims of hardship imposed upon certain individuals could have been adjudicated upon by the land court where all the circumstances of the case could have been considered, but that we should here and now assent to the proposition put forward is, in my judgment, wrong. What is going to be the position of property which may have to be sold? It would practically be impossible for the property to be divided or single parts to be sold, because a man would not be able to obtain possession if he bought it. If you take the case of an estate where

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  there is a mortgage which may be called up, it is clear that the position of the bondholder is going to be very much worsened under this proposition. If they were confined to small cases of complete hardship and if these cases of hardship had to be taken before the land court, the matter would be settled. As far as I am personally concerned, I should be prepared to meet the Government on that footing, but I must tell the right hon. Gentleman at once that both my friends and I are very strongly opposed to the proposal in its present form.
  There is another Clause about which I should like to have some further information. It is Clause 14. It deals, as I understand it, with the problem of the fencing of smallholdings. I am aware that in the Nairne Committee Report reference is made to this problem. Clearly some of the schemes where very extensive fencing has had to be erected have imposed very heavy burdens upon the Government Department in carrying them out, and if some method of lessening the heavy burden can properly be achieved I shall be bound to consider it. As at present drafted, the Clause is open to some criticism, since it may lead to holdings being established, and the interpretation of the term
  "as the usual and reasonable practice of agriculture and estate management may require in the conditions"
  is a little wide and vague. One knows that it is open to a variety of interpretations. If the terms on an estate between the individuals concerned Pare good and satisfactory little difficulty arises, but, if they are not, then great difficulties may arise. The Clause is one which will have to be looked at most carefully. I will not delay the House longer than to say that we approach this Measure with a measure of good will in so far as assisting the improvement of machinery is concerned. We are at one with the Government in accepting many of the recommendations made by the Nairne Committee, and, with the exceptions I have mentioned, I hope that we may find that in Committee we shall be able to come to a moderate state of agreement.
  Mr. MACPHERSON: Since last we discussed Scottish affairs in this House a
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  kindly and lovable personality has gone from our midst. I refer to our late right hon. and learned Friend and colleague, Mr. MacRobert. I think it is safe to say that in the discussion of this Bill his intervention would have been frequent, but each intervention would have shown care and conspicuous ability. We may not have agreed with him, but he will live in the memory of this House as a man who left it without an enemy. Like my right hon. Friend the Member for Pollok (Sir J. Gilmour) I was rather astonished at the speech which was delivered by the Secretary of State for Scotland. At the same time, my colleagues and I were pleased, because it was a recital, and a somewhat long one, of the good deeds which Liberal Governments had done in the past.
  Mr. W. ADAMSON: That ought to please you.
  Mr. MACPHERSON: I am paying my right hon. Friend a compliment. I think I am speaking on behalf of all my colleagues when I say that, when we are contesting seats in Scotland in the future and we desire to explain to a new elector what Liberalism has done in connection with land settlement in Scotland, we shall produce, and with pleasure, the entire speech of the right hon. Gentleman the Secretary of State for Scotland. The most remarkable thing about our discussion today is the fact that there was not a word of mention of this great Bill in the King's Speech. We know how Bills are introduced into the House of Commons. 'If they are not mentioned in the King's Speech, we private Members come surreptitiously by the side of your Chair, Mr. Speaker, and hand in a dummy document. Instead of having a far-reaching and an all-embracing Bill which was going to do wonders, as we were promised last Session, in the matter of land settlement in Scotland, where a crisis exists just as much as in England, the Secretary of State for Scotland surreptitiously passed your Chair and handed in a document. When it was handed in I am told that it was a dummy document. It has been handed in many days, and it is now printed, but it is still a dummy document. Therefore, it must be, I understand, a minor Measure, and what I regret is that, if the Government find themselves pressed for time, they will

  1395
  not have the opportunity which we would willingly accord to them of introducing a far-reaching and an all-embracing Measure of real, genuine land settlement in Scotland. The time will be occupied by this miserable, anemic thing which we are discussing to-day, and we shall be told when we press them for the promised Measure of land reform in Scotland that there is no time, as the time available has already been devoted to a discussion of this small and minor Measure.
  This Bill, as the Secretary of State pointed out in the one sentence which he devoted to the explanation of the Bill, is merely a collection of grievances which have been pigeon-holed for years in the Department of Agriculture. Is there a single Clause in the Bill which is going to put a single new man on to the land in Scotland? [Interruption.] We are dealing with Scottish affairs just now. I am asking the question of the Under-Secretary of State in the hope that he will reply. Is there in this Bill a single Clause which is going to put another man on to the land in Scotland? Not one. I hold that the Bill is nothing but a pill to cure an earthquake. The Government have missed a great opportunity in not pressing for a substantial Bill. Instead of putting a man upon the land, or encouraging him to go on the land, this Bill will frighten him. It is full, as the right hon. Member for Pollok said, of new restrictions and changes, and, instead of having a simplified and codified Measure, we have a Measure fobbed off on us at the beginning of the Session which is to do good to nobody. It will only alleviate the troubles of the Department of Agriculture.
  I should have thought that it would have been far better if last Session the Government had taken courage in both hands and supported the Bill which was introduced by my hon. Friend and colleague the Member for Kincardine (Mr. Scott). That Bill was a real Bill and had something in it which would have helped the whole situation in Scotland. Instead we had very little support from the Government. They could easily have helped us to get the Bill through. In the past a, private Member's Bill has been adopted by the Government. The Government with their majority could have passed the Bill easily. It had been
  1396
  thoroughly discussed in Committee upstairs. And yet, in order to be allowed to produce a trumpery Bill of this kind, they sacrifice the support of the party to which I belong, and, indeed, they sacrifice the support of the whole country in asking the country to accept a Bill which will do no good to man or beast.
  There is only one proposal of first-class importance in the Bill. Whatever I may have to say on the Committee stage about the remarks which have been made by my right hon. Friend the late Secretary of State for Scotland and his suggested opposition to it, if not in its entirety in certain of its parts, there is this to be remembered, that while the right hon. Gentleman the Secretary of State for Scotland was standing at the Box giving us his essay he took pride that in 1924 he was going to do wonderful things in the direction of the resumption of smallholdings. What happened? It was the Liberal party and the Liberal party alone who fought against the abuse of the principle of the resumption of holdings. They took the initiative. It was their Bill which was introduced, and after the House, by a unanimous motion, had approved of the Measure, the Secretary of State for Scotland came forward and adopted it as his own.
  The UNDER-SECRETARY of STATE for SCOTLAND (Mr. Johnston)The UNDER-SECRETARY of STATE for SCOTLAND (Mr. Johnston) indicated dissent.
  Mr. MACPHERSON: I am within the recollection of the House. I say that he introduced another Bill, but the main principle was there.
  Mr. STEPHEN: Differing from that Bill.
  7.0 p.m.
  Mr. MACPHERSON: I should like to see the difference. There may have been a difference of words, but the principle was the same; that is undoubted. It was not generous, to say the least of it, of the right hon. Gentleman to stand up this afternoon and pride himself and his party upon producing that Bill when he knew that exactly the opposite was the case, and that it was the Liberal party that really initiated the Bill and supported it through thick and thin. Why is it that the Liberal party have taken such a strong objection to the abuses of the resumption of holdings? The reason is not far to seek. If there

  1397
  was one thing that the Act of 1886 did, supported in a way by the Act of 1911, it was to give security of tenure to the holder. If the holder having been allotted a certain amount of land paid a specified amount of rent and continued to pay that rent, there was no power, so far as we understood in the Highlands, to turn him out. The result has been that conditions in the holding districts in Scotland have improved enormously, simply and solely because of the sanctity of the doctrine of security of tenure. The man felt that if he did put anything into the land (which he was occupying it did not go directly into the landlord's pocket, but, in the course of time, when he died it would go to his family, or if he lived it would go to him in the form of compensation if and when he left the holding. When the man found that he was working for himself and that the fruit of his labour went to him or his family, he put everything that he knew into the land. Hence the brilliant essay which we have had to-day upon Liberal administration and Liberal legislation by the Secretary of State for Scotland.
  Under the Act of 1886, Section 2, reference was made to the power of resumption of a holding. That reference was not one to be cavilled at; it was a fair and generous Section, because the resumption referred to in the first Act of 1886 was an impersonal resumption of the holding. It enabled the landlord to take over a holding at, a certain time and in certain conditions, if, for instance, in the public interest a church was to be built, or a school was to be built or a road was to be made for the benefit of the whole community. This it seemed to me and it seemed to those who introduced that provision, gave quite a fair right of resumption by the landlord, but if that right were exercised there was an obligation upon the landlord at that time to give adequate compensation to the man from whom the holding was taken. That adequate compensation took various forms. It might have been compensation in money or compensation in the reduction of rent because of the decreased value of the holding in consequence of the part which had been taken from it, but, what is more important, and this was the general way in which it was done, the man was
  1398
  compensated by the landlord by the grant of other land equivalent in value in that locality. None of us could object to that. It was reasonable and fair.
  When Section 19 of the Act of 1911 was introduced, the real trouble began. We all remember what happened before and after the War. There was a tremendous amount of sale and transfer of land at low prices in the Highlands, and the resumption of holdings was applied for to the Court for all sorts of reasons. There arose a general abuse of the whole principle, and not only abuse but anomalies arose, and, to make matters worse, there was no obligation under the new Act upon the landlord who was going to resume his holding, as being his only estate, to provide land in substitution in that locality for the man from whom the holding was taken. There was no compensation given to him of any sort of kind except the compensation to which he would be entitled at common law or under the Agricultural Holdings Act.
  When an appeal was made to the Court of Session for the resumption of a holding—there were all sorts of cases which I have taken the trouble to look up—the extraordinary thing was, and I would like the late Secretary of State for Scotland to remember this, that there was no option or discretion on the part of the Court. The moment a resumption was applied for, upon all sorts of pretexts, the Court felt itself bound to authorise the resumption. Was not that a blow at the doctrine of security of tenure? Did not that make all those who had been hitherto holding their land in the belief that whatever happened they were safe there so long as they paid a fair rent, lose their confidence? Did not that shake their faith in the doctrine of the sanctity of security of tenure? Consequently, the Liberal party from that day have been insistent upon an alteration, and I welcome the wisdom of the present Government in coming forward and adopting the proposal made by Liberal Members in the past. I shall welcome the discussion upon this particular Clause in Committee and I shall give all the assistance that I can, and I speak for my colleagues, to the Government when they remedy what is undoubtedly a great grievance among the land holding class in Scotland.

  1399
  Notwithstanding the admirable debate that we had upstairs in Committee on the Bill of my hon. Friend the Member for Kincardine, when the Government were defeated on the point of extending the holdings, there is no appearance of that proposal in this Bill. That surely ought to have been an instruction to any intelligent Government that they should include such a provision in this Bill. Some of their own colleagues voted against them on the point, my hon. Friends above the Gangway voted against them and the Liberal party voted against them, yet six months afterwards, when they know the general feeling of the House in regard to this matter, there is not a sign in this Bill of any proposal to extend the size of the holdings from 50 acres to 100 acres or to make the rental £100 instead. of £50. Anyone with any experience of holdings must know that there is a general desire on the part of those who are permanently fixed on holdings that the holdings should be extended. It is almost impossible when the holding is small to make a living out of it, and nowadays when co-operation and other things are in the air it is surely an appropriate time to accede to the general wish of the holding community in Scotland and increase the size of the holdings and to give security of tenure to the holdings thus increased, but instead Of that the Government have turned a deaf ear to what was the majority opinion of hon. Members representing the whole of Scotland. I would ask the Under-Secretary of State why this provision is not included in the Bill. He will probably be able to explain it, but I have not yet met anybody who is cognisant of the situation in the rural districts of Scotland who was not in favour of it. It cannot be that the principle of security of tenure is wrong. It cannot be that he is going to say that it would be wrong to give security of tenure to 100 acres when you give it 50 acres. There must be some other reason and I should like to hear from the Under-Secretary what is the reason. I fail to apprehend it at the moment.
  7.0 p.m.
  We made a fight upstairs to embody in the Bill the principle that the statutory small tenant should become the landholder. There is a vast difference between the status of a landholder and the
  1400
  status of a statutory small tenant. The landholder has privileges which the statutory small tenant has not. I remember when the statutory small tenant was created. He was, as I have said before, a creature of compromise. I believe that the late Secretary of State for Scotland was responsible for him, along with Mr. Younger as he then was. He was simply created in order to cover difficulties in negotiations which were then going on between various parties in the House. The result is that the statutory small tenant, qua statutory small tenant, has not been a success, because he has not the same privileges as the landholder, and when there is a desire on the part of the landholding community to have, in any case, the option, if not to make it compulsory, to become landholders, I cannot see why a Labour Government should resist an appeal of that kind. We were told by the Secretary of State for Scotland that the Department of Agriculture had supplied him with certain grievances. I am not surprised that the Department of Agriculture did not supply him with another grievance, and that is a grievance against them by the landholding community. There is a body in Scotland called the Land Court. Whatever people may say about the Department of Agriculture there has been no doubt in the minds of people in Scotland, in recent years particularly, when all party bias is gone, that the Land Court is an admirable body and that its main interest is to look after, in fairness, the equitable problem of settlement upon the land. What do they say in their report for the year 1928, on page 12?
  "A new development in the practice followed by the Board of Agriculture in dealing with the method under which we are asked to fix rents on properties of which they are proprietors has rendered it necessary for us to add a new table to those hitherto appended to our Reports. This new practice signalises a departure from the normal conception of a landholder, which has been embodied in the Statutes, as being a tenant who has acquired a pecuniary interest in the permanent improvements on the holdings on which he is not rented, and for which he is entitled to claim compensation at outgo. On the outgo of a landholder who has entered under the above conditions, the new practice abolishes the distinctive characteristics which have previously marked the holding as a landholder's holding, and substitutes for the tenant, clothed with the normal rights of a landholder, a tenant who has few of his attributes except the name."

  1401
  They go on, as strongly as they dare do, to tell the Department of Agriculture that they are acting ultra vires in taking possession of money to which they are not entitled. What happens? A landholder may be upon the land. He gets money from the Board of Agriculture, either by grant or by loan. With that money he builds his tenements, his outhouses, his roads, and his fences and makes various improvements. If he goes on paying to the end of the period of 50 or 60 years until the loan is repaid all these improvements are then his. But, supposing that at the end of the 17th or 18th year, he dies or chooses to leave that croft, what happens? There is no compensation in reality, while the incoming tenant—and this is what is so iniquitous—has got to take over all those holdings and steadings at valuation, and has to pay the full amount. Supposing he and his family pay year after year, those holdings will never become theirs. Upon what ground does the Department of Agriculture justify that? The money has been granted by the State in order to make improvements, which, in time, might become the permanent possession of the man, but, as in the case I have just quoted, the man who goes in is practically a tenant of those buildings, while the money paid by the late tenant has been seized by the Department of Agriculture without any sanction from the State or anyone else. No wonder that a sane, judicial body like the Land Court comes forward and, as strongly as it dares in a Government document, denounces this practice. I have put question after question to the Secretary of State about it and I was promised consideration — whether favourable, active or careful I forget—hut here was an opportunity for them to remedy this in their Bill; yet, instead of that, simply because it is an attack upon the Department of Agriculture who supply the pabulum for this Bill, it is not included. The thing is iniquitous, and I have no doubt that every Member from Scotland will, when the discussion arises in Committee, press for a remedy in this direction.
  I know there are a great many of my colleagues and other Members who wish to speak on this Bill, so I shall not refer
  1402
  to various other Clauses which I am glad to see have been introduced, such as the clauses with regard to common grazing and police burghs. Having read this Bill with the greatest possible care, and having listened to the speech delivered in defence of it, I have come to the conclusion that, notwithstanding the fanfare of trumpets in Scotland as to what this Government was going to do to create a new heaven and a new earth in the countryside in Scotland, we have only this miserable contribution. I should like to hear its justification from the Under-Secretary of State for Scotland. He knows that the justification of the Secretary of State for Scotland was not a justification. The Secretary of State seemed to me to be hiding the Bill and to have made a speech covering up his tracks, so that none of us would draw attention to the Bill.
  I have never seen at the beginning of a Session a Government so powerful, with the active assistance that would be given to it by allies so interested in agriculture and its difficulties, and at a time of such great crisis in England and Scotland, produce such a miserable mouse. What happened was that the Department of Agriculture said, "We have here half a dozen things that have been lying in our pigeon-holes for years, and we shall put them together in a Bill Clause by Clause for you. It will do nobody any good, and it will do nobody any harm." Nobody can stand up in this House and say this Measure is going to put a single soul upon the land. It is a miserable Bill, an anaemic Bill and a Bill not worthy of the attention of the House of Commons because of its sins of omission. We were told we were going to have a great agricultural policy. If that is the agricultural policy of the present Labour Government as far as Scotland is concerned, it is high time the Government gave place to better men.
  Mr. SKELTON: I do not propose to follow the right hon. Gentleman in his passionate diatribes against this Bill. I propose to take it in the way it was offered to the House, namely, as a Measure of practical administrative improvements. I agree with the right hon. Gentleman in the point that there is one administrative change in the interests of smallholders which has been

  1403
  omitted, and which I hope will be put in in some form or another in the Committee stage. I refer to the point about compensation on the question of equipment and the change in status of the second holder as compared with the first, and the apparent and, I believe, real seizure by the Department of Agriculture of the instalments paid on the buildings by the first holder. That is a matter very relevant to the improvement of administration in Scotland, which I hope will be remedied before the Bill proceeds to Third Reading. I have no desire to blame the Government for not having included in this departmental and administrative Measure a, large number of controversial Clauses cutting deep into such controversial and unpractical questions as alterations in tenure. I do complain a little of, though I really enjoyed, the speech of the right hon. Gentleman who introduced the Bill. I was very much at one with him in his description of the growth of land settlement, which was of great value as a statement of the total achievements with regard to new holdings. I welcomed his action in placing the figures before the House in this way, but, in introducing this Bill, it would have been wise and of assistance if the meaning of some of the Clauses had been more definitely explained. I am in more than a little doubt as to the practical value of Clause 1. I may not have fully grasped it, but I hope that the Under-Secretary will make it clear to the House, and, if possible, to me, what its importance is, and what its value is to the smallholder.
  Mr. JOHNSTON: The hon. Gentleman has frequently pressed us to see that compensation was paid as we have provided here under Clause 1.
  Mr. SKELTON: I thank the hon. Gentleman. It was not very clear to my mind on reading the Clause, and I mentioned it because I wished the Under-Secretary of State to summarise the intentions and results of the Clause. As to Clause 8, I do not intend to go into a lengthy discussion on small holdings, but I do commend to the Government the suggestion of my right hon. Friend that this is a matter which should be dealt with by the Land Court. Opinion is that the present situation is unsatisfactory
  1404
  and also that the automatic exclusion of the question of resumption from the purview of the Land Court is simply swinging the pendulum from one extreme to another. It looks very much as if in a highly controversial Measure we might find a considerable measure of agreement, namely, that the actual case of proposed resumption should be made a matter of discussion before the Land Court and not be excluded from its purview. If that be so, we on this side will be satisfied, and it would be a proper solution of a difficult matter.
  There is one other matter, which is perhaps almost too trifling to discuss on Second Reading, but I do not like—to use a homely phrase—the smell of Clause 7. I do not see why, when there is a question of the enlargement of holdings and an application for enlargement is made, the name of the applicant should not be given. Why should it be done in a hole-and-corner way?
  Mr. JOHNSTON: I can satisfy the hon. Gentleman on that point. It is because of the fact that if there should be any change—if a man dies, for instance—when the scheme is maturing, it means that we have to begin all over again, and this is in order to avoid that unnecessary delay.
  Mr. SKELTON: I am much obliged to my hon. Friend, and it shows the danger of harbouring suspicions on a topic where suspicions are unnecessary. I can see that Clause must be of very considerable administrative value, and is well worthy of a place in this Bill. On the whole matter, we on this side of the House and we in Scotland as a whole will welcome any additions or improvements in the machinery of land settlement. I regret, although it is clear that this Bill is framed with a somewhat narrow scope, that even here there has not been an effort made to alter the system whereby men settled on the land have to pay for a long period of years instalments on their buildings, many of them buildings which will have ceased to be humanly habitable long before the instalments are finished. In my own constituency, the most admirable and successful scheme of land settlement is to a large extent vitiated from a health point of view by the fact that the settlers are lodged in ex-Army huts. If I remember rightly, they have got to pay

  1405
  for these Army huts, which they are in process of making their own, instalments for 48 years. Nobody supposes that these huts will be useful for anything but kindling wood long before the expiry of 48 years. It is a gross abuse that such a system in such a case should be allowed to continue. Welcoming as I do the improvements that this Bill brings, I feel that there are still many practical improvements to be made in the administration of land settlement in Scotland. It is the continued existence of such grievances as I have mentioned, the payment for 50 years for huts which will have disappeared long before the end of that period, which gives a false impression of the value of land settlement, alienates settlers from the Board of Agriculture and brings the Department itself into a disrepute which it does not deserve. Leaving these grievances open spreads throughout the country a feeling that land settlement is not conducted with sufficient elasticity and on practical lines. I hope during the Committee stage that we may add further practical improvements to the administrative machine which will definitely and distinctly clear away what I think are perfectly impractical problems of land tenure and what is called land reform, which has so vitiated the whole policy of the Liberal party in Scotland.
  Mr. SCOTT: I have seen it stated in the Press on more than one occasion that the Bill which we are now discussing is the joint production of the Labour party and the Liberal party. I should like to say for myself that until the Bill was printed I had never seen it, and knew nothing whatever about it, and I am perfectly certain that the Liberal party were not consulted in regard to this Bill. The speech of the Secretary of State for Scotland, although very interesting, was entirely irrelevant. This Bill will not cause a thrill of satisfaction in the mind of any smallholder in Scotland, and, what is even more suspicious, it does not raise any terror on the Tory benches. That is the most suspicious thing in connection with this Measure. The Conservative party are not going to divide against it because it raises no fundamental principle. It is not in the slightest degree a land settlement Measure; it does not hurt a single landowner in Scotland.
  Mr. MACQUISTEN: Do you want to hurt him?
  Mr. SCOTT: If the Labour Government meant business they might have to hurt somebody. Something must be said as to the way in which the Bill has been introduced. It appeared on the Order Paper on the first day of this Session. I wondered at this extraordinary haste; but it must be remembered that last Session the Liberal party in this House introduced a Bill which was debated for 11 separate days in the Scottish Standing Committee, and then came to the House and received some three hours discussion on Report stage. It then remained at the door of the Government—they alone could give the time necessary for the further stages—from May until August when the House adjourned, and although we pressed the Government to give facilities for the completion of the further stages they failed to do so. I regret that exceedingly; not because it was a Measure which was initiated from the Liberal ranks but because it would really have conferred some benefits on smallholders. We are, I hope, above taking a purely tactical point of view with regard to this question. We want to be honest and straight-. forward in dealing with this subject, and I regret that the opportunity was not taken last Session to pass that Bill.
  Now we have this Bill introduced by the Government. It was put down on the Order Paper for the first day of this Session, obviously with the idea, that if in the Ballot any Liberal Member were lucky enough to find an early place and attempted to bring in a Bill similar to the one of last Session, we should be prevented by the obstacle which this Bill would present. However that may be, we are not going to oppose this Bill for the sake of Clause 8. If hon. Members will consider the contents of this Bill they will see that there are only four Clauses which are not of the nature of departmental reforms, or reforms in matters of procedure. There are four Clauses dealing with matters referred to in the Bill of last Session—Clauses 6, 9, 16 and 17. I should like the Under-Secretary of State to have intervened earlier in the debate and explained the Bill, because the House is proceeding with its discussion without the benefit of a single word of elucidation as to the

  1407
  Bill itself. Clause- 6 provides for an amendment of the law as to vacant holdings, and Clause 9 will slightly widen the meaning of "predecessors in the same family." Clause 16 deals with land within burghs and Clause 17 limits the renunciation of tenancy to stated times. I am not quite certain that that Clause is not in direct contradiction to a recent judgment of the Land Court, but the matter will be able to be considered in Committee.
  I am more concerned at the moment with the omissions from the Bill; and there are one or two flagrant omissions. The Bill of last Session contained two Clauses to which the Liberal party attached great importance. One dealt with statutory small tenancies, the optional abolition of statutory small tenants, and the other with the extension of the Code of Acts to a wider range, to holdings of 100 acres or £100 rental. I should like to know why that the first proposal has been dropped. In deference to the demand made by the Government in Committee on the Bill last Session the Liberal party conceded a point and made that Clause optional, so that any statutory small tenant, if he wished, might give notice to the landlord that he wanted to become a landowner. Why is it that even in that attenuated form the Government has dropped that particular Clause? Then with regard to the extension of the Code of Acts, to which we attach great importance. We say that a holding of 100 acres is a smallholding, and that you ought to etxend to them all the benefits of fair rents, security of tenure and compensation for improvements, which the smallholder at present enjoys. Sooner or later all the tenant farmers of Scotland will demand and will require security of tenure for their holdings. They demand it now, and it is in the forefront of the Parliamentary programme of the National Farmers' Union. It is not that we do not agree with the demand of the National Farmers' Union, but because we thought that we should take reform by stages.
  The objections which were raised to this Clause in Committee were extremely interesting. They seemed to me to be quite invalid, and the Under-Secretary
  1408
  of State will remember that I asked him to explain how much it cost the Treasury per annum in loans to smallholders who came for the first time within the purview of the 1911 Act. He said that the amounts varied. In some years only a few hundreds of pounds were required, and in other years it might vary from £3,000 to £5,000. These sums are trifling to the contribution the Treasury might be called upon to make if the Code of Acts was extended to holdings of 100 acres or £100 rental.
  There is also an important omission with regard to compensation. I wish I could burn into the minds and understanding of the Government the demand that smallholders and farmers are making for full compensation for improvements. In spite of the education which I had hoped the discussion on the Bill of last year would have given to the present Government they have not yet appreciated the extent to which smallholders and farmers generally in Scotland are losing the value of improvements which they and their predecessors have made on their holdings; otherwise, there would have been a Clause in this Bill dealing with the matter, or the extent to which these values are being absorbed by landowners who are not paying fair compensation or, indeed, any consideration at all for improvements. That is really what lies at the hack of our demand that all statutory small tenancies ought to be abolished and that all holdings ought to he land holdings. It only means that every penny expended by a tenant upon a holding will return to him in his claim for compensation. It will not rob the landowners of a single penny they have contributed; and it will operate with exact justice. I trust that before the Committee Stage of the Bill the Government will consider the advisability of introducing a Clause dealing with these important matters.
  Another omission is that there is no Clause dealing with game damages. I wonder whether hon. Members appreciate the extent to which during the last month the smallholders of Scotland, especially in the hilly districts, have suffered from game damage. If the Government appreciated the burden which the smallholders are suffering in this respect they would have found room for a Clause—
  Mr. JOHNSTON: The Secretary of State, in answer to a question, has said that he has only just received the report from the Joint Committee which has been considering this question and that he is at present considering the possibility of separate legislation.
  Mr. SCOTT: That report deals only with the damage of deer. I am raising the whole question of game damage, which includes winged game.
  Mr. SPEAKER: On the Second Reading of a Bill it is always permissible to express regret that other things are not in the Bill, but I think we ought sometimes to talk of the Bill that is before the House.
  Mr. SCOTT: I did not intend to detain the House further with regard to game damage. What I said was really in answer to a point which had previously been made. Another matter which is omitted from the Bill is one to which the right hon. Member for Ross and Cromarty (Mr. Macpherson) referred, that of equipped rents. I was extremely interested to find from the speech of the hon. Member for Perth and Kinross (Mr. Skelton) that we who have agitated on this matter in this House more than once may expect to receive from the Conservative Members support in urging the Government to deal with the question. The Government are appropriating for the Treasury moneys which were intended by Parliament to be expended for the purchase of land for landholders, the buildings ultimately to become the absolute property of the landholders. According to the policy of the Department of Agriculture they are retaining the ownership of the permanent improvements which they are putting on the holdings, and letting at equipped rents to the landholders at amounts which really correspond to the present payments for bonds and land rents, but with the unfortunate consequence that the landholders will never become the owners of these buildings.
  I wonder whether the Government cares twopence about the tenure of landholders or their claims for compensation? If their ultimate object is the nationalisation of all the land of Scotland, I can quite understand that they are less interested in questions of compensation, because they may intend that one day all
  1410
  the smallholders and all the tenant farmers in Scotland will be tenants of the State and will have to take only such crumbs in the way of compensation as may fall from the table of the State; they will have to take only such rights as the State may give them. At the present time the smallholders of Scotland enjoy rights which cannot be filched from them, and it is those rights that we on these benches intend to do the utmost we can to retain for them.
  With regard to the second part of the Bill, I have little to say. The Bill ought to have been two separate Bills. There is a distinct code of smallholdings Acts and a separate code of agricultural Acts. This Bill deals with both of those codes. I ask the Secretary of State to explain what is the urge behind the second part of the Bill. Has he received representations from the National Farmers' Union, for example, on all the matters that are dealt with in the second part? The first two Clauses of Part II relate to improvements for which notice must be given to the landowner or for which the landowner's consent must be got. The guiding principle ought surely to be to give the tenant farmer the utmost freedom of cropping, and he ought also to be assured of reasonable compensation for all improvements which are of the nature of permanent improvements. Within those two canons I think the Schedule ought to be considered, and it may be that still further laxity may be given to the tenant farmer than is at present contained in the Bill.
  I pass to the Clause dealing with arbitration. I think it was an absurd arrangement, introduced by the Conservative party, that of all people the President of the Court of Session of Scotland should be asked to make up a list of farmers from whom arbiters could be drawn for arbitrations. It may be unwise, as has been said, to leave entirely to the Department of Agriculture the framing of a list of such farmers. I suggest that there is another body in Scotland to whom, with the consent of all parties, the matter could be referred, and that is the Land Court. It might itself conduct the arbitrations, but if that is not thought advisable at least it might be entrusted to draw up a panel of arbiters. Being in touch with farmers from day to day, it could lie well trusted

  1411
  to deal with the matter. There is another thing which one would have liked to have seen in the second part of the Bill, and that is the granting of security of tenure to all farmers.
  Mr. SPEAKER: The hon. Member cannot go into that matter now.
  Mr. SCOTT: I did not intend to do more than mention it. I hope that when the Bill goes into Committee the Government will welcome criticism and Amendments from both parties, and especially from the Liberal party, so that this Measure, which is a rather wan and pettifogging one, may be converted into a real Measure of land reform.
  Mr. MACQUISTEN: I listened with great interest to the speech of the Secretary of State. He gave a long résumé of what had been done by the Department. It is true that my hon. Friend who has just spoken claimed that it was all inspired by the Liberal party. All I can say is that When the amount of work that had to be done is compared with the amount that has been done, even though the latter may seem considerable, it is only a very small fraction of what is needed. Clause 8 of the Bill requires more consideration. It is a question of the balance of hardship practically every time. I cannot understand anything harder than the case of a man who, with his family, has cultivated a little property for a long long period and has had it bought over his head, and is excluded by the purchaser on the ground that the purchaser wanted the property for his own occupation. On the other hand there may be great hardship in excluding the new owner. He may have even greater claims than the actual tenant. After all, if matters are equally balanced in this topsy-turvy world the owner should be the man with the first claim. Suppose that I were to lend some article of my personal apparel, such as my top coat, or my umbrella, to the hon. Member for Kincardine (Mr. Scott). It would be hard if he came to me and said: "I have kept your umbrella for a number of years, and I am now going to stick to it." There is sometimes something to be said for the owner of property enjoying it. The Clause might be amended so as to read:
  1412
  "The occupation by a landlord, for the purpose of personally residing thereon, of a holding, being his only landed estate, may be but shall not necessarily be deemed to be a reasonable purpose, etc."
  Something of that kind would ensure that individual cases would be dealt with on the balance of hardship. Some reference has been made to the question whether the Lord President should appoint arbitrators or whether the Land Court should do it. Either proposal would be more satisfactory than leaving the matter to the Department of Agriculture. The Department has never been too popular in the Highlands. If anything has been learned from nationalisation it is that the State has always been the harshest landlord. Any of the London tenants will tell you that. I am not going to comment on what is missing from the Bill. The real difficulty about land settlement, the crofter's difficulty, is that he has been deprived by modern development of what used to be a portion of his main source of livelihood, the harvest of the sea. In the days of King Charles II no English fishing boat could come within 28 miles of the coast of Scotland. Now English trawlers come up and destroy the livelihood of the crofters. If they had protection in that respect land settlement would come about, because a man's croft, supplemented by the fishing, would be sufficient to keep him alive. Until that problem is dealt with no other Measure will provide a solution. The fish came back to the coast during the War, and the crofters were more or less in comfortable circumstances, but now in time of peace the seas have been swept again. There is plenty of deep sea fish for the trawlers. Little countries like Iceland and Denmark can protect their nationals. I do not see why we should not do so.
  Mr. R. W. SMITH: This Bill is an objectionable example of legislation by reference. It was printed only a short time ago. Consequently there is difficulty in understanding what the Clauses mean. When the Bill came on I was in the Library, and I immediately hurried into the Chamber to hear the description of the Bill, but I have to confess that when the Secretary of State sat down I knew no more about the Bill than when I left the Library. It seemed to me that the right hon. Gentleman's remarks dealt

  1413
  with points which were not touched by the Bill at all. If this Bill contains all that the Government can suggest for the improvement of the agricultural industry at the present time, it seems to me to be a very small thing. I am aware that on the Second Reading it is not customary to go through all the Clauses of a Bill, but unfortunately we do not yet know exactly what this Bill means. We have had one or two explanations from the Under-Secretary of State as to the meaning of particular Clauses, but I wish to put questions on several other points. I first refer to Clause 2, the sub-title of which is
  "Department to be entitled to require information."
  That information must be wanted for some specific purpose. We all know that the Government are interested in the question of smallholdings and, I presume, this Clause is designed to facilitate the provision of small holdings in some way. It provides that, with a view to ascertaining whether land is suitable or available for smallholdings, the landlord is to be compelled to give information as to the occupiers and the terms of their tenancies. I could understand that that information might be useful, in some way as regards the question of whether land is available or not, but how on earth is such information going to help the Department to decide whether the land is suitable or not? The Clause seems to contain a very unnecessary provision and I do not see what benefit will be gained by it. I agree also with the right hon. Gentleman the Member for the Pollok division of Glasgow (Sir J. Gilmour) that a fortnight's notice, which it is proposed to give to the landlord under this Clause is very short, and that the penalty proposed is rather high. I would also like some further information in regard to Clause 3 which provides that in certain cases:
  "Where a landholder, whose rights to compensation for permanent improvements have been transferred to the Department, abandons his holding or breaks any statutory condition, it shall be lawful for the Land Court, on the application of the Department, and after consideration of any objections stated by the landlord, to make an order for the removal of the landholder."
  At the present time if a landholder defaults as regards any loan from the Department, the Department can then apply to the Land Court and have the
  1414
  landholder removed. As I read this Clause, if the landholder breaks any statutory condition the Department is to have the right to step in and remove that landholder whether the landlord wishes it or not. I should like to know whether that is a correct reading of the Clause or not. There has been a very good spirit in many cases between landlord and tenant and small landholders have been on very good terms with their landlords. A tenant may have broken some statutory condition and the landlord in consequence may have been entitled to apply to the Land Court for his removal, but in many cases the landlord has preferred to allow that tenant to remain in the holding. Is that power now to be taken away from the landlord? If the ordinary right of agreement between landlord and tenant is to be taken away and if the Department is to be allowed to step in and apply to the Land Court for the removal of the tenant, I think it is a very unsatisfactory provision.
  I was rather interested in the reply which was given by the Under-Secretary to the point raised, I think, by the hon. Member for Perth (Mr. Skelton) with regard to the meaning of Clause 7. The Under-Secretary said that the reason why it was not thought necessary to include the name of a landholder applying for enlargement of a holding, was that the landholder might die, and then the notice or the application might be vitiated. But there is another point in regard to this matter. The Clause provides that it shall not be necessary to include the names "or the areas or rents of their existing holdings." Although the names of the landholders need not necessarily be included, it seems to me that the holding which is to be enlarged should be indicated, but, that, of course, is a point which might be brought up in Committee. I do not propose to say much about the question of the resumption of holdings, but I trust that it will be possible for the Land Court to take into consideration cases where the holding is the only landed estate of a person making an application.
  In reference to Clause 14 which amends Section 10 of the Act of 1919, in regard to the erection of fences, it seems to me that the present law, laid down in the Act of 1919 is quite fair and reasonable

  1415
  in one sense. It lays down that if land is taken for smallholdings the Department must be satisfied that it is properly fenced so that the stock of the smallholder can be kept from straying on to adjacent land. Clause 18 repeals Section 14 of the Act of 1886 which makes provision for deductions from rent in certain cases. I understand that it deals with cases where a tenant—a shooting tenant as far as I can understand—has part of the land which he rents taken for the purpose of enlarging holdings. At the present time it is possible in such cases for his rent to be reduced, but apparently under Clause 18 that right is to be taken away from him and although he may suffer damage, he is not to have any reduction in the rent which is payable by him. I should be grateful for some reply on the point as to whether that is the actual effect of this clause or not.
  I now come to Part II of the Bill, in regard to which the hon. Member for Aberdeen and Kincardine (Mr. Scott) said there were not any tremors among those who sit on these benches. I must say that I rather tremble at what seems to underlie Part II of the Bill. It seeks to amend the Agricultural Holdings (Scotland) Act, 1923. Now I am one of those who believe that the landlord and tenant system which we have, is one of the best systems of land-holding which we could have in this country, and it seems to me that the proposals in Part II of the Bill cut right across the system of landlord and tenant. The old idea was that the landlord provided the capital and the permanent equipment of the farm, and, for that, the tenant paid a rent, and it was therefore considered the duty of the landlord to keep up the permanent expenditure on the farm. What do we find in this Bill? Under the Act of 1923 there was only one improvement which could be carried out by the tenant without giving notice and getting the consent of the landlord. He had to give notice and get consent in all other cases, if he was to receive compensation. Now a large number of items are put into the category of improvements in respect of which only notice to the landlord is required and practically all these are capital expenditure items.
  1416
  If hon. Members refer to the First Schedule, they will find, for instance, that under Part I improvements to which the consent of the landlord is required include the erection, alteration or enlargement of buildings. But under Part II of the Schedule the improvements in respect of which only notice to the landlord is required, include the making or improvement of roads or bridges, the formation of silos, the making or removal of permanent fences, embankments and sluices against floods and so forth. These are all improvements in respect of which the tenant only requires to give notice in order to get compensation and many of them, as I have pointed out, are items of capital expenditure. To that extent the Bill is altering the law in what is, I suggest, a very serious matter. The Government, as I see it, are going to create a system of dual ownership and spread it over our land. That system proved an absolute disadvantage in other countries of which we have known, and cost this country a good deal of money. Therefore I regard it as very serious that the Government should seek to introduce this system now, but that appears to be the effect of substituting the First Schedule of this Bill for the First Schedule to the Act of 1923.
  Clause 22, Sub-section (2), provides that where a landlord to whom notice has been given by the tenant of intention to execute an improvement, gives notice within one month that he objects to the improvement or the manner in which the tenant proposes to do the intended work, the matter may be referred to the Department who shall determine the same. I do not like the idea of the Department coming in as this Clause proposes, because the Department's point of view is quite clear. It considers that there should be more capital expenditure by the farmer. That is the Government point of view, and. with that point of view, I submit that the Department will not be really unbiased judges and that we ought to have some other body to decide whether the proposed alterations are. really for the benefit of agriculture or not. I was rather interested in the suggestion of the hon. Member for Aberdeen and Kincardine that the panel of arbiters should be left to the Land Court instead of to the Lord President of the Court of Session, because just about five minutes previously the hon. Member had been

  1417
  saying that Part II of the Bill should be a separate Bill. I would remind him that the Land Court was set up to deal with smallholdings and not to deal with agriculture altogether, and therefore I do not think it a good suggestion that the Land Court should decide on the panel of arbiters. In my opinion it would be much better if that matter were left to the Lord President of the Court of Session. We want to have as arbiters men who are judges of these questions. I hope that the Under-Secretary will be able to give us some enlightenment on these points. As has been said we do not propose to divide against the Second Reading, but the Bill appears to propose a very drastic alteration of the land system in Scotland, especially by the amendment of the 1923 Act. It is a move for dual ownership, a system which in the past has proved so bad elsewhere, and this and other provisions will require very careful and close examination.
  8.0 p.m.
  Mr. WRIGHT: I have long been deeply interested in all questions affecting agriculture and I welcome this Bill as one contribution among others towards the solution of the unemployment problem in Scotland. I share the views of the last speaker regarding the necessity for a further explanation in order to enable us to comprehend what is contained in the Bill. I also would welcome a much fuller exposition of the Bill by the Secretary of State. Among other reasons, I support this Bill because there are something like 300,000 men and women unemployed in Scotland, and in my judgment the land must be cultivated much more thoroughly and extensively if we are ever to provide even a partial solution of our unemployment problem.
  I have hesitated to take part in this debate because the Secretary of State told us that the Under-Secretary of State would offer some exposition of the Clauses of the Bill, and I think the House has been at some disadvantage up to this stage with regard to these matters. Reference was made to the amount of food imported into this country from Denmark from 1928 onwards, and it seems to me that the soil and the people of Scotland are as competent to produce food for the people of Scotland as the people are in Denmark to produce it there and export it to Scotland. There is very con-
  1418
  siderable alarm as to this continued and increasing problem of unemployment, and I had hoped that when the present Government introduced a Bill dealing with the land problem, they would introduce one having some big, fundamental changes.
  I know there are difficulties confronting the Government in that regard, but one of the defects of the Bill was, I thought, expressed by the Secretary of State when he said that it provided no revolution in the existing law. One of the things that we require is a big and drastic revolution in the existing law with regard to the land of Scotland, but I should not be in order to discuss that new. I should like the Under-Secretary of State to explain what provision for training is to be given to men and women who are perfectly willing and able to work on the land, but many of whom have had no previous experience and are, therefore, very much at a disadvantage in dealing with this problem.
  Some of the things which are mentioned in the Schedule are extremely important, such as land reclamation, silos, the application of electricity to agriculture, and sundry other improvements which have been extensively introduced into agriculture in some other parts of the land, but, so far as I know, not to any appreciable extent in Scotland. I believe there is a great future for a drastic land reform Bill for Scotland, and I should very much welcome it.
  Mr. JOHNSTON: Electricity is in the Bill.
  Mr. WRIGHT: Yes, that is true, but if we had had a fuller exposition of the Bill in its introduction, we should have been able to learn something of what has been done in other places and of the enormous water power which is running to waste in Scotland and which might be turned to account in the application of electricity to agriculture, which would be of enormous advantage to the people of Scotland. I welcome the Bill for what it contains, but I should like to see a very much more drastic and comprehensive Bill introduced into this House. I believe it would be supported by all parties from the point of view of our common desire to find some big remedy for the great evils. of unemployment from which we are suffering, particularly in our own county of Lanarkshire.
  Sir FREDERICK THOMSON: I should like to ask one or two questions with regard to this Bill. With regard to Clause 2, reference has already been made to the Department being entitled to require information. I think that is reasonable, but the Under-Secretary of State will probably remember that he accepted an Amendment in Committee on the previous Bill that any expense incurred should be borne by the Department. The Department might never go on with a scheme, and I hope he will consider an Amendment dealing with that point, because that would seem to be obvious justice.
  I should like to join my hon. Friends in deprecating the last sentence of that Clause. It seems unnecessary that if there should be failure to comply, it should be made a criminal offence. The Lord Advocate drew a distinction on the previous Bill between a statutory offence and a crime, but a person is haled into the criminal Courts merely for failure within 14 days to give the information required. The Lord Advocate said he would consider whether we might not put in some simple form of civil process instead, but the Clause appears in exactly the same form now as in the former Bill, and I would ask the Under-Secretary of State to consider very carefully whether this penalty is necessary. After all, he has the power under the Statute to get the information, and if the person fails to give it and is brought into Court, he must pay the expense. It is likely, therefore, that he will be careful to give the information, and there would seem to be no necessity for the multiplication of offences in such a matter and taking people into the criminal Courts and fining them. In any event, I would join my right hon. Friend in front of me in urging that 14 days is much too short a period and that the hon. Gentleman should make it 28 days, and I think the amount of the fine is a bit excessive for the case in question.
  With regard to Clauses 4 and 5, which are recommendations of the Nairne Committee, I take no objection to them. Clause 6, as I understand, proposes to treat a holding that falls vacant as if it were a new holding for the purposes of rent fixing and compensation. I notice that the rent is to be such as the Department may fix. Again, I would ask my
  1420
  hon. Friend to consider a point which we raised in Committee, Where there was general interest in the matter, as to whether the fixing of this rent should not be in the hands of the Land Court. There may be objection that the same procedure is followed about the new holdings, but I would point out that this Clause makes the Department judge in its own cause. If it fixes a high rent, it gets off with less compensation, and there is injustice to the landholder for the time being, but, of course, he has his remedy. After seven years he can come forward and have his rent reduced, and then the hardship is on the landlord, who gets the reduced rent, but who, at an earlier stage, when compensation was fixed, got a lower figure of compensation because of the higher rent. I would ask my hon. Friend to consider that question with the greatest care, because I think it is wrong in principle that the Department should decide this question. It may be true, as the Nairne Committee say, that there have not been many complaints about too high a figure being fixed, but none the less it is wrong in principle that the Department should be judge in its own cause, and I think the Land Court would be the more appropriate body.
  The next Clause with which I wish to deal is one on which there has been some discussion already, namely, Clause 8, dealing with the question of resumption. My right hon. Friend pointed out that we take no objection to the second part of the Clause. We raise no objection to the Amendment of the Act of 1911, because under Section 19 of that Act the Land Court is given no discretion, but is told outright that the occupation of a holding by a landlord for the purpose of personally residing thereon, it being his only landed estate, shall be deemed a reasonable purpose. They have no discretion in the matter, and we think it reasonable that there should be an Amendment of the law so far as that goes and that we should get back to Section 2 of the Act of 1886.
  I would press this on the attention of my hon. Friend opposite with a view to the further progress of this Bill. I do not think we seem to be very far from the right hon. and learned Member for Ross and Cromarty (Mr. Macpherson), who spoke of the procedure under the Act of 1886, under which the question

  1421
  of resumption was left entirely to the Land Court, which, on being satisfied that the landlord desired to resume possession of the holding for a reasonable purpose, having relation to the good of the holding or of the estate, might grant resumption. That is what we wish to get back to, and I think the Liberal party should support us in this, because in the memorandum which described the purposes of the Bill of last year it was stated that the purpose of the Clause dealing with resumption was to restore security of tenure to the smallholder and to bring him back to the position which he occupied before 1911 A similar statement was made in the memorandum attached to the Bill introduced by the hon. Member for Caithness and Sutherland (Sir A. Sinclair), and that is what we are agreeing to, namely, to get back to the law as it stood from the introduction of the crofters' tenure in 1886 until 1911, when the change was made and the Land Court was given no option.
  Of course, my hon. Friend opposite notices the point which was made upstairs in Committee on the last Bill, that we are left with a rather curious anomaly, in that it is only a man who has only one landed estate who is dealt with in this way. If a man has an estate elsewhere, the Land Court is not instructed to rule him out, and the matter would still fall to be considered by the Land Court under Section 2 of the Act of 1886. There is, therefore, this anomaly under Clause 8, that it is only the person with one estate who is to be told outright, without inquiry of any sort, that he cannot get resumption, whereas if a man has an estate elsewhere, the Land Court can go into the whole matter and, if they think it is for the good of the holding or of the estate, they can grant resumption.
  I should like to emphasise that this is not really a point of immense practical importance at present. There have only been 151 cases of resumption on the ground of personal occupation since the Act of 1911 was passed, and that is some 18 years ago. There were 26 cases in the year 1923, but they have gone down since then, and in the last three years, as my right hon. Friend on the Front Bench pointed out, the figures have been trifling—six in 1927, eight in 1928, and three in the whole of Scotland for the year 1929.
  1422
  Under the state of the law in which the landlord is given no discretion he is told outright that he has to give possession to a man if he comes forward—
  Major McKENZIE WOOD: All the cases may not have come before the Land Court.
  Sir F. THOMSON: The numbers that did come before the Court are a pretty fair indication of any feeling that there might be, and show whether the matter was regarded as of great importance. My hon. and gallant Friend must regard the Land Court figures as of great importance, and he cannot get round the question by such a statement. I agree with the right hon. Member for Ross and Cromarty that the position under the Act of 1886 was a reasonable one. My right hon. Friend on the Front Bench pointed out how hard this might be if there were an impoverished estate, and somebody had died and money for the Estate Duty cannot be raised unless there is a sale. Let the Land Court go into the whole question as they did under the Act of 1886, and they, being skilled people, can come to a decision as to whether resumption should be granted or not. That is, I think, a fair position to take up. The right hon. Member for Ross and Cromarty came rather close to our point of view, and I would point out to the Under-Secretary that we will be perfectly willing to facilitate the passage of this Clause if he gets back to the Act of 1886. If he attempts to go the whole hog and gives the Land Court no sort of discretion in the matter, we shall strongly oppose the Clause. Clause 13 proposes when a smallholdings scheme is being drawn up, to extend the period during which a landlord is prevented from letting his land from six months to 12. I would ask the Under-Secretary to consider that carefully. The Department, being human, will be rather apt to take whatever time is given, and he should remember that it does not matter to a. landlord because he gets compensation, but the compensation is running against the State all that time, and it seems an unnecessarily long time to put an embargo on the letting of land and to run the State into the paying of compensation during a protracted period.
  The only other thing I have to say is with regard to what fell from the hon.

  1423
  Member for Aberdeen and Kincardine (Mr. Scott) as to extending smallholdings from 50 acres to 100 acres and from £50 to £100 in value. He said he hoped the Government would be prepared to consider favourably suggestions that were made in Committee with regard to the amendment of the Bill on those lines. While we support the Second Reading of this Bill, and think that it contains a number of admirable administrative improvements, and while we are in favour of the alterations suggested in the second part of Clause 8, we shall oppose most strongly, as indeed the Under-Secretary did in Committee, the proposal to extend the limit to 100 acres or £100 value. To do so would be flying in the face of the recommendations of the Nairne Committee, which said:
  "We are of opinion that the experiment initiated by the Act of 1911 of extending crofting tenure to the Lowlands has not been a success. From the point of view both of landlords and of tenants the system of settlement has proved, when applied to Lowland conditions, to contain defects, the result of which become more apparent as time goes on."
  They point out various reasons why that has been so. They therefore suggested that the creation by the State of smallholdings on privately-owned estates should be discontinued in the Lowlands and in other districts of Scotland where conditions are akin to those of the Lowlands. In the face of all that the hon. Gentleman the Member for Kincardine solemnly proposes to increase the amount from 50 acres to 100 and from £50 to £100 in value. The Under-Secretary pointed out that the money available for small landholdings in Scotland would be used very largely in helping people who were brought in under the Act by loans for the improvement of their buildings and that the Department would supply funds to do what is now being done by private landlords. That would be a retrograde step. There is also this to be considered, that if you extended the small landholders' system in this vast way you would use up many smallish farms which are just the farms which a man starting farming would wish to occupy, a man who had not the capital to take over permanent buildings under a land holding tenure. He would like to get a small farm in which the
  1424
  landlord keeps up the buildings, and have all his rights under the Agricultural Holdings Act.
  For a variety of reasons, we strongly oppose this retrograde step to make much wider in Scotland the system of dual ownership. I am aware that historical conditions made it necessary to pass the Crofters Act of 1886 in order to give the crofter in the Highlands who built his house on a. bit of land, security of tenure, but we must admit that the system of dual ownership has never 'been a success, and to extend it in this wide way in Scotland would be a. very retrograde idea. It would not be in the interests of Scotland. We are all anxious to improve Scottish agriculture, and have as many people settled on the land as possible, but this system would snake that more difficult and expensive than it is. My hon. Friend also said that he was disappointed that the Clause in regard to statutory small tenants did not find its way into this Bill. I am glad that the Government did not include that Clause. We should certainly have felt it our duty, as we did before, to oppose such a Clause in the belief that it is not in the interests, of Scotland that it should be passed.
  There has been no demand among statutory small tenants for it. The small man is freer to move from one farm to another if he has not to purchase the buildings, and we cannot forget that the statutory small tenant cannot be turned out of his holding unless his landlord is able to show to the Land Court that there is reasonable cause for doing it. The statutory small tenant can go to the Land Court and get an equitable rent fixed, but there has been no rush for that. There were only nine cases last year in which application was made the first time to fix an equitable rent, and seven cases in which the application was made on a second or later occasion for fixing an equitable rent. So as regards the statutory small tenant, there seems to be no great rush to go to the Land Court, and get an equitable rent fixed. If the landlord does not keep the buildings up, and they deteriorate, the statutory small tenant can go to the Land Court, and if he satisfies the Court that the landlord has not kept the buildings up he can get

  1425
  himself declared a small landholder. The statutory small tenants have all these safeguards and there is not the smallest need to extend this system or even to give them the option of becoming landholders, as was finally suggested when the Bill left Committee. Therefore, while we regard the Bill as containing a number of valuable administrative reforms, based largely on the very valuable Nairne report, and we welcome it, we. shall feel it our duty, in the interests of Scottish agriculture, strenuously to oppose any suggestions to bring into the Measure the Clauses which were so fully discussed in Committee last year.
  Mr. JOHNSTON: I am afraid that some hon. Gentlemen have rather misunderstood the very minor part which this Bill is intended to play in the Government's land and agricultural proposals. It does not in any way pretend to increase the number of smallholders already upon the soil of Scotland. That is reserved for a Measure which, I understand, is to be introduced on Thursday, and the right hon. Member for Ross and Cromarty (Mr. Macpherson), who delivered himself of a long oration on the subject, might have kept his remarks for the proper time. The Bill we are discussing this afternoon is one merely to remove the grievances of existing smallholders and small tenants, and provides no new money. it gives statutory form, where administrative reform was impossible, to over half of the recommendations of the Nairne Committee. Two main difficulties have been raised by hon. Members on the Liberal benches, relating not to what is in the Bill but to what it does not include. Their first grievance is that there is no reference to the abolition of the statutory small tenant as such and his conversion into a small landholder. The hon. Gentleman the Member for Aberdeen and Kincardine (Mr. Scott), whose Bill occupied us for so long in Committee last Session, will remember that in his Measure he proposed to abolish the statutory small tenant, but that the Government felt themselves unable to agree, for the reasons which they gave to the Committee. They agreed, however, to give the statutory small tenant the option of choosing to become a landholder.
  1426
  The chief reason why we had difficulty in agreeing to compel the statutory small tenant to become a landholder was that we had received petitions—I have one of them now—from tenants on the Department's own estates against the proposals made in the Committee. I am not going to argue here what is right and what is wrong. I am not even going to discuss whether it is possible to reconcile the divergent opinions. it is perfectly well known that the late Secretary of State for Scotland and his friends are completely opposed to the abrogation of the statutory small tenant, and it is equally well known that hon. Members of the Liberal party are anxious to abolish the statutory small tenant. Whether it is possible to reconcile those two views is a matter of opinion, but I am sure there is no doubt whatever that it was precisely that divergence which caused the hon. Member for Kincardine to lose his Bill. It is because that Bill was fought so bitterly and so strenuously that, though it contained other beneficent Clauses—as I think they were—we could not carry it into law. I differ with the historical resume of the situation at the end of last Session which was given by the hon. Member for Kincardine and the right hon. Member for Ross and Cromarty. So far from the Government being responsible for killing the Bill, I say we did everything to assist it, to amend it, and to get it carried into law. I myself went to great lengths in that direction. I never missed a moment of the Committee stage. I did everything I could to assist the hon. Gentleman, and so did my right hon. Friend the Secretary of State.
  Mr. SCOTT: Probably I ought to have acknowledged in my speech—I intended to do so—the helpful manner in which the Government dealt with the Bill in the Committee stage. The only criticism which I made was that they allowed it to lie on the Floor of this House between May and August without finding time for it to pass its final stages.
  Mr. JOHNSTON: We have got something any way—that during the Committee stage we were helpful, though one would never have gathered that from the oration of the right hon. Member for Ross and Cromarty this afternoon. We had assisted in the Committee stage, but in May, towards the end of the Session,

  1427
  we found ourselves with a Measure which we could not possibly get any chance to attend to in this House. The hon. Member for Kincardine takes a very strong view, backed by a long personal knowledge of the subject to which I, for one, would pay considerable attention, but he knows that there are other hon. Members in the House who have very strong opinions in the opposite direction, and when the Government have representations made to them from tenants on their own estates it is a very difficult matter indeed for them to become arbiters and to impose compulsorily upon people a system of tenure which they themselves do not desire. But, as I say, that is a Committee point. If the hon. Member and his Friends can succeed in convincing the majority of the Members of the Committee that his point of view is right, then my right hon. Friend the Secretary of State made his position perfectly clear. In the Committee stages of the Bill of the hon. Member, his attitude was that he would leave a free option to the statutory small tenant.
  Mr. SCOTT: We accepted that.
  Mr. JOHNSTON: The hon. Member accepted it at the end of a very long and stormy struggle. If he had accepted the good advice at the beginning of his Bill which he took at the end, the Measure might have been on the Statute Book by this time. However, I will not pursue "might-have-beens." There is another difficulty raised by hon. Gentlemen on the Liberal Benches, again concerning something that is not in the Bill. The question is whether we should extend the operations of these Acts to holders with rents of £100 and holdings of 100 acres. Here, again, there are difficulties. They were explained at considerable length in Committee upstairs. It is true that these restrictions do not apply everywhere. It is equally true that the Nairne Committee recommended extensions, and it is equally true that the National Farmers' Union of Scotland also recommended the extensions. What is the objection? It was stated by the right hon. Member for South Aberdeen (Sir F. Thomson), who spoke a moment ago, when he said that if we extend the limits we shall automatically, whether we like it or not, increase the demands upon the finances of our agricultural fund.
  1428
  Is it not a fact that if we extend the holdings to £100 rent and 100 acres that we shall organise a large number of men whose holdings are at present maintained by the landowner I We shall automatically, by arrangement between landlord and tenant, have these men coming to the Department and legitimately applying for financial assistance so that the work of maintaining the buildings on those estates hitherto maintained by the landlord class in Scotland will be transferred to some extent to the Department of Agriculture. I am not so sure that that is a very wise thing to do. I would far rather see the State spending all the money it has to spare for facilitating the development of smallholdings in the creation of new holdings. I cannot discuss that point now, but that subject will he dealt with when the Agricultural Land (Utilisation) Bill is before the House. The State has only a limited amount of money to spend, and it is better that we should spend that money on the creation of new holdings, putting more men on the soil rather than spend it in transferring the burden which the landlords of Scotland are at present carrying to the Agriculture Scotland Fund.
  May I make one or two comments upon what has been said in this debate? The right hon. Gentleman the Member for Ross and Cromarty made a most surprising oration, and I had difficulty in believing that he had read the Bill. On the 6th of November the right hon. Gentleman asked when the Government were likely to bring forward the Scottish Landholders Bill, and said that the Prime Minister had said it was to be taken on Monday, and he added "We have not got it yet," but he was unaware at the time he made that statement that it had been deposited in the Vote Office a week previously.
  Mr. MACPHERSON: I went to the Vote Office immediately after that announcement, and I have been studying the Bill ever since.
  Mr. JOHNSTON: I hope that between now and Thursday we shall have the advantage of the right hon. Gentleman's skilled criticism. The right hon. Gentleman said that this Bill would do no good to any human being, and I think he added the word "animal"—[Interruption.]

  1429
  The Bill is intended to secure for small tenants compensation for improvement which, in some cases, is now withheld by law. After Clause 1 is passed the small tenants will get that compensation. The Bill is designed to facilitate changes of tenancies, to encourage house building by smallholders, and there are provisions to ensure the smooth working of these Acts. This afternoon the right hon. Gentleman the Member for Ross and Cromarty boasted about what Liberalism had done for the smallholders and, when the Government bring in a measure to ensure that poor men shall have the full benefit of this kind of legislation, which includes clauses similar to those proposed in the Bill introduced by the hon. Member for Aberdeen and Kincardine, the right hon. Gentleman the Member for Ross and Cromarty says:
  "This Bill is no use either to man or beast."
  With regard to the improvements created by smallholders, I understand that the cost of putting a building on a smallholding may be one figure at the time of its erection, but that the value of that building may be much smaller. Value and cost are two different things. The right hon. Gentleman the Member for Ross and Cromarty omitted to inform the House that the Scottish Department, when granting loans, granted them at 1¼ per cent. interest.
  Mr. MACPHERSON: When I spoke on this question I was merely referring to page 12 of the Scottish land report, where it was stated that the Land Court make observations on this point, and practically they tell the Department of Agriculture that its action in appropriating these funds is dishonest.
  Mr. JOHNSTON: They did not say that at all. The right hon. Gentleman said that they practically said it, but as a matter of fact they did not say it. I strenuously deny that the Department has confiscated any compensation due to the tenant. Where holdings are let at equipped rents, that is done in consequence of the decision of the Court of Session, and the landholder is charred a fair equipped rent which is fixed by the Land Court; so that a great deal of the indignation voiced by the right hon. Gentleman this afternoon has no justification whatever.
  Mr. MACPHERSON: Ask the Land Court!
  Mr. JOHNSTON: We will deal with these details in Committee, but I put it to the right hon. Gentleman that on every major point that he has raised this afternoon he has been wrong. The right hon. Gentleman the late Secretary of State for Scotland raised several questions, some of which, as he will agree, would be better discussed in Committee, but one point which he put directly was whether or not there should be an appeal available to the landlord in case of a dispute about compensation under one of the Schedules. -If the right hon. Gentleman will turn to Sub-section (2) of Clause 22 of the Bill, he will find that we do give there an appeal to the Department. It may be that the right hon. Gentleman and his friends would prefer that the Department should not be the arbiter, but, at any rate, we have made provision in the Bill for some court of arbitration or some court of appeal against what might otherwise be a very arbitrary decision.
  Underlying most of the discussion this afternoon there is the big, broad question whether or not a tenant should be a State tenant—whether he should be a tenant on State soil, as we think, or whether he should be a tenant on privately owned land. I have repeatedly heard the statement that it is cheaper to create holdings on privately-owned land, and that the State is not justified in spending money in acquiring the ownership of the soil and then putting these smallholders upon it. I see that the hon. Member for Kincardine assents to that, and that is a point of view which I should like to meet.
  Mr. SCOTT: It is not raised by this Bill.
  Mr. JOHNSTON: I say that it is the underlying difference which has been discussed this afternoon. In the Select Committee on Public Accounts, in May, 1928, the hon. Member for Orkney and Shetland (Sir R. Hamilton) raised this very question, and asked that it should be threshed out. It has been threshed out. Papers have been laid before the Public Accounts Committee, and, so far as I know, the figures are not disputed. What do they show? They show that, when we take account of the cost of com-

  1431
  pulsory acquisition, when we take account of all the legal costs involved, we find that there is an even balance as to the cost of putting down a smallholding, and that at the end of the day, under our system, we are the owners of the soil. Let me give the hon. Member for Kincardine some figures. On page 532 of the report of the Select Committee on Public Accounts he will find contrasted the cost of land settlement under State ownership and of land settlement under private ownership. He will find, for example, that in Argyllshire, under public ownership, it cost £507, and under private ownership £467; in Inverness, under public ownership, £225, and under private ownership £210. The difference is very small indeed, and at the end of the day the State is the owner of the soil. The suggestion has been made, and it seems to me to have been made of all Governments, Coalition, Unionist and ourselves—
  Mr. SCOTT: Not Liberal.
  Mr. JOHNSTON: There has been no Liberal Government for many years, and, if they go on as they are going on, they have no prospects. Be that as it may, the general purpose for which this Bill is introduced is perfectly clear. There has been very little detailed criticism of any Clause except Clause 8, though there has been criticism of what is not in the Bill; there has been criticism of what will not be in the Bill until next Thursday. On Clause 8 of the Bill, however, the late Secretary of State for Scotland has expressed apprehension about the provision as to resumption. We think we can argue that out in detail. We take a very strong view on this point. There have been gross cases of hardship—serious hardship—arising out of the present state of the law, under which a man may purchase land ostensibly for his own personal occupancy, and the holder may find himself dispossessed after having put all his life's savings and energy into the holding. This Clause is designed to stop that.
  Clause 1, as I have said, gives the holder a title; it gives him security in so far as he may henceforth sell or dispose of his compensation rights to a newcomer, and the newcomer may purchase those compensation rights and acquire
  1432
  them. Clause 1 is designed to remedy a defect in the existing law. A Court of Session decision discovered that the Department had no power to transfer from one holder to another. Clause I is designed to meet that difficulty, and, as I understand it, there is general agreement in all parts of the House that it is necessary that we should meet it. Clause 2, which was referred to by the hon. Member for Central Aberdeen (Mr. R. W. Smith), entitles the Department to compel an owner to give the Department information regarding tenancies on his land. We have had remarkable cases where, owing to difficulties in getting particulars, the State has been landed in very considerable sums of money. Letting has taken place, and the Department, not knowing that leases were falling in, were unable at the right time to make their request for purchase, and, having to purchase after a new lease had been granted, were consequently obliged to pay compensation. The question has been asked, why should the landowner be made to pay the cost of getting that information? We do not make him pay the cost, but we say that he must allow copies to be made of any leases on his land. That means that the Department is at the expense of getting the copies made; it does not mean that the landowner is put to a penny of expenditure.
  Mr. R. W. SMITH: It says that the landlord is required to give such information as may be specified, and, surely, he will be put to expense there?
  Mr. JOHNSTON: If the landlord would prefer that the Department's lawyers should not see the leases, he may himself supply the information, and I should be delighted if he would. But if he prefers not to supply it, all we can compel him to do is to exhibit his leases to the Department's lawyers and enable the Department's lawyers to take cognisance of them. Surely there is no injustice in that? Clause 3 is designed to meet the difficulty that arises when a man abandons his holding. There is a flaw in the 1911 Act. It provides for all other cases of desertion of holdings, and failure to cultivate, but we have no power to deal with the case where a man abandons his holding. There may not be many of these cases, but where there are such cases the Department asks for power to deal with them. Clause 4 deals

  1433
  with cases where holders have failed to occupy. It is a most distressing state of affairs. There are instances, particularly in the West Highlands and in the Lewis, where holdings have been allocated at some considerable expense, and where indeed other people are kept out of the holdings, because certain men have them, and have failed to work them. They may let them out as grazings to a butcher and actually make a profit, and the Department is asking power to deal with such cases as that. I am sure everyone will agree that we ought to have that power.
  9.0 p.m.
  Clause 5 deals with loans for buildings. We can give loans for replacement now, but we desire power to give loans on old created holdings for new buildings. In Clause 6 we ask power to have a vacant holding treated by the Department as if it were a new holding. In Clause 7, we take power to ensure that the names of the holders need not necessarily be supplied at the time of the promulgation, and the reason for that is simply that if you start a scheme, as we have to do now, and give all the names of the holders, and then find that one man has died before the scheme is completed, you have to begin all over again, a sheer waste of public money and time, and we only ask that we shall not be compelled to supply the names of all the intending occupants in the scheme. I understand that there are no objections to Clauses 9 to 13. Clause 14 deals with what might be difficulties about deer forests. We have had occasional difficulties, though not many, in dealing with smallholdings in the neighbourhood of deer forests. We are compelled under the existing Acts to put up very high fences. We are asking for power to substitute the usual and reasonable practice of agriculture and estate management—whatever may be the custom in the district—so that we need not be asked to put up impossible fences. Clause 18 repeals an obsolete section of the 1886 Act.
  Part II of the Bill deals with amendments of the agricultural Holdings Acts generally. We have not been able to agree fully with the proposals of the National Farmers' Union of Scotland but we have met them to a very considerable extent. The schedules now transfer more and more of the operations as a
  1434
  whole to Part II where only notice is required to be given to the landlord, or to Part III where consent or notice is not required, and while we have been unable to meet the demands in every possible respect, Part II, we believe, meets, as far as is reasonably possible to get through the existing Houses of Parliament, the demand of the agricultural community for compensation for improvements that can be made upon the land. We have, of course, not been able to put in buildings. Many of the points I have discussed ought, more properly, to have been discussed in Committee. It is exceedingly difficult to work up any enthusiasm for many of the dry-as-dust points of these old and obsolete Acts. Nevertheless, I trust, as a result of the discussion, that the right hon. Gentleman the Member for Ross and Cromarty (Mr. Macpherson) may have had his ideas somewhat clarified, and it may be that he will now appreciate the fact that the Bill is only one for removing difficulties, that it deals only with the recommendations of the Nairne Committee and deals in substance with all the major grievances except two of the hon. Member for Aberdeen and Kincardine.
  Mr. SCOTT: I could give you many more.
  Mr. JOHNSTON: I said the major grievances—I do not think all the tin-pot grievances the hon. Member has referred to are worthy of putting into an Act at all—major grievances which experience has taught the Government and everyone interested in agriculture must be remedied. This Bill is only one step on. the ladder, one part of the framework of the agricultural policy of the Government. It is absurd to ask why it does not deal with marketing.
  Mr. MACPH ERSON: It was the Secretary of State who said that.
  Mr. JOHNSTON: He did not say anything of the sort. If the right hon. Gentleman had not written his speech before he came down to the House, he would have grasped the idea that my right hon. Friend the Secretary of State explained so clearly, namely, that there were three primary Bills. One Bill was to facilitate the work of the Small Landholders and Agricultural Holdings Bill, which is this Bill.
  Mr. MACPHERSON: I wrote out my speech here.
  Mr. JOHNSTON: I hope that the right hon. Gentleman will pay more attention to the next speech. The second Bill, which will deal with the creation of more holdings, is now in the Vote Office and can be read by any hon. or right hon. Gentleman, as I trust that it will be, between now and Thursday. The third Bill will deal with marketing. These three Bills, taken as a whole, embody the agricultural policy of the Government, a policy which, we trust, will remove the hardships, grievances and difficulties which beset the primary producers on the soil of our country. With these observations, I trust that on the Committee stage we shall find the right hon. Gentleman and his friends in a better frame of mind, and more inclined to discuss matters on their merits. I commend this Measure to the House.
  Question put, and agreed to.
  Bill read a Second time, and committed to a Standing Committee.

  PUBLIC ACCOUNTS.
  Ordered,
  "That the Committee of Public Accounts do consist of Fifteen Members:"
  Mr. Arthur Michael Samuel, Mr. Benson, Mr. Bird, Mr. Butler, Captain Crookshank, Mr. Denman, Mr. Ede, Mr. Gill, Sir Robert Hamilton, Mr. Leif Jones, Mr. Lathan, Mr. Pethick-Lawrence, Sir Assheton Pownall, Major Salmon, and Mr. West nominated Members of the Committee.
  Ordered,
  "That the Committee have power to send for persons, papers, and records."
  Ordered,
  "That the Committee have power to report from time to time."
  Ordered,
  "That Five be the quorum."—[Mr. T. Kennedy.]

  HOUSE OF COMMONS (KITCHEN AND REFRESHMENT ROOMS).
  Ordered,
  "That a Select Committee be appointed to control the arrangements for the Kitchen and Refreshment Rooms in the Department of the Serjeant-at-Arms attending this House."
  Ordered,
  "That the Committee do consist of Seventeen Members."
  Mr. Compton, Major Sir George Hennessy, Sir Leolin Forestier-Walker, Mr. James Gardner, Sir Nicholas Grattan-Doyle, Mr. David Grenfell, Mr. Fiore-Belisha, Lieutenant-General Sir Aylmer Hunter-Weston, Major-General Sir Robert Hutchison, Countess of Iveagh, Mr. Jenkins, Lady Cynthia Mosley, Mr. Muff, Sir Herbert Nield, Lieutenant-Colonel Sir Lambert Ward, Mr. Westwood, and Miss Wilkinson nominated Members of the Committee.
  Ordered,
  "That the Committee have power to send for persons, papers, and records."
  Ordered,
  "That Three be the quorum."—[Mr. T. Kennedy.]
  The remaining Orders were read, and postponed.

  ADJOURNMENT.
  Resolved, "That this House do now adjourn."—[Mr. Hayes.]
  Adjourned accordingly at Twelve Minutes after Nine o'clock.

  AIR MINISTRY CONTRACTS (FAIR WAGES CLAUSE).
  AIR MINISTRY CONTRACTS (FAIR WAGES CLAUSE).
INDIA.
  DHARIWAL WOOLLEN MILLS.
  DHARIWAL WOOLLEN MILLS.
  PRISONERS, MEERUT.
  PRISONERS, MEERUT.
  AFRICA (NATIVE POLICY).
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  EAST AFRICA (AGRICULTURAL DEPARTMENTS).
  EAST AFRICA (AGRICULTURAL DEPARTMENTS).
  CHATHAM DOCKYARD (WORKPEOPLE).
  CHATHAM DOCKYARD (WORKPEOPLE).
  BRITISH EMBASSY, WASHINGTON.
  BRITISH EMBASSY, WASHINGTON.
  EMPIRE MARKETING BOARD.
  EMPIRE MARKETING BOARD.
EDUCATION.
  MAINTENANCE ALLOWANCES, C ARNARVONSHIRE.
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  NURSERY SCHOOLS, BRECON AND RADNOR.
  NURSERY SCHOOLS, BRECON AND RADNOR.
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  MOTOR ACCIDENTS.
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UNEMPLOYMENT.
  BENEFIT.
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  GILLINGHAM AND CHATHAM.
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  BUILDING INDUSTRY.
  BUILDING INDUSTRY.
  HOUSING ACT, 1930.
  HOUSING ACT, 1930.
  NAVAL AND MILITARY PENSIONS AND GRANTS.
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POOR LAW.
  CASUALS.
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  RELIEF.
  RELIEF.
  JOINT INDUSTRIAL COUNCILS.
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  FOREIGN HYDROGRAPHIC CHARTS.
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  EX-ENEMY ACTION (BRITISH SEAMEN'S CLAIMS).
  EX-ENEMY ACTION (BRITISH SEAMEN'S CLAIMS).
TRANSPORT.
  GOODS MOTOR VEHICLES.
  GOODS MOTOR VEHICLES.
  STEAM-DRIVEN VANS AND LORRIES.
  STEAM-DRIVEN VANS AND LORRIES.
  MOTOR VEHICLE LICENCES.
  MOTOR VEHICLE LICENCES.
  HOUSE OF COMMONS (PROCEDURE).
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  OVERSEAS TRADE DEPARTMENT (ADVICE).
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  STATE SUBSIDIES.
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  FRENCH CHAMBER (VOTING).
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  FRANCHISE (NON-EXERCISE).
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  WILD STAG HUNTING.
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  OPIUM CONFERENCE.
  OPIUM CONFERENCE.
  AUSTRALIAN AIR MAIL.
  AUSTRALIAN AIR MAIL.
AGRICULTURE.
  COMMITTEES (WORKERS' REPRESENTATIVES).
  COMMITTEES (WORKERS' REPRESENTATIVES).
  LAND DRAINAGE ACT.
  LAND DRAINAGE ACT.
  MILK PRICES.
  MILK PRICES.
  FARM SETTLEMENTS.
  FARM SETTLEMENTS.
  BEET SUGAR.
  BEET SUGAR.