Sitting of 12 July 1932

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

PRIVATE BUSINESS
Regents Canal and Dock Company (Grand Junction Canal Purchase) Act, 1928,—
Resolved,
"That, notwithstanding the promise given in the proceedings before the Committee to which the Regents Canal and Dock Company (Grand Junction Canal Purchase) Bill was referred in the year 1928, to the effect that the promoters of the Bill would within five years of the date of the Bill becoming law promote a Bill to consolidate the Act relating to the several parts of their undertaking, it shall not be incumbent on the Grand Union Canal Company to promote such a Bill before the expiration of ten years from that date, in view of the fact that since the year 1928 the company have acquired the undertakings of other canal companies, and of the possibility that the undertakings of further canal companies will in the future be acquired by the company."—[The Chairman of Ways and Means.]
Dundee Corporation Order Confirmation Bill,
Read the Third time, and passed.

1.

2.

3.

4.

5.

6.

Date when Closure moved, and by Whom.

Question before House or House or Committee When Moved.

Whether in House or Committee.

Whether assent given to Motion or withheld by Speaker or Chairman.

Assent withheld because, in the opinion of the Chair, a decision would shortly be arrived at without that Motion.

Result of Motion and, if a Division, Numbers for and against.

and (2) in the Standing Committees under the following heads:—

1.

2.

3.

4.

5.

Date when Closure moved, by whom.

Question before Committee when moved.

Whether assent given to Motion or withheld by Chairman.

Assent withheld because, in the opinion of the Chair, a decision would shortly be arrived at without that Motion.

Result of Motion and, if a Division, Numbers for and against.

(in continuation of Parliamentary Paper, No. 159 of Session 1930–31)."

[The Deputy-Chairman.]

COLONIAL STOCK ACT, 1900.
Copy ordered,
"of Treasury List of Colonial Stocks and of Stocks of Territories to which the Colonial Stock Acts, 1877 to 1900, have been applied under the powers conferred by the Colonial Development Act, 1929, in respect of which the provisions of the Colonial Stock Act, 1900, are for the time being complied with."—[Major Elliot.]

OFFENCES RELATING TO MOTOR VEHICLES.
Address for,
"Return showing the number of Offences relating to Motor Vehicles in England and Wales, together with the results of the proceedings in courts of summary jurisdiction, and the number of persons cautioned or prosecuted for such offences, during the year ended the 31st day of December, 1931 (in continuation of Parliamentary Paper, No. 113, of Session 1930–31)."—[Mr. Stanley.]

BUSINESS OF THE HOUSE.
Return ordered,
"showing, with reference to Session 1931–32, (1) the total number of days on which the House sat; and (2) the days on which Business of Supply was considered (in continuation of Parliamentary Paper. No. 158, of Session 1930–31)."—[The Deputy-Chairman.]

CLOSURE OF DEBATE (STANDING ORDER No. 26).
Return ordered,
"respecting application of Standing Order No. 26 (Closure of Debate) during Session 1931–32, (1) in the House and in Committee of the whole House, under the following heads:—

PRIVATE BILLS AND PRIVATE BUSINESS.
Return ordered,
"of the number of Private Bills, Hybrid Bills, Bills for confirming Provisional Orders, and Bills for confirming Schemes under the Public Works Facilities Act, 1930, introduced into the House of Commons and brought from the House of Lords, and of Acts passed in Session 1931–32
Of all the Private Bills, Hybrid Bills, and Bills for confirming Provisional Orders which in Session 1931–32 have been reported on by Committees on Opposed Private Bills or by Committees nominated partly by the House and partly by the Committee of Selection, together with the names of the selected Members who served on each Committee; the first and also the last day of the sitting of each Committee; the number of days on which each Committee sat; the number of days on which each selected Member has served; the number of days occupied by each Bill in Committee; the Bills the Preambles of which were reported to have been proved; the Bills the Preambles of which were reported to have been not proved; and, in the case of Bills for confirming Provisional Orders, whether the Provisional Orders ought or ought not to be confirmed:
Of all Private Bills and Bills for confirming Provisional Orders which, in Session 1931–32, have been referred by the Committee of Selection to the Committee on Unopposed Bills, together with the names of the Members who served on the Committee; the number of days on which the Committee sat; and the number of days on which each Member was summoned and on which each Member attended:
And, of the number of Private Bills, Hybrid Bills, Bills for confirming Provisional Orders, and Bills for confirming Schemes under the Public Works Facilities Act, 1930, withdrawn or not proceeded with by the parties, those Bills being specified which hare been referred to Committees and dropped during the sittings of the Committee (in continuation of Parliamentary Paper, No. 0.004, of Session 1930–31)."—[The Deputy-Chairman.]

PUBLIC BILLS.
Return ordered,
"of the number of Public Bills, distinguishing Government from other Bills, introduced into this House, or brought from the House of Lords, during Session 1931–32; showing the number which received the Royal Assent; the number which were passed by this House, but not by the House of Lords; the number passed by the House of Lords, but not by this House; and distinguishing the stages at which such Bills as did not receive the Royal Assent were dropped or postponed and rejected in either House of Parliament (in continuation of Parliamentary Paper, No. 0.005, of Session 1930–31)."—[The Deputy-Chairman.]

PUBLIC PETITIONS
Return ordered,
"of the number of Public Petitions presented and printed in Session 1931–32, with the total number of signatures in that Session (in continuation of Parliamentary Paper, No. 0.001, of Session 1930–31)."—[The Deputy-Chairman.]

SELECT COMMITTEES.
Return ordered,
"of the number of Select Committees appointed in Session 1931–32 and the Court of Referees; the subjects of inquiry; the names of the Members appointed to serve on each, and of the Chairman of each; the number of days each Committee met, and the number of days each Member attended; the total expense of the attendance of witnesses at each Select Committee, and the name of the Member who moved for such Select Committee; also the total number of Members who served on Select Committees (in continuation of Parliamentary Paper, No. 0.002, of Session 1930–31)."—[The Deputy-Chairman.]

SITTINGS OF THE HOUSE.
Return ordered,
"of the days on which the House sat in Session 1931–32, stating for each day the date of the month and day of the week, the hour of the meeting, and the hour of adjournment; and the total number of hours occupied in the Sittings of the House, and the average time; and showing the number of hours on which the House sat each day, and the number of hours after 11 p.m.; and the number of entries in each day's Votes and Proceedings."—[The Deputy-Chairman.]

STANDING COMMITTEES.
Return ordered,
"for Session 1931–32 of (1) the total number and the names of all Members (including and distinguishing Chairmen) who have been appointed to serve on one or more of the fire Standing Committees appointed under Standing Order No. 47, showing, with regard to each of such Members, the number of sittings to which he was summoned and at which he was present; (2) the number of Bills considered by all and by each of the Standing Committees, the number of days on which each Committee sat, and the names of all Bills considered by a Standing Committee, distinguishing where a Bill was a Government Bill or was brought from the House of Lords, and showing, in the ease of each Bill, the particular Standing Committee by whom it was considered, the number of days on which it was considered by the Committee, and the number of Members present on each of those days (in continuation of Parliamentary Paper, No. 0.003. of Session 1930–31)."—[The Deputy-Chairman.]

ORAL ANSWERS TO QUESTIONS.

  IRISH FREE STATE (FINANCIAL RELATIONS).
  Mr. LEWISasked the Secretary of State for Dominion Affairs if he has any further statement to make as to the matters in dispute between this country and the Irish Free State?
  The SECRETARY of STATE for DOMINION AFFAIRS (Mr. J. H. Thomas): I have nothing to add to the statements which I made during the course of the Debates last week, wherein I made clear that the Government intend to put the Act into operation.
  Mr. LEWIS: Do I understand that since that statement no further communication has been received by my right hon. Friend from the Government of the Irish Free State?
  Mr. THOMAS: No communication of any sort.

  TRADE AND COMMERCE.

    CANADA.
    Mrs. COPELANDasked the President of the Board of Trade if he is aware that, in the year ended 31st May, 1932, 2,091,898 tons of coal were exported from Britain to Canada, and 30,701,802 bushels of wheat were imported from Canada to Britain, mostly in foreign ships; and if he will consider, in the interests of economy, arranging a barter agreement on the lines of the one concluded recently between Brazil and the United States of America, so that our boats that take the coal to Canada would bring back the wheat to England?
    The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Mr. Hore-Belisha): I understand that in the period in question 1,033,454 tons of coal were exported from the United Kingdom to Canada and 30,701,802 cwts. of imported wheat were registered as consigned from Canada. I have no information as to the flag of the ships in which either the coal or the wheat was carried. I do not think an agreement such as that suggested in the second part of the question would be practicable.
    Mrs. COPELAND: Is the hon. Member aware that, according to the Turgeon re-
    1088
    port on the Canadian grain trade, 66 per cent. of the Canadian wheat shipped last year from the Atlantic seaboard was exported from United States ports in foreign ships?
    Mr. HORE-BELISHA: I have no reason to dispute that statement or to confirm it.
    Viscountess ASTOR: Would it not be a good idea to bring it up at Ottawa?

    EXCHANGE RESTRICTIONS.
    Mr. RAMSDENasked the President of the Board of Trade whether steps have now been taken to arrange agreements whereby frozen or blocked accounts in foreign currencies can be used in payment of goods purchased for export?
    The PRESIDENT of the BOARD of TRADE (Mr. Runciman): I am not yet in a position to add to the statement made on Tuesday last in reply to my hon. Friend and the Member for the Platting Division of Manchester (Mr. Chorlton).
    Mr. RAMSDEN: In view of the importance of this matter to trade and industry, will not urgent steps be taken to deal with it?
    Mr. RUNCIMAN: A full statement was made, I think, on Tuesday last.
    Mr. RAMSDEN: Are instructions given to heads of commissions to act in this matter?
    Mr. NEIL MACLEAN: Can the right hon. Gentleman state how many of the ships that were sold to foreigners have been brought into port under these conditions?
    Mr. RUNCIMAN: This has nothing to do with that matter.

    IMPORTED HOSIERY (MARKING).
    Lieut.-Colonel ACLAND-TROYTEasked the President of the Board of Trade why he refused to prosecute in the case reported to him by Mr. N. G. New, of Craddock, Collompton, in which a pair of stockings was sold as of English make although the words "Foreign made" appeared on the heels and had been partially erased?
    Mr. RUNCIMAN: My hon. and gallant Friend will appreciate that in such cases it is necessary to be in a position to prove that the article complained of is in fact of foreign origin. Following

    1089
    their usual procedure, the Board consulted trade experts who stated that there was no distinguishing characteristic in the stockings which would enable them to give such evidence. In the circumstances the Board had no option but to drop the proposed proceedings.
    Lieut.-Colonel ACLAND-TROYTE: Does my right hon. Friend really think that anyone is going to stamp the word "Foreign" on a pair of English-made stockings and then try to erase it? Is not that proof enough that they are foreign?
    Mr. RUNCIMAN: You cannot get a conviction without evidence.
    Lieut.-Colonel ACLAND-TROYTE: Is not that sufficient evidence?

    IMPORT DUTIES.
    Mr. CHORLTONasked the Chancellor of the Exchequer whether, in view of the fact that the duties imposed on imports competing with British manufacturers are now only in effect of a revenue nature, he will say what is the policy of the Government with a view to affording sufficient assistance to the industries concerned, either directly or in the increase of labour employed?
    The FINANCIAL SECRETARY to the TREASURY (Major Elliot): I do not accept my hon. Friend's premiss, but in answer to his question, Parliament on the recommendation of the Government has entrusted to the Import Duties Advisory Committee the task of deciding what recommendations to make for the charge of additional customs duties, having regard to the advisability in the national interest of restricting imports into this country and the interests generally of trade and industry in the United Kingdom.
    Mr. CHORLTON: Is the Financial Secretary aware of the serious effect that this will have on small men, who will not always be able to make representations to the committee?

    CHEESE (PRICES).
    Colonel Sir VANSITTART BOWATERasked the President of the Board of Trade if he is aware that 87 tons of Cheshire cheese were sold at the Nantwich fair at 7¾d. per pound and that the price charged retail is 1s. 8d. per pound;
    1090
    and what action does he purpose taking in the matter, through the Food Council or otherwise?
    Mr. HORE-BELISHA: My attention has been drawn to correspondence on this subject published in the Press. I am making inquiries into the matter, and shall be glad to let my hon. and gallant Friend know the result.
    Sir V. BOWATER: Does not the hon. Gentleman consider that this is gross profiteering; is it not subject to a penalty of £500 and/or three months; and is it proposed to institute prosecutions?
    Mr. HORE-BELISHA: I have told my hon. and gallant Friend that we are instituting inquiries, and it will depend, of course, upon the results of those inquiries what action is taken.
    Mr. T. WILLIAMS: Will all Members of the House be able to have a copy of the result?
    Mr. HORE-BELISHA: If the hon. Member will ask me that question when the inquiry is over, I shall be able to answer it.

  MERCANTILE MARINE.

    BRITISH SHIPS (SALES TO FOREIGNERS).
    Mr. MITCHESONasked the President of the Board of Trade the total number of British-owned cargo ships in the last quarter of each of the years 1929, 1930 and 1931, respectively, and the number of these sold to foreigners during each of the years named, respectively?
    Mr. RUNCIMAN: Separate particulars relating to cargo vessels are not available. According to the Returns of the Registrar-General of Shipping and Seamen, the number of vessels registered under Part 1 of the Merchant Shipping Act, 1894, that were reported as remaining on the register at ports in the United Kingdom, the Isle of Man and the Channel Islands on 31st December, 1929, 1930 and 1931, was 18,062, 18,117 and 17,979 respectively. The number of vessels reported as removed from the register on sale to foreigners was 240 in 1929, 238 in 1930 and 208 in 1931.
    Mr. NEIL MACLEAN: Are any further efforts being made by the right hon. Gentleman's Department to get the shipbuilders and the shipowners together

    1091
    to try to evolve some satisfactory scheme to do away with the sale of ships to foreigners?
    Mr. RUNCIMAN: No. We have no reason to suppose that this is at all a detrimental movement for the British Mercantile Marine.
    Mr. MACLEAN: But is it not the case that a Select Committee was set up three or four years ago, and cannot something be done to get some satisfactory agreement between shipowners and shipbuilders, as the report of the last Committee was rendered nugatory because there was no satisfactory agreement?
    Mr. RUNCIMAN: The report of the last Committee was unanimously against the proposal for the breaking up scheme.
    Mr. MACLEAN: Was not the report of the last Committee that they could not arrive at a satisfactory arrangement, not that they could not agree to this scheme?

    SAFETY AND LOAD-LINE CONVENTIONS.
    Captain PETER MACDONALDasked the President of the Board of Trade whether he has considered the recommendation of the Chamber of Shipping of the United Kingdom that similar regulations with regard to the safety and load-line conditions should be imposed upon foreign vessels trading in British waters; and what steps he proposes to take to ensure that precisely similar conditions in this respect should apply to British and foreign vessels trading in British home waters?
    Mr. RUNCIMAN: The reply to the first part of the question is in the affirmative; as to the second, I would refer the hon. and gallant Member to the Merchant Shipping Act, 1932, which gives effect to the safety and load-line conventions as regards British ships registered in this country and other ships when in British ports.
    Sir BASIL PETOasked the President of the Board of Trade whether it is the intention of the Government to put in force the Convention for Safety of Life at Sea, including the Reversal of Helm Orders, without waiting for the ratification of the United States of America?
    Mr. RUNCIMAN: We are in communication with a number of countries as to
    1092
    the date of coming into force of this Convention and I am not yet in a position to make a statement.

    CHAMBER OF SHIPPING COMMITTEE (REPORT).
    Lieut.-Colonel MOOREasked the President of the Board of Trade if he has received the report of the committee appointed by the Chamber of Shipping to consider the issues affecting British shipping in general; and whether, prior to the Conference at Ottawa, his Department will familiarise themselves with the views of the Chamber of Shipping for discussion in Canada?
    Mr. RUNCIMAN: I have received the report referred to by my hon. and gallant Friend, and I can assure him that it is being most carefully considered.
    Lieut.-Colonel MOORE: Will my right hon. Friend recall that in 1923 the Imperial Economic Conference laid it down that should there be any discrimination by foreigners against ships under the British flag, the Imperial and Dominion Governments would meet together to decide what action should be taken; and would not Ottawa be a suitable opportunity for that discussion?
    Mr. RUNCIMAN: I have already told my hon. and gallant Friend that the matter is being carefully considered.

    PORTUGUESE PORTS (FLAG DISCRIMINATION).
    Sir JOHN SANDEMAN ALLENasked the President of the Board of Trade whether he is aware that the Portuguese line trading to the United Kingdom has given notice that in future it will extend its monthly service to a fortnightly service; and, seeing that this line Is dependent for its existence in this trade upon discrimination by Portugal against British ships while itself enjoying equality of treatment in British ports, and in view of repeated representations already made, will His Majesty's Government now inform the Portuguese Government that the maintenance by that Government of the discrimination above referred to constitutes a breach of the treaty, and notify that Government that this country must now take countervailing steps?
    Mr. RUNCIMAN: The answer to the first part of the question is in the affirms-

    1093
    tive. As regards the second part of the question, the matter is still under discussion between the Governments.
    Sir J. SANDEMAN ALLEN: How long will it be; I understand that it has been going on for a long time?
    Mr. RUNCIMAN: These Governments do not decide very promptly

    CARGO BOATS (EMERGENCY REQUIREMENTS).
    Mr. MITCHESONasked the President of the Board of Trade what precautions are taken, in view of the number of cargo boats which have been sold to foreigners or scrapped during the past few years and the few replacements, to ensure that the number of British-owned cargo boats now available for the Admiralty, War Office, and for food requirements would still be sufficient for national needs in case of emergency?
    Mr. RUNCIMAN: The present position does not give rise to anxiety in this matter, which is always kept under review by His Majesty's Government.

    MERCHANT SHIPPING CERTIFICATES BILL.
    Sir B. PETOasked the President of the Board of Trade, whether the policy of His Majesty's Government is still that contained in the Merchant Shipping Certificates Bill introduced by the Government into the House of Commons in 1911 and 1913; and whether it is intended to re-introduce this Measure in the next Session of Parliament?
    Mr. RUNCIMAN: There is no intention of introducing in the next Session of Parliament legislation on the lines of the Merchant Shipping Certificates Bill of 1911 and 1913. As my hon. Friend indicated in his reply of the 6th July, there is no reason to think that the present position is a source of danger.

  BRITISH ARMY.

    SERVICE PENSION (J. W. MILLER, ROYAL ARMY SERVICE CORPS).
    Mr. DAVID ADAMSasked the Financial. Secretary to the War Office whether he is aware that John William Miller, late No. 11543, Royal Army Service Corps, a copy of whose birth certificate has been shown to the authorities of the Royal Hospital,
    1094
    Chelsea, has been refused a pension due to him on reaching the age of 65 years because the records at the Royal Hospital do not coincide with his birth certificate, due to the man having been enlisted from a Poor Law institution by Poor Law guardians; and if he will inquire into this case?
    The FINANCIAL SECRETARY to the WAR OFFICE (Mr. Duff Cooper): I have made inquiries into this case, and I would refer the hon. Member to the reply given on 5th July to the hon. Member for Westhoughton (Mr. Rhys Davies).

    SCHOOLMISTRESSES.
    Brigadier-General NATIONasked the Financial Secretary to the War Office from what source the Queen's Army schoolmistresses are obtained; and whether they are provided with living quarters in Government buildings?
    Mr. COOPER: Candidates for these appointments consist of Army pupil teachers and others with Army connections whose qualifications are recognised as adequate, and also of civilians who have been already certificated in civil schools or who have completed adequate training in a civil training college. As regards the second part of the question, Queen's Army Schoolmistresses are provided with quarters when serving abroad. Those serving at home may be accommodated in quarters if they are so desirous and quarters are available. When they are not provided with quarters, a higher rate of pay is received.
    Brigadier-General NATION: How many of these ladies are serving at home and how many abroad?
    Mr. COOPER: I could not say without notice.

    REMOUNTS.
    Captain P. MACDONALDasked the Financial Secretary to the War Office whether arrangements have been made to cease purchasing Army remounts in the Irish Free State and to obtain the necessary supplies in Great Britain in the event of it proving necessary to impose tariffs on Irish exports to this country?
    Mr. COOPER: No, Sir, but it is the policy to purchase horses in the United Kingdom whenever possible.

    FIGHTING SERVICES (MEAT SUPPLIES).
    Mr. LEVYasked the Financial Secretary to the War Office the details of the meat purchases for the Army during the past three months in pounds of beef, mutton, pork and bacon?
    Colonel BROADBENTasked the Financial Secretary to the War Office the figures of meat purchases for the Army for the past three months; and what would have been the cost if only home-produced meat had been supplied?
    Major CARVERasked the Under-Secretary of State for Air the figures of meat purchases for the Air Force for the past three months; and what would have been the cost if only home-produced meat had been supplied?
    Mr. PIKEasked the Under-Secretary of State for Air the details of the meat purchases for the Air Force during the past three months in pounds of beef, mutton, pork and bacon?
    Mr. COOPER: I will answer these questions together, as the purchase of meat for the Royal Air Force is made by my Department. The quantity of beef and mutton purchased for the Army and the Royal Air Force at home for the past three months amounted to approximately 7,000,000 lbs., and if home-killed meat had been supplied, the cost would have been rather more than doubled. The precise amount of mutton purchased is not available, but it would be inconsiderable and certainly less than one-seventh of the total. Pork does not form part of the soldier's ration; and bacon is purchased by the troops through the Navy, Army and Air Force Institutes.
    Mr. PIKE: Does not the hon. Gentleman consider that it would improve the physique and efficiency, especially of members of the Air Force, if, as in the case of the engines over which they have control, they were fed on British power?
    Viscountess ASTOR: Does not the hon. Gentleman think that it would be better policy to encourage the Services to eat British meat than to subsidise the wheat grower?
    Mr. COOPER: They eat nothing but British meat.
    Major BRAITHWAITEasked the Minister of Agriculture the additional
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    cost of the Treasury if His Majesty's Forces were supplied with home-produced meat during the next three months?
    The MINISTER of AGRICULTURE (Sir John Gilmour): It is estimated that the additional cost would be somewhat over £160,000.
    Mr. HANNONasked the First Lord of the Admiralty if he can give the details of the meat purchases for the Navy during the past three months in pounds of beef, mutton, pork, and bacon?
    The PARLIAMENTARY SECRETARY to the ADMIRALTY (Lord Stanley): The purchases of beef and mutton for the Navy at home during the past three months were 465 tons and 50 tons, respectively. No purchases of pork were made, as this item is only supplied during the period 1st October to 31st March. Bacon is not included in the Service standard ration, and any bacon consumed is purchased directly or indirectly, mainly from Navy, Army and Air Fore Institutes. Details of quantities so bought are not readily available.
    Mr. HANNON: Are we to assume from the answer that all the meat purchased for the Navy is British meat?
    Lord STANLEY: The whole of the beef and mutton purchased is British.

  SCOTLAND.

    FISHING INDUSTRY.
    Lieut.-Colonel CHARLES KERRasked the Secretary of State-for Scotland whether he will consider the reconstruction of the Scottish Fishery Board to enable the line and seine-net fisherman to be represented thereon?
    The SECRETARY of STATE for SCOTLAND (Major Sir Archibald Sinclair): The hon. Member's suggestion will be kept in view, but under the statutory provisions the Board cannot be reconstructed until the expiry, four years hence, of the term of office of the present members.
    Lieut.-Colonel KERRasked the Secretary of State for Scotland whether he will suspend the regulation of the Scottish Fishery Board restricting the length of the line and seine-net fishing boats to 40 feet in St. Andrew's Bay, and

    1097
    institute an inquiry into the regulation, in order to avoid further hardship on the fishermen whose boats are over 40 feet in length?
    Sir A. SINCLAIR: I regret that I cannot see my way to accede to my hon. Friend's request. The subject has recently received exhaustive consideration in connection with a petition by the fishermen concerned, and I am quite satisfied that the existing restrictions are necessary for the conservation of the stocks, and are therefore, in the long run, in the interests of the fishermen themselves.
    Lieut.-Colonel KERR: Is my right hon. Friend aware that there is suffering on the part of the fishermen owing to their having to cut down their boats, which are over 40 feet, and that this has no effect on the fishing capacity of the vessels; and will he reconsider this matter, as it is a real grievance on the part of the fishermen?
    Sir A. SINCLAIR: The right method of conserving the stocks of fish is a highly technical matter and has received the closest investigation of the Fishery Board, which has come to the conclusion that this regulation is in the best interests of the fishermen as a whole.
    Mr. MACQUISTEN: Why not regulate the length of the fish instead of the length of the boats?

    EDUCATION RATES.
    Lieut.-Colonel MOOREasked the Secretary of State for Scotland whether, in view of the coming conference regarding local rates, he will suggest to educational authorities in Scotland the desirability of awaiting this meeting before raising any education rate for the coming year?
    Sir A. SINCLAIR: I presume my hon. and gallant Friend refers to the committee representative of the Scottish local authorities which is being set up, on the initiative of the Government, to examine the whole question of economies in local expenditure. I must, however, point out that Sub-section (2) of Section 21 of the Local Government (Scotland) Act, 1929, requires a county council to requisition from the town council of each burgh included in the county the sum apportioned and allocated to the burgh as rate contribution not later than the 15th day of
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    July in each year. Accordingly, it is not open to me to take any such action as is suggested by my hon. and gallant Friend.

    BACON (MARKING).
    Mr. JOHN WALLACEasked the Secretary of State for Scotland whether he is aware that Danish bacon is being sold in various parts of Scotland at the present time under the description of Wiltshire bacon; and whether, if definite evidence of this practice is produced, he is prepared to institute proceedings under the Merchandise Marks Act, 1926?
    Sir A. SINCLAIR: Complaints have reached the Department of Agriculture for Scotland that Danish bacon is being sold as Wiltshire. If definite evidence is produced that Danish bacon unaccompanied by an indication of origin as required by Section 1, Sub-section 1, of the Merchandise Marks Act, 1926, is being sold as Wiltshire the Department are prepared to approach the Crown Agent with a view to proceedings being taken for a contravention of the Act.
    Mr. WALLACE: What does the right hon. Gentleman mean by "definite evidence" of the country of origin from which the bacon is imported?
    Sir A. SINCLAIR: The word "Danish" is necessary in accordance with the terms of the Act under which we have to proceed. For example, recently a complaint was made to the Department, and we proceeded to take the necessary steps for a prosecution, but it was discovered that the particular bacon was sufficiently marked with the L.U.R. mark and with the name of the country of origin, Denmark, and consequently we could not proceed any further.
    Mr. WALLACE: Is my right hon. Friend aware that in the case to which he refers the mark was quite unobservable by the purchaser, and that across the side was the mark "Wiltshire bacon"; under these conditions, does he think that the provisions of the Act were being followed up by his Department?
    Sir A. SINCLAIR: Certainly; my Department is making every effort to enforce the Act, but we cannot go further than the Act itself allows. My Department took it up with the legal authorities and they said that a prosecution could not be successfully sustained.

    AGRICULTURAL SECURITY COMPANY.
    Mr. R. W. SMITHasked the Financial Secretary to the Treasury whether the formal documents setting up the Agricultural Security Company under the Agricultural Credits (Scotland) Act, 1929, have yet been approved by the Treasury?
    Major ELLIOT: Yes, Sir.

    POLICE FORCES (STRENGTH).
    Mr. N. MACLEAN (for Mr. DUNCAN GRAHAM)asked the Secretary of State for Scotland what was the total authorised strength of the police forces in Scotland as at 31st December in each of the last five years?
    Sir A. SINCLAIR: The figures are as follow:

    1927

    …

    …

    …

    …

    6,605

    1928

    …

    …

    …

    …

    6,607

    1929

    …

    …

    …

    …

    6,613

    1930

    …

    …

    …

    …

    6,621

    1931

    …

    …

    …

    …

    6,626

    It will be observed that there has been a small increase in each of these past years, and I am glad to have this opportunity of making it clear that, when I informed the hon. Member, in the course of Debate on the Police (Scotland) Vote, that the numbers of the police were decreasing, I was thinking of the present year and next year, when, as a result of measures of consolidation and reorganisation either adopted or to be adopted, there should, unless unforeseen circumstances arise, be a substantial decrease.

    AFFORESTATION.
    Mr. LEONARDasked the hon. and gallant Member for Rye, as representing the Forestry Commissioners, what were the prices paid by the Forestry Commission for ewes with lambs, eild ewes, and ewe hogs, respectively, at Kirkton, Balquidder; what prices were got for the sheep stock from these sheep when sold; and what was the total loss incurred by the Commission on the total stock?
    Colonel Sir GEORGE COURTHOPE (Forestry Commissioner): No sheep were taken over by the Forestry Commission at Kirkton, Balquidder, and, consequently, they incurred no loss.
    Mr. LEONARDasked the hon. and gallant Member for Rye, as representing the Forestry Commissioners, when it is proposed to proceed with planting the
    1100
    land, upwards of 15,000 acres, in Scotland which remains unplanted?
    Sir G. COURTHOPE: Planting in Scotland by the Forestry Commissioners is proceeding at the rate of approximately 10,000 acres annually.
    Mr. LEONARD: Does not the hon. and gallant Gentleman think it would be desirable to exhaust the lands available to the Commission before purchasing land, especially when it is in use for sheep?
    Sir G. COURTHOPE: That would be quite impracticable.
    Mr. LEONARDasked the hon. and gallant Member for Rye, as representing the Forestry Commissioners, whether, in connection with the purchase of large areas of arable and sheep land at Fintry, Stirlingshire, from the Duke of Montrose by the Forestry Commission, the obligation is left upon the Duke to take over the sheep stock from his tenants at valuation prices or taken over by the Commission?
    Sir G. COURTHOPE: There has not been any purchase of arable and sheep land at Fintry from the Duke of Montrose by the Forestry Commission.
    Mr. LEONARD: Is the hon. and gallant Gentleman aware that there is under the control of this gentleman a considerable amount of land on which game is preserved, and could not some of that land have been purchased, instead of land which is in use for sheep?
    Sir G. COURTHOPE: We have made no purchases of arable or sheep land, and, consequently, have no information such as the hon. Member refers to.

  COAL INDUSTRY.

    GAS DETECTORS (TESTS).
    Mr. TINKERasked the Secretary for Mines the names of the collieries where the automatic gas detector is being tested; when the tests will be made; and when the issue of the report can be expected?
    The SECRETARY for MINES (Mr. Isaac Foot): I assume that the hon. Member is referring to the arrangements which have been made for giving the Ringrose firedamp alarm a thorough

    1101
    trial on a full working scale. These trials are to be conducted at Houghton Main colliery in Yorkshire, Mosley Common colliery in Lancashire, and Waun Llwyd colliery in South Wales. Representative pit committees are being set up at each colliery in consultation with the Divisional Inspectors concerned, and the trials will be begun as soon as these committees have decided how many alarms they want and how the trials will be conducted. Each committee will report independently. Obviously I cannot say how long a period of trial each committee will consider to be necessary, but if any committee wishes the trials to continue for more than six months, I will ask for an interim report at the end of that period.
    Mr. TINKER: In the selection of collieries did the Department consult the Miners Federation of Great Britain or the districts?
    Mr. FOOT: I believe that the Federation was taken into consultation at the time. I do not think that agreement was quite possible, but, of course, in this matter it depends on a willing colliery being put at our disposal.
    Mr. T. WILLIAMS: In accepting the names of these three collieries, did the hon. Gentleman make sure that they were gaseous mines?
    Mr. FOOT: These were the three mines where it was considered that the experiments could be carried out with the best possible success.
    Mr. PIKE: Is it the intention of the Ministry, provided the tests are successful, to make the use of the detectors compulsory?
    Mr. FOOT: It is impossible to state what the result will be.

    REORGANISATION.
    Miss WARDasked the Secretary for Mines whether he has been informed if it is the intention of the Coal Mines Reorganisation Commission, under the powers conferred on it under Section 12 (1) of the Coal Mines Act, 1930, to further the reorganisation of the industry otherwise than by amalgamation?
    Mr. ISAAC FOOT: The primary duty of the Commission under the Act is to promote and assist the amalgamation of collieries, but I understand that they are
    1102
    prepared to interpret the word amalgamation broadly and to consider any scheme of reorganisation which is calculated to produce the results at which they aim.

    EXPERIMENTS ON LIVING ANIMALS.
    Mr. GROVESasked the Secretary of State for the Home Department the total number of experiments performed under licence by vivisectionists in Great Britain during 1930 and 1931 and The number where anaesthetics were compulsorily used?
    The UNDER-SECRETARY of STATE for the HOME OFFICE (Mr. Oliver Stanley): The figures for 1930 are given in the Annual Return of Experiments on Living Animals which was published last year. The return for 1931 is in course of preparation and will, I hope, be published shortly.
    Mr. GROVES: If I cannot get them from that source, will the hon. Gentleman try to let me have them?
    Mr. STANLEY: Perhaps the hon. Member will approach me on the subject.
    Mr. GROVESasked the Home Secretary this number of certificates granted by the Home Office in 1930, 1931, and 1932, respectively, to vivisectors for special experiments in feeding, including the giving of such diets that the animals cannot be sustained in life; what reports his Department receives upon the scientific results of such experiments; and whether he will consider refusing to grant any further permits for such practices?
    Mr. STANLEY: Experiments in feeding are carried on for many different purposes and it would require a long and laborious search to get the information asked for. My right hon. Friend regrets that he would not be justified in undertaking it. Every licence holder is required by a condition of his licence to furnish the Department with a copy of any paper which he may publish containing a description of his experiments. The power of granting certificates does not rest with the Secretary of State. Section 11 of the Act confers it on the scientific authorities there specified.
    Mr. GROVES: May I ask who appoints the body of scientific authorities which is responsible for issuing these certificates?
    Mr. STANLEY: If the hon. Member will read the Act, he will find it all set out there.
    Mr. GROVES: May I ask the hon. Gentleman to what Act he is referring?
    Mr. STANLEY: The appropriate Act.
    Mr. GROVESasked the Home Secretary if he is aware that certificates granted by his Department to authorise vivisection experiments upon animals include operations which entail cutting out organs of the body and keeping the animals alive as long as possible under these conditions; and whether his Department imposes the obligation of the use of an anaesthetic in these cases?
    Mr. STANLEY: The Home Office has no power to grant any certificates; this can only be done by the scientific authorities specified in Section 11 of the Act. If the hon. Member will refer to the report prefixed each year to the Annual Return of Experiments, he will find it explained that in all experiments under Certificate B the operative procedures are done under anaesthetics.

    BETTING CONTROL BOARD.
    Mr. T. WILLIAMSasked the Home Secretary if he can state how much capital has been borrowed by the Betting Control Board during the first six months of 1932 for capital expenditure; the source of such loan or loans and the rate of interest charged; and can he state who is guarantor for these loans?
    Mr. STANLEY: I have no information which would enable me to answer this question.
    Mr. WILLIAMS: Is the hon. Gentleman aware that there is a good deal of dissatisfaction with the form in which the accounts are presented to this House, and will he represent to the Betting Control Board that such information as is sought in this question should be provided when the next balance-sheet is prepared?
    Mr. STANLEY: No, Sir. When the Estimates were debated I stated the reasons why we thought that some of the questions now asked are not such as would be required from any company and therefore we could not require them from the Betting Control Board.
    Mr. WILLIAMS: Is the hon. Gentleman aware that the accounts presented to Parliament are useless and futile unless such particulars are made available?
    Mr. STANLEY: No, Sir; I think that those who are accustomed to read balance-sheets have given to them all the information which one can find in any company's balance-sheet.

  AGRICULTURE.

    IMPORTED CIDER.
    Mr. PERKINSasked the Minister of Agriculture whether he is aware that the imports of cider for May, 1931, and May, 1932, have increased from 24,530 gallons to 110,385 gallons; and whether he will make representations to the Tariff Advisory Committee in respect of these imports?
    Sir J. GILMOUR: While it is true that imports of cider and perry in May, 1932, were much heavier than in May, 1931, total imports for the current year to date are not very greatly in excess of those for the corresponding period of 1931. It is open to the interests immediately concerned to make representations to the Tariff Advisory Committee.

    WAGES.
    Mr. LEWISasked the Minister of Agriculture whether the test inspections undertaken from time to time under the Agricultural Wages Act, 1924, show any diminution in the proportion of cases where wages lower than those laid down by law are being in fact paid?
    Sir J. GILMOUR: The investigations undertaken under the Agricultural Wages (Regulation) Act to test the observance of the minimum rates fixed under the Act show little variation year by year in the proportion of cases where the Act is found to be infringed.
    Mr. LEWIS: Would the right hon. Gentleman reconsider his policy of reducing the number of test inspections and give us more inspections, such as he had last year, so that the agricultural workers might feel that they were adequately protected?
    Sir J. GILMOUR: No, Sir.
    Mr. T. WILLIAMS: Can the right hon. Gentleman say why there were only one-third the number of test inspections?
    Sir J. GILMOUR: The reduction in inspections was due to the need for economy. I am satisfied that very full inspections are carried out.
    Mr. WILLIAMS: As the inspectorate has been reduced by approximately one-quarter and the number of test inspections has been cut down by one-third, does not the right hon. Gentleman think that more test inspections might take place with the present inspectorate, if he had the will?
    Sir J. GILMOUR: No, Sir.

    MEAT PRICES.
    Mr. LOUIS SMITHasked the Minister of Agriculture the average difference between the price paid to the farmer and that paid by the public for mutton and beef during the past six months?
    Sir J. GILMOUR: I regret that I am not in a position to furnish the information asked for by my hon. Friend.
    Mr. SMITH: Having regard to the desperate position of many farmers at the present time could not the right hon. Gentleman supply the information? The difference in the prices is very wide?
    Sir J. GILMOUR: It would be very difficult. There are some figures published by the Ministry of Labour, but they are only for selected foodstuffs, and to produce further figures would be very costly.
    Mr. MACQUISTEN: Is not the difference between the gross profits something like 80 to 100 per cent.?
    Mr. PIKEasked the Minister of Agriculture the average prices of home and foreign produced meat per pound during the past three months?
    Sir J. GILMOUR: As the answer contains a number of figures, I propose, with my hon. Friend's permission, to circulate it in the OFFICIAL REPORT.
    Following is the answer:
    The average wholesale prices (per lb.) of beef, veal, mutton, lamb and pork (mean of 1st and 2nd quality) at Birmingharn, Leeds, London and Manchester, also prices (per cwt.) of bacon (mean of 1st and 2nd quality) at Bristol, Liverpool and London, for the months April to June, 1932, are shown in the following table:

    —

    April.

    May.

    June.

    Beef.

    s. d.

    s. d.

    s. d.

    Scotch, longsides

    0 8⅜

    0 8⅜

    0 8¾

    English, steer and heifer.

    0 8

    0 8⅛

    0 8½

    English, cow and bull

    0 5¾

    0 5⅝

    0 5¾

    Argentine, chilled hindquarters.

    0 6⅜

    0 6¼

    0 6⅛

    Australian, frozen hindquarters.

    0 4⅜

    0 4⅝

    0 4⅜

    Veal.

    English

    0 10½

    0 10⅜

    0 10½

    Mutton.

    English

    0 8

    0 8

    0 7⅞

    Argentine, frozen

    0 4½

    0 4⅛

    0 3½

    New Zealand, frozen

    0 4½

    0 4⅛

    0 4

    Lamb.

    English

    1 2⅛

    1 0¾

    0 10⅜

    Argentine

    0 5⅛

    0 5¾

    0 5⅜

    Australian

    0 6

    0 6

    0 5⅜

    New Zealand

    0 7⅛

    0 6⅞

    0 6⅜

    Pork.

    English

    0 7½

    0 7¼

    0 6⅛

    Irish*

    0 7½

    0 7

    0 5¾

    New Zealand, frozen

    0 5¾

    0 5¾

    0 5⅜

    Bacon.

    English*, green sides

    75 6

    86 6

    81 6

    Irish, green sides

    77 6

    86 0

    79 0

    Danish, green sides

    53 0

    66 6

    58 6

    Dutch, green sides

    46 0

    64 0

    53 6

    * Prices at London only.

    EDIBLE ANIMALS.
    Sir PAUL LATHAMasked the Minister of Agriculture if he has any figures to show whether the edible animal population has increased or decreased during the past six months?
    Sir J. GILMOUR: Comparison with last year's figures of animal population will be possible when the tabulation of this year's returns is completed early in August, but the returns collected by the Ministry are annual and do not enable the Ministry to compare figures of animal population for periods of six months.

    LIVESTOCK PRODUCERS.
    Major BRAITHWAITEasked the Minister of Agriculture if it is the intention of the Government to take powers to help the livestock producers of this country after the Imperial Conference and before the House reassembles?
    Sir J. GILMOUR: My hon. and gallant Friend's suggestion is impracticable.

    FEEDING STUFFS (IMPORT DUTY).
    Mr. LAMBERTasked the Chancellor of the Exchequer if he will state the amount of duty collected on imported foreign cattle-feeding commodities to the end of June or the latest available date?
    Major ELLIOT: I regret that the information required is not available, as cattle-feeding commodities are not distinguished in the official statistics from other animal feeding stuffs.

  UNEMPLOYMENT.

    AGRICULTURAL WORKERS.
    Major BRAITHWAITEasked the Minister of Agriculture if his attention has been drawn to the increase in the unemployed in the country districts; and if he can give the reasons for such increase?
    Sir J. GILMOUR: I have no means of obtaining precise figures in regard to unemployment in country districts, but so far as my information goes the numbers of agricultural workers unemployed have considerably decreased during the last few weeks consequent upon seasonal operations.

    HOSIERY TRADE (GERMANS).
    Mr. CHARLESBROWN asked the Minister of Labour if he will state the total numbers of Germans who were granted permits to enter this country for erecting hosiery machinery and for instructional purposes during the years 1930 and 1931, and for the six months ending 30th June, 1932?
    The MINISTER of LABOUR (Sir Henry Betterton): It is estimated that the number of German machinery erectors and technical workers for the hosiery trade admitted under permit did not exceed 20 during each of the two years 1930 and 1931. The corresponding figure for the first six months of 1932 is approximately 60.
    Mr. BROWN: Owing to the unsatisfactory nature of the reply, I beg to give notice that if I have an opportunity I shall raise this matter on the Motion for the Adjournment to-morrow.

    PRESIDENT OF THE BOARD OF EDUCATION.
    Mr. MORGAN JONESasked the Prime Minister when he proposes to make an announcement concerning the vacant post of President of the Board of Education?
    The PRIME MINISTER (Mr. Ramsay MacDonald): An appointment will be made shortly.
    Mr. JONES: May I ask the right hon. Gentleman when he anticipates that an announcement will be made? Will it be before the House rises to-morrow?
    The PRIME MINISTER: I am afraid not.
    Mr. JONES: Does not the right hon. Gentleman think that it is in the public interest, and in the interest of the local authorities particularly, that this post should be filled as speedily as possible?
    The PRIME MINISTER: I quite agree, but I need not explain to the hon. Gentleman why the delay has taken place.

    INCOME TAX.
    Sir PARK GOFFasked the Chancellor of the Exchequer whether he will consider introducing legislation with a view to clearing up the doubt as to whether an Income Tax payer may charge against the profit arising from the letting of a furnished house the cost of the alternative accommodation that he is compelled to secure in those cases where the transactions are due to the exigencies of the employment of the persons affected?
    Major ELLIOT: The question raised by my hon. Friend has already been the subject of a decision by the Court of Session. My right hon. Friend is not in favour of the introduction of legislation to modify the effect of that decision which seems to him entirely in accordance with equity.
    Sir P. GOFF: Is the hon. and gallant Gentleman aware of the hardship that falls on officers, particularly naval officers?
    Sir WILLIAM DAVISONasked the Chancellor of the Exchequer, having regard to the terms of reference issued to the Committee to inquire into the present position of co-operative societies in relation to Income Tax, whether the con

    1109
    sideration of any scheme of taxation other than that of income taxation will be within the scope of the inquiry; and, if not, will the terms be so extended to permit such consideration?
    Major ELLIOT: The terms of reference of the Committee were announced in answer to a question by my hon. Friend the Member for Bedford, Mid. (Mr. Lennox-Boyd) on the 12th May last. The object of the Government in setting up the Committee was to obtain an impartial opinion on the question whether the present position of co-operative societies under the Income Tax Acts ought to be modified and, if so, what alteration of the law would be required. It was not the intention of the Government that the Committee should inquire into other possible forms of taxation upon the societies.
    Sir W. DAVISON: Is the hon. and gallant Gentleman aware that, with similar terms of reference, the Royal Commission of 1920 stated that they were precluded from considering what many people think is desirable, namely, that in lieu of paying Income Tax some special tax should be imposed on co-operative societies; and is it not desirable that this present Commission should be given a free hand in this matter?

    LOCAL AUTHORITIES (EXPENDITURE).
    Mr. LEWISasked the Chancellor of the Exchequer if he will make arrangements to present to this House a summary of the estimated expenditure of all the local authorities for the coming year at the same time as he introduces the next Budget?
    Major ELLIOT: My right hon. Friend fears that the precise suggestion made by my hon. Friend is impracticable under the present arrangements for local budgeting. He will, however, request my right hon. Friends the Minister of Health and the Secretary of State for Scotland to bring the matter before the Committees on Local Expenditure which are in course of establishment.
    Mr. LEWIS: As to the practicability, does the right hon. and gallant Gentleman realise that these figures of the local authorities are all got out in February or early in March each year?
    Major ELLIOT: Yes, but I think their consideration in the first place by the Committee on Local Expenditure would be more appropriate.
    Mr. T. WILLIAMS: Is the right hon. and gallant Gentleman aware that, though they are got out in February or March, they are seldom available before early April?
    Mr. DICKIEasked the Minister of Health whether his Department intends to accede to the request of the Houghton-le-Spring Rural Council to sanction the expenditure incurred in sending a delegate to a conference after he had officially refused to give the council his permission to do so?
    The PARLIAMENTARY SECRETARY to the MINISTRY of HEALTH (Mr. Ernest Brown): No, Sir.
    Mr. DICKIE: Will the Parliamentary Secretary take steps to see that that matter is brought to the notice of all local authorities with a view to checking these joy rides at the public expense?
    Mr. BROWN: If councils send delegates in defiance of sanction, those delegates must expect to pay for their own joy rides.

    GOVERNMENT CONTRACTS (DISPUTES).
    Mr. MANDERasked the Financial Secretary to the Treasury if he will consider the advisability of stipulating that the purchasing Departments in making contracts should provide that disputes of a technical nature should be submitted to the appropriate State-aided research association of the industry concerned?
    Major ELLIOT: I regret that I am unable to adopt the hon. Member's suggestion.
    Mr. MANDER: Will the right hon. Gentleman be good enough to bring this point to the attention of the Departments concerned for their consideration?
    Major ELLIOT: I did that before deciding that it was impossible to adopt the hon. Member's suggestion.
    Mr. MANDER: This is a new point, and will the right hon. Gentleman be good enough to put this fresh point to the Departments?
    Major ELLIOT: Each fresh point put by my hon. Friend I will bring to the notice of the Department concerned.

    WAR LOAN CONVERSION.
    Miss HORSBRUGHasked the Financial Secretary to the Treasury whether, in those advertisements appearing in the Scottish Press encouraging the public to convert War Loan stock, he will consider including among the extracts from Press comments some from Scottish newspapers, and not confining them, as at present, to notices from 12 London newspapers?
    Major ELLIOT: My hon. Friend will see that her suggestion has already been put into force in the Press advertisements appearing to-day.
    Mr. DENVILLEasked the Financial Secretary to the Treasury if he can state the amount of 5 per cent. War Loan owned and converted by the joint stock banks of the country; whether the banks acted for themselves in the conversion; and do they draw 5s. per cent. brokerage in addition to the £1 bonus?
    Major ELLIOT: My right hon. Friend is glad to say that the response made by the joint stock banks of this country to the Government's offer has been highly gratifying; and the great majority have already indicated their intention to convert the whole of their holdings of the loan. He cannot, however, undertake to publish information respecting the amount of any individual holding. The answer to the last two parts of the question is in the affirmative.
    Sir W. DAVISON: Can the right hon. Gentleman say whether, in the case of individuals making application themselves, the Bank of England still charge a commission of 5 per cent. against the revenue?
    Mr. DENVILLE: Could the banks not show a little of the patriotism that the country is showing at this time?
    Sir W. DAVISON: May we be told whether the Bank of England charges 5 per cent. against a private application which is filled in, and sent direct to the Bank of England?
    Major ELLIOT: I understand that, in the case of an application sent direct,
    1112
    the charge is not made, but I desire to have any of these technical questions put on the Paper.

    MAGISTRACY (SKEGBY, NOTTINGHAM).
    Mr. C. BROWNasked the Attorney-General if he is aware of the inconvenience caused to the inhabitants of the parish of Skegby, Notts, since the death of the last resident magistrate three years ago; and if he will recommend the making of a new appointment?
    Captain AUSTIN HUDSON (Lord of the Treasury): I have been asked to reply. The question of the need for the appointment of a resident magistrate in the parish of Skegby will be referred by my Noble Friend, the Lord Chancellor, to the Advisory Committee, for their consideration.
    Mr. BROWN: Is the hon. and gallant Member aware that I put this question two years ago, and still nothing has been done? Will he stimulate the Notts Advisory Committee to act?
    Captain HUDSON: I think the hon. Member will see that action is being taken.

    SUNDAY PERFORMANCES.
    Captain ERSKINE-BOLSTasked the Lord President of the Council if he can now make any detailed statement as to the allocation, under the auspices of the Privy Council, of the sums up to 5 per cent. of the profits from the opening of Sunday cinemas to be devoted to some organisation to help in the development of educational and cultural films?
    The LORD PRESIDENT of the COUNCIL (Mr. Baldwin): It is too early as yet to make any statement as to the allocation of the sums referred to in the hon. Member's question.

  HOUSING.

    EXCHEQUER CONTRIBUTION.
    Mr. L, SMITHasked the Minister of Health whether, in view of the fact that under present contractual arrangements the average Exchequer contribution up to 1980 on houses built under the Housing Act of 1919 is 13s. a week, he has

    1113
    examined all possible methods of reducing this charge, which is out of proportion to present day conditions?
    Mr. E. BROWN: The possibility of reducing the charge to the Exchequer under the Housing Act of 1919 is under constant consideration.
    Sir JOSEPH NALL: Is it not the fact that in certain cases these schemes might very well be put on the basis of an economic rent?
    Mr. BROWN: All these points are constantly in the mind of the Minister. When I point out to my hon. and gallant Friend that the estimated charge this year in connection with such matters is £6,827,000, he will understand why.
    Sir J. NALL: Is it not a fact that in certain cases people, who can well afford to pay an economic rent, are being subsidised at the public expense?

    BUILDING SOCIETIES (INTEREST).
    Mr. POTTERasked the Minister of Health whether, in view of the hardship caused to borrowing members of building societies by the present high rates of interest payable, he will introduce legislation fixing a maximum rate of interest payable by borrowers from building societies?
    Mr. E. BROWN: I would refer my hon. Friend to the reply given by the Lord President of the Council to a previous question, of which I am sending him a copy.

    MERTHYR TYDVIL (FINANCIAL ADMINISTRATION).
    Lieut.-Commander BOWERasked the Minister of Health if he has completed his investigations into the financial administration of the county borough of Merthyr Tydvil; whether he will state what steps he proposes to take in the matter; and what reply he has sent to the ratepayers who sent him a petition?
    Mr. E. BROWN: My right hon. Friend hopes to make an answer to the petition referred to by my hon. and gallant Friend in the near future and will furnish him with a copy of it when sent.

    ROYAL SEAMEN'S PENSION FUND.
    Sir JAMES DUNCAN MILLARasked the Minister of Health whether he
    1114
    can state the proposals which have been made by the governing body of the Royal Seamen's Pension Fund for the amendment of the present scheme of administration of the fund?
    Mr. E. BROWN: The proposals for the amendment of the scheme for the administration of the Royal Seamen's Pension Fund are the subject of negotiations which are still proceeding between the governing body of the fund and the several Government Departments concerned. In these circumstances, my right hon. Friend does not think it desirable at this stage to add anything to the information given to my hon. and learned Friend on this subject on the 5th instant.
    Sir J. DUNCAN MILLAR: The Members representing seaboard divisions have been invited to make a suggestion with regard to an alteration in the present scheme, and how can Members do so unless they are put in possession of the main features of the scheme? Will the Parliamentary Secretary undertake to discuss the matter with Members representing such constituencies
    Mr. BROWN: I should be very glad to discuss representations made by my hon. and learned Friend and other hon. Members, but the points which he has raised have all been put before the authorities concerned.
    Sir J. DUNCAN MILLARasked the Minister of Health (1) if he can state the number of applications for pensions from fishermen which are at present before the governing body of the Royal Seamen's Pension Fund; and whether steps will be taken to deal with the applications of qualified applicants under the existing scheme;
    (2) if he can state, separately, the number of pensions awarded to seamen and fishermen, respectively, from the Royal Seamen's Pension Fund at each period of award 'as from 1st January, 1928, down to and including the last period of award in 1932; the number of applications for pensions from seamen and fishermen, respectively, before the governing body at each such period; and the total number of pensions awarded, respectively, to seamen and fishermen since the institution of the fund?
    Mr. E. BROWN: My right hon. Friend has asked the governing body of the

    1115
    Royal Seamen's Pension Fund to furnish the desired particulars, but their reply is not yet to hand. He will communicate with my hon. and learned Friend as soon as the reply is received.
    Sir DUNCAN MILLAR: Can the Parliamentary Secretary reply to the second part of Question 73 as to whether steps will be taken to deal with the applications of qualified applicants under the existing scheme, seeing that during the present year 431 pensions were given to seamen and only 28 to fishermen?
    Mr. BROWN: My hon. and learned Friend knows that there are many applications, and that causes delay in answering his questions.
    Sir J. DUNCAN MILLAR: Will the hon. Member give an undertaking that pensions for fishermen will not be postponed or delayed in cases where the applicants are qualified?
    Mr. BROWN: I would point out that the governing body has submitted proposals for amending the scheme for the administration of benefits whereby they will he settled on a somewhat lower scale in respect of years which have not been recorded, or cannot be clearly proved, rather than on the length of actual sea service.

    EAST AND WEST AFRICA (MOTOR TRANSPORT).
    Mr. MACQUISTENasked the Secretary of State for the Colonies whether he will inquire into the action of the Government of Tanganyika Territory in imposing a levy at the rate of £500 per annum on each motor lorry plying in the territory although these vehicles do not use the roads but travel across the veldt; and what action does he propose to take to terminate this charge?
    The SECRETARY of STATE for the COLONIES (Sir Philip Cunliffe-Lister): The rate of tax to which my hon. and learned Friend refers applies only to heavy lorries plying between Dar-es-Salaam and Tabora, Shinyanga or Mwanza, or between Tanga and Arusha or Mwanza. These routes are impracticable except by using Government roads and bridges. The recent legislation providing for motor licences was passed in order to prevent uneconomic competition
    1116
    between road and rail. In the cases mentioned, higher rates were recommended by a Select Committee of the Legislative Council, but, after discussion with local bodies, the present scale was adopted. The Governor has been instructed to report on the system after it has been in operation for a year. Pending this, I do not propose to take any action.
    Mr. MACQUISTEN: Does not my right hon. Friend see the danger of the railways belonging to the Government, and that this legislation is simply racketeering on behalf of the railways against the best motor transport which the people of the Colonies desire?
    Sir P. CUNLIFFE-LISTER: In some Colonies the railways are owned by the Government, and in others they are not. The essential interest of the Colonies is that the railways should be maintained, and that we should avoid developing in the Colonies the hopeless state that we have here.
    Mr. MACQUISTENasked the Secretary of State for the Colonies whether he will inquire into the action of the Government of West Africa in destroying the roads leading into the various towns in the territory so as to prevent motor-transport lorries or other like vehicles having access or plying thereto; and what action does he propose to take to remedy this?
    Sir P. CUNLIFFE-LISTER: I have no knowledge of any such action; but, if my hon. and learned Friend will say in which of the four West African Colonies this policy is alleged to have been adopted, I will make inquiries.
    Mr. MACQUISTEN: I will find out from the officials. This again is a case of racketeering.

    GOLD COAST (GOLD PRODUCTION).
    Mr. PICKERINGasked the Secretary of State for the Colonies whether in view of the possibility of increasing gold production at a profitable rate revealed by the Gold Coast geological survey, he is prepared to help the industry by affording financial assistance to enable new machinery to be installed, means of transport improved, and the application of hydro-electric power made available wherever necessary?
    Sir P. CUNLIFFE-LISTER: No, Sir. I regret that the present financial position of the colony makes it impossible to consider the question of affording assistance for such purposes.

    BERMUDA (CURRENCY).
    Mr. PICKERINGasked the Secretary of State for the Colonies whether he is aware that the widespread use of American currency in Bermuda has contributed to the raising of the price level to a height detrimental alike to British interests and British influence; and what he intends to do to give effect to the recommendation of the Empire Parliamentary Association Committee regarding this and other instances of the Americanisation of Bermuda?
    Sir P. CUNLIFFE-LISTER: While I have read the Committee's Report with great interest, I have not yet had an opportunity of considering what, if any, action on my part is called for in regard to the wide range of subjects which it covers.

    EX-ENEMY PROPERTY.
    Captain SPENCER (for Mr. ATKINSON)asked the President of the Board of Trade whether he has considered the advisability of an entire cessation of claims by the custodian of enemy property to the private property of late enemy nationals; and whether he is prepared to take steps to effect such a cessation?
    Mr. HORE-BELISHA: The policy of the Government in regard to ex-enemy property is embodied in various agreements concluded with the ex-enemy countries in 1929 and 1930, which provide, subject to certain defined exceptions, for a general release of property not already liquid or liquidated or finally disposed of. These settlements must be regarded as final, and I am unable to contemplate any modification of them. I would add that so far as Germany is concerned, the Agreement with Germany signed at Lausanne on the 9th July in no way affects the finality of the settlement of this matter agreed with the German Government in December, 1929.

    ESTATE DUTY (INTEREST).
    Major MILNERasked the Chancellor of the Exchequer whether, in view
    1118
    of the reduced interest offered on Government stock, he is proposing to take steps for a reduction in the rate of interest charged on Estate Duty?
    Major ELLIOT: I have noted the hon. and gallant Member's suggestion, and will bear it in mind in connection with the Budget of next year.

    HORSE BREEDING, IRELAND (GRANT).
    Captain HOPE (for the Earl of DALKEITH)asked the Financial Secretary to the Treasury whether, in view of the reduction in the grants for horse breeding, he will reconsider the advisability of the annual grant of £1,563 for the King's plates in Ireland?
    Major ELLIOT: As my predecessors have explained, it was decided, in view of the special nature and long standing of this payment, to continue it after the establishment of separate Governments in Ireland.
    Captain HOPE: In view of the altered conditions in the Free State, will the matter be reconsidered?

    LEAGUE OF NATIONS (BRITISH DELEGATION).
    Mr. DAVID GRENFELLasked the Secretary of State for Foreign Affairs whether he can state the composition of the British delegation to the forthcoming Assembly of the League of Nations?
    The UNDER-SECRETARY of STATE for FOREIGN AFFAIRS (Mr. Eden): The Cabinet Ministers who have been appointed to attend the Assembly are the Secretary of State for Foreign Affairs and the Minister of Health; in addition the following will form part of the delegation: Viscount Cecil of Chelwood, the Financial Secretary to the Treasury, the Under-Secretary of State for Foreign Affairs and Mrs. Dugdale.
    Mr. GRENFELLasked the Secretary of State For Foreign Affairs who will represent His Majesty's Government at the next meeting of the League of Nations Council?
    Mr. EDEN: As at present arranged, my right hon. Friend the Foreign Secretary.

    IMPERIAL ECONOMIC CONFERENCE (AGENDA).
    Mr. LANSBURY (by Private Notice)asked the Secretary of State for Dominion Affairs whether he is now in a position to make a statement as to the Agenda of the Ottawa Conference?
    Mr. THOMAS: Yes, Sir. As a result of discussions which have been proceeding for several months past between His Majesty's Governments it has been agreed that economic questions of general importance to various parts of the Empire might be conveniently discussed under the following general headings which will constitute the provisional Agenda for the Conference:
    (A)General trade questions.

    1. Examination of aspects of questions of trade and tariffs policy and administration affecting Empire trade, including, inter alia, the following subjects:

    (a) Recognition of principle of reciprocal tariff preferences within the Commonwealth.

    (b) General application of existing and future tariff preferences within the Commonwealth.

    (c) Extension to other parts of the Commonwealth of tariff advantages accorded to foreign countries.

    (d) Determination of percentage of "Empire content" necessary to secure preferential tariff treatment;

    (e) Export bounties and anti-dumping duties within the Commonwealth.

    2. Commercial treaty policy with respect to foreign countries, including inter alia:

    (a) Relations of inter-Imperial preferences to concessions to foreign countries.

    (b) Interpretation of Most-Favoured-Nation Clause, particularly with reference to development of regional preferences and of systems of import quotas.

    3. Consideration of appropriate basis and means of inter-Imperial co-operation, including review of existing agencies, examination of report of Imperial Economic Committee on Industrial Cooperation, and discussion of communications and of research and standardisation.

    (B)Monetary and financial questions.
    Consideration of existing inter-relationships of various currencies and monetary standards of the Empire, and of the desirability and feasibility of taking steps to restore and stabilise the general price level and to stabilise exchanges.
    (C)Negotiation of Trade Agreements.
    Mr. SMITHERS: Have I understood correctly that an attempt will be made to establish an Empire currency?
    Mr. THOMAS: No, I did not say anything about that. I said there would be a general discussion on currency questions.
    Mr. LANSBURY: Will there be any discussion as to the relationships between the British Commonwealth of Nations and the rest of the world? [HON. MEMBERS: "Russia!"] I am thinking of everyone.
    Mr. THOMAS: Obviously, it will be the duty of the delegation to keep clearly in mind that, while we must do all we can to develop and encourage Empire trade, we must also have regard to the rest of the world.

    NEW MEMBER SWORN.
    Captain Sidney Herbert, for the Borough of Westminster (Abbey Division).

    SITTINGS OF THE HOUSE.
    Resolved,
    "That this House do meet To-morrow, at Eleven of the clock; that no Questions shall be taken after Twelve of the dock; and that Mr. Speaker shall not adjourn the House until he shall have reported the Royal Assent to the Acts which have been agreed upon by both Houses, but that, subject to this condition, Mr. Speaker at Five of the clock shall adjourn the House without Question put."—[The Prime Minister.]

BUSINESS OF THE HOUSE.
Ordered,
"That the Proceedings on Government Business be exempted, at this day's Sitting, from the provisions of the Standing Order (Sittings of the House)."

MESSAGE FROM THE LORDS.
That they have agreed to,—
Kilmarnock Gas Provisional Order (No. 2) Bill,
Public Works Facilities Scheme (Shrewsbury Corporation) Confirmation Bill,
Marriages Provisional Order (No. 2) Bill,
Newcastle-upon-Tyne Fire Brigade Provisional Order Bill,
Dundee Corporation Order Confirmation Bill, without Amendment.
Amendments to—
Ministry of Health Provisional Orders Confirmation (Elham Valley Water and Herts and Essex Water) Bill [Lords],
Ministry of Health Provisional Order Confirmation (Hailsham Water) Bill [Lords],
Ministry of Health Provisional Order Ewes and lambs Confirmation (Henley-on-Thames Water) Bill [Lords], without Amendment.

ORDERS OF THE DAY.

  CONSOLIDATED FUND (APPROPRIATION) BILL.
  Considered in Committee, and reported, without Amendment.
  Motion made, and Question proposed, "That the Bill be now read the Third time."

  LAUSANNE AND GENEVA CONFERENCES.
  The PRIME MINISTER (Mr. Ramsay MacDonald): Perhaps I ought to begin by offering an apology to my right hon. Friend the Member for Epping (Mr. Churchill) for not having been present when he started the Debate yesterday. He had given me no notice of his intention or I can assure him I should have been in my place. I should like, in as short a time as possible—and I hope I shall not make too great a draft upon the time and patience of the House—to report the proceedings, at any rate in their main features, of the Conference at Lausanne. Let me begin right away with the claim that I make for the importance of the Conference. I make this claim, that the Conference and its results can lead to a settlement of this question of Reparations, which lies somewhere about the root of every economic trouble that has overtaken the world since the War, which has falsified national Budgets, has placed in the centre of Europe a country whose financial position is a menace to the whole world, and has done much to throw every national economy out of gear. While Reparations last there can be no complete industrial recovery. We went to Lausanne to deal with that question, and I make no apology to the House that we put it first and foremost in our programme. The rest are now under way. Why? Because we have offered a solution of the Reparations problem. It was big enough of itself, as every one of my very admirable colleagues who sat with me through those days and nights knows and, if hon. Members doubt that, I ask them to exercise their imagination just a.Little and make up their minds what would have happened if we had come back from Lausanne without an agreement. Ever since Reparations were imposed upon Germany there have been plans arid schemes and inquiries and con-
  1134
  ferences one following the other. I think I myself have taken part in two major and two minor ones, and the last before Lausanne was just as bad as the first. There were still those economic follies of Reparations staring us in the face. We could reduce them and we could manipulate them, but we could not clear them out. As the result of Lausanne I think we have heard the last of them.
  When the world began to move in the darkening shadows of the financial and economic eclipse, in which we are, unfortunately, at the moment, German credit or lack of credit occupied a greater and greater proportion of the menace to the general stability of the world. It was not Germany only. I have read a good deal in some of the newspapers of this country that "this is Germany," "this is Europe." What antediluvian journalists and journalistic proprietors we still have in our midst. Germany— something apart—some sort of roving island isolated in the universe; German credit, German trade, German policy, as though they were not organically united with our own. Until the position of Germany as a factor, as an element in world trade, as a factor in the unfortunate position, not of Germany itself nor of Continental Europe, but German condition as a factor in British condition, is understood and settled, there is no recovery for us. In the same way, there is no recovery for Germany itself. There is no one, Chancellor of the Exchequer, President of the Board of Trade, or Prime Minister, who could sit in these seats through these years without turning an eye ever increasing in its anxiety to the signs and portents of Germany. The last Government phase was the Seven Powers Conference which sat in London and over which I presided and from which emerged the Basle Committee Report. The Basle Committee reported on 23rd December, 1931, and I hope that I shall not weary the House if I remind it of the terms of the conclusions of the Basle Committee.
  "When Governments come to examine "—
  and these were not politicians—
  "the whole group of questions allied to the subject of the present report"—
  that is the financial state of Germany, the credit position of Germany—
  "they will have to take account of many matters relevant to these complex problems which can only be solved in conformity with

  1135
  economic realities. In this connection, certain considerations seem to us of great importance. The first is that transfers from one country to another on a scale so large as to upset the balance of payments, can only accentuate the present chaos. It should also be borne in mind that the release of a debtor country from a burden of payments which it is unable to bear may merely have the effect of transferring that burden to a creditor country which in its character as a debtor, it, in its turn, may be unable to bear.
  Again, the adjustment of all inter-Governmental debts (Reparations and other War Debts) to the existing troubled situation of the world—and this adjustment should take place without delay if new disasters are to be avoided—is the only lasting step capable of re-establishing the confidence which is the very condition of economic stability and real peace.
  Finally, although the German Government is energetically defending the stability of its currency, steps are necessary to secure that these measures shall have a permanent effect."
  That is the report. That report was made on the 23rd December, 1931. The issue of the call to the Lausanne Conference was made on 13th February, 1932, and it met on the 1st June, 1932. Someone said in the innocence of his heart yesterday that we ought to have gone on awaiting election after election. I have waited for elections until my patience is ended. The gap between these two dates is no credit to anybody. Why is it there? Because we sat supinely in our seats and elsewhere? Not at all! There was an election. Every time that we got to the point of treatment some election came along. There were two German elections. We could do nothing. There was a French election, and not only an election, but there was a month when there was no Government in office and we could do nothing. And now one of the great contributions which the right hon. Gentleman made to the problem which we have had to solve, or have tried to solve, was, "You may be misunderstood in America. There is an election on and we ought to wait until March next year" before we come to any decision to alter the state of things which has been described so pathetically and eloquently by the Basle Committee; to go on and on, month after month without any certainty, any security or any hope or promise of help. Not at all! I never knew before that there were so many elections in the world as l have known since my colleagues and myself sat down to see how we were to
  1136
  get the nations together to face and to solve this problem and remove this menace. It seemed that an ill fate destined that every country in the world was going to have an election between the issue of the Basle report and the meeting of the Lausanne Conference, and then we had to leave out the United States.
  We certainly did not enter the negotiations with a light heart. We knew that there were difficulties. We knew, moreover, that there were questions not merely of substance. There were questions which are much more troublesome than questions of substance; there were questions of mental states. There were memories; there were mental attitudes; there were expectations, and we had to face them all. May I make clear an initial difficulty? Germany paid Reparations and Reparations only. France, ourselves, and others paid War Debts and also received War Debts—not the same transaction as Germany had. America received debts. Each of the three groups quite properly refused to treat its contractual obligations so as to mix itself up with the position of any of the others. Mr. Chancellor von papen stoutly declined throughout to admit to me that War Debts were any affair of his. He did not care about War Debts. He had nothing to do with them. He had nothing to do with them; he would 4.0 p.m. not take them into account. If I said, "Now you really must give a sixpence," he said, "No; I do not know what the sixpence is wanted for. I have no interest in it, and, on principle, I refuse absolutely to recognise that Reparations and War Debts should be mixed up together." And Washington has told Europe that it could not consider War Debts from the point of view of those of its debtors who were recipients of Reparations.
  How could the three parties be brought together? That was the first problem with which we had to deal. Fortunately, the gist of American speeches and other expressions of American public opinion amounted to this: Let Europe decide the settlement which it believes practicable for itself, taking all the circumstances into account. Let it publish to the world what its views are, and we shall consider reasonably what is the part which America in equity can play. Of course, we might have gone to America first, but

  1137
  who was to have gone to America? The centre was Germany. The centre was the European situation. No doubt Great Britain had an interest of its own. No doubt Great Britain had some business it could do with America itself. But we were out for Europe, not as a combination against America. It is very difficult even to form sentences upon this subject which will not be misunderstood on the other side of the Atlantic. No American will have any sort of misunderstanding about this: that the mere putting of Great Britain upon its financial feet is not enough to put Great Britain upon its industrial feet. Our payments may be reduced; they may be excused; they may be abolished. But that is not all we want.
  The right hon. Gentleman said yesterday, no doubt quite truly—I leave it on his authority; he knew, as he was in office a large part of the time—that we may have paid to America hardly. But supposing that had been rectified that would not have solved the problems we are now facing—the problem of trade, the problem of markets and the problem of International exchange; and if we are going to deal with this question of Reparations in such a way as a surgeon deals with a wound, or some trouble or other, when he makes a clean cut of the whole thing and takes it out, leaving his patient to get thoroughly well, this was not the time to nibble, to cut here and to cut there, and scrape here and scrape there. The hour for that has gone past, and if any Government is going to lead Europe in recovery, it must cut deep at the root of the disease. That is what we did at Lausanne, before we went to America. But on that point, quite obviously, before any European nation went to America, whether it was France, Italy or ourselves, before any of them were in a position to make any representations, even individual ones, they had to examine their own household. That household had never been examined. President Hoover granted a moratorium to all of us, and, after some negotiations, it was decided that the sum withheld, together with interest and sinking fund, should be added to the annual payments due by Germany under the Young Plan and by its debtors to America. Trade has declined, national income has diminished, the moratorium was running to
  1138
  an end. The Basle Committee exposed by words and figures a state of things which was leading not only to the financial but the social collapse of Europe. Private as well as public credit was involved in the German situation. We had to take the world as we found it. A good deal has been written and talked about a "Gentlemen's Agreement." The right hon. Gentleman the Member for Epping went the length of saying that he had never heard of such a thing before.
  Mr. CHURCHILL: My right hon. Friend has read abridged extracts from my speech. I said, speaking of semisecret diplomacy, that that was a new term of art.
  The PRIME MINISTER: I am not talking about that part of the right hon. Gentleman's speech which I read last night before I went to bed. He said that, but he also said that this was a new thing.
  Mr. CHURCHILL: I said until yesterday, when I read the "Times," that I had no idea of this Gentlemen's Agreement.
  The PRIME MINISTER: It is my right hon. Friend's innocence which always surprises me. He goes through life either as a rampageous individual who knows everything, roaring like the bull of Bashan or cooing like a sucking dove, when that is the proper part to take. But whether he is roaring or cooing, it is his innocence which always strikes me. Would he be surprised if I told him that on Friday morning at Lausanne, from the chair of the Conference shortly after the final plenary opened, in the presence of all the Press, I announced that. I did not call it a "Gentlemen's Agreement," because it had no label; but, in reply to a question put to me by the German Chancellor, who said, "If this plan should fail, will the Chairman guarantee that a conference will follow—a conference of the Powers, especially of the six calling Powers?" I said, "Certainly that will happen." But for that, what would the position have been? We should have been back to the Young Plan. All the provisional machinery that has been created would have fallen to bits. The foundation would have gone. The Conference was not going on. The continuing of the moratorium depends on the continuing of the Conference, and as soon as the Conference fails, then that

  1139
  fell away, and with that falling away we should be back, not by our will, but by the ordinary operations of nature's law, to the place where we were a minute before I read that announcement of the continuing moratorium to those assembled at the opening of the Plenary Conference.
  In order to prevent that coming about, we super-imposed another agreement, that if this thing we had been building up by compromise, by elaboration, by patient talking over things and understanding things, could not be worked except, as we always said, in a world framework—if that would not work, then, instead of allowing Germany to fall back on the suspended Young Plan, we said that, in the meantime, we shall take up the matter again, and see whether some other method is not available. If hon. Members care to make verbal points, I do not mind. There is a risk that it will fail. I know there is a risk⁁we all know it. But those of us who have been through it, and those of us who have exchanged views with people whose views are worth exchanging are convinced that it will not fall through. I may be wrong. I can give no guarantee, but I can assure you of this, that if there is any chance of pulling it out, His Majesty's Government will be there doing the pulling. We shall do everything we can to make it a success.
  Very well, this matter about the Gentlemen's Agreement of which my right hon. Friend spoke, really I cannot exactly follow the criticisms of my right hon. Friend. It was announced in public. The substance of it was announced in public on Friday. I think I said "morning;" I am sorry. The final plenary started at nine o'clock in the evening, adjourned till 10, and shortly afterwards it was announced in the conference. What would have been the position of ourselves if we had not had the agreement. I was not quite sure what my right hon. Friend meant by certain remarks he made yesterday. Perhaps I shall draw him now. If he had been in my position, or that of the Chancellor of the Exchequer when the Italian representatives and the French representatives came and said to us, "Well, you will get your agreement on condition that here and now you will excuse us all our debts," what would he have answered? I venture to say
  1140
  that if he had been Chancellor of the Exchequer—I am not quite sure what he would have done as a Member below the Gangway, but if he had been Chancellor of the Exchequer, he would have answered precisely what the Chancellor of the Exchequer and myself answered, "You have got to wait and see. You know perfectly well, from the relations you have had with us now, that everything we can do of a sympathetic and friendly character will be done. You know perfectly well that in the future, as in the past, the British Government is not out for making any profits out of anything it receives in the shape of Reparations or War Debts—not a brass farthing of profit. That rule will hold." The Chancellor of the Exchequer, being a very hard-headed and cautious man, and I being a very ordinary Scotsman, we were not going to give away any money unless we knew what conditions we were under. I am sorry that my right hon. Friend has not some Scottish blood in his veins.
  Mr. CHURCHILL: Does my right hon. Friend mean that in the late Conservative Government we ought to have endeavoured to exact more from Europe than what we were required to pay to America?
  The PRIME MINISTER: Not at all, because a Scotsman is always honest and honourable. I am perfectly conscious and I do not care who knows it, either at home or abroad, that in dealing with this matter of America we are touching very tender spots, and I want to say quite clearly that no one has the right to blame America for taking up the attitude she has done. If we had all got together our work would have been greatly simplified, but America felt that she had to be consistent to her position throughout, and I for one, although America has never uttered a pledge, so far as I know, nor in any way indicated how she is prepared to meet us, believe that there is no nation in the world more ready to lend a hand in straightening out the entanglements and troubles with which we are surrounded than is America and her people. In view of the grievous results likely to follow upon any representations made either here or in America that at Lausanne Europe has combined to present something in the nature of an ultimatum to the United States, I want to make

  1141
  it absolutely clear that all that Lausanne did was to straighten out the internal difficulties of Europe, which in all conscience were many and difficult, and agree to proposals which the nations there represented believe are both essential and possible.
  When we settled down to the very complicated business in front of us it was perfectly evident that if we were going to settle anything in six months somebody would have to devise certain tests up to which every scheme and proposal would have to come. I tried my hand at it. There were four tests laid down, and. by applying those tests to the various schemes a great many were slaughtered straight away. The first was that, whatever was done, no payment could be expected or asked now from Germany. The second was that the arrangement, whatever it was, that was made was one that could be made final. But supposing there was an interval; you cannot say; you do not go to these Conferences with your minds made up and your cheque in your pocket; you go to these Conferences to work your way through, just as a man goes into a crowd to work his way through to the other side. It was clear, therefore, that, supposing there was to be an interregnum between the condition of reparations and the condition of no reparations, the interregnum must be in the nature of no reparations rather than in the nature of reparations. In other words, it must be a settlement which can be made final with very small adjustments. We did not want and we would not have agreed to merely another stage in the scaling down of these reparations, followed by big transfers of money.
  The third test was this, that whatever imposition was to be put on Germany, it must not be of a character to damage her credit and to keep the German community a festering financial and commercial sore in the middle of Europe. You might say that you could put on her thousands of billions of francs. You could put up a committee to look into the subject, and that committee could report that Germany's capacity to pay was equal to even more than that, but that would not get you out of the difficulty, because you would then have to assess the capacity of the world economic system to absorb it. If in the attempt of the world economic system to absorb it there were residues, there was stuff left
  1142
  over, and that stuff, in the shape of gold, was rushed into the vaults of the banks, then Germany might have been capable of paying, but the world economic system was not capable of absorbing it, and the unemployment was going to continue and bad trade was going to last. Therefore, whatever figures were settled, they had to come up to the test that, first of all, they were not to break down Germany's international credit, and, secondly, that they were not to be so big, so ponderous, so bulky that the world economic system had to throw out some of them as being useless for its purpose and as being illusory for the roundabout volume of international exchange upon which people work, feed, clothe and house themselves.
  I have already dealt with the fourth test, and that was that the transfer system as we know it should be stopped. I need not go through all the stages of the proceedings—hon. Members have the White Paper in front of them—the discussion day by day and week by week, but I should like to say that we were a good long time at Lausanne and that there has never been a Conference that went over such ground arid had such numerous points of agreement in the time occupied. The position of the British Government was a very simple one. We said "cancellation all round," which would have obliterated a great many of the consequential difficulties of adopting any other scheme. But it could not be done. Cancellation all round meant cancellation of reparations, cancellation of War debts and so on. Finally, we got them to agree to one capital payment, and be done with it. That is the characteristic of the scheme. Three milliards of reichmarks are to be paid into the Bank for International Settlements by the German Government and to be kept in trusteeship.
  Then we had to face this position. When are those marks to be released, or when are those bonds to be put on the market? Obviously, if you have a moratorium say for one, two or three years, it might be that Germany would not have recovered itself. Supposing that you had a moratorium for five years, which was a period mentioned sometimes. It might be that at the moment of putting the bond on the market, German credit was just going up but had not been stabilised enough to bear the weight. Then you would

  1143
  be away back where you are now. That, obviously, was no good. It would have looked well on paper, but it would not have worn well. Therefore, we had to devise a method by which the bonds were in the hands of the Bank. They were taken away altogether from the politicians, with no general election questions coming up again, and no party bids between elections about it. The first thing that had to be done was to see that the money was taken completely away out of the hands of the politicians, and put into the hands of the Bank for International Settlements.
  The second thing was that a certain moratorium should be given, because we had to give the creditors of Germany some sort of security that within a few months or a year or two they should not find that the security would completely disappear. In the end, after much argument, we settled on three years—three years complete moratorium. Supposing at the end of the three years Germany's credit is not restored. Quite obviously, at any rate so far as we are concerned, we would never agree to that money coming on to the market then. That is the sort of thing from which we are suffering so much. Therefore, we devised a means by which not the German Government, not anybody with any relations with that Government, not the French, not the British, nor the Allied combinations, but a pure banking authority, the Bank for International Settlements, with representatives of all the big international banks upon it, should decide themselves when the bonds were to be put upon the market. The bonds should be put upon the market only when German public credit had reached a certain point. Until German public credit reached that point no bonds could be put upon the market.
  4.30 p.m.
  The idea is that the bonds should not be put upon the market until there is a regular indication that that is the opportune moment. Any hon. Member of this House if he was investing his own money would,wait for certain indications and then and then only would he invest his money. The Bank for International Settlements will watch for the same sort of indication after the three years moratorium has elapsed, and then and then only will the bonds be put upon the market. I think we have hit upon a very
  1144
  ingenious way of meeting the necessities of both aspects of the case. On page 6 of the White Paper hon. Members will find, in Article 1, a draft of the scheme, and I will not take up any more time in explaining it to the House. The great point of Article I is this, and I state it very clearly, that it puts an end to reparations. That is a great achievement. If hon. Members when they go to their constituencies would take the opportunity of looking at the connection indicated in the Basle Report between reparations and industrial activity they will be able to show that by the ending of reparations we have, although we have sacrificed some money on paper, given industry a chance to recover. I saw in the papers yesterday references to this question somewhat in this form—they pile up a lot of figures of reparations that Germany should pay, reparations that they had paid and have not paid, and they say that that amounts to so and so. Then they look at the recommendations that we make and our agreement and they say that that amounts to so much, and delighted patriots say: "Look what the Government have lost for us." I cannot imagine anything more futile either in abstract mathematics or in applied business. These figures are not our net balances. We have never received reparations when we did not pay more away for it than we got. Take the general effect.. The shrinkage of the exports of the four chief trading nations during two years is 10 times as great as the maximum annuities under the Young Plan and is 14 times as great as the annuities due last year. It is not even a penny wise and pound foolish policy. It is the tenth-of-a-penny wise and a £4 foolish policy. That is the sort of argument which those critics who are trying to persuade the people that we have sacrificed the national interest are putting forward. The most foolish man in creation is he who sums up the figures of reparations from Germany and thinks they are net profit or income to this nation. These payments raise far greater issues than their own amount. They threaten the whole of our modern industrial civilisation.
  Hon. Members who are following this will see if they consult the White Paper that there are arrangements for carrying on the inquiries that are being made for the purpose of coming to conclusions.

  1145
  Again I wish hon. Members could all go and hear a debate by Central European and Eastern European experts on the financial and trading conditions of Middle and Eastern Europe. My hon. Friends who were with me had great enlightenment from that, and when hon. Members say that it has gone on week after week it is most miraculous if it is done in that time. It requires not human skill and ingenuity but something more akin to divine knowledge and power to drive these problems through to a conclusion. But the work is set up and is going on; the work of the Conference beyond Reparations is still proceeding. On page 15 hon. Members will see that preparations are being made for the second phase of this Conference, and I can assure them that there will be no delay. It is going to be done; and done quickly. This agenda will be pursued. The idea is that the League of Nations should call it. It is practically impossible for any Government in Europe, with the tremendous amount of work which Ministers have on their shoulders, to add to that work the calling of a further Conference like this. We pay money to the League of Nations, we pay our subscriptions to help to keep the staff, and this is precisely the sort of thing that they can prepare for us. The Conference will not necessarily be held in Geneva. I do not know whether it is proper for me to say any more, but I will say this, that I am not in favour of it being held in Geneva. But the Conference will be held, this work will be gone through. The preparatory committee will consider certain things upon which we want more advice. The great trouble is that with so many first-class business men I never could get the same replies from any two. It would be a great blessing if the right hon. Member for Hillhead (Sir R. Horne) would set about solving that problem so that the next deputation of business men which comes to see me on these things will all speak with the same voice, give me the same counsel and tell me to do the same things.
  Mr. CHURCHILL: In order to make it quite clear, may I ask whether the. Conference about which the right hon. Gentleman is now speaking is not the Conference about the affairs of Central Europe? It is the world Conference on the money problem, to which the United
  1146
  States have expressed their willingness to come. Is that so?
  The PRIME MINISTER: Yes, that is so. The White Paper is a little complicated. The appendices after Article (1) deal with Central Europe, and non-German Reparations; and Appendix No. 5 deals with the Conference of which I am speaking, the conference to which the right hon. Member refers.
  One may go to the Continent, to a conference or bring Continental representatives here on money business, but, believe me, behind it all there is the political factor. You cannot get away from it. It may not come out in speeches that are being taken down in shorthand, delivered in front of a green table. It may not come out in formal committees in one's own private sitting room at an hotel, but it comes out in early walks in the morning, and in the half hours spent in general confidential talk up in the hills. If Europe is going to solve its economic and financial problems it must also solve its political problems, and these political problems depend on the state of political mentality.
  We have still to dissipate the surviving atmosphere of war. Germany must be brought back into ordinary national relationship. Germany is going to be dealt with as a nation which is consulted, whose views are heard and accepted in the same way as another nation's views are accepted when they are wise and rejected when they are unwise. I am glad to say that Lausanne brought us nearer to France, France nearer to Germany, and France and Germany nearer to us. I had almost hoped that I need not refer to America, but I do hope that those whose voices carry across the Atlantic with clearness will not use phrases which will make it difficult to bring about an understanding. I was thinking of Europe alone. There are still delicate relations. My right hon. Friend who had such a burden to bear at Geneva, the Foreign Secretary, has found them cropping up at Geneva. I found them again and again cropping up at Lausanne. We must strive to get them removed by mutual assistance by getting the great nations of Europe more and more to apply the spirit of the Covenant of the League of Nations, to come together in a great council of those who help and of those who wish to help. We shall certainly continue to co-operate and

  1147
  use our good offices for peace. The work has only begun. Lausanne has opened new ways, it may be very broad ways, and I ask for the work of any colleagues and myself the hearty approval of this House.
  Mr. LANSBURY: My hon. and learned Friend the Member for East Bristol (Sir S. Cripps) said yesterday that so far as we are concerned we should at all times give whatever support in our power to work the Government might undertake which in our judgment was for the good not only of the nation but of the world. It is not at all out of place that on this question a Member of the House who has had no part in any of the past negotiations, and who has taken no part in any diplomatic work of any sort or kind, should put forward the point of view of hon. Members on these benches in regard to the present position of German Reparations. The first thing I want to put on record is that the statesmen who took part in the Peace Conference and who have taken part in all the conferences which have succeeded the original Peace Conference, may take this flattering unction to their souls, that on each occasion that they came back to this House they were received with great admiration.
  This is not the first occasion on which the question of German Reparations has been dealt with. At the beginning, when reparations were first imposed, there was only a tiny group of men in this House, though they represented a large body of opinion outside, who took the view expressed by the right hon. Member for Epping (Mr. Churchill) yesterday, and the right hon. Gentleman the Prime Minister to-day, that you did more harm to yourself by receiving reparations, if that were possible, than you did to those from whom you received them. That is now an acknowledged fact. The despised Labour party, whom we represent to-day, and who on every conceivable occasion in this House are held up to ridicule and obloquy—[HON. MEMBERS: "No!"] Hon. Members will allow me to express my opinion on the matter. When these reparations were imposed the Labour party fought the question in the 1918 election, and were as heavily defeated by a Coalition Government as they were last October. It is a great measure of satisfaction to us that at long last everyone in the State has arrived at the con-1148
  clusion that this wicked, pernicious business ought never to have been transacted at the time of the Peace Treaty. These reparations were imposed in sheer defiance of the pledged word of all the statesmen who took part in the Peace Treaty negotiations previously.
  Viscountess ASTOR: Why go back to the past?
  Mr. LANSBURY: The Noble Lady asked, "Why go back to the past? "Because unless we learn the lessons of the past we shall never get out of our mistakes. The lesson of the past is that these Reparations were imposed in defiance of the 14 points laid down by President Wilson, and for 12 years the nations have reaped the harvest of the repudiation of the pledged word of all the Governments engaged on the Allied side. Of that there is no question. I repeat that k, is a matter of great satisfaction to the small group of men here, and to the people whom we represent, who fought this dastardly business from the beginning. We have never ceased to fight it to this day. Because that is the case, we are delighted that at last an agreement has been reached, which we hope and believe that the great people in the United States will help the signatories to implement. I cannot believe that any Government, or any President elected next November in the United States, will do other than act in a most generous and open-hearted manner in order to get this business settled once for all. Our friends in America must remember that they were parties to these Reparations. They assisted in imposing them. As it is now admitted by everyone that it was a colossal blunder, the least we can expect is that they will help us to put it right.
  In regard to the business with which the Prime Minister has dealt, someone will have to pay a very great deal of money all through Europe arid the United States, but there is something that is worth much more than mere gold in this matter. If at the end of three years the German people are accounted unable to pay, or if at the end of any period they are accounted unable to pay, I am sure that it will be better for Europe and the world that there should be no more haggling about the business, but that the whole of the Governments should come together and find out how best the cancellation can be brought into being. The

  1149
  declaration on page 5 of the White Paper expresses the intention of helping
  "to create a new order permitting the establishment and development of confidence between the nations in a mutual spirit of reconciliation, collaboration and justice."
  I say on behalf of my friends here that, most sincerely as we congratulate all the statesmen who have brought this agreement to the present point, we think there never will be a real clearing up of the relationships between Central Europe and France until the political issues of the Peace Treaty are dealt with, and especially until we face up to that most terrible accusation that lies against the German nation, that they alone were responsible for the War. There were many iniquitous things said during the War, but all these years have passed and the stories of the statesmen have been told. We have had biographies and histories and now there is no one who will say that there is any proof whatever that the German people are worse than any other people in the world. Every nation sinned over that business, and all of us ought to be ready to see the cancellation of that terrible accusation. Another paragraph of the declaration states:
  "These further successes will be more readily won if the nations will rally to this new effort in the cause of real peace, which can only be complete if it is applied both in the economic and in the political sphere, and rejects all possibility of resort to arms or to violence."
  There have been many declarations of that character, and I hope that this time the men who have signed that declaration really mean to carry it out. I am not calling in question their bona fides when they signed, but with the events that are happening away down in Asia just now I cannot help saying that I hope this will have more effect than apparently the Kellogg Pact or the Pacific Agreement with regard to China has had.
  We who sit here attach as much importance to the Resolution that is found on page 15, dealing with the world financial and economic conference. We are convinced that it is not merely War Debts and Reparations that are the cause of the world economic distress. They are a part of it and a good part of it, and must be cleared away, but we are also quite certain that economic nationalism, as against internationalism, is something which is bound to bring failure not only to individual nations, but to the whole of the
  1150
  world. We think that the world must now be treated as one unit. When I asked the right hon. Gentleman the Dominions Secretary whether at Ottawa the delegates were going to consider the world situation, I had in my mind this conference, which we had only heard about but which it is now agreed shad be held. I hope that nothing will be clone or said at Ottawa to prejudice in any way the proceedings of this later Conference, because unless we can: get real co-operation in Europe and in the world, as well as in the British Commonwealth, I do not see much chance of world recovery for mankind.
  We feel that this business will probably take a long time and will impose a good many sacrifices on other nations as well as ourselves. We think that that is all quite worth while if in the end there is real agreement to come to economic arrangements for the exchange of goods and commodities on a basis of cooperation and not competition. I must be forgiven for stressing that, because just as this House and the country refused to listen to us in 1918 at the close of the War, so to-day it seems to us that many people are trying to argue as if it was still possible for one nation to live to itself at the expense of other nations. We do not believe that. We do not believe that the thing called civilisation can be saved along any such lines. So we stand to-day, supporting, so far as this agreement becomes practicable, the Government with all the strength that we have. But we support them more whole-heartedly, if that is possible, in their proposal to seek a solution of all the world economic problems at a later conference, where not only ourselves but the nations of the world will be represented. That is all I want to say about Lausanne.
  I want now to say a few words about the Loan Conversion scheme, which I hope that the Chancellor of the Exchequer or someone on his behalf may be able to deal with. According to Press notices the joy with which that proposal was hailed at the beginning is now rather tempered down, for two or three reasons. In the first place I would ask whether it is not possible for the Government to make an appeal to bankers, stockbrokers and others to forgo some portion, if not all, of the commission involved in this matter, and also the £1 per £100 that

  1151
  is offered as a kind of bonus. There are many thousands of people to 5.0 p.m. whom 30s. in every £100 off their income means a severe reduction in their standard of life. There are small people, living on relatively tiny incomes, derived from this loan, who will be affected in that way. We are asking these people to make this sacrifice. I am asking them, hon. Members opposite are asking them—because we are all supporting this proposal. Why should we not appeal to the great banking houses and the solicitors and others to forgo making any money out of the business? It will cost a little to carry through these transactions, but it seems to us that there ought not to be such a sum as £20,000,000 made in profits out of those transactions. Someone, however, has made that estimate. We think that if the Government were to make an appeal in this matter there would be some measure of response.
  I should like to tell the Prime Minister and the Chancellor of the Exchequer that, if they make inquiries, they will find that in connection with the big Goschen conversion scheme many of these people refused to make money in this way. I know that such profits are made as a matter of business, but the banks have made considerable sums while everybody else has been losing money in the last few years, and I think that solicitors and others could quite easily help to meet the country's need by refusing at least to take the £1 bonus and by reducing their other charges to a minimum. I think it a great pity that the Government did not in some way deal with the Stock Exchange so as to prevent the wholesale gambling which appeared to be going on two or three days after the conversion announcement. Many millions of pounds profit must have been made out of other Government stocks and stocks of various descriptions. These are days when people such as those who live in my neighbourhood watch the newspapers very carefully and they are not satisfied to think that those who have a relatively small amount in this Five Per Cent. War Loan should be asked to accept a reduction, while at the same time a considerable amount of profit-making should be going on in connection with this business.
  I do not suppose that anything can be done just now but in regard to this ques-
  1152
  tion of what I call usury, for want of a worse name, some steps ought to be taken when the Government come to deal, as they will have to deal, with the rest of the internal indebtedness of this country. They ought to take care that the same thing does not happen again. There is no reason why anybody should be permitted to make money at all out of these transactions. If I am told that it is inevitable under present conditions, all I can say is that present conditions ought to be changed and it ought to be made quite impossible. As that remark appears to cause some amusement to the right hon. Gentleman the Member for Epping may I add that mere writing on a piece of paper does not create wealth. It may transfer wealth, but there is no creation of wealth, and every penny that has been gambled for and won in the City of London over this transaction has had to come out of the labour of men and women. [Laughter.] I repeat that it has to come out of the labour of men and women somewhere or other.
  Mr. CHURCHILL: The right hon. Gentleman is surely not referring to the labours of literary men?
  Viscountess ASTOR: What about brains?
  Mr. LANSBURY: The literary men and the Noble Lady and myself would not live for a single day unless some man somewhere did dirty, miserable work. Like the right hon. Gentleman I have made money by writing articles and so on but my life, and the life of the right hon. Gentleman, depend upon the men and women who dig and delve and toil in order to give us the means of living. [Interruption.] Well, we can have it out some other time, but I hope the right hon. Gentleman will not mind it if I say that neither he nor I could keep up our health and strength by eating books or by eating shares and dividends or by eating bank notes. They have to be translated into commodities and the only people who translate them into commodities are not people like the right hon. Gentleman or the Noble Lady or myself but the people whom we pat on the back. We tell them what fine people they are—
  Viscountess ASTOR: Can I ask the right hon. Gentleman a question?
  Mr. LANSBURY: The Noble Lady can ask me anything she likes.
  Viscountess ASTOR: Does not the night hon. Gentleman find it more difficult to think than just to move with his body?
  Mr. LANSBURY: That of course is meant as a joke.
  Viscountess ASTOR: No.
  Mr. LANSBURY: I take it as a joke. The Noble Lady must know that if she were to think from now until she is as old as I am she would not get a mouthful of food or a drop of anything else merely by doing so. You can go on thinking for ever but you will not get these things merely by thinking. However there is something more important than that which I wish to say to the House. This is almost the last day of the Session and although many hon. Members wish to discuss Lausanne we desire to raise a question which is very akin to Lausanne and that. is the question of disarmament. We think that people in America will look with more favour on Europe if it is a disarmed Europe, than if we go on spending the millions which we are spending on armaments. Before proceeding further with that question, I am reminded of one other question which I wish to put to the Chancellor of the Exchequer. The Noble Lady and the right hon. Gentleman the Member for Epping put it out of my mind for the time being. Can the Chancellor of the Exchequer or someone on his behalf to-night, give us a statement in regard to the reports appearing in the Press to-day as to a decision arrived at by the International Bank in reference to the Gold Standard. Is there any proposal about this country being put back on to the Gold Standard immediately, or while Parliament is not in Session?
  The CHANCELLOR of the EXCHEQUER (Mr. Chamberlain): I have no hesitation in, saying at once that the resolution passed by the Bank for International Settlements does not represent any new departure on the part of this Government. There is no intention on the part of this Government to return to the Gold Standard either now while Parliament is sitting, or in the immediate future.
  Mr. LANSBURY: I ask the question because Mr. Montagu Norman is a very powerful person, and we understood that he was partly responsible for the resolu-
  1154
  tion which has caused a good many people a great deal of disquietude. There are varying opinions on this matter, and there is a very large body of opinion which thinks that it would be disastrous to go back to the Gold Standard, especially in view of the fact that you are to discuss currency problems at Ottawa. We think it would have been better if that resolution could have been held up so far as Great Britain is concerned until after the right hon. Gentleman had had an opportunity' of dealing with it.
  Mr. CHAMBERLAIN: The resolution as I understand it was the view of the Bank for International Settlements of what the ultimate solution of the currency problem ought to be. I did not read it to have any bearing upon any immediate action to be taken by this or any other Government.
  Mr. LLOYD GEORGE: The Government are not committed to it?
  Mr. CHAMBERLAIN: No.
  Mr. LANSBURY: I am glad to hear that Mr. Montagu Norman was only speaking for himself and Sir Otto Niemeyer in supporting this resolution, and I think I can leave the matter there. Returning to the question of disarmament, I want to put some points to the Foreign Secretary to which I hope he will reply. The Conference has been sitting for many months, but this is not the first Conference that we have had. They have been going on ever since the Peace Treaty was signed, and we always appear to get into a sort of deadlock. Various proposals are made and then counterproposals are made. The President of the United States made what we thought was a very clear-cut proposition that there should be a reduction of one-third. Then we had the statement which was read by the Lord President of the Council here and was also read at Geneva. President Hoover, as we understand it, proposes the abolition of tanks. We propose the limitation of tanks to those of a weight of 20 tons. It is said that they cannot be regarded as offensive weapons. In that ease I do not know what they can be regarded as, because I should think that anything that can blow you into smithereens and move about in the way that tanks can do is to be regarded as a pretty dangerous weapon.

  1155
  On the question of naval armaments the British Government reject the Hoover plan of an all-round reduction of one-third in the existing number of battleships and offer a reduction in tonnage but not of number in future replacements. I would like to know why. This applies to cruisers and also to aircraft carriers. With regard to destroyers the Hoover plan proposes a one-fourth reduction in the present numbers and, from the statement read by the Lord President of the Council, it would appear that the British Government are willing to reduce tonnage by one-third on the condition that other countries agree to the abolition of submarines Does the right hon. Gentleman really think that other countries will agree to refrain from building big submarines if we continue to build big capital ships? Does anyone think it a reasonable proposition to say "Because of our situation we must have big battleships but you other countries ought not to want great submarines to chase those battleships"? I am sure that it is the question of monster battleships which is at stake here.
  When one remembers the great promises held out to us after the Prime Minister had met President Hoover originally, the promises which were held out to us in the Hall at the end of the corridor there, I think it is rather terrible to find at this time of day that Great Britain is standing out in this manner. The Hoover proposal—and this I think is probably the worst feature of the situation—included the total prohibition of bombing planes. We, on the contrary, say that there shall be bombing only in certain areas. Why cannot we go as far as America in this matter? Why should not we say that we do not want any aerial warfare at all and that we do not want any bombing from the skies, either of ships or soldiers or civilians? My view is that we cannot possibly limit this business in the manner you are suggesting, and if you did it would not work at all. Then we want also to say that we are rather disgusted that our own Government have not gone further in regard to chemical and bacteriological warfare. The Hoover proposals and our own are the same. They got a sort of gentlemen's statement about this, but as far as we understand it there is no
  1156
  agreement that we should give up the manufacture of these things. If the right hon. Gentleman tells me that they propose to give up the study of methods of chemical warfare or that they have given up altogether the idea of relying or agreeing that any other country should rely on that form of warfare, they must take further steps than merely professing to abstain from evil doings. They must, as in the case of the air, get international control. I join those two things together, because, for all practical purposes, they run together—that is, aerial warfare and chemical warfare, the aeroplanes to carry the bombs and to drop them. If the Governments of the world are really in earnest, there should be international control of aviation and of chemical industries. The statement of the Lord President, which has been printed, says in regard to tanks that the United Kingdom unequivocally rejects the proposal of the United States of America that tanks should he abolished.
  The SECRETARY of STATE for FOREIGN AFFAIRS (Sir John Simon): The right hon. Gentleman read "rejects"; he means "accepts."
  Mr. LANSBURY: No, you reject the proposal to abolish them altogether. The United Kingdom proposes only the abolition of all tanks above the weight of 20 tons. That is in the document. The United States, if their proposal is carried into effect, would at one stroke put out of business 924 tanks which they have already built; these are available for service, and their weight is from seven tons up to 40 tons. How many tanks do we now possess, and how many do we propose to abolish above 20 tons? A 20-ton tank is a very powerful weapon. We had none, I believe, during the War so powerful as this, but whether we had or not, the point about these tanks is that just as with the big battleships, we appear to be choosing the weapon that will suit us best, and standing for that. Our position on disarmament is exactly what our position is on reparations. We want to get the fullest and the best settlement of reparations possible, but on disarmament we are not going to be satisfied with being fobbed off again with a conference that passes pious resolutions and then goes home to rest.
  The right hon. Member for Epping, when he spoke a week or two ago, said, quite truly, that all this was a question

  1157
  of the spirit in which you approached the matter, that you could abolish everything arid still, if you wanted to have a good old war, you could have it if you were determined to have it; and he went on to say that we had no tanks and no poison gas and so on previous to 1914. All that is very true, but if it is correct that there is a new spirit in Europe, and if all the old statesmen, the old and middle-aged men who have brought the world to what it is, have learned their lesson, let us put it into operation and let our country take some risk in this matter. We are going to risk a lot of money, and a jolly good job too, if it brings peace, but we do not want to take these risks and at the same time go on spending lots of money and then, at the end, perhaps have another war which will land us into a worse condition than now.
  If the British people were polled, I am sure they would take a tremendous risk for disarmament, and I am sure too that no civilised people would for a moment want chemical warfare continued in any shape or form. I am sure also that they would vote whole-heartedly for the international control of aviation, and I am equally certain: that the women and men of the world, the ordinary common people, would vote always against any further resort to arms. It is time, we think, that this Conference at Geneva, instead of waiting on the experts, instead of balancing a little here and a little there, came down and either accepted Mr. Hoover's proposal or went one better and said, "We will not only accept your one-third, but we will go one-half."
  5.30 p.m.
  Mr. LLOYD GEORGE: I should like to congratulate the Prime Minister on the fact that he has gone through a very difficult conference and that he has not strained or impaired his strength or vitality. No one knows better than I do what the anxiety of these conferences amounts to, and how very wearying they are. I should also like to congratulate his colleague who sits there upon the original proposals he submitted to the Conference, and my only regret is that he did not stand by them to the end, when he proposed that we should have the clean slate. That is not an idea which I have formed since I have seen the Lausanne Treaty. I endeavoured to get that 10 years ago, but I realised exactly what the present Government
  1158
  have understood 10 years later, when opinion was more mature, how difficult it is to achieve—that is, to wipe out the whole of the international debts. Had it been done in 1922, as the Government of which I was the head proposed, what a difference it would have made to the world at the present moment. As to whether they could have put it through or not, they are the best judges. I still think they could, if they had persisted. Italy would have supported them—I am taking that from the speech of Signor Grandi—I understand Belgium took the same view, Germany naturally would, and I do not believe France would have stood out alone. She would have been perfectly isolated, and not even a powerful country like France can afford that in these days, certainly not when it is only a question of £150,000,000 to be distributed among all the signatories of the Treaty of Versailles.
  I have only just had in my hand, during the speech of the Prime Minister, "The Final Act of the Lausanne Conference." That is not all that happened at the Lausanne Conference. In fact, the most important thing that happened at the Lausanne Conference is not in this document. The documents upon which the life of this agreement depends are not here, and I should have thought that Parliament was entitled to have the whole story, every document that would enable it to judge upon a transaction which the Chancellor of the Exchequer and the Prime Minister described, one as a new era and the other as a new book. We have only got the preface to the new book, and as far as I can see, the new era is not here at all. This is rather important. No one knew when the announcement came what had really passed at Lausanne—a summarised statement that Germany had agreed to find £150,000,000 under certain conditions, that France had accepted it, that the word "Reparations" had been wiped out—practically a continuation of the same chapter. But no one knew that that was dependent upon some other document, some other transactions to which Germany was not a party, and it was left to the French Prime Minister to reveal it on Sunday to the French newspapers, first of all the "Temps," which is very much in touch, as everyone knows, with the French Foreign Office, the "Matin," and the "Journal."

  1159
  Now let us see what it means, because the Chancellor of the Exchequer yesterday rebuked my right hon. Friend the Member for Epping (Mr. Churchill). It was severe, but the right hon. Gentleman, like myself, is so accustomed to rebuke that it does not seem to make very much difference on our subsequent appearance after the rebuke. I think the Chancellor of the Exchequer was rather hard; in fact, he was very severe, and I was surprised. I am new to this House, and I was under the impression that there was a new era of tolerance of differences of opinion, but I realise that that privilege is one which is confined to Members of the Administration and that it is not extended to supporters. But his rebuke was to the right hon. Gentleman. He said, when the right hon. Member for Epping suggested that this might be put off till after the Presidential election and that we should extend the moratorium, "We could not wait; it was essential that we should have some agreement; this was a sore which was affecting the vitality and the strength of the nations; trade was declining, and we must have something which was final." Where is the finality? I get my information from the French Press, and I am entitled to ask whether it is true or not. The right hon. Gentleman will see what is said there. The "Matin" says:
  "The Gentlemen's Agreement is the link which has been not only clearly established, but openly avowed, between Lausanne and the adjustment of the American debt. It is the express condition of the ratification of the agreement by the Parliaments, and, if there is no settlement of the American debt, the Lausanne Treaty will be considered null and void. If there is no settlement also, the Young Plan would be legally the only system of fixing the actual payments of Germany."
  I could give other quotations from other French newspapers. The "Journal" referred to documents: It will be noticed that the Gentlemen's Agreement, which establishes the link between reparations and debts, does not figure in this White Paper.
  "This document"—
  that is the Gentlemen's Agreement, which is not a, phrase used by the right hon. Gentleman but was obviously used in the conference:
  "and the letter by which Germany is informed of the agreement will only be pub-
  1160
  lished when they are placed before the Parliaments."
  Why have they not been placed before the Parliaments? This White Paper is not complete. There is another document that may render it entirely nugatory. If France cannot agree with the United States and the United States with France; if Italy is dissatisfied with the terms and if we are dissatisfied, there is an end to this agreement; and, until these negotiations have gone through, that is, negotiations between America and every.individual debtor, and between ourselves and France and Italy, this White Paper is not alive, it is not a document at all. I think that the old legal term is "escrow." It is an escrow, and until that happens it has no validity at all.
  I am not urging that we should take the extreme nationalist view, but we do come in. We have borne far and away the largest share of the burden. We have been quite willing to surrender our rights and interests if everybody else does the same thing. We made that offer. The right hon. Gentleman opened the Conference with it, and I wish that he had stuck to it. I thought that it was the right line. Suppose there is a satisfactory arrangement with France and the United States of America. We have got to pay; America has made it quite clear, and the fact that we are not going there with a clean slate means that we are going there not to discuss the wiping out of debts, but the question how much. That is the difference. If we had wiped out the whole thing, we could have gone to America and said: "Here we are; we have wiped it out. We, the most heavily taxed country in the world, lent money to all the Allies, and we have never exacted anything like a decent proportion of what we advanced. We were willing to give up reparations and debts. We made the offer 10 years ago, and we repeat it now. What are you prepared to do?" I have never suggested repudiation, but, if America insists, Britain must stand by her bond.
  In the words of the old legal saying, he who comes to equity must come with clean hands and he who asks for forgiveness of his debts must forgive his debtors. But you have not. You have gone to Germany, and you have said to Germany, with 6,000,000 unemployed, and with debts which she has incurred to carry on

  1161
  her industries, "On the basis of your capacity—" [Interruption.] You must have judged capacity; you have not asked beyond her capacity. You are going to ask Germany for £150,000,000, and say to her, "You are not capable of paying in three years, but you may be." That is what I mean by judging capacity. [Interruption.] Do not let us dispute about that. You have asked Germany for £150,000,000 under certain conditions. Now you go to America, not to negotiate a clean slate, but upon the basis of the measure that you have meted out to Germany. You ask her what she is going to abate. I see in a paper that supports the Government for the time being, the "Daily Mail," that we should have to pay, if a full demand were made, £55,000,000 on the comparative value of the dollar and the pound. We may be called upon to pay a very substantial sum. What arrangements have we made with Italy and with France?
  There is a written document. It is part of the transactions at Lausanne. It was entered into six days—I get that information from the French side—before we negotiated this bargain with Germany. What is it? Surely the British Parliament which has the responsibility of finding this money and facing its constituents, is entitled to know something which is so vital to it. I now press for an answer. Are these documents—the letter to Germany, written a day after Germany signed the Pact on the 9th, and the Gentlemen's Agreement entered into six days before that-to be withheld from the British Parliament? We ought to know. The public ought to know.
  The next question I ask is this: Did von Papen know when he signed that agreement that there was another agreement entered into Which might render the whole of it nugatory? Were the terms of that agreement given to him? [Interruption.] I think that that is rather important. When you are entering into negotiations with a man with a view to getting him to commit himself to £150,000,000, and he has great difficulties with his own country, he is entitled to know if you have entered into another agreement which will affect his agreement; he is entitled to know the facts. Did he know when he signed the agreement with the right hon. Gentleman, France and the other
  1162
  countries of the existence of the other agreement, and of the terms of it? If he did, he withheld it from his public, but that is his responsibility. If he did not, then surely you cannot, whatever this other agreement is, call it a Gentlemen's Agreement.
  Let us pursue this, because it is rather important. There was a considerable amount of satisfaction that another agreement had been arrived at which all the parties were prepared to sign. In the main, I think that that is the thing that gave satisfaction—that at last you had something that Germany and France signed together. It looked like the final word on Reparations. It was not. You have got to discuss something in three years hence with the other Powers. There was great satisfaction, and there was great satisfaction, too, in America—and that is vital. I am just as anxious as the right hon. Gentleman not to say a word that will create any difficulties. [HON. MEMBERS: "Oh!"] I do not see why hon. Gentlemen should always suspect the motives of men who are just as much patriots as they are. I could easily make mischief if I really wanted to. It does not require very much power or authority to make mischief. Therefore, I do not want to do it. I am bound, however, to call attention to this, because I am calling attention to something that appeared in a paper, which even the right hon. Gentleman will not claim is not patriotic—the "Morning Post" of today. Here is a telegram from the correspondent of the "Morning Post" in America. It is headed "Washington and Lausanne," and "From our own Correspondent." He says:
  "While it is not expected that any move will be made by the debtor nations until after the November election, the disclosure that a Gentlemen's Agreement ' has been drawn up which nullifies the Lausanne accord, threatens to make a political football out of what should be primarily an economic question. The jubilation in the Press which bad hailed the Lausanne action "—
  I think that is probably the jubilation in America because of real satisfaction when they heard the news—
  "as a big step by the European Powers to set their own house in order has changed to general resentment over the supplementary agreement. Already a number of Conservative papers"—
  not mischievous fellows like myself—
  "have begun attacking the agreement."

  1163
  If you are going to negotiate with a creditor, the worst thing you can do is to make him angry. Having done that, whatever there is in these agreements it would have been better to have them all out—much better. It would have been far better to tell the whole story to the public, and certainly to Parliament. Why was it withheld? It was not withheld from Germany on the 9th. I do not know whether it was on the 8th—and that is important. On the 10th France knew it. Britain knew nothing of it except through France and through America. That is not quite playing the game with the British public, who have given overwhelming support to this Government. This is what I have to ask. I would like to ask, first, whether those documents are going to be published, so that we shall be fully informed of what is in this new book that was issued at Lausanne. It is quite true, probably, that it would never have come out until after the American Conference, but M. Herriot let the cat out of the bag, and, incidentally, set the cat among the pigeons. And there it is. He is very pleased with himself, and he showed it in a very dramatic way in the conference hall. It makes conferences very attractive for Prime Ministers. He is very pleased, obviously—and the French are.
  But what does it mean? An agreement of this kind, as it has now been elucidated from the facts we have received from France, could have been entered into at any time during the last 12 months. Chancellor Bruening would not have been less reasonable than Chancellor Von Papen. This has been the French thesis always—to get one final payment from Germany, provided you could wipe out the debts to America. They have always taken that view. If this is the kind of thing which is going to start a new era, and to clear away the difficulties from the recovery of trade, why in Heaven's name was it not entered into months and months ago—if this is all you have got out of it? The right hon. Gentleman was very severe on elections—in other countries. He quite forgot a little election in which he was engaged a little earlier. The era of elections had begun then, and election after election has been going on since, while all the time the world has been getting worse and worse.
  I would like with the indulgence of the House to say a word upon the general
  1164
  situation. I have no right to speak except for myself. I represent no one. I am an independent Member of this House. I have only got a very long experience of this House and a long experience in government. But there it is. I stand alone. I did not even get a letter from the Lord President of the Council telling my Conservative constituents to "play the game" by electing me. I got no letters of commendation from either of the leaders of the two rival sections of my party. I did not get a passport from the Foreign Secretary, nor a reprieve from the Home Secretary, and therefore I am standing quite alone; but if the House of Commons would like to hear the views of an old Member of the House, who has seen a good deal of the difficulties of which the Prime Minister has given so eloquent a description, I am prepared to give them quite fearlessly.
  There is no doubt about the gravity of the position. I do not want to use strong, and certainly not panicky terms; but I need not use them myself. I can quote them from authorities who are not generally accused of that kind of nervous disorder. The "Times" the other day talked about the "violent destruction of the present economic system." as a possibility. The experts on currency, in their report just issued, which is a very remarkable document but, like most of these currency documents, not very intelligent to an ordinary man, talk about the gradual strangulation of trade, the starvation of millions, and the end of the present civilisation. The right hon. Member for Hillhead (Sir R. Horne) used language of that kind here. The highest ecclesiastical authority in the world said this was the greatest world crisis since the Flood. Well, that is very strong language. I hope it exaggerates the position, but I am afraid it does not. Certainly there has been nothing which is comparable to it. The post-Napoleonic crisis was on the whole confined to this country. Europe was then a peasant Continent, and so was America. Since then there has been erected in every Continent and in every land this ugly, flimsy, ramshackle structure of modern industrial civilisation. The first great earthquake has thrown it out of shape and balance, and experts say that unless something is done to shore it up and strengthen it it will come tottering with

  1165
  a, crash. That is the situation with which we have to deal.
  What are we doing in this country to tackle this grave situation? The Government claim that they have restored the balance of trade and restored general confidence. They have certainly won the confidence of all the pundits whose shortsightedness and bungling have plunged the world into this disaster. But that is not the point I want to make. The point I want to make is this. The more you believe that, the more serious is the fact. You restore your Budget, restore the balance of your trade, you win general confidence here and abroad—let us assume that. In spite of that trade is going down, unemployment is increasing, pauperism is increasing in this land. The figures of the unemployed are 2,700,000, though if we had comparable figures with last year's the total would be much nearer 3,000,000. Here, again, I quote from the "Morning Post." I wonder how many people have read those very remarkable articles in the "Morning Post" about the black-coated unemployed. They are very grave. One is constantly getting letters on them from every part of the country, and one is sorry in his heart that he cannot do more for them. They are reckoned at half-a-million.
  6.0 p.m
  I am not now blaming the Government; the point I am making is that whatever they have done it has not yet touched the root of the evil, and some of the Measures they have passed have aggravated it. We have only to look at our shipping—at the ships that have been laid by; at the speeches which have been made about the effect on the railways; and then that blow at the coal trade. We had a crisis in the past. We treated it as a sterling crisis. As a matter of fact it was purely a symptom of a local injury inflicted upon us very largely by the stupidity of our own advisers, and its very outbreak relieved the pressure of the deeper evil for a short time. In 1925 we restored the sovereign to parity. It was a fatal error. Hon. Members may ask why I go back to 1925. Because we are dependent upon exactly the same advice to-day. In 1925 I sat on the benches behind—there. By my side was the late Sir Alfred Mond. That act, on the advice of the highest financial authorities in the City of London, urged by them, was hailed by every pundit in the
  1166
  land as a triumph. As a matter of fact, we have descended from triumph to triumph to the present pit. In 1925, if you wished to pose as a great and sound financial authority, you had to acclaim the restoration to parity, and do it with due pomposity. Then you were a pundit. Parity and prosperity were interchangeable terms, just as Protection and patriotism are interchangeable terms to-day—or were yesterday. I think there were just three Members in this House who protested at that time. I am glad to see here my hon. Friend the Member for East Aberdeen (Mr. Boothby), who was one of them, and there were also the late Sir Alfred Mond, as he then was, and myself. [Interruption.] Four men on the plain of Dura who ref used to bow to the golden idol; and we were treated as a sort of curious cross between heretics, fanatics and lunatics, and we were let off the fiery furnace on the last-named plea! We said, "It will queer your exports"; so it did. We said, "It will be a bonus on your imports"; so it was. We went on, and there is no greater 6.0 p.m. proof of the innate strength of this country than that we were able to carry this terrible burden on our backs, with a gigantic trade, for six whole years, without stumbling. British commerce marched through the marts of the world on high stilts. In 1931 the support gave way. There was a panic. What was the result? British commerce fell flat—on its feet on the high road. That is all that happened.

  ROYAL ASSENT.
  Message to attend the Lords Commissioners.
  The House went; and, having returned—
  Mr. SPEAKER reported the Royal Assent to:

  1. Irish Free State (Special Duties) Act, 1932.

  2. Marriage (Naval, Military and Air Force Chapels) Act, 1932.

  3. Patents and Designs Act, 1932.

  4. Rating and Valuation (No. 2) Act, 1932.

  5. British Museum Act, 1932.

  6. Agricultural Credits Act, 1932.

  7. Carriage by Air Act, 1932.

  8. Solicitors Act, 1932.

  9. Hire Purchase and Small Debt (Scotland) Act, 1932.

  1167

  10. Extradition Act, 1932.

  11. Gas Undertakings Act, 1932.

  12. Isle of Man (Customs) (No. 2) Act, 1932.

  13. Public Works Loans Act, 1932.

  14. Malta Constitution Act, 1932.

  15, Bills of Exchange Act (1882) Amendment Act, 1932.

  16. Rights of Way Act, 1932.

  17. Children and Young Persons Act, 1932.

  18. Town and Country Planning Act, 1932.

  19. Public Works Facilities Scheme (Shrewsbury Corporation) Confirmation Act, 1932.

  20. London Midland and Scottish Railway Order Confirmation Act, 1932.

  21. London and North Eastern Railway Order Confirmation Act, 1932.

  22. Grangemouth and Stirling Water Order Confirmation Act, 1932.

  23. Leven Burgh Extension Order Confirmation Act, 1932.

  24. Kilmarnock Gas Order Confirmation Act, 1932.

  25. Dundee Corporation Order Confirmation Act, 1932.

  26. Provisional Order (Marriages) Confirmation (No. 2) Act, 1932.

  27. Newcastle-upon-Tyne Fire Brigade Provisional Order Confirmation Act, 1932.

  28. London United Tramways (Trolley Vehicles) Order Confirmation Act, 1932.

  29. South Lancashire Transport Company (Trolley Vehicles) Order Confirmation Act, 1932.

  30. Sea Fisheries (Lynn Deeps and Lynn) Orders Confirmation Act, 1932.

  31. Ministry of Health Provisional Orders Confirmation (Abergavenny and Newcastle-upon-Tyne) Act, 1932.

  32. Ministry of Health Provisional Order Confirmation (Bridlington and Wells) Act, 1932.

  33. Ministry of Health Provisional Order Confirmation (Leyton) Act, 1932.

  34. Ministry of Health Provisional Order Confirmation (Oxford) Act, 1932.

  35. Ministry of Health Provisional Order Confirmation (Paignton) Act, 1932.

  1168

  36. Ministry of Health Provisional Order Confirmation (River Dee) Act, 1932.

  37. Ministry of Health Provisional Order Confirmation (Hertford) Act, 1932.

  38. Ministry of Health Provisional Order Confirmation (Watford) Act, 1932.

  39. Ministry of Health Provisional Orders Confirmation (Elham Valley Water and Herts and Essex Water) Act, 1932.

  40. Ministry of Health Provisional Order Confirmation (Hailsham Water) Act, 1932.

  41. Ministry of Health Provisional Order Confirmation (Henley-on-Thames Water) Act, 1932.

  42. Kettering Gas Act, 1932.

  43. Kendal Corn Rent Act, 1932.

  44. North Metropolitan Electric Power Supply Act, 1932.

  45. Commercial Gas Act, 1932.

  46. Oakham Gas and Electricity Act, 1932.

  47. Sidmouth Water Act, 1932.

  48. Bury Corporation Act, 1932.

  49. London County Council (General Powers) Act, 1932.

  50. Hove Pier Act, 1932.

  51. London County Council (Money) Act, 1932.

  52. Southern Railway Act, 1932.

  53. Trent Navigation Act, 1932.

  54. Mid Southern Utility Act, 1932.

  55. Weston-super-Mare Grand Pier Act, 1932.

  56. Gateshead Extension Act, 1932.

  57. Wokingham District Water Act, 1932.

  58. South Suburban Gas Act, 1932.

  59. Nottingham Corporation Act, 1932.

  60. Birkenhead Corporation Act, 1932.

  61. Gas Light and Coke Company's Act, 1932.

  62. South Metropolitan Gas Act, 1932.

  63. Chester Corporation Act, 1932.

  64. Metropolitan Water Board Act, 1932.

  65. Lindsey County Council (Sand-hills) Act, 1932.

  66. Chesterfield and Bolsover Water Act, 1932.

  67. Warrington Extension Act, 1932.

  68. Bournemouth, Poole, and Christchurch Electricity Act, 1932.

  69. Wolverhampton Corporation Act, 1932.

  CONSOLIDATED FUND (APPROPRIATION) BILL.
  Question again proposed, "That the Bill be now read the Third time."
  Mr. LLOYD GEORGE: I apologise to the House for continuing my observations, but there are a few more things that I would like to say. I was just pointing out that what happened was quite inevitable sooner or later. It was only our great strength that enabled us to go on with a pound which was considerably above its real value, and, when the great crisis came, it precipitated the fall. Then there was a panic, and hon. and right hon. Gentlemen certainly took full advantage of it. We had the election which I call the election of the billion mark. The sovereign is down by 25 per cent., and we are in a state of constant apprehension lest it should go up. We have a fund of £150,000,000, nominally to keep it steady, really to prevent it from being forced up. We had a 20-shilling sovereign, we had a Government coming into existence to keep it there, and we have the same Government taking special measures to keep it at 15s. because it is better for us. So much for the wisdom of pundits and penguins; and they are still advising us.
  There is a great deal of discussion about inflation and reflation. I am sorry that the right hon. Gentleman the Member for Hillhead (Sir R. Horne) is not here, because he has taken a very leading part in it. I hope we shall observe due caution before we commit ourselves to that policy. These great currency problems are above the average intelligence, among which I include my own, and there is more nonsense talked about currency than about anything except theology. But I am a great believer in the saying of Goethe, I think it was, that there is a point of view beyond the sphere of philosophy, namely, that of common sense. I am hoping that the common sense of the nation will prevail against these ideas that we are going, to recover world trade, or our own trade, by merely juggling with currency. In a report by a very able Italian financier, all the nations are warned against imagining that trade recovery is going to be established by what he calls mere monetary witchcraft. I think that that is an essentially wise observation, and I
  1170
  have every reason to believe, from the speeches that I have read from the Lord President of the Council and the Chancellor of the Exchequer, that they have not yet been captured by this iridescent heresy.
  No doubt the tyres of commerce are down, and gentlemen naturally say, "Inflate them; that is the way to do it; pump a little air into them"; and I think the right hon. Gentleman the Member for Hillhead wants a few silver studs on the tyres to prevent them from skidding. But I hope we shall be a little careful. The tyres are worn out. They are jagged and torn by travelling along roads littered with the jagged debris of war, and you will have to repair them before you inflate them. You may need new tyres. If you wait too long, you may find that you will need a new machine. Therefore, I was delighted to hear the statement which the Chancellor of the Exchequer made, in reply to the very important question addressed to him by my right hon. Friend, as to what appears in the Press to-day about the Governor of the Bank of England having expressed an opinion in favour of the restoration of the Gold Standard.
  Mr. CHAMBERLAIN: The Bank for International Settlements.
  Mr. LLOYD GEORGE: I understood that he was there, and that he expressed the opinion. I know that he led us into this wilderness before, and I sincerely hope that he will be regarded with due and salutary suspicion when he gives any further advice on this subject. I think it is far better to speak quite plainly on this matter. I am delighted to hear the very emphatic statement of the Chancellor of the Exchequer that the Government have no intention of committing themselves. I also agree with him that perhaps it is premature to decide definitely the basis for our currency. I always thought that the wisest thing that M. Poinearé did was when, on being invited to stabilise the franc, he decided to bide his time. As to whether he fixed it at the right amount I express no opinion, but I think the Government are wise in not being in too great a hurry. Time lost there is time gained, and I think that we ought to look round very carefully, especially in view of the great Conference at Ottawa, where, I understand, the whole of this problem is to be discussed. We are holding our own quite

  1171
  well as far as sterling is concerned and, therefore, I am delighted to find that the Government take that attitude.
  6.30 p.m.
  I should like to say a word about the restoration of international trade. I agree with the very eloquent words used by the right hon. Gentleman the Member for Epping. We are more dependent on international trade than any other country and, therefore, its restoration is a much more important matter to us. Before the War, 40 per cent. of our production was exported across the seas and, since the War, I think something like 30 per cent. On the whole, I think we have maintained Our proportion. I do not know whether the figures of the Chancellor of the Exchequer the other day would claim that they were higher. If they do, I have no reason to challenge them. Our shipping before the War was pretty nearly half the international shipping of the world. We carried about half of the trade of the Seas. Since the War, I think we have carried something like 30 per cent. Our international trade to-day and our international shipping to-day are the greatest in the world, and it is vital that we should keep them, because we cannot keep a population like this, the most densely populated industrial country in the whole world, merely by depending upon our own resources. We have to depend upon what we sell and what we carry abroad.
  The Government claim that our trade has fallen in recent months less than the trade of any other country. That is only a half of the truth. I think the Chancellor of the Exchequer will recognise it when I tell him what I mean. Up to 1929 the international trade of the world had gone up in comparison with pre-War to 127 per cent., France had gone up to 147 per cent. compared with her pre-War foreign trade—but then you must take Alsace into account there—Italy had gone up to 148 per cent. and the United States of America had gone up to 169 per cent. But our foreign trade compared with pre-War has gone down, if you take the peak figure, to 87 per cent. Still, it is the greatest international trade in the world, and we have, therefore, the greatest interest in restoring world trade. There have been endless commissions and committees here and at Geneva to deal with the problem of the restoration of world
  1172
  trade. I am not complaining of the number at all, and I am glad that there is going to be one more. There were differences of opinion at many of them about questions like currency. The last report of a committee composed of the greatest currency experts was split up into six or seven different and contradictory reports. All these committees and commissions agreed without reservation, and without the protest of minorities, that the first essential to the restoration of world trade is the removal of restrictions and barriers preventing intercourse between nations. I will quote a sentence from the last report:
  "It may truly be said that international trade is being gradually strangled to death. If the process continues, millions of people in this economically interlocked world must inevitably die of starvation and it is, indeed, doubtful whether our present civilisation can survive."
  That is written by great currency experts. I do not propose to inflict upon the House a belated speech upon Free Trade. I leave that to my Friend the Home Secretary. I had never any doubt at all what would happen the moment there was an election fought in those conditions. I said so at the time. But the Lord President of the Council invites us to suspend judgment on the success or failure of tariffs. I think he did so in my constituency and, in that invigorating air, he made a very reasonable and sensible speech. I have heard him repeat the same sentiments in the House in a speech which I enjoyed very much, in fact much more than did the people behind him. He said, "Suspend judgment. These tariffs have only been in operation for two or three months." Very well. If he wants to postpone the inquest on Free Trade—and he is in a position of authority—I am quite prepared to postpone my testimony on the subject. But what I have observed is that there is not the same radiant confidence about tariffs that there was. Hon. Members are beginning to discover, in the words of Robert Louis Stevenson, that it is better to travel hopefully than to arrive. One thing that strikes me is that, when you get manufacturers and traders coming together to discuss world tariffs, they are all agreed as to the disastrous effect of these barriers on international trade. They may disagree about currency, but deflationists, inflationists and reflationists all agree that

  1173
  there is no doubt that high tariffs are strangling world trade.
  That is not a recent discovery. There was a great conference at Geneva in 1927. You had there representatives of the great trading interests of the world. I think 30 or 34 countries were represented there—our traders were represented by the President of the Board of Trade—and they came to the conclusion that the greatest obstacle to the recovery of world trade was these high tariffs, and one recommendation on which they all agreed was, that the sooner the nations first of all reduced them and then took steps to eliminate them, the better for the world. The right hon. Gentleman the President of the Board of Trade came here and delivered a most eloquent speech expounding this theory. He then foresaw dangers into which he has since himself plunged headlong with a splash. There is nothing, so reckless as the stern and unbending doctrinaire once he breaks loose. I remember his speech on that occasion. I heard it. In fact I have heard many of his speeches on the subject and I have read some of them since and, when I used to read them or hear them, stating the pure doctrine, I felt my own shortcomings and I said, "cannot come up to that standard." I look at him now just as one looks at the skeleton of a departed Free Trader, and I say "Alas, poor Yorick. We knew him well, and still do." But, in spite of all those opinions, tariffs have gone higher and higher, and exchange restrictions and quotas have been added on, and the result is that international trade is dwindling, and our way to remove world restrictions is first of all to tie ourselves up in exactly the same knot as our neighbours.
  I attach great importance to the speeches of the Lord President of the Council, and I read them all with very great interest because they are so fresh. He is alive to the trading importance of removing these restrictions abroad, and he is equally alive to the political importance of retaining them at home. Now you have got your tariffs and the other day the right hon. Gentleman in a letter, which is good in parts, a letter to what I have no doubt is a very important magazine, though it is the first time that I have had the pleasure of making its acquaintance, called "The Popular View," said:
  1174
  "We have taken the necessary steps to protect our home markets and to strengthen the position of our producers and manufacturers."
  He does not stop there.
  "But we shall not reap the full reward of our policy until we have removed the obstacles that are handicapping the export trade of the whole world."
  That is what I call making the best of both worlds. His colleagues have not dwelt quite so much upon the second part. They believe, like Horace Greeley, in the motto, "One world at a time." There is nothing unsophisticated about the right hon. Gentleman, not even in the cloak of simplicity which he so artfully wears. I want to know when the process is going to begin. I am only saying this with a view to the point I am going to make now. The one argument for tariffs which always made an impression, if you followed it in the most powerful assembly, was that you are defenceless as long as you are a Free Trader. You have no weapon. That was the argument which carried great audiences who, on the whole, were in favour of Free Trade. I was never convinced myself on examination that it was true, but hon. Members opposite did believe it. When are you going to prove that it is true?
  Mr. MACQUISTEN: Wait and see!
  Mr. LLOYD GEORGE: Yes, but how long are you going to wait That is exactly the question I am going to put. Wait and see is not a very good policy when you have a great crisis like this. When is the process going to begin? If you can use this weapon—and it is in your hands—you have a Parliament which will last, in the ordinary course, from four and a-half to five years. Nobody can alter tariffs, remove them or reduce them except the Parliament that imposed them. The whole situation is entirely in your hands. There need not be any illusions about that. Whatever meetings you addressed in this country would not change your opinion. I am now asking, When are you going to use the weapon in which you believe for the purpose you have always indicated as one of the essentials of the imposition of tariffs? If you succeed, I shall be very glad to go on the penitent form myself. I will promise you that if I go on the penitent form I shall not ask, like some of my colleagues

  1175
  on this bench, that it be specially cushioned. I say now, at once, if you can do it, God speed to you! But do it; do not wait and see. There is really no time. There is a real danger that we are just like people with a chronic invalid to whom they are getting accustomed. They do not notice his growing weakness. They do not get alarmed, and they forget the possible end. That is what is happening with the nations of the world to-day. They are gradually getting weaker.
  I hope that the Government will take the initiative, and take it quickly. The longer you delay, the greater you will need the weapon. Why you will be beaten by the very weight of the armour of which you yourselves have complained. More than that, the vested interests which are growing up will restrain your arm. There was a little skirmish on the Floor of the House the other day between the Conservative Member for one of the Durham Divisions and the hon. Member for Macclesfield (Mr. Remer) as to the using of the tariff to reduce the Silk Duties in order to obtain better terms for coal. Civil war between coal and silk stockings! That is the kind of thing which will happen if you go on too long. You have now got the initiative of three countries in Northern Europe, with that very statesmanlike document issued by the King of the Belgians.
  I hope that the Government will take the opportunity they will have in the voyage which they are starting to-morrow to Ottawa. I listened with intense interest to the document which was read by the Dominions Secretary, and I was very glad to hear the answer he gave that world trade would be discussed. If you get the Empire behind you, the position will, of course, be more formidable, but I hope that you will, without loss of time, make full use of such powers as you have for the purpose of beating out the barriers which are strangling the trade of the world. "Let Britain lead the way" I have heard it said. Britain cannot lead the way unless the Government lead Britain. The Government were not elected specially for the purpose of initiating a Protectionist regime. I am not charging breach of faith. [HON. MEMBERS: "Hear, hear."] No, I am not, and I have never done so. On the contrary, I read the speeches delivered by the Lord President of the Council and
  1176
  by the Chancellor of the Exchequer during the election. They made statements which were intended, I have no doubt, to safeguard themselves from any charge of that kind being levelled against them. That is not the charge which I make. All I say is that that is not the purpose for which you were expressly called into being. It was in order to deal with the world emergency which is rapidly approaching a catastrophe and to take such steps as you will be advised to take and can recommend to Parliament for the purpose of dealing with the situation. I beg of you to deal with it, and to deal with it in time.
  You are going to Ottawa. I am not expecting great results from Ottawa. I think that the cotton deputation and what happened there is not propitious, but, personally, I should be very relieved to see the delegates come home without having committed us to anything which will deprive us of the initiative in dealing with the whole problem of world trade. From that point of view, I think that the speeches of the Lord President of the Council have been very encouraging, and I was especially delighted to hear what he said about the quota. I am not going to discuss the quota here. I think that it was a mistake; that it was not, from your point of view, the best method of approach. I think it would have been better if you had dealt with the matter in a far more practical manner. From your point of view you would be in a far better position to deal with the Dominions. If you give a quota to the Dominions, it handicaps you for business with other countries. If you have to do anything at all, preferential tariffs, in my judgment, are infinitely better than quotas.
  The question of Disarmament has been dealt with very effectively by my right hon. Friend, and therefore I will not touch upon it, but I should like to say a few words on the question of what is known as economy. I am all for cutting down wasteful expenditure, and I am quite convinced that there is a good deal of it in every branch of the public service, national and municipal. But by wasteful expenditure, I mean expenditure for which you do not get value. I do not include judicious expenditure for productive purposes. You lose far more money by not spending wisely in time than you gain by what you save. You

  1177
  save more money by spending in time than you do by hoarding it in bankers' stocks. I am all for cheese-paring. I do not object to that, but that is not what is done. You have practically 3,000,000 unemployed who are deteriorating. You have, in addition, your land deteriorating. Anyone who lives in the country can see that for himself. You have, I think, £1,700,00,000 of deposits in the banks which you cannot use, and there is practically no interest upon it. Cheese-paring is all right, but it is a very different thing to allow the cheese to moulder in your cupboard while you are living on dry bread. That is what is happening.
  7.0 p.m.
  I saw the other day what is happening with agriculture. I am a little bit of a farmer myself, so I take an interest in it. I was staggered with what is happening. In the last three years, while trade is going down in this country, you find an increase in the imports of all the food products which you can produce in this country as well as, and even better than, any other country. Listen to this. Do you know that since 1929, with trade tumbling down—I am giving you quantities and not values, which have gone down everywhere—our mutton imports have gone up by 27 per cent., bacon by 26 per cent., poultry by 36 per cent., live animals for food by 15 per cent., butter by 31.8 per cent., eggs, not in shell, by 14.7 per cent., apples—we can grow the most beautiful apples in the world—up by 25 per cent., milk, condensed and unsweetened, up by 13.4 per cent., and miscellaneous vegetables up by 8.2 per cent.? You think that you can do it merely by Protection. All I can say is that all that you have clone at the present moment is to put up all the prices of the things we have to buy. [HON. MEMBERS: "No!"] I know that prices have gone up. But the prices of all the things you sell are down. [Interruption.] I will show my hon. Friend in a minute. You are not going to deal with it merely by Protection. No country in the world has done it by Protection alone. Just see what you have done. Many of you read that White Paper issued in August last. Listen to this:
  "The provision for 1932 for agriculture will be reduced by £580,000."
  What for?
  "This will involve the discontinuance of grants to landowners for field drainage and water supply schemes; a reduction in the
  1178
  sums available for the assistance of Drainage Authorities and Catchment Boards; the postponement of new developments in agricultural research…"
  Then you are going to postpone allotments and small holdings; you are going to cut off another sum for Scotland, £478,000 for forestry—why? This Government is the most abject picture I have ever seen of statesmanship in a funk! To cut clown research at this moment, when agriculture is fighting for its life, is a lunatic policy. I ask the Government—it is too early yet to put the whole point before them, but I do ask them—to consider very carefully whether they cannot utilise the resources of this country for the purpose of re-equipment and development during this period when the world is not coming to us? You are not going to get your conferences restoring world trade in a hurry. Every country is fighting for its own hand. Look at Lausanne. You have made a very small advance there; I am not expecting very much more from your big Conference. Every country wants to succeed at the expense of a sacrifice by others, and the result is that we are making no headway. But let us meanwhile do something for our country, and not always be looking forward to something happening just round the corner. Do not let this country be like that Pompeian slave just discovered in Italy who was found among the ruins clutching the leather bag of his savings. Utilise them! The land of this country was reclaimed in the Middle Ages by people who were consecrated to service. Let us revive the ages of faith, and instead of Britain standing for ever at the doors of Employment Exchanges, Foreign Offices and conferences expecting something to happen, let it exert its great strength in the spirit of faith. And if we do it boldly, fearlessly, in these trying days, then when the trouble is over you will have a country which has not been dilapidated and deteriorated by these years of crisis, but is a stronger, mightier, richer and more contented land.
  Mr. CHAMBERLAIN: In ordinary circumstances I should never have thought of intervening at this stage in the Debate, especially when more than three hours have already been consumed by speeches from the Front Benches; but I am afraid that the exhaustive survey to which we have just listened, ranging from commentaries upon the monetary system

  1179
  of the world to the imports of miscellaneous vegetables, may possibly have driven out of the recollection of the House the fact that the right hon. Gentleman has made two speeches to us. The first of those speeches was an attack upon the proceedings at Lausanne, which gave—or suggested—such a distorted picture, that I hope the House will forgive me if I rise to spend a few moments in giving what, I think, is a truer account of what took place there. We must remember that speeches in this House, especially when they concern foreign affairs, are not confined to those who listen to them; the whole immediate future happiness, even perhaps the livelihood, of millions of people throughout Europe, and even beyond Europe, will turn on whether, in fact, what has been done at Lausanne is going to open a new chapter or not.
  The first essential is that confidence should be restored. I should not desire for one moment to try to establish a confidence which I thought was likely to be destroyed in a brief period of time; but, on the other hand, it is equally necessary that confidence which is well based should not be diminished by any inaccurate view of the real circumstances of the case, and although criticism of what took place at Lausanne may perhaps give some satisfaction to people who do not wish to see credit given to this Government, after all there are bigger things at issue here than any personal reputation of statesmen. The right hon. Gentleman rebuked me for having reproached my right hon. Friend the Member for Epping (Mr. Churchill) yesterday for something which he said. I do not reproach the right hon. Gentleman for having to-day, after having heard my right hon. Friend the Prime Minister, made criticisms which I think it will be quite easy to answer, and which I hope in the end may have the effect of clarifying the situation. The right hon. Member for Epping, if I may say so, came here without having got the information that was to be given to-day, set up a number of hypotheses, each one of which was damaging to the prestige of the Government, and then proceeded to criticise us successively on the basis of these various hypotheses.
  Let me return to the attack of the right hon. Gentleman. He approved, he said, the original policy of the Govern-
  1180
  ment, the policy of cancellation all round, and said that he wished that we had never abandoned it, and that he—who was not there—was quite sure that if we had stuck by our guns we could have carried it through the Conference. Well, were we to pay no attention to America in what we did at Lausanne? Were we to agree to a cancellation all round irrespective of what might happen between ourselves and America afterwards, or was the cancelling at Lausanne to be dependent upon the cancelling by America afterwards? If it was, then the right hon. Gentleman's settlement would be no more final, no more complete than that which we are able to put before the House. If it was not that that he was going to do, then he would have us adopt for this country the very policy which he denounces as being impossible even to think of, namely, that we should cancel all debts owing to us and leave nothing settled as to the debts we owed to other people. The right hon. Gentleman said: "Ah, but we could have gone to America and said, 'We have cancelled everything, we come with clean hands.'" "He who comes to equity," he said, "must come with clean hands." Does he suggest that we are not coming with clean hands to-day? Did he not hear the Prime Minister say that we had declared to all the Powers at Lausanne that we would not retain for ourselves one penny of the reparations which we obtained from Germany?
  How, then, can he suggest that we are not going, when we go to America later on, with clean hands? If America should decide, either when we go to her or at any future time, to cancel all debts owing to her, our offer is still open, still remains good; we are still ready to cancel all debts owing to us. America, I take it, has open to her various possibilities or alternatives. I am not suggesting that America will take any one of them; she has a perfect right to decide for herself what she will do. But suppose that she said, "Very well, I will accept the settlement you have made with Germany as a basis for your settlement with me, and I am not going to ask of the debtors in Europe any more than is at their disposal from the final payment now substituted for reparations"; again I say that our intention of cancelling the debts due to us would hold good, because it would be in line with the general declaration which

  1181
  my right hon. Friend repeated again this this afternoon: that it is not the intention of the British Government to retain one penny for ourselves of any of the reparations which we may obtain.
  But the situation may be different from that. It may be that, when we go to America, America may say to us, "Well, you have done what we asked you to do; you have agreed among yourselves. So far as you are concerned, you have made a definite arrangement of a certain kind. We approve of your general mode of action, but we feel that we must ask you to pay something more than you have received." In that case we must consider what we are going to do, but if you ask me to suggest, for instance, that before we go, America is going to propose to us that we should consent to cancel debts from our European allies to ourselves, that would be an altogether unreasonable suggestion. Therefore, when the right hon. Gentleman asks, in a voice which seems to suggest that there is something mysterious and sinister behind that is being concealed from the House of Commons and to inquire, "What is the real arrangement made with France and Italy?" does he suggest that the arrangement might be that we have agreed to cancel their debts irrespective of what America says to us?
  Mr. LLOYD GEORGE: It is in the power of the right hon. Gentleman to give the answer. If he would publish the paper, that would be the best answer. There is a written document, according to the French 'story, between this country and Italy, and another between this country and France. Will he publish those papers, so that we may be able to judge for ourselves and it will not depend upon any argument in this House?
  Mr. CHAMBERLAIN: I have not the slightest objection to publishing those papers if the other Governments agree. Of course we cannot publish them without their agreement. I have just told the House what the arrangement is. There is no mystery about it; our position is perfectly plain and simple. If the cancellation all round can be achieved, we cancel; if, on the other hand, cancellation all round is not possible, then we must wait and see what America may propose to us before we decide what we are going to do. He spoke about a so-called Gentlemen's Agreement.
  Mr. LLOYD GEORGE: The French are using that term.
  Mr. CHAMBERLAIN: The French are using that term. I never thought the right hon. Gentleman had invented it. What is the so-called "Gentlemen's Agreement"? It is simply an agreed summary of conversations which took place between the creditor Powers. It was absolutely necessary that the creditor Powers should have among, themselves an understanding on what was going to take place over the main agreement with Germany. If America had been a participant in our discussions at Lausanne, no Gentlemen's Agreement would have been necessary, because we could have got a complete and final settlement on the subject; but America was not there and in the absence of America it was impossible for us to come to a final settlement. What we had to do was to see whether we could come to a settlement among ourselves. That is the great value of the Lausanne Conference. If we had gone away without showing that we had been able to come to an agreement among ourselves that would have undermined confidence and have written Lausanne down as a failure. That we were able to do what only a few months ago everyone would have thought a fantastic suggestion, that we could get the European Powers to agree to an arrangement such as that which was described this afternoon by my right hon. Friend the Prime Minister, constitutes the success of Lausanne.
  What was this arrangement? The Treaty with Germany does not itself say what is going to happen about ratification. It merely says that the agreement does not finally come into force until it is ratified. That is not a new feature of a Treaty of this kind. You find that in all Treaties, The Hague Treaty and the rest of them. To have put into the main agreement arrangements which really concern only the creditor Powers would have been inappropriate, because the Treaty was a Treaty with Germany, which was the debtor Power. Germany, as my right hon. Friend has stated, has always taken up the view that reparations and War debts were two entirely separate things. Therefore, the Treaty itself only contains the provision that it must be ratified before it becomes finally operative. What are the circumstances

  1183
  in which the ratification should take place? There is no mystery about it, there is nothing sinister about it, there is nothing that we desire to withhold from this House, from this country or from the world in the arrangement, which was natural, necessary and, indeed, only common sense.
  As we could not at that moment make an arrangement with America, we had to postpone ratification until we knew what it was possible to do with that country. Therefore, the first thing that we had to put into the agreed summary of our conversations was that the Treaty would not operate until after ratification, and, secondly, that ratification would not be possible until we had seen that we could fit our Treaty into a world settlement. If the world settlement is one which is agreeable to the European creditor Powers, well and good, they ratify, and the Treaty at once comes into operation, but, of course, you must consider—whether you think it probable or improbable—you must consider what is going to happen supposing ratification is not found possible, because no satisfactory agreement can be made by one or other of the Powers. What is to be done in that case? Obviously, we had to consider that, and it appeared to us that in that case a new situation would arise altogether; the agreement which we had made at Lausanne would be of no effect, it would become null, and the legal position would automatically revert to what it was be fore the Hoover moratorium. Then, my right hon. Friend said anybody who really thought that we could go back to that situation, ought to have medical attention. This is only the question of the legal situation, and it will be necessary that the Powers should come together and have another conference to decide what they would do in the face of this very unfortunate circumstance.
  Let me make it perfectly clear that, although it was absolutely necessary that we should contemplate the possibility of that situation, we are not expecting, and I think I might say that none of the Powers are expecting, that that is going to he the outcome. On the contrary, we are confident that, having followed the advice that was given to us by the United States in having shown that we can harmonise our differences and that we can come to an arrangement
  1184
  which as far as we are concerned is one of general agreement, America is never going to refuse to play her part in a world settlement which must benefit her, and that we can count upon her willing and ready co-operation when the proper moment arrives.
  The right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) at the beginning of the second part of his speech dwelt gravely upon the seriousness of the world situation. I entirely agree with him that the situation is not only serious, but in many respects critical. He asked what the Government are doing and what they have done to deal with that serious situation. I say that Lausanne is the answer to that question. It is no use to come along the moment the Government tackle one problem and ask why they have not tackled another. We have to tackle the problems one by one, not forgetting their inter-relation but tackling them as it is possible, one by one, and in tackling this problem of reparations we have succesfully shown what can be done. Let the House make no mistake, the influence of the British delegation and the prestige which this country carries to-day was one of the main factors in the settlement which was arrived at, and, in using that influence at Lausanne to get a settlement of this vexed problem of reparations, if we have not got at the root of the evil we have got very near to the root of it, and we have solved a great problem, temporarily, it is true, subject to the cooperation of the United States at a later stage, and have made a long step forward towards the restoration of that confidence which, as I began by saying, is the one essential need of the world to-clay.
  Mr. CHURCHILL: I shall not delay the House more than a few moments, but I should like to ask my right hon. Friend whether I understood from him that the documents asked for by the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) will in due course be made public with the other documents upon this subject. I gathered that that was the answer he gave, that it was in the affirmative, and that, there was no objection to the publication of these documents. Is that not. so? [HON. MEMBERS: "He said so."] I am asking the Government. Is that so? There is no objection to the publication of these documents? of course, if other parties to an agree-

  1185
  ment of this character object, I agree that you are not entitled to act independently, but is it understood that these documents will be published if the other Powers agree?
  The PRIME MINISTER: We have no objection. As a matter of fact, the documents are announced and the gist has been put on public record. That is why there is no occasion to publish them.
  Mr. CHURCHILL: I think the Government would act very wisely in making it clear that they have no objection whatever to the publication of these documents, because the mere fact that they had not been published would undoubtedly lead to all kinds of comments in many countries upon the subject. [HON. MEMBERS: "Why?"] Because these are matters of great consequence to many countries, because these subsidiary agreements are the essence of the whole controversy and because they entirely alter the whole effect of the Act of Lausanne, as published. All these matters will be pressed for. [HON. MEMBERS: "No!"] I am going to put my point of view, and it will not take very long. If these documents are withheld or if one is withheld, and as long as they are withheld, undoubtedly it will cause difficulty in the United States, and it will arouse a worse thing which I want to avoid, and for which there is no justification, namely, suspicion. I cannot believe that there is anything in these documents which is in any way improper if put in a full and clear manner as expressed in the simple terms which the Chancellor of the Exchequer has used. It will be a disaster to make an unnecessary mystery about them. It only means that either they will leak out from some quarter or another in fragments and that the worst construction will be put upon perfectly innocent things, or it means that the enemies of debt revision in other countries will assert, very often in the most unscrupulous manner, that these documents contain all kinds of provisions which never entered into the heads of the negotiators Therefore I press most earnestly the head of the Government and the Chancellor of the Exchequer to endeavour to lay this matter simply and plainly and in its integrity before the countries concerned, now that matters have reached this point.
  I think I have had a special rebuke from the Chancellor of the Exchequer.
  1186
  He singled me out for victimisation over the head of the right hon. Member for Carnarvon Boroughs because, apparently, I had spoken before the Prime Minister had made his statement. If I had spoken after it and had had an opportunity of coming into this Debate I could hardly have altered one single word of the argument that I employed yesterday. I have listened to everything that has passed, and I have meditated most carefully on what I said yesterday, and I cannot see that the account that I then endeavoured to give to the House has been in any way upset or altered by what we have been told to-day. There was this great act of Lausanne, and then it appears that there was a subsequent agreement, a separate agreement, which makes the act of Lausanne contingent upon the settlement of debts with the United States. That is a fact and there is nothing improper or dishonourable about it. On the contrary, I consider that if the Government had not inserted a provision of that kind it would have been neglectful of British interests. If that is so, then I do say that much too much has been made about the importance of this settlement at Lausanne. If it is contingent upon negotiations of which the crux has not yet been reached; if it is contingent upon events which no man can foresee, control or measure, then I consider that a far more moderate, modest and restrained presentment of the achievement at Lausanne would have been more in conformity with the general interests of the Government and with the policy which they are no doubt anxious to pursue.
  7.30 p.m.
  Sir ALFRED BEIT: I am grateful to the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) for having brought the Debate back from the Swiss atmosphere of conference to that of national economy, because, although this subject was dealt with yesterday, I wish to address myself to it to-day. The public mind is bewildered by the vast figures of millions of money involved in our public services. We have heard from the Chancellor of the Exchequer that a sum of £122,000,000 is involved in old age and widows' pensions, and health and unemployment insurance; education £50,000,000 and housing £15,000,000. I have set myself out to show how this expenditure is reflected in the life of the

  1187
  individual, and for this purpose I have taken an average working man, whom I have imaginatively called "John Smith." He will be seen to be highly adept at delving into the Government pocket; indeed, he is a composite character, for, while no real man has ever mulcted the country of so much money, it must be borne in mind that all the claims which I am going to attribute to him are actually being made by someone to-day. Also, his long life of 80 years must be presumed to cover the period when existing statutes governing the national purse are in force. His birth, then, will cost the nation £4—I am assuming that 60 per cent. of the 760,000 babies born in 1929 will have shared in the £1,770,000 provided in that year by the Ministry of Health for maternity and child welfare services. As his father died shortly before John was born a pension of 7s. 6d. per week is payable on his behalf until he is 16 years of age. That will cost £312. His elementary education starts at the age of three years and continues until he is 10. The education report in 1931 shows that 118 children under the age of three were registered at elementary schools. The most expensive elementary education is that provided by the London County Council, which averages £18 12s. per annum, so that seven years' education will cost £130. From the age of 10 until the age of 18 he receives a secondary education, which, as given by the London County Council, costs £36 a year. Therefore, in eight years he will have got £288.
  I confess that I am taking an extreme case, for after so long and excellent an education my hero will undoubtedly be worthy of a finer future that I have in store for him. At the age of 18 he works for 30 weeks and qualifies for unemployment benefit. Thereafter he can re-qualify for unemployment benefit as soon as he has worked 10 weeks and paid 10 contributions. Thus till the age of 21 he can work in 82 weeks of dole at 12s. 6d. per week, which, after subtracting his own and his employer's contributions, will cost £45. At the age of 21 he marries, and works for periods of 10 weeks, followed by unemployment benefit for six months. He pursues this practice until he is 30 years of age, that is, for nine years, which will cost £382, after
  1188
  deducting his own and his employer's contributions. At this time he spends six months at a Government training centre as a waiter. In 1931 the average cost of this was £35. He proves unsuccessful, and turns to a smallholding, under the Agricultural Land Utilisation Act, 1930, now temporarily in abeyance. Under this Act it was estimated that the capital cost of his holding will be £640, workers' capital £275, training £70, and maintenance for the first year £40, a total of £1,025. He occupies this smallholding for three years, fails, and is sold out, the loss to the Government being £500. From the age of 34 up to the age of 65 he reverts to his previous procedure of drawing unemployment benefit for himself and his wife for six months' periods after a 10 weeks period of work. The cost of this for 30 years at 23s. 3d. per week, less 1s. 8d. per week contribution, is £1,273. It would be absurd in my opinion to classify assistance such as this as an insurable risk and to obscure its charitable basis under the cloak of rights, which rapidly become vested.
  At the age of 35 Smith rents an Addison house, built under the Act of 1919, which he occupies for the remaining 45 years of his life. In a recent reply, the Minister of Health stated that the average cost of these houses was 13s. per week, up to 1980. For 45 years this means £1,521. When he is 65 years of age his wife dies, and he enjoys the old age pension of £26 per year for 15 years, when he dies at 80 years of age. This costs £390. Being found without any means when he dies, he is provided with a pauper's funeral, the average cost of which to the London County Council is £5. The sum total of all this is £4,886. Nor is that the end, for at the age of 75 John Smith marries a second wife, aged 20, not an impossible supposition, who survives his death for 50 years, and draws a pension of 10s. a week since she does not re-marry. Thus John Smith, who has been most generously provided for during his life, leaves as a legacy to the nation a, burden of £1,300, making a grand total of £6,186. Expenditure such as this is gnawing at the very vitals of the nation. Why? Because, apart from the expenditure on education, it is utterly unproductive. Further, it destroys initiative, which is so essential a factor in the building up and the formation of character.

  1189
  I have heard Socialism described as inertia in production and activity in consumption, and I think that the narrative I have given is an eloquent illustration of this definition. Indeed, the whole crux of my criticism is directed not so much against the volume of this expenditure, although it represents too great a proportion of the much reduced national income, as against its character. This is where I differ from the average economy monger. The problem of the nation's surplus man-power is one for constructive policy, not for mere subsidies. From this narrative hon. Members would probably think that I am an advocate of ruthless retrenchment. I welcome the economy committee, and I think lit is time that the estimates of the Departments were inspected by a Parliamentary body of this nature. But the attitude of mind of this Committee is disastrously deflationary. It will be seen that I am no great friend of social subsidies and that I advocate a realignment of national expenditure. If economies are realised, deflation can only be avoided by at, equivalent, if not a more than equivalent reduction of taxation. Some of us are a little nervous of the attitude of the Chancellor of the Exchequer who, analysing the social expenditure of the nation on the Third Reading of the Finance Bill, said:
  "Here are items which in the aggregate form a great part of our national expenditure bill. I do not say that in no circumstances should any of those things be touched, but I do say that he want to be very sure that changes are necessary before we undertake them."
  And again he said:
  "I ask hon. Members to remember that a substantial rise in wholesale prices, which has been recognised as desirable in all quarters of the House, might materially change the whole situation."—[OFFICIAL REPORT., 10th June, 1932; col. 23415, Vol. 266.]
  The logical sequence to this argument is disquieting in the extreme; a hesitation to readjust the burden of social expenditure, since the time may come when that burden is more easy to bear than it is to-day. But what harm will be done by leaving the money in the taxpayers' pocket? How else can money be found for capital development, which is the crying need of the country to-day. Further, if a host of artificial restrictions throughout the world—and I am happy to think that their death knell has been
  1190
  sounded—has brought the capitalist machine to a standstill, it is the duty of the Government to set it going again. I do not wish to be construed as meaning that the Government should protract the dying agony of a superannuated system. On the contrary, I wish to pay a tribute to the resilience which that system has shown in conditions of unprecedented strain, and in the crisis of to-day our people are more prepared than ever before to support a Government which will give a lead to productive enterprise.
  I think I have made it clear that in criticising the volume of social expenditure and in urging a reduction in taxation, many of us are willing now, where we were not before, to see the Government inaugurate the contruction of revenue-producing works, for the twofold purpose of oiling the wheels of the capitalist machine, and of making better use of the country's surplus man power. Are there not thousands of improvements which need to be effected, improvements which, for the most part, will enrich the nation and which will produce revenue? Italy has raised herself from a second rate to a first rate power by the constructive use of her labour. Yet in Great Britain little of this nature with the exception of the electricity grid system, has been achieved. In a recent letter to the "Times," the members of the Economic Faculties of Oxford and Cambridge Universities say:
  "The Government should speed up expenditure on sound schemes of construction and development. The Government should obtain funds for these purposes from the banks, which will thus be assisted in their efforts to put fresh money into circulation."
  Retrenchment and reconstruction are not self-contradictory terms. If further deflation is to be avoided economy must go forward hand in hand with progress. Since the beginning of this year the Government have achieved much. They have prepared the country to take advantage of better times; they have gone far in the work of destroying the barriers which have prevented their arrival. Now they must lead towards reconstruction.
  Miss GRAVES: In addressing the House for the first time I take courage in the knowledge that I am begging for that indulgence which I have seen so kindly granted to others who have gone through this difficult task before. My reason for venturing to interfere in this great De-

  1191
  bate on foreign affairs is because through force of circumstances I have for a long time been very interested in the relations between Great Britain and the United States and Europe. I took a part in an official capacity in the Paris Peace Conference which perhaps is title enough to express repentence to-day. I listened yesterday and to-day to the candid friends of the Government. Much that has been said by them has been pure destruction disguised as criticism. listened yesterday to a paraphrase of the old story of Red Riding Hood and the wolf, the wolf who did not deign to emerge from his lair unless he is hungering to destroy. This afternoon we have had an exhibition, I can only call it that, of the exuberance which is the result of memories. I also have memories of the Paris Conference and of a very different attitude towards Germany than that which have been expressed. I was sent to this House as a Member of the National Government and it is my duty, as I conceive it to examine such proposals as may be presented to us for consideration by the National Government with at least an open mind.
  There are a great many things in this imperfect world which we would like otherwise. But what Haegel and Sir Basil Blackett, would call the "Altogetherness of Everything" is the dominant factor, and is that aspect which is in operation now and which must necessarily govern our considerations in the future. We have had the conference at Lausanne. We have an attitude on the part of the United States which to my mind is very properly not revealed until After the conference has been brought to a successful issue. What business man or woman would consider dealing with a debtor who was engaged in dealing with several sub-debtors unless that debtor had come to some arrangement with his sub-debtors. The United States are perfectly within their rights in refusing to re-open the question of debts until Europe has presented a united front on the matter. That united front has been attained at Lausanne. Germany has been made an honest woman. That is what it amounts to. If for that alone I count the Lausanne Conference certainly not the failure that was suggested this afternoon, but the foundation stone of a good edifice to come.
  1192
  We have heard a good deal to-day about Germany. One must hold a balance in these things. We have heard nothing at all about France, except some reference to war guilt from the Leader of the Opposition. I would like to put the French point of view. Possibly because I lived there for five years I have a somewhat harsh view of her, but at the same time I know a little about the French point of view. Their view is that they have given up in this cause of world recovery a phrase which is quite as dear to them as any phrase can be and often is to a nation which is intensely national. They have given up any insistence on the term Reparations. They have washed away the word "Reparations." They have in substance possibly, at any rate they have tacitly abrogated certain clauses of the Treaty of Versailles which were so injurious to the peace of Europe. France has done something else. She has receded from the position which she held so strongly at the beginning of the Geneva Conference. I think that mention should be made of this action on the part of France because in her giving she has been, within her limits, as generous as this country is prepared to be in certain circumstances.
  I mentioned Geneva just now. We heard this afternoon that at all costs the British Navy should be reduced. It was not said in those words, but that is near enough. I am deliberately avoiding a reference to my family tradition in regard to the Navy. I would like to go back further and recall a small Navy that looked after the interests of traders in Elizabeth's day. Following from that I shall venture to ask the Foreign Secretary for some assurance that when, in the course of these negotiations and the drafting for which he is justly celebrated, he is adjusting the difficulties of different points of view regarding disarmament proposals, he shall consider that what I will call the vanishing point, the irreducible minimum in regard to the 'police work of the Navy, has been reached. The day after to-morrow there will be an opportunity to see the strength of the Navy, which is some 40 odd ships. I venture to ask for an assurance that at Geneva consideration shall be given to what we have given up, and that the work of protection which the Navy is

  1193
  now called on to do shall not be lessened. It is not only because the coastline of the British people is the most vulnerable or the longest in the world, it is not only because the trade routes are the arteries of this country, although those considerations count mightily. It is to my mind because there are many places on the globe where the presence of a British gunboat or cruiser within hail constitutes a safeguard for the wives and children of the settlers in those places. There have been many incidents—I can recall about five—where the presence of a gunboat or a cruiser has not only constituted that safeguard, but has maintained peace in that neighbourhood. I hope that the Foreign Secretary may not consider it impertinence on my part if I should beg him to reflect upon that particular safeguard for which I am pleading.
  There is the future. Perhaps because we have been broker in this business of reparations and debts, a broker who is not taking the brokerage and is going to lose on the general transaction, our foreign policy has been an ad hoc one. I have some recollection over the last years of a perpetual balance of policy, balancing to suit Germany and France, balancing in regard to Russia, according to which point of view prevailed. I am going to ask for a new consideration about British foreign policy. This Chamber has echoed to many great enunciations of British foreign policy in the past. In those days—I believe they have come to an end—the balance of power was the consideration. Palmerston is policy has been described as a ruthless attack, only to withdraw at the last moment. That was because of the age in which he lived. The policy of Palmerston belonged to his age. The spirit of Palmerston is the spirit which should inspire British foreign policy at this hour.
  We have Great Britain to-day the only country in the world which can attempt to convert War Loan at 3½ per cent. That alone, and a balanced Budget, would seem to authorise her position as a strong chairman of Europe. In these days we do not consider the balance of power. In these days we are bent on reconstruction. Europe is crying out for a strong chairman. I do not consider that it would be wise at this moment to approach America single-handed. I have had some acquaintance with America. Let the
  1194
  conference system go on until such time as the business of reparations and, as we all pray, war debts, may be safely finished; but then may we hope for an enunciation of British foreign policy that is going to carry us over the next 25 years? I am not going to think any longer in terms of years, but in terms of quarter and half centuries. Given the position of chairman of Europe, Great Britain would be above reproach. At this moment the world knows that she is not out for herself. But I plead for a British foreign policy in future. Geneva and Lausanne are rightly linked to-day because the signature of the Lausanne Conference seems to me to unite two troubled streams into a mighty navigable river. The navigation is difficult, and must often be dangerous, but given the pilot and steersmen that we know, I do not feel that anyone here, with the will to success, can draw back. As I see it, we are afloat on a wide waterway which can bring us to world peace and economic recovery.
  Colonel WEDGWOOD: I have heard a great many maiden speeches, but never before a maiden speech of a lady Member, and I must say that the speech to which we have just listened is a speech for which the House has been waiting for 25 years. I am not alluding to the part dealing with the Navy and to her traditional spirit of the Navy, but I am alluding to the hon. Member's demand for the Palmerstonian touch about the conduct of our foreign affairs. How often have I prayed for Palmerston. Now I have an ally. The Secretary of State for Foreign Affairs may perhaps now listen to that old Liberal principle of doing justice and making Britain act for justice whatever the risks that may be involved. I hope that we shall hear more of the hon. Lady in this House, and that she will not confine herself to a maiden speech, but will lead more the benches from which she speaks on foreign affairs. I only hope that she may agree with the speech which I am going to deliver on the Lausanne Conference.
  I welcome, as I think everyone must, not only the end of reparations, but the position that has been taken up by the British Prime Minister in bringing about this agreement. We have ended reparations, but we have not cancelled debts, and I am a little nervous because of what the French Press tells us. It appears

  1195
  that, all unknown to the White Paper, there has come into being at Lausanne a "united front." A united front against whom? A united front of what Powers? A united front presupposes someone against whom that front is to be used. I do not wish to have any allies, however excellent, in dealing with America. Our debt to America is not merely one of cash. I know enough of America to say that she is more likely to deal with a situation such as she is faced with to-day as we should have dealt with it had we been in the same position. Yielding to threats and coercion is not part of American philosophy, any more than it is ours. I dread to see a united front used not by England but used by the other partners to the front.
  8.0 p.m.
  We owe America a good deal, and not only money. I ask the House to observe that the money we owe to America is not an ordinary debt but a debt of honour. It is a debt which cannot be claimed by legal process. America cannot send her fleet over here to blockade our ports and impound our Customs. We can, if we like, refuse to pay the next instalment of that debt quite safely. Nothing would happen if we did except that we should earn our own contempt and the contempt of other people. Why a united front? So that the other nations may say, "Well England did it, so why should not we?" I do not want that said about England. This House is a new House of Commons. I wish I could transport hon. Members back in memory to that House of responsibility which fought the great War and show them the straits through which we passed then. I remember how we pledged our credit to America, how we took every dollar security we had and pledged it to the Americans. Then America came into the War and they asked no more security. Conditions before they came in had come to such a pass that I remember suggesting that we should pledge with them the ground rents of London. There was nothing further that could be offered in the spring of 1917. Then they came into the War and they took our word. It is true that much of the money lent to us and Much of the stores bought upon our credit went to our Allies, but it is no defence to a debt of honour to plead that
  1196
  the money which you borrowed, you spent upon your friends. In that House we were very thankful when America came in. I think there have been only two occasions in my life when I have gone down on my knees and thanked God—a God in whose personality I cannot believe—once, when Bulgaria collapsed and I knew that the end had come, and once when America came into the War and I knew that we were saved. Do not let us in these days forget or descend to huckstering in alien company when to our own flesh and blood we owe so much.
  That old House has gone. Some names are inscribed up there of those Members who have gone for good. None of them wanted to go. They were not professional soldiers. They were all horribly afraid as everyone who has been under fire knows. They went without any advertisement, and they died without a word of recognition here. Why did they go? Just on a little point of honour, just to set the right. Example—"Ad majorem Dei gioriam"—for the greater glory of the House of Commons. Not many Members of that House are here to-day. I have survived, and I am almost ashamed that I have survived. I have survived to tell this House that if they would do their duty by those who formed this House in the great days, who helped to shape the policy of this country and the world, there is one thing that they must support at all costs, and that is the honour of the House of Commons. What does it matter to us how "the lesser breeds without the law" deal with problems such as these? It is so easy when you are hard pressed to ally yourself with other debtors and compound. I had sooner sell the National Gallery, sell the British Museum. I had sooner sell our incomparable British fleet, aye, sell up England, lock stock and barrel, than default on the debt that we owe to America. If there is anything that must be said about a situation such as this, it is that the first hint of remission must come from America and not from us.
  I am glad that the Senator for Oklahoma did make a suggestion the other day indicating at any rate the possibility of some other way of meeting the debt than in gold. He suggested that we should hand over or transfer the West Indies to America. The West Indies are not ours to transfer. The West Indies are self-governing Colonies, populated by

  1197
  coloured people and they are I fear the one section of the British Empire which would resent and resist most bitterly annexation to the United States where coloured people are not so happy. The West Indies are, perhaps, the only countries in the world where coloured people are proud of their British citizenship. We cannot say that of the coloured people in Africa.
  The proposal to which I refer went further than that. The Senator suggested that the mandated territories which we administer might be transferred to America. I should welcome that proposal. At any rate the natives in the mandated territories would be looked after by America quite as well as by us and the natives in South-West Africa a good deal better. The natives in Tanganyika would be looked after quite as well and I am certain that Palestine Would welcome the change. Possibilities he in that direction and if we are faced with the question of the future career of the British Empire, a career which I think the hon. Lady and myself agree consists only too largely in carrying the black man's burden until the black man is able to carry it himself, I could wish for no better partners than the American people. I have even contemplated the possibility that we might offer them half India—not a physical half but half control with alternate Viceroys and recruitment of the Indian Civil Service in America. I look forward to the union of the Anglo-Saxon race and I think that union could not start better than by a willing honourable conclusion of the debt; coupled with co-operation in the gigantic task which the British Empire has before it.
  However that may be, there must be some way out beside repudiation, besides going pathetically to those who lent and saying: "We cannot pay you; do let us off." We can pay them in goods, if we cannot pay them in gold, we can pay them in Cunarders, yes, and we can pay them in crockery. Once the Americans recognise that in some way or other we intend to meet that debt we shall find people there who wish to meet us on friendly terms. We shall find people there who will say that in Europe there remains one nation which understands an honourable bargain, not based upon force. We are here, the rank and file of the Commons of England, for a few years
  1198
  only. We do not find our way into Westminster Abbey or into the Dictionary of National Biography. We are soon forgotten but we are part of an institution which is 700 years old and we are in our time the governors of this country.
  This House is as we shape it. British policy is as we shape it. We have had ups and downs in the past, but we are proud, on the whole, of the part Parliament has played. We are the torchbearers. The torch through the ages has blazed and flickered from age to age. It is our duty in the short time that we are here to see that the torch of honour that we took from our predecessors is passed on to the next generation burning as brightly as ever. Those men who sat in this House in the past, who sat on these benches here, on those benches there, have gone and are almost forgotten. But they all did their part and I do beg of the Government now to see that the English Parliament is not let down and that they do theirs. I do not know what the Prime Minister means to do. I do not suppose anybody else does, but we have this guarantee. The right hon. Gentleman the Member for Bewdley (Mr. Baldwin) has made his proofs. He paid £100,000 for his country. He is no longer a rich man, but I think that he would resign out of this Government before he would go back upon the honourable settlement which he signed. He has been abused by all the irresponsible Press; he has been abused on every platform in this country for doing the right thing. It is very rarely that anyone does the right thing and gets credit for it. He did not bargain, he could not bargain, and the Government of which he is a member had better not try bargaining when British honour is at stake.
  Mr. BOOTHBY: We have listened to a very interesting and a very moving speech from the right hon. and gallant Member for Newcastle-under-Lyme (Colonel Wedgwood), who has just sat down. I wish that I could find it in my heart, as one who has the possibility of having to face the future for some considerable number of years, to agree with him about the American debt settlement. I shall come to it in a minute. But I have always quite sincerely believed that although it was entered into by the present Lord President of the Council with the very best intentions, it has proved a most disastrous step, and was

  1199
  in fact the most fatal blunder of all the many blunders which have been made by the statesmen of the world since 1918.
  We have heard a lot to-day about the Lausanne Agreement. I am one of those who have admired deeply, and for a few days at close quarters, the heroic efforts of the Prime Minister to achieve a settlement at Lausanne; and I believe that without him, and without his efforts, a settlement could not have been achieved. I think that he does deserve the very greatest credit for what has been a great service rendered, not only to this country, but to Europe. I do not take the view that the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) and my right hon. Friend the Member for Epping (Mr. Churchill) were being mischievous or damaging in pressing the Government to give the fullest information about what has become known as the subsidiary "Gentlemen's" Agreement.
  I think the right hon. Member for Carnarvon Boroughs and my right hon. Friend the Member for Epping rendered also a service, not only to this country, but to the world, in pressing the Government not to allow any sort of mystery to enshroud the results of the Conference at Lausanne. Because nothing could be more calculated to engender suspicion in the United States of America and to jeopardise the chances of an ultimate satisfactory settlement of the debt problem than any idea entertained at Washington that there was some backstairs agreement between the creditor countries of Europe to form a united front against them. I believe that nothing more fatal than that could possibly happen. Surely we had our lesson in the ill-starred secret Naval Agreement with France. We saw the effect of that upon opinion in the United States of America; and I think the right hon. Gentleman the Secretary of State for Foreign Affairs or the Under-Secretary of State, whichever is going to reply to-night, would do no harm if he emphasised once again, on behalf of the Government, what has already been emphasised by the Chancellor of the Exchequer, that there is no mystery, that there is no secrecy, or secret document which we are trying to conceal in any way, either from the United States of America, or from any country in the world.
  1200
  No one who examines the results achieved at Lausanne, nobody who looks at the White Paper, can have any doubt that that Treaty provides no solution for the world economic problem with which we are confronted at the present time. But I think it does one good thing. The world at the moment is in bondage to the past. It is being strangled by debts. Any step taken to wipe out or reduce any debt at the present time is a step in the right direction; and that, at any rate, has been done at Lausanne. The second thing that I think my right hon. Friend the Member for Epping was a little inclined to forget when he made his speech yesterday was the psychological effect upon Europe of a breakdown of the Lausanne Conference. That is what you have to bear in mind. It is no good claiming that you have solved the world problem by reaching a settlement at Lausanne; but look for one moment at what would have happened if you had failed to reach any agreement at all at Lausanne. I do not think it is any exaggeration to say that you would have had an economic collapse throughout Central Europe; and once that had happened nobody could tell in what difficulties and dangers not only Central Europe but this country and the whole of the world would have become involved. This has been averted temporarily. I think the most you ought to claim for Lausanne is that it is, first of all, a step in the right direction; and that it has avoided an immediate economic collapse in Europe. That is a good deal.
  Now we have to proceed to the next stage in the solving of the most tremendous problem which has ever confronted statesmen in the history of the world. Without the United States of America, Lausanne means nothing, from the long-term point of view. I said just now that I believed that the American debt settlement on our part was a blunder. I say now that the other great blunder we made—and it was pointed out by the right hon. Member for Carnarvon Boroughs—was the restoration of sterling to gold at the pre-war parity of exchange in 1925. If my right hon. and gallant Friend the Member for Newcastle-under-Lyme were here at the moment, I am sure he would agree with me upon that point. And when we in this House are inclined, as we often are inclined, to abuse the French, let us

  1201
  remember that the French did resist, to the very best of their ability, the American debt settlement and that they certainly did not copy us in restoring the franc to the Gold Standard at the prewar parity of exchange; and when we are inclined to lay the blame, as we so often are, upon France for all our troubles and for the economic difficulties of the world, I sometimes think that if we had paid a little more attention to the very realistic economic policy pursued by France during the last 10 years, and had even attempted to copy it in some respects, our bankers might not have been compelled to go cap in hand to Paris at the supreme crisis last summer.
  The right hon. Member for Carnarvon Boroughs, in the second part of his speech, made a most interesting survey of the general condition of the nation, and he dealt with almost every aspect of the economic life of this country. I would like in a very few minutes to deal with the economic problem, and the situation in which this country finds itself at the moment, because this is the last opportunity we shall have of making a general survey probably until October next; and I think we ought never to lose sight in this House of the fundamental problem. Productive capacity, not only here but all over the world, is greater than it has ever been. Demand also. Neither of those two things is disputed. Has either diminished since 1929? Has either productive capacity or potential demand gone down? No. Never before has there been so much want, so much scarcity, in the midst of so much plenty and of so much potential plenty.
  We are still told over and over again that the remedy lies in what is rather loosely termed "economy." Reduce the standard of living. That was the amazing prescription given by my right hon. and Noble Friend the Member for Hastings (Lord E. Percy) in this House yesterday. Reduce the standard of living. Why? What justification is there for any reduction in the standard of living in the world at the present time, when the capacity to satisfy the requirements of mankind all over the world has never been so great? "Let the rich economise, and the poor starve." That is the maxim for the moment, despite the fact that productive plant the world over cannot market its output. I believe, when you look down into the
  1202
  very roots of this problem, that a policy which is based simply upon what is, as I say, loosely termed economy—a policy of reducing the standard of living all round—is a policy of stark insanity; and I believe that if it is continued, it will land us in far greater difficulties than those we are in to-day.
  The problem is not like the problem of the last century, that of obtaining increased production. The problem which confronts the world and this country at the moment is generally admitted to be a problem of consumption. Increase your consumption, and production will look after itself. No one wants wasteful, unproductive expenditure. Everyone is agreed that there is still room for considerable savings in the expenditure of the public departments. But economies which involve a restriction of expenditure on goods and services must mean a further restriction of consumption; and that, in turn, must, from the long-term point of view, aggravate the fundamental problem with which we are faced. If you reduce consumption by reducing expenditure on goods and services, that is to say productive expenditure, it involves a diminution of trade; and an accumulation of goods in the factories, which cannot be marketed. It throws out the whole economic balance; and it cannot be denied that the effect of the kind of economy which is now being preached in this House, and which has had such a disastrous psychological effect outside the House, will be to decrease the purchasing power of the people at home. When we talk about nothing but economy and sacrifice and the necessity for reducing the standard of living, people outside take it as a hint that all forms of expenditure must be ruthlessly curtailed and cut down. That is what we are getting throughout the country among private individuals, municipalities, and companies of all kinds—a steady reduction of expenditure, coupled with a steady diminution of trade, and a restriction of consumption.
  What is the avowed object of these economy-mongers They want, they say, to release more money, more savings for the private individual; but what is the private individual to do with his savings if they are released to him in a world that is frozen stiff from lack of confidence, as the world is at the present time He can hoard; that is deflation. He can invest in industries for the further stimu-

  1203
  lation of production, but that in turn must, under present conditions, only aggravate the problem. More and more goods would be accumulated in the factories, and they could not be marketed because there would be no purchasing power. We do not want more and greater investments in producing industries. We want more and greater consumption.
  8.30 p.m.
  I want to put two questions regarding first, foreign investments, and, second, foreign exports, both of which very interesting and important questions have been dealt with by the right hon. Gentleman the Member for Carnarvon Boroughs in his interesting speech. I believe that in the post-War decade foreign investments have been the cause of a good deal of the trouble with which we are now confronted. They have been the cause of the piling up of debts in many countries, which those countries could ill afford to bear, and which have now to be paid in a currency which is worth a great deal more than it was at the time the debts were contracted. The trouble with all the small debtor nations in the world as that they have been so heavily over-invested by us and the United States of America. It is also the trouble with Germany. In the years between 1924 and 1929 they were saddled with burdens that they have found it exceedingly difficult, if not impossible, to discharge. Excessive foreign investment has further been a cause of the over-production of those commodities of which over-production can be proved to have taken place. Take, for example, the case of coffee in Brazil. Why has Brazil produced so much excess of coffee that they have had to burn it? It is because there was an artificial and unhealthy stream of investment going into Brazil from 1924 to 1929 from this country and the United States, which caused the Brazilian coffee growers to grow far more than they could profit-ably market. Last, but by no means least, the interest that we have taken on these foreign investments during the last few years, in so far as we have taken it in goods, has paralysed our own domestic production to a great extent. At this critical juncture in the economic history of the world our main objective, so far as the foreign investments of this country are concerned, should be to create a balanced and self-sustaining economic
  1204
  unit within the British Empire. That is the safest and surest line of development so far as foreign trade is concerned in the immediate future. Overseas investment during the next decade will only be sound and profitable in countries where there is room for a great deal of expansion and capital development, and which can provide us with the raw materials which we must import. Overseas investment, on a heavy scale, in countries which produce manufactured goods in competition with our own will do us no good, and will increase and aggravate the debt problems of those countries.
  I want also to deal with the question of foreign exports and foreign trade. Every country in the world to-day is striving for a favourable balance of trade. It cannot be achieved. The result is wholesale dumping in almost every market; and the dumping has to be checked by increasing tariff barriers. Some country has to make up its mind sooner or later to be content for some time with an unbalanced trade budget if the small struggling debtor countries are to have a chance of reviving their position and prosperity. It is manifest that every country in the world cannot enjoy a favourable balance of trade: and that is why, during the next few years at any rate, I should like to see the commercial and economic attention of this country diverted from foreign investments in manufacturing countries to investments within the Empire on the one hand; and from the development and expansion of trade with foreign manufacturing countries to the development and the expansion of our own country, not -only in the interest of our country, but in the interest of the ultimate revival of world trade.
  There is another vital aspect of policy which has been briefly touched on to-day. Monetary policy is one of the vital factors. I am not going to bore the House any more with a dissertation on the Gold Standard. But I read with the greatest resentment and indignation a speech of Lord Snowden in another place in which he characterised all those who had ventured to draw attention to the monetary problem and the question of currency as qualifying for a lunatic asylum. When Lord Snowden sneers at those who raise this question, and lectures them and everybody else in the

  1205
  country from time to time, one is tempted to remind him that there are quite a number of people, amazing as he may consider it, who regard him as the principal architect of our misfortunes last year. It was the dishonest Budget which he introduced in the spring of last year that was the prime cause of the failure of world confidence in Great Britain for the first time for 100 years, which occurred last August when the true facts became known.
  It was his own failure to grapple with the fundamental economic problem when he was Chancellor in the Labour Administration that led to the savage cuts which he himself had to propose last autumn, and which timely, judicious and wise action on his part would have rendered unnecessary. His policy was neither expansionist nor economical. During the actual critical weeks preceding the great crisis of August, 1931, the only solutions which Lord Snowden had to offer to the people of this country were Free Trade and the taxation of land values, both of which he has since abandoned. That is the record at a critical time of the man who now says that anybody who ventures to question the advisability of our monetary policy is qualifying for a lunatic asylum. I would only say that if in the future the Government are going to be guided by Lord Snowden in economic affairs I do not think they are likely to command the confidence of the country for Any considerable time. However, I am bound to say that I am not very anxious in the matter, because they certainly have not shown the slightest signs of being guided by him on any point up to date.
  The only objective of all the people who have the interests of a sound monetary system at heart is to secure, somehow or another, for our currency a constant purchasing power. Look after the commodity value of gold—or of sterling or whatever the currency is—and the exchange value will look after itself. I base myself in this respect not so much on stock inflationist arguments as upon the observations of one of the directors of the Bank of England in a publication which ha issued recently. Sir Basil Blackett wrote:
  "The only way to keep a national currency sound and stable is to make sure that its volume at any given moment is neither too great nor too little for the
  1206
  work it has to do. The volume of money should be increased or decreased according to the amount needed to keep prices stable. Prices should not be allowed to dance attendance on the unregulated supply of monetary gold. The amount of the gold reserve that a central bank requires has no direct relation to the amount of its notes in circulation. The measure of its gold reserve requirements is the maximum demand which it is reasonably likely to be called upon to meet for gold for export in the interval between the occurrence of the demand and the time when by taking the appropriate measures it can restore equilibrium and put a stop to the outflow of gold."
  No one would for a moment think of disputing these facts; and I was happy to hear the Chancellor of the Exchequer reassure the House this afternoon upon the question of an immediate or early return to the Gold Standard. I think the right hon. Member for Carnarvon Boroughs was perfectly right when he said that, whatever his merits may be, and we know them to be great, we must be very chary of being entirely influenced in this matter in the future by the Governor of the Bank of England; because he has not been uniformly right or successful in the past—perhaps no man could have been. At any rate, I am quite satisfied that no British House of Commons ought to permit a return to the Gold Standard unless and until some international action has been taken, and successfully taken, to stabilise the value of gold.
  In conclusion, I would beg the Government, and the Government spokesmen, to direct their attention to Ottawa to the creation of a currency system within the Empire managed with the avowed objective of keeping the value of sterling stable in terms of commodities. So far from jeopardising the possibility of an international agreement over a wider field, with the United States of America brought in, if we can get a stable sterling area first it will facilitate the achievement of the wider agreement, which we all hope may come later. The second thing to which the Government ought to devote their attention is the development of a planned and complementary external trade within the Empire, and Ottawa again provides the opportunity. Finally, there is the restoration of industrial prosperity through expansion at home. The right hon. Member for Carnarvon Boroughs said that a revival of world trade would not come in a hurry. I agree. I do not believe world trade

  1207
  will revive in a hurry; but I believe that we have a tremendous chance to move ahead here at home within the course of the next two or three years, and I believe that this can now only be done by the Government.
  I agree with the critics of the policy of inflation when they say, "You can pump credit, you can pump money into commerce, but you will do no good at the moment, because there is no confidence." Now that we have reached this particular stage, the only instrument by which confidence can be revived, and expansion inside this country restarted, is the Government itself. And here lies the danger of this loose talk about economy—economy in productive as well as unproductive expenditure. Here lies the danger of those circulars issued by the Chancellor of the Exchequer and the Ministry of Health to hold up the construction of schools, to hold up the construction of houses, to hold up development in all forms. If the last circular of the Ministry of Health to the municipal authorities means anything at all, it means "Retard; slow down; stop your schemes of development." I have never heard that there was a, shortage of bricks and mortar in this country. I have never heard that there was a shortage of any commodity or a shortage of productive capacity, and I do not believe there is. If we do not adopt this timid policy so far as productive expenditure is concerned, I believe there is an opportunity, and a great opportunity, for real expansion in this country; but if we are on the brink of another anti-waste campaign—cut wages, reduce your standard of living, stop unnecessary travel, close down your factories, reduce your railways to bankruptcy—I, for my part, cannot see any hope for a. revival of prosperity.
  I would like to see housing developed, not held up. I would like to see slum clearance proceeded with. Nearly every large Continental city in the centre of Europe is miles ahead of us in the matter of slum clearance and the construction of great tenement houses for the workers, and that is what we ought to be doing. It is well known, also, that we are behind every country in Europe in the matter of the development of electricity; and the same observation applies to
  1208
  transport and, perhaps above all, to agriculture and to land settlement. We are letting this country go fallow at the very moment when we should be preparing ourselves for a great move forward. The deflationists have already reduced us to a pretty plight. Look at the plight of the world to-day. They have had their way so far. But if we are to continue economising in productive expenditure, if we are to continue to cut down salaries and wages and all expenditure of that kind, I shall certainly vote against it in the Division Lobby. I do not believe even yet that the deflationists have finished. They have already succeeded in putting such a burden on the heavy industries in the shape of debt that I believe the Government will now be forced to take some of that debt off the shoulders of at any rate the iron and steel industry and the cotton industry. I believe the whole policy of contraction in this country will only aggravate the fundamental economic problem with which we have to deal; but the situation, if thus aggravated, will undoubtedly go on developing until ultimately the Government will be compelled to take steps to give the necessary impetus to a revival of trade and industry by the development of an adequate home market for our own industries inside this country.
  Mr. SMITHERS: We have listened to a most interesting speech, with part of which I agree and with part of which I do not. Many of the theories advanced by the hon. Member need the acid test of practice to prove them. One point on which I disagree with the hon. Gentleman is as to the two speeches made by the right hon. Member for Epping (Mr. Churchill) and the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George). I think anyone who has followed the policy of Lausanne might have asked quietly for Papers in the form of a question. To have had a full dress Debate on this subject was inopportune and mischievous. I wish the right hon. Gentleman the Member for Carnarvon Boroughs were here at this moment. He made the extraordinary statement that the £150,000,000 Stabilisation Fund is being used to keep the pound down. The Stabilisation Fund of £150,000,000—and

  1209
  some people seem to have forgotten what its function is meant to be, although, it has been explained by the Chancellor of the Exchequer on two occasions—is meant to iron out the day-to-day fluctuations in the exchange. If there were any big loss of confidence, or any big revival of confidence, in this country, which meant the transference of big sums of credit, £150,000,000 could not hold out.
  The Leader of the Opposition took credit to himself when he said that his party had been right all through the piece because they had always advocated the policy of a clean slate. I have been sitting through the whole of this Debate to-day, and once only, and that just in a sentence, has the honoured name of Lord Balfour been mentioned. He it was in 1921 who, on behalf of the Government, then advanced his well-known policy of the clean slate. I will not attempt to go over the ground again, except to call attention to a speech made by the hon. and learned Member for East Bristol (Sir S. Cripps). He made two amazing statements which I, however humbly, shall attempt to answer. He said:
  "The Government came into power…in the middle of what was undoubtedly the most serious industrial crisis in the history of the world."
  He also stated:
  "The Government…have completely failed to take any constructive step to initiate any ideas or plans which will solve the difficulties in which this country finds itself."—[OFFICIAL REPORT, 11th July, 1932; col. 924, Vol. 268.]
  I suppose I ought not to be surprised, but when the hon. and learned Member, a leading light of the legal profession, makes a wild statement like that, it is someone's job to answer him. I am only going to give a catalogue, because I do not wish to go into details, and it is that we have taken steps to develop our trade, we have converted £2,000,000,000 of War loan and we have already achieved £60,000,000 of economies, as the Chancellor of the Exchequer says, by the emergency Budget of last year, and further steps are being taken.
  Having mentioned the word "economy," I want to lay down one or two principles on which economy should be pursued. The first thing that the Government, or the committees who are looking into this question, should do, is to search for economy in those items in the national expenditure which have
  1210
  increased in the last seven years. I made a note of that before the Chancellor of the Exchequer made his speech, and I was rather gratified to notice that he also took his figures from the years 1924 to 1930. The next broad principle I want to lay down is: abolish the Road Fund and let all the contributions that come from the licences on cars go direct into the Treasury. Let them be under more Parliamentary control than they are to-day, and let the Treasury allocate to the roads every year in the Budget the amount that they can afford. The Noble Lord the Member for Hastings (Lord E. Percy) made a suggestion yesterday, of which I also made a note, and which I now wish to emphasise. It is that, if we are going to economise, our proposals must not be for one or two years, but must be permanent and progressive, on whatever lines of economy we settle. My suggestion is that the percentages of reduction should be small in the first year, and should grow up year by year to the sum that the Government think should be taken off each item of expenditure.
  I wish to say a word about Disarmament. The right hon. Gentleman, the Chancellor of the Exchequer, laid down the principle yesterday that this country could not and would not disarm any further, unless others did likewise. The hon. Lady the Member for South Hackney (Miss Graves) referred to the work of the Navy and to its function as police. I want to point out that this country is responsible, not only for our own benefit, but for the benefit of the whole world, in policing the trade routes to the East, from England to Gibraltar, to Malta, to Egypt and, through the Suez Canal, to India., Ceylon, Singapore, Australia, Shanghai and the Yangtse. The great trade route to the East is being kept safe and secure, because, to put it in a commonplace way, we are manning it with a man and boy in each place. The mere presence, as the hon. Lady said, of a British cruiser or gunboat creates security. I submit to the Government the principle that the first necessity on the trade route must be cruisers. The second essential is infantry, because you want a man to stand with a rifle to keep order in the ports where our cruisers and our merchant ships call for coal and commerce. The third item is, safe ports.

  1211
  I would ask the Under-Secretary of State for Foreign Affairs to note these three words: "cruisers, infantry, safe ports." Those are the essentials which should underlie our policy.
  The success at Lausanne, and the success at home in the increased credit of our country and the conversion of the War Loan, have been achieved because we have had a return of confidence, due to the existence of a National Government. The right hon. Gentleman the Leader of the Opposition yesterday made a remark in which he called the four right hon. Gentlemen who left their party and came over to this side, the "four chief lunatics." There was method in their madness. It is because they had the courage to put country before party and to come over here, that they gave a surge of confidence all over the world in the belief that, England was united, and that Socialism was swept off the face of the nation and out of the House of Commons. That enabled this country to go to Lausanne, and to use the great influence that we have heard to-day it was able to use to restore the credit of this country. I want to emphasise that. We have heard speeches to-day about monetary policy, finance and economics; the basis of it all, that must be considered first and foremost, is the restoration and the maintenance of confidence in England and in her Government.
  I want to say a word about the Conversion Loan—the conversion of £2,000,000,000 of Five per cent. War Loan. I think its success is assured. The great principles of British finance were maintained right through. It is voluntary and the bargain—the bond—was not broken. But there is no need to make an appeal to the patriotism of people to convert their Five per cent. War Loan into the new 3½ per cent. security, because it is the best bit of business they can do. I would ask the House to envisage the position on the 1st December. Suppose that there are two or three millions of holders of Five per cent. War Loan who have demanded cash, and who, on the 1st December, instead of having £5,000, £10,000, or £20,000 in War Loan bonds in their boxes at the bank, will find themselves in possession of £5,000, £10,000 or £20,000 in cash to their credit at the bank. What are they going to do with it? I very
  1212
  much hope that some proportion of it will be spent, and thus flow into industry, but the bulk of it must go into the investment market.
  The backbone of our investment market consists of the trustee and quasi-trustee funds. I am not here, as a member of the Stock Exchange, in any way to give advice; I have never done it in my life; but I can see no other course for the gilt-edged market, unless some great catastrophe happens in the meantime, than that, the sheer weight of investments of money realised must push that market up nearly to a 3 per cent. basis; and, if there were any word that I could say—I am not saying it in any way; it is not needed—to urge conversion, it would be that the best thing that the holders of Five per cent. War Loan can do is to go in for the new ½3 per cent. security, because, wherever they look, there is practically no other investment which will pay more than 3½ per cent. with the same security. What has made the impression on the world, to my mind, is not the size of the conversion, but the quiet, efficient way in which it was done—the way in which we carried it out without fuss, taking it in our stride. Enormous credit is due to the officials of the Treasury and the Bank of England for the fact that that enormous transaction was carried through without one word ever leaking out until it was announced officially.
  I should also like to refer to the proposed London Economic Conference, and here I wish that my hon. Friend the Member for East Aberdeen (Mr. Boothby) were in his place. We put our house in order, as is shown by the record of the Government. We then went to Lausanne, and we are going to Ottawa to try to tell the rest of the world to do the same thing. We are then going to call a London Economic Conference in order to attempt to stabilise world prices. I wish that sufficient courage could be shown to attempt to raise them a bit, but still it is an attempt to stop the continued fall of commodity prices all over the world. All sorts of cures have been brought forward, but I venture to think that all the guns must be brought to bear—those of getting away from restrictions on trade, of monetary policy, of economic policy, of international agreement—all directed to trying to raise the commodity price level. There I am in entire agreement

  1213
  with the calling of the London Economic Conference; but—and this is not politics, but absolutely hard fact—before that conference is called, two things have to be settled. One is the payment of debts and reparations. Reparations are now out of the way, but the question of debts has still to be settled.
  9.0 p.m
  We can only pay America in three ways—in gold, in goods, or in services. We cannot send her any more gold, at any rate beyond one more instalment of £50,000,000, which we might send if we had to do so; we can only pay in goods and services. Under the Young Plan this year, if there were no Hoover moratorium, we should have sent to America £38,000,000 at par, or, with the depreciated pound, £52,000,000 or £54,000,00. We can only send that amount to America in goods or services, and the reception by America of those goods or services must have one result, and one only, namely, further to depress the commodity price level in America, and further to put out of employment 50,000,000 pound-man units of work in America. It must have that effect, because the payment of debts and reparations is a one-way traffic—it has no commercial basis. The right hon. and gallant Member for Newcastle-under-Lyme (Colonel Wedgwood) was quite right when he said that, if America demands payment, we must strain every nerve to pay; we must not break our tradition of never defaulting; and yet at the same time I believe, in view of the strength of the position at Lausanne, that, when the American elections are over, they will realise that it is in their own best interests not to allow this dumping of goods to go on and further to accentuate the present chaotic conditions in America. That is the first point to be settled before any attempt can be made to raise or stabilise the commodity price level.
  There is another point that has also to be settled, and that is as to what attitude the world is going to take towards the economic policy of Soviet Russia. Soviet Russia sends goods into the world at a, price which bears no relation to the cost of production. I am not going to speak about the moral or human side of Russia; what I want to talk about is the purely economic side. If the Russian Soviet system is to continue, they must, if they are to live, secure foreign ex
  1214
  change and credits, and in this connection I am glad to see on the Front Bench my hon. Friend the Secretary of the Overseas Trade Department. The Socialist Government increased the facilities for credits to Russia. It is true that, since export credits to Russia have been in existence, they have not defaulted to the extent of one penny, but, owing to the expansion of credit given to them by the Socialist Government, they have put this country in a very difficult position, because, directly we do anything to tighten matters up or demand fairer and better terms, their only answer, I feel certain, will be that which they gave before on the question of the £1,000,000,000: "All right, we will keep it." That is the danger that any Government in this country has to face, and it is for that reason that no business man will take the risk himself, but has to come to the Government and ask for a Government guarantee in respect of Russian credits. My second point, then, is that the economic policy of Soviet Russia must continue to depress the commodity price level, for, if the London Economic Conference were a success, and it was decided that the commodity price level should be stabilised at x to-day, to-morrow morning the Soviet Government would be selling goods at x—5.
  I am very surprised that no mention has been made in the Debate of silver as a basis of currency. I hope to send Members of all parties during the week a very carefully analysed pamphlet written by an expert and not by myself. The right hon. Gentleman the Member for Newcastle-under-Lyme paid a great tribute to the Lord President of the Council. It is not my job to say much about my leaders, but, whatever he or anyone else thinks of what I am going to say, I am going to say it, because I mean it from the bottom of my heart. Those who have been to Lausanne have been in the limelight. They have done a great piece of work for civilisation. But I think an equal amount of credit should be given to him who stopped at home and held the fort and carried on the business of the country.
  Mr. MANDER: I congratulate the Government most warmly on two bold and successful strokes of policy which they have recently carried out, first of all the great Conversion Loan, which has had

  1215
  its happy effect not only throughout this country, but in every civilised country in the world and has helped to restore that feeling of confidence that we desired to see, and, secondly, the very great success that they have attained at the Conference at Lausanne in the one field where it is possible to do anything practical in these days, and in that way provide employment to the people of this country. However much you may do by your tariffs or Free Trade, you are not going to solve the problem unless you tackle it on international lines in co-operation with other countries. That is why I am so glad that the Government have tackled the international Conference at Lausanne in the admirable way that they have. It is a good example of what we can do when we stand as a united nation and attempt to lead the world. I am not referring to the National Government only. The Opposition were, as I understand it, entirely in favour of the policy pursued by the Government at Lausanne and the fact that we stood united, with certain exceptions, which always occur, was a very great help indeed. It is true that Lausanne is only the beginning, but it has done away with the uncertainty that existed. It has not altered the facts. There would in no case have been any payment, but it is agreed that no such payments can take place. To use the language of the frontiersman, it is only the beginning of a long, long trail that we shall have to follow up if we are to arrive finally at a satisfactory settlement of the troubled state of the world.
  The next step lies in negotiations with the United States, and the success of those negotiations depends in a very large measure on the Disarmament Conference and what we are able to offer there and what agreement we can come to. The success of the Disarmament Conference is contingent, to a considerable extent, on the settlement of the state of affairs that has arisen in Manchuria. If it is to be allowed to go forth that naked force can get its way in spite of all the power and influence of the League of Nations, Governments are going to feel uncertain, insecure and unwilling to give up their armaments. That is why I hope that, when the Lytton Report comes out, on which all the future hinges, the Government will give it their whole-hearted support in the Council of the League and
  1216
  will do their best to persuade the other countries to press it with such force that neither China nor Japan can resist what will be the settled judgment of the whole world upon this problem.
  I wish I could go on, having congratulated the Government on those two points, to congratulate them equally warmly on the Disarmament proposals that they have put forward, but I am afraid I cannot do so. I want to state quite clearly what I believe to be the view of a large number of people who are interested in this question. It is right that the Government should know it, whatever importance they may attach to these views. It is true that it is a definite step forward with the whole weight of the National Government and of the Admiralty behind it, but it is a very limited step. It is a long way behind the Hoover proposals, and I believe it is a long way behind what the public opinion of the country would like to see carried out. It is clear that, if we are to go to the United States and ask them to deal leniently in the matter of the debts that we owe them, unless we are able to say, "We in Europe have agreed on drastic cuts up to one-third in armaments," the United States will answer, "If you in Europe can go on spending hundreds of millions a year on armaments which you all agree you are never going to use, we are not going to let you off," and they will be perfectly right not to let us off. That is why it is so vitally important that at the next stage we should come out boldly and fearlessly in connection with disarmament proposals. The Prime Minister to-day said, "We want to cut at the root of the disease." This Disarmament policy of the Government is not cutting at the root of the disease, and I do not think it is going to cure the disease unless they move forward. If there is one thing that causes one to think furiously, it is that I believe the Government have the support, in their Disarmament policy, of the right hon. Gentleman the Member for Epping (Mr. Churchill).
  May I turn in more detail to the different aspects of the Disarmament proposals of President Hoover and of the Government? I asked to-day whether information could be given as to the estimated savings to this country if the proposals of the Government were carried out unchanged, and I was told that no

  1217
  such calculations could be made. I have another question to-morrow asking for similar information about the Hoover proposals, and I assume that I shall get the same answer. It seems to me rather surprising and regrettable that it is not possible to make a rough calculation when the figures, after all, are fairly definite, but a calculation has been made by competent people who are used to dealing with figures of this kind in connection with this subject. The estimate that they make—the Government can refute it if they wish to do so—is that, under our proposals if carried out up to tam end of 1936, there would be a saving of £20,000,000 and, under the Hoover proposals, of £42,000,000. With regard to battleships, which are the most important of all in the whole sphere of Disarmament so far as we are concerned, the Hoover proposal is the immediate scrapping of five battleships. That would involve that we should save the upkeep of 150,000 tons a year, and that proposal foreshadows the ultimate abolition by non-replacement of the large battleship itself, so that when we come to 1937 I believe under the Hoover proposal it is highly probable that you would get no battleship built over 10,000 tons at all.
  Vice-Admiral TAYLOR: Is the hon. Member stating that the Hoover proposal is an agreement for a reduction of the tonnage of the present heavy ship?
  Mr. MANDER: I am stating what the Hoover proposal is with regard to large battleships. It is the immediate scrapping of five of those battleships.
  Vice-Admiral TAYLOR: I thought that the hon. Member had said that it would mean the reduction of battleships to 10,000 tons.
  Mr. MANDER: I was going to express the view, which may or may not be accurate, but I do not say it without some reason, that it would seem to foreshadow a very real possibility that in 1937, when the question of replacing those ships arises, no replacement in fact can take place over the limit of 10,000 tons. The proposal we put forward is that there shall be no scrapping and no financial saving of any kind with regard to battleships now, but that in 1937, when the question of replacement arises, we should do it on a smaller scale, and that, instead of 35,000 tons, it should be 22,000
  1218
  tons. I am afraid that you would have in that the danger of starting a new race in battleships, because the view is held that if you keep to the size of 35,000 tons there will be some countries who will have no desire to build monster battleships. They would not face the expense, and therefore would not build battleships, but if you come down to a lower scale and make it 22,000 tons, it will be something within their power and scope, and they may start building. Indeed, at the present moment France has adopted a 23,000-ton battleship in reply to Germany's pocket battleship and is only holding it over, I understand, because of the Disarmament Conference. If France started building small battleships, Italy would, no doubt, be obliged to do the same, too. It is true, if we assume that there is going to be a replacement of battleships after 1937, that the reduction in size proposed by the Government is definitely a step forward. It means a decrease of one-third, and that is a very substantial difference. I hope that they are going to allow for the possibility of that replacement never taking place at Germany has made it clear, I understand, that she would be willing to give up her pocket battleships if we would meet her on a matter of this kind.
  I have no doubt that all sorts of technical arguments could be brought forward as to the necessity of large battleships, but this did not weigh when the Treaty of Versailles was being brought about and its terms were imposed upon Germany. If they were good enough for Germany then, I suggest they might be applied to us now. If we showed to the world that we were now in favour of a policy of that kind, we should have behind us nearly all the Governments of the world, with the exception of Japan at the moment. Furthermore, it would be a sound application of the principle of qualitative disarmament on a large and important scale. It is the only thing making possible dealing with the abolition of, or a very large reduction in the size of submarines. The two must go together. Here our proposal is much better than that of the Americans. We propose a limit of 250 tons, and theirs is one of 1,200 tons. The last point I wish to make on the naval matter is that it affords the largest opportunity of saving money which we can find anywhere in connection with the services of the Crown.

  1219
  I turn to land armaments, and the question of tanks. My right hon. Friend ably dealt with this subject this afternoon, and I should like to go over a few points on the same grounds. The Hoover proposal is that all tanks should be scrapped. Our proposal is that only tanks of over 20 tons should be scrapped, which, I imagine, means that we should retain practically all the tanks we have at the present time. When on 11th April, at Geneva the Foreign Secretary spoke on this subject, he agreed that it was desirable to abolish heavy tanks, and I am informed that the impression created at Geneva was that he had in mind tanks of from five to seven tons. Therefore, it is very surprising to find that these very large tanks are desired to be kept. Germany was prevented from having tanks, and I believe that it is only this country and France which are opposed to the abolition of tanks altogether.
  On the subject of air bombing, the Hoover proposals would abolish bombers altogether. Our proposals would allow bombing to take place within certain areas, and never in the case of civilians. That is a perfectly ridiculous proposal. If you have a great war and a nation is fighting for its life it is going to use every weapon at its disposal. It is going to create the utmost havoc it can, and it is bound to bomb civilians as much as anybody else. Personally, I think that if we are going to have war in future it is right that everybody should be in it, that the civilians should be in it, and that there should exist the wholesale bombing of the civilian population in the area. If you have that horror and danger, you will make more certain than ever that the people of this country and the world will never tolerate such a thing taking place. We do not want to make it simply into a Gentlemen's Agreement to be applied according to certain rules. The best policy would be to abolish forces in the air altogether, or to inter-nationalise them. There would be strong opposition both from France and Germany to the one or the other of those proposals. I hope, therefore, that the Government will go as far as they can in supporting the Hoover proposal of abolishing all bombing planes.
  The proposal of the United States is that the use of gas should be prohibited.
  1220
  We have thought so for many years, but everybody goes on spending large sums in producing poison gas for use of some kind. Not only should its use be prohibited, but the preparation of it in peacetime should be prohibited also. In the well-known words:
  "How oft the sight of means to do ill deeds,
  Makes ill deeds done!"
  If, when war takes place we have gas provided for defensive purposes, it is certain sooner or later to be used for all purposes. I am not clear as to the policy of the Government on the point. It may be that they are in agreement with the American proposals, and I hope that the Foreign Secretary will be able to deal with the point to-night. It is a matter of great importance as to whether we now propose that both the preparation as well as the use of poison gas should be prohibited. Lastly, I hope that the Government will do all they can to move boldly in the direction of the lead which was given to the Conference by President Hoover. That will lead us towards the equality which we must have sooner or later, or Germany will begin to rearm; to economy, because we want to get the largest financial saving we can, and to security for this country. What could be a greater contribution to the security of this country than to obtain the abolition of bombing aeroplanes and the abolition of submarines?
  Vice-Admiral TAYLOR: The hon. Member mentioned the question of equality with regard to naval forces. Does he really mean to suggest that there should be absolute mathematical equality in forces between this country and other nations?
  Mr. MANDER: No; I do not propose that, but I do say that unless there is a substantial step made towards equality—Germany is not asking for mathematical equality—Germany will take to herself the right of arming, because we shall have broken Article 8 of the League of Nations. This is a very definite policy of disarmament, although I think that it is an unduly modest one. I hope that the Government will go on with courage because any policy they bring as a united Government before this House will always go through without the slightest difficulty. They are the dictators of this

  1221
  country, as I believe, for the next four years. Their policy at the present time is a long way behind President Hoover's proposal and a long way behind the wishes of the people of this country, who desire to take this opportunity, by the joint action of all nations, to deal a smashing blow at the forces anywhere that tend, consciously or unconsciously, to lead us once again into the ways of war.
  Mr. HAMILTON KERR: I should like to add one word of humble congratulation to the Government on the magnificent achievement of the Prime Minister at Lausanne. I think in this connection that the address with which he handled the situation almost outrivalled the nimbleness of wit of a certain Lord Stair, who was the British Ambassador at The Hague in the 18th century. At a banquet the French Ambassador rose and drank: "To my master, Louis XIV, the sun of European monarchs." The Austrian Ambassador rose and drank "To Queen Maria Theresa, the moon of European monarchs." Lord Stair then rose and drank "To my master King George, who, like Joshua, the son of Nun, made both the sun and the moon stand still." I think that the Prime Minister, by quelling these deep-seated animosities which have divided France and Germany for centuries, has held at bay the Amalekites and allowed the forces of construction to win the day. Dr. Nicholas Murray Butler, addressing the American 4th July celebrations in London, said:
  "What the nations of the world need today is not so much a declaration of independence as a declaration of interdependence."
  I think that this new spirit of interdependence which has shown itself so clearly at Lausanne can find one more field for its activity; I refer to Shanghai. That city is indeed distant from Lausanne, but a spot where opportunity for disarmament arises from a successful settlement of the disputes now at stake between China and the Concessionary Powers. I need not outline to hon. Members the great trade which passes through that seaport. The city itself, containing in the concessional area alone a population twice the size of Manchester, serves an area of some 750,000 square miles, equal to more than four times the size of Germany; an area, likewise, supporting a population of no less than 180,000,000
  1222
  souls, equal to the total population of Africa. This city is not only renowned for its factories and commercial enterprises, but also for its great banking establishments. Indeed, £16,000,000 worth of silver lies in the vaults of Shanghai banks and forms a credit structure of no less than £50,000,000 of silver which circulates throughout most of 'China. It is that spirit of security which has fostered trade and made the great prosperity of the Concession and the surrounding country. Along the Bund and along the Whangpoo wharves the value of land is no less than £400,000 an acre, while outside the Concession the value of land is 20 per cent. less.
  9.30 p.m.
  I shall not dwell on this problem. As hon. Members know, time is pressing, and I should like chiefly to point out that the prosperity of Shanghai has been achieved through what we might call the Western democratic system based on the rule of law. We need not treat at length the means by which the constitution evolved itself. In the early days of 1843 occurred the original settlement with the Taotai, or local Chinese official, whereby "three upright merchants" were appointed to administer the affairs of the Settlement. It is sufficient to understand that to-day the International Council of five Chinese, five British, two Americans and two Japanese run the affairs of the Settlement; they are responsible for law and order. Indeed, there are likewise 14 courts where the defendants of each nationality have cases heard against them. To stress the good work of the Council in the face of immense difficulties, I should like to say that Shanghai is the centre of the notorious opium traffic, and breeds gangs just as unscrupulous and cruel as their more famous confreres of Chicago and Detroit. Indeed, in spite of this fact Shanghai has been the one rock in the shifting quicksands of Chinese political life. It is for this reason that the demand of the Nanking Government for the surrender of extra-territoriality on 1st January this year is all the more serious. It is undeniable that China is passing through such a phase of political evolution; but the Kuomintang, established by Sun Yat Sen and Chiang Kai Shek, is but the descendant of the autocratic rule of 40 centuries of Chinese Emperors. With all the good will in the world, the Chinese Government is not yet

  1223
  fit to take over the vast resources and vast liabilities in Shanghai. As an example, I may say that the Chinese War Lords, or Tuchuns, have control of a great portion of the country outside the city, and, like Robert Louis Stevenson, seem to think that:
  "The world is so full of a number of things,
  That I'm sure we should all he as happy as kings."
  They live by plunder and, as an example, have plundered the town of Iyang no less than 72 times during the recent civil war.
  It is for this reason that the Council of Shanghai, with the full assent of the moderate Chinese opinion, asked Mr. Justice Feetham to make a careful survey of the situation. After 18 months he has presented his report. May I humbly appeal to the right hon. Gentleman the Secretary of State for Foreign Affairs to give to its perusal all the lucidity of mind and the grasp of detail which characterise him, and try to reach some decision on the lines laid down with the other Powers concerned? A state of great hesitancy prevails in Shanghai, and, so far from wishing to appear as imperialistic in the worst sense of the word, the Council wishes to give all reasonable Chinese aspiration its fullest play. This report lays down the principle that, whilst the rendition of Shanghai is the ultimate objective to be aimed at, a period of greater co-operation between the Chinese and the European elements in the city must intervene. The Feetham report proposes that the Chinese members of the Council shall outnumber the representatives of any one other single nation; and it likewise proposes that there shall be a meeting of the Chinese ratepayers as well as the already existing meeting of the European ratepayers. The decision of both will be binding, but where there is a difference of opinion a decision of the Council shall be binding. It is an important step in the political and constitutional development of China. For this reason I wish to say that enlightened opinion in the settlement is mindful of the old Chinese proverb,
  "A lie travels round the world whilst the truth is putting on its boots."
  It would not wish the propagandist rumour to gain strength that the
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  European community is adopting a recalcitrant and backward attitude.
  Mr. D. GRENFELL: The hon. Member who has just spoken quoted the well-known saying of a diplomatist who made extravagant claims on behalf of his sovereign. Unfortunately, that kind of diplomacy still exists, and we find that on return from Lausanne equally extravagant claims have been made by diplomatists who have been addressing the House during the last few days. I think it is a great mistake to exaggerate the results of the Conference at Lausanne. The Prime Minister on his return was given a reception which has probably never been excelled in recent years. There were people—common people, ordinary people, people who were not in the House of Commons, people who had not got the details of diplomatic negotiations—who were allowed from time to time to believe that much had been achieved in Lausanne; that the world would never be quite the same after the Prime Minister returned as it had been before. Now to-day the gilt has been taken off, and the right hon. Gentleman here to-day will probably have something to say in regard to the statements made in the House this afternoon. I do not think that it is a good thing to encourage these excessive hopes, because when disillusionment comes and disappointment takes its place the pain is much more felt owing to the high hopes that have been entertained. While we readily admit that Lausanne is the beginning, perhaps a generous beginning, of the large task of world reconstruction, it would be a mistake to overrate its importance, having regard to the great work yet to be fulfilled. Even if the Lausanne agreement was a final settlement of reparations, which it is not, and if it was a final settlement of War debts, it would still be a very small part of the work that has to be done before the breakdown which is threatening the world is upon us.
  This afternoon I had the advantage of going into the figures of the indebtedness of the Dominions. When we view the problem of indebtedness we have to remember that the world is suffering from mortgages and debts of all kinds, which are not confined to Germany, France, Britain, Italy and the United States. The debts of the Dominions are very

  1225
  serious. Astounding figures can be quoted to show how the problem of commercial and municipal debts, ordinary debts between the moneylender and borrower, are paralysing trade all over the world. Australia, a small country from the point of view of population, numbering only about 6,000,000, has a national debt of eleven hundred million pounds. Over £1,000,000,000 is owing by a small community of 6,000,000 people. To meet the interest on that debt Australia has to find year by year a total of £57,500,000 of which 232,000,000 comes to this country. When we think of Lausanne it is a tiny settlement, viewed in. its right perspective, compared with the whole problem of world indebtedness. Australia has to find £32,000,000 a year interest to this country under exceptional difficulties, because Australia produces primary products which have one by one fallen to less than half the value at which they stood only two years ago. Australia has to pay for interest and repayment of the debt to this country twice as much in wheat, in oats, in sugar and in all the commodities that she produces, compared with what she formerly paid.
  When we come to Canada, South Africa and India we find the same state of things—an enormous fall in the value of primary products and huge burdens of debt which are maintained not at their past level, but are increasing day by clay in their incidence. When Australia pays us she has to convert Australian money into English money and, owing to the depreciated value of the Australian pound, the Australian people have to pay £130 to discharge a debt of £100. Therefore, instead of paying at the agreed rate of 5 per cent. she has to pay at a rate of 6½per cent. on the money that has been lent to her.
  Compare that with the position in Italy. The Italian people are very grateful for our generous treatment of them, but even so Senor Grandi, in the Conference at Lausanne, was not satisfied with what has been done for Italy and wanted a guarantee that if Italy was to be deprived of reparation payments she should not be called upon to pay her debts to the creditor countries. Compare the treatment meted out to Australia, a country of our own family, a people with whom we have no quarrel, and the treatment of Italy. Italy pays not one penny piece of interest on the money lent to her by
  1226
  Britain during the War. She does not even repay the capital. She is let off by repaying one-third of the capital sum lent to her, but she has not to pay one penny of interest, while Australia, a member of our own family, striving at the opposite end of the world against grave economic difficulties, has to pay more than the pound of flesh to us. She has to pay 6½ per cent. in addition to repaying the capital sum.
  I use these arguments to show that we have not settled the world problems or our own family problems when our Ministers come back from Lausanne, when the big drum is beaten, when record crowds greet the Prime Minister and extravagant speeches are made in this House. Nothing has been said by the Prime Minister about Australian, Canadian and.South African debts to this country. When we view the question of the debts owing by the Dominions or South America, where we have very large investments, we find that the large loans made to these countries from time to time remain as a crushing burden of debt. This problem of debts will not be fully settled until we have taken into consideration in our negotiations not only the cancellation of war debts and reparations but the cancellation of the excessive burden of commercial debts which we find all over the world. I would advise the Government and the Foreign Secretary, who is not apt to speak in extravagant terms, to put the soft pedal down on Lausanne and to reserve the heavy forti for something more substantial.
  The Chancellor of the Exchequer has stated that the chief aim of this country should be the reduction of taxation. He said that that is the country's greatest need, and that the efforts of the Government should be to reduce taxation. He then examined the financial position and the possibility of economies in the Departments. He took an unwarranted pride in the fact that the staff in the Civil Service last year had been reduced by 2,600. He spoke as if by putting 2,600 civil servants out of employment the country had saved something. Where have those people gone? Where shall we meet them next? There are very large numbers of black-coated people out of employment who do not appear in the accounts of a Department of State. The

  1227
  Chancellor of the Exchequer says it is economy; that we are saving money. Some time or other these 2,600 persons will be poorer than they are to-day, and will have to be provided for by the nation. It, is an erroneous idea of economy.
  Hon. Members are much confused on the question of economy. The Chancellor of the Exchequer has said that the State should imitate the individual. If the individual is hard up he spends less, he cuts down his expenditure. That is quite true, but it is a mistake to preach that policy in these days. What is forced on the individual may be a very improper thing when applied to the community, and in these days of plenty and super-abundance of all kinds of goods what a folly it is to advocate a reduction in expenditure. It is just as if a farmer who had a record crop of all kinds of cereals and fruits and vegetables were to say that he had got too much of everything and, therefore, he must eat less and wear less. Such a policy is the bankruptcy of political ideas. In regard to the question of disarmament the Lord President of the Council spoke the other day and I confess that we were disappointed with his speech. It was not generous enough. President Hoover has made a bold and far-reaching declaration and we expected that Great Britain, with her security, her unchallenged and unchallengable position, would be prepared to go equally as far as the United States. That is not the case. The Hoover Plan goes much further than the proposals of the British Government, and in that assertion I am supported by a statement I read in the "Manchester Guardian" the other day, which compared the results of the Hoover plan with those of the British proposals, and said that the British proposals would achieve much smaller results over the next five years. The statement said that:
  "Taking battleships and cruisers over 10,000 tons the British proposals would make no change in five years' time, while the American plan would scrap one-third, five out of 15. As to aircraft carriers, the British scheme would not touch them, but Mr. Hoover's plan would scrap one ship of 14,000 tons not due for scrapping until 1938. Eight-inch gun cruisers would be affected by neither plan, but while the British proposals would leave light cruisers alone, the Hoover scheme would mean not building 84,750 tons, or say 12 ships of about 7,000 tons each."
  Sir J. SIMON: Does the hon. Gentleman mean that the British plan would leave eight-inch cruisers alone?
  Mr. GRENFELL: That is the statement of the "Manchester Guardian." It went on to say:
  "Our plan would mean avoiding the building of 30,000 tons of destroyers and flotilla leaders provided submarines were abolished, while Mr. Hoover's plan would avoid building 78,800 tons. Thus the total saving on naval construction by the end of 1936 would be on the British plan 67,700 tons or about £20,000,000, conditionally on the abolition of submarines, while the adoption of the Hoover proposal would save altogether 139,930 tons or about £42,000,000."
  That is a comparison, showing the effect of the Hoover plan for the next five years as compared with the British plan. The conclusions are these: that the Hoover plan would mean a saving of £42,000,000 in naval construction and the British plan a saving of £20,000,000. I hope the right hon. Gentleman when he comes to deal with this question that he will give the House some encouragement to hope for a further reduction in armaments. The world is asking for such a reduction, but never have we received such scant encouragement. Petitions signed by millions of people have reached the right hon. Gentleman from those who want peace and who are praying for peace, but who so far have been grievously disappointed; and their mortification is all the more bitter because they see another country which has made more advanced proposals than our own Government. I hope the Foreign Secretary will assure us that the Lord President of the Council did not speak the last word for the Government the other day, and will give us some encouragement in our task of organising the peace mind in this country, in the hope that there will be a substantial reduction in armaments of all kinds in this and in every other country.
  Mr. MACMILLAN: This Debate which has now ranged over two days has covered a wide field, and I hope the House will bear with me for the few moments I propose to occupy in dealing with one single topic, that is the subject of economy. It might have been more germane to the Debate of yesterday, but our calculations were a little upset by the right hon. Member for Epping (Mr. Churchill) who no doubt feeling that there was a strong team of guns to go

  1229
  out on the 12th thought he would have a little drive of his own on the 11th, but, I think, it entitles those of us who might otherwise have intervened yesterday in the Debate to say a few words on the subject to-day. The subject of economy is one on which it is difficult to speak without raising prejudices of one kind or another. It is one of those subjects on which we are all disposed to—
  "Compound for sins we are inclined to, By damning those we have no mind to."
  Some hon. Members who advocate economies in public Departments the objective of which does not appeal to them are quite prepared to spend on those Departments which they think are salutary. Sometimes those who quite approve the great rise in the social services forget the comparatively small rise on armaments. At the same time those who speak of the great pressure of the social services and object to them, forget that even after conversion we shall be paying £270,000,000 a year on debt charges. Some friend brought to my notice the other day a passage in that delightful novel by Jane Austen, "Persuasion," where an impecunious baronet finds himself in temporary difficulties, and after full discussion of his affairs it is decided not to economise upon his horses or upon his table or upon his sport, but upon his charities. Some of us are a little prone to that. Those who are well acquainted with Miss Austen's works will remember that the name of that baronet by some divine chance was Sir Walter Elliot. Well, coming events may cast their shadows before them.
  But at any rate this is a subject upon which there is clearly a very great deal to be said on both sides, and I do not think that the whole of the question has been really debated from a theoretical point of view, although very useful suggestions have been made from a practical point of view. One side, of course, says, "We must economise because we want to make a saving in taxation. Taxation is in itself a burden on industry, and obviously the first method to produce industrial recovery is to reduce the charges." The trouble of that is that, while it is the truth, it is not the whole truth. The other side, those who are against economy, say, "If you economise on national expenditure you will reduce purchasing power, you will still further increase the vicious circle of deflation. You
  1230
  will reduce further the profits of those businesses that sell their wares to the great mass of the people, you will have a falling revenue, and you will lose in the long run all you have gained." The trouble again is that, while that is largely true, it also is not the whole truth. The fact is that in these conditions the old watertight and easy theories do not apply
  We have to take a much more balanced view of a very difficult situation, to weigh and balance one against the other, and to make the best choice that we can. It cannot be doubted that a very high rate of direct taxation, such as now exists, is in itself a discouragement of the entrepreneur. It tends to destroy the incentive and initiative of business. To that extent its removal at the present time would more than balance the evil results of a decreased Government expenditure. You have to choose between the beneficial market results of large Government expenditure and the beneficial psychological and subsequent economic results of a reduction of taxation. But when we come to the question of the reduction of taxation it is clear that what we are looking for is not a relief of the taxpayer which can be spent on consumption goods. The whole policy will fail unless the sums given to the taxpayer in relief are spent in capital goods. If the sums transferred and given back in relief to the taxpayer are spent on consumption goods, the only result is the transfer of a certain purchasing power from the poor to the rich. That may be good or it may be bad.
  10.0 p.m.
  On the other hand the real object behind any economy now—I know it is easy to deplore the paradox of the absurdity of economy at a time of depression— the only object of economy is to secure expenditure on capital goods. Expenditure on capital goods will have the result that men who draw wages to make the capital goods will spend those wages on consumption goods without adding to the total production of such goods. Therefore prices will rise. There is no better way of getting what we want, a rise in the price level, than the employment of men in production of capital goods. That is the whole object of the financial policy of economy. But there are grave difficulties. I do not think anyone who has studied the present economic situation would deny that one of the main troubles at the present time is the failure of the

  1231
  rate of investment, of new capital investments, to keep up with the rate of savings. If the only result of economy is to add to the liquid pool of unused and uninvested money none of these beneficial effects will come. We have to do two things. We have to add to the amount of money available for capital expendature, and we have also to drive into capital expenditure the present amount of liquid money which is kept liquid and not invested. How can we do that?
  By far the most interesting part of the speech of the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) was that in which he made a powerful ease for capital development at this time. If I may say so, I think his was a far stronger case for capital development at a time when money rates are low than it was at the time when he presented it to the nation in 1929, when money rates were high and we were approaching the top of the boom, when money from day to day in New York paid 10 to 12 per cent., and we would have had to pay high rates for loans. There is a far stronger case for capital expenditure by direct national action when money rates are low. But I do not myself believe that it would be wise, and it is not necessary, now to embark upon direct Government investments. What we have to try to do is to get liquid capital back into investment. But is there any means of doing that other than by direct Government investment?
  I think we are all agreed as to the difficulties of getting suitable plans, and the tendency to waste and unproductive expenditure which follows from ordinary Government work schemes. But I ask the Government to consider what really are the causes that are keeping money out of investment. Of course we know the ordinary causes. We know that there has been a tremendous fall in the price level. I do not propose to discuss all the questions that arise from that, deflation and the rest. We know of the ordinary causes, but there is another cause to which attention has been called in two of the most powerful reports presented by financiers and industrialists to the country—the Macmillan report and the recent report of the Federation of British Industries. That other cause is the memory of the last boom. The investor
  1232
  has not forgotten what happened then, and I do not think it is altogether the low price level, or the difficulties and the lack of confidence surrounding us to-day, but the memory of the last price boom which is causing the situation I have described. May I give the House a quotation from a very remarkable report on this matter by Sir Arthur Salter? He says:
  "How discouraging to the investor has been the provision of his savings for new capital to industry is shown by some striking figures, published by the Macmillan Committee, for the year 1928. In that year the total amount subscribed for capital issues in Great Britain of shares and debentures of 284 companies was £117,000,000. On the 31st May, 1931, the total market value of these issues was only £66,000,000, a loss of 47 per cent.; and indeed, the loss was really greater, since many of the shares were sold by the promoters at a high premium. Moreover, of these 284 companies, 70 were already wound up, and the capital of 36 others had no ascertainable value, the issues of these 106 companies amounting to £20,000,000."
  I think it is clear from those figures that it is not wholly the financial and economic conditions of the present time that are responsible. It is what always happens after the folly of fantastic and in some cases even fraudulent flotations. The investor becomes thoroughly frightened: of the market. There is one other consideration. In the 19th century, which was a century of smaller family businesses and closer connection between ownership and management, the capital raised for the expansion of business was mainly raised from the private owners of businesses. It was not raised in the London money market. Sir Arthur Salter has produced another set of figures on that point. Of the £200,000,000 which were invested in home concerns in the year before the War, only £18,000,000 came from the London money market, but in recent years, instead of £18,000,000, about £170,000,000 out of the £200,000,000 were raised upon the money market, and only the remainder represented the investments of smaller owners—re-invested profits. That is partly due to high taxation and partly to the spread of ownership from the smaller type of family controlled business to the very large concerns. That makes it all the more important to restore the confidence of the investor.
  I only wish to put this point before the Government. I believe that economies are justifiable. I believe that economies are now justified in order to reduce taxa-

  1233
  tion. But the object of reducing taxation can only be to create a further amount of capital investment. If it does not do that, we simply depress the level of the poor without doing any good and increase the circle of deflation. Ultimately, I would remind hon. Member s, it is by the results of the whole of our economic policy, that this Government and, perhaps, the capitalist system will be judged. Therefore let us take every step we can to ensure that the possible good results which we expect, will arise. This is not merely the suggestion of a private Member like myself or some faddist, but is a suggestion which has come from the greatest organisation of industries to-day namely the Federation of British Industries which has put forward definite proposals in this respect.
  The main unanimous recommendation of the Macmillan Committee which was signed by economists, industrialists, bankers, representatives of the issuing houses and representatives of the Socialist party was that which recommended the creation of a structure which could link the operations of finance and industry, guide and influence investors, and give to investors that sense of security which I am sorry to say some of the results of the issues during the boom period have not given to them. It was proposed to have such a structure, not bureaucratically controlled, but directed by some organisation of industry and finance which would give confidence to the country and would guide back into capital investment all that present uninvested pool of liquid savings and also the additional savings that would arise from the reduction of taxation. If that can be done I believe we shall get good results and I do ask the Government to inquire into that aspect of the question.
  Sir ARTHUR MICHAEL SAMUEL: May I interrupt my hon. Friend? I agree with every word he has said and his powerful argument is helpful to us who are in trade, but I hope that he will add this consideration. One of the reasons why it is difficult to get people to put money into industry to-day is due to the 1929 Companies Act. I believe that he would strengthen his argument—although it might imply new legislation—by drawing the attention of the Government to the fact that the 1929 Companies Act supplies one of the reasons why we cannot
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  get money into industry. That Act is a shield for scamps and is not assisting honest investors.
  Mr. MACMILLAN: I am much obliged to my hon. Friend for his assistance, but the particular point which he mentions is one which had not altogether escaped my notice. I only venture to add one other word on this suggestion of which I hope the Government will take notice. I recently put down a question to ask the Prime Minister whether the Government would take action in this direction on the lines of the reports of the Macmillan Committee and the Federation of British Industries. The Lord President of the Council in the absence of the Prime Minister said that while his right hon. Friend would welcome action taken by private initiative on the lines suggested by the Macmillan Report in these matters he did not think that those matters could properly be made the subject of direct Government action. I could make an easy retort to that. I could suggest that that is a rather strange doctrine for the Lord President of the Council to put into the mouth of a Socialist Prime Minister and that he need not be so much afraid of Government action in these matters.
  There are, however, other methods besides direct action by the Government. A lead could be given by the Government, a suggestion could be made by the Government, a conference could be called by the Government. I am not asking for any kind of interference with industry which industry would resent. I am only asking for that interference for which every specialist on the Macmillan Committee has asked, which has been asked for by the best representatives of the banking and issuing houses and which within recent months, has received overwhelming support in the very remarkable document issued by the Federation of British Industries. If the Government went upon those lines I believe that they might expect the results which they seek from a policy of economy. If they do not, if we are simply to have economies which will depress the market, without effort to induce money to go into fresh capital production, then, I fear, we shall reach a situation even worse than that in which we now find ourselves.
  Sir J. SIMON: The Debate on the Third Reading of the Consolidated Fund Bill always leads to a wide range of discussion, and in making some remarks from this bench at the latter end of the evening I cannot do more than touch on two or three of the many important questions which have been raised. My hon. Friend the Member for Stockton (Mr. Macmillan), who has just contributed so well informed and interesting a speech on a subject which he knows so well, will forgive me if I do not endeavour myself to deal with that particular topic.
  There are two main questions which have been discussed, the Lausanne Agreement and the present position and prospects of the Disarmament Conference at Geneva, and I should like to say a few words about these. Of the first, the House has already heard from the Prime Minister and the Chancellor of the Exchequer, and naturally I do not desire to emulate them in going over the whole ground, but now that the Debate is reaching its conclusion, let us face the question which was put just now across the Table, very fairly, I thought, by the hon. Member for the Gower Division (Mr. D. Grenfell), who asked the question—and it is what everybody is asking—"After all, what is the result which is secured by the Lausanne Conference" He went on to answer the question in terms which showed that he was rather inclined to measure the results at something very minute; I think he called it a tiny result. Well, I agree that it is only a part of a much larger problem, but still, let me try, in three or four uncontroversial sentences, to put what the result may be said to be.
  A month ago the Lausanne Conference had not yet begun. It began on the 16th June, and a month ago the position was that on reparations account Germany, as soon as the Hoover year was over, would come under a régime, the Young Plan, by which she would be bound, over her own signature, to make payments which would run on for more than 50 years and would only ultimately run out some time in the 1980's. That was the situation that existed before the Lausanne Conference met, and not only so, but, the Conference having met on the 16th June, those obligations would at once have attached themselves again to Germany as soon as
  1236
  the Hoover year was over. For that very reason, at the beginning of the Conference, purely as a matter of suspension, so as to give time to the discussion, which took three weeks, we began the Conference by an agreement, signed by the principal creditor Powers, by which they said, "We do not want the discussion embarrassed while it is going on by any question of whether the money is due to-day, to-morrow, or the next day, or whether it is Reparations or European debts from A to B or from B to C. Hold the whole thing up until we are able to sign a document."
  That was the first step, and now as to the result. We have got this, that whereas only three weeks ago, after many attempts to revise reparations, Germany, as I have said, was under a plan which bound her to make provision, half-year by half-year, for more than half a century to come, to-day we at least have got a new arrangement, signed by all concerned, which puts an end to that whole system and substitutes what is really and truly a single payment, which is not in the name of reparations, but which is in the name of a contribution made once and for all, if Germany can do it, to assist the restoration of Europe. I do not want to exaggerate, I do not want to claim more for the Lausanne Agreement than is fair—history will judge—but that is in itself if not a great achievement, at any rate an achievement in which we are all entitled to take satisfaction.
  Allow me, in the second place, to put this question: Let us suppose, because from this corner or from that there is some criticism, which is quite right and proper, that those criticisms had prevailed and we had come back here to this House to announce that after three weeks at Lausanne there was no agreement, that it was not possible to get everybody there to agree to the same scheme, and that therefore the whole thing had broken up in confusion. Where should we be then? That is the real test. If one wants to measure fairly what has been accomplished, one must ask oneself what the position would be to-day if we had had to come back and say that nothing had been accomplished. For the very nature of the agreement at Lausanne is this, that under a guidance and influence which I hope his colleagues will allow me to say is one of the most remarkable exhibitions of the Prime

  1237
  Minister's skill in these matters, day by day and night by night, never losing touch, always bringing together people who seemed to be breaking away, always fertile in suggestions, always good-tempered, always conciliatory, always ready to listen to the other man's point of view, suffering, as we all know he has been, throughout this time sometimes intense pain, and with the greatest difficulty in reading documents—it is that man, and that man alone, who has been able to come back here and say that, at the end of three weeks, we have got an agreement.
  Now we come to the main criticism—and I am not complaining. I am not sure that everybody in the House has appreciated that the two principal critics, if the other critics will excuse me for calling them so, contradict themselves fundamentally at every point. The contradiction has been to some extent concealed because they spoke on different days. The right hon. Gentleman the Member for Epping (Mr. Churchill) used this language yesterday:
  "Until this morning's newspapers we were led to believe that we had forgiven Europe all debts and reparations irrespective of our obligations to the United States."
  The right hon. Gentleman went on to say that he was very shocked at it. He said later:
  "I am glad to know that the Young payments are in suspense. I feared that we had been left utterly defenceless."—[OFFICIAL REPORT, 11th July, 1932; cols. 945–6, Vol. 268.]
  To-day we have had one of the most remarkable exhibitions of the art of my right hon. Friend the Member for Carnarvon Boroughs (Mr. Lloyd George). He is singing exactly the opposite tune. He says that what he wishes above all things is that we had come back from Lausanne without any possible recourse to any European debtor in any circumstances, but that we had wiped one side of the slate entirely clean—the European side—without raising any question of what was going to happen on the other side. You may take your choice and pay your money, but it is obvious that these two points of view are contradictory. It is not perhaps surprising, when two statesmen of the calibre and knowledge of these two right hon. Gentlemen take absolutely opposite lines that what in fact has been done as the result of the
  1238
  negotiations for three weeks is something which partakes—as I agree it does—a little of the qualities of both.
  Let me say a word to explain as clearly as I can the subject of ratification. The House will appreciate that when we draw up an international treaty of this sort it necessarily follows that there is the stage of signature, which may or may not be followed in the case of each signatory by the stage of ratification. When States enter into these treaties there are always those two stages. It must be so, because—at any rate, in some countries—it is necessary to get Parliamentary approval before the signatures of their foreign Ministers actually bind their countries. Technically that is not so in this country, although as a matter of fact in recent years Parliament has been given the opportunity of ratification. So there is nothing in the least abnormal or surprising in having a treaty at Lausanne which can be described as signed but not ratified.
  The next point is this. Nothing that you can do at Lausanne or anywhere else can possibly secure by main force that any particular State will ratify. That necessarily remains to be decided by the State in question. It will be a very gross breach of international good faith if they do not do their best to ratify, but at the same time you must leave each State free to say, when the time comes, "Yes" or "No." The only reason why this supplementary arrangement has not been printed in the document is that the whole basis of our agreement is that everybody should ratify and that we mean to carry it through. I agree that there is the possibility of ratification not following.
  Would the House follow me while I make this final point? A great many people think that German reparations are, so far as Germany is concerned, divided up, so that Germany promises to pay so much in the way of reparations to A, so much to B and so much to C. If that were true then, of course, creditor A might release Germany from the reparations due even though creditor B and creditor C refused to do so; but that is not the scheme of reparations. Germany is bound, or was bound until the Lausanne Agreement, to pay reparations in a global sum to a single recipient, the Bank of International Settlements, and what happened to that total when it was

  1239
  thus provided by Germany was not a matter with which Germany had any concern at all, but was an arrangement between the different creditor countries. In those circumstances it is obvious that to get an effective and final Lausanne Agreement you must have not ratification by one State but ratification by all the principal States concerned, because only in that way can you provide the relief. The House has been told by the Chancellor of the Exchequer that we are perfectly willing that the fullest information shall be given, and I have already caused a telegram to be sent to-night to ask the other foreign Governments whether they have any objection to publication.
  All that was arranged—and it was entirely in the interests of Germany—was that instead of leaving an individual State to make trouble on its own, to boggle and refuse ratification, we said it would be much better if we, the principal creditors, agreed among ourselves that as regards ratification we would do our best to act together, and, if trouble arises, we would meet and discuss what we can do. That is no injury to Germany, not the least in the world. In the first place, a debtor who owes a sum which is going to be divided between a number of creditors has no reason or right to complain because those creditors agree that in certain events they will meet together, as is the right of all creditors; but, as a matter of fact, not only has Germany no reason to complain, but Germany does not complain. So far from its being a fact—as was suggested by the right hon. Member for Carnarvon Boroughs was a possibility—that this was done behind Germany's back, which would have been furtive and secretive, the day before the Lausanne Agreement was signed this very question was raised as between the German representatives and ourselves. We told the German representatives what we proposed to do. The German representatives not only made no objection, but have since then referred to it as an arrangement which they quite understood.
  It is an error to suppose that there has been some tricky business in this connection. At the same time, I think everything is to be gained by removing every possible suspicion, by making known to the public, with the assent of the other Powers, any and every supplementary
  1240
  arrangement. In a thing like this there always are, necessarily, certain supplementary arrangements, and it is much better that people should know, in order that there should be no exaggeration or misunderstanding. That is all I desire to say about the Lausanne Agreement, and I trust the points I have made will put the value of that agreement in its proper light. An hon. Gentleman who just now asked the question, "Well, after all, what does it amount to?" will, I am sure, give fair weight to these considerations.
  10.30 p.m.
  The biggest consideration of all remains and it is this. We have been struggling for years to get outside the period of the post-War atmosphere. That is the big thing, to get free of this inheritance of war, with its moral effect upon the outlook of peoples which is one of the most dreadful things about it. We here, in all parts of this House, realise to the full. What have you had? On the political side, a great effort to get out of this post-War mentality was made at Locarno. There always remained this financial link with the past, in the shape of Reparations. As long as they were there, and as long as they were due and claimed, they were a perpetual turning back of the gaze of Europe on the road that had already been followed. There was a continual stretching back into the past. The real meaning of Lausanne, which the Prime Minister in his final speech put in language which I wish I could repeat, because it was immensely moving at the time, is that an effort is being made, in true comradeship, to turn the whole gaze of Europe to the future of Europe, and to turn our backs upon the past. That is the big thing, and if you can get rid, not only of the name of Reparations but of the whole idea that what is to be done in the future is to have reference to the quarrels of the past, and if you can start a new system in Europe by which you are going, for the future, to ask people to co-operate for the sake of the things that are to come, you have effected an enormous change in the psychological outlook of every population. I know that nobody will more heartily rejoice about that than the right hon. Gentleman who leads the Opposition. That is, I am convinced, the largest and most important result that is going to flow from Lausanne.

  1241
  I will not detain the House at any length on the other sides and upon other subjects, but a, number of questions have been asked, and I wish to discharge my duty to my colleagues in all parts of the House as well as I can. Let me speak of Disarmament. May I be permitted, in the first place, to say that it would be a matter of regret if we were to devote ourselves exclusively to comparison, or even to contrast and opposition, between President Hoover's very striking proposals, and any other proposals or criticisms which have been put forward, because that is not the spirit in which, so far as the British Government are concerned, to advance any proposition. I was very glad to see that our friends in America perfectly understood the spirit in which we advanced our proposals. Mr. Stimson, the Secretary of State in Washington, after the statement made in this House by the Lord President of the Council, interpreted American opinion authoritatively by saying that he
  "regarded Mr. Baldwin's speech as an indication of the momentum that is given to the Disarmament Conference since the announcement of the President's plan,"
  and that he
  "welcomed the British suggestion as an expression of the same spirit, that details would be studied with care and confidence that we"—
  that is America and ourselves—
  "have a common purpose."
  While I quite recognise that it is just that we should have in this House, or outside, some criticism of what has been said by the British Government, do not let us try and deal with this terribly important matter as though we were endeavouring to outbid one another or to put one another in opposition. That is not the spirit. The spirit of it is that Disarmament, in general terms, is the desire of everybody. Disarmament in practical terms is one of the most difficult things to accomplish that can be imagined. What we have to do, and what I have tried my very best to do—whatever the measure of success I may have had—is to show the Americans that there is no question of showing oneself aggrieved or of opposing the principles, methods and drive of their plan. The point is rather this, that President Hoover has made a contribution of inestimable value. No one who has lived in the doldrums of Geneva will doubt
  1242
  that, but at the same time he has never suggested that the contribution is some cast-iron proposal which everybody must bow down to and worship, and that everybody who tries to modify it is a heretic or a backslider, Not at all. It is his contribution. We are entitled to say, in exactly the same spirit, that we want to make a contribution.
  There is one other observation of a general kind. I beg the House to remember that nothing will be accomplished at all about Disarmament unless we reach agreement. What we are after is international Disarmament, and, therefore, though there may be a great deal of natural temptation to say, "Why don't you swallow the whole of this plan?" you have to remember that other people have to accept it too; and the work that we are really trying to do at Geneva is not to oppose or put difficulties in the way of what I have always admitted to be a most important and invaluable contribution, but to try, while fairly explaining our own position and our own difficulties, to make room for other people also to come in in the effort to get a general agreement.
  I should like to say, next—there is no possible advantage in our burking this point—that, apart altogether from the overwhelming desire of the British people and the British Government to contribute substantially to Disarmament in all departments, which I here affirm, we are entitled to say that there are two things in the minds of our people which constantly are in our thoughts, which are not urged as reasons why we should not disarm further, but which must-be allowed for, which must be borne in mind, before we can reach a reasonable conclusion. The first is this: We are entitled to say, in no vainglorious spirit, that, after all, if we are trying to reach new levels, proper regard must be had to the reduction which Britain has made, single-handed, in advance of any general scheme of agreed Disarmament. Let me be entirely plain. If that argument were used as an excuse for not delimiting now, I would be the last man to put it forward, but I am quite convinced—and I say this to those who are keenest about Disarmament—that we are not going to carry this cause with the people of Britain behind it unless we show that we remember that fact.

  1243
  Let us see what the facts actually are, because, really, they are well worth a moment of attention. They are set out in a perfectly unprovocative way in the statement which the Lord President made the other day. No one suggests that our land forces are bloated and swollen to an unreasonable extent, but the actual fact, of course, is that in contradistinction from most of the great countries of Europe, we have got rid of conscription altogether—and mightily glad I am of it; and, in addition to that, if we merely compare our Army situation before the War with the situation now, leaving out altogether those enormous masses of men that were raised during the War—if we compare the situation of the British Army in the year before the War with its situation now, the fact is that we have reduced it from 259,000 to 207,000. That has been effected by the disbandment of nine regiments of cavalry, 61 batteries and companies of artillery, 21 companies of Royal Engineers, 21 battalions of infantry, and six battalions of Colonial troops.
  It is right that that should be borne in mind, and it is worth noticing that President Hoover's plan by which he tries to analyse the land armies of the world by dividing them into two, one portion which he regards as being necessary for keeping internal order and the balance which he calls the "defence contingent" which is regarded as necessary for the defence of the country—if you apply that analysis to the British Army, the actual result is to prove that we have a minus quantity, so that we have nothing to apologise for there, and it is very material that we should call the attention of others at Geneva to the fact that at any rate in that respect we have really been as good as other people's word.
  But that is not enough. If Great Britain was to go to Geneva and say, "We will do nothing," we should be rightly open to the gravest admonition. What we have to do is to make an adequate contribution in the naval sphere, because it is essential that everyone should make an adequate contribution in the arm in which he is the strongest. That is quite right. At the same time, let us see how things really stand about the Navy. We all have in mind that the Navy before the War had for some years been developed and
  1244
  brought up to a point in view of a particular peril which has disappeared, but still the fact is that, if you take both the British Navy and the navies that are associated with us in the British Commonwealth, you will find, as compared with the year before the War, that capital ships have been reduced from 69 to 15, cruisers have been reduced from 108 to 52, destroyers have been reduced from 285 to 147, and submarines have been reduced from 74 to 52.
  I again say that is not the slightest reason in the world why we should not be expected to make a substantial contribution at the Disarmament Conference, but it is not treating the situation reasonably if you do not call attention to the fact that that is our record up to date. I do not know of any great naval Power in the world that can point to such a record. If you take the Air Force, it is no good taking the year before the War, because fighting in the air was in its infancy, but when the War ended the British air arm was one of the two strongest Air Forces in the world. I remember very well calling attention in 1924 on the Estimates to the way in which we had cut that force, and to-day, instead of being the second force in the world, it is the seventh, and, if you take our first line aeroplanes, we have got rid of four out of five. I say again I do not in the least insist upon these points with any idea that this is an excuse for not doing very substantial things now, but I say that you cannot expect to get British opinion with you, and you cannot expect to get reasonable treatment from others, unless these facts are plainly, but without boasting, put before the world.
  There is one other thought that is in the mind of everyone. No one would dream of disputing it. The responsibilities that attach to the British Navy, in the sense that they are spread over so many parts of the world, are something which really cannot be paralleled in their diversity with the responsibilities of other naval Powers. We make no reproach to them. We do not know any reason why we should be blamed. I do not know of a naval Power which has at one and the same time this complex of responsibility which attaches to us, not in the interest of war but in the interests of peace, as was very movingly pointed out in the admirable maiden speech of the hon. Member for South Hackney (Miss Graves).

  1245
  What I have pointed out shows the reason why in our case there is a real difficulty in consenting to a further reduction in units, because in units we have cut and cut and cut. I am not saying that nothing can be done, but it is very material to observe how we have cut down units. The proposals I confess are of great value and would certainly be an enormous relief if they were applied to the taxpayers, and, I think, a great reduction in the danger of war.
  It is suggested that there should be a great reduction in tonnage, and here I have difficulty in following some of the criticisms. Apparently if you were to bring ships down from the present maximum size to 10,000 tons you would be doing a very good thing. I do not pose as a technical expert, but I imagine that the capital ship only means the biggest ship we have got. If there was no bigger ship, then the 10,000 ton ship would be the capital ship. Can you really think that you are not promoting Disarmament if you can secure a substantial and, as I should like to see, a progressive reduction in the size of those monsters. For a moment I thought that one hon. Gentleman was arguing that it was not only not a contribution to Disarmament but was actually calculated to encourage people to spend more money upon armaments on the ground that a 35,000 ton ship cost more than a 32,000 ton ship, and that if you brought the tonnage down to 22,000 you would only be encouraging people to arm more. I really do not think that that could be regarded as a serious argument at all. If you can bring down the whole scale substantially you are certainly doing one thing—and I think you are doing two things—beyond all possible question, you are reducing the financial burden enormously. My information is that you would reduce the burden in the case of capital ships by half. Not only that, but you are doing a second thing. At the same time you reduce the size of those fighting ships—it applies to cruisers as well as to capital ships—you are reducing the size of the guns they mount.
  The hon. Gentleman opposite was mistaken—I am not blaming him—if he thought our proposal had nothing to do with naval guns. It has. I remember during the first Labour Government, when that Government proposed what at that time some of us sitting over there thought to be a great pity, namely, to
  1246
  establish a larger size cruiser of 10,000 tons, that I made a speech and I was looked at very coldly by members of the Government and regarded with indignation by most of the Conservative Members opposite. The time has now come when we are entitled to say that it would have been a good thing not to have started that race in armaments, and it is a good thing now to bring it down. Therefore, though I am the first to admit that the proposals which we have been able to put forward, do not, of course, strike the eye and produce the immediate results which President Hoover's plan, if it were applied to-morrow morning, might produce, I beg the House not to treat the proposals which have been put forward, and which involve an enormous sacrifice of the tradition which has obtained, for instance, among our Fighting Services, as though they were trumpery or ill-conceived.
  The last point I want to mention has to do with bombing. Here, again, do not let there be any doubt as to the attitude which the British Government have taken up, are taking up, and will take up. I will read a sentence from the Lord President's declaration which puts it as well as I can put it:
  "There is no aspect of international disarmament more vitally urgent than the adoption without delay of the most effective measures to preserve the civilian population from the fearful horrors of bombardment from the air. The Government of the United Kingdom would be prepared to go to any length, in agreement with other Powers, to achieve this object."
  It may be—I do not rule it out—that the method that is to be considered as the most practicable method is a very drastic method indeed, but I would ask hen, Gentlemen who feel, as we all do, very keenly on this subject, to observe one or two practical questions which arise. The last thing that I wish to do is to criticise the wording of President Hoover's document, but there is a passage in that document which seems almost to suggest—in fact, I think it says so—that if you could get rid of bombing aeroplanes you would get rid of all fear of bombing. That may be so in the United States, but at least we have to have regard to these two difficulties. I do not mention them, because I desire to use them as a shield to protect the British Government against criti-

  1247
  cism, but because they are there, and nothing is to be gained by not looking things in the face. One is this. It is not true, unfortunately, under modern conditions that the only military machine that can drop bombs is a bombing machine, and therefore you have to carry your plan further than appears at first sight. If not, then you run a grave risk by believing that you have got rid of this frightful new method of warfare, as I, for my part, most earnestly wish to do. You will, as a matter of fact, still have left the opportunity in various air forces to use other kinds of machines—machines which are not specially designed for bombing but for other purposes. There is a second difficulty which assails the minds of many people, and particularly of our friends in France, namely, that, apart from military aeroplanes, there are large civilian machines which are capable of lifting great weights into the air and carrying people in time of peace, which is a more suitable occupation, and which could be used for dropping bombs in time of war.
  These are all perfectly manifest points and the reason I am making them is not in the least because I desire, having introduced them, to say that nothing can be done. On the contrary, my firm conviction is that there is nothing in the whole disarmament discussions which is more vital than that Great Britain should play its own full part in seeing that steps should be taken effectively to stop this abominable practice of indiscriminate bombing which is threatening the whole future of the world. I would point out to the hon. Member for East Wolver-hampton (Mr. Mander) who made, as usual, a well-informed speech, that in his enthusiasm for President Hoover's proposals he read rather more into them than I have myself been able to, for he told the House that President Hoover had proposed a treatment of such things as gas and bacteriological warfare which went far beyond and was much more effective than the proposals which were generally accepted at Geneva. I did not know that. Therefore, I sent for the document to see what President Hoover said. This is what he said:
  "I propose the adoption of the presentation already made at Geneva for the abolition of all chemical warfare."
  1248
  I am not aware there is any difference at all between us. It may be asked what is going to be done now.
  Mr. LANSBURY: Will the right hon. Gentleman deal with the question of preparations and continuing the work of inquiry.
  Sir J. SIMON: I know that subject is in the mind of the Leader of the Opposition and of the hon. Member for East Wolverhampton. I have studied very closely the report of the Gas and Bacteriological Warfare Sub-Committee which has a scheme which is, I think, a very good one, and I quite agree that if there is anything which can be done to strengthen it on the lines of checking and preventing preparation it would enormously improve it. The right hon. Gentleman knows the difficulties in the matter and that a very large number of these chemicals are chemicals which are produced in themselves for a variety of purposes, and it is the use or misuse of the chemical and not the fact that it is produced in a chemical factory which is the practical thing you can tackle. On the other hand, there are preparations, bacteriological preparations, which are produced on a large scale and can only be intended for abominable uses in time of war. If you can get instances defined in which you can stop the preparation of gas which is intended only for warlike purposes, I can say on behalf of the British Government that we join most heartily in including that in the prohibition.
  What is going to happen now? The Geneva Conference has been sitting for many months. Whereas the Lausanne Conference was only sitting for weeks, the Geneva Conference has lasted for months. It is fair to say, however, that the problem with which Geneva is dealing is on a much wider scale. It would be very unjust to Mr. Henderson to refer to the task which he has to discharge as being one which is in the same comparatively narrow compass, very important but narrow compass, of Lausanne. In the second place, at Geneva you have something like 50 to 60 States represented instead of the four or five creditor Powers who to a very large extent led the whole business of reparations at. Lausanne. Moreover, one met at Lausanne with the realisation that something must be done, while at Geneva you meet in the atmosphere that something

  1249
  ought to be done. That is a very important difference. Therefore, it is quite natural that Mr. Henderson should not have been able to drive his team any faster.
  But a very important decision wan reached last week when I was at Geneva, and I trust to be able to help in carrying it through when I return with my colleagues to-morrow. It was decided that before the end of this month, possibly at the end of this week or the beginning of next week, we should have a comprehensive Resolution which would be so drawn as to cover all the points of the maximum amount of agreement which we have been able to attain up to now, and that it should be divided into three parts. One part would heartily welcome the Hoover scheme, and would affirm on behalf of the whole conference the Hoover principle that there must be substantial reductions in all three Arms, and that they were inter-connected. It would also affirm the Hoover principle that reduction should be carried out not only by broad general cuts in armaments, but by increasing the comparative power of defence and decreasing the power of attack. That is pure Hoover. The second part of the Resolution would affirm about a dozen propositions which, after a great deal of inquiry by my colleagues and myself, we believe we can get the whole conference to accept. They include the gas and bacteriological recommendations, as well as various points in connection with the other forces. No doubt the House would like to see a longer and more important list but so far as it goes it is something which is an actual contribution towards the desired object.
  11.0 p.m.
  In the third place it is proposed by the Resolution that, on the subject of effectives in Territorial Forces, a matter of particular importance to the countries with conscript Armies, or on the subject of the method of naval reduction, it is necessary to get together, without loss of time, the Powers that may be specially concerned, and appeal to them to reach agreement, if they can, and make a report to the conference. The conference would invite the Powers who were parties to the Naval Treaties of Washington and London, by which substantial measures of limitation and reduction of naval armaments have already been brought about, to confer together and report to the General Commission before
  1250
  resumption of its work as to any other measures of naval disarmament which may be possible as part of the general programme. No other method is possible. We cannot possibly secure that Japan is going to agree with America or ourselves between now and the end of next week, but you can, having got them together, say that as regards the broad object of naval disarmament we are all aiming at the same thing, we may not be agreed as to the best method; there must be give and take; no one can get everything his own way, therefore let us meet at once and report to the conference the view which the naval Powers take as to further reductions. I believe that that is thoroughly practicable, and if, as I hope, the Resolution is proposed in a few days time, and is adopted unanimously—it must be remembered that it can be upset by a single adverse vote—it will be a valuable—I do not desire to exaggerate the achievement—and a, substantial advance which will justify all the hard work that has been put into it.
  My last word is this. Disarmament, reparations, economies, all these things are aspects of the same problem. The greatest mistake is to suppose that one can exercise its healing influence without the other. At Lausanne we tried to get the countries to look forward instead of behind. What we had particularly in mind, as the Prime Minister said to M. Herriot, is that in the future we do not want to see the policy of Europe diverted by secret conversations between a couple of Powers at the expense of a third. We want to deal with the whole problem of Europe in a spirit of candour and mutual assistance. The value of Lausanne is that it was done that way. The Germans put their case with the greatest firmness, everyone listened. The French did the same and the Italians did the same, and we did the same, and I trust that at Lausanne and at Geneva we may be able, under the leadership which beyond all doubt falls to this country at this moment, to set a new manner of life which will lead to the exercise of candour and kindness between all nations of the world.
  Miss RATHBONE: I want to make a protest. Last Thursday we were told by the Lord President of the Council that a Debate on the disarmament proposals would take place to-day on the proceed

  1251
  ings at Lausanne and Geneva. The Debate has not taken place. We have had a long Debate on Lausanne. When I asked leave to speak on disarmament I was informed by Mr. Speaker and the Deputy-Speaker that no speeches would be taken on disarmament until everyone who wished to speak on Lausanne had done so. The hon. Member for East Wolverhampton (Mr. Mander) has managed to get away with it, probably because he did not announce beforehand the subject of his speech. I want to ask whether it is really carrying out the promise of the Government that there should be a Debate on both these conferences. The Lausanne Conference, memorable as it has been, is past and over. In the opinion of the majority of this House it has resulted in a substantial advance which cannot be affected by the Debate to-day. The Conference at Geneva is in full progress. As compared with the Conference at Lausanne the complicated issues raised at Geneva are as a game of chess compared with a game of football. Last Thursday proposals were put forward by the Government on the subject of disarmament of greater importance than anything that has been laid before the country for several years. Is it desirable that this House should be given absolutely no opportunity of discussing those proposals when it is about to adjourn for three months?
  The Foreign Secretary has made a most interesting speech, and has repeated a good many interesting points with regard to Disarmament which were more or less contained in the speech of the Lord President of the Council on Thursday last; but he has not answered any one of the very pertinent questions about points of different interpretation which have been raised in the Press and the country during the few days that have intervened since the proposals were known. He has not told us, for example, on the question of capital ships, how exactly the relative proposals of President Hoover and the British Government would work out. Mr. Hoover proposes an immediate scrapping of one-third of capital ships. The British Government propose to replace the largest capital ships and the fixing of a new maximum which would not begin to be effective until the year 1941. Surely the House is entitled to know how these two pro-
  1252
  posals compare with each other. Then, again, Mr. Hoover's proposal is for the scrapping of all tanks. The British proposal is only to scrap all tanks over 20 tons. Are we not entitled to know what the relative sacrifices mean? How many existing tanks are over 20 tons? Mr. Hoover proposed the total prohibition of all bombing from the air. The British Government merely proposes that bombing should be prohibited except within limits agreed to by international convention, and that attacks on civilians should be entirely prohibited. The House is entitled to know how these proposals compare.
  We have had six hours discussion today upon what is passed and gone at Lausanne, and I think we could very well spare another 10 minutes in order to settle a few of the difficult points that are puzzling many of us who care about Disarmament. I would remind the House that two men who are no small experts on Disarmament, Lord Cecil of Chelwood and Professor Gilbert Murray, in letters to the "Times" have expressed the most pessimistic view as to whether the proposals of the Government do in fact or do not represent any substantial contribution whatever to the problem of constructive, reciprocal Disarmament. Is it the case that the Government are only too well aware that they have nothing to lose by discussion of proceedings at Lausanne, but nothing whatever to gain in credit by a further and more meticulous examination of the proposals with regard to Disarmament, and by a comparison between their proposals and those of President Hoover? What is the use of agreeing with President Hoover's proposals in principle, if the Government proceed to disagree with the practical application of those proposals in nearly every particular?
  Question put, and agreed to.
  Bill read the Third time, and passed.

  SUNDAY ENTERTAINMENTS BILL.
  Order for Consideration of Lords Amendments read.
  Motion made, and Question, "That the Lords Amendments be now considered," put, and agreed to.—[Mr. Stanley.]
  Lords Amendments considered accordingly.
  Lords Amendments to page 2, line 36, agreed to.

  SUNDAY ENTERTAINMENTS BILL.

    CLAUSE 1.—(Provisions as to cinematograph entertainments.)
    Lords Amendment:
    In page 3, line 7, at the end, insert
    "or (ii) it is proved—

    (a) that the person was employed contrary to the said conditions only by reason of his having been employed on each of the six days previous to that Sunday in connection with similar entertainments or exhibitions by an employer other than the employer who employed him on that Sunday; and

    (b) that the last-mentioned employer had, after making due inquiry, reasonable ground for believing that he had not been so employed as aforesaid."

    The UNDER-SECRETARY of STATE for the HOME DEPARTMENT (Mr. Oliver Stanley): I beg to move, "That this House doth agree with the Lords in the said Amendment."
    The House will remember that we inserted in the Bill during the Report stage a provision that one of the conditions attaching to licences for Sunday entertainment should be that no one was to be employed in a cinema on Sunday who had been employed on each of the six days previous to the Sunday, either in connection with similar entertainments or by the same employer. The effect of this Amendment is to give the employer who is charged with a breach of that condition, the defence that he had made due inquiry and that as a result he had reasonable ground for believing that the person in question had not been so employed. The consequence of the Amendment will be that if the employer charged with a breach of the provision is able to establish that defence, it will be held that no breach is involved, and he will not be subject to penalties. I think it is a fair provision that a man should not be held guilty of an offence, when he has taken all reasonable steps to avoid that offence.
    Mr. RHYS DAVIES: Speaking entirely on my own behalf, I regret this Amendment. When the Bill left the House, it was definite that one day's rest in seven for the employés was safeguarded. This Amendment practically destroys that provision. The hon. Gentleman opposite seems to be offended by that statement. What does the Amendment from another place say?
    "that the last-mentioned employer had, after making due inquiry, reasonable ground for believing that he had not been so employed as aforesaid."
    1254
    What happened in connection with another Measure some years ago? A Bill was introduced to prevent the supply of alcoholic drinks to young persons under 18. Everybody thought when it became an Act that it would prevent such young persons being supplied with alcoholic drinks. But an Amendment was introduced to the effect that, provided that the person supplying the drink had reason to believe that the person to whom it was supplied was over 18, no charge could succeed against him in a court of law. The adoption of that Amendment practically killed the usefulness of that Measure. The acceptance of this Amendment means that the employer who is taken to court will be able to say that he had made all the inquiries he was capable of making and had not offended against the law at all. I feel sure that all the provisions made upstairs and on the Floor of this House in favour of one day's rest for those employed in the entertainment industry will be made almost null and void by the acceptance of the Amendment. I therefore register my protest on that score.
    Sir BASIL PETO: When we were upstairs in Committee we were promised by the Home Secretary that as far as it was found to be administratively feasible the principle that there should be no seven days' work in the week was put into the Bill. It was not found that this could be done in a positive manner, and in the Bill we had a proviso which gave plenty of loopholes, I think, and now we are asked to put in further Amendments making still further provision for the thing being inoperative. I do not accuse the Government in any way of not carrying out the undertaking as far as they thought it could be carried out, but it is regrettable that at this last moment, when we thought we had inserted something which certainly left much to be desired, we are asked to put into the Bill still further provisions that if there is seven days' employment, provided the employer can satisfy the person who brings him to task for it, that he made such reasonable inquiries as he could, that he had some grounds at the time he gave the seventh days' employment to the workman to believe that he had not been employed on the previous six days, then no conviction would lie. We had very little before, arid of that little that we had received a part has been

    1255
    taken away. I agree thus far with the hon. Member for Westhoughton (Mr. Rhys Davies), that the real security against continuous employment for seven days in the week is so weak as to be almost negligible with this further Amendment. I very much regret that the Government have not stood firm on the provision that they put in, when, with all the assistance at their command, they put into the Bill what they thought was administratively possible, and that they are prepared to accept a still further watering down of that undertaking.
    Question, "That this House doth agree with the Lords in the said Amendment," put, and agreed to.
    Lords Amendment: In page 3, line 33, leave out from the word "arrangements" to the word "purported," in line 34.
    Mr. STANLEY: I beg to move, "That, this House doth agree with the Lords in the said Amendment."
    Perhaps it would be a good thing if I said a word or so on this Amendment and the following one, because they go together. The result of the two is to make some provision for a state of affairs which has, oddly enough, only been disclosed to us since the Bill left this House. In Committee and on the Report stage the hon. Member for Barnstaple (Sir B. Peto) on several occasions held out to us the case of the Middlesex County Council as one of the shining protagonists of the Sunday closing of cinemas, but we have discovered that that Bayard among local authorities was not quite so much sans peur et sans reproche as he thought. In fact, so far from being averse to Sunday opening, they have permitted no fewer than 20 openings during the course of the year. We also found that other cities which had told us there was no desire whatsoever for the Sunday opening of cinemas in their localities have been on occasions granting permission to cinemas to open for specific charitable performances.
    Although my own feeling—and that is why during the previous stages of the Bill I was not prepared to agree to any Amendment—is that authorities like that should choose on which side of the fence they are going to sit, whether they want Sunday opening or whether they are
    1256
    against it, yet it has been represented—and that, as I understand it, is why the other place has accepted these Amendments—that in a number of cases a few specific entertainments, in a number of which not only the profits but all the takings are given to local charities, will be prevented if a provision of this kind is not carried.
    The effect of these provisions will be that any authority, which has during the period mentioned in the Bill granted these specific performances, will in future not come under the general provisions of the Bill and open regularly—unless they use the ordinary machinery of the Bill—but will be able to allow an occasional performance limited to not more than two Sundays in the year. That will cover the case of the charitable openings in the West Riding of Yorkshire, Middlesex, Birmingham, Nottingham and one or two other places, and it will probably meet with the general desire of the House that these few charitable performances should be safeguarded.
    Sir B. PETO: I do not want to question the statement of the Home Secretary, but I feel bound to point out that when an Amendment was moved in another place to allow the opening of cinemas on Sundays for charitable purposes not in excess of 24 in a year, Viscount Hailsham, speaking on behalf of the Government, said that that arrangement, which was really a compromise, would be completely destroyed if this Amendment were carried.
    Mr. STANLEY: The effect of that Amendment would be to allow every cinema in the area to open 24 Sundays in the year.
    Sir B. PETO: I agree with the Under-Secretary that it is a different proposition to have the openings limited to two Sundays in the year from the proposition to enable cinemas to open in areas where there has been no public expression of opinion under the provision of the Bill on 24 Sundays in the year. I can see that there is a claim which could be put forward on behalf of that, but I am bound to point out that it goes counter to the whole principle on which the Bill is constructed, namely, that in the 97 areas where cinemas had been licensed and regularly opened the machinery of the

    1257
    Bill providing for the expression of public opinion has not to be put into force, while in the other areas it must be put into operation. Now we have an intermediate set of areas where there have been occasional openings on Sundays, which are also to be exempted from the machinery of the Bill. If this was the principle which the Government intended to accept, it is rather a pity that it should have been brought in at the eleventh hour. At the same time, I believe that there is a case to be made for it and I do not wish to oppose it.
    Mr. LECKIE: I should like to ask the hon. Gentleman to elucidate the last two lines of the proviso. Does it mean that a local authority will be able to choose different dates for different picture houses? Does it mean simply that there are only two Sundays for each area for all the picture houses in the area, or will the local authority be allowed to allow two Sundays to each cinema?
    Mr. STANLEY: The local authority will have power to license any cinema in the area so long as that licence does not extend to more than two Sundays.
    Question, "That this House doth agree with the Lords in the said Amendment," put, and agreed to.
    Subsequent Lords Amendment page 3, line 39 agreed to.

    CLAUSE 2.—(Provisions as to Cinematograph Fund.)
    Lords Amendment: In page 3, line 7, after the word "shall" insert ",subject as hereinater provided,"
    Mr. DEPUTY-SPEAKER (Captain Bourne): I have to direct the attention of the House to the fact that this Amendment raises a question of Privilege.
    Mr. STANLEY: I beg to move, "That this House doth agree with the Lords in the said Amendment."
    I do not know whether it would be more convenient to discuss this matter on this, which is a purely drafting Amendment, or on the next Amendment, which is a substantial one, but the effect of the two together is simply to make plain
    1258
    something which I said during the Report stage. That was that no part of the expense of administering this fund should fall as a public charge. I thought, and I think still, that even without this Amendment it would be possible to secure that, but I thought it wise to put it beyond the possibility of doubt that the expense of administering the fund shall come out of the fund itself, and that the amount to be given to whatever societies are chosen should be not the gross but the net amount. It is for that reason that we have accepted the Amendment in this, which is the usual form, that is to say that the expenses are charged on the Vote; and then the Appropriation-in-Aid is taken.
    Question, "That this House doth agree with the Lords in the said Amendment," put, and agreed to.
    Mr. DEPUTY-SPEAKER: I direct that a special entry be made in the Journals of the House.
    Subsequent Lords Amendments to page 4, line 13, agreed to.

    CLAUSE 5.—(Interpretation.)
    Lords Amendment: In page 5, line 23, leave out from the word "as" to the word "and" in line 25, and insert:
    "a Secretary of State may, if he thinks fit, prescribe by regulations made by him"
    Mr. STANLEY: I beg to move, "That this House doth agree with the Lords in the said Amendment."
    This Amendment only provides that the Secretary of State need not prescribe if there are no institutions to which he wishes the money to go.
    Question put, and agreed to.

  SCHEDULE.—(Extension of powers to allow cinematograph entertainments.)
  Lords Amendment: In page 8, line 17, leave out paragraph (9).
  Mr. STANLEY: I beg to move, "That this House doth agree with the Lords in the said Amendment."
  This is simply to meet the wishes of the other place in connection with their rules of procedure. It was stated by the Chairman of Committees there that a Resolution would have the same effect.
  Question put, and agreed to.

  NATIONAL HEALTH INSURANCE AND CONTRIBUTORY PENSIONS BILL.
  Order for Consideration of Lords Amendments read.
  Motion made and Question, "That the Lords Amendments be now considered," put, and agreed to.—[Mr. E. Brown.]
  Lords Amendments considered accordingly.
  Lords Amendment to page 1, line 11, agreed to.

  NATIONAL HEALTH INSURANCE AND CONTRIBUTORY PENSIONS BILL.
    CLAUSE 9.—(Provisions as to widows', orphans and old age contributory pensions.)
    Lords Amendment: In page 9, line 19, insert:

    NEW CLAUSE A.—(Repeal of s. 44 (7) of 15 & 16 Geo. 5. C. 70.)
    —(1) Sub-section (7) of Section forty-four of the Widows', Orphans' and Old Age Contributory Pensions Act, 1925, (which Subsection relates to the reckoning, for certain purposes, of insurance in Northern Ireland and contributions paid in that country) is hereby repealed.

    (2) For the purposes of any financial adjustments to be made under Section thirty-three of the said Act, this Section shall be deemed to have come into operation on the same date as the reciprocal arrangements first made between Great Britain and Northern Ireland under the said Section thirty-three.

    Mr. DEPUTY-SPEAKER: I have to draw the attention of the House to the fact that the Amendment raises a question of Privilege.
    Motion made, and Question proposed, "That this House doth agree with the Lords in the said Amendment."—[Mr. E. Brown.]
    Mr. BUCHANAN: May we have a word or two of explanation on this Amendment?
    The PARLIAMENTARY SECRETARY to the MINISTRY of HEALTH (Mr. Ernest Brown): I only wished to consult the convenience of the House. There are certain reciprocal arrangements between Northern Ireland and this country for insured persons who may at any time work part of a period in Northern Ireland and part in this country. The Clause to be repealed was inserted in the original Bill of 1925 before it was known whether Northern Ireland would or would not adopt that Bill. Northern Ireland did
    1260
    adopt it. The Clause subsequently introduced into the Bill of 1925, which is now Section 33, overlooked the fact that it was necessary to repeal Sub-section (7) of Section 44 and now an adjustment is being made.
    Question, "That this House doth agree with the Lords in the said Amendment," put, and agreed to.
    Mr. DEPUTY-SPEAKER: A Special Entry will be made in regard to this Amendment in the Journals of the House.

  ELECTRICITY SUPPLY ACTS.
  Resolved,
  "That the Special Order made by the Electricity Commissioners under the Electricity (Supply) Acts, 1882 to 1928, and confirmed by the Minister of Transport under the Electricity (Supply) Act, 1919, and the Public Works Facilities Act, 1930, in respect of part of the urban district of Ormskirk and part of the rural district of West Lancashire, in the county palatine of Lancaster, which was presented on the 9th day of June, 1932, be approved."
  Resolved,
  "That the Special Order made by the Electricity Commissioners under the Electricity (Supply) Acts, 1882 to 1928, and confirmed by the Minister of Transport under the Electricity (Supply) Act, 1919, and the Public Works Facilities Act, 1930, in respect of the burgh of Kirkcudbright and the parish of Kirkcudbright, in the county of the Stewartry of Kirkcudbright, which was presented on the 23rd day of June, 1932, be approved."
  Resolved,
  "That the Special Order made by the Electricity Commissioners under the Electricity (Supply) Acts, 1882 to 1928, and confirmed by the Minister of Transport under the Electricity (Supply) Act, 1919, in respect of part of the rural district of Aberystwyth, in the county of Cardigan, which was presented on the 23rd day of June, 1932, be approved."
  Resolved,
  "That the Special Order made by the Electricity Commissioners under the Electricity (Supply) Acts, 1882 to 1928, and confirmed by the Minister of Transport under the Electricity (Supply) Act, 1919, and the Public Works Facilities Act, 1930, for the transfer of the undertaking authorised by the Maldon and District Electricity Special Order, 1925, which was presented on the 28th day of June, 1932, be approved."
  Resolved,
  "That the Special Order made by the Electricity Commissioners under the Electricity (Supply) Acts, 1882 to 1928, and confirmed by the Minister of Transport

  1261
  under the Electricity (Supply) Act, 1919, and the Public Works Facilities Act, 1930, in respect of part of the parish of Dunoon and Kilmun, in the county of Argyll, which was presented on the 28th day of June, 1932, be approved."
  Resolved,
  "That the Special Order made by the Electricity Commissioners under the Electricity (Supply) Acts, 1882 to 1928, and confirmed by the Minister of Transport under the Electricity (Supply) Act, 1919, and the Public Works Facilities Act, 1930, in respect of part of the parish of Inverkip, in the county of Renfrew, which was presented on the 28th day of June, 1932, be approved."—[Mr. Pybus.]

  GAS UNDERTAKINGS ACTS.
  Resolved,
  "That the draft of a Special Order proposed to be made by the Board of Trade under the Gas Undertakings Acts, 1920 and 1929, on the application of the Worksop Gas Company, which was presented on the 30th day of June and published, be approved."
  Resolved,
  "That the draft of a Special Order proposed to be made by the Board of Trade under the Gas Undertakings Acts, 1920 and 1929, on the application of the Cambridge University and Town Gaslight Company, which was presented on the 24th day of June and published, be approved."
  Resolved,
  "That the draft of a Special Order proposed to be made by the Board of Trade under the Gas Undertakings Acts, 1920 and 1929, on the application of the Oxford and District Gas Company, which was presented on the 23rd day of June and published, be approved."—[Mr. Hore-Belisha.]
  Motion made, and Question proposed,
  "That the draft of a Special Order proposed to be made by the Board of Trade under the Gas Undertakings Acts, 1920 and 1929, on the application of the Sheffield Gas Company, which was presented on the 24th day of June and published, be approved."—[Mr. Hore-Belisha.]
  Mr. T. WILLIAMS: Will the hon. Gentleman kindly inform us what is involved in the making of this Order in regard to Sheffield?
  The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Mr. Hore-Belisha): This Order authorises the transfer to the Sheffield gas undertaking of the Elsecar, Wentworth and Hoyland gas undertakings. No Government grant is involved.
  Question put, and agreed to.
  Resolved,
  "That the draft of a Special Order proposed to be made by the Board of Trade under the Gas Undertakings Acts, 1920 and 1929, on the application of the Sheffield Gas Company, which was presented on the 24th day of June and published, be approved."
  Resolved,
  "That the draft of a Special Order proposed to be made by the Board of Trade under the Gas Undertakings Acts, 1920 and 1929, on the application of the Yeovil Corporation, which was presented on the 21st day of June and published, he approved."
  Resolved,
  "That the draft of a Special Order proposed to be made by the Board of Trade under the Gas Undertakings Acts, 1920 and 1929, on the application of the Newbury Corporation, which was presented on the 20th day of June and published, be approved."—[Mr. Hore-Belisha.]
  The remaining Orders were read, and postponed.
  It being after half-past Eleven of the Clock, Mr. DEPUTY SPEAKER adjourned the House without Question put, pursuant to the Standing Order.
  Adjourned at Twenty-five Minutes before Twelve o'Clock.

SCOTLAND.
  SHEEP STOCKS.
  SHEEP STOCKS.
  EDUCATION (GAELIC).
  EDUCATION (GAELIC).
  FORESTRY COMMISSION LAND, FORT AUGUSTUS.
  FORESTRY COMMISSION LAND, FORT AUGUSTUS.
RUSSIA.
  COMPENSATION CLAIM, MR. JOSEPH MARTIN.
  COMPENSATION CLAIM, MR. JOSEPH MARTIN.
  EXPORT CREDITS.
  EXPORT CREDITS.
  ROYAL NAVY (MEAT SUPPLY).
  ROYAL NAVY (MEAT SUPPLY).
  POST OFFICE (TELEPHONE SERVICE).
  POST OFFICE (TELEPHONE SERVICE).
  BRITISH ARMY (VOCATIONAL TRAINING).
  BRITISH ARMY (VOCATIONAL TRAINING).
COAL INDUSTRY.
  SCOTTISH COAL (IMPORT, WALES).
  SCOTTISH COAL (IMPORT, WALES).
  COALPIT HEATH COLLIERIES, BRISTOL.
  COALPIT HEATH COLLIERIES, BRISTOL.
  ROYAL AIR FORCE (NIGHT FLYING).
  ROYAL AIR FORCE (NIGHT FLYING).
  HUNGARY (BRITISH INVESTORS).
  HUNGARY (BRITISH INVESTORS).
NATIONAL FINANCE.
  BANK OVERDRAFTS (INTEREST).
  BANK OVERDRAFTS (INTEREST).
  WAR LOAN CONVERSION.
  WAR LOAN CONVERSION.
  AIR EXPENDITURE (SAVINGS).
  AIR EXPENDITURE (SAVINGS).
  UNEMPLOYMENT (TRANSITIONAL PAYMENTS).
  UNEMPLOYMENT (TRANSITIONAL PAYMENTS).
  MEAT (EMPIRE AND FOREIGN).
  MEAT (EMPIRE AND FOREIGN).
  DARTMOOR PRISON (OFFICERS' CLAIMS).
  DARTMOOR PRISON (OFFICERS' CLAIMS).
Preamble
The House met at a quarter past four of the clock, The LORD CHANCELLOR on the Woolsack.

BUSINESS OF THE HOUSE.
LORD PONSONBY OF SHULBREDE: My Lords, may I ask the noble and learned Viscount the Leader of the House at what time to-morrow the House will sit?
THE SECRETARY OF STATE FOR WAR (VISCOUNT HAILSHAM): My Lords, I think it would be convenient if we met at half-past eleven to-morrow and have the Royal Commission at half-past twelve, which I understand is likely to be in accordance with the convenience of the other place. Some little discussion may arise with regard to the Humber Bridge Bill, about which the Lord Chairman of Committees has something to say. Half-past eleven would give time to dispose of that and also give time for the Royal Commission at half-past twelve.

TOWN AND COUNTRY PLANNING BILL.
Returned from the Commons, with the Amendments, agreed to.
CHILDREN AND YOUNG PERSONS BILL.
Returned from the Commons with the Amendments insisted upon by the Lords and the Lords Amendment in lieu of an Amendment disagreed to by the Commons, agreed to.

DUNDEE CORPORATION ORDER CONFIRMATION BILL.
Brought from the Commons; read 1a; to be printed, and (pursuant to the Private Legislation Procedure (Scotland) Act, 1899) deemed to have been read 2a and reported from the Committee.
LORD STRATHCONA AND MOUNT ROYAL: My Lords, under Section 7 of the Private Legislation Procedure (Scot-

769
land) Act this Bill passes straight to its Third Reading and therefore, Standing Order No. XXXIX having been suspended, I move that this Bill be now read a third time.
Moved, That this Bill be now read 3a.—(Lord Strathcona and Mount Royal.)
On Question, Bill read 3a, and passed.

OXFORD AND DISTRICT GAS ORDER, 1932.
SHEFFIELD GAS ORDER, 1932.
YEOVIL GAS ORDER, 1932.
NEWBURY GAS ORDER, 1932.
CAMBRIDGE GAS ORDER, 1932.
LORD TEMPLEMORE: My Lords, I beg to move the Motion standing in my name with regard to these Orders.
Moved, That the Special Orders, as reported from the Special Orders Committee on Thursday last, be approved.—(Lord Templemore.)
On Question, Motion agreed to.

BATH GAS ORDER, 1932.
LORD TEMPLEMORE LORD TEMPLEMORE had given Notice that he would move, That the Special Order, reported from the Select Committee on the 29th of June last, be approved as deposited and without modification. The noble Lord said: My Lords, as regards the Motion in my name relating to the Bath Gas Order, 1932, the Board of Trade have received a proposal from the parties concerned that in the circumstances which have arisen, and into which I need not go, it would be in the interests of everyone if the Order were not moved now but were postponed till next Session. The Board of Trade gladly assent to this proposal, and I understand that my noble friend Lord Bath, who was Chairman of the Select Committee of your Lordships' House which dealt with the matter, also assents. Accordingly, with your Lordships' concurrence, I do not propose to move to-day the Motion standing in my name.
THE MARQUESS OF BATH THE MARQUESS OF BATH, in whose name stood an Amendment to the Motion, to leave out the words after "approved" and insert "with the modifications proposed by the Select Commit-
770
tee," said: My Lords, of course the House will understand that if this Motion had been proceeded with by my noble friend it would have been my duty to ask the House to support its own Committee, but in view of the fact stated by Lord Templemore, that the parties are agreed to the course which he is taking, I, of course, speaking on behalf of my noble friends who sat with me on the Committee—we take no sides—are quite content to leave the matter there, on the understanding that the Order, which is still in the possession of your Lordships, will be brought forward at a later stage.
I should like, however, just to say this on the point that came before us. It is one of considerable importance, and I think I am speaking from the strong point of view held by my noble friends, when I say that we felt that it was one which was worthy of the consideration of Parliament in some way, but that it was not the proper place and time to bring it forward in an Order—I even go further and say in a Bill—which had the assent of all the parties concerned in that Order. I throw out the suggestion that it is a matter—a question of one or more basic prices of gas—which ought to be decided probably on the lines on which other gas questions have been dealt with, or by a Joint Committee or something analogous thereto, such as those two Committees which have already sat under the Chairmanship of two members of your Lordships' House, Lord Chalmers and Lord Marks. Having said that, and on the understanding that this Order will be proceeded with later, I have nothing more to say.
THE EARL OF HALSBURY: My Lords, I should like to understand exactly what it is that Lord Templemore has told us. As your Lordships know, there has got to be an affirmative Resolution by both Houses before any Order can come into operation. This Order went before the Special Orders Committee. They recommended that a Special Committee should sit upon it. That Committee sat upstairs and heard counsel on behalf of everybody, and made a report to this House. Then the Government, at the last moment, put down in the name of Lord Templemore a Motion that the Committee's recommendations should not be followed and that the original Order should be left. Surely the Government must have

771
realised that your Lordships would never disagree with the findings of your own Committee without hearing arguments, and evidence if necessary. If that has all got to be gone into again on the floor of this House, is it reasonable that the Government should have put down this Motion on the last day of the Session, when they know that we could not possibly deal with it in that way?
I hope that Lord Templemore meant, and will tell your Lordships that he meant, that next Session we shall have before us, for our consideration, the Report of our Committee as it stands now, and not as possibly modified at the express desire of some particular bureaucratic Department, who, I have no doubt, can bring pressure to bear upon the other parties. We are entitled to see the Report of our Committee, and to see if we can approve it, and if necessary have arguments about that Report. That I think is a very important matter in your Lordships' House. These Orders and these Private Bills that come before your Lordships' House, have got to be looked at carefully, or there is a grave danger sometimes of something slipping in to which the attention of the House has not been called. There is the historic case of a Private Bill relating to a borough, where the town clerk happened to be on bad terms with his wife. He succeeded in slipping into a Private Bill dealing with sewage a clause to this effect: "The marriage between the town clerk and his wife is hereby annulled." One has to be a little careful that something of that kind does not happen again. I do hope that we may have the Report of our own Committee for our consideration unaltered, even though, through the exigencies of time, if cannot be taken this Session, but will be taken next Session.
LORD PONSONBY OF SHULBREDE: My Lords, I cannot help thinking that this does require rather more explanation from the Government than has been given to us. I do not pretend to be an expert in the procedure in your Lordships' House, but I attended the Special Orders Committee when this Bath Gas Order came up, and I think that what we decided was that the matter was going to be referred to a Committee of your Lordships' House, and that the Report of that Committee would be received. I was very much mystified when I saw that the Government had gone back, and had
772
put down a Motion that the original Order should be passed. I did not really gather from the noble Lord who is in charge of this part of the business what exactly has persuaded the Government to take the course they have. I cannot help being rather suspicious. We have had Government Departments quoted often, and in this case again it is the Board of Trade which persuaded the Government to take this action.
LORD MOYNE: My Lords, can the noble Lord clear up the position? We are in great uncertainty as to whether this Order is to be brought forward at the end of the current Session, or whether the whole thing will have to start in the next Session. If a new Order must be proceeded with in the next Session I think the suggestion of my noble friend Lord Halsbury cannot possibly be carired out. I fear the matter is bound to start all over again, and probably entirely new proposals will be forced upon the parties. I feel very strongly as to the impropriety of that. We have had two separate systems of basic gas prices existing side by side. We were given a list in the Committee. I think all of us felt that there is a great variation in local conditions. The case was given to us of Middlesex where a large increment in revenue came like ripe fruit to the gas company without any effort; it does not necessarily apply to a rural area in the surroundings of Bath. Although since 1920 these two different systems have existed side by side, although the Board of Trade themselves strenuously fought the very system which they want to impose by a ukase now uniformly throughout all these Gas Orders, it is now suggested that a complete veto should be applied to the system of multiple basic prices. I do think we should be told whether this issue is coming up in its simple form when this Order again comes up or whether the whole thing is going to start afresh next Session, the parties to be put to the expense and inconvenience of an entirely fresh hearing, and whether the issue which I think was brought out very plainly as between the multiple and the single basic price will again come before your Lordships' House.
LORD TEMPLEMORE: My Lords, I will try to answer the various questions

773
which have been put. As regards the question of Lord Halsbury, he asked whether the House was to be allowed to see the Report of the Select Committee. The modifications in the Order approved by the Select Committee have been published as a White Paper and I think it is lying on the Table now. I was also asked as to whether this Motion was to be moved at the end of this Session. The answer is that supposing we had gone on with this matter to-day and the Motion had been defeated, I understand the Order would have been killed, but, as it is, it remains alive and can be brought forward either at the end of this Session or at the beginning of, or any time in, the new Session, and that it will not involve the parties concerned in any fresh expenditure. As regards the question asked by the noble Marquess, Lord Bath, about an undertaking that this matter will be brought forward again, that is certainly what I intended to convey. It is not at all a matter of killing the thing now; it is merely postponed. As regards the reasons which induced His Majesty's Government to take the line they did, I should have been able to explain that, had this matter been proceeded with. I had a fairly long speech ready in which I could have explained it to your Lordships. I can assure your Lordships that there were very good reasons why His Majesty's Government assented to the agreement which had been come to between the parties in this case.
LORD JESSEL: I am not at all clear. I do not understand what the noble Lord means by "postponed." Does he mean that this stage will come on at the end of this Season? Or will the Order have to go before the Committee again?
LORD MOUNT TEMPLE: My Lords, what the House would like is to have an opportunity of hearing the views of the Select Committee and to see the evidence that would enable them to judge of what the Select Committee suggest should be done. If that is so, should it not be an understanding that no pressure should be brought to bear by a Government Department on the parties to this Order when they discuss it afresh, so that it should not be said: "Oh well, the Report of our Select Committee is immaterial; it has all been settled between the two
774
parties"? What I should suggest is that there should be an undertaking on the part of the Government that the Government Department concerned—I suppose it is the Board of Trade—should not enter into communication with the parties to this Order till your Lordships' House have had an opportunity of hearing the recommendations of the Select Committee.
LORD JESSEL: May I ask the noble Lord, Lord Templemore, how exactly this will operate? Will this Order have to go before a Committee upstairs, or will the Government decide here in the House? Can that be done in the very few sittings after the resumption, or can the Order be carried over? I understand the Chairman of Committees brings up a Motion that certain Private Bills are carried over from one Session to another. Is that so, and will this Bill only be discussed in the week before Parliament is prorogued?
LORD TEMPLEMORE: I understand that this matter cannot be moved at once, but must take two or three days. As regards the Session in which it is moved I do not know, but I understand that it is doubtful whether we shall meet again this Session.
VISCOUNT HAILSHAM: We meet again on October 27.
LORD TEMPLEMORE: I did not know, but I now understand we meet again in this Session on October 27, and the matter can then be brought forward.
LORD JESSEL: But if that continuation of the Session only lasts a week, can the Bill be carried on to the next Session?
LORD TEMPLEMORE: My noble friend informs me that it cannot.
LORD PONSONBY OF SHULBREDE: What does that precisely mean—that this matter cannot be moved at once, but must take two or three days?
THE CHAIRMAN OF COMMITTEES (THE EARL OF ONSLOW): My Lords, I think three days are needed in order to pass it through. That is the necessary time in one Session. If we have three days then I believe it will be possible to proceed with the Motion as it stands, but, supposing there are only two days, and the House is prorogued, and Parlia-

775
ment meets again, then the Special Order would have to be reintroduced. I do not think that any unnecessary expense would be entailed, but it would be possible to reintroduce the Special Order with certain modifications, and, as I understand from what Lord Templemore said, it is hoped that agreement may be reached between the Board of Trade and the Bath Corporation and the gas companies which will render it possible to bring before your Lordships a settled and agreed proposal. That will come before your Lordships as a Special Order, and it will go before the Special Orders Committee, and be dealt with in the ordinary way.
At the same time, as your Lordships will observe, it is said in the Motion—
"That the Special Order, reported from the Select Committee on the 29th of June last, be approved as deposited and without modification."
Therefore the Report of my noble friend Lord Bath's Committee is before your Lordships' House. It will remain before your Lordships' House, and when the Special Order in its modified form, or in its original form, comes up after Prorogation in the next Session your Lordships will have everything before you, and be able to deal with the matter in such a way as your Lordships think right—to modify it in any way, to refer it to a Select Committee, or take any action which your Lordships think proper. But I think it ought to be quite clear that if it is after Prorogation it will be really a new Special Order with such modification as may be agreed upon between the various parties, or may not be agreed upon. As in this case there may be a difference, then it will be for your Lordships to decide, but you will always have before you the Report of the noble Marquess, Lord Bath's Committee.
May I say one word with reference to what fell from the noble Marquess? If it would be possible to appoint a Joint Select Committee, or some such body, to consider the whole of this question it seems to me it would be advantageous. It has been done in the original case of the Committee presided over by the noble Lord, Lord Chalmers—the case of the question of basic prices—and it has been dealt with by the Committee presided over by the noble Lord, Lord Marks, in regard to the investment
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clause, and a very useful settlement has been obtained. As regards this question of single and multiple basic prices it seems to me the suggestion of the noble Marquess may possibly commend itself to His Majesty's Government and to your Lordships' House. I think that is the state of affairs as regards the question of the Special Order and the procedure which will be followed by your Lordships if your Lordships agree.
LORD MOUNT TEMPLE: My Lords, I am sorry to be persistent, but the noble Lord, Lord Templemore, has not answered the question I put. It was this. Very properly your Lordships' House attached the greatest importance to the recommendation of their Select Committee. After all, what is the use of having a Select Committee unless you pay attention to what they recommend? What, I apprehend, would occur, and probably will occur, is that during the Recess the Government Department concerned, who can put a great deal of pressure upon local authorities—I know that myself—will go to these various authorities and say: "Now cannot you come to an agreement? Never mind what the Committee recommend; come to an agreement," and the agreement will be come to, and then the Government, when Lord Bath's Committee bring forward their recommendations, will say: "It has all been settled, and your recommendation is a back number and out-of-date." I do not want that to happen. I want the Government to say: "We will not interfere with these local authorities during the Recess." We shall then be able to have the spokesmen of the local authorities if necessary, and above all the recommendations of the Committee, before us, and on that Committee's recommendations I should wish to judge the Order.

KILMARNOCK GAS PROVISIONAL ORDER (No. 2) BILL.
Read 3a (according to Order), and passed.
PUBLIC WORKS FACILITIES SCHEME (SHREWSBURY CORPORA- TION) CONFIRMATION BILL.
Read 3a (according to Order), and passed.

MINISTRY OF HEALTH PROVISIONAL ORDERS CONFIRMATION (ELHAM VALLEY WATER AND HERTS AND ESSEX WATER) BILL. [H.L.]
Order of the Day for the consideration of Commons Amendments read.
VISCOUNT GAGE: My Lords, I beg to move that the Commons Amendments to this Bill be now considered.
Moved, That the Commons Amendments be now considered.—(Viscount Gage.)
On Question, Motion agreed to.

COMMONS AMENDMENTS.
Schedule, page 4, line 36, leave out from ("owner") to ("afford") in line 38 and insert ("which term when used in this section shall include the owner, lessee or occupier for the time being of a private well")
page 5, line 22, leave out ("by the owner under this section") and insert ("under this section by an owner, lessee or occupier")
page 13, line 41, after ("recoverable") insert ("as a civil debt")
line 43, leave out from second ("occupier") to the end of line 44.
page 14, line 9, after ("under") insert ("the")
page 31, line 24, leave out lines 24 to 27.
VISCOUNT GAGE: My Lords, I beg to move that we agree with the Amendments of the Commons.
Moved, That this House cloth agree with the Commons in the said Amendments.—(Viscount Gage.)
VISCOUNT BERTIE OF THAME: My Lords, I should like to draw attention to one Amendment in this Bill. I have no doubt that it is a very excellent Amendment; it is the last on the Paper —page 31, line 24, leave out lines 24 to 27. Those lines read:
"If any money is payable to a shareholder mortgagee debenture or stock holder being a minor idiot or lunatic the receipt of the guardian or committee of his estate shall be a sufficient discharge to the undertakers."
Two Bills follow—the Ministry of Health Provisional Order Confirmation (Hailsham Water) Bill, and the Ministry of Health Provisional Order (Henley-on-Thames Water) Bill—and that clause word for word appears in those two
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Bills. The Commons have not moved to leave that clause out, and I should like some explanation.
LORD JESSEL: My Lords, I should like to support my noble friend, who is so industrious in these matters, in asking the representative of the Board of Trade for the reasons. The only thing I can attribute it to is some influence of the noble Viscount the Leader of the House. I beg to remind your Lordships that it, is in the Hailsham Water Bill.
VISCOUNT HAILSHAM: This is not the Hailsham Water Bill; this is the Elham Valley Water Bill.
LORD JESSEL: The Leader of the House says "No," but I would point out that I am drawing attention to the Hailsham Water Bill. The point of my noble friend is that this paragraph is in both Bills. It reads:
"If any money is payable to a shareholder mortgagee debenture or stock holder being a minor idiot or lunatic the receipt of the guardian or committee of his estate shall be a sufficient discharge to the undertakers."
That provision is also in the Hailsham Water Bill. All I was going to say was that I did not know whether it was due to the influence of the noble Viscount the Leader of the House that this provision remains in this Bill. Both Bills are connected with water, and the noble Viscount the Leader of the House is about to embark upon water, and I desire on behalf of the Back Benches of this House to wish him a safe return from the journey he is going to begin to-morrow. Let us hope that the Conference which he is going to attend will be a useful one and that it will be very successful.
VISCOUNT GAGE: My Lords, perhaps it is rather unusual to introduce into this matter a wish that the Leader of the House may have a safe journey to Canada. As regards the matter under discussion, I should have been able to give the noble Viscount, Lord Bertie, fuller information had I been given a little longer notice. In the circumstances it is difficult for me to give very full information. I understand this particular sub-section has been left out of the Elham Valley Water Bill because the company in this case is incorporated under the Companies Act, whereas in the other case it is incorporated under a Special Act of Parliament
VISCOUNT BERTIE OF THAME: My Lords, I am very much obliged to the noble Viscount. I expect that his explanation is quite watertight.
On Question, Amendments agreed to.

MINISTRY OF HEALTH PRO VISIONAL ORDER CONFIRMA TION (HAILSHAM WATER) BILL. [H.L.]
Commons Amendments considered (according to Order), and agreed to.
MINISTRY OF HEALTH PRO VISIONAL ORDER CONFIRMA TION (HENLEY-ON-THAMES WATER) BILL. [H.L.]
Commons Amendments considered (according to Order), and agreed to.
MARRIAGES PROVISIONAL ORDER (No. 2) BILL.
Read 3a (according to Order), and passed.
NEWCASTLE-UPON-TYNE FIRE BRIGADE PROVISIONAL ORDER BILL.
Read 3a (according to Order), and passed.

PIERS IN THE HIGHLAND COUNTIES.
LORD LOVAT LORD LOVAT rose to call the attention of His Majesty's Government to the question of piers in the Highland counties, and to ask His Majesty's Government what is their policy in regard to the construction of new piers and the maintenance and upkeep of old piers, especially in the districts that are not served by any other means of communication. The noble Lord said: My Lords, I rise to ask His Majesty's Government what is their policy about piers in the Highland counties and in that I include of course boat slips. I believe that a Commission was set up and toured this district, but I have heard of no result from its inquiries. The position as regards communications in the Highlands is very serious. Your Lordships are aware of the state of agriculture generally, so that you can imagine what is the position
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when farmers receive low prices for their products and at the same time have to pay heavy charges—perhaps £1 for rail freight or cartage and a similar amount for steamer transport. With such conditions the position of agriculturists is not a happy one.
My information is that a very large proportion of these piers are getting into such a state of disrepair that if the present neglect is continued it will have a very serious effect on the whole of this part of the Highlands. The tenure of the piers varies considerably. They are financed in some cases partly by the landowner, partly by the parish council, and partly by what used to be the Congested Districts Board and is now the Ministry of Agriculture. If the Ministry of Agriculture will not do anything, the landowner certainly cannot, because the majority of the piers do not give any financial return, and the parish council, of course, is defunct and no longer functions. Therefore nothing is being done and unless something is done it will be, as I say, a great blow to agriculture. The present condition of the piers is undoubtedly resulting in a considerable movement of population. If the Government is unable at this time, when the need for economy is so pressing, to provide money for putting these piers into repair, I would suggest that some money might be obtained by not spending the whole of the grant now made for providing new small holdings. Your Lordships are probably aware that something like £200,000 a year is spent in that way and the average cost of providing a small holding is something in the neighbourhood of £900. A sum of £30,000 or £40,000 spread over a period of five years would probably suffice to put these piers in order, and I believe it would result in keeping more people on the land than is being done to-day by the small holdings policy.
What happens at present is that a large farm is broken up and actually fewer people remain on the land than were there before. We cannot afford to let that state of affairs go on. If the Government would cut out of its small holdings programme those divisions of farms which do not definitely increase the number of people on the land, then I believe they could get enough money—£30,000 or £40,000 a year—to put these piers in repair in a period of four or five years

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There is a further suggestion I would like to make to the Government, and that is that when the piers have been put into repair it is essential that arrangements should be made to keep them in repair. The only authorities who can do that are the county councils, and I suggest that there should be a definite rating for this purpose in pier areas just as there is a definite rating in water areas or scavenging or lighting areas. In that way I think that those who benefit by the piers will be brought to see that it is to their advantage to keep the piers in order. The position is definitely serious and is getting worse. Many of the crofts in the Western Highlands are not occupied to-day by able-bodied men. They are occupied by old people, and when those people die the young folk will refuse to return to these crofts because they know that agriculture is impossible there under present conditions.
LORD STRATHCONA AND MOUNT ROYAL: My Lords, I should like to thank the noble Lord for suiting the convenience of His Majesty's Government and of myself in regard to this Question. I am glad to have an opportunity of informing your Lordships of the present position in regard to the piers in the Highland counties. The problem of communications in the Highland districts is one that has engaged the attention of successive Governments for many years. There have been projects for light railways, and projects for roads, but the fundamental problem, naturally enough when you are dealing with Highland and mountainous country sparsely populated, has been that of securing the supply by sea of the necessities of life to the people and an outlet by sea for the products of their industry, fish, wool, live stock and so on.
As long ago as 1891 Parliament passed the Western Highlands and Islands (Scotland) Works Act to enable county councils in the Highland counties with the aid of Government grants to provide piers and harbours in those counties. Under that Act a number of useful piers and harbours were built. In addition to these numerous piers were built by the proprietors of the estates on which they were situated. These constitute the great majority of the piers in these counties. There are also a few piers vested in statutory trusts. The public money
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granted under the Act of 1891 has long since been exhausted, but the procedure of the Act is still applied in connection with small works such as jetties and slips, which are from time to time constructed with the aid of grants from the sum of £10,000 which has been voted for many years to the Department of Agriculture of Scotland for the purpose of aiding the provision or improvement of piers, boat slips, roads and other works in the congested districts.
In course of time many of the piers and harbours which were built by estate proprietors or county councils have fallen into disrepair. The causes are not far to seek. Even when powers were taken to charge dues the revenue from that source has been far from sufficient to defray the cost of upkeep. In many cases it is so small as hardly to defray the cost of collection and often no dues are charged at all. So far as county council undertakings are concerned the Act of 1891 gives a power to levy a rate to supplement revenue from dues, but the rate which can be levied in respect of the undertakings in a county is limited to a penny in the pound leviable over the whole county and it will be readily appreciated that this rating power is of no great value. We have the situation now that there is an urgent need for the renovation of a number of essential piers throughout the Highland districts, piers which are essential for the maintenance of communications. The shipping companies, which have been busy reorganising their transport arrangements, are hampered by the conditions prevailing at their places of call and in some cases have had to contemplate the abandonment of calls.
At the present time of intense stringency, it is quite impossible for the Government to embark upon any new scheme of State assistance to pier and harbour undertakings, but they are of the opinion that, whether or not it may be found possible within a measurable period to place additional funds at the disposal of the Department of Agriculture or the Fisheries Board, it is desirable without delay to confer new powers on local authorities to acquire and to provide for the proper maintenance of such undertakings. Accordingly the Secretary of State has it in view to introduce a Bill empowering local authorities to acquire piers and harbours by

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simple transfer from private owners, to fix schedules of dues and charges subject to appeal to a central Department, and to levy rates to make good any deficiency in the revenue from dues. In the case of a pier or harbour so acquired by a county council, or by a county and town council in combination, the proposal is that a special rating district should be constituted. I have noted the noble Lord's suggestion as regards small holdings, but the noble Lord will not, I hope, expect a definite answer under that head. I shall bring it to the notice of the Secretary of State and may be able to give an answer at a later date.
The noble Lord referred to the construction of new piers. I think that the view of the Departments principally concerned is that in general there is no pressing need for new piers. Indeed I am not sure but that under the stimulus of the Act of 1891 piers were in some cases built which were not economically sound propositions and for which there was—I will not say no need, but at any rate not sufficient need to justify the expenditure entailed. However that may be, there is no reason why in the proposed legislation dealing with this subject such powers as may be necessary should not be given to the appropriate local authorities to undertake with the minimum of expense, the construction of new works which may seem to them to be required. It is proposed therefore to include in the Bill provisions similar to those contained in the Fishery Harbours Act, 1915, an Act which applies only to England, for a simple procedure by Provisional Orders made by the Secretary of State for Scotland. These provisions are directed primarily to another kind of case, that of the fishery harbours on the East coast, but they will also be available for works of the type which the noble Lord has in view.
Perhaps I ought to add that there are a number of points on which a final decision has not yet been reached. It is not altogether easy, for example, to determine whether and to what extent the new code should be applied to those piers and harbours at present vested in local authorities, whether under the Act of 1891 or by Provisional Orders. Whatever may be the ultimate decision on that point, the Government's view is that in future it should be an essential condition of any State contribution towards the construe-
784
tion or reconstruction of pier and harbour works that the authority responsible should accept the obligations and conditions of the new Act with respect to the future maintenance of the works. It is only on such terms as these that further expenditure of public money could be justified.
I agree with the noble Lord that the position is a very serious one and I can assure him that the Government have the interests of agriculturists in the Western Islands and Highlands very much at heart. The noble Lord referred to the question of jetties and boat slips. The legislation proposed by the Government will cover that type of works as well as larger works, but I fear what I have said as to the impossibility of any new scheme of State assistance for pier and harbour undertakings applies also under the present financial stringency to these smaller works. I have no doubt that the noble Lord's representations on this question will receive the fullest possible consideration from the Department in considering the allocation of funds at their disposal. In the near future the Secretary of State will, as I have said and hope, introduce the Bill and it is hoped that opportunitites will be given to local authorities and others interested to examine the Bill before it is passed through this and the other House. I am advised that there are several points in the Bill which require consultation with other Departments and that probably accounts for any delay so far in its introduction. I hope I have dealt with all the points the noble Lord has raised and I am only sorry that the circumstances of the day render the substance of my answer not as satisfactory as I should like it to be.

INDIAN FRANCHISE COMMITTEE.
VISCOUNT BERTIE OF THAME: My Lords, on behalf of my noble friend Lord Lloyd, who is unable to be present today, I beg to ask the four Questions standing in his name.
[The Questions were as follows:
To ask His Majesty's Government—

1. Whether the Franchise Committee will reassemble in London when the communal questions have been decided, in order that the necessary changes in their report may be made and the gaps filled in?

785

2. Whether His Majesty's Government agree with the Franchise Committee that secret voting can be secured by the adoption of coloured ballot boxes, each representing a candidate, thus getting over the difficulty of placing a mark on the ballot papers.

3. Whether His Majesty's Government agree with the Franchise Committee in setting up two Labour constituencies: namely: — "Special Labour constituencies," and "Trade Union constituencies," while providing no constituency for agricultural labour, in which industry the vast majority of Indians are employed.

4. Whether there is any precedent in any country for reserving seats for women, as recommended by the Franchise Committee for the Assembly and Provincial Councils.]

THE UNDER-SECRETARY OF STATE FOR INDIA (THE MARQUESS OF LOTHIAN): My Lords, the question of the future of the Franchise Committee can only be settled after the communal decision has been announced. It is receiving the attention of His Majesty's Government, but I can give no answer about it at the present time. As regards the second and third Questions asked by the noble Lord, His Majesty's Government cannot, in advance of the decisions to be taken in due course, express opinions on isolated proposals contained in the Committee's Report. As regards the reservation of seats for women, so far as I am aware, there is no country at present using this practice. The principle of the reservation of seats for special interests is, of course, familiar in India to-day under the present Constitution.
LORD BANBURY OF SOUTHAM: My Lords, I do not quite understand the answer to the second Question:
"Whether His Majesty's Government agree with the Franchise Committee that secret voting can be secured by the adoption of coloured ballot boxes, each representing a candidate, thus getting over the difficulty of placing a mark on the ballot papers."
Am I to understand that the voters who are going to be enfranchised are unable to put a mark on the paper? If that is so, it does not seem to me to be a very good omen for the future of India. Secondly, if the ballot boxes are coloured, surely everybody will see who you are voting for and there will be no secrecy?
THE MARQUESS OF LOTHIAN: My Lords, I cannot add anything to my answer so far as the policy of His Majesty's Government is concerned. They must reserve judgment till they consider the problems as a whole. As to the adoption of coloured ballot boxes, might I refer the noble Lord to the appendix in the Franchise Committee's Report which deals fully with the matter?
House adjourned during pleasure.
House resumed.

ROYAL COMMISSION.
The Royal Assent was given to the following Bills:

Irish Free State (Special Duties),

Marriage (Naval, Military and Air Force Chapels),

Patents and Designs,

Rating and Valuation (No. 2),

British Museum,

Agricultural Credits,

Carriage by Air,

Solicitors,

Hire Purchase and Small Debt (Scotland),

Extradition,

Gas Undertakings,

Isle of Man (Customs) (No. 2),

Public Works Loans,

Malta Constitution,

Bills of Exchange Act (1882) Amendment,

Rights of Way,

Children and Young Persons,

Town and Country Planning,

Public Works Facilities Scheme (Shrewsbury Corporation) Confirmation,

London Midland and Scottish Railway Order Confirmation,

London and North Eastern Railway Order Confirmation,

Grangemouth and Stirling Water Order Confirmation,

Leven Burgh Extension Order Confirmation,

Kilmarnock Gas Order Confirmation,

Dundee Corporation Order Confirmation,

Provisional Order (Marriages) Confirmation (No. 2),

Newcastle-upon-Tyne Fire Brigade Provisional Order Confirmation,

787

London United Tramways (Trolley Vehicles) Order Confirmation,

South Lancashire Transport Company (Trolley Vehicles) Order Confirmation,

Sea Fisheries (Lynn Deeps and Lynn) Orders Confirmation,

Ministry of Health Provisional Orders Confirmation (Abergavenny and Newcastle-upon-Tyne),

Ministry of Health Provisional Orders Confirmation (Bridlington and Wells),

Ministry of Health Provisional Order Confirmation (Leyton),

Ministry of Health Provisional Order Confirmation (Oxford),

Ministry of Health Provisional Order Confirmation (Paignton),

Ministry of Health Provisional Order Confirmation (River Dee),

Ministry of Health Provisional Order Confirmation (Hertford),

Ministry of Health Provisional Order Confirmation (Watford),

Ministry of Health Provisional Orders Confirmation (Elham Valley Water and Herts and Essex Water),

Ministry of Health Provisional Order Confirmation (Hailsham Water),

Ministry of Health Provisional Order Confirmation (Henley-on-Thames Water),

Kettering Gas,

Kendal Corn Rent,

North Metropolitan Electric Power Supply,

Commercial Gas,

Oakham Gas and Electricity,

Sidmouth Water,

Bury Corporation,

London County Council (General Powers),

Hove Pier,

London County Council (Money),

Southern Railway,

Trent Navigation,

Mid Southern Utility,

Weston-super-Mare Grand Pier,

Gateshead Extension,

Wokingham District Water,

South Suburban Gas,

Nottingham Corporation,

Birkenhead Corporation,

Gas Light and Coke Company,

788

South Metropolitan Gas,

Chester Corporation,

Metropolitan Water Board,

Lindsey County Council (Sandhills), Chesterfield and Bolsover Water,

Warrington Extension,

Bournemouth, Poole and Christchurch Electricity,

Wolverhampton Corporation.

House adjourned during pleasure.
House resumed.

  ABYSSINIAN RAID INTO BRITISH SUDAN.
  ABYSSINIAN RAID INTO BRITISH SUDAN.

WORKSOP GAS ORDER, 1932.
DUNOON ELECTRICITY (EXTENSION) ORDER, 1932.
MALDON AND DISTRICT ELECTRICITY ORDER, 1932.
SKELMORLIE ELECTRICITY (EXTENSION ORDER, 1932.
KIRKCUDBRIGHT AND DISTRICT ELECTRICITY ORDER, 1932.
BORTH AND YNYSLAS ELECTRICITY ORDER, 1932.
Report from the Special Orders Committee, That no Petition has been presented praying to be heard against the Special Orders, and that there is nothing in these Orders to which they think it necessary to call the attention of the House: Read, and ordered to lie on the Table.