Sitting of 3 April 1935

Preamble
The House met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.
PRIVATE BUSINESS.
  MINISTRY OF HEALTH PROVISIONAL ORDER (GUILDFORD) BILL,
  "to confirm a Provisional Order of the Minister of Health relating to the borough of Guildford," presented by Sir Hilton Young; read the First time; and referred to the Examiners of Petitions for Private Bills, and to be printed. [Bill 52.]
ORAL ANSWERS TO QUESTIONS

  ITALY AND ABYSSINIA.
  Mr. MANDERasked the Secretary of State for Foreign Affairs whether, in view of the serious effects on British interests in Somaliland and the Sudan that any military operations between Italy and Abyssinia would have, the Government will use their utmost endeavours to have the question settled in the terms of existing international treaties?
  The SECRETARY of STATE for FOREIGN AFFAIRS (Sir John Simon): Yes, Sir. His Majesty's Government have done everything possible since this problem first arose to influence both sides towards an amicable settlement of their differences, and their efforts will be continued.
  Mr. MANDER: Is the question coming before the next meeting of the Council in the middle of April?
  Sir J. SIMON: I cannot say.
  Mr. MANDERasked the Secretary of State for Foreign Affairs what action was taken with reference to the action of an Italian military aeroplane, S. O. 4, on 4th November last, flying over the camp of the British Commissioner on the British Somaliland Boundary Commission at Walwal where the Union Jack was hoisted, and training a machine gun on
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  the members of the commission, their staff, and their escort, as observed by Mr. Curle, Captain Taylor, Lieutenant Collingwood, and Corporal Griffiths among the British, and by Abyssinians also?
  Sir J. SIMON: The misunderstandings which arose following the arrival of the Anglo-Ethiopian Joint Commission at Walwal on the 23rd November were informally discussed in December and January with representatives of the Italian Government, who explained that the action taken by the Italian forces, and in particular the aerial reconnaissance complained of by Colonel Clifford, had been instituted in order to ascertain the local situation and in complete ignorance of the fact that British officers were present with the Ethiopian tribesmen who had approached the wells. In view of these explanations, and in the light of the fact that what had occurred had been due to local misunderstandings, it was agreed that no useful purpose would be served by further inter-Governmental discussions on this subject.
  Mr. MANDER: Would it not be reasonable to ask the Italian Government to act in the same way as she wants Abyssinia to act towards her, to apologise and salute the Flag?
  Mr. HANNON: Would it not be better in the interests of the relationship between Italy and Abyssinia to leave these matters outside the purview of the House of Commons and to discuss them with the Secretary of State privately?

  MANCHURIA.
  Mr. JOELasked the Secretary of State for Foreign Affairs what reply the British Government has received from Japan to the British protest against the proposed Manchurian oil policy?
  Sir J. SIMON: I would refer to the answer given on Monday to my hon. and gallant Friend the Member for the Isle of Wight (Captain P. Macdonald), to which I cannot at present add.

  EUROPEAN SITUATION (STRESA CONFERENCE).
  Mr. MANDERasked the Secretary of State for Foreign Affairs whether he

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  can give an assurance that no decisions will be made at the Stresa Conference which will prevent the full and free discussion of the existing political situation in the world at the forthcoming council meeting of the League of Nations?
  Sir J. SIMON: Nothing which passes at Stresa will prevent full and free discussion of any subjects which the League Council will be called upon to examine at their forthcoming meeting.

  GERMANY (AIR STRENGTH).
  Sir CHARLES CAYZERasked the Secretary of State for Foreign Affairs whether, during his recent conversation with the Chancellor of the German Reich, Herr Hitler gave him any indication of the present size and strength of the German Air Force?
  Sir J. SIMON: Yes, Sir. In the course of those conversations the German Chancellor stated in general terms that Germany had reached parity with Great Britain in the air.
  Mr. COCKS: Did he indicate that he had started building this Air Force before he left the Disarmament Conference?
  Sir J. SIMON: No, Sir, there is nothing to add to my answer. My answer is accurate.
  Mr. MANDER: Has the right hon. Gentleman seen the conflicting statements made by the German Embassy in London and contradicted by the British Broadcasting Corporation; and has he no statement to make on this subject?
  Sir J. SIMON: The only statement that I have to make is as I have already stated.

  ROYAL NAVY.

    CHINA SEAS (PIRACY).
    Lieut.-Commander TUFNELLasked the First Lord of the Admiralty to what extent air reconnaissances and air patrols are being made use of to protect British shipping in Chinese waters from capture by pirates?
    The FIRST LORD of the ADMIRALTY (Sir Bolton Eyres Monsell): As the type of piracy prevalent in the China Seas
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    takes the form of an attack from within the ship, air patrols are of little use as a preventive measure. Aircraft are, however, employed against pirates as far as possible with the limited resources available, whenever a ship is believed to have fallen into their hands. In the two most recent cases, aircraft were employed in this manner with great success.

    CAPITAL SHIPS (EXERCISES).
    Mr. D. G. SOMERVILLEasked the First Lord of the Admiralty how many days were spent at sea, and in carrying out exercises, respectively, by each of the capital ships in His Majesty's Navy during 1934; how the average number compares with that spent at sea by the capital ships of His Majesty's Navy in pre-war years; and what would be the additional cost in fuel at the present time for each additional week spent at sea by the Atlantic and Mediterranean Fleets?
    Sir B EYRES MONSELL: Since the answer is somewhat long and involves a tabular statement, I will with my hon Friend's permission circulate most of it in the OFFICIAL REPORT I may say how ever that the average number of days spent at sea by capital ships in 1934 is 47, Compared with 38in 1913.
    Following is the answer:

    Home Fleet.

    Days.

    "Nelson"

    57

    "Rodney"

    55

    "Barham"

    39

    "Valiant"

    56

    "Hood"

    40

    "Renown"

    38

    "Malaya" (to large repair, August, 1934)

    54

    Mediterranean Fleet.

    Days.

    "Queen Elizabeth"

    49

    "Royal Sovereign"

    44

    "Ramilles" (from large repair,September,1934)

    11

    "Revenge" (refit, and recommissioning at portsmouth from 30th may, 1934, to 20th August, 1934)

    44

    "Resolution"

    46

    "Royal Oak" (to large repair, April, 1934)

    9

    His Majesty's Ships "Repulse" and "Warspite" were under large repair during the whole of 1934. Movements of ships leaving port for exercises for not more than two days, and returning to the same port, are not reported to the Admiralty; and the above figures do not include such movements, of which there are a very considerable number. The cost of the additional fuel which would be expended by ships of the Home and Mediterranean Fleets while steaming for a week (168 hours) at a speed of 12 knots, instead of remaining in harbour, is estimated to be approximately £70,000.

    HIS MAJESTY'S AUSTRALIAN SHIPS "AUSTRALIA" AND "BRISBANE."
    Mr. D. G. SOMERVILLEasked the First Lord of the Admiralty how long His Majesty's Australian Ships "Australia" and "Brisbane" are to remain in home waters; and what arrangements are being made to ensure that adequate hospitality is extended to the officers and men of these Dominion ships during their stay here?
    Sir B. EYRES MONSELL: The "Australia" will probably remain in home waters until early in May. The "Brisbane" will arrive in home waters early in July, and will in due course be scrapped, on replacement by the "Sydney," which will be manned by her crew. Arrangements for extending hospitality to the officers and men of both ships are under active consideration. I may mention that the Lord Mayor and Corporation of the City of London have very kindly invited a representative party from the "Australia" to luncheon in Guildhall on the 10th April. I hope that these men and officers may see the Boat Race, and the Spring Meeting at Epsom.

    ADMIRALTY CONTRACTS (FAIR WAGES CLAUSE).
    Colonel BROADBEN (for Mr. HEPWORTH)asked the First Lord of the Admiralty whether a fair wages clause is insisted on in connection with all contracts entered into with his Department?
    Sir B. EYRES MONSELL: All contracts placed by the Admiralty with firms in this country include the fair wages clause.

    HIS MAJESTY'S SILVER JUBILEE (CELEBRATIONS).
    Mr. RANKINasked the First Lord of the Admiralty why no officers on the emergency list are to take part in the Jubilee naval review at Spithead; and what is the object of maintaining an emergency list of officers, as distinct from the ordinary retired list, if they are not to be given that occasional training which would be of value to them?
    Sir B. EYRES MONSELL: The number of officers required in addition to those on the active list is limited, and the most satisfactory way of meeting the requirements is to afford officers of the Royal Naval Reserve and Royal Naval Volunteer Reserve the opportunity of performing their obligatory periodical training at the time of the Review. I think that my hon. Friend is under a misapprehension as to the nature of the emergency list. This does not consist of retired officers who hold themselves in some special sense available for service, but of officers who have resigned their commissions, but have requested to be allowed to undertake the same responsibility to serve in time of emergency as is incumbent upon all officers on the retired list.
    Mr. EVERARDasked the First Lord of the Admiralty whether any special facilities will be given to Members of Parliament to see the Naval Review on 16th July?
    Sir B. EYRES MONSELL: Arrangements are in hand, and I hope will shortly be completed, whereby an opportunity will be given to Members of both Houses of Parliament to see the Review of the Fleet at Spithead on the 16th of July. The accommodation that will be available should make it possible to reserve about 1,200 places in all for members of the two Houses and their wives. The hospital ship "Maine" and two Southern Railway steamers will convey guests round the Fleet in the wake of the Royal Yacht "Victoria and Albert" and the Admiralty Yacht, "Enchantress." Special trains will be run from London to embark guests, and if there is sufficient demand it may be possible to arrange for a subsequent journey by steamer to see the illumination of the Fleet which takes place from 10.30 p.m. till midnight. It will be necessary to

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    make a charge of £1 per head to cover the railway journey and such meals as are taken in the train. Members who wish to see the Review will be asked later to enter their names in a book in the office of the Speaker's Secretary. It will not be possible to allot more than two tickets to any member.
    Mr. JOELasked the Secretary of State for the Home Department whether he will consider the possibility of permitting military or other bands between certain hours on the night of 6th May to play dance music in specified streets or squares in London, such streets or squares to be selected by him for their proximity to areas where large crowds are likely to-gather, and with a view to the minimum congestion of traffic, so that the public may have the opportunity of celebrating the Jubilee by dancing in those places?
    The SECRETARY of STATE for the HOME DEPARTMENT (Sir John Gilmour): No, Sir; I think that my hon. Friend's suggestion would greatly add to the difficulty, which will in any event be great, of regulating the crowds on this occasion.
    Mr. JOEL: Will my right hon. Friend not reconsider the desirability of having some such arrangements at any rate in the poorer districts of London?

  WEST AFRICA.

    WHARFAGE AND QUAY ACCOMMODATION.
    Lieut.-Colonel HENEAGEasked the Secretary of State for the Colonies whether, in view of the extensive building of wharves and quays at the French West African port of Dakar, he is satisfied with the primitive arrangements at Freetown and Bathurst; and whether he proposes to take any action?
    The SECRETARY of STATE for the COLONIES (Sir Philip Cunliffe-Lister): I have received no complaints of the inadequacy of the wharfage and quay accommodation at Bathurst and Freetown. Improvements of the Government wharfage accommodation at Bathurst are at present being carried out, and it is expected that they will be completed during this year. A grant from the Colonial Development Fund of approximately one-half of the cost of construct-
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    ing a passenger jetty at Freetown was made in 1930 and the materials were purchased. In view, however, of the financial position of the Colony it was decided to postpone the completion of the work. I am consulting the Governor as to whether it will be possible to complete it this year.

    YELLOW FEVER.
    . Lieut.-Colonel HENEAGEasked the Secretary of State for the Colonies whether he has any information to give as to the outbreak of yellow fever on the West Coast of Africa; whether the outbreak is now stopped; and whether the necessary help from research stations and personnel at home has been promptly forthcoming?
    Sir P. CUNLIFFE-LISTER: As the reply is rather long, I propose, with my hon. and gallant Friend's permission, to circulate it in the OFFICIAL REPORT.
    Following is the reply
    Yellow fever is endemic among the natives of West Africa, and thus it is not, strictly speaking, correct to refer to an "outbreak of yellow fever" During the past few months cases of yellow fever have been reported from each of the four West African Dependencies. In the Gambia the first case diagnosed as one of yellow fever (European) proved fatal on the 6th October, 1934, and later three other Europeans also succumbed, among whom were Mr. Parish, the Colonial Secretary, and Mr. Hamlyn, Assistant Colonial Secretary. Three African cases were also notified of which one proved fatal. The usual precautions were taken to deal with this situation and the Island of St. Mary was placed in quarantine. The order declaring the Island an infected district was cancelled on the 18th January, since when no further cases have been reported. In this connection I would refer my hon. and gallant Friend to a reply which 1 gave on the 21st December to a question by the hon. Member for Gower (Mr. D. Grenfell). Between 21st November and 15th January five African cases of yellow fever were notified from the Gold Coast. of which two proved fatal. On 24th December it was reported that two Europeans were suffering from yellow fever in Kano in Northern Nigeria, but both have since recovered. Previous to this, three Europeans had died at Kano,

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    and it is suspected that they were suffering from yellow fever. A number of African cases, of which one proved fatal, were also notified, and the usual precautions were taken to prevent the spread of infection. On the 21st January a suspected case of yellow fever, which was later confirmed, was reported from Sierra Leone. The victim in this case was a European who died on 26th January. With regard to the second part of the question, I am able to say that no new cases have occurred since the middle of January
    To combat this disease in the Gambia, assistance was obtained in the first place from the Gold Coast and from Sierra Leone. I should like to take this opportunity of expressing my thanks, and the gratitude of the Government of the Gambia to Dr. Howells, of the Gold Coast, and to Dr. Davey and Dr. Duncan of Sierra Leone for the zeal and energy with which they handled a difficult situation, and to the Wellcome Research Institution, who kindly gave permission for Dr. G. M. Findlay, O. B. E., to visit Bathurst in order to conduct inoculations against yellow fever. The Governor reports that, "Apart from the inoculations (152 persons in all were successfully inoculated) Dr. Finlay worked tirelessly, investigating the cause and extent of the outbreak, and also gathering a mass of data relating to the incidence of yellow fever and other diseases for scientific examination in London. It would be difficult to express our thanks too warmly or to exaggerate the importance to West Africa of the conclusions to be drawn from his work here."

    IMMIGRANTS (FRENCH SYRIANS).
    Lieut.-Colonel HENEAGEasked the Secretary of State for the Colonies whether he has received any complaints as to the immigration of Syrian (French) persons for trading in the Colonies of the West Coast of Africa; and whether the deposit asked for has proved insufficient?
    Sir P. CUNLIFFE-LISTER: Representations on this subject have been received from a private firm and from the Government of Nigeria, but the opinions of the West African Governments generally are divided, and no specific proposals have been laid before me. I have no reason to believe that the deposit to which my hon. and gallant
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    Friend alludes is insufficient for the purpose of preventing the immigration of persons without visible means of support or likely to become paupers.
    Lieut.-Colonel HENEAGE: Will my right hon. Friend inquire whether these French Syrians are not taking money out of the country which might be kept in the country if the trade were in the hands of British or local traders?
    Sir P. CUNLIFFE-LISTER: This is rather too wide a question to discuss by means of question and answer. Different views have been expressed by the various Governments concerned.

  PALESTINE.

    PROPOSED AIRPORT, LYDDA.
    Mr. LYONSasked the Secretary of State for the Colonies whether the proposal to establish an airport at Lydda for use in Palestine and on the Empire services of Imperial Airways has now been abandoned; whether another site has been yet chosen; when it is expected that construction will commence; and whether, in view of the unsuitability of Gaza for an aerodrome, this work can be expedited?
    Sir P. CUNLIFFE-LISTER: The answer to the first part of the question is in the negative: the second part does not therefore arise. Close examination is being given to the best means of developing the Lydda site, which will be used by Imperial Airways, Limited, in place of the air-port at Gaza; and my hon. Friend may be assured that there will be no avoidable delay.
    Mr. LYONS: While thanking the right hon. Gentleman for the information, may I ask him whether there is any proposal to establish another air port in the vicinity of Tel-Aviv?
    Sir P. CUNLIFFE-LISTER: No, I have already answered that question; about a week ago.

    HOSPITAL ACCOMMODATION, TEL-AVIV.
    Captain STRICKLANDasked the Secretary of State for the Colonies whether he is aware that in view of the congestion which obtains in the poorer sections of Tel-Aviv there is an urgent need for the provision of more hospital beds for maternity cases and hospital

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    accommodation generally; and whether he will suggest to the High Commissioner For Palestine that urgent consideration should be given to the proposals of the municipality of Tel-Aviv to be permitted to provide such additional and improved accommodation without delay?
    Sir P CUNLIFFE-LISTER: I am not in a position to confirm the statement in the first part of the question, but I will bring the representations of my hon. and gallant Friend to the notice of the High Commissioner for Palestine.

    EXPLORATION PERMITS.
    Lieut.-Colonel TODDasked the Secretary of State for the Colonies whether he is aware that the Iraq Petroleum Company and the Palestine Potash Company held no official exploration permits under the Palestine mining laws to explore or survey in the region at the south end of the Dead Sea up to 6th October, 1934, when His Majesty's Government notified Dr. Homer and the British group that no further permits would be granted until after the Palestine mining laws had been amended, and that such permits as were granted to the Iraq Petroleum Company in 1933 applied to different areas; and are these companies still to be allowed to work while the British group is prevented from working?
    Sir P. CUNLIFFE-LISTER: I assume that my hon. and gallant Friend refers to exploration permits for oil. So far as I am aware, the Palestine Potash Company hold no such permits either in Palestine or in Transjordan; but a small area of land immediately south of the Dead Sea has been made available to that company, not for oil exploration, but in connection with their potash works. One of the permits granted to the Iraq Petroleum Company is in respect of an area in Transjordan to the south of the Dead Sea, of approximately 500 square kilometres. This permit was granted by the Government of Transjordan in 1933. As regards the last part of the question, I would refer my hon. and gallant Friend to the replies which I gave to him on the 19th March.
    Lieut.-Colonel TODD: Is the right hon. Gentleman aware that these two companies have been in this district with boring machinery since the Government stated that no work was to be done, and that meanwhile British development is being held up?
    Sir P. CUNLIFFE-LISTER: I have answered that question three or four times. What I have said is that no new permits have been or would be granted pending a reconsideration and redrafting of the law, but that old permits would continue in force.
    Lieut.-Colonel TODD: May I ask—
    Mr. SPEAKER: The hon. and gallant Member has already been answered three or four times.
    Mr. KIRKWOODWhat is it that we are getting in return from these companies or from Iraq?

    WEST INDIES (BROADCASTING).
    Mr. D. G. SOMERVILLEasked the Secretary of State for the Colonies whether any decision has yet been reached as to the establishment of a broadcasting station in Jamaica; whether it is proposed that such station should serve the whole of the West Indies; and whether he will give the scheme every encouragement, in order to diminish the reliance of the West Indies on programmes and radio apparatus from the United States of America?
    Sir P. CUNLIFFE-LISTER: My latest information in the matter is that, following upon a motion in the Jamaica Legislative Council, a local committee was to be appointed to examine the whole question of broadcasting in the colony. Pending the report of this committee and its consideration by the Government of Jamaica, no decision is being taken as to the establishment of a broadcasting station in Jamaica; but I can assure my hon. Friend that I am always anxious to encourage the establishment of such stations in the colonies where circumstances permit. I may add that I am informed that recent reports received by the British Broadcasting Corporation show that the direct reception in Jamaica of the daily transmissions from the Empire Station at Daventry is now excellent.

  TRANSPORT.

    NON-TRAFFIC LIGHTS AND SIGNS.
    Captain STRICKLANDasked the Minister of Transport whether he has given consideration to the desirability of prohibiting the exhibition of red lights

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    and signs on the roads other than those indicating danger or warning signals?
    The MINISTER of TRANSPORT (Mr. Hore-Belisha): Section 48 of the Road Traffic Act, 1930, already directs highway authorities to require the removal of any object which so closely resembles a traffic sign that it might reasonably be taken to be such a sign. If my hon. and gallant Friend has any particular lights or signs on roads in mind and will communicate with me, I will take up the matter immediately. There is, however, no power to remove lights or signs of any kind simply because they may be visible from a road.
    Captain STRICKLAND: Has the Minister of Transport in his own experience of the roads come across the difficulties which arise when these red lights in the distance appear to be danger signals?
    Mr. HORE-BELISHA: Yes, Sir, and I am glad to do anything within the powers Parliament has conferred upon me. If there are any special lights that the hon. and gallant Member has in mind, I will attend to them, but I cannot go outside my powers.
    Captain STRICKLAND: Does my hon. Friend realise the difficulty which rests on one individual Member in calling attention to special lights, when he must know the general case?
    Mr. HORE-BELISHA: If there is any further legislation to be undertaken, that is certainly a point which will be borne in mind.
    Sir PERCY HARRIS: Is it not the case that these red lights are used for advertising purposes by tradesmen on main roads, and will the hon. Gentleman make a statement as to the undesirability of using lights of this kind which confuse the public?
    Mr. HORE-BELISHA: It is undesirable that any lights should be used in such a position as to cause confusion to motorists, and I hope that those who are inclined to use them will desist.
    Mr. EVERARD: Is the Minister aware that in sonic municipalities tram stop lights cause great confusion to motorists and will he take steps to see that they are taken away?
    Lieut.-Colonel HENEAGE: Is it not the case that anybody can call attention to lights that are confusing, and that it is not necessary for Members of Parliament to call attention to them.

    BUILT-UP AREAS (SPEED LIMIT).
    Sir PHILIP DAWSONasked the Minister of Transport whether he is aware that there are intermediate restriction signs in restricted areas on main roads which, in the general absence of derestriction signs, appear to be terminating a restricted area, particularly when located so that on one side there are practically no habitations, and where, although the roads are lighted, the lamp posts are of such a nature and so located as to be easily overlooked, particularly in the daytime when not lighted; and what steps are being taken to avoid the promiscuous erection of restriction signs and to see that these are erected so as to be easily visible by the motorist, which many are not to-day?
    Mr. HORE-BELISHA: I am aware of one case where intermediate restriction signs have been erected in this manner, and I have asked the local authority to remove them. I will at once take similar action in any other case which is brought to my notice and will also draw the attention of the local authority concerned to any restriction sign which is alleged to be insufficiently visible.
    Mr. JOELasked the Minister of Transport whether he is aware that, in view of the introduction of the 30-milesan-hour speed limit in built-up areas, there is no further need for the construction of traffic roundabouts within such areas; and whether he will see that no more work of this kind is carried out except in special circumstances?
    Mr. HORE-BELISHA: I do not share my hon. Friend's view that traffic roundabouts are unnecessary in areas where the 30-miles-per-hour speed limit is in force.
    Captain Sir WILLIAM BRASS: Would it not be a very dangerous thing to do what is suggested in the question?
    Mr. HORE-BELISHA: Yes, Sir.
    Sir W. BRASSasked the Minister of Transport (1) whether he is aware that, as a result of the introduction of the 30-miles-per-hour limit

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    so soon as the 18th of March last, many miles of road, including by-pass roads, are still without any de-restriction signs; and whether, in view of the confusion which is resulting therefrom, he can state when a sufficient supply of these signs will be available;
    (2) whether, in view of the fact that the 30-miles-per-hour limit was brought into force by his Department before the local authorities had the necessary restriction and de-restriction signs available, he will inform the House if he has undertaken the responsibility for the cast of the temporary signs and posts which had to be erected by 18th March, or whether the cost of these will have to be borne wholly or in part by the local authorities; and whether he can give an approximate estimate of the amount of money involved?
    Mr. HORE-BELISHA: Local authorities had ample notice of the coming into force of the speed limit. The Act imposing it was passed in July last, and on 31st October local authorities were formally asked to make their preparations. Again on 14th January, they were asked to have all signs in position by 18th March. I have undertaken to pay the whole cost of certain temporary signs supplied to local authorities before that date. An estimate of the amount involved is £700. If my hon. and gallant Friend will indicate any particular road or roads he has in mind, I will at once take up the matter with the responsible local authority.
    Sir W. BRASS: Why should I have to point out these roads? There are roads all over the country where de-restriction signs are not up. Could not the Minister use his own commissioners, who are all over the country, to see whether these de-restriction and restriction signs are in proper order?
    Mr. HORE-BELISHA: Yes, Sir; I have been using my road engineers, but I hope my hon. and gallant Friend will realise that I am dealing with 200,000 miles of road and 2,000 local authorities. Most of them have complied very readily with my requests, and, if there are any delays or inconveniences, I have made it my business, whenever my attention has been called to them, to persuade the local authorities to act more promptly. I will certainly do anything in my power to
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    hasten the provision of any signs that may be missing.
    Mr. HANNON: On the experience that he has had since the 30-miles limit came into operation, is there not, on the whole, general satisfaction throughout the country with it?

    MOTOR DRIVERS' HOURS.
    Mr. THORNEasked the Minister of Transport what action he intends to take in view of the case of a lorry driver who was charged at Cardiff Police Court on 27th March with driving more than five-and-a-half hours at a time and more than 11 hours in 24 hours, and failing to take 10 hours' rest in 24 hours; whether he is aware that his log book showed that he had worked for 16½ hours with only half an hour for lunch and many other similar offences; that this man, when he complained to his employers, a Liverpool firm, was told that if he did not like the conditions he could get out, and when charged with the present offence he was discharged by his employers; and whether he will take steps to ensure that enough time is allowed for long-distance journeys so that drivers are not compelled to exceed the speed limit or to work such long hours at a stretch?
    Mr. HORE-BELISHA: I am of course not empowered to take any action in a case heard in the ordinary course before magistrates. Employers who fail to observe the law in this respect are liable to prosecution, and I understand that in this particular case steps have been taken with a view to instituting further proceedings.
    Mr. DAVID GRENFELL: Will the Minister consider suspending the service in cases of repeated offences by the same employers?
    Mr. HORE-BELISHA: I do not know that I have power to do that. The law has endeavoured to protect the driver by limiting his hours, and it is most undesirable that any employer should abuse his authority.
    Mr. THORNE: Has the Minister power to call for the time-table of running, say, between Birmingham and Liverpool? If so, he will see with his own eyes that drivers are compelled to exceed the 20 miles speed limit to do the journey.

    TRAFFIC SIGNS (COST).
    Mr. GROVESasked the Minister of Transport the cost per standard and per beacon in use at pedestrian crossings, and the cost per standard and per disc of the 30-miles-per-hour speed limit; and whether all these are of British production and manufacture?
    Mr. HORE-BELISHA: The cost of standards for beacons and speed limit signs is about 17s. 6d. each. The cost of globes is approximately 5s. and the cost of the discs of the speed limit signs varies from about 5s. for a plain sign to 20s. for the best type of reflecting sign. These signs are purchased and erected by highway authorities and I make it a condition of grant towards their cost that they should be of British manufacture. I have, however, been compelled to make an exception with regard to reflecting lenses used on these signs, which are not at present satisfactorily made in this country. On being informed of this I immediately took the matter up with the Department of Scientific and Industrial Research, with a view to a satisfactory article being produced.
    Mr. GROVES: Is it not the fact that the reflectors used in this country are still of foreign manufacture; have the resources of British production been exhausted, and what reason exists for the non-use of British reflectors?
    Mr. HARCOURT JOHNSTONE: Can the hon. Gentleman tell us approximately the cost price to the manufacturers concerned of the articles he has mentioned?
    Colonel GOODMANasked the Minister of Transport what number of beacons are being scrapped, what amount of expenditure has been incurred in the erection of these redundant indicators, upon whom the cost of their erection and dismantlement falls; and what steps he is taking to prevent for the future the erection of unnecessary beacons?
    Mr. HORE-BELISHA: Naturally, from time to time the position of pedestrian crossings is reviewed in the light of experience, and there is always opportunity for moving beacons, not necessary in one place, to another.

    PEDESTRIAN CROSSING-PLACES.
    Mr. LEONARDasked the Minister of Transport whether he is aware of the
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    indecision shown on the part of pedestrians and drivers of vehicles at crossings equipped with beacons, and also a policeman directing vehicular traffic; and whether he will adopt measures to obviate this difficulty?
    Mr. HORE-BELISHA: The regulations provide that any driver approaching a crossing where traffic is for the time being controlled by a police constable shall allow uninterrupted passage to any foot passenger who has started to cross before the driver receives a signal that he may proceed. It should be clear to any pedestrian that he should not attempt to cross while the main stream of traffic is passing in accordance with a signal given by a police constable.
    Sir W. BRASS: Is it not the case that a motor driver might pass behind a pedestrian after he has crossed the road?
    Mr. WEST: Is there not good reason for the fear of pedestrians using these crossings as the truth is that the majority of motorists are still ignoring these Belisha beacons?
    Mr. HORE-BELISHA: I hope that the present increasingly courteous manner in which motorists are observing these crossings will prevail.
    Mr. LEONARD: Will the hon. Gentleman keep his attention on this matter with a view to seeing whether the regulations made are adequate for the purpose?
    Mr. HORE-BELISHA: Yes, Sir.
    Captain STRICKLAND: Is my hon. Friend aware of the great difficulty of seeing a policeman on duty when he is controlling more than one passage-way in the traffic?

    MOTOR VEHICLES (IDENTIFICATION PLATES).
    Mr. LEONARDasked the Minister of Transport whether he has yet completed his examination into the desirability and practicability of prescribing that the rear identification plates of motor vehicles must be discernible at night by the illuminant showing through white letters and numbers?
    Mr. HORE-BELISHA: Further practical experiments have been carried out within the last few weeks, and I expect shortly to receive a report upon the subject.

    MITRE BRIDGE, BURNLEY.
    Vice-Admiral CAMPBELLasked the Minister of Transport whether he is aware that the Mitre Bridge, Burnley, is in a very defective condition; and whether, in view of this, he is prepared to make a grant towards its reconstruction?
    Mr. HORE-BELISHA: Yes, Sir, and I am to-day issuing a grant towards the cost of its reconstruction.

    MOTOR DRIVERS (TEST).
    Mr. STONES (for Sir JOHN HASLAM)asked the Minister of Transport why residents in Bolton and district who must undergo the new driving test are compelled to visit Manchester for that purpose; and will he make arrangements for such tests to be held in Bolton, seeing that it is the centre of a population of about a quarter of a million people and offers better facilities for such tests?
    Mr. HORE-BELISHA: There must be a radius for each particular examiner and Bolton, which is only ten miles distant and where there are comparatively few applicants, falls within the Manchester radius. Everything possible will be done to arrange times and dates suitable to applicants.

    ELECTRICITY UNDERTAKINGS.
    Mr. WESTasked the Minister of Transport whether his attention has been drawn to the proposed merger of capital and administration of certain electricity companies operating in the West of London; and whether he is satisfied that the proposal is not detrimental to the interests of the consumers of electricity and does not infringe any of the provisions of the London Electricity (No. 2) Act, 1925?
    Mr. HORE-BELISHA: I am not aware of any infringement of the provisions of the Act referred to; the results to the consumers will depend on the efficiency of the future management as compared with that of the separate companies.
    Mr. WEST: Can the Minister say whether the physical assets of these companies as well as their finances are to be amalgamated? And does he consider that in this amalgamation the consumers' interests will be safeguarded?
    Mr. HORE-BELISHA: I can only do what I am empowered to do. I have said in my answer that I am not aware of any infringement of the provisions of the law.
    Mr. WEST: Will the Minister answer my question; whether the physical as well as the financial assets of these companies are to be amalgamated?
    Mr. HORE-BELISHA: I do not think that I am called upon to answer that question. It is not within my jurisdiction.
    Mr. WESTasked the Minister of Transport whether he will take steps to ascertain the views of the London County Council and the London and Home Counties Joint Electricity Authority on the proposed merger of West London electricity companies, having regard to the provisions of the London Electricity (No. 2) Act, 1925, under which these undertakings are to be transferred in 1971 to the Joint Electricity Authority and to the control which, in certain circumstances, the London County Council and the Joint Electricity Authority have over the operations of these companies?
    Mr. HORE-BELISHA: If the London County Council or the London Joint Electricity Authority find it necessary to make any representations on any matters which are within my jurisdiction I shall be glad to consider them.
    Mr. D. GRENFELLasked the Minister of Transport the total sums set aside on 1st January, 1934, by all authorised electricity undertakings for superannuation and pension schemes what were the sums paid in premiums and the policy values for the same date, if any; and the number of employesé covered by these superannuation and pension schemes?
    Mr. T. SMITHasked the Minister of Transport the total value of any insurance funds for plant, machinery, etc., established by authorised electricity undertakings, the total value of insurance policies, and the total value of the annual premiums paid on those policies up to 1st January, 1934?
    Mr. HORE-BELISHA: I regret that the information desired is not available, and I am not aware of any returns from which it could be compiled.
    Mr. GRENFELL: Will the Minister consider asking for a return from these semi-statutory organisations?
    Mr. HORE-BELISHA: I think it would be difficult to get the information, but I shall be happy to give what assistance I can.
    Mr. D. GRENFELLasked the Minister of Transport the total rates paid for the years 1923 and 1933 by all authorised electricity supply undertakings, and what did these sums represent per kilowatt of connected load and

    Particulars.

    All Undertakings.

    Public Authority Undertakings.

    Company Undertakings.

    £

    £

    £

    Total Rates paidduring1924–25

    1,790,746

    1,189,178

    601,568

    Total Rates paid during 1932–33

    4,453,065

    2,749,070

    1,703,995

    s.

    d.

    s.

    d.

    s.

    d.

    Average Rates per Kilowatt of connected load including bulk supplies, *1924–25.

    5

    6

    5

    6

    5

    7

    Average Rates per Kilo watt of connected load including bulk supplies, *1932–33.

    5

    7

    5

    3

    6

    3

    Average Rates per Kilo watt of installed generating plant capacity, 1924–25.

    9

    7

    9

    5

    10

    1

    Average Rates per Kilowatt of installed generating plant capacity, 1932–33.

    12

    1

    11

    8

    12

    10

    * As the ratio of bulk supplies to total supplies varies, the figures for the two periods are not strictly comparable.

    Mr. WESTasked the Minister of Transport, what were the values on 1st january1934, as respects municipal authorised electricity undertakings, of the total outstanding loan capital, average interest rate, and average loan period, and for the same date, as respects company authorised undertakings, of the loan capital (mortgage debentures, etc.), preference capital, and ordinary capital, and the average dividend rate in each of the years 1929, 1930, 1931, 1932, 1933, and 1934?
    Mr. HORE-BEBLISHA: As the answer contains a number of figures, I will, with the hon. Member's permission, circulate it in the OFFICIA REPORT.
    Following is the answer:
    The latest compiled Returns show that at 31st March, 1933, the outstanding loans of municipal electricity undertakings(including electricity undertakings of joint boards and joint electricity authorities) amounted to —144,150,000.
    The amount paid in interest by these undertakers in 1932–33 was … £6,844,000per
    per kilowatt of installed generating plant capacity; what were these values for municipal authorities and company authorities, respectively; and what was the lowest and the highest rate per kilowatt of connected load and per kilowatt of installed generating plant capacity for the years 1923 and 1933?
    Mr. HORE-BELISHA: I will with pleasure circulate such figures as I have in the OFFICIAL REPORT.
    Following are the figures:
    being an average rate of 4¾per cent. on the loans outstanding.
    Sinking Fund and Loan Repayment in 1932–33 required …… £7,826,000
    The average loan period cannot be stated.
    As regards Companies the returns for the year 1932 show issued capital as under:—

    £

    Loan (debentures, etc.)

    …

    47,417,062

    Preference shares

    …

    21,168,423

    Ordinary shares

    …

    63,412,087

    Total

    …

    £131,997,572

    The average rates of dividend paid are as under:—

    Preference.

    Ordinary.

    Year.

    Per cent.

    Per cent.

    1929

    …

    …

    5.87

    7.02

    1930

    …

    …

    5.79

    6.85

    1931

    …

    …

    5.78

    7.05

    1932

    …

    …

    5.71

    6.73

    Later figures have not yet been compiled.

    NONSUCH PARK.
    Commander BOWERasked the First Commissioner of Works whether he will intervene to prevent the erection by the Surrey County Council of a secondary school in the ancient Royal Park of Nonsuch?
    The FIRST COMMISSIONER of WORKS (Mr. W. Ormsby-Gore): Nonsuch Park is not under the jurisdiction of my Department, and I have no power to take any action in the matter.
    Commander BOWER: Has my right hon. Friend any power to recommend that such historical sites in the neighbourhood of London be scheduled, with a view to saving them from so-called development?
    Mr. ORMSBY-GORE: My power under the Ancient Monuments Act is limited to actual buildings or erections.

  SCOTLAND.

    MILK MARKETING SCHEME.
    Captain McEWENasked the Secretary of State for Scotland whether the Scottish Milk Marketing Board are prepared to accept payment by a system of instalments of the amounts due by registered producers in respect of unpaid levies?
    The SECRETARY of STATE for SCOTLAND (Sir Godfrey Collins): I understand that all registered producers concerned have been informed that, in cases where payment in full will involve undue hardship, the board will be prepared to accept payment of the amounts due by instalments spread over a period. Nearly 50 per cent. of those who are in arrears have arranged to take advantage of the offer to pay by instalments. The board's officers have authority to make arrangements with producers for payment by instalments over a period of not more than six months. Cases in which producers state that they are, unable to make payment over this period are referred to the executive committee of the board for consideration.

    LANARKSHIRE POLICE.
    Mr. MAXTON (for Mr. McGOVERN)asked the Secretary of State for Scotland whether he is aware that Chief Constable
    358
    Keith, of the Lanarkshire Constabulary, asked Mr. Lachlan McDonald, a pensioned and retired police officer of the Glasgow Police Force, to visit the hon. Member for Gorbals at his home and at the Central Station, Glasgow, with a view to demanding that the hon. Member for Shettleston should stop asking questions in Parliament concerning the administration of the Lanarkshire force; and what action he intends to take in this matter?
    Sir GODFREY COLLINS: As regards the first part of the question, I am informed that the Chief Constable of the Lanarkshire Police Force made no request and gave no instructions to Mr. McDonald to visit the hon. Member for Gorbals (Mr. Buchanan) for the purpose indicated. The last part of the question does not therefore arise.

    HOUSE RENT, GLASGOW.
    Mr. MAXTON (for Mr. McGOVERN)asked the Secretary of State for Scotland whether he will have inquiry made into the case of A. Kirkwood Brown and Sons, house factors, 180, West George Street, Glasgow, who have increased the rent of a house occupied by Mr. William Miller, 32, Carntyne Road, Glasgow, from 9s. 10d. per month to £1 15s. ld. because he was 19 days late in paying one month's forehanded rent; and will he take steps to put an end to actions of this nature?
    Sir G. COLLINS: The house being privately owned, I have no power to take action in a matter of this kind, which can only be determined, in the event of dispute, by a court of law.

    AVIATION (AUSTRALIA).
    Captain PETER MACDONALDasked the Secretary of State for Dominion Affairs what is to be the approximate expenditure of the Australian Commonwealth on the improvements in the facilities for ciivl aircraft on the route from Port Darwin to Melbourne; and by what approximate date it is anticipated that the new directional wireless stations, beacons, and flood-lit aerodromes are to be available?
    The SECRETARY of STATE for DOMINION AFFAIRS (Mr. J. H. Thomas): I understand that these questions are still under consideration by His Majesty's Government in the Commonwealth of Australia, and I am therefore not in a position to make any statement in regard to them.

    DOMINIONS: ADVERTISING MATTER (DUTIES).
    Captain P. MACDONALDasked the Secretary of State for Dominion Affairs which Dominions at the present time impose a duty on advertising matter descriptive of British manufactures; and whether he anticipates the possibility of these Dominions following in the near future the decision of Canada in abandoning this duty in her recent budget?
    Mr. J. H. THOMAS: Duties on advertising matter descriptive of United Kingdom manufactures are at the present time levied in Australia, New Zealand, the Union of South Africa, and the Irish Free State, though in each case free entry is accorded in certain circumstances. I fear that I am not in a position to express an opinion as regards the second part of the question, but the matter will be borne in mind for such action as is possible.

    CANADA (IMMIGRANTS).
    Brigadier-General NATIONasked the Secretary of State for Dominion Affairs whether he has information showing how many foreign migrants have entered the Dominion of Canada during the last 10 years; and from what countries they have chiefly originated?
    Mr. J. H. THOMAS: During the 10 years ending 31st March, 1933, 470,368 migrants entered the Dominion of Canada from the Continent of Europe. The chief countries of origin were Germany, Ruthenia, Scandinavia and Poland. In addition 210,899 came from the United States of America.
    Brigadier-General NATION: Can my right hon. Friend say whether the number entering into Canada annually is increasing or decreasing at the present time?
    Mr. THOMAS: I should think that at the moment it is decreasing, but, taking the period that my hon. and gallant
    360
    Friend has referred to, 424,514 migrants from the United Kingdom entered Canada.
    Mr. KIRKWOOD: Is it the case that the population of Canada has not increased in the last 50 years?
    Mr. THOMAS: I am sure, if we look at the geographical position of Canada, that if it had increased 50 times Canada could still do with it.
    Mr. KIRKWOOD: But that is not an answer to my question.

    BRITISH ARMY (RESERVISTS).
    Mr. DENVILLEasked the Financial Secretary to the War Office whether soldiers in the Reserve remain under contract of service to the War Office?
    The FINANCIAL SECRETARY to the WAR OFFICE (Mr. Douglas Hacking): Yes, Sir. The reservist is under contract of service to His Majesty.
    Mr. DENVILLE: Is my right hon. Friend aware that on one side of the River Tyne for the purpose of transitional payment it is acknowledged that men on the Reserve have a contract of service and their income from that source is not taken into account for transitional payment, but that on the North side, at Newcastle in particular, one week is deducted from single men and two weeks from married men during the course of each month because they are in the Reserve?
    Mr. HACKING: I am not aware of that, but the fact remains that the man is under a contract of service.

  HOUSING.

    TOWN PLANNING, BRISTOL (ALLOTMENTS).
    Mr. NOEL LINDSAYasked the Minister of Health whether he will reconsider his decision to allow part of the 50-acre site at South Liberty Lane, Bedminster, Bristol, at present used for allotments for unemployed men and scheduled by the Bristol City Council as industrial land under the Town Planning Acts, to be used for the erection of dwelling-houses, in view of the hardship to unemployed men, the unsuitable nature of the site, and the strong representations of the Bristol City Council?
    The PARLIAMENTARY SECRETARY to the MINISTRY of HEALTH (Mr.Shakespeare): The circumstances to which my hon. Friend refers were fully considered in determining this appeal and my right hon. Friend was satisfied that the balance of argument was nevertheless in favour of allowing the proposed development. My right hon. Friend sees no reason to vary his opinion and he has no power to revise his decision.
    Mr. LINDSEY: Did my hon. Friend take into consideration, first of all, the fact that both the medical officer and the city engineer of Bristol emphatically said that this land was not suitable for housing development; and, secondly, the fact that the result of his decision has been to throw nearly 400 unemployed off their allotments?
    Mr. SHAKESPEARE: All these facts were taken into consideration, but particularly the fact that it is very difficult to refuse leave to an owner to develop his property and build houses on it save under very exceptional circumstances.
    Mr. BERNAYS: Is my hon. Friend aware that this site is most unsuitable for building, being very marshy; and is it not the case that the decision of the Minister in this matter impairs the whole principle of town planning?
    Mr. SHAKESPEARE: This area was scheduled for development purposes, and it is therefore not suitable for allotments.
    Mr. BERNAYS: Is that any reason for placing it in the hands of the speculative builder?
    Mr. LINDSAY: In view of the unsatisfactory nature of the reply, I beg to give notice that I shall raise this matter at the earliest opportunity.

    SLUM CLEARANCE, MANCHESTER.
    Mr. CHORLTONasked the Minister of Health whether he is aware that the Manchester Corporation is recommended by the committees concerned not to use the slum-clearance areas in Collyhurst for rehousing; and what steps he proposes to take to protect the interests of those concerned who wish to live in the locality and also the non-provided schools and their loss of grant?
    Mr. SHAKESPEARE: My right hon. Friend's information does not agree with
    362
    that of my hon. Friend. My right hon. Friend had just given general approval to the proposals of the town council for rehousing in blocks of flats on the Collyhurst site, and tenders for the erection of the first section of the work are about to be obtained. The second part of the question does not therefore arise.

    LOSSES AT SEA (COURT OF INQUIRY).
    Mr. LOGANasked the President of the Board of Trade the terms of reference of the shipping inquiry which he announced in the House last Tuesday and the membership of the court?
    The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Dr. Burgin): The inquiries will be held as provided in Part VI of the Merchant Shipping Act, 1894, and the Shipping Casualties Rules, 1923. The questions which will be submitted to the court will cover the widest possible grounds. The court will consist of Lord Merrivale as Wreck Commissioner, assisted by nautical, marine-engineer and naval architect assessors.

    INDIA (WOMEN MINE WORKERS).
    Mr. GEORGE GRIFFITHSasked the Secretary of State for India the number of women working in the coal mines of India at the latest available date; and the number of fatal accidents to women for the latest 12 months
    The UNDER-SECRETARY of STATE for INDIA (Mr. Butler): In the calendar year 1933, 23,835 women were employed in coal mines in India and there were 19 fatal accidents. There are no later figures available.
    Mr. T. SMITH: Is the hon. Gentleman satisfied that the number of women employed in the mines in India is being reduced in accordance with the Ordinance made some years ago?
    Mr. BUTLER: I understand, Sir, that is so.

    HERR JAKOB (DISAPPEARANCE).
    Sir C. CAYZERasked the Home Secretary whether he has yet received any report from the Metropolitan Police with regard to the inquiries which have

    363
    been made by them in this country concerning the disappearance of Herr Jakob at the request of the Swiss authorities?
    Sir J. GILMOUR: I have received an interim report but it would clearly be undesirable to make any statement about inquiries which are still in progress.
    Mr. COCKS: Will the right hon. Gentleman expel from this country all known Nazi agents and spies?

    IMPRISONMENT FOR DEBT.
    Mr. CLEARYasked the Home Secretary whether he will set up an inquiry into the existing laws which permit imprisonment for debt?
    Sir J. GILMOUR: The question of imprisonment by courts of summary jurisdiction in default of payment of fines of rates and of sums due under maintenance and affiliation orders has already been the subject of inquiry by a Departmental Committee, whose report was presented to Parliament in July last.
    Mr. CLEARY: May I ask the right hon. Gentleman whether on the general question of imprisonment for debt, he is prepared to initiate an inquiry without having it restricted to the particular matters mentioned?
    Mr. GODFREY NICHOLSON: Is my right hon. Friend aware that all people who have anything to do with prison administration, such as governors, consider the existing state of the law to be profoundly unsatisfactory, as it leads to the prisons being filled with large numbers of short-term prisoners who come back again and again, often in respect of the same debt, being dealt with on a sort of cat and mouse principle.
    Sir J. GILMOUR: All I can say is that the recommendations of the report are under consideration with a view to framing legislation.
    Mr. NICHOLSON: Can the right hon. Gentleman give us any indication of when the legislation is likely to be introduced.
    Sir J. GILMOUR: No, Sir.

    BRITISH SUBJECTS (FOREIGN NATURALISATION).
    Brigadier-General NATIONasked the Home Secretary how many British subjects have accepted foreign naturalisation during the last 10 years; how much has been paid in fees for the purpose; and to what countries they have chiefly gone?
    Sir J. GILMOUR: No information is available as to the number of British subjects who become naturalised in foreign states. If, however, my hon. and gallant Friend has in mind declarations of alienage under Section 14 of the British Nationality and Status of Aliens Act, 1914, 54 such declarations have been registered in the United Kingdom during the last 10 years, and the total fees received in respect of such registrations has been £27.

    NATIONAL FINANCE.
    Mr. MABANEasked the Chancellor of the Exchequer by what amount the revenue for the financial year ended 31st March, 1935, exceeded the ordinary expenditure for that year?
    The FINANCIAL SECRETARY to the TREASURY (Mr. Duff Cooper): I must ask my hon. Friend to await the review of the outturn of the past year which, as usual, will be included in the Budget statement.
    Mr. MABANEasked the Chancellor of the Exchequer whether he is aware of the widespread desire that a restoration of Income Tax allowances to the levels in force before the second Budget of 1931 should be given prior consideration by him in preparing his Budget for the current year; and whether he will do his best to give effect to this desire in framing his Budget?
    Mr. COOPER: I must ask my hon. Friend to await the Budget statement.
    Mr. MABANEasked the Financial Secretary to the Treasury the average rate of interest on Treasury bills during the financial year ended 31st March, 1935?
    Mr. COOPER: My right hon. Friend thinks it will be more appropriate to give information of this nature as part of his Budget statement.

    PUBLIC WORKS (COST).
    Mr. CHORLTONasked the Minister of Labour whether he can give the comparative annual cost per individual in different countries of those engaged on public works; and what special steps are taken in any country to prevent such a cost becoming uneconomically high?
    The PARLIAMENTARY SECRETARY to the MINISTRY of LABOUR (Mr. R. S. Hudson): As regards the first part of the question, my hon. Friend will find some information in a report on "Public Works Policy" recently published by the International Labour Office, and in a report on "National Public Works," issued by the League of Nations in 1934. As regards the point raised in the second part of the question, to which only brief references are made in these reports, I regret that I am not in possession of information which would enable me to supplement the particulars given.
    Mr. CHORLTON: Could not my hon. Friend have a resume… made of these returns in a tabular and condensed form to make them readily available.
    Mr. HUDSONI am afraid the figures are so lumped together that I could not extract the information for which the hon. Gentleman asks.

    NYASALAND (EMIGRATION POLICY).
    Mr. MALLALIEUasked the Secretary of State for the Colonies whether seeing that in 1931 the policy of the Nyasaland Government with regard to emigration was stated to be that native labourers should be free to go where they wished without let or hindrance and that recruiting should not be allowed for work outside the protectorate, he can state in what respects the policy has been changed, as announced in the legislative council on 28th December last?
    Sir P CUNLIFFE-LISTER: The Governor's intention, as stated in the Legislative Council, is that, in place of the present system under which natives of Nyasaland leave the Protectorate on their own account and so become untraceable, arrangements shall be made whereby natives intending to take up work in Northern or Southern Rhodesia shall be engaged from a reputable and
    366
    recognised organisation, and on a proper form of agreement. The Governor's proposal is actuated by the anticipation that in view of the contraction in the local demand for labour and of increased mining activity in neighbouring territories, Nyasaland natives will seek work abroad in greater numbers than formerly. The Governor therefore wishes to arrive at an arrangement, in collaboration with the Governments of Northern and Southern Rhodesia, under which natives who leave the country shall do so on a proper agreement providing for fair conditions of labour, for some portion of their pay being made available for their wives and families during their absence, and for their repatriation on the expiration of their agreements. Despatches on the subject have been received from the Governor and are at present under consideration.
    Mr. MALLALIEU: Can the right hon. Gentleman say whether it will now be possible for outside agents to recruit labour inside the territory for work outside the territory.
    Sir P. CUNLIFFE-LISTER: I should like notice of that question. The whole object which the Governor has in view is to see that natives who go out of the territory to take up work get the best possible conditions.
    Mr. PALINGDoes this mean that a native will not be able to leave the territory at all to seek work on his own initiative?
    Sir P. CUNLIFFE-LISTER: I do not think so, but I should like notice of any detailed questions when I have had an opportunity of fully considering the despatches.

BUSINESS OF THE HOUSE.
Mr. LANSBURY: Might I ask the Prime Minister what business he proposes to get through to-night if the Motion on the Paper to suspend the Eleven o'Clock Rule is carried? I should also like to ask what arrangements have been made for this House to present an Address of Congratulation to His Majesty on the occasion of his Silver Jubilee?
The PRIME MINISTER (Mr. Ramsay MacDonald): Regarding the question of business first, the Eleven o'Clock Rule is being suspended in order to obtain the

367
three Works Votes which are on the Order Paper, namely, Class 7, Vote 3 (Labour and Health Buildings, Great Britain), 7A (Silver Jubilee), and 8 (Public Buildings, Overseas).
As regards the second question, the Government propose on Wednesday, 8th May, to move for an Address of Congratulation to His Majesty The King on the occasion of the 25th Anniversary of His reign. A similar Motion for an Address will be moved in another place. His Majesty has been pleased to indicate that it will be his pleasure to come to Westminster Hall on Thursday, 9th May, to receive both Addresses. In order to facilitate the arrangements, it would be convenient if Members who intend to be present on this occasion would sign their names not later than 10th April in the book which will be kept for the purpose in the office of Mr. Speaker's Secretary. Further details with regard to the ceremony will be announced later.
Mr. CHURCHILL: Further on the question of business, might I ask the Prime Minister—and I apologise to him for not having been able to give him longer, or fuller, or more definite notice —whether, in view of the answer given by the Foreign Secretary to Question No. 5 this day about the relative strengths of the British and German Air Forces, he will reconsider the answer which he gave to my Noble Friend the right hon. Member for Horsham (Earl Winterton) yesterday in respect of providing some occasion to debate these urgent and serious matters?
The PRIME MINISTER:I am sorry I have had no notice of this question, but, if I had, I am afraid I could only give the answer that I will give now, that the State of public business is so pressing that we cannot, at any rate for the moment, set aside any special day for a discussion on this subject. There will be opportunities, like the adjournment, for raising the question, and the other adjournments that are available. I am sorry, but if I asked the right hon. Gentleman to give me notice, I am afraid I should be compelled, in view of the state of public business, to give him the same answer.
Mr. CHURCHILL: But will not the right hon. Gentleman, attaching all the
368
weight which he no doubt should to the state of public business, also take into consideration the fact that the answer given by the Secretary of State for Foreign Affairs to-day is in direct contradiction, in respect of the relative strengths of the Air Forces of the two countries, to the solemn, deliberate, and reiterated Ministerial statements which have been made on behalf of His Majesty's Government, and that it is a matter of such grave importance that some special arrangements should be made to enable the House of Commons, which shares with the Government responsibility for the safety of the country, to participate and to take stock of the existing situation?
Mr. LANSBURY: If it is considered advisable to discuss this matter, would it not be possible to take a Supply Day early—I am not asking for any extra time—but one of the Supply Days, either on an Army Vote or the right hon. Gentleman's own Vote, in order to discuss this matter?
The PRIME MINISTER: Raising that question as well only shows the desirability of my having notice of the question, but that must not be understood as a half acceptance of the proposal.
Mr. KIRKWOOD: I would like to ask the Prime Minister what is the reason for Members of Parliament being required to sign a. book to go to Westminster Hall in order that those congratulations may be presented to His Majesty?
The PRIME MINISTER: Everybody is entitled to go, and, so far as the Government are concerned, everybody ought to go, but in order that proper arrangements may be made, it is convenient that they should be good enough just to go and sign this book, so that we may know, for instance, what number of seats should be provided.
I am sorry I overlooked an item of business that we propose to take in the event of the suspension of the Eleven o' Clock Rule. The Government also propose to take the Committee and remaining stages of the Land Drainage (Scotland) Bill, which it is understood is not a contentious Measure.
Lieut.-Colonel HENEAGEWill the Prime Minister, when deciding whether time shall be allotted to discuss the air

369
question, also appreciate that there are many Members in this House who would like to discuss the three Services together?
The PRIME MINISTER indicated assent.
Duchess of ATHOLL: Would it not be possible for one of the four days which, I understand, are proposed to be devoted to the Government of India Bill next
week to be allotted to this very pressing question?
Motion made, and Question put,
"That the Proceedings on Government Business be exempted, at this day's Sitting, from the provisions of the Standing Order (Sittings of the House)."—[The Prime Minister.]
The House divied: Ayes, 233; Noes, 38

Division No.139.]

AYES.

3.38 p.m.]

Acland-Troyte, Lieut.-Colonel

Erskine-Bolst,. Capt. C. C. (Blackpool)

Loftus, Pierce C.

Adams, Samuel Vyvyan T. (Leeds. W.)

Essenhigh, Reginald Clare

Lovat-Fraser, James Alexander

Allen, Lt.-Col. J. Sandeman (B'k'nh'd.)

Evans, R. T. (Carmarthen)

Lumley, Captain Lawrence R.

Assheton, Ralph

Everard, W. Lindsay

Mabane, William

Atholl, Duchess of

Fermoy, Lord

MacAndrew, Capt. J. O.(Ayr)

Baillie, Sir Adrian W. M.

Fielden, Edward Brocklehurst

McConnell, Sir Joseph

Baldwin, Rt. Hon. Stanley

Fleming Edward Lascelies

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

Balfour, Capt. Harold (I. of Thanet)

Fox, Sir Gifford

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

Barclay-Harvey, C. M.

Ganzonl, Sir John

McEwen, Captain J. H. F.

Barrie, Sir Charles Coupar

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

McKie, John Hamilton

Beauchamp, Sir Brograve Campbell

Glossop, C. W. H.

Maclay, Hon. Joseph Paton

Beaumont, Hon. R. E. B.(Portsm'th,C.)

Gluckstein, Louls Halle

McLean, Major Sir Alan

Bernays, Robert

Glyn, Major Sir Ralph G. C.

McLean, Dr. W. H. (Tradeston)

Blindell, James

Goldie, Noel B.

Macmillan, Maurice Harold

Bower, Commander Robert Tatton

Goodman, Colonel Albert W.

Magnay, Thomas

Bowyer, Capt. Sir George E. W.

Grattan-Doyle, Sir Nicholas

Mallalieu, Edward Lancelot

Brass, Captain Sir William

Gretton, Colonel Rt. Han. John

Mander, Geoffrey le M.

Briscoe, Capt. Richard George

Grigg, Sir Edward

Manningham-Buller, Lt.-Col. Sir M.

Broadbent, Colonel John

Guest, Capt. Rt. Hon. F. E.

Margesson, Capt. Rt. Hon. H. D. R.

Brocklebank, C. E. R.

Gunston, Captain D. W.

Martin, Thomas B.

Brown, Ernest (Leith)

Guy. J. C. Morrison

Mason, David M. (Edinburgh, E.)

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

Hacking, Rt. Hon, Douglas H.

Mayhew, Lieut.-Colonel John

Browne, Captain A. C.

Hamilton, Sir R. W. (Orkney & Zetl'nd)

Mills, Sir Frederick (Leyton, E.)

Burghley, Lord

Hanbury, Cecil

Mills, Major J. D. (New Forest)

Burgin, Dr. Edward Leslie

Hannon, Patrick Joseph Henry

Molson, A. Hugh Elsdale

Burnett, John George

Harris, Sir Percy

Monsell, Rt. Hon. Sir B. Eyres

Campbell, Vice-Admiral G. (Burnley)

Hartington, Marquees of

Moore, Lt.-Col. Thomas C. R. (Ayr)

Castlereagh, Viscount

Harvey, George (Lambeth, Kenningt'n)

Morris-Jones, Dr. J. H. (Denbigh)

Cayzer, Sir Charles (Chester, City)

Harvey, Major Sir Samuel (Totnes)

Munro, Patrick

Cazalet, Thelma (Islington, K.)

Haslam, Henry (Horncastle)

Nation, Brigadier-General J. J. H.

Chorlton, Alan Ernest Leofric

Headlam, Lieut.-Col. Cuthbert M.

Nicholson, Godfrey (Morpeth)

Christie, James Archibald

Hellgers, Captain F. F. A.

Nicholson, Rt. Hn. W. G. (Petersf'ld)

Churchill, Rt. Hon. Winston Spencer

Henderson, Sir Vivian L. (Chelmsford)

Ormsby-Gore, Rt. Hon. William G. A.

Clarry, Reginald George

Heneage, Lieut.-Colonel Arthur P.

Peat, Charles U.

Cobb, Sir Cyril

Herbert, Major J. A. (Monmouth)

Percy, Lord Eustace

Cochrane, Commander Hon. A. D.

Herbert, Capt. S. (Abbey Division)

Pickthorn, K. W. M.

Colfox, Major William Philip

Hore-Belisha, Leslie

Pybus, Sir John

Collins, Rt. Hon. Sir Godfrey

Howard, Tom Forrest

Radford, E. A.

Colman, N. C. D.

Howitt, Dr. Alfred B.

Ralkes, Henry V. A. M.

Colville, Lieut.-Colonel J.

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

Ramsay, T. B. W. (Western Isles)

Conant, R. J. E,

Hudson, Robert Spear (Southport)

Ramsden, Sir Eugene

Cook, Thomas A.

Hunter. Capt. M. J. (Brigg)

Rea, Walter Russell

Cooke, Douglas

Hurst, Sir Gerald B.

Reed, Arthur C. (Exeter)

Cooper, A. Duff

Jackson, Sir Henry (Wandsworth, C.)

Reld, James S. C. (Stirling)

Copeland, Ida

James, Wing.-Com. A. W. H.

Reld, William Allan (Derby)

Courthope, Colonel Sir George L.

Jesson, Major Thomas E.

Rhys, Hon. Charles Arthur U.

Crooke, J. Smedley

Joel, Dudley J. Barnato

Rickards, George William

Crookshank, Capt. H. C. (Gainsb'ro)

Johnstone, Harcourt (S. Shields)

Ross Taylor, Walter (Woodbridge)

Cross, R. H.

Jones, Lewis (Swansea, West)

Rothschild, James A. de

Davies, Edward C. (Montgomery)

Ker, J. Campbell

Ruggles-Brise, Colonel Sir Edward

Davies, Maj. Geo. F. (Somerset, Yeovil)

Kerr, Hamilton W.

Runciman, Rt. Hon. Walter

Dawson, Sir Philip

Keyes, Admiral Sir Roger

Russell, Albert (Kirkcaldy)

Denman, Hon. R. D.

Kirkpatrick, William M.

Russell, Alexander West (Tynemouth)

Denville, Alfred

Knight, Holford

Rutherford, Sir John Hugo (Liverp'l)

Despencer-Robertson, Major J. A. F.

Lamb, Sir Joseph Quinton

Salmon, Sir Isidore

Dickie, John P.

Law Sir Alfred

Samuel, Rt. Hon. Sir H. (Darwen)

Doran, Edward

Leckle, J. A.

Sanderson, Sir Frank Barnard

Duckworth, George A. V.

Leech, Dr. J. W.

Sandys, Duncan

Dugdale, Captain Thomas Lionel

Leigh, Sir John

Savery, Samuel Servington

Duggan, Hubert John

Lennox-Boyd, A. T.

Shakespeare, Geoffrey H.

Duncan, James A. L. (Kensington, N.)

Lewis, Oswald

Shaw, Helen B. (Lanark, Bothwell)

Dunglass, Lord

Lindsay, Kenneth (Kilmarnock)

Simon, Rt. Hon. Sir John

Ellis, Sir R. Geoffrey

Lindsay, Noel Ker

Smith, Bracewell (Dulwich)

Emmott, Charles E. G. C.

Lister, Rt. Hon. Sir Philip Cunliffe-

Smith, Louis W. (Sheffield, Hallam)

Emrys-Evans, P. V.

Llewellyn-Jones, Frederick

Somerville, Annestey A. (Windsor)

Entwistle, Cyril Fullard

Lloyd, Geoffrey

Somerville, D. G. (Willesden, East)

Sotheron-Estcourt, Captain T. E.

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

Watt, Major George Steven H.

Spender-Clay, Rt. Hon. Herbert H.

Thomas, James P. L. (Hereford)

Wedderburn, Henry James Scrymgeour-

Stanley, Rt. Hon. Oliver (W'morland)

Thompson, Sir Luke

White, Henry Graham

Stevenson, James

Todd, Lt.-Col. A. J. K. (B'wick-on-T.)

Williams, Charles (Devon, Torquay)

Stewart, J. Henderson (Fife, E.)

Touche, Gordon Cosmo

Willoughby de Eresby, Lord

Stones, James

Tree, Ronaid

Wilson, Lt.-Col. Sir Arnold (Hertf'd)

Storey, Samuel

Tryon, Rt. Hon. George Clement

Wilson, Clyde T. (West Toxteth)

Stourton, Hon. John J.

Tufnell, Lieut.-Commander R. L.

Womersley, Sir Walter

Strickland, Captain W. F.

Wallace, Captain D. E. (Hornsey)

Worthington, Dr. John V.

Sueter, Rear-Admiral Sir Murray F.

Ward, Lt.-Col. Sir A. L. (Hull)

Sutcliffe, Harold

Ward, Irene Mary Bewick (Wallsend)

TELLERS FOR THE AYES.—

Taylor, C. S. (Eastbourne)

Warrender, Sir Victor A. G.

Sir Frederick Thomson and Sir George Penny.

Taylor, Vice-Admiral E. A.(P'dd'gt'n,S.)

Waterhouse, Captain Charles.

NOES.

Addison, Rt. Hon. Dr. Christopher

George, Megan A. Lloyd (Anglesea)

McEntee, Valentine L.

Attlee, Clement Richard

Grenfell, David Rees (Glamorgan)

Mainwaring, William Henry

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

Griffiths, George A. (Yorks, W. Riding)

Maxton, James

Buchanan, George

Grundy, Thomas W.

Owen, Major Goronwy

Cleary, J. J.

Hall, George H. (Merthyr Tydvil)

Parkinson, John Allen

Cocks, Frederick Seymour

Hicks, Ernest George

Smith, Tom (Normanton)

Cove, William G.

Jenkins, Sir William

Tinker, John Joseph

Cripps, Sir Stafford

John, William

West, F. R.

Daggar, George

Kirkwood, David

Williams, Edward John (Ogmore)

Davies, David L. (Pontypridd)

Lansbury, Rt. Hon. George

Wilmot, John

Davies, Stephen Owen

Lawson, John James

Dobble, William

Leonard, William

TELLERS FOR THE NOES.—

Gardner, Benjamin Walter

Logan, David Gilbert

Mr. Paling and Mr. Groves.

George, Major G. Lloyd (Pembroke)

Macdonald, Gordon (Ince)

ORDERS OF THE DAY.
  SUPPLY.

    CIVIL ESTIMATES AND ESTIMATES FOR REVENUE DEPARTMENTS, 1935.
    Order for Committee read.
    Motion made, and Question proposed, "That Mr. Speaker do now leave the Chair."—[Captain Margesson. ]

    INDUSTRIAL ORGANISATION.
    3.48 p.m.
    Mr. MOLSON: I beg to move, to leave out the word "That," to the end of the Question, and to add instead thereof:
    "with a view to creating employment by increasing the consumption of British products at Home and abroad, it is essential that the fullest use should be made both of modern methods of production and distribution and of the present abundance of cheap money, and that it is desirable for a departmental committee to be set up forthwith to consider what measure of industrial reorganisation is necessary for these purposes and what steps should be taken to this end."
    The House has devoted a good deal of time lately to the discussion of what steps should be taken for the maintenance of the unemployed. I would, therefore, like to ask the House to consider the policy of His Majesty's Government which has been directed towards giving to industry in this country an opportunity of becoming more active and therefore of reabsorbing the unemployed. I hope, especially as this Parliament is drawing to an end—[Hon. MEMBERS: "Hear, hear."]—at any rate, this Parliament is no longer as young as it was some years ago—that there will be an opportunity of having a statement from the Government as to what is their long-term policy for dealing with the industrial position. I ask for a departmental committee in order that the question may not be dealt with only by the Chancellor of the Exchequer, the Minister of Agriculture and the President of the Board of Trade, each approaching it from his own departmental point of view and from the point of view of his own economic principles or prejudices, as the case may be, but that it may be dealt with are the policy of the Government as a whole. There is a precedent for setting up such a, committee. In 1924 the Balfour Committee was set up, with very wide terms of reference:
    378
    "To inquire into the present position of British overseas trade and the prospects of British participation in the markets of the world being such as to ensure sufficient and continuous employment and a satisfactory standard of living in this country."
    During the 11 years that have intervened since then, very great changes have taken place both in the organisation of industry and in the problems it has to face. I suppose most people would admit to-day that the outlook for industry in the future is less bright even than it was in 1924, and certainly the unemployment problem is of longer standing and of a greater gravity. The record of the Government since it has been in office is one of which it may well be proud. In dealing with the changed circumstances of the present time it was necessary that a number of different expedients should be adopted, and the changes since 1924 are so very great that I think it is necessary that there should be a fresh inquiry into the prospects for the future. In the first place, we have lost more export trade than, I suppose, the most gloomy prophet would have anticipated in 1924. In that year the value of our exports was £801,000,000, and in 1934 they were estimated at only £481,000,000. What is even more significant as showing how much more we are to-day dependent upon the horns market for our employment is that of the total production in this country in 1924 about 22 per cent. was exported and in 1934 only 15 per cent.
    The development of oil and of electricity has resulted in this country losing to a very great extent the industrial advantages which it used to have over other countries, and that fact, together with the development of motor transport, has resulted in the new and expanding light industries which cater principally for the home market choosing to go to the south of England and to the London area. As a result of this we have the devastated areas of South Wales and the North-East Coast, and I think most of us would recognise that with our old staple industries, upon which our population was dependent for its employment in the past, depressed in the way they are, and with this new development taking place in a fresh part of the country, it is in the first place probable that we shall not in future be able to maintain in employment the whole of the population at present in these islands, and, secondly, that even if we are the present distribution of that population is wrong.

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    The National Government since it has been in office has adopted a number of expedients for dealing with this problem, but I have an uneasy feeling that instead of there being one single policy, there are different expedients which are specially associated with individual members of the Government and Departments. There was, in the first place, the adoption of Protection for our industries, but in the case of our industries the same policy was not pursued as in the case of agriculture, that of giving Protection against the undercutter at home. In the second place, the policy for which the Conservative Party has stood for a quarter of a century past, that of Imperial Preference, was adopted at Ottawa. If the results of that policy have not been all that was hoped, that is in part due to the old difficulty that the Dominions insist upon protecting their secondary industries against our manufactures, and at any rate equally due to the fact that the present Minister of Agriculture is seeking to adopt a policy of high Protection for agriculture in this country; and there does appear to be, at any rate at first sight, some inconsistency between a policy of Imperial Preference and one of protecting British agriculture even against Dominions agriculture.
    Again, the whole position of British industry has changed since 1924 because we have gone off the Gold Standard, and, as I understand it, the Chancellor of the Exchequer views with equanimity the decline in the external value of sterling because he feels that by stimulating exports and checking imports it will improve our balance of trade. But at the same time that he is pursuing that policy, it seems to me that both the President of the Board of Trade and the Minister of Agriculture are converts to what I may call international barter. The idea is to try to have a balance of trade which is more or less in equilibrium with almost every other country. The difference between their views on barter seem to me to be very wide. My right hon. Friend the President of the Board of Trade desires that that barter shall be on. as extensive a scale as possible. The Minister of Agriculture on some occasions has said he approves of economic nationalism, because he believes it is generally to the advantage of a country to produce everything which it can pro
    380
    duce for itself, and that international trade will ultimately consist only of the exchange of superfluities. How long there will be any superfluities if his policy of restriction is followed is a matter for conjecture. Another change since 1924. In the case of agriculture, self-government has been given to the various branches of that industry, and they have been used for the purpose of the organisation of restriction of output and of fixation of prices. The President of the Board of Trade, on the other hand, has been rather unwilling to encourage industry even to ask for similar powers, and has, on the whole, been reluctant to give them.
    If I have ventured to some mild extent to suggest that the National Government has not an entirely united policy in these matters, it is surely necessary that we should consider what ought to be the long-term policy. It is undoubtedly the case at the present time that the depression in the world is largely due to the fact that there is a lack of harmony between costs of production and prices, and one has to make up one's mind how that difficulty is to be dealt with. I can well understand that as a temporary expedient it may be necessary, when you are face to face with an emergency, to restrict output and to try to maintain prices, but I cannot believe that that can be a sound long-term policy. Surely the sound policy must be to try to bring down the costs of production until they are in harmony with prices, and if my right hon. Friend the Minister of Agriculture has concentrated, as I think unduly, upon keeping up prices, I feel that the President of the Board of Trade has in some respects not been sufficiently active in trying to reduce costs of production.
    So far as the old staple industries are concerned, my friends and I believe that the first and most urgent problem is that of eliminating redundant plant. I feel that industries like coal and cotton are rather in the position of a man who, in these more impoverished days, inherits some great country house which he neither has a large enough family to fill nor a large enough income to keep up. When he inherits he has to make up his mind whether he is going to live uncomfortably and expensively in this great house, or whether he is going to close

    381
    down, or perhaps knock down, part of it, and live more comfortably and more economically in a small corner.
    I will take, in the first place, the example of coal. I will not repeat at any length what I have said about that on at least two previous occasions, but in 1930 a Measure was introduced into this House for establishing quotas which were going to spread the limitable disposable production of coal over all the pits in operation during the period of the quota. That Bill was criticised at the time by the Conservative party. It was also criticised by the Liberal party, and it was only defended by the Socialist party as a temporary expedient. At the same time—and this was the better part of the Bill—there was a provision for a Reorganisation Commission which would try to concentrate production upon those pits which were able to produce most cheaply. Now, all these years afterwards, there is still a test case pending before the Railway and Canal Commission to ascertain exactly what are the powers of the Reorganisation Commission. In the meantime, the cost of producing coal is artificially increased by this spreading of production over an unnecessarily large number of units. The manager of a pit near my constituency has made some calculations, and he estimates it to be about is. for every ton of coal raised throughout the country. This uncertainty not only prevents the Gowers Commission from taking action, but we get the worst of both worlds, because the industry will not take measures to reorganise itself as long as the Gowers Commission at some time may do it compulsorily. In the last report there was again raised the question of royalties—a matter also referred to by the Civil Lord of the Admiralty in the very remarkable report he presented to the Government on the conditions on the North-East Coast. The Gowers Commission said that, whatever their powers may be, it would none the less be necessary, if they are effectively to carry out the task imposed upon them by Parliament, that the industry should be unified, and royalties put under their control. The time is slipping away, and no substantial advance has been made during the last three years.
    I would like to refer briefly to the cotton industry, about which I spoke in November, when last I ventured to speak
    382
    on this subject. On that occasion my right hon. Friend the President of the Board of Trade, in replying, said that he would keep his mind open to any scheme of this character connected with the cotton industry, and I should like, if I may, respectfully to congratulate him upon the welcome which he gave to the scheme for the elimination of redundant spindles in Lancashire. I understand that he has promised to introduce legislation in order to make that scheme effective, and that he is also prepared to give such financial assistance as may be necessary in order to carry it into effect. But I would ask him, is it necessary for him to stop there? There are other sections of the cotton industry. I understand that the problem of redundant plant in the weaving section is just as great as it is in the spinning section. He has already taken a most useful step in giving statutory validity to the wages agreed upon by the two sides, but I would ask him whether, really, it is necessary for progress in this way to be made slowly—here a step and there a step—whether it is necessary on every occasion for a special ad hoc Bill to be introduced into this House, and whether it would not be possible to give to the cotton industry powers to carry through these schemes of reorganisation of their own?
    In addition to the spinning and weaving sections, there is also the finishing section, and I understand that a short time ago the Bradford dyers prepared a comprehensive scheme for reorganisation which they took to the Board of Trade, but, unfortunately, they did not there receive a, very warm welcome. I wonder whether the right hon. Gentleman could tell us something about that when he replies. I would ask him whether it is not a fact that there is in the finishing section, as well as in the weaving section and in the spinning section, which he has already dealt with, much redundant and obsolete plant? There is no prospect of the industry becoming really profitable until that redundant machinery and plant has been eliminated. I would also ask him whether there is not at the present time a great deal of undercutting and selling below cost; whether there is not uneconomic competition among merchants, and whether many of them are riot as much concerned to sell foreign cloth as they are to sell British cloth;

    383
    whether there would not be a far better hope for the cotton industry if something were done to encourage vertical combines, or a single selling agency which would enable Lancashire in the export markets of the world to have, at any rate, as effective machinery as that which the Japanese industry possesses? I refer to these great staple industries as the old ones where, I think, this problem of redundant plant is an acute one.
    I would ask my right hon. Friend whether it is not possible for something more to be done to reduce the costs of production even in those industries which to-day are comparatively prosperous and expanding? One of the most courageous and imaginative actions of the late Conservative Government was in setting up the great electrical grid system, upon which no less than £46,000,000 has already been spent; but I understand that the benefit of that great scheme has, to a large extent, been lost, because there is no co-ordination and very little regulation of the distributing companies. There is the most extraordinary variation in the prices at which the current is sold in different parts of the country and it has been suggested to me that it would be possible for there to be a very substantial reduction in the price at which that current is sold. Again, take the question of transport. The Salter Committee made certain recommendations which this Government carried out, but they went on to say that for the future they hoped there would be something much more than putting road transport and railways upon a fair basis of competition, and that the future of transport in this country, in the interests of industry, depended upon there being really cordial co-operation between the two. I want to know whether anything has been done since the Road Transport Act in order to encourage that co-operation and co-ordination.
    A committee such as I have suggested, obviously, would not overlook the extraordinary capitation tax upon employment which is impsed by our various insurance schemes. If ever an industry wishes to expand and take on more labour, it has to pay a capitation tax upon every man that it takes out of the army of unemployed. It may be said that we have had commissions upon unemployment insurance, but they were looking at this matter from a different point of view.
    384
    Their task was to put unemployment insurance on a sound acturial basis. I am asking that this new committee should look at it from an entirely different point of view, and whether, in view of the different standard of living in this country, and our difficulty in competing with other countries with lower standards of living and without the social services we have, something might not be done in this respect, following the example of the Chancellor of the Exchequer in derating. I remember he used the very striking phrase, that although this did not result in any reduction of taxation, it meant taking the weight off a man's heels and putting it on his shoulders. Again, there is the curious anomaly that the same Income Tax is levied if profits in an industry are put back into the industry in order to re-equip it or extend it, or whether they are distributed in dividends.
    If and when everything has been done that can be done to make production in this country as cheap as possible, it will still be desirable to consider the question of cheap distribution. The Balfour Committee gave very great attention to the cost of distribution. I recognise that it is impossible for retail prices to fall in anything like proportion to the fall in the prices of primary articles, but I should be sorry if the Government did not pay special attention to reducing the cost of distribution, and for this very obvious reason. If only there could be a substantial fall in the cost of distribution, and so a reduction of prices to the consumer, that would result in a tremendous increase in purchasing power. We attach a great deal of importance to the increased purchasing power which comes from the restoration of cuts, or putting people back into employment, but it has been calculated by my hon. Friend the Member for Huddersfield (Mr. Mabane) that a reduction of 10 per cent. in the retail prices of this country would result in an increased consuming power to the people of this country of something like £180,000,000 a year.
    If I appear to commend to the President of the Board of Trade in some respects the policy of the Minister of Agriculture, I will not ask him to follow the Minister of Agriculture in all respects. I do feel that it is unfortunate that the Minister of Agriculture, in trying with so much courage to improve the position

    385
    of the farmers of this country, has concentrated rather upon raising the price of imported foodstuffs than upon reducing the price of home-produced foodstuffs to the consumer. There is a world of difference between the scheme of the Minister of Agriculture of restricting the importation of Danish bacon, which, I understand, has already resulted in a reduction in the consumption of bacon in this country, and his entirely different policy of subsidising the sale of milk for school children, which has resulted in a greatly increased consumption. What is, to me, a little alarming is that the Consumers' Council has presented two reports which have been published upon the working of the milk marketing scheme. In the first, they drew attention to the large, and, in their view unjustifiable margin which the distributor was obtaining. In the second report which was signed on 15th April, and only published on 15th September, the Consumers' Council added a note that in the new contract which had been entered into for the six winter months of 1934–35, the margin allowed to the distributors was even larger than the previous margin they had criticised. Therefore, I am very glad that at last a reorganisation commission has been set up.
    It is not only in the matter of foodstuffs that it is of vital importance to make certain that the costs of distribution are not more than they need be. I was reading again the other day a passage in the Report of the Royal Commission on the Coal Industry, published in 1926, in which figures were brought out showing that in some respects the profits on the distribution of coal in the years following the War were larger than in the years before the War. I made inquiries from the Department as to what action had been taken on the recommendations of the Samuel Commission, and what further information was obtainable as to what has happened during the intervening years. I understand that nothing has been done, and that no further information is obtainable. It is remarkable that, although we have had a census of production, there has been no census of distribution. It is useless to reduce costs of production if costs of distribution are at the same time increased, and there is a very clear case for a committee which would inquire into the whole question of whether costs of distribution
    386
    in this country are not higher than they need be.
    I understand that the Chancellor of the Exchequer relies for the re-absorption of the unemployed into industry very largely upon the existence of cheap money which, he says, is entirely due to the action taken by the Government. I respectfully agree with everything that the Chancellor said on that matter. I happen to know two cases where great, undertakings were riot considered to be worth while when money was dearer, but which have both been undertaken during the last few months. I believe that, if the Chancellor of the Exchequer is able still further to reduce the price of money, the improvement which we have already seen will continue, but I am not satisfied that everything is being done that might be done to take the fullest and most complete advantage of the cheapness of money.
    Some very interesting proposals have recently been made by the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George), and, though at first sight it appeared that there was some conflict between the outlook of the right hon. Gentleman and the outlook of the Government, 1 cannot help feeling that, underlying, there is a very considerable measure of agreement. The Chancellor of the Exchequer has always made it plain that he is most anxious that the plentiful credit now available should be used for productive purposes, but he does not believe, and 1 respectfully agree with him, that it is ever worth while to spend money upon relief works, the sole or primary purpose of which is to give employment during the time that the money is being spent.. The right hon. Gentleman the Member for Carnarvon Boroughs has also agreed that relief works are undesirable, and he continues to emphasise the importance of encouraging the flow of capital into many works which will be to the advantage of the country as a whole.
    There may be a difference of opinion as to what are relief works and what are works which are for the national advantage, but I believe that both the right hon. Gentleman and the Government would agree that the re-equipment of our staple industries in order to enable them to produce more efficiently and therefore more cheaply would be an extremely desirable employment of that

    387
    at present partly unemployed capital. The immediate effect would be to give employment to the manufacturers of machinery, and the outward effect would be to increase markets both at home and abroad. I understand, although I have no official figures, that something like £10,000,000 might well be spent in re-equipping the spinning section of the cotton industry and £20,000,000 in re-equipping the iron and steel industry. If something like the 1929 scheme could be revived, the railways would be able to provide employment for £55,000,000, part of which would be upon electrification of suburban lines.
    I would conclude by asking that the Government should give sympathetic consideration to our proposals and that a committee on the lines of the Balfour Committee should be set up to make a full and comprehensive survey of industry, of the potentialities of industry, and of the outlook in regard to markets at home and abroad. Improvement has been shown during the last few years, and most of us who are supporters of the Government would agree that individual Ministers have achieved great things since they have been in office. Conditions are changing, however, and I believe that there is now need not merely for those brilliant expedients of which the Minister of Agriculture is so remarkable an exponent, but for a long term policy which will aim at seeing that British agriculture and that British industry are given the greatest measure of protection in the home market that can be given without sacrificing the export market. Conditions have so far changed and there is so great a danger of individual Ministers approaching things from the departmental point of view, that I hope they will be prepared to set up a committee which will investigate the subject in an impartial and scientific way.
    4.23 p.m.
    Mr. PEAT: I beg to second the Amendment.
    I do so not only as a Member of this House, but as a professional man who, in the whole of his business life, has been closely associated with the evolution of industry. I have seen the formation of price associations and have seen those associations developed until they have
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    brought about, as in the case of the iron and steel industry, an almost complete reconstruction of an industry on the most efficient lines. I welcome the Amendment because industry, whether we like it or not, is the source from which we get all our material benefits. It provides the widow with her pension and the unemployed man who has run out of insurance with his relief. Iris the source whence all things come, and, if that great source be left in its present chaotic condition, I cannot see how the Government or the people of this country can hope to rectify the present economic position which, in its turn, leads to the social position, which is more conspicuous than the economic position.
    I am convinced—I am going to say a number of elementary things with which hon. Members are familiar, but which I think should be said, even though they constitute repetition—that the organisation of our industries on a national basis is essential. Such organisation, coupled with self-government, cannot be called Socialism, because it is the only alternative by which individual enterprise and the great stimulus of individual effort can be kept alive. It forms a bulwark against what I have always described as the cold and clammy hand of State control of industry. This new philosophy—I may call it that, or new technique—of the organisation of industry is not the conception of a few hot-headed Members of this House who may be described as planners. It is in the minds and in the mouths of many members of our industrial community. In my professional life I have met men from all industries, and I am astonished at the volume of support for this suggestion. Two days ago, the chairman of one of the biggest iron and steel companies gave it as his opinion at a directors' meeting that self-government of industry was essential, and would have to come much sooner than later. Producers have come to me and have said: "We cannot go on like this. There are 14 of us putting in tenders for one job, and the available trade is only enough for two of us. We can see no daylight, and no hope of overcoming that difficulty unless we have help in the nature of an enabling Bill to give self-government to our industry." Large sections of the cotton industry are in favour of that, and, as I have just said,

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    large sections of the iron and steel industry also. So are many of the subsidiary industries, like book-binding and printing.
    Where reconstruction has already commenced and has been partially successful, results are beginning to show themselves. It is estimated in the iron and steel trade that, owing to some of the recent amalgamations, a reduction of between 10s. and 12s. 6d. per ton in cost of production may be realised. Increasing co-ordination takes place in an industry which has self-government. In the iron and steel industry, negotiations with our international opposite numbers are now more satisfactory, because we are able to meet them as a united industry, and that is the secret of the cure for many of the present troubles of the world. We find that one of our great achievements is that we are seeking for efficiency through central research and through what is probably a novel feature to some Members of this House, and that is central costing for the formation of a national cost, which shall be a yardstick of efficiency for the industry as a whole. I have the privilege of being chairman of the iron and steel costing committee and we are about to produce a book on the subject which I hope will tend to greater efficiency in that industry. I am trying to point out that in the rudimentary stages of reconstruction these useful results begin to appear.
    I turn for one moment to the subject of the new industries and how they require self government. My hon. Friend who proposed this Resolution in such a lucid and interesting manner said that perhaps the new industries did not require this reconstruction as much as the older and basic industries. I differ from him in that respect. The canning industry is an industry which was brought into very great prominence by the Government's policy of protecting horticultural products. It had a flourishing year or two and is now faced with a definite redundancy problem. If that industry had had proper self government, I do not believe the present position would have arisen. If you are tackling either old or young industries, organised self government is essential.
    I said I was approaching this subject from the point of view of a man who has had considerable experience in the re-
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    organisation of industry. The only alternative I see to the form of organisation which we are suggesting is that ancient method of attrition whereby people hoped that in a comparatively short time weaker members of an industry under free competition would fall by the wayside and that the survivors would carry on a prosperous business over their dead bodies. Well, that is a fallacy. It is a complete fallacy, because on the bodies of these weaker brethren who fall by the wayside new companies are resurrected. They rise from the ashes, and you have a worse condition of competition than you had before; and this bloodletting, this bleeding to death which seems to be a fair simile of the process of attrition continues in a worse state. I do not think the cure for unemployment is the creation of new competition on those lines. I do not believe that the steel trade, if I may take an example, would benefit by the expenditure of £500,000 on the creation of new steel works at Jarrow which would put out of employment a corresponding number of men in Middlesbrough.
    I will turn to some of the defects as I see them in what I should describe as a unanimous or rather non-statutory form of organisation or reorganisation in industries. I have watched the process for many years, and I have three complaints about it. First of all, it takes a very long time to prepare and negotiate and to agree upon anything which is worth having at all, because as at present constituted representatives of all the different firms who come together and sit round a table must think of their own people first and try to get the best bargain they possibly can. In other words, they must make sacrifices to the present in order to gain prosperity in the future, and they are not always long sighted enough to accept this point of view. When you finally get the scheme going you find on many occasions that agreement has been reached through compromise. Some essential feature like redundancy or problems relating to labour has had to be modified or even scrapped in order that some form of general agreement may be arrived at. At the same time during the operation of a scheme of that sort without statutory authority it is my experience that there is a lot of back sliding. One would hesitate to call it dishonest work, but you sometimes find

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    people who have signed an agreement and who are prepared to take advantage of the fact that they could not be punished for not carrying it into effect and seize the immediate advantage of breaking the terms of the agreement.
    The final complaint is that it is not a permanent thing. Many of the schemes of reconstruction which have been carried through are subject to three months' notice. What is the value of a reconstructed industry whose reconstruction is subject to three months' notice? What we want is a permanency in these schemes, and we must have it. Otherwise, consumers, employers and employed have not that sense of security which they should have. At the present moment we are asking, under this self government proposal, that a majority of an industry should have the opportunity of putting a case before an independent tribunal, and, if that independent tribunal is satisfied that the reorganisation is in the interests of the consumers, producers, and wage earners and their allied industries, we feel statutory authority should be given to such a scheme without delay, and that the industries should be organised on the most efficient basis which the industry itself can conceive and suggest. Time is the essence of our industrial position to-day. We cannot wait for years. We have got to make this movement effective and quickly. Another strong argument in my mind for hastening this movement is that within a protected market we must have efficiency. We cannot stop short of a price association. We must have a price association developed into an effectively organised industry from the point of view of costs and distribution.
    At the same time as we are discussing this matter, self government for industry and organisation on a national basis, the House should bear in mind that at this moment some of the great Powers of the world have taken action. The American position, the Italian position, the German position, the position in France, Belgium and Japan should be borne in mind. I am not suggesting that this country should follow in their footsteps. I do not think in many cases that what they have done has been sufficiently proved in the first place or that it has been demonstrated to be
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    satisfactory so far as we are concerned. Each country should have its own inherent method of reorganising its industry, and I do not think we should accept these models of reorganisation in other countries for our own. We should watch out that, when we do have a chance to come back to the export markets, we are not faced with a position of national competition from other nations, and centralised competition against sporadic efforts on our own part. We find that particularly in the case of Japan. We find it in the international steel cartel which is a collection of national units to share the export markets of the world. Unless selling organisation is centralised nationally, we shall find ourselves out of the picture in the export market, and that is the most important thing from the point of view of employment in this country.
    I should like to deal with one or two of the criticisms which are directed against our suggestions for statutory self government of industry. I am told that the small man will be forced out of production. I have seen the small man wrestling and struggling against the inevitable for many years, and I have seen him absorbed, and I have seen him liquidated and wound-up and forgotten, and I know the small man is very nervous of his position. Combinations are the fashion and the most efficient methods of standardised trade to-day, and standardised trade will be the basis of our trade in the future. The small man is anxious for this self government. In many cases he is vocal on that point. There are some of them who fear it, but I believe if he has an opportunity of putting his case effectively before an independent tribunal when the whole reconstruction is under reconsideration, he will stand a much better chance of having justice done than if he is left alone to face the inevitable trend of industrial reorganisation, which will leave him not only out of business but out of compensation.
    Then we have the complaint that self government of industry will mean monopoly, that you will have industries organised on a national basis putting up prices to the consumer. I believe it is a truism that a monopoly which seeks to exploit the consumer is committing suicide. We have seen wherever we go

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    and wherever we look that the monopolies which at present exist—the chemical industry for one—have not exploited the consumer. They have made it their purpose to keep prices as low as they can in order to encourage the sale of their product. If you take the case of the iron and steel industry, you have a great industry where arrangements have been made with the primary consumers, the re-rollers, the structural engineers and the shipbuilders. The industry is helping them in the export market and trying to co-ordinate prices with them. In any reorganisation of a great industry, you will find within the ambit of that organisation the machinery to correlate prices between the producer and his immediate consumer, and the cases in which the ultimate consumer may have to come before some tribunal for justice will be few and far between.
    We are also told that the impulse towards efficient production may be stultified in a nationally organised industry. I believe that any scheme which resulted in deterioration of efficiency would be fundamentally bad. My own conception of a nationally organised industry is that it should sell centrally, because I cannot for a moment believe it is right that 20 salesmen should try to sell the same product to one consumer, and that their only hope of getting the better of one another should be either in some social advantage that they may have or in their power to cut prices, directly or indirectly. I believe, and I am very glad to know that my hon. Friends above the Gangway agree with me, that one should sell through a centralised channel. But I do not consider that one should produce under the same conditions. I think the producer should be left free so to develop his ingenuity and his technique and to reduce his costs as to take every advantage he can possibly get against the ruling price, whatever it may be; and the more money he makes by his efficiency the better pleased I should be. I have not the anti-profit complex. I think that a man has a right to make a profit, and that a reasonable profit is, or should be, a gauge of his efficiency. Therefore I believe that we should endeavour to keep alive that essential desire to be efficient, at the same time centralising our selling efforts.
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    May I draw the attention of the House to one or two of the more obvious results which will flow from reconstruction on this basis? I believe that at the present moment one of the methods of dealing with unemployment is to increase the spending capacity of all those concerned in industry and shorten working hours. But some of my hon. Friends above the Gangway are trying to plant this responsibility upon industry without giving it the opportunity to fit itself to comply with their demand. What is the use of going to an industry which is struggling and fighting to keep its head above water in chaotic conditions, without sufficient centralisation or organisation, and saying to it, "You must take on snore men; you must pay them higher wages; you must shorten the hours of work" The answer obviously is, "We cannot afford to do it." But I maintain that an industry organised on a national basis would have this efficiency, would have this reduction of costs, and would be able to co-operate more readily in such matters.
    Another advantage, as I see it, would be a cheapening of distribution. At the present moment some producers in the Midlands are selling their products in Scotland, and some producers in Scotland are selling their products in the Midlands —the same product in both cases. In my opinion that should be curbed. A central selling agency would see to it that the sales were made from the nearest producer to the consumer, with a considerable saving to the consumer. I believe we should get rid of trade cycles and, as they say in America, iron them out, because, with regulated production, we should get away from the inflated stocks which are the key to these recurring periods of bad trade. I think, also, that finance should be facilitated. I should like to see the Trade Facilities Act renewed, but I should like to see it made available to industries and not to individuals. I think that, if it were available to industries, expenditure being authorised by an industry as an industry, money would be obtained more readily and it would be better spent.
    I believe that through the organisation of industries on a national basis we should get international peace, because, while political instability reacts unfavourably on economic stability, if economic stability can be obtained it

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    may bring political stability in its train. In conclusion, I should like to support what my hon. Friend said about the Government. They have done their work well; they have laid good foundations. The next stage is in uncharted land. Most people in the country, including, I think, all industrialists, are anxious at this moment as to the future. They can see no definite trends of policy along which their salvation can come. They are faced with the position that the Opposition have indicated that, when they get their chance of reorganising industry, the first stage will be a financial crisis. In these circumstances I believe that the uncertainty, the sense of insecurity in the minds of the population of this country, industrial and otherwise, will reach a point almost of crisis unless the Government in the near future give us a programme covering the necessary industrial reconstruction.
    4.54 p.m.
    Mr. CHARLES BROWN: I am certain that none of us on these benches will have any cause to regret that the hon. Member for Doncaster (Mr. Molson) has brought this Amendment before the House to-day, for seldom have I heard a more telling indictment of the capitalist system by persons who, presumably, are its defenders, than I have heard this afternoon. Both hon. Members who have addressed the House seemed to be laboriously endeavouring to build a sort of half-way house towards the complete socialisation of industry, but neither of them dare say so. They have cloaked what they were really doing in phrases which they thought would not offend unnecessarily supporters of the Government who do not share their particular views. It is impossible to conceive of a more telling indictment than that to which we. have just listened from hon. Members who support the existing economic system. The hon. Member for Darlington (Mr. Peat) told us in the early part of his speech that the present chaotic conditions must grow worse if something more is not done, and the hon. Member for Doncaster even referred us to the fact that the outlook now is worse than it was in 1924. One can hardly imagine a more telling indictment than that, coming from people who apparently rose
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    in the House this afternoon to defend the existing economic system.
    I can easily understand the hon. Members' anxiety about our present industrial organisation. They realise, as we all do, that our present industrial organisation cannot get its goods consumed either at home or abroad, and I have no difficulty in understanding how that occasions distress of mind to those who run industry and direct the labour of others. Undoubtedly, it is calculated to occasion very great distress of mind, and it is not difficult to understand the position of both hon. Members in view of the fact that, in the main, they have been loyal supporters of the Government, which, they have told us, has been trying to do something for more than three years. They recognise, however, that all the efforts of the Government have made very little real impression on the problem which has to be dealt with. The hon. Member for Doncaster reminded us that a protectionist system has been established in this country; and, although he did not say so, I am convinced that he realises that the tariff system has been disappointing to a considerable degree, or, at any rate, that it has not realised the promises which were held out on its behalf before it was instituted. I am rather surprised at some of the arguments which have been advanced this afternoon in regard to making industry more efficient when I recall the fact that the advocacy of tariffs was frequently accompanied by the contention that, once tariffs had been established in this country, industry would be able, behind those tariff walls, to reorganise itself, because it would not be so much exposed as it formerly was to the impact of foreign competition.
    I admit that the Amendment recognises that the major problem of our time is the problem of unemployment, and faces up to the fact that in the view of both the Mover and the Seconder, the Government are not doing enough. They realise that we are faced with a situation which cannot be left alone, and in that I think most of us on these benches would agree with them. I should like to say something, first, about industry as it is organised to-day; secondly, about industry as the hon. Members who have moved and seconded this Motion would like it to be; and, thirdly, about what some of us on these benches think industrial organisa-

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    tion ought to be in the day in which we are living.
    The hon. Member for Darlington reminded us that the industrial organisation of to-day, such as it is, is the result of a long process of growth and development, and he indicated that in the process of its growth it has been governed more or less by the self-regulating mechanism of prices and profits. Of course, at one stage in the process of its evolution, that was all very well, so long as there were in existence ever-expanding markets for its goods. But we all recognise that modern industrial organisation is made up of a complex and complicated mass of competing units. Once it was thought—I am glad to say that neither the hon. Member for Doncaster nor the hon. Member for Darlington agreed with this proposition—that, the more of those competing units there were, the better it would be for everybody concerned. That point of view has been dropped, at any rate by the two hon. Members who have already addressed the House, both of whom now contend that, the smaller the number of competing units, the better, probably, it will be for industry. Apparently, we have now passed into a phase in which the two hon. Members and those who agree with them in the ranks of the Conservative party realise the evils which are involved in a system of innumerable competing units, and consequently they agree, I take it, with the attempts which have been made, by unification and combination, to reduce the number of competing units.
    The tendency of some economic theorists and critics of our industrial system—and I noticed it in both the hon. Members' speeches this afternoon—is to talk about the inefficiency and technical backwardness of British industry. I think, however, that that point is often over-emphasised and much exaggerated, and my own view is that, if some of those who deliver speeches of that kind were more familiar with British industry, they would not make them. The fact that I happen to be a member of a Departmental Committee which is investigating a specific problem about which I need not talk at the moment has furnished me with opportunities of going into many industrial undertakings in this country, and I am quite certain that, as regards
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    their standards of efficiency and technical up-to-dateness, there is no room in present circumstances for any improvement whatsoever. Their methods are absolutely up to date, and they are the last word in industrial organisation.
    I feel that manufacturers have some ground for resenting some of the statements by critics who are mere theorists with regard to our industrial organisation. Two or three weeks ago I went over an undertaking 20 miles from London, where the raw material came to a wharf at the side of the Thames. The undertaking employed about 3,000 people and in its organisation and machinery it was the very last word in efficiency. Following that, some of us went to the Midlands and looked into the textile industries—particularly in connection with hosiery, which concerns my own constituency—and I am certain that those who accompanied me would come to the conclusion that many of the factories we visited in that particular industry were, again, the last word in efficiency and up-to-dateness. I asked a question in the House some time ago about the importation of cheap Japanese hosiery into this country and the Minister of Labour, wanting to score a point, hailed me at once as a supporter of the Government's policy of excluding cheap goods by means of tariffs. He was quite entitled to do that. While visiting some of these hosiery factories I tried to find out whether it was possible to produce cheap hosiery in this country. I came across a manufacturer whose plant was very efficient and he was actually able to produce artificial silk stockings at sixpence a pair. He told me at the same time that he could make a reasonable profit out of the business, and he allowed us to question his workers, who were getting decent wages.
    Mr. PEAT: I want to make it quite clear that neither my hon. Friend nor I indicated or wished to indicate that we considered British industry was inefficient. What I am personally aware of—and I have considerable knowledge of the subject—is that a great many producers in the industries with which I am connected are most efficient. Take the iron and steel industry, for instance, in connection with which you had a report that some of the producing units were on the highest plane of efficiency, while a number of units were not efficient and are redundant.
    Mr. BROWN: I completely fail to understand the purport of the two speeches to which we have listened if the construction I am putting upon them is incorrect. In my view, one of the major arguments which both hon. Members advanced was that there was a good deal of inefficiency in British industry. The point I was trying to make was that, in spite of the efficient plant to which I am referring, and the fact that hosiery can be made so cheaply, with all the operatives in receipt of relatively good wages, nevertheless it is perfectly true that the goods so produced cannot compete in the English market with those cheap products from Japan. The only comment I want to make on that is that so far as I can see tariffs are no remedy for that situation. At the moment there is a 20 per cent. tariff on such goods, but if you raised it to 100 per cent., it would not make any difference. The Japanese would still be able to undersell British goods in the home market in that particular line. Let me say here that we on these benches are not old-fashioned Free Traders. Some of us have definitely reached the stageߞ2 and I among the number—where we should do everything we possibly could to protect the working-class standards of life which have been attained in this country. We would go to the length—I would, without hesitation—of prohibiting the importation into this country of goods made by such sweated labour as that which obtains in some Eastern countries. I should not have any hesitation at all about doing it.
    There are certain facts concerned with industrial organisation in this country about which we are all agreed. We all agree that under present conditions the country's productive capacity exceeds the demand for its products. Take the coal industry, to which the hon. Member for Doncaster refers. I well remember, during the Debates on the Coal Mines Act, 1930, that the late Mr. William Graham on more than one occasion told the House that if the coal industry in this country was working at full time, with all the pits operating, its output would probably be in the region of 330,000,000 tons a year. We are now in an industrial phase when we cannot possibly sell more than 220,000,000 tons of coal a year. The same is true of textile products, and the same would be
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    true of the products of the boot and shoe industry and of many other commodities. I hope the hon. Member for Doncaster agrees with me, for I hope to carry him along with me as I seek to deal with certain arguments he advances. We should all be agreed that the employment-giving capacity of British industry over the whole range of productive processes is still expanding to some degree. Supporters of the Government find great consolation in that fact. I do not deny that to some degree this employment-giving capacity is still expanding, but that expansion is not regular and continuous. Everybody agrees that the system is subject to pulsations of expansion and contraction which periodically produce chaos. Some Members might not use the word "chaos." They would prefer a much milder word and call it "depression." We are all agreed that there is a greater volume of labour available than can at the moment be profitably employed. Yet, in spite of all that, is it not true that in many industries very long hours are being worked, that overtime is being worked, and that the working-week is abnormally long for some sections of workers?
    I can illustrate this point in connection with mining. Everybody knows, and nobody better than the Secretary for Mines, that the mining industry is undergoing a revolution. In that industry there is taking place very rapid mechanisation. For instance, as the hon. Member for Doncaster would agree, there are many collieries in this country which are very modern and up-to-date and which are the last word in efficiency. The hon. Member went down a colliery with me not long ago and there we saw steel arch roadways, steel props, roadways well lighted, coal cut by machine, and mechanical conveyors. It was a really up-to-date colliery—and it is not an isolated instance either. In the coal industry, in many places, you have the very last word in efficiency with every modern device that can be used actually in operation. And yet, in spite of this process of revolution in mining, I am certain that in many cases where part of the mine is being worked by coal-cutters and mechanical conveyors and part of the coal is still hand-got, in that part of the mine where men are using coal-cutters and conveyors, men will be found work-

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    ing six, seven and eight shifts per week and overtime is not uncommon. In the same mine other men will be working only three or four shifts per week.
    I suggest that when hon. Members are addressing themselves to this problem of British industrial organisation they should take cognisance of these facts to which I am drawing attention. I am very glad that the Lord President of the Council some time ago made an appeal to employers to cease the working of overtime. Will the President of the Board of Trade tell us whether the Lord President's appeal had any general effect on employers? And could he give us any information whether his appeal has bad any effect on coalowners working mines by modern machine-mining methods? We are all agreed that, on the one hand, we have a lot of idle workers and idle machines, and unused resources both natural and monetary; and that, on the other hand, there is a great lack of consuming power. Working as uncoordinated units the various industrial plants in this country are pouring their goods into a market which, periodically, they glut and choke with commodities for which at such periods no sale can be found. I suggest to the hon. Members who have submitted this Amendment to the House that that cannot be called industrial organisation at all. It is not industrial organization—it is anarchy.
    I am astonished at the hon. Member for Darlington suggesting that we can relieve this problem by leaving the producer free to do as he likes. That is where the anarchy begins. That is the source of the anarchy, and none of this talk about centralisation and reorganisation to which both hon. Members have referred can be effective if you leave the individual producer free to do as he likes. There is a point which arises out of that anarchy which we all very much deplore. Let me for a moment turn my attention to the state of things which the hon. Member for Doncaster would like to see. He recognises the bad social conditions arising from the prevailing economic structure. What has he been advocating? He did not use the word—which, I agree, was an overworked word for a long time —but what he was really advocating was rationalisation. He did not use the word; it has temporarily gone out of fashion; but that is what he really wants—the modernisation of inefficient plant. Is he
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    not very well aware of the fact that many efficient plants are standing idle, and that many efficient plants cannot find work for those who usually man them?
    What are the reasons for suggesting that this course should be pursued? He wants to reduce the unit costs of production, so that even the present wages of the working class may buy more goods than they do at present. He wants to increase Britain's competitive power in the markets of the world. He has a vision, apparently, of Briton's industrial machinery and organisation being so efficient that the commodities it turns out will be so good and cheap that all the world will be clamouring for them. I really cannot accept that in the present condition of the economic life of the world. He sees Britain once more as the workshop of the world. Perhaps he overlooks the fact that there are now many other workshops in the world besides Britain, and the changes he seeks to make in our national workshop would be quickly followed by similar changes in other national workshops. Therefore, he has put forward no proposals which can solve or even alleviate our problem. He merely desires to postpone facing up to the real problem with which we have to deal. He is also perturbed about the idle money in the banks. To him there is a job to be done, and the means are at hand to do it. On the one side, there is unused capital, and, on the other, bad organisation and obsolete machinery. Why should you not use the unused capital to replace the obsolete machinery? Then he goes on, in effect, to say that with new resources and new technical efficiency we should set to work again pouring out our goods and capturing the markets of the world.
    That, roughly, is the summary of the thesis that underlies the speech of the hon. Member who moved this Amendment. I wonder whether in this connection he has ever studied the details of the national income? Has it not some relation to this problem? Does he not know that a big minority of people have incomes which they cannot spend and which they must reinvest, and that profitable sources of investment are scarce at the moment. So money is not being used. But does he not know, on the other hand, that there are millions of people with insufficient incomes who

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    would spend if they could, and would be delighted to buy many of the products of our industrial organisation if they could possibly buy them. What does he propose to do about that fundamental problem? Perhaps one of his hon. Friends will tell us at a later stage in this Debate, because, unless he can solve that problem, it is certain that none of the suggestions which he has put before the House to-day will have any real effect upon the situation which exists in this country.
    In conclusion, I will say a few words on the industrial organisation which we really want. These privately-owned industrial units plunge further into these periodic gluts' with which we are too sadly familiar, and, following upon these periodic gluts, there is a trail of suffering, misery and despair, which, in a society with a sane and sensible economic system, would never occur. There is no opposition on these benches—let me make this quite clear—to the improvement of the technique of industrial production and organisation as such. Everyone of us on these benches would do everything he possibly could to further the throwing of work on to the machine and relieving human labour of some of the laborious toil in which it has still to engage. We have no sort of opposition whatever to throwing increasingly the burden of work on to the machine. But, as we throw that burden of work on to the machine, as industrial development inevitably does, we want to see, as the result of it, the industrial resources of this country used to their fullest extent in order to bring about the material well-being of the millions of the working-class population of the country. We do not find in the suggestions which have been put to us this afternoon by the hon. Members who have addressed the House any proposals likely to bring about that desirable end, but we are not adverse to their suggestion that a departmental committee should be set up. It would be a nice way out for the Government, among other things, but we are sure of the fact that, unless fresh minds are brought to bear on this problem, and there is a fresh outlook and an entirely different method of dealing with it, and some fundamental reconstruction of our economic lot, we shall have talked in vain
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    here to-day. Consequently, though we welcome the Amendment moved by the hon. Member for Doncaster and this discussion, and do not disagree with the setting up of a committee, we hope that, if such a committee be established, it will turn its attention to dealing with this problem in unusual and uncommon ways, and that the members of it will tackle the problem with fresh minds and a fresh outlook determined to build out of the chaos and confusion of to-day a saner and more humane economic structure.
    5.23 p.m.
    Mr. ASSHETON: As this is the first occasion that I have had the privilege of addressing the House, I hope that it will be good enough to give me that measure of indulgence which it usually accords to novices. The House must have been deeply impressed by the very able case that was put by the hon. Member for Doncaster (Mr. Molson) and the hon. Member for Darlington (Mr. Peat). They put forward with great clarity many of the more superficial attractions of the economic scheme which, for the purposes of this Debate, we are calling planning The speech of the hon. Member for Mansfield (Mr. C. Brown) was very refreshing to capitalist ears. Attractive, however, as the theories put forward by the planners undoubtedly are, I should like to be allowed to direct the attention of the House for a few minutes to some of the dangers that I see in those theories. The planners ask that a substantial majority in an industry should have the right to coerce the minority, however unwilling they may be, into federations or cartels; but before this extreme power is given to any industry, surely it is necessary to prove that such power will be used in the interests of the community, and that the interests of the industry itself will be best served by such measures. I suggest that in most cases this is unlikely to be so.
    The adventurous spirits in industry arc always in a minority, but it is to those adventurous spirits that the world owes such progress as it has made. I cannot imagine that the majority of the coaching industry in the 19th century would have welcomed the arrival in their midst of wild fellows advocating the advantages of steam traction, nor do I recollect that the transport industry in this country rejoiced very much at the arrival of the motor car, while the federation of shop-

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    keepers would hardly have given a hearty welcome to Mr. Woolworth. Monopolies have been regarded by Parliament for many centuries with the greatest suspicion, and rightly so; the objections to them are as great to-day as ever they were in the past. A State monopoly which was able to dictate prices to consumers without that fear of competition, which now keeps even the strongest cartel on the qui vive, is not likely to work in the interests of the community. After all, the main object of fixing prices must be to fix them above the ordinary level of the law of supply and demand, otherwise there is not much object in having price-fixing agreements, and "orderly marketing" really means the raising or the maintaining of prices. Pools and marketing boards have always had this object in view. The result of such a policy, however much it may be denied by the hon. Members who moved and seconded the Amendment, must inevitably be, in my view, restriction of sales and eventually restriction of production.
    I doubt very much whether there is any advantage in artificial restriction. It is urged by the planners that the restriction will be relaxed if the demand grows, but are associations of producers likely to be good judges of the interests of the consumers when they are not hampered by competition? There is, after all, no such thing as demand irrespective of price, and as long as price exists there is an unsatisfied demand for the product. It is true that the time may come when it Will pay producers better to produce something else, and they may find it more profitable so to do, but even if they had the support of and were watched by a strong independent committee, I should not be inclined to trust producers to form an altogether satisfactory opinion as to the price at which their products should be sold. Restriction involves restriction of labour and restriction of production. At the best, restriction of labour means that no more is produced, but that more people do the work. That must mean either a reduction in the income of the individual worker, as in the case of the weaver, who, perhaps, is used to tending four looms and is only permitted to tend two, or, if it is assumed that the same weekly wage is to be paid for less work, the inevitable result is increased cost per unit, less goods sold, and, in
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    consequence, eventually more unemployment. I will try to illustrate this point in a few minutes by quoting some figures of unemployment in the United States of America, As for restriction of production, if it succeeds it deprives those who would have gained by greater cheapness, of the benefits of technical improvements, and it therefore benefits the producer at the expense of the producers of other commodities. Restriction all round must lead to general impoverishment, and a rise in prices brought about by this would be a sign, not of increased wealth, but of increased poverty. I do not know whether hon. Members saw a letter some time ago in the "New York Commercial and Financial Chronicle," on the question of the American pig restriction scheme. May I be allowed to quote from it, because it throws a light on the lengths to which restrictionists are inevitably forced:
    "Dear Sir, A friend of mine in New England has a neighbour who has received a Government cheque for 1,000 dollars this year for not raising hogs. So my friend now wants to go into the business himself, he not being very prosperous just now. He says, in fact, that the idea of not raising hogs appeals to him very strongly. Of course, he will need a hired man, and that is where I come in. I write to you as to your opinion of the best kind of farm not to raise hogs on, the best strain of hogs not to raise and how best to keep an inventory of hogs you are not raising. Also, do you think capital could be raised by issuance of a non-hog raising gold bond? The friend who got the 1,000 dollars got it for not raising 500 hogs. Now, we figure we might easily not raise 1,500 or 2,000 hogs, so you see the possible profits are only limited by the number of hogs we do not raise."
    One of the effects of restrictionism is to maintain the value of capital invested, and there are always those who are anxious to try to preserve capital in this way. I believe, however, that it would be wholly wrong and contrary to the interests of progress to try artificially to preserve the value of capital by restricting, for example, the business which a motor transport concern might do in a certain area in order to preserve the capital invested in a railway company. The worst of restrictionism is that it spreads. When, for example, the American farmer was restricted in the acreage of wheat he might sow, he immediately proceeded to produce the same amount of wheat by a greater use of artificial manures. One difficulty inevitably

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    leads to another. It seems to me that restrictionism is really of the very essence of this sort of planning. As Professor Robbins says in his recent book
    "If planning is not a polite name for giving sectional advantages to particular industries, what does it denote but Socialism—central control of the means of production? A planned economy introduced by right-wing parties might, for a time, until the parties of the left got control, acknowledged certain rights to the receipt of income, in the past associated with the ownership of property, which would be destroyed at the outset by a purely Socialist dictatorship. But, if it were to be true to its name, it could not acknowledge the substance of ownership, the right of individual disposal of the actual instruments of production. For planning involves central control. And central control excludes the right of individual disposal. Nothing but intellectual confusion can result from a failure to realise that planning and Socialism are fundamentally the same."
    Have those Conservative Members of Parliament who are now flirting with extreme ideas of planning really faced up to what such a form of planning means and involves They do realise that it means, as the hon. Member for Darlington has indicated, the destruction of all small enterprises, the doom of all small shopkeepers and farmers. Do they not think that it is worth preserving that independence of character which is alone gained by real responsibility? Do they not think that the people of England are far too individualistic and fond of liberty to want to have anything to do with things of this sort? Even if greater efficiency were attained—and that I profoundly disbelieve—would it be worth the sacrifice involved? Do they even believe that these huge structures, to control which it is necessary to find supermen, who do not exist, are for the benefit of the community? Have they thought of the unparalleled catastrophe which a big failure on the part of supermen has brought in cases where a plan goes wrong?
    Mr. MACQUISTEN: Kreuger.
    Mr. ASSHETONYes, £70,000,000 of debts owed by one man. It is incredible. We are fortunate in this country in that we move slowly, and we have had the advantage of watching the great experiments in planning in Russia and in the United States of America. I do not think it can be doubted that the new
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    deal in America is proving a failure. It had two great objectives—the recovery of the farmer and the solution of the problem of unemployment. The recovery of the farmer, in so far as it has taken place, must be attributed to the disastrous drought of last year rather than to government action, and the reduction of unemployment has not been achieved. I quote from the report of the Commercial Counsellor to His Majesty's Embassy at Washington the figures of unemployment in the United States. In April, 1930, according to the figures of the American Federation of Labour, there were 3,100,000 unemployed. The average of 1931 was 7,400,000, and of 1932, 11,489,000, which had fallen by December, 1933, to 10,700,000. By November, 1934, it had increased to 11,459,000. And do not forget that the cost of the new deal, to quote the words of the Commercial Counsellor at Washington, is
    "like the cost of waging war, on the whole not currently paid for but financed by loans, with a shifting of the burden from the present to the future earnings of the community."
    The truth of the matter seems to me to be, that planning in its very essence must destroy the confidence of the business man, and it is to a return of confidence in this country, for which we are indebted to the National Government, that we owe the fact that unemployment has declined here while it has increased in the United States. We cannot be too grateful to the Government, and in particular to the Chancellor of the Exchequer and the President of the Board of Trade, for the courage with which they have resisted the tempting proposals that are constantly being made for a new deal on similar lines here. If only we can get another period of sound government, confidence will be increased again. The unemployed can only be reabsorbed into industry by the restoration of our export trade, and this in its turn can only be achieved by a continuance of the policy which the Government are now pursuing. To get that increased confidence the Government must and will strive, and are striving, continually for world peace, for the cessation of economic war, for the stabilisation, as soon as possible, of currencies, for the lowering of trade barriers, for a greater flexibility both in

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    wage rates and in cartel prices, and, finally, for an appreciation by governments all over the world that it is time they gave up interfering in business, and went back to their own business of government. Mr. A. P. Herbert once wrote a happy couplet, entitled "The President of the Board of Trade," which, although it could never by any stretch of imagination be applied to the present distinguished occupier of that high office, sums up so well what I have had in mind this afternoon that I will conclude by quoting it to the House:
    "This high official, all allow, is grossly overpaid,
    There wasn't any board, and now there isn't any trade."
    5.41 p.m.
    Sir HERBERT SAMUEL: It fell to my lot a few weeks ago to follow the maiden speech of the hon. Member for Wavertree (Mr. Cleary), and to-day I have the privilege in voicing to the hon. Member who has just spoken what I feel sure will be unanimous congratulations of the House on the admirable speech he has delivered, and a cordial welcome to our Debates. He has spoken with clarity, with conviction, with courage and not least with humour, and if his views may not command absolute and complete agreement perhaps they are none the worse for that. To a Member like myself who entered this House more than 30 years ago, and is devoted to its service, it is a great pleasure indeed to welcome a young Member of ability and sincerity, who will help to carry on in the years to come the great traditions of this Assembly. The hon. Member struck a cautionary note, and has urged us not to be carried away by the force and cogency of the speeches of the Mover and Seconder of the Amendment. Yet I think that there is a general feeling in the House and country that in these matters of industrial organisation we cannot in these days take a merely negative view, that it is not enough to say that we must rely simply on private enterprise and energy, valuable and indeed indispensable as they are. The framework of our industry, its degree of organisation, is undoubtedly a matter of immense importance, and when we compare the successes which have been won in various spheres in other countries by well
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    organised industries we cannot complacently assume that everything is perfect in Great Britain in this respect.
    It was my duty, nearly 10 years ago, to preside over an inquiry into the organisation of one of our most important industries, the coal industry, at the behest of the then Prime Minister who is now Lord President of the Council. We sat for six months. We were sentenced indeed to six months' hard labour. We investigated every aspect of it, and had the advantage of the most expert advice. We came to an absolutely unanimous conclusion on all points. The main conclusion, in brief, was that the coal industry was suffering from inadequate organisation, that it was divided into hundreds and hundreds of separate units which were too small to be economically right, and that a concentration of these units was essential; and that to that end the nationalisation of mining royalties was an indispensable step. Let me remind the House of the composition of that commission. It was a small commission of four members, and among those members were Sir Henry Lawrence, who is now the Chairman of Vickers, Sir Kenneth Lee, one of the ablest business men in the Lancashire cotton industry, and Sir William Beveridge, one of our most capable economists. After giving the most careful consideration to this matter, we were all emphatically of opinion that it was of vital importance that the nationalisation of royalties should be effected. We did not recommend the nationalisation of the mines, but we said that the nationalisation of royalties was essential to the reorganisation of the industry. There followed in 1930 the Bill which was introduced by the Labour Government, and into that Bill was inserted, as a matter of fact on pressure from these benches, a provision for the establishment of a Reorganisation Commission. That Commission has been labouring for nearly five years. Its results are exceedingly small. It has been faced by obdurate and obstinate resistance on the part of many of the interests affected.
    Mr. MACQUISTEN: By the people who know the business.
    Sir H. SAMUEL: That Commission came to exactly the same conclusion as the Royal Commission and every other inquiry of recent years, that unless the

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    State can exercise the power of a landlord in mining leases and secure proper organisation of the industry by that means, no effective progress will be made. When the present Government appointed a Commissioner to investigate the conditions on the North-East coast the Civil Lord of the Admiralty, who presented an able report which has been justly praised, came to precisely the same conclusion. What has been done? For nearly ten years this measure has been advocated by every impartial inquiry that has been made into the industry, and the position is exactly the same in the end as at the beginning. We are told now by the Government that the matter is under active consideration. I have no doubt it has been under active consideration for the last 10 years. We feel that it ought not to be under active consideration for another 10 years.
    When the hon. Members who moved and seconded this Amendment propose that a further inquiry by another committee should be made into all these matters, we legitimately ask at the outset that at all events the first step should be to carry out the recommendations of all the inquiries in the past, unanimously made by all the members of every Commission. Then with regard to the other proposals that my hon. Friend has made to-day, many of them, I think all of them, it may be said, are by no means novel. They too have been the subject of various inquiries and investigations in the past, official inquiries and non-offilcia1 inquiries. In 1927, under the auspices of my right hon. Friend the Member for Carnarvon Boroughs (Mr. Lloyd George), there was set up an unofficial inquiry into the whole organisation of British industry. Its members included several ex-Ministers, and they were assisted by several of the chief political economists in this country and by a number of business men. We sat for many months, made a most painstaking inquiry, and published the resulting a book, "Britain' Industrial Future," which appeared in 1928.
    If my hon. Friends will look into that book, they will find that almost all the proposals they have made to-day are in-chided in one form or another—that industries should be grouped together; that
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    there should be certain powers exercisable under proper conditions by what we called public corporations, which would govern those industries that are natural monopolies or quasi-monopolies; that we should not seek to keep all our industries in separate highly competitive and unregulated units, but should rather encourage the movement for concentration, provided always that certain conditions were fulfilled—conditions which we described; and that the trade associations should be placed upon a statutory basis and should be given certain limited and specified powers. We went further and said that in order to secure the effective adoption of all these measures a new Ministry should be created, a Ministry of Industry, which should absorb some of the existing departments or sections of departments, and make it their main business to see that British industry shall be highly effective and efficient in all its branches. It seems absurd that a great nation like this; dependent for its very life on industry, should have a Ministry of Agriculture, a Board of Trade dealing with commerce and a section dealing with mines, but should have in the Cabinet no Minister of the first rank whose whole business should be to assist our industrialists to make the organiation of their trades as efficient as it can be made.
    During the eight years that have passed since those recommendations were made—they did not have the authority of an official report—hardly any progress has been made in these directions, which have been so forcibly advocated to-day by the hon. Member for Doncaster (Mr. Molson) and the hon. Member for Darlington (Mr. Peat), in their admirable speeches. There has been only one new achievement on these lines: The cotton industry has come to Parliament and has asked for an Act which will give statutory validity to wage agreements voluntarily entered into by employers and employed. That was essential, because the voluntary agreements that had existed were being undercut by competitive forces and were made futile and inoperative, working the grossest injustice between good employers who paid the standard wage and those who did not do so. That has been done. The President of the Board of Trade took up the matter, proposed the Bill, Parliament readily

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    and almost unanimously enacted it, and it is now the law of the land. It may prove to be a model for other industries in days to come. That is practically the only measure of importance which in all these years Parliament has adopted.
    The dangers are real. They have been emphasised by the hon. Member who has just spoken. There is a danger that the great industrial corporations, exercising their functions over very large sections of industry, may become so great as to be unwieldy and may become bureau-cratised, and that instead of having the vital energetic action of individual employers you may have a few able men at the top, but below them a machine so complicated that a great bureaucracy has to be set up to work it. That is the real danger. Any who are charged with the administration of these matters must be on their guard against it. Some of them are aware of this danger and are successfully coping with it. Private initiative is absolutely essential. Anyone who studies industry knows that what matters most is management. You may have whatever plans you choose on paper, but unless you have individual people who are competent, honest, active and successful in what they undertake, your industries will not prosper.
    Although to-day hon. Members have criticised our industrialists, it is right that in this House tributes should be paid to the very strenuous efforts that have been made during these last few years of depression in many industries to make head against the great difficulties which have surrounded industry. It is undoubtedly true that in many of the new industries particularly, and in some departments of the old, men have come forward and have risked their capital and branched out into new lines, have conducted admirable works of scientific research with a view to improvement of their methods, and have greatly bettered their salesmanship, with the result that we have to some extent in those departments been able to make head against the great depression. An interesting point is that most of the men who have so distinguished themselves are the very ones who are most in favour of a large measure of organisation for the whole of the industries in which they are engaged.
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    The other great danger is that to which the hon. Member for Rushcliffe (Mr. Assheton) has drawn attention, the danger that comes from monopoly, the danger of restriction, the danger of an undue rise in prices. None of us wishes to see goods sold, whether agricultural or industrial, below the cost of efficient production. The producer, whether the farmer or the manufacturer, is of course entitled to a fair reward for his labour if his labour is really efficient and if his product is one which the natural conditions in this country make advantageous. But there is a danger that, if you group people all together in an industry they may not be content with these perfectly legitimate and proper profits, but may go beyond them and use their monopolistic powers in order to squeeze the public. Although the hon. Member who seconded the Amendment said that it was not to their interest to do so, and that it would not be found that the evils of monopoly would ensue upon the measures he proposed, experience has not in fact always endorsed that view. In America and other countries it has been found that where a complete monopoly has been created and is protected from outside competition by a high tariff so that competitors cannot bring prices down to a normal level, the public is squeezed, undue profits are made and vast fortunes built up by the use of these monopolistic powers. That is why in the report to which I have referred we suggested that where a monopoly or quasi monopoly was created, it should be the subject of special statutory control, that there should be created a new class of organisations which we called public corporations, and that they should have special State inspection and regulations in order to avoid these dangers.
    My hon. Friend the Member for East Wolverhampton (Mr. Mander), if he has the good fortune to catch Mr. Speaker's eye, will develop further son of these matters, with which he has close personal acquaintance. Let me say this in conclusion. However much our British industry may improve its methods, however much it may develop scientific research, however much it may organise its operations, if the markets of the world are closed against it, it cannot prosper. As the hon. Member for Rushcliffe said, that is of the very essence of the whole situation. But even if the markets of the

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    world were open to us, if the peoples of the world are impoverished and cannot afford to buy the goods of high quality which are the staple products of this country, our industry cannot prosper. The conclusion of the whole matter is this: That the welfare of any one country is dependent upon the welfare of the whole world; that no one country can prosper except in a prosperous world. Employment, production, commerce, peace—these four are inseparably linked together, and a wise statesmanship must simultaneously seek to promote them all.
    5.59 p.m.
    Lord EUSTACE PERCY: I wish to address the House for a few minutes, because I think I take a view on this Amendment which is rather different from any view hitherto expressed. I would begin by adding my tribute to my hon. Friend the Member for Rushcliffe (Mr. Assheton) on his maiden speech. I have never heard a maiden speech which so clearly and incisively expressed a definite point of view. I congratulate my hon. Friend warmly on having shown that he is one of those people whom this House perhaps too much lacks, a born, debater. But I think he was, very largely, debating an issue which was not raised—certainly not1 by the speech of my hon. Friend the Member for Doncaster (Mr. Molson). One could warmly agree with everything that my hon. Friend the Member for Rushcliffe said, but as warmly agree with everything that my hon. Friend the Member for Doncaster said. I am not sure, however, that I agree entirely with either of them. I want the House to consider this question: What is the real political issue which we are discussing? I agree that industry and commerce are not matters with which politicians can deal efficiently. We in this House therefore ought to concern ourselves chiefly with the broad political issue which is raised and there is a broad political issue at the present moment, on which many future Elections will, I fancy, be fought. It is this. We have a state of unemployment. We are caught in that vicious circle of under-consumption and unemployment, in which the whole world has been struggling since the War.
    There are two broad proposals for remedying that state of under-consumption. One is a proposal, increasingly
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    represented by hon. Members opposite and by their friends of the Labour party outside. It is the expedient advocacy of which they share with other so-called reformers like Major Douglas, of distributing token purchasing power to the consumer in order that consumption may thus be increased. That is not a proposal which I intend to argue this afternoon. The only alternative to that subsidisation of the consumer by the manufacture of currency is to revive consumption in the only way in which it has ever been revived in the last century, namely, by the reduction of the costs of production and reduction of prices, a deliberate paring of prices so as to reach a deeper level of demand. Having reached that deeper level of demand you get an increased demand which enables increased production, increased employment and increased wages to follow and thus you get out of your vicious circle into what I may call a virtuous circle. That is the political issue with which, not in this Debate only but in all our policy, we have increasingly to deal.
    If, as the vast majority of hon. Members do, we agree that that is the way in which the vicious circle must be broken, it may be asked, why has it not been broken by the free operation of industry in the last few years? I know that there is one possible answer to that question— an answer which was indicated though not emphasised by the hon. Member for Rushcliffe— namely, that that failure to break the vicious circle has been due to the state of international trade and to restrictions placed upon international trade, and that the vicious circle can only be broken by an increase in our export trade. I believe that to be untrue. I believe that restrictions on international trade are only a symptom of the disease, and that the foreign market is in the same position as the home market. The texture of demand has changed. The character of consumption has changed, and it has changed, broadly speaking, in this way. Hitherto the industry of the civilised world has been dealing with an expanding market. It has never done much more than scratch the surface of a continually expanding market. In the old days there were always numbers of new little niggers to whom Mr. Stiggins could send moral pocket handkerchiefs. That situation has changed owing to a number of

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    factors, such as the industrialization of other countries and the holding down of the growth of population until there has been reached throughout large areas in the world a state in which population figures are practically stationary.
    Owing to these factors, and owing also, I think, to the taking of the first bloom off great markets like that of Africa, we are now faced, as we have never been faced before, with the problem of the intensive cultivation of a market instead of ploughing virgin land. It is necessary to reach a deeper level of demand. It is necessary to study the market as it has never been studied before. For that purpose, the existing organization, or the ninetenth century organization of industry, is in some ways ill-adapted. After all, one is only repeating what every sales manager knows, and what various committees and commissions have reported, in saying that our sales organization in industry has been too largely concentrated on extension into new markets, and has never been so organized as to study the market intensively. Even if it had been so organized, your sales organization, after studying the foreign markets, would not have been able— it has never been able—to influence your production factories at home to the extent necessary to change the character of production so as to meet a new, deeper and wider level of demand.
    If that statement of the problem be more or less accurate, what, then, is the duty of the Government in regard to it? My hon. Friend the Member for Darlington (Mr. Peat) in a speech which was, despite what he said, mainly devoted to the problem of certain old industries, made one statement with which I warmly agree, namely, that any reorganization of industry should take the form of unified selling organization and independent, individual producing units, rather than of any aggregation of producing units. That, I believe to be profoundly true. I believe that the common superstition which is going about the world to-day, that there is a tendency to more and more intense aggregation of producing units is a fallacy. I believe that there are many influences tending, if anything, towards a greater individualization of producing units, and the one thing, to my mind, which is holding up that individualization of producing units is the lack of any joint selling organisation,
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    and the fact that the small producing unit is unable to carry out that study of the market which is essential in order to expand producing power to-day. If there be anything in that view, is it not possible that the way to get what I believe the vast majority of my party wish to get, namely, a far greater freedom and volume of individual private enterprise in production, may be by the better organization of marketing?
    Now I come to my main criticism of the speech of my hon. Friend the Member for Doncaster. I think he had the idea of compulsion far too constantly before his eyes. Compulsion is a very necessary element where you have an industry which, for any reason, has reached its full possible development. Clearly when the railways in this country or any other country were fully developed, it became essential to stabilize that monopoly under statutory powers. The worst thing you can have in railway development in any country is continual competition by new tin pot railways. Everybody agrees with that view. It is a question whether the other industry mentioned may have, on its heavy side or at any rate on its structural side, reached that position, but when my hon. Friend says that the same thing applies to the canning industry, I ask him to look at the way in which the canning industry has been over done. Surely there is, in that case, no necessary element of compulsion at all. What the canning industry had not was a scientific marketing organisation which would have told any intending entrant into that class of production that there was no extra market available except by a certain reduction of price. The very existence of a voluntary marketing organization means that there is an organization which acts in a selective capacity and by its mere information chokes off ill-advised competition in that market.
    If, as I believe, the function of Government is not to try to lead industry in a way in which industry does not want to go just because the Government have formed a certain idea of the public interest; if as I believe the duty of a Government is to help commerce and industry along the main lines of their obvious trend, then ought not our main demand on the Government to be that they should remember the course on which this country embarked 20 years

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    ago, and ask themselves whether that course has not been broken off much too soon? Rather more than 20 years ago, the Government of this country deliberately set itself to establish on a voluntary basis research associations for industry, by co-operation with the industries— a co-operation encouraged by subsidy. My right hon. Friend the President of the Board of Trade had a good deal to do with that policy in its early stages, and that policy has been, at least up to a point, remarkably successful. In connection with the cotton industry we have in the Shirley Institute the finest cotton research organization that exists in any country in the world. It is however unaccompanied by any organization which would link up that research with the study of markets. It is true that the Shirley Institute has undertaken, on at least one occasion some study of a market situation. But surely what the cotton industry needs most at the present moment is a scientific marketing organization, corresponding to the research organization which it has built up, and closely linked with it.
    Does that general line of policy, the encouragement by the Government of the establishment of voluntary marketing organizations in industry, conflict with the proposal that certain industries which are in a state of peculiar difficulty, like the cotton industry, should also be given certain compulsory powers of reorganization? I do not think there is any conflict between the two, but I do increasingly regard that form of compulsory reorganization as an exceptional measure to deal with an exceptional situation. My complaint there against the Government—and it is not only against this Government, but against previous Governments—is that, after all, we have been faced, as my hon. Friend the Member for Doncaster said, by this problem of unemployment, distress, dislocation, and confusion in Lancashire for more than 10 years. We have had discussion after discussion and negotiation after negotiation, and we none of us, except one or two on the inside, quite know what has happened in the back rooms of the Board of Trade, what industry has asked for, or what the Board of Trade has refused to agree to. That is why I am so anxious to have some statutory form of regular procedure by which the proposals
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    of industry in such a case can be openly stated and fully worked out by a regular, recognized machine.
    But, if my hon. Friends will allow me to say so, that exercise of compulsion in the reorganization of certain industries seems to me to be the least important part of the case that we should urge upon the Government, because, after all, the increase in consumption which you wish to bring about in order to break your vicious circle is an increase in the consumption of consumable goods, and, with the exception of the cotton industry, it is true that these schemes of reorganization are mainly proposed for the reorganization of industries producing capital goods. That is really to begin at the least important end. If you are to break the vicious circle, it is the consumable goods, in all their varieties, which you need to cheapen and in regard to which you need to dig down to a deeper level of demand. For this purpose, you have to establish marketing organizations which can enlist the voluntary co-operation of an enormous number of small and medium-sized producers. It is not, I think, a problem which can ever be dealt with by rough and ready legislation, but it can be dealt with by administration. It is, after all, administrative action by the Government which we are pressing on the Government on this occasion. We ask from the Government a statement of policy not about an enabling Bill for the application of compulsion to industry, but a statement of policy on the broad lines of the question put by my hon. Friend the Member for Doncaster, a statement which covers a wide field and a whole range of topics on which we do ask the Government to give us an idea of the broad, long-term policy which it has in mind.
    6.20 p.m.
    Sir STAFFORD CRIPPS: The Noble Lord the Member for Hastings (Lord E. Percy) started to deal with this problem, as he said, as one which raises a broad political issue, and he stated that it was the policy of those on these benches to distribute token purchasing power, whereas, if I may say so with respect, that is the first time I have heard that such was the policy of the people on these benches. We have no policy that is similar to that of Major Douglas or any of these social credit or various other monetary schemes.

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    We believe, however, in the necessity for planning production for the use of the consumable commodities in regard to which the Noble Lord was saying the trouble is that they cannot at the present time distribute them.
    Lord E. PERCY: I was basing my statement of Socialist policy on as intelligent a study as I could give to Mr. G. D. H. Cole's last book on the "Principles of Planning".
    Sir S. CRIPPS: I am afraid I have not read his last book. I have only read the last but one, but that, of course, does not happen to be the policy of the Labour party, although I have no doubt the right hon. Gentleman has interpreted the book rightly. The right hon. Gentleman says that one has to proceed somehow or other by bringing about a reduction of costs, and so a reduction of prices, in order to get down to a new bottom of distribution. I think his own expression was "a deeper level of demand." Surely that is precisely what was tried from 1870 to the end of the last century— the reduction of wages to low levels in order to cheapen production and thereby to lead to the good spiral of increase of distribution and production, and it is nothing more, although it is approaching it from a slightly different angle, than a general inflationary scheme, by which you get the same readjustment of proportions, the one by going upwards and the other by going downwards. We certainly do not believe that any such attempt can conceivably solve the inherent contradiction which lies in the present scheme.
    The right hon. Gentleman said one thing with which I entirely agree, and that is that always prior to the War capitalism had found itself in an expanding market. The capacity for production was unable to keep pace with the expansion of the markets all over the world. We were, in association with one or two other countries perhaps, still substantially the workshop of the world, and, mass production having hardly come on the scene at that date, the expansion of productive capacity was less than the expansion of markets. But since then we have entered a new state of affairs, wherein capitalism finds itself no longer with those expanding markets, but with the potential productive capacity in fact greater than the market capacity, and
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    that is the changing circumstance to which the right hon. Gentleman quite accurately referred as having made this dislocation in the system so obvious and so noticeable and so tragic in the world in the post-war era. He says that in his view some voluntary solution, some voluntary action by industry along the lines along which it is naturally proceeding, should be encouraged by the Government.
    I think his argument as regards voluntary procedure by capitalist industry was sufficiently dealt with by the hon. Member for Darlington (Mr. Peat), who has perhaps as wide an experience as anybody in this House of what one might call gentlemen's agreements. When anybody comes into my chambers and starts the conference by saying, "This has to do with a gentlemen's agreement," I always know that he is either asking me how it can be broken or whether it has been broken, because that seems to be the chief incident of what is known as a, gentlemen's agreement. A legal agreement, of course, is a different thing altogether, the difference being that you have to keep a legal agreement, and the law can get at you if you do not, but a gentlemen's agreement is something which you are only honourably bound to keep, and the law cannot get at you if you break it.
    The hon. Member for Darlington made it quite clear that you cannot attempt to reorganize industry upon the basis of such voluntary agreements, because, for the different reasons which he gave us, it has been found so often in the past that through their lack of permanence and what he talked of as a lot of backsliding and the very long time which they take to complete, it makes that type of arrangement or agreement impossible to operate. If anybody wanted to know how difficult it is to organize capitalist industry, not merely by voluntary agreement, but by actual legal agreement, he need only ask the Minister of Mines, as to his experience with regard to the arrangements as to minimum prices which have been made legal among the coalowners, to find out how many of them have ever kept to the arrangements which have been made.
    If voluntary agreement is of no use, the question arises as to whether a compulsory agreement within capitalism it-

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    Self, within our existing economic system, is one that can bring any alleviation or improvement in the present difficulties of the situation. I think it is apparent from the discussion to-day that laissez faire Liberalism has gone into the limbo of the long-forgotten past. Nobody to-day even suggests—not even, I think, the right hon. Member for Darwen (Sir H. Samuel), with his corporations and his building-up of control of every kind —that there is any possible advantage to be gained from uncontrolled individualism. Therefore, the question arises as to what form of control is to be imposed. Is it to be a voluntary control within capitalism; is it to be a compulsory control, as the hon. Mover and seconder of the Amendment suggested; or is it necessary to get rid of the whole basis of the economic system in order to make planning effective, as has been demonstrated by the hon. Member for the Rusheliffe Division (Mr. Assheton), in his very able speech, if I may say so, and in the passage which he cited from, I think, Professor Robbins's book? If there could be a, solution within our existing system by voluntary or compulsory control, it would be far better, and there would be far less disturbance and difficulty entailed, but if we look around the world, the first thing that we must notice is that nearly every conceivable kind of control has been tried in one place or another, as, for example, the experiment of President Roosevelt in America, which has shown itself to be entirely incapable of coping with the situation.
    May I first examine for a moment the sort of lines upon which the proposals which are made by the Mover and Seconder of the Amendment proceed? You are to give industry within its own ambit complete powers of controlling all the units within that industry, all the prices and, presumably, the quantity of production. You are going, in fact, to create a paradise for the monopolist and the cartelist, the thing of which they are always dreaming, when nobody in the world will be allowed to stand out against them, and they will be given the absolute, final autocratic control of the whole of industry. There would be no competition by which the consumer could hope to get price reductions, and no competition by which the worker could hope to get
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    better terms. They would be the absolute masters of the Fascist corporation which would thereby be created. That, of course, is what has been done in the Fascist countries of the world. The hon. Members said that the evil at the base of the trouble to-day is a lack of efficiency. If only we could rationalize and make our industries more efficient! What do they mean by "more efficient"? More efficiency reduces costs. It is the same thing as the right hon. Gentleman said, only he wants to do it voluntarily, and they want to do it compulsorily. How are you going to reduce costs? By eliminating some part of the labour costs That is the only way in which to do it— either turn people out altogether, or else reduce their wages. The right hon. Gentleman shakes his head. How else can you reduce costs?
    Lord E. PERCY: By increasing your sales, and thereby decreasing your unit costs.
    Sir S. CRIPPS: And thereby reducing the labour cost per article produced. I do not know how else you can do it.
    Mr. HOWARD: You also increase consumption thereby.
    Sir S. CRIPPS: I am not dealing with that. I am dealing with the method of reducing costs. The only way in which to reduce the cost of an article is by taking some of the labour out of it. [Horn MEMBERS: "No!"] The right hon. Gentleman has just confirmed me. The capital cost is all reduced to labour cost in the last resort. If you put in a new machine you may call it capital cost, but the cost of the machine depends on the labour that is put into it. In the last resort, if you are going to produce an article at a cheaper cost per unit, it means there is less man-power in it. That must be the ultimate result. The right hon. Gentleman agrees with that, of course.
    Lord E. PERCY: But what follows from that?
    Sir S. CRIPPS: I can only deal with one point at a time. I propose to follow the argument through. The attempt is, in the first stage in the right hon. Gentleman's cycle to eliminate some part of the cost of production per unit, for he says, you cannot increase consumption

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    until you have lowered the cost of production. First, there is to be a lower cost of production as it stands to-day. That has to be done by lowering either wages or the number of men employed. [HON. MEMBERS: "No!] Until a man increases his production, he cannot start from the present moment decreasing his costs unless he can reduce some of his costs on the present level of production.
    Lord E. PERCY: That is not the way in which it works out. He gets an order for three times the number of motor cars that he got last year. He starts on that basis.
    Sir S. CRIPPS: The right hon. Gentleman does not get the order until he has reduced prices.
    Lord E. PERCY: Your marketing organization exists for the purpose of sales. I can give you an order for so much and you will be able to sell so much if you can sell it at a certain price, and on that basis you produce it.
    Sir S. CRIPPS: Sir Herbert Austin might tell his agents that if they get orders for three times as many cars he will drop his price by £5 per car. The right hon. Gentleman does not suggest that he is such a fool as to avoid doing such an obvious thing if it is going to recreate British industry. We have the great iron and steel people who have their large selling organization; even the cotton industry has got some intelligence; there is the Imperial Chemical Industries, that great combine of the heavy and light chemical trades; and then there is the Doncaster Collieries' Association, a vast combination of coal mines. Surely all these people are not standing by when, simply by telling someone that they would take a lower price if they sold more, they could expand their production and set going this cycle which would lead us back to prosperity.
    If that is the proposition, it is disproved by current events without any necessity for disproving it any further; but it includes what the right hon. Gentleman entirely neglects to observe, that is, the fact that you are trying to balance the consumption on the one side with the production on the other, of these great common commodities, these necessaries of life, and you are inserting in between the factor of interest, of profit,
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    or whatever it may be. The right hon. Gentleman laughs. If he will look at it in terms of consumption, it has somehow or other to have a corresponding production by the State or the community of a similar amount in order to balance the totality of consumption and production in the community, with the result which is seen everywhere, that that does not call for the production of necessaries. It calls for the production of capital goods and luxuries. To-day, however much we desire to do it, we cannot prevent the building of flats in Park Lane while we are not able to build small houses for working people. That is inherent in the system because we insist on this method of distribution and production, on taking out at a certain stage a sum of money which has to have its equivalent in goods which are going to a particular limited number of people—whoever they may be does not matter.
    To attempt by rationalizing or by creating greater efficiency to get over that factor in distribution is perfectly hopeless. If you neglect that factor you can go on organizing industry until you are blue in the face, and you will still always have to organize it on the present basis, that is, the basis of a scarcity market to which the right hon. Gentleman so accurately and justly drew our attention. So far as the great common necessaries of life are concerned, a scarcity market must always produce a very low standard for the workers in industry. That has been the uniform experience of all capitalist industry, and it is no good saying that by using exactly the same economic system, but making it more efficient, you will be able to cure that inherent defect. The right hon. Gentleman has not pointed out a single thing in the suggestion that he has made that will cure that defect. He has not pointed out how the system with which he is now dealing— this voluntary marketing by voluntary association— is going to make the capitalist system capable of producing and distributing abundance as against scarcity. He has not told us how his price system will operate in a market that is always glutted, that is, in which there is always abundance. He knows perfectly well that inherently his system cannot work unless there is always enough scarcity to maintain price.
    Lord E. PERCY: Nonsense!
    Sir S. CRIPPS: Then is the right hon. Gentleman prepared to abandon all scarcity devices within Capitalism— tariffs, quotas, restrictions of every kind, including price restrictions? Is he prepared to let prices fall to the natural level by keeping every man in the country employed on the production of necessaries?
    Lord E. PERCY: What has that to do with the hon. and learned Member's proposition?
    Sir S. CRIPPS: It has a great deal to do with it. The right hon. Gentleman is suggesting that by a voluntary marketing scheme— voluntary as regards exports and the internal market— you will, by reducing costs and prices, get a total distribution in accordance with the productive capacity of the community. That is what we are all aiming at, of course. What I am suggesting is that unless under the right hon. Gentleman's system the price level can be maintained somehow— a low or a high price level, but a level— then the level of wages must fall to allow the profit factor and private enterprise to continue with its operations. Unless that price level can be maintained, obviously production must cease. That is the law which always operates with private enterprise under Capitalism which the right hon. Gentleman does not dispute.
    Lord E. PERCY: I dispute absolutely that it applies any more to Capitalism than to Socialism. Production and consumption must balance under any conceivable system.
    Sir S. CRIPPS: The right hon. Gentleman is accurate, but the whole question is, are you going to balance it for the whole community or are you going to try to balance it for each unit of production? The right hon. Gentleman says that he would balance it through each unit of production— each little factory, shop and unit. In order to do that he has to maintain his price as regards each little unit. The unit will go out of production unless it can maintain its price high enough to reward the little producer for his little production.
    Lord E. PERCY: On the contrary, it is under a system of State control and Socialism that prices are based on the marginal cost of production of the less
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    efficient producer. The whole advantage of Capitalism and private enterprise is that you are not bound down to that terrible restriction.
    Sir S. CRIPPS: I think that when the right hon. Gentleman reads that remark in the OFFICIAL REPORT he will see how perfectly ridiculous it is. He says that under a State of Socialism you are bound down to price by the less efficient producers. There are not any individual producers—
    Lord E. PERCY: Well, the least efficient producing unit.
    Sir S. CRIPPS: At one time the right hon. Gentleman was in charge of a very fine Socialist service, that of education. Did he find that the charge for elementary education was regulated by the cost of teachers in the least efficient elementary school?
    Lord E. PERCY: I could hardly have asked for a better instance. If the hon. and learned Gentleman will look into the question of the cost of education, he will find that what limits the expansion of education in relation to this cost is just precisely that thing.
    Sir S. CRIPPS: The question is whether the price of education is limited by the cost in the most inefficient unit. The answer is that neither the right hon. Gentleman nor I would have been so extremely foolish as to attempt 100 per cent. Production and distribution of education through a capitalist system, because we know it could not have happened. If we tried to relate the price of education to its cost, we know that we could never have distributed it. That is precisely what the right hon. Gentleman wants to do with regard to the other necessaries which are produced in this country. It is for precisely the same reason that that system is not operating to-day. I am sorry to have carried on this back-chat with the right hon. Gentleman, but it was so interesting that I had to go on with it.
    Lord E. PERCY: I apologise.
    Sir S. CRIPPS: Let me in a few words summarise our objections to the system proposed by the hon. Member and his Seconder. First of all we say that if you did start a system of compulsory organization you would be laying the consumer and the worker open to the maximum of

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    exploitation by the worst form of monopoly. Secondly, we say that it is taking an entirely wrong view of the problem to imagine that it depends upon the creation of efficiency in what is at present inefficient industry from the technical point of view. That, in fact, is not the problem at all to-day. The problem is that of somehow or another avoiding those wastes which occur through luxury production or by the production of goods that you do not require or which you export and for which you never get paid by somehow or another balancing the consuming against the producing power. However much you monopolise or reorganize you cannot to-day do that through single units or single industries, you must, in fact, do it for the nation as a whole, exactly as the hon. Member who seconded realized that you cannot deal with foreign trade to-day except through a foreign trade monopoly. He realized that and that is part of his idea.
    Finally, we say that you can only bring about that planning which is essential for the proper balancing of the consuming power and the producing power in the nation as a whole if you have control of the productive units. To have control of marketing alone is obviously not sufficient, because you cannot then direct your productive energy into the channels where you must have it in order to create a balance of production and consumption. That is why none of these schemes of planning under capitalism can do anything except to force capitalism into a straight waistcoat in which the very principles of capitalism cannot properly operate. Once you put it in the straight waistcoat you have to keep it there, and use more and more force in order to maintain it there, and that is exactly what has been the process of the development of the industrial and economic side of Fascism in various countries in Europe.
    6.48 p.m.
    The PRESIDENT of the BOARD of TRADE (Mr. Runciman): This has been one of the most interesting debates on industrial subjects which we have had in the House for some time past, and I think we are indebted to those who have addressed the House for the contributions which they have made. I listened with great interest to the opening speech of my hon. Friend the Member for Don-
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    caster (Mr. Molson), and I would like to commend him for the care and caution with which he approached these very difficult subjects. I would like to add a word of commendation to the hon. Member for Rushcliffe (Mr. Assheton), who enlightened our proceedings with twenty minutes of sparkling speech, and I trust that in the future and on other subjects he will always prove as entertaining and informative to the House. I do not propose to discuss the high economics which exercise the minds of the hon. and learned Member for East Bristol (Sir S. Cripps) and my right hon. Friend the Member for Hastings (Lord E. Percy). I would like to imagine myself as coming down to the House this afternoon as a visitor and sitting in the gallery upstairs or under the gallery downstairs full of anxiety to know what contribution the House had to make to the prosperity of the industry on which I depended. If I were a commercial traveler on a large scale, home from China, I should want to know what the House had to say that was going to make it easier for me to sell my goods in China, and how I could get hold of markets which appear to have been closed and which may be closed more effectually in the future than they are now. Or I might be interested in South America, and should listen with great care to hear whether on any side of the House there is any solution coming to the problem which I have to solve of getting orders for my own concern here and, in effect, bringing home work for our people.
    I must say I should have listened, although greatly interested, with a certain degree of disappointment. My hon. Friend the Member for Doncaster was naturally full of the necessity of reducing the costs of production. There are practically four elements in the costs of production which can be tackled, and I should like to know which he would take first. First and foremost, there are wages. I see that my hon. Friend has now taken his seat. I was just drawing attention to the way in which my hon. Friend approached these problems. He wished to bring about a reduction in the costs of production. I was pointing out how the costs are made up al; the present time, in the main by wages. Does my hon. Friend want to bring about a reduction of wages? He certainly does not. Does he want to add to the amount of

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    machinery in industry—I mean the kind of machines which; takes the place of men? I have no doubt he is able to defend on strictly sound lines the introduction of machinery and the displacement of labour for the time being, but, if there is to be that displacement, you have a social problem to be dealt with in other ways.
    Mr. MOLSON: I fully recognize that, if that concentration which I advocated upon the best pits takes place in the coal mining industry, the first result would be to increase the number of those totally unemployed, but to reduce the number of those who at the present time are under-employed in a large number of pits.
    Mr. RUNCIMAN: If that can be achieved my hon. Friend has taken a great step in advance, for we have all been through the very painful process of having to get rid of the least competent labour and to replace it with ingenious machines. We must not shirk that point if we are to look ahead either in the manner of planners or of the Socialists or of those who are neither. That is one of the subjects which must be taken in hand. Then there is the next element, the saving which comes by the centralization of control, the reduction of overhead charges. By all means there is much to be done, providing there are not countervailing disadvantages. Then there is, finally, the contribution to be made by cheap capital. I think we can dismiss the latter at once. There never has been a time when capital was so cheap, and any capital that is required for wholesome and promising industries can be obtained in the market with comparative freedom. Only in the last few weeks we have seen very large amounts provided by the investing public for industries which they thought had some chance of success, and I have no doubt that the contribution of cheap capital is one of the elements which is likely to bring about a considerable change in the whole trade of this country, the costs of our production and I think, ultimately, in the selling of our goods.
    Let it be noted that throughout the whole of our discussions we have been proceeding on the assumption that by better organization we are going to increase the profits of our industry. May
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    I say that if we wish our industries to expand, if we want our sales to be on a large scale, we shall have to sell on a lower scale of prices It will be the price level which will have its effect on the total volume of trade and only the price level. There is no doubt that we could regain a considerable amount of what we have lost in China if we were able to bring our costs down, so that our remunerative prices in China were below those or were equivalent to those obtained by the Japanese. Therefore, I come back to my practical suggestion. Let us test things in terms of China. So far I can only say that I have seen and heard nothing this afternoon which will help us in solving the China problem. There is one thing which is clear, that every time you have a lowering of the scale of prices you increase to an almost immeasurable degree the number of your customers, and that is exactly what we want. There are not enough people consuming the things we produce in this country. Let us take a lesson out of the book of those who produce tobacco. They taught the Chinese to smoke, and one of the most prosperous departments of their industry—far more prosperous than pepper—is to be found in China. If the Chinese standard of living were raised, if they got a liking for more clothes and a greater liking for sugar, there is no doubt we should add greatly to the demand for commodities which we can produce and from which we get profit. We can only do that provided we can get the range of prices down to an attractive level.
    That is one of the things which, I have no doubt, is in the minds of those who, like my hon. Friends, are looking ahead and wish to plan industry on what they believe to be profitable lines. They are hoping that by concentration they will be able to reduce the costs of output. I am heartily in agreement with them there, but may I point out that if we are to proceed with the solution of this problem we cannot do it by any one cut-and-dried method. That is where some of my hon. Friends, if they will allow me to say so, are too didactic. I do not believe you can by one and the same effort provide for the reorganization of shipbuilding, the chemical industry, iron and steel and cotton. The conditions in all those industries are so varied that you cannot possibly apply one and the same system

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    to all of them. In order that we may know exactly where we stand and what necessity there is, or may be in the opinion of some, for a reorganization of industry imposed from above, may I point out what has already been done in the way of modern reorganization? Long before the present method of dealing with these industries was ever contemplated a great deal of voluntary amalgamation had gone on. It is the same idea; it is done with the idea of reducing costs, bringing concerns under one control and with one selling agency, as recommended by the right hon. Member for Hastings. There are all the advantages which come from massed control.
    Those attempts at amalgamation have in some cases been failures and in others a success. Let me mention one of the failures which must be fresh in the minds of the House. What happened to the Royal Mail Steamship Company? There was gathered together into one organization a vast congeries of trading concerns — shipbuilding and shipowning concerns. They were all under the control, ultimately, of one man. That one man made profound blunders. His judgment was wrong and to his mistakes can be traced the whole of the upheaval which led ultimately to the break-up of the Royal Mail group. That was an attempt at voluntary concentration, but along the wrong lines; and it overlooked one fact, that there are some industries which do lend themselves to this massed control but others which are better left under the control of a large number of people. If you like to put it in another way and apply it to ships, it is far better to have many shipowners each with a small fleet than to have one shipowner with a gigantic fleet. There are some lines which I might mention to the House if it would not be impertinent on my part to do so which, because they are small, are able to run their concerns better. Their passenger ships are more attractive, they can take action very quickly, and they keep their ships in better order. They come right up to the standards asked for by the right hon. Member for Swindon (Dr. Addison). There are other big concerns where that close personal touch is impossible. There are some lines which because they are small in number are able to run their industry better. There are rather big
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    concerns where close personal touch is almost impossible from the nature of the problem. I do not say you can apply the same rule to all industries. In the case of shipping it might be that the mere factor of size embarrasses it.
    I would like the House to follow me as I give a list of industries where voluntary organization has been a success. First of 'all, I take the case of the production of motor cars. We have two or three concerns in this country which are as good, as efficient and as remarkable as anything in the world and which owe their success entirely to the range of the organization of a comparatively small number of concerns. They have grouped together under their control a number of industries which are closely related. That has been done quite voluntarily and because they could make it pay. That was the very simple incentive, which induced them to do it. They may not have known very much about economics but they knew how to reduce costs or to correlate various branches of the industry to enable them to produce at a profit. The motor industry of this country has therefore been to some extent reorganized on a voluntary basis. The electrical engineering industry which is now, I think, more prosperous in this country than in any country in the world has succeeded in bringing in a steady flow of orders from those very customers whom we wish to cultivate in other parts of the world and who have offices and place orders here in England. The electrical engineering industry has been transformed by voluntary reorganization. It is the same idea; it is necessary, in order that you may not waste too much of your money in overhead charges or in selling organization that the industry shall be more or less unified. I might mention rapidly, in passing, the chemical industry, which now covers under the new organization a great many industries which are not directly chemical producers but which are rather akin to that organization. The production of cement has been organized on a voluntary basis with the same object in view. The production of soap and of margarine has come under the same reorganizing transformation.
    The right hon. Gentleman the Member for Darwen (Sir H. Samuel) as well as other hon. Members have asked why the Government have not done more. I

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    wonder if my right hon. Friend realizes how much the Government have already done? Let me point out in the first place that so far as shipping is concerned our consent to the granting of a subsidy for tramp shipping was absolutely conditional upon the reorganization of that industry, and they have succeeded very well. I can tell the House to-day that they have taken, I will not say command, but a repeat deal of control of one or two markets upon which British tramp shipping depends for employment at a profit. One of the conditions 'which we laid down, apart from the labour conditions which are inherent in the scheme, was that there should not be dissipation of the financial assistance that we gave because of internal competition If there were to be any benefit from the subsidy, it must go to the tramp shipping industry itself. How did they set about it? They set to work on a voluntary basis, I may say, before the Bill had gone through the House. They succeeded in formulating a minimum freight scheme for the homeward trade from the River Plate, and up to date, I am informed, no less than 156 vessels have been chartered under the scheme. Of these almost one-half were foreign vessels, but that is all to the good, because we have by our scheme and by the pressure we brought to bear upon our own industry actually succeeded in sweeping in foreign shipping industries as well, and they are not now undercutting us as they were this time last year in the River Plate. They have extended their operations now to the St. Lawrence grain trade. Their scheme covers the Australian grain trade which has been approved by the British owners in that trade both for tramps and liners under the form of contract which was adopted by the administrative committee only a few days ago. Therefore, the steps which we have taken and successfully achieved are exactly on the lines which have been suggested by hon. Members this afternoon. The tight hon. Gentleman the Member for Darwen will be glad to hear that some good thing has come out of the subsidy.
    Let me turn to cotton. Cotton is by no means a simple product. There is probably no industry in the world which is so highly specialised in almost every
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    branch We have been ready from the first to take advantage of any movement showing itself in Lancashire, and we were prepared to give every assistance. One of the first things which had to be done was to study the things which are advocated in Lancashire itself. I do not envy the man who without a close study of these things attempts to dictate to Manchester as to the way in which they should run their trade. Fortunately in that industry there are a good many live men and men of great ability, as well as men of not so great ability; there are some bold men who are prepared to take bold steps in order to do what is necessary for the better organization and the salvation of Lancashire. What have they done so far? They have had matters under discussion, and the pace at which they have discussed them is not my responsibility. They may have taken a long time to formulate their views, and they have taken a long time to discuss some aspects of their many difficult problems.
    What has happened in the spinning section They have come to the conclusion that the right thing to start on there is to get rid of redundant spindles many of which are idle and are becoming dustier and dustier and stand in mills which are silent. It is possible that whenever there appears to be a turn in the market a lot of those idle spindles may be brought into use again, and by increasing production again reduce prices to a less remunerative level. But those who are in the industry made up their minds that they must deal with the position somehow or other. They were fortunate enough to get Lord Colwyn to undertake the chairmanship of their committee. I can tell the House what progress they have made. They have succeeded in getting the necessary majority, and it must necessarily be a large majority if compulsory powers are to be given for reorganization, in favour of redundant spindles being wiped out. They have done that under a scheme which we have discussed with them from time to time, and ultimately they have reached the happy conclusion to wipe out anything up to 10,000,000 spindles, a very large proportion of which are already idle and a certain proportion are in use or occasionally in use. The displacement of labour by the wiping out and the scrapping of those 10,000,000 spindles is, I am assured, not a very serious problem.

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    Where it arises I think it is incumbent, upon the industry to make their contribution towards work for these men. They hope to wipe out 10,000,000 spindles at a compensation cost of £2,500,000 and with the sale of the scrap to bring in 2500,000, so that £2,000,000 has to be found.
    The industry is going to find that sum itself. That will involve them for 15 years in a charge of some £180,000 per annum. There is just a possibility that the surviving spindles will not be enough to provide £180,000 per annum and may fall short of that. The Government have gone so far as to say, in order to give that scheme a chance, that they will undertake a guarantee of part of that sum, whatever it may come to, which the industry itself is unable to produce. That is an experiment which we shall
    watch with very great care. I should like to make it clear that by describing what has been done I am not committing the Government to repeating the same process again. We must see how it works out. It goes without saying that what has been done in the case of the spindles of Lancashire might be quite unsuitable for some other forms of re-dundancy elimination.
    Let me turn to iron and steel. Here we have a very different problem. The hon. Member for Darlington (Mr. Peat), who speaks with great knowledge of the subject, would I am sure confirm what I am saying, namely, that the iron and steel industry has had to be pushed into reorganization. There have been some very serious obstacles standing in the way. For a long time it was impossible to secure unification of the interests, for instance, of the North East coast, and it has been very difficult to get them to agree to draw together all the organizations and bring them under the control of one administration. I am glad to say that great progress has been made there. Indeed, we have been able to promise that we shall recommend to the House of Commons a grant of a considerable degree of protection provided that they will, in the first place, do nothing to injure the interests of the consumers. That is an integral part of the undertaking which we have given. In the second place, they are to endeavour to come to some agreement with the Continental cartel instead of providing as we do at the moment a very curious situation on the Continent
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    where it is impossible for all those producers in the North to come to an agreement. Finally, they are to draw themselves together into one organisation of which an independent chairman has been appointed as head. We hope that we shall by the means that have been taken already bring the iron and steel trade out of a state of comparative disorganisation into a position where the industry will act together. They will no doubt arrange their prices in conformity with the views of the majority-I am not sure whether we cannot go further and say the whole-of those who are organising the federation. I would like to point out that, if that is to be done, and if they are to continue to receive our support, they will have to comply with the conditions that have been laid down. That is not on all fours with the scheme which has been proposed by hon. Members, because it does not follow exactly the lines of an enabling Bill, but the House will see that by one means or another we have been able to impose these conditions upon an industry which has not been too willing to set up a central organisation.
    In order that the list may be complete, I would point out what has been done with our main electricity supply, the grid, and what has been done also with regard to railways and road transport. Let it be clearly understood that some of the principles which have been advocated here to-day found their way into the London Passenger Transport Board. Many problems have been solved to some extent by the measure of control which is now exercised. Finally, there is the group of industries which are covered by agricultural marketing. Having mentioned these and having shown that a great deal has already been done, I would emphasise the point that you cannot apply the same principles to all industries.
    I must now deal with some of the other criticisms which have been offered in the course of the Debate, and I will do so as rapidly as possible. First, I will deal with the question of mining royalties. The right hon. Gentleman the Member for Darwen takes a paternal interest in this subject. I am sure that he will be glad to hear that we are actively examining the whole question at present, and that we hope that the difficulties which

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    we are meeting will be overcome and that we shall be able to carry into effect a recommendation which is not exactly the same as his, but which has come to one Government after another and that will lead to unification of royalties. I say nothing more about voluntary organisation in the iron and steel industry which, as I said, has gone a very long way.
    I would like, in conclusion, to draw attention to some of the difficulties which we have to meet directly we sit round a table with the people who are interested in these trades, and which will have to be met no matter to which party we belong or how our Governments may be constituted in the future. The first question to which we must find an answer is What is the consumers' position as a result of the compulsory ring which undoubtedly is being formed in many industries, and which is part of the reorganisation proposals? Reasonable safeguards are to be used against exploitation, but we must find an answer to the question: What is a reasonable safeguard? Some people might say that no ring at all is the only safeguard, but I am afraid that we have passed that stage, and that in this year of the world's history we have to face very large organisations and to see that they do not obtain control. They must be subservient to the public interest. We have to answer a still more difficult question: How are we to encourage new entrants into these industries? We have been talking to-day about old-established concerns and about various companies which we have had under discussion as though they have gone on for ever and are going on for ever. If we do anything to block the way to new entrants to these industries, we shall do a great deal to destroy the free enterprise upon which we depend. That question has to be faced, and it must be answered.
    Then I would ask the next question:In the reorganisation of these industries, who is to take the first step? Are we to assume that the Government are always to take the first step, or are the Government only to come in in the last resort? The next question is this: When you have secured these very large organisations, covering a great variety of concerns in many parts of the country, how are you going to run them? Somebody said this afternoon that you can only run them by
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    supermen. If that be the case they will never be run at all. There are no supermen. Then comes another very awkward question. If we are to proceed with the planning of industry from outside, we must ask ourselves the question: What is going to happen while that planning is going on? There is one danger which I may say I foresaw from the first. It is that if you allow industries to know that Parliament and the Government are to solve their problems for them, they will not move, and will wait for us to move. That is the wrong way about. They should not be encouraged to sit back and wait while other people and Governments do something for them. They should receive every stimulus from outside as well as from within to make their concerns pay in the interests of everyone attached to them.
    Another question to which we have not received any answer, and which naturally touches everybody who is at close quarters with the problem, is: Who is to be responsible for an industry making profits or losses? If it be the Government of the day, it entails a very great responsibility, not only for those whose capital is invested but for those who are in control of a concern and their employeés. A mistake made there might very easily lead to a great deal of harm being done. The next question I would like to ask, and I ask it only because it occurs to me whenever I sit down to deal with these problems, is Can Parliament ensure the prosperity of these industries I say emphatically that we cannot. If it be not within the ability of the industry to make its operations profitable, we shall not be able to do so. Then will Parliament give these powers but disclaim an interest in the profits of industry, or responsibility for its losses? If Parliament is to do that, it must give up the idea that it can solve these problems itself. I put these questions, not with the idea of raising bogies or attempting to put obstacles in the way of enterprising and ingenious men—far from it—but because, if we are to approach those problems with success, we must do so in a different spirit.
    We have succeeded in many cases by voluntary organisation. Very cautiously we have proceeded, with the help of this House, in the reorganisation of industry. We are going in the right direction. Do not let the House believe that we are

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    going dead slow; far from it. I noticed that my hon. Friend the Member for Rushcliffe, whose maiden speech we so much enjoyed, referred to the views of Mr. A. P. Herbert, who made some reference to the Board of Trade. Another hon. Member said that he would like to see a Ministry of Industry, apart from the Board of Trade. I would like to know where he draws the line between trade and industry. They are very much interwoven. I do not know that there is a Minister great enough in status to meet all the needs of the many industries, but I would hesitate to see him cut up into a number of little ministries which would be drawn together only from time to time. For the time being, the hest departmental Committee that the Government can provide is the Cabinet, and the best Minister that the Cabinet can provide is the President of the Board of Trade.
    7.22 p.m.
    Mr. MACMILLAN:We have just listened to a speech of considerable interest from the President of the Board of Trade. Before I reply to some of the questions which he put, I would like to refer to some of the other speeches. A certain number of the speeches to which we have listened cancel each other out. The hon. Member for Mansfield (Mr. C. Brown) chaffed us because he said that we were reluctant to change from one economic system to another. He called us reformists, but that is exactly the expression that those on the left of his party would apply to him. He and his friends think that the economic system is like a sort of hat. If you do not like a bowler, you can buy a cap. They think that we can change from our present economic system to the economics of Socialism, as it suits us. But we do not live under what can be called entirely a capitalist system, any more than we live in a completely collectivist system. Taking the whole range of the energies of this country, some are carried on upon a collectivist basis, some on a profit-making basis and some upon a public-utility basis. There is every gradation of economy, and it is no accusation against a set of proposals to say that they do not make a sudden switch over from one system to another. It would be utterly contrary to the whole of our history if we undertook any such futile programme.
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    The hon. Member for Rushcliffe (Mr. Assheton), in a most brilliant maiden speech which everyone in the House enjoyed, rather took the other line, and said that we were going too fast. I very much enjoyed the quips with which he accompanied his criticism. It is rather fortunate that he has been so short a time a Member of the House. If he had sat here from the beginning he would have had to vote for a number of Measures all of which must have come under his condemnation. I do not see how he could be, with the views he expressed, a Protectionist, and agree with the most complete interference with the free flow of trade. I hesitate to say what might have happened when the Minister of Agriculture was presenting various schemes for the consideration of the House. Before I come to the speech of the President of the Board of Trade, let me refer to the hon. and learned Member for East Bristol (Sir S. Cripps) who presented to us the full Marxist doctrine which we have learned to associate with him. He gave us, none the less, a very interesting dissertation on the application of Marxism to modern England. There was one sentiment which he expressed with which I found myself in agreement. He pointed out that the old laissez faire of the Manchester school of Liberalism was now almost entirely abandoned, and had passed into the limbo of forgotten things. I agree, with this reservation, that it lingers in some of the darker recesses of that part of the Tory party which has suffered from a continuous infusion of Whigs.
    The President of the Board of Trade asked a number of questions as to the application of the views put forward in connection with that part of the Amendment which deals more specifically with industrial reorganisation. He asked questions, and I am glad to say that, unlike Pilate, he has stayed for the answer. In a very sympathetic reply, which we welcomed very much, he pointed out that the Government were in fact operating in many respects as hon. Members wished. He pointed out that shipping, cotton, iron and steel and other industries were directing their attention towards this kind of organisation. Everybody recognises that, although some of us think that we might have made more rapid adjustments along those lines. After all, the iron and steel duties were

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    Voted in this House in 1932, and three years later we are still considering reorganisation in those great industries. The speech which the right hon. Gentleman made was far in advance, and far more sympathetic, than those that have hitherto fallen from Members of the Government Front Bench. The answer to the question he asked in respect to our views on the question of enabling legislation, are largely to be found, of course, in the drafting of the various Bills of people who put forward legislation of this kind.
    It is obvious that safeguards against the difficulties that we foresaw, to prevent rigidity of trade and to allow for new entrants into trade, are an essential part of any schemes of quotas or control, but there is one thing which I would venture to commend to the President of the Board of Trade. This is not a question of the interference of Government with industry. What is suggested, whether rightly or wrongly, is the exact opposite. It is the giving by Government of certain rights to industry by permissive legislation, and giving, under certain conditions and certain safeguards, the right to undertake their own reorganisation. The Government are very fond of telling industrialists:" Put your House in order and we will help you." The suggestion in regard to an enabling Act amounts to a proposal that under certain conditions and subject to safeguards, and after very careful investigation, under certain limited circumstances a majority shall have the right to govern. Is that so revolutionary a proposal to put to an assembly of this kind? Even on these schemes it takes majorities of 75 per cent. to have a right to govern. Our proposal, our conditions, are not governed by more narrow majorities. We are told it is the duty of industry to put their house in order. But industry say, "Give us the power to put our own house in order." There is only one political institution in the history of the world which required a 100 per cent. vote to carry its proposals, and that was the old Parliament of Poland. Not unnaturally, it led to three partitions. Under the present conditions a 5 per cent. or a 10 per cent. minority can wreck any scheme that is put up. It is not at all a revolutionary proposal to say that given certain conditions and certain safeguards the majority shall receive
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    the permissive right to make use of their powers of reorganisation by enabling legislation of this kind.
    Much as I welcome the very sympathetic reply of the President of the Board of Trade, I venture to call the attention of the House to the second part of this Amendment. It deals, first, with modern methods of production and distribution and the existence of cheap money. It is because the use which Parliament and the nation may decide to make of the present abundance of cheap money is intimately bound up with the organisation of industry that I venture to put before the House some considerations upon this monetary aspect of the problem. It is common knowledge that probably the great division between parties in the future may be an argument as to the desirability or not of increased public expenditure for the definite purpose of dealing with unemployment. It is common knowledge that there is now before the Government some proposals associated with the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) and also with a certain group of Members of this House that have the common object of using the monetary resources of the country in order to increase employment, to bring idle capital and idle workers together; and it is because this question of industrial reorganisation has so close a bearing upon the decision that has to be taken that I venture to impress on the Government the importance of organised industry looked at from the point of view of capital expenditure.
    What is the real argument? What is the serious argument against expansionist capital expenditure, expenditure on capital account? What is the ease which the experts of the Treasury, the people who really govern England from the Box that is outside? What is the argument which those who have studied economic thought and theory will submit? It will not be that the policy of capital expansion is impossible, but that it is unwise. It will not be that you cannot increase employment by public expenditure, but that public spending will result in even greater unemployment, and your last case, it is said, will be worse than your first. They say the economic consequences of a policy such as has been put forward by the right hon. Gentleman the Member for Carnarvon and such as is now under

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    the sympathetic consideration, I believe, of the Government will be roughly as follows: First, that the money goes into the production of capital goods; secondly, that the wages and salaries distributed in the production of those goods come into effective demand for the consumption of goods; in the third stage, that the industries supplying consumers' goods expand their output and add to the purchasing power in the hands of the people; and, fourthly, that the prices of consumers' goods are put up to a more economic level. But fifthly, and here is the rub, the capital plant and equipment is multiplied by the competing producers, and at last supply once again begins to outstrip demand, prices once again fall, workers once again are thrown out of work, and the market constriction begins all over again. That is what happens with this dismal alternation of slump and boom. At the end of the artificial boom you are left with the inevitable slump, with a still greater proportion of redundant plant as a result of over-investment. The problem of every manufacturer is therefore accentuated and the burden of debt on the community has been increased.
    I think that is a fairly simple and fair statement of the case against expenditure on capital account. In spite of those arguments, I still remain in favour of expansion, not because I think the arguments of the well-informed opponents are without foundation, but because I consider the danger can be avoided. When these critics put up the destructive side they are right, but when they turn to their constructive side they are wrong. They see the error which may be committed by doing something, and therefore they say:" Let us commit the crowning error of not doing anything at all." My submission is that it is by the policy of industrial reconstruction which is advocated in this Amendment that we have a means of safeguarding ourselves against the dangers of over-investment and the unwise direction of our productive forces. The dangers arise from a system in which any private speculator is allowed to engage in short-term speculative investment in an industry; is allowed to scoop the cream during the profit-making period and then get out of the industry and get out with the swag, when times are not so good, leaving the industry over-capitalised, burdened with
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    redundant plant, and with all those features to which the President of the Board of Trade has mentioned in respect of particular industries, and that long trail of disaster from which 12 or 15 years after the War we are still trying to recover. Reorganisation of industry is required following the character of the particular industry as regards technical administration. We are trying to set up joint control of selling which will prevent these evil results which would otherwise follow from an expansion now on the lines of the policies under the consideration of the Government.
    I would say this to the Government. If they decide not to make any movement in the direction of the policies advocated by the right hon. Gentleman the Member for Carnarvon on capital account, if they decide not, to follow the policies put forward by the group of Members representing northern constituents, if they decide not to attempt to use the power of government to bring together the idle money and the idle worker, if they pursue a policy of monetary laissez faire, there is no need to proceed along the lines of this Amendment and this Amendment is contrary to what they should do. But the Government must take some step. They cannot afford to see 2,250,000 workers left idle. The Government dare not face the situation in which men are kept out of work, not because there is insufficient money to employ them, but because there is too much money. They are bound therefore to embark to a greater or lesser degree on some such policy of expansion as is now in everybody's mind; and if they are to avoid the evil effects of an expansionist policy, they must take steps now to ensure that the organisation of industry can benefit from what an expansionist policy can give without the evil results that will follow it in a state of disorganisation.
    You must make your choice, and the choice of the nation is absolutely certain. I am convinced that the support which these proposals have met emphasises this. Three years ago I ventured to speak on these lines as a private Member, and I could expect nothing more than the courtesy I then received. Two years ago some colleagues of mine presented these proposals for the consideration of the Government. Now

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    opinion is changing, not among academic thinkers, but among the leaders of industry. For instance, when I went to Manchester the other day, I found that the one thing which the large number of industrialists who were good enough to come to discuss this matter agreed upon was that they should have permissive rights under enabling legislation of this kind. They have in Manchester the largest branch of the Industrial Reorganisation League in any part of the country. The people on the reorganisation committee are not academic theorists they are men who are up against the present problems of industry. The members of the council and the executive committee would, I think, at least show the Government that these proposals are not, as they were three years ago, of a theoretical nature, but that they now have the earnest attention of industrialists.
    The right hon. Member mentioned one industry which has voluntarily organised itself in a satisfactory way. One of the particular industries he mentioned, namely, the flour milling industry, is one of the keenest supporters of these proposals. Having made this voluntary association, having imposed a voluntary levy and raised a sufficient amount of money to put redundant plant out of operation and having got that balance of production and demand which was essential to employment and a reasonable margin of profit, there begins to come in, since it is only voluntary, the blackleg, the new entrant who comes in on the basis of the financial sacrifices of those who put the industry on a regulated basis. There is no stronger supporter of statutory regulations than those who have made individual sacrifices from which they are now suffering. I therefore venture to say to the Government that opinion in the country has largely changed. Industrial opinion has changed. I quite recognise some of the views of the Labour following that this is an idea for making the world safe for capitalism. I believe, however, that Labour opinion is strongly in support of a reorganisation of industry which will bring demand into balance with supply and so bring in decent wages and decent conditions of labour for their men. The
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    first problem that all of us are up against,— —
    The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Dr. Burgin): Would the hon. Member allow me to interrupt him for a moment, because I was not quite sure whether I understood him correctly just now? He was referring to the voluntary measure of re-organisation introduced into the flour-milling industry. Did I understand him to say that there was no one more keen on asking for statutory prohibition against the arrival of new entrants than those in that industry?
    Mr. MACMILLAN: Yes. I do not say that it had the official support of the industry; it would not be fair to say that; but, if the hon. Gentleman will be good enough to look at the names of the executive committee of the Industrial Reorganisation League, he will see that the chairman of the milling trade association is a member of the executive committee, and he is one of the keenest supporters of these proposals. I quoted what I have heard from the chairman of this group of companies, and therefore I adhere exactly to what I said. In these circumstances, since opinion has changed in two directions—first, as regards the social organisation of industry, and, secondly, as regards the technical organisation of industry—since something on these lines is generally felt now to be not only a necessity but a practical thing; and because upon the other question, that of monetary expansion, I am certain that sooner or later this Government or the next Government will be forced to make some effort to bring 2,250,000 people who are now unemployed into employment by some method or other, for the pressure will so grow that neither the Treasury nor the Government will be able to stand up against the demand for expenditure in order to promote employment. Since both these things are pending, I venture once more to ask the Government not now to regard these views as the views of a crank or of an individual Member or Members, but to regard them as views strongly held, as I believe they are, by a growing number of those responsible for the conduct of industry; of ordinary people in all three parties, and still more by that vital number of people who belong to no party,

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    and who really, in the long run, settle the government of England.
    7.48 p.m.
    Mr. DENMAN:The Debate this evening on industrial organisation is proving far too important to allow members of the National Labour group to remain wholly silent. Happily, there is a merciful rule against the repetition of what other Members have said, and the right hon. Gentleman the Member for Darwen (Sir H. Samuel) said so much of what I should have desired to say, and said it so much better than I could, that I need cover little fresh ground. He began by warmly congratulating the author of that brilliant maiden speech, and the whole House agreed with him in doing so. He went on to deal with royalties, and I was glad to hear the encouraging reply of my right hon. Friend the President of the Board of Trade; but may I stress to him the point that the matter might be even more rapidly dealt with than, I gather, lie was prepared to encourage us to believe was possible I I think that opinion on that matter has developed during the last few years, and he will find that owners are at least accustomed to the idea of the nationalisation of royalties. I would suggest to him that, if the matter were dealt with as the question of petroleum was dealt with, by introducing a Bill in the House of Lords during the course of this Session, it would at least expedite the matter considerably, and would get us further upon the road to a solution of this important problem.
    The right hon. Gentleman the Member for Darwen then emphasised, in a substantial argument, the need for the organisation of industry, and the dangers of the process. With all of what he said on that subject I agree, and I need not repeat any of it. I should like, however, to urge upon the Government the importance of a more definite declaration of policy than we have been able to enjoy this evening. We all appreciate the sympathetic approach of the President of the Board of Trade to the Amendment which is before as, but I believe that more is needed. It seems to me that on the lines of industrial organisation we have one big object of policy to put before the country; with
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    a view to giving the country the assurance it desires, that the Government have a definite policy on this head. We know perfectly well that the Government have pursued a consistent and successful policy, but they have not yet succeeded in explaining that policy to the country. They have been too busy doing the job to formulate a theory of what they have been accomplishing.
    Industrial organisation is, it seems to me, the inevitable next step in the policy of the National Government. The basic policy adopted by all Governments since the War has ben the policy of State aid to capitalism, accompanied by measures of control. That was a policy which the House of Commons would not have recognised before the War, and I think we have only gradually recognised it after the War. To me it became decisively the post-war policy during the lifetime of the last Government. It was the basic principle that governed the whole industrial policy of the Labour Government. They were always trying, honestly, and in some cases successfully, to make capitalism work, ad to bring the resources of the State to the aid of hard pressed industry. That is the fundamental policy which we have had now for, not quite 20 years, but for a substantial time, and obviously it is going to be as much the dominant policy of this country during our generation as laissez faire was during the nineteenth century.
    That being our general principle, what is to be the next step in the State aid of capitalism? We put forward the assistance of industry by means of an enabling Bill. No one who has ever considered the drafts of any of the Bills that have been framed to deal with this problem will minimise the real difficulties and dangers that have to be faced. And a recognition of the dangers does not by any means imply that complete methods of avoiding those dangers have been discovered. I freely admit that there is the danger of rigidity, the danger of lack of enterprise and progress—all those dangers that we have known since our childhood. They are real dangers, and it is very likely that they will not be fully overcome, but the whole problem is one of balance of advantage and disadvantage. Admitting a reasonable amount of realised disadvantage such as no doubt will occur when we have achieved industrial organisation, is it not

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    still the better alternative What is happening now in the chaos of unordered competition among small units?
    My right hon. Friend must have seen the speech of the Chairman of the Bradford Dyers' Association at their last annual meeting, and he must have seen what has happened in that industry, where excessive productive facilities have meant that a whole number of units have not been able to pay their way, and have been gradually losing their financial resources and their power of enterprise. That is the fundamental evil of the process of attrition to which reference has been made—that the companies which are suffering it cannot keep up to date, cannot maintain research, cannot get cheap new capital for the replacement of machinery; and, once that process has gone beyond a certain stage, the industry is practically doomed. The purpose of the proposed industrial enabling Bill, and the organisation to be set up under it, is to prevent that attrition, and to enable our industries to stand upon their own feet and, under proper safeguards, to obtain the advantages of cheap production, adequate research and ease in raising fresh capital.
    There is, of course, also the side of the workmen to be considered. In industries suffering from attrition, the workers are in perpetual peril of their livelihood, but in a properly organised trade, such as the milling trade, provision can be made, as I am told it has been made in that case, for redundant staff. What chance is there, however, of making provision for redundant staff in the competitive chaos of unorganised industry? I hope that in this matter we shall have, as we ought to have, the support of the Labour party, or at any rate of those members of it who are more interested in the welfare of the workers than in some rather barren theory. I trust that the Government will regard this Amendment as having been accepted by the House. Of course, we cannot divide on it, but it is quite obvious that it expresses the views of the majority of the speakers this evening, and a very wide and differeng range of thought. I hope the Government will regard it as an important expression of opinion, and that they will be able
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    further to study the question and to make it a central item in the total national policy which they pursue.
    7.58 p.m.
    Mr. MANDER:I cannot help thinking that the President of the Board of Trade used his colleagues in the Cabinet rather harshly. We have always been led to believe that they were a set of very remarkable supermen, But, as he has informed us that there are no supermen, I suppose we shall have to regard them in future as just ordinary mortals. He dealt in the course of his sympathetic reply with the many dangers that might arise from monopolies, and said that there was a possibility of unreasonably high prices being fixed. Surely one remedy for that would be to give to the Board of Trade special powers to inspect books, and to see that publicity was given to a large number of factors, and, as a final measure, if it were found that unreasonable profits were being made and too high prices charged, there should be a resort to some form of tribunal which would ultimately have the power to prevent abuse by fixing prices. I suggest that as one possible reply to the very important point that the right hon. Gentleman put.
    In this Debate we have had evidence of the very widespread movement which exists in all parties in the House, and of which we have seen evidence in publications that have recently been brought out. The hon. Members who initiated this Debate have recently brought out a little blue-book on this subject which is of great interest, and I think that other Conservative Members, more on the right, have also brought out, a book. I understand, too, that another publication is to come out shortly, representing the views of members of almost all parties, very much on the same lines. Then, of course, there are the proposals now before the Cabinet of the right hon. Gentleman, the Member for Carnarvon (Mr. Lloyd George). As the right hon. Gentleman the Member for Darwen (Sir H. Samuel) said, it is not unreasonable for us in the Liberal party to claim that all these ideas found their origin consciously or sub-consciously in the Yellow Book published in 1928, because the ideas that were in that book are really the current coin of controversy at the present time. The Liberal party, as always, is very

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    glad to contribute ideas which other people may carry out.
    One of the most interesting features of the Debate has been the rivalry between the capitalists here and the Socialists there. We have had the capitalists criticising to some extent the present efficiency of industry, and we have had art impassioned defence of the high efficiency of industry from the hon. Member for Mansfield (Mr. C. Brown) who spoke just now. Even in regard to tariffs, he seemed to show more sympathy than anybody else in the House with the hon. and gallant Member for Bournemouth (Sir H. Croft). This old controversy between capitalism and Socialism is now dead. Many years ago Sir William Harcourt used the words:" We are all Socialists now." If that was true then, it is much more true to-day. It is really very much the pace at which you are going and the particular method that you are going to employ. I believe that there are in all three parties in the House-not a majority in every case-Members who are in complete agreement as to the methods and more or less as to the pace at which we should proceed along the lines which we have been discussing. They could, if the need a, co-operate with and support a Government in carrying out a policy of that kind. I agree with the statements that have been made that the old strictly limited form of laissez faire that once existed in this country is now dead and abandoned for ever.
    The present lack of direction in industry is hampering it very severely. I feel that the object of planning and the result of planning is to give greater freedom and opportunity to manufacturers and business men to make the fullest use of their individuality, because that is the keystone of all success in whatever system you operate. The hon. Member who made such a brilliant maiden speech to-night was rather suggesting that all this planning is unnecessary, but the point is that planning is taking place, and inevitably it will take place. Shall it be slow, sporadic, and inefficient, or, as it is taking place, shall we try to make it as efficient as we possibly can? There is only one answer to that. When the history of these times comes to be written, historians can only regard this period of economic chaos as being very
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    crude and infantile. What we see now is that the problems of production, distribution and consumption have to be co-ordinated and controlled in some way. We do not see quite clearly, as yet, how to do it. Our descendants will regard it as a perfectly simple thing. All we are doing is to grope, not in the dark but in the twilight, and a good deal of light has been shed upon the subject to-night by the various interesting speeches that have been made.
    My hon. Friend who introduced the Debate suggested that they wanted a Departmental Committee. That might be useful, but it might be much more effective, and much more rapid progress might be made, if we had a Cabinet committee to deal with the agreed policies of so many different people that they might put into operation as quickly as possible. I want to make brief reference to another side of these proposals not, so far, touched upon to-day. I want to suggest that in order to deal with the industry of this country properly we require something in the nature of a committee of national development, presided over by the Prime Minister, as the Committee of Imperial Defence is, making it a committee of the Privy Council, with all the most competent and experienced people in charge of it. Its object would be to formulate a consistent and comprehensive policy for the development of our national resources, and to co-ordinate the work of the different Departments of the Government engaged in it. This committee should have associated with it, in order to enable it to carry out its work properly, a board of national investment, to take over the task now performed by the National Debt Commissioners and other bodies. All the capital resources of the different Government Departments— and they are very considerable—should be pooled and placed at its disposal.
    The board would survey the whole problem of national development, and see if such resources as are now at the disposal of the Government are used to the best advantage and not dealt with haphazardly as is inevitable under the present system. My hon. Friends who initiated this Debate consider that the main point of their proposal is that there should be an Industrial Advisory Committee. That is very similar to the

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    Liberal proposal of 1928 of a Council of Industry. There is no doubt that the methods of the 19th century, which served so well at that time, have now become inadequate and that we are suffering as the result of our success. The extreme individualism which was developed is hampering progress. The organisation of industry is now static and rigid, and some collective action is needed to start things moving once more. When industry observes, as it does, what is being done for agriculture in the way of marketing boards, consumers' councils and the many other production schemes that have been brought forward, it gets rather hungry, and, so far As there is success in these agricultural schemes, you cannot be surprised if industry comes along and says: "Why should we not be given the same opportunities as are offered to the extreme individualists in agriculture in order to enable them to come together and be more effective?"
    The proposals of my hon. Friends who started this Debate are, in a word, first of all, to get industrialists themselves to organise. If they do not show any inclination to organise, they should be invited by the advisory committee to do so. If they will not even do that, the advisory committee itself should take action and make proposals. We have an interesting precedent for this in the reorganisation committee in the coal mines which is dealing with that industry more or less on the same lines, but, unfortunately, not with a great deal of success up to the present time, although I hope success awaits their efforts in the future. I just want to refer to this subject, because I feel, when we 'are dealing with the reorganisation of industry, we must not think solely of the employing side. If it is to be made a success, you have to bring into your schemes the equally vital element of labour. I should like to see a threefold structure in industry in this country. First, a national industrial council for all industry, such as was agreed upon in the great industrial conference of 1919 presided over by the right hon. Member for Clay Cross (Mr. A. Henderson), and later abandoned, agreed upon later during the Mond-Turner discussions, and which could be set up without any legislation if good will existed on both sides.
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    I should very much like to see the Government taking the initiative in that direction and setting up a body representing employers and employed and certain Parliamentary and independent interests, with the threefold object of having a useful channel of communication between industry and the Government, a body which should investigate and survey all the legislative proposals dealing with industry brought before Parliament—in that way the time of the House would be greatly saved—and with the object of intervening in any threatened dispute that seemed likely to arise. The second part of the national structure is that you should have in each industry either a joint industrial council or a trade board, or where at the present time there is joint negotiating machinery of some other type, that statutory powers should be given to each industry and the right of self-government. You would find that one result would be that the trade unions, who are so much confined to dealing solely with the wages and hours side of the trade, would be able to play their constructive part in co-operating in the building up of industry which they can do very effectively indeed if given the opportunity.
    The last part of the structure would be greatly to the interest of industry from the human and business side if you had associated—it can be done, if necessary, by voluntary action—with every factory a works council of an advisory type, where every element engaged in the factory would have the right to be representd and of being told what was going on. He should be given full knowledge of all the activities of the work. It would make the worker feel that he was regarded not simply as a weekly wage-earner, but as an essential element that has as much right as anybody else to play his part in the conduct and control of industry. There are just two points where I think the men should be given statutory rights: the right to decide and agree upon the rules to be enforced in any factory, and the right of appeal against any dismissal, an appeal to some joint tribunal associated with the works. If we had machinery of that kind, through the national scale, the scale of each industry and then to each factory, it would greatly assist the other schemes of reorganisation with which we have been dealing to-night

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    I just want to touch shortly on one other point of some importance. In this Amendment reference is made to modern methods of production and distribution. It is a fact that many industries are feeling the necessity, as the result of competition, and in order to bring themselves up to date, to go in for rationalisation or reorganisation, which is the main basis of our discussion to-night. I want to submit to the Government that here a unique opportunity is given to industry — and I hope they will make an appeal to them on the subject— to put into operation the 40-hour week, or a reduction in hours of something like that, without any reduction of wages whatever. I appreciate that where there is no reorganisation taking place it is very difficult, short of an international agreement, to make a reduction of hours without some reduction of wages, but where you have reorganisation taking place in an industry it is perfectly practicable, and experience has shown it, that you can, if the two things are done concurrently, reduce the hours certainly without any reduction of wages, and, if you are fortunate in the particular industry, actually with an increase. I do not suggest that that is any solution of the unemployment problem, but it does mean that if you take these two actions concurrently you are keeping in employment a larger number of people than will otherwise be the case. I hope that the Government will listen carefully to what has been said to-night, that they will ponder over the almost unanimous views expressed in favour of thinking and planning ahead, and that they will definitely act. At one time we used to be proud of our way of muddling through in this country. You cannot muddle through under modern conditions, and I hope that, as a result of the united help of this House in an age of planning, it will be found that our plans will be the best.
    8.16 p.m.
    Mr. VYVYAN ADAMS: When my hon. Friend the Member for East Wolverhampton (Mr. Mander) described himself as groping, not in the dark but in the twilight, I think that he did himself rather an injustice, because I found much of what he said extremely illuminating, although perhaps some of the shafts from his spotlights fell a little obliquely on the subject. He has given the House
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    the great advantage of listening to his own immediate experience in industry. I should like to stress the most excellent answer given by my hon. Friend the Member for Stockton-on-Tees (Mr. Macmillan) to the hon. Member for Mansfield (Mr. C. Brown). He seemed to be surprised at the sentiments of the hon. Members for Doncaster (Mr. Molson) and Darlington (Mr. Peat) who respectively moved and seconded the Amendment before the House to-night. He expected them, as far as I could infer from what he said, to offer an unbending defence of the present economic system as though this economic system was something stationary and inflexible like, let us say, the Albert Memorial or Cleopatra's Needle. The economic system is no more stationary than are the hon. Member for Mansfield and the hon. and learned Member for East Bristol (Sir S. Cripps), who, I am sorry to see, is no longer in his place. You cannot live without growth, and no system can survive without perpetual modification.
    Before I go on to make one or more constructive suggestions about dealing with the mass of unemployment, I wish to say that I am not at all blind to what the Government have done to improve the industrial position of the country. Like my hon. Friend the Member for Central Leeds (Mr. Denman), who has left the Chamber, I share with him to some extent the representation of a city which almost exactly mirrors and reflects the degree of our industrial prosperity. I cannot forget that the present volume of unemployment there is no more than two-thirds of what it was in August, 1931. It is quite clear that in that great industrial centre in particular, and in the country at large, we might be a very great deal worse off. Indeed, under the last retrogressive Labour administration we went tragically and progressively worse with every month that passed.
    My hon. Friend the Member for Doncaster said at the beginning of his remarks, what is clear from the terms of the Amendment, that the Amendment is designed to attempt some solution of the volume of unemployment, and to reabsorb the mass of the unemployed. There are, I suggest, two avenues along which one could usefully approach this problem. The first is to discover means of contracting the supply of labour, and

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    the second means of enlarging the demand for that labour.
    Cursorily, and without going into any detail, I will just mention two fundamental and long-term proposals which, I think, must be implemented within measurable time to increase the demand for workers and to contract the supply of labour. The first is the shortening of the hours of the working week, and the second is the raising of the school-leaving age. I only wish to-night fleetingly to mention those two proposals, but I believe in them with the same kind of confidence as I believe in the rising of the sun to-morrow morning. Both are perfectly inevitable. I have no doubt that the official answer to the raising of the school-leaving age would be that it has been deemed necessary to use public funds for other and more necessary things. With that I might not agree, but I do not wish to go any further into that matter now, because I want to come to a no less controversial matter—the proposal which is now being made on all sides for utilising public works, to absorb a larger number of the unemployed.
    In this matter it is possible—and I hope that my hon. Friend the Parliamentary Secretary to the Board of Trade will agree with me—to divide these public works into two categories or classifications, first the unproductive but the necessary type, and secondly the productive and perhaps not so necessary type. I will, first of all, briefly deal with the figures that concern and illustrate the unproductive type. We have heard from an almost unimpeachable authority, the Chancellor of the Exchequer, that to keep a total of 4,000 men in work for a single year it is necessary to expend a sum of no less than £1,000,000, and that at the end of that period of 12 months you will need another sum of £1,000,000 to keep that same body of 4,000 men in work. That is to say, according to his figure, you need no less than £250 per man per year. There is another great economic authority whose economic predictions have been carried out by history, Mr. J. M. Keynes, who puts the figure much more optimistically at a lower level. He says, I believe, that it requires no more than £150 per man per year. But even if you take the lower figure, and if you attack the vast body of unemployment by that kind of unproductive public
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    works, you will see that if you are to put 1,000,000 men into industry, you will need no less than £150,000,000 for a single year. If you take the Chancellor of the Exchequer's figure, you need not less than the astronomic figure of £250,000,000. That is clearly impossible when you consider that the type of public works contemplated would not yield any rent. Again, the capital sum would one day have to be repaid. When we hear of these ambitious public works it seems constantly to be forgotten that the capital sum has some day to be repaid and the bill must be footed.
    But that criticism, as I say, is only applicable to the strictly unproductive type, under which heading, I suppose, can be held to fall the removal of level crossings, the building of non-tollpaying bridges, of roads, of reservoirs, and such capital expenditure. Several of these types of work, I submit to the House, are absolute necessities, and should be pursued without too close regard to cost. Particularly may that be argued of reservoirs up and down the country, because I am informed there is a danger this year of even more serious drought than that which occurred last year, and then caused such great and widespread anxiety. But there are other kinds falling under this unproductive head which, I think, should be set in hand. Every day that I come to this House and go on to the Terrace I see a perfect example. It is only necessary to look eastwards from the Terrace to see that hideous, that monstrous structure of Charing Cross Bridge defacing the grandest sight in the whole Kingdom. Some day that blot will go. There wilt be no Charing Cross Railway Bridge, and no Charing Cross station, north of the river. They will be replaced by a road bridge, and that road bridge will help to solve the traffic problem at the west end of the Strand. I cannot understand why the Government cannot do for the Southern Railway what they recently did for the Cunard-White Star Line in the building of the "Queen Mary." This is, I suggest, on every ground, economic, public, aesthetic, expenditure which is absolutely necessary. The millions of pounds involved. in the reconstruction of the Charing Cross site would send, I believe, an electric current through all the arteries of our national industries. You would need thousands of tons of

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    steel and thousands of tons of concrete. We are promised a nocturnal view of London by floodlighting in the next few months. I hope that the illuminations will not be confined to the noble monuments which somewhat absent-mindedly distinguish our Metropolis. Let a hundred searchlights be concentrated on Charing Cross Bridge so that public odium may be focussed on this ghastly medley of steel zigzags. That is an instance of public expenditure upon something which could not be expected to yield any immediate return in the form of rent.
    But the inquiry is quite different when you approach productive public works. There are large classes of works where the Government could successfully guarantee a loan and be certain that the rent or yield from what they construct would provide the necessary interest. Hon. Members will have present in their minds the type of works I mean, unsubsidised or slenderly subsidised housing, telephones, possibly the Cunarder, anything indeed which restores what has been expended upon it. Recently on two occasions I have had the adventurous experience of passing along the Mersey Tunnel and I was one in a continuous chain of motor traffic. Tolls are paid. Quite soon, far sooner than was originally anticipated, this brilliant and useful feat of engineering will have paid for itself hand over fist. I wish seriously to ask the Government whether they will not at this stage reconsider the building of the Channel Tunnel. I have on two or three occasions asked by question in the House what is the Government's policy with regard to this possibility of vast and productive public expenditure. The Victorians proved that it was a scheme which is geologically possible, and the aeroplane has reduced to a final absurdity any strategic objections which may have been valid in the past. Everyone will assent that aircraft is not going to supersede the transport of heavy goods or earth-bound passengers. Here I suggest is a means of productive expenditure involving the expenditure of millions of pounds and the inevitable employment of thousands of men.
    Mr. DEPUTY-SPEAKER (Captain Bourne): The Channel Tunnel also involves legislation.
    Mr. ADAMS: If that is so, then clearly I am out of order, and I submit to your Ruling. I was merely trying to adduce this as an example of one of those public works which could conveniently and profitably be embarked upon by the Government. I think it falls within the classification of useful and inevitable public works, and in these days of wireless, television and aircraft, we ought not to shrink from making a highway to the continent. I will not pursue that matter any further. All I wish to submit to the Government is, that with a little more vision and venturesomeness we might, by capital expenditure, put not merely thousands and tens of thousands of men into work, but hundreds of thousands. We do not want any voyages on the uncharted seas of Socialism. All that the Government should do now is to concentrate upon the achievement of the inevitable. It can only be delayed by stubborn procrastination. If the Government will look round the country they will see excellent opportunities for spending money on necessary objectives, and also upon objectives which will yield a profit, rent and interest. I hope that during the next 12 or 15 months the Government will not merely consider implementing a number of these plans. Are they going in the immediate future to concentrate upon their own future policy, or are they going always to turn their eyes backwards upon their own excellent record, a record which, unfortunately, the electors forget—and perhaps are entitled to forget—because they can only live in the present and in the future
    8.32 p.m.
    Mr. CHORLTON:It is rather difficult to know exactly where to begin when you have listened to such an interesting discussion as we have had to-day, in which so many hon. Members have joined who are, obviously—they will pardon me—amateurs at the work. Many statements have been made which, if one had the opportunity, could be shown to be incorrect. I should like to suggest to the President of the Board of Trade that one way in which the Department can help the smaller industries is actually to prepare their case for submission to the Advisory Committee. This is, of course, unnecessary in the case of the large industries, but there are many small industries which are totally inexperienced,

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    and do not realise the changed state of affairs, and I suggest that the Board of Trade could help them in preparing their case. There is, for instance, the Japanese competition in the shirt trade and the number of people thrown out of employment as a consequence. It has been said that our only hope of recovery is the return of our overseas trade, the interchange of trade between nations.
    No doubt many people have heard of Professor Bergius, who invented the hydrogenation of coal. In their search in Germany for other possible changes they are now dealing with food, and Professor Bergius has succeeded in producing food from wood; you can get quite a considerable output of sugar from wood. A few days ago he said that he did not see an early return to inter-trade between nations because the nations themselves were able to produce all their own stuff. That is to say, that the raw material, for which we have been dependent upon other countries, can now be produced by these various ingenious processes and that the necessity for this inter-trade will not exist. That is one of the ways in which Germany is working at the present time. Industry is being put right by German doctors. The re-organisation of industry, about which we have heard so much, was taking place when I was a lad and manager of some works. We had then a scientific management, and one of the first steps in the edifice of our scientific management was to set up a planning department. That was long ago. I was one of the first to set up such a department in engineering in this country. We had nobody to put into it, but I took workmen from the machines and started the department. The man in charge was a man who had been working a shaping machine. In the end it was a success, although there was some trouble at first. I met this man the other day, and he reminded me of what was done on this occasion and of the measure of our success. The firm in which that was introduced is still one of the leading firms of the country. So possibly we began in the right way all those years ago.
    Industry does not depend only upon itself, upon its internal organisation; it depends on the facilities that are given to it in the area where it has to carry
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    on its work. There is a tremendous amount to be done in this country in re-equipping the country so as to make each industry more efficient to carry out its work. That is a part of the subject which has been little touched upon to-day. It is rather disappointing that it has been overlooked, because it brings with it, if properly done, an immense amount of employment. In my opinion it is the first way in which industry should be helped. What is meant by that? It means that every public utility, everything that in general we apply to our ordinary life, shall be made as efficient as it possibly can be made. To-day the public utilities of the country are in the main run by local authorities or by companies, and we have an illustration of a widespread organisation in the electrical industry and in the rate which allows them to supply the country.
    The great success of the electrical industry was touched upon by the President of the Board of Trade. That success is largely the result of the good technical education that was applied throughout that industry almost earlier than in any of the other industries. electricity there is water. I suppose you could spend £50,000,000, nay £100,000,000, on water in this country, and get a return for it. Why cannot we do it? Possibly because the authorities who now have charge of water think they can carry on as they are doing now. There are many industries which require water. We have the example of the rayon industry. Instead of being in Lancashire it is to be in Somerset, and it has asked for a large supply of water. There is enough water that comes down from above, though we do not collect it in the right way. Given sufficient water an industry can go anywhere. The same holds good of gas. There is a gas grid in Belgium. The whole country is covered with a gas supply by an English company. There is a gas grid in the Rhine Valley, that is to say in the industrial area of Germany, from Hanover to Essen; and also from Berlin to Silesia. With extended gas supplies there would be demands for labour based on something from which there would be a return.
    But of course all these things depend upon highly skilled and highly technical training to guide them. Suppose that you were to follow the policy of aiding industry by improving everything of this

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    nature, transport being perhaps one of the biggest things. I may say in regard to transport that when I was in Germany I found that improved transport was one of the principal things to which they were looking for employment. They had an immense railway programme. What is the difficulty in dealing with the whole of the public utilities and general need supplies of this country? One difficulty is that they are in different hands. Gas is under the Board of Trade, electricity is under the Ministry of Transport, water is under the Ministry of Health, and land drainage under the Ministry of Agriculture. How is it possible, if you are to equip the country as a first-class industry would be equipped, when these main services are controlled by four different departments? It is not possible.
    Therefore you are led, when you consider this problem, to setting up some sort of co-ordinating committee, which I believe should be a technical committee. I cannot say that, with the difficulties of this job, it would be possible to co-ordinate the working of these departments with a technically trained council. We have had many councils and committees mentioned today. I do not want to suggest things which are in any way impracticable, but I do want to draw attention to this fact You cannot do work of this nature efficiently unless a majority of the people who constitute that board are technically trained. I do not want to hold Germany up as an example, but in a certain sense, in regard to technically trained people, there are many points to be picked up from Germany. Those who travel there know that the boards of control in most of their industries are technically trained people. That is so with the biggest concern, such as Siemens.
    How can this particular aid to industry be applied? Let me refer to the industrial district of South Lancashire. You have 5,000,000 people around Manchester. There the various public services might be brought into proper correlation. The towns themselves might go on performing their ordinary functions, but the general services could be reorganised and made more efficient. I mention this area because there is a dense population there and a close net-work of railways. Here is an oppor-
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    tunity for putting transport into the very best possible condition. The Rhineland is to be entirely redeveloped by the Germans. They are going to make it possible to run high speed trains and to give the greatest facilities for transport. It is to cost 1,000,000,000 reichs-marks. That area is equivalent to the Lancashire area. To electrify the Lancashire area would cost an immense amount of money, probably;£100,000,000, or at any rate three-quarters of that. But it would mean immense employment and 'would leave the district so well equipped that industry would stay there and new industries go there.
    It is not safe to proceed with the industries of this country and their equipment on the assumption that everything will come straight in time. The shortest way to make sure of success in future is to make the equipment of the country itself as good as or better than that in the best factories. A regional council could deal with an area such as I have mentioned, and other regions could be dealt with in a similar manner. We have such a system to a certain extent at present in the regional councils for town planning but their powers are limited. The time has arrived when, all these services should be combined under one authority, and in drawing them together in the various towns in a district of this kind we could provide against redundancies which have been occurring in towns where industry is affected.
    Before I conclude I want to make a reference to what is I think, the biggest change at present contemplated in Germany. German industrial organisation to-day is very much on the lines of our own to this extent, that the industries are grouped in certain big towns and the people who work in the industries live in those towns or on the immediate outskirts. They have in Germany to-day a policy of establishing settlement towns which is on such an immense scale that, I am told, out of 10,000,000 workers 5,000,000 are going to be moved out of the present towns into the country. The country is being planned out and the most suitable places are being allocated to small towns devoted to definite industries which are also being moved out from the present towns. There is a special organisation working out that scheme at present. I have spent some time in trying to follow

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    up these developments, and of all the schemes for providing employment and changing industry in Germany that is the biggest one. It is indeed on a colossal scale. Apart from that proposal, they are taking steps in Germany to aid industry by way of relief. Little has been said to-day about the subject of relief but the German method of encouraging development is to grant various reliefs as for instance to a man who puts in new machinery. That is having the effect of encouraging the re-equipment of works, and has provided employment in those concerns which are engaged in the making of the machinery and plant. I cannot tell how the financial balance of that scheme is worked out, and whether these are grants from local authorities or not—
    Mr. DEPUTY-SPEAKER: I think that to carry out such proposals in this country would require legislation.
    Mr. CHORLTON: I was only trying to illustrate the effect of the steps that are being taken in Germany to secure employment and help industry generally. I was really addressing myself to the industrial side of the question, but I do not wish to carry the illustration any further. I would again direct serious attention to the help which could be given to industry generally by improving the facilities in the country, providing re-equipment and bringing the various services up to date in every way. It seems to me that, apart from the more contentious question of the statutory control of industry, of which we have heard so much to-day, there is a great chance to get on with big works of the kind I have indicated which would provide more employment than any of the other propositions brought forward to-day.
    8.50 p.m.
    Mr. LOFTUS: My hon. Friend the Member for Platting (Mr. Chorlton) will excuse me if I do not follow him in his most interesting and stimulating speech which contained a mass of instructive ideas. More especially, I do not propose to follow him for the very good reason that both he and other previous speakers have been informed by you, Captain Bourne, that they were discussing matters involving legislation. I shall do my utmost to avoid falling into the same
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    mistake. In general, I am in sympathy with the idea behind what is called national planning as it has been put forward here to-day, but I am not sure that I am in favour of the actual plans which have been suggested to us. I feel great sympathy with the general idea that at the present time we must look ahead and plan ahead but whether or not we should plan exactly on the methods which have been indicated to us to-day is an open question. This feeling of hesitation on my part is reinforced by certain claims made by those who advocate this policy.
    My hon. Friend the Member for Darlington (Mr. Peat) claimed that if industry were organised in huge national combines it would be an instrument for international peace. I suggest that the two countries in the world which have their industries organised nationally in the most efficient manner are Japan and Germany and I have yet to hear that they are to be regarded as foremost among the pacific nations of the world. There is another doubt which I have in mind, and in expressing these views, I would ask my hon. Friend the Member for Doncaster to believe that I am not putting forward these points as criticisms. I am trying to get elucidation. I am led to fear by speeches which I have heard and books which I have read on the subject that planning is too often regarded as the planning of production in order to meet effective demand. I am afraid of that because that kind of thing has led to the destruction of good foodstuffs all over the world—a result which has undoubtedly shocked the conscience of the world. I feel that it is necessary, above all, to plan consumption, that is to say to plan a market which will be effective to meet potential production.
    In the most attractive book which I have yet read upon the value of planning, namely, that by Sir Basil Blackett, the author states that national planning will be useless unless it includes the planning of the money system. The Noble Lord the Member for Hastings (Lord E. Percy) said that the only alternative to the subsidisation of the consumer by the creation of currency was the lowering of the cost of production, and my hon. Friend the Member for Doncaster said that a sound policy would be to bring down the costs of production until they were in harmony with prices. But sup-

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    pose prices are not in harmony with the whole economic structure of this country or the world. Suppose prices fall so low, as they have done in most countries, that the burden of debt becomes insupportable and the whole economic balance is destroyed. Are we then to pursue a policy of forcing down costs so as to bring them into relation with prices, even when we realise that existing prices have made the burden of debt intolerable on industry and on the nation? That is surely what has been happening all over the world by the last three years, and it is recognised by the revaluation of currency and by the leaving of the gold standard. Prices have fallen to such a level as to destroy the industry and commerce of the world.
    I feel that that policy is dangerous in the extreme, and when I hear the Noble Lord the Member for Hastings saying that the only alternative to this lowering of the costs of production is the subsidisation of the consumer by the creation of currency, I confess to some astonishment. I feel that it is essential so to organise our money and our price equilibrium as to increase the purchasing power of the people, but I feel that we may, in our usual British way, already have stumbled on the right road and that, by going off gold and keeping the pound stable in terms of purchasing power for four years, we may have, as we so often do in our history, stumbled into a solution of our difficulties. I would suggest that if it were possible to stabilise money on the purchasing power in the sterling area and to have fixed exchanges, not on gold, certain results would follow. One result would be that you would get rid of booms and slumps, and it would allow the automatic expansion of Government capital works when prices were falling. It would have the exact reverse of the effect of the gold standard. Under the gold standard, when there is a slump coming on and prices are falling, you have increased taxation and the stoppage of Government capital expenditure, and by such a means as I suggest exactly the reverse would take place. You would increase Government capital expenditure and decrease taxation, and it appears to me that it would, in a rough and ready way, give constantly increased purchasing power equal to constantly increasing production, and national productive power is constantly increasing.
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    Another criticism that I suggest in a tentative way to this policy of planning is, Will these vast organisations encourage or tend to stifle inventions Is it not possible that, if an invention is brought out which causes an enormous increase of unemployment, these combines would deliberately stifle it? There is, I believe, an invention in existence to-day in the spinning industry which would throw out of employment 75 per cent. of those engaged, and for this reason it is held up. Any economic improvement which we are working on must allow for and must welcome the fullest possible use of labour-saving machinery. The third criticism that I put forward is that I am not quite satisfied, in spite of the speeches this afternoon, that this policy will not crush out the small man. I think the hon. Member for Darlington said the small man could go to the board and would probably get compensation. Another speaker, I think it was the hon. Member for Stockton-on-Tees (Mr. Macmillan), said that the small man could become a new entrant into one of these great national industries. But could he? Take the Hops Board to-day. It is very difficult for a new entrant to go in unless he buys the right from an existing holder. The result might be to accentuate what is really an evil feature in our modern life— the concentration of power and of wealth in fewer and fewer hands. That evil has been drawn attention to in the following words
    "It is patent that in our days not alone is wealth accumulated, but immense power and despotic economic domination is concentrated in the hands of a few, and those few frequently not the owners, but only the directors of invested funds who administer them at their own pleasure."
    The final point that I want to put forward is this: Would planning make for unduly increasing the authority of the State? If it did, it would be entering into the territory of the authoritarian State, and we get the authoritarian State to-day in so many different forms— in the forms of the Socialist, the Nationalist and the Fascist States. There, I think, is the real division in politics to-day. The great division in politics to-day is between those who believe that by the increase of State authority and the control of the individual you will achieve happiness for mankind. There are those who believe that the fixed ideal of the State can be attained in a few years and

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    that once it is attained you get stability. Against that you get the other mental attitude of those who believe that progress can only be attained by liberty and that liberty involves the right to experiment, the method of trial and error, and that this involves the liberty of the individual to fail. I feel that that is the one thing that is worth working for in political life— absolute freedom, freedom to experiment and even to fail. By that means alone, I believe, can we ensure human progress.
    Mr. MOLSONIn view of the reply of the right hon. Gentleman the President of the Board of Trade, I ask leave to withdraw the Amendment.
    Amendment, by leave, withdrawn.
    Main Question again proposed.

    UNEMPLOYMENT ASSISTANCE.
    9.4 p.m.
    Mr. ARTHUR GREENWOODBefore the Question, "That Mr. Speaker do now leave the Chair," is put, I should like to bring the House back to a very immediate, practical, and important question, if my voice will allow me, because I am suffering from a slight temporary failure at the moment. This question of the position of the local authorities is now very serious, and it is not one which they have created for themselves. The position in which we are now placed because of the postponement of the second appointed day arises, not because the local authorities have committed any sin, but because of the muddle into which the Government has fallen, arising out of this Unemployment Act and the regulations which were made under it. That muddle has been admitted. The Chancellor of the Exchequer himself, I think in the country, admitted that it was a most unfortunate mistake. However that may be—it is not for me to-night to go into that question—the truth is that the Government have had in effect to suspend the operation of the Unemployment Act of last year. After all the magnificent things that were said about it from the Government Front Bench—it was described as the greatest piece of social legislation of modern times—one would have thought it would be able to hold water. As it was, it was clear that when the regulations were published—and this is the first piece of legislation we have
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    had where the regulations were far more important than the substance of the Statute itself—they would not work.
    On the 7th January the regulations came into operation and there was a protest against them not merely from people who were concerned to make trouble in the country but from the unemployed, from employed persons, from persons who were not likely ever to be unemployed, from ministers of religion, and not less important from the point of view of this House, from Members who support the Government. The Government, therefore, determined that their regulations should be, for the time being, suspended, and what has been called a standstill arrangement was agreed upon with no definite date for its termination. Unfortunately, however, that involved the local authorities, and they are among the victims of the Government's own incompetence. Hon. Members will remember that under Part II of the Act of last year local authorities were to be relieved of their responsibility for the maintenance of the able-bodied unemployed. That was a long overdue recognition of what ought to have been the case many years ago. I imagine, if the usual procedure were followed, that prior to the introduction of the Bill there had been discussions with the local authorities as to the terms and the date on which this transfer should take place. An arrangement was arrived at sharing the responsibility as between 60 and 40 per cent., and the new principle of British law was established for the first time that local authorities were to contribute to the expenses of the State. Hitherto the boot has always been on the other leg and the State has contributed to the expenses of local authorities.
    I cannot deal with any question of new legislation, and it is not for me to raise the justice of the division of 60–40 per cent., but I cannot believe that, when these negotiations were taking place, there was no mention of the date when the transfer had to take place. It may be that the Chancellor of the Exchequer and those who were engaged in the negotiations with the local authorities never gave any binding undertaking with regard to the date on which the transfer of the care of the able-bodied should take place, but it was rumoured—I put it no higher than that—that local authorities might be relieved of their

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    responsibility for the able-bodied as from 1st July last. It is certainly true that local authorities were led to believe that they would be relieved as from the 1st October. I have seen a good many reports which make it dear that county borough councils and county councils were allowed to believe that. I am not putting it higher than that because that is part of my case, which is that they have been very badly let down. They were led to believe that the date was to be the 1st October. When I mentioned that date in the House on the 12th February an hon. Member interrupted me, and then the hon. and gallant Member for Tiverton (Lieut.-Colonel Acland-Troyte), who is, or was, the chairman of the County Councils Association, said that when the question was considered by the Government and the County Councils Association the 1st October was mentioned.
    There is not the slightest doubt that local authorities had obtained the impression, without perhaps a definite statement from the right hon. Gentleman, that they were to be relieved of this burden on 1st October. It is undoubted that a very large number of authorities did, as a matter of fact, begin to prepare their budgets for the current financial year on the understanding that the new arrangements were to come into effect on that date. After the Act was on the Statute Book— the second appointed day was not stated in the Act— the Government made up their mind that the appointed day should be 1st March. As I understand it, that was done behind the backs of the local authorities. So far as I know, the negotiations were then over, the Government had got what they wanted, and they could make the appointed day whenever they liked. Instead of consulting the local authorities frankly, they issued their own edict that the appointed day should be the 1st March. That brings the story up to the point of the collapse of the Government scheme and of their regulations and the beginning of the operation of the standstill arrangement. But prior to the 1st March disappointed local authorities, hastily revising their estimates, were still of opinion that the appointed day would be the 1st March this year. Their estimates were quite rightly based upon that assumption.
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    At the eleventh hour, within a few weeks of the beginning of their new financial year, when they had all their plans made and their rates settled, the Government took off the appointed day. I say that that is a betrayal of the local governing authorities in this country, and t0hat if the Government make a mistake, and if their regulations will not work and they have to withdraw them, they ought not to call upon the local authorities to be the victims. The present position is that the Government have not declared when the new appointed day is to be. When they came to this House in sackcloth and ashes, as they did, they might, in common decency, have told the local authorities the date of the second appointed day. But I suppose they do not know. "Standstill arrangement" is a very good description of the kind of arrangements this Government makes. I suggested in a previous Debate that the standstill arrangement would continue until the next General Election, so that all the dirty linen would have to be washed by some other Government.
    The local authorities are now faced with a burden which the law said they would be relieved of on an appointed day which the Government had determined should be before the expiration of this financial year. It is not for me to enter into calculations of the effect of the Government's formula, but there is not the slightest doubt that local authorities are facing an increase of the rate burden due to the fact that the Government have capitulated and left them in the lurch. It is all very well for the Chancellor of the Exchequer, who represents the city of Birmingham. So far as I can calculate, the postponement of the appointed day means only an additional third of a penny rate in Birmingham. On the same basis of calculation— and the right hon. Gentleman may be able to challenge my figures— Liverpool, which has not enjoyed the economic prosperity of Birmingham during the last seven or 10 years, finds itself with an increase of 1ld. Then there is Merthyr Tydvil, a derelict town if there ever was one. There is no more distressed borough in this country than Merthyr Tydvil. It has been hit as hard as the city of Liverpool, and hit longer than the city of Liverpool. Because of the Government's betrayal of its interests and of the Government's own promises, Merthyr Tydvil finds itself faced with an

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    additional rate of 8½d. Gateshead will have to face an addition of 5¼d. and Sunderland an addition of 7¾d., and other towns will pay accordingly.
    Those are burdens cast on the local authorities after the State had given a solemn undertaking that they were to be relieved of them, after the Government had declared that whatever happened they were to be relieved of them on 1st March. I will take the county boroughs, without the county councils, because, on the whole, it is the county boroughs, apart from one or two county councils, which are most affected by the action of the Government. They would have been asked to make a contribution of £1,200,000 per year to the Unemployment Assistance Board. That is the way in which this Government transfer the responsibility for the unemployed from local rates to the Exchequer. I cannot believe that all the responsible local administrators invented 1st October as the date when this change was to commence, and assuming that they were led to believe that the change would operate as from 1st October, from that time up to the beginning of March—21 weeks—the contribution would have been rather more than £480,000. In that period I think I can say that the out relief of the county boroughs in England and Wales would have amounted to £4,000,000. As regards the able-bodied it would have amounted to £1,400,000. If the Chancellor of the Exchequer thinks my figures are wrong, he will give me the correct figures. It is true that in that period of 21 weeks from 1st October to 1st March we should have had a little bit of this miserable £500,000 for the distressed areas, which the Minister of Labour announced with pride was to tide the worst of them over the difficult time.
    The net effect of it all is this, that in the five months from 1st October to 1st March the county boroughs have lost through the postponement of the operation of the Act over £800,000. From 1st March onwards, because of the fact that the Government cannot make up its mind as to when the appointed day is to be, that sum will be proportionately increased. But that does not end the trouble of the local authorities. If the amount of destitution in the country were the same as in the standard year
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    1932–33, the local authorities instead of having spent over £800,000 in that five months would not have spent half that amount, they would not have spent over 2350,000. But the truth is that in the interval between the standard year and to-day their problem has increased, and instead of the local authorities dividing these responsibilities with the Government in the proportion of 60 per cent. and 40 per cent. they are, in fact, bearing the whole burden and bearing it on an increased scale.
    Since then the Government have provided £2,000,000 for the depressed areas. I am very sorry to say that I have almost lost my voice. It has provided £2,000,000 for a year. That will be spent subsequently. Unfortunately, it is not coming to the assistance of many areas which are, in fact, depressed but which do not come within the definition. Here are the local authorities, who during the past three and a half years have been deprived of assistance which had been previously forthcoming to them, who have had to face very considerable difficulties, who have been compelled to retrench on very necessary services because of the policy of the Government and have to do things now because of the postponement of the last three and a-half years. They meet the Chancellor of the Exchequer and put, I assume, this case They are still carrying a burden that Parliament never intended them to carry after 1st March. What is the right hon. Gentleman offering? Either the right hon. Gentleman ought to have made no concession at all, or he might have exercised a little real generosity to the local authorities. He has, in effect, said" I know you are having to bear these burdens through the misdeeds of the Government of which I am a member "—a fact he has admitted in public"— but I cannot help you. All the burdens I am casting upon you you can pay in the next five years instead of this year." To borrow to meet current expenditure, that is one of the most dreadful expedients that any orthodox financier could ever be expected to have to accept, least of all the Chancellor of the Exchequer. I always thought that the worst kind of expenditure was to borrow in advance for current expenditure. The Chancellor of the Exchequer and the Treasury were so hard driven that the best they could do for the hard-driven local authorities

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    was as much as to say: "True you have to spend perhaps 1,500,000 more this year, because nobody knows when the appointed day will be, but you spend it, and we will allow you to repay it over five years." I do not believe current expenditure ought to be carried out on the instalment system. The honest thing for the Government would have been to admit this mistake with regard to unemployment, and to indemnify the local authorities for the additional expense because of their action. I think that would have been common justice to the local authorities of this country.
    I am only sorry to think that the, Government, who have been in discussion with the local authorities, and claim to be anxious to assist the local authorities, should have treated them in this shabby fashion, for the local authorities have done nothing; it is all the mistake of the Government. I hope even at this late stage, that, just as the right hon. Gentleman the Minister of Labour made a complete climb down about the Regulations, so the Chancellor of the Exchequer will be prepared to repent his ways and to show it little more generosity to the local authorities of this country, who are being expected now, who indeed must, carry responsibilities which were to have been transferred to the State, who have never grumbled at accepting responsibility, but who have quite rightly objected to having to meet a large heavy bill for the maintenance of the unemployed which the Government said last year was a responsibility that they were prepared to bear. I think this episode in the history of the Government is perhaps one of the most unfortunate, one of the meanest, and, late though it may be, having regard to the right hon. Gentleman's surplus I hope he will be able to agree to-night to make a statement that will reassure the local authorities. Because of the misfortune of the Government, the local authorities and the poor they have to assist should not be in any way prejudiced by that mistake.
    9.30 p.m.
    Mr. CLEARY:I want to make a few remarks on this subject this evening, not merely as a Member of this House, but as a member of a local authority, having in mind my experience in the City of Liverpool, which is one of the distressed areas that has taken the initiative in conven-
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    ing the recent conferences to discuss this matter with the Chancellor of the Exchequer. I want to suggest that these discussions must go on inside and outside the House until the Government accept full and complete responsibility for unemployment, for until we have that basic question settled local authorities, particularly distressed areas, are likely to labour under a grievance. We do feel in cities like Liverpool, and in areas that are even more distressed, that unemployment is something caused by national and international factors. Because of that industrial areas in the nature of things are least able to bear that burden, and should not be called upon to bear a disproportionate share of that liability" while other areas, for example residential, escape scot-free from a burden they can at least bear in part. Local authorities have been justified in expecting the Government to accept that position. On 12th April, 1933, during the discussion of a problem similar to that now under review this evening, the Minister of Health made the following statement
    "One of the bases of this redistribution of responsibility between local authorities and the central Government will be that the central Government shall accept responsibility, both administrative and financial, for assisting all the able-bodied unemployed who need assistance."—[OFFICIAL REPORT, 12th April, 1933; col. 2,607, Vol. 276.]
    That, I think, was an undertaking that we had a right to anticipate being fulfilled in the near future. The Government ought to face up to this problem as a national one. The Government have not done so. The grants to distressed areas of £440,000 have proved altogether inadequate, having regard to the increasing load thrown upon distressed areas. The total number of persons receiving poor relief in 1930 was 976,000, and at the end of 1934 that figure had risen to 1,432,000, so that there has been a progressive increase in the number of persons receiving poor relief and the financial liability falling on local authorities. In the city of Liverpool, which I mention because of my intimate knowledge of its burden and only use as an illustration of the 50 odd other local authorities which have been brought into consultation recently—some of which have suffered over a longer period—according to yesterday's meeting in Liverpool there will be an increase in

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    the public assistance rate of 1s. 4d. for this year. The amount to be raised is £1,286,799, which is an increase of £131,827 over last year. In the budget for Liverpool only one-fifth, &£270,000, which is our extra burden from the period starting 1st October, and ending in March, was included, due to the promise of the Government to facilitate a spread-over period for five years.
    Local authorities claim that they had some right to anticipate that 1st October would be the appointed day. Some areas, including Liverpool, expected that 1st July would be the appointed day, and Liverpool budgeted upon that basis. I am not going to argue with regard to 1st July, but I suggest that the authorities were justified, because of the Government's vacillation and indecision upon this matter, and of statements that had been made in the House and outside by responsible Members of the Government, in expecting that 1st October would be the appointed day. They are justified in coming to the Government by direct negotiation and asking for some kind of relief. Local authorities are, in many cases, great corporations carrying on, in their own sphere, the work of administration in this country, and they come to the Government as responsible corporations, not to beg, but to ask for relief which only comes into question because of the Government's policy, and the muddle and mismanagement regarding the unemployment Regulations which resulted in the further delay of the appointed day. The Government should bear the full burden of the consequences of their failure to face up to the policy which they placed before the House of Commons.
    Many people and many interests are approaching the Government, probably indirectly, expecting blessings to come from the wonderful surpluses which are always rumoured at this time of the year. We are led to understand that the country is not exactly impoverished, and that something like £7,000,000 is likely to be available. Part of that money will presumably be used to relieve taxation here and there, and to relieve hardships. Have the local authorities not the right to ask for a share of that £7,000,000? Can any argument be placed against their request? The Government have argued
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    that they cannot afford it, but the case of the local authorities is morally right, and the only refusal that can be made is on grounds that the Government cannot afford further to relieve the distress of the local authorities. Now that we are told that there will be this surplus, unexpected I believe, of over 27,000,000, it is right for the local authorities to ask for help.
    I do not expect the Chancellor—to use the immemorial phrase—to anticipate his Budget statement, but I expect him, when the time comes for him to consider various interests, to take into consideration the distress of the local authorities Which has been continuing over a long period. The local authorities are bearing their share of the distress of the country and of the consequences of the failure of Government policy, and the Chancellor might consider with a little more sympathy the great local authorities, in the administration of which he himself has had vast experience. I speak as a representative of the City of Liverpool, and other hon. Members will speak because they are interested in other distressed areas. The right hon. Gentleman the Chancellor of the Exchequer represents a city which can hardly give him the right outlook with regard to the distressed areas of the country. We have in mind our own cities and our distressed industries, and I ask him therefore to view the question as Chancellor of the Exchequer and as a Member of His Majesty's Government. In that light, and having regard to all the circumstances Which I, in a very humble capacity, have placed before the House, I ask the Chancellor of the Exchequer to grant the local authorities some relief out of the Budget surplus.
    9.41 p.m.
    Brigadier-General Nation: I want to say only a few words upon this subject, which has already been fully covered during the Debate. I do not wish to quote figures; hon. Members who take an interest in the distressed areas must be very familiar with all the figures, in view of the various deputations which we have had to London and of the debates which have taken place in the House of Commons. I represent one of the cities which are mostly hardly hit. I can assure hon. Members that in Hull the unemployment question transcends every other and the

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    question of benefit from the Government is taken very seriously. The policy of the Chancellor of the Exchequer throughout this period has benefited a great many towns, but for the city which I represent the benefits have not been so apparent. We have suffered to a large extent from the shipping policy and from the tariff policy, as well as from the employment of coloured and foreign labour on British ships. What we have gained in industry and in business we have lost at the docks.
    We consider in Hull that relief of the unemployed is a national charge and should not be borne by the local authorities. We have contributed our quota towards national charges by way of taxes and so on, and we have not complained about that, but when it is a question of paying for the unemployed, which are no fault of the city, we consider that it is a national charge to be borne by the nation as a whole. When the Unemployment Act was introduced we made no complaint about the appointed day. We made no complaint as to the delay when the appointed day was postponed, and when it was postponed again. We made no complaint when the Regulations were introduced and when they were withdrawn. We recognised that a mistake had been made, and we made no complaint about the mistake. I do not wish to know who made the mistake, or anything of that sort. We are convinced that neither the postponement of the second appointed day nor the withdrawal of the Regulations can in any way be attributed to the local authorities, and therefore we think that the local authorities should not be called upon to bear the burden.
    It is true that the Chancellor of the Exchequer has to some extent made concessions, but they are so small that they have made little or no difference to the rates. In Hull, the rates at the present time approach 20s. in the pound. With the further postponement of the Regulations there may be a further addition to the rates. We consider that the cost should be borne by the taxes rather than by the rates, which hit the poorest people in places where there is the most distress. Last week-end we had a very cheering piece of news. I refer to the financial position at the end of the year 1934, and I do appeal to the Chancellor of the Exchequer once more, after having taken part in deputations and meetings
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    with him, that in view of the surplus and representations that have been made to him and the deputations that have come to London, he should reconsider his decision once more, and see if he could not make a further contribution to help those who are really hard hit through no fault of their own.
    9.46 p.m.
    Mr. CURRY:I regret that I did nor, know until a very short time ago that this discussion was going to take place at this time, otherwise I should have been able to look up details of the position of local authorities which I have the honour to represent in this House. I observe that speakers who have come before me have all confined their illustrations to the county boroughs, and have made no reference to the county councils. Whatever may have been said about certain of the county boroughs, it is equally true, and true to a greater extent in regard to certain of the county councils, that these industrial counties have suffered depression for many years and are finding their rate burdens increasing year by year, and even with the relief that has been given, are more conscious of the tremendous burden they are carrying in rates than they have ever been before.
    It is not the time to-night to retrace the history of these long negotiations which led to the insertion in the Unemployment Act of the Section which agreed that the burden would to some extent be taken over by the Treasury, nor do I think it profitable at this stage to argue the merits or demerits of the claim of unemployment being made a national charge. The point we are discussing tonight is simply whether or not the position in which we find ourselves is the position in that the Government are in honour bound to take over the burden which would have been taken over if the Unemployment Act had taken its natural course.
    The CHANCELLOR of the EXCHEQUER (Mr. Chamberlain):What does the hon. Member call its natural course?
    Mr. CURRY:I will just continue. I remember a discussion which took place in this House on the regulations, after the re-assembling of Parliament, when we had a discussion in this House in which

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    the regulations were withdrawn. I think it was the generally expressed opinion at that time that whoever may have been responsible for that situation, the local authorities were not responsible, and should not be asked to carry a greater burden, and therefore it was hoped that the standstill order would not affect the coining into operation of the second appointed day. The purpose for which I intervene in this discussion is because I do not think I should be doing my duty here if I did not attempt to make the Government aware that there is a real feeling of disappointment among the local authorities in the areas from which I come.
    I understand that, in my district the precept is up again this year by 1s. and there are other authorities on the North-East Coast where the increase is, I understand, greater still. I have not the knowledge to suggest that this is entirely due to an increase in the public assistance charge, but it is obvious that if they are not going to get the promised relief, their rates will be higher than they would otherwise have been. It is not only the county council. I have here a copy of a resolution to which I would respectfully draw the Chancellor's attention, because I think he would like to say something in reply to it. It has been passed by the corporation of Newcastle-upon-Tyne, and I understand that it has been forwarded to other Members of Parliament. The resolution is
    "This council supports the conference of representatives of local authorities, etc., in their request for co-ordinated action on the part of Members of Parliament representing distressed areas, in order to secure the payment to local authorities of an amount representing the payment of which local authorities should have been relieved in respect of the able-bodied unemployed from 1st October, 1934, being of opinion that the Government are under an obligation both explicit and implied to pay this sum."
    If a large borough like Newcastle-upon-Tyne solemnly passes a resolution of that sort, it is difficult to believe that it has not some substantial reason for using the term "1st October." That date has long since passed out of our mind. We understood that it was to be 1st March. Still further has that date been postponed I ask the Chancellor of the Exchequer if he cannot see his way to do in more even than was promised in the Act
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    of 1934 for the relief of the rate burden in many of our industrial areas. It is really growing serious, and while authorities may have their faults, and while the Treasury may have reason to differ from many of their actions, the fact remains that the local authorities of this country deserve well of the central Government, and it is not at this time that the central Government should seek to make more difficult the discharge of a difficult task.
    9.52 p.m.
    Mr. CHAMBERLAIN: This Debate has revealed an astonishing misunderstanding on the part of nearly every Member who has taken part in it. The hon. Member who has just addressed the House told us that he had had only short notice, and had not had an opportunity of looking up the figures. He has evidently not had an opportunity of looking up even the facts. I can hardly blame him, because the right hon. Gentleman the Member for Wakefield (Mr. Greenwood), to whom his friends and supporters must have listened in amazement and consternation, packed his speech with so many complete misunderstandings, errors and misrepresentations. The right hon. Gentleman seems to be completely ignorant of the negotiations which recently took place with the representatives of local authorities in respect of the financial arrangements to be made by them in consequence of the postponement of the second appointed day after 1st March. He has told the House over and over again that the local authorities are bearing the whole burden of that sum of which they would have been relieved if the second appointed day has been as was intended, 1st March. Let me inform him that he is entirely and absolutely mistaken. He has no right to come down to this House and make a charge against the Government without having first made himself acquainted with the facts which are is the recent memories of Members of the House.
    I would say to the hon. Member for Bishop Auckland (Mr. Curry) with reference to his statement that the Government were in honour bound to relieve the local authorities, that so far as the period after 1st March is concerned, the Government took the view, and publicly announced that they took the view, that they did consider themselves in honour

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    bound to see that the local authorities did not suffer by reason of an alteration which was by no means due to them, and which was necessitated by the action of the Government. I thought that everybody knew it, but I must repeat that I met the representatives of local authorities in Scotland and in England and Wales, and came to an agreement with both as to the terms on which we should make arrangements for the purpose of putting the local authorities at least in as good a position as they would have been in if the appointed day had been maintained at 1st March. There is, therefore, no grievance on the part of any of the local authorities in this respect through the postponement of the second appointed day after 1st March. That was the gravamen of the right hon. Gentleman's charge, but of course, if one begins with false premises, one is apt to be led into false conclusions.
    The real case concerns a very narrow point. It concerns entirely the period between the 1st October, 1934, and the let March, 1935. It is that period which alone is the subject of difference of opinion between the local authorities and the e Government. As to the suggestion that there was any pledge by the Government, some hon. Members have heard me quote before, but I will quote it again for the sake of those who did not hear it or have forgotten it, a letter from the County Councils Association dated the 24th April, 1934, in which they said:
    "Admittedly the Association have not received any undertaking either written or verbal that the Bill would come into force on the 1st October next."
    If it were true, as the right hon. Gentleman has Bo often asserted, that local authorities were led to believe that the appointed day would be the 1st October, one is tempted to inquire how it was that the City Council of Liverpool took the 1st July as the date. There was no question of any undertaking, but of course local authorities made their own guesses at the date on which they thought it possible or likely that the appointed day would be fixed. Therefore, while I cannot admit that there has been any breach of any pledge or undertaking, I think it is perfectly fair, as I have said before, to discuss whether, since the appointed day was in fact later than some local authorities bad hoped it would be, there is a case that some special
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    relief would be given for that period. But in considering the point whether the local authorities ought to be compensated for not having had the relief at the time when they expected it, I think it is fair to take some other circumstances into account.
    In particular, let me remind the House that we are not here to-day to discuss questions which would require an alteration of existing legislation, and, therefore, I am not proposing to discuss any suggested Amendment of the Act. When, however, the amount of the local authorities' contribution towards the cost of relieving the able-bodied unemployed was fixed, the 60 per cent. in question was not 60 per cent. of what is being spent to-day, but 60 per cent. of the expenditure in a standard period. At the time when that standard period was fixed— the standard period being the year 1932—it was said by a good many local authorities that it was not fair to them, because, they said, it was probably a year of peak expenditure, and, since the amount expended on relief would probably come down, the contribution should be fixed at a lower figure. As everyone knows, however, they were mistaken, for, so far from its being a peak year, the expenditure of that year has continually been exceeded, and the latest estimate, which I have only had to-day, of the rate expenditure in the current year, namely, the year beginning on the 1st April, contemplates a figure some £3,000,000 in excess of the standard year; but the 60 per cent. is still only that percentage of the expenditure in the standard year, and, therefore, the local authorities have made a bargain very much better, and the Exchequer has made a bargain very much worse, than we anticipated at the time when the bargain was made. Seeing that the period in question is only this short period between the 1st October and the 1st March, and seeing that the local authorities are going to get a higher scale of relief than they anticipated, I must say I do not think there is any case for a further concession. I am afraid that this is one of those cases where appetite comes in eating. Every time they get a fresh concession they seem to make that a jumping-off place for a fresh demand.
    After all, we have to consider that the taxpayers too have their burdens

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    to bear. I am sure that everyone sympathises with those parts of the country which have suffered so much and so long from unemployment, but do not let us forget that, although this 60 per cent, is often quoted as though it were the local authorities' share of the burden of the cost of relieving the able-bodied unemployed, it is only 60 per cent. of a very small fraction of the whole amount which is being spent upon the able-bodied unemployed, and, as I have informed the House on previous occasions, the Exchequer to-day is bearing, of the cost of assistance to the able-bodied unemployed, not 40 per cent., but something like 95 per cent., and it is only the difference between that 95 per cent. and 100 per cent. that is still left as the contribution of the local authorities. That being so, it is really, practically speaking, the case that the relief of these people has been made a national charge; what is left resting upon local authorities is a mere trifling fraction of the whole cost. In these circumstances, I think the House must agree that there is really no case for any further concession.
    10.4 p.m.
    Mr. BUCHANAN:I rise, not to continue the discussion on the previous point, but to raise another matter of which I have given notice, concerning a point which I previously raised with regard to standard benefit. Hon. Members who were present at Question Time last Thursday will recollect that I then raised the question of the right of certain unemployed people to their, standard benefit so far as dependent children were concerned. On that occasion I endeavoured to raise the matter on the Adjournment, but you, Mr. Speaker, in your judgment, thought it would be best to raise it here. Accordingly, I now desire to raise a matter which is of importance to a large section of those who are unemployed. After the last Unemployment Insurance Act had gone through the House, we had what is commonly called a consolidating Act. Part I, roughly speaking, dealt with standard benefit, and Part II with what is called transitional benefit. That was subsequently altered in the consolidating Act, but for the purposes of our present discussion Part I enacted that the applicant for standard benefit
    488
    was entitled to that benefit without any means test being applied to him.
    It was the common conception in the House of Commons that if a person had the stamps, there ought not to be any form of means test applied to that person. I raised two cases, one of a man at Stanningley in Leeds, the other at Dudley in Birmingham, where applicants for standard benefit were questioned when they applied for dependants' benefit as to the household income. In regard to the man Simpson in Leeds, the facts, broadly, are not in dispute. He was in standard benefit. He is a tradesman of my own, and was paid his benefit through the Pattern-makers' Association. When he applied at the Exchange, the insurance officer, or someone acting on his behalf, started questioning the man, and wanted to know whether anyone else in the house was working, how much they handed in to the household, so that afterwards a calculation could be made, and if it were found that other members of the household who were at work handed in, in combination, more than the parent, the parent would be disqualified from receiving standard benefit for his children.
    In the Dudley case the circumstances were similar. The man had two children who were at school, and two adult children who were admittedly at work. There were questions as to the amount the two adult children handed in, in order to calculate the proportion of the family income, and if it worked out in a certain manner the parent would be disqualified from receiving dependant's benefit. In the Leeds case it is disputed by the Minister that the man was asked as to how much he gave in to the family income. When a Minister in this House makes a definite statement denying facts, one must take notice. I took notice, and have again got into touch with the man and the society which paid his benefit. The man is a good type of citizen, and he is prepared to swear before any court that he was questioned as to how much he gave in.
    The second and more important fact is the question of the child. The Minister's defence is that he is entitled in a claim for standard benefit, if the adult members of a family who are at work give into the household a sufficient sum, to disqualify the parent for standard bene-

    489
    fit in respect of dependent children. That is a state of affairs that frankly I have never known to prevail in standard benefit claims. I am sick and tired of the defence, although I never praised the Labour Government, that for everything wrong the Government are doing they say that the Government before them did the same. That is good enough in a Censure Debate, but when you are dealing with a man's right to benefit it does not fit in. Whether the other Government did it or not is not my concern; I am concerned with the practice.
    Since the Minister answered my question, I have made further inquiries to find out if it were the practice throughout the country that in claims for standard benefit questions as to the contributions of other members of the family were asked. I cannot find a single case where it has been done. It would be wrong of me to quote the managers of Exchanges, because it might involve them in wrangles across the Floor of the House, and I have a great admiration in the main for the way in which they do their work. I have a feeling of shame when I think that I do nothing but irritate them from morning till night, and I am not anxious to attack them, because I think that they do a difficult job decently. But I have tried through the medium of the Exchanges to find out whether in. Scotland this is done, and I cannot find a single case where it was done. I should like the Minister to tell us in how many standard benefit claims a person has been refused dependants' benefit on the ground that the amount handed in to the household outweighed the contribution of the parent.
    The Minister sought refuge and defence in Section 37 of the Act, which says if a child
    "is under the age of 14 and is maintained wholly or mainly by."
    Section 38 applies in the same way to a wife. It says:
    "where the assured contributor is residing with her or is wholly or mainly maintaining the wife."
    The Minister seeks, in defence, to say that the Government of the past did it, and that wholly or mainly dependent depends on what the family income is. That was never the construction of the Act, and was never meant to be. I admit at once that a child may not be dependent because the child has an
    490
    income of its own. In that case the child is not a dependant child; the child itself has its income. The practice has been in unemployment insurance that where the child had an income, that is to say, if it were the child of a deceased person and a man had married a soldier's widow who had a pension of 10s. a week, in such a case the child was not taken as being a dependant. In the case of a man marrying a widow, a, child may have a pension of 5s. or 3s., according to age. There the man has to prove dependency. In these cases it was not dependent on the family income; it was dependent on the income of the child itself. Here the family is asked. It means, in effect, that if this practice goes through, the child of a man on standard benefit is in danger. In effect it is a premium on honesty. I represent a division, I suppose, where poverty is worse than in most divisions, and which is an average kind of constituency in respect of people who sometimes break the law. I hope that the House of Commons will never put a premium on decency and honesty. This sort of thing is really putting a premium on honesty. Take the typical case of a miner. The average wage of a miner is about &£2 8s,
    Mr. G. GRIFFITHS: £2 1s.
    Mr. BUCHANAN: I will say £2 5s. or even £2 10s. a week. He has three sons working and two at school. That is an average family. The three sons who are working may not all be miners. One may be earning £3 or £4 a week, another £2 10s., and the third £2, and they may give £3, £2 and 30s., respectively towards the combined income, and this obviously makes a child, if you argue the matter on an equitable basis, more dependent upon the sons than upon the father. What is your insurance principle? When the Bill was going through the House, the great defence of the Tories was that on a question of insurance you have no right to examine these things. If you were insured and there was a fire, theft or burglary you should not, having paid the premium, be examined in regard to these matters. The premium of unemployment insurance includes a wife and children. It is said that they only ask the family income. I believe that when the Tories fought the party above the Gangway more bitterly than they do now, they claimed

    491
    that they were the upholders of family life and that Socialism would smash it. That used to be the stock argument. For goodness sake do not put a premium on decency. If a man comes along and says that he earns £2 or &£5 a week, but only gives £1 a week to the household, who is to say whether this is right or wrong? Under the family income test in regard to standard benefit, if a man tells the truth, you can put a premium on him and can disqualify a child. If someone with £5 a week pays only £1 into the household, you give the family the benefit because they are being treated less generously by members of the family than they were before. I come from a family where a brother carried on the whole family, even when my father was alive, giving £4 and even £5 a week. Under this sort of thing he would be punished for being decent to the rest of the members of his family, whereas if he only contributed £1, full benefit would be granted.
    The whole approach to the question is entirely wrong. When a man claims in respect of his wife he has to sign a declaration saying whether she is working, whether he is living with her, and whether he is maintaining her. He has to sign that declaration. For a child it should be the same. The Section was never meant to apply to the family income. If it did, obviously you could have no test of family income which was worth anything unless there was verification of earnings. When a man claims for his child he should say whether the child is dependent on him.
    When the Section of the Act of 1930 was framed, children were allowed to work and earn wages, and you applied the same dependency test to a child's earnings as you did to the man's earnings. Now all the test that is needed from the man is the same test as in the case of a wife; does he maintain the child and is he prepared to make a sworn statement that he is maintaining the child? If he makes a sworn statement to that effect then, obviously, he is entitled to claim that he is maintaining his child. I look upon this as a serious issue; if it is allowed to go unchallenged, if the Minister adheres to the statement that has been made, it places the standard benefit in the case of children in danger,
    492
    and I shall take the earliest possible steps to remedy it.
    10.23 p.m.
    The MINISTER of LABOUR (Mr. Oliver Stanley): There appears to be some misunderstanding in regard to the question which the hon. Member has raised. It is not possible on this occasion to discuss anything which requires legislation and, therefore, I take it that the hon. Member is not asking for amendments of the law, but trying to prove that in the administration of the Act there has within the last three months been introduced into unemployment insurance in respect of dependent children an entirely new principle. I can assure the House that the principle of which the hon. Member has complained has been a feature of the administration of this Act ever since dependants' benefit in respect of children was first granted. The dependants' benefit for children had its origin in the Act of 1922. It was laid down in that Act that dependants' benefit was not to be granted as of necessity in respect of a, child but only in respect of a child maintained wholly or mainly at the cost of the person entitled to benefit. On that point there is no dispute.
    For some years subsequent to the Act of 1922 the granting of children's benefit was in the discretion of the Minister, and was not subject to a decision of the umpire, but, even so, it happened that in one or two cases which went to the umpire on other points this point of being wholly or mainly maintained a incidentally. The umpire even as far back as 1927 laid it down that that was a question of fact which had to be decided in each case and involved an examination of the sources of income in the family, not of earnings but of contributions to the household fund. In 1928 the administration of this dependants' benefit was brought within the purview of the umpire, and subsequently the umpire gave several decisions which made it quite clear that the matter must be determined by what is known as the family fund. I quote the words of one of these decisions:
    "The applicant is entitled to benefit in respect of each of his children if they are maintained wholly or mainly by him. Whether the children are so maintained is a question of fact. In my view, in order to determine this question it is necessary to inquire who provides the main or greater part of the fund out of which the children are maintained."

    493
    That was in 1928. As a matter of fact these umpires' decisions are not really of immediate relevance, because although they governed the practice of the time the substance of the decisions was subsequently embodied in the Unemployment Insurance Act which was passed in 1930 by hon. Gentlemen opposite—an Act to which the hon. Member for Gorbals (Mr. Buchanan) gave his support.
    Mr. MAXTON: With many qualifications.
    Mr. STANLEY: I think the hon. Member for Gorbals has overlooked this Section in that Act which in 1930 quite clearly set out a provision that disposes entirely of his contention that these inquiries were never meant to extend to the contribution of other members of the family to the household fund, but only to the total earnings by the children themselves. Let me read Sub-section (2, f) of the Act of 1930:
    "An insured person shall not be deemed to be wholly or mainly maintaining any other person unless the insured person when unemployed contributes towards the maintenance of that other person an amount not less than the amount of the increase of benefit received in respect of that other person, and when in employment (except in a case where the dependency does not arise until after the date on which the insured person became unemployed) contributed more than one-half of the actual cost of the maintenance of that other person."
    Mr. BUCHANAN: Hear, hear.
    Mr. STANLEY: It is quite clear that the applicant for the benefit has to prove, in order to be entitled to it, that he contributed more than one-half of the actual cost of the maintenance of that person. It has been the practice of—
    Mr. G. GRIFFITHS: Not the practice.
    Mr. STANLEY: If the hon. Member will listen to me perhaps I shall convince him. It has obviously been laid down by law that somehow or other the applicant for benefit has to discharge the onus of that proof; he has to prove that he wholly or mainly maintains the child, and that means that he has to prove that when in employment he contributes more than one-half of the actual cost of the maintenance of the child. To enable the applicant in the easiest way, from his own point of view, to discharge that onus, it has been the practice for
    494
    many years since the introduction of children's benefit, to insert upon the form which the applicant has to sign questions directed to this particular point. In 1922 the question took this form:
    "Which of them (the children) are resident with you and maintained wholly or mainly at your cost? Are any of the children earning wages?"
    In 1928, this matter first came directly within the purview of the Umpire and the decisions to which I have referred were given and the form of the question was altered. It then read as follows:
    "Do any of the children contribute to the household expenses? Is any pension or allowance payable in respect of any of thorn or is any other payment for their maintenance made by any person other than yourself?"
    After the passage of the 1930 Act, including the Section which I have read to the House, clearly setting out the position with regard to dependants allowances, the question on the application form was altered to read as follows:
    "Have you any other children living at home who earn wages? If so state names and amounts paid towards household expenses"
    From February, 1931, until some time in 1934 every applicant for children's allowance had to fill in an answer to that question and sign it. It is true that since that date certain differences were made in the question, in order, it was hoped, to meet the convenience of the applicants themselves. It will be remembered that the actual words of the original question were:
    "state names and amounts paid towards household expenses."
    It was found that in many cases applicants misunderstood the purpose of the question. They misunderstood the only question which we were entitled to ask them and they actually filled in what we neither asked for nor were entitled to know, namely, the actual earnings of the other children living at home. They were also apt to misinterpret the word "children" and to think that it only meant sons and daughters under a. certain age. Therefore, purely for the convenience of the applicants—as we believed—in July of last year the direct inquiry on the form with regard to the amount contributed by the sons and daughters was dropped and this question was asked:
    "Are there any other sons and daughters or any other persons living with you?"

    495
    If that were answered in the affirmative the applicant was then asked orally:
    "Whether and what they contribute to the family fund?"
    That was done purely because it was found that the answers to the written questions were sometimes incorrectly given to the disadvantage of the applicant. It is clear that if the applicant filled in the amount of earnings, instead of the amount of his son's contribution to the household fund, he would be increasing, against his own interest, the amount which he would be entitled to take into account. I think it is plainly established that for many years the law has been that this family fund has to be taken into account. It is established that far many years every applicant for dependants benefit in respect of children had to fill up and sign a form stating the names of any other children living at home and the amounts which they paid towards the household expenses. The only change in practice in recent years has been that to which I have just alluded, namely, that instead of including that question on the printed form the applicant is merely asked, "Have you any sons or daughters living at home" and the question "How much do they contribute" is put orally.
    That change was made, not for the convenience of the Department, but in the interests of the applicants themselves. If it has caused any misgiving or if any hon. Members can give any evidence that, as a result of it, inquiries have been made which were improper or which were not made before, I am perfectly willing to consider the substitution in the application form of some form of question directed to meeting that case. I submit to the House that it is abundantly clear that as the law stands the applicant for this benefit has, before he is entitled to claim the benefit, to discharge the onus of proving—
    Mr. BUCHANAN: Assuming that the income of one of the family is more than the parent's income and he, rather than the father, is held to be the person maintaining the child, will he become eligible, if unemployed, for unemployment benefit for the child? Is the right hon. Gentleman aware that another Section deliberately cuts him out and that therefore, nobody could claim for the child in that case?
    Mr. STANLEY: I cannot answer as to what in a particular case would be the meaning attached to that Section which I read, but if the hon. Member refers to the possibility of the father not being able to claim in respect of a dependant and nobody else being able to claim in respect of him, I wonder if he has not overlooked the proviso to Section 39, Sub-section (1) of the new consolidating Act, under which the father and the earning members can claim under a joint dependency. I think he will find in that Section the answer to his question. It is clear that as the Act stands. the applicant, to entitle himself to benefit, must prove that he wholly or mainly maintains the child, and that means that he has to fulfil the conditions laid down in the Act passed by hon. Members opposite as long ago as five years. During those five years until this day no complaints have been raised against the provisions of that Section, nor has it been suggested that any hardship was caused by it, nor, I am sure, did hon. Members opposite, when they introduced and passed it, ever think they were instituting a means test into unemployment insurance.
    I give the House the assurance that there has been no change in the practice whatsoever and that, in so far as an alteration has been made in the machinery, it is purely for the benefit of the applicant. In so far as that can be shown not to have contributed to his greater convenience, then I am prepared to consider a reversion to the old system and to consider finding some new form of question; but the House will realise that I can only discharge the duty laid down by the Acts of Parliament, and it is clear that those Acts demand that in fact proof of this dependency should be given.
    10.38 p.m.
    Mr. G. GRIFFITHS: I wish to draw attention to Sections 37 and 38 of the 1930 Act. It is remarkable that nothing has turned up between 1930 and 1935, after the Minister himself has stated to us to-night that he has sent out a different form to be filled in by the people who are claiming for dependent children. I am satisfied that there has not been a similar case to those mentioned by the hon. Member for Gorbals (Mr. Buchanan) in the country. Those are two cases that have just come up now, and the

    497
    reason for their coming up is primarily that the Minister, after the passing of the 1934 Act, has sent out a different form entirely. This will raise a storm of contention all over the country. I have been thinking, while the Minister and the hon. Member for Gorbals have been speaking, of the man with part-time employment who has sons at home. His sons may be working and he may be only working short time. Because he is working short time he has to suffer through not being able to draw benefit for his children. The Minister tells the man when he is out of work that he can maintain a child on 2s. a week, but he does not ask the man whether he has contributed to the child's keep so far as claiming benefit is concerned. If this kind of form is to be filled up because a father for the time being may not be able to work to earn as much as his son, and because the son is contributing to the upkeep of the home and the maintenance of his brothers and sisters, it is brutal to deprive the father of the benefit for his children.
    Mr. STANLEY: It is the result of the Act passed by the hon. Member's Government.
    Mr. GRIFFITHS: It is the result of the circular which the Minister has sent out. It is due to the right hon. Gentleman's administration. Why is it that cases have never arisen before July, 1934? The Minister cannot cite a case where anything of the kind has arisen.
    Mr. STANLEY: I can give the hon. Member at least half a dozen cases which have gone to the umpire for decision since 1930.
    Mr. GRIFFITHS: It is a remarkable thing that the right hon. Gentleman did not say anything of the kind until I put the question to him. These men have
    paid their contributions, and they expect to draw benefit for their own children. They are not the children of the sons or the daughters, and the men are entitled to draw the benefit in respect of the children. When they go to the employment exchange, however, they are told that they are not wholly or mainly maintaining their children. It is a wrong which has only just arisen. The Act was passed in 1930, and the Government seem to be saying that what they have not been able to get on the swings they are going to get on the horses, and the horses in this instance are the fathers who should be allowed to draw benefit for their children. If this thing is carried on, there will be a row from one end of the country to the other.
    10.44 p.m.
    Mr. BATEY: This is the most important question with which the House can be faced. The Minister is going to cause such a turmoil throughout the country by applying the means test to dependent children on standard benefit as he cannot imagine. Can the Minister tell us in how many cases this means test has been applied where the father was on standard benefit?
    Mr. STANLEY:I could not do so offhand, but will certainly make inquiries. Five or six cases have gone up to the umpire—since 1930—and I think in two of them the umpire decided against the applicant and in the others in his favour.
    Mr. PALING:Were they adopted children Was there any point of that sort?
    Mr. STANLEY: No.
    Question put," That Mr. Speaker do now leave the Chair."
    The House divided: Ayes, 121; Noes, 34.

    Division No. 140.]

    AYES.

    [10.45 p.m.

    Acland-Troyte, Lieut.-Colonel

    Broadbent, Colonel John

    Copeland, Ida

    Adams, Samuel Vyvyan T. (Leeds, W.)

    Brocklebank, C. E. R.

    Crooke, J. Smedley

    Albery, Irving James

    Brown, Ernest (Leith)

    Croom-Johnson, R. P.

    Allen, Lt.-Col. J, Sandeman (B'k'nh'd)

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

    Cross, R. H.

    Apsley, Lord

    Browne, Captain A. C.

    Davies, Maj. Geo. F. (Somerset, Yeovil)

    Aske, Sir. Robert William

    Burghley, Lord

    Denman, Hon. R. D.

    Atholl, Duchess of

    Burnett, John George

    Dickle, John P.

    Baldwin, Rt. Hon. Stanley

    Campbell, Vice-Admiral G. (Burnley)

    Duncan, James A. L. (Kensington, N.)

    Baldwin-Webb, Colonel J.

    Castlereagh, Viscount

    Dunglass, Lord

    Beaumont, M. W. (Bucks., Aylesbury)

    Cazalet, Thelma (Islington, E.)

    Elliot, Rt. Hon. Walter

    Blindell, James

    Christle, James Archibald

    Elliston, Captain George Sampson

    Bowyer, Capt. Sir George E. W.

    Collins, Ht. Hon. Sir Godfrey

    Erskine-Bolst, Capt. C. C. (Blackpool)

    Bracken, Brendan

    Colville, Lieut.-Colonel J.

    Everard, W. Lindsay

    Braithwaite, Maj.A.N. (Yorks, E. R.)

    Cook, Thomas A.

    Flint, Abraham John

    Briscoe, Capt. Richard George

    Cooper, A. Duff

    Fremantle, Sir Francis

    Gillett, Sir George Masterman

    Llewellin, Major John J.

    Ropner, Colonel L.

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

    Lloyd, Geoffrey

    Russell, Albert (Kirkcaldy)

    Gledhill, Glibert

    Lockwood, Capt. J. H. (Shipley)

    Russell, R. J. (Eddisbury)

    Goodman, Colonel Albert W.

    Loftus, Pierce C.

    Rutherford, Sir John Hugo (Liverp'l)

    Greene, William P. C.

    Lovat-Fraser, James Alexander

    Salt, Edward W.

    Gretton, Colonel Rt. Hon. John

    Lyons, Abraham Montagu

    Samuel, M. R. A. (W'ds'wth, Putney).

    Gunston, Captain D. W.

    Mabane, William

    Sanderson, Sir Frank Barnard

    Guy, J. C. Morrison

    MacAndrew, Lieut.-Col. C. G. (Partick)

    Shaw, Helen B. (Lanark, Bothwell)

    Hannon, Patrick Joseph Henry

    MacAndrew, Capt. J. O. (Ayr)

    Smiles, Lieut.-Col. Sir Walter D.

    Hartington, Marquees of

    McConnell, Sir Joseph

    Somerville, Annesley A. (Windsor)

    Headlam, Lieut.-Col. Cuthbert M.

    McKie, John Hamilton

    Stanley, Rt. Hen. Oliver (W'morland)

    Hope, Capt. Hon. A. O. J. (Aston)

    Macmillan, Maurice Harold

    Stevenson, James

    Howard, Tom Forrest

    Magnay, Thomas

    Stourton, Hon. John J.

    Howitt, Dr. Alfred B.

    Margesson, Capt. Rt. Hon. H. D. R.

    Strickland, Captain W. F.

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

    Martin, Thomas B.

    Stuart, Hon. J. (Moray and Nairn)

    Hudson, Robert Spear (Southport)

    Mayhew, Lieut. Colonel John

    Taylor, C. S. (Eastbourne)

    Hume, Sir George Hopwood

    Moore-Brabazon, Lieut.-Col. J. T. C.

    Thomson, Sir Frederick Charles

    Jamieson, Douglas

    Morris-Jones, Dr. J. H. (Denbigh)

    Titchfield, Major the Marquess of

    Jones, Lewis (Swansea, West)

    Ormsby-Gore, Rt. Hon. William G. A.

    Ward, Irene Mary Bewick (Wallsend)

    Kerr, Lieut.-Col. Charles (Montrose)

    Palmer, Francis Noet

    Williams, Herbert G. (Croydon, S.)

    Kerr, Hamilton W.

    Petherick, M

    Wise, Alfred R.

    Lamb, Sir Joseph Quinton

    Radford, E. A.

    Womersley, Sir Walter

    Law, Sir Alfred

    Ramsay T. B. W. (Western Isles)

    Leckie, J. A.

    Reid, William Allan (Derby)

    TELLERS FOR THE AYES.—

    Leech, Dr. J. W.

    Ramsden, Sir Eugene

    Sir Victor Warrender and Lieut.-

    Lindsay, Kenneth (Kilmarnock)

    Rhys, Hon. Charles Arthur U.

    Colonel Sir A. Lambert Ward.

    Little, Graham-, Sir Ernest

    Rickards, George William

    NOES.

    Adams, D. M. (Poplar, South)

    Dobble, William

    Macdonald, Gordon (Ince)

    Addison, Rt. Hon. Dr. Christopher

    Foot, Dingle (Dundee)

    McEntee, Valentine L.

    Batey, Joseph

    Gardner, Benjamin Walter

    Maclean, Neil (Glasgow, Govan)

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

    George, Major G. Lloyd (Pembroke)

    Mainwaring, William Henry

    Buchanan, George

    Greenwood, Rt. Hon. Arthur

    Mallalieu, Edward Lancelot

    Cleary, J. J.

    Griffiths, George A. (Yorks, W. Riding)

    Maxton, James

    Cocks, Frederick Seymour

    Groves, Thomas E.

    Milner, Major James

    Cripps, Sir Stafford

    Grundy, Thomas W.

    Salter, Dr. Alfred

    Curry, A. C.

    Jenkins, Sir William

    Smith, Tom (Normanton)

    Daggar, George

    Lansbury, Rt. Hon. George

    Tinker, John Joseph

    Davies, David L. (Pontypridd)

    Logan, David Gilbert

    Davies, Stephen Owen

    Lunn, William

    TELLERS FOR THE NOES—

    Mr. John and Mr. Paling.

    Supply accordingly considered in Committee.
    [Captain BOURNE in the Chair.]

    LABOUR AND HEALTH BUILDINGS, GREAT BRITAIN.
    Resolved,
    "That a sum, not exceeding £150,960, be granted to His Majesty, to complete the sum necessary to defray the charge which will come in course of payment during the year ending on the 31st day of March, 1936, for Expenditure in respect of Labour and Health Buildings, Great Britain."
    [NOTE£74,000 has been voted on account.]

    SILVER JUBILEE.
    Motion made, and Question proposed,
    "That a sum, not exceeding £50,000, be granted to His Majesty to defray the Charge which will come in course of payment during the year ending on the 31st day of March, 1936, for Expenses connected with the Celebration of the Twenty-fifth Anniversay of His Majesty's Accession."
    10.55 p.m.
    Mr. MAXTON: I do not want to delay the House on this matter, but I want to
    500
    oppose this Vote. I feel that it is absolutely necessary that at some stage in this matter we should make our protest against national expenditure on jubilee celebrations. We recognise that it might be appropriate on occasions for a nation to celebrate the passing of important milestones in its history, but we feel that. this has become a matter of pro-monarchist propaganda, and some of it not very appropriate. There is a boosting of the monarchist institution. We who sit on these benches are not monarchists; we are socialists, democrats and republicans. We know that this country has inherited a monarchist institution from the past and that round about it a lot of history has grown up, but we are also aware that the people on a large proportion of the earth's surface manage to conduct their affairs reasonably well without maintaining a hereditary monarchy, and we do not propose, holding the view which we hold, and which we were elected to the House to further—
    Mr. HANNON: Was the hon. Member elected to further republican views?
    Mr. MAXTON: Oh, yes, there was no doubt about that, and to further a lot of other things that might strike my hon. Friend as being worse still. I can claim that my constituents were under no illusions as to the principles upon which I fought my elections, and upon which they were good enough to return me at a number of consecutive elections. The institution remains, but we cannot cast any votes which tend in our view to perpetuate the monarchist institution. I do not know what my hon. and right hon. Friends on the Opposition benches propose to do on this matter, but I know that one of the affiliated organisations, at its annual conference which took place in Scotland a week or two ago, carried, I think unanimously, a resolution for the abolition of the monarchy. The organisation is an integral part of the British Labour party, and, if hon. Members above the Gangway are proposing to disown their Scottish membership for the purpose of this Vote, I am ready to convey that information. So far as I am aware, the Scottish members of the Labour party are still in good standing in their membership and are still welcome members.
    I oppose this Vote on that general principle. Secondly, I oppose it because at this time in this nation's affairs there are large masses of people who are not in any mood for jubilation. Their circumstances are such that they do not feel that the national condition justifies a general rejoicing. There are 2,000,000 unemployed, and so far as we can see there will be 2,000,000 people unemployed at the time when the celebrations which are being provided for are in progress. These 2,000,000 people unemployed, that very big proportion of people who, by Act of this House, have been refused medical benefits, whose wives and unborn babes have had the benefits withdrawn which were
    previously granted for the birth of a child, labouring under a deep sense of injustice and grievance, are told that the sufferings that have been imposed are absolutely necessitated by the difficult national circumstances. All these millions of people have neither the heart nor the inclination for general jubilation, and on top of that there is hanging over this country, as there hangs over the whole of Europe, a great doubt about the future so far as peace and war are concerned. All these things tend to make us believe that in the circumstances the attempt to create celebrations and jubilations in this country are completely out of place, and instead of bringing gladness to the hearts of many, will intensify the sadness that already exists.
    The sum asked for here is, I admit, not an excessive amount. I would have liked to have heard from the spokesman of the Treasury what is the total sum to be expended from national sources, because as he explained in the Estimates the £50,000 asked for is only the fraction which falls directly to be discharged by the Office of Works. There are other charges to fall upon the Navy, the Military and the Air Force, and other charges to fall upon the Post Office and the Mint. I would like to know what is the whole amount to be spent out of the national purse. I know that very large sums of money are going to be spent by local authorities out of the rates, and by local governing bodies in one direction or another the total expenditure nationally must amount to a very large sum indeed. We, holding the views that we hold, elected upon the principles for which we were elected, are compelled of necessity to cast our vote against the granting of this sum.
    Question put.
    The Committee divided: Ayes, 137; Noes, 0.

    Division No. 141.]

    AYES.

    11.3 p.m.]

    Acland-Troyte, Lieut.-Colonel

    Braithwaite, Maj. A. N. (Yorke, E. R.)

    Christle, James Archibald

    Adams, D. M. (Poplar, South)

    Briscoe, Capt. Richard George

    Cleary, J. J.

    Adams, Samuel Vyvyan T. (Leeds.W.)

    Broadbent, Colonel John

    Collins, Rt. Hon. Sir Godfrey

    Albery, Irving James

    Brocklebank, C. E. R.

    Colville, Lieut.-Colonel J.

    Allen, Lt.-Col. J. Sandeman (B'k'nh'd)

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

    Cook, Thomas A.

    Apsley, Lord

    Brown, Ernest (Leith)

    Cooper, A. Duff

    Aske, Sir Robert William

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

    Copeland. Ida

    Athoil, Duchess of

    Browne, Captain A. C.

    Crooke, J. Smedley

    Bailey, Eric Alfred George

    Burghley, Lord

    Croom-Johnson, R. P.

    Baldwin, Rt. Hon. Stanley

    Burnett, John George

    Cross, R. H.

    Baldwin-Webb, Colonel J.

    Campbell, Vice-Admiral G. (Burniey)

    Curry, A. C.

    Beaumont. M. W. (Bucks, Aylesbury)

    Castiereagh, Viscount

    Davies, Maj. Geo. F.(Somerset, Yeovil)

    Bowyer, Capt. Sir George E. W.

    Cazalet, Thelma (Islington, E.)

    Denman, Hon. R. D.

    Dickle, John P.

    Lansbury, Rt. Hon. George

    Reid, William Allan (Derby)

    Duncan, James A. L. (Kensington. N.)

    Law, Sir Alfred

    Rhys, Hon. Charles Arthur U.

    Dunglass. Lord

    Leckle, J. A.

    Rickards, George William

    Elliot, Rt. Hon. Walter

    Leech, Dr. J. W.

    Ropner, Colonel L.

    Elliston, Captain George Sampson

    Lindsay, Kenneth (Kilmarnock)

    Russell, Albert (Kirkcaldy)

    Everard, W. Lindsay

    Little, Graham-,Sir Ernest

    Russell, R. J. (Eddisbury)

    Filnt, Abraham John

    Liewellin, Major John J.

    Rutherford, Sir John Hugo (Liverp'l)

    Foot, Dingle (Dundee)

    Lioyd, Geoffrey

    Salt, Edward W.

    Fremantle, Sir Francis

    Lockwood, Capt. J. H. (Shipley)

    Sanderson, Sir Frank Barnard

    Gardner, Benjamin Walter

    Loftus, Pierce C.

    Shaw, Helen B. (Lanark, Bothwell)

    George, Major G. Lloyd (Pembroke)

    Lovat-Fraser, James Alexander

    Smiles, Lieut.-Col. Sir Walter D

    Gillett, Sir George Masterman

    Lyons, Abraham Montagu

    Somerville, Annesley A. (Windsor)

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

    Mabane, William

    Sotheron-Estcourt, Captain T. E.

    Goodman, Colonel Albert W.

    MacAndrew, Lieut.-Col. C. G. (Partick)

    Stanley, Rt. Hon. Oliver (W'morland)

    Greene, William P. C.

    MacAndrew, Capt. J,O. (Ayr)

    Stevenson, James

    Gretton, Colonel Rt. Hon. John

    McConnell, Sir Joseph

    Stourton, Hon. John J.

    Groves, Thomas E.

    Macdonald, Gordon (Ince)

    Strickland, Captain W. F.

    Gunston, Captain D. W.

    McEntee, Valentine L.

    Stuart, Hon. J. (Moray and Nairn)

    Guy, J. C. Morrison

    McKle, John Hamilton

    Taylor, C. S. (Eastbourne)

    Hammersley, Samuel S.

    Mallalleu, Edward Lancelot

    Thompson, Sir Luke

    Hannon, Patrick Joseph Henry

    Margesson, Capt. Rt. Hon. H. D. R.

    Thomson, Sir Frederick Charles

    Headiam, Lieut.-Col. Cuthbert M.

    Martin, Thomas B.

    Tinker, John Joseph

    Hope, Capt. Hon. A. O. J. (Aston)

    Mayhew, Lieut.-Colonel John

    Titchfleld, Major the Marquess of

    Howard, Tom Forrest

    Mifner, Major James

    Ward, Lt.-Col. Sir A. L. (Hull)

    Howitt, Dr. Alfred B.

    Moore-Brabazon, Lieut.-Col. J. T. C.

    Ward, Irene Mary Bewick (Wallsend)

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

    Morris-Jones, Dr. J. H. (Denbigh)

    Ward, Sarah Adelaide (Cannock)

    Hudson, Robert Spear (Southport)

    Ormsby-Gore, Rt. Hon. William G. A.

    Williams, Herbert G. (Croydon, S.)

    Hume, Sir George Hopwood

    Palmer, Francis Noel

    Wilson, Lt.-Col. Sir Arnold (Hertf'd)

    Jamieson, Douglas

    Pearson, William G.

    Wise, Alfred R.

    Jenkins, Sir William

    Percy, Lord Eustace

    Womersley, Sir Walter

    Jones, Lewis (Swansea, West)

    Petherick, M.

    Kerr, Lieut.-Col. Charles (Montrose)

    Radford, E. A.

    TELLERS FOR THE AYES.—

    Kerr, Hamilton W.

    Ramsay T. B. W. (Western Isles)

    Sir Victor Warrender and Mr.

    Lamb, Sir Joseph Quinton

    Ramsden, Sir Eugene

    Blindell.

    NOES.

    TELLERS FOR THE NOES.—

    Mr. Maxton and Mr. Buchanan.

  PUBLIC BUILDINGS OVERSEAS.
  Resolved,

  "That a sum, not exceeding £75,500, be granted to His Majesty, to complete the sum necessary to defray the Charge which will come in course of payment during the year ending on the 31st day of March, 1936, for Expenditure in respect of Public Buildings Overseas."[NOTE£37,000 has been voted on account.]
  Resolutions to be reported To-morrow; Committee to sit again To-morrow.

  LAND DRAINAGE (SCOTLAND) BILL.
  Considered in Committee, and reported, without Amendment; read the Third time, and passed.
  The remaining Orders were read, and postponed.

  ADJOURNMENT.
  Resolved, "That this House do now adojurn."—[Captain Margesson.]
  Adjourned accordingly at a Quarter after Eleven o'clock.

  INCOME TAX (RELIEFS).
  INCOME TAX (RELIEFS).
  HIGHWAY GRASS MARGINS (RIDERS).
  HIGHWAY GRASS MARGINS (RIDERS).
  AIR MINISTRY CONTRACTS (EX-SERVICE MEN).
  AIR MINISTRY CONTRACTS (EX-SERVICE MEN).
  CYPRUS (ENGLISH LANGUAGE, SCHOOLS).
  CYPRUS (ENGLISH LANGUAGE, SCHOOLS).
UNEMPLOYMENT.
  AGRICULTURAL WORK.
  AGRICULTURAL WORK.
  ASSISTANCE (APPEALS TRIBUNAL,ROTHERHAM).
  ASSISTANCE (APPEALS TRIBUNAL,ROTHERHAM).
  TAFF'S WELL.
  TAFF'S WELL.
  SEASONAL WORKERS, CHANNEL ISLANDS.
  SEASONAL WORKERS, CHANNEL ISLANDS.
  WORK-SHARING SCHEMES.
  WORK-SHARING SCHEMES.
  COAL INDUSTRY (STATISTICS,YORKSHIRE).
  COAL INDUSTRY (STATISTICS,YORKSHIRE).
Preamble
The House met at a quarter before four of the clock, The LORD CHANCELLOR on the Woolsack.
VAGRANCY BILL.
Brought from the Commons; read 1a; and to be printed.

SITUATION IN THE FAR EAST.
EARL PEEL EARL PEEL rose to call attention to the situation in the Far East and to the relations between China and Japan; and to move for Papers. The noble Earl said: My Lords, in the department of foreign affairs our attention and the attention of the public generally has been rather concentrated on the developments in Europe. We have all watched with the greatest interest the perambulations of our Ministers through many European capitals, and we have been thrilled almost by the reports of the international tea parties that have taken place in various centres. We have read the statements and speeches of Signor Mussolini and Herr Hitler and perhaps these have too much concentrated our attention on Western matters, to the exclusion of Far Eastern affairs. Indeed, it is not too much to say that during the last few months a new situation has arisen in Far Eastern affairs. We had only last week the final act of a definite severance of Japan from the League of Nations, and a little before that China, no doubt through the arrangement at the League itself, ceased to be a member of the Council.
These two events, coming together, suggested to many minds in China and Japan that there was some weakening of the ties between the Far East and Europe. They created the impression of a China and Japan rather thrown back upon themselves, and the question seemed to be forced to the front of "Asia for the Asiatics," a separatist and dangerous idea in many respects. Indeed, Russia, with her far-spread position touching European countries on the West and Japan and China on the East, rather goes to prove the close connection of all different parts of the world, and condemns this Continental, departmental

519
system as unreal and rather absurd. I should like to say at the outset that I wish to deprecate any idea of hostility to Japan or any desire to charge her with underhand or malignant schemes at the expense of China or ourselves. Indeed, I think enough harm has been done by ill-considered denunciations of Japan. The Report of my noble friend Lord Lytton was judicial and impartial in tone but, unhappily, when all this great subject came to be debated at Geneva it cannot be said that everyone there followed his impartial methods of stating the position of affairs. The result, of course, was that Japan withdrew from the League of Nations, and any chance of influencing her at Geneva was lost from that time.
Let me say a word about our position and influence in the Far East. We have still many friends in Japan and also in China. Our interests, it is well known, are vast in the Far East; merely from the point of view of investment alone, we have some£300,000,000 in various forms in China. We have had a long and intimate association with the Far East. We have a right and even a duty to examine closely what happens there and to offer, as a friend with a full knowledge of the situation, advice to both parties. I understand that negotiations are going on between Tokyo and Nanking, though I do not pretend to know precisely what the nature of those negotiations is. But there are rumours to the effect that Japan is trying to get China under her control and to expel all Western influences. Reassuring statements have been made both from Nanking and Tokyo, and I should like in this connection just to refresh your Lordships' memories with part of the statement made last year to Sir Francis Lindley, at that time our Ambassador in Japan, in reply to his representations—a statement made by a Foreign Office spokesman in April, 1934.
The reply, of which I shall read a part, was to this effect: He assured His Majesty's Ambassador that Japan would observe the provisions of the Nine-Power Treaty and that the policy of the Japanese Government and His Majesty's Government in regard to the Treaty coincided. Mr. Hirota stated in conclusion that Japan continued to attach the greatest importance to the maintenance
520
of the "open door" in China and reaffirmed her acceptance of that policy. On May I another statement was made to the French Government. I shall read the last paragraph of that statement, which rather seems to express what I may call a different shade of meaning to the emphatic statement made to our Ambassador. The passage I should like to read runs as follows:
"Japan cannot, however, remain indifferent to any possible intervention of third parties which, under whatever pretext it were made, might be prejudicial to the maintenance of order and justice in the Far East and in regions where Japan, if only by reason of her geographical position, has interests of vital importance. Consequently Japan cannot allow Chinese problems to be exploited by third parties with a view to pursuing an interested policy without regard to the conditions indicated above."
I dare say these two statements mean very nearly the same thing, but your Lordships will notice that they are couched in rather different language.
The difficulty is that the whole situation is, unfortunately, full of suspicion. The Chinese Press seems to be possessed of the idea that Japan wants to get entire control of China, and in many quarters abroad the same suspicion is rife. I think it must be admitted that the statement made in April by the Foreign Office spokesman at Tokyo did lend some colour to this view, and it is difficult not to believe that if Tokyo and Nanking are left to themselves to negotiate the only result will be to deepen the suspicion of Japan both in China and abroad, with the most unfortunate consequences.
During the last four years great progress has been made in China. In May, 1931, the National Economic Council of Nanking was established and co-operation with the League of Nations was proclaimed as a fixed policy. Some twenty or thirty officers were supplied by the League of Nations and with their assistance and the aid of the Boxer Indemnity—money returned by Great Britain—over 20,000 miles of railway were made in Central China and public works were prepared and built. There was a better feeling everywhere. The civil wars all died down, and the relations between Nanking and Canton seemed to have been put aside for a time and their perennial jealousies softened. As an example of this, I may perhaps cite the

521
co-operation of the two authorities against the Communists when their stronghold in Central China was finally overthrown last autumn. But, unfortunately, there are darker sides to the picture. For instance, control of Nanking over the officials in the interior is still very weak. The peasants are heavily taxed, and the peasantry are the great mainstay of China, and unless they are prosperous there can be no real recovery. Moreover, the Communists themselves, though nattered from Chiangsi, are harrying Central and North-Western China, and their quickly-moving bands are very difficult to overtake and destroy.
Again, may I say a word about the currency? The Silver Purchase Act caused a very large outflow of silver, and attempts to check this outflow last autumn by an export tax on silver merely intensified smuggling. The stocks of silver in China were so greatly reduced that business suffered severely. There was a Monetary Advisory Council set up in Shanghai on February 15, to advise on remedies, but Economic Councils, as we know, are not always completely successful, and unless the stocks of silver can be replenished, the financial and business situation must continue to be indifferent. It may be, of course, that some promise to assist the financial position in China may be one of the levers on which Japan is working. It is true that the relations between Japan and China since 1932 have, in some ways, improved. They have been running mails and passengers between Manchukuo and Peking, and the collection of Customs has taken place at the Great Wall. These perhaps are rather minor matters, but in larger questions China still refuses to recognise Manchukuo as a State, and even if Nanking wished to do so, there would be great indignation in Canton and possibly even civil war, so deeply rooted are the fear and suspicion of China regarding Japan.
A serious disturbance was caused by the Japanese attack on Chinese frontier troops in South-East Chahar, Inner Mongolia, last January. The Chinese were driven back, and the frontier of Jehol, in South-West Manchukuo, was rectified. Since then, however, the disturbance seems to have died down. Very soon after that it was announced that Ariyoshi, the Japanese Minister in China,
522
was to open conversations at Nanking with Wang Ching-Wei, the Premier, and General Chiang Kai-Shek. These talks have been carried on semi-officially in Tokyo, and recently there was a rumour that General Doihara, the Japanese Lawrence, was coming to China with new proposals. The question then arose: What are the aims of Japan? The semi-official statements from Tokyo maintain that she only requires that the anti-Japanese boycott in China should be suppressed, but from reports received it appears that the boycott has practically ceased. It can hardly be thought, therefore, that Japanese aims are so limited. Japan, perhaps, can hardly be expected to be an undiluted admirer of the League of Nations, and regards with suspicion the progress of China with League advisers as having a tendency to withdraw China from her own influence and bring her into the orbit of Western ambition.
I may again be allowed to refer to that statement made last year which was interpreted as a Monroe doctrine for China. That statement certainly seemed to imply that Japan wished to have the final say in any projects of the Western Powers in regard to China. No doubt the Military Party in Japan have a dream of Japanese leadership in Eastern Asia. So did the great Shogun Hideyoshi dream at the end of the sixteenth century, and die in trying to realise his dream. Many Japanese also, both soldiers and civilians, hold that the Far East is for Japan and is her special province. They see that the Western Powers have divided up the rest of the world among themselves, and that there is no great zeal to admit Japanese into countries so controlled, whether in the matter of immigration or in the matter of trade. The Far East she is tempted to regard as her special appanage. Of course, the great central truths about Japan cannot be ignored. She has this great population of 65,000,000 in a country which, for purposes of living, is not much bigger than Great Britain, and the increase of her population is something like three quarters of a million a year. Hence we must recognise her need for expansion, her desire for further markets and raw materials, which is growing every day.
Japan, no doubt, stands in fear of the spread of Communism in China. Mr. Hirota referred lately in the Diet of

523
Japan to the Sovietising influences in Sinkiang. Another feature of the situation is the Japanese anxiety about Russia, and the unwelcome neighbourhood of Vladivostok. The Russian Air Forces are only within a few hundred miles of the great industrial centres of Japan, and are a fruitful cause of anxiety. Then, too, we must take into account the national movement in Mongolia. Outer Mongolia has passed almost wholly under Russian influence. It is not strictly a part of the Union of Soviet Republics, but it has been thoroughly imbued with Russian teaching and looks generally to the leadership of Russia. Inner Mongolia is ruled by its hereditary Princes, and has much sympathy with the elevation of a Manchu Emperor to the throne of Manchukuo. No doubt there is a strong national feeling running through Mongolia, and the issue is whether, if they were all united, they would turn their face to Russia or to Manchukuo. If towards Russia, the Princes would lose their position, and if towards Manchukuo, the young Mongol Party would lose its influence. There are many differences between the various elements in Mongolia, and if Japan and Russia were drawn into the struggle it would be most important for Japan to have a quiet China on her flank.
Turning for a moment to the point of view of China, the Chinese have observed the unyielding attitude of Japan at Geneva over Manchukuo and her withdrawal from the League, her unyielding attitude in the London naval conversations and her denunciation of the Naval Treaty. All this means, in Chinese eyes, Japan's determination to have a completely free hand in the Far East and to use it at the expense of China. I have already referred to China's loss of a seat on the Council of the League of Nations. This has weakened the position of those who preach co-operation with the League, and it strengthens the hands of the party which says Europe cares nothing for the East and that China must come to terms with Japan because she is near and powerful. Some of the Chinese fear that as she is at present China cannot stand by herself, and that if she does not get moral and diplomatic support from the West she will not be able to resist the advances of Japan. At present reports in Nanking are to the effect that Japan wants China to replace
524
her League officers by Japanese officers, to replace the German officers who have been training Chiang Kai-Shek's troops for the past five years by Japanese officers, and to take on several hundred Japanese non-commissioned officers to train Chinese troops; to consolidate their outstanding Nanking loans to Peking, mostly dating from 1918 and amounting to about£40,000,000. In return—of course I am only quoting and I cannot youth for the truth of these reports—Japan would help China to crush the Communists, and would make her a big loan to see her through her present currency troubles.
Already protests are rising in China. Nanking and Chiang Kai-Shek are accused of being pro-Japanese. Canton speaks of their policy as tantamount to making China a Japanese protectorate and ruining China. The conciliatory character of Mr. Hirota's speeches is admitted, but the question asked is: What is behind it all? Suspicion is rather increased than lulled by these agreeable speeches. This division of opinion, if pressed too far, might, of course, lead again to civil war. In that case what would be the result? Would Japan come in to quell it and what would be the reactions in other countries to this action? Mr. Hirota is certainly taking the line that Japan can get all she wants in China—markets and raw materials—by fair means, without detriment to the interests of anybody. The Liberal Party in Japan supports these views. They are alarmed by the state of the national finances—the heavy cost of Manchukuo and the military expenditure. Nearly half of her central Budget is military and the burden of 2,190 million yen lies very heavily on a poor country like Japan. Other events recently have caused some suspicion abroad. In Manchukuo it has been said "If the door is not shut, it is so crowded with Japanese that it is difficult for others to get through." It is certainly very difficult to reconcile the Manchukuo oil monopoly with the pledge of an open door and equal opportunities for all.
LORD NEWTON: It is not coming into force.
EARL PEEL: My noble friend who has recently travelled in these countries informs me that the monopoly is not coming into force. I dare say his information

525
is extremely accurate. Note has also been taken of the appointment of a Chief Secretary in the Customs in China—a post which has been given to a Japanese. This official is next in importance to the Inspector-General. What may happen when the present Inspector-General, Sir Frederic Maze, retires? Will Japan claim the post on the ground of her increasing trade with China? Such being the general condition of affairs, is it practical politics for a third Power to let Japan have a great deal of what she wants, to satisfy the Chinese that there is no danger of Japanese aggression, to dispel the atmosphere of distrust and to help China to complete the work of internal restoration which she has so well begun?
First, I ask, would a conference of the signatories of the Nine-Power Treaty be of value? The object of that Treaty, made at Washington in 1922, was to put an end to the old gunboat policy towards China, to respect her sovereignty, independence and territorial integrity, to give her the fullest and most unembarrassed opportunity to develop a stable government and to preserve the open door in the fullest sense. It is an obvious course to take, and perhaps this is the kind of thing for which the Treaty was put into action. But a conference has never been called, I believe, since 1922, and to call nine Powers into conference might have an unduly alarming appearance. It is quite possible that Japan might take offence and the situation would be worse than it was before.
Could not Great Britain offer her services as mediator? The offer would be put, of course, in the friendliest way, but with the understanding that she desires to know what is going on and to have a hand in the affair. May I suggest as a precedent the work done by Sir Miles Lampson, the Minister in China in 1932, who assisted in bringing about the Armistice after the Japanese attack on Shanghai? I do not know whether the noble Earl who is going to reply this afternoon has any taste for foreign travel, because, if so, I might suggest that in view of precedents set in Europe he might find that by a journey to China and Japan he would reinforce by information gained on the spot the admirable information and knowledge that he no doubt receives
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from our official Ministers in Tokyo and Nanking.
There is a great deal of friendly feeling still remaining for us in Japan. The Liberals, at any rate, ought to realise the advantage to themselves of an agreement with China which bore the stamp of our approval and assent. We cannot be accused of any new territorial ambitions in the Far East; we have no, axes to grind, only a general desire for peace and confidence. The Chinese are perfectly ready to trade with Japan, and if we gave our support to an agreement, there would be no suggestion afterwards that it contained clauses detrimental to China. This, I may say to your Lordships, would be rather a good year in which to offer our services. It may be called a Chinese year in London. We have seen the success of the play called "Lady Precious Stream"; we have an exhibition at Burlington House of Chinese pictures, and there are, I believe, at the present moment something like 400 Chinese students in this country who will themselves no doubt take back to China their impressions of our friendliness to that country.
Now we may have a definite policy in China, but I am afraid that it would appear to many people that for the last few years it has been rather uncertain and indefinite in its aim. We have of course very large trade interests in China, but by insisting on the statement that we seek nothing in China but trade, we have succeeded not so much in convincing China of our disinterestedness but, I am afraid, of our selfishness and indifference to everything but profit. We certainly took the lead a century ago in forcing open Chinese doors. We have therefore some responsibility for the disorder throughout China which the introduction of modern and foreign ideas has brought into that country. We are accused by the Chinese of pursuing a waiting and drifting policy merely to stave off trouble. As regards Japan, the present policy may be to breed in her the sense that she is isolated and without friends. Is it not possible that, relying on our reputation for disinterestedness, we may be able to act as a mediator between China and Japan and to bring about a reconciliation of interests between these two great countries which is so difficult for them to obtain as they

527
are at present situated, without exciting the suspicions and hostility of other Powers? I beg to move.
LORD NEWTON: My Lords, my noble friend in his opening remarks had something to say about what I will venture to term the peripatetic diplomacy which is so much in favour at the present time. Personally, I have never been able to see the object of this movement. After all, we know everything that is going on in Europe. We know the minds of France, Germany, Italy and so forth; the only European country about which we are partially ignorant is Russia, and Russia is so skilled in the art of making things look different from what they really are that perhaps it might be just as well to avoid it. If, however, this practice is going to be pursued, no better plan could be adopted than that of sending a Minister—an intelligent Minister of course—to Manchukuo, as my noble friend has already anticipated my suggesting.
Now, if this were done and Sir John Simon or Mr. Eden were to go to Manchukuo, he would at once be faced with reality. The real facts would be brought home to him, facts which appear to be very imperfectly appreciated in this country. The first fact which would be literally staring him in the face—I say that with regret in the presence of my noble friend Lord Lytton—would be the fact that the League policy has badly broken down. I might even go further, I am afraid, and say that the Minister would also recognise the fact that the Mission of my noble friend Lord Lytton was, to put it mildly, a failure. It was a failure because, although he and his friends went there, no doubt, with the best intentions, they made proposals which they ought to have realised were never likely to be accepted by the Japanese. If I might venture to point it out to my noble friend, I think the mistake he made was in this. His Report is an admirable Report and, as far as it goes, constitutes an excellent case for the Japanese. If he had confined himself merely to reporting and had not obeyed the direction to make suggestions, I think the Mission would have done nothing but good. He has, however, in obedience to his instructions unfortunately made suggestions with which the Japanese find themselves incapable of
528
complying. The Mission, I am afraid, must be put down as a failure.
I have no intention of taking up your Lordships' time in recounting events with which you are all well acquainted, but the rejection by the Japanese of the demands of the League—I suppose I am entitled to call them demands—has led to a perfect avalanche, a torrent of vituperation against that country which is without parallel. In this country there has always been a set of people who are only too delighted to fall upon former friends of this country, and the mere fact that the Japanese had formerly been allies of this country was sufficient inducement for a violent attack. The Labour Party, if I am not maligning them, have gone so far as actually to state that if they had been in office they would have made war on Japan. They may deny it, of Course; they may say that their language did not amount to that, but that is the only meaning you can really attach to the statement made in another place not long ago.
I cannot help thinking that all this vituperation is partly the fault of the Japanese themselves. It has largely been a question of propaganda on the one side and on the other. On the one side the propaganda has been good, on the other it has been extremely bad. The Chinese are extremely clever propagandists, and they started with the initial advantage of being, so to speak, pet children of the League. This is rather a curious fact, because after all, whatever you may say, China is a pronounced xenophobe country. It does not pay its debts, it detests all foreigners, and it does not even pay its subscriptions to the League. Nevertheless it remains, and I suppose it will remain, the pet child of the League and will be supported whenever an opportunity occurs. The Chinese propaganda was, as I have said, remarkably adroit and made a great impression in England. The Japanese propaganda, on the other hand, can only be characterised as more or less inept.
In every step the Japanese have taken they have protested, when remonstrated with, that they were acting for the benefit of humanity and in the cause of civilisation. I think they went so far as to say that they only dropped bombs on the heads of the Chinese in Shanghai for the benefit of the Chinese themselves, and

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that the Chinese should really be grateful to them for what they have done. That sort of argument does not really go down with any one. They ought to have said, and if they had been more sensible—and it is curious that such an intelligent race should have been wanting in common sense—they would have said: "We are extremely sorry, we admit that we have broken a treaty, but the circumstances were entirely exceptional, and if you will look closely into them you will see that we could not really have done anything else. You accuse us of all kinds of crime, and the main crime is that we are in occupation of a country which belongs to another Power." But the circumstances, as I have said, were exceptional.
The Report of my noble friend points out, in the clearest and most unmistakable language, that the position of the Japanese in Manchuria, as it was then called, was entirely exceptional. It was a sort of double control, which only broke down when the situation became intolerable from the Japanese point of view. The Japanese regard, rightly or wrongly, the control of Manchukuo, as it is now called, as absolutely essential to them, not only for political but also for economic and military reasons. They fought a desperate war, in which they risked their very existence as a nation, in order to obtain and retain that control, and they succeeded. Well, now, after the sacrifices and the enormous efforts which they have made, and after all the work which they have done, is it reasonable to suppose that they would accept the proposal that they should clear out and that that country should—in all probability—fall into the hands of their former enemy, Soviet Russia? It is inconceivable that any Power in the circumstances would have done so.
I have said that their position in Manchuria was quite exceptional, but their position in other respects is exceptional too. The Japanese suffer from the curse of being over-populated. They are constantly seeking for outlets for their population, and are unable to find them. On every side they repulsed. They might say to us: "It is all very fine your objecting to what we do, but it is owing to you that we are unable to find outlets. We should like to go to some of your Dominions, if you would let us. We should like to go to America, but they will not let us in. We should like to go
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to Canada, but they keep us out. Above all, we should like to go to Australia, but we are rigidly excluded from there. Yet, when an opportunity occurs, and a sort of no-man's-land falls to us, you charge us with being like brigands, and put every obstacle in our way in order to prevent us from developing this country, which might not be a very suitable place for Japanese migration, but will provide means by which our industries can be greatly assisted, and thereby mitigate this curse of over-population."
They might also say: "If we had mismanaged the place, then you would have a much greater case against us, but we have not." Nobody who has ever been in that part of the world could fail to realise that the place has been literally transformed. I hesitate to use that epithet, so hard-worked in journalism, "amazing" Amazing is hardly sufficient. The transformation in Manchuria is almost magical. It is almost inconceivable. Until you have actually set eyes on it, you can have no conception of what has been done there. Then, again, they might say: "Even if you look at things at their worst, what have we done except what you are doing yourselves and always have been doing? We are charged with being grossly immoral and predaceous in taking possession of this country. What moral right is there for similar actions on the part of other Powers? What moral right, for instance, is there for the occupation and control of a country like Morocco by the French, or Tripoli by the Italians? "They might almost say to us: "How is it you are still in possession of Egypt? How many times have you said you were going out of Egypt, and still you are there—and unless you are bereft of your senses you will remain there permanently. We are doing it for a much better reason, because our actual existence depends upon it."
It might be said that we were in Egypt because of our other possessions in the East, but that argument cannot be used with regard to other of our possessions. Then it might be said by the Japanese: "You denounce us for creating what is called a Puppet State and a Puppet Emperor—which I suppose is very much the same thing as a Constitutional King—but who founded Puppet States? Such a State was founded a few years

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ago by the State which is now loudest in denunciation of Japan. When America started the Panama Canal, which was in Colombian territory, she got into difficulties with the Colombian Government, and she then created a Puppet State and called it Panama, and there was not a bleat of complaint by anybody." So much for that. To return for one moment to the question of what the Japanese have done there, they might say: "We may have been hypocritical to some extent, but no one can deny that we have transformed this country, and turned it from a no-man's-land, populated by brigands and tyrannised over by so-called War Lords, into a modern and civilised State, to the benefit of the whole world. In addition, we offer you the open door, and, in the words of the Commission which lately went out there, there is an opening for the products of every country in Manchuria at the present moment."
These are the arguments which I should have used if I had been the Japanese, and I cannot help thinking they would have been more efficacious than those which have been used; but whether those arguments are well-founded or not, you are up against the solid fact that the Japanese are there and cannot be dislodged. The League, in fact, is up against a blank wall, and cannot do anything. Neither can we, and in those circumstances, what is to be done? I hesitate to speak disrespectfully of the League of Nations in the presence of my noble friend, and I am aware that there are many people in this House who look upon the League as a sort of divine institution, which is incapable of doing wrong, but in my opinion the League is capable of making mistakes, and has made a vital mistake in this particular case. The only thing is to admit it. No doubt it is a humiliating thing to do, and it would have been difficult to get the League of Nations to admit that it was wrong, but some formula could possibly have been devised which would save the face of the League and console my noble friend.
The necessity for that has gone. Lord Peel pointed out that Japan and China are now in consultation, and it is highly probable that these negotiations will end favourably, more especially as the Japanese are ready, as I understand, to pay over a large sum of money to the Chinese, in virtue of some arrangement
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relating to Customs. It seems to me that it is in the interest of everybody that these negotiations should terminate amicably as soon as possible. Certainly neither China nor Japan will gain by their continuing in a state of hostility. It is not only to their advantage that the situation should be eased, but to the advantage of the rest of the world, and civilisation generally, and what I would suggest—as I think was suggested by my noble friend—is that this Government should take, if possible, the lead in bringing about peace between those two countries. It is a curious thing that the suggestion that the matter should be settled amicably between these two Powers does not commend itself to many eminent people, including General Smuts and various members of this House. They seem to entertain fears that if Japan and China are left to themselves, the result will be an arrangement by which Japan gets complete possession of China, and will eventually absorb her. I believe that to be an hallucination. However great the power of Japan, in my opinion she is not in a position, either financially or otherwise, to do any-thing of the kind, and I believe that those fears are unfounded.
So persuaded are these gentlemen of the imminence of this danger, however, that they are actively engaged in trying to promote a sort of Anti-Japanese League, founded upon a bloc consisting of this country and the United States. Personally I consider this a most dangerous solution of the difficulty. It may lead to endless trouble, and even to me, who do not profess to be an authority, it seems that there is a far more obvious and simple plan. Let us do what we can to facilitate an agreement between China and Japan, and in doing so let us eliminate as far as possible the League of Nations. If the League of Nations had not intervened these two countries would have come to an agreement long ago. When that is effected and they have come to an agreement, then let this country take the lead again in proposing a conference between the four Powers which are really interested and which ought to decide the matter—those Powers, of course, being Great Britain, America, China and Japan. I believe that it would be discovered then that the claims of the Japanese were much more moderate than is imagined in this country.

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In any case, anything is better than resorting to the method suggested by General Smuts and his friends. What does it mean? It means that there should if possible be a sort of crusade conducted against Japan, which eventually would develop into a war between races, a war between the white man and the two Asiatic Empires, which certainly would be ready to combine together against Europeans or against Americans. The result, as far as we are concerned, would inevitably be in the end the loss of our Eastern possessions, which already rest upon a basis which is much feebler and more slender than people in this country generally realise.
THE DUKE OF ATHOLL: My Lords, we have heard two very interesting speeches from rather different points of view, and I think that a great many of us probably agree very largely with the speech which has just been made. The only thing I would say with regard to the speech of the noble Earl, Lord Peel, is in reference to his suggestion that Britain might become the mediator between Japan and China. He did not tell us what we were going to mediate about, and I am not aware that there is any very great difference at the present moment between them. I may be a little prejudiced, and your Lordships may wonder why I come in at all in this matter, but I had the honour a few years ago of entertaining for three weeks the present august Ruler of Japan, anti naturally one is interested in a matter of this kind affecting the history of that country, and I have very many friends in Japan in consequence.
But, quite apart from that, I think there are reasons why all of us are interested in the Far East. Many of your Lordships have been brought up in old houses—probably many of them have gone now—where we used to see old Chinese plates and embroidery, and we inevitably got to learn about China and love its art. We were also taught to be rather suspicious of another place called Japan, which faked these articles, or was alleged to fake them. Since that time I have led a fairly varied life. I have been a soldier for thirty years in different parts of the world, I have had to study military problems, and I have also been for many years a member of another place and have studied the problem from another
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point of view. Now I must say that I prefer the stability and the real government in Japan to what I may call the camouflaged one in China. This is just the reverse of what one used to think when one was young.
Japan, as has been pointed out, is a great Island which in some respects resembles Britain. It has something like 87,000,000 inhabitants, industrious and virile people who have more or less Western ideas. They are great fighters and they are no dreamers. In all the discussions of this matter I always wonder what is the idea that people really have when they come down to brass tacks with regard to the surplus population in Japan. We are told that the Japanese are not wanted in America, they must not go to Australia, the islands are forbidden to them, and they must not go to China. Well, where are they to go? They are not to be allowed to trade with anyone, they are, in fact, to be bottled up apparently in their own island and cease to exist. I am glad to see here the noble Marquess, Lord Lothian. He wrote a long letter on the subject and the only conclusion that I could grasp from it was that in his opinion there must be some system of birth control in Japan—otherwise, what was to happen?
Then I was told that Japan was not to be trusted. It was a nation which always broke its pledges and therefore nobody could trust it, and especially in regard to its action at Geneva. I have looked very carefully into history to find out when Japan broke a pledge and I cannot find such a case. I have no doubt that the noble Marquess, who is going to speak, has among his bundle of papers a long list of the pledges that Japan has broken, but I confess that I have not found them. I think this all arises out of people not having read and studied what Japan's intentions were and what she has always said. In every single agreement that she has made, so far as I am aware, she has always said that she meant to go for Manchuria and possibly Inner Mongolia., and that has been her policy right through. She has always said, when you have talked of China, "Please remember when we talk about China that does not include Manchuria," and I cannot find a single case in which that has not been mentioned when the matter has been before the League of Nations, or when it was up at Washing

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ton at the time of the Washington Treaty, or at any other time. I think it is the lack of appreciation of this fact that has made people think that Japan has been breaking pledges.
She has certainly got to have an outlet, and perhaps noble Lords who will speak later will explain what that outlet should be and where it should be. She has given a promise, and there is no reason to believe that she will not keep it—that she will not go south of the Great Wall. She says that she has no intention to go into China with the idea of appropriation, and I believe her, because, after all, though Japan is a strong and virile nation, it is going too far to say that Japan, which has already got enough trouble, and is not too well off, will take China or anything of that sort. There is another people to the north of Manchuria who would probably take the same opportunity to fight. Therefore I do not think she would think of doing anything so silly.
I wrote a letter in The Times which the noble Marquess, Lord Lothian, would probably think was not worth answering, in which I asked him some questions with regard to a very long letter that he wrote. He was, I think, the first person to stir up the recent agitation in the Press, and he said that his letter was the result of numerous telegrams that had been reaching this country during the six or nine weeks before and he felt constrained to write to the Press last February. I have looked in vain for those telegrams. I do not find them in The Times and I do not know what telegrams they can be. I should like to ask the noble Marquess if these telegrams were official, from whom they emanated, or whether they were from purely Chinese sources. He then told us that Japan was likely to present the world with a fait accompli in China, that within two years we should find her in possession of China, and that that was her intention. I should like to know where the noble Marquess found that.
THE MARQUESS OF LOTHIAN: I never said anything of the kind, that I expected to see Japan in possession of China in two years.
THE DUKE OF ATHOLL: I read it as within the next two years. It is as follows:
"Japan hopes to face the world with a fait accompli in China analogous to that
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which she accomplished in Manchukuo by the date of the expiry of the two years' notice during which the Washington Treaties still remain in force."
Is that correct? Perhaps we differ, but I thought the noble Marquess meant what appeared in the Press. He also told us about a high Japanese official who made a similar statement and that that was where he got it. Would he give us the name of this high Japanese official? It would be very useful. There is, apparenty, another man lost in the world. The Japanese Government has been trying to find out his name. If the noble Marquess will restore him to his relatives by telling us his name we shall all be extremely glad, especially his family. I need not go on further quoting the noble Marquess's letter, but I asked him several questions. He made several statements in his letter, and I am sure we shall be very glad to hear the answers to-night to the questions I have raised.
The whole thing is rather a tragedy. It does seem to me that opportunities have been missed. Japan is a wonderful nation, and something has got to be done to enable it to keep alive. On the other hand, we have China, which has fallen into a most unfortunate state. There is no Government in China which can be called a Government and which is capable of carrying out anything. The small thing round Nanking is a mere semblance of Government and alone cannot carry out its duties and desires. I am not saying anything against it. The noble Marquess, Lord Lothian, I think, has an idea of bringing in various nations, including Russia, to finance China. I do not think that would be the best plan. I am quite certain that the best plan is to leave Japan alone to occupy Manchukuo, which is not part of China and for which she has already paid very handsomely both in blood and treasure to China, and to leave her alone in Inner Mongolia.
If you do that, that will keep her busy for a long time and it will give you a stable Government round the outside of China. China would then have an opportunity of pulling herself together and it is there that the nations of the world would be able to help, although "foreign devils" are not popular in China. Next, after settling Mongolia, if you worked

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down to the Yangtse in the north of China and settled the position there, by degrees China herself would be able to settle the south. There are many people who think that because Japan came away from the League of Nations she has done something absolutely immoral, but you have got to remember that what may be a mere study for us on this side is vital to Japan and her interests. Although we have abrogated the Treaty with Japan, which many believe should never have been done, Japan still looks upon us as her "elder brother." Long may she do so!
THE EARL OF GLASGOW: My Lords, I shall not keep you more than four and a half minutes. In common with some of your Lordships I look upon the Japanese nation with respect and admiration. We are told by some people that they are aggressive and that they have seized territory which does not belong to them, but that is exactly what our own country was doing when many of your Lordships were at school and before that. If the Japanese have done these things, which I do not admit, they have done them for the same reason as ourselves—namely, for the security and necessities of their Empire. At the same time, as a British subject, I realise that the Chinese frontier marches with Burma. Your Lordships will remember that when the Japanese consolidated themselves in Manchuria—I prefer to use the old name because I cannot pronounce the new one—they took good care that all important passes leading from the Province of Jehol into Chinese territory were in their hands. Only last year the Japanese again encroached upon part of Mongolia and took possession of a strategic pass leading into that Province.
The point I want to make is this, and I hope the noble Earl will give me some answer. I understand that arrangements have been made for the setting up of a Commission to settle the boundary line between China and Burma. It was hoped that the expedition would have started this spring, but since the conversations which have taken place between the Nanking representatives and the Japanese representatives, the whole question of the delimitation of this boundary has been postponed. I do not say it was because of these conversations, but the fact is it has happened. If in
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the future we find that, perhaps owing to the advice of a friendly nation, the Chinese occupy all the strategic passes on this frontier, posterity will not necessarily blame the Chinese Government or their advisers, who, after all, have really done what was done in the past by ourselves, but posterity will certainly blame our statesmen for lack of foresight. Can any information be given as to when this Boundary Commission is going to start operations on the frontier between Burma and China?
LORD LAMINGTON: My Lords, my noble friend Lord Peel, in the course of his speech, referred to the fact that China had not recognised Manchukuo. I do not know what exactly he meant by that. Why should China recognise Manchukuo? Manchukuo, or Manchuria, was never part of the Chinese Empire. It was, first of all, in 1644 occupied by the Manchus. The Manchus carefully kept it as their own special preserve and did not allow it to be joined in any sense with China proper. So much so that Chinese were never allowed to enter it until 1907, when, owing to Russian expansion, it was thought desirable that Chinese should come in as a counteracting influence. Then when the Chinese rebellion took place, General Chang Tsolin occupied Manchuria but still kept it absolutely separate from China proper. He had a large army there for the express purpose of keeping out any possible rival Chinese Generals. After his mysterious death his son instituted anti-Japanese propaganda in Manchuria which led to every kind of outrage being practised, banditry and the like, with the connivance of the Chinese authorities. It is not surprising that the Japanese took steps to make good what they had done in Manchuria. Perhaps they were very ill-advised not to inform the world generally, and more particularly Geneva, how much they had suffered at the hands of the War Lords and bandits in Manchuria. Had they made the world more alive to the fact that they had incurred great detriment, it is quite possible that there would not have been shown the feeling that was shown when they seized Manchuria.
My noble friend Lord Newton referred to negotiations between the Chinese and Japanese at the present time. This is not an altogether favourable opportunity for ourselves, Japan and the United States to try to come to some agreement.

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Only last January, the Japanese Minister of Foreign Affairs stated before the Diet that in order to safeguard Japanese overseas trade the Government had yet to discuss various matters with Great Britain, and that there was in his view no part of the globe in which an adjustment of interests between the parties was unattainable. A good understanding, he added, between the two former allies was really an important contribution to the peace of the world. In yesterday's Times, in an article dealing with the islands in the Pacific mandated to Japan, there is quoted a statement by Admiral Suyetsugu regarding the Japanese possession of the mandated islands, and stating that Japan's possession of those mandated isles was not a menace to any Power. I think those are both very hopeful statements. Surely the United States and Japan have really no cause to fear any hostility on the one side or the other.
The fears of America are largely caused—this I can say on the authority of an American writer—because the people of the Pacific Coast want to have a large navy there so as to get the money spent by the sailors on that coast, and also because there Are large armament contractors, and they want to keep their works employed. I will read what is stated by an American writer in a book just published called Ways that are Dark, which is well worth reading by everyone interested in the Pacific question. He says:
"Almost nobody in California liked the Japanese. Among the reasons, possibly first of all should be mentioned the less affable manner of the Japanese. Next in order, I believe, uneasiness at Japanese ambitions in the Pacific inspired distrust. This latter factor was, and is, fanned as vigorously as possible by California business men and chambers of commerce, who want the United States Government to increase navy yards and army bases on the California coast …A good deal of estimating goes on as to the amount men…would spend per month, etc., but the reasons advanced in the newspapers have to do with safety for Pacific Coast residents …and the 'adequate defence' drum is the one thumped. This line of talk is not analysed in its particulars by the illiterate in the State, and they are thus driven to a state of alarm, whereby they look under the bed for a Jap every night before retiring."
This was written by an American writer, who was in the Consular Service for many years in China, and he lays stress upon the point that Americans in Washington
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and the rest of America are ill-informed with regard to the Japanese and the Chinese.
He states that it is impossible that there should ever be an understanding with the Chinese owing to the fact that they have no national characteristic. Every man is for himself, and corruption is rife throughout all aspects of life. As my noble friend Lord Newton said, they are most astute and adroit in their propaganda. They make marvellous pronouncements and declarations to satisfy the credulity of European nations, but those pronouncements and declarations are not carried out. For instance, they are not carried out in regard to the cultivation of the poppy. The poppy is still cultivated on a large scale, and very often by compulsion from the War Lords. It seems to me that this is a desirable opportunity for Great Britain, the United States and Japan to come together, if possible, and arrive at a common policy in the Pacific. I do not believe anybody can rely upon co-operation with China, which would not be possible. China has not had a united Government for hundreds of years; it has always been some foreign Power that has held sway in China, and given her anything like a united Government.
LORD BARNBY: My Lords, it is with some diffidence that I intervene in this debate, but having recently returned from the quarters which are now under discussion, I hope I may be pardoned for making a few remarks. In dealing with questions of this kind, it is desirable to avoid being misunderstood. I, like other noble Lords who have studied this question, have had the pleasure of listening to a very happy exposition of the fundamentals of the position from the noble Earl who raised the question. Fundamental points have already been dealt with by various noble Lords who have spoken, and I shall confine myself to two or three points which do stand out to anyone who has any familiarity with the situation, and who particularly deplores some of the misinterpretations which are put upon various factors in connection with the actions of Japan. Particularly does one deplore these easily-made suggestions that Japan has an aim of extended aggression and domination, which causes much disturbance to those who watch the Far East. One wishes, at this

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stage, to avoid being drawn into any political discussion, and I wish rather to state facts as I know them.
Looking at the economic side of the question, it has been pointed out what fundamental requirements Japan has, but surely this suggestion of an aim of a very wide domination disregards the essential question of finance. Thanks to the courtesy of the Japanese Government and the Manchukuo Government, and the assistance of those of our own nationality who are on the spot, we are familiar with the prevailing conditions, and know that there is a limit to the capacity of what a relatively recently rich country, if you like to call it so, like Japan can undertake. One must remember that the Westernization of Japan, which is internally going on very fast, in its factory expansion requirements, puts a vast strain on her national finance. In addition, she has, as is well known, undertaken to assist financially the new State of Manchukuo. That State has a population of 25,000,000 people, and is a great burden. Surely with the urgency that there is to maintain wide aims in the immediate future, councils of prudence will prevail upon a nation so clever as Japan and cause her to modify any action she may take in the immediate future.
It is true that her population is increasing at a very rapid rate and that her fundamental requirement is either emigration of her people or exportation of her products. For a reason which is not sufficiently understood, that the Japanese standard of life is so high that her people cannot live in competition with the inhabitants of the Asiatic mainland, emigration is impossible. That seems sufficient assurance, if it is carefully analysed, that the suggestion that Japan can absorb a large part of China, or aims at doing it in the immediate future, is unreasonable. The plea I would like to make to your Lordships' House is that we should look at this in a practical way. The way to lead China to realise the necessity of reliance upon herself and collaboration with Japan, is to give evidence that for our part we wish and are ready to help. If we get Japan and China to collaborate, it is not unreasonable that Great Britain should collaborate with the two, and that, logically, would bring the United States to collaborate also. Too often it is said that the United
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States must inevitably have a policy at variance with that of Japan. Surely, apart from jingo politicians from California, who wish to make an impression at Washington and try to make trouble, there is no fundamental reason for discord between Japan and the United States.
I come now to the question of the State of Manchukuo. The question of recognition has been referred to already by noble Lords who have spoken. Surely there is no reasonable person who expects that Japan is going to back-pedal from the position as it is to-day. If we look at it from the angle of British trade it is surely to our advantage. Present conditions in the State of Manchukuo, in comparison with what existed a few years ago, must not only benefit the world at large but the inhabitants of Manchukuo and Japan in particular. For that same reason—that order has been restored in Manchukuo—if by association between Japan and China more orderly conditions can be developed in China, then Japan would be indeed foolish to resent the penetration of other Powers in China, because whatever business those other Powers bring to China will develop the buying power of China, and by reason of her proximity Japan must always have a great advantage in supplying China with consumable goods.
Permit me to say in conclusion that the drift of affairs in the Far East is indeed rapidly changing. The fact that registrations in the Imperial University of Tokyo in the last six months have expanded to 2,500 Chinese students as against some 600 a year ago, coupled with the strong demand in China, particularly in Peking, for instructors in the Japanese language, shows that the drift at the moment is towards a better understanding by China that collaboration with Japan is to her advantage. If that promises a composure of the position on the mainland it must be to the advantage also of this country.
LORD ADDINGTON: My Lords, five years' residence in Shanghai at a critical time has roused in me a deep interest in the problems of the Far East. I am therefore proposing to make some remarks on the Motion moved by the noble Earl. In the first place I would like to urge, like other noble Lords who have spoken, that we should do everything

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in our power to keep China and Japan within the family of nations. Were they to become entirely dependent on themselves and each other, both they and the rest of the world would, it seems to me, be very much poorer. There is so much that we can exchange and share with each other, not only in the spheres of trade and commerce but also in those of art, literature, culture, philosophy and religion. Japan's recognised need for expansion, which is one of the main causes of the situation, is apparently being met by industrialisation rather than by emigration. Here I differ from the noble Duke. It seems to me that the Japanese have never emigrated readily. They have had opportunities in Manchukuo and Korea which they have been very loath to take. On the whole I think they are going to stay at home and not go far afield. Perhaps the noble Marquess, Lord Lothian, will deal with some of the other points raised by the noble Duke.
A peaceful, well-governed, orderly and prosperous China will surely provide for Japan both a better market for her goods, which she will have to export in very large quantities, and also a far better source for the food and raw materials, which she will have to import for her growing population and expanding industry. The interests of China and Japan are not necessarily conflicting but rather are complementary. It must be clear, I think, to any of your Lordships who have followed at all closely the events of the last few years in the Far East, that the clash of those interests has caused grave conflict and that the situation now is by no means without danger. If that is so, surely, as the noble Lord suggested just now, what is needed is some other member of the family of nations to play the part of mediator, to study, understand and appreciate thoroughly on the one hand the needs of Japan, her fears and her sense of destiny, and on the other hand the difficulties and aspirations of Young China, and then to work out in consultation with them both jointly and severally a solution which will meet the fundamental needs of each and benefit both of them and the whole of the Far East.
As the noble Earl pointed out, it seems that we in Great Britain are uniquely qualified to play that part. We have a
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long tradition of friendship both with China and with Japan. Englishmen have played a great and noble part in building up the new China. Take, for instance, Chinese Gordon; take Sir Robert Hart; a distinguished line of British Ministers, among them Sir Miles Lampson, reference to whom was made by the noble Earl; the Commission led by Lord Willingdon, who went out to settle the Boxer Indemnity, and the work of Sir John Hope-Simpson and his helpers regarding famine relief. In regard to Japan, as has already been pointed out, we have the tradition of the Anglo-Japanese alliance, which played such an important part in preserving the peace and prosperity of the Far East.
I would suggest further that we might well carry this another step. Both China and Japan, though their civilisations are very old, have only emerged recently from comparative isolation. They have effected within themselves, in a generation or two, changes which have taken us perhaps the greater part of our known history. It is therefore perhaps only natural that their religious and moral ideas should be somewhat in a state of flux. Cannot they recapture some of their old ideals, such as Bushido in Japan, which was somewhat akin to our idea of chivalry, and apply them to the needs of the hour? Could we not encourage in Japan those leaders who already see that in co-ordinating the needs of others with their own lies the highest type of leadership, so that that leadership should be a moral leadership which alone can provide a life-line worthy of a great nation? In China, can we not really help the leaders to understand each other and to cooperate for the rehabilitation of the national morale and the constructive development of the whole country? Such an internal rapprochement has already taken place in South Africa, and if we have learned the secret of unity within the Empire, could we not impart that secret to those without?
It seems to me that here, again, we in Great Britain are peculiarly fitted to take the lead in that direction. The problem of the expansion of England in the eighteenth century was somewhat similar to that of the expansion of Japan to-day, though I am quite aware that the analogy must not be pressed too far. That expansion of ours was in many

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cases based upon principles of stewardship and real concern for the welfare of the inhabitants of the territories we administered. We should be prepared to place our experience in these matters at the disposal of Japan. It is surely almost a commonplace to say that the forces that threaten peace in the Far East, as elsewhere, are fear, hate, pride, national selfishness and suchlike. These forces deal with the moral and spiritual sphere, and can best be met by their positive antidotes: love, humility, appreciative understanding and generous co-operation, drawing out the best in them by giving them the best in us. Further, public policy needs the support of public opinion and cannot very far advance ahead of it. Cannot we therefore encourage and co-operate with those who are working for the regeneration of these countries—for example, the originators of the New Life movement in China, the political and social leaders in Japan, such as some members of the House of Peers, and certain movements of public opinion in both countries the leaders of which have been deeply influenced by the present spiritual renaissance emanating from Oxford?
We must not forget, again, that these problems are Eastern problems. I do not pretend to expert knowledge of the Far East, but I was there long enough to realise that the Eastern mind proceeds from different premises, so that only those who understand those premises, the historical background and the present movements, can really help. There are many Englishmen who are in a position to give that help. So I would urge on His Majesty's Government first of all to make up their minds that these issues are of great importance; such great importance that, in spite of their preoccupations in Europe, they will give them real attention. After all, as we have been reminded this week in another connection, "Peace is indivisible." These issues affect a large part of the world and a large proportion of its inhabitants. We have very important interests in the Far East and in the Pacific, and we expect that they will given their due place, as we are equally prepared to see that Japanese interests have the place that is their due.
Secondly, I would urge upon His Majesty's Government to make up their
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minds at once. Those who follow events in China must surely realise that there is a grave risk of economic collapse. The large adverse balances of trade cannot continue much longer unless a remedy is found. To judge from unofficial statements, we may at any time be faced with a fait accompli in the shape of an Asiatic Monroe doctrine. There appears to be a real danger of some conflict arising that could well have world-wide implications, so that it may soon be too late to prevent disaster. Finally, His Majesty's Government must be prepared to face the implications of such a policy and to carry it through. A strong lead in a constructive and conciliatory policy and in one of understanding co-operation would, I am convinced, find a ready response in China and Japan and lay a sure foundation for the peace and prosperity of those countries and the whole of the Far East.
THE MARQUESS OF LOTHIAN: My Lords, I ventured a few weeks ago to say that there were two major problems confronting the world, one the problem of finding a place for an "equal" Germany, and the other that of meeting the needs of Japan and the Far East; and that if these two problems could be solved, we might hope for peace in the world for fifty years. I heartily congratulate the mover of this Motion this afternoon on having brought this Far Eastern question before your Lordships' House. I feel that one of the serious things in the Far Eastern situation during the last year has been that, when great events have been taking place in that part of the globe, there has been no public discussion of those questions either in this House or in another place. If there are suspicions rampant—and they are rampant—it is particularly so because we have not received authoritative information as to what is going on and what is the policy of His Majesty's Government. We are therefore liable to believe things which are not wholly true. I venture to believe that if the situation is faced with that tolerance and wisdom for which so many noble Lords have asked this afternoon, it is possible to solve Far Eastern problems with reasonable justice for all concerned.
I would venture to put before your Lordships a little history, because from

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some of the remarks which were made this afternoon I think there is a slight tendency to forget certain things which have happened in the past. The history begins, perhaps, with the Anglo-Japanese Alliance, which was a very good arrangement in the anarchic world which existed before the War and which benefited both the signatories very considerably. There is an illusion going about that we got all the benefit from the Japanese Alliance and the Japanese got none. I am quite certain that any scrutiny of history would prove that to be untrue. The Alliance gave Japan the opportunity which she has seized, and rightly seized, to solve her problems in the Far East in relation to Russia. That was due to us. On the other hand, it kept Japan on the side of the Allies during the War, though for her co-operation I venture to say that she was very handsomely paid.
But what happened after the War? It was not just a question of continuing with the old Alliance. There was a very dark war-cloud across the Pacific through the growing antagonism between the then great American Navy, which was being built up to the largest standard then in the world, larger even than the British Navy, and Japan. The Four-Power Naval Treaty was the wisest way of removing that antagonism and reaching an agreement between the four major Powers in the Pacific that they would solve the problems of the Pacific without antagonism and in agreement for the next ten or fifteen years. Noble Lords have said that it would have been wiser to continue with the Anglo-Japanese Alliance. Even if it had been possible, and I believe it was not possible, it would have disrupted the Empire, as the Canadian Government at that time made perfectly clear. I venture to think that the Washington Treaties were the wisest treaties which were made at the end of the War, and their justification is that for ten years or more they have preserved peace in the Far East, until the events which began with the Putsch in Mukden in December, 1931.
What were the basic principles upon which the Washington Treaty rested? I do not believe you are going to solve the Far Eastern question until you go back to those principles. They are two-fold. The first was that the Contracting Powers, other than China, agreed, in the terms of the first Article of the Nine-Power Treaty that "they respect the
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sovereignty, the independence and the territorial and administrative integrity of China," and promote her development. After all, that is a treaty which Japan, this country, China and the United States have signed, and it is still in force.
THE DUKE OF ATHOLL: Might I interrupt to ask the noble Marquess whether Japan did not exclude Manchukuo, an exclusion to which President Wilson had already agreed in 1918?
THE MARQUESS OF LOTHIAN: It is the first I have heard of it and if the noble Duke can find any reference to that I shall be surprised. The word "China" has always included Manchuria.
THE DUKE OF ATHOLL: It was not in any of the maps before the War.
THE MARQUESS OF LOTHIAN: Then why was not Manchukuo represented at the Nine-Power Conference. The second Article is as follows:
"To provide the fullest and most unembarrassed opportunity to China to develop and maintain for herself an effective and stable Government."
The third Article is:
"To use their influence for the purpose of effectually establishing and maintaining the principle of equal opportunity for the commerce and industry of all nations throughout the territory of China,"
and the fourth reads:
"To refrain from taking advantage of conditions in China in order to seek special rights or privileges which would abridge the rights of subjects or citizens of friendly States, and from countenancing action inimical to the security of such States."
LORD BARNBY: Would the powers of Japan with regard to the railway zone by previous treaty be affected?
THE MARQUESS OF LOTHIAN: This treaty did not purport to abrogate any treaties or agreements previously in force. There, anyhow, is the first principle of the Washington settlement, and I think noble Lords can only believe it is a fair and just one, and there can be no peace in the Far East unless it is accepted. The second principle was embodied in the Naval Treaties which gave equality and security to those great Naval Powers. This security was provided for as follows. Inside the great triangle represented by Japan in the North, Hawaii in the East and Singapore

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to the South no fortifications of any sort were to be made. These naval bases were three thousand miles away from one another, which meant, in fact, that no major fleet action could be fought between fleets so far separated, and that each country had complete security in its own zone. The naval ratio of 5:5:3 was fixed, not through any abstract idea of the relative importance of the three Powers, but on the basis of their then existing Navies. This naval arrangement provided for equality of security for the three major Powers. The Armies were unlimited, and everybody knows that the Army of Japan is very much larger than the Army of either the United States or Great Britain.
These two principles of the Washington Treaties, were, as I see it, fair, and I do not personally see any chance of a lasting peace in the Far East unless fundamentally they are observed. Why has there recently been a certain measure of anxiety which has caused the suspicions to which the noble Duke and others have referred? I venture to think it, is derived from one fact, and that is, that while in many ways the situation has changed, and while the economic anxieties which Japan has have become more difficult, as the noble Lord so eloquently described, and which I think no one in this House fails to recognise, she has taken action unilaterally instead of after consulting her co-signatories to those two Treaties. I venture to think that that is at the root of the trouble. This unilateral action began even during the period of the Anglo-Japanese Alliance. The famous Twenty-one Demands made on China in 1915 were made without any previous consultation with her British Ally. It is this kind of unilateral attempt to upset treaty arrangements which, I venture to think, is the root of all the difficulty, and until we get back to the principle that those very difficult problems in which I, personally, and I think all noble Lords are prepared to give the greatest weight—with friendly consideration to the needs and difficulties of Japan—must be considered collectively, there will be no lasting settlement.
This unilateral action was resumed at the unexpected and unannounced putsch in Manchukuo in September, 1931. I have always thought, as Lord Lytton in his Report admitted, that the status quo at that time was impossible. To continue
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two sovereignties within a single State was impossible, but the gravamen of the charge against Japan has been that her action was taken unilaterally and in disregard of her obligation to consult other nations who were co-signatories of the Treaties and the Covenant. Then, in April, 1934, you had that curious series of semi-official pronouncements made by various official Japanese Ministers in different parts of the world, proclaiming, without prior consultation with their associates, a new policy in China. I will quote a pronouncement by Mr. Sato, the Japanese Ambassador to the United States, made on April 22, 1934. These are the words quoted in The Times:
"Japan does not desire to interfere with legitimate foreign business in China, but it wishes to be consulted by those who want to deal with China before they conclude any transactions."
That was the beginning of the so-called Monroe doctrine for the Far East. The Times correspondent in Tokyo, on April 18 of that year, stated that the effect of this pronouncement was that "Japan will oppose international projects for assisting China." The Manchester Guardian correspondent referred to these statements in the following words:
"They rank in seriousness with the twenty-one demands of 1915."
So serious was the outcry that the Foreign Secretary, Sir John Simon, had to make what was then called an inquiry in Tokyo as to what those statements really meant. As the result of that a semi-official statement—not an official statement—was issued, very considerably toning down the effect of the original demands, and the incident, which provoked grave anxiety in China, and graver anxiety in the United States, gradually died down.
That was again unilateral action. That is why the statements which emerged in February last in connection with the Ariyoshi-Chiang Kai-Shek conversations also caused such concern. If the noble Duke will permit me, I will just interject here that my authorities were The Times, the New York Times and the Manchester Guardian. But there were statements issued which caused a good deal of anxiety relating to the policy which Japan was said to be pressing on China, and which was embodied in the words "Asia for the Asiatics," that China

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was being pressed to withdraw from her association with European Powers and the League of Nations, and pursue a policy which would ultimately mean the exclusion of British and other interests from the Far East. I am not in a position, I frankly admit, to say whether those statements are wholly true or not, but they are precisely the sort of thing which gets circulated and believed when nations begin to take unilateral action; and the remedy, and the only remedy, is a frank and open conference between all the Powers concerned, with all the cards on the table.
That is why I greatly hope that the Government will be able this afternoon to say that it is their intention to have a full and complete discussion of these problems with the other major signatories of the Far Eastern Treaties in the near future. We had not long ago the naval discussions. I think it is quite useless to have an armaments discussion unless you are first agreed about policy, and I thought it was ominous that before the naval discussions took place an official statement was issued from Tokyo that political subjects were to be ruled out of discussion. It is quite obvious that if there is going to be a settlement in the Far East there has to be some modification of the Washington Treaties—not of the basic principles, but of the details of the Washington Treaties.
A new situation has arisen in the last fifteen years, and I for one think it is far better to face the facts honestly and squarely, and try to reach an agreement between Japan, China, the United States, ourselves and Russia, the main parties concerned. As to the principles which are to govern the Far East in the next ten or fifteen years, I believe that if that is done, no doubt first in private conversations through diplomatic channels, but afterwards at a more formal conference, these clouds of suspicion will be dispelled, and will do for the next fifteen years what the Washington Treaties have done for the last. Therefore, I hope it will be possible for His Majesty's Government to say that conversations are taking place leading to the kind of conference that will take place, as it ought to take place, now that the Naval Treaty has been formally denounced by Japan.
LORD MARLEY: My Lords, as I understood, the noble Earl who introduced this discussion desired to help in a loosening of the tension in the Far East. I think his speech was a very thoughtful contribution to a very difficult problem, and during the discussion this afternoon we have had a number of speeches of very great value. I want to deal for a moment with a few of the factors affecting the possibilities of peace in the Far East. As regards the position of Japan, the House has been told of the very serious economic position affecting that Empire. It, is perhaps more serious than is generally understood and I think it was brought out in an article in The Times in December, 1933, headed "A Million more mouths to feed." It was pointed out that in Japan the average farm is only 2.7 acres and has to feed six persons, and that no countryside in the world is so crowded as Japan is, with 959 inhabitants to every square kilometre of cultivated land as compared with only 394 in Belgium. The Japanese, therefore, are quite incapable of feeding their people from Japanese sources and are impelled to seek overseas the means to keep their people alive; that is, sources of raw materials for their factories and a market for the products of those factories. A nation so crowded, with such limited agricultural land, cannot live on agriculture alone. It must live on industrial production.
That is the reason why it is wrong to take up a purely anti-Japanese attitude in considering this problem, because that is not facing realities, it is not facing the needs of the Japanese people and it is merely encouraging an obstinate continuation of a policy which has caused a great deal of misgiving in the rest of the world. Equally I venture to think a purely uncritical support of Japanese action will not lead to the solution the noble Earl desired, because it will merely encourage the continuation of a policy of expansion on the mainland without reference to other nations, which has been rightly condemned by the noble Marquess, Lord Lothian, and which in the end leads to a state of affairs which will merge into war.
In facing the problem and in studying the factors involved, I think it is important to realise the accuracy of a point made by Lord Addington and a point entirely misunderstood by the Duke

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of Atholl, and that is that the Japanese are not, in fact, colonisers. The noble Duke talked about the Japanese being bottled up; but they are not trying to escape out of the bottle, they are trying to live inside the bottle. It is a fact that during the last three and a half years' occupation of Manchuria by the Japanese only 35,000 Japanese have actually left Japan to live in Manchuria, and those are mainly engaged in looking after the Japanese troops in Manchuria and are not, in point of fact, colonisers.
THE DUKE OF ATHOLL: What I meant was that they could not remain bottled up where they were unless they had something for their industries, and that they hoped to get that by opening up trade with Manchuria and Mongolia. That was my point.
LORD MARLEY: If the noble Duke did not say that they intended to colonise I at once accept that and withdraw any such suggestion. But in dealing with this matter, it is quite clear that the Japanese are not seeking a place to colonise, and therefore a good deal of the suspicion of Japanese aims may be discarded, particularly, for example, the suspicion quite widely held recently in Australia, I believe, that the Japanese were seeking to colonise the Northern part of Australia. It is true that the Japanese have adopted what is called a Continentalpolicy with regard to Asia, and it is true that they have done this against existing treaties. They have, against existing treaties, seized Manchuria, and that Continental policy, that unilateral policy, as it has been called, is the reason that has been given for the possible holding of a conference of all the Powers involved.
But up to the beginning of the operation of that Continental policy there was no sign that other nations were prepared to discuss with Japan what was involved if one faced up to it—that is, the giving up of some of our privileges and handing them over to Japan. We believe this matter can never be adequately dealt with until sacrifice on the part of other countries is realised as a practical necessity in dealing with the problem. If is possible that the Japanese have very serious further developments in view, and competent observers are pointing out the possibility of the development of a Mongolian Empire to the north of China which
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would act as a barrier between China in the south and the Soviet Union in the north. That is a factor which wants very careful watching and, whether it is for good or evil, I believe we shall never-get a satisfactory solution of the tension in the Far East unless we watch with sympathy and judge how far we can aid developments such as that proposition.
In dealing with the relationship between Japan and China I think a mistake is made in talking of China as though it were a. complete entity. In point of fact, China consists of a number of separate Governments. They are opposed to one another, they are not co-operating they are so far separated that they are hardly in communication. It is a, known fact, for example, that the Nanking Government in the north is quite unable to be in communication with Sinkiang or Chinese Turkestan in the west. The Canton Government, as has been pointed out, is actually opposed to many aspects of Nanking policy, but the Chinese Soviet Government, which has been mentioned, has the support of many millions of Chinese, particularly the peasants and working masses, and is succeeding in existing in the face of a continual series of attacks aided by other nations. China therefore has many sides, and to refer to China alone is not accurate but is misleading.
If we are talking about the Nanking Government, that Government is in very serious financial difficulty, and it is, I understand, one of the propositions of the Japanese Government to make a loan to the Nanking Government provided that Government carries out the policy dictated or advised by Japan. That policy was the policy that the noble Earl, Lord Lytton, called "internal reconstruction in China," which appears to me to be an encouragement of the Nanking Government to continue an impossible civil war. British newspapers published in China, such as the North China Daily News, have long advised that the Nanking Government should limit their activities to those Provinces which they actually control and should devote foreign money from Japan or wherever else to the development of social services, roads, and communications in the Northern Provinces instead of throwing into the maelstrom of war millions upon millions

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of pounds in continuing internal civil war.
We must take a share of responsibility for the fact that the Western nations are supplying large quantities of arms to the Nanking Government which are being used for this purpose. I see that in the recent return of the League of Nations Great Britain's exports of arms to China, in gold units, increased from 900,000 in 1932 to 1,450,000 in 1933, and that France increased her exports of arms into China from one per cent. of her total exports to China in 1931 to 29 per cent. of her total exports to China in 1933, a rise from 2,000,000 to over 4,000,000 gold units. We are told that the bombing operations of Chiang-Kai-Shek, the Chinese General, have been carried out by 200 American bombing planes, and other nations are involved in this trouble. We cannot say we are helping in a solution of a difficult situation when we must bear a share in the wickedness of supplying arms to enable that state of affairs to continue.
There is one factor which has been mentioned by one or two of those who have taken part and which is a factor of very great hope and optimism in the Far East—that is, within the last two or three days, the generally recognised pacific intention of the Soviet Union. Russia is a very great power for peace in the Far East. I think it would be generally recognised that she has proved that by her offer of a non-aggression pact with Japan and by her sale of the Chinese Eastern Railway because it was a constant source of possible irritation in the relationship between Japan and the Soviet Union. The recent speech of the Foreign Minister for the Soviet Government, Litvinov, is of very great importance. It was reported in the Daily Telegraph of March 15 and it reads as follows:
"When the present situation slackens, Russia will be ready to discuss the reciprocal withdrawal of a certain part of her armed forces, including military aeroplanes, to a definite distance behind the Soviet-Manchurian frontier. For that purpose it is important to disperse the unfavourable impression created in Russia by Japanese refusal to accept the Soviet offer of a pact of non-aggression."
That offer is one which should be followed up, because it is of vital importance in easing the tension which has
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existed for too long between the Soviet Union and Japan in the Far East.
We on these Benches believe first of all—and we agree in this with the noble Marquess, Lord Lothian—in the maintenance of the treaties which govern or are supposed to govern the position in the Far East, and we would support a full discussion by all the nations involved of the problems in the Pacific. The noble Lord, Lord Newton, in his proposal for a Four-Power Conference, carefully omitted the Soviet Union, but I hope he will get over that feeling of dislike and will follow what is, I think, the growing opinion of thoughtful people in this country that the Soviet Union has a very great deal to contribute towards the peace and stability of the world. Then again, we on these Benches believe that we must control the arms traffic in the Far East. That arms traffic should be one of the factors to be considered by such a conference as has been proposed by so many speakers. We believe that we must secure the political and economic integrity of China, and that that political and economic integrity must be for the benefit of the Chinese masses and not for the benefit of this or that Government, temporary or permanent; and not for one portion of China only. The factor of the non-unity of China must be taken into account in any such conference. Finally, we believe that such a conference must reiterate and underline the fact which has been stated before, but which has never been put into practice, that the Powers concerned have no intention of the continuation of the domination and exploitation of the Chinese people.
THE UNDER-SECRETARY OF STATE FOR FOREIGN AFFAIRS (EARL STAN-HOPE):My Lords, when I saw upon the Paper the Motion of my noble friend, I realised that I should probably be faced with a variety of opinions about China and the Far East, many of which perhaps would be contradictory one of the other, and that I should be faced with a very difficult debate to which to reply. The differences of opinion have perhaps been less than I anticipated, but my difficulties are none the less. Several of your Lordships have referred to the financial situation of China, and it reminds me that some two or three years ago we had a debate on bimetallism in this House, in

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which several of your Lordships took the point of view that if the price of silver were raised then both India and the Far East would find themselves in affluence and everybody would be well off.
EARL PEEL: I did not.
EARL STANHOPE: My noble friend, course, was not one of them, but I found myself somewhat alone. I did not even get the support of my noble friend when I took the opposite point of view, that any great appreciation in the price of silver would probably mean a slump in prices in China, and that so far from China being better off as a result of the increase in the value of silver, we should find things very much worse than they were before. I regret to have to say that, at any rate on that occasion, I was right. We find that China is suffering in exactly the same way as we did when gold was at a very high price. We found a vast amount of unemployment and difficulty, until, eventually, we had to go off gold. I am not going to suggest that it is China's plan to cease linking her currency with silver, but I wish to remind your Lordships that the situation in China now is one of considerable difficulty in that respect, not only in regard to her trade and unemployment, but also in regard to her currency. But it is, I think, going too far to say that China is on the point of collapse from that point of view, and that unless we do something immediately there will at once be general chaos and a break-up of the Far East.
Recently China has been enquiring of this country whether we would be prepared to support her with a loan. The scheme was put before us, and we considered it with sympathy and with care, but we came to the conclusion that the scheme, as proposed, would have had only a temporary effect and, therefore, would have been of no real value to China. We have consulted with other Powers about this matter, and we have done as several noble Lords have suggested. We have taken those Powers who were particularly interested in the Far East into conference about the matter, and have told them what action we were taking with China. At the present moment the situation is that the Chinese have appointed a Committee of their own people, who are considering the matter, and I understand that they are drawing up a report on the whole situation. When
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that report is handed in, then we, in common with other countries, will consider it with every possible sympathy, and see what we can do to alleviate the situation in regard to China.
Several of your Lordships have remarked that there was a possibility that Japan would be prepared to grant a loan to China on her own account in return for various privileges and rights which would be conferred on her alone. I have no information of that kind, and no such information has come in any kind of way to the Foreign Office, although we are the receptacle for a good many rumours from all parts of the world. But I think your Lordships would agree that it is an unlikely rumour to be true, because, as several of your Lordships have pointed out, the situation of Japan herself is not so extraordinarily favourable, from the financial point of view, that she could really consider making a loan to some other country. In some respects Japan's financial position is very secure. She has a small national debt; I think it works out at something like eighty-four yen per head of population, not a very large sum; hut it is quite true that she has only been balancing her Budget during recent years by raising bonds in her own country to an extent of something like one-third of her total expenditure. That, of course, is not a policy that any country can pursue for any length of time with impunity, and, therefore, she will have, in the comparatively near future, either to reduce her expenditure very materially, or greatly to increase her taxation.
There is a possibility that she may be able to reduce her expenditure in Manchukuo. A great deal of the expenditure there was of a military character when first her Army went into the country, but a good deal of it also has been, as several noble Lords have remarked, upon the very great developments which have taken place in Manchukuo since 1931. That, to some extent, is likely to continue. I think, probably, the building of railways will now slow down, but there is the making of roads, and there is still the suppression of banditry, which has to be brought to an end. No doubt banditry is much less prevalent than it was, but, none the less, the expenditure which Japan has to face in Manchukuo in the near future must still remain, I think, considerable,

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and it will be some time before she can expect to get a return from the money she has put into Manchukuo. Several of your Lordships have gone in considerable detail into the events that occurred when Japan proceeded to take possession of Manchukuo. I do not think I am called upon, in view of the Motion on the Paper dealing with the situation in the Far East as it is at present, to go into past history, and I am all the less inclined to do so when I see sitting on the Cross Benches the noble Earl, Lord Lytton, who went into the matter so fully in the Report he made to the League of Nations.
My noble friend referred to the fact that neither China nor Japan any longer was represented on the Council of the League of Nations. That is quite true, and it is most unfortunate, but I think it was unavoidable. I am very grateful that he mentioned the subject to-day. As your Lordships all know, Japan herself resigned her permanent seat on the Council, and, therefore, there was no alternative but that she should disappear. China was in a different position. China was elected to one of the temporary seats on the Council, and at the end of her period of three years, she was again re-elected for a similar period. But when a nation has been re-elected once as a temporary member of the Council, I understand that it requires the vote of the Assembly of the League in order that she should be re-elected for a third term. In fact, I think it has only been done on one occasion and that was in the case of Poland. Therefore your Lordships will see that there was no alternative but that the seat allocated to Eastern countries should cease to be occupied by China, and it was then occupied by Turkey in her stead.
EARL PEEL: I merely said it was unfortunate.
EARL STANHOPE: I quite agree, and I know that no accusation was made either against the Government or against the League of Nations, but the noble Earl did say that there was a feeling in the Far East that the League of Nations was no longer interested in Far Eastern matters because these two nations were neither of them represented. I wanted to put it that the League had no alternative, and that so far from having lost interest in the Far East the exact
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contrary was the case. I think the noble Marquess, Lord Lothian, said that if we could only settle matters as regards Germany and Japan we should probably have peace throughout the world for fifty years. That is a big assumption. Incidentally it leaves out South America which we have heard of in regard to war. I agree with him, however, that if we could find a satisfactory solution of these questions our troubles would be very materially reduced.
The noble Lord, Lord Marley, was very much distressed at the quantity of arms sent into China. I wondered why, until I remembered that those arms were being used principally against Communists and that as he is a supporter of the Communists he would naturally feel somewhat hurt about the matter. He entirely exaggerated the situation in China. It is quite untrue to say that there is no Central Government and that there is no control by the Central Government, and it is even more untrue to say that there are many million Communists in China at the present day.
LORD MARLEY: May I be allowed to interrupt for a moment? I did not say there was no control by the Central Government. I said that the Central Government control was limited to a certain number of Provinces. With regard to the number of Chinese who are supporting the Soviet Government in China, I only quoted the Report of the noble Earl, Lord Lytton, in which he pointed out that there were something like eighty million people—I think that was the figure, at any rate it was something astronomical—under the control of that Government.
EARL STANHOPE: Yes, but as probably the noble Lord knows the support of troops in China depends entirely on who pays them. Therefore when pay stops the number of troops goes down with a rush on one side or the other. It is no longer a figure of eighty million or anything approaching eighty million. My information is that the Communists are now being definitely rounded up into one part of China—mostly in Kiangsi but also in Szechuan—and there seems every probability that General Chiang Kai-Shek will be able to bring to an end the greater part of the Communist danger, at any rate in Central China (I am not talking about Chinese Turkestan) and to

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get orderly government over the greater part of China.
LORD MARLEY: That is not my information.
EARL STANHOPE: Perhaps mine is rather better. If that is true, and I profoundly hope it is, quite a new situation will begin to arise in China. The trouble is that it is not only Communists but various War Lords who keep fighting each other. Therefore it is very much in the interest of China herself and of the great trading nations of the world that there should be a Central Government powerful enough to prevent civil war going on in any part of China. I was going to say that it is money well spent, but at any rate I will say that until you get a powerful Government in China dealing with a vast, population there is no real hope of getting a solution of the difficulties that beset us and other nations in that part of the world.
Several noble Lords suggested that we should become the mediators between China and Japan. Well, I do not very much like the word "mediation." It usually means that you interfere with other people in their quarrels and one has known cases where two people who were quarrelling have turned to fight the mediator. That is not the position we wish to get into. There is, indeed, a great difficulty in the Far East and I do not think that everybody who has spoken has quite realised the change in the situation. China has got, as so many other countries have, a much stronger national sense than she had sometime ago, and it is quite impossible in these days to go to China and suggest that she should employ advisers, British or other, to help her out of her difficulties. We have suggested, and we continue to suggest, that where there are difficulties then if we can help we shall be only too glad to do so. That is a different way of doing it, but it is the effective way and the right way.
In another place a day or two ago it was stated in reply to a question that three experts, two from the Great Western Railway, are going out to China, starting from this country to-morrow, to advise on the reorganisation of the whole of the railways of China. That was not put forward by us. The Chinese approached our Minister and asked him
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if he could suggest someone who could assist them in reorganising the railways and getting them on a sound financial footing. We were able to give him names and as a result these advisers are going out to China. They are going out entirely at the request of the Chinese Government for temporary service and, of course, they will be temporary servants of the Chinese Government. That is rather different from the position in Egypt in the old days, when advisers sent out were British and in some ways were the servants of the British Government rather than the servants of the Government of the country in which they were serving.
Several of your Lordships suggested that we should call a conference of the interested Powers in order to consider all these questions. I am very doubtful whether we should get any real advantage from that at the present time. When you get a conference, unless the way is very well prepared beforehand, you have each country taking up its own position to support its own interest and its own point of view. The result is that those views become intensified and as they have been made public it becomes difficult for any country to withdraw them. What in fact we have been doing without a great flourish of trumpets is to try to bring about a détente between the various countries interested in the Far East. The noble Lord opposite mentioned the case of the Soviet Union. We welcome warmly the détente that has now occurred between the Union of Soviet Socialist Republics and the Manchukuo Power. If they can settle their differences perhaps the most obvious cause of war, as it appeared some two years ago, will be eliminated and we shall be so much to the good in that respect.
Similarly, in regard to China and Japan, there seems to be a notion in the House that there was very strong hostility between China and Japan, and that—I forget the exact phrase that was used—conferences and so on were taking place. There are conversations taking place, which is rather a different matter, and both sides I am sure realise that if we can assist in any way in easing difficulties that may occur or in explaining the situation from one country to another, then we shall be only too glad to do what we can. Every one,

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I think, of those in authority both in China and Japan realises that we are very strongly of the opinion that it is to the interest not only of China and not only of Japan that they should come to terms together, but also to the interest of the whole world.
China is such a vast country and is peopled with so many millions that there is no question of any one nation being able to get a monopoly of trade in that country. As she becomes more settled, with a stronger Central Government, she will require more and more trade and more and more products as the years go on. Therefore, if we can succeed in getting this détente among the nations of the Far East, we shall all prosper by it, including China herself. We believe that that is the best way to deal with the situation and, although it is perhaps not one that looks well in a firework display, it may be none the less effective for that.
I entirely agree with most of what my noble friend Lord Addington said, and particularly with his remark that the Japanese are dealing with their expansion more by industrialisation than by emigration. I think the noble Lord, Lord Marley, also agreed with that statement. That is quite true. There has always been a difficulty with the Japanese in getting them to face either great heat or great cold. As they have a climate very much like that of this country, they do not readily go to places either north or south of Japan where they do not get such an equable temperature.
My noble friend Lord Glasgow asked me about the boundary between Burma and China. The situation there is that there has been no delay about the matter. The Boundary Commission can only work during the dry months of the year, which in that part of the world begin in November. I understand that Notes have not actually been exchanged at present to set up the Boundary Commission, but we are expecting to be able to do so in the course of the next few days; at any rate, we are expecting to get it settled at a very early date.
I think I have dealt in the course of my remarks with most of the questions that have been put by noble Lords. If I have missed any, I apologise, and perhaps the House will allow me to rise again if they wish to have any further
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remarks from me. It is such a vast subject that I am afraid I have had to deal with it very generally, and perhaps my speech has been rather disconnected. In view, however, of the many different points of view that have been put forward by your Lordships, I hope you will forgive me if, instead of reading out a brief as I once did on a former occasion, and getting into trouble for it, I have been rather more disjointed.
EARL PEEL: I am extremely obliged to the noble Earl for the answer he has given us on many points. As I think that I was a little time ago the author of some criticism of him for reading out a rather stereotyped reply, perhaps I may thank him for the fluidity of his present deliverance. There is just one point I may mention. I am very glad, if I may say so, that the noble Earl has given support to the Central Government and has rather dwelt upon the advantage which the growing strength of that Central Government at Nanking constitutes to the whole of China. May I say that I am also very glad that he has given official expression to the idea that a conference should not be called. That was a suggestion I advocated myself, and I am naturally gratified that it is the official view of the Foreign Office. May I also say that, as regards the efforts that he has told us the Government are making to bring about a détente of the countries, I do not know whether I could translate that into meaning friendly relations between the countries. If the Government are taking an active part in that line, that meets some of the points which I was suggesting to the noble Earl. The only other point I should like to make is to say that I am very interested to hear, on the highest official authority, that conversations are not conferences. I beg leave to withdraw my Motion.
Motion for Papers, by leave, withdrawn.

"THE NATIONAL GOVERNMENT."
LORD MOUNT TEMPLE LORD MOUNT TEMPLE had given Notice that he would draw attention to the Ministry of Transport Circular No. 419 (Roads); ask His Majesty's Government why in that Circular His Majesty's Government is referred to as "the National Government"; and move for Papers. The noble Lord said: My Lords,

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I rise to ask the Question which appears on the Order Paper to-day in my name. I am not going to suggest that this departure from traditional practice is going to wreck our Constitution. I am not going to say that it has been done on purpose, but I think it is of sufficient importance to bring before your Lordships' House, so that what I consider a bad innovation may be scotched at its Very inception. The Prime Minister, poor man, is not the origin of this practice, as most people seem to think, but the chief villain of the piece is the Minister of Transport. Now the Minister of Transport, in the Circular which I quote in my Question, dated the 5th February of this year, is quoted as saying that the "National Government" had decided on a five-year plan. That he was quite entitled to do, if he had been using that phrase at a political meeting outside Parliament and not in an official Paper. In the same Paper, however, which is signed by the chief permanent head of the Ministry of Transport, this is written:
Sir, I am directed by the Minister of Transport"—
so the Minister of Transport is responsible and is the directing person behind it—
"to acquaint you, for the information of your council, that he has had under consideration representations made by the County Councils' Association…With the object of meeting these representations, the National Government has decided"—
to do so and so.
What I take strong exception to are the words "the National Government has decided" to do something, in an official document. I submit, my Lords, that, in accordance with practice and with courtesy to the Crown, the phrase ought to have been "His Majesty's Government" and nothing else. Then, led away by this bad example, the Prime Minister does the same thing in his White Paper dated the 11th March, which was issued when the discussion took place on the increase in His Majesty's defensive forces. In that document he twice used the words "National Government." On page 4 the words "National Government" are used, and on page 10 they are used again. That Paper is signed "March 1st, 1935; J. R. M." So we have, not once but twice in the last three months, an official document issued by His Majesty's Government ceasing to call
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the Government "His Majesty's Government" and substituting for its name "the National Government." It follows that if this is not stopped the next Government, whether a Socialist or Conservative Government, will cease to use the expression "His Majesty's Government" any more, but we shall learn that "the Socialist Government" or "the Conservative Government" decided so and so. I submit that this is against all precedent and ought to be stopped, and I hope that the noble Earl who answers for the Government will stand in a white sheet and say "Peccavi, I will not do it again." But in all seriousness, this matter has a certain constitutional importance. After all, His Majesty the King appoints Ministers, he receives their resignations, and in case of a crisis no doubt he could use his Prerogative to dismiss them. Therefore what has been done is not only bad taste and against tradition, but it is also historically wrong, and in my submission it is not the way in which the Crown ought to be treated by this or any other Government. I beg to move.
LORD PONSONBY OF SHULBREDE: My Lords, perhaps I might save the noble Earl the trouble of replying by giving an answer to the noble Lord. That sort of error would not have occurred while he was at the Ministry of Transport, and I am sure would not have occurred whilst I was at the Ministry of Transport. The noble Lord will remember the almost incomparable genius for publicity which is possessed by the present Minister of Transport, and he therefore thought it as well to kill two birds with one stone—not only to regulate the traffic, but also try to give as much publicity as possible to the present Government. I entirely agree with what the noble Lord said, but I am afraid we shall not correct them—they are incorrigible.
THE EARL OF MUNSTER: My Lords, the object of the Motion is to call attention to Circular No. 419, issued by the Minister of Transport on May 5 last, wherein the words "National Government" were inserted instead of the words "His Majesty's Government," which, of course, should have been used. The Circular of that date follows the language of, and makes quotations from, the Minister's speech at Birmingham, in

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which he announced that the National Government had decided on a five-year plan for the roads. My honourable friend the Minister of Transport will, however, take note of the points raised by my noble friend, and there is, of course, no intention of employing the phrase to which exception has been taken.
LORD MOUNT TEMPLE: My Lords, I ask the leave of the House to withdraw my Motion.
Motion for Papers, by leave, withdrawn.

TRAFFIC IN ARMS.
VISCOUNT CECIL OF CHELWOOD VISCOUNT CECIL OF CHELWOOD had the following Notice on the Paper: To ask whether it is true that the representative of the British Government on the Sub-Committee at Geneva dealing with the manufacture of and trade in arms has finally refused to agree to international control on the spot; whether any other Power is supporting this point of view, and if so, which; and what is the reason for which the British Government is taking this attitude which, in the view of several other Governments, is fatal to the success of the negotiations; and to move for Papers.
The noble Viscount said: My Lords, I have put this question in fairly full form, and I hope that it will be intelligible to the Government. When the so-called deadlock occurred in the disarmament proceedings, it was decided that there were two or three subjects which might still be discussed in the Committees of the Disarmament Conference while the main questions were in suspense, and among those subjects was that of the traffic in arms. In order to permit a discussion of that, it was referred to a Committee of the Conference, and that Committee was called together a few weeks ago. When it was called together the American delegation put forward certain proposals for the regulation of the traffic, and the main point of those proposals was that each Government should assume responsibility for the sale of arms. It is not exactly the solution that I personally should have liked—I would have gone further—but it was, many of us thought, a very important proposal which might, at any rate, do something to remove the undoubted difficulties which have been deplored by
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the head of the present Government and by others in connection with this traffic in arms.
There was a discussion in public. The British Government, while expressing general friendliness to the proposals, announced that they were going to move important amendments which it was an open secret that the American delegation regarded as a very serious deterioration of their proposals. The matter was discussed in public, and then it was referred, I think very unfortunately, to a Committee sitting in private for further discussion. We do not, know, we have not been told by the Government—I believe, in fact, they have refused to tell us—what amendments they have moved, or given notice of in this private Committee. I deprecate that attitude. I think it very important that in a matter of this great moment, which excites very great feeling in the country, we should have been kept fully informed of what exactly the Government were doing. However, they thought differently.
It is now stated in the Press—I do not know with what accuracy—that on a very important matter, with the details of which I do not propose to trouble your Lordships, but which is sufficiently referred to in this Question, the British Government insisted on moving an amendment which was opposed, as is stated—of course, I do not know—by almost the whole of the other Governments represented. Indeed, I am told that only one Government supported the British Government in their proposal. I am told that they moved a second amendment, dealing with another matter affecting the nature of the returns that were to be made to show what traffic in arms was actually going on, and on that occasion the British Government received only the support—so I am told: I do not know whether it is true—of Persia and Afghanistan. I think it only right that we should be informed whether those reports which have been printed in the Press are accurate or not. We should know what is the attitude of the Government on this matter, and that there is no danger of a repetition of what has happened so frequently in the Disarmament Conference, where discussions in public have seemed to be so near to leading to an agreement, and then there has been a reference to these private Committees

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when all hope of agreement has vanished. I beg to move.
EARL STANHOPE: My Lords, I am, of course, not at liberty to state what is happening in the Sub-Committees at Geneva. My noble friend knows that these Committees are sitting in private, and therefore if I tell him and other people what is happening in private, obviously I am transgressing the rules that prevail in any assembly which meets under those conditions. I am certainly not going to tell him or anybody else whether the suggestions made by the Press are accurate or otherwise, but I am in a position, of course, to tell him that naturally our delegation is taking the same general line in regard to these matters that I took in the open sessions which I attended at Geneva last month.
From the remarks which my noble friend has made before, I think he is not quite aware of what is the actual intention of this Convention, and therefore I think it would be advisable, if I may, to tell the House the history and the objects of this Convention and how it arose. The mandate given to the Committee which is sitting on this proposal was given to it by the Bureau of the Disarmament Conference, and it was of a strictly limited character. The Committee was instructed to draw up three separate protocols on three different subjects, and the one with which we are concerned was for the regulation of the manufacture of, and trade in, arms. Now the objectives which we had before us in that Committee I defined in the speech that I made at Geneva in the early part of the proceedings, and if I may I will quote them, because they have, I think, been generally agreed by all the delegations which attended the Conference.
I suggested that the objectives were these:

"(1) To introduce adequate and practicable measures of regulation and publicity, internationally agreed upon, in regard to the operation of arms manufacture;

"(2) to devise a similar system of regulation and publicity in regard to the trade in arms, whereby that trade is confined to legitimate channels and only passes through responsible hands;

"(3) to ensure that the world should have timely information of any material increase in the armaments of any country whether by import or manufacture."

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Then I ventured to add a further one which was rather outside the terms of reference given to the Committee by the Bureau—namely:
"To provide the machinery for the immediate imposition of an effective embargo on the export and import of arms if and when such action should appear to be advisable."
That was generally agreed by all the various delegations as being an accurate description of the objectives which we had in view.
The House will recognise that of course the task before the Committee had nothing to do either with the reduction or limitation of armaments. The proposals submitted to the Committee by the United States in their draft protocol were based on two principles: (1) National control of arms manufacture and trade on internationally agreed lines; and (2) international publicity and supervision to ensure that the objects of the Convention are attained. The system proposed by the United States seemed to us unnecessarily complex for the object in view. We were all of us agreed that the control both of manufacture and trade should be of a national and not international character, and therefore when it was proposed in the United States draft that there should be set up international committees, who should be in every country, to supervise this control and to supervise the returns, we felt that such a system was unnecessary. We proposed instead that it would be sufficient if the returns which were given on a national basis were to be supervised at Geneva by the Permanent Disarmament Commission which it had been proposed should be set up there.
Supposing that the United States proposal had been accepted, and supposing these committees had been set up in every country, what would these committees have had to deal with? I do not know whether my noble friend knows about the manufacture of arms. Of course the manufacture of arms is very much ate same as the manufacture of any other kind of product. It is a continuous process, and if you have to decide how many and what kind of arms have been produced in a particular factory, it would be necessary to have the committee there very often, in order to see what was happening and to see whether the amount put forward as the production was accurate or not. Supposing

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the committee had discovered that the return was incorrect? All that would happen would be that the country in question would say: "Oh, we are very sorry, the proper figure should be so-and-so"—because under the Convention as proposed there was absolutely no question of any limitation of any sort or kind, qualitative or quantitative, and therefore any country had a perfect right to make any number of any kind of arm it pleased.
Therefore your Lordships will see that to set up these committees was really getting us nowhere, and we—that is the United Kingdom delegation—felt that it was extremely unlikely that anybody would commit a mistake deliberately in order to falsify a return. There was really no reason why they should, for they could make as many, and as many different kinds of arms, as they pleased, and if they did there was nobody who could object to their action in any sort of way. The proposal which I put forward on behalf of the Government was that the Permanent Disarmament Commission should have the right to supervise these returns, when they came to Geneva, and should have the right to call for further documents, and to send for individuals and examine them. That is by no means a new system. A somewhat similar system works admirably, I understand, in regard to the drug traffic, and one of the greatest things to the credit of the League is the way in which the drug traffic has been controlled. I am told that similarly, with regard to publicity, the Budgetary Publicity Committee is proposing to set up exactly the same system, by which further returns can be sent for and verbal examination made of witnesses, in order to verify those returns.
Your Lordships will see that we are not by any means opposed to supervision. It is merely a question of degree. The United States proposed to set up supervision in each country, on each article, and we proposed that supervision should be at Geneva, on the returns for which each country is responsible. The noble Lord asked if we were not alone in our proposal. Far from it, but once again I am not in a position to tell the noble Viscount who was with us and who was against us on this matter. He must possess his soul in patience, because I think presently the Committee will make
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its report in public, and then he will be able to find out who agrees with us.
Apart from the reasons I have given, I want to put forward two very cogent reasons for taking up this attitude. The first is that we know that if we put forward a Convention setting up permanent and automatic supervision in each country, which is not attached to a Limitation of Arms Convention, there are certain countries who are not going to ratify that Convention and therefore it will never come into force. Personally I am extremely doubtful whether, when it comes to the point, the Senate of the United States will agree that an International Committee with Japanese and other representatives upon it should be allowed to go and inspect American factories in order to see whether the United States Government is telling the truth and rendering an accurate return to the League of Nations. It seems to me it is a matter we may find ourselves in some difficulty about, and on which the Senate may take a view not less contrary than that which it took in regard to the International Court.
But quite apart from the United States and ourselves, there are in fact other countries who have intimated that they are not prepared to have this inspection in their own country unless it is accompanied by a Limitation of Arms Convention. The result of that will be that the Convention will not have come into force, and once again a proposal will have been put forward by the League of Nations which will have fallen to the ground. A further failure of this kind—and unfortunately there has been more than one—does not tend to the prestige of the League of Nations. We advocated a short step because we believed a short step would prove to be effective. We would not be tempted into an ambitious one which would only lead to failure.
But we had a further reason, perhaps the most cogent of all, and it is this. We still believe that a Convention for the limitation or even for the reduction of arms is possible. I may be accused, and the Government may be accused, of being hopeless optimists. I admit I think a Convention of that character will have to be on very limited lines, possibly merely on the qualitative line that guns over a certain calibre or tanks over a certain tonnage shall be destroyed and shall

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never be manufactured; but at any rate let us try to take a small step, even if it is a small step, because sometimes from a small beginning you may in the end get a great achievement. To try and make these large Conventions which are not ratified leads us nowhere, and only causes doubt and suspicion as to the effectiveness of the League of Nations.
My noble friend knows better than I do that there are certain nations who are extremely anxious to get this inspection sur place in each country, but they are also in some cases the nations who have raised considerable difficulties in regard to the reduction of armaments. It would be folly for those who, like ourselves, hope for a Limitation of Arms Convention to give away now one of the greatest inducements we have to offer by agreeing to local inspection when we are not at the same time getting a limitation of arms. Not only should we be destroying the prospects of this Convention by agreeing to local inspection when we know other countries will not accept it unless it is coupled with limitation, but we should throw away the chances of getting a Limitation of Arms Convention by having already surrendered our most telling inducement. I believe your Lordships will agree that in adopting the attitude we have, in refusing to accept inspection on the spot and going for inspection at Geneva of documents and individuals, we have not only taken the right step for this moment, but one which is wise in looking to the future of the possibility of a Limitation of Arms Convention.
VISCOUNT CECIL OF CHELWOOD: My Lords, I am very much obliged to my noble friend for the fullness of his answer, but I confess I am a little puzzled by the reasons which he gives. I take the last one first, because I really am at sea as to exactly what it means. If I understand him rightly, he says we are holding back the concession on the question of local inspection because we hope, by giving it later on, to induce other countries to agree to limitation of armaments. It seems to me a very unlikely calculation that if there is a real objection to limitation of armaments they will agree to it by being offered the possibility of local inspection. It may be so, because anything may be so, but it seems to me a most extraordinary and
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unlikely state of things. The other argument was that he was afraid, if too much were put into this Convention, it would be rejected by certain Powers. I do not deny the force of that as a reason, but I think it is perfectly hopeless to speculate as to what the Senate of the United States will do with regard to any treaty. No one can tell, and they are just as likely to reject a treaty on the ground that it is too small as they are to reject it because it is too large. You cannot tell, and the only thing to do is to do the best thing for the interests of the treaty itself and hope for the best when it gets to America.
EARL STANHOPE: I do not want my noble friend to think I was referring only to the United States. In fact I was referring less to the United States than to other countries.
VISCOUNT CECIL OF CHELWOOD: It was the only country my noble friend actually mentioned. That is why I mentioned it. I do not know to what other countries he was referring. I shall not go into the question of drugs, because there is no doubt that anybody who has watched that tremendous struggle will admit that, though a great deal has been done, the actual proposals with regard to drugs are constantly being evaded, and every year the authorities at Geneva have to stop a new hole that has been created in the system. That was the reason for my hesitating to accept the example of drugs as an altogether encouraging one for any other proposal. But it was the first part of my noble friend's reply which puzzled me most, because he said this is to be a Convention for the national control of armaments. I understand that thesis, but it involves also international supervision, even on my noble friend's thesis, because he proposed international supervision, only it is to be international supervision at Geneva and not on the spot. I do not see what bearing that prelude, that the thing was to be constructed on national grounds, had on the difficulty that has arisen in this matter.
The real issue is simply this. Granted that it is of importance for the purposes of the Convention that there should be some kind of international guarantee that the returns made by the various

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countries are accurate, that is common ground between my noble friend and myself. The question is what that international guarantee shall be. That is the only question. It is admitted there must be some guarantee. The whole question is what guarantee. In spite of the discretion of my noble friend, it appeared even in the open discussion that the majority of the countries represented on this Committee supported local inspection. They say that is the best guarantee. I do not know whether that is so or not. That is a matter on which I can only form a kind of man-in-the-street opinion; but on that kind of ground it would certainly appear to me to be more likely you would get a valuable guarantee by going to the country itself and seeing what is done than by taking the returns at Geneva and cross-examining some official as to their accuracy, which I understand is the proposal of my noble friend.
I should have thought it was clear that local inspection is more likely to be of service than such a system as my noble friend suggests. From my point of view it is not so important whether local inspection or inspection at Geneva is the better plan. But here is a proposal, a very mild, moderate proposal, dealing with a great international and national evil, and it does seem to me a great pity that in these circumstances, without overwhelming reasons, the British Government should appear in an obstructive capacity. I think it is very disastrous and I do deeply regret the action which the Government have taken in this matter. And not only on this question. As my noble friend knows, there were one or two other amendments of a similar character. I hope and trust that when it comes back to the full Committee it may be possible for the Government to take a more generous view of these questions and agree with the proposals of the United States. I beg to withdraw the Motion.
Motion for Papers, by leave, withdrawn.

LONDON BUILDING ACT (AMENDMENT).
PETITION FOR BILL.
Examiners' Certificate of non-compliance with the Standing Orders referred to the Standing Orders Committee.

MIDDLESEX COUNTY COUNCIL BILL. [H.L.]
The Order made on the 26th of March last appointing certain Lords the Select Committee to consider the Bill, discharged.
  EXPORTS OF WOOL TO ITALY.
  EXPORTS OF WOOL TO ITALY.