Sitting of 2 July 1937

Preamble
The House met at Eleven of the Clock, Mr. SPEAKER in the Chair.
MEMBER SWORN.
A Member took and subscribed the Oath.

PRIVATE BUSINESS.
Dunstable Gas and Water Bill,
Rochdale Corporation Bill,
Lords Amendments considered, and agreed to.

ORAL ANSWERS TO QUESTIONS.

  SCOTLAND (CATERPILLAR PEST).
  Mr. T. Johnston(by Private Notice) asked the Secretary of State for Scotland, whether he is aware that a destructive plague of caterpillars has swept from the Ochil Hills, in Perthshire, to the Campsie Hills, in Stirlingshire, and that some 10,000 acres of sheep pasturage have already been affected; whether outbreaks have been reported from other parts of Scotland: and whether he can make any statement as to the origins and causes of the plague and as to the steps which may be usefully taken by agriculturists and the Department of Agriculture for Scotland for the speedy arrestment of the plague.
  The Secretary of State for Scotland (Mr. Elliot): I am aware that extensive damage has been done during recent weeks by caterpillars of the Antler Moth in the areas referred to in the Question and in other upland areas in South and Mid Scotland. The position has been investigated by the authorities of the Edinburgh and East of Scotland College of Agriculture, and it is stated that the rare periodic outbreaks of this pest have always followed upon a season in which
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  much snow has lain on the hills until late spring or early summer protecting the young caterpillars. I understand that control by artificial methods at this juncture is regarded as out of the question. It appears that in the opinion of expert entomologists the outbreak is past its zenith, that the pest is not likely to spread to the low ground, and that the damage done is not permanent, and may very quickly be repaired by growth of new grass. The Department are in communication with the College as to whether any further action is requred by way of advice to farmers on the subject.
  Mr. Johnston: Can the right hon. Gentleman say whether this pest is also attacking the fronds of the bracken, and whether investigations are being made as to whether some permanent advantage might not be secured in that direction?
  Mr. Elliot: My information is that it is rather an underground pest than a leaf pest; that it attacks the roots. I will call for a report as to whether it is attacking bracken.
  Mr. Macquisten: Does the right hon. Gentleman not think that this pest, which is ruining small agriculturists, is completing the work which has been done in this part of the country by the Milk Board?
  Mr. Elliot: I do not think the Milk Board is concerned with these particular areas.

  SPAIN.
  Mr. Attlee(By Private Notice) asked the Secretary of State for Foreign Affairs whether His Majesty's Government, in association with the French Government, have come to any decision regarding the maintenance of naval control of the Spanish coast, in view of the withdrawal of German and Italian forces; whether His Majesty's Government propose to make any suggestions for the immediate withdrawal of foreign nationals acting as combatants in Spain; and whether, failing satisfactory arrangements on these points, they propose that full facilities shall be accorded to the Spanish Government for the acquisition of arms and supplies?
  The Secretary of State for Foreign Affairs (Mr. Eden): With regard to the first part of the Question, the right hon. Gentleman will be aware that at the last

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  meeting of the Non-Intervention Committee, Lord Plymouth made a statement on behalf of His Majesty's Government, in which he outlines certain proposals for reconstituting the Naval Observation Scheme. It is hoped that the Italian and German representatives will be able, at this morning's meeting of the Committee, to state the views of their Governments with regard to these proposals. With regard to the second part of the Question, His Majesty's Government have consistently pressed, and will continue to press, for the withdrawal of all foreign combatants from Spain. With regard to the third part of the Question, in the event of no satisfactory settlement being reached on the question of patrol, a new situation would be created in respect of which I am not at present in a position to make any statement.
  Mr. Attlee: May I ask whether any consideration will be given to the granting of belligerent rights without the withdrawal of foreign troops from Spain?
  Mr. Eden: I do not think the right hon. Gentleman would expect me to enter into details as to what is at present a hypothetical situation. The Committee is now meeting, and I think we must await the outsome of their proceedings before I make any further statement.
  Mr. Attlee: Are we to understand that the question of belligerent rights has been considered?
  Mr. Eden: There is no question of an agreement being reached on it at this morning's meeting.
  Mr. Lloyd George: In view of the fact that the House will not meet until Monday, and that very serious decisions may be taken meanwhile which will affect British interests very much, would it be possible for the right hon. Gentleman to promise to make a statement before the House separates this afternoon, if any conclusion is come to at the meeting this morning?
  Mr. Eden: Certainly, if there is anything I can say. It is difficult for me to say anything now, as the House will appreciate, but I suppose a communique will be issued at the end of the meeting, however long it takes to-day. I doubt whether it will be possible for me to make any statement beyond the terms of the
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  communique until I have had time to consider the outcome of the meeting and to consult with my colleagues.

ORDERS OF THE DAY.

  EXCHANGE EQUALISATION ACCOUNT BILL.
  Order for Third Reading read.
  Motion made, and Question proposed, "That the Bill be now read the Third time."
  11.15 a.m.
  Mr. Pethick-Lawrence: Before we part with this Measure, I propose to say a few words, and they will be very brief, because I have no desire to cover again the wide range which has been traversed in the exceedingly interesting Debates we have had during the previous stages of this proposal. I want rather to sum up the position as it will be when the Bill is passed. In the Debate on Monday, on the Money Resolution, the Chancellor of the Exchequer described the old Gold Standard as a measuring rod. That, I agree, is a correct description, because contrary to the opinion of many people, the old Gold Standard was not self-acting but indicated when action should be taken if the principles on which it was based were to be adhered to. I will give another analogy which, I think, is appropriate to the actual facts. There used to be a practice, which I hope is no longer carried out, on the part of certain dog fanciers who were very particular about the shape of the ears of a dog. They used to put a piece of cardboard of the shape they wanted the ears to be alongside the ears of the puppy and then cut the ears of the dog to the shape of the cardboard. That analogy more closely fits the working of the old Gold Standard.
  The tissues and sinews of the life blood of the trade and industry and commerce of this country had to adapt themselves to the card which was set up by the Gold Standard, and the life of the country was subordinated to this particular arrangement. I am not saying that there was not a time when it worked well, but gradually it became less and less suitable for modern conditions, and I suggest that it is inconceivable, or nearly so, that there should be a return to it to-day. It would be very much worse at the present time, because of the large upset which the movement throughout the world of the huge cash balances
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  now presents. I say nearly inconceivable, because, from my experience in life, I have learned that there is scarcely any suicidal folly which the human race may not practise if its leaders take it in that direction.
  In the course of our Debates the question has been raised as to whether the amount of gold which exists at the present time is just sufficient, or superabundant, to support the credit structure of international financial operations, but there is a question which, I think, has to be asked prior to that, and it is this: Is gold at the present time the basis of our credit structure and is it really required for that purpose? If I were asked that question I should not be prepared to answer it with a direct yes or no. As I see it, in the matter of currency and credit the world is passing through a transition stage from the old system to something new, just as a walker gradually passes from resting on his right foot to resting on his left, and when he is in the transitional stage it is difficult to say on which foot his weight rests. But what will the new standard be? Before I attempt to answer that I should like to make this observation. A great European statesman, when he was discussing the factors which brought success in war, said that he was of the opinion that the imponderables were more important than the ponderables. I suggest that if this is true of war, it is true to a still greater extent of currencies.
  The imponderable causes in the case of these financial operations are moral, psychological and political, and they may be all summed up in the word "confidence." We have seen how even the most careful arrangements of the Tripartite Agreement come to grief, at any rate temporarily, when lack of confidence prevails, as it has done in one of the countries subject to that agreement. When that comes, no mechanical device can sustain exchange equilibrium. The question is whether the provisions of this Bill and whether any future arrangements can provide a substitute. I venture to answer that question by saying that ultimately it may very well prove that sterling itself rather than gold will provide a solution to this problem. I have great faith in the genius of the British people. Their genius for finance has been marked all down history.

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  I believe that in the control of the world's monetary system this nation has a great part to play, because of the recognised honesty and confidence which the world is able to place on our judgment in these matters. But it is of the utmost importance that those who control this system should be world-minded, and should recognise that any action they take should not be solely concerned with this country or even with the British Empire, but that to a large extent they should take their action in trust for the world as a whole.
  The powers which the Bill confers on the Government are very considerable. This large additional sum which the Bill proposes shall be used for the Exchange Equalisation Account is going to increase the influence which the Government of this country will have in dealing with these large currency questions. Looking back on the record of this Government, I am bound to say that in trade matters and in a number of other matters, they have not shown a full sense of their world responsibility. In many respects they have taken a narrow view of the interests of this country. The real interests of this country cannot be decided on economically exclusive grounds, but only by taking into full account the international repercussions of what they do.
  The Financial Secretary to the Treasury (Lieut.-Colonel Colville): When the right hon. Member says "economically exclusive grounds," he will realise that we are by far the largest purchasers of overseas goods in the world.
  Mr. Pethick-Lawrence: That does not affect the point I was making. In my view, the Government have not always, particularly in trade matters, taken that wide international view which undoubtedly is of great importance at the present time. I will conclude with the observation that if there is a wide international use of the powers that the Government are seeking in this Bill, and if the Government are going to grasp the opportunity here provided to take the lead in monetary matters throughout the world, I believe that sterling may have the most important rôle to fill in the future development of this immensely important question; but if the Government take what I would call a parochial view—even though the parish
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  may be the whole of the British Empire—if they think merely of the results to the people of the British Empire in the immediate future, they will be sacrificing a tremendous opportunity, they will be injuring the ultimate prospects of the British Empire, and they will be failing in their duty to the civilisation of the world as a whole.
  Question, "That the Bill be now read the Third time", put, and agreed to.
  Bill read the Third time, and passed.

EXPORT GUARANTEES BILL.
Order for Second Reading read.
11.27 a.m.
Mr. R. S. Hudson (Secretary, Overseas Trade Department): I beg to move, "That the Bill be now read a Second time."
When moving the Financial Resolution the other day, I gave the Committee an explanation of the reasons for which we were asking permission to introduce this Bill. I think the House will not wish me to go over that ground again. I will simply remind hon. Members that, considering the difficulties that still exist in carrying on international trade owing to the disturbed position of the world, and considering the increased use which has been made of the Export Credits Department, we are of the opinion that the time has come to regard these facilities for the British export trade as part of a permanent structure. It is for that reason that we are asking for the abolition of the existing time limit, and it is owing to the success which the Department has recently had that we are asking for the financial limit of £26,000,000 to be increased to £50,000,000. In addition to that, we propose to take advantage of the opportunity to consolidate the existing law, which is spread over a number of Statutes, and to introduce one or two small Amendments which our experience has suggested would be useful.
Clause 1 of the Bill gives us power to give guarantees, and in lines 13 and 14 the persons to whom the guarantees may be given are defined. That represents a slight change of the existing practice. At present we can give guarantees only to firms which are domiciled in this country. Difficulties have arisen in connection with the definition and in deciding where a

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particular firm is domiciled, and of course that has prevented us also from giving facilities to firms established in the Dominions but having branches here. The main object of the Export Credits Department is to facilitate the export of United Kingdom goods, and if they are United Kingdom goods, it does not seem to us to be of importance where the firm is established as long as the branch is here. Of course, we take great care to make inquiries regarding the standing of the firm exporting the goods and the firm to whom the goods are consigned. At the bottom of page r and at the top of page 2 of the Bill, we provide for an increase of the limit of £26,000,000 to £50,000,000.
Proviso (a) on page 2 is an innovation and enables us to give guarantees in respect of work executed outside the United Kingdom. A certain number of cases arise in which a firm can get a contract for the provision of British goods provided they carry out in the territory of a foreign country certain constructional work, and so on. Hitherto we have not been able to guarantee that expenditure. We are asking for permission to guarantee it provided that in no case expenditure outside England exceeds one-third of the price of the home-produced goods exported. Proviso (b) is also an innovation, and will enable us to cover cases where in a large consignment of British goods there are a few articles of non-British origin. What often happens is that an exporter in this country receives an order from a firm overseas for a considerable consignment of British goods, but the firm overseas also demands that he shall send certain specified goods which can only be obtained from overseas, and it is very difficult in the invoices and so on to distinguish the home-produced goods from the others. The mere fact that the consignment includes goods of foreign origin has in the past prevented us from extending cover to it. In order to get over that difficulty we are asking for additional powers, and again the Committee will notice that we have imposed a limit and that the amount of foreign goods must in no case exceed 25 per cent.
There is a slight change in Clause 2. In order to make the guarantee formally complete, it is proposed that if in a particular case there is not enough money available out of the provision voted by Parliament, the payment under the
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guarantee should be met from the Consolidated Fund. Clause 3 continues the existing provision that the Board of Trade shall publish quarterly a return showing the aggregate amount of the guarantees that are outstanding, but we are omitting the existing provision that there shall also be published a list of the countries to which goods have been sent. When the scheme was first started, there was a definite restriction of the countries to which it could be extended, and there was consequently some advantage in publishing a list of the countries in the case of which guarantees had, in fact, been given. That distinction has now disappeared and, practically speaking, all the countries in the world are covered. Clause 4 changes the title from Overseas Trade to Export Guarantees Act, and Sub-section (2) repeals the existing Acts to the extent specified in the third column of the Schedule.
There is one further point I will mention. In the course of the discussion on the Financial Resolution, the hon. Member for Wallsend (Miss Ward) asked me whether the time had not come when we could remove the existing administrative restriction under which the Export Credits Department is not able to give guarantees in respect of building ships in this country for owners abroad. I promised that that matter would be reconsidered. We think the time has come for that change, and I am glad to be able to tell the House and the hon. Lady that we propose to suspend that restriction. In future the Export Credits Department will agree to consider applications for guarantees in respect of the export of ocean-going ships provided that there is reason to suppose that the vessel would not be built in this country without a guarantee and, in addition, that it would be built elsewhere. This limitation will apply to ocean-going vessels which might conceivably compete with British ship-owners, but will not, of course, apply to vessels in the coasting trade, tugs and so forth. I think the House will agree that it is necessary and desirable.
The shipowners of the country have expressed some apprehension that as a result of a decision of this kind a glut of tonnage might be created with serious effects in regard to foreign competition. Of course, that is a risk, and it is in order to avoid that risk that we have put in these safeguards. In addition, in order

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to reassure the industry still further, I propose to increase the number of the existing advisory committee which passes these individual applications by adding thereto a leading expert of the shipbuilding interest and a leading expert of the shipowning interest and so I hope both sides of the industry will feel that their interests will be safeguarded when any particular case arises. In conclusion, I wish to repeat the warning uttered by me on the last occasion when this subject was discussed, namely, that it must not necessarily be considered certain that guarantees will be given even when the two desiderata to which I have referred are fulfilled. Of course, every individual case has to be considered on its own merits, having regard to all the relevant circumstances and, in particular, the standing and financial position of the countries conerned. I hope the House will agree that we have come to a right decision.
11.38 a.m.
Mr. Pethick-Lawrence: When this matter came up at an earlier stage I gave the hon. Gentleman the support of Members on this side, and I propose to do the same on this ocassion. This export credits scheme is the work of all parties in this House. We have all helped to build up this system, which we believe to be beneficial to British trade. There is a considerable amount of money involved in these proposals—not as much as is involved in the Bill with which we dealt a few moments ago, but still a by no means insignificant sum. From experience of the past working of this fund, there is of course no suggestion that the money is being lost. Rather is it to be supposed that the money is being utilised for the best advantage of the country and that being so, I think the House can properly vote in favour of the Second Reading of the Bill.
The primary object of the Bill is to increase the total amount which can be used from £26,000,000 to £50,000,000. With regard to the provisos in Clause I, I think the Minister has made out his case, but these innovations must, he will, I am sure, agree, be regarded as an experiment and will, I think, want very careful watching. If it should be found that these provisions are abused or are capable
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of abuse, we shall expect the Minister to come to the House again for some amendment of the Measure which will prevent any abuse taking place. I understand that the change relating to the Consolidated Fund is only an added safeguard to meet the exceedingly unlikely possibility of some future Parliament repudiating the promises made at an earlier date. However unlikely that eventuality may be, if there is any advantage in having the additional security of the Consolidated Fund, I see no objection to the course proposed here.
Next we come to the question of the administration of the Measure relating to the question of the shipping industry which has been referred to by the Minister. In the previous Debate the hon. Lady the Member for Wallsend (Miss Ward) put forward a strong plea for the inclusion of shipping within the scope of the guarantees and I felt that, to a very large extent, she made out her case. I realised, however, as I am sure other hon. Members realised at the time, that there might be considerations which were not apparent then and which might make that concession undesirable. I am very glad that it has now been found possible to meet, not merely the plea of the hon. Lady but the requirements of districts all over the country where an increase of shipping will reduce unemployment and add to the trade of the country. I have not of course had time since the hon. Gentleman spoke to estimate how far the safeguards he proposes are desirable or adequate but we shall have opportunities of considering that matter later on and, speaking off-hand, what he proposes seems to be sound and advantageous. Therefore, speaking on behalf of those who sit on these benches I conclude by saying that we approve of the principles and outline of this Measure which is, I repeat, the outcome of the work not of one party, but of all parties in this House.
11.42 a.m.
Major Hills: I welcome this Bill, and I am very glad to see that my hon. Friend has had the good sense to put all the provisions dealing with credits into one Act of Parliament. That will be a great convenience to everybody who has to deal with this question. I have only one comment to make. I am glad that the rigidity of the old Acts which limited the guarantee to the export of goods of

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British manufacture has been slightly relaxed by paragraphs (a) and (b) of Subsection (I) of Clause 1. The first extension is that where works or services outside the United Kingdom have to be added to the goods exported, the guarantee can still be given, provided those works and services do not exceed an amount equal to one-third of the price of the home-produced goods exported. The second extension is that a guarantee can be given in respect of mixed consignments of home and foreign goods but the guarantee shall not be given unless at least three-quarters of the price of the goods is payable in respect of the home produced goods included among them. I welcome those extensions and I venture to think that, as time goes on, further extensions may be made for the benefit of British trade generally and not only for trade in home-manufactured goods. I think, if my hon. Friend watches the operation of these extensions, he will find that the point which I have in mind might be met by giving to the very able committee which now looks after the operation of the Act, a greater degree of flexibility in regard to the extent to which these guarantees can he applied to trade generally instead of confining them to the export of British goods. With that comment I welcome the Bill.
11.45 a.m.
Mr. Ellis Smith: As one who is associated with 12,000 men and women who are now in regular employment as a result of the facilities given under this Export Credits Scheme, I want on their behalf to welcome the increased facilities which are contained in the Bill. I understand that the main purpose of the Bill is to consolidate the existing Acts, and also to increase the amount at the disposal of the Export Credits Advisory Committee in order to enable them to give increased credits for the export or more goods from this country. In view of the policy which is being pursued in certain countries, I contend that unless this country takes steps to deal with that policy—and in my view this is one of the necessary steps to take—the equilibrium of British industry will be very vitally affected in the near future. In our correspondence this morning we had a little book published by the Ministry of Health, a book which is typical of the policy which the Ministry is now pursuing with regard to health in
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this country. Apart from our political ideas with regard to the present Minister of Health, there is no doubt about it that there is a growing feeling in this country among all public-spirited men and women of the need to safeguard the health of the workpeople of this country, and just as that policy has been brought up to date in this way, so I am hoping that our trade relations with other countries will also be brought up to date.
We who are relatively young have a good deal to be thankful for in regard to the way in which industry has been developed in this country, and, therefore, having regard to that, we have to be concerned about the future, because it is on the shoulders of the young people of the country that will fall the running of this country. Unless we take steps of an up-to-date, scientific character to safeguard the industries of Britain, seeing how our prestige is being deliberately undermined by certain countries, we shall not be able to hold our own in the future. I therefore welcome this Bill, because I have seen the facilities operating from the administration of this scheme. In 1930 had it not been for these facilities the probability is that where I was employed there would have been considerably more unemployed or on short time than there were, but owing to these facilities it was possible for big-scale industry in particular to obtain orders from a number of countries in the world. Although they were only just able to cover their overhead charges by running the factory on that basis, through the facilities operating under this scheme, it was possible for them to meet competition in other parts of the world and so keep their factories going.
I am very much concerned about the effect of the Schacht policy on the future of this country. There is no doubt about it that this country has not yet paid the attention to this matter which it ought to have done, and which the big industrialists in this country realise they have to do, but up to now this House has not paid sufficient attention to it. The Schacht policy in Europe in particular is undermining the future of British trade. I, therefore, welcome this Bill as being one step that will put a strengthened instrument in the hands of the Board of Trade officials to enable them to counteract to a small extent the effect of the policy to which I have just referred. Up

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to now it is true to say that the facilities in these Acts have only benefited the heavy industries particularly electrical engineering and turbine and locomotive manufacturing, and these are the firms which have the great monopolies. They already have the benefit of large finance companies behind them, and they are the firms which have at their disposal great credit facilities. I appeal to the Board of Trade, through the hon. Gentleman opposite, to reconsider their policy with regard to this Bill, and to see that light industry has the benefit of these facilities in the future in the same way that heavy industry has had in the past.
The old Josiah Wedgwoods were pioneers in trade in this country, and in just the same way the young Wedgwoods, whom I have met recently, are pioneers also. They were very progressive-minded men, and they are going to embark upon large-scale capital expenditure, pioneering in the same way as the old Wedgwoods did for the purpose. of manufacturing on a large scale, and I want the facilities in this Bill to be used in order to encourage progressive-minded people in industry so that they can be pioneers in the same way as such people were 100 or 150 years ago. The progressive minded men in industry at this time are not able to take advantage of credit facilities because the big business companies in London will not place at the disposal of the light industries the financial facilities with which they help the heavy industries, because in the heavy industries they get a relatively big return and a relatively earlier return, and, therefore, the only hope for the light industries is that the same facilities should be placed at their disposal.
Take the coal trade. It is generally acknowledged that one of the main reasons why we have certain depressed areas in this country is the loss of our export trade in coal. I have been looking up some figures during the past week, and I find that we are increasing our imports of coal from Germany, the reason for that being mainly that the German coal trade is very highly syndicated. I want the coal trade of this country to have the benefit of the facilities in this Bill, which they have not had in the past. It is well known that Germany is pursuing a deliberate policy of this kind. The coal industry in this country is not yet syndicated to the same extent, but if the coal industry in certain
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areas could have a guarantee that they could have these credits placed at their disposal and could be encouraged to export coal in large bulk as a result of these facilities, the export coal trade would be considerably increased. The same kind of thing applies to the whole of the North Staffordshire area, where we have the pottery industry carrying on with the restricted credit facilities at their disposal. I want the whole of the pottery industry and the whole of the coal industry to have the benefit of these facilities, and that is why I am making this appeal.
We are finding that the Colonies and the Dominions that are attached to this country are, relatively speaking, adopting a more progressive attitude than is this country, and we are finding that they are in the forefront in regard to proposals of this character. Take New Zealand, for example. You find that one of the most scientific proposals that has been made for some time has been made by the New Zealand Government, who have given an undertaking that they will be prepared to take the whole of their imports from this country on condition that this country will take from them the whole of the agricultural produce with which they can supply us. In this way lies the future of industry, and in this way Britain will be able to hold its own in future. Therefore, I am hoping that when this Bill becomes law it will be administered on the lines I have indicated, and that light industry will be able to benefit from the facilities in the same way as heavy industry.
11.56 a.m.
Mr. Kirkwood: It would be wrong on my part if I did not express my appreciation of a Bill of this kind, seeing that I come from the greatest shipbuilding district in the world. I rise only to ask the Minister whether he can tell us the names of the ship-builder and the shipowner whom it is proposed to put on the Committee.
11.57 a.m.
Mr. David Adams: I am glad to welcome this Measure to-day on two broad grounds—first, because of the increase in the amount to the substantial sum of 15,000,000, and second, because of the raising of the embargo which has prevailed altogether too long against the use of export credits for shipbuilding for foreign countries. As the head of a

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municipality some years ago, I was privileged to lead delegations to various Ministers in order to see whether it was not possible to utilise export credits for the building of ships for foreign countries. It was turned down at that time, but while we are five or six years late in taking advantage of building for, say, the Russian Government, orders may now be available to us and there is probably a substantial amount of business still to be done. At that time the general opinion was held on the North-East Coast that in the struggle between the shipowner, who did not desire an increase of. foreign tonnage in the markets of the world, and the shipbuilder, who was anxious to build for all and sundry and could do so under normal conditions, the shipowner was successful.
The appearance of the North-East Coast would have been entirely different during the last five or six years in the matter of shipbuilding if these facilities could have been extended to the Russian Government. Some years ago there was great monetary stringency there. That appears to have abated, but it is probably true to say that they will be glad to avail themselves of the export credit facilities for the purpose of placing orders for deep sea tonnage with our shipbuilders. The North-East Coast would share substantially in any such orders. I think that the Government were wrong in the period of which I have spoken, because facilities were being granted by shipbuilders to certain foreign countries, particularly Scandinavia, and credit was given for as long a period as seven years, but no such credit would be extended to the republic of Russia. Therefore, no business passed in regard to shipbuilding in a voluntary way.
That state of affairs has happily been relieved now, and I believe it is possible that we may find that the shipbuilding industry of this country, particularly in regard to orders coming from Russia and contiguous countries, which, owing to lack of facilities, have not been able to place orders there, will be able to receive such orders that, when the present industrial prosperity has passed, our great centres of shipbuilding will be kept busy for many years to come. I should like to ask a question about the rates of interest on advances. Certain complaints were made
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some time ago that the rates were excessive and that the banks were making excessive charges for the encashment of advances. Are the rates of interest what may be termed reasonable? I hope the Department will see that the struggle which will inevitably occur between the shipbuilder and the shipowner will not be permitted to prevent orders being placed with such countries as Russia, against which a certain amount of prejudice still prevails.
12.2 p.m.
Mr. R. S. Hudson: With the leave of the House, I should like to express appreciation of the kind things that have been said about this Bill. The hon. Member for Stoke on Trent (Mr. E. Smith) made an interesting speech, and I was glad to hear his tribute to the Department. He will, I am sure, be pleased to know that the Department does, in fact, grant facilities to light industries, and that actually the figures show that this is done to a greater extent than to the heavy industries, and that the Department's facilities are granted for coal exports also. The hon. Member for Dumbarton Burghs (Mr. Kirkwood) asked me who the representative shipowner and shipbuilder would be. He will realise that we have only just come to the decision which I announced this morning and that it will take a few days to make the necessary arrangements. I am afraid that I am not in a position to give the names, but there will be no avoidable delay in getting the appointments made.
Mr. Kirkwood: This is an important question to Clydebank and also to the trade unions. I am speaking on behalf of 250,000 trade unionists in shipbuilding engineering. Will the Minister tell me when I can put down a Question so that he will be able to announce who the individuals are? Will there be a workers' representative on this Committee?
Mr. Hudson: I think that I might be allowed a few days to think it over, but I will get into communication with the hon. Gentleman so that he can put down a Question. As regards the point made by the hon. Member for Consett (Mr. David Adams) about the rates of interest, I think at the moment that it is a hypothetical question. He can rest assured, however, that they will be the best possible that we can do in the circumstances of the particular cases.
Question, "That the Bill be now read a Second time", put, and agreed to.
Bill read a, Second time.
Bill committed to a Committee of the whole House for Monday next.—[Sir A. Lambert Ward.]

LOCAL GOVERNMENT SUPER-ANNUATION BILL.
As amended (in the Standing Committee) considered.
Mr. Speaker: I do not propose to select the Amendments to the Bill which are down on the Paper.
Motion made, and Question proposed, "That the Bill be now read the Third time."—[Mr. Bernays.]
12.4 p.m.
Captain Ramsay: There are certain provisions in this Bill which may give rise to what may be rather important differences between the regulations in England and in Scotland, if the Scottish Bill gets through the Standing Committee as it appears to be going through. As you have ruled out the Amendment which I put down—
Mr. T. Johnston: I would remind my hon. and gallant Friend that the Scottish Bill is through Committee.
Captain Ramsay: I am glad to have that correction. I understood that there was only an assurance from the Secretary of State for Scotland.
Mr. Johnston: The Scottish Bill is through the Committee stage, and the Secretary of State has given an assurance, on the point the hon. and gallant Member is raising, that he will reconsider it before the Report stage.
Captain Ramsay: I thank my right hon. Friend for his correction. That is what I meant to convey. The Scottish Committee having received this assurance from the Secretary of State, we can reasonably expect that effect will be given to the provision which I have outlined in this Amendment. Very briefly the position is this: The English Bill lays down that the service of those who volunteered to join up and who served in the war is to reckon for pension but shall not include any period during which they voluntarily continued to serve after the 11th November, 1918.
2344
Although it is not the duty of Scottish Members to put down Amendments to English Bills, I felt that I ought to draw attention to what may become an important difference in law. We held in the Scottish Committee that if a man volunteered to continue serving after nth November, 1918, he should not be disqualified from having that extended service reckoned towards his pension. In the first place it is our contention that that State service is as important as, if not more important than, any other State service.
It is all very well to say the man volunteered, but we know very well what the circumstances may be. If the commanding officer of a battalion is told that he must let so many men of his battalion go, and must persuade so many to stay, it is not the least valuable men whom he will try to persuade to stay. Therefore, the men who volunteered for service after the Armistice were, in our opinion, probably the most valuable men in the battalion, and the better deserving, perhaps, of their country's recognition. We hold, therefore, that it is a pity and a mistake that the fact that these men, whose services were particularly required either in the Army of Occupation or for military duties elsewhere, should now be at a disadvantage compared with those who, for some reason or other, were allowed to terminate their service and to return home. My object in making this appeal is that the right hon. Gentleman, if he persists in this regulation for English ex-service men, will not use his influence or make a case to say that the Scottish Bill must be drawn in conformity with the English one.
12.10 p.m.
Mr. Johnston: May I add a word to reinforce what the hon. and gallant Member has said? I can appreciate that it is impossible on the Report stage to move the deletion of this Sub-section, because that would inevitably increase the charge, and would, therefore, be a violation of the decision of the House on the Money Resolution. But there is a very curious anomaly, and I trust that the Government will find some means between now and Third Reading to obviate it. What is happening here is precisely the same as happened with the Scottish Bill. I raised the matter on the Committee stage of the Scottish Bill yesterday. What

2345
is happening here is, in our view, an unnecessary and unwarranted penalisation of army service. So far as I know this is the first time any such penalisation has ever been imported into an Act of Parliament. The penalisation takes this form, that a local government officer, in having his length of service as a local government officer computed for pension purposes, is entitled to have his period of army service included up to firth November 1918, but if he extended his period of Army service after 11th November, 1918—I believe that the official date of the end of the War was subsequent to that date—the period during which he remained in the Army, Navy or Air Force, after 11th November, 1918, is not to be included for pension purposes.
That seems a curious provision for a National Government to import into a Bill. We could get no explanation of the reason for it yesterday in the Scottish Grand Committee, except that a similar provision had been included in the English Bill. The Secretary of State for Scotland could not at that moment offer any justification of it on its merits, nor could he give any assurance that on the Report stage he would agree to its deletion. All he would say was that before the Report stage he would consider what, if anything, could be done, but we are faced to-day with the fact that for reasons which we can quite appreciate the Chairman cannot accept an Amendment for the deletion of this Sub-section, and yet if we pass the Bill as it stands we shall commit the House to a definite penalisation of army service. It may be that this will not mean very much financially in a large number of cases. On the other hand, there is a principle involved here which we are very much surprised that the National Government should have fathered. No reason for it has been given, and I trust that the Minister of Health, who is in charge of this Bill, will be able to give us some assurance that the Government will find ways and means of not operating this provision.
12.13 p.m.
Mr. Charles Brown: I want to ask one question. As I understand it the Bill applies only to those local authorities which employ more than 100 officials and clerical staff, unless an authority with fewer chooses to associate with other
2346
authorities bring up the number of their joint staffs to the requisite number. The Bill is not compulsory in the case of, manual workers. If a local authority has fewer than 100 staff and clerical workers, and a ballot shows that the workmen are in favour of coming into the scheme, and the officials, clerical staff and workmen combined number more than 100, can it have a superannuation scheme of its own without associating with another local authority?
12.14 p.m.
Mr. Arthur Greenwood: I should like to say one or two things before we part with the Bill. In the Committee stage we did secure some improvements, and it is now a better Bill than when it was introduced. In Committee I raised a point as to definition. There is a full definition of the term "remuneration," but none dealing with gratuities. The term "remuneration" is not used. The word used is "emoluments," and I raised the desirability of having emoluments defined in the Bill. Otherwise, there might subsequently be trouble. I have been assured by the right hon. Gentleman and the Solicitor-General that the term "emoluments" is much wider than the term "remuneration" and in that respect it is advantageous to officers of local authorities. That being so, one need not press the point any further. We still to-day have one capital defect in the Bill and have not received from the right hon. Gentleman that sympathy which we are coming to expect him to show. This has gone a great way to meet the just claims of the officers of local authorities and it has gone some little way to improve the superannuation provisions of servants in so far as local authorities bring servants within the Act, but it does remain still a great injustice that the servants have not been treated on precisely the same footing as the officers. In parting from the Bill to-day, whilst one can say that for a considerable number of deserving servants and officers of local authorities the Bill is doing a measure of justice, it still leaves that crying injustice which I hope that on a later occasion the right hon. Gentleman will be prepared to remedy.
12.17 p.m.
Sir Joseph Lamb: I did not happen to be a member of the Standing Committee which considered the Bill, but I think the

2347
case put forward by the right hon. Gentleman is one that requires some explanation. It seems rather strange that those who were on the Committee are not here to put forward the claims of the serving men.
The Minister of Health (Sir Kingsley Wood): It was thoroughly discussed in Committee.
Sir J. Lamb: Probably, then, the Minister will have a reply to give us. I hope he will see that if these men are not allowed to count time served with the Forces for the purpose of superannuation he will say whether they are to receive any extra emolument or advantage for remaining in the Army for extra time. Otherwise, it seems that there will be an injustice done.
12.18 p.m.
Mr. Leslie: I want to put certain particularly hard cases which I brought up in Committee. An individual has served with a certain local authority for a period of ten years. That local authority has a superannuation scheme. He transfers to another local authority that has no superannuation scheme. He has his contributions refunded. I hope the Minister will consider whether, if that individual is prepared to pay "back" contributions for ten years be will be placed under the scheme. Otherwise it is no compensation to him to say that he has had his contributions refunded. He has had only his own contributions refunded; he has not had any portion of the contributions paid by the local authority to the fund. In such a case a man ought not to be penalised for that period of ten years.
12.19 p.m.
Sir K. Wood: I shall endeavour to answer some of the questions put to me. So far as the case just mentioned is concerned, I will study it carefully and communicate with the hon. Gentleman. Where a man leaves a local authority in such circumstances he would receive his contributions back, together with interest, I believe, but I will verify that statement. On the question of emoluments, as raised by the right hon. Member for Wakefield (Mr. Greenwood), I have consulted my hon. and learned Friend the Solicitor-General and he takes the view,
2348
which I am sure we shall all accept, that that is the widest possible definition. I hope that statement will meet the point which the right hon. Gentleman made. A question was raised about the position of the smaller local authorities. There are in the Bill provisions which make it possible for the smaller authorities, in such circumstances as he mentioned, to associate with the larger authorities. I think it is obvious that it would not be desirable for a local authority with 50 or 60 employés to endeavour to set up a superannuation scheme of its own. Every one who has knowledge of these schemes knows that that is hardly a sufficient number. But I should be glad to go into the matter further with the hon. Gentleman if he desires it. My own impression is that a fund would have more stability and security with a much larger number of employés than that.
The only substantial point I have to meet was that which dealt with the position of people who served in His Majesty's Forces, and the reason why the privilege of a pension given by the Bill ceased, so far as they are concerned, after nth November, 1918. This matter was fully discussed in the Standing Committee and that Committee was satisfied with the explanation which was then given. In the first place this, of course, is not the first time that this matter has appeared in this form. The subject was fully discussed with representatives of the British Legion and the ex-service men in 1929, and Sub-section (3) of this Bill and the Proviso are closely modelled on the provisions of the Act of 1929. There was reason for it. So far as the provisions in this Bill are concerned I moved an Amendment in Committee to make it clear that War service within the meaning of the Section should be reckoned as service for local government pension purposes. The Amendment which I moved, in which this Proviso is included, was intended to make certain beyond any doubt that War service in that sense should be reckoned for superannuation purposes. The Proviso which I also moved was incorporated from the 1929 Act. The reason why that Proviso is included is simply this: It was considered right and proper, if a man who had served under a local authority decided to continue with the Army as a vocation, that the principle of reckoning the service, so far

2349
as the local authority was concerned, for pension purposes, would not be applicable.
Mr. Johnston: The right Hon. Gentleman has used the words "in the Army as a vocation."
Sir K. Wood: I am using my own words. A man decides at that particular time to continue with the Forces of the Crown. It was for that reason that a distinction was made and that is why it has been applied in this Bill just as it was in 1929. At the conclusion of the Debate the ex-service representatives expressed approval with the agreement that had been made, and it was after that discussion and those representations from them that I moved the Amendment to the Bill. Distinctions have to be drawn sometimes; one has to draw the line somewhere, and this has been generally agreed. I have received no representation from anybody that the line which was drawn in 1929 by arrangement and agreement was not satisfactory.
I thank the right hon. Gentleman and other hon. Members for the support they have given to the Bill. I recognise that the Bill is complicated and difficult, and that without their assistance it would not have been possible to put it upon the Statute Book at this time. I claim that the Bill goes a considerable step forward, certainly so far as officers are concerned. The House may be satisfied that the Bill meets the long-expressed wishes of the officers of the country, and I think they will be gratified at our putting this Bil upon the Statute Book. Many of the employés would not desire to see compulsory conditions applied to them. There have been ballots upon occasion, but there has not been complete unanimity of opinion, as hon. gentlemen may be aware. The Bill is, however, a step forward so far as they are concerned, and local authorities will be able to bring in a measure of superannuation by a bare majority, in contradistinction to the two-thirds majority which previously had to be attained. I hope hon. Members will agree that there are many provisions which I have incorporated in the Bill which meet the desires and needs of the employés and I hope that the Bill will be of benefit to them. I again thank hon. Members for the consideration and the promptitude with
2350
which the Bill has been carried through, and I hope that it will do something worth while.
12.28 p.m.
Mr. Wedgwood Benn: I apologise for raising a point of detail at this stage, but we have had no Committee stage or Report stage in this House, and Members who were not upon the Committee can raise points of detail only upon the Third Reading. I want to ask the right hon. Gentleman to look further into the question of the ex-service men, but before I do so I want to raise a small point upon Clause 34. I notice that the marginal note speaks of:
"Central Electricity Board and Joint Electricity Authorities."
I cannot find any mention of the Central Electricity Board in the Clause, and it does not appear to be one of the undertakings referred to in the long title of the Bill. No doubt this is just a piece of careless drafting, and that the services of the other place will be used. On the question of the ex-service men I would ask the right hon. Gentleman what the position is. I understand that if a servant of a local authority was in the Forces at the time of the War, the period which he served is counted for the purposes of this Clause.
Sir K. Wood: Up to the date mentioned in the proviso.
Mr. Benn: No, it does not say so. The proviso applies only to men who voluntarily extended their term of service. The Sub-section says that a contributory employé who served in His Majesty's Forces during the late War shall have the period during which he so served taken into account. We know that at the end of the War many men were not demobilised for months, and clearly that was a period during which they so served. For that period, a man who was not allowed to leave the army gets the advantage of the Bill. Suppose it were a case in which he could have been demobilised, but was asked by his Commanding Officer to stay on, as very frequently happened, because it was inconvenient to demobilise him, and he, being a public-spirited man, said "I am willing to go on"; because he did that, he loses a privilege which is possessed by the man who did not do so. It appears to me that there is a clear case for the reconsideration of this point.
12.31 p.m.
Mr. H. G. Williams: I was on the Committee of this Bill and also on the Scottish Bill and, unfortunately, we did not spot this point. [An HON. MEMBER: "Oh, yes."] But not this aspect of it. I made a suggestion that instead of "eleventh day of November, nineteen hundred and eighteen," the day should be inserted of the official ending of the War, which was a substantial period later, although I forget the exact date. It would add about 12 months. If the right hon. Gentleman thinks that the suggestion can he accepted and possibly put in in another place, it might involve questions of privilege, but I imagine that this House would be willing to waive that privilege in this case.
12.32 p.m.
The Solicitor-General (Sir Terence O'Connor): I rise to answer the right hon. Gentleman the Member for Gorton (Mr. Benn). The Parliamentary draftsmen's duties are exceedingly difficult and elaborate, and the draftsmen often come in for a good deal of ill-merited criticism from this House. The right hon. Gentleman's observation was one of that character. If he looks at Sub-section (2) of Clause 34 he will see that "the Board" is referred to. If his researches had carried him as far as that, he would have found that that was the Central Electricity Board. The drafting is therefore quite accurate. The point of substance which he raised will be reconsidered. While I can make no promise the matter will be the subject of consideration between now and the appearance of the Bill in another place to see that something can be done with regard to it.
Captain Ramsay: May I ask the right hon. Gentleman whether he would reply to a question which I put? If he should decide, as regards the English Bill, that tion with regard to ex-service men will he give us an assurance that he will not put pressure on the Secretary of State for Scotland with a view to having the Scottish Bill on all fours with the English one?
Sir K. Wood: My hon. Friend does not realise the strength of character of the Secretary of State for Scotland.
Question, "That the Bill be now read the Third time," put, and agreed to.
Bill read the Third time, and passed.

RATING AND VALUATION BILL.
Order for Second Reading read.
12.34 p.m.
Sir K. Wood: I beg to move, "That the Bill be now read a Second time."
The object of this Bill is to continue for a further quinquennium the temporary provisions contained in the Rating and Valuation Act, 1928, as regards the scales. of deductions from gross values in calculating rateable values in respect of small property, and the compounding allowances which may be made to owners. The Bill is immediately necessary, since the existing provisions will, if not extended, cease to operate in some areas on 1st April, 1938, when the new valuation lists are due to come into force. These lists will have to be substantially complete before the end of the calendar year. In default of amending legislation such as I am bringing forward to-day, the scale originally enacted in the Rating and Valuation Act, 1925, will automatically be revived, with a resultant general increase in the rating burden on occupants of working class houses. The Bill is limited to rating areas outside London, because the present London scale will continue in operation until 1941. The Bill has the approval of the Central Valuation Committee, on which many local authorities are represented, and it will maintain the present position for the duration of the third new valuation lists.
12.36 p.m.
Mr. Greenwood: This is one of the Bills with regard to which I find myself having to say that I think it is a good Bill. The postponement for which it provides is, I think, urgently necessary, and it will prevent an increased burden from falling upon the occupants of working-class houses who are ratepayers. To that extent we on this side of the House clearly cannot oppose the right hon. Gentleman, much as we should like to do so on principle.
Question, "That the Bill be now read a Second time," put, and agreed to.
Bill read a Second time.
Bill committed to a Committee of the whole House for Monday next.—[Sir A. Lambert Ward.]

TRADE MARKS (AMENDMENT) BILL. [Lords.]
As amended (in the Standing Committee), considered.
TRADE MARKS (AMENDMENT) BILL. [Lords.]

  NEW CLAusE.—(Infringement of trade mark by breach of certain restrictions.)
  (1) Where, by a contract in writing made with the proprietor or a registered user of a registered trade mark, a purchaser or owner of goods enters into an obligation to the effect that he will not do, in relation to the goods, an act to which this section applies, any person who, being the owner for the time being of the goods and having notice of the obligation, does that act, or authorises it to be done, in relation to the goods in the course of trade or with a view to any dealing therewith in the course of trade, shall be deemed thereby to infringe the right to the use of the trade mark given by the registration thereof, unless that person became the owner of the goods by purchase for money or money's worth in good faith before receiving notice of the obligation or by virtue of a title derived through another who so became the owner thereof.
  (2) The acts to which this section applies are—

  (a) the application of the trade mark upon the goods after they have suffered alteration in any manner specified in the contract as respects their state or condition, get-up or packing;

  (b) in a case in which the trade mark is upon the goods, the alteration, partial removal or partial obliteration thereof;

  (c) in a case in which the trade mark is upon the goods, and there is also thereon other matter, being matter indicating a connection in the course of trade between the proprietor or registered user and the goods, the removal or obliteration, whether wholly or partially, of the trade mark unless that other matter is wholly removed or obliterated;

  (d) in a case in which the trade mark is upon the goods, the application of any other trade mark to the goods;

  (e) in a case in which the trade mark is upon the goods, the addition to the goods of any other matter in writing that is likely to injure the reputation of the trade mark.

  (3) Sub-section (2) of section sixteen of this Act shall not apply to an act that is deemed by virtue of this section to be an infringement of a trade mark registered in Part B of the register.
  (4) In this section references in relation to any goods to the proprietor, to a registered user, and to the registration, of a trade mark shall be construed, respectively, as references to the proprietor in whose name the trade mark is registered, to a registered user who is registered, and to the registration of the trade mark, in respect of those goods, and the expression 'upon' includes in relation to any goods a reference to physical relation thereto.—[The Solicitor-General.]
  Brought up, and read the First time.
  12.38 p.m.
  The Solicitor-General: I beg to move, "That the Clause be read a Second time."
  The House, or that part of the House which has paid attention to the meetings of the Committee upstairs, will have noticed that Clause 17 of the Bill as it was originally before the House was the subject of a good deal of criticism, both in the Committee upstairs and on the Floor of the House on Second Reading. The purpose of Clause 17 and of the new Clause is as follows: The Departmental Committee set out, in paragraph 179 and following paragraphs of their report, certain cases of misuse of trade marks. For instance, they quoted a case in which Player's cigarettes were taken out of their cartons and sold in a different kind of wrapping, and cases in which advertisement matter which was not desirable from the point of view of the owner of the trade mark was put upon the package in which the goods were being sold. To meet that situation the Departmental Committee recommended that it should he within the power of the owners of a trade mark to enforce a prohibition against such misuse of the wrapping, or against the character of the material which surrounded the goods that they were selling, and, following that recommendation, Clause 17 was introduced.
  It was criticised, as I thought with great effect, on two or three main grounds. The first was that it introduced an innovation into our law with respect to contracts for branded goods. A second ground of criticism was that the contract was not with anybody in particular; it might have been with the office boy; and a third was that the burden of proof was not put upon the person who wanted to safeguard his trade mark. There were various other criticisms, which I need not elaborate. To meet these criticisms we have completely redrafted the Clause. The main differences are that in future the contract will only be, so to speak, the repository of the matters which the proprietors of the trade mark desire to prohibit; that it must be in writing; and that the restrictions are to be enforceable, not against anybody dealing with the goods, but against the person who for the time being is the owner of the goods, and who, having notice of the obligation, does the act or

  2355
  authorises it to be done in the circumstances set out. A breach of the restrictions imposed by the owner of the trade mark is not in future to be a breach of the contract. The fiction of a contractual relationship between someone who obtains the goods through, perhaps, 16 or 17 different hands and the original proprietor has now disappeared, and a breach of the restrictions will be treated, if the owner of the trade mark cares to take proceedings in respect of it, as an infringement of the trade mark.
  These are the main features of the proposed new Clause. It has been put down on the Order Paper in different forms on successive days, because we were anxious to make it conform as nearly as possible to the general wishes of the Commitee upstairs. We have deleted an Amendment which the Committee made upstairs, and which is embodied in paragraph (c) of the existing Clause 17, because when I looked at that carefully it appeared to me to be at any rate arguable that it might have been used to support an attempt to fix prices, and, as it is not the intention of the Government that there should be any ambiguity in the Bill on that matter, the provision was deleted. I hope that with this explanation the House will consider that the proposed new Clause fairly meets the objections which have been raised, and that we may have it in substitution for the existing Clause 17.
  12.42 p.m.
  Mr. A. V. Alexander: I say at once that we are glad that the Government have endeavoured to meet the points which we thought were of substance in regard to Clause 17 as it originally appeared in the Bill. The amendments which have been incorporated in the proposed new Clause are of importance to those who hold the views which I and other Members express. I think, however, I should hardly be doing justice to my own views if I did not say that I still regret that an Amending Trade Marks Bill should include within its ambit a fundamental change in the basis of trade marks legislation, in that it should allow in any circumstances statutory control of conditions to run with the sale. I have been somewhat exercised in my mind as to whether, in view of the obvious good intent of the Parliamentary Secretary and the Solicitor-General, I should still divide on the Clause because of the principle
  2356
  involved. I think it is true that as the Solicitor-General says, to a large degree the more objectionable features of the original Clause have been removed, and for that we desire to express our thanks. The only point about which I am still not quite certain is exactly how and when an action arises. One of the objections that we had before was in regard to the possibility that the owner of the goods at the time of the first sale by the trade mark proprietor, or the actual user of the goods for the time being, might be proceeded against. Am I quite clear in understanding now that the only place at which an action will lie will be against the owner of the goods under the contract in writing? If that be so, I do not think I need ask my hon. Friends to divide against the Clause.
  12.45 p.m.
  Mr. Goldie: Can the Solicitor-General tell me whether this Clause will in any way affect criminal procedure? A good many years ago these proceedings used to take the form of a prosecution in the police court under the Merchandise Marks Act. I remember a case in which a very well-known firm of brewers found that beer which was not of their brewing was being sold in bottles bearing their registered mark. On several occasions proceedings were taken under the Merchandise Marks Act and were dealt with expeditiously and cheaply. I shall be grateful if the hon. and learned Gentleman will tell me whether or not the Clause in any way affects the alternative remedy which is still preserved in the Merchandise Marks Act.
  12.46 p.m.
  The Solicitor-General: The point to which my hon. and learned Friend calls my attention is not affected by this Clause. I do not think the Merchandise Marks Act is very much affected by the Bill. There are penalties under Clause 21 for acts of the character of fraud—false representation and so on. With regard to the point put by the right hon. Gentleman opposite, what the Clause now drafted enacts is that the restrictions that are imposed must be observed by any person who is owner for the time being of the goods if he has notice of those obligations. That is to say, supposing the goods have passed through an intermediate stage and have been sold and resold and

  2357
  the second purchaser receives them with notice of the restrictions imposed by the manufacturer on the original sale, if he does any of this limited number of things the proprietor of the mark is entitled, even in the case of a second or third owner of the goods, to enforce the right that he has reserved to himself.
  12.48 p.m.
  Mr. W. Benn: I congratulate the hon. and learned Gentleman on the great care that he has shown in drafting the Clause, because he is a master of accuracy in these matters. Only a few minutes ago he reproved me for drawing attention by mistake to a marginal note in another Bill. I accepted the correction but the Secretary of State for Scotland on another point to which I drew attention said that the reference to the Central Electricity Board was there by mistake, thanked me for drawing attention to it and said he would have it put right.
  Question, "That the Clause be read a Second time," put, and agreed to.
  Clause added to the Bill.

  CLAUSE 2.—(Registrability in Part A of the Register.)
  12.49 p.m.
  The Parliamentary Secretary to the Board of Trade (Captain Euan Wallace): I beg to move, in page 2, line 34, at the end, to insert "to the extent to which."
  These are in the nature of drafting Amendments and aim at replacing the word "adaptibility," which does not appear in this connection in the existing Act and would need interpretation—by the expression "adapted to distinguish" which is already in the Act and has been elucidated by a number of judgments of the Courts.
  Amendment agreed to.
  Further Amendments made:
  In page 2, line 35, leave out "to the inherent adaptability of the trade mark," and insert "the trade mark is inherently adapted."
  In line 37, leave out "to the extent to which."—[Captain Wallace.]

  CLAUSE 3.—(Registrability in Part B of the register and provisions as to registrations therein.)
  Captain Wallace: I beg to move, in page 3, line 13, at the end, to insert, "to the extent to which."
  2358
  These Amendments are exactly parallel to the last three. They seek to replace the word "capability" by the words "capable of distinguishing."
  Amendment agreed to.
  Further Amendments made:
  In page 3, line 14, leave out "to the inherent capability of the trade mark to distinguish," and insert "the trade mark is inherently capable of distinguishing."
  In line 16, leave out "to the extent to which."—[Captain Wallace.]

  CLAUSE 4.—(Words used as name or description of an article or substance.)
  12.51 p.m.
  Captain Wallace: I beg to move, in page 4, line 2, to leave out "have been originally invalid, or to."
  I apologise for the number of Amendments we have had to put down. I hope the House will take it as evidence of the care that the Solicitor-General has taken to get the Bill exactly right. We are most grateful to Members in all parts of the House for the assistance that they have given in the matter. The Clause deals with cases in which a word trade mark becomes the name or description of the article in relation to which it is used. It protects the trade mark from being invalidated by the mere fact that the word has become a general description of the goods, on the very just and equitable ground that it frequently is not the fault of the proprietor of the mark. There are two cases in which this protection is not given. The first is the case where there is a well-known and long-established use of the word as a description of the article by some other person who does not own the mark and who is a trader in the goods. The other case which is excluded is that of an article formerly manufactured under a patent where a period of two years has elapsed since the cesser of the patent, and the word is still the only practicable name for the article.
  The Clause as drafted, and as considered in Committee, was wide enough to cover, first, the case where the mark has become the descriptive name before the date of its registration and the case where it became the descriptive name generally used by the public after it had been registered. In reply to criticisms in the Committee the Solicitor-General gave a promise to reconsider the Clause, and all

  2359
  these Amendments are designed to limit it to the cases in which the word became the descriptive name after the trade mark had been registered. This will leave cases in which the word may be alleged to be already descriptive at the date of the application to he dealt with under the ordinary rules for testing the suitability of a mark of registration. In these circumstances the reference to Section 41 of the principal Act is no longer necessary, because that Section deals with the validity of the original registration of the trade mark, and the amended Clause is now confined to matters arising after registration. I hope with that explanation it will be possible to regard all these Amendments as drafting.
  12.54 p.m.
  Mr. Alexander: We all, including my right hon. Friend the Member for Gorton (Mr. Benn), appreciate the care with which the Solicitor-General has treated the Bill. I am sure, whatever standing we may have on this side as contributories to its drafting, the right hon. Gentleman will sympathise with us in trying to follow the large number of detailed Amendments that have been put down to the Clause. Up to the present I am not convinced that the Government have really met the substantial part of my argument in Committee by this series of Amendments. The Parliamentary Secretary makes it clear to me from one part of his remarks that, in the case of articles in respect of which the trade mark has become the common name for the substance after the date of registration, he is not meeting me at all. That is to say, in the case of such articles that are to be given these special and new protections in the Bill. We had quite a long Debate on this matter upstairs, and I do not wish to keep the Members of the House in full session for any length of time upon it. But when you deal with such articles as Aspirin or Aspro, which are just names given to a perfectly common and generally used mixture of salts to deal with common ailments, such as headaches and complaints of that kind, it seems ridiculous to give this protection to what is not a specially devised article to which you attach a trade mark, but merely a much advertised name for the packing of it. I suggest that the Clause puts into the trade marks legislation of this country a point
  2360
  which it was never intended such legislation should cover, and that is, that there should be a protection in law for the goodwill established by much advertising, very often very misleading to the public, in order to keep up the price of well-known and perfectly common remedies for the people.
  If you get a much advertised name like Aspirin or Aspro, a very substantial price is charged for the article, and yet there are people, some of whom I am not unconnected with, who can put up exactly the mineral and other substance to do the same work, and do it, perhaps, for half or one-third of the cost. Yet, if somebody comes to you and you say, "This is the same as Aspirin or a substitute for Aspirin or Aspro, which does the same work," then in certain circumstances—but not in quite such a wide way as in the original Bill, I agree—you will be committing an offence. I am very doubtful whether the Parliamentary Secretary in his Amendments is meeting what is a point of great substance in this matter, and I feel that it is a very doubtful use of trade marks legislation to bring in special protection for goods due entirely to large advertising, and especially not in the case of the substance I have mentioned, but certainly in the case of certain common patent medicines advertised at much expense in the Sunday papers and leading undoubtedly to the exploitation of people along the lines mentioned quite recently by Lord Horder at one of the great health conferences, in which he said that by this kind of process you could persuade people to believe in anything, take anything or eat anything. So far as reasonable provision is available for the protection of the public, I should like to see it maintained. I am not satisfied, however, that we have been fully met on this point, and before we proceed I do not think it will be right to ask the House to deal with these ten Amendments as a whole, without some further information from the Government.
  12.59 p.m.
  The Solicitor-General: I accede at once to the request of the right hon. Gentleman to do the best I can to explain the extent to which we have tried to meet him. I sympathise with him when he sees the number of Amendments on the Paper which would require the exercise of much

  2361
  patience if, for instance, one were to write in the Bill in red ink exactly what they mean, but he can take my assurance that the Amendment of substance is the first one, and that the other Amendments are consequential and carry out the intention of the first Amendment. That intention was a matter that was raised by an hon. Gentleman from the other side in the Standing Committee, and it was—I think I can explain it shortly in this way. Under the present law the more successful you are in making known your trade mark, the more you run the risk of losing the value of that trade mark. The instance I gave upstairs was Kodak. If Kodak became synonymous to camera, then Kodak would cease to be a trade mark and anyone could sell his camera under the name of Kodak. Perhaps it would bring it home a little more if I imagined that the right hon. Gentleman or those with whom he is associated had invented the name "C.W.S." to be attached to goods, and had registered it as a trade mark.
  Mr. Alexander: A very accurate forecast.
  The Solicitor-General: Supposing he did so there is nothing whatever in this Bill to prevent anybody else from making that commodity, all that the Bill says is that you may not take that word which has been used as a trade mark by the right hon. Gentleman, and attach it to the goods of somebody else. The example that he gave of Aspirin is, I imagine—I do not know, but I believe it to be—a good example of the evil at which the Clause aims. Somebody invented Aspirin.
  Mr. Alexander: Oh, no.
  The Solicitor-General: Then I am wrong. I do not know whether Aspirin is a trade mark or not.
  Mr. Alexander: I beg the hon. and learned Gentleman's pardon. I thought he said that somebody invented the substance.
  The Solicitor-General: I do not mean the substance, but that somebody discovered that acetyl-salicylic acid was a specific for headaches and attached to it the trade mark "Aspirin". Aspirin was so well advertised and so well-known that everybody who wanted acetyl-salicylic acid asked for aspirins. The moment that occurred the value of the trade mark disappeared and anyone could sell under the invented name. That is the situation which the Committee recommended to be dealt with, because it was considered to be unfair to people who spent a great deal of money, and, perhaps, carried out a great deal of research in securing that their product should be pure and carefully got up, to find that the trade mark, through their very success, had become public property. What was suggested in Committee by an hon. Gentleman on the other side of the House was that, as the Clause stood, it would apply to cases where a general name was used by somebody and attached to the goods. The case was given of brown bread. What was said was, why should anybody be enabled to adopt "brown bread" because they had registered that as a trade mark?
  It is in order to meet that kind of case that these Amendments have been framed to bring in a time factor and give protection only in cases where the trade mark has come first and the generic use of the trade mark has come afterwards. Of one thing I am perfectly certain. The right hon. Gentleman can see that the Amendments are improvements. I recognise the point of principle that he does not like the protection that the Government desire as a matter of policy to accord to trade marks, but at any rate, he cannot, I think, object to the Amendments, because they improve the Clause in the sense that I have explained.
  Question put, "That the words proposed to be left out, stand part of the Bill."
  The House divided; Ayes, 54; Noes, 98.

  Division No. 257.]

  AYES.

  [1.6 p.m.

  Acland, R. T. D. (Barnstaple)

  Brown, C. (Mansfield)

  Edwards, Sir C. (Bedwellty)

  Adamson, W. M.

  Charleton, H. C.

  Frankel, D.

  Alexander, Rt. Hon. A. V. (H'lsbr.)

  Chater, D.

  Gallacher, W.

  Ammon, C. G.

  Cluse, W. S.

  Gardner, B. W.

  Attlee, Rt. Hon. C. R.

  Cove, W. G.

  George, Rt. Hon. D. Lloyd (Carn'v'n)

  Barnes, A. J.

  Daggar, G.

  George, Major G. Lloyd (Pembroke)

  Bellenger, F. J.

  Davies, S. O. (Merthyr)

  Greenwood, Rt. Hon. A.

  Benn, Rt. Hon. W. W.

  Ede, J. C.

  Griffiths, J. (Llanelly)

  Groves, T. E.

  McEntee, V. La T.

  Sorensen, R. W.

  Hall, G. H. (Aberdare)

  MacLaren, A.

  Strauss, G. R. (Lambeth, N.)

  Hall, J. H. (Whitechapel)

  Morrison, R. C. (Tottenham, N.)

  Taylor, R. J. (Morpeth)

  Henderson, A. (Kingswinford)

  Naylor, T. E.

  Thorne, W.

  Henderson, T. (Tradeston)

  Pethick-Lawrence, Rt. Hon. F. W.

  Thurtle, E.

  Jenkins, A. (Pontypool)

  Ritson, J.

  Watkins, F. C.

  Johnston, Rt. Hon. T.

  Robinson, W. A. (St. Helens)

  Whitelay, W. (Blaydon)

  Jones, Morgan (Caerphilly)

  Rowson, G.

  Windsor, W. (Hull, C.)

  Kennedy, Rt. Hon. T.

  Seely, Sir H. M.

  Kirkwood, D.

  Smith, Ben (Rotherhithe)

  TELLERS FOR THE AYES.—

  Leslie, J. R.

  Smith, E. (Stoke)

  Mr. Mathers and Mr. John.

  NOES.

  Albery, Sir Irving

  Guy, J. C. M.

  Remer, J. R.

  Anstruther-Gray, W. J.

  Hannah, I. C.

  Rickards, G. W. (Skipton)

  Beaumont, Hon, R. E. B. (Portsm'h)

  Hannon, Sir P. J. H.

  Rosbotham, Sir T.

  Bernays, R. H.

  Hepburn, P. G. T. Buchan-

  Ross Taylor, W. (Woodbridge)

  Boulton, W. W.

  Hills, Major Rt. Hon. J. W. (Ripon)

  Samuel, M. R. A.

  Briscoe, Capt. R. G.

  Hope, Captain Hon. A. O. J.

  Savory, Sir Servington

  Brocklebank, Sir Edmund

  Hume, Sir G. H.

  Shaw, Major P. S. (Wavertree)

  Brown, Brig.-Gen. H. C. (Newbury)

  Kerr, J. Graham (Scottish Univs.)

  Somervell, Sir D. B. (Crewe)

  Bull, B. B.

  Lamb, Sir J. Q.

  Somerville, A. A. (Windsor)

  Campbell, Sir E. T.

  Liddall, W. S.

  Southby, Commander Sir A. R. J.

  Cary, R. A.

  Little, Sir E. Graham-

  Strauss, H. G. (Norwich)

  Channon, H.

  Loftus, P. C.

  Strickland, Captain W. F.

  Clarke, Lt.-Col. R. S. (E. Grinstead)

  MacAndrew, Colonel Sir C. G.

  Stuart, Hon. J. (Moray and Nairn)

  Colville, Lt.-Col. Rt. Hon. D. J.

  Macquisten, F. A.

  Sueter, Rear-Admiral Sir M. F.

  Cooke, J, D. (Hammersmith, S.)

  Maitland, A.

  Tasker, Sir R. I.

  Crooke, J. S.

  Makins, Brig.-Gen. E.

  Tree, A. R. L. F.

  Cross, R. H.

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

  Tufnell, Lieut.-Commander R. L.

  Conant, Captain R. J E.

  Mayhew, Lt.-Col. J.

  Wallace, Capt. Rt. Hon. Euan

  Davies, Major Sir G. F, (Yeovil)

  Mellor, Sir J. S. P. (Tamworth)

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

  Denville, Alfred

  Mills, Sir F. (Leyton, E.)

  Ward, Irene M. B. (Wailsend)

  Dower, Major A. V. G.

  Moore, Lieut.-Col. Sir T. C. R.

  Waterhouse, Captain C.

  Duckworth, W. R, (Moss Side)

  Morrison, G. A. (Scottish Univ's.)

  Williams, H. G. (Croydon, S.)

  Emmott, C. E. G. C.

  Morrison, Rt. Hon. W. S. (Cirencester)

  Wilson, Lt.-Col. Sir A. T. (Hitchin)

  Evans, E. (Univ. of Wales)

  Neven-Spence, Major B. H. H.

  Windsor-Clive, Lieut.-Colonel G.

  Everard, W. L.

  Nicholson, G. (Farnham)

  Winterton, Rt. Hon. Earl

  Fildes, Sir H.

  Nicolson, Hon. H. G.

  Withers, Sir J. J.

  Gluckstein, L. H.

  O'Connor, Sir Terence J.

  Womersley, Sir W. J.

  Goldie, N. B.

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

  Wood, Rt. Hon. Sir Kingsley

  Graham, Captain A. C. (Wirral)

  Orr-Ewing, I. L.

  Wright, Squadron-Leader J. A. C.

  Grant-Ferris, R.

  Palmer, G. E. H.

  Young, A. S. L. (Partick)

  Grattan-Doyle, Sir N.

  Ponsonby, Col. C. E.

  Gridley, Sir A. B.

  Raikes, H. V. A. M.

  TELLERS FOR THE NOES.—

  Grimston, R. V.

  Ramsay, Captain A. H. M.

  Captain Dugdale and Mr. Munro.

  Gunston, Capt. D. W.

  Reid, Sir D. D. (Down)

  Further Amendments made:
  In page 4, line 3, after "use," insert "after the date of the registration."
  In line 6, leave out "but," and insert "Provided that."
  In line 7, leave out "had been before the date of the registration, or has been, as the case may be," and insert "is."
  In line 16, leave out "and that such use continues."
  Leave out line 23.
  In line 24, leave out "as the case may be."
  In line 31, leave out "notwithstanding anything in section forty-one of the principal Act."
  In line 39, leave out "an entry made in the register without sufficient cause or."
  In line 41, leave out "as the case may be."——[Captain Wallace.]

  CLAUSE 7.—(Assignment and transmission of trade marks.)
  Amendments made:
  In page 7, line 6, leave out "trade mark when registered," and insert "registered trade mark."
  In line 10, leave out "trade mark when registered," and insert "registered trade mark."
  In page 8, line 36, leave out "person," and insert "of the persons."
  In line 39, leave out "such person," and insert "of those persons."—[Captain Wallace.]
  1.17 p.m.
  The Solicitor-General: I beg to move, in page 10, line 9, at the end, to insert:
  "(7) Where an assignment in respect of any goods of a trade mark that is at the time of the assignment used in a business in those goods is made after the commencement of this Act otherwise than in connection with the goodwill of that business the assignment

  2365
  shall not take effect until the following requirements have been satisfied, that is to say, the assignee must, not later than the expiration of six months from the date on which the assignment is made or within such extended period, if any, as the Registrar may allow, apply to him for directions with respect to the advertisement of the assignment, and must advertise it in such form and manner and within such period as the Registrar may direct."
  This Clause introduces an innovation into our law of trade marks. Hitherto a trade mark has only been assignable in connection with the goodwill of a business in which the trade mark is used. As a result of the recommendations of the Committee and a discussion of the matter in Committee, no objection has been raised to the new principle and in future trade marks will be assignable without the goodwill of the business in which they are used. It is thought that there should be some safeguard in such a case, and to meet the case put by hon. Members opposite as well as hon. Members on this side, it was thought that where a trade mark is being assigned in these circumstances of greater freedom, some notification should be given to the consuming public that such assignment has taken place. Accordingly, the Amendment provides that in the case of assignments which for the first time are now being permitted under the Bill such advertisement as the Registrar may require shall be given in such papers as he may direct. It follows the ordinary form of procedure, and it is thought it is the most convenient way to ensure that some notice of the fact of such an assignment shall be brought to the notice of the consuming public.
  1.19 p.m.
  Mr. Alexander: I am obliged to the Government for having substantially met the criticisms we advanced on this Clause. There is, I understand, some objections still remaining in the minds of some people that there should be this change with regard to the assignment of goodwill in any case, but my own view is that you have met what might be a great injustice to the consumer, when a recognised trade mark with the goodwill has been transferred to some other manufacturer who may not deliver the same quality or, in fact, the same goods. If the Department will ensure that the Clause is really administered and that due advertisement is made to the public of any change in ownership
  2366
  of goodwill, a large part of our criticism has been met, and I do not propose to divide against the Amendment.
  Amendment agreed to.

  CLAUSE 8.—(Registered users.)
  1.21 p.m.
  The Solicitor-General: I beg to move, in page 1o, line 36, to leave out "any," and to insert:
  "the purposes of section twelve of this Act and for any other."
  The Clause deals with a new class of person having the right to a trade mark as registered users, and Sub-section (2) provides:
  "The permitted use of a trade mark shall be deemed to be use by the proprietor thereof, and shall be deemed not to be use by a person other than the proprietor."
  We propose to add the words "the purposes of section twelve of this Act." One of the reasons for including this provision is to prevent a mark being taken off the register which is dealt with in Clause 12. As that is the intention it is thought that it would be just as well to have Clause 12 specifically referred to in this Sub-section.
  Amendment agreed to.

  CLAUSE 12.—(Provisions as to non-use of trade mark.)
  Amendment made: In page 17, line 23, after "or" insert "for the purposes of".—[Captain Wallace.]

  CLAUSE 15.—(Effect of registration in Part A of the register).
  1.24 p.m.
  The Solicitor-General: I beg to move in page 20, line 2, to leave out "colour-ably resembling it" and to insert:
  "so nearly resembling it as to be likely to deceive or cause confusion."
  This is the Clause which the right hon. Gentleman will remember we referred to as the Yeast-Vite Clause. It provides that there may be an infringement not only by the use of an identical mark but by one colourably resembling it. It is considered that this discription is not precise enough and, therefore, we propose to substitute the words of the Amendment which are more definite.
  Amendment agreed to.
  1.25 p.m.
  Mr. Alexander: I beg to move, in page 20, line 14, at the end, to insert:
  "Provided that in any action for infringement of the provisions of this section no injunction or other relief shall be granted if the defendant establishes to the satisfaction of the court that the use complained of is not as a trade mark or likely to deceive or cause confusion."
  I see that my hon. Friend the Member for Burslem (Mr. MacLaren) is in his place, and I may say at once that I shall be willing to incorporate in my Amendment his Amendment to it—in line 3, leave out "as a trade mark or." On the other hand, if the Government are ready to accept my proviso as it stands, without the wider application of it to which my hon. Friend attaches importance, then I shall be willing to accommodate them in that direction, subject to the consent of my hon. Friend. Although in the last Amendment that was carried the Solicitor-General undoubtedly endeavoured to remove some of the doubts that we had in our minds as to the interpretation in the courts of such words as "colourably resembling," nevertheless I feel that in this matter there ought to be a reasonable basis for a defence in the court of the persons accused. In that respect, the words of this Amendment seem to me to be eminently reasonable. I should have thought that the Amendment would have appealed to a lawyer such as the Solicitor-General as being a reasonable one, and I should have thought that he would have accepted it.
  Trade marks are granted and used for the purpose of distinguishing goods manufactured or sold by the owners of the marks from goods manufactured or sold by other persons. I want to stress what I said in the Committee upstairs in this connection, tint when this Bill is passed, even more than before, the trade marks concerned will be in the nature of a monopoly. In those circumstances I feel that no injunction, damages, costs or other relief should be granted if the defendant can find the satisfactory explanation for which we are providing in the amendment. There are many ways in which traders may commit what may be alleged to be an infringement and be liable to have proceedings taken against them which no ordinary citizen would desire to see take place. I do not think it is ever in the public interest to encourage proceedings where nothing has
  2368
  really been done from the point of view of confusing or misleading the buying public. I hope that the fact that I do not make a longer argument on the point will not cause the Solicitor-General to be less inclined to accept the Amendment. I think the Amendment is a reasonable one and I hope he will accept it.
  1.30 p.m.
  The Solicitor-General: I am afraid I cannot accept the Amendment, and I hope that the right hon. Gentleman will agree with me in this, at any rate, that the brevity with which he made the point in the Committee upstairs has not resulted in our overlooking it or neglecting to reflect upon it. This Amendment, however, raises a point of such substance that I do not think it is possible for the Government to accept it consistently with the policy to which they have committed themselves by introducing the Clause. That policy arises out of a case known as the Yeast-Vite case. In that case it was held in the House of Lords that it was not an infringement of a trade mark to sell goods with a label which said "as good as Yeast-Vite," or words to that effect. The Committee recommended that that was a very unsatisfactory state of the law. I do not for a moment suppose that the right hon. Gentleman would defend the practice that was held to be within the law in the Yeast-Vite case. Hon. Members will observe that the vice that was disclosed in that case was a vice of adding something to the trade mark so that it was not used as a trade mark. If I were to accept the Amendment, we should not deal with the Yeast-Vite case at all, because the Amendment would limit the action for infringement for which we are providing in Clause 15 to cases where the use is use as a trade mark. The Yeast-Vite case was one where use was not use as a trade mark, but in another way. The right hon. Gentleman's Amendment runs entirely counter to the policy which we stand by of reversing the decision in the Yeast-Vite case, and that is the first reason why the Amendment is not acceptable.
  There is another reason. This Clause deals only with registered trade marks in Part A of the register; that is to say, trade marks which are of the highest quality of trade mark, differing from those in Part B of the register. In the

  2369
  case of Part B trade marks, which are not so sacrosanct, it is a good defence to say that the mark has not been used in such a way as to be likely to deceive. That is no defence in the case of trade marks registered in Part A. Therefore, the right hon. Gentleman's Amendment would assimilate the Part A marks to the Part B marks, and would leave very little advantage in being in Part A of the register. For those two reasons, I am afraid the Amendment raises such a large question of policy that plainly we cannot accept it.
  Mr. Alexander: Would not the first point raised by the hon. and learned Gentleman be met if he were to accept with my Amendment the Amendment of my hon. Friend the Member for Burslem (Mr. MacLaren)?
  The Solicitor-General: I think that that would make it much worse. I always fear the Greeks when they come bearing gifts. I did not look upon the hon. Gentleman's Amendment as being intended to help the Government out of the difficulties in which they find themselves. The effect of Subsection (1, b) of the Clause is to cover the case where use of the trade mark is not use as a trade mark, and is not likely to deceive or to cause confusion. That was the very case of "a substitute for Yeast-Vite," so that the omission of the words, "as a trade mark or," and the retention of the other words, "likely to deceive or to cause confusion" would still nullify what we want to do. You cannot say that the putting in of the words "a substitute for Yeast-Vite" is calculated to cause confusion. It is not. It does not say that the article is Yeast-Vite. It only says that the article is a substitute. But the vice in that case was that it was an attempt by one trader to sell his goods by reference to the goodwill established by somebody else, and that vice we should not defeat if the Clause were amended in the manner proposed.
  1.36 p.m.
  Mr. Barnes: I have not found the reply of the Solicitor-General very satisfactory. I am never impressed by legislation which while endeavouring to deal with one evil proposes to create others. In the Yeast-Vite case the design was, more or less, to deceive the public but why, in attempting to deal with that matter, should we pass legislation which may work out in a
  2370
  very arbitrary fashion, and seriously affect a large body of traders who have no design whatever to deceive the public? The Amendment seems to me to be the natural sequence to the Government Amendment which we have just carried. I do not see why there should be any moral distinction between categories A and B under the trade mark law when it comes to affecting the rights of other traders. The Amendment which the Government have just submitted to overcome administrative and legal difficulties arising out of the words "colourable resemblance," introduces such language as "so nearly resembling as to be likely to deceive." Obviously what we are endeavouring to secure here is that there should be no deliberate fraud imposed on the public.
  The Solicitor-General The Solicitor-General indicated dissent.
  Mr. Barnes: Then what is the purpose of the Clause? I shall be glad to give way if we can have an explanation of it.
  1.38 p.m.
  Captain Wallace: The Solicitor-General has already explained the purpose of the Clause. It is to reverse the Yeast-Vite judgment and to prevent Trader A from trying to sell his goods by reference to a standard which has already been set up by Trader B. Even if his representations do not deceive the public, we believe that to be a wrong practice, and I do not believe it is a practice which the hon. Gentleman himself would condone. If that be so, it seems to me—and I am no lawyer—that to alter the Clause in the way proposed would completely defeat the object which I think we are all trying to achieve.
  When I am on my feet may I say that we have gone a long way towards meeting the points made in Committee by the right hon. Gentleman the Member for Hillsborough (Mr. Alexander) and the hon. Member for East Ham South (Mr. Barnes). We have made it clear that it is open to any trading organisation to send round circulars within their organisation saying "We have some goods which we believe to be as good as A. or B. and we want to try to sell them." We have also removed from any penalty under this Measure what was described in Committee as "oral boosting." A person saying, for instance, "Do not buy that, we have something which is just as

  2371
  good," would have rendered himself liable to a penalty under the Bill as it stood originally, but we have deliberately excluded that. We are determined, however, to prevent if we can the practice of trying to sell one's own goods by reference to the standard which has been set up by somebody else, and, as I say, I do not think hon. Gentlemen opposite themselves would condone that practice.
  1.42 p.m.
  Mr. Barnes: It is becoming the habit on the Treasury Bench to deal with Amendments proposed from this side by saying that they defeat the purpose of the Clause without giving any argument to show that that is so. It is useless for the Parliamentary Secretary to direct questions at my right hon. Friend and myself as to whether we would stand for a practice such as that described in the Yeast-Vite case. Of course we would not, but that is no argument. We are not concerned with that. What we are concerned with is that when Parliament sets out to remedy an abuse which has been discovered in the trade marks law, it should not do so in such a way as to cause irritation among the great body of normal traders. Why should such abuses lead to a type of legislation which is restrictive on the great body of traders, who have no intention to defraud the community? Why, as a result of an abuse by one Mader, should the law of
  monoply embodied in trade mark legislation be strengthened in this way, with no safeguard for the trader who may make an honest mistake in his literature or in some other way?
  What amazes me is the lack of confidence in the courts shown by the Solicitor-General. All the Amendment seeks to accomplish is that the defendant should establish to the satisfaction of the court that the abuse complained of is not likely to deceive or cause confusion. Surely that is sensible and reasonable. Why should a trader who has no intention of defrauding the public, be prevented from establishing that before the court, and if he does establish it, why should he be held guilty of an offence and become liable to penalties? Neither the Solicitor-General nor the Parliamentary Secretary made any case against the Amendment. Hon. Members who move these Amendments cannot be expected to draft them with the same accuracy as Ministers who have the aid of their advisers but surely the Government will recognise that this request is reasonable and, if they cannot accept these words, will agree to introduce some other words to meet our point.
  Question put, "That those words be there inserted in the Bill."
  The House divided: Ayes, 58; Noes, 105.

  Division No. 258.]

  AYES.

  [1.44 p.m.

  Adamson, W. M.

  George, Rt. Hon. D. Lloyd (Carn'v'n)

  Naylor, T. E.

  Alexander, Rt. Hon. A. V. (H'lsbr.)

  George, Major G. Lloyd (Pembroke)

  Oliver, G. H.

  Ammon, C. G.

  Greenwood, Rt. Hon. A.

  Pethick-Lawrence, Rt. Hon. F. W.

  Anderson, F. (Whitehaven)

  Griffith, F. Kingsley (M'ddl'sbro, W.)

  Rathbone, Eleanor (English Univ's.)

  Barnes, A. J.

  Groves, T. E.

  Ritson, J.

  Bellenger, F. J.

  Hall, G. H. (Aberdare)

  Robinson, W. A. (St. Helens)

  Benn, Rt. Hon. W. W.

  Hall, J. H. (Whitechapel)

  Rowson, G.

  Brown, C. (Mansfield)

  Harris, Sir P. A.

  Smith, Ben (Rotherhithe)

  Brown, Col. D. C. (Hexham)

  Henderson, A. (Kingswinford)

  Smith, E. (Stoke)

  Charleton, H. C.

  Henderson, T. (Tradeston)

  Sorensen, R. W.

  Cluse, W. S.

  Jenkins, A. (Pontypool)

  Strauss, G. R. (Lambeth, N.)

  Cocks, F. S.

  Jones, Morgan (Caerphilly)

  Taylor, R. J. (Morpeth)

  Cove, W. G.

  Kelly, W. T.

  Thorne, W.

  Daggar, G.

  Kennedy, Rt. Hon. T.

  Thurtle, E.

  Davidson, J. J. (Maryhill)

  Kirkwood, D.

  Viant, S. P.

  Davies, S. O. (Merthyr)

  Lathan, G.

  Watkins, F. C.

  Ede, J. C.

  Lawson, J. J.

  Windsor, W. (Hull, C.)

  Edwards, Sir C. (Bedwellty)

  Leslie, J. R.

  Evans, E. (Univ. of Wales)

  McEntee, V. La T.

  TELLERS FOR THE AYES.—

  Frankel, D.

  MacLaren, A.

  Mr. Whiteley and Mr. Mathers.

  Gardner, B. W.

  Morrison, R. C. (Tottenham, N.)

  NOES.

  Albery, Sir Irving

  Boulton, W. W.

  Clarke, Lt.-Col. R. S. (E. Grinstead)

  Anstruther-Gray, W. J.

  Briscoe, Capt. R. G.

  Colville, Lt.-Col. Rt. Hon. D. J.

  Assheton, R.

  Brocklebank, Sir Edmund

  Conant, Captain R. J. E.

  Balfour, Capt. H. H. (Isle of Thanet)

  Bull, B. B.

  Cooke, J. D. (Hammersmith, S.)

  Beaumont, Hon. R. E, B. (Portsm'h)

  Campbell, Sir E. T.

  Craven-Ellis, W.

  Bernays, R. H.

  Cary, R. A.

  Crooke, J. S.

  Crockshank, Capt. H. F. C.

  Loftus, P. C.

  Shaw, Major P. S. (Wavertree)

  Cross, R. H.

  MacAndrew, Colonel Sir C G.

  Somervell, Sir D. B. (Crewe)

  Davies, Major Sir G. F. (Yeovil)

  McCorquodale, M. S.

  Somerville, A. A. (Windsor)

  Denville, Alfred

  Macquisten, F. A.

  Southby, Commander Sir A. R. J.

  Duckworth, W. R. (Moss Side)

  Maitland, A.

  Stanley, Rt. Hon. Oliver (W'm'l'd)

  Emmott, C. E. G. C.

  Makins, Brig.-Gen. G.

  Strauss, H. G. (Norwich)

  Everard, W. L.

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

  Strickland, Captain W. F.

  Fildes, Sir H.

  Mayhew, Lt.-Col. J.

  Stuart, Hon. J. (Moray and Nairn)

  Gluckstein, L. H.

  Mellor, Sir J. S. P. (Tamworth)

  Sueter, Rear-Admiral Sir M. F.

  Goldie, N. B.

  Morrison, G. A. (Scottish Univ's.)

  Tasker, Sir R. I.

  Grant-Ferris, R.

  Morrison, Rt. Hon. W. S. (Cirencester)

  Tree, A. R. L. F.

  Grattan-Doyle, Sir N.

  Neven-Spence, Major B. H. H.

  Tryon, Major Rt. Hon. G. C.

  Gridley, Sir A. B.

  Nicholson, G. (Farnham)

  Tufnell, Lieut.-Commander R. L.

  Grimston, R. V.

  Nicolson, Hon. H. G.

  Walker-Smith, Sir J.

  Gunston, Capt. D. W.

  O'Connor, Sir Terence J.

  Wallace, Capt. Rt. Hon. Euan

  Guy, J. C. M.

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

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

  Hannah, I. C.

  Orr-Ewing, I. L.

  Ward, Irene M. B. (Wallsend)

  Hannon, Sir P. J. H.

  Palmer, G. E. H.

  Waterhouse, Captain C.

  Heilgers, Captain F. F. A.

  Petherick, M.

  Williams, H. G. (Croydon, S.)

  Hepburn, P. G. T. Buchan-

  Ponsonby, Col. C. E.

  Wilson, Lt.-Col. Sir A. T. (Hitchin)

  Hills, Major Rt. Hon. J. W. (Ripon)

  Raikes, H. V. A. M.

  Windsor-Clive, Lieut.-Colonel G.

  Hope, Captain Hon. A. O. J.

  Ramsay, Captain A. H. M.

  Winterton, Rt. Hon. Earl

  Hudson, R. S. (Southport)

  Ramsbotham, H.

  Withers, Sir J. J.

  Hutchinson, G. C.

  Reid, Sir D. D. (Down)

  Womersley, Sir W. J.

  Kerr, H. W. (Oldham)

  Reid, W. Allan (Derby)

  Young, A. S. L. (Partick)

  Kerr, J. Graham (Scottish Univs.)

  Rickards, G. W. (Skipton)

  Lamb, Sir J. Q.

  Rosbotham, Sir T.

  Wright, Squadron-Leader J. A. C.

  Liddall, W. S.

  Ross Taylor, W. (Woodbridge)

  TELLERS FOR THE NOES.—

  Little, Sir E. Graham

  Samuel, M. R. A.

  Captain Dugdale and Mr. Munro.

  Llewellin, Lieut.-Col. J. J.

  Savery, Sir Servington

  Bill read the Third time, and passed, with Amendments.

  CLAUSE 17.—(Contractual restrictions on use of trade mark.)
  1.50 p.m.
  Captain Wallace: I beg to move, in page 22, line 1, to leave out Clause 17.
  This is a consequential Amendment.
  Amendment agreed to.

  CLAUSE 18.—(Certification trade marks.)
  1.51 p.m.
  Captain Wallace: I beg to move, in page 23, line 12, at the end, to insert "to the extent to which."
  I might perhaps be allowed to explain the six Amendments to Clause 18 which stand upon the Paper briefly together. The first three of them correspond to Amendments that we have already made to Clause 2 in respect of ordinary trade marks registered in Part A, and are designed to get rid of the word "adaptability," which we got rid of in Clause 2. The next one, the cancellation of the words:
  "or comprising any of its essential features."
  corresponds to a deletion from Clause 15 which was made in Committee upstairs. The next to that is consequential on a similar replacement in Clause 15 which we made this morning, and the last one is purely drafting.
  Amendment agreed to.
  Further Amendments made:
  In page 23, line 12, at the end, insert "to the extent to which."
  In page 23, line 13, leave out "to the inherent adaptability of the mark," and insert "the mark is inherently adapted."
  In page 23, In line 16, leave out "to the extent to which."
  In page 23, In line 31, leave out "or comprising any of its essential features."
  In page 23, In line 32, leave out "colourably resembling it," and insert "nearly resembling it as to be likely to deceive or cause confusion."
  In page 23, In line 42, after the first "the," insert "relevant."—[Captain Wallace.]

  CLAUSE 33.—(Short title, citation, construction, repeal and commencement.)
  1.53. p.m.
  Mr. Alexander: I beg to move, in page 35, line 10, to leave out:
  "such date as the Board of Trade may by order appoint,"
  and to insert:
  "the first day of July, nineteen hundred and thirty-eight."
  The only point that I wish to make on this Amendment is that it is admitted by the Government that the changes in the law which will be operative when this Bill is passed are extensive in principle, and, indeed, there are some very extensive changes in details as well, but here is a Bill of 33 Clauses and four Schedules and frill of references to previous Acts, and it is exceedingly difficult for the people concerned to be able to follow all these changes. I understand—perhaps the Parliamentary Secretary can tell me about

  2375
  this—that it is the case that there is in preparation a consolidating Measure of the trade marks enactments. If that be so, it seems to me to be a reasonable thing to fix a date when these things are to come into force and, if possible, to arrange that that consolidating Measure, which would go through this House without opposition, as all consolidating Measures do when you have established the principle, should be passed before 1st July, 1938. Under the Bill a date is to be fixed and announced by the Board of Trade. I do not want to cast any suspicions upon a Department of which I was once a junior Minister, but I say with great respect that the number of decisions which the Department has to make and which it has to publish from time to time in the Board of Trade Journal and other newspapers, makes it exceedingly difficult for traders to follow all the liabilities and commitments which they have to meet If we had a firm date such as I am suggesting in the Bill, and if it be understood that if that firm date is inserted we will give a passage to the consolidation Measure which will put the requirements into a commonly accessible form in which there would not have to be so much legislation by reference, I think it would he a reasonable proposition to make.
  1.57 p.m.
  Captain Wallace: The right hon. Gentleman was perfectly correct in stating that we are hoping to introduce a consolidation Measure as soon as possible, and to bring this Bill and the consolidation Measure into force in such a way that the new rules which we shall have to make in connection with this Bill will be based upon the consolidation Measure and will, therefore, eliminate a number of those references to which the right hon. Gentleman sensibly objected. In circumstances of this kind we are very anxious to keep the date on which this Bill shall be brought into operation elastic. We are grateful for the offer of assistance which the right hon. Gentleman has just made to pass the consolidation. Bill through the House, but I am sure he will appreciate that although a great deal of work has been done on it, it will, in the present circumstances, take a certain amount of time to complete. Then we have to make up the rules. At the same time, I must admit that we
  2376
  do not want to delay the coming into force of the present Bill any longer than we can help. The Departmental Committee, whose report was really the genesis of this Bill, was appointed as long ago as 1933 and reported in April, 1934. It has taken some time to prepare this Measure, but it is one which is generally admitted on all sides to be urgently required in the interests of trade, and perhaps not least in the interests of the export trade. Therefore, my right hon. Friend the President of the Board of Trade is anxious to bring this Bill into force as soon as it can be done. I am prepared to give an undertaking that it shall not be brought into force before the end of six months, at any rate. I hope that the right hon. Gentleman will be prepared to leave it at that, and that if we find we are able to get the consolidation Measure through the House and to get the rules made, he will leave us with the option of bringing it into force as soon as possible.
  2 p.m.
  Mr. J. J. Davidson: The last words of the Parliamentary Secretary were very welcome, because the suggestion of my right hon. Friend is one that should be followed up by the Government. It would be bad if it went out from the House that the Government were always asking for elastic legislation. The Government ought always to be able to tell the House on question such as this how long the Department concerned will take to do the necessary work and to give a definite date. It is unfair to ask the House to give a sort of elastic doctor's mandate to the Government to decide when decisions of the House shall become operative. We welcome the Parliamentary Secretary's undertaking, and I would like to ask him whether, if the Department finds that the Bill can be operated before the date mentioned in the Amendment, it will take the necessary steps.
  Captain Wallace: That is the whole point of my remarks in asking the right hon. Gentleman not to press the Amendment. It is because I think we shall be able to operate the legislation before the date that he suggests that I am anxious for him not to press the Amendment. We will not start it within six months, but, if it is possible to do so, we would like to bring it into operation before the date suggested by the right hon. Gentleman.
  Amendment negatived.

  NIGERIA (REMISSION OF PAYMENTS) BILL.
  Read a Second time.
  Bill committed to a Committee of the whole House, for Monday next.—[Mr. Grimston.]
  The remaining Orders were read, and postponed.
  Whereupon Mr. SPEAKER adjourned the House, without Question put pursuant to Standing Order No. 2.
  Adjourned at Three Minutes after Two o'Clock until Monday next, 5th July.

BRITISH ARMY.
  RECRUITMENT (PHYSICAL STANDARD).
  RECRUITMENT (PHYSICAL STANDARD).
  PERSONNEL (NATIONALITY).
  PERSONNEL (NATIONALITY).
  SERVICE OVERSEAS (AGE LIMIT).
  SERVICE OVERSEAS (AGE LIMIT).
  DUKE OF YORK'S HEADQUARTERS, CHELSEA.
  DUKE OF YORK'S HEADQUARTERS, CHELSEA.
  SPAIN.
  SPAIN.
  TRANSPORT (TRING-WATFORD ROAD).
  TRANSPORT (TRING-WATFORD ROAD).
  ROYAL AIR FORCE (NOISE, NIGHT FLYING).
  ROYAL AIR FORCE (NOISE, NIGHT FLYING).
  SOCIAL SERVICES (EXPENDITURE).
  SOCIAL SERVICES (EXPENDITURE).
  GOVERNMENT CONTRACTS: FAIR WAGES CLAUSE.
  GOVERNMENT CONTRACTS: FAIR WAGES CLAUSE.
  TRADE UNION ACTS.
  TRADE UNION ACTS.
Preamble
The House met at two of the clock, The EARL OF LUCAN on the Woolsack.
EXCHANGE EQUALISATION ACCOUNT BILL.
Brought from the Commons endorsed with the Certificate from the Speaker that the Bill is a money Bill within the meaning of the Parliament Act, 1911; read 1a; and to be printed.
DUNSTABLE GAS AND WATER BILL.
  ROCHDALE CORPORATION BILL.
  Returned from the Commons, with the Amendments, agreed to.

HAIRDRESSERS (REGISTRATION) BILL. [H.L.]
LORD STRABOLGI: My Lords, I beg leave to introduce a Bill to provide for the registration of hairdressers and to regulate the practice of hairdressing, and for other purposes connected therewith, and to move that it be read a first time.
Moved, That the Bill be now read 1a.—(Lord Strabolgi.)
On Question, Bill read 1a, and to be printed.

MINISTRY OF HEALTH PROVISIONAL ORDER CONFIRMATION (SELBY) BILL. [H.L.]
Read 3a (according to Order), and passed, and sent to the Commons.
MINISTRY OF HEALTH PROVISIONAL ORDER CONFIRMATION (TYNEMOUTH) BILL. [H.L.]
Read 3a (according to Order), and passed, and sent to the Commons.
CLEETHORPES CORPORATION (TROLLEY VEHICLES) PROVISIONAL ORDER BILL.
Read 3a (according to Order), and passed.
WALSALL CORPORATION (TROLLEY VEHICLES) PROVISIONAL ORDER BILL.
Read 3a (according to Order), and passed.
MARRIAGES PROVISIONAL ORDERS BILL.
Read 3a (according to Order), and passed:

MINISTRY OF HEALTH PROVISIONAL ORDER CONFIRMATION (SOUTH EAST ESSEX JOINT HOSPITAL DISTRICT) BILL. [H.L.]
Read 3a (according to Order), and passed, and sent to the Commons.
House adjourned at four minutes past two o'clock.