Sitting of 5 July 1937

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

PRIVATE BUSINESS.
Huddersfield Corporation Bill,
Lords Amendments considered, and agreed to.
Hastings Extension Bill [Lords] (King's Consent signified),
Bill read the Third time, and passed, with Amendments.
Kent Electric Power Bill [Lords],
Pontypool Gas and Water Bill [Lords],
Read the Third time, and passed, with Amendments.
Wessex Electricity Bill [Lords] (King's Consent signified),
Bill read the Third time, and passed, with Amendments.
Eastbourne Extension Bill [Lords],
Newcastle-under-Lyme Corporation Bill, [Lords],
As amended, considered; to be read the Third time.
Bristol Transport Bill [Lords],
Shoreham Harbour Bill [Lords],
Whitehaven Harbour Bill [Lords],
Read a Second time, and committed.

ORAL ANSWERS TO QUESTIONS.
  INDIA.

    ROYAL AIR FORCE.
    Mr. Dayasked the Under-Secretary of State for India the present strength of the Royal Air Force in India?
    The Under-Secretary of State for India (Lord Stanley): I would refer the hon. Member to page 277 of the Indian Defence Services Budget Estimates for 1937–38, a copy of which will be found in the Library of the House, from which he will see that provision has been made for a strength of 250 officers and 1,884 airmen.
    Mr. Day: Can the Under-Secretary of State say whether any early increase is contemplated?
    Lord Stanley: Not that I know of.

    ALL-INDIA CONGRESS COMMITTEE.
    Mr. Sorensenasked the Under-Secretary of State for India how many proceedings have been taken recently against members of the All-India Congress Committee, and the nature of their alleged offences?
    Lord Stanley: I have received no information of any such proceedings.
    Mr. Sorensen: Will the Under-Secretary make an investigation in respect of this matter?
    Lord Stanley: I regret that I can make no inquiries. Any such proceedings would

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    be taken at the discretion of the Provincial Governments, and therefore, in view of the Prime Minister's statement, I cannot undertake to make inquiries.
    Mr. Sorensen: Are we to take it that we shall never get any information with regard to proceedings against members of the All-India Congress Committee?
    Lord Stanley: Not in cases where it is a provincial matter, where authority has been given to the Provincial Governments.
    Mr. Macquisten: Have we not given home rule to India? Why should we now interfere?

    CIVIL SERVANTS.
    Mr. Sorensenasked the Under-Secretary of State for India whether the recommendations of the Esher Committee, the Innes Committee, and the Hezeltine Committee have been fully carried into effect; and whether the Government of India have received representations concerning the grievances of Civil servants at Simla?
    Lord Stanley: The recommendations of the committees mentioned were very numerous and dealt with a variety of matters. Not all of them were accepted, and I am afraid that it is not possible for me within the limits of an Oral Answer to deal adequately with the subject. If the hon. Member will give me some indication of the particular subjects on which he desires information I will make inquiries.

    SPAIN.
    Lieut.-Commander Fletcherasked the Secretary of State for Foreign Affairs (1) what specific proposals there are at present before the Non-Intervention Committee for securing withdrawal of foreign troops from Spain and the effective functioning of the commission of control; and are these proposals supported by the German and Italian Governments;
    (2) what decisions have been arrived at by the Non-Intervention Committee regarding the withdrawal of foreign troops from Spain and the functioning of the commission of control?
    Mr. Arthur Hendersonasked the Secretary of State for Foreign Affairs
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    whether he will make a statement on the present position with regard to maintaining the effectiveness of the naval control off the coast of Spain?
    Mr. Cocksasked the Secretary of State for Foreign Affairs whether, with reference to General Franco's request for the recognition of belligerency, it is still the policy of His Majesty's Government that no immediate change is contemplated?
    Mr. Vyvyan Adamsasked the Secretary of State for Foreign Affairs what progress has been made by the Non-Intervention Committee towards agreement for the general withdrawal of non-Spanish nationals from the theatre of the Spanish civil war?
    Mr. Wedgwood Bennasked the Secretary of State for Foreign Affairs the Government's present policy in the matter of the Spanish civil war; in particular, is the naval patrol to be continued and by what Powers; are the observers in Portugal to be permitted to resume their duties; are belligerent rights to be accorded; and, in general, are the Government still of opinion that the principle of Non-Intervention can be made effective?
    The Secretary of State for Foreign Affairs (Mr. Eden): As the House is aware, the Chairman's Sub-Committee of the Non-Intervention Committee met on Friday morning. At the outset of this meeting, Lord Plymouth renewed, on behalf of the United Kingdom and French Governments, their offer to take over the naval observation of the whole of the Spanish coast on the lines that had already been indicated. The German and Italian representatives then stated that, while their Governments were still unable to regard the Anglo-French proposals for filling the gap in the naval patrol as a satisfactory solution of the problem, they had had under consideration the question of finding new methods of rendering nonintervention as effective as possible. With this aim in view, the German and Italian Governments wished to submit certain proposals to the Committee. These proposals were, briefly, that all interested Powers should agree to recognise the possession by both parties in the Spanish conflict of belligerent rights: that the international system of naval patrol

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    should be abandoned: and that the rest of the present system of supervision by land and sea should be maintained.
    These proposals formed the subject of a general discussion in the sub-committee. The Belgian, Czechoslovak, Swedish and Russian representatives expressed their support of the Anglo-French proposals, and the United Kingdom representative repeated that these proposals were still maintained. The Portuguese representative considered that the wisest course would be that the committee should adjourn to enable the chairman to discuss with the representatives of the four Powers concerned the possibility of devising some method of dealing with the situation on which agreement could be secured to renew full collaboration between the four Powers. Lord Plymouth made it clear that the scheme of supervision of the Spanish coast would be deprived of an essential element if the system of naval observation were eliminated. He added that a proposal such as that made by the German and Italian Governments to continue non-intervention without a complete scheme of supervision and to grant belligerent rights to the two Spanish parties was not acceptable to His Majesty's Government. The grant of belligerent rights could not be regarded as a substitute for a complete supervision scheme.
    The sub-committee finally decided that the two sets of proposals should be communicated to all the representatives on the full committee, with a view to the situation being considered at a plenary session to be held this week. In the meantime the question of the withdrawal of foreign combatants is still before the committee, and it is the earnest hope of His Majesty's Government that it may be possible to proceed further with the discussion of this subject at an early date.
    Mr. Attlee: Can the right hon. Gentleman state when that plenary meeting will take place, in view of the danger of the position in which the French frontier remains under control, whereas the Portuguese frontier is open, and there is an absence of any control over the sea coast of the Mediterranean?
    Mr. Eden: No, Sir, I am afraid I cannot give an indication of the date. The House will appreciate that there are many considerations to be borne in mind before a date is fixed. I would not like the
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    House to assume that conditions on the Portuguese frontier are not satisfactory, though I do agree that the sea position has to be remedied as soon as possible.
    Mr. Attlee: Has the right hon. Gentleman any information as to the present position of the German and Italian warships off that coast, and whether we have any warships in that area?
    Mr. Eden: So far as I am aware there are at present no German warships at all in the Mediterranean.
    Sir Archibald Sinclair: Can the right hon. Gentleman say whether the position is that this gap on the east coast of Spain where the German and Italian ships were stationed has not been filled, and that elsewhere around the rest of the coast of Spain control is in full operation?
    Mr. Eden: Yes, that is so.
    Mr. Lloyd George: May I ask the Foreign Secretary whether there is not a complete suspension of observation on the Portuguese frontier at the present moment, and until some arrangement is arrived at it is open for the transmission of arms to the parties there?
    Mr. Eden: Yes, it is quite true that there is no observation, but it is also true that the Decree under which the observers were keeping watch remains in force, and, therefore, I should not like the House to assume that the frontier has been opened to traffic. I do not think it would be fair to make that assumption.
    Mr. Attlee: Does not the whole history of this affair show that the mere passing of decrees and signing of treaties is useless unless all the parties carry them out?
    Mr. Eden: I would ask the House to draw a distinction on this matter with respect to the Portuguese Government.
    Mr. Sandys: In view of the fact that my right hon. Friend previously stated that recognition of belligerent rights is not incompatible with a policy of non-intervention, can he tell us whether, as a compromise, the Committee have considered the possibility of granting belligerent rights, not as an alternative, but in addition to a system of arms control?
    Mr. Eden: I cannot debate these matters now, but the House will be aware

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    that there are special circumstances in relation to the present situation. One of them is the presence of large numbers of non-Spanish nationals on this coast.
    Mr. Attlee: Will the right hon. Gentleman be in a position to-morrow to state when the plenary meeting will take place?
    Mr. Eden: I cannot give any undertaking, because it means consultation with other Governments.
    Mr. Benn: How long are the Government willing to permit one sided nonintervention to continue?
    Captain Cazalet: Is the coast of the Spanish Government at the present moment open to ships of all kinds to go in?
    Mr. Eden: Yes, Sir, that is so, except so far as the scheme by which the ships have to submit to certain rules remains in force.
    Mr. Gallacher: Does not the granting of belligerent rights mean granting belligerent rights to Germany and Italy?
    Mr. Thurtle: Could the Foreign Secretary say whether all the parties to the non-intervention scheme, with the exception of Germany, Italy and Portugal, support the British-French proposals?
    Mr. Eden: I cannot say what the full Committee will do, but the Portuguese Government did not oppose the Anglo-French proposals.
    Mr. Cocksasked the Secretary of State for Foreign Affairs whether, in view of the assurance given to the Non-Intervention Committee by the Italian representative that no Italian volunteers have left Italy for Spain since the ban was agreed upon, he will inquire whether similar assurances can be given concerning the despatch of regular troops from Italy, of Italians who have become naturalised Spaniards before leaving Italy, and of Arab troops from Libya?
    Mr. Eden: I understand that the Non-Intervention Board have no evidence of foreign nationals having arrived in Spain from any quarter since the ban was agreed upon.
    Mr. Cocks: Will the right hon. Gentleman make inquiries in Rome as to whether Italian subjects are recruited at
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    the Mussolini Baracks in Rome, naturalised as Spanish subjects, then sent to Naples and shipped to Spain?
    Sir William Davisonasked the Secretary of State for Foreign Affairs, what action has been taken by the British Government, and with what result, as to the shooting by Spanish Government forces at Bilbao, on 16th June, of a British subject, Miss Bridget Boland, an Irish lady who was a governess to a Spanish family in Bilbao?
    Mr. Eden: I understand that the Irish Free State Government are making inquiries into this matter.
    Sir W. Davison: Do not the British Government recognise their responsibility for the safety of British citizens from whatever part of the Empire they may come?
    Mr. Eden: Yes, Sir, but I understand that the Irish Free State are represented in Spain, and are therefore able to look after the matter themselves.
    Mr. Macquisten: But what power have the Irish Free State behind them? None whatever.
    Miss Rathboneasked the Secretary of State for Foreign Affairs whether, in view of the fact that the evacuation of women, children, and old men from the Basque country has been impeded by the reluctance of the French Government to increase the heavy expenditure they have already incurred in receiving into France nearly 30,000 Spanish refugees, of whom many thousands are being maintained at the French Government's expense, he will recommend and, if necessary, obtain legislative sanction for some grant from public funds to aid in the evacuation, transit, and maintenance of Basque refugee women, children, and old men, whether in this or some other country?
    Mr. Eden: I would refer the hon. Member to the reply which I gave to a question asked by my hon. and gallant Friend the Member for Cambridge (Lieut.-Commander Tufnell) on 3rd March, in which I explained fully the conditions under which His Majesty's Government were prepared to contribute towards the relief of Spanish non-combatants. The offer of His Majesty's Government to play their part in such humanitarian work

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    under these conditions still holds good. As regards the question of the maintenance of further Basque refugees, I am informed that the French Government are prepared to allow Basque women, children and men of non-military age to pass in transit through France to other parts of Spain. This solution of the problem appears to possess the advantage that it does not involve the maintenance of Spanish refugees outside Spain.
    Miss Rathbone: Is it not a fact that the reply on 3rd March referred to negotiations with the Spanish Government, and in view of the tremendous burden now placed upon the Basques by the presence of vast numbers of refugees, would not His Majesty's Government consider giving some financial aid—[HON. MEMBERS: "Why?"]—in view of the fact that those Basques who have been brought to this country are being maintained wholly by private subscribers?
    Vice-Admiral Taylor: Is my right hon. Friend not aware that it would be better to give a public grant to provide sufficient milk for our own school-children, a policy of which the hon. Lady is an ardent supporter, before providing for children from other countries?
    Mr. Macquisten: Will the right hon. Gentleman see that, if any more Spanish children are brought into this country, all women in this country who have no children shall be compelled to adopt half a dozen?
    Miss Rathbone: May I have an answer to my question?
    Mr. Macquisten: And an extra £200 a year to bring them up?
    Mr. Cocksasked the Secretary of State for Foreign Affairs whether he has received any recent reports as to the present position in Majorca and Minorca; and whether he can give any information on the subject?
    Mr. Eden: I receive regular reports from the British Consul at Palma, but they do not call for any special comment. I have no information as to the situation in Minorca.
    Mr. Cocks: Can the right hon. Gentleman say whether Majorca still remains practically an Italian base, or have the Italian forces been withdrawn since the assurance given by the Italian Govern-
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    ment to His Majesty's Government some time ago?
    Mr. Eden: I can make no statement on that, but His Majesty's Government's position about the territorial integrity of Spain has been clearly expressed again recently.
    Miss Rathboneasked the President of the Board of Trade whether he is aware that General Aircraft, Limited, of Croydon, has been informed that export licences for the supply of Monospar air-ambulances to the Basque Government cannot be allowed; and whether, in view of the terms of Article 18 of the Geneva Convention of 1929, he will now reconsider this decision?
    Mr. R. S. Hudson (Secretary Overseas Trade Department): I presume that the hon. Member refers to the replies given to certain inquiries, which were not supported by evidence that the aircraft in question were in fact destined for Red Cross use. Any application for an export licence for ambulance aircraft for Spain supported by an approved Red Cross organisation will certainly be sympathetically considered.
    Miss Rathbone: Is it not the case that the Red Cross organisation is not working in Spain; and would it not suffice if the application were supported by some recognised organisation that was working in Spain?
    Mr. Hudson: I have nothing to add to the answer I have already given. If it were an approved Red Cross organisation, the matter would be sympathetically considered.
    Miss Rathbone: May I press the point that the Red Cross organisation has declined to work in Spain? Is it fair to deprive the Basque Government of these ambulances if the Red Cross organisation refuses to work in Spain and has nothing in Spain? Neither the international Red Cross nor the British Red Cross has a single ambulance in Spain.
    Mr. Benn: What does the hon. Gentleman mean by "approved Red Cross organisation" for this purpose?
    Mr. Hudson: As far as I am aware none of the applications received have been from organisations that could be classed as approved Red Cross organisations.
    Mr. Benn: Does the hon. Gentleman mean to say that if he considers the organisation making the application is not an approved Red Cross organisation, for this purpose, he then declines to allow these ambulances to be supplied to Spain?

    SUEZ CANAL COMPANY.
    Mr. Dayasked the Secretary of State for Foreign Affairs when each of the present British Government directors on the board of the Suez Canal Company were appointed; the number of meetings that have been held by this board during the 12 months ended to the last convenient date and the remuneration received by them during this period; and by what means communications pass between these directors and the Government?
    Mr. Eden: The dates requested in the first part of the hon. Member's question are 28th January, 1920, 4th December, 1922, and 30th September, 1926, respectively. As regards the second part of the question, I understand that the board meets once a month, or more often if occasion requires. My information is that the sum distributed to the whole board of 32 directors for the year 1936 was 12,515,800 French francs. As regards the third part, official communications between the British Government directors and His Majesty's Government take the form of despatches addressed by them to my Department in the customary form.
    Mr. Day: Can the right hon. Gentleman say for how long these appointments are made?
    Mr. Eden: Not without notice.
    Mr. Thurtle: Are there any vacancies on this board?

    RUSSIA.
    Captain Ramsayasked the Secretary of State for Foreign Affairs how many countries, members of the League of Nations, still refuse the diplomatic recognition of the Union of Soviet Socialist Republics?
    Mr. Eden: According to the information in my possession, the number of foreign countries, members of the League of Nations, which refuse diplomatic recognition to the Soviet Union, is 25.
    Captain Ramsay: Can the right hon. Gentleman say whether the reason for refusing recognition in every case is the subversive propaganda which is carried on by Soviet Russia whenever diplomatic recognition is granted?
    Mr. Eden: I can only answer for His Majesty's Government, and not for the 25 members of the League.
    Captain Ramsay: In view of the fact that all these countries are members of the League of Nations, would His Majesty's Government consider whether they could take any action through the League of Nations Council?
    Mr. Eden: There is another question on the Paper.
    Captain Ramsayasked the Secretary of State for Foreign Affairs whether he is aware that the Third International is still spending large sums of money in Great Britain on subversive propaganda of every kind; and, in view of the fact that His Majesty's Government now hold the Government of the Union of Soviet Socialist Republics responsible for the actions of the Third International, will he now take vigorous steps to induce them to refrain from this violation of their undertakings?
    Mr. Eden: I would refer my hon. and gallant Friend to the reply which I gave on 23rd June to a similar question asked by my hon. Friend the Member for Central Newcastle-on-Tyne (Mr. Denville).
    Captain Ramsay: Can I have an answer to the question as to whether the Soviet Government are held responsible for the actions of the Third International; and whether in view of the body of opinion in the League of Nations Council, and the evidence in this country of Soviet propaganda, the right hon. Gentleman will take any action which will put a stop to this violation of their undertakings?
    Mr. Eden: The hon. and gallant Member talks of evidence. If he has any evidence and will submit it to me, I will consider it.
    Captain Ramsay: Is the right hon. Gentleman aware that the Under-Secretary in a reply to me admitted that there was evidence?
    Mr. Gallacher: If the hon. and gallant Member gets this information and submits it to the right hon. Gentleman, will he also submit it to me?

    FRANCE AND RUSSIA.
    Captain Ramsayasked the Secretary of State for Foreign Affairs whether he can give the House any information regarding the negotiations which took place before the Franco-Soviet alliance was entered upon; and whether Great Britain was consulted or not?
    Mr. Eden: I would refer my hon. and gallant Friend to Command Paper No. 5143 of 1936, and, in particular, to document No. 59 of that publication which summarises in convenient form the history of the negotiations in question. His Majesty's Government were kept generally informed of the progress of the negotiations.
    Captain Ramsay: In view of the fact that the Soviet subversive propaganda is a more formidable weapon than the Soviet army, and that this more formidable machine would be enabled to operate with special facility were this country an ally during a war, will my right hon. Friend represent to the French Government any treaty exposing us to such risks is viewed with grave concern by this country?

    GERMAN PROPAGANDA LEAFLET.
    Mr. McEnteeasked the Secretary of State for Foreign Affairs whether he has considered the copy sent to him of a German propaganda leaflet now being distributed in this country purporting to be part of a radio address by one Roland E. Strunk, a German Press correspondent, issued by the Fichte Association, Fichte Bund, printed in Hamburg and marked "No. 942, English"; and what steps he proposes to take in the matter?
    Mr. Eden: I have read the leaflet of which the hon. Member was good enough to send me a copy, but I do not consider that it calls for any action on my part.
    Mr. McEntee: Does not the right hon. Gentleman agree that literature of this kind makes it difficult to maintain a peaceful atmosphere in the country, and ought not some action to be taken to prevent its importation?
    Mr. Eden: The hon. Member will appreciate that the entry of propaganda into this country is not a matter for the Foreign Office. I am only concerned with whether or not the propaganda is directed against this country.
    Mr. McEntee: Is it not directed against a friendly nation, and therefore calls for some action?

  TRADE AND COMMERCE.

    RUSSIA.
    Sir W. Davisonasked the Secretary of State for Foreign Affairs whether, seeing that the temporary commercial agreement between Great Britain and the Russian Soviet Government of 16th February, 1934, has proved in many ways unsatisfactory, and that the supplementary agreement for a financial credit of £10,000,000 in connection with trade between Great Britain and Russia will terminate on 30th September next, notice will now be given to abrogate the temporary agreement with the object of entering into a permanent treaty of commerce and navigation in which proper provision could be made for settling all outstanding differences which at present retard the growth of trade between the two countries, including the question of claims of British nationals and the granting of a long-term loan for the purchase of British manufactures over a period of years, in place of any renewal of the short-term financial credit agreement?
    Mr. Eden: His Majesty's Government are fully alive to the desirability of concluding a permanent treaty as soon as there is any prospect of the conditions laid down for its conclusion being satisfied. Among these conditions, as has frequently been stated, His Majesty's Government attach great importance to a satisfactory solution of the claims of British creditors. I can assure my hon. Friend that the whole position will be kept carefully under review.
    Sir W. Davison: While thanking the right hon. Gentleman for his reply, do the Government recognise that a series of temporary agreements extending over a period of years is something in the nature of a permanent agreement, which it was promised by the British Government would not be entered into until these debts, to Britain have been dealt with?
    Mr. Eden: I see the point of my hon. Friend's contention, but I would not like to deal at Question Time with the difference between the temporary and permanent character of these agreements.

    PARIS EXHIBITION (BRITISH PAVILION, FASHION DISPLAY).
    Miss Wardasked the Secretary to the Overseas Trade Department who is responsible for the fashion display in the British pavilion at the Paris Exhibition; and whether he will give instructions for the removal of an exhibit which falls far short of the high standards expected by British people to be shown as representative of our workmanship?
    Mr. R. S. Hudson: Acting on the recommendation of the Gorell Committee of 1932, His Majesty's Government invited the Council for Art and Industry to co-operate on this occasion. At the request of the Government, the Council undertook responsibility for the design of the United Kingdom Pavilion; for the selection of exhibits in this country, and for their arrangement and display in Paris. I am informed by the Chairman of the Council, who has just returned from Paris, that, owing to a necessity to alter the settings for the dress section at a late date, it is recognised that this section falls behind the general standard of display, and that steps are already being taken to alter the settings with a view to the adequate display of the articles selected.
    Miss Ward: While thanking the hon. Gentleman for that statement, which will cause great satisfaction to many visitors to the Paris Exhibition, may we have an assurance that if we take part in any further exhibitions in future, we shall not have to make an alteration in the goods supplied by this country at which foreigners go to look?

    FILM INDUSTRY.
    Mr. Remerasked the President of the Board of Trade whether he will assure the House that, in the new legislation contemplated, the object of Government policy is to be the development of British film production in Great Britain rather than the development of American film production in Great Britain?
    The Parliamentary Secretary to the Board of Trade (Captain Euan Wallace): The object of the proposed legislation will
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    be to encourage the production in Great Britain of films which conform to certain statutory requirements designed to ensure that they are preponderantly of British origin.
    Mr. Remer: Is the right hon. and gallant Gentleman aware that American film producers are organising themselves in such a way that American films will be produced in this country but with the employment of very little British labour?
    Captain Wallace: If that were the case, they would not conform to the statutory requirements necessary for the renters' quota, and would not count.
    Mr. Remer: If I send my right hon. and gallant Friend the information at my disposal, will he look into the situation?
    Captain Wallace: I shall be delighted to do so.
    Mr. R. C. Morrison: Will the right hon. and gallant Gentleman also take steps to prevent the continued exploitation of the British film industry by certain financial interests in this country?
    Captain Wallace: That is a different question.

    STEEL (EXPORTS).
    Mr. Thorneasked the President of the Board of Trade whether it is the intention of the Government to see that all British manufacturers who use steel are fully supplied before they sanction the export of any steel?
    Captain Wallace: My right hon. Friend fully appreciates the importance of securing adequate supplies to British manufacturers who use steel, and every effort is being made to ensure that the requirements of steel users in this country are met; but he is satisfied that it would not in the long run be in the interest of British trade to place restrictions upon exports.
    Mr. Lyons: Can the right hon. and gallant Gentleman say whether any system of rationing steel, according to the needs of users, is under the consideration of the Government?
    Captain Wallace: Perhaps my hon. and learned Friend would put that question down.

    ARMAMENTS PURCHASE (TREATY OBLIGATIONS).
    Miss Rathboneasked the Secretary of State for Foreign Affairs what are the

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    names of the countries to which we are bound by treaty obligations to permit the purchase of arms or munitions from this country?
    Mr. Eden: The annexure to the Treaty of Alliance between the United Kingdom and Iraq of 30th June, 1930, provides that His Majesty's Government undertake to grant, whenever they may be required by His Majesty the King of Iraq, all possible facilities, inter alia, in the matter of the provision of arms, ammunition, equipment, ships and aeroplanes of the latest available pattern for the forces of His Majesty the King of Iraq. As recorded in a Note attached to the Anglo-Egyptian Treaty of Alliance of 26th August, 1936, His Majesty's Government undertake to use their good offices to facilitate the supply of such armament and equipment from the United Kingdom at prices similar to those which would be paid by His Majesty's Government whenever the Egyptian Government so desire. By notes exchanged with the Government of Saudi Arabia on 20th May, 1927, and 3rd October, 1936, His Majesty's Government have stated that if the Government of Saudi Arabia should place orders for arms, ammunition and war material with British manufacturers His Majesty's Government will not, subject to the regulations in force in the United Kingdom at the time of exportation, prevent the export thereof or place any obstacle to their importation into Saudi Arabia.

    CZECHOSLOVAKIA.
    Mr. Sorensenasked the Secretary of State for Foreign Affairs whether he has any statement to make respecting conditions in Czechoslovakia; whether he is aware of propaganda designed to disintegrate that State; and whether the alleged grievances of minorities are likely to be considered by the League of Nations at an early date?
    Mr. Eden: I have no general statement to make regarding conditions in Czechoslovakia. As regards the second part of the question, no State, so far as I am aware, is wholly immune from propaganda designed to disintegrate it either from within or without. A minorities petition from members of the Sudetendeutsch party in Czechoslovakia came before the appropriate organ of the League of
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    Nations last autumn, but the matter was closed, after careful examination, in May last. So far as I am aware, no other petition dealing with the position of minorities in Czechoslovakia is at present before the League, but it is always possible for the general question of minorities to be discussed at the Assembly.
    Mr. Sorensen: Is the right hon. Gentleman aware that a body styling itself the Slovak Council has been sending propaganda to this country regarding Czechoslovakia, and, in view of that fact, can he inform the House as to the status of this particular body?
    Mr. Eden: I was not aware of it. Perhaps the hon. Member will be good enough to give me particulars.
    Mr. Hannah: Are the Government responsible for all forms of propaganda?
    Mr. Dalton: Is it not well known that the minorities of Czechoslovakia are much more considerately treated than any other minorities in Europe?

    GREAT BRITAIN AND JAPAN.
    Mr. Joelasked the Secretary of State for Foreign Affairs whether he can make any statement on the proposed Anglo-Japanese negotiations?
    Mr. Eden: I would refer my hon. Friend to the statement which I made on this subject during the Debate on 25th June. I am not at present in a position to add anything to that statement.

  AGRICULTURE.

    MILK MARKETING SCHEME.
    Mr. De la Bèreasked the Minister of Agriculture whether he can make some statement before 30th July, 1937, as to the amount of contributions that producer-retailers licensed by the Milk Marketing Board will be required to make under the scheme?
    The Minister of Agriculture (Mr. W. S. Morrison): I hope to be in a position to lay before the House this month, draft amendments of the Milk Marketing Scheme, one of which will provide for a revised basis of assessment of producer-retailer contributions.
    Mr. De la Bère: Arising out of that answer, may I ask my right hon. Friend whether he will bear in mind now that what the farmer wants is 2½ per cent. long-term credit—not 5 per cent.?
    Mr. Morrison: That seems to me to be an entirely different question, and I should be obliged if the hon. Member would put it on the Paper.
    Mr. Macquisten: Why should the retailer have to contribute to this scheme when he gets no benefit? He sells to his own customers.
    Mr. Lambertasked the Minister of Agriculture whether he is aware that the price of milk powder has been increased from 17s. 6d. per cwt. in June, 1936, to 25s. per cwt. in June, 1937, despite the fact that the factories are not paying the Milk Marketing Board a higher price for milk; and what steps he intends to take to deal with the situation?
    Mr. Morrison: I am aware that during the period referred to the price of milk powder has risen, but it is not the case that the prices of milk sold for manufacture have remained unchanged. Since October last, such prices have ranged between 5½d. and 6¾d. per gallon; the price from June to September, 1936, was 4½d. per gallon.
    Mr. Lambert: Is it not a fact that the milk marketing scheme benefits the processors and the distributors, but not the farmers?
    Mr. Morrison: No, Sir, I should not accept that general statement.

    POULTRY INDUSTRY.
    Mr. Mathersasked the Minister of Agriculture when he will make a statement of Government policy in relation to the poultry industry?
    Mr. W. S. Morrison: I am not in a position to say when it will be possible for me to make a statement on this subject.
    Mr. Mathers: Is not the right hon. Gentleman aware that there is much disappointment with him and the Government which he represents about the policy on this subject not being stated before now, and may we have generally an indication of whether there will be a statement before the Recess?
    Mr. Morrison: One uncertain factor in the matter is that there is an application before the Import Duties Advisory Committee for an increased duty on eggs in shells. Until the report of that committee has been received, it is not possible to consider the matter in all its stages.
    Mr. Mathers: When may we expect it?
    Mr. Morrison: That depends on the committee.
    Mr. T. Williams: Is the right hon. Gentleman aware that the price of eggs has increased in this House this week?
    Mr. Morrison: I am aware that there has been an increase throughout the country.
    Mr. Macquisten: Why does the poultry policy take such a long time to hatch? If it is much longer, it will be addled.

  POST OFFICE.

    STOKE-ON-TRENT (NEW BUILDING).
    Mr. Ellis Smithasked the Postmaster-General where it is proposed to build the Stoke-on-Trent new post office?
    The Postmaster-General (Major Tryon): No decision on the situation of the Stoke-on-Trent new post office has yet been reached, but various possible sites are being considered.
    Mr. Smith: Will the Postmaster-General consider the site recommended by the city council?
    Major Tryon: All suitable sites will be considered.

    LOTTERY TICKETS (TRANSMISSION).
    Mr. Dayasked the Postmaster-General whether he is aware that lottery tickets are being transmitted to England through the mails from Continental countries; and whether the Post Office are taking any steps to stop the transmission of these communications through the post?
    Major Tryon: It is well known that the transmission of lottery material through the post in this country is not permitted. Such steps as are practicable are taken to prevent the post from being used for this purpose, but it would not be in the public interest to detail the measures taken.
    Mr. Day: Are advertisements for these Continental lotteries allowed to circulate?
    Major Tryon: That is a different question. Perhaps the hon. Member will put it down.

    SAVINGS BANK.
    Mr. Lyonsasked the Postmaster-General what was the number of depositors in the Post Office Savings Bank and the aggregate amount of their deposits at the 30th June, 1937, or the latest convenient date?
    Major Tryon: The number of depositors in the Post Office Savings Bank on 30th June, 1937, was approximately 10,500,000, and the aggregate amount of their deposits with accrued interest was £455,000,000.
    Mr. Lyons: Do these figures constitute a record?
    Major Tryon: Yes, and they represent an increase since 30th June last of 300,000 depositors and a total sum of £40,000,000 added to the deposits.
    Mr. George Griffiths: Does not that show that the people in this country have confidence in a national, rather than a private bank?
    Major Tryon: It shows that they have confidence in this Government.

    SUB-POSTMASTERS (HOLIDAYS).
    Colonel Goodmanasked the Postmaster-General what facilities are allowed by his Department to sub-postmasters to take annual leave; and what facilities his Department requires sub-postmasters to grant to their employés in the way of holidays?
    Major Tryon: A sub-postmaster is not required to render personal service and he is free to absent himself at any time for the purpose of a holiday, provided he makes satisfactory arrangements for the conduct of the office during his absence. As regards his assistants, a sub-postmaster is expected to grant conditions of service, including holidays, not less favourable than those of shop assistants of about the same standing in the service of good employers in the same district.
    Colonel Goodman: Does not my right hon. and gallant Friend consider it to be illogical for the Post Office not to grant holidays to sub-postmasters and at the same time to require sub-postmasters to
    22
    treat their employés on the same standard as the best employers in the district?
    Major Tryon: If my hon. and gallant Friend will read my answer, he will see the reason for the present arrangement.

  UNEMPLOYMENT.

    TEAM VALLEY TRADING ESTATE.
    Mr. Sextonasked the Minister of Labour (1) the number of unemployed persons from the South-west Durham area now engaged on temporary work preparing the Team Valley trading estate; and the total number of unemployed from the same special area who are now permanently employed in factories on the same trading estate;
    (2) the total number of unemployed persons who have been found work in the factories now opened at the Team Valley trading estate?
    The Parliamentary Secretary to the Ministry of Labour (Mr. Butler): I cannot say how many of the 1,200 persons engaged in laying out the Team Valley Trading Estate have come from Southwest Durham. As regards the number of persons employed in the factories, I have nothing to add to the reply given to the hon. Member for Houghton-le-Spring (Mr. W. Joseph Stewart) on 24th June.
    Mr. Sexton: Is the Minister aware that there are hundreds of people in South-West Durham who are 40 miles away from this trading estate, and who, therefore, cannot get work there?
    Mr. Dalton: May we have an answer? Is there no system whereby the exchanges from which the workers come to the Team Valley Estate are recorded? Is there no record of the places whence they come?
    Mr. Butler: I understand there is no record of the actual places they which come.
    Mr. Shinwell: Is the hon. Gentleman aware that in the previous answer to which he referred, he was unable to state how many men were actually being employed in the factories on the trading estate; and why can he not supply those figures?
    Mr. Butler: The hon. Gentleman is not correct. In the previous answer to which I referred, the exact number of workers was not given.
    Mr. Shinwell: That is my point. Why is the hon. Gentleman unable to say how many workpeople are now engaged in these factories?
    Mr. Butler: The work in the factories is of a preliminary nature. I can give no exact figures at the present time. When I have the exact figures, I shall give them to the hon. Gentleman.
    Mr. Dalton: Will the hon. Gentleman ask for information from the Employment Exchanges in the area as to how many men have gone from each exchange to this work? The information is available.
    Mr. Butler: The expression "South Durham" is a very general one. I will certainly endeavour to get the information if it is in my power to do so.
    Mr. Dalton: Is not the term used "South-West Durham," and is not that well known in the Ministry of Labour by this time?

    LIVERPOOL.
    Mr. Kirbyasked the Minister of Labour how many vacancies for work-people were filled by the Employment Exchanges in Liverpool during the year 1936; what were the proportions in terms of men, women, boys, and girls; and what were the numbers in respect to the Corporation of Liverpool?
    Mr. Butler: The total number of vacancies filled through Employment Exchanges in Liverpool and Bootle during the year 1936 was 78,459, of which 41,905 were for men, 7,727 for boys, 17,743 for women and 11,084 for girls. I regret that separate statistics for corporation vacancies are not available.
    Mr. Kirby: Does not the hon. Gentleman think that that is an exceedingly low number as regards the men, and cannot he take steps to increase it?
    Mr. Butler: The exchanges always do their best to increase these numbers.

    SUGGESTED WORLD CONFERENCE.
    Mr. A. Hendersonasked the Prime Minister whether he is aware of the joint statement issued by President Roosevelt and the Belgian Prime Minister in relation to the work of rebuilding international trade co-operation in monetary matters and the reduction of armaments;
    24
    and whether he will offer the co-operation of His Majesty's Government with a view to the summoning of a world conference or otherwise facilitating the attainment of such objectives?
    The Prime Minister (Mr. Chamberlain): The answer to the first part of the question is in the affirmative. As regards the second part, I would refer the hon. Member to the answer which my predecessor gave to him in reply to a question on 22nd April.
    Mr. Henderson: In view of the fact that the international situation is steadily deteriorating, does not the Prime Minister consider this to be an urgent matter, and will he not approach President Roosevelt with a view to assembling such a world conference?
    The Prime Minister: It is rash to assume that you can solve the difficult problems in the world merely by calling a world conference. It must be preceded by very careful preparation.
    Sir A. Sinclair: Has the attention of the Prime Minister been drawn to an article in the journal "Foreign Affairs" by the economic adviser to the Secretary of State in Washington, in which he points out that the real obstacle to an agreement of this kind is the fixed margin of preference in the Ottawa Agreements; and are the Government prepared to deal with that obstacle?
    The Prime Minister: No, Sir; I have not seen the article, and I do not agree with that conclusion.
    Mr. Lansbury: Are the Government taking any preparatory steps to bring about such a conference, whether it is a world conference or a more limited one?
    The Prime Minister: The Government have shown their willingness to co-operate for the purposes mentioned in the question, both in entering into the Tripartite Monetary Agreement and also, in conjunction with the French Government, in asking the Belgian Prime Minister to make a series of inquiries, about which I am hoping to hear from the Belgian Prime Minister himself this afternoon.
    Mr. Lennox-Boyd: Is it not a fact that this country in the last five years has

    25
    bought £350,000,000 worth more manufactured goods from America than America bought from us?
    Sir John Haslam: Will my right hon. Friend inform America that example is better than precept where tariffs are concerned?

  TRANSPORT.

    ROAD MATERIAL, GLAMORGANSHIRE.
    Sir Cooper Rawsonasked the Minister of Health whether he has any information about a proposal that the Glamorgan County Council should acquire and work a quarry for road-stone; whether he is aware that ample supplies of granite for roads can be obtained from privately-owned quarries in England and Wales; and whether he can give particulars of any municipally-owned quarry which, after allowing for the full costs of management, transport and depreciation of machinery, is producing stone at less than contract prices?
    The Parliamentary Secretary to the Ministry of Transport (Captain Austin Hudson): I have been asked to reply. I understand the council have such a proposal in mind, but I have no details; the answer to the second part is in the affirmative. I have not available the particulars asked for in the third part, but where materials obtained by local authorities from their own quarries are used on grant-aided works, my right hon. Friend requires to be satisfied that the prices charged are reasonable.
    Mr. Morgan Jones: Does not the Minister think that it is best to leave the internal affairs of Glamorgan county to the members of that area?
    Mr. G. Griffiths: Is the Minister aware that the West Riding has a small quarry which has already brought the price of private stone down by 1s. 6d. per ton?

    ROAD-SURFACE TESTS.
    Sir C. Rawsonasked the Minister of Transport how many local authorities have made use of the apparatus mounted on motor-cycle and side-car combinations for measuring road-surface resistance to skidding; and whether, in view of the fact that slippery roads reduce the braking efficiency of cars, he will take steps to test roads, with or without the consent of the
    26
    local authority, simultaneously with the testing of the braking efficiency of cars?
    Captain Hudson: Tests have been made by means of this type of apparatus in the areas of 41 local authorities. It is not necessary to test the resistance to skidding of a road in order to determine whether the brakes of a vehicle are efficient.

    LIGHT-CONTROLLED CROSSINGS.
    Mr. H. G. Williams (for Sir George Mitcheson)asked the Minister of Transport whether he will place in the Vote Office copies of the circular he proposes to issue to highway authorities on the subject of the duration of the amber light at light-controlled crossings?
    Captain Hudson: I will gladly send my hon. Friend, and other Members who have asked for it, a copy of the circular when it is issued.

  EDUCATION.

    MUSEUMS (VISITS).
    Mr. E. Smithasked the Parliamentary Secretary to the Board of Education whether he will give consideration to the need for the organisation of parties from elementary schools to visit the science museums and the Royal Botanic Gardens; and will he arrange for each county to be allocated certain months each year to enable the children to visit in organised school parties?
    The Parliamentary Secretary to the Board of Education (Mr. Kenneth Lindsay): The organisation of educational visits for children attending public elementary schools is a matter for the local education authorities for the schools concerned, but the authorities of the museums and gardens to which the hon. Member refers are glad at all times to facilitate such visits in every way possible to them. In this connection I would call the hon. Member's attention to the board's pamphlet "Museums and the Schools," of which I am sending him a copy. I should certainly be glad if still more could be done by local education authorities to familiarise school children with the nation's treasures housed in the various museums. I must point out, however, that considerations of distance and expense render visits to institutions in London difficult, if not impossible, for children from the more distant parts of England and Wales, and that there are

    27
    very many admirable local museums scattered up and down the country. As regards the second part of the hon. Member's question, the allocation of fixed periods to particular areas would not be likely to serve any useful purpose, since visits of children to museums, to be of educational value, need to fit in with the curriculum of the schools concerned.
    Mr. Smith: Is the Parliamentary Secretary aware that there are no science museums in the country to be compared with the national museums in London, and is he aware of the education which could be derived from visits to these museums? In view of that, will he issue a circular to education authorities recommending that their scholars should be put on the same basis as the London scholars?
    Mr. Lindsay: That is rather a big question.
    Mr. Macquisten: Is the hon. Gentleman aware that taking children to museums gives them very bad headaches?
    Mr. McEntee: Will it be possible to make arrangements for parties of older school children to visit picture galleries on days other than public days?

    FREE MEALS IN SCHOOLS.
    Mr. Ridleyasked the Parliamentary Secretary to the Board of Education how many borough councils, county borough councils, and county councils, respectively, supplied free solid meals to school children in 1936?
    Mr. Lindsay: During the year which ended on 31st March, 1937, free solid meals were provided for school children in England and Wales by nine county councils, 68 county borough councils, 49 borough councils and 15 urban district councils.
    Mr. Ridley: Will the Parliamentary Secretary be good enough to consider the considerable disparity between the county borough figures and the county council figures, and do what he can to bring the county council policy into line with the county borough policy in this matter?
    Mr. Lindsay: I think the hon. Gentleman knows that there is difficulty in the scattered rural areas in dealing with this problem, but I am having a look at it.
    Mr. Shinwell: Is not the small number of free school meals supplied due to the policy of the Government?
    Mr. Lindsay: It has nothing whatever to do with the policy of the Government.

    ALIEN (SENTENCE, READING).
    Mr. V. Adamsasked the Secretary of State for the Home Department whether he will review the sentence of six months hard labour, for failing to report as an alien, passed at Reading, on or about 31st May, on Hugo Nathan, aged 54, a German Jew and fugitive from the Nazi terror?
    The Secretary of State for the Home Department (Sir Samuel Hoare): The sentence imposed on this person was imprisonment for six weeks, not six months. He arrived in this country on 11th December last and was allowed to land for a business visit of nine days. He failed to leave within the period authorised, and after his case had been carefully investigated was given a final warning in January that he must leave within a week. Instead of doing so he disappeared and it was not until 22nd May that he was found by the police at Reading. I see no ground for advising any remission of sentence.
    Mr. Adams: Will the Secretary of State accept my regret for the unfortunate mistake I made?

    NEW PERIODICALS (POLICE INQUIRIES).
    Mr. T. Williamsasked the Home Secretary whether it is the practice of Scotland Yard to interview some person or persons in connection with the production of every new magazine or periodical; if so, will he state the number of new periodicals or magazines that have started during the last 12 months; and how many persons were questioned concerning them?
    Sir S. Hoare: I am informed by the Commissioner of Police that it is the practice to make inquiries of the kind referred to, but only if there are special reasons such as suggestions of libel, obscenity or sedition. No statistics are kept of the number of inquiries made in such circumstances or of the number of new periodicals, but I am informed that the number of inquiries is negligible compared with the number of new periodicals.
    Mr. Williams: Can the right hon. Gentleman say on what Scotland Yard based their calculations when they sought information because a magazine organised by Indian students had been produced, and what special reason was there to feel that they were more seditious than other people?
    Sir S. Hoare: The hon. Member's information is not entirely correct. What happened was that the police were informed that these individuals were starting a new movement and collecting money for it. In accordance with the usual police practice, they made inquiries, and during the inquiries one of the individuals concerned offered a police officer a copy of this periodical for him to look at.
    Mr. Williams: Were not Scotland Yard aware that the Provincial Governments for many years subsidised the Indian student movement in this country to the extent of £800 per annum, and does not the right hon. Gentleman think that that in itself indicated that they were a perfectly bona fide body to publish a magazine?
    Sir S. Hoare: I think it was necessary, in view of the fact that these individuals were collecting money, that the police should inform themselves of the object for which the collection was being made.
    Mr. De la Bère: Will the right hon. Gentleman start a magazine "Great Britain comes first"?

    INCOME TAX (CHARITABLE GIFTS).
    Mr. R. Gibsonasked the Chancellor of the Exchequer how much is the loss to the Treasury when a sum of £2,000,000 is expended on educational or charitable objects by equal instalments over a period of seven years by a person liable to pay Income Tax at the present rate and Super-tax at the maximum rate?
    The Financial Secretary to the Treasury (Lieut.-Colonel Colville): I presume the hon. Member has in mind an annual payment which, having regard to the provisions of Section 20 of the Finance Act, 1922, would be allowable as a deduction in computing an individual's total income for Income Tax purposes. The highest rate of Income Tax and Sur-tax combined is 13s. 3d. in the £ and there is a loss of Tax at that rate in so far as any annual
    30
    payment to a charity is a deduction for Income Tax purposes from income chargeable at that rate, which, on the figures contained in the hon. Member's question, would amount to £1,325,000.
    Mr. Gibson: Does that mean that in such a gift a sum of something like £1,325,000 comes out of public funds, whereas only something like £675,000 instead of £2,000,000 comes out of the pockets of the alleged benefactor, say, to the University of Oxford?
    Lieut.-Colonel Colville: I rather resent the suggestion in "alleged benefactor." When the benefaction is given, if only a portion of it comes from the man's retainable income, it must be regarded as such, but the hon. and learned Member can draw his own conclusions from the answer I have given.
    Mr. Macquisten: Will the Financial Secretary refuse to accept any suggestion from the other side that will discourage education or charity?

  GOVERNMENT DEPARTMENTS.

    SPARE-TIME POSTS.
    Mr. Loganasked the Financial Secretary to the Treasury whether he is aware that ex-service men and other applicants for employment in His Majesty's Customs as spare-time watchers or other similar posts are not considered unless they are in receipt of life pensions from the Army or Navy; and is he prepared to give non-pensioners with good character employment?
    Lieut.-Colonel Colville: The reply to the first part of the question is in the negative. Ex-service men who are non-pensioners and other applicants for temporary casual employment in the Customs Department are not excluded from consideration but, in accordance with the general practice in the Civil Service, preference is given to ex-regular applicants who enlisted on or before 11th November, 1918.
    Mr. Logan: Will the right hon. and gallant Gentleman make inquiries in order to find out whether that is the practice?
    Lieut.-Colonel Colville: Perhaps the hon. Member will give me any information which he has on the subject. My

    31
    information is that he is wrong in supposing that they are excluded from consideration.
    Mr. Logan: Then do I take it that men of good character and in receipt of a pension will receive favourable consideration?
    Lieut.-Colonel Colville: Yes, but regard must be had to the preference which is given to the class of ex-service men to which I have referred. That represents the deliberate policy of the Government, and I could not suggest that there would be any change in that respect.
    Mr. Morgan Jones: Does this policy involve the displacement of men already in jobs?
    Lieut.-Colonel Colville: I think that raises a different question answered before.

    MINISTRY OF LABOUR (STAFF RULES).
    Mr. Ridleyasked the Minister of Labour whether any prohibition exists against officers of his Department or other members of his staff becoming members of local authorities, either as aldermen or councillors; and, if so, what is the nature of the prohibition?
    Mr. Butler: The Staff Rules of the Department prescribe that officers of the Ministry are not allowed to become candidates for county councils or borough councils; and that, further, they are not allowed to become candidates for other councils or accept municipal office without the express consent of the Department.
    Mr. Ridley: May I ask whether that means that the policy of his Department is more rigid than that of other Departments and that permission is only given in individual cases?
    Mr. Butler: As I have already said in my answer, the policy of the Department permits members of the staff in certain circumstances to become members of certain local bodies.

    HOUSE OF COMMONS REFRESHMENT DEPARTMENT.
    Colonel Goodmanasked the Financial Secretary to the Treasury, whether his attention has been called to the continuance of the trading loss incurred by
    32
    the Select Committee on the Kitchen and Refreshment Rooms of the House of Commons and to the observation in their report that, in the absence of the restoration of an annual subvention or of the defrayment by the Treasury of the cost of staff and equipment, it will be necessary for the price of meals to be raised; and whether he is in a position to make any statement on the subject.
    Lieut.-Colonel Colville: Yes, Sir. My right hon. Friend has already informed the Chairman of the Select Committee that he would feel the greatest difficulty in agreeing to relieve the Committee of their liabilities at the expense of the taxpayer. I would remind my hon. Friend that the Kitchen Committee already, receives at the cost of State Funds certain free services, and my right hon. Friend does not feel a case exists for still further assistance from State Funds, especially in view of the recent increase in the salaries of Members.
    Mr. MacLaren: Does not the right hon. and gallant Gentleman think the time has come for an inquiry to be made regarding the whole management of these kitchens?
    Mr. Thorne: Is this the policy that is to be pursued, that you are going to bang in our faces the increase of Members' salaries every time anything of this sort is asked for?
    Lieut.-Colonel Colville: There is no suggestion of "banging in the face," but I am repeating the view of my right hon. Friend and the Government that they do not think there is any case for granting increased assistance.
    Mr. Logan: Is it not possible to bring this place up to date and to modernise it?
    Lieut.-Colonel Colville: I am not responsible for the management of the kitchens. I am concerned with the question of an increased grant, and I have said that it is not possible to give it.
    Mr. Gallacher: Will the right hon. and gallant Gentleman not get the advice of the hon. Member who represents Lyons?

    COAL (PRODUCTION, EUROPE AND AMERICA).
    Mr. Gibson (for Mr. George Hall)asked the Secretary for Mines the output of coal in each coal-producing country in

    33
    Europe and America for each year since 1928?
    The Secretary for Mines (Captain Crookshank): As the answer involves a

    Production of Coal in Europe and America during the years 1928–1936.

    Country.

    1928.

    1929.

    1930.

    1931.

    1932.

    1933.

    1934.

    1935.

    1936.*

    Million metric tons.

    United Kingdom (including Ireland).

    241·3

    262·1

    247·9

    212·2

    210·5

    224·4

    225·9

    232·2

    223·1

    Germany (including Saar).

    164·0

    177·0

    155·9

    130·0

    115·2

    120·2

    136·2

    144·8

    158·4

    France

    51·4

    53·8

    53·9

    50·0

    46·3

    46·9

    47·6

    46·2

    45·2

    Czechoslovakia

    14·6

    16·5

    14·4

    13·1

    11·0

    10·5

    10·7

    11·0

    12·4

    Belgium

    25·6

    26·9

    27·4

    27·0

    21·4

    25·3

    26·4

    26·5

    27·9

    Netherlands

    10·9

    11·6

    12·2

    12·9

    12·8

    12·6

    12·3

    11·0

    12·8

    Poland

    40·6

    46·2

    37·5

    38·3

    28·8

    27·4

    29·2

    28·5

    29·7

    Spain

    6·4

    7·1

    7·1

    7·1

    6·9

    6·0

    5·9

    7·0

    Not available.

    Soviet Union†

    35·5

    40·0

    47·8

    56·8

    64·7

    76·2

    93·9

    109·0

    123·7

    Rest of Europe

    2·8

    3·0

    2·8

    2·9

    2·9

    3·0

    3·2

    3·6.

    3·6

    Total Europe

    593·1

    644·2

    606·9

    561·2

    522·2

    538·6

    589·8

    614·4

    645·9‡

    U.S.A.

    522·6

    552·3

    487·1

    400·8

    326·2

    347·6

    377·9

    385·1

    443·5

    Canada

    12·4

    12·3

    10·4

    8·5

    7·5

    7·7

    9·6

    9·4

    10·3

    Central and South America.

    3·0

    3·3

    3·4

    2·6

    2·5

    3·1

    3·6

    4·0

    4·0

    Total America

    538·0

    567·9

    500·9

    411·9

    336·2

    358·4

    391·1

    398·5

    457·8

    * Provisional figures.

    † Including lignite and production in Asiatic Russia, 1928–1930 are in respect of the years ending September.

    ‡ Excluding production in Spain.

    HOLDITCH COLLIERY DISASTER.
    Colonel Wedgwood (by Private Notice)asked the Secretary for Mines whether he can throw any light on the disaster at the Brymbo pit, Newcastle-under-Lyme, and the heroic deaths of the rescue party?
    Captain Crookshank: It is with very great regret that I have to inform the House that 30 men lost their lives and two men are lying injured in hospital as a result of a fire and subsequent explosions that occurred on the morning of Friday, 2nd July, at the Holditch or Brymbo Colliery, Staffordshire.
    At about 6 a.m. men were engaged on coal-cutting operations mid-way along a longwall face in the Four Foot Seam, about three-quarters of a mile from the pit bottom, when a fire broke out where the coal-cutter was working. The cause of the fire is at present not definitely known. All the men succeeded in withdrawing except two who were working at the return end of the face about 100 yards from the site of the fire. The management were immediately informed, and the
    number of figures, I will, with the hon. Member's permission, circulate it in the OFFICIAL REPORT.
    Following is the answer:
    manager and his assistant descended the pit about 6.45 a.m. after arranging for a rescue team to be sent. On reaching the pit bottom they felt the effects of an explosion, but proceeded inbye, and on the way met under-officials who told them that the two men already referred to were missing, and that a third man who had gone to help with the fire had been caught in the intake airway by the explosion. The party was unable to reach the face owing to falls of ground, smoke and gas, but started exploratory work. They were soon joined by Mr. John Cocks, joint managing director, and by other officials, but the face was still inaccessible, and further exploration was suspended pending the arrival of a rescue team.
    The first rescue team got to work about 8 a.m. and efforts were made to find the missing men and to make preparations for sealing off the fire. Mr. Finney and Mr. Bloor, His Majesty's Inspectors of Mines, arrived at the pit at about 9 a.m., and, after interviewing the manager at the pit bottom, proceeded inbye. By 10 o'clock there were about 40 men in the district,

    35
    comprising officials, rescue teams, inspectors, and men who had gone to build the stoppings, and at this moment another and far more serious explosion occurred, and 29 of the men who had gone in were killed or seriously injured, but a few, notably the members of a rescue team who were in the return airway, escaped unhurt.
    Following the explosion, additional rescue teams went below ground and succeeded in recovering 10 of the seriously injured and in locating the bodies of those who had been killed. Of the injured, eight have, I regret to say, since died. Further attempts were made during the course of the afternoon to recover the bodies, and further explorations were made until about 8 p.m., when a conference was held by all the parties concerned, and it was decided that:
    "1. there cannot be in the district any persons still alive;
    2. to attempt at this stage to recover the bodies of the dead would be to expose the rescuers to serious and unwarranted danger;
    3. by allowing water to flow into the workings the fire would be extinguished, but access to bodies lying in the main crut and in the cross-crut will not be affected."
    Flooding was accordingly put in hand.
    The whole House will join with me in expressing our deep sympathy with all those on whom this disaster has brought such terrible grief and suffering.
    Colonel Wedgwood: I desire to thank the hon. and gallant Gentleman for his words of sympathy and appreciation of these brave men. They went down the pit to save their fellows, and Staffordshire
    will never forget them. I want to put one question about the two inspectors of mines, Mr. Finney and Mr. Bloor. They went down, knowing perfectly well what the danger was. They went underground, as near as could be got to the fire, knowing that every yard they went they were getting nearer and nearer to death. They did far more than their duty. The standards of our fighting Services have been established by men like Sir Richard Grenville, the Guards at Inkerman, and Chard and Bromhead at Rorke's Drift. These two men, Finney and Bloor, have done as much or more for England and for the Civil Service, and I would like to ask the hon. and gallant Gentleman that their services shall not be forgotten, that their sacrifice shall be remembered, and that it shall never be said that we forgot their dependants.

    NEW MEMBERS SWORN.
    Admiral Percy Molyneux Rawson Royds, C.B., C.M.G., for Borough of Kingston-upon-Thames.
    Commander Arthur Marsden for County of Surrey (Chertsey Division).

BUSINESS OF THE HOUSE.
Motion made, and Question put,
"That the Proceedings on Government Business be exempted, at this day's Sitting, from the provisions of the Standing Order (Sittings of the House)."—[The Prime Minister.]
The House divided: Ayes, 228; Noes, 90.

Division No. 259.]

AYES.

[3.51 p.m.

Acland, Rt. Hon. Sir F. Dyke

Bull, B. B.

Davison, Sir W. H.

Acland, R. T. D. (Barnstaple)

Bullock, Capt. M.

Dawson, Sir P.

Acland-Troyte, Lt.-Col. G. J.

Burgin, Rt. Hon. E. L.

De la Bère, R.

Adams, S. V. T. (Leeds, W.)

Burton, Col. H. W.

Denman, Hon. R. D.

Albery, Sir Irving

Butcher, H. W.

Denville, Alfred

Anstruther-Gray, W. J.

Butler, R. A.

Despencer-Robertson, Major J. A. F.

Aske, Sir R. W.

Campbell, Sir E. T.

Doland, G. F.

Assheton, R.

Cartland, J. R. H.

Donner, P. W.

Astor, Hon. W. W. (Fulham, E.)

Cary, R. A.

Dorman-Smith, Major Sir R. H.

Balniel, Lord

Cazalet, Capt. V. A. (Chippenham)

Dower, Major A. V. G.

Baxter, A. Beverley

Chamberlain, Rt. Hn. N. (Edgb't'n)

Drewe, C.

Beauchamp, Sir B. C.

Channon, H.

Duckworth, Arthur (Shrewsbury)

Beaumont, M. W. (Aylesbury)

Chapman, Sir S. (Edinburgh, S.)

Dugdale, Captain T. L.

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

Christie, J. A.

Duggan, H. J.

Beit, Sir A. L.

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

Dunglass, Lord

Bennett, Sir E. N.

Clarry, Sir Reginald

Eden, Rt. Hon. A.

Bernays, R. H.

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

Ellis, Sir G.

Birchall, Sir J. D.

Cooper, Rt. Hn. A. Duff (W'st'r S. G'gs)

Elmley, Viscount

Bossom, A. C.

Cox, H. B. T.

Emmott, C. E. G. C.

Boulton, W. W.

Crooke, J. S.

Emrys-Evans, P. V.

Bower, Comdr. R. T.

Crookshank, Capt. H. F. C.

Entwistle, Sir C. F.

Brocklebank, Sir Edmund

Cress, R. H.

Everard, W. L.

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

Crossley, A. C.

Fleming, E. L.

Fox, Sir G. W. G.

Locker-Lampson, Comdr. O. S.

Rothschild, J. A. de

Fremantle, Sir F. E.

Loftus, P. C.

Royds, Admiral P. M. R.

Furness, S. N.

Lovat-Fraser, J. A.

Russell, Sir Alexander

Fyfe, D. P. M.

Lyons, A. M.

Russell, R. J. (Eddisbury)

Gluckstein, L. H.

MacAndrew, Colonel Sir C. G.

Salt, E. W.

Goldie, N. B.

McCorquodale, M. S.

Salter, Sir J. Arthur (Oxford U.)

Goodman, Col. A. W.

McKie, J. H.

Samuel, M. R. A.

Graham, Captain A. C. (Wirral)

Macnamara, Capt. J. R. J.

Sandeman, Sir N. S.

Grant-Ferris, R.

Macquisten, F. A.

Savery, Sir Servington

Granville, E. L.

Maitland, A.

Seely, Sir H. M.

Grattan-Doyle, Sir N.

Makins, Brig.-Gen. E.

Selley, H. R.

Gretton, Col. Rt. Hon. J.

Manningham-Buller, Sir M.

Shaw, Major P. S. (Wavertree)

Gridley, Sir A. B.

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

Sinclair, Rt. Hon. Sir A. (C'thn's)

Grigg, Sir E. W. M.

Marsden, Commander A.

Smith, Bracewell (Dulwich)

Grimston, R. V.

Maxwell, Hon. S. A.

Smith, Sir R. W. (Aberdeen)

Guest, Hon. I. (Brecon and Radnor)

Mayhew, Lt-Col. J.

Somerset, T.

Guinness, T. L. E. B.

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

Somervell, Sir D. B. (Crewe)

Gunston, Capt. D. W.

Mills, Sir F. (Leyton, E.)

Somerville, A. A. (Windsor)

Hannah, I. C.

Mitchell, H. (Brantford and Chiswick)

Spears, Brigadier-General E. L.

Harbord, A.

Mitchell, Sir W. Lane (Streatham)

Stanley, Rt. Hon. Lord (Fylde)

Hartington, Marquess of

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

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

Harvey, Sir G.

Moreing, A. C.

Stewart, William J. (Belfast, S.)

Haslam, Henry (Horncastle)

Morris, 0. T. (Cardiff, E.)

Strauss, E. A. (Southwark, N.)

Haslam, Sir J. (Bolton)

Morris-Jones, Sir Henry

Strickland, Captain W. F.

Heilgers, Captain F. F. A.

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

Sueter, Rear-Admiral Sir M. F.

Heneage, Lieut.-Colonel A. P.

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

Tasker, Sir R. I.

Hepburn, P. G. T. Buchan-

Nall, Sir J.

Tate, Mavis C.

Herbert, A. P. (Oxford U.)

Neven-Spence, Major B. H. H.

Taylor, Vice-Adm. E. A. (Padd., S.)

Herbert, Major J. A. (Monmouth)

Nicholson, G. (Farnham)

Thomas, J. P. L.

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

Nicolson, Hon. H. G.

Titchfield, Marquess of

Hoare, Rt. Hon. Sir S.

O'Connor, Sir Terence J.

Touche, G. C.

Holmes, J. S.

O'Neill, Rt. Hon. Sir Hugh

Tryon, Major Rt. Hon. G. C.

Hope, Captain Hon. A. 0. J.

Orr-Ewing, I. L.

Tufnell, Lieut.-Commander R. L.

Horsbrugh, Florence

Palmer, G. E. H.

Turton, R. H.

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

Patrick, C. M.

Wakefield, W. W.

Hudson, R. S. (Southport)

Percy, Rt. Hon. Lord E.

Wallace, Capt. Rt. Hon. Euan

Hulbert, N. J.

Perkins, W. R. D.

Ward, Irene M. B. (Wallsend)

Hutchinson, G. C.

Pickthorn, K. W. M.

Waterhouse, Captain C.

James, Wing-Commander A. W. H.

Porritt, R. W.

Watt, G. S. H.

Joel, D. J. B.

Pownall, Lt.-Col. Sir Assheton

Wayland, Sir W. A

Keeling, E. H.

Procter, Major H. A.

Whiteley, Major J. P. (Buckingham)

Kerr, H. W. (Oldham)

Ramsay, Captain A. H. M.

Williams, C. (Torquay)

Keyes, Admiral of the Fleet Sir R.

Ramsbotham, H.

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

Lamb, Sir J. Q.

Rathbone, Eleanor (English Univ's.)

Willoughby de Eresby, Lord

Lambert, Rt. Hon. G.

Rathbone, J. R. (Bodmin)

Windsor-Clive, Lieut.-Colonel G.

Latham, Sir P.

Rawson, Sir Cooper

Winterton, Rt. Hon. Earl

Law, R. K. (Hull, S.W.)

Reed, A. C. (Exeter)

Wise, A. R.

Leighton, Major B. E. P.

Reid, Sir D. D. (Down)

Withers, Sir J. J.

Lennox-Boyd, A. T. L.

Reid, W. Allan (Derby)

Womersley, Sir W. J.

Levy, T.

Remer, J. R.

Wood, Hon. C. I. C.

Lewis, O.

Rickards, G. W. (Skipton)

Young, A. S. L. (Partick)

Lindsay, K. M.

Roberts, W. (Cumberland, N.)

Llewellin, Lieut.-Col. J. J.

Robinson, J. R. (Blackpool)

TELLERS FOR THE AYES.—

Lloyd, G. W.

Ropner, Colonel L.

Lieut.-Colonel Sir A. Lambert

Ward and Mr. Munro.

NOES.

Adams, D. M. (Poplar, S.)

Griffiths, G. A. (Hemsworth)

Naylor, T. E.

Adamson, W. M.

Hall, G. H. (Aberdare)

Paling, W.

Anderson, F. (Whitehaven)

Hall, J. H. (Whitechapel)

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

Attlee, Rt. Hon. C. R.

Hayday, A.

Pritt, D. N.

Banfield, J. W.

Henderson, A. (Kingswinford)

Quibell, D. J. K.

Bellenger, F. J.

Henderson, T. (Tradeston)

Ridley, G

Benn, Rt. Hon. W. W.

Hopkin, D.

Riley, B.

Broad, F. A.

Jagger, J.

Ritson, J.

Brown, C. (Mansfield)

Johnston, Rt. Hon. T.

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

Chater, D.

Jones, A. C. (Shipley)

Rowson, G.

Cluse, W. S.

Jones, Morgan (Caerphilly)

Salter, Dr. A. (Bermondsey)

Cocks, F. S.

Kennedy, Rt. Hon. T.

Sanders, W. S.

Daggar, G.

Kirby, B. V.

Sexton, T. M.

Dalton, H.

Lansbury, Rt. Hon. G.

Shinwell, E.

Davies, R. J. (Westhoughton)

Lathan, G.

Short, A.

Day, H.

Lawson, J. J.

Simpson, F. B.

Dunn, E. (Rother Valley)

Leslie, J. R.

Smith, E. (Stoke)

Ede, J. C.

Logan, D. G.

Smith, Rt. Hon. H. B. Lees- (K'ly)

Edwards, Sir C. (Bedwellty)

Macdonald, G. (Ince)

Smith, T. (Normanton)

Fletcher, Lt.-Comdr. R. T. H.

McEntee, V. La T.

Sorensen, R. W.

Gallacher, W.

McGhee, H. G.

Stephen, C.

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

MacLaren, A.

Stewart, W. J. (H'ght'n-le-Sp'ng)

George, Major G. Lloyd (Pembroke)

MacMillan, M. (Western Isles)

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

George, Megan Lloyd (Anglesey)

Mathers, G.

Taylor, R. J. (Morpeth)

Gibson, R. (Greenock)

Maxton, J.

Thorne, W.

Green, W. H. (Deptford)

Montague, F.

Thurtle, E.

Greenwood, Rt. Hon. A.

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

Tinker, J. J.

38

39

Viant, S. P.

Wedgwood, Rt. Hon. J. C.

Young, Sir R. (Newton)

Walkden, A. G.

Westwood, J.

Walker, J.

Williams, T. (Don Valley)

TELLERS FOR THE NOES.—

Watkins, F. C.

Windsor, W. (Hull, C.)

Mr. Charleton and Mr. Groves.

Question put, and agreed to.

MESSAGE FROM THE LORDS.
That they have agreed to,—
Cleethorpes Corporation (Trolley Vehicles) Provisional Order Bill,
Walsall Corporation (Trolley Vehicles) Provisional Order Bill,
Marriages Provisional Orders Bill, without Amendment.
That they have passed a Bill, intituled, "An Act to confirm a Provisional Order of the Minister of Health relating to the urban district of Selby." [Ministry of Health Provisional Order Confirmation (Selby) Bill [Lords.]
Also a Bill, intituled, "An Act to confirm a Provisional Order of the Minister of Health relating to the borough of Tynemouth." [Ministry of Health Provisional Order Confirmation (Tyne-mouth) Bill [Lords.]
And also, a Bill, intituled, "An Act to confirm a Provisional Order of the Minister of Health relating to the South East Essex Joint Hospital District." [Ministry of Health Provisional Order Confirmation (South East Essex Joint Hospital District) Bill [Lords.]

MINISTRY OF HEALTH PROVISIONAL ORDER CONFIRMATION (SELBY) BILL [Lords].
Read the First time; and referred to the Examiners of Petitions for Private Bills, and to be printed. [Bill 184.]
MINISTRY OF HEALTH PROVISIONAL ORDER CONFIRMATION (TYNEMOUTH) BILL [Lords].
Read the First time; and referred to the Examiners of Petitions for Private Bills, and to be printed. [Bill 185.]
MINISTRY OF HEALTH PROVISIONAL ORDER CONFIRMATION (SOUTH EAST ESSEX JOINT HOSPITAL DISTRICT) BILL [Lords].
Read the First time; and referred to the Examiners of Petitions for Private Bills, and to be printed. [Bill 186.]
ORDERS OF THE DAY.

  AGRICULTURE BILL.
  Order for Second Reading read.
  4.0 p.m.
  The Minister of Pensions (Mr. Ramsbotham): I beg to move, "That the Bill be now read a Second time."
  I think that my right hon. Friend the Minister of Agriculture has every reason to be satisfied with the reception already given to the proposals in this Bill, both inside and outside the House. Indeed, if it be really true that certain hon. Members opposite desire from time to time to adopt a more drastic and militant attitude towards Government measures, it is no mean achievement on the part of my right hon. Friend to have secured the approval of the Opposition to about three-quarters of the proposals contained in this Bill. The House will, I am sure, agree to regard this Debate as in some sense a continuation of our Debate on the Financial Resolution last week. Thanks to my right hon. Friend, that Resolution was so widely drawn that we were able to discuss practically all the topics which will be debated to-day. From the proceedings last week it appears that of the four main portions of the Bill, dealing respectively with lime and slag, oats and barley and wheat, land drainage, and diseases of animals, it is only the portion dealing with oats, barley and wheat which commands the positive disapproval of hon. Gentlemen opposite. What their attitude will be to the Bill as a whole, I do not know. I would say this to the hon. Member for Don Valley (Mr. T. Williams), speaking as one politician to another, that it is sometimes difficult to explain to one's constituents, when one votes against a Bill, that one is really in favour of three-quarters of it.
  I would like to deal for a short time with that portion of the Bill which the hon. Member for Don Valley opposes and which he wished to expunge from the Financial Resolution last week. In that connection I would like to enlist his sympathy for those Socialist candidates who are hanging on by their eyelids in oat-growing districts, in Scotland, parts of North-West England and parts of Wales, where the assistance to oats and barley will be very welcome to the farmers. I cannot help thinking that
  48
  the hon. Member by his vote last week went a long way to sign the political death warrant of those unfortunate supporters of his. It is out of consideration of the point of view of those candidates and the political future of the hon. Member himself, for whom I have a high regard, that I will try to persuade him to swallow the gnat as well as the camel and convert his 75 per cent. of support into 100 per cent.
  The hon. Member's main objection to the scheme was that part which insures the price of oats and barley and extends the area of wheat eligible in certain circumstances for assistance. He said that we could not hope to compete with the rolling plains of Canada and the United States, of Australia and South America. If that be so, the logical inference from that position is that we should grow no cereals at all but import all our requirements, whether of animal or human food. That would be in strict accord with the old Liberal Free Trade theory that you should not produce here what you can import more cheaply from abroad. But I thought that the hon. Member and his friends had abandoned that idea long ago. I am sure he does not wish to push his criticisms of our cereal proposals to that extreme. But are we in his judgment to offer no more encouragement to cereal growers? Is the hon. Member, are the party opposite satisfied with our present acreage under oats and barley and wheat? Does the hon. Member say that we have reached the optimum, that without any further raising of the price we can now rest on our oars; let the future look after itself and rely on a continuation in cultivation of our present acreage of oats, wheat and barley? If that is the hon. Member's opinion I suggest to him that he is really unduly complacent about the position.
  I would remind the hon. Member that in recent years there has been a steady fall in the production and the acreage of oats and barley in the United Kingdom, compared with the 10-year average of acreage and production from 1925 to 1934. Last year's production of oats was 15 per cent. below, and that of barley 22 per cent. below the average of those years. Even with wheat there was a decline in 1936 compared with 1935, although the 1936 figure was in excess of the 19-year average. Incidentally, I do not know on what

  49
  authority the hon. Gentleman told us that most of the land was wheat sick and that wheat was being grown on land that was unsuitable. I have looked up the figures giving the average of wheat acreage and production for the years 1910 to 1913. They show the acreage to be 1,849,000 acres, and the production 1,579,000 tons. There is no suggestion that the land was wheat sick or that the farmers were growing wheat on land that was unsuitable in 1910–13. In 1936 the acreage under wheat was 1,798,000 acres —slightly less than in 1910–14—but the production is larger, 1,722,000 tons. That really does dispose of the contention that our land is wheat sick and that farmers are growing wheat on land that is unsuitable.
  What it comes to is this: Are the party opposite prepared to see a decline in cereal production with equanimity, to let it fall to lower levels? If so, to what level can it fall before they become alarmed and wish to take steps to arrest it? I would also ask this question. Is it really wise to be so dependent upon imports of cereals from abroad? We have been told that the rise in the price of foodstuffs for human beings and animals is due to world causes, to climatic and economic conditions affecting the world's harvests and the cost of production of those harvests. That is mainly true. It is also true that for some years we have been purchasing distress cargoes. I believe the time has gone by when that is possible, and I doubt whether any more bankrupt stock will be forthcoming. Unless we ourselves possess resources, and considerable resources of our own, surely our position as a buyer in the world market will become a very weak one.
  Let me give a case in point. Take the sugar-beet industry. The production of sugar-beet in this country has always been regarded as a very useful insurance against our being charged unduly high prices by producers from overseas. Apart from the general economic aspect, there is the very important aspect of National Defence in the event of an emergency. The hon. Member for the Forest of Dean (Mr. Price) has rather curious views on that matter. He told us last week that he thought it unwise to grow large quantities of cereals because we had command of the seas and could import all that we required. Certainly we had command of
  50
  the seas in the last War, yet according to the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) we were at times, to use his own words, "face to face with starvation." In any event it is common knowledge that there was the most acute anxiety on that score during the War. I cannot help thinking that hon. Members opposite would have intensified that anxiety a hundred-fold if their views on the growing of cereals had been adopted before the Great War broke out. It was difficult enough for our Navy to keep the seas open then. The hon. Member and his party would surely make it far more difficult.
  But the hon. Member does admit that there is a case for limited assistance by the State under special conditions in the cereal-growing industry. If he and his friends will examine the proposals of the Bill they will see that the assistance is limited not only as regards price but as regards the acreage eligible to qualify under the provisions relating to the standard acreage. Some of my hon. Friends behind me think that that provision is too drastic. Therefore I suggest to the hon. Member for the Forest of Dean and his friends that, in view of our experience in the Great War, in view of our intention to limit the assistance, he and his friends should reconsider their attitude to the cereal proposals and earn the thanks of the cereal farmers for so doing.
  I would also remind hon. Gentlemen opposite that the maintenance of an arable area enables us to keep on the farm the necessary equipment, the horses and tractors and implements and so forth, which would be required should an emergency arise. Apart from the question of Defence and the importation of supplies, there is the equally important effect of cereal growing on the land itself. The land matters more than anything else. My hon. Friend the Under-Secretary of State for Scotland, in the Debate on the Financial Resolution, reminded the hon. Member for Don Valley that his attitude with regard to cereal growing would have a very unfortunate effect on the grass lands of Scotland. I gather that you cannot keep land for a long time in permanent pasture in many parts of Scotland without the grass deteriorating, that it is necessary to keep it in arable in order to grow grass. My hon. Friend

  51
  said that in some parts the land could not be kept in grass for more than three or four years, and in certain cases not for more than one or two years.
  Again, the proposal of the hon. Member for Don Valley to bolster up grass at the expense of cereals in order to increase the head of livestock would have a very serious effect on East Anglia. About 60 per cent, of the value of agricultural output from the Eastern Counties comes from livestock. They produce, proportionate to their acreage, nearly as much meat as the rest of the United Kingdom. It is only made possible by the growing of corn and the feeding stuffs needed by the livestock. If East Anglia were laid down to grass the result would be either that an immense quantity of feeding stuffs would have to be imported to feed the livestock, or the head of livestock would have to be reduced and we should be increasingly dependent on meat from abroad. The hon. Member, I know, does not wish either result to flow from his policy, but I cannot help thinking that one or other of them would do so. The right hon. Member for North Cornwall (Sir F. Acland) said the other day that there must be a certain balance between grass and crops, and between crops like wheat and oats. That is true. We cannot treat grass-growing, grain-growing and livestock producing as all in separate watertight compartments. They are inextricably linked together and form part of the very balance of agriculture which the hon. Member is anxious to preserve, though I think his policy would do something to destroy it.
  A few words about the effect of the hon. Member's policy on employment. There was a most serious and regrettable fall during the last five or six years in the number of agricultural workers in England and Wales. It amounts to nearly 12 per cent. compared with 1931. But in arable areas there was very little change. In the Eastern counties there was a fall of 1½ per cent. and in Norfolk, Suffolk and the Isle of Ely there was an increase, compared with 1931, of 1¼ per cent. It is the fact that the number of workers per thousand acres of crops and grass in a typical arable area like the Eastern division is something over 40 compared with 25 per thousand acres in a typical pastoral division like the West
  52
  Midlands division. That is, to some considerable extent due to the assistance already given to beet and to wheat, and it may well be hoped that employment will be maintained—we are hoping it will possibly be increased—by the assistance contemplated in this Measure. Therefore, in view of these considerations I express the hope that the hon. Member and his party will support all our proposals. I claim that they treat the agricultural problem as a whole. They do not break it up into separate unrelated processes, and their effect will be to store up fertility in the soil, to keep the plough going, as much for the benefit of grass land as for the production of food for man and animals, and there is practically no form of agricultural activity which is not likely to benefit from these proposals.
  I will say a word in regard to the attitude of the Independent Liberal party. My right hon. Friend has been even more successful with the independent Liberal party than he has been with the official Opposition in front of me, because it appears from the proceedings last week that he can count upon the support for his four main proposals from seven-tenths of the Independent Liberal party and will meet with opposition to the cereal proposals from only three-tenths, so that the area of my missionary effort is limited and the field is narrowed. As regards two-tenths of the dissentient three-tenths, the hon. Baronet the Member for South-West Bethnal Green (Sir P. Harris) and the hon. Member for South Bradford (Mr. Holdsworth), I doubt whether any missionary could convert them. They are deeply sunk in political paganism and I admit now I can do nothing to save their agricultural souls, particularly as their constituents in Bethnal Green and South Bradford are not, so far as I know, directly or indirectly interested in oats and perhaps only indirectly interested in barley. But I have many more hopes for the remaining one-tenth, the hon. Baronet the Member for Berwick-on-Tweed (Sir H. Seely), and I believe that there I can snatch a brand from the burning when I assure him that in Northumberland three-quarters of the acreage in that county which is under cereals consists of oats and barley, and I believe that that argument will bring a Liberal tithe to my barn. His other two colleagues are beyond redemption.

  53
  I referred just now to the limitation involved in Government policy in regard to the price of oats and barley, and I said that I would just mention that. It is true that the production both of oats and barley is less than pre-war. There were factors before the War making for increased consumption and therefore increased production which are no longer present to-day. There was a very much larger number of horses and an increased consumption of beer, and to stimulate the production of oats and barley to-day, up to, say, the pre-war figures in the absence of pre-war factors, would be to encourage artificial and uneconomic production and create an unstable position in those commodities which sooner or later would have to be liquidated at very great cost to those concerned. I am positive that nobody in this House wishes us to repeat the experience of the Corn Production Acts. Also I might put this point to the Committee as well—a policy without limitation would not only endanger the price of oats, but might also involve the taxpayer in expenditure without limitation. The taxpayers' hands are quite full enough, or I should say empty enough to make him adverse to entering into indefinite commitments.
  This Bill, as my right hon. Friend said on a previous occasion, does not purport to put agriculture on a war-time footing. It is a peace-time Bill, but it is designed to enable expansion to take place in an emergency should an emergency arise, more rapidly and more efficiently than would have been possible some years ago or is possible at the present time. Whatever happens, none of us here will regret the improvements in the fertility and the productiveness of our soil and in the health of our herds which should result from this Bill. If the worst should happen, if an emergency should arise, then we should be in a position as a result of this Bill to take immediate advantage of the enhanced productivity of the country thereby secured.
  I do not propose to expatiate on the other proposals of the Bill. They were fully debated last Monday and I think met with general approval. I do not think that the Committee will wish me to preach to the converted or waste their time by painting the lily and gilding the rose. I commend the Bill to the House. It is a good
  54
  Bill, whether for peace time or whether for emergency, and my right hon. Friend is heartily to be congratulated upon it. The right hon. Gentleman the Member for Carnarvon Boroughs speaking a short while ago on the Agricultural Estimates claimed, I think, authorship for a good deal of this programme. I am not saying that in any way in disparagement. On the contrary. But I am no Solomon to settle the claims of two contending mothers and I am pretty sure that if I now threaten to cut this Bill in halves, there would be a far louder cry of anguish from my right hon. Friend than we should ever hear from the right hon. Gentleman the Member for Carnarvon Boroughs. At the same time in order to avoid any possible offence, should he read these words, or they be reported to him, and as a peaceful compromise, I am quite prepared to admit that the right hon. Gentleman the Member for Carnarvon's contribution, illustrates quite clearly the importance of pre-natal influence. In any event, that such a determined and vigorous opponent of the Government as the right hon. Gentleman should be anxious to pay tribute to these proposals is a very considerable testimony to their value, and that, I think, should encourage all of us, supporters of the Government and opponents alike, to vote for this Bill with a good heart and a clear conscience.
  4.24 p.m.
  Mr. Paling: The hon. Member who moved the Second Reading of the Bill tried to pull our legs a little, I think, when he referred to the fact that the production of the Bill was no mean achievement in that three-quarters of the Members on our side were in support of it. I think that the hon. Member has used exaggeration. It is true that we welcome the proposal in the Bill dealing with diseases very heartily indeed, but on the question of drainage some of us think that the proposals are not as good as they might be. Fertilisers are very necessary, but we are not quite sure that the provisions in the Bill are so very good, and there are the provisions in respect of oats, barley and wheat which we are against altogether. If the hon. Member sums up the position on that basis, he will have some difficulty in saying that 75 per cent. of us are in favour of the Bill. He also referred to the fact that the party on the Government Benches are doing well in the

  55
  rural and farming divisions. The most typical farming division in the list of by-elections was probably Boston-with-Holland where our vote went up and the vote of the hon. Members opposite fell disastrously, so that there does not seem to be too much justification for complimenting themselves in that direction.
  Nobody will deny that, with regard to this Bill and farming policy generally, agriculture has had a fair share of the attention of this House since 1931. I do not know how many Bills have been presented to the House and how many administrative efforts have been made, but they are very numerous indeed. One would have supposed that, in view of the number of times agriculture has had legislation proposed in its favour and administrative efforts made on its behalf in the last six years, it would have led the agricultural industry into the paths of prosperity, and that, after six years of intense effort by a party thoroughly believing in agriculture, with all its friends in agriculture, and with a huge majority enabling them to do as they wish and pass any legislation they like, agriculture would have been doing very well indeed. But if one listens to the complaints of hon. Members opposite who represent agricultural constituencies, one is forced to the conclusion, that, in spite of all that has been done, they are not doing very well, and still appear to be in Poverty Street. We have had tariffs, subsidies, levies, quotas, restrictions, marketing schemes, and we have dealt with beef, wheat, milk, butter, bacon, potatoes and pigs, and in this Bill we are dealing with oats, barley, fertilisers, drainage and animal diseases. If we go on at this rate there will hardly be anything left in agriculture with which to deal. We have gone through the whole lot of commodities which they produce.
  Sir Joseph Lamb: Except prices.
  Mr. Paling: I shall come to that before I finish. In spite of all that has been done, enough has not been done, and they still cry for more. I have been reading in some of the agricultural papers, that in the very near future agricultural credits are to be given, and there are to be short-term loans. Did the hon. Member shake his head? At any rate, I read in the papers that this is to be done, and also that poultry is to be dealt with shortly. If the efforts of Members in
  56
  this House, during the last 12 months in particular, indicate anything, they indicate that they are proposing to put sufficient pressure upon the Minister until these things are dealt with. In this week's agricultural papers it is stated that pigs are to be dealt with in the very near future.
  Major Dower: Is the hon. Gentleman against assistance being given to the primary industry in this country?
  Mr. Paling: I am merely indicating what has been done in the past, what is being done at the moment, and what hon. Members opposite intend shall be done in the future with regard to agriculture. I read:
  "Mr. Morrison will make an announcement on pig policy within a month. Assistance will probably be given by way of covering the producer when his feeding costs rise beyond a certain figure."
  It goes on to say:
  "The Ministry has been exploring the possibilities of this course for some time. It is now a question of putting the finishing touches to the machinery of distribution. The money, of course, could be derived from a levy, and there should be no difficulty in devising a scheme whereby the curer would be compensated after adding the 'agreed subsidy' to the producers payment sheet checked by a Treasury representative. As I have urged before, this should not be regarded as a subsidy to the producer; it is really a consumer's subsidy."
  So that apparently these things that are being done for the agriculturist are not so much for the benefit of the producer as for the benefit of the consumer. I read also that, despite all that has been done, all that is being done at the moment and all that is intended to be done, the agriculturists are still unsatisfied. I read, for instance, that in Cumberland and Westmorland the Farmers' Union are sending out a questionnaire to Members of Parliament. They ask six questions, some of them very interesting. They ask:

  "(1) Are you prepared to vote for such a tariff as may be found necessary to secure the first claim for the British farmer in the home market?

  (2) Would you be prepared to support a subsidised scheme of tile drainage similar to that which was in force some time ago, and is at present in force in Scotland?

  (3) Will you support subsidising farm wages to bring the rate of wages up to an equal standard with the local demand in respect of other industries?

  (4) Are you in favour of foreign farm implements, feeding stuffs and manures coming into this country free of duty?

  57

  (5) Are you in favour of all wheat being milled in this country and of offals obtained therefrom being used in here?

  (6) Are you in favour of a duty upon foreign milk products, foreign eggs (including liquid eggs) and poultry?"

  We might sit here as representing agriculture, but we are doing more this afternoon. There are three other things which the Ministry is going to help. In spite of this, agriculture is putting up this comprehensive list of questions to Members of Parliament as to what they are prepared to do in the future. It appears to me that, in spite of all that has been done, the Government's policy has not been particularly successful up to the present time, as appears from the farming representatives themselves.
  There are one or two questions I would like to ask with regard to lime. One thing that I noticed in the discussion last week was that the Minister was asked once or twice as to the cost of lime per ton. He said he was not able to answer. I think two or three days later a question was put down by an hon. Member behind me also asking for that information, and again the Minister was not able to answer. It appears to me that before the Minister went into the question of giving a subsidy on lime to the extent of paying half the value he must have gone into the question of cost.
  Mr. Ramsbotham: The Minister could not explain, and the reason is that there are so many very different grades of lime and the price varies according to the quantity of oxide. Had I been asked to give the cost of any particular grade of lime I could have answered.
  Mr. Paling: In spite of that I should think that it would have been possible, particularly in answer to a question of which the Minister had at least two days notice, even if the price was asked for no particular grade of lime, it would have been possible to give some information to the House as to the cost of lime. That has not been given up to the present. There is another point. We all agree that lime is necessary; we are not disputing that, but it appears to me that more care might have been taken by the Minister with regard to price. We do not know what it is. We know that 50 per cent. is to be paid, but we do not know the average cost of lime, and it appears to me that he might have given more care
  58
  to the matter. It is safe to assume that if 50 per cent. of the cost is to be paid by the Treasury, the amount of lime consumed will go up considerably, and that may mean a rise in price. They have made an arrangement with the lime industry, but I do not know that it is good enough. If there is a huge increase in production, the cost of production should go down rather than increase, and if producers are selling much more than they are at the moment, it should be possible to secure a decrease in the price of lime, and not merely get an agreement that the price will remain at its prevent level.
  I have no reason to suppose that the present price of lime is not good. Lime has been in great demand in this country for a large number of years, particularly because of the large amount of building that has taken place. It is used in a number of other directions, and, so far as I know, there is no reason to suppose that the present price of lime is not good, and it was not too much to ask that he should get not only a guarantee that it would not increase, except in certain cases, but he should come to the House with a guarantee that it would be very much decreased. With regard to basic slag, perhaps, the argument does not hold good to quite the same extent. The amount to be paid for basic slag is only 25 per cent. against 50 per cent. for lime, and I understand that with regard to the basic slag the suppliers have agreed to a reduction of one shilling per ton on high grade, 9d. for middle qualities, and 6d. per ton for low grade. The Minister thought this was so good that he said:
  "I should like to express my appreciation to the producers of slag and to the British iron and steel industry for the way in which they have met me in these negotiations."—[OFFICIAL REPORT, 29th June, 1937; col. 1819, Vol. 133.]
  But I have my doubts as to whether the proposal is good enough. The steel industry has had a tremendous help by the introduction of the armaments programme. It is doing exceedingly well now, and because of that is making an increasing amount of slag every day and every week which at the reduced or ordinary rate of consumption might have become a drug on the market. Then prices would have tended to decrease in any event, and if that had been taken into full consideration, I think it highly probable that a lesser price than the

  59
  Minister has obtained would have been gained. Again, reading some of the farming papers I see they take the same point of view. The editor of the "Farmers' Weekly" writes in the "Editor's Diary":
  "The Government's proposals for encouraging farmers to use more basic slag certainly fit in well with the rearmament programme. This has led to a much greater production of steel and, incidentally, to a begger output of slag, the by-product of steel manufacture. It is being said that if matters had been allowed to take their course, and the ordinary rule of supply and demand had been left to operate, farmers would, anyway, have been able to get their slag cheaper this autumn. The inference from this argument is that the benefit of the Government grant of 25 per cent. of the price of basic slag will go to the manufacturers who are thus enabled to maintain their selling prices."
  Another letter says:
  "Is the Government grant for basic slag really meant to help the farmer, or is it a subsidy for the steel manufacturers? With the present high production of steel, stocks of slag must increase. Unless consumption of slag also increases, prices must come down."
  And another suggests:
  "The prices of British slag as published recently are substantially higher than the corresponding prices of Continental basic slag, even after adding freight, landing charges, carriage, etc., and the import duty. A subsidy confined to British basic slag has the effect of a secondary import tax on foreign slag. It will prevent a reduction in the prices of British slag. The farmer, therefore, will not get the full benefit of the subsidy."
  So that in the view of the farming community themselves and the people who issue their publications, the Government have not done half so well in this case as was indicated on the occasion of the Debate last week.
  Now I come to the question of wheat, oats and barley subsidy. I do not pretend to be an expert at this. I could not tell you when the maximum amount of wheat which is good for our agriculture is being grown, but I have listened to Debates in this House, and I have read farming papers, too, and there seems to be some genuine doubt as to whether this increase of 33⅓ per cent. over and above what is already produced is really going to be a good thing for the industry itself. The hon. Member also referred to the question of whether it was wise to depend on such large imports from abroad, and whether it was not better to develop our own production. In a general way, of course, it would be better to develop our
  60
  own production, but in spite of anything we do here, in spite of the most intense production of wheat that we can make, it still remains the fact that we have to import by far the biggest proportion of our foodstuffs from abroad, and, so far as I can see, it does not matter Whether it be wheat or any other necessary.
  There was another matter mentioned by the hon. Member for the Forest of Dean (Mr. Price) in that Debate. He is a practical farmer, and everybody will admit that he speaks with great knowledge of the subject. He said with reference to the Wheat Act, 1932, that the then Minister gave some kind of guarantee:
  "We desire that the farmers should try by every means in their power, and we believe the Bill will encourage them, to market their produce under the most economical methods and to produce their wheat in the best form." —[OFFICIAL REPORT, 21st March, 1932; col. 751. Vol. 263.]
  The hon. Member for the Forest of Dean went on to point out that that was not being done, and that, as far as his reading and research showed, it was far from being done, and the promise that had been given was not being carried out. In spite of that, the growing of wheat is to be increased by 33⅓ per cent. Oats and barley are not quite in the same category as wheat, and I do not see why the subsidy should have been given in those cases except it may be that there was a substantial demand on behalf of one or two people in this House, particularly those representing Scottish constituencies, to have as good a deal as the grower of wheat had made in the English counties. Apparently they have succeeded at the present moment, but, at any rate, I understand there can be no competition of foreign oats in this country. I am told that the import is only round about 7 per cent. When we talk about wheat, we say the low price is duc to intense competition from abroad, but that cannot apply to oats. Oats are at a very low price, and I am told that the biggest proportion of oats grown in this country is consumed on the farms. If the farmer gets a low price for his production, he pays only a very low price for the thing he is to consume, so he does not lose much. But now he is to get a subsidy in addition, and that appears to me to be a very bad illustration of the old saying about having your cake and eating it at the same time.
  With regard to barley, the same thing seems to operate. I am told that 60 per

  61
  cent. of the barley is consumed by the brewers. Some years ago an agreement was made with the brewers in regard to the consumption of British barley, which was called "A gentleman's agreement." According to the hon. Member for the Forest of Dean, I understand that that "Gentleman's agreement" has not been carried out to the satisfaction of the farmers. Seeing that 60 per cent. of the barley goes to the brewers, surely it does not pass the wit of man to arrange that it might be possible to stabilise the price of barley, when one customer takes the major portion of it, and that customer such a wealthy customer. The brewers have been making profits for years, almost second to none. They have made profits on a large scale through the years of the depression. In spite of that fact, there is to be a subsidy for barley.
  Now I come to the question of drainage. We admit the necessity for drainage work being done, but we want to call attention to the fact, and we will not let the House lose sight of it, that nearly all the land of this country belongs to private people. I am told that there are about 1,750,000 acres of land suffering from lack of drainage. It is a sad commentary on private ownership that 1,750,000 acres of arable land should be in need of the most necessary treatment, that of drainage. That state of things exists despite the prosperous times that landowners have had, if not in the last few years at any rate previously.
  Sir J. Lamb: Does the hon. Member say that land wholly mortgaged is still in private ownership?
  Mr. Paling: It is owned by the mortgagees, who, in a good many cases, are the banks. The hon. Member would not suggest that they are badly off. If the mortgagee happens to be a bank they are surely in a better position to do the drainage than some of the private owners of the land. It is private ownership that has led to this position. Another point to remember is that if this money is spent on drainage of the land, the land will increase in value. Is that going to be for the benefit of the landlords? Is the State to come in and do the work which private landlordism has failed to do, and then when the value increases, the landlord is to run away with the increased value?
  Sir William Wayland: Does the hon. Member not consider it to be a public duty to drain agricultural land, just as it is to drain the towns?
  Mr. Paling: If the land of this country belonged to the people I should not have the slightest objection to the people finding the money with which to drain it, but in view of the fact that most of the land, particularly agricultural land, does not belong to the people but to private landlords, I do not see why the public should find the money to do something which the private landlord ought to have done himself. We grant that the work ought to be done and that these 1,750,000 acres ought to be put into a state of production, but while we agree to the money being spent, we wish to point out that private capitalism and landlordism has failed, and because it has failed the State has to come in and do the duty which it ought to have done for itself.
  With regard to the question of animal diseases, we give our whole-hearted support to what is proposed to be done. The Minister of Agriculture stated that diseases of animals were responsible for the loss of about £14,000,000 a year. That is a tremendous waste for the community, and if it can be prevented it ought to be. As far as we are concerned, we will willingly spend any money in that direction. On this question I should like to quote a statement in an article in last week's "Farmers' Weekly," which points out that for animals the cheapest and best of all food is good water. The article goes on to refer to the fact that thousands of beasts, dairy cattle, in this country are drinking water that is filthy and foul, and that that is a prolific cause of disease. Is anything to be done to remedy that state of affairs? I do not see any remedy in the Bill. This is one of the things which might be attended to. It is excellent work to have research committees and veterinary services for the purpose of curing and eradicating disease. It is much better to prevent disease by insuring a purer water supply rather than dealing with the disease after it has occurred.
  My last point deals with a matter that is not in the Bill, namely, the question of wages. I said at the beginning of my speech that all sorts of matters relating to the farming community had been dealt

  63
  with since 1931, when the National Government came into power, but that nothing has been done as far as I know for the agricultural worker.
  Sir Francis Fremantle: What about the Agricultural Wages Committees?
  Mr. Paling: We put into operation the Agricultural Wages Act, which gave the agricultural worker a minimum wage, and the first thing the National Government did after coming into office in 1931 was to reduce the number of inspectors who see that the agricultural worker gets the right pay. It is only because of the amount of agitation on this side of the House and from other quarters that the number of inspectors has since been increased. That is about the only thing that has been done for the agricultural worker since this Government came in. The Minister of Agriculture stated the other day that the minimum wage of the agricultural worker was 8 per cent. higher than in 1933, and the National Farmers' Union state in their report that whereas in 1925 the average wages were 31s. 3d., they were 32s. 3d. in 1936. As the hon. Member for Don Valley (Mr. T. Williams) pointed out, there has been an increase of Is. per week in the wages of agricultural workers in II years, in spite of all that has been done for the farmers, in spite of the millions of pounds of subsidy that has been poured into their pockets and the millions that are to be poured into their pockets. It would appear that the farmers and the landlords have kept the money in their own pockets and have not passed any of it on to the agricultural labourer.
  We are also told that there has been an increase in production of 14 per cent. and that farmers' prices have increased by 31 per cent. Surely, leaving out the subsidies and having regard only to the increased production of 14 per cent. and the increase in prices of 31 per cent., the agricultural workers ought to have had some substantial increase in wages during the last few years.
  Mr. De la Bère: What about the millstone of mortgage that is hanging round the necks of the farmers?
  Mr. Paling: The hon. Member asks me about the millstone of mortgage. Mortgage has already been mentioned this afternoon. That subject is not on the
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  list of subjects with which I am to deal, but if on some future occasion I am allowed to speak about that, I will say what we as a Socialist party would do with the millstone of mortgage. In a bulletin issued by the Cambridge Farm Economics Branch, it appears that in the Eastern counties the output value has increased per 100 acres from £654 in 1931 to £928 in 1936. That means that the output value has increased by about 42 per cent.—a tremendous increase. The statement also shows that profits in 1931 per 100 acres were £1 and in 1936, £139, yet the wages of the workers have gone up by only 1s. per week. Reference is also made to the fact that there has been a decrease in the number of workers employed on the farms. Is there any wonder at that decrease in view of the wages that are paid—an average wage of 32s. 6d. per week, on which the farm worker has to keep his wife and family? In face of the increase in profits and in output value to which I have referred, and in face of the huge subsidies that have been poured into the agricultural industry, the worker's wage has increased by 1s. Is the agricultural worker getting a decent deal?
  When I opened my correspondence this afternoon the first thing that attracted my attention was a copy of the "Land Worker," the organ of the Agricultural Workers' Union. On the first page there is a statement of a budget on a weekly wage of 32s 6d. Here are a few of the items. A joint of meat of about 5 lbs. for four people, 2S. 6d.—6d. per lb. for meat for the people who are producing the best meat in the world. They cannot get British beef at that price. Bacon, half a pound at 1s. per lb. Sixpenny-worth of bacon. What sort of a wage is it that allows a family of four only to buy half a pound of bacon? Milk, an article of food produced by the agricultural worker himself, one and a half pints a day, at 3d. Is that good enough? Yet, in spite of these facts, every Bill that has been produced by the Government dealing with agriculture has paid no attention to the agricultural worker. Nothing has been done for him.
  Major Dower: We have instituted a system of insurance for the agricultural worker?
  Mr. Paling: Yes, on the same basis as everything else that this Government has

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  done for the agricultural worker. It is true that a system of insurance has been instituted for the agricultural worker, but it is at a rate of benefit about two-thirds or three-fourths of what is paid to the ordinary worker. In other words, because the wage of the agricultural worker is shockingly low, much below the average wage paid to the industrial worker, the agricultural worker is penalised in his unemployment benefit. The hon. and gallant Member is proud of this unemployment benefit. How would he like to live on the benefit that is paid to the agricultural workers? The Government would not have done even that but for the pressure from this side of the House.
  Major Dower: Why did not your Government when in office introduce such a scheme?
  Mr. Paling: There is a very good answer. When we were in office we did everything that we were allowed to do. We did as much as we could do, and no more. One of the things we did was to pass the Agricultural Wages Act, which is the best thing that has ever been done for the agricultural workers. In spite of the fact that the present Government have unprecedented power, and that they have brought in Bill after Bill and made administrative efforts time after time on behalf of the farmers, they have really not done a scrap of anything for the agricultural worker.
  Sir R. W. Smith: Was the hon. Member in the House the other day when a Bill was passed for the agricultural workers in Scotland?
  Mr. Paling: That is on the same basis as the insurance scheme to which reference has just been made.
  Sir R. W. Smith: The hon. Member said that nothing had been done for the agricultural worker.
  Mr. Paling: It has taken the Government six years to think about it. I read a book a week or two ago dealing with the agricultural community and land in general. The chief character in it is a man named George Simmonds. He takes a farm known as Sutton Manor, and round this farm the story is woven. The author sums up to the effect that the landlord wanted his rent, the farmer wanted his profit, the parson wanted his tithes, the dealer wanted his profit and the agent
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  and auctioneer wanted his commission. George Simmonds was the only man who had put more into the industry than he got out of it. Exactly the same circumstances apply to-day, and in this Bill—one of many Bills brought in for the benefit of the farming community—the George Simmondses, of whom there are thousands in this country, are once again forgotten. The workers in this country are the only people who create the wealth in the industry, and they are the people who put more into it than they get out of it, but it is the people who get more out of it than they put into it for whom the Government are catering.
  What have the Government got in mind? Does the hotchpotch that we have had for the last six years represent a plan? What are the Government trying to get at and what are they trying to do for the agricultural industry? On what stable basis are they trying to put the industry? What is their policy? We have had one-term policies, short-term policies and no policies at all, and there is not a Minister on the other side who knows what he is after. They are using their powers for the benefit of their own class—the privileged class—for hitting the man who does the work every time. We are asking, when these numerous Bills are brought in giving subsidies and levies, that in the future they will have more regard for the man who does the work, and that if they are going to bring in any future Bills giving subsidies to the farmer, the landlord and the profiteer, they should also bring in a Bill giving some small amount of assistance to the agricultural, labourer.
  5.5 P.m.
  Mr. R. Acland: Shafts of wit have been directed at my two senior Whips, and I take a serious view of those shafts of wit because they indicate a point of view which I believe is foreign to the best traditions of this House. Incidentally I am defending—although it is no part of my duty—the hon. Members above the Gangway from the shafts of wit directed against them. The hon. Member was inviting hon. Members above the Gangway and the hon. Member for Berwick (Sir H. Seely) to vote for something in which they do not believe, in order to catch votes in their constituencies. Is not that invective addressed to us on this side by the Minister because he has caught the

  67
  atmosphere of his own party? One hears many speeches from hon. Members opposite, speeches on subjects on which, if similar subjects were raised on a county council, the hon. Members opposite would not be entitled to vote. They are speeches which I can only describe as pure dole-scrounging and vote-scrounging speeches.
  On this side we refuse to put ourselves in that position, and I would rather lose my seat than pay any attention to the arguments which the Minister addressed to my hon. Friend here, asking him to vote for something in which he did not believe because of the effect it would have upon his electors in his constituency. We do not refrain from supporting Government proposals when we think the case for them has been made out, but—and I do not think the House will deny it—in proportion to our numbers and in the matter of constructive suggestions other than the mere pouring out of public money in relation to agriculture, the record of this bench will stand comparison with that of any part of this House. I would like to proceed with the process of throwing constructive suggestions before the Minister. This Government has made itself a past-master in the art of taking hold of a policy which amounts to nothing more than tinkering with the surface of the problem and introducing it with a blast of trumpets which makes it sound like an agricultural revolution. They have done it in all Departments—the Minister of Labour in relation to the Special Areas and the Minister of Transport in relation to trunk roads—and now we have got it in this Bill.
  I can understand the point of view of my hon. Friend the Minister of Agriculture. He is a lucky man. The Secretary of State for Scotland had to wrestle with this problem of continually falling world prices, and perhaps that is why he has gone to Scotland. The present Minister of Agriculture has taken on the job when prices are going up, so I can understand why it is his policy to make as much noise as he can and do as little as he can to annoy anybody, to rely upon the rising world prices and leave the impression that he has been the best Minister in the history of this industry. There is a little bit of work that he is doing in relation to grass. In a speech which he made he said he hoped we could develop the great resources of grass to a degree that would
  68
  decrease our dependence upon imported stuff. He said we regarded grass as a crop and not something which was laid down on land, and the Government could combine the application of lime and slag in a policy for improving grassland management.
  I want to know where that policy is. Where in these pages is the policy for improving grass? I ask the Minister in reply to point it out. It seems to me that the management of grass has five requisites: Drainage, manures (the correct manures for the particular soil), a grain or root crop every fifth year (I am told it is the second or third year in Scotland and the fifth year in my part of the country), the breaking up of the soil (both in relation to hilly pastures and poor pastures), and the pedigree seed. With those five points in mind, what are the Government going to do? There has been a negligible sum provided for drainage; it amounts to £5,000 per year, I think. With regard to manures, we are to encourage the application of two types. That is good so far as it goes, but it is inadequate. The science of manuring is now an exact science. I am aware that there are many farmers who, by long training, have acquired almost a subconscious instinct for knowing what are the right manures to apply, but to-day even the instincts of the best farmers can be beaten by the scientific tests in modern research. Soil requires a particular quantity of a particular manure and not just a general application of an unspecified amount of two manures. Rather than use this blunt instrument to force upon a farmer two particular manures, I would suggest that a farmer should get his soil tested and get those manures in those quantities which the test indicates are desirable, and that the application of those manures should be subsidised.
  Would not that be a more accurate and scientific policy? I think I know one of the answers to such a suggestion, that some of these manures come from foreign countries and therefore they ought not to be encouraged. But I want to know who is governing this country. Is it a National Government representing all shades of opinion or is it the hon. and gallant Member the Member for Bournemouth (Sir H. Croft)? If the hon. and gallant Member the Member for Bournemouth is in control I can understand that any foreign manure will poison our crops,

  69
  but if we are an all-party Government representing all shades of opinion, can we not be sensible and apply to the land the particular manure that it requires, no matter where it comes from? As to the roots and grain which are needed in the fifth year, is it not curious that we are going to encourage grain for four years? There seems to be little connection between the grain policy and the grass policy, so I assume that the grain policy is different from grass management. Now we come to the breaking up of land and sowing a pedigree seed, and there is no mention of it at all in the Bill. Does the Government mean business or does it not? One hears reference made to Professor Stapledon. Here is a quotation from the Minister about research:
  "Research is of no use if it ends in the laboratory. Its fruits must be brought into the field."
  Does not the Government mean anything by those words? Professor Stapledon has taken this matter as far as laboratory research can take it. It is beginning now to dribble and trickle out into the fields with, behind it, the limited resources which the individual and the institutions connected with the subject can find. Why does not the Government apply its weight and authority and apply some financial assistance to the suggestion? There is the question of pedigree grass seed. If we had a grass policy worthy of this nation we would not have a hundredth part of the pedigree grass seed that is needed in this country. It is a question of sowing the pedigree seed which we have got and taking the resulting seed and resowing; only then can the grass policy be set in motion. Why is not the Government doing that?
  Ought not the Government to put financial resources behind this Fertility Committee so as to enable it to tackle a job of that kind. With regard to breaking up of pastures—indifferent pastures and hilly country pastures—has not the Government made up its mind whether it intends to convert beta minus into alpha pastures or gamma minus into beta plus? In any case there will be needed apparatus for breaking up the land far more costly than any ordinary farmer can hope to acquire. Who is going to do this? Is it to be left to Professor Stapledon to do the work which the Government ought to be doing?
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  The Government ought to endow the Land Fertility Committee with money to acquire the apparatus for breaking up the indifferent pastures and hilly country pastures at the cheapest possible rate. How are they going to do it? Lectures by scientists in halls, booked on market day, produce very little effect. Visits to experimental farms or to agricultural colleges produce rather more effect, but, even so, farmers remain suspicious, because they say there are unlimited resources behind it. The only thing which is going to get a British farmer interested in grass development is when he can see what is going to be done on his neighbour's farm. Could not this Land Fertility Committee get down to the business of producing public demonstrations of that kind? I suggest that they should break up the land on certain farms free; that they should sow pedigree seed free; and apply the correct manures free; and that they should offer to do all these things for the first couple of hundred farmers who might apply.
  When the Government have demonstrated the result on farms throughout the country they will be able to say to all other farmers, "These men took the risk and invited us to cut up their farms, to take control of their farms for two or three years. We did the work free, and this is the result." Only then will it be possible to offer to do it on other farms at a price which will cover the cost of provision and management. I suggest that the Land Fertility Committee should be converted into a public body whose function it would be to improve the grassland throughout the country on a nonprofit-making basis. I hope the Government will consider this and will not turn it down as a piece of Socialism. I hope they will not reject it out of hand as being a public enterprise and that they regard themselves as being the agents of private enterprise. After all, they claim to be a Government which represents all points of view.
  On the quay at St. Ives, at a public meeting quite recently, I heard the Government spokesman say that if the Communists came and said "We have got an idea," the Government would reply, "Come on in and help us to carry it through." If that is the real state of mind of the Government it seems to be a more sensible point of view than that

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  adopted by the Leader of the Opposition and the right hon. Member for South Hackney (Mr. H. Morrison). I think it is worth serious consideration on the part of the Government to make the Land Fertility Committee a public non-profit-making corporation for the improvement of grassland, and to put into practice the experiments which have been carried out in the laboratory. In his speech the Minister of Agriculture said:
  "We shall be glad to place within the reach of the agriculturist an apparatus which confers upon agriculture this immense boom of ensuring a home supply of all the food required for wintering our cattle."—[OFFICIAL, REPORT, 7th June, 1937; col. 1440, Vol. 324.]
  What do the Government mean by saying that they will be glad to place this apparatus within the reach of agriculturists? What steps have the Government taken to place it within the reach of farmers? None whatever. It is another case of trumpet blowing, and no action. They are going to wait until private enterprise, with miserably inadequate resources, has slowly been able to turn out these machines as a practical proposition. They will let the machines trickle into general use and then pat themselves on the back, saying what a wonderful think we have achieved. I hope the Government will consider whether this is not also a proper field for a public company. This apparatus is much nearer perfection than is generally believed.
  Mr. Ramsbotham indicated dissent.
  Mr. Acland: The Minister of Pensions shakes his head but I think that as a result of the competition which will be announced at the Royal Agricultural Show to-morrow for grass-drying machines, in which the Ministry's officials have been acting as part judges, it will be revealed that a machine has been perfected which is transportable and which has a drying ratio of nine pounds of water driven out for one pound of coke consumed. That is a staggering advance on anything which has been possible up to now, and if I am right I suggest that the position has become urgent. What is going to happen? You have four or five different individuals or companies with inadequate resources working to perfect these machines. They are each taking out patents. Some may be good, and some may not, but you will get four or five machines on the market,
  72
  some with some advantages and some without, and not one of them with all the advantages of all the possible patents.
  The people who are experimenting in these machines have sunk what they consider to be a large amount of capital in their experiments, although it is quite small from the point of view of the public. They may make the machines as cheap as they can and sell the maximum number, but there is no moral reason why they should not quite legitimately make a few of them and sell a smaller number. But that is not good from the point of view of the interests of British agriculture. I believe the Minister regards this as presenting possibly a revolution in British agriculture. In that case ought it not to be done by the State? Ought we not to buy up the experimenters at this stage? Ought we not to pool all the discoveries they have made, spend money in experimenting a little further and then for the Government to produce these machines as cheaply as possible, get them out into the country at the lowest possible price and in the greatest possible numbers. I beg the Minister to consider these ideas and not to talk about a great policy of developing grasslands which leaves out almost every essential element of grass management as understood by every expert body.
  5.25 p.m.
  Major Hills: The hon. Member for Barnstaple (Mr. R. Acland) has certainly given plenty of advice to the Government. He objects to everything they have done. He objects to the scheme for increasing the fertility of the land and for manuring the land, in fact, from start to finish, except in regard to land drainage, he thinks the Bill will do nothing. I would respectfully suggest that it is no good increasing the fertility of the land unless the products of the land can be sold at a price which will give the farmer a living. In fact, you have to follow two lines of policy which at the end will meet. You have to improve the fertility of the soil and at the same time by duties or subsidies make it possible for the farmer to make a living out of his land. I am sure the hon. Member will forgive me for saying that I began to listen to Liberal speeches on agriculture before he was born—and they have not changed. They are full of advice to the farmer and also carry the implication that the whole knowledge of farming is inherent in the Liberal

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  party. In fact, the hon. Member said so. He said that the record of the Liberal bench would compare favourable with the record of any party in Parliament. At any rate, their record has been a highly critical one and a great deal of intelligence has been brought to our debates from Bethnal Green and South Bradford, well known agricultural districts, criticising those of us who, in face of great difficulties, are trying to help agriculture slowly up the hill.
  When hon. Members opposite jeer at us and say that we have been trying for six years to put agriculture on its feet, they forget what happened before 1931, a period of bad prices, the disastrous effects of the Gold Standard and the catastrophic fall all over the world in the prices of primary products. All that reduced agriculture to a condition very near bankruptcy. The present Secretary of State for Scotland had a tremendous task when he was Minister of Agriculture to bring the industry out of the terrible condition in which he found it. If mistakes have been made a great deal of success has also been achieved, and while there has been a rise in prices the hon. Member for Barnstaple cannot attribute the whole of the success to external circumstances, but must give some credit to the Ministers in charge of agriculture.
  Mr. Acland: The right hon. and gallant Member must bear in mind that in the three years 1934–35 and 1936, during which we had an enormous number of schemes with no very substantial world or national recovery, the index price for primary products rose four points, and that in the year 1936–37, during which there has been a considerable increase in internal prosperity, and we had no new schemes, the rise in agricultural products was 16 points. It looks as though the Liberal party were right in saying that agricultural prosperity depends far more on the general prosperity of the people than on any particular scheme.
  Major Hills: I do not in the least underestimate the effect of general prosperity upon agriculture. A strong consumers' market is essential for agriculture. I agree with the hon. Member that an increase in prices did take place, but I do not put as much weight on it as he does. One must be certain that when there is a strong consumers' market, the benefit goes to British producers. It is in that respect that the party of which
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  the hon. Member is so distinguished a representative fails. Hon. Members who belong to that party say that the soil should be made fertile by manuring and they say that the best sort of knowledge should be given to the farmers, which, of course, I admit is absolutely necessary; but after those things have been done, one has to make sure that the farmers get reasonable prices for their products. If they do not, they will not stay on the land, and above all, there will not be any increase in farm workers' wages.
  The present position with regard to labour is extremely serious in the agricultural industry. In the district of Yorkshire that I represent, men are going to the aeroplane works, where they get much higher wages, and land which in the past it was easy to let and easy to sell—which was always bought as soon as it came on to the market—cannot now be let or sold in some cases. One cannot get something out of nothing, and one cannot get wages when no profits are made. The farmers' profit and the wages paid to the farm worker are really the same question. If agriculture is prosperous for the farmer, it is also prosperous for the farm worker; and anything that I can do to help the prosperity of both parties concerned in the land I shall do, as I have always done in the past.
  Turning now to the speech of the hon. Member for Wentworth (Mr. Paling), it always seems to me to be rather curious that hon. Members opposite do not take a different line. I think they might have claimed that the policy initiated by the present Secretary of State for Scotland when he was Minister of Agriculture stole a good deal of their thunder. Who would have thought that the farming community, the most individualistic in the world, would have accepted the principle that nobody may plant an extra acre of potatoes without paying a heavy fine? Who would have thought that the milk producer would have agreed to sell his milk only to a certain purchaser? Both of those things might have been claimed by hon. Members opposite as part of the Socialist policy. [Interruption.] It is so, for the Socialist policy is to have entire control of agriculture, not for the benefit of the producers certainly, but for the benefit of the consumers.
  The work of my right hon. Friend the present Secretary of State for Scotland

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  has been accepted by the most individualistic community in this country. The right hon. Gentleman created an organised system which is of tremendous advantage to the farming industry and which, I believe, contains in it the seeds of future prosperity. It seems to me that hon. Members opposite attack the wrong part of that policy. It is a policy which may be open to criticism here and there, but in its general lines I do not think it is open to the criticism that they make against it. The hon. Member for Wentworth, for instance, sees no good in that policy. To him the whole policy, whether it be liming, or the wheat, oats and barley subsidies, or land drainage, is bad from start to finish. Yet, on the whole, agriculture is in a much better position than it was six years ago. I do not think hon. Members opposite have helped the industry towards that prosperity. I have heard many Measures discussed in the House; I have heard wheat, milk, potatoes, beef and veal discussed with a view to helping agriculture, but I have never heard a word from hon. Members opposite either helping the Government or bringing forward an alternative policy.
  Mr. Quibell: That is not true.
  Major Hills: The hon. Member for Don Valley (Mr. T. Williams), who is an extremely able debater, has always said, when challenged, "Let the farmers produce their accounts, and if they cannot show a profit, then is the time for giving them a subsidy." That has been the continual cry of hon. Members opposite. Only at the end of a long inquiry would they consider the possibility of granting a subsidy. Surely, hon. Members opposite must accept the fact that agriculture was at a very low ebb in 1931. There are two methods, I think, of making the industry more profitable, after an essential preliminary measure, marketing, has been carried out. When one has arranged for the marketing of the produce, one must be certain that the produce which takes advantage of the marketing scheme is not foreign, and to make sure of that one has to apply one or both of two policies, either to tax foreign products or to subsidise British products.
  I have never heard anybody suggest an alternative. I ask hon. Members opposite whether they want taxation in place of a subsidy. The subsidy comes from
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  the taxpayers, and taxes to a very large extent fall on the rich. If one imposes a duty, it falls on the consumers, and it falls particularly heavily upon the poor consumers. I believe the best course to follow is to combine a low duty on the foreign product with a subsidy on the home-produced article. We are often told that we on this side of the House do not have regard for the consumers. The consumers must be there or the stuff cannot be sold; unless beef is eaten, it is of no use producing it; unless wheat is made into bread, it is useless. Therefore, anybody who looks at farming cannot for one moment disregard the existence of the consumers. There must, of course, be a large consumers' market. Let it be remembered that the consumers' market depends, not on what a few rich people eat, but on what is eaten by the vast majority of people who cannot afford to pay much for their food.
  I see that the hon. Member for Don Valley is now in his place. There is nobody whose debating powers I admire more than those of the hon. Member. I wish he would devote his great intellectual capacity to helping agriculture. He always seems to be on the point of saying something that I think will help agriculture, but then he turns to something else. I am not quite despondent about the hon. Member, for at the back of his mind—I wish it came forward more often—there is a genuine love for agriculture and a genuine wish to see that great branch of national activity prosperous.
  In conclusion, let me say that I welcome this Bill in all its parts. I welcome the fact that we are extending the wheat subsidy to other cereal products, not entirely for the reason that it will make the growing of those crops more profitable, but because cereal crops are essential for the cultivation of land. There is especially a danger that the oats crop might be neglected if the price were allowed to fall too low, and that the class of land on which oats are grown might go out of cultivation. I welcome the part of the Bill which deals with drainage. I believe we have to do a great deal more in drainage matters. This Bill applies only to the smaller features of drainage—field drainage and the draining of the smaller water-courses—but no one can go about the country without realising that a great deal of our land is much

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  too wet, and that drainage is necessary. I welcome the Bill as a step forward. It is one more stage on the long road that still has to be travelled before agriculture is as prosperous as I would like to see it. I regard agriculture as being one of the most important, if not the most important, of our national industries. I want to help the man who produces something, whether it be coal or corn, and who adds to the national wealth.
  5.44 p.m.
  Mr. Quibell: I wish to refer to the speech made by the right hon. and gallant Gentleman the Member for Ripon (Major Hills). I understood him to say that he has never heard suggested from this side of the House an alternative to taxation of the foreign product or a subsidy on homegrown products. I am afraid that I have not been in the House as long as the right hon. Gentleman, but I distinctly remember that this question was debated from 1929 to 1931 and on several occasions during the present Parliament. I will suggest to the right hon. Gentleman an alternative. I do not believe in subsidies, for I think there is a better way of helping agriculture. Far from the Government's policy being a case of Socialism, as was stated by the hon. Member for Barnstaple (Mr. Acland), I believe that it is bureaucracy and enslavement of agriculture of the worst kind, and that it is the wrong way of putting the industry on its feet. There is no Member in the House who wants to see agriculture helped more than I do. But in my own constituency, despite all the help that has been given to agriculture, one sees in the local papers farms advertised as to be let. Only last week-end I saw one of the best farms in my district advertised as to be let, and I venture to say that there will be difficulty in many cases in letting such farms. I know that some estate offices have had to make arrangements for the farming of land, while awaiting tenants. That state of affairs is manifestly wrong. Therefore I say that the subsidy has not remedied the problem and is not likely to do so.
  The right hon. and gallant Member said that no practical alternative has been put forward. May I suggest one which would, I agree, involve a measure of Socialism? Contrary to the opinion which has been expressed in many quarters of the House, I believe that wheat is an essential crop for British agriculture. I
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  would stabilise the price of wheat at 45s. a quarter and insist upon a higher standard of cultivation than exists to-day. On some land that I know of, one finds three crops growing at once—a crop of docks, a crop of thistles and a little corn. We have been subsidising the bad farmer as well as the good farmer. Subsidies are all alike in that respect. On some farms of 300 acres one finds three men employed and some of the men have expressed the opinion to me that while "the boss" is well content to take all the subsidies and subventions that he can get out of the Government, as far as cultivation is concerned he does not care. At any rate the land does not get the kind of cultivation I would like to see and I am sure hon. Members opposite would also like to see. The farmer employs as few as he can and takes as much out of the State as he can.
  That is all wrong and, as I say, I would stabilise the price at 45s. I would then set up a wheat import board. I remember when complaints used to be made about Russian wheat being imported at 19s. a quarter. Well, I would buy it at 19s. a quarter through the wheat import board and I would give to the farmer a stabilised price that would encourage him to grow wheat. The more wheat per acre he grew the better it would be for him and for agriculture in general. That plan, I submit, would preserve the best principles of Free Trade. I know that hon. Members on the benches below the Gangway go on their knees to the principles of Free Trade. Personally, I am not such a blind worshipper of Free Trade, but the scheme which I suggest would, as I say, preserve the best elements of Free Trade while securing an economic price for the farmer.
  Mr. Maxwell: Is not that a subsidy?
  Mr. Quibell: No, it is not a subsidy as far as the State is concerned. May I illustrate it further in this way? I would apply compulsion to the millers who have set up big mills at places like Cardiff and Liverpool and destroyed all the little mills which used to exist throughout the country. In my county there used to be a great number of these picturesque mills, where the corn was ground into flour, but now the corn is used only as chicken corn instead of being sent to the mill to be made into flour and finally into bread. Now it does not find its way into the mill

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  at all, and hon. Members who have practical experience know that that is not because it would not make good flour and good bread. It is simply because there were in some places such small quantities to be ground that the great millers who imported from foreign places set up these huge mills at the ports and now we scarcely know flour made from English-grown wheat. I would impose a condition in that respect. I do not think that any subsidy would be required, nor do I think that the price of bread to the consumer would be raised by a fraction. These great millers have made millions. In fact one knows that a particular milling combine could supply a new parish organ to every parish in the United Kingdom; but they have destroyed all the little mills with their huge combines.
  In regard to barley my hon. Friend who spoke from the Front Bench criticised very strongly the brewing fraternity —at least I suppose they are regarded fraternally by hon. Members opposite, if not by hon. Members on this side. Some of them, I agree, are not altogether bad fellows. Nevertheless they dip very deeply into the public purse. I would apply compulsion to the brewers of this country in the same way as to the millers of this country, and I would compel them to pay at least the world price to the home producer—the price which they pay to the foreign producer. I have gone into the market in Brigg in Lincolnshire, the town from which my division derives its name, and I have found two or three buyers of barley there, who met in a hostelry and fixed the price that they were going to pay for barley that day. It was a price which had no connection with the world price. But a farmer could walk about that market from 8 o'clock in the morning until 4 o'clock in the afternoon and he would not get any more than the price on which those buyers had agreed among themselves. In one case the price was 29s., whereas they were paying at that time 55s. for barley from Czechoslovakia.
  I hope the Minister of Pensions will pass that information on to the Minister of Agriculture and ask him whether he thinks that the National Government are giving a square deal to the farmers by allowing brewers—who have had a subsidy by being derated—to pay the home producer, the man whom they ought to support, only 29s. a quarter for malting
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  barley while they were paying 55s. a quarter to the foreigner. If that is giving agriculture a square deal, I do not understand it. My alternative would be to make them take a certain proportion of home-produced barley for brewing and malting purposes at the proper price. If those two crops were dealt with in that way, we would have gone a long way towards dealing with the problem of those parts of the country where barley is grown, as well as the heavy lands in parts of eastern England which grow wheat, following potato crops. So we could go on to deal with several other main crops. That is a practical alternative and one which would, I submit, help agriculture.
  This Bill makes me wonder what is to become of the farmer. The farmer has never been regarded as an educated man, but it will be necessary to send him to a university to tune him up a little if he is to fill in all the returns now required from him by the new bureaucracy which is being set up by the National Government. What with subventions, subsidies, acreages and so forth, and returns of all kinds, it would seem that we are going to turn the farmer into a clerk. I am delighted to find in the Bill a reference to land drainage, although I do not think it is likely to solve the difficulty. As I have said before on this question, it is far more important to secure efficient administration of the Acts already on the Statute Book than to continue passing Measures which become dead letters. The 1930 Drainage Act has not been administered as it should have been, and that is due almost entirely to the fact that the National Government have not found sufficient money to aid the drainage authorities to carry out their work efficiently. I cannot find in the Bill any reference to the authority who is to carry out these provisions. The Minister himself does not seem to know. The Bill provides:
  "The Minister may, out of moneys provided by Parliament, make towards expenditure incurred by drainage authorities to which this section applies in the exercise of their functions in carrying out drainage schemes, grants of such amounts and subject to such conditions as may be approved by the Treasury."
  Here we find the dead hand of the Treasury in this Measure, as we found it in the 1930 Act. Then the Bill goes on to say:

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  "The drainage authorities to which this section applies are all drainage authorities as defined by section eighty-one of the Land Drainage Act, 1930, except catchment boards, and except the council of any county borough which has not established an agricultural committee constituted in accordance with a scheme approved by the Minister."
  Who are these authorities to be? In the drafting of these Measures could we not have a few words plainly indicating the machinery of administration which is to be used? Could it not be made clear in this case for instance, whether the Bill applies to field drainage? Main rivers are already provided for by the main catchment boards and tributaries by the internal drainage boards, and if this does not apply to catchment boards and county boroughs, what machinery is being set up to administer this Bill or what existing machinery can administer it? The success or failure of the Measure will be determined by how it is administered, and it is in the administration of a large number of the Measures passed by this House that we have failed lamentably.
  The Minister makes provision in the Bill for dealing with diseases of cattle, and I was very pleased to hear my hon. Friend who spoke from the Front Bench mention, in this connection, the question of drinking-water for cattle. Those who live in river areas know that this is another case where there is a necessity for collaboration between the various authorities concerned, or else be a clear statement from the Front Bench indicating who is to be responsible for seeing that the water supplies in grazing areas are not polluted. We know the danger of cattle drinking out of polluted streams and we know that in some cases the water supplied to cattle is abominable. Whose duty is it to look after this matter? Is it the duty of the Ministry of Health or of the Ministry of Agriculture? Whoever has the duty, it has been neglected for many years.
  I could take hon. Members to places where all the effluent from the farm goes down-hill into a pond and that pond is the only source of water supply for all the animals on the farm. Veterinary surgeons occasionally inspect the animals and the shippens, but we would like to know who is responsible for seeing that the scandalous state of affairs with regard to water supply is altered. With
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  its alteration there would be a distinct improvement in the housing of the cattle. I would like to draw the Minister's attention to part of the Bill which gets on my nerves. On page 21 it says "Animals' means cattle." That is news, is it not? It goes on:
  "sheep and goats and all other ruminating animals and swine and horses, asses and mules, and includes also in the case of any particular section of Part IV of this Act any other four-footed animal to which the Minister may by order declare that section to be applicable."
  That definition is, indeed, all-inclusive. It really beats me what it means, because there are other Acts which apply to some of the four-footed animals. It is the two-footed animals with which I am concerned in considering this Measure. With regard to the assistance for lime and basic slag and all the other subventions, I am one of the old-fashioned sort who believe that if you give economic prices to agriculture a number of these things will remedy themselves. Unless there is field drainage the Drainage Act of 1930 is of no avail. Unless the ditches on the farms are cleaned out the field drains cannot operate, but they are not cleaned out and the hedges are not trimmed. Whatever figure is put in the Bill for drainage, it will mean nothing unless drainage is efficiently administered. We must have ditches cleaned out, adequate field drainage and economic prices.
  A farmer said to me on Saturday, "I do not want to be no the dole, nor do I want subsidies. What I want is a price for the stuff I grow." I want the agricultural labourers also to have more wages than they are getting. This Bill would be more palatable if it were made to operate for only five years on condition that there was an automatic increase in wages to bring them up to £2. Most of the farmers would like to see their labourers in receipt of wages as good as they would get in industrial areas. Why should they not be as good?
  This Bill will give some temporary aid to agriculture and this will not be the last time the subject is debated, for agriculture will come for something more. This Bill is the wrong way of dealing with the problem. While I support anything that will help agriculture, my view is that this Bill will not put it on its feet. It is not dealing with agriculture in the best way. The industry want stabilised economic prices. They will lead to a prosperity

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  which will reflect itself in increased wages on the countryside and stop the flow of agricultural labourers to the towns. It will retain the skilled men who are leaving the countryside to work on aerodromes and in the towns. A depopulated countryside is developing and we want to see the rural areas repopulated. I welcome any provision in this Measure that will help it, but I warn the Minister that this is not the last time this question will be considered, for this Measure will by no means put agriculture on its feet and bring prosperity to the countryside.
  6.6 p.m.
  Sir R. W. Smith: I am sure that the House has listened with interest to the speech of the hon. Member for Brigg (Mr. Quibell). I always find that what he has to say about agriculture is nearly my own opinion. There is hardly a Member who sits for an agricultural constituency who would ask for more if farmers could get a stabilised economic price. The point is how is that to be attained? The best thing that could happen would be for the hon. Gentleman who spoke first from the Opposition bench to have a chat with the hon. Member for Brigg, for that would enlighten him a good deal on agricultural subjects. The hon. Member for Wentworth (Mr. Paling) said that he disapproved of the proposals of the Government because the benefit would go into the pockets of private individuals inasmuch as the land was privately owned. I would point out to the hon. Gentleman, who apparently does not know much about Scotland, that the largest individual landowner there is the Department of Agriculture. He also objected to land drainage because the benefit would go into the pockets of the landowners. If he objects to that, why does he approve of the proposals with regard to veterinary services? They will cost the country a lot of money. I was unaware of the fact that the cattle of this country belonged to the State and not to private individuals. If it is not correct to assist land drainage because the land is privately owned, it is not correct to assist in veterinary services because the cattle are privately owned.
  It would be as well if the Member who is leading for the Opposition should at least know something about oats in Scotland. The hon. Member for Brigg spoke
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  about wheat being a staple crop for England. It is just as necessary in Scotland to have a white crop if the land is to be kept in condition. In many parts of Scotland oats and barley are the only white crops we can grow. Therefore, if we are to keep the land up to its proper ratio of production, we must have some crop that will pay. That is why these proposals are in the Bill. In introducing the Financial Resolution the Minister practically said that the oats and barley subsidies were being given for the sake of Scotland. The hon. Member also stated that there were very few oats sold off the farm. All I would say is that the hon. Member had better come to the north-east of Scotland and see what the farmers say about it. The farmers in my constituency arc very much disposed to consider that the six cwts. which are being taken as the average amount sold off the farms in Scotland is rather low. They say that it ought to be 12 cwts. Some farmers in my part of the world, who have taken their results over II years, find that they are nearer 12 cwts. than six. It is of vital importance to Scotland that we should keep the land in cultivation, and I would ask the hon. Member to look into it from the point of view of Scotland before deciding what is and what is not good for agriculture.
  The hon. Member for Barnstaple (Mr. R. Acland) made a speech of high moral tone in which he accused us of voting subsidies for our own pockets, and said that his party would never do anything of that sort. We had a Debate the other day and a right hon. Gentleman closely connected with the hon. Member said that he had been asked to go down to Cornwall to the by-election that was taking place, but he thought that it was a more important duty to attend here and to support the policy of the Minister of Agriculture. Apparently the hon. Member for Barnstaple and other Members of his party do not agree on that policy.
  Mr. Acland: When we agree on a policy we support it and we cannot be induced to support a policy with which we disagree by the kind of argument which was brought forward by the Minister of Pensions to-day. Our support or otherwise cannot be influenced by that line of argument which, even in fun, ought not to be bandied about the Floor of the House.
  Sir R. W. Smith: The hon. Member spoke about Members on this side voting

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  on questions when they would receive some benefit, but I see that the right hon. Member for North Cornwall (Sir F. Acland) pressed the Government to give assistance for field drainage. I understand that the right hon. Baronet is a large landowner, and not only did he press the Government to do that, but he voted for the Financial Resolution. Therefore, I fail to see why the rest of us should be blamed for voting on this question. The right hon. Gentleman also said:
  "If we are convinced of one thing, it is that the Minister of Agriculture is very much in earnest and extremely sincere about the proposals he has made, that he explained them very clearly, and that we shall be in safe hands in following him through their complexities in the next few weeks in this House." —[OFFICIAL REPORT, 29th June, 1937; col. 1901, Vol. 325.]
  It does not seem to be a very united party on the Liberal benches. I draw attention to these facts because it is only fair to say that all of us here wish to do the best we can for agriculture, and there is no necessity to say that men on this side of the House who happen to be landowners support this Bill merely in order to put money into their own pockets.
  The hon. Member who spoke from the Opposition Front Bench said that a tremendous lot had been done for agriculture, was being done for agriculture and remained to be done for agriculture, but that agriculture is still in a hopeless condition. Let me point out that with the exception of what has been done in the case of wheat, sugar-beet and one or two other things the policy of the Government has been in force only for a very short time. We have not seen the effect of the livestock policy, which it is admitted deals with a most important branch of agriculture. But it certainly cannot be said that the Government has given no help to those branches of agriculture with which it has dealt so far. If the hon. Member asks a grower of sugar-beet, for instance, what value he puts on the assistance which has been received from the Government he will find that the grower holds a very different view from his own. It is no use talking about what we are doing for agriculture at the present time and then turning round and saying that Government assistance has proved of no use to agriculture. As we are told, this is not the final policy of the Government, and most of us are happy to know that it is not, because there are
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  still many aspects of agriculture which require to be dealt with.
  I welcome the Bill very much, especially as we in the North-East of Scotland particularly have felt that the branch of agriculture in which we are specially interested has so far been rather neglected, and many farmers have found that it would be impossible to carry on unless they could see higher prices. There are one or two points, however, on which I should like to hear more from the Minister. In regard to the Land Fertility Committee which is to advise the Government on questions of liming and other points connected with the soil, as the Bill is drawn there appears to be no provision that one member of that Committee should be a Scotsman. In the case of a committee of this importance there ought to be at least one Scottish member who will understand Scottish farming conditions. Another point is that many farmers fear that in the course of the first year after this Bill comes into operation the supply of lime in Great Britain will probably be hardly large enough to meet the demand. We want to be assured that the Land Fertility Committee, or whoever will have charge of the administration of this part of the Bill, will see that if there is any scarcity such supplies as are available will be fairly distributed between England and Wales, Scotland and Northern Ireland, because it would be unfair to benefit the land of one part of the country at the expense of the land elsewhere.
  Further, I should like to know whether, if a farmer is liming his ground on a more lavish scale than is considered necessary, there is any power by which the Minister can refuse to contribute towards the cost of that lime or basic slag. I should also he glad if the Minister could give us an explanation of what is meant by the words in paragraph (i) of Sub-section (1) of Clause 3.
  "Make different provisions in relation to different kinds, descriptions and quantities of lime and of basic slag."
  That is very general language and I should like to understand what is meant by it.
  Next I would turn to the question of oats and barley. There is no doubt that the assistance which is now offered to the oat growers of Scotland has been long overdue. One small point, but a very

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  necessary point, to which I would refer is the fact that the Bill speaks of "subsidy payments." The phrase is found first in the second paragraph of the first Sub-section of Clause 6 but is used throughout the Bill. "Subsidy" seems to me to be a very unfortunate word to use, especially in view of the speeches we get from the other side of the House, in which we are always told that agriculture is getting subsidies and subsidies. This is not a subsidy, but a deficiency payment. It does not come into effect until there is a deficiency in the price, and it is wrong to call it a subsidy when it is given only to make up a loss.
  Further, I am worried, and so are many farmers in Scotland, over how the average price for oats in the United Kingdom is to be arrived at. That it is to be an average price for the United Kingdom will work rather hardly in the case of many farmers in Scotland. Under what rules are the average prices to be worked out? The prices one finds in the agricultural papers are the prices prevailing at certain markets throughout the country. I do not know whether it is intended to take those prices to arrive at the average price in the United Kingdom. If so, that is not a fair way of doing it. I suggest that it would be preferable to take the price which the farmer who has produced the crop gets for it before anything is added for carriage or anything of that description. Some of my farmers probably sell oats down in Bristol. If the oats are sold in Bristol and the Minister calculates his average on the prices ruling in certain markets, then it is the price paid for those oats at Bristol which will appear in the returns; but that will be unfair to the Scottish farmer, because it will not be the true average price. The proper way to arrive at the average is to take the price which the farmer receives before there is any cost of carriage or any other charge to be taken into account.
  We in Scotland will suffer because the United Kingdom price will probably be a higher price than the average price in Scotland. It would have been much fairer if the Minister had taken the average price for each of the three countries, England and Wales, Scotland and Northern Ireland. The average price in England is usually a few shillings higher than in Scotland, and it would be unfair if there were no deficiency payments in Scotland
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  when the price of oats there was well below 7s. 7d. a cwt. because the average price for the three countries was not below 7s. 7d. That would be a very hard position, and I hope the Minister will do all he can to see that the system he is proposing is made to work fairly.
  I have a further question to ask regarding the relation of the reduction of the subsidy when the qualifying acreage of oats or barley exceeds the standard acreage in the three Kingdoms by a certain fraction. It is hard that we in Scotland should have the assistance given to our farmers reduced because English farmers have increased their acreage. In the case of the potato crop, I think I am right in saying that each farmer is allotted by the Potato Board a certain acreage on which he can grow potatoes, and if he wishes to exceed that acreage he has to pay for the privilege. It would have been fairer if the Government had adopted a similar policy with regard to oats and barley, and said "We will allow each farmer so much acreage under oats or barley, and that shall be the amount of his standard acreage, and if he goes above it he must pay."
  As regards the other points in the Bill, I should like to say that we welcome very much the land drainage proposals, and we welcome also the provisions for extending the means of dealing with diseases of animals. There was a feeling in Scotland that under the centralisation of the veterinary services many of the veterinary surgeons who are now working with the local authorities in different parts of the country would be thrown out of work, and I thank the Minister for the assurance he gave us on that point the other night. There is also a feeling among my farmers that it is a great pity that the Minister did not go further in dealing with the diseases of animals and include grass sickness among horses. I gather that the Minister has power to bring other cattle or animals under the provisions of the Bill and I trust that he will do so, because the losses through horse sickness are in certain cases very serious, and it is a disease in which research has apparently not yet been carried very far.
  I have raised a number of minor points, but I can assure the Minister that in the North of Scotland we welcome this Bill, because it does mean a great deal to the farming community there, although in some

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  respects we still think we shall not get as much benefit out of it as we are entitled to. If he can see his way in Committee to secure some greater equity between the two countries then we shall be extremely grateful.
  6.29 p.m.
  Lord Willoughby de Eresby: I rise to support this Bill. I must admit that I find myself in a slight difficulty, as I expect other Members do, in understanding the attitude towards the Measure taken up by hon. Members opposite. My hon. Friend the Member for Brigg (Mr. Quibell) seemed, on the whole, to give the Bill his support, with certain qualifications. The hon. Member for Wentworth (Mr. Paling) appeared to think there was nothing at all good in it. My hon. Friend the Member for Don Valley (Mr. T. Williams), who spoke on the Financial Resolution the other day, seemed to think the Bill is rather like the curate's egg, good in parts; but apparently he could not commend it as a whole to the House. I think that, on the whole, the Bill is good as far as it goes.
  As one representing an agricultural constituency I must say that I should have liked to have seen in the Bill certain things which have not been included. We see that it has rather a hybrid composition, including something of the short-term policy about which we have all heard, and something of the rather more spectacular long-term policy of my right hon. Friend. I say that in no derogatory spirit, for I have always been a staunch supporter of the short-term policy. I think it is the primary duty of the Government, before we can hope to maintain wages, not to mention raising them or bringing about any degree of prosperity, to put a bottom into the home agricultural market, and I think we can say that although this is not the case in every branch, the Government have met with some measure of success in their policy in this direction, and I welcome those parts of the Bill which go to reinforce that policy on those sectors of the agricultural front where unremunerative prices still prevail. We have the assurance of the hon. Member for Wentworth that very soon we are to have something dealing with poultry and pigs. That is most reassuring, and I will say nothing further about it until the occasion arises.
  To deal first with the short-term policy, I think that the raising of the quantity of
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  wheat that is to receive the guaranteed price from 6,000,000 to 8,000,000 quarters is a wise course, and one which must commend itself to all who are anxious about the defence of our country at this moment. I think, too, that the establishment of a minimum price for oats is also a wise and far-seeing course. There are many districts, especially in Scotland, which have not benefited to anything like the same extent as other districts from the policy of the Government up to the present time. For those districts where wheat cannot be grown and oats are a cash crop, I think the assurance of a guaranteed minimum price is both timely and far-sighted. I must admit, however, that I am rather less enthusiastic about the provisions dealing with barley. The traditional cash crop for the lighter lands has at all times been malting barley, and I rather agree with the hon. Member for Brigg that some scheme which would have given an assurance that the brewers would hold to their agreement, or that corn merchants did not buy feeding barley and sell it as malting barley, would have been more valuable to the barley growers of this country than a subsidy for feeding barley, and would have gone a great deal further to help the lighter lands which I think it is the genuine desire of my right hon. Friend to help. I am afraid that these proposals for subsidising feeding barley will be of no real assistance on the lighter lands, and that they may, indeed, do what is even more dangerous —they may encourage false farming methods. There are a thousand and one practical reasons why it is inadvisable to grow wheat on these lands, but I am afraid that the increased return from the Wheat Act may encourage people to grow wheat where they should be growing malting barley.
  With regard to the long-term policy as we see it in this Bill, I think we should be grateful that we are in a position, as a result of the short-term policy, to go forward on the foundations which have now been laid and consider a long-term policy. I think that my right hon. Friend's proposals with regard to the supply of lime and basic slag, the eradication of disease, and drainage, are sound, and that they will, if successful, be a real contribution to agriculture in this country. The "bull" point in their favour is their fairness; they will benefit all kinds of land alike, and they will benefit both small and big farmers alike. But, while this

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  policy for increasing the fertility of the land appeals to us all, we should remember that a complement of this new policy is well stocked and well manured fields, and another complement is a regular use of the hoe and the shovel. Anyone who motors about—and both the hon. Member for Brigg and myself motor about in the same part of England—cannot but be struck by the fact that our fields to-day are not carrying their full head of stock, and also by the very large number of docks and thistles and rubbish which are all too prevalent in our fields; and one cannot help feeling that, if their fertility is increased, there will be an even greater crop of thistles and docks unless something is done about it.
  It is very difficult to counter the defects, but I feel that, if some scheme could be introduced as a component part of this long-term policy for providing easier long-term credit for the agricultural community, it would be of very real assistance. Owing to the shortage of labour, the use of the tiller and the cultivator is now a real necessity for the progressive farmer, and a larger head of livestock on our land is also essential if we are to get full value from the basic slag and lime that are to be applied. The present practice of buying cultivators and other machinery on the hire-purchase system, and the present short-term credit system of buying livestock, are not in the best interests of agriculture as a whole. They diminish freedom of marketing, lead to forced sales, and are fundamentally unsound. I venture to suggest that the need for machines is an unmistakable sign of the commercialisation of agriculture, and that agriculture can claim to have a right to enter into the capital market of the country. One often hears farmers saying that, if they could lay their hands on a bit of capital, they could go right ahead. I know that that sentiment is also expressed in other branches of life, but I feel that as regards agriculture the time is ripe for a stimulus in this direction, and that, unless that stimulus is forthcoming, we shall not get the best value from these proposals for increasing the fertility of the land.
  Another reason why the industry is entitled to claim capital assistance is the extreme desirability to-day of encouraging men of ambition and enterprise, who are working on the land, to go ahead and start a small mixed farm themselves. I
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  would stress the word "mixed," because I think we can all see to-day how painfully true is the old maxim about putting all your eggs in one basket. I believe that at all times there is a life and a prospect for the man who is prepared to work with his family on a small mixed holding, and he should have greater opportunities than he has to-day to find the necessary money to start in this way. The part of the Bill which deals with the eradication of disease will have the good will of everyone, but when I was reading the other day an article which stated that the road to health is to be found rather in the art of living than in the science of avoiding death, I could not help thinking that a well balanced and really prosperous agriculture would do more to eradicate disease than these proposals, welcome though they are. A certain amount has already been said about drainage, and, as there are many others who want to speak, I will only conclude by saying that I am certain that my right hon. Friend and his predecessor have been right to concentrate first of all on getting a balanced agriculture, helping every branch, and I hope, now that a long-term policy is being started which is full of promise, my right lion. Friend will see his way to add to it those proper credit facilities which will be needed if it is to work out to the best possible advantage.
  6.40 p.m.
  Mr. Ridley: I have listened with careful attention to the Debate to-day, as I did to that of last week, and I have reached the conclusion that my general view is confirmed that in this, as in other matters, truth is to be found in simplicity, and not in complexity. The right hon. and gallant Member for Ripon (Major Hills) seemed to have stumbled on a simple truth without recognising it when he said that, unless the consumer is there, it is no use producing, while the Noble Lord who has just spoken says that we must put a bottom into the agricultural market. I would like to draw attention to some rather interesting features of this Bill. It seems to me to incorporate all those curious characteristics which I believe are peculiar to British policy, and which entirely baffle the understanding of the foreigner.
  The party opposite arrived on the benches where they now sit temporarily by offering the electorate a number of assurances. One was that they would be

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  very careful guardians and custodians of the public purse, that if there was anything they would be really zealous about, it was public economy and public finance; but, immediately an opportunity occurs, not only is the mouth of the money-bag widely opened, but the bottom is actually knocked out, and no regard is had to the means or needs of the recipients. The Bill includes provisions which, if they had come from this party when they were on the other side of the House, would unquestionably have met with the hostility of the party who now sit there. Further, the fact that it is now considered desirable to take steps to proceed with research work, both in agriculture and in industry, and to establish, among other things, a national veterinary service, confirms the view that in these matters private enterprise is not nearly so enterprising as it pretends to be, for otherwise it would have done the job itself. It also confirms the view that public ownership is being applied in practice by those who affect not to believe in it in principle, because it is the only solution for the problem that immediately confronts us.
  In the Debate on the Money Resolution the Minister used what I thought was a very significant phrase, of which I would like to remind him. He said that the first purpose of the Bill was to have regard to the object of putting the land into such a condition that
  "if an emergency should occur, the land will be able to play its part in a worthy manner to provide food for our own people."—OFFICIAL REPORT, 29th June, 1937; col. 1817, Vol. 325.]
  That seems to me to be an excellent statement of the real purpose of agriculture, except that the tense is wrong. The right hon. Gentleman said:
  "if an emergency should occur";
  but I would draw attention to the fact that several millions of our people are not being worthily provided with food, and that an emergency exists in millions of homes in this country. It should be the purpose of our agricultural policy here and now to meet the existing emergency, and not to wait for an emergency to arise. What is an emergency? Is it a set of circumstances created, say, by a sudden outbreak of war; or is not just as great an emergency created in the homes of large numbers of our people by the creeping paralysis of poverty? The right hon. Gentleman also said that this Bill would
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  restore to the soil the mineral constituents whose absence leads to feebleness and decay in plant life; but it should be the purpose of our agricultural policy to restore to the physical constituents, the vitamin contents whose absence creates feebleness and decay in human life.
  We have before us an extremely grave problem, with which this Bill proposes to deal only in a very limited sense—the problem of the condition as regards food of a large section of our population; the consumer, in the right hon. Gentleman's own words, so far as large masses of our people are concerned, does not exist. The bottom has fallen out of the market which the hon. Member who preceded me desires to replace. The right hon. Gentleman the Member for Bow and Bromley (Mr. Lansbury) last Tuesday said that the agricultural labourer should be able to buy at least what he produced and my right hon. Friend was, I thought, rather rudely interrupted by Members on the other side of the House who hastened to assert that at least he could buy more now than he could when the Labour Government were in office. There are some things about which a dignified reticence is best observed, and reticence in this matter by the party opposite would be the best policy. Followers of the party opposite have done their best or worst to victimise trade union organisation in the countryside, and to oppose the Agricultural Wages Board and to frustrate their purposes. They have opposed every application for wage increases. There is not a single instance known of the employers' side of the Agricultural Wages Board ever voluntarily offering an increase of wages. It is not true to say that a dirge should be the appropriate theme song of agriculture in every area in this country. There are very considerable areas of prosperous agriculture where much more considerable wage increases should have been conceded than has been the case in the last few years.
  A nodding assent was given by the Minister last Tuesday in reply to the question whether there was co-ordination between the Minister of Agriculture and the Minister for the Co-ordination of Defence. I suggest that on economic grounds, and not on social grounds alone, there should be the closest coordination between the Minister of Agriculture, on the one hand, and the Minister of Health and the Minister of

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  Labour, on the other. The Minister of Health surely could not be satisfied with the condition of the underfed population which the House should face much more seriously. Emergency exists in millions of homes in this country. In thousands of homes in my constituency, and in other constituencies largely represented by hon. Members on the benches on this side of the House, there are underfed people yearning for food. I strongly urge that there should be that sort of coordination between the Minister of Agriculture on the one hand, and the Minister of Health, on the other, which would result, (a) in raising the effective demands of large sections of unemployed people, (b) in lifting, in consequence, their physical and health standards, and (c) in contributing, because of an expanding consumption demand, much more effectively than expanding production would do, to the restoration of prosperity to the farming industry and the countryside.
  6.50 p.m.
  Mr. Pickthorn: I wish, as shortly as I can, to draw attention to two aspects of this Bill, to one of which no attention has previously been drawn. The one which has been mentioned by previous speakers is Part IV—the veterinary part. It is too late in the Debate to argue at all elaborately the general case for the Bill, but I should like to add my voice in approval particularly of that part of the Bill. I feel sure that it is in that sort of direction, and in the improving of the status of the veterinary profession and of their education that the greatest hope lies. The other matter which I wish to mention, because it has not yet been mentioned, might have perhaps come more appropriately from the Official Opposition, or from the guardians of constitutional purity below the Gangway. However, without any wish to be embarrassing or hypercritical, because they have not taken up this point I desire to draw attention to it. It is the great elaboration in this Bill of all the safeguards or the absence of safeguards for House of Commons control over administration and indirect legislation.
  I do not wish to go into the matter at length because there is not time, and to go into it at length would mean very great length, because it varies very much in different parts of the Bill. But I wish
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  to ask one or two questions. In Clauses 1 and 14 it is necessary, if the Minister wants to lengthen the period for which the Bill is to be effective, that he must get an affirmative Resolution from this House. That is clearly proper, and these are the only purposes for which he needs an affirmative Resolution. If you look at Clause 12 you will see that the Bill contracts out of the Rules Publication Act, 1893. I do not want to argue that Section 1 of that Act, which insists on a long period of publicity before rules are effective, really ought to apply to this Bill, but I want to draw the attention of the House to the fact that it has become the almost invariable practice of the draftsman, that where a Bill or part of a Bill is of any importance, that you should contract out of Section 1 of the Rules Publication Act. We are long overdue for some sort of reform of the Rules Publication Act. Either there should be another Act or the Act should sometimes be made effective. It is little short of preposterous that such a Section should be on the Statute Book, and that habitually, as a matter of course, the Departments and draftsmen should contract out of it whenever they think the matter of importance, and leave it in only if they think that it does not matter in the least.
  There are one or two other Clauses to which I would wish to draw attention in this connection, but in the interest of brevity I pass to that which I think of most real importance, the second Subsection of Clause 3, dealing with the Land Fertility Scheme. There the Parliamentary control is merely by way of negative Resolution. The Minister makes his orders and arrangements, and unless this House or another place, within 28 days, votes against it, it remains effective. That check in practice is bound to be almost wholly illusory. Vested interests and legitimate expectations, as soon as an Order is issued, of traders and producers and so on, and the perfectly legitimate desires of the Whips, and so on, seem to make that check almost entirely illusory. It is at least not unreasonable to suggest—I have not gone into this so fully as to be able to speak with complete confidence—but I think it reasonable to suggest that there was a clear analogy in the Agricultural Marketing Act, 1931. There, there are

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  all sorts of safeguards, and in particular the necessity for an affirmative Resolution.
  With that analogy it appears reasonable to suppose that we should have had an affirmative Resolution on Clause 3 of the Bill. If the answer be that by insisting on safeguards and affirmative Resolutions you would, in effect, put this off for a year, because you could not get the thing working before the new cleaning season starts, preparing the fields for the next sowing, it would be well if that answer could be officially given. I do not want to be excessively pedantic and constitutionist about this, but if it can officially be said that this was an exceptional emergency with an exceptional necessity to get the thing through quickly, then it will be easier to pass these parts of the Bill, about rules, orders and regulations, with a better heart than can be done without some such assurance.
  6.55 p.m.
  Mr. Christie: So many speeches have dealt with the fertilising part of this Measure that I propose to say very little about it, except to reinforce what has been said, and to ask the Minister to see whether he cannot fairly soon encourage people to take advantage of the facilities for obtaining lime and slag at a cheap rate by telling them that they can reasonably hope for a proper price for the bullocks or milk they produce as a result of the extra fertility. That would go further than anything else to encourage the farmer to take advantage of this offer. May I remind the right hon. Gentleman of a question that was asked by the hon. and gallant Member for Petersfield (Sir R. Dorman-Smith) last Tuesday as regards cereals, when he asked him to consider the calling together of the Standard Price Committee with a view to trying to relate the costs of the amount which will be received in order to meet the present day needs? It is common knowledge that the costs have risen, and it is very problematical whether 45s. is now sufficient to meet the cost of growing wheat. May I reinforce that question and ask the Minister whether he will be good enough to answer it later on?
  Ever since about the year 1921 there have been promises from Governments to do something for the barley grower, and with the exception of the 10 per cent. duty, which has not made the slightest difference one way or the other, and of the
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  the "gentleman's agreement," it is fair to say that these promises have never been fulfilled. The "gentleman's agreement," as far as the brewers are concerned, has worked very well—certainly in my part of the world they have kept their promise very well—but I do not think that the same applies to the maltsters. I hope that the right hon. Gentleman will in due course consider carrying out something a little more spectacular than his present proposal, which I do not suppose he really regards as a very serious contribution towards helping the barley grower. I would remind him that he is at present considering a very ingenious Measure which has been concocted by the hon. and gallant Member for Buckrose (Major Braithwaite) which might have a very great effect in assisting the barley grower, but if he does not agree about that, I would remind him of the fact that we are now importing into this country maize from Argentina perfectly free which is taking the place of much of the barley which we used to grow before the War. Surely, a small tax on that maize would have the effect of putting the bottom into the price of barley at a considerably higher figure than the right hon. Gentleman now proposes.
  I noticed that when the Minister of Pensions was speaking at the beginning of the Debate, he said that there was not very much point in encouraging the growing of barley and oats because there was not now the demand for either of these cereals. We are growing very much less barley, and we are making up for it by increasing the importations of maize. In the year 1913, when we were growing, I think, our maximum quantity of barley, or near it, we were importing only 49,000,000 quarters of maize, and last year we imported 73,000,000 quarters of maize, and, with the exception of 5,000,000 quarters, all of it came from the Argentine. It is obvious that a great deal more maize, which is interchangeable with barley for feeding, can be grown in this country than is grown at the present time, and it would provide farmers with a very useful alternative for other materials.
  I suppose as a general proposition it is difficult to say anything against the veterinary proposal. I very much regret the fact that the old Diseases of Animals

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  Committees have to go out of existence. The work the committee has done in my own county has been admirable, and it is a great mistake and a great pity to dispense with public work done by busy people who are prepared to give up their time in order to serve their fellow-citizens. I cannot help thinking that if somehow the Minister could still keep them in being and make use of them, even if only in an advisory capacity, it would be very wise, and would make his machinery work very much more smoothly. These men are well known in the agricultural industry, their opinions are accepted as being accurate and they have the confidence of their fellow-farmers, and it would be a great mistake to dispense with their services.
  In conclusion, I would like to say a word about wages. The hon. Member for Wentworth (Mr. Paling) said that it was such a shame that although the farmer was continually receiving all these benefits, he never handed any of them on to the agricultural labourer. I do not think that he appreciates two things: First, that if it were not for these benefits agricultural wages could not have been maintained at their present figure; second, he does not appreciate that the minimum wage is only a minimum wage, and that the vast majority of agricultural workers are being paid a much greater sum. [Interruption.] Oh, yes they are.
  Mr. E. Dunn: What are the wages?
  Mr. Christie: Further, I would like to impress on the hon. Member that in my own county, at any rate, the work of the Wages Committee is admirably done. The case for the workers is conducted by the Agricultural Labourers' Union.
  Mr. T. Smith: What are the wages?
  Mr. Christie: I think that they are 33s. 6d. The workers' representative is a very able advocate. He lets nothing slip. The final amount is not decided by the farmers but by the impartial members of the committee, and if they do not grant a larger wage, that to me is satisfactory evidence that the wage is as much as the industry can offer. Hon. Members opposite are taking the wrong line. It is their Act. Their people are the advocates, and if they do not do better at it, they should get somebody else.
  Mr. Dunn: Does the hon. Member regard 33s. 6d. a week as being a satisfactory wage upon which even an agricultural labourer and his wife and family can live?
  Mr. Christie: That is not the point at all. In the first place the agricultural labourer in my county gets a great deal more than that. Secondly, the question is how much the industry can afford to pay. That is what the Agricultural Wages Committees are set up to find out, and in my own county they do it very well indeed. I think that this Bill is very good as far as it goes, and I hope that it will not be long before the Minister goes a great deal further.
  7.6 p.m.
  Mr. T. Williams: The House is full of Oliver Twists. They seem to grow with what they feed on. The Minister of Pensions, who is quite appropriately in charge of agriculture for the moment—he is doing his best to pension agriculture off—suggested that my attitude to this Measure was calculated to bring about the political death of many of my colleagues in the country. If their political death is to be assured by my attitude to this Measure, I should not regard that as the greatest compliment to agricultural intelligence that one could think of, because I think that I gave last week justifiable reasons for the attitude we take, particularly in regard to the question of cereals. Whether those of us on these benches are considering agriculture from the point of view of cereals, grassland, beef, dairy produce or the number of men on the land, we not only think in terms of a particular commodity but of national economy. Considerations of health, physique and social well-being have weight with us.
  When we are invited to reply to the question, Do we think that we have reached the optimum with regard to cereal production? I should not think that we have reached the maximum to which we could go in grave times of national emergency, but I am not at all sure that we have not reached the economic optimum. Indeed, if we knew the facts in regard to wheat alone and the quantity of wheat regarded as millable, receiving a deficency payment, that went into the production of bread, we should all feel that we had reached the economic optimum. Farmers have taken their wheat to the appropriate

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  depot to receive their deficiency certificate, and it has been returned to the farm from which it was taken or some other farm to be consumed on the farm. The question I raised in regard to wheat sickness was a term fully justified in these circumstances when it is known that many farmers have grown wheat much more frequently that the land itself could bear, and to increase the quantity for which the deficiency payment can be made from 6,000,000 to 8,000,000 quarters is not to do the best thing we could do for agriculture whether one thinks in terms of peace time or war time.
  The Minister of Pensions told us what the acreage was in 1911. Since 1911 quite a few acres of good wheat land have been taken over for housing, industrial and other purposes. One of my complaints against the Government is that they have no control over the land of this country. The Beta shoe works go to one of the best portions of agricultural land in a county, buy a square mile of land in that county and set down a boot and shoe factory. Quite a large area of land on which wheat was previously produced is now no longer available for agricultural produce. If one studies a document issued by the Ministry on agricultural statistics, noting the average production per acre, one will see that whereas the production is 17.9 cwt. per acre in parts, there are parts where the average is only 12½ cwts. Wheat has been grown—it certainly will be grown when this Measure gets on to the Statute Book—on land wholly unfitted for the production of wheat unless other agricultural commodities are going to provide them with better prices. From 1923 to 1932 the average output of wheat was 26,500,000 cwts., so that we were not altogether without wheat even in a period when no deficiency payments were made. When the right hon. Gentleman suggests that we ought to grow cereals because they provide more employment, I am not at all sure that the figures he gave are conclusive. Examinations have taken place in certain counties, and on a series of mixed dairy farms it has been proved that they employ more agricultural labour that does Norfolk, taking the same acreage, and more than the average arable farm.
  A fortnight ago there was a case in my own division where two agricultural labourers had been paid less than their
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  wages for a considerable period. A complaint was lodged with the right hon. Gentleman's Department, an inquiry was established and the men's case was proved. There was £63 owing to these two employés. It was obtained, but instantly these two labourers were dismissed and instantly they went into the town or out to a new aerodrome which the nation is building and got a job at once. Four or five other labourers have left in similar circumstances during the past five or six weeks. The reasons are that the labourer's wage, when he has obtained it, is not what it ought to be; that many are not getting what the agricultural wages committees determine; and that when the farmer realises that he has got to pay the bill, he is not willing to pay for the labour required for good husbandry and the wellbeing of his farm. The hon. Member for Wentworth {Mr. Paling) referred to the fact that for the past 10 or 15 years there have been increased production with a reduced number of agricultural labourers. Mr. R. McG. Carslaw and Mr. A. P. Graves, of the Farm Economics Branch of Cambridge University, referred to records of 170 farms in the eastern counties and give a comparison between 1931 and 1935—a very short interval indeed. They say that in money values the output per worker in 1935 was 40 per cent. more than in 1931 and in actual volume the increase was 25 per cent. Therefore, it is true that the number of employés is fewer. Mechanisation has found its way on to the farms. I hope, however, that that will not be used as an argument in favour of continuing a cereal policy which we think entirely wrong.
  In regard to oats, the hon. Member for Central Aberdeen (Sir R. W. Smith) made a very earnest plea for Scotland in particular, and said that, because the price in England may be slightly higher than in Scotland, that is going to react to the disadvantage of the Scottish producer. The highest price paid for beef is paid to Aberdeenshire producers, but they walk off with the same subsidy as the fellow who gets much less for his beef. I am sure the hon. Member would not agree to a reduced subsidy for his beef though he wants a higher subsidy for his oats. I do not see any need for this subsidy. After all, of the small imports to-day compared with but a short time ago, 99.8 per cent. come from the Empire and only 2 per cent. from foreign countries. The reason

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  is very simple. There is a duty of three shillings per cwt. on imported oats, and 7s. 6d. on oatmeal, so that foreign competition has been completely cut out. We are now importing only 3,500,000 cwts., and they are not really in competition with home-grown oats at all. Eighty per cent. or so of the oats produced in this country are consumed on the farms and, while in certain parts of Scotland it may be true that on some farms 40 per cent. is sold to other farms, on the whole this cereal crop is grown by the farmer not necessarily for the cash price that he obtains for it. He grows it because it is necessary as a rotation crop.
  You cannot divorce oats from all the other agricultural products on a particular farm and demand that for every article produced there shall be a specified guaranteed price. What industry is there where the owner would not like to know that, when the going is good, he can walk off with the maximum price that he can obtain and, when it falls below a certain point, the Government make up the difference to him? At the moment barley is selling for 10s. per cwt. and the right hon. Gentleman is guaranteeing 8s. I wonder if the hon. Member will approach the Scottish farmers, tell them they are getting 2s. too much and ask them if they will hand over the 2s. to the Treasury to be saved up for the time when the price falls below 8s.
  Sir R. W. Smith: They have lost in the past, and have something to make up for.
  Mr. Williams: I really do not think it is fair. Men who go into speculative, highly competitive business are prepared to take big profits when they are available but, when the price falls, come creeping on their hands and knees to the Government to have it made up to a certain specified figure. The hon. Gentleman said this was not a subsidy but a deficiency for a loss. A loss upon what? Has he any costs of production of barley or oats and, if so, has he handed them to the right hon. Gentleman? Because all that we ask for on this side is that some Minister of Agriculture will tell us how much it costs to produce anything. We have never had any costs submitted to us either in regard to beef, wheat, barley, oats or anything else. We are told from
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  time to time that this particular commodity is essential to good husbandry. The hon. Gentleman said we must have a wide crop in Scotland. They had a wide crop in Scotland before the 1932 Wheat Act was passed. There was no complaint. They had a wide crop in England before the Wheat Act. They have always produced either wheat, barley or oats, because it has been consistent with the best use of their particular land. But no Government in the past has deemed it advisable to separate beef from dairy farming, milk from oats, wheat from barley or potatoes from turnips, and guarantee a price for a number of years for every single separate thing produced on a farm. If that is the new agricultural policy of the National Government, there will not be any farms to let and agriculture will be the most static, stabilised, happy industry in this country. My hon. Friend said you are turning fanners into clerks. Who would not be turned into a clerk if his income was guaranteed in perpetuity by one form of subvention or another?
  I entirely agree with the right hon. and gallant Gentleman the Member for Ripon (Major Hills). We want to see agriculture really prosperous. The urban population is about 92 per cent. We want, therefore, an agricultural policy which will carry the urban population along with us. The right hon. and gallant Gentleman knows how often the National Government have placed the Opposition on the horns of a political dilemma. In this Measure, for instance, they bring in three proposals, not of their own volition, and not that they have at long last converted me or my colleagues, because in 1934 we had an Amendment on the Order Paper which concluded in these words:
  "fails to make adequate provision for the eradication of disease from cattle."
  That was our Amendment to the Government's negative proposal. Now that they have accepted our policy, let them not suggest that they have converted us. They are just three years too late. We want to see agriculture prosper but we want to see it on a solid foundation, and not a sort of flotsam and jetsam, here to-day and gone to-morrow, which is not going to be stabilised at all. We think the Minister might very well have come forward with a Measure dealing with drainage, the eradication of disease and

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  his fertilising plans, and he could have had a united House of Commons. The next Motion on the Order Paper is another piece of business to place the Opposition on the horns of a dilemma. They want to continue to provide cheaper milk for the schools and, at the same time, to subsidise milk that goes into manufactures. If we vote against one, every hon. Member opposite will go to the country and say that we voted against their Bill. If we want to be decent to agriculture and fair to ourselves, we shall have to wait for a day when there is no longer a Scotsman at the Ministry of Agriculture and one who has been reared in the law. Only then will there be a chance of saving our political skins when we think we are doing what is reasonable justice to these proposals. We shall persist in our opposition to these cereal proposals while continuing to support the other three items embodied in the Measure.
  7.26 p.m.
  The Minister of Agriculture (Mr. W. S. Morrison):I hope the House will allow me to preface my reply by a reference to the great loss which the agricultural community has suffered in the death of the late Lord Ernle. The Noble Lord was President of the Board of Agriculture from 1916 to 1919 and on him fell the heavy burden of the War at the time of the food production campaign. He was closely associated with many other aspects of the problem. After his elevation to another place he was regarded as the elder statesman of agriculture. He has written authoritatively, on agricultural questions, works which have become classics of their kind, but his interest in agriculture was by no means exclusively academic or theoretical. For years he managed the large estates of the Duke of Bedford and he had a wide practical experience of agricultural problems. He was a true friend of the land and a wise helper of the farmer. We shall he much the poorer for the loss of his valuable and kindly counsel.
  Mr. Denman: The right hon. Gentleman must not forget that he was the architect of the Corn Production Act, his greatest contribution to agriculture.
  Mr. Morrison: The hon. Member for Wentworth (Mr. Paling) admitted that great efforts had been made to help the state of agriculture, but I think he was also conscious of the fact that we have
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  by no means reached a position where there is nothing more to be done. Indeed, he himself referred to various outstanding problems, and I welcome that approach to the Bill, because it is merely one instalment, though I think a very important one, and does not pretend to cover the whole ground of agricultural policy. He first of all asked me about lime prices and seemed to think that it was some laxity or negligence on the part of the Government that they were not able to answer the question at once. There are so many different commodities comprised under the term "lime" that, unless a description of the commodity is given, it is not easy to answer the question. Lime includes ground lime, quick lime, ground limestone and many other commodities, their characteristic being that they contain the element calcium. From figures that we have received from farmers, prices range from 11s. to as much as 40s. a ton. In order to compare costs you must have schedules describing each quality or grade according to some fixed chemical constituent in it.
  The hon. Member seemed to be of the opinion that we had not done enough to prevent the cost of lime rising. I pointed out in Committee of Ways and Means that the matter was in many hands. Lime is not a product like slag, which is in relatively few hands. Although we have certain assurances from large suppliers, a further check against an undue rise in price exists in the presence all over the country of numerous lime kilns which are now idle but which, if prices were to advance, would come profitably into work again. That results in a real check against any general rise or exploitation on this ground. As to the price of slag, as I say, that is a more concentrated material, and though the hon. Member may have his opinion that we did not get as good terms as we ought to have got about it, I would point out that it is a symptom of industrial production which is general, that prices are rising. Take lime, for example. The raw material exists in inexhaustible quantities in the country. The raw material exists and is readily available, but the whole cost of the production is very largely composed of two constituents, of which one is the fuel used in burning and the other is the labour used in manufacture and transportation. It is common knowledge that both coal and labour costs have risen, and

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  consequently we should not forget that in assessing what has happened with regard to lime.
  Labour costs have had a similar incidence in the case of slag. It is true, as the hon. Member said, that slag is a by-product of the steel industry, and that an expanded production of steel means a greater production of slag. But slag as used in agriculture is not just the byproduct unmanufactured. It has to be milled, treated, placed into containers and transported, and all that involves labour costs. I make these general observations for the purpose of showing that there is something to be said for the attitude which I adopted before with regard to the manufacturers of slag. I made no comment on the figures when I mentioned them, but I did want to say that the manufacturers had been reasonable.
  With regard to the other matters, the hon. Member said that the general opinion was that prices should fall because there would be a larger turnover, but so far as I can see there will be just the same inducement for prices to fall on that account as there would otherwise be. Remember that a farmer still has to pay half the cost of lime and three-quarters of the cost of slag, and if he expends so much more on these two materials as to lead to a largely increased turnover, in the competition for his favours, I should think there is further scope for a reduction of price.
  The hon. Member—and here he was followed by most hon. Members on that side of the House, including the hon. Member for Don Valley (Mr. T. Williams) —took most exception to the provisions with regard to cereals contained in the Bill. It is not an unfair summing up of the attitude of those hon. Members to say that, though they had their criticisms on the other part and reserved their criticisms on that, it is the cereal matter which strikes them as most objectionable. There are one or two things I should like to say, and the first point is this: The House will remember that in introducing these proposals originally, I had to keep in mind and call the attention of the House to the Defence aspect, and that aspect remains. We all hope that we shall not be asked to go to war, or again be subjected to pressure on our food supplies; but it is our duty in time of peace to bring proposals which are good
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  in time of peace and which will be of assistance to the nation should emergency come. It was characteristic of the effort made in the last War, and would be characteristic of the effort of any Government in any similar emergency in the future, to try to increase the production of food for human consumption, not to make the nation self-supporting, but to diminish the strain upon shipping and on His Majesty's ships which are convoys to carriers of food over long distances.
  That means ploughing up, and you cannot plough unless you have the land in the condition for ploughing, and, secondly, the men and tackle with which to do it. The ploughs, the gear, the animals, and the men cannot be conjured into existence in a moment of emergency. We must have arable cultivation maintained in the country quite apart from the great part it plays in the ordinary course of agriculture, because it is a thing we shall all ask for in time of war and expect to see in its place. So much for the emergency side of the proposal. But the proposals can be abundantly justified for the place they take in the practice of agriculture.
  We have heard a great deal, with which I agree, from the hon. Member for Don Valley and others, on the importance of grassland and the natural advantages of soil and climate in which we are preeminent in this regard. But it is impossible to have good grass over the whole country without the plough being used, and it is my belief that unless assistance is given to cereal agriculture we shall all suffer not only a loss of cereals, but a loss in the quality and fertility of our grassland. The importance of that side of it fully justifies us, in my opinion, from the point of view of agriculture in peace time. The hon. Member for Don Valley made an acute observation when he said that people would, in any case, grow these arable crops because they are a necessary part of the rotation. But one should not close one's eyes to the fact that if a crop like oats, wheat or barley is constantly unprofitable when produced, there is a tendency for agriculture to avoid that fruitless expenditure, and to neglect the rotations which are essential for the proper cultivation of the soil, and whilst I agree that every farmer, so long as he could, would maintain arable cultivation for the sake of its effect on rotation, I

  109
  think any general assistance to agriculture over the country must include some provision for arable cultivation.
  Other questions were asked me and, as was fully expected, a great deal was said about wages, and the hon. Member for Wentworth (Mr. Paling) made a comparison between the rise in wages and the profits in the Eastern counties. I think the basis of his remarks was the same document as that quoted by the hon. Member for Don Valley, the Bulletin issued by the Farm Economics Branch of the Cambridge University Department of Agriculture published last month. But what do the figures show? They show profits based on the returns from 150 farms. I should probably not be prepared to say that 150 farms are necessarily a sufficiently broad base on which to form conclusions of any accurate character, but they are interesting so far as they go. What they show Is that the average profit per 100 acres of those 150 farms was £1 in 1931, and in 1936 that average profit had risen to £139 per 100 acres. That seems a very great rise, but I would ask the House to remember that an average-sized farm would be something in the nature of 200 acres. In spite of the fact that you have the rise from £1 to £139 per 100 acres, it would mean that you were remunerating a man with £280 for his own labour, for interest on his capital, for the great risks attendant upon agricultural operations in general, and for all the work and maintenance and anxiety he puts in.
  I think it is right of me to say that, because, although the hon. Member for Wentworth did quite properly draw attention to these figures, he rather left the House with the opinion that there had been an advance in agricultural prosperity of a startling character. It is only an advance of that character if you compare it with the very low level of 1931. Still I do not think anyone would say that such a remuneration for a man with 200 acres was excessive in the circumstances. Of course the attainment even of that measure of profitability depends on a lot of things, adventitious things that may happen, weather conditions which make it posssible for him to put in his seed at seeding time and other such things.
  The hon. Member asked me about drainage and he asked me—and the hon. Member for Brigg (Mr. Quibell) also
  110
  asked me—which authority would be administering these grants? You will find the answer in the White Paper, and it is that these particular grants are intended for internal drainage boards. They are all grants to be administered by public authorities—internal drainage boards in districts where such boards exist and, where they do not exist, the county council is the proper drainage authority. If the hon. Member has any further difficulty I will be glad to explain further. I know he is interested in matters of drainage in his constituency.
  The other points that were raised were as follows: Many hon. Members expressed approval of the provision to deal with animal diseases. The hon. Member for Central Aberdeenshire (Sir R. W. Smith) asked me about grass sickness, and it is true that the proposals which are now embodied in the Bill would enable the central veterinary service to take powers to deal with that disease. But an essential preliminary to the administration of an Act against disease is an understanding of that disease, and at present this disease is in the realm of research. We are conducting researches into it at the Moredun Institute, which is very well suited for this particular research. That is being done by grants which are made available by the Agricultural Research Council. When the results of these researches become available, that will be the time for a campaign against the disease to be initiated. But while it is true that the central veterinary proposals in this Bill will enable us to suggest remedies for any disease in any animal, the first preliminary is to have an understanding, and for that purpose to have research conducted.
  I come to the hon. Member for Barnstaple (Mr. R. Acland), and I want to do justice to his speech. I understand he was generally denunciatory of the attitude of His Majesty's Government in this matter, but he made reference to various problems of agriculture in which I hope, when he reconsiders the matter, he will see that we are doing something to assist him. For example, drainage. That is one of the points dealt with in the Bill. He may say that these proposals are inadequate, but I would ask him to reflect that to assist the internal drainage boards is an essential step if you are to prepare the way for better drainage of the soil of the fields.

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  Many other points were raised by him, including a proposal that the soil should be broken up by some authority other than the farmer. I do not think that that proposal would be very welcome to the farming community. I have seldom come across a topic which caused so much disagreement as the breaking up of soil during the War, under the authority and orders of certain committees. It was almost like a civil war at home. I would not venture to make a general criticism of what was done at home at that time, through ignorance, but I am convinced that in many cases land was broken up that should never have been broken up. It is the farmer himself who really knows what land should be broken up. It is true that sometimes he is dissuaded from breaking up land which ought to be broken up, by reason of expense and other considerations, but I do not think that the position would be assisted by placing the decision of such an intimate domestic matter as the breaking up of the soil into the hands of a public authority.
  The hon. Member for Barnstaple asked me about fertilisers. I agree with him that it would be altogether wrong to say that by specifying lime and slag we have exhausted the list of substances whose application is of benefit to the soil; but there is this to be said, that both of these are long-term fertilisers. Many other substances are of great value if applied with intelligence at the right time, but they are of value for a relatively short time. On the ground of comparative permanence we should be justified in confining ourselves to these two substances. Another point is that these two substances which are selected for consideration in this Bill are both entirely of home origin. While we have been able to make arrangements to prevent the prices rising in the case of lime and slag, it would be impossible to arrive at any satisfactory solution of the problem of preventing the foreign exporter of raw materials, such as superphosphates and others, from reaping part of the benefit.
  The hon. Member also asked me about grass drying. I should like to make clear the attitude of the Government on this matter. We feel that there are still great problems to be solved before we can be certain as to the success of this operation, but we are doing what we can in the
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  Ministry of Agriculture and in the Agricultural Research Council to carry out investigations with a view of solving the problems which remain. There are problems of three categories. There is the problem of the nutritional value of the product, and, although there is a great body of evidence which shows that the product is an extremely valuable one, there are problems of a scientific, almost a dietetic character, to be solved. The product varies according to the condition of the grass itself and other matters which are attendant upon it. There are also problems of an engineering character —the design of apparatus which is sufficiently powerful to effect its purpose in the necessary space of time and yet which is not too expensive for the pocket of the ordinary agriculturist. There are also other problems, most difficult and stubborn problems, such as farm technique in regard to the proper management of grassland, if you are to subject it to this process. We are investigating the matter and hope that at the end of this season we shall be in possession of more information and knowledge about it.
  The House will forgive me if I do not deal with all the points raised. The hon. Member for Brigg made one of his very interesting speeches. He does not believe in subsidies, and dissociates himself from this practice, and gave it as his idea that there ought to be a guaranteed price for all agricultural products. As he rejected the subsidy, I wonder what other method he has in view? Perhaps he and his hon. Friends opposite may explain that to us at some other time.
  Mr. T. Williams: Perhaps the right hon. Gentleman will be good enough to say a few words on Clause 10, with regard to the administration of the deficiency payments, if any.
  Mr. Morrison: I think the administration of the deficiency payments was adequately explained in the White Paper, but there are other points which arise and which we might discuss in Committee. The broad idea with regard to oats and barley is to fix a standard price and a standard acreage and then to assure to the grower your standard price related to acreage in the manner described in the White Paper by means of an acreage subsidy. The administration of the subsidy is naturally a problem which has many facets. It is an acreage subsidy, and

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  therefore one has not, as in the case of a subsidy like the wheat subsidy, the check upon farming procedure which is implied by the grain itself being the judge and criterion of how much has to be paid. In the case of the acreage subsidy you have not that check. Therefore, there are provisions for administrative regulations to ensure that negligent farming, mixed crops and other problems are dealt with.
  Mr. A. V. Alexander: Can the right hon. Gentleman say what are the functions under Clause 10 which are to be given to the Wheat Commission?
  Mr. Morrison: I think they are sufficiently detailed. The actual payments out of public funds will rest with the Ministry of Agriculture in England and the Department of Agriculture in Scotland, but the Wheat Commission is in possession of a great deal of information which would be useful to us, and if the hon. Member looks at the Clause he will see that Sub-section (1) authorises the Commission to perform on behalf of the appropriate Minister any functions connected with the administration, as may be approved. Then follows the point which I have just made, that the actual subsidy is to be paid out by the public Department and not by the Commission.
  Mr. Alexander: Will that mean that no farmer will have a claim in law against the Government?
  Mr. Morrison: In regard to the provision for the oats and barley acreage subsidy, no.
  Mr. Hopkin: Is it possible for the right hon. Gentleman to say how the subsidy will work in the case where there is mixed corn, that is, mixed oats and barley? That is a crop which is largely grown in Wales and the West of England, and it would be of service to the agricultural community to know how the subsidy will be paid for mixed corn.
  Mr. Morrison: Sub-section (2) gives power to the appropriate Minister, with the approval of the Treasury, to make payments to the Wheat Commission to defray expenses incurred by the Commission in the performance of functions entrusted to them under the Clause. That is for the obvious reason that if you allowed the cost of the oats and barley
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  administration to fall upon them, you would be taking the course of asking them to pay something that the Government should pay. In Sub-section (3) there is provision in regard to administration expenses of the Wheat Commission. It is not the intention that the Wheat Commission should have to undertake the task of sending out the forms or receiving them back again. That will be done by the Ministry of Agriculture and by the Department of Agriculture in Scotland, and the expense will be borne on the Votes of the Department, but the clerical staff of the Wheat Commission may be of use to us as they have the register of wheat growers, and they may also perform certain inspectorial functions in regard to the matter.
  The hon. Member for Carmarthen (Mr. Hopkin) asked me about a crop which is very common not only in Wales but in other parts of the Kingdom, and that is where you get a mixed crop, say, of oats and barley. Under Clause 8 (1) regulations have to be made to deal with that. Where you have oats and barley growing intermixed with grass or clover, and where in consequence the yield of oats and barley is not affected by the mixture, the acreage will not be treated as reduced on that account for subsidy purposes. In an ordinary case where you have a mixture of oats and barley mixed with other crops, the acreage will be treated as reduced acreage in accordance with the proportion of oats and barley which exists combined with the other crops. I hope I have made my meaning clear. That, again, is a matter that we can discuss in detail in Committee. The point has not been lost sight of. The general result of our regulations will be that where a man is growing oats and barley mixed with a crop in such a manner that the yield of these two crops is not reduced by the mixture, then we shall not make any reduction of his acreage for that reason, but where it is grown with other crops which are not the subject-matter of the subsidy, then we shall take into account the proportion of the mixture that takes place.
  The hon. Member for the Don Valley was mostly concerned with the question of the cereal provisions of the Bill, and he also made a point about oats, and drew attention to the undoubted fact that oats are for the most part home-produced; that we produce 93 per cent. of our oats

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  and only 7 per cent. are imported. He asks why we should specially assist a crop for which we have already got almost a monopoly. I would say, in reply, that it is very easy to take too isolated a view of this crop. Its fortunes are very largely bound up with those of other cereals used for feeding purposes. It is greatly affected by the price of maize and the price of feeding barley. It is to feeding barley and oats that we are proposing to give some assistance. The House may think, as I do, that it is well worth while to keep alive the cultivation of these homegrown feeding stuffs for the purposes for which the legislation has been drafted. The hon. Member for Central Aberdeen was concerned about the oats provisions and about having an arrangement of prices applied to the circumstances of Scotland. The Under-Secretary of State for Scotland, on the Financial Resolution, gave a complete answer on that matter. The broad fact is that if we take into account the price of oats from Northern Ireland we get an average for the whole of the United Kingdom which is very nearly identical with the Scottish price.
  An hon. Member asked me about the committee whose duty it is to investigate and recommend as to whether or not the standard price of wheat should be raised. In that committee there was an examination in 1935, and they were of opinion that the standard price of 45s. should not be raised. I understand that the hon. Member's complaint was that determination should take place more often than once every five years, and that is a matter which will have to be decided. I should like to thank the Noble Lord the Member for Rutland and Stamford (Lord Willoughby de Eresby) for making an interesting and suggestive speech. He made the point that the health of animals is ensured not only by reason of veterinary services, but is bound up to a large extent with the health of the soil itself, if there are present in it the correct amounts of minerals and other constituents. That is the correct answer to the suggestions of some hon. Members that there are different purposes in different parts of the Bill. Hon. Members may have thought that the proposals for the eradication of animal diseases bear no relation to other proposals for assisting arable cultivation. There is one keynote of all the provisions,
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  and that is health. The health of animals is assisted by healthy soil.
  Bill committed to a Committee of the Whole House, for To-morrow.—[Captain Dugdale.]

  MILK (AMENDMENT) [MONEY].
  Considered in Committee under Standing Order No. 69.
  [Captain BOURNE in the Chair.]
  Motion made, and Question proposed,
  "That it is expedient—

  (1) to amend the Milk Acts, 1934 and 1936—

  (a) by extending by twelve months the periods in respect of which sums are to be payable to boards administering milk marketing schemes, out of moneys provided by Parliament, under sections one, two and three of the Milk Act, 1934, as amended by the Milk (Extension of Temporary Provisions) Act, 1936 (which first-mentioned Act as so amended is hereinafter referred to as "the Milk Act");

  (b) by extending by twelve months the period in respect of which sums are to be payable to the Exchequer by boards administering milk marketing schemes under section five of the Milk Act;

  (c) by enabling the payments out of moneys provided by Parliament which may be made under sub-section (1) of section eleven of the Milk Act in respect of expenses incurred by boards administering milk marketing schemes, to be made in respect of such expenses attributable to any time before the first day of October, nineteen hundred and thirty-eight, and to increase the amount which may be so expended under the said subsection by five hundred thousand pounds;

  (d) by providing for a butter-milk price, to have effect in lieu of the cheese-milk price mentioned in section four of the Milk Act, for the purposes of sections one, two, and five of the Milk Act, in relation to milk used in manufacturing butter;

  (e) by providing for the certification of a cheese-milk price, to have effect in lieu of the cheese-milk price mentioned in the said section four in relation to milk used in manufacturing milk products other than butter;

  (f) by providing for the interpretation of the reference in section one of the Milk Act to the net cost per gallon of milk;

  (2) to authorise the payment out of moneys provided by Parliament of such sums as may fall to be defrayed by reason of the aforesaid amendments to the Milk Acts, 1934 and 1936;

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  (3) with respect to Northern Ireland—

  (a) to authorise the payment, in certain circumstances, out of moneys provided by Parliament to the Government of Northern Ireland of such sums as the Treasury may determine in respect of milk produced in Northern Ireland which has, in the period of twelve months beginning on the first day of October, nineteen hundred and thirty-seven, been used in manufacturing cream or butter at premises registered under any Act of the Parliament of Northern Ireland relating to the marketing of dairy produce; so, however, that the sums payable in accordance with this sub-paragraph shall not exceed such amount as appears to the Treasury to be sufficient to secure that the sum per gallon payable in respect of such milk used as aforesaid in any of those twelve months to the respective producers thereof is not less than the standard price (as defined by the Milk Act) for that month;

  (b) to extend by twelve months the period in respect of which sums are to be payable to the Exchequer under subsection (2) of section six of the Milk Act by the Government of Northern Ireland; so, however, that that Government shall not be liable to pay as aforesaid any sum in excess of the aggregate of the sums paid to that Government under sub-section (1) of section six of the Milk Act and in accordance with sub-paragraph (a) of this paragraph;

  (4) to provide for payments by boards administering milk marketing schemes to registered producers in respect of milk sold at a reduced price;

  (5) to make minor and consequential amendments in the Milk Acts, 1934 and 1936; and

  (6) to provide for other matters connected with the matters aforesaid."—(King's Recommendation signified.)—[Mr. Ramsbotham.]

  8.4 p.m.
  Mr. Ramsbotham: This Resolution contains no new question of principle at all. Its main purpose is to extend by 12 months the provisions of the Milk Act of 1934, as amended by the Milk Act of 1936, which would otherwise expire on 30th September next. To enable the Committee to judge the theme of this matter it might be advisable to give a short sketch of the events which led up to the present position. In 1930, and indeed up to 1933, when the purchasing power of people was very low, there was an unprecedented concentration of world exports upon the United Kingdom, and the result of that state of affairs was a very serious and drastic fall in the price of manufactured milk. When the difference between the price for liquid milk and manufactured milk was comparatively small, there
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  was no particular pressure of milk on the liquid milk market at cut prices. Furthermore, the disparity between the prices of liquid milk and manufactured milk was comparatively small. In 1913 it was about 6d. a gallon and in 1930 that disparity increased to 11d. a gallon. It rose further in 1933 to 1s. 1¼d. a gallon, and in 1935 it was nearly 1s. 1d.; to-day it is still over 11d.
  The result, in those circumstances, is that the natural protection afforded to liquid milk was threatened by the competition of home supplies driven out from their customary manufacturing channels by the very large volume of imports of dairy produce from abroad. We must also take into account in this review of the situation the improvements in transport since the War, which enable supplies to be concentrated on big centres of consumption. The result is that in 1933 the collective system of bargaining between the producers and the distributors was unable to cope with the position, and beyond any question of doubt and as a matter of historical fact a crash in the liquid milk market was imminent. That crash was averted by the milk marketing schemes which came into operation just in the nick of time. There is no doubt that the liquid milk price in this country would have collapsed but for that. Consequently there would have been a disaster to the countryside, and although it is true that the consumers for a short while might have benefited by purchasing their liquid milk at practically bankrupt prices, the advantage could not have lasted long and must have been followed by a period of short supply and high prices.
  The milk schemes, based as they were on the pooling system, although stabilising the liquid milk price, had little or no effect upon manufacturing milk prices. Those prices were still governed by the price of imported dairy produce, and a gap between the liquid price and the other price became apparent. By reason of the Ottawa Agreements and the foreign trade agreements, the Government at that time was prevented from helping the industry either by means of tariffs or by means of the regulation of imports, and accordingly it was decided in the spring of 1934 to make advances to the Milk Board by means of which minimum returns for manufactured milk could be secured, and those advances were to be repayable. The

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  Milk Bill of 1934 was tabled and passed and the policy endorsed by this House. Again, it is a matter of historical fact that that method unquestionably enabled the consumer to get very large supplies of butter and cheese at very low prices. The advantages under the 1934 Act were to continue until March of 1936.
  In July, 1935, my right hon. Friend the Secretary of State for Scotland—then Minister of Agriculture—informed the House of the Government's intention to review the situation before March, 1936, in the light of our obligations under trade agreements and the recommendations of the Re-organisation Commission. That was in July, 1935, and it was then expected that this Commission would be able to report by Christmas, 1935. It became apparent later in the year that the report would not become available so soon, and as the advances under the Act of 1934 would expire in 1936 a Financial Resolution was passed on the 17th February, 1936, followed by an Act for the extension of the period of advances for another 18 months up to September next. At the time of the Financial Resolution, in February, 1936, the report was expected in May, 1936. In the Debate on the 17th February, 1936, the Minister of Agriculture expressed the hope that it would be possible to lay before the House a more permanent policy in the Autumn Session of 1936. I will admit that when in February, 1936, I was privileged to stand here and move that Financial Resolution, I thought it would be positively my last appearance as far as any extension under the Milk Act was concerned. I did not expect that the speech which I then delivered would be a sort of prima donna's goodbye. But sometimes Governments propose and Commissions and other circumstances dispose.
  In this case the report of the Reorganisation Commission was in fact presented last November, and it then had to be carefully considered. The views of the Milk Board and other organisations concerned with this great industry had to be ascertained and studied by my right hon. Friend, and in pursuance of that very desirable and necessary procedure the following organisations submitted their views on the following dates: The National Farmers' Union and the Milk Marketing Board on the 25th February this year; the Milk Marketing Board sub-
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  mitted a further memorandum on 30th April this year; the Central Milk Distributive Committee submitted its views on the 14th May; the National Farmers' Union on the 26th May, and the Co-operative movement on 3rd June. I feel sure that the Committee will appreciate the soundness and wisdom of consulting these bodies, and they will agree that it would be extremely foolish for my right hon. Friend to do otherwise. It would not save time in the long run and it would definitely be asking for trouble. Indeed, I suggest that delay is not surprising and is inevitable when you are dealing with an industry so immense and complicated as this one is. Beyond any doubt, an ill-considered and precipitate action might do irreparable harm both to producer and consumer. We are dealing with an industry the value of whose output of milk and dairy produce is about £65,000,000 sterling in Great Britain. In the last financial year of the Milk Marketing Board the turnover was £48,000,000. The fixed capital in the dairy industry amounts to some £90,000,000. If you value the dairy herd at between £75,000,000 and £80,000,000 you have a total of £165,000,000 to £170,000,000 as the capital in this industry.
  These are large figures, and the success or failure of a permanent policy would have meant repercussions on those engaged in the industry and on those who consume its products. One might compare it with the problem of electricity distribution. I doubt whether it is any less complicated and, indeed, if I were given a choice I would far sooner deal with the problem of electricity distribution than with the problem of milk. The report of the McGowan Committee on the distribution of electricity was issued in May 1936, 14 months ago, and I understand that the views of interested parties are still being sought by the Minister of Transport. Therefore, I do not think the Committee will blame the Government for giving careful and protracted thought to this difficult problem. At the same time I can assure the Committee that no time is being lost or will be lost, and although my right hon. Friend cannot pledge himself as to a date when he can make a statement, if he is able to make a statement before the House rises he will do so. At any rate he cannot give an indication of a more permanent policy on the proposals before us to-day.

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  Let me therefore go through the provisions of the Financial Resolution which we are asking the Committee to accept. Paragraph (1) (a) provides for an extension of Exchequer payments in respect of milk manufactured in Great Britain for a further 12 months, that is up to the 1st October, 1938. The effect of the paragraph is that on each gallon of milk sold at prices below the standard price—that is 5d. per gallon in the summer and 6d. per gallon in the winter—for manufacture into cheese, milk powder, condensed milk and cream, the Exchequer will pay a sum which will make up the cheese-milk price or the net cost per gallon to the purchaser, whichever is the greater, to the standard price. That, broadly speaking, is what was provided in the previous Act, but I would point out when I come to later paragraphs that there will be a new cheese-milk price.
  Mr. Hopkin: Is that really so? We have not heard a single word from the Minister about the effect of the new formula of the investigation committee. Is the statement which the Minister has now made really correct?
  Mr. Ramsbotham: It is perfectly correct. This paragraph provides for a payment by the Exchequer in respect of any milk sold below the standard price at a rate which will make up the cheese-milk price or the net cost per gallon to the purchaser, whichever is the greater, to the standard price.
  Mr. Hopkin: The Minister knows that the investigation committee made two new formulae, one for milk for butter and the second for milk for cheese, and both these formulae made a profound difference to the price paid.
  Mr. Ramsbotham: I think I shall be able to make the position quite clear if the hon. Member will allow me to continue. I do not think he will find that there is any difference between us. Similar payments will be made in respect of milk manufactured into butter and the new butter-milk price, referred to in paragraph (d), will take the place of the cheese-milk price. The estimated cost of this extension will be £550,000. Paragraph (1) (b) extends for a further year, from October, 1939, to September, 1940, the period during which the Milk Boards are under a contingent liability to repay
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  the Exchequer advances. That provision is in conformity with the 1934 Act. Paragraph (1) (c) extends the period of grants to schemes for increasing the demand for milk, that is the milk in schools and publicity schemes, for a further 12 months, and will cost £500,000.
  Now I come to paragraphs (d) and (e) in which the hon. Member is interested. These paragraphs provide for the calculation of a new cheese-milk price and a butter-milk price to take the place of the present cheese-milk price. This provision has been made to meet the complaint of the Milk Board that as a result of the cheese and butter prices awarded by the investigation committee to which the hon. Member has referred the payments under the Milk Acts have not been enough to bring their returns on manufacturing milk up to the standard price (5d. in summer, 6d. in winter). It provides for a new calculation of the prices for cheese-milk and butter-milk to take the place of the old formula as from next October.
  Mr. Hopkin: In the meantime is it possible for the Minister to tell us how much the producers say they have lost under the prices given to them by the board?
  Mr. Ramsbotham: I cannot give a close estimate, but I have heard it claimed that they have lost £1,000,000. However, as a result of this complaint and this decision it is proposed to amend the definition of the cheese-milk price as from October next in such a way that it will represent the price obtainable for milk manufactured into cheese, and it is also proposed to amend the calculation of butter-milk prices to represent the prices obtainable for milk manufactured into butter. Paragraph (f) is an interpretation of a phrase, "net cost per gallon of milk to the purchaser," which appears in Section (1) of the 1934 Act. It is in the nature of a drafting Amendment and is designed to remove an anomaly, and enable the intentions of the 1934 Act to be realised.
  Sir R. Dorman-Smith: May I ask whether this involves any expense to the producer?
  Mr. Ramsbotham: I think it breaks fairly evenly and that there may possibly be no expense or loss either way. Paragraph (2) of the Resolution authorises

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  payments consequent upon these Amendments and paragraph (3) applies to Northern Ireland and extends the period for payments for another 12 months, that is to 1st October, 1938. The estimated cost of that is £67,000. At the same time it extends for a year, that is up to the 30th September, 1940, the period during which there is a contingent liability for repayment. Paragraph 4 regularises the payments of the English Milk Marketing Board to producer-retailers who have taken part in experimental schemes for the supply of cheap milk for nursing and expectant mothers and children under school age in certain parts of the Special Areas. Some doubt has arisen as to whether it is within the legal power of the Milk Marketing Board to make these necessary rebates to the producer-retailers, and in order to remove that doubt and to make it beyond any legal question, this provision is proposed. It involves no extra charge on the Exchequer.
  I think I have dealt with all the points in the Resolution. The position now is very much what it was in February, 1936, and the Committee has, broadly speaking, the same alternatives before it as it had at that time. The hon. Member for Don Valley is to-day in the same dilemma as he was 18 months ago. I very much regret that, for nobody dislikes more than I do putting the hon. Member in a dilemma; but the dilemma is there and I cannot help him. He is faced with two alternatives. The first is to allow the 1934 Act to lapse. As he knows, that would immediately have a disastrous effect upon the industry and indeed upon the consumers, and as he pointed out in the last discussion on this subject, it would bring to an end the milk-in-schools scheme.
  The other alternative might be to adopt the suggestion that the assistance given to the manufacturers of milk should be diverted in order to cheapen the price of liquid milk. If hon. Members examine the figures, they will see that the difficulty is that the diversion would have very little effect, because it would mean spreading some £500,000 over something like 700,000,000 or 800,000,000 gallons, and the actual cheapening would be one of a number of decimal points. That suggested solution would not do much to cheapen the price of liquid milk. Therefore, the only course which I can suggest to the Committee at the moment is
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  to continue the 1934 Act, as amended by the 1936 Act, in accordance with the terms of this Financial Resolution. I think that is the only possible course, bearing in mind that a more permanent policy is to be introduced as soon as possible and that the case for insuring this industry against the depressed prices of manufacturing milk is just as strong to-day as it was in 1936 and in 1934.
  8.29 p.m.
  Mr. T. Johnston: As my hon. Friend the Member for Don Valley (Mr. T. Williams) indicated during the discussion on the previous Measure this evening, we had some difficulty in framing an Amendment to the Financial Resolution which would not lay us open to serious misrepresentation in the country. There is one part of the Resolution with which we cordially agree; that is, the part which provides for the continuance of subsidised milk to children from 5 to 14 years of age during their hours of school attendance. There is another part of the Resolution with which every hon. Member on these benches without exception is in complete disagreement. I trust this is the last occasion on which the Opposition may be called upon to object to a Measure of this nature and not be able to carry its objection to the length of a reasoned Amendment in the Lobby without laying itself open to misrepresentations of a political character.
  I have great difficulty in finding appropriate and suitable language within the rules of order to describe the criminal follies of an organised high price for liquid milk against the poor consumer, and a subsidised and non-economic price for wealthy manufacturers. That is what is involved in the continuance of the milk scheme as at present organised: a deliberately inflated price to the poor, and a deliberately non-economic price to wealthy manufacturers. Even at the risk of being accused of having "a bee in my bonnet," I venture once again to ask the Minister of Agriculture, or whoever is to reply, how much longer is this to go on? Time and again we have given facts and figures on this milk business as at present organised, and nobody in the House has ventured to dispute them; but still the system goes on. We ask questions and we receive very polite replies to the effect that this is a matter that should be dealt with on the Ministry of Health vote. When we tackle the

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  Minister of Health, he refers us to the Minister of Agriculture; and when we ask the Minister of Agriculture about it, he assures us in a serious manner that it requires the attention of the Treasury, and the Cabinet, because there is a Milk Reorganisation Commission's Report to consider. Somehow or other, nothing is ever done.
  What are the facts? The Minister of Pensions skated beautifully and politely over them this afternoon, but nobody knows better than he does that he did not face the realities. What are the facts? The Government are to-day subsidising milk in schools; school-children are being sold milk at 1s. a gallon. The Government say that it is necessary that that should be so, that children from five to 14 years of age must get milk at 1s. a gallon in the interests of the national health. Nobody objects to the Government doing that; everybody applauds them. Every medical officer of health in the country, every educationist and every nutritionist, says that in that respect the Government are on the right lines. But in the case of children who are four years old, three years old, two years old, the babies, the sick, and nursing mothers, the price is 2s. a gallon. Will the Minister of Agriculture tell us why the Government continue to charge 2s. a gallon for milk for the mothers, the babies and the toddlers in the distressed areas, or any other areas, when they say it is right and proper on public health grounds that children between five and 14 years of age should be charged only 1s. a gallon for the milk? We want an answer to that question. Further, why do the Government subsidise the chocolate manufacturers? Why should Frys and Cadburys and Rowntrees and the Horlicks Malted Milk people get their milk at 5d., 6½d., and 7d. a gallon when 2s. a gallon is being charged for milk supplied to mothers and babies? Why should the Government subsidise, as they did last year, the export of 12,000,000 gallons of milk in tins to Central Europe at 6d. a gallon? Why should Czechoslovakia get its milk in tins at 6d. a gallon, while we have to pay 2S. a gallon for milk for mothers and babies in the depressed areas of this country? Yet the Government can come here and ask the country to continue to subsidise a policy of that kind.
  We have subsidised production long and long enough. The production of liquid
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  milk in this country has, I understand, been doubled since 1913. You are at your wits' end to know what to do with it, and you will do any old thing with it, except subsidise the poor consumers and enable them to make use of it. You will subsidise the producer, you will subsidise Czechoslovakia, you will subsidise the chocolate manufacturers—anyone and everyone to take this liquid milk off the market, but you will not subsidise the poor consumer except, as I have said, in regard to children between the ages of 5 and 14. I have said repeatedly that there is only one market left for liquid milk. It ought to go into the stomachs of the poor and it is a crime for the Government to divert the supplies that ought to be consumed by mothers and babies to other uses—to be converted into chocolate or cheese, or into umbrella handles, or put to any other use except that of satisfying the human needs of our own citizens. The Minister of Pensions seems to regard it as a joke. Where is the joke in it?
  Mr. Ramsbotham: What I regarded as a joke was the right hon. Gentleman's reference to milk being made into umbrella handles. I was thinking of how little foundation there is for that allegation.
  Mr. Johnston: Does the Minister mean to say that there is no milk converted into such things as combs, and umbrella handles and the like? I do not say it is a large quantity.
  Mr. Ramsbotham: I believe a very tiny amount of the residual milk.
  Mr. Johnston: Does the Minister regard it as a joke that liquid milk should be diverted to Central Europe or made into chocolate by wealthy manufacturers who pay fabulous dividends and that they should get the milk at cheap prices while the poor have to pay 2s. a gallon for it? If that is a joke, the sooner the joke is stopped the better. For my part, I am rapidly coming to the conclusion that mere argument in the House of Commons on this matter is no use. Something more spectacular is required. Members will have to adopt Irish tactics here to draw public attention to what is just about the greatest scandal of our time. Not only in the case of milk, but in the case of nearly every other necessary foodstuff is this kind of thing going on at present. Last Friday 13,500,000 herring came into the

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  port of Lerwick and the port had to be closed. While our fishermen are in starvation we throw away herring. It is no wonder that I feel annoyed when I find this matter being treated as a joke.
  I know that in Sweden last year the average citizen consumed 420 pints of milk, whereas in this country the average consumption per head was 150, or about one-third that of Sweden. But the price in Sweden to the consumer was only 1½d. per pint, while here it runs from 3d. to 3¼d. per pint. Thus milk is three times the price to the consumer here compared with Sweden, and the consumption is only one-third that of Sweden. Then we have a continual outpouring of expenditure on public health in a frantic endeavour to undo the harm that we have been doing by preventing mothers from getting the milk which they so much require. I am tired of quoting the results of investigations in Cardiff, in Durham, in Oxford, and other places showing the results of the present policy. I am tired of quoting what has been said by Sir John Orr and other authorities, by the Government's own advisory committee, and by their committee on nutrition. I am tired of quoting the Government's own documents. Nobody disputes the facts and figures. Nobody denies that the more children there are in a family the less milk they get. Nobody denies that the Oxford investigation proved that a family of six children only get, per head, one-third of the quantity of milk available where there is one child in the family. The reason is obvious. The more units in a family the less the parents can afford.
  There is a simple way out. Why cannot the Minister of Health and the Minister of Agriculture go together to the Treasury and say, "There is going to be pandemonium and there can be no united front of any kind, sort or character as long as this goes on. There must be food for all. There is no justification for starvation in the midst of plenty. There is no justification for the destruction of good food until everybody has been fed"? Why cannot the Government say to every medical officer of health in the land, "As long as a mother with young children cares to go or to send to any authorised distributor of milk she shall get milk at the same price as that at which it is supplied to the schools"? If
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  it pays the farmers to sell milk to the schools at 1s., it will pay them equally well to sell it at 1s. for the benefit of children under four years of age, and they will be delighted to do it, I know.
  It only requires a new vision and energy, a new view of their responsibilities by the Minister of Agriculture and the Minister of Health, in order to put an end to this scandal. We have had promises galore. We were told over a year ago that the question would be re-examined. We were told over a year ago by the Minister of Health that his sympathies were with us. We can quote election pledges against the Government. We can quote statements to the effect that this milk was to go to the people first. Why have they not carried out those pledges? Why continue this insane system of diverting an absolutely necessary foodstuff from the homes of the poor? In the Cardiff investigation it was proved that 26 per cent. of the poor class families bought no milk at all in liquid form. Whatever milk supplies they got was tinned. In the municipal housing schemes, when investigations were made, it was found that the people were so hard put to it to pay the rents that they, too, could not get liquid milk.
  Here we have a situation in which the farmers are in distress because they cannot sell their milk, and the poor are in distress because they cannot buy it, while the Government stand in between doing their utmost to divert the liquid milk supplies as much as they can into manufacturing processes. I do not deny that one part of this policy has made cheaper butter and cheese. It may, for all I know, have made for cheaper chocolate, but I beg the Government to face the conclusions arrived at by every nutrition committee, national and international, that the fundamental essential to good health is plenty of milk for babies, the sick, nursing mothers and toddlers. If we do not do that, if we do not insist upon it, the armament programme is going to defend—what? It will defend a nation in disease. The hon. Member for St. Albans (Sir F. Fremantle) publishes a book with a preface written by the Prime Minister to prove that it is costing £300,000,000 in an attempt to eradicate disease. Nobody disputes the facts, and while we do not propose in existing circumstances to divide against this Money

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  Resolution, I hope that it is the last occasion upon which any Minister will come to the House and defend a system which means the perpetuation of hunger and starvation in the midst of plenty. If he does ever attempt it, I hope that it will be met with hoots of derision and the most strenuous attacks from these benches. I hope that this is the last time upon which it will be said that the British Government deliberately acquiesced in the destruction of a valuable and necessary foodstuff for the poor of this country.
  8.49 P.m.
  Sir Francis Acland: The Minister makes it a little difficult for us to continue with another instalment of subsidy in the hope that before this new instalment is extended something may at least be done to put our milk house in order. I will give three reasons for the difficulty that I feel. The first is that we do not seem to be yet within reasonable reach of a policy which will strike at the root of the milk difficulty, namely, the tendency for the amount of factory milk steadily to increase in proportion to the liquid milk. Whatever we do in the way of subsidies to try to mitigate that fact, it has an unfortunate influence which is more and more severely felt on the price that the average producer is receiving, because, of course, the larger the proportion which goes to the factories, the larger must be the levy in order to enable the producer who sends his milk to the factory to get the same price for it as the man who sends his milk into the market for liquid consumption. I believe that there has been a temporary improvement in the figures, due largely to the shortage of hay in the last season, but if we look through the different years published partly by the Minister of Agriculture and partly by the Milk Marketing Board, we see this steady tendency of the proportion of factory milk to increase. As long as that is happening things are getting worse and more difficult rather than better.
  It is very difficult for the ordinary person to understand why there should be so great a difference between the two prices, and why factories should be able to get milk at ¾d. a pint or less, while, if you or I buy it, we have to pay 3d. a pint or more. Until we can hear that something definite is being done to increase the consumption of liquid milk, apart from pious aspirations as to the
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  increase of the milk-in-schools scheme, which seemed some months ago to have reached a pretty definite level, above which it refused to increase, it is difficult to vote for these subsidies. That increase surely could be obtained at some price which would give the farmers a better return that the 5d. a gallon, or whatever it may be, which is the lowest price he gets for some proportion of the factory milk. We feel that, although we agree with what has been said by the Minister in presenting this Financial Resolution, that care has to be taken in these difficult matters, the period of eight months—and it will be 11 or 12 months before we get any solution—is rather long after the Reorganisation Commission has made the careful report that it has made before the Government can announce any policy arising out of that report.
  The third point I want to make is in regard to butter and the price which the butter factories have been paid for the milk they have been receiving. I believe that it has been the lowest figure of all, and that the milk powder makers, the milk chocolate makers and the cheese makers have paid better prices than the butter factories. The prices they have paid has tended to pull down the average price received more than any other factory price. I believe that that is partly due to the fact that a bad bargain was made as to the price. It ought to be possible to get better butter factory prices, as far as the farmer is concerned, either by a subsidy, which is the worst way, or by getting a better demand for English butter, which does not seem yet to have come above the horizon of practical politics. Ask an ordinary householder what butter she gets, and she says, "Do you mean New Zealand, or Danish, or Canadian?" She will never dream of saying she gets English. It is not yet marketed, or standardised, or graded, or advertised in the same way as it is in other countries. In fact, we do not seem to be yet within reach of really treating it as other countries treat their butter. In that connection I want to call attention to a few sentences spoken by two hon. Members on this subject in March of last year. The hon. Member for Barnstaple (Mr. R. Acland), speaking on the Extension of Temporary Provisions Milk Bill, said:
  "The most essential part of an efficient butter and cheese industry depends upon the

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  existence of graders of butter, who must be as skilled in the performance of their task as the most expert wine tasters in their particular task."
  I ask the Minister whether such people exist. Then he said:
  "My anxiety is that when, in the course of 18 months, we come to the working out of a long-term policy, those of us who will then be pressing for a more efficient industry will not be met by the answer that an efficient milk-using industry depends upon the existence of a corps of butter graders, and that it is practically impossible to produce those butter graders in the twinkling of an eye."
  The then Minister of Agriculture replied to him that he wanted general support for the agricultural policy of the Government and added:
  "I give the hon. Member all the assurance in my power that from the point of view of efficiency and quality what he said will not be lost sight of in preparing the long-term policy during the interim period."—[OFFICIAL REPORT, 2nd March, 1936; cols. 1149–51, Vol. 309.]
  We have had an interim period of 15 months since March of last year, and as yet we have heard nothing about the inclusion of butter grading, butter production and the better standardising of our butter as part of the long-term policy. That is another reason why it is difficult for us to vote for the continuance of these subsidies. I am hoping that the largest of the three points I have raised, namely, the continued inability of all the powers-that-be connected with milk to find some means of getting more liquid milk consumed at a price which will be fairly remunerative to the farmer will be tackled. I hope the Minister will be able, without in the least telling us what may be the scheme for re-organisation—we cannot expect that to-day—to give us some assurance that when that scheme comes we shall get the present tendency for a proportion of milk to go into factories really tackled and put right by some scheme for increasing liquid consumption.
  8.58 p.m.
  Mr. Croom-Johnson: I hope the Committee will think that the time has now gone by when I ought any longer to abstain from taking part in the Debates on this topic in this House. The Committee knows that for a very long time, some three or four months, I was engaged professionally in the investigation into the milk industry which ended some time in the Spring of last year, and I thought that
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  in the circumstances it was my duty not to take a part in any Debate in his House. But, after all, I represent a constituency which is in the heart of the milk-producing country. My constituents have been extremely kind to me. They have told me on many occasions that they would not ask me questions on this particular topic by reason of the particular position in which I stood, and I hope that having behaved myself in this way for a period of at least 15 months I may now be permitted to resume my duties as a Member of Parliament. The speech from the right hon. Member for West Stirling (Mr. Johnston) was to a very large extent, if he will forgive my saying so, a speech in which he was thrusting at an open door. I do not think any one in this House would contest the greater part of what he said as to the desirability of increasing the consumption of liquid milk, not only by children but, if I may venture to speak to him personally and to other grown people in this House, by the adults of this country, who do not, I am satisfied, drink half enough of it.
  In the course of repeated visits to the United States of America I have been struck by the health and by the size of the young people of all classes in the schools, and I am satisfied that their condition has been brought about by the fact that for some reason or other there is in the United States of America a very large and a very excellent supply of liquid milk for human consumption available at almost every place to which one goes. And there, by reason of I know not what method of propaganda, when you go to take your ordinary meal either in a railway train or in a restaurant, you are offered a sealed bottle of milk, containing approximately one-third of a pint, without any question at all. Speaking for myself, I drank it constantly, and I hope derived sufficient benefit therefrom.
  Mr. Johnston: How does the price compare with this country?
  Mr. Croom-Johnson: It is more expensive than in this country, as, indeed, most things are more expensive in the United States. I do not know, but I think the quality may be said to be a little better; perhaps it was due to my unaccustomed taste, but it certainly seemed a little richer than the milk which on more rare occasions I consume over

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  here. But I am satisfied that great steps are being taken in the United States to encourage people to drink milk—I brought the matter to the attention of the late Minister of Agriculture some time ago—and there is no question that in all classes of schools in that country the scholars are encouraged, if not directed, to consume milk with regularity, so that all young people and middle-aged people are quite accustomed to it as a perfectly natural and ordinary beverage. I cannot help wondering what would be the effect if I invited one of my friends in this House to come to another part of the House to drink let us say, a pint of milk instead of some other beverage which is perhaps more often drunk.
  The difficulties of the problem are the difficulties which have been pointed out by the right hon. Member for North Cornwall (Sir F. Acland). The real difficulty is that, over and above the amount of liquid milk which can be used for human consumption, the herds of the country are producing more and more milk which cannot be absorbed in that particular way. It is, no doubt, a Gilbertian situation that as a result of years and years of organisation of the industry, long before the Milk Board had anything to do with it, a great deal of the milk surplus to liquid requirements is being used for so-called manufacturing purposes, for making into butter, cheese, milk powder, cream and a variety of other things; but I would venture to point out to the Committee, after a very close association with this problem almost ever since the Milk Board came into existence, that it is a good deal easier to state the problem than to find a solution for it.
  People point out over and over again that there has been an apparent increase in the amount of milk which is being produced in the country, but that increase is very often more apparent than real. There is no doubt that a great deal more milk is now coming on to the market and being made the subject of contracts by the Milk Board than ever left the farms in the old days, when a great deal of the milk was consumed on the farm or turned into butter and cheese on the farm by the farmer's wife and daughters, who are no longer able, or perhaps sometimes no longer desire, to carry on what used to be one of the most attractive of the activities on the dairy farm. That is the problem which has to be faced. I think it is un-
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  reasonable to say, as the right hon. Gentleman the Member for West Stirling said earlier this evening, that the Government are trying to divert milk into manufacturing. The whole policy of the Milk Act of 1934, and the whole policy of the Government and of the Milk Board in recent years, has been the direct opposite. The right hon. Gentleman the Member for North Cornwall refers to the low price of butter, and says that the low price for milk manufactured into butter must have been the result of a bad bargain. I can only think that he has not followed exactly what took place with regard to that matter, and I am sure that, if he refers back to the report of the Committee of Investigation which reported rather more than a year ago—
  Sir F. Acland: I mean since then—a bad bargain this year.
  Mr. Croom-Johnson: After all, those who are responsible for making these contracts are bound to be guided to a very great extent by what happens to them when they try to make a good bargain on behalf of the milk industry, and, as the right hon. Gentleman knows, the Milk Board are not altogether masters in their own house with regard to these matters. That is one of the difficulties of this problem. Of course, we want to see schemes introduced which will have the effect of increasing the consumption of liquid milk. A scheme was proposed some time ago—I do not quite recollect what happened to it—for the provision of milk in the distressed areas to those who were most in need of it at specially low rates. As I have said, it must not be thought that those who are interested in the milk problem—and, after all, it is the farmer, at the root, who is interested in this problem—are oblivious either of the needs of the poorer section of the community or of the desirability of increasing the market for liquid consumption, and I am sure that my right hon. Friend the Minister of Agriculture will welcome any suggestions from any quarter of the Committee which have for their object the increase of the consumption of milk and the decline, so far as may be, in the proportion which goes into the manufacture of milk products.
  There is one other topic in connection with this problem which I desire to bring to the attention of the Minister himself.

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  In the Milk Act, 1934, there are provisions for something in the nature of a subsidy for milk that goes into liquid consumption. The effect of that, of course, is that, the more milk that goes into manufacture, the lower becomes the pool price which eventually the farmer receives. That is one of the difficulties of the problem. But I would ask my right hon. Friend, in the interests of the farmer, to examine again the method by which this subsidy is calculated. I suppose that the calculations come from the Treasury. Of course, if you take the right sort of figures and the right sort of averages, you can produce one result, while if you take what you think is another right set of figures, and produce another right set of averages, you can by calculation produce a totally different result. So far as the farmers in my own county of Somerset are concerned, some of them are under the impression that the calculations which have been made—based of course, under the Act of 1934, on the cheese milk price—have been done by taking a series of prices in the markets which do not reflect the true average.
  A little time ago there was a discussion in the Court of Appeal, in which the Court of Appeal had to consider whether the figures which had been put into the calculation of averages were the right figures or the wrong figures for the determination of a particular dispute between a wholesaler and the Milk Board, and in that connection they examined the method of the Ministry of Labour. As I was professionally engaged in that case, it would be wholly wrong for me to communicate to the Committee anything which I learned in connection with my work in that case, but the Court of Appeal expressed in public their view as to the particular calculations which had been made, and I think I am doing nothing which I am not entitled to do when I ask my right hon. Friend the Minister of Agriculture to read what the Court of Appeal said in that case, if I send him the reference and all the particulars, with a view to seeing whether the calculations are really being made in the sense in which the House meant those calculations to be made when it was a party to the passing of the Milk Act, 1934.
  Unfortunately, the subsidy is based on the cheese milk price. I do not want to
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  enter into technical details this evening, but it is an unfortunate fact that the butter price, which is responsible for a good deal of the milk that is sold surplus to liquid requirements, has been, certainly until lately and I believe still is, considerably below the cheese milk price. The result has been most unfortunate from the point of view of the Milk Board, and the Milk Board, after all, represents, not the Government, but the farmers who produce the milk in constituencies such as that of the hon. Member for Carmarthen (Mr. Hopkin), whom I see sitting opposite, and the various divisions in the county of Somerset. I beg my right hon. Friend to look into this matter of the calculations from the point of view of this proposed extension of the Act, and see whether what, I suggest, was really intended to be the basis upon which this subsidy should be granted—that is to say, the levelling up, as it were, of the price of milk used for manufacturing purposes—is really being implemented, having regard to the fact, which I admit to some extent, that the butter price is so much lower than the cheese price; and I would also ask him to look into the other matter to which I called attention earlier in my remarks.
  9.14 p.m.
  Mr. Hopkin: I have the honour to represent the county of Carmarthenshire, which produces 20,000,000 gallons of milk per annum, and this proposed extension of the Milk Act will affect the intimate lives and fortunes of about 26,000 people in my constituency. I hope to argue and to prove that by this extension of the Act it is the Government who will benefit, and the Government only, to the disadvantage of the producer. The Minister, in introducing the Money Resolution, argued that there was no question of principle. Perhaps there may be no question of principle here involved, but there is somethinǵ more, and that is the method which the Government have seen fit to adopt in the introduction of the Money Resolution. May I remind the Committee of the Preamble of the 1934 Act, which says:
  "An Act to provide for temporarily securing to producers of milk, by means of payments out of moneys provided by Parliament, a minimum return in respect of milk."
  I desire to emphasise the word "minimum" and the minima which we resolved upon in Sections 1 and 2 were

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  respectively 5d. and 6d. The Committee will not have forgotten that the then Minister of Agriculture in introducing the 1934 Act, said:
  "The definition of cheese milk in this Clause represents what the board actually receives for milk used for cheese making."—[OFFICIAL REPORT, 13th June, 1934, col. 1856; Vol. 290.]
  It seems to be quite clear that what he had in his mind was a figure, namely, 5d., which would represent what the board would actually receive for milk. I am surprised that the Minister should come down to the Committee and keep in the two figures of 5d. and 6d. If 5d. and 6d. were the appropriate and proper sums in 1934, seeing that the cost of feeding stuffs, that is, of barley, oats, maize, meals, milling offals, oil cake and brewers' grains have increased by at least 20 per cent., then 5d. and 6d. cannot possibly be to-day the right and the proper prices, which ought to be 6d. and 7d. or more. It is true that in Sections 1 and 2 the figures which are named are 5d. and 6d., but it is a popular fallacy that the farmer has always had those figures, or indeed that he still gets them. I was astonished at the way the Minister so lightheartedly introduced this Money Resolution to-day. As my right hon. Friend the Member for West Stirling (Mr. Johnston) said, he skated over all the difficulties; he did not face up to and tackle a single difficulty. I was astonished at the way that he thought that it was sufficient to explain the Measure. He could not possibly have forgotten that as a result of the Investigation Committee two separate formulae were used—one was a formula for milk for cheese and the second was a formula for milk for butter—and both these formulae were lower than the Milk Act formula. The result was that in working out these formulae, the price which came to the producer was a grave injustice to him.
  If the Committee will bear with me for a minute or two I propose to prove that statement. I will give, as a simple example, the price in March, 1937. I am sorry that my right hon. Friend is not here, because this statement simply puts the bottom into his argument upon which he built the case for a lower price to the consumer. The price of milk for butter from the buyer was 3.43d., the Milk Act formula was 4.90d., and the Milk Act standard minimum was 6d. What did
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  the producer receive? He received 3.43d., plus the difference between 6d. and 4.9d. That is, he got 4.53 pence per gallon, which meant that he received 1.47 pence less than this House intended him to get. This House passed by the Act of 1934 that he should not get less than 5d. in the summer and 6d. in the winter, but here in March, 1937, the producer is not getting one penny more than 4.53d. per gallon. If my figures are wrong, I know that I shall be corrected. I will give the Committee another example, the price in June, 1937, and I desire that the Committee should notice the first figure—milk under the Milk Act formula, 6.26d. The price of milk for butter from the buyer was 3.96d. The producer had to pay back that .26 of a penny because it was 1d. over the standard price. But notice this, that the milk for butter was 3.70d., much lower than what this House has laid down it should be. This House said that they should have a minimum of 5d. Here the milk for butter was 3.7d. per gallon, but in spite of that the .26 was taken off the milk price. The result was that the producer got 1.3d. per gallon less than this House intended he should get.
  If that is right, it seems to me that it is altogether contrary to what this House ever intended regarding the price for manufacturing milk, and if these figures are true—and I ask the Minister frankly to tell the Committee, if they are not true, where they are wrong—quite obviously this is a most serious matter because the House has passed, and it is down in the Act, that there should be a minimum of fivepence and sixpence which the producer, I will not say has never received, but certainly has not received since the formulae of the Investigation Committee.
  May I ask the Minister for his views on the question of repayments? As the Committee know, repayments are made when milk for manufacturing is more than the standard price by 1d., that is when the standard price in the summer is 6d.; anything more than that, as I have just shown the Committee, must be repaid. The Minister of Agriculture, in introducing the Milk Bill in 1934, said:
  "If prices rise the Board certainly could commence to repay some of the money which they have been borrowing, but if prices do not rise it is difficult to see how it will be possible for them to repay these advances, and I am very anxious not to put the nation or the boards into a position where it was actually desired to screw up the price of milk so that

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  a very large area of consumers should be drawn upon in order to repay the relatively small advances made to guarantee the producers against disaster."—[OFFICIAL REPORT, 31st May, 1934; col. 380–81, vol. 290.]
  Can the Minister stand up in his place and say that the price of milk for butter has risen? He knows himself that it has not and, that being so, following the clear intention of his predecessor it is my submission to the Committee that no repayments ought to be made on milk for butter. I desire to make two suggestions. The first is that the Government should waive any repayments of the first £1,000,000 of which the Board are deficient in grants. I do that on the understanding that the producers under this formula have lost about £1,000,000. I understand the Minister said that a figure of £1,200,000 has been mentioned. Is that figure right, or is it £1,000,000? My suggestion is that no demand should be claimed until £1,000,000 or thereabouts has accrued as a liability, and then repayment should commence. The Minister could quite easily put this matter right by the insertion of these words: "It is also proposed" and now add these words, "from the 1st July of this year," "to amend the method of determining the cheese milk price," and so on.
  In this memorandum on the Financial Resolution the Minister declared that the present method is wrong. If it is wrong now, why not put it right now? Why is it right to put the formula as it was intended it should be in October? Is it not right now? If it is right now, why should not the date be put in as 1st July? The situation is getting worse. The July price is 6.46 pence. That means that a repayment of .46 pence must be made on every gallon, although the price of milk for butter is far below 5d. Is it not possible for the Minister to increase that standard price not of a penny, but of 2d. over and above 5d. and 6d.? I heard the earlier answer which the Minister gave to my hon. and gallant Friend the Member for Petersfield (Sir R. Dorman-Smith). I presume that he was referring to the last sentence in paragraph 2 of the Memorandum on the Financial Resolution. As I understand it, the trouble that has arisen about the interpretation of the words, "the net cost per gallon of the milk to the purchaser," is divided into two parts: First, the difficulty of the one-eighth penny for publicity purposes.
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  There is the second part about what is meant, and how far must it be taken into consideration of collecting charges. Is it not a fact that the producer has a claim of anything from £100,000 to £200,000?
  If that is so, it seems an extraordinary thing for the Minister of Pensions to come down to the Committee without knowing that important fact, because the attitude of the Government is summed up in this way. There is no retrospective effect to the benefit of the producer by amending the formula by which he may have £1,000,000. In fact, the Government will not even meet him half way. The Government could say, "We will go back to the day that the price started against you under the formula." Not at all. The Government will not even go so far as to say, "Let these prices be calculated from 1st July." On the other hand, where the producer is to lose a possible £200,000 retrospective effect is given to the advantage of the Government by wiping out the existence of £200,000. It seems to me that any benefit that may inure under the extension of this Act will inure to the Government, and is completely unjust to the producer. Can the Minister justify to the Committee what he is doing now? Carl he say that he is giving the Board and, therefore, the producers a fair deal? Can he say that the figures I have given are wrong? If they are right, how does he justify the fact that where this £1,200,000 is considered and made no account of the effect of this is not made retrospective, but when it is to the advantage of the Government and against the producer he makes the effect of the legislation retrospective? I ask him to give the Board and the producers that fair play which will give the Board an even and a fair chance to make this great experiment, which affects the lives of many thousands of people, a success.
  9.35 P.m.
  Mrs. Tate: I am sure no one regrets more than the Minister that there has been so much delay in bringing in the long-term policy, but the Committee realises the great difficulties with which he has been faced. No one realises more than he himself the urgency to the farming community that the long-term policy should be brought out as soon as possible. The hon. and learned Member for Bridgwater (Mr. Croom-Johnson) has said how very much more milk he saw

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  drunk in America, and hon. Members opposite have said how much more is drunk in the Scandinavian countries. A great deal more milk would be drunk in this country if the price were lower. That is the first essential. The farmer is now being faced with greater instead of less difficulties. He pays more for his labour and has far more difficulty in getting it. He will not be able to produce milk at a lower price, and that difficulty has to be faced. But think there is another reason for the small amount that is drunk in this country. Probably the climate of America is one in which one wishes to drink both more milk and more water than is drunk here.
  I have constant complaints from mothers of the children in the schools in my constituency that one of the reasons why they do not care for the milk is that it is pasteurised, and I think it is time we had a real impartial inquiry as to the relative value of pasteurised and unpasteurised milk. I notice with very great concern that the Minister frequently makes remarks tending to stress the value of pasteurised milk, but I cannot help thinking that that is very largely an organised campaign on the part of the distributors, because there is no possible doubt that they cannot keep their milk fresh unless they pasteurise it. That is because the milk is not really clean. If you produced really clean milk—anyone can make the test for himself—it does not go sour under at least 48 hours, but the milk that we are supplied with in London is sour within a very few hours.
  Some very careful inquiries should be made as to the relative nutritive value of pasteurised milk, and also as to whether that is not one of the factors tending to make milk an unpopular drink. We have now had the milk-in-schools scheme for three or four years, and there should be leaving school a generation of children who have acquired a taste for it, but if inquiry were made I think it would be found that very few children who have left school have continued with the milk habit. We are spending some £60,000 a year in advertising milk, and on the "Drink more milk" campaign, £30,000 of which is supplied by the Milk Marketing Board. It is about time some of that money was spent on advertising the right way in which to serve milk. The hon. and learned Member for Bridgwater wondered
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  what the reaction would be if he were to ask a Member of the House to go out and have a glass of milk with him instead of some other beverage. If he went downstairs and asked for a glass of milk, he would get it served in a jug, and it would be a miracle if the jug was clean. I do not wish to comment on the excruciating and expensive food that we are given here, but all over the country milk as a rule is served in an unappetising way. Where it is served in a more appetising way, for instance in the milk bars, it is beginning to be a very great success. But we should spend more money on advertising the right method of serving it and on an impartial investigation as to the relative value of pasteurised and unpasteurised milk.
  9.40 p.m.
  Mr. Quibell: We have just heard an interesting speech, with most of which I agree. Speaking with experience in the management of a dairy, I have come to the conclusion that it is very doubtful what the advantages of pasteurisation are, and I can echo the hon. Lady's sentiment that it is high time that some competent committee or commission inquired into its merits. I believe its greatest advantage is that it takes out the dirt that never ought to have been in. I think opinion on all sides of the House would be that the value of milk is very largely reduced as a consequence of pasteurisation. I met a small producer on my way to the House to-day. Although he has been a very ardent supporter of the party opposite he has a very distinct grievance against milk marketing. He has eight cows and, if the scheme continues as it now is, he will have none left in three years. The Milk Marketing Board levies have nearly put the small producer out of business. The whole scheme ought to be very radically reconsidered.
  The disparity between the amount that the small producer gets and the amount that the consumer pays will not bear examination. The producer gets 9¼d. a gallon and the consumer pays 2s. I know of an actual case of an agricultural organisation which is a large distributor of milk and takes the surplus from the producers of the area and makes it into butter, cheese and ice cream during the summer season. That organisation has,

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  been enabled to pay several pence more per gallon—6d. in one case—to its own farms, than it has paid to the other producers of milk in that area; and it goes to show that, so far as the commercial side of milk is concerned, the distribution is a more profitable business than the production. I would like to draw the attention of the Minister to this fact, and ask him to see whether something cannot be done to narrow the margin between the price that the producer of milk is receiving as the net amount and the price that the consumer is paying for his milk on the doorstep.
  9.46 p.m.
  Mr. W. S. Morrison: We have had a very interesting debate on this Resolution. Some of the subjects have been referred to by the hon. Member for Brigg (Mr. Quibell) in his concluding remarks on the problem of distribution. Also we have had such questions raised as the pasteurisation of milk, and in general many other aspects of the general economic question which are all of great interest to me in attempting to formulate a Government policy in this matter. But all I am asking the Committee to agree to to-night is to extend the existing provisions for another 12 months, so that I may get some other opportunity of laying before you legislative proposals of a more permanent character. The right hon. Gentleman the Member for West Stirling (Mr. Johnston) dwelt in a familiar theme on the disparity existing, in his words, "between the high price to consumers and the low price to manufacturers." But the real reason for a great deal of the disparities in this respect arises from the fact that we import an immense quantity of milk products into this country at a very low price. That is really the root fact which makes our milk problem different from that of any other country.
  The right hon. Gentleman instanced the case of Sweden, where he said they drink 420 pints of milk at 1½d. whereas we drink 120 at from 3d. to 3¼d. I am glad that he mentioned Sweden, because it gives an admirable example of the extent to which our economical disposal of milk here is affected by a cause of which the Swedes have no experience. They have in Sweden a very interesting scheme whereby the price of milk is stabilised on the price of butter and cheese, and they
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  are able to sell liquid milk at a low price because they charge a high price for butter and cheese. The fact is that if we had followed the Swedish plan, and had by a similar scheme reduced the price of our milk to 1½d. a pint by charging a high price for butter, we should have had to ask the butter consumers in this country during 1936 to pay £11,000,000 more than they did for this commodity. The truth about this problem, as about many others, is that it is difficult to have it both ways. I do not mind the Committee making strenuous efforts to have it both ways—to have cheaper butter, cheese and milk—but one should realise what is the root factor in the economic position of the industry. If you were to take the immense amount of milk imported in the form of milk products and reduce that to a gallonage figure, you would find that the average price of milk in this country is extremely low, lower than that charged over the whole range of products in most other countries in the world. When hon. Members seek to increase the amount of liquid milk consumed I am with them.
  I do not think the right hon. Gentleman the Member for North Cornwall (Sir F. Acland) meant what he said when he stated that the producers are endeavouring to encourage the consumption of manufactured milk. If so, they have been unsuccessful because the consumption of liquid milk rose by twelve million gallons. The right hon. Gentleman the Member for North Cornwall was wrong when he said that the proportion of milk consumed by manufacturers was rising. Last year that was so but this year it is not so; many things have gone to bring about this change. We are desirous to see more milk consumed, but when we are considering ways and means to this end let not hon. Members forget the custom of the people. We are by custom a butter and cheese eating people and not a milk drinking people to the extent that we ought to be, and a good deal of education will have to be conducted if we are to increase the consumption of this nutritious fluid, which has no substitute in the world.
  The right hon. Member for North Cornwall seems to imagine that the Milk Board must have made a bad bargain with its customers in fixing a low price, and another hon. Member pointed to the same question, though he did not make that

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  assertion, when he asked what the House intended in 1934 and what has happened. In 1934 there was incorporated into the Act what was called the cheese-milk price, a certain formula taking into account the price of cheese of Canadian and New Zealand origin. Those words in that formula were inserted in the Act because they had formerly been in the current contract of the Milk Marketing Board by which they were charging for milk to be used by manufacturers. When my right hon. predecessor said this would be what the board would get for their milk, he was entitled to say so because it was embodied in the contract between the board and the manufacturers. But an unforeseen thing happened when a complaint under the Agricultural Marketing Act was made to the effect that the price charged for manufacturing milk was too high, and under the machinery of the Agricultural Marketing Act it was referred to a committee of investigation. That committee delivered its report in April, 1936. What happened after that was that that committee, having decided on purely commercial grounds that in spite of the immense production of manufactured milk the price was too high, the price was reduced. But the Minister of Agriculture and the Treasury were still bound by the Act passed by the House as to the amount of money which could be paid under the Act, although in fact the Milk Board were no longer getting what it was confidently expected they would get from the manufacturer for their milk.
  We are now taking the first opportunity to put that right, and the new formula will to this extent improve matters. It is really an attempt to give effect to what Parliament really intended in 1934. The hon. Member for Carmarthen (Mr. Hopkin) wishes to ask me a question and perhaps I can answer it before he asks it. The Committee would like to know what would be the effect if we did not revise the cheese-milk price and what would be the effect it we do?
  Mr. Hopkin: May I ask this, if the Minister then did not have the option either of adopting the formula about which he was warned or leaving it as the House had intended it should be left?
  Mr. Morrison: I would like to explain to the hon. Member that the cheese-milk price actually received by the board was reduced as a consequence of the com-
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  mittee of investigation's report. The only payments which could be made under the Act proceeded on the assumption that the board would in fact continue to get the original price for its manufactured milk. and we are proposing the only way in which the matter can be put right to give effect to the intention of Parliament, which is that the payments should represent the difference between the standard price of 5d. and 6d. and what the board can obtain for manufactured milk. Let me put it this way: Under the cheese-milk price in the 1934 Act, the gross payments estimated for the next 12 months to the Milk Boards would be £68,000, but as we propose to alter it in this Financial Resolution and in the Bill which will follow, the boards will be entitled to a gross payment of £550,000, providing the conditions as to price and so on are fulfilled. If the payments had been left as provided in the 1934 Act there would have been due to the Exchequer from the Milk Boards a net sum of £1,000, but as a result of the proposed arrangement there will be a net payment by the Exchequer of £540,000.
  The hon. Member also asked me a question to which I will endeavour to give an answer, because it was one on which he lays some stress. He drew attention to paragraph (1) (f) of the Financial Resolution, which provides for the interpretation of the reference in Section (1) of the Milk Act to the net cost per gallon of milk. What has happened there is simply this, that a legal interpretation of the words in the 1934 Act has been given which nobody ever intended should be given to them and on which nobody has ever rested a claim. In other words, although this legal difficulty in drafting has arisen subsequent to the Act, everybody has been of the same mind that that interpretation was never intended and nobody has attempted to enforce it. What we are doing is simply a drafting Amendment to the words in the original Act. It may be true to say, as the hon. Member said, that if the meaning in the interpretation were adhered to people might have a legal claim to a larger sum of money. That claim has not been made, and nobody has ever thought that such a claim would be well founded. That is a very different thing from altering the cheese-milk price formula which has come about not because of an error in the Act but as the result of a change in circumstances,

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  and the report of the investigation committee. That is a different matter, and we can deal with it only in the way we have done.
  I can only say, as my hon. Friend the Minister for Pensions has said, that our proposal in the Resolution is to carry on for another 12 months, but that does not mean that we shall do nothing for 12 months. I hope that well before the 12 months period is over we shall see permanent proposals if not on the Statute Book at any rate brought forward. Therefore, the Committee will be well advised to pass the Resolution to-night.
  Resolution to be reported To-morrow.

  HYDROGEN CYANIDE (FUMIGA TION) BILL. [Lords.]
  Considered in Committee; reported, without Amendment; read the Third time, and passed, without Amendment.

  GREENWICH HOSPITAL AND TRAVERS' FOUNDATION.
  Resolved,
  "That the Statement of the estimated income and expenditure af Greenwich Hospital and of Travers' Foundation for the year 1937, a copy of which was presented to this House on the 30th day of April, 1937, be approved."—[Lieut.-Colonel Llewellin.]
  The remaining Government Orders were read, and postponed.

  ADJOURNMENT.
  Resolved, "That this House do now adjourn."—Captain Margesson.]
  Adjourned accordingly at Five Minutes after Ten o'Clock.

POST OFFICE.
  EMPIRE AIR MAILS.
  EMPIRE AIR MAILS.
  TRADES TELEPHONE DIRECTORY.
  TRADES TELEPHONE DIRECTORY.
  EDUCATION (TEACHERS SUPERANNUATION BILL).
  EDUCATION (TEACHERS SUPERANNUATION BILL).
  LICENSED HOUSES, WESTMORLAND.
  LICENSED HOUSES, WESTMORLAND.
  AIRCRAFT (EXPORT).
  AIRCRAFT (EXPORT).
  LOCAL TAXATION RETURNS.
  LOCAL TAXATION RETURNS.
  HARWORTH COLLIERY DISPUTE (ASSIZE SENTENCES).
  HARWORTH COLLIERY DISPUTE (ASSIZE SENTENCES).
  NURSING HOMES REGISTRATION ACT.
  NURSING HOMES REGISTRATION ACT.
  OLD AGE PENSIONS.
  OLD AGE PENSIONS.
UNEMPLOYMENT.
  TREFOREST TRADING ESTATE.
  TREFOREST TRADING ESTATE.
  WALES (STATISTICS).
  WALES (STATISTICS).
Preamble
The House met at three of the clock, The LORD CHANCELLOR on the Woolsack.
LOCAL GOVERNMENT SUPERANNUATION BILL.
Brought from the Commons; read 1a and to be printed.
TRADE MARKS (AMENDMENT) BILL. [H.L.]
Returned from the Commons, agreed to, with Amendments.

BUSINESS OF THE HOUSE.
THE EARL OF MUNSTER: My Lords, on behalf of my noble friend Lord Stanhope, I beg to move the Motion which stands in his name.
Moved, That leave be given to advance the Motion for the Second Reading of the Teachers (Superannuation) Bill, which stands appointed for Thursday next, to to-morrow.—(The earl of Munster.)
On Question, Motion agreed to, and leave given accordingly.

POST OFFICE AND TELEGRAPH (MONEY) BILL.
Order of the Day for the Second Reading read.
THE EARL OF MUNSTER: My Lords, I beg to move that this Bill be now read
2
a second time. The object of this Money Bill is to authorise the issue of a further capital sum of £35,000,000 for development of the postal, telegraph and telephone systems. It is estimated that £32,000,000 will be required for telephone development, which has increased enormously under the influence of improving trade and as a result of the reduction in telephone charges; and a further sum of £3,000,000 will be required for the postal and telegraph services. The period for which the borrowing powers now to be taken will suffice depends upon the future rate of development, but the sum now to be authorised should meet all requirements until September, 1939. I might mention in conclusion that the actual expenditure and the works to be carried out each year are subject, as in the past, to the approval of the Treasury.
Moved, That the Bill be now read 2a.—(The Earl of Munster.)
On Question Bill read 2a, and committed to a Committee of the Whole House.

EXPORTATION OF HORSES BILL.
Read 3a (according to Order), and passed.

COAL (REGISTRATION OF OWNER SHIP) BILL. [H.L.]
Order of the Day for the House again to be put into Committee read.
Moved, That the House do now resolve itself into Committee.—(The Earl of Munster.)
On Question, Motion agreed to.
House in Committee accordingly:
THE LORD PRESIDENT OF THE COUNCIL (VISCOUNT HALIFAX): My Lords, I beg to move that my noble friend Lord Lucan take the Chair.
Moved, That the Earl of Lucan take the Chair.—(Viscount Halifax.)
On Question, Motion agreed to.
[The EARL OF LUCAN in the Chair.]
Second Schedule [Property and rights associated with coal and matters to which coal is subject, as to which particulars are to be registrable]:
Debate resumed on the Amendment, moved by Lord Hastings last Thursday, to leave out the Second Schedule.
VISCOUNT HALIFAX: Before my noble friend speaks, it might perhaps be of service to your Lordships and have the effect of shortening our proceedings if I said a word as to the position in which we now stand on the discussion of this Amendment to leave out the Second Schedule. Your Lordships will recall that we had this Amendment under discussion on Thursday and that in the course of that debate, which was adjourned, my noble friend drew attention, among other matters, to one point where he claimed with, I think, justification that the provisions of the Schedule went beyond what had been the professed intention of His Majesty's Government. In so far as that point was concerned I undertook to endeavour to meet the legitimate apprehension of my noble friend by introducing an Amendment. It was for the purpose of considering that Amendment and of seeing it before us that, your Lordships will remember, it was decided to adjourn further discussion of the Amendment on that occasion in order to resume it to-day. In a very few hours I had such an Amendment to meet my noble friend's point in draft, and it had been my intention to put it down.
On further examination of the situation as disclosed in the debate, however, I became conscious, as did my right honourable friend the President of the Board of Trade and the Minister of Mines, that there was another aspect from which this question had to be judged—namely, the feeling that was implicit in the speeches of some of those who took part in the debate on that occasion, that this Second Schedule might have the effect and, perhaps, in the view of some, did have the effect of prejudicing the position of the royalty owners and possibly to a less
4
degree of Parliament in regard to the main Bill that is at present not before Parliament. I felt bound, having regard to what I myself had said on behalf of the Government on the Second Reading of this Bill, to give great weight to the feeling I found to be implicit in what had passed during the debate. In a matter of this kind so vitally important to so many interests, it is imperative for the Government, as for Caesar's wife, to be above suspicion. Accordingly, although I myself could not agree that the ground for that suspicion was well-founded, none the less, so important do the Government deem it to be that no ground, even in appearance, should exist for it, that your Lordships will observe that there is an Amendment in the name of my noble friend in charge of the Bill, Lord Munster, in the same terms as the Amendment we are now discussing, to delete the Second Schedule.
I do not conceal from your Lordships that I should have preferred to have seen the Second Schedule remain in the Bill with such Amendment as it was necessary to make to it. But in view of what my noble friend Lord Hastings said on the last occasion that he, and presumably those on behalf of whom he speaks, wanted to see the effective operation of this Bill in the least possible time, I thought it right to advise my right honourable friend and the Minister of Mines that in all these circumstances the Second Schedule should be deleted. That is the explanation of the further Amendment in similar terms that stands in the name of my noble friend Lord Munster, and I hope, having made that explanation, it may possibly facilitate our further proceedings on it.
LORD HASTINGS: I am very much obliged to my noble friend the Leader of the House for the words that have fallen from him. As the matter was fully debated last Thursday, there is clearly no occasion for me to repeat what was then said. Accordingly I gratefully accept the decision of the Government on the advice of my noble friend and formally proceed to move to leave out the Second Schedule.
On Question, Amendment agreed to.
Third Schedule:

THIRD SCHEDULE.

  PART I.
  Procedure as to Registration.
  1.—(1) An application for the registration of particulars in respect of a holding must

  5
  be in the prescribed form, and there must be furnished to the Board of Trade therewith a statement in the prescribed form, and verified in such manner by statutory declaration or otherwise as the Board may reclaim, of all the circumstances of the holding relevant to tie matters specified in paragraphs (a) to (d) of subsection (4) or Section one of this Act, including, as regards the matters specified in the said paragraph (d)—
  (a) in the case of a holding consisting of a freehold or leasehold reversion, the terms of the lease or underlease on which that reversion is immediately expectant:
  2.—(1) The Board shall examine an application duly made for the registration of particulars in respect of a holding with respect to the following matters, that is to say,—

  (a) whether all the property and rights, of which particulars are sought to be registered as being held in association with any coal or a mine to which the application relates, are property and rights that would have vested therewith on such a conveyance as is mentioned in the Second Schedule to this Act, and whether any other property or rights that would have vested on such a conveyance as aforesaid are held in association with any such coal or mine;

  (b) whether all the servitudes, restrictive covenants and other matters, of which particulars are sought to be registered as being matters subject to which any coal hereditaments to which the application relates are held, are matters subject to which they would have vested on such a conveyance as aforesaid, and whether they are held subject to any other such matters;

  (5) When copies of a draft have been sent under the last preceding sub-paragraph and either no application has been made to the Court thereunder within the time therein mentioned or any application so made has been disposed of by the Court, the Board shall register in respect of the holding the particulars as specified in the draft or as varied by the Court, as the case may require.
  3.—(1) …
  (2) Where after any such information has been given to the Board any material change takes place in the circumstances as to which the information was given, it shall be the duty of the person by whom the application was made and of any other person having a proprietary interest comprised in the holding, forthwith to inform the Board of the change, if it is known to him and unless he has ascertained that information of the change has already been given to the Board.
  4. Subject to the preceding provisions of this Schedule, the Board may make rules prescribing the procedure to be followed in giving effect to the provisions of Section one of this Act.

  PART II.
  Payment of Costs by the Board.
  5.—(1)…
  (3) The Board shall not be liable to pay any such costs as aforesaid incurred either—
  (b) in relation to a holding which appears to the Board to be of no marketable value; or
  (c) by a person who has failed to comply with any of the requirements of Part I of this Schedule or of the rules made thereunder relating to the information to be given by him, whether on the original making of the application or thereafter.
  (4) Subject to the provisions of this paragraph, the Board shall pay the costs of or incidental to proceedings on an application made to the Court under Part I of this Schedule reasonably incurred by a person whom the Court, under sub-paragraph (6) of paragraph 2 of this Schedule, directs to be made a party to the application.
  THE EARL OF MUNSTER THE EARL OF MUNSTER moved in paragraph 1 (1), after "may" ["Board may require"] to insert "reasonably." The noble Earl said: This Amendment is merely explanatory, and I beg to move.
  Amendment moved—
  Page 10, line 29, after ("may") insert ("reasonably").—(The Earl of Munster.)
  On Question, Amendment agreed to.
  LORD HASTINGS LORD HASTINGS moved, in paragraph 1 (1), to leave out "the circumstances of the holding relevant to." The noble Lord said: This is quite a minor Amendment. It is merely a matter of redundant phraseology. I am not quite sure whether the Government intend to accept this Amendment. If so, I shall not enlarge on it, but reference to the context will show that the words proposed to be left out are unnecessary verbiage. I beg to move.
  Amendment moved—
  Page 10, line 29, leave out from ("all") to the second ("the") in line 30.—(Lord Hastings).
  THE EARL OF MUNSTER: I am advised that if these words were left out of this Schedule the effect would be to limit registration to a bare statement of the property and rights concerned, and it would exclude information which might be essential to check the accuracy of particulars submitted for registration. It was generally agreed on the Second Reading that whatsoever is registered should

  7
  be correct and accurate. I hope, with that explanation, my noble friend will not press his Amendment.
  LORD HASTINGS: I have no intention of pressing the Amendment. Our efforts are directed towards simplifying the Bill and its phraseology, and we thought, and still think, it would be advisable to leave out these words. But it is not a matter of principle and I am not prepared to press the Amendment.
  Amendment, by leave, withdrawn.
  THE EARL OF MUNSTER THE EARL OF MUNSTER moved, in paragraph 1 (1) (a), to leave out "terms" and insert "provisions." The noble Earl said: The object of this Amendment is to remove any possible doubt whether "terms" might mean only the duration or the financial terms of the lease. It is intended to mean all the terms and conditions.
  Amendment moved—
  Page 10, line 35, leave out ("terms") and insert ("provisions").—(The Earl of Munster.)
  On Question, Amendment agreed to.
  LORD HASTINGS LORD HASTINGS moved, in paragraph 2 (1) (a), to leave out all words after "rights," where that word occurs for the second time, and insert "so held and whether there are any other property or rights so held which are not stated to be so held." The noble Lord said: This Amendment is consequential to the leaving out of the Second Schedule, and I beg to move.
  Amendment moved—
  Page 11 line 40, leave out from ("rights") to the end of line 45 and insert the said new words.—(Lord Hastings.)
  On Question, Amendment agreed to.
  LORD HASTINGS LORD HASTINGS moved, in paragraph 2 (1) (b), to leave out all words after the last "which" and insert "those coal hereditaments are held and whether those coal hereditaments are held subject to any other such matters not stated in the application." The noble Lord said: This is also consequential.
  Amendment moved—
  Page 12, line 5, leave out from ("which") to end of line 7, and insert the said new words.—(Lord Hastings.)
  THE EARL OF MUNSTER: May I add one word on the Amendment which precedes this? The Amendment is consequential upon the deletion of the Second
  8
  Schedule, but it may be necessary to reconsider the actual wording, and if any alteration is necessary, perhaps my noble friend will allow me to put down an Amendment to meet that point at the next stage.
  LORD HASTINGS: Yes, it is realised that it is possible other words will be needed when these come out. I quite agree to the course suggested by my noble friend.
  On Question, Amendment agreed to.
  LORD HASTINGS LORD HASTINGS moved, at the end of paragraph 2 (2), to leave out "if possible." The noble Lord said: this Amendment, I understand is agreed to. I beg to move.
  Amendment moved—
  Page 12, line 35, leave out ("if possible").—(Lord Hastings.)
  On Question, Amendment agreed to.
  THE EARL OF MUNSTER THE EARL OF MUNSTER moved to insert at the end of sub-paragraph (5) of paragraph 2:
  "and shall send to each of the persons specified in sub-paragraph (2) of this paragraph notice of the registration of the particulars either stating that they have been registered as specified in the draft or, if they have been varied, setting out the particulars registered."
  The noble Earl said: The object of this Amendment is to provide that the interested parties to whom the particulars for registration have been submitted in draft, shall be officially informed of what is subsequently registered I might add that where the particulars registered are the same as those which will be specified in the draft, a notice to that effect will be sent; when the particulars in the draft are subsequently altered a copy of the particulars as registered will be sent. I beg to move.
  Amendment moved—
  Page 13, line 12, at end insert the said words.—(The Earl of Munster.)
  On Question, Amendment agreed to.
  LORD HASTINGS LORD HASTINGS moved, in paragraph 3 (2), to leave out "material change takes place in the circumstances" and insert "change of circumstances takes place materially affecting the matters." The noble Lord said: This Amendment is really of a drafting character. It is really a question of argument which words are best, whether the words as proposed should be inserted are better than those

  9
  in the Bill. Again there is no matter of principle here. I beg to move.
  Amendment moved—
  Page 13, line 26, leave out ("material change takes place the circumstances") and insert the said new words.—(Lord Hastings.)
  THE EARL OF MUNSTER: While I consider the words in the Bill are better than the noble Lord's, I am prepared to accept his Amendment.
  On Question, Amendment agreed to.
  THE EARL OF MUNSTER THE EARL OF MUNSTER moved to insert, at the end of paragraph 4, "with respect to any matter other than a matter with respect to which rules of Court may be made." The noble Earl said: This Amendment is to remove a doubt. As your Lordships are well aware, the Court has always a right to make its own rules, and it is not intended that the scope of the rules made by the Board of Trade shall extend to Court proceedings. The Amendment which I have put down specifically says so. I beg to move.
  Amendment moved—
  Page 14, line 16, at end insert the sail words.—(The Earl of Munster.)
  On Question, Amendment agreed to.
  THE EARL OF MUNSTER THE EARL OF MUNSTER moved to insert in paragraph 2:
  "(2) Where any rules are made by the Board under this Scledule a notice of the rules having been made, and of the place where copies of them can be purchased, shall he published in the London Gazette and in the Edinburgh Gazette."
  The noble Earl said: This Amendment is to provide that official notice shall be published of the fact that the rules have been made. The chief importance of this is that, as the Bill stands, the period within which application must be made in order to qualify for costs starts with the date on which the rules come into operation. There is another Amendment consequential on this, which I will move at a later stage. I beg to move.
  Amendment moved—
  Page 14, line 6, at end insert the said paragraph.—(The Earl of Munster.)
  On Question, Amendment agreed to.
  THE EARL OF MUNSTER THE EARL OF MUNSTER moved to insert in paragraph 4:
  "(3) Without prejudice to any power of the High Court the Board shall have power to extend, upon any ground deemed by them sufficient, any limit or time imposed by this
  10
  Act or by any rule made by the Board thereunder for the doing of any act or thing."
  The noble Earl said: This Amendment deals with the period within which applications must be made in order to qualify for costs, and that period is already capable of extension. This Amendment gives a general power to the Board to extend any limit of time for any purposes if they think there is good reason for doing so.
  Amendment moved—
  Page 54, line 6, at end insert the said paragraph.—(The Earl of Munster.)
  On Question, Amendment agreed to.
  THE EARL OF MUNSTER: The next Amendment, in paragraph 5 (3) (a), is consequential. I beg to move.
  Amendment moved—
  Page 15, line 1, leave out from ("months") to ("or") in line 4 and insert ("beginning as to England and Scotland respectively on the date on which notice is first published in the London Gazette and in the Edinburgh Gazette respectively of rules having been made by the Board with respect to the procedure for the making of applications,").—(The Earl of Munster.)
  On Question, Amendment agreed to.
  THE EARL OF MUNSTER THE EARL OF MUNSTER moved, in paragraph 5 (3) (b), to leave out "which appears to the Board to be of no marketable value" and insert "in the case of which it appears to the Board that there is no reasonable ground for believing that any coal hereditaments in which the holding is stated to subsist have any marketable value." The noble Earl said: The object of this Amendment is to make it clear that the Board shall not refuse costs in cases of reasonable doubt about marketable value, but only in cases where there is no reasonable ground for maintaining that there is a marketable value. I beg to move.
  Amendment moved—
  Page 15, line 15, leave out ("which appears to the Board to be of no marketable value") and insert the said new words.—(The Earl of Munster.)
  On Question, Amendment agreed to.
  THE EARL OF MUNSTER THE EARL OF MUNSTER moved, in paragraph 5 (3) (c), to leave out "failed" and insert "neglected." The noble Earl said: This Amendment is designed to make it clear that unintentional failure is not to be penalised, but only intentional omission or neglect to comply.
  Amendment moved—
  Page 15, line 17, leave out ("failed") and insert "neglected").—(The Earl of Munster.)
  On Question, Amendment agreed to.
  LORD HASTINGS LORD HASTINGS moved, in paragraph 5 (4), after "sub-paragraph (6) of paragraph 2," to insert "or under that sub-paragraph as applied by sub-paragraph (3) of paragraph 3." The noble Lord said: This is rather a storm in a teacup, but it is held that it would not be quite proper to avoid reference to certain consequential matters earlier on in this Bill, and a purist in drafting thinks that these words ought to be inserted here. There is no matter of principle involved. I beg to move.
  Amendment moved—
  Page 15, line 31, after ("2") insert ("or under that sub-paragraph as plied by sub-paragraph (3) of paragraph 3").—(Lord Hastings.)
  THE EARL OF MUNSTER: The Amendment which has been moved by my noble friend is one which I do not think is necessary, although the Government are prepared to accept it. But perhaps I may give my noble friend the reasons why I do not think the Amendment is absolutely required. This paragraph provides that the Board shall pay the costs of Court proceedings incurred by a person who has been specifically brought into them at the instance of the Board, and reference to that will be found on page 13, line 13, of the Bill, in sub-paragraph (6) of paragraph 2. A person can be brought in on an original application or on proceedings for rectifying the Register. I think that it does appear in the Bill as it is at present drawn to be quite clear that the provision relating to costs covered all persons brought in, including persons brought in for proceedings on rectification. If the noble Lord had referred to page 13, line 13, he would have observed that the reference is to "any application to the Court under this Part of this Schedule," and it is not limited to the application under the provisions of paragraph (2) that relate to original applications. However, if the noble Lord thinks the Amendment will remove any doubt that there might be and simplify the reading of the Bill, as I have said I am prepared to accept it.
  On Question, Amendment agreed to.
  Third Schedule, as amended, agreed to.
  Title:
  An Act to make provision for the ascertainment and registration of particulars as to proprietary interests in unworked coal and mines of coal and in certain associated minerals and property and rights in land, and for purposes connected therewith.
  LORD HASTINGS LORD HASTINGS moved to leave out "and" [minerals and property]. The noble Lord said: Leaving out this word is really desirable to remove ambiguity. It is intended quite clearly in the operative clause to link associated property and rights in land and minerals, but the insertion of this word "and" in the title makes that impossible—or at any rate it might be so interpreted. I understand the Government are prepared to accept the excision of this word. I beg to move.
  Amendment moved—
  Line 4 of the Title, leave out the first ("and").—(Lord Hastings.)
  On Question, Amendment agreed to.
  Title, as amended, agreed to.

  EXCHANGE EQUALISATION ACCOUNT BILL.
  Order of the Day for the Second Reading read.
  LORD TEMPLEMORE: My Lords, the object of this short Bill of two clauses is to increase the resources of the Exchange Equalisation Account by £200,000,000. As your Lordships are no doubt aware, the Account was set up in 1932, shortly after the National Government came into office, under the Finance Act of that year, with borrowing powers of £150,000,000, and in 1933 these powers were enlarged by the Exchange Equalisation Account Act to £350,000,000. It is now proposed four years later to bring the total up to £550,000,000. The purpose of the Account, as has been explained on previous occasions, is to smooth out variations in exchange rates or, in the words of the Act which established it, "to check undue fluctuations in the exchange value of sterling." It does not attempt to alter any long term, deep-seated trends in exchange rates, if such should develop. What it aims to do, and I think I can claim it has succeeded in doing, is to provide reasonable stability of the exchanges from day to day.
  The most obvious fluctuations to be guarded against are those resulting from day to day changes and anticipations and,

  13
  in particular, seasonal considerations. The pound is normally higher in the spring and lower in the autumn owing to the importation of very large quantities of goods during the autumn months, and this process, normal in itself, might be seriously intensified by speculative transactions. But there is a more serious form of fluctuation which also needs to be counteracted. This is the fluctuation that results from a deliberate shifting of large quantities of capital from one centre to another. Great quantities of short-term funds which their owners can call upon at any moment are accumulated in the main financial centres and are liable, under the influence of temporary distrust, or indeed by way of mere speculation, to be shifted suddenly from one centre to another. Such movements have little to do with the ordinary settlement of international trading balances and are in any case quite out of proportion to the amounts required for that purpose. The money is sometimes described as refugee capital and the more stable and flourishing any particular centre is the more it is liable to be embarrassed by a large influx of this refugee capital. Such temporary move-merits, if left unchecked, would produce fluctuations in the exchange so large as seriously to hamper ordinary trade, converting much of it into a gamble, and it is essential that effective steps should be taken to neutralise their bad effects.
  A further reason for the expansion of existing powers in this way is to be found in the Tripartite Monetary Agreement entered into last September with the United States, France and ourselves. The object of this policy, as your Lordships are aware, is to maintain equilibrium as far as possible in the system of international exchanges. If we are to pursue that policy, which is, I think, almost universally approved, we must inevitably from time to time purchase gold. It is quite impossible to avoid at the same time both addition to our gold holdings and wide fluctuations of exchange rates. Some considerable expansion of our available resources is therefore necessary if we are to pursue the policy embodied it that Agreement.
  There bas been in the past considerable criticism made from time to time of the secrecy of the Account's operations. In the opinion of my right honourable friend the Chancellor of the Exchequer and His
  14
  Majesty's Government the necessity for day to day secrecy remains undiminished, because if the daily workings of the Account were common knowledge they would undoubtedly accentuate those very speculative tendencies which it is the object of the Account to check. But His Majesty's Government quite realise that it is natural that Parliament and the public should wish to be informed of the general position of the Account, and the Chancellor of the Exchequer has come to the conclusion that a statement in regard to its resources each half-year can safely be published three months later, that is to say, at the end of June and at the end of December. In accordance with this conclusion it has already been announced by my right honourable friend in another place last week that the gold actually held in the account on March 30 this year, three months ago, was 26,674,000 fine ounces and that held in the Issue Department of the Bank of England was 73,842,000 fine ounces. This makes a total of 100,516,000 fine ounces and at the price of £7 an ounce represents just over £700,000,000. My right honourable friend I think added at the time that at the same date the Account held no more than a trifling amount of foreign currency. I may add that although the primary object of the Account is not to make a profit, the Chancellor of the Exchequer was able to state once more, as has been done before in previous debates, that the Account still showed a profit.
  I do not think your Lordships will require me to say much more in commending this Bill to you. It is a very complicated subject and I have no doubt that an interesting debate will arise, after which I will try to answer any questions that may be asked. I may claim that it is universally recognised that in present circumstances an Account of this kind, of which we were pioneers, is essential; that if it is to exist at all and operate successfully its resources must be ample, and nothing could encourage more that speculation which it is the object of the Account to defeat than the suspicion that this was not the case. In conclusion I would say that this is a certified Bill under the Parliament Act. I beg to move that it be read a second time.
  Moved, That the Bill be now read 2a.—(Lord Templemore.)
  LORD ARNOLD: My Lords, the noble Lord in moving the Second Reading of this Bill has done so in a speech of clarity and brevity, although it was not as informative in certain respects as I should have liked it to have been. I would like to emulate his clarity and brevity, but it is rather difficult to do that because the Bill is one of great complexity as well as one of great importance. The Bill passed through another place without a great deal of criticism and I have no doubt it will pass your Lordships' House without difficulty. Nevertheless it is a Bill which I think is bound to give rise to certain misgivings, and I propose to voice some of those feelings, speaking for my noble friends on these Benches although without binding them to every syllable of what I say.
  As the noble Lord explained this Bill asks Parliament for a further £200,000,000 for the operations of the Exchange Equalisation Account. Added to the previous figure of that Account of £350,000,000 it means that we shall have reached a total of £550,000,000, which is an amount not far short of the pre-War National Debt. Therefore we are getting into big figures; and there is no guarantee that this £200,000,000 is the end, or that sooner of later—and I dare say sooner rather than later—the Chancellor of the Exchequer will not come to Parliament wanting further money for this Account, another £200,000,000 or £300,000,000, whatever it may be. I say that especially having regard to the now very large and increasing output of gold. The noble Lord has told us, as the Chancellor of the Exchequer did in another place, that there is a profit on the Account. That is, of course, only a paper profit. There is no realised profit on the Account, and it is impossible to say whether, when the Account is finally wound up, there will be a profit or there will not be a profit. To put it in another way, whether eventually there is a profit or not depends upon the rate at which the United States, or France, or Great Britain stabilises its currency. If America does not alter the present gold content of the dollar, the price of gold here will fluctuate with the exchange between this country and the United States. It remains, I repeat, to be seen whether in the end there is a profit or a loss.
  We have been told by the noble Lord and by the Chancellor of the Exchequer
  16
  that this subject is a very complex one—in fact, so much so that the Chancellor of the Exchequer almost suggested that nobody really understands it. I dare say that is more or less true, but that is no reason why we should not try to understand it better than we do, and to have better information in certain regards than at the present time has been furnished to us. This is the time for getting information. This is the Second Reading of the Bill, and it is in the—as I think—quite legitimate and, indeed, commendable endeavour to obtain certain information that I am going to ask the noble Lord in the course of my speech a few questions. I have given him notice of one or two of those questions; perhaps not all, because this Bill is being hurried through Parliament. If he is not able to reply to all the questions to-day, I have no doubt that with his customary courtesy he will do what he can at a later stage, probably on the Third Reading of the Bill. That would give him time to consider the matter. It would be quite unreasonable to expect the noble Lord to deal with very technical matters like these without some notice.
  The first main question I want to ask is this. Is this Exchange Account being used only for the purposes for which it was originally intended, or have its operations gone beyond that? The noble Lord has said—and he is quite right, because it is laid down in the Finance Act, 1932, where this Account was set up—that its purpose is to check undue fluctuations in the exchange value of sterling. My submission is that the operations of the Account have really gone and are going beyond that, and that it cannot now be said that the Exchange Account is only being used—to employ the phrase which has been current in this connection—"to iron out small fluctuations in the exchanges." It has, in fact, been largely used to help the franc. Before the franc was devalued, and again recently, it has been used, as the noble Lord has said, to work the Tripartite Agreement, the Monetary Agreement of last September between the United States, Great Britain and France. And, as the noble Lord indicated, the operations of the Account have led to an enormous increase in the country's holding of gold.
  Now that may or may not be right, but the question is: Is it what Parliament intended? In practice the Exchange

  17
  Equalisation Account has been operated in a way which has become a backdoor return to what is really a new kind of gold standard. Shortly, we are now, in effect, measuring our currency by gold. What is the position? The American exchange is based on gold, and if the British exchange is being kept steady, as the noble Lord indicated, by the Exchange Equalisation Account with the American exchange, then in effect Great Britain's currency is also being based on gold. Then, as I will show later, the Exchange Equalisation Fund has been used to reduce the fiduciary note issue, and if—which is at any rate theoretically possible—the fiduciary note issue were wiped out altogether and at the same time our exchange were kept steady with the American exchange, which is based on gold, then we should really have sterling based on gold. In those circumstances it is surely not an exaggeration to say that we should have gone back to what would be in effect, de facto, a gold standard.
  Obviously, this kind of policy which I have been indicating may suit very well those who would like this country sooner or later to return the gold standard, but I think that it is a matter which wants very careful scrutiny by Parliament. I am not now discussing whether this country ought sooner or later, or ought not, to go back to the gold standard. The point I am making is that certain operations of the Exchange Equalisation Account might appear to be paving the way for the return to the gold standard. The question, I say again, is: Is that the intention of Parliament, and was it for any such purpose that the Fund was created? Surely the reply to that question is in the negative.
  Is it going too far to suggest that the operations of the Account are going beyond the objects stated when the Fund was set up, and beyond the words of the Statute upon which it is based, those words which the noble Lord quoted—namely, "to check undue fluctuations in the exchange value of sterling"? In the years before Great Britain went off the gold standard the dollar was at 4.86 and the franc, after stabilisation, was at 125. As we know, in that period this position proved to be a costly matter to Great Britain in its export trade. Sterling was over-valued and the franc was
  18
  under-valued. To-day the dollar exchange is 4·96 and the franc exchange is probably somewhere about 128. Now, I want to ask the noble Lord whether the Government are satisfied that such a change has taken place in relative price levels as to give assurance that, at these present rates of the American and French exchanges, sterling is not still overvalued; because if that were so, it would, of course, be to the detriment of our export trade. That is the first question, of which I have given the noble Lord notice, and no doubt he will be good enough to give a reply.
  The second main consideration which I wish to put before your Lordships is this: Is the Exchange Equalisation Account being actually worked in accordance with the law or, as I have indicated, with the intention of Parliament? Look at this matter of the country's total gold holding. The noble Lord has given the figures, just as the Chancellor of the Exchequer gave the figures in another place. If you add £186,718,000, in respect of gold at £7 per fine ounce held in the Account: on March 30 to the £,516,894,000 in respect of gold at £7 per fine ounce held in the Issue Department of the Bank of England, you arrive at a total of about £703,000,000; at any rate over £700,000,000 as the noble Lord said. Very well. In 1932 when the Exchange Equalisation Account was set up, the gold holding of the country was very much smaller. The amount in the Issue Department of the Bank of England was £130,000,000 taking gold at £4 4s. 11½d. per ounce. If that gold be valued up to £7 per ounce, it will come out at a value of £217,000,000 That would be the value of the gold which was in the Issue Department of the Bank of England in 1932, taking it at to-day's price of £7 per ounce. Now if, to that figure, you added the £350,000,000 worth of gold, assuming that all the Exchange Equalisation Account's money has gone in the purchase of gold, you would arrive at a total of £567,000,000. But as I say, we are told that we have actually an amount of £703,000,000. Therefore there appears to be an excess of £136,000,000 over the figures which I have just given to your Lordships. It is quite true that some part—not a very large part—of that excess would arise because a certain amount of gold has been bought at a price below £7 per ounce, and you have to take

  19
  that into account. But, taking everything into account, it would seem that the Exchange Equalisation Account has bought gold to a considerably greater extent than £350,000,000, which is the nominal figure of the Account. It may be that the Exchange Equalisation Fund has bought gold to the amount of over £450,000,000.
  Now consider a little more in detail, because there is one transaction which we know a good deal about. A very great deal about this Bill is buried in mystery, and nobody knows anything about it except the potentates who sit at the Treasury; but we know that there was a specific transaction last December about which the facts are more or less known. Last December the Exchange Equalisation Account bought gold worth £108,000,000, I suppose at £7 per ounce, and passed it to the Issue Department of the Bank of England at £4 4s. 11½d. per fine ounce. As your Lordships know, the Bank of England cannot pay more for gold—that is, in its books—in the Issue Department Account. Now the amount which the Exchange Equalisation Account received from the Bank of England for this purchase of about £108,000,000 was about £65,000,000, because the Bank of England only paid the Exchange Equalisation Account at the rate of £4 4s. 11½d. per ounce for the gold, for which the Exchange Equalisation Account had paid £7 per ounce.
  We arrive at this position. The Exchange Equalisation Account had already spent £108,000,000 of its assets in buying gold, but was furnished by the Bank of England with another sum of £65,000,000, with which it could buy more gold. That is the point which I wish to impress upon your Lordships. It would seem—I am asking for information, as to whether this is correct—that the limit of the Exchange Equalisation Account's capacity to buy gold is not that of the nominal amount of the Account. It would seem that this figure might be increased from time to time, if it were all done in that way, by not far short of two-thirds of this total, if all the Exchange Equalisation Account's assets are used for the purchase of gold, which is passed to the Bank of England at £4 4s. 11½d. per ounce, and then the Bank of England pays the Exchange Equalisation Account for the gold bought, at
  20
  £4 4s. 11½d. per ounce. Quite obviously the Exchange Equalisation Account is going to have far more assets which it might spend, and appears to have spent far more than the nominal amount of the Fund.
  Apply that to what we are asked to do this afternoon. We are asked to authorise a further £200,000,000 for the Exchange Equalisation Account. If that £200,000,000 be all used for the purchase of gold at £7 per ounce, it will buy somewhere about 29,000,000 ounces of gold. If, in due course, that gold is passed on to the Issue Department of the Bank of England at £4 4s. 11½d. and the Bank of England pays the Exchange Equalisation Account for the gold bought at the rate of £4 4s. 11½d. per ounce, the Exchange Equalisation Account will receive a sum of rather over £120,000,000. For simplicity's sake we will call it £120,000,000. With that sum the Exchange Equalisation Account can buy about another 17,000,000 ounces of gold at £7 per ounce. Thus, with this £200,000,000 which we are being asked to authorise this afternoon, it would seem, if I am right, that the Exchange Equalisation Account may buy as much as £320,000,000 worth of gold. The £200,000,000 might, supplemented in the way I have described, come to £320,000,000, and that might possibly all be spent in the purchase of gold. So, if that is right, what your Lordships are asked to do in fact is to give power to the Exchange Equalisation Account to buy gold, not only to the limit of £200,000,000, but to a limit of about £320,000,000, with of course a proportionate increase in the risk—this great gold holding at the price of £7 per ounce which is a very high price compared with what the price used to be. In short, the Exchange Equalisation Account may have bought, with what your Lordships are authorising this afternoon, about 46,000,000 ounces of gold at £7 an ounce instead of only about 29,000,000 ounces of gold. I want the noble Lord to tell your Lordships, either to-day or tomorrow, whether what I am indicating may happen, and whether there is anything to stop it happening in the way in which this Fund has been worked, because I think Parliament ought to know.
  There is a further point of great importance in regard to this transaction

  21
  which took place last December. When this purchase of gold made by the Exchange Equalisation Account, a purchase of £108,000,000 worth, was passed to the Issue Department of the Bank of England, the sum in the Issue Department was not£108,000,000 but was £65,000,000, because, as I say, gold there has to be taken at £4 4s. 11½d. per ounce instead of £7 per ounce. When the Issue Department received that gold, valued at £65,000,000, it does not appear really to have needed the gold, but something had to be done with it or about it. As a fact what was done was to reduce the fiduciary note issue from £260,000,000 to £620,000,000. If this sort of thing has happened once it may happen again; indeed, in theory there seems no reason why in course of time the fiduciary note issue should not be wiped out altogether and replaced by god without Parliament doing anything about it.
  A question was asked of the Chancellor of the Exchequer in another place about three weeks ago. He was asked whether in order to ease the gold difficulties he would reduce the paper cover held against the note issue by replacing the £200,000,000 of fiduciary paper with gold coin and bullion from the Exchange Equalisation Account until the whole of the note issue had been covered by gold at 85s. per ounce, pending revaluation. The Chancellor of the Exchequer said:
  "It is not necessary to consider this proposal at the present time."
  That is not very reassuring. It does not rule it out apparently. He says it is not necessary to consider the proposal at the present time. In those circumstances it does not appear to be fantastic to suggest that the fiduciary note issue might in time go altogether. Of course, if that should happen it would be very much easier to make out a case for the return to the gold standard because then there would be no fiduciary note issue, and the Bank would have gold against notes pound for pound.
  Before I sit down there is one question which I want to put to the noble Lord in the endeavour to elucidate the position, so that we may know what is going on. I ask the noble Lord if he will be good enough to reply to this question, probably to-morrow. The question is this: Does the Issue Department have gold
  22
  bought for it through the Banking Department or through any channel other than the Exchange Equalisation Account? If the answer is Yes, does the Exchange Equalisation Account—
  LORD TEMPLEMORE: May I interrupt the noble Lord? I am exceedingly sorry, I did not quite catch the first part of his question.
  LORD ARNOLD: I will give the noble Lord a copy of this question. I did not expect him to follow it, it is too technical. But if the answer is Yes, does the Exchange Equalisation Account hand over immediately gold or securities for the difference between £4 4s. 11½d. and £7 per ounce? If the Exchange Equalisation Account does not hand over the difference, but is debited by the Bank of England with the difference, is not the effect to leave more funds in the Exchange Equalisation Account for more purchases of gold and so forth than if the difference had been made good by the Exchange Equalisation Account immediately? Also, if the difference is not made good immediately, how can this be reconciled with Section 25, subsection (3) of the Finance Act of 1932, which begins with the word "Whenever"? I will not take up time in expatiating on that question. When the noble Lord receives it he will realise its significance and what I mean by it, and I should very much appreciate a reply, which, I take it, he will be good enough to give to-morrow.
  I do think, in conclusion, that I am not going wrong in uttering a note of warning. I suggest that we must not necessarily accept the decision of the Chancellor of the Exchequer in this matter as sacrosanct. His decisions are made on expert advice, but unfortunately that advice has proved to be wrong on more than one occasion in dealing with these matters of gold and currency since the War. I remember Mr. Churchill, who was Chancellor of the Exchequer for some time, saying, "I am not a currency expert, and if I said I were nobody would believe me." Years afterwards he said in effect, in regard to the advice which was given to him about the return of this country to the gold standard, that that advice had proved to be a mistake. And again we remember the woeful predictions about what was going to happen in 1931 if the country was forced off the gold standard. We were forced off the gold standard,

  23
  and in a very short time the vast majority of people were saying what a good thing it was, and that we must be very careful about going back to it. So I say, having regard to past experience, we must not necessarily assume that the decisions of the Chancellor of the Exchequer, though no doubt made with the best possible intentions on what he deems to be the best advice, are sacrosanct. The advice which has been given has been wrong before, and it may be wrong now—I am not saying it is wrong; but I have endeavoured to indicate to your Lordships why I think this Bill is one of importance and ought to be very carefully scrutinised before it passes.
  LORD MANCROFT: My Lords, may I ask your Lordships' permission to say a few words on a Bill which the noble Lord opposite, Lord Arnold, has described as one of great complexity? I feel some diffidence in addressing your Lordships' House for the first time, and if I stray beyond the rules of order I am sure I have only to ask for your Lordships' forbearance and that you will put the most favourable interpretation upon my words. I do not propose to follow the line taken by the noble Lord opposite, because he looks at the problem rather from the standpoint of an accountant and of one who has mostly thought of the matter in terms of finance. I look at the matter from the standpoint of thirty or forty years' connection with manufacture, the turning of raw material into manufactured goods and selling them abroad. But I think the noble Lord, Lord Arnold, is quite right when he says it is very difficult to analyse what this all means. I have in my private capacity endeavoured to understand the intricate problems of exchange. It was my duty, when Minister of Overseas Trade and afterwards at the Treasury, to do that also for public purposes; but the longer I study the matter the more I feel I can know nothing about it. To analyse the effects of this Bill in this House this afternoon and get down to the integral factors on which it is based would be like trying to pour the Atlantic and Pacific into a tea-cup. No man can tell the tangential effects of interference with exchange.
  The noble Lord has told us that the amount we are dealing with is about £550,000,000. It is bigger even than that. There was also the £25,000,000 taken out
  24
  of the dollar exchange reserve. The amount really appals me. I hardly dare to trust my mind to think of it in case I say something or imply something which may be subject to misinterpretation. All I have learned from my study of exchange is this, and I make a reservation if Free Trade is urged against me, that Free Trade is not an analogous argument, that interference with the free play of the laws of supply and demand, whether it applies to pepper or to gold, will sooner or later bring disaster. I am totally against any policy of long-continued interference with the laws of supply and demand. What is this Fund meant to do? What is the basis of this Bill? I shall not go into minor details as to ounces of gold or whether £705,000,000 is involved or £704,000,000 or indeed any particular sum. That is not the point. May I take your Lordships along with me when I say that what we are really trying to do by this Bill is to dam the flow of unwanted, surfeit gold which is flowing into the currency systems of Britain and the United States? Why do we do that? Here we do not want an inflation of credit which might lead to unbridled and unjustifiable share and commodity speculation. The United States do not want a large influx of gold into their system of currency because, quite rightly, they desire that there should not be an inflation in the cost of living, which always leads to trouble and an increase in the cost of production.
  The noble Lord who introduced the Bill told us what its specific aims were, but nobody in my opinion can tell us—certainly I cannot find out—what really we should do or should not do, about the gold problem, the oscillations of exchange and flight of panic money-values, because we are working entirely in the dark. We do not know the basic facts of what is actually happening. What is more, the measuring rod, the unit of value we are dealing with, is anchored down to nothing; whether it be dollar, sterling or franc it has no fixed basis. It has been well described as an india-rubber rod. We are working in the dark. The noble Lord who moved the Second Reading has repeated what was said in another place, that the details of the accounts of the Fund will be submitted to the Public Accounts Committee in order that there might be modified secrecy. I do not pay

  25
  much attention, nor do I think your Lordships need pay much attention, to the effect of that disclosure. I do not know whether there are sitting in this House many of your Lordships who have been members of the Public Accounts Committee of the House of Commons. The noble Lord opposite, Lord Arnold, was, I think, a member. I sat on that Committee for years and until I resigned my membership of the other House a few weeks ago, and for two years was Chairman and for a good many years often sat as Deputy Chairman. I think I can carry the noble Lord opposite along with me, if it is said here or elsewhere that the Committee on Public Accounts will be able to look into the accounts of this Fund and discover any irregularities, when I reply very bluntly "Nonsense." It is not likely that there will be any irregularities. The devoted, conscientious, efficient public servants at the Treasury and elsewhere, helped by the experts in exchange outside, are not for a moment likely to do anything which is irregular. There will be nothing irregular discovered there. But if an irregularity was discovered, what is the good of discovering an irregularity three or six months after it has occurred? It is shutting the stable door after the horse has gone.
  We are told that we are not to receive the information until three months after March 31 or September 30. There is more money to be lost by speculation in exchange than by gambling on the Stock Exchange or at the roulette tables of Monte Carlo or by buying modern French pictures. There is more money to be lost rapidly in exchange than in any other form of gambling. Let me carry the noble Lord opposite with me. The period during which the Public Accounts Committee sits to examine the matters submitted to it is from the beginning of January to about the first week in July. I do not remember sitting in July. How, then, in the name of what is reasonable is it going to be of any use to the public service that the information which has been accruing up to March 31 should be handed over to the Public Accounts Committee on June 3o, when the Public Accounts Committee has already done its year's work and is making its Report? The consequence will be that any examination will have to be deferred until the Public Accounts
  26
  Committee meets again, usually in the spring, by which time more months will have passed. To describe this as a concession made to certain persons who want more disclosure is merely so much dust thrown in the eyes.
  If there is an irregularity in administering the Fund it will of course be reported. But if it is a matter of policy it cannot be dealt with. I have ruled many times on that point. If it is a question of policy that is entirely ruled out. Policy is the crux. You cannot discuss policy on the Public Accounts Committee and that kills the root of the demand for a modified secrecy. Furthermore, I have not yet known of a Report by the Public Accounts Committee being- submitted to debate on the floor of the House of Commons. Therefore, I hope that the noble Lord (Lord Templemore) will recognise that it is really a waste of breath to tell us that the matter will be referred to the Public Accounts Committee.
  LORD TEMPLEMORE: I did not say so.
  LORD MANCROFT: I think the noble Lord said that after March 31 certain accounts would be submitted to the Public Accounts Committee. Am I wrong?
  LORD TEMPLEMORE: What my right honourable friend said exactly was that the public would be informed of the state of the Fund's resources each year three months after the half year—that is, the end of June and the end of December. If I may say so, my noble friend has been rather putting up the Public Accounts Committee in order to knock it down.
  LORD MANCROFT: Is the information then to be published in Punch or the Labour Gazette? I do not know whether I am in order, but I certainly have a recollection of a statement being made in the other House that the information would be given to the Public Accounts Committee. I do not know if I am wrong in saying that this statement has I think appeared in The Times and in the House of Commons OFFICIAL REPORT, but if I am wrong, I will apologise at once. If the noble Lord looks at the OFFICIAL REPOR1 he will find whether or not I am wrong, and whether the information is to be given merely to the newspapers or elsewhere or to the Public Accounts Committee.

  27
  Will your Lordships allow me to deal further with the underlying conditions as I see them? It is absolutely necessary that our manufacturers must have the tramline of exchange open to enable them to pay for materials bought from abroad and for receiving the proceeds of their own exported manufactures. We send out goods and sell in foreign currencies; it is impossible to carry on unless our manufacturers are afforded means of obtaining payment for their goods. Our export trade is a pivotal part of our economic life. Unless we know for certain what we have to pay in sterling for any goods and raw materials that we buy from abroad, it is impossible for us to carry on our import businesses. We must know for certain what we are going to get for the proceeds of our workmen's efforts when we export our coal and manufactured goods abroad and receive payment in foreign currencies, when we have turned those currencies into sterling.
  I have never been in favour of this type of Bill or of its principles. I have spoken mildly against its ancestors on other occasions in another place. I have never welcomed its principles in form of law. The idea has been that this Fund was to be used as a fund to level out wide fluctuations of the exchanges, hut, in the long run, it does not do that. We have an immense direct and indirect trade with our very good neighbours, the French. Has it levelled out the exchange between us and them? You have only to look at the great variations in the franc during the past twelve or eighteen months to see that it has not done so. I am certain that eventually it will be found that the principle which is implicit in this Fund will do about as much good as you would do by pouring out a kettleful of hot water into the Gulf Stream in order to raise its temperature. I think the method is foolish, and, in the long run, will not succeed in achieving its purpose in regard to the exchanges.
  My noble friends will have seen a skilful billiard player propelling a ball against a cushion, and will have seen it bounce off from one cushion to another and hit another ball and go into the proper pocket. There are only four sides to a billiard table and there are six pockets. There are scores of foreign currencies different from our own. They act like
  28
  tangential cushions, and if you interfere with the free passage of the exchange ball as it touches any one of those cushions you never know what deflection may happen as a result of your action. For instance, go and buy a consignment of copper in Chile, and you may find that it will be paid for with a bill drawn by Shanghai for soya beans shipped from Manchuria to Hull and the bill is to be met in Hamburg. Interfere with one of those operations by means of a Fund like this, and you do not know what 'the repercussions will be. I think it is very foolish to interfere at all, and try by artificial means over long periods to iron out the hollows and hills of a comprehensive international exchange which is anchored to nothing.
  The noble Lord, Lord Templemore, has said that we are now voting £200,000,000. Where is it going to end? Where is he taking us to? I looked up a speech to-day made when the then Chancellor of the Exchequer, the present Prime Minister, spoke on this same matter. He said then that he did not think he would want any more money for this Fund. That was in 1933. But now in 1937 we are told that £200,000,000 is required, or one-third of what the National Debt was just before the War. Where are we going to? We are voyaging into an uncharted sea. We may be asked again for another £200,000,000, and that will make it up to £775,000,000. The whole policy is artificial, short-sighted and foolish.
  I want to ask the noble Lord three questions. The first is a simple one, and it is this: Is the gold which is brought with the Fund in Paris earmarked there and left in France, or is it brought immediately to London? The second thing I want to ask—and I think this is vital to the whole policy and argument—is: How long is America going to give 35 dollars an ounce for gold? America is now the refuge for frightened holders of gold and securities. America buys with borrowed money gold which now amounts to £2,000,000,000 sterling, and puts it away into vaults in Kentucky. How long will the American people be willing to continue to let their Government borrow to buy and receive a perfectly useless commodity—for it is perfectly useless—in return for their useful products, services and income-yielding securities? What has happened is this:

  29
  America exports commodities, services and securities, and imports commodities to the extent that she will allow them over her tariff wall, services and securities, but not enough to pay for what she has exported. The result is she gets the balance in gold, and that gold, which includes some of the refuge gold of which I have spoken, she pays for by money which 311e has borrowed, and then, having got it, she puts it into a vault and cannot use it.
  The Americans cannot eat it, or wear it or use it because they are not allowed to trade with it, for if they did so it might cause inflation, rises in cost of living, in costs of production which would clog the power of exporting and attract foreign imports. The business men in the United States will, sooner or later, come to the conclusion that this is a stupid and foolish game, and they will not allow it to continue when it means buying gold at 35 dollars an ounce by borrowing, and then putting it away and doing nothing with it. The change may not be imminent, but it is very probable. Already they have £2,000,000,000 worth of it, and we have under the same system bought £700,000,000. That brings me to this question. Suppose the Americans say, "We are not going to give 35 dollars an ounce for gold any longer," who, I ask, is to bear the loss upon the gold that we are holding here? And to show how little is known of the reactions and repercussions of exchange, I would remind noble Lords of this. I heard at a meeting three or four years ago in one of the rooms of this building a statement made I think by Professor Cassel, that there was a shortage of gold in the world. He has been proved to have been quite wrong about that word shortage. He also said that in fifteen years the Transvaal mines would be exhausted. He has also been proved to be wrong there.
  There is plenty of gold in the world to-clay, but it is badly distributed. There is, to-day, more than there has been at any other time. The mere fact of giving gold an unnatural value has literally drawn gold out of the bowels of the earth. It has stimulated the production of gold in the Transvaal, and has drawn out the hoards of India. Already since 1931 £231,000,000 worth of gold has come from India; we never dreamed for a
  30
  moment twenty-five years ago that such a total would come from there. That gold sent to us from India is the equivalent of the discovery of a new goldfield. It represents something like three or four times the annual production of the whole of the mines of the Transvaal. I am not going to dogmatise, because I do not know, but my opinion is that if the present gold price continues for a few years longer you will eventually get £500,000,000 of hoarded gold out of India and you will probably find that there was:£1,000,000,000 of hoarded gold in India in 1931. Gold has been absorbed in India since the time of Tiberius. Moreover, since the Transvaal mines were opened in 1895, gold has been absorbed in great quantities by India, often at the rate of about £25,000,000 per year, and a very good thing it has been because this absorption of gold from the Transvaal into India prevented a surfeit of gold in Europe, and a rocketing of the cost of living by currency inflation. That gold will come out of India as long as there is the temptation of 35 dollars an ounce from America. I think also-that probably the flow from South Africa will riot only continue, but perhaps increase, and also that from Russia. In Russia the volume of gold is not known, but we know that a large amount recently has come from there, and my opinion is that the total world supply of gold will increase from South Africa, from Russia; from India and elsewhere. Then we shall be faced with this question: Will this Fund and will America be willing or able to absorb this Niagara of unwanted gold as it pours in? I do not believe that even the two great nations, the United States and Great Britain, will be able to cope with it.
  The noble Lord opposite made the point that this Account appears to be used to get back to the gold standard. Do not let me, at any rate, express any view as to whether we ought to get back or not. But I do say that the United States and Great Britain must make up their minds about what they mean to do. They have been dithering for six years and now with the price of 35 dollars per ounce offered by the United States they are facing the danger that they may have to Combat an uncontrollable flood of gold

  31
  from Africa, India, Russia and everywhere else. We must ask whether the two countries are to continue now to buy unwanted gold at the risk of eventual loss. If we are going back to gold we ought to make up our minds and say that the United States and Britain will stabilise gold. It may be at somewhere about the present price. I do not dogmatise about the price, but the price should be stabilised soon if they are eventually going back to gold; it should be done without much delay. Otherwise they should say they are not going back to gold.
  Too much has been said about the effect of a fall in the price of gold upon Johannesburg and the Stock Exchange. Why should we pay so much attention to difficulties about profits on goldmining shares? They are of less import compared with the necessity that the international tramlines of international trade should be kept open and level by a stabilised exchange upon which people can depend. For that reason we must take first into consideration what is the natural remedy. I do not know what will happen, no man can tell. Nor do I know the solution that is best and most opportune. But I rather think that the natural solution is the best solution. I am not advocating the natural solution—there may be a compromise—but thinking aloud again. I merely desire to convey to your Lordships that it seems to me that the natural solution first requires that all countries on the gold standard should wipe out consideration of the present price of gold in relation to investors or speculators in gold mines, or even the Revenues of South Africa, consideration of whether it should be 140s or 85s. I do not wish any man ill, I wish everyone to prosper, but I am not going to take into account now whether the owners of gold, or mines, or shares, should get 140s. or 85s. Then I will go to the next step and say that all countries at present on gold should come off it and join a sterling area or, as it may suit them, a dollar area. Let there be the two areas of exchange. Then Great Britain and the United States should guarantee a fixed sterling dollar rate of exchange, and maintain that with all the might and wealth in their power, and gold should
  32
  be left to find its own level in the market as a commodity. That is the natural way of solving the difficulty instead of drifting on and having to find £200,000,000 or £300,000,000 a few years hence to support an artificial price for unwanted gold. In passing this Bill I desire to suggest to your Lordships that we should register our view that we should stop this drift of undecided policy and make up our minds—and we shall in any case have to do it sooner or later—as to what we really intend to do before an unexpected decision elsewhere forces our hand.
  LORD TEMPLEMORE: My Lords, at the outset I should like to compliment my noble friend Lord Mancroft on the great success of his most interesting maiden speech in your Lordships' House. I have had the pleasure of reading some of the speeches he used to make in another place, but this is the first time I have heard him speak, and I am sure your Lordships will all hope that he will join in our deliberations frequently in future. I am always something of an optimist and the fairly long time that I have sat on this Bench has accustomed me to viewing a situation with not too much alarm. If it were otherwise I should be somewhat alarmed at the state in which I now find myself, in having to reply to very able speeches from two financiers. I apologise to my noble friend Lord Mancroft. He would not claim to be a financier. He is a manufacturer. I will describe them as two very able men of business. If I may deal first with the questions put by my noble friend Lord Mancroft, I understood him to find fault with me for having said that the accounts of this Equalisation Fund were periodically to be submitted to the Public Accounts Committee of the House of Commons. The only reason why I interrupted him was that I thought it really was rather hard lines on me because I had not mentioned that Committee. I think the noble Lord was perhaps confusing what he thought I said with what my right honourable friend said in another place. No doubt it is right that the Public Accounts Committee are going to look into the matter, for the reason, I suppose, that they are the natural people to do so, but whether my noble friend thinks their deliberations are of any use is a matter for him.

  33
  In the course of his most interesting speech my noble friend addressed himself to this Bill to a certain extent, but I think that his remarks in a general way were an attack on the whole monetary policy of this and preceding Governments. My noble friend and your Lordships must excuse me, a complete tyro, if I do not go very deeply into that matter. My noble friend asked me certain questions, one of Which was whether gold bought in France going to be left in Paris, and another a rather long one, about the length of time for which America was going to give 35 dollars per ounce for gold. I hope he will excuse me from answering those questions this afternoon. I will consult my advisers and if it is possible to give him an answer I will do so to-morrow afternoon when the Third Reading of the Bill is to be taken.
  I turn to the questions which were put by the noble Lord opposite, Lord Arnold. He was good enough to give me notice of some of his questions. With regard to others of which he did not give me notice, I can only repeat what I have just said to my noble friend behind me, that I have not got the answers now but I shall have great pleasure m trying to deal with them on Third Reading. When my noble friend was talking about the use to which the Equalisation Fund was put I understood him to say it was used to support the franc last autumn before devaluation and that it was again used in that way recently. My answer to that is that the Exchange Account is not really used to support the franc, but is used in accordance with the terms of the Statute which I quoted in- introducing this Bill, to check undue fluctuations of sterling. In pursuance of that object the Fund has to buy gold where necessary. Recent trends in regard to the franc caused an influx of gold which the Account had to buy. The devaluation of the bra to which he referred in parenthesis did not have the same effect.
  Another question he asked was with regard to the value of sterling. I gathered that his opinion was that sterling was over-valued before we went off the gold standard, and that at the present day the pound is worth more in terms of both franc and dollars than it was then. He therefore asked whether there has been such a change in the relative general price
  34
  levels as to prevent sterling being overvalued at these levels. I would answer, in the first place, that the purpose of the Account, and of this Bill, which add to its sterling resources for the purchase of gold, is not concerned with the permanent relation between sterling and francs and dollars. Secondly, but for the existence of the Account, sterling would at times have been temporarily over-valued. Thirdly, the question whether a particular currency is relatively over- or undervalued depends upon a number of considerations other than price levels: changes in tariffs, sufficiency of profit margins, relative figures of unemployment or activity, and wage rates. I hope the noble Lord will excuse me from saying more on this occasion than that there does not seem sufficient warrant for saying that the value of sterling is very seriously out of relation with that of other currencies at the present time. The practical point is that it might easily become so if we do not take such steps as the Bill proposes to enable us to prevent the exchange value of sterling from being unduly raised by an influx of refugee capital.
  The noble Lord, Lord Arnold, then asked me a third question, which had to do with the amount of gold in the Exchange Equalisation Account, and referred to two statements made by my right honourable friend in another place. The first was to the effect that the gold in the Account on March 3o was valued at £186,000,000; the second, that gold which has been passed to the Issue Department of the Bank is valued at the old par of £4 4s. 11½d. per fine ounce and that the excess of the market value over that figure is in substance an asset of the Exchange Equalisation Account. The noble Lord, if I understand him aright, contests this second statement by reference to Section 24 (3) and (6) of the Finance Act, 1932, which he takes to mean that differences between the old par and the present market price must be made good at the time. I can assure the noble Lord that the requirements of the Statute have been properly and exactly complied with.
  In the first place, I must draw a distinction between the cash assets or sterling resources of the Account on the one hand, and the total assets of the Account, which we speak of when we say that the Account as a whole shows a profit or a loss, on the

  35
  other. Now my right honourable friend the Chancellor of the Exchequer stated that the Account held on March 36, taking the value at 4',7 per ounce, gold valued at 186,000,000, and a negligible amount of foreign currency. But in addition to that, of course, there were the sterling resources of the Account, which are necessary to buy gold and which it is the purpose of this Bill to increase. In considering whether at any given date the Account shows a profit or a loss, we take account on the one hand of the cash issues to the account, and we take account on the other hand not only of the gold and foreign exchange held in the account at current prices, and of its sterling assets, but also of the excess value of the gold purchased by the Issue Department since the inception of the Account.
  The reason why we are entitled to do so is as follows. When the Issue Department buys gold, either in the open market or from the Account, after the date of the setting up of the Account, the effect of the statutory provisions is that the Issue Department pays only £4 4s. 11½d. an ounce and the Account pays the difference between this amount and the market price; or, taking the market price at £7, pays £2 15s. When the Account is wound up it will receive back from the Issue Department a sum, corresponding to that £2 15s., equal to the difference between the fixed value of £4 4s. 11½d. and the then market price. Thus, one of the assets of the Account has taken the form of a book entry. The Account has lost cash and its power to buy further gold is reduced, but its assets are unimpaired.
  I have answered to the best of my ability those questions which the noble Lord opposite asked me about this Bill. I can only repeat what I have said, that those questions which I have not answered I will do my best to answer on Third Reading. I beg to thank your Lordships very much for listening to me for, I am afraid, an undue time, but this is a rather complicated subject. We have had a most interesting financial debate, which cannot, I think, but do good and which will show the value of your Lordships' House to the country in being able to have a debate of this kind on this subject. I hope that your Lordships will
  36
  now give the Bill a Second Reading. I beg to move.
  On Question, Bill read 2a; Committee negatived.

  BUSINESS OF THE HOUSE.
  THE MARQUESS OF CREWE: My Lords, I beg to ask the noble Viscount the Leader of the House a question on Business. I am informed that the Report of the Palestine Commission is to be issued to the public on the night of Wednesday next. The matter will be of deep interest to every member of your Lordships' House, and I understand that the Report is a very voluminous document. Some little time will therefore probably be required for its examination before it can be debated here. I should be grateful if the noble Viscount could inform me whether he has in mind the question of a debate on this subject in this House, and whether, as I presume is the case, he has been in communication on the subject with his colleagues in another place.
  VISCOUNT HALIFAX: My Lords, I had certainly anticipated, as' the noble Marquess suggests, that it would be your Lordships' desire to have an opportunity for the discussion of the Palestine Commission Report after the Report has been laid. I had also anticipated, as the noble Marquess also suggested, that, having regard to the nature of the Report, it would be the desire of your Lordships that some days at least should elapse between the laying of the Report and opportunity for debate. I have been in communication with those who direct the business of another place, because I think it is perhaps desirable, as far as may he, to keep debates in both Houses reasonably close together, but I understand that no official decision has yet been reached. Therefore, if the noble Marquess would allow me, I would place myself in communication with him and others in this House who are interested—my noble friend the Chairman would, I hope, be able to be present whenever we decide to have the debate—and communicate with them as to the actual date which would be the most generally convenient.
  Before moving the adjournment of the House, may I say a word or two about other business? It is proposed to take the remaining stages of the Coal (Registration of Ownership) Bill—the Report and

  37
  Third Reading—on Thursday next; and I propose to place a Motion on the Paper to that effect. That will appear to-morrow. I hope that no objection will be taken to that course, as I think the main matters of difference that arise on the Bill have now been amicably adjusted. My noble friend Lord Hastings authorised me, if he was not able to be in his place, to say that he and those for whom he acts would raise no objection to that course. The alternative would be to ask your Lordships to sit on Friday to take the Third Reading, and that, I am advised, would not generally be held to be convenient.
  It is proposed to move the consideration of the Committee stage of the Factories Bill from Thursday next to Monday, the 12th, in order to leave further time for consideration of the Marriage Bill in Committee on Thursday, if that course be found necessary. It is hoped to conclude the Committee stage of the Factories Bill on Tuesday, the lath. I understand that
  38
  the Motion for the Third Reading of the London Passenger Transport Board Bill has now been put off till the 14th. Therefore, the Committee stage of the Marriage Bill will be the first Order on the Paper for Wednesday next, and I anticipate that the House may find it necessary to sit on that day after dinner. Time will be found for the Report stage of the Marriage Bill on Thursday the 15th. It is proposed to take the Third Reading on Monday, the 19th. It is hoped to take the Report stage of the Factories Bill on Thursday, July 22, and the Third Reading on Monday, the 26th. Noble Lords will forgive me for looking so far ahead, but I know that at this stage of the Session it is not inconvenient to noble Lords to know how to adjust their business. After to-morrow, Tuesday, the House will meet for public business every day at three o'clock.
  House adjourned at eight minutes before five o'clock.

HASTINGS EXTENSION BILL. [H.L.]
KENT ELECTRIC POWER BILL. [H.L.]
PONTYPOOL GAS AND WATER BILL. [H.L.]
WESSEX ELECTRICITY BILL. [H.L.]
Returned from the Commons, agreed to, with Amendments: The said Amendments considered, and agreed to.

HUDDERSFIELD CORPORATION BILL.
Returned from the Commons, with the Amendments, agreed to.
WADEBRIDGE RURAL DISTRICT COUNCIL BILL.
The CHAIRMAN OF COMMITTEES informed the House that the opposition to the Bill was withdrawn. The Orders made on the 10th and 23rd of June last discharged, and Bill committed for Thursday next.
TORQUAY CORPORATION BILL.
The CHAIRMAN OF COMMITTEES informed the House that the opposition to the Bill was withdrawn. The Orders made on the 6th of May and 23rd of June last discharged, and Bill committed for Thursday next.
LONDON COUNTY COUNCIL (GENERAL POWERS) BILL.
The CHAIRMAN OF COMMITTEES informed the House that the opposition to the Bill was withdrawn. The Orders made on the 9th and 23rd of June last discharged, and Bill committed for tomorrow.