Sitting of 28 June 1937

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

PRIVATE BUSINESS.
Hastings Pier Bill [Lords],
Read the Third time, and passed, without Amendment.
Kingsbridge and Salcombe Water Board Bill [Lords],
Taf Fechan Water Supply Bill [Lords],
Warrington Corporation Bill [Lords],
As amended, considered; to be read the Third time.
Canvey Island Urban District Council Bill [Lords],
Dartford Tunnel Bill [Lords],
Liverpool United Hospital Bill [Lords],
North Cotswold Rural District Council Bill [Lords],
Read a Second time, and committed.
Ministry of Health Provisional Order (Birmingham Tame and Rea Main Sewerage District) Bill,
Ministry of Health Provisional Order (Wisbech Water) Bill,
Ministry of Health Provisional Order (Yeadon Water) Bill,
Read the Third time, and passed.

ORAL ANSWERS TO QUESTIONS.

  INDIA (TRIALS, SPECIAL TRIBUNALS).
  Mr. Dayasked the Under-Secretary of State for India the number of persons during the previous 10 years who have been tried by a special tribunal of High Court Judges in India without the services of a jury and sentenced to be executed?
  The Under-Secretary of State for India (Lord Stanley): The Delhi conspiracy case of 1930 was heard by a Special Tri-
  1618
  bunal of three High Court Judges sitting without a jury, and three persons were sentenced to be executed in that case. Under Bengal Ordinance XI of 1931 it was provided that terrorist offences could by tried by a Special Tribunal of three High Court Judges, but so far as I have been able to trace no persons were, sentenced to death by a tribunal set up under that Ordinance. I am not aware of any other occasions during the last 10 years when provision has been made for the setting up of Special Tribunals of High Court Judges.
  Mr. Day: Will the Minister consider suggesting to the Indian authorities that persons charged with offences shall have the right to be tried by a jury?
  Lord Stanley: I understand that it is quite common under the Code of Criminal Procedure for cases to be tried by a sessions judge sitting with assessors and not with a jury.

  ANTI-BRITISH PROPAGANDA.
  Lieut.-Commander Fletcherasked the Secretary of State for Foreign Affairs whether he has any information to give the House regarding the anti-British Italian propaganda in Palestine and Arabia; and whether he proposes to protest to the Italian Government against its continuance?
  The Secretary of State for Foreign Affairs (Mr. Eden): His Majesty's Government take strong objection to this anti-British propaganda, and His Majesty's Ambassador in Rome has, on my instructions, more than once made representations to the Italian Government on this subject, the last occasion being about six weeks ago. I myself spoke on the matter to the Italian Ambassador a fortnight since. I am glad to be able to inform the House that the tone of the broadcasts from Bari has lately shown an improvement.
  Mr. Morgan Jones: Has any undertaking been given by the Italian Government in this matter?
  Mr. Eden: Yes, Sir; and I am glad that that question has been asked, in order to show the interest that is taken in this country in the matter.
  Colonel Wedgwood: Is it not possible for our stations to send out counter-propaganda?
  Mr. Eden: We do not like it.
  Sir Percy Harris: Is it not entirely against international custom for propaganda to be indulged in by countries with which we are at peace?
  Mr. Eden: Yes, Sir.
  Mr. Noel Baker: Is it not a violation of international agreement on broadcasting?
  Lieut.-Commander Fletcher: In view of the importance of this matter, I beg to give notice that I will raise it at an early opportunity on the Adjournment.
  Mr. Arthur Hendersonasked the Secretary of State for Foreign Affairs whether he will make representations to the German Government in respect of the anti-British propaganda campaign at present being conducted in the State-controlled German Press?
  Mr. Eden: No, Sir. But I would repeat the Prime Minister's appeal to the Press both at home and abroad for restraint in the present difficult times.
  Mr. Henderson: Does not the right hon. Gentleman agree that these venomous Press attacks are prejudicial to good relations between this country and Germany?
  Mr. Eden: That is true of Press attacks wherever they come from.

  DANZIG.
  Lieut.-Commander Fletcherasked the Secretary of State for Foreign Affairs whether the High Commissioner at Danzig has furnished any report to the League of Nations concerning the death of Hans Wiechmann; whether this report indicates that Herr Wiechmann was murdered; and, if so, by whom?
  Mr. Eden: So far as I am aware no such report has been received from the High Commissioner. I am, however, making inquiries at Geneva.

  SPAIN.
  Mr. A. Hendersonasked the Secretary of State for Foreign Affairs whether he will name the principal European
  1620
  Governments which have not intimated their acceptance in principle of the scheme for the withdrawal of foreign nationals now serving in Spain, submitted to them a month ago by the Non-Intervention Committee?
  Mr. Eden: I am not in a position to make any statement on the attitude of the various Governments towards the scheme. I understand that only four Governments have so far communicated their observations to the Committee. His Majesty's Government, for their part, have informed the Committee that they are willing to agree in principle to accept the plan with any modifications which the Committee may adopt.
  Mr. Henderson: Is it not a fact that Lord Plymouth publicly stated a few days ago that this scheme had been sent to various Governments a month ago, and that only a few of them had replied; and are we not entitled to know which Governments have replied?
  Mr. Eden: Yes, Sir, I think that is right, but I can answer only for our country.
  Mr. A. Hendersonasked the Secretary of State for Foreign Affairs what steps are being taken to maintain the effectiveness of the naval control of the Spanish coast, in view of the withdrawal of the German and Italian Governments?
  Miss Wilkinsonasked the Secretary of State for Foreign Affairs whether, in view of the fact that Germany and Italy have withdrawn from the naval control scheme, it is the intention that the British and French Governments should take over the patrol of the coasts previously allotted to the withdrawing countries?
  Mr. Eden: I would refer the hon. Members to the statement which I made on this subject in the course of last Friday's Debate. His Majesty's Government have continued in the closest consultation with the French Government and other Governments concerned on the question of filling the gap in the naval patrol caused by the withdrawal of Germany and Italy from the work of the patrol. A meeting of the Non-Intervention Committee is to be held to-morrow morning at which it is contemplated that definite proposals with this end in view will be put forward. I hope to be in a position to make a further statement on the matter tomorrow.
  Mr. Thorne: Has the right hon. Gentleman seen a report published in Italy to the effect that it does not matter whether there is intervention or otherwise since General Franco must win?
  Mr. Eden: If that is so, I wish there would not be intervention, any way.
  Miss Rathboneasked the Secretary of State for Foreign Affairs whether His Majesty's Government have, or had at the time of its occupation by the insurgent forces, any representatives in Bilbao; and what was the basis of the evidence which has reached him through His Majesty's Minister at Hendaye to the effect that the final occupation of Bilbao took place without bloodshed and that the Basques who gave up their arms were immediately set free, a small number of anarchists being held to be tried by tribunals?
  Mr. Eden: The answer to the first part of the question is, No, Sir. As regards the second part, I understand that the information was obtained by His Majesty's Ambassador from a journalist who was at Bilbao when General Franco's forces entered the city.
  Miss Rathbone: Is it not well known that General Franco permits no journalists to remain with his forces if they issue reports unfavourable to his Government; and how can the information be reliable and unbiased seeing that there is no source of such information?
  Mr. Eden: "Unreliability" and "bias" are strong terms, but this information does seem to be generally confirmed. Only last week we were informed that the journalists now in Spain were reliable.
  Mr. Jagger: Does the right hon. Gentleman think it advisable that His Majesty's Government should be dependent upon the reports of journalists?
  Captain Heilgers: Was not the British Consulate sacked before the arrival of General Franco, and His Majesty's representative therefore was not able to return?
  Mr. Noel-Baker: In view of the large number of courts-martial now at work in Bilbao, could not the Government take some measures to see that the principles of humanity are observed?
  Mr. Vyvyan Adamsasked the Secretary of State for Foreign Affairs whether any progress has been made in arranging for the withdrawal of non-Spanish combatants from the theatre of the Spanish civil war?
  Mr. Eden: This question is on the agenda for the Non-Intervention Committee's meeting to-morrow morning.
  Mr. Bellengerasked the Secretary of State for Foreign Affairs whether he has come to any decision on the reply of the Spanish insurgent authorities to the British protest concerning the mining of His Majesty's Ship "Hunter"?
  Mr. Eden: I have already stated the present position in answer to a question by the hon. Member for Broxtowe (Mr. Cocks) on Wednesday last. I cannot at the moment add anything to that answer.
  Mr. Bellenger: In view of the considerable time which has elapsed since the protest which His Majesty's Government sent to General Franco, may we not ask the right hon. Gentleman to expedite some sort of settlement of this matter?
  Mr. Eden: We have had an answer, but the matter is now under consideration as to what our next step will be. I cannot say more.
  Lieut.-Commander Fletcherasked the Secretary of State for Foreign Affairs whether, failing specific guarantees from the countries represented on the Non-Intervention Committee which have since its inception frequently intervened in the Spanish conflict and are doing so at the present moment on an unprecedented scale, he proposes to withdraw from the work of the committee, while stating that the territorial and political independence of Spain are matters of vital concern to this country?
  Mr. Eden: I have nothing to add to the statement on the subject of the policy of non-intervention which I made in the course of last Friday's Debate.
  Lieut.-Commander Fletcher: Does the right hon. Gentleman intend to persist, in face of the declaration by the head of the Italian Government that he intends to pursue his intervention on behalf of General Franco to a victorious conclusion?
  Mr. Eden: Yes, Sir.
  Mr. Bennasked the Secretary of State for Foreign Affairs whether he has any statement to make as to the future working of the Spanish Non-Intervention Agreement?
  Mr. Eden: I would refer the right hon. Gentleman to the statement which I made in the course of last Friday's Debate.
  Mr. Bennasked the Secretary of State for Foreign Affairs whether any plan is before the Non-Intervention Committee for preventing the passage of foreign military aircraft to Spain?
  Mr. Eden: As the right hon. Gentleman is aware, this question has been under constant examination. He will also be aware of the extreme complexity of the problem. I regret to state that, up to now, no solution has been found, but His Majesty's Government are fully alive to the importance of this subject and the right hon. Gentleman may rest assured that they will do everything in their power to secure a solution.
  Mr. Benn: In view of the decisive ressults which have been obtained by the intervention of foreign military aircraft recently, are the Government of opinion that non-intervention exists at all as long as foreign military aircraft are permitted to come to Spain?
  Mr. Eden: I would remind the right hon. Gentleman that it has been frequently stated how unsatisfactory this aircraft procedure was.
  Mr. Noel-Baker: Has the right hon. Gentleman seen the statement of Herr Hitler that he intends to proceed in order to get the iron ore from Spain?
  Mr. G. Straussasked the Secretary of State for Foreign Affairs whether he has received any further information concerning the alleged recent landing of Italian troops at: Malaga and elsewhere?
  Mr. Eden: I would refer the hon. Member to the answer which I gave to a similar question put by the hon. Member for Derby (Mr. Noel-Baker) on 24th June, to which I have nothing to add.
  Mr. Strauss: Has the right hon. Gentleman any information regarding the Spanish Government's statement that over 8,000 Italian troops sailed on 24th June from Civita Vecchia to Spain?
  Mr. Eden: I think that is covered by my answer.

  ANGOLA.
  Mr. Dayasked the Secretary of State for Foreign Affairs whether he will give particulars of the latest reports received from His Majesty's Consul-General at Loanda on the economic conditions in Angola, with special reference to the system of forced labour for private profit that is in operation in that country?
  Mr. Eden: I would refer the hon. Member to the report on economic conditions in Angola for the year 1936 by His Majesty's Consul-General at Loanda which has been published. I have received no recent reports on the subject referred to in the second part of the question.
  Mr. Day: Will the Minister ask for a further report with regard to this matter?
  Mr. Eden: I think we must wait.

  SPANISH REFUGEE CHILDREN.
  Mr. Donnerasked the Secretary of State for Foreign Affairs whether, in view of the fall of Bilbao and the speed with which normal conditions are being restored in that city, he is in a position to state whether arrangements are now being made for the early return to Bilbao of the Basque refugee children in this country?
  Mr. Eden: I am not in a position to make a statement on this subject at present.
  Mr. Donner: Has the attention of my right hon. Friend been called to the fact that it is the one desire of these children to return to their homes in Bilbao as soon as possible?
  Miss Rathbone: Is the right hon. Gentleman not aware that the parents might be subjected to ill-treatment or even to death if they expressed their real opinions of the suitability of the conditions in Bilbao for the return of their children?
  Mr. Noel-Baker: Are not the homes of many of these children destroyed and their parents refugees?
  Mr. Gallacher: Are not their parents either dead or in flight to Santander, and can there be any question of sending these children back to their parents?
  Commander Bowerasked the Secretary of State for Foreign Affairs whether it is proposed that the British Consul shall now return to his post at Bilbao; and

  1625
  whether, in that case, he can be instructed to make inquiries whether any parents of children now in this country are prepared to receive these children back?
  Mr. Eden: The question of consular representation of Bilbao is at present under consideration. I am, therefore, at present not in a position to give a reply to the second part of my hon. and gallant Friend's question.
  Commander Bower: Now that the tide of war has swept past Bilbao, does not common humanity dictate that these children should be restored to their parents?
  Mr. Thurtle: What does General Franco know about common humanity?
  Commander Bowerasked the Secretary of State for the Home Department whether any of the Basque children now in this country are in possession of a passport or other documents establishing their identity; and whether he is satisfied that there will be no difficulty in repatriating these children in consequence of any omission as regards proper identification papers?
  The Under-Secretary of State for the Home Department (Mr. Geoffrey Lloyd): I would refer to the reply given on the 24th instant to my hon. Friend the Member for Eastbourne (Mr. C. S. Taylor). The answer to the second part of the question is in the affirmative.
  Mr. Benn: May I ask the Prime Minister whether, arising out of this and other questions, he can take some steps to discourage this campaign against these poor little children?
  Commander Bower: On a point of Order. Has the right hon. Gentleman the faintest justification for making a charge of this description against those of us whose sole object is to get these young persons back to their own country as quickly as possible?
  Colonel Wedgwood: Can the hon. Gentleman explain why it is that Catholic Members of this House are so anxious to get these children back?

  NAVAL AND MILITARY PENSIONS AND GRANTS.
  Mr. Tinkerasked the Minister of Pensions the figures of the number of
  1626
  applications made under the special arrangements for dealing with cases when more than seven years have elapsed since discharge from the service after the Great War; and how many have been successful?
  The Minister of Pensions (Mr. Ramsbotham): I would refer the hon. Member to the particulars which I gave in reply to questions on the same point on the 14th April and the 8th of the present month, of which I am sending him copies.
  Mr. Tinker: Is the hon. Gentleman aware that the ex-service men are of opinion that the concession granted by the Government over the seven years is no good at all to them, because very few are succeeding?
  Mr. Ramsbotham: If the hon. Member will study the replies I have given, he will see that that question is quite unfounded.
  Sir Arnold Wilson: Is not this one of the principal reasons for the difficulties we are now experiencing in recruiting?

  AGRICULTURE.

    BASIC SLAG.
    Mr. Thorneasked the Minister of Agriculture whether the basic slag that he intends getting from the steel melting and blast furnaces will be ground up for fertilising purposes at furnaces, the price per ton of slag, and any other information about the matter?
    The Minister of Agriculture (Mr. W. S. Morrison): I would refer the hon. Member to the Memorandum on the Financial Resolution, from which he will see that it is contemplated that farmers will themselves purchase the basic slag they require from authorised suppliers at prices that have been approved for the purposes of the scheme. Basic slag used for agricultural purposes is always ground, and the seller is required by law to declare the proportion that will pass through a prescribed sieve. The phosphoric acid content has also to be declared. If the hon. Member desires any further information and will communicate with me, I will do my best to supply it.

    CHEAP MILK, SPECIAL AREAS.
    Mr. James Griffithsasked the Minister of Agriculture whether, in view

    1627
    of the report of the Milk Marketing Board that under the provisions of their cheap milk scheme in the Rhondda the consumption of milk by those benefiting under the scheme increased 43 per cent., he will take steps to extend the scheme to other areas in Wales?
    Mr. W. S. Morrison: The schemes for the supply of cheap milk in the Special Areas have been inaugurated for experimental purposes by the Milk Marketing Board, with the co-operation of local distributors and of the local authorities concerned, and with financial assistance from the Commissioner for the Special Areas. I understand that the board are of opinion that fuller information as to the working of the present schemes is desirable before any question of further action along these lines could be considered.
    Mr. Griffiths: In view of the undoubted success of this scheme, will the right hon. Gentleman represent to the Milk Marketing Board the desirability of applying it to other districts in the Special Areas as quickly as possible?
    Mr. Morrison: The matter will be kept under review.
    Mr. George Griffiths: Will the right hon. Gentleman consider applying it also to the semi-distressed areas, of which there are a good many?
    Mr. Leach: Will the Minister say what it is that causes the board to have the slightest doubt about the success of this scheme?
    Mr. Morrison: There are many matters involved in the first place, it is necessary to secure the co-operation of the local authorities and of the local distributors, and that has contributed to the success of the scheme; and, in the second place, it is not quite clear yet from the figures whether the increase of 43 per cent. does mean a gain to the board, in view of the reduction of price over the original 100 per cent.
    Mr. J. Griffiths: Has not the chairman of the board reported that they, as a board, are satisfied that the scheme is a success: and is any difficulty being placed by any local authority in the way of the board applying the scheme?
    Mr. Morrison: So far as I know, none.

  POST OFFICE.

    TELEPHONE KIOSKS (EMERGENCY CALLS).
    Mr. Dayasked the Postmaster-General whether he is aware that a caller dialling O in case of emergency at an automatic telephone box and asking to be connected with the police is asked to first insert 2d. before he can be connected; and whether he will introduce regulations that all emergency calls for police, ambulance, or fire service made at automatic telephone boxes should be put through without this charge?
    The Postmaster-General (Major Tryon): In the case of an emergency call to the police, a caller should not be asked to insert 2d. before being connected. The notices in the kiosks concerned make it clear that no charge is made for emergency calls, and operators are instructed that the caller must not be asked to pay for them.
    Mr. Day: Has the Postmaster-General investigated the particulars of a case which I sent to him in regard to this matter?
    Major Tryon: I understand that in that case someone unnecessarily spent 2d. instead of asking for an emergency call.

    AUTOMATIC TELEPHONE EXCHANGE, CLAY CROSS.
    Mr. Gibson (for Mr. Ridley)asked the Postmaster-General what progress is being made with the installation of an automatic telephone exchange in the Clay Cross area and when the work is likely to be complete?
    Major Tryon: The bulk of the equipment has been installed, and the remaining work is being pressed forward. While it is not yet possible to give a precise date, it is anticipated that the new exchange will be opened in the near future.

  HOUSE OF COMMONS (ACCIDENT).
  Mr. Thorneasked the First Commissioner of Works whether he can give the House any information in connection with an accident to a man who is employed by the Office of Works at the House of Commons, what was the cause of the accident, and any further information about the matter?
  The First Commissioner of Works (Sir Philip Sassoon): The accident occurred on the afternoon of 18th June, when the workman, who was employed by my Deportment as a hot-water fitter, was found lying unconscious on the floor of the pantry attached to the House of Commons kitchen. He was removed to Westminster Hospital, where he died the following morning. At the inquest, the post-mortem examination revealed that he had died from a fracture at the base of the skull, and that he had suffered from a form of arterial disease which might have caused giddiness. He had apparently fallen and struck his head, either against a table or on the floor, and the coroner accordingly found that his death was due to accidental causes.
  Mr. Thorne: Will compensation be paid to the relatives in this case?
  Sir P. Sassoon: The claim is being handled by the man's union, and the matter is being investigated.

  THE CORONATION.
  Colonel Goodmanasked the First Commissioner of Works what sum has been realised from the sale to the public of Coronation chairs, stools, and decorations by his Department?
  Sir P. Sassoon: Final figures are not available, but the estimated amount to be realised from the sale to the public of Coronation chairs, stools, decorations, etc., is £15,000.
  Sir William Davison: Is my right hon. Friend aware that certain Members of this House have paid for some of these chairs, but have not yet received them; and can he say when they will be delivered?
  Sir P. Sassoon: As soon as possible.
  Colonel Goodmanasked the First Commissioner of Works what sum was realised from the sale of seats provided by his Department for the purpose of viewing the Coronation procession; and what balance of the cost remains to be met from public funds?
  Sir P. Sassoon: The receipts from the sale of seats on the stands erected by my Department amounted approximately to £76,000. Final figures are not yet
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  available, but the balance of costs to be met from public funds is estimated at £45,000.

  GOVERNMENT DEPARTMENTS (FUEL).
  Mr. David Adamsasked the First Commissioner of Works what diminution, if any, in the use of raw coal has been made in Government offices in Whitehall during the previous 12 months and when it is expected that the complete elimination of atmospheric pollution from this, source will be achieved?
  Sir P. Sassoon: Raw bituminous coal represents 20 per cent. of the total amount of fuel consumed by Government offices in Whitehall, and there has been no material diminution in the use of this coal during the last 12 months. The extension of central heating is tending to eliminate atmospheric pollution by gradually reducing the number of open fireplaces, and smokeless fuel is used in these fireplaces whenever local circumstances make it possible without an undue increase in cost, but I regret that I am unable to forecast the date at which the elimination of atmospheric pollution from the use of raw bituminous coal will be achieved.
  Mr. Adams: Does not the Minister see the absurdity of his Department being employed in cleansing the fabric of the Parliament building and of Westminster Abbey, while at the same time this smoke nuisance continues from offices which come under his Department?
  Sir P. Sassoon: Smokeless fuel is used wherever the local circumstances permit, as long as it does not involve an unreasonable increase of cost.
  Mr. Thorne: Would there be any difficulty in installing gas fires for use during the winter?
  Sir P. Sassoon: I should like notice, of that question.

  PALESTINE.

    MUFTI OF JERUSALEM.
    Colonel Wedgwoodasked the Secretary of State for the Colonies why, in official documents, the Mufti of Jerusalem is always spoken of as His Eminence, seeing that his clerical status is in no way superior to several other muftis in Jerusalem?
    The Secretary of State for the Colonies (Mr. Ormsby-Gore): I have no official information as to the origin of this title, but I understand that Haj Amin al-Huseini is accorded by courtesy the title of "His Eminence" by virtue of his appointment as President of the Supreme Moslem Sharia Council in Palestine. Similar courtesy titles are used in addressing the spiritual heads of other religious communities in Palestine.
    Colonel Wedgwood: If it is solely because he is the head of the Moslem Spiritual Council, may I ask how long that appointment endures, and whether a flight to Syria vacates the post?
    Mr. Ormsby-Gore: I must have notice of that question. The Mufti of Jerusalem is still functioning as head of the Sharia Council.

    COMPENSATION CLAIMS.
    Colonel Wedgwoodasked the Secretary of State for the Colonies whether it is only claims for personal injury which are being inquired into in Palestine, or whether claims for damage to crops, livestock, and motor-cars will equally be entertained?
    Mr. Ormsby-Gore: Approval has already been given for payment of compensation in respect of loss of life and personal injury. I have recently received proposals from the High Commissioner for Palestine for payment of compensation in respect of damage to certain classes of property, and this matter is under consideration.
    Colonel Wedgwood: Is it not time that a decision was come to, seeing that most of the damage was done over a year ago?
    Mr. Ormsby-Gore: The damage continued during the last year. As the right hon. Gentleman knows, Palestine is under Treasury control, and I have to secure the concurrence of the Treasury, and these questions of compensation are always very complicated matters.

  HONG KONG UNIVERSITY.
  Major Neven-Spenceasked the Secretary of State for the Colonies whether he has seen the report, published on 27th May, 1937, of the committee appointed by the Governor of Hong Kong to investigate the present and future
  1632
  financial position of Hong Kong University and to inquire and advise whether any changes are desirable in the interest of utility or prestige; and what action he proposes to take?
  Mr. Ormsby-Gore: I have received copies of the report, which is at present under consideration by the Hong Kong Government and by the Council of the University. I propose to await the Governor's and the Council's considered recommendations, which I expect to receive in due course, before coming to any decisions in the matter.

  TRINIDAD (DISTURBANCES).
  Sir John Mellorasked the Secretary of State for the Colonies whether he has any information to give with regard to the recent disturbances in Trinidad?
  Mr. David Adamsasked the Secretary of State for the Colonies whether he will make a statement as to recent events in Trinidad and the present position there?
  Mr. Ormsby-Gore: I apologise for the length of this reply. From information received from the Governor it appears that there has been for some time unrest among the employés on the oil-fields due to the rise in the cost of living. On Saturday, 19th June, a sudden strike began among the workers in the oil-fields. Violent speeches were made, and on the police attempting to arrest the ringleader under a warrant at Fyzabad in the oil area in the south of the island, riots broke out and two policemen were shot dead by the rioters. The Governor immediately asked for a cruiser to be sent to the island. On Monday, 21st June, the strikes spread and became very serious, the trouble tending to develop on racial lines. Women and children were brought into Port of Spain under protection and the Governor asked for a second warship. Further violence and rioting occurred on the oilfields, including an attack on the San Fernando Telephone Exchange. The strikes spread northward to the sugar areas and to Port of Spain on 22nd June. Some 350 special constables of all races were enrolled, and there were many more volunteers. His Majesty's Ship "Ajax" arrived on the same day and platoons from the ship were posted at various points, and the situation was generally got under control.

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  On 23rd June the Governor reported that trouble had occurred at Rio Clara in the south-west of the island, where the rioters fired at the police, wounding three. The police returned the fire and four rioters were killed. His Majesty's Ship "Exeter" reached Trinidad on the 23rd, and platoons were posted at strategic points. The naval reinforcement was invaluable in restoring public confidence and in affording rest to the local forces, and the situation improved generally. The Governor then issued a proclamation in which he urged that the strikers should resume work without delay and promising that as soon as work had been resumed the Government would take all the steps in its power to promote a settlement fair to employers and employed alike. The latest information received from the Governor indicates that the situation though tense, is again quiet throughout Trinidad, but that there has been no return to work.
  The Governor has appointed a committee of the Executive Council for the purpose of bringing employers and employed together and making recommendations to him for a settlement, and has appealed to both sides to refer their differences to it. This committee has already taken steps to establish personal contact with the disputants, and it has reported optimistically to the Governor who states that he is convinced that the majority of the strikers sincerely desire to return to work. Information has reached me to the effect that a statement has been made that His Majesty's Ship "Exeter" brought regular troops from Bermuda to Trinidad. There is no truth in this statement.
  Sir J. Mellor: Is the right hon. Gentleman satisfied that the Governor now has sufficient forces at his disposal to control the situation?
  Mr. Ormsby-Gore: Two warships have been sent with marines who have been landed but no regular troops have been sent. I hope we shall not have any further incidents of violence and that the dispute will be settled without the necessity for sending Army troops.
  Mr. Morgan Jones: Have these workmen any facilities for representation through trade unions and, if not, what facilities are afforded them to provide themselves with some spokesman to conduct negotiations with the employers?
  Mr. Ormsby-Gore: Certainly, I understand there are some organisations of the workers in Trinidad. It may be, as the strike has spread, that there are groups of other workers and stevedores who may not be organised.
  Mr. Gallacher: Do we understand from the answer that it is always lawful to kill strikers?
  Mr. Ormsby-Gore: I would point out that the first people to be killed were two unfortunate policemen, killed by strikers.
  Mr. Creech Jones: Will there be an investigation into the grievances of the strikers, and are we to understand that, while disputes are pending, peaceful picketing is definitely prohibited?
  Mr. Ormsby-Gore: Certainly, in view of the violence that has taken place, all forms of picketing will be prohibited. There will certainly have to be an inquiry when this is over into all the circumstances.
  Mr. David Adams: The Minister certainly indicated one of the causes of the trouble in Trinidad and surrounding areas, namely, the rising cost of living. Independent of that, there are——
  Mr. Speaker: The hon. Member cannot make a speech.

  UNEMPLOYMENT (STATISTICS).
  Mr. R. Gibsonasked the Minister of Labour whether he will state, for each of the years 1931 to 1936, inclusive, the average number of unemployed persons in Scotland, showing those in receipt of unemployment benefit and public assistance, respectively, in each of the said years; and what were the corresponding figures for Sweden, Denmark, Holland, and Belgium, respectively, for these years.
  The Parliamentary Secretary to the Ministry of Labour (Mr. Butler): As the reply includes tables of figures, I will, if I may, circulate a statement in the OFFICIAL REPORT.
  Mr. Gibson: Where does Scotland stand with regard to unemployment in relation to the other countries mentioned?
  Mr. Butler: If the hon. Member will read the series of statements that I am circulating, he will be able to deduce something which will help him to answer this rather complicated question.
  Following is the statement:

  UNEMPLOYMENT (STATISTICS).

    I.—SCOTLAND.
    The following Table shows for Scotland the average numbers of (1) unemployed persons registered at Employ-

    Year.

    Average numbers of unemployed persons registered at Employment Exchanges.

    Average numbers of claims admitted for insurance benefit or transitional benefit.

    Average numbers of applications authorised for transitional payments or unemployment allowances.

    1931

    …

    …

    …

    357,660

    (a) 313,725

    —

    (b) 171,277

    (b) 127,878

    1932

    …

    …

    …

    378,073

    143,116

    155,309

    1933

    …

    …

    …

    364,114

    112,678

    167,216

    1934

    …

    …

    …

    331,326

    103,799

    141,870

    1935

    …

    …

    …

    314,041

    106,965

    123,245

    1936

    …

    …

    …

    277,827

    (c) 95,664

    107,777

    (a) Average for the period January to 11th November, 1931, including both insurance benefit and transitional benefit.

    (b) Average for the period 12th November to end December, 1931. The transitional payments scheme came into operation on 12th November, 1931.

    (c) Exclusive of claims admitted under the agricultural scheme.

    II.—OTHER COUNTRIES.
    Comparable figures are not available for any of the other countries named in the question, mainly because provision for the relief of unemployment is on a different basis from that in operation in this country. Some information as to

    AVERAGE NUMBERS OF PERSONS RECORDED AS UNEMPLOYED.

    (Nearest thousand: 000's omitted.)

    Year.

    Belgium. (a)

    Denmark.

    Holland.

    Sweden.

    (b)

    (c)

    (a)

    (d)

    (e)

    (f)

    1931

    …

    …

    110

    53

    59

    83

    138

    65

    47

    1932

    …

    …

    211

    100

    126

    154

    271

    91

    114

    1933

    …

    …

    210

    97

    121

    163

    323

    97

    165

    1934

    …

    …

    235

    82

    98

    160

    333

    85

    115

    1935

    …

    …

    212

    76

    92

    174

    385

    81

    62

    1936

    …

    …

    155

    79

    93

    169

    415

    72

    36

    (a) Unemployment insurance statistics of unemployed.

    (b) Trade union unemployment fund returns of unemployed.

    (c) Applicants for work registered at employment exchanges.

    (d) Unemployed registered at employment exchanges.

    (e) Trade union returns of unemployed.

    (f) Applicants for relief registered by local unemployment committees.

    Information is not available which would show to what extent the same individuals are included in the two series of figures given for Denmark, Holland and Sweden.

    UNEMPLOYMENT BENEFIT.
    In Belgium, Denmark, Holland and Sweden, unemployment insurance is on
    ment Exchanges, (2) claims admitted for insurance benefit, and (3) applications authorised for transitional payments or unemployment allowances, in each of the years 1931 to 1936:
    the numbers registered as umemployed has, however, been complied by the International Labour Office.
    The following Table showing the average numbers recorded as unemployed has been extracted from pages 715–723 of the May, 1937, issue of the "International Labour Review."
    a voluntary basis, with subsidies from public funds, and is for the most part administered by trade unions. In Belgium, there are, in addition, official funds established by the Ministry of Labour and Social Welfare. The following Table gives averages derived from statistics published each month by the countries concerned. For Belgium, the statistics

    1637
    relate to the numbers of persons who received benefit during the course of the month; for Denmark, to the numbers of persons in receipt of benefit at the end of the month; and, for Holland, to the average weekly numbers in receipt of benefit

    PERSONS IN RECEIPT OF UNEMPLOYMENT BENEFIT.

    (Nearest thousand: 000's omitted.)

    Country.

    1931.

    1932.

    1933.

    1934.

    1935.

    1936.

    Belgium—

    Wholly Unemployed

    …

    79

    161

    168

    183

    165

    122

    Partially Unemployed

    …

    122

    175

    170

    166

    119

    91

    Denmark

    …

    36

    61

    57

    47

    55

    57

    Holland

    …

    51

    60

    59

    48

    44

    37

    The figures given in the two preceding Tables are not strictly comparable, in the case of any one country, over the whole period, owing to changes in their scope, or in legislation or in administrative practice. Moreover, owing to the wide diffferences between the systems in force in the various countries, the figures cannot properly be used for the purpose of comparisons between one country and another or with this country.

  COAL INDUSTRY (OVERTIME).
  Mr. Bateyasked the Secretary for Mines when his Department made the last investigation into the amount of overtime worked in the coal mines of Great Britain; and whether he proposes any further investigations?
  The Secretary for Mines (Captain Crookshank): The last special investigation into the working of overtime was held in Scotland in 1935. Following upon this inquiry, I appointed a special inspector to devote his whole time to this question. He has hitherto been stationed in Scotland, but his services are available in other districts if and when circumstances require them. In addition to this, as the hon. Member is no doubt aware, the question of overtime working receives the constant attention of His Majesty's inspectors as a whole. Investigations at individual pits are constantly taking place, and from time to time I call for reports of a more general nature.
  Mr. Batey: Has that special officer made any investigation into the amount of overtime working in England as well as Scotland?
  during the month. I am unable to give corresponding figures for Sweden. Statistics showing the number of unemployed persons in receipt of public assistance in the four countries named are not available.
  Captain Crookshank: I have said he has hitherto been in Scotland. The matter is constantly under my attention. If the hon. Member has any places that he would like looked into, perhaps he will let me know.
  Mr. Batey: That is not answering my question. Has he made any investigation into any district in England and Wales?
  Captain Crookshank: I have already answered that question. I say he has been stationed in Scotland up to now.
  Mr. Batey: Does not the Minister consider it is time he was having another investigation, seeing that the last investigation in Scotland was in 1935? Was it not the intention of the Mines Department to go on making investigations in each district?
  Captain Crookshank: I do not think it was the intention to have them held everywhere. I am prepared to have investigation made when I have some reason to think there is sufficient cause for it. At present I have not had that.
  Mr. T. Smith: Is the hon. and gallant Gentleman aware that a good deal of this overtime is due to a wrong interpretation being placed on the emergency clause, and will not the Department get down to that fact?
  Mr. Paling: Has there been any report issued for Scotland, and has there been any considerable decrease in the amount of overtime worked?
  Captain Crookshank: I do not know about decrease in the amount of overtime, but there has been a very great decrease in the number of complaints to my Department on the subject.

  EDUCATION.

    MILK IN SCHOOLS, DEVONSHIRE.
    Mr. Dreweasked the Parliamentary Secretary to the Board of Education whether he is aware that there are 165 schools in Devonshire, with 3,731 children, where no supply of fresh milk is available; that difficulty is being experienced in obtaining supplies owing to the low price that the producer receives; and what action he proposes to take in this matter?
    The Parliamentary Secretary to the Board of Education (Mr. Kenneth Lindsay): It appears from the returns from the Devonshire schools showing the position on 31st March, 1937, that of the 514 public elementary school departments in the administrative county there were 113 departments, containing 4,543 children, in which no fresh milk was provided. In 19 of these departments, containing 756 children, various forms of dried milk were provided. In about 87 of the 401 departments where fresh milk was available it was provided outside the milk-in-schools scheme at the ordinary retail price. I am aware that difficulty is being experienced in obtaining supplies of milk in this and certain other rural areas because the suppliers claim that the distribution allowance under the milk-in-schools scheme is insufficient. The future of this scheme is one of the questions which falls for consideration in connection with long-term milk policy, a matter to which the Government are giving close attention, and in this connection the difficulty to which my hon. Friend refers will not be overlooked.
    Mr. Drewe: When does my hon. Friend expect that the Government will be able to make some statement as to what terms producers will be given?
    Mr. Lindsay: That question should be addressed to the Minister of Agriculture.
    Mr. T. Williams: How does the hon. Gentleman reconcile the statement that supplies are not available when over 390,000,000 gallons are going to the manufacturers; and ought not the distributors who stand in the way of the scheme for providing milk for school children to be removed from the path?
    Mr. Lindsay: That is, a question which should be put to the Minister of Agriculture. I understand that it is very largely
    1640
    the small schools and the cost of transport in those areas, but perhaps I had better not go into details of that kind.
    Mr. Leach: Is it not the case that the milk shortage in these Devonshire schools is due to the very greatly increased demand for milk caused by the influx of visitors into Devonshire?

    FOREIGN TRAVEL.
    Mr. Leachasked the Parliamentary Secretary to the Board of Education whether he will consider making it compulsory for all education authorities to provide one or more month's foreign travel to every school child before leaving school?
    Mr. Lindsay: Apart from the fact that such an arrangement would probably be found to be impracticable, my noble Friend would not be prepared to place this obligation on local education authorities.
    Mr. Leach: Has the hon. Gentleman observed that the practice of foreign travel for school children is growing very steadily among those parents whose means allow it, and why should not the education authority provide the same facilities for the good education of their children which better-off parents are able to provide?
    Mr. Hannah: May I ask what countries?
    Mr. Lindsay: My hon. Friend has drawn his question very wide.

    FIRE PRECAUTIONS, SCHOOLS.
    Mr. Montagueasked the Parliamentary Secretary to the Board of Education whether he will consider the prevalent lack of appliances necessary to combat possible fires in schools throughout the country and make representations to local education authorities in the matter?
    Mr. Lindsay: The Home Office handbook "Fire Precautions in Schools" was brought to the notice of local education authorities and the governors and managers of schools recognised by the Board in their Circular 1446 of 20th January, 1936, of which I am sending the hon. Member a copy.
    Mr. Montague: Cannot the hon. Member exert pressure upon the local authorities in this matter, especially upon those where, over wide areas, there is not the slightest provision?
    Mr. Lindsay: We have not the information which the hon. Member suggests in his question, but if he will give it to me, I shall be very glad to receive it.
    Mr. Kelly: Is there any intention on the part of the Board of Education to issue a new manual with regard to fire precautions in schools, as the old one is out of date?
    Mr. Lindsay: This manual is a year old.
    Mr. Kelly: It is out of date already.
    Mr. Macquisten: Is the hon. Gentleman aware that many country schools complain of want of fire during the winter time?
    Mr. Kirby: Is the hon. Gentleman aware that the schools on the black list of this country, and many other old schools, would be veritable death traps in case of fire, and, that being so, will he take steps to expedite the replacement of these old buildings?
    Mr. Lindsay: I will look into that matter.

  PHYSICAL FITNESS CAMPAIGN (ROWING).
  Mr. Noel-Bakerasked the Parliamentary Secretary to the Board of Education whether his Department has any information to give to the House about the change adopted recently by the Amateur Rowing Association in its rules regarding amateur status; and whether it is proposed to enter into consultations with this association relative to the physical fitness campaign?
  Mr. Lindsay: I have been informed that resolutions have been passed by the committee of the Amateur Rowing Association and the stewards of the Henley Royal Regatta amending the amateur definition so as to omit the disqualification of persons engaged in manual occupations. I understand that the National Advisory Council will be very glad to consider, in consultation with the association, what steps can be taken to encourage this form of sport in connection with the Government's scheme.
  Mr. Noel-Baker: Is the Minister aware that this very desirable change is largely due to the efforts of the senior Member
  1642
  for Cambridge University (Sir J. Withers), and will he convey to the hon. Member the gratitude of those taking part in this sport?

  ANGLO-SPANISH CLEARING OFFICE.
  Mr. Gibsonasked the Chancellor of the Exchequer whether he is aware that a sum of £5,042 19s. 9d. which is due to the legal representative of the late Mr. William Dick, Greenock, and for which a cheque was issued by the Anglo-Spanish Clearing Office on 9th July, 1936, has not yet been paid; and whether he has any statement to make on the matter?
  The Financial Secretary to the Treasury (Lieut.-Colonel Colville): I would refer the hon. and learned Member to the reply which I gave him on 26th January last, to which I cannot at present add anything.
  Mr. Gibson: Does the right hon. and gallant Gentleman realise that the withholding of this money is a serious disadvantage to the individual concerned, and to the Newfoundland interests that are involved, while at the same time the withholding of the money confers no benefit on the Clearing House?
  Lieut.-Colonel Colville: I am aware of the circumstances of the case, but the hon. and learned Member will recollect that no further payments can be made until a further order is made.
  Mr. Gibson: Can the right hon. and gallant Gentleman give any indication as to when that further order may be forthcoming?
  Lieut.-Colonel Colville: If the hon. and learned Gentleman can give an indication when Spain will be in a more settled condition.

  SPECIAL AREAS RECONSTRUCTION ASSOCIATION.
  Mr. J. Griffithsasked the Financial Secretary to the Treasury whether it is intended to present a report to Parliament upon the work of the Special Areas Reconstruction Association; and, if so, when the report will be ready for publication?
  Lieut.-Colonel Colville: I have given the House information from time to time

  1643
  on the association's activities and, as the hon. Member knows, there is an annual Vote for the grant to the association. I do not consider that a formal report would be appropriate.
  Mr. Griffiths: Since it is more than 12 months since the organisation was first set up, will not the right hon. and gallant Gentleman consider the advisability of asking the representatives of this board to present a formal report to Members of the House, so that we may be better able to estimate the value of the work which is being done by them?
  Lieut.-Colonel Colville: As the hon. Member knows, I gave a considerable amount of information a few days ago in the form of a table, which I circulated in the OFFICAL REPORT. I do not think this is an appropriate matter for a formal report, hut the work of the association can be discussed when the Vote comes up in Parliament. I will certainly take into consideration anything that the hon. Member says on this subject.

  OLD AGE PENSIONERS (PUBLIC ASSISTANCE).
  Mr. Tinkerasked the Financial Secretary to the Treasury whether he is in a position to say what is the total amount paid in Poor Law relief to those who are getting the old age pension; and what further sum would have to be added to this to increase the present 10s. a week to 15s. to all old age pensioners?
  Lieut.-Colonel Colville: Information as to the total amount of public assistance paid to old age pensioners is not available, but 90 per cent. of the old age pension population is not in receipt of public assistance and the annual cost of an increase of 5s. per week in the case of these pensioners alone may be estimated at £30,000,000.
  Mr. Tinker: May I ask through you, Mr. Speaker, that this information should be given, as the question of old age pensions is becoming a live question now, and it is necessary to get to know what is being paid to old age pensioners in the way of relief, so that we may have some idea of what it costs?
  Lieut.-Colonel Colville: The question affected two Departments and I thought
  1644
  that it would be convenient for me to reply because the latter part affected me. If the hon. Member wishes to follow up the matter, the question of public assistance is a subject for the Minister of Health.
  Mr. Gallacher: Has the Financial Secretary made any inquiry into the actual cost of increasing old age pensions, taking into account what would be saved in other directions?
  Lieut.-Colonel Colville: That is a separate matter.

  CZECHSLOVAKIA.
  Mr. Kellyasked the Secretary of State for Foreign Affairs whether he proposes to have official conversations with the German Foreign Minister during his visit to this country; and, if so, whether he will give an assurance that no understanding will be arrived at which would in any way give support to a policy which would weaken the present position of Czechslovakia in relation to Germany?
  Mr. Eden: As the hon. Member is aware, the proposed visit from the German Foreign Minister has been postponed, and he will therefore appreciate that the points referred to do not at present arise.
  Mr. Dalton: Will the right hon. Gentleman make it clear to the German Government, either to the German Foreign Minister when he comes, or, if not, through other channels, that British public opinion deplores the violent German Press attack against Czechoslovakia and regrets the refusal of the German Government to submit its allegations, which are denied by the Czechs, to an impartial inquiry?
  Mr. Eden: The hon. Member can be assured that His Majesty's Government regret any cause of friction between these two countries, and our sole desire is to see good relations between them.

  HANWORTH COLLIERY DISPUTE (ASSIZE SENTENCES).
  Mr. Bellenger(by Private Notice) asked the Home Secretary whether his attention has been called to the severe sentences passed on Saturday at the Notts Assizes

  1645
  on the defendants tried in connection with the disturbances caused at Harworth during the recent trade dispute, and whether he will season justice with mercy by reviewing the sentences which have been imposed?
  The Secretary of State for the Home Department (Sir Samuel Hoare): It is open to the defendants in question to apply to the Court of Criminal Appeal within ten days for leave to appeal against their sentences. If there are special considerations to be urged on behalf of any of the defendants, it will be my duty to consider them, but it would be premature for me to do so at this stage.
  Mr. T. Williams: Will the right hon. Gentleman in the meantime, particularly in view of the existing industrial peace throughout the country, make it his duty to ascertain all the information so that should representations be made at the appropriate time, he will have all the facts at his disposal?
  Sir S. Hoare: Yes, Sir, I should desire to put myself in possession of the facts of the case, but I think the hon. Member will agree with me when I say that I can make no further statement until I know whether or not the persons in question are going to appeal.

BUSINESS OF THE HOUSE.
Mr. Attlee: Can the Prime Minister say what business it is proposed to take in the event of the Eleven o'Clock Rule being suspended?
The Prime Minister (Mr. Chamberlain): After the Committee stage of the Exchange Equalisation Account [Money] Resolution, we shall take the four Government of India and Government of Burma Act Orders, the third, fourth and fifth Orders on the Paper, and the Committee stage of the Nigeria [Remission of Payments] Resolution. We do not intend to take the Trade Marks (Amendment) Bill. The Suspension of the Eleven o'Clock Rule is purely a matter of precaution.
Mr. Attlee: I take it that it is not intended to take any of the other Orders very late at night if the Debate on the first Order should go late?
The Prime Minister: No, Sir.
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, 185; Noes, 89.

Division No. 240.]

AYES.

[3.37 p.m.

Acland, Rt. Hon. Sir F. Dyke

Croft, Brig.-Gen. Sir H. Page

Harris, Sir P. A.

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

Crookshank, Capt. H. F. C.

Harvey, T. E. (Eng. Univ's.)

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

Cross, R. H.

Haslam, Henry (Horncastle)

Albery, Sir Irving

Davies, Major Sir G. F. (Yeovil)

Haslam, Sir J. (Bolton)

Allen, Lt.-Col. J. Sandeman (B'kn'hd)

Davison, Sir W. H.

Heilgers, Captain F. F. A.

Assheton, R.

Denman, Hon. R. D.

Heneage, Lieut.-Colonel A. P.

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

Donner, P. W.

Herbert, A. P. (Oxford U.)

Balniel, Lord

Dower, Major A. V. G.

Herbert, Major J. A. (Monmouth)

Barclay-Harvey, Sir C. M.

Drewe, C.

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

Baxter, A. Beverley

Duckworth, Arthur (Shrewsbury)

Hoare, Rt. Hon. Sir S.

Beamish, Rear-Admiral T. P. H.

Dugdale, Captain T. L.

Holdsworth, H.

Beauchamp, Sir B. C.

Duggan, H. J.

Hope, Captain Hon. A. O. J.

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

Duncan, J. A. L.

Hore-Belisha, Rt. Hon. L.

Bennett, Sir E. N.

Dunglass, Lord

Horsbrugh, Florence

Bernays, R. H.

Ellis, Sir G.

Howitt, Dr. A. B

Blair, Sir R.

Elliston, Capt. G. S.

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

Blaker, Sir R.

Emmott, C. E. G. C

Hulbert, N. J.

Boothby, R. J. G.

Emrys-Evans, P. V.

Hunter, T.

Boulton, W. W.

Evans, Capt. A. (Cardiff, S.)

Hurd, Sir P. A.

Bower, Comdr. R. T.

Evans, D. O. (Cardigan)

James, Wing-Commander A. W. H.

Brass, Sir W.

Furness, S. N.

Jarvis, Sir J. J.

Bull, B. B.

Fyfe, D. P. M.

Keeling, E. H.

Butcher, H. W.

Ganzoni, Sir J.

Kerr, Colonel C. I. (Montrose)

Carver, Major W. H.

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

Kerr, H. W. (Oldham)

Cary, R. A.

Gluckstein, L. H.

Kerr, J. Graham (Scottish Univs.)

Cayzer, Sir C. W. (City of Chester)

Glyn, Major Sir R. G. C.

Keyes, Admiral of the Fleet Sir R.

Cayzer, Sir H. R. (Portsmouth, S.)

Goldie, N. B.

Lamb, Sir J. Q.

Cazalet, Thelma (Islington, E.)

Goodman, Col. A. W.

Lambert, Rt. Hon. G.

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

Grant-Ferris, R.

Leckie, J. A.

Channon, H.

Granville, E. L.

Leighton, Major B. E. P.

Chapman, Sir S. (Edinburgh, S.)

Gridley, Sir A. B.

Lennox-Boyd, A. T. L.

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

Grigg, Sir E. W. M.

Lindsay, K. M.

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

Grimston, R. V.

Lipson, D. L.

Conant, Captain R. J. E.

Guinness, T. L. E. B.

Little, Sir E. Graham-

Cook, Sir T. R. A. M. (Norfolk, N.)

Guy, J. C. M.

Llewellin, Lieut.-Col. J. J.

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

Hannah, I. C.

Lloyd, G. W.

Cox, H. B. T.

Hannon, Sir P. J. H.

Loftus, P. C.

Lovat-Fraser, J. A.

Pickthorn, K. W. M.

Stanley, Rt. Hon. Lord (Fylde)

Mabane, W. (Huddersfield)

Pilkington, R.

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

Macdonald, Capt. P. (Isle of Wight)

Ponsonby, Col. C. E.

Storey, S.

Macmillan, H. (Stockton-on-Tees)

Ramsbotham, H.

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

Macnamara, Capt. J. B. J.

Rankin, Sir R.

Tasker, Sir R. I.

Macquisten, F. A.

Rathbone, Eleanor (English Univ's.)

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

Makins, Brig.-Gen. E.

Reid, Sir D. D. (Down)

Thomas, J. P. L.

Manningham-Buller, Sir M.

Reid, J. S. C. (Hillhead)

Touche, G. C.

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

Remer, J. R.

Tryon, Major Rt. Hon. G. C.

Maxwell, Hon. S. A.

Robinson, J. R. (Blackpool)

Tufnell, Lieut.-Commander R. L.

Mayhew, Lt.-Col. J.

Russell, Sir Alexander

Wakefield, W. W.

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

Russell, R. J. (Eddisbury)

Wallace, Capt. Rt. Hon. Euan

Mitchell, H. (Brentford and Chiswick)

Russell, S. H. M. (Darwen)

Warrender, Sir V.

Mitchell, Sir W. Lane (Streatham)

Salmon, Sir I.

Watt, G. S. H.

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

Salt, E. W.

Whiteley, Major J. P. (Buckingham)

Morgan, R. H.

Salter, Sir J. Arthur (Oxford U.)

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

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

Samuel, M. R. A.

Windsor-Clive, Lieut.-Colonel G.

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

Sassoon, Rt. Hon. Sir P.

Winterton, Rt. Hon. Earl

Munro, P.

Savery, Sir Servington

Withers, Sir J. J.

Neven-Spence, Major B. H. H.

Selley, H. R.

Womersley, Sir W. J.

Nicolson, Hon. H. G.

Shaw, Major P. S. (Wavertree)

Wood, Hon. C. I. C.

O'Neill, Rt. Hon. Sir Hugh

Simon, Rt. Hon. Sir J. A.

Wright, Squadron-Leader J. A. C.

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

Sinclair, Col. T. (Queen's U. B'lf'st)

Palmer, G. E. H.

Smith, Sir R. W. (Aberdeen)

TELLERS FOR THE AYES.—

Patrick, C. M.

Somerville, A. A. (Windsor)

Mr. James Stuart and Lieut.-Colonel

Peters, Dr. S. J.

Southby, Commander A. R. J.

Sir A. Lambert Ward.

NOES.

Adams, D. (Consett)

Griffiths, J. (Llanelly)

Naylor, T. E.

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

Hall, J. H. (Whitechapel)

Noel-Baker, P. J.

Adamson, W. M.

Henderson, A. (Kingswinford)

Paling, W.

Anderson, F. (Whitehaven)

Henderson, J. (Ardwick)

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

Attlee, Rt. Hon. C. R.

Henderson, T. (Tradeston)

Ridley, G.

Banfield, J. W.

Hopkin, D.

Ritson, J.

Barnes, A. J.

Jagger, J.

Rowson, G.

Barr, J.

Jenkins, Sir W. (Neath)

Sanders, W. S.

Batey, J.

Jones, A. C. (Shipley)

Sexton, T. M.

Bellenger, F. J.

Jones, J. J. (Silvertown)

Simpson, F. B.

Benn, Rt. Hon. W. W.

Jones, Morgan (Caerphilly)

Smith, Ben (Rotherhithe)

Brown, C. (Mansfield)

Kelly, W. T.

Smith, E. (Stoke)

Burke, W. A.

Kennedy, Rt. Hon. T.

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

Charleton, H. C.

Kirby, B. V.

Smith, T. (Normanton)

Cocks, F. S.

Lansbury, Rt. Hon. G.

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

Cove, W. G.

Lawson, J. J.

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

Daggar, G.

Leach, W.

Taylor, R. J. (Morpeth)

Dalton, H.

Lee, F.

Thorne, W.

Davies, R. J. (Westhoughton)

Leslie, J. R.

Thurtle, E.

Day, H.

Logan, D. G.

Tinker, J. J.

Dobbie, W.

Macdonald, G. (Ince)

Viant, S. P.

Dunn, E. (Rother Valley)

McEntee, V. La T.

Walker, J.

Ede, J. C.

McGhee, H. G.

Watkins, F. C.

Edwards, Sir C. (Bedwellty)

MacLaren, A.

Wedgwood, Rt. Hon. J. C.

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

Marshall, F.

Whiteley, W. (Blaydon)

Gallacher, W.

Messer, F.

Williams, T. (Don Valley)

Gardner, B. W.

Milner, Major J.

Windsor, W. (Hull, C.)

Garro Jones, G. M.

Montague, F.

Gibson, R. (Greenock)

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

TELLERS FOR THE NOES.—

Green, W. H. (Deptford)

Muff, G.

Mr. Groves and Mr. Mathers.

Griffiths, G. A. (Hemsworth)

Nathan, Colonel H. L.

NEW MEMBERS SWORN.
Daniel Leopold Lipson, esquire, for Borough of Cheltenham.
Captain Roger John Edward Conant, for County of Worcester (Bewdley Division).
Herbert Walter Butcher, esquire, for County of Holland with Boston.

MESSAGE FROM THE LORDS.
That they have agreed to,—
Methylated Spirits (Scotland) Bill, with Amendments.

BANBURY WATERWORKS BILL [Lords].
Reported, with Amendments, from the Committee on Unopposed Bills (with Report on the Bill).
Bill, as amended, and Report to lie upon the Table; Report to be printed.

ESTIMATES.
Second Report from the Select Committee, with Minutes of Evidence and Appendices, brought up, and read.
Report to lie upon the Table, and to be printed.

EXCHANGE EQUALISATION ACCOUNT [MONEY].
Considered in Committee under Standing Order No. 69.
[Sir DENNIS HERBERT in the Chair.]
Motion made, and Question proposed,
"That it is expedient to increase from three hundred and fifty million pounds to five hundred and fifty million pounds the aggregate amount which may he issued to the Exchange Equalisation Account out of the Consolidated Fund."—[King's Recommendation signified.]—[Sir J. Simon.]
3.46 p.m.
The Chancellor of the Exchequer (Sir John Simon): The Resolution is for the purpose of authorising an increase in the resources of the Exchange Equalisation Account by £200,000,000. As the Committee knows, the Exchange Equalisation Account was set up by a Section in the Finance Act, 1932, and its resources were extended in 1933 when the borrowing powers of the Treasury for the purposes of the Account were enlarged from £150,000,000 to £350,000,000. Now, I am asking for authority to bring the total up to £550,000,000. I should like to say a few words, elementary though they may appear to some hon. Members, as to the Account itself. The Exchange Equalisation Account was set up, as the language in the Finance Act states, to check undue fluctuations in the exchange value of sterling. It is not necessary to emphasise the importance of that object. If there were undue fluctuations, traders would be hampered in entering into and executing their foreign contracts, they would not be able to count with confidence on prices holding and they could not venture freely on extensions of enterprise.
It will be remembered that the Exchange Equalisation Account was established after we left the Gold Standard. As long as currency is linked to gold, there is, obviously, in constant operation a restraining and limiting influence which confines the oscillations in foreign exchanges to narrow limits. The Gold Standard is, as it were, a measuring rod, and when the measuring rod of the Gold Standard is removed, then the oscillations in currency exchange may become more pronounced, more frequent and more serious, and opportunities for speculators are very greatly increased. Hence, after we left the Gold Standard we decided to set up the Exchange Equalisation
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Account. We were the first country to do so, but our example has been widely followed. For instance, it has been followed by the United States, France, Holland, Switzerland and other countries. There really can be no doubt that the existence and the operation of this Account has been instrumental in promoting and maintaining our steady recovery.
The view which I present to the Committee is, that under existing conditions such an Account is an essential element in the financial machinery of any country in our position. I will not attempt to describe the technical operations of the Account. Not many people would be capable of descanting upon them, and even of those only a small minority would be accurate and complete; but for the purposes of the discussion in the Committee, I think I state it sufficiently accurately if I say that this Account acts, as it were, as a shock absorber. It damps down the fluctuations in the currency exchanges, as they arise, through appropriate purchases and sales in order to suppress and minimise these undulations.
Colonel Wedgwood: May I ask how you distinguish between an undue fluctuation and a trend?
Sir J. Simon: My right hon. Friend will no doubt have an opportunity of dealing with that later, but I think that, on the whole, it would be best if I stated the matter in my own way now. It follows from what I have said that the contemporary operations of the Exchange Equalisation Account must be conducted in the most complete secrecy, for anything like a contemporary disclosure of what it is doing would be a heaven-sent opportunity for currency speculators, and indeed, it would enable them, by plunging in at the right moment, to amplify and to exaggerate those very undulations which the Fund is engaged in reducing. So much for correcting the direct variations in foreign exchange.
But there is a second sort of phenomenon which is calculated to produce the same fluctuations in exchange and which needs to be counteracted by similar methods. It is a phenomenon which has very greatly developed of late. It is the deliberate shifting of large quantities of capital from one centre to another. I invite the Committee to observe this contrast, Before the War, gold movements from one place to another were

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usually due to what one may call more strictly economic or financial causes, which could be isolated, measured and appreciated on their separate merits. It might be, for example, a difference in interest rates—the bank rate is put up with the result that foreign capital is attracted to London—striking variations in price levels in various countries, excessive borrowing or lending, and things of that sort. They were really economic causes. That was the general explanation of gold movements before the War, and especially before the dropping of the Gold Standard. Since the War, and especially since the suspension of the Gold Standard, capital movements have been far more frequent and far more sudden and they are not necessarily directly economic or financial. They are in a much less degree due to the purely economic causes of which I spoke.
What really happens is this: Great quantities of short-term funds, which their owners may call back again when they please, are accumulated in the main financial centres, and then under the influence of it may be temporary distrust or speculative ingenuity, they are shifted precipitately from one centre to another, and one gets the situation which is sometimes picturesquely described as the movement of refugee capital. The point which I am asking the Committee to observe is that this is, to a certain extent, a new development. Under the Gold Standard regime, gold movements took place mostly for the purpose of settling international trading balances, but now we have large amounts of capital moving from one country to another for quite other reasons. The Committee will observe that unless the bad effects of this in causing violent fluctuations in currency exchanges are, as far as may be, neutralised, the result will be exactly that same obstruction to trade and exactly that same loss of business confidence which I described as the danger against which the Exchange Equalisation Account is directed.
Although I have put it briefly, I hope I have stated it correctly and intelligibly. It follows that while these large-scale capital movements to London are taking place, the Exchange Equalisation Account in present circumstances must be prepared to add to our holdings of gold, for that is what is necessary to avoid
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frequent wide fluctuations in our exchange rates, both now when the gold is coming in and also later on when the foreign owners call for a return of their deposits. For this purpose, having considered the matter carefully and with the advisers who are always at the service of the Treasury, the Government have come to the conclusion that it is prudent and timely to add £200,000,000 to our existing borrowing powers.
There is a further reason which, I think, will appeal to the Committee. Hon. Members will recall how last September we entered into what is called the tripartite monetary agreement, between the United States, France and ourselves. That is a policy which, I think, was almost universally approved. We then announced, with the other signatories, that one constant object of our policy was to maintain the greatest possible equilibrium in the system of international exchanges, and to avoid to the utmost extent the creation of any disturbance in that system by British monetary action. I wish to state most plainly to the Committee that if we are to pursue that policy, then that policy at the present time and in existing circumstances does involve us from time to time in the purchase of gold. It is quite impracticable to avoid one consequence and yet to keep the other; it would be quite impracticable that we should both avoid any addition to our gold holdings and at the same time avoid wide fluctuations of exchange rates. If we want to avoid the second it must be because we are prepared to face the first. On Friday, when making a statement on the matter, I was asked by my hon. Friend the Member for Plaistow (Mr. Thorne) whether the line of policy that we are pursuing is in accord with the line of policy of the United States of America, and I am very glad to give him and the Committee the answer. I am happy to say that the line of policy we are pursuing is in accordance with the line of policy of America.
Having made that statement about the Account, its nature and its needs, I would turn for a moment to a second question which from time to time has interested hon. Members and to which I wish to make a contribution to-day. It has not to do with the merits of having such an Account, or even with the merits of the way it is worked, but it has to do with

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the extent to which its past operations are kept secret. I feel that there is a widespread view among the Committee, without in the least desiring to prejudice the good operation of the Account, that if it was possible they would be glad if more disclosure could be given—I do not mean contemporary disclosure, because that obviously could not be done, but disclosure after a proper interval. I have been looking into this matter very carefully, remembering that my predecessor, the present Prime Minister, in the Budget Debates referred to the matter, and pointed out that it was very difficult to decide what should be done, but promised that he would himself look into it and see what could be done.
I have inherited that pledge, and I am to-day doing my best to show the result. Of course there can be no doubt at all as to the wisdom of the rule laid down by the present Prime Minister and adopted, I think with complete good will, by Parliament as a whole, the rule of the policy of secrecy with regard to the current transactions of the Account. In the nature of things that must be so. Anyone who wants to pry into that wants to break up the Account, not to understand it. But while any other course would merely destroy the effectiveness of the operation of the Account, I do feel, after going into this matter very carefully with my advisers, that it is most desirable if possible to find some concession in respect of past operations and records.
Let me give one illustration of how important: it really is not to make premature disclosures. Since the Exchange Equalisation Account was set up we have had in this country more than one experience of violent movements of capital both inwards and outwards, continuing sometimes over quite a considerable period. There is no question, of course, that the violence of those movements would have been accentuated and prolonged if the action taken to resist them had been publicly known. Here is an example. It is not one of a time when capital was flowing to London, but when, since the establishment of the Account, there was a very big pull the other way. A few years ago, when the total gold resources of this country were comparatively small, the Exchange Equalisation Account lost in three weeks no less than £50,000,000 of
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gold. That was followed by the loss of a further £25,000,000 in the succeeding eight weeks. In all that was £75,000,000 in II weeks. Of course if that had been advertised and there had been a rush to follow this example, the pressure on the Account would have been extreme. The way we dealt with it was unknown, and that had a most material effect in limiting the danger. On other occasions we have gained equally substantial quantities of gold with equal rapidity, and publicity could only tend to exaggerate those large sums. Therefore, there can be no question at all that there must be no disclosure of current or recent transactions connected with the fund.
The true position is this: Our situation now, the situation of the Exchange Equalisation Account is very much better than it was; that is to say, we are much better secured, and we have resources which by comparison with earlier dates can be described as fairly abundant. I am not going to prophesy. This is much too difficult a subject for me to do that. But I am advised, and it appears to me to be true, that it is at any rate unlikely that any sudden sustained loss of gold would now occur of a magnitude to embarrass us very seriously. Therefore, I have been considering with my advisers what information as to the former state of the Account could without serious harm be made available from time to time, and I have two proposals to make.
First of all I have come to the conclusion that there would be no harm in indicating at a date after the event the amount of the gold and all other assets held by the Account every six months, the information being made public three months in arrear. In other words I propose that henceforward, at the end of June and December, the Treasury should publish what were the resources of the Account on a date at the end of the preceding March or the preceding September. I think that in the first place that will be a change which will be recognised by the Committee as contributing to their natural desire for more information. Inasmuch as we are just at the end of June I may as well begin my new practice now. I therefore inform the Committee of these facts: On 30th March last, three months ago, the gold held in the Exchange Account was 26,674,000 fine ounces. I am giving weights for the moment, for a reason

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which the Committee will see later. On the same date, 30th March, there was also gold held in the Issue Department of the Bank of England amounting to 73,842,000 fine ounces.
Mr. Thorne: What is the value of it in money?
Sir J. Simon: If I began with the money value there would be confusion. I shall, of course, give the value later. That makes a total of 100,516,000 fine ounces, and at the price of £7 an ounce represents a little more than £700,000,000. The Exchange Account at that date did not hold more than a trifling amount of foreign currency. That sort of statement, I propose, should be made public at intervals of six months, and I think it will have a great deal of interest for those who follow these matters.
Mr. Dalton: The right hon. Gentleman says he is prepared to make such a statement as to the amount of "gold and other assets." Is "other assets" to be a blanket term or is it to be subdivided?
Sir J. Simon: It will be subdivided. Perhaps the Committee will forgive me if I add one matter, a little technical, which really explains why I began with weights and only later turned those weights into value. The reason is this: Perhaps the Committee will recollect that gold in the Issue Department of the Bank of England is shown in the Bank of England accounts, and indeed is bound to be shown by law, not at the current market price of gold, but at the old par value of 84s. 11½d. a fine ounce. When gold is bought or sold for the Issue Department the difference between the actual price and this old par price is provided by or is paid to the Exchange Equalisation Account, and the Statute provides that when the Exchange Account comes to be wound up the whole of the gold of the Issue Department will be revalued at the then current price. The surplus in the Issue Department so created by valuing its gold at a higher price must by law be handed to the Exchange Equalisation Account, and must thereafter, together with any profit in the Account itself, be applied to the repayment of debt. The Committee will see that the way I stated it by giving weight first and multiplying it to get the value afterwards, really simplifies the matter.
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That is the first of the two matters to which I refer. Before I pass to the second, the Committee may wish to know whether in the view of the Treasury the possession of a stock of gold exceeding £700,000,000 is regarded as reasonable or adequate or excessive. It is, of course, a, much larger figure than has prevailed in the past, and if necessary very good reasons can be given to show why it should be. Circumstances are very different indeed. But if you put to yourself that question about the £700,000,000 of gold, or any such figure, and try to answer it, it seems to me that you must weigh many things. Much depends, for example, on the extent of our short-term obligations, that is to say on the amount of money which has been placed in London from abroad and is liable to be recalled. After all, we are the centre of the Sterling Bloc, and many of the countries concerned, included in that Bloc, keep very large holdings of sterling in London as a part of their reserves. The conclusion which the Treasury is disposed to come to is that when all considerations are weighed we do not consider the present gold holding excessive.
I hope it is made quite plain to the Committee that the action I am now proposing, which the terms of the Resolution will carry out, does not indicate any change in our present policy. There is no reason why the present conditions of uncertainty in connection with the international movement of capital should persist. We are dealing with the present situation and the present situation compels us, for the purpose of maintaining our general financial policy and in support of our undertakings and objectives under the Tri-partite Monetary Agreement, to make this further provision, as an insurance against additional movements into sterling. Now I come to the second of the two new departures which I am contemplating in the interest of getting rid of what might seem to be unnecessary secrecy, and, as far as may be, providing discreet disclosure. So far, I have spoken of the six-monthly statements of gold holdings which would be made public.
Mr. Dalton: And "other assets."
Sir J. Simon: Yes, of the different elements. I am not going back on that at all. I think the time has come when the Public Accounts Committee, a most

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responsible committee which has to be appointed every Session, and which guards these matters in the interests of us all, might reasonably desire an opportunity of examining, after a suitable interval, the state of the Account itself, together with The amount of its surplus or deficit. I am not now directing my remarks to the question: "How much?" I am directing my observations to the question: "Is there a profit or is there a loss?" I had indeed already framed proposals on this head when I noticed on the Order Paper this morning—whether as the result of intelligent anticipation or original skill—a New Clause which has been put clown to the Finance Bill by certain hon. Members, all, I think, Members of the Public Accounts Committee. I should be out of order if I were to discuss it in relation to the Finance Bill, but I can state what I have in mind, I think, while keeping strictly in order. Those who put down that Clause have, to some extent, stolen my thunder. I thought I had something good to give, but they have anticipated me. However. I am very glad to see that we have been thinking alone very similar lines, and I state categorically what I am prepared to do.
I am ready to agree that the state of the Account as at 31st March—the annual account—should not only be available to the Comptroller and Auditor-General, who has a statutory duty to report to the House of Commons, but should also be confidentially communicated to the Public Accounts Committee by the following 31st January. Not only so, but I think if they are to make good use of their opportunity they must have the opportunity of putting questions to the Treasury witness when the Account comes before them later in the year. I, therefore, propose that, having got the Account before them, the Public Accounts Committee should examine the Treasury witness on the Account, as they do about a great many other confidential matters. They will get particulars of course and, there will be, on the Account, an indication as to whether at the date when the Account was taken the result was a profit or a loss. I notice that the New Clause put down by my hon. Friend the Member for Caerphilly (Mr. Morgan Jones) and others suggests that this piece of information should include the prices at
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which different elements in the Account were acquired. I think if he reconsiders the matter, he will see that in that form it would not be a very easy or a very useful thing to do, because this fund is continually buying and selling. It may buy a large block and dispose of a portion of it. Each transaction will have its appropriate price and it would be difficult to specify, in an accountancy sense, the proper price for the particular part of the stock that is left. What I think is really sought for, and what I should be prepared to give, is this statement which would show, in respect of the contents of the account, at the date when it was taken, whether or not at present prices there was a profit or a loss.
There is one more thing. We in the House of Commons naturally place great confidence in the Public Accounts Committee. It is a most important Committee of the House, and one of its duties is to report, if it finds on examination of the public accounts anything irregular. Therefore, while stipulating that the information shall be given confidentially, I should be prepared to agree that that would not alter their right, if they found any point in the statement put before them which they considered to be irregular and for that reason calling for special mention, to make a report on it to the House of Commons. I think hon. Members will see that we have honestly set ourselves to try to remove this veil of mystery as it has been called. I am sure that public confidence in our proceedings will be greatly promoted when we remove any idea that we are seeking unnecessarily to work in secrecy.
Mr. G. Strauss: Is it proposed that the House of Commons and the public should not know whether a profit or a loss has been made on the fund after a period of, say, two or three years?
Sir J. Simon: I think that is in fact made public. I think if the hon. Member looks up the statutory duty of the Auditor-General together with the practice of the Chancellor of the Exchequer, he will see that that is covered.
Mr. Bellenger: But it is only a general statement, and does not give the amount.
Mr. Dalton: In order to have the matter made clear, may I ask whether the Public

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Accounts Committee will receive disclosure from the Treasury witness of the complete transactions in detail during the year? Will they be told, for instance, that on such-and-such a date a certain quantity of francs were exchanged for certain quantities of other currency?
Sir J. Simon: I have not contemplated that, and I think probably the exact arrangements will have to be discussed with the Public Accounts Committee. I recollect that the present Prime Minister made a similar offer. I am not seeking at present to draw the lines too precisely. I am trying to make a real advance in the direction of public information. I should be opposed to the idea of these arrangements being laid down by Statute. This must be regarded as an experiment; it may turn out to be a rather generous experiment, and, therefore, these arrangements may have to be revised. But I am confident that if the disclosure is maw in the way in which I visualise it and dealt with by the Public Accounts Committee in the way in which they deal with such matters, it will give a great deal of satisfaction to the public and will, I think, strengthen the hold which this policy has upon public opinion.
I have reminded the Committee of the purposes of the Account, I have explained the reasons for the present Resolution, and I have indicated the change of practice which I am willing to adopt to meet the natural desire that there should be no unnecessary secrecy—a desire which, I think, the Treasury can now face, because the fund is in a much stronger position. I make one observation in conclusion. If there be, in any corner of the Committee, anybody who is disposed to resist this policy, he must be prepared to face the alternative. I assert with very much confidence that the long spell of cheap money, during which we have vastly increased our production, during which we have witnessed a great reduction of unemployment by one half, these results would not have been possible, had there been nothing like this Exchange Equalisation Account to act as a shock absorber. After all, if the burden now put upon the Account has increased, that is the result, the penalty if you like, of this country being a solid rock in an unstable world. Therefore, while there is no reason why present conditions of unsettlement, in connection with international movement of capital, should be permanent, the
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present situation compels us to make this further provision as an insurance against additional movements into sterling. I hope I have satisfied the Committee that the policy which we are following is essential for maintaining our general financial policy, and in order to support the undertakings which we gave under the Tri-partite Monetary Agreement.
Mr. Mabane: With regard to the £700,000,000 of gold which the right hon. Gentleman said was in the fund in March last, is the Committee to understand that the only liability to set against that is the £375,000,000 of capital originally in the fund?
Sir J. Simon: I do not think my figure of £700,000,000 was limited to the fund. I was careful to state that we had to include, for this purpose, the gold in the Issue Department of the Bank of England.
4.27 p.m.
Mr. Pethick-Lawrence: The right hon. Gentleman towards the close of his speech told us that he had explained the working of the Exchange Equalisation Account, that he had promised to alter the arrangement regarding the publicity attaching to the Account, and that he had elaborated to us the reasons why it was necessary to make this increase at this time, and why the particular amount of £200,000,000 had been chosen for that increase. I agree that on the first two heads he gave us a good deal of information, but on the last two heads, which I imagined would have provided the main theme of his discourse, up to that moment he had been almost silent. I think we are entitled to know a little more about the reasons for this course—why the Chancellor of the Exchequer has come here in this great hurry to ask the Committee to pass this Resolution, and why the particular amount of £200,000,000 has been selected for the augmentation of the fund. I should have thought that the grounds for it were not a matter of mystery. I thought they were largely understood. I thought it was known everywhere that the reason for extending the fund at this time is what has been happening in the international world and, in particular, what has been happening, not so far away, across the Channel.
I desire at the outset to make it clear that we on these benches are ready to

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support any action which, without injuring the position of our own country, is to the benefit of the other great democratic nation across the Channel. It is probably within the knowledge of most Members of this Committee that during the past week-end an all-party delegation from this House has been enjoying the hospitality of the Deputies of the French Chamber, and I have been asked by my colleagues of all parties who have been with me in Paris to take the opportunity of this Debate to reaffirm the cordial relations between our two countries. In this House as in France the acute differences between the political Right and Left do not affect the common sentiment of good will which the two great democracies have for one another, and in so far as this proposal of the Chancellor of the Exchequer is designed to assist our French friends, it will, I am confident, have the united approval of this Committee.
There is another matter which I should desire to make abundantly clear at the outset. We, on these benches, fully believe in the principle of the Exchange Equalisation Account. We regard it as a very valuable institution, and we do so primarily because it has restored to the Government of this country the control over its currency and finance which it ought never to have parted with. We go back for many centuries, to a date before the Christian era, and we find that the rulers of countries in those days realised that the control of the monetary system was an essential part of the functioning of their government. We remember in the Gospels an indication of the character of the sovereignty of the country, in the words, pointing to a coin, "Whose is this image and superscription?"
That control of currency and money remained vested in the King and the Government of the country until recent times, and then, for some unexplained reason, as the character of money changed, it was seen fit to hand over the essential control of finance to a private institution in this country, the Bank of England, which, with the powers that it had during the greater part of last century and the early years of this century, had really the control of the lifeblood of the community; and, coupled with the form in which the Gold
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Standard found itself, the trade and industry of this country were clamped in a vice, and the price level was determined by the accident of the amount of gold that happened to be mined in some remote corner of the world and the arbitrary decision of a single body of persons, however excellent and well-informed they might be, that sat in the parlour of the Bank of England. For my own part—and I think certainly for those hon. Members who sit behind me and some Members in other parts of the House—I say that we welcome most definitely this restoration of the control of our currency and our money to the Government of the country and to this House of Commons, and I hope that, having got it back, we shall never part with it again, and that, having freed ourselves from the narrowing shackles of the Gold Standard as it was worked in those days, we shall never submit to being put into those shackles again.
I do not want to pursue that rather academic subject any further, important though it is; I want, rather, to come to the present position and to be allowed to put in a very few words how I see the need which has arisen at the present time. I understand the position to be this: A citizen of some foreign country has more confidence in sterling than he has in his own currency. Therefore, he desires to convert his holding of securities in his own land to the holding of securities here. It is rather remarkable to note, in passing, that he actually prefers sterling securities to the possession of gold itself, and it is a very great tribute to this country that that should be so. If there were no question of gold in the picture, then large numbers of the foreigners of that nationality would be competing with one another to buy sterling with their own currency, and the necessary result of that would be to depress the value of their own currency in terms of sterling, and thereby very considerably to upset the exchange market. What do they do instead? They go to the Treasury of their own country, and with their own currency they buy gold. That is in effect what they do. That gold then comes across into our country to purchase the currency of our country. They pay for their securities which they have bought with the currency of our country, and the currency of our country, going into the banks, finds

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its way into the coffers of the Bank of had some explanation from the present England.
In order to make that possible, two things are necessary. In the first place, there must be sufficient gold in the Treasury of the foreign country for the foreigner to be able to buy it with his currency, and, in the second place, the Chest of this country must be large enough to take the gold which comes across in that way. If those conditions are not fulfilled, the transaction cannot be carried out by those means, and we get a pure higgling and haggling of the exchange. As I understand it, the right hon. Gentleman has come down to this House to ask for this Resolution because it is necessary to enlarge the chest in this country, in order that it may hold more gold, and, as I said at the beginning, that is being done to assist the foreign nations which are involved, and to prevent the undue rising of British sterling as against the foreign currencies. We on this side support this action.
That is all very well, and we are prepared to agree to it in general, but I must remind the right hon. Gentleman—and I was rather surprised that he did not refer to it—that in the last Debate, when the first increase was made in this fund from the sum of £150,000,000 to £350,000,000, the then Chancellor of the Exchequer, the present Prime Minister, said that he had been considering what amount it was desirable to make the increase. He said he might have proposed some comparatively small amount, but then he would have had to come to the House again, possibly later on. He had therefore fixed the amount, and he said he had no expectation that he would have to come to the Committee again and ask for any further sum. The figure of £200,000,000 which was proposed, therefore, on 4th May, 1933, was at that time considered by the then Chancellor of the Exchequer to be the maximum that would be required, and he thought there would be no further need to come to this House for more.
Sir Frank Sanderson: What date was that?
Mr. Pethick-Lawrence: It was 4th May, 1933. The right hon. Gentleman said, at the same time, quoting from the Bank of International Settlement's report that at the beginning of 1931, the amount of short-term capital totalled a sum of £2,000,000,000. I think we should have
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had some explanation from the present Chancellor of the Exchequer why, in spite of what had been said only four years before, it had been decided to make this very considerable further increase. I am not quarrelling with the fact of the increase—I recognise the fact—but I should have thought it was for the Chancellor of the Exchequer, and not for me, to explain why this further large demand is being made upon this House. We have to remember that the cost of this apparatus is not entirely negligible. The effect of the assets of the Exchange Equalisation Account becoming more and more golden in their appearance is that, of course, we lose the interest on this amount. It is true that at the present time we borrow money on short term at comparatively low rates, but as the amount of gold in the chest goes on increasing, even at that low rate the interest will assume proportions that we cannot altogether neglect.
Now I have said that I think I understand broadly, and I think the Committee appreciates broadly, without going into too great detail, why this proposal is being made at the present time, but I do not feel quite so sure that other circumstances may not arise in the comparatively early future which may bring either the present Chancellor of the Exchequer or his successor to this Committee again for another Money Resolution increasing this amount still further. I confess that I was rather alarmed during the week-end on reading the current issue of "The Statist." I will not trouble the Committee with the quotation, but the effect of the article was to suggest that there was a considerable body of opinion which anticipated that a large proportion of the gold at present sterilised in the United States may shortly be coming over to this country. Personally, I think that is probably a considerable exaggeration, but even if a comparatively small part of that gold comes across—I think there is something like £2,000,000,000 worth of gold in the United States at present—or even if none of that gold comes across, but this country is expected to absorb the whole of the new gold which is coming into the market in the course of the next two or three years, we may easily find, as I have already said, that the amount which even the Chancellor of the Exchequer is asking for to-day may not be sufficient, and I am bound to say that that is rather an

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alarming fact, if it be a fact, that we may have to face in the early future.
I am all for friendliness, not only with France, but with the United States of America, and I am very anxious to see nothing said or done which will in any way be antipathetic to our great neighbour across the Atlantic. I will go further. I am very anxious that trade with the United States shall increase, and that we shall support our great neighbour in attempting to free the trade of the world. Therefore, I have no wish to take any step either with regard to this Account or any other which will discourage that end. I do think, however, that the Chancellor of the Exchequer and the Prime Minister, and, indeed, the whole Government will have to consider this matter very carefully. We are prepared to support them to-day in making a further advance in this sum. That is not to say that they can expect the House of Commons to hand out to them on a plate £200,000,000 additional money to the Exchange Equalisation Account whenever and however often they come to the House to ask for it. Sometimes the Chancellor of the Exchequer—using the title in a general sense—says, "It is all right; you need have no worry about the fund, for it is making a profit, and any sum that it costs in interest is fully met by the profits which it has already made." I want to examine that a little carefully.
I suggest that this statement about a profit and loss is somewhat illusory. Take the case of a private individual. He can look at his investments on 1st January, 1936 and again on 1st January, 1937, and if he takes the Stock Exchange prices on these two dates, he can judge whether he has an appreciation or a depreciation in the value of his investments during that 12 months. That is true provided he holds a reasonable amount in any one of the securities which he possesses. But suppose, in point of fact, that in any one of those companies or whatever they may be, he holds the major part of the capital, and suppose the price at which the stock is valued on the Stock Exchange is largely dependent on the fact that for some time past that individual has been buying up the stock of that company. It is true that the market price of the stock in that company appears at a certain figure, but let him begin to un-
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load. As soon as he does that those shares go down in value and the apparent appreciation which he thought he had was a paper appreciation only that is dissipated as soon as he attempts to sell. The Government are rather in the position of that man with regard to these assets that they hold. It is true that the paper value of the assets of the Exchange Equalisation Account may have appreciated, but let the Government find it desirable to dispose of those assets, and it by no means follows that the appreciation that was called profit will, in fact, result. Therefore, I take with a great deal of reserve—not because I mistrust their arithmetic, but because I doubt the accuracy of their basis of calculation—the principle on which their estimate is made.
The Chancellor has dealt with the question of publicity. I think that he has dealt with the matter in a very good House of Commons spirit, and speaking on behalf of my hon. Friend the Member for Caerphilly (Mr. Morgan Jones) and others on this side who have raised the issue, we are satisfied with the proposal he has put forward. I cannot, of course, speak for other hon. Gentlemen who have put down certain proposals. I think that more publicity of a retrospective character was desirable, though no doubt current publicity might be injurious to the objects for which this fund exists.
As I have already pointed out, the Chancellor has made no attempt of any kind to defend the figure of £200,000,000 in this Resolution. We on these benches think that the figure is unnecessarily high. We consider it is rather salutary that at not too long intervals the Chancellor of the Exchequer should be obliged to come to this Committee and defend his actions. Therefore, at a later stage in this Debate, I or one of my hon. Friends propose to move a reduction, so that the increase shall be only £150,000,000. I do not regard that as a party concern but as a House of Commons matter, because it is important that this House should be able to review the policy which is involved in this fund without too long intervals. Over and above that question, I hope that the favourable attitude which there is on all sides of the Committee towards this Account will not send the Chancellor and the Treasury to sleep as to its future. It is all very well for us to be willing to take another 50 or 100 millions of gold to-day; it may be that we shall have to

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take another 50 or another 100 a little later on. Governments are very fond of taking short views, but clearly, if we are to take a really long view, this process cannot go on indefinitely. There is any amount of gold to be dug out of the earth in different parts of the world, and it is obviously impossible for the United States and this country to be the dumping ground for an indefinite amount of gold while other countries reap the interest on securities.
One of the advantages of this fund is that it is forcing the Treasury to have an individual and positive mind of its own with regard to the question of currency and finance. The time was when the Treasury never had a mind on finance until it had run round to the Governor of the Bank of England to find out what he had to say on the matter. That day has gone by. [HON. MEMBERS: "Oh!"] It has, and the proof that it has is that the policy which the Treasury is pursuing on many of these matters is not the policy which the Governor of the Bank of England would have pursued had he had entirely his own way. I repeat that the Treasury and the Chancellor have a mind of their own to-day on financial questions apart from the Bank of England. It is a good thing they have, but that is not enough. It is true that they are guiding this fund and have been doing so with a certain amount of success for some time past, but they have to look ahead. They have to see that there is a time coming when a new attitude will have to be adopted. We have got away from the old dominance of the Gold Standard. We have got out of the narrow limits in which the Gold Standard forced us. We must not allow the dominance which gold has at the present time to increase until it becomes a new shackle upon our life and industry. I ask the Chancellor of the Exchequer, and I ask the Prime Minister and the Government as a whole, to put on their thinking caps and to make up their minds not only what is to be the short-term policy, with which we are in substantial agreement in the matter of the increase in the amount, but also what is to be their long-term policy with regard to the whole question of the gold supply of the world.
4.56 p.m.
Sir Francis Acland: I think everybody will agree that the statement of the Chancellor of the Exchequer at the end of last
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week with regard to this Resolution, being made when it was, did a great deal of good, and that it was at once a sedative and a tonic. It evidently seemed to finish off the last remains of the gold scare. It meant that we were willing to help the United States and France to hold their babies—those very different babies which are only alike in that they are inconveniently heavy at times. The news of it got out to the United States before it did here. The considerable buying of gold mining shares which took place on Thursday after 4.30 on American orders showed that that was so. I know how difficult it is to prevent, but this is not the first time it has happened, and it would be a good thing if it could be prevented in future.
While I hold that the announcement of the intention to increase at the end of last week did a great deal of good, I also believe that the continued increase of this fund in the conditions on which it has hitherto been operated is, on the whole, liable to do harm. Therefore, I welcome the statement which the Chancellor has made as to the modifications of the conditions with regard to the limited publicity. All that we have hitherto been told periodically is that the fund has been operated at a profit. I do not know, and I do not know whether other people know, in spite of what the Chancellor said to-day, whether that means a net profit. Does it, for instance, cover the fact that, as the Chancellor told us before, when gold is sold by the fund to the Bank, it is sold at the new price but bought at the old price? If considerable transactions are in question, as they were some time ago, it must mean a very heavy loss. We do not know when we are told that the Account has been run at a profit, whether that profit covers losses which would be made by transferring gold from the fund to the Bank. I do not press that point now because this sort of thing will surely be clear in the periodical statements which are to be made, according to the promise which the Chancellor has just made to us.
I agree with the Chancellor that the fund is a useful buffer—his word was shock-absorber, but it is much the same—between the markets and the stark and hard reality of otherwise unescapable facts. One may sometimes sleep

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very uneasily even on the softest pillow. In this connection it seems to me there is a great deal in an argument which I found in the financial article in the current issue of the "Spectator," in which one is reminded that many of the influences responsible for trade activity and the prolonged rise in securities are special, artificial and temporary, and that the ease in money responsible for the great rise in gilt-edged securities, say, in the last two years, was largely the result of the monetary policy of this country and the United States, and that the expansion of credit was largely, though not wholly, due to the operation of their Exchange Equalisation Accounts.
Following upon that it is suggested—and that is a suggestion which leads up to the idea of extra publicity, the main point I want to make—that because this easy money and abundant credit were due, not to natural causes, but to Government policy, there is now apt to be underlying mistrust of policies, as there is bound to be of any human agency which "moves in a mysterious way its wonders to perform." I think that has helped in the past—and I hope that what is now to be done may prevent—that strained and jumpy and sensitive condition which has been so marked a feature of the investment markets, as we saw lately when a very unnatural distortion and dislocation of things arose out of a cause which ought not to have produced anything of the kind, and that was the announcement of the National Defence Contribution in its first form. The dislocation—stagnation—that that caused was due to the fact that we have got into the habit of relying on accounts of this kind and suspecting their methods without knowing much about it. There was the same sort: of upset over the recent gold scare.
If the City had known, as it would have known by the publication of a quarterly statement in arrear, that the Exchange Equalisation Account had plenty of money behind it with which it could, if necessary, buy gold, or had known that the Account was likely to be increased, half the upset over gold might never have occurred. We shall, at any rate, all agree in this, that these upsets, when they do occur, encourage the speculator and the gambler, and discourage the honest investor, and,
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therefore, it is desirable to do everything we can to avoid them. I should not have been making these points to the Committee, and I am not sure that the Chancellor would have made his proposals to avoid undue secrecy in future, if it were not possible that events may be approaching—I think it was wise of the Chancellor not to say much about it—which may lead to our having to make still further increases in the Account—that was one of the points which was made so well by the right hon. Member for East Edinburgh (Mr. Pethick-Lawrence)—and, possibly, to that swollen account being operated in a still more disturbing way.
For instance, if we are effectually to help France through, we may have to have a great deal of gold earmarked for our Account in France, in order to support the franc. I agree with the right hon. Gentleman that that is a very important thing to do, but I think it may lead us into needing a great deal of money in order to do it effectively. If the United States has to repel that large of "hot money" which is now bothering her, particularly at a time when events in Europe may be looking worse, which will mean that no one will be wanting to bring gold back from the United States, the Account may then have to be used not for buying gold but for creating fresh money here. Things have been all right with plenty of cheap money about on the boom, but they might be very different in a few months' time, and then the uncertainty of whether the Account was going to create inflationary money would be very disturbing.
The hope we have with regard to all these difficult matters is that international trade will revive to such an extent that our preoccupations with finance will tend to be relieved, and that the world supplies of gold may then be found insufficient rather than 'redundant, and then the remaining problem will only be to correct the present lop-sided distribution of our gold stocks, and to remove the reproach that large amounts of gold which ought to be used as a basis for money and credit are sterilised at a heavy cost to those concerned. But hopes of this kind are rather a poor diet, and hopes that a probable revival of trade and of returning confidence in Europe, which would automatically relieve the strain on the Exchange Equalisation Accounts, are, unfortunately, rather difficult to justify now.

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Therefore, it is with very special pleasure that I have noticed the Chancellor of the Exchequer's suggestion that a good deal of the existing mystery and secrecy should be removed from the operation of this account, particularly if, as I fear, we may have to increase it still further.
To show how minds of different calibre work together, I had been intending to make a suggestion that we should publish a quarterly statement in arrear. That differs to only a small extent from the proposal of the Chancellor of the Exchequer, which is for a six-monthly statement quarterly in arrear. Perhaps he will consider the small variant which I make, which is for four statements in a year, each a quarter in arrear; because, as he said, one cannot make contemporary disclosures of what is being done. The other suggestion I was proposing to make was that there should be periodical reports to the Public Accounts Committee, who would enjoy reasonable powers, to be worked out between them and the Treasury, of asking how the account had been operated. Both those points have been met in substance and I am very glad of it. I started out to make in the main the one point that we wanted more light on this subject, and I am very glad that we are to get it. We on these benches would not have been willing to vote this large sum unless the Chancellor had been willing to meet us in this matter, and I am very glad to hear the suggestions he has made to the Committee.
5.10 p.m.
Mr. Boothby: I think the Chancellor must be gratified with the welcome which has been accorded to his request to the Committee to sanction a further £200,000,000, which is a large sum. Personally, I think it is the best step which could possibly have been taken by the Government at the present juncture because I can conceive of nothing that could so quickly contrive to restore confidence, which is more important, perhaps, than anything else in the world to-day in both the political and the economic fields. Confidence in the determination of the Government to maintain the monetary policy which was laid down at the World Economic Conference and from which, the Chancellor told us the other day, they had not deviated; confidence in the determination of the Government to maintain, so far as is possible
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in a rocking world, exchange stability; confidence in the determination to maintain the status of gold; and last, but not least, confidence in their determination to share with the United States of America the temporary burden of absorbing the surplus supplies of gold at a very difficult and abnormal period. It may be truly said that,
"The dogs bark, the caravan proceeds."
I think this policy will give satisfaction to many responsible people not only in politics, but in trade, and not in this country only but all over the world. I think the Committee will warmly welcome the suggestions for publicity made by my right hon. Friend. I had intended to add my plea for less mystery and secrecy about the operations of this Account, but I feel that, broadly speaking, the Chancellor has satisfied the Committee and I do not now intend to say more on this point.
But when all is said and done we shall have voted nearly £600,000,000 for this Exchange Equalisation Account. It is a very large sum. It is used to operate our financial and monetary policy. And I think it is desirable in these circumstances that we should have from time to time not only information, but a discussion about the broad lines of the financial policy which has been pursued. At the time of the scare the other day some of us put down questions to try to elucidate from the Chancellor of the Exchequer whether there had been a change in policy; and there is no doubt that there was for a time a great deal of mystery, which did a lot of damage, as to what the financial and monetary policy of the Government really was. We know clearly for the moment what the financial policy is; but it is a changing world, and policy may have to be altered from time to time; and it is desirable that in addition to the explicit information to be given to the House and the Public Accounts Committee we should be given an opportunity on some Vote or other to have a general discussion, perhaps once or twice a year, on the main lines of the financial policy which is being pursued. Meanwhile, the proposals which the Chancellor has made, and the information which he has given with regard to the condition of the Account, can only be regarded as very satisfactory. The right hon. Gentleman said there was

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no doubt that in the immediate future the Account would have to make fairly substantial additional purchases of gold. In this connection I wish to raise one rather technical point. In the past there has been, I understand, an agreement between the different Exchange Equalisation Accounts for the purchase of gold from each other. Could not that arrangement now be rounded off by having an agreement for the sale of gold to each other under certain conditions? It is rather a technical point, but I should be grateful if my right hon. Friend would look into it.
The fundamental question which has been raised in every speech this afternoon is, Have we got too much gold? Are we going to have too much gold as a result of voting this money? In this connection I would venture to suggest that hitherto there has never, in the history of the world, been a superabundance of gold. From 1921 to 1931 there was a definite shortage, and in those days, it ought not to be forgotten, everybody was talking not of the plethora of gold but of how to economise the use of gold for monetary purposes. There is no reason whatever to suppose that if conditions were normal or anything like normal the available supplies of gold in the world to-day for monetary purposes would be too great for the adequate support of the credit structure of the world. The problem is not one of plethora, but of mal-distribution, and we ought not to confuse the two. At the moment conditions are far from normal; and, even so, and in support of the largest possible gold reserve for this country at the present moment, I should like to reinforce what the Chancellor himself said.
We are still, to a large extent, the world's bankers, even now. We have short-term obligations which may grow very considerably at any given moment. We hold the reserves not only of the Colonial Empire and of the Dominions, but of a very large part of the sterling area. It is also sometimes forgotten that we have an adverse balance of trade at the present time. We have, in addition, to re-arm and to purchase raw materials on a very large scale from all over the world for some years to come. Last, but not least, the time will come, and we hope it will come sooner rather than later, when
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we shall have to consider lending our money abroad again. All these things taken together impose upon this country, above all others, the necessity of having ample supplies and reserves of gold, so that we may never again be caught in the position in which we were caught in 1931.
That last point, foreign lending, has already been stressed in debate on both sides of the Committee. No one wants to see this country plunged, as a result of obtaining adequate gold reserves, into a reckless foreign-lending policy. But this is a matter which deserves continuous consideration by the Chancellor and the officials at the Treasury. The Chancellor has a committee, the Foreign Transactions Advisory Committee, to advise on this particular question from month to month. Is that committee given any information regarding the supplies of gold at the disposal of the authorities, in the Exchange Equalisation Account, and in the Issue Department of the Bank of England? As the Chancellor of the Exchequer suggested in reply to a question of mine, this does seem to be one of the criteria which have to be borne in mind in framing a foreign-lending policy. It seems, if the Foreign Transactions Advisory Committee are to carry out their duty properly, that they must take cognisance of the amount of the gold reserves which are from time to time at the disposal of the Government of this country.
Another argument that has been used, not in this Committee but in the Press, is that it is highly dangerous to increase the Exchange Equalisation Account for the purpose of purchasing gold because of the danger that, in the future, the gold itself will be written down, and the Account will thus sustain a substantial loss. I would say in answer to that argument only this—that never yet has a currency been successfully revalued. The main economic problem which has confronted the human race ever since the days of Moses has not been how to write up debt but how to write off debt. The right hon. Gentleman may remember that Moses had an admirable idea, which I wish we could have put into operation in 1919—that of the Jubilee year, when all debts were written off and everyone started again with a clean slate. There is no doubt that any revaluation of gold would inevitably increase the burden of indebtedness of all kinds all over the world, and it does not

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seem to me to make sense. When, after much travail, the world has succeeded in writing down some portion of the gigantic burden of debt accumulated between 1914 and 1919, why on earth should we now go out of our way to write it up again? We tried that in 1925, without conspicuous success. It landed us in, among other things, a general strike, a coal stoppage, and acute unemployment for seven years. As the right hon. Gentleman the Member for North Cornwall (Sir F. Acland) pointed out, the problem now is not a superabundance but a maldistribution of gold; and the solution, the only solution, is once more to use the gold, instead of merely sterilising it in the vaults of the banks. That, in turn, can be done only by a revival of confidence and of international trade.
Before I sit clown I would like to point out that a very valuable lesson can be learnt from the events of the immediate past, the last three or four weeks. Until two months ago recovery was proceeding steadily but satisfactorily, based, as always, upon confidence, and a rising commodity price level. No prosperity is genuine—here, I am sure, I shall have with me hon. Members opposite—which is not based upon the prosperity of the primary producer. There can be fictitious booms which benefit the rentier, but they do not count, in the long run. Then came this so-called "gold scare," caused by uncertainty about the intentions of the British Government and of the Government of the United States regarding the price of gold; and also, I think, by considerable doubts as to whether effective co-operation did exist between these two countries.
In my submission, that gold scare should have been and could have been nipped in the bud right at the outset; and that would have done a great deal of good. It was not done. Instead of it being nipped in the bud, no clear, explicit statement of policy was given either from the other side of the Atlantic or from this side and the discount in relation to the American shipping parity of gold was allowed by our authorities to widen until on one day the difference was something like sevenpence; and that caused many people to think that all effective co-operation between the Treasury officials here and in Washington, had, for the time being, come to an end.
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Nobody knew what was going to happen. It may be that the reason why the discount became so wide was that we had at the time insufficient sterling reserves in the Exchange Equalisation Account; and that, I believe, is one of the main reasons why the Chancellor of the Exchequer has had to come to the House to-day to ask for £200,000,000, a sum which I do not think will be too much. But it just shows what confidence or the lack of it can do. Immediately you had that uncertainty, the trend was reversed.
Much has been made of the fall in the value of securities by between 20 and 30 per cent. That is a temporary thing, not very serious in itself, except for the people who held the securities as a speculation and not as investment; but much more serious was the temporary but quite distinct reversal in the trend of commodity prices, which, if it had been allowed to continue, could have landed us in very serious consequences. That is the answer to those who maintain, academically, that a deliberate alteration in the price of gold need not involve an alteration in the level of commodity prices. A reduction in the price of gold at the present time would be a signal to the trading community that prices were going to fall, and would be so interpreted; and prices would fall. Of course, so long as gold is not allowed to affect the credit structure, for the time being and temporarily, it need not affect the price level; but that is an artificial condition which is not desirable as a permanent feature of policy.
If, arising out of this proposal of the Chancellor of the Exchequer, there is to be increased co-operation between the Exchange Equalisation Account of this country and that of the United States, we ought in my submission to bring every pressure upon the United States Government to allow some of the gold which has flowed into the United States to influence the credit structure, and to raise the commodity price level over there. It is because commodity prices in the United States are kept so artificially low as to be out of alignment with the exchange value of the dollar, that the inflow of gold into America has been aggravated, and with it the problem of maldistribution.
With regard to the future, I would say I hat this step of the right hon. Gentleman is to be welcomed, not only because

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it will be of such value in restoring confidence, which should never have been lost, but because it is a practical gesture, far more powerful than any words could be, towards the United States of America. That is a point of supreme importance. In the long run, co-operation between the British Empire and the United States of America in the economic field is the best hope of the future, and indeed, of saving civilisation. There may be great technical difficulties in the way of achieving a wider economic agreement; but they can, and must be, swept away, because the basic interests of the United States and of this country and the Dominions, are identical. Separately, we can achieve something, perhaps; together, the United States arid the British Empire could use their natural resources and their gold in fruitful co-operation to restore prosperity to the whole world.
5.26 p.m.
Colonel Wedgwood: I hope that the hon. Member will forgive me if I suggest that Sir Henry Strakosch could not have put it better; but it must be remembered that Sir Henry Strakosch is not the last word in this controversy. We have had three very admirable articles after Sir Henry Strakosch's letter in the "Times." in the articles it was argued that a fall in the price of gold would not necessarily mean a fall in the price of raw materials or of anything else, and would not involve the deflation feared by Sir Henry Strakosch. It is important that we should realise that there are two views on this question. The question is whether, if the American Government and ourselves should co-operate and refuse to buy gold, whether that would have the slightest effect upon the credit structure or upon the exchange between England and America, provided that the two countries continued to act together?
Mr. Boothby: I have held these views for 14 years, and I think the right hon. and gallant Gentleman will do me the credit to say that it is legitimate to hold them without particularly having a directorship in mind.
Colonel Wedgwood: The hon. Member's views have changed completely since 1932, when he was supporting inflation and held the view that we should come off gold and become a sterling country.
Mr. Boothby: No. It is exactly the same. I am resisting deflation now.
Colonel Wedgwood: The speech of the right hon. Gentleman to-day urged that the Exchange Equalisation Account should be increased by £200,000,000. There was nothing about the profits of the Account, and he promised that for the future we should have some information about the exchange fund. But he gave no reason why the Account should be increased. The old use of the fund was ironing out fluctuations. If it were found that there was a variation in the rate of exchange between two countries, the Account might be used to reduce that fluctuation. That was one perfectly clear use of the fund, and although I opposed it at the time with a great many people, yet there has been a great deal to be said for it. It has proved itself useful.
The right hon. Gentleman mentioned something new that the exchange fund is to do. It was no longer to act merely as a buffer to reduce fluctuations, but it was to carry out the policy of the tripartite conversations between America, France and ourselves. Under that tripartite policy we were to maintain the exchanges at the figures at which they stood at that time. But a change has come about, not on account of the difficulties on the Continent, but on account of the enormous increase in the supply of gold. When the tripartite agreement was come to, there was no fear of this increase in the supply of gold, and to the best of my recollection the compulsory purchase of gold was not a feature of the tripartite policy. Now the situation as regards the Exchange Equalisation Account, as regards the actual exchange between us and America, and as regards the tripartite agreement. is completely changed. It is no use concealing the matter; it is a matter of history.
Some months ago there was a fear, not that America would go off gold, not that there would be any violent change in that country, but that America might cease to buy gold at the price at which gold stood at that time. Supplies from South Africa have increased very largely, and, according to the statements from South Africa, will increase still further. Above all we have the enormous unexpected increase from Russia; and the question now is, how long will America go on buying all the gold that is offered to her? Without

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us she would not be able to go on, but now we are bound together, not under the tripartite agreement, but under some understanding with America, that we also will continue to buy gold at the top price of 140s. an ounce if she will do so too. That is a very serious position. When we use this fund to keep up prices for the purposes of a "corner in gold," the risks involved are infinitely great. We all know what has happened before in the case of wheat, and a similar thing may happen in the case of gold. It is not that I disapprove of the policy of the Government, but I want the Committee to realise the risks that are involved in carrying through this policy, and to remember that a point may come when we shall have to drop out.
We have seen two previous crises similar to this. The right hon. Gentleman opposite will remember the stop on the exchange during the War. All through the War, the exchange between England and America was kept at a stable figure. Our purchases from America were all regulated on the basis of the £ being equal to 4.87 dollars, and at the end of the War the real value of sterling was far less than the dollar equivalent. For six months after the end of the War we continued that stop on the exchange, so that everything we bought from America was artificially cheap, the difference between the price at the actual value of sterling and the figure at which sterling was stopped by the Treasury being paid by the Treasury. I brought the matter up over and over again, and was ridiculed at the time, but at the end we were actually paying something like £1,000,000 a day to the Americans to balance the artificial value with the real value. That was not going into our pockets; the import of munitions had more or less ceased; it was going into private pockets as a bonus on the importation of goods from America. The Treasury insisted that there should be no change, that the matter should not even be mentioned, and they predicted terrible results if we took this stop off the exchange. But when the stop was taken off the exchange, things went on just as before, except that the £ sank from 4.87 to 3.50 dollars. That had the perfectly natural result of making things that we bought from America much dearer, so that we did not import so much from America, while on the other hand it made goods supplied to America from this country much cheaper, so that our export trade to
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America increased. That was a perfectly natural result, and one which was not disadvantageous to this country. On that occasion the Treasury were quite wrong. This country was bled to an extent which worked out, I think, at something like £200,000,000 and the change that was finally forced upon the Treasury, owing to the expense, was of benefit to the trade and industry of this country.
The second occasion was in 1931. I remember rising from the bench opposite, while the Labour Government was still in power, to denounce the idea that sterling and gold should be permanently united. I pointed out that the crash was bound to come, that we should have to go off gold, that that was the only way in which we could reduce the debts which were strangling industry, and regain the natural exchange between foreign goods and British goods. In the same way as before, the Treasury ridiculed the idea. Only a week before we came off gold, the Treasury officials were saying to me, "You do not really think it would help British export trade if we came off gold?" The same vaticinations of ruin came from the City of London. Again the Treasury wasted millions in trying to support sterling against other currencies and against gold. We did everything we could, at great expense, to prevent this country going off gold, and when we went off, in the twinkling of an eye, the investing public and the business community decided that it was the best possible thing that could have happened. The Treasury were wrong again.
Are they going to be wrong a third time? The issue does not rest any longer entirely with us. I ventured to point out the other day that the principal reason for the Government buying gold was in order that they might keep up the price of the gold which they have. We know now that all the gold they have is 100,000,000 ounces, worth, at the old figure, £450,000,000, and at the present figure £700,000,000—a very satisfactory profit, if it be all profit, which I doubt. But this is not the end. It may well be that the right hon. Gentleman will come back to this House in three months' time and say he must have another £200,000,000 to keep the price up, to keep the "corner" firm, and we shall give it to him. He may come back again and still be spending 140s. an ounce on buying gold from Russia which no one

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wants. I may add that, when we buy gold from Russia, either at this price or at any other price, we pay for it, of course, in British goods made in this country, and, according to all modern theories of economics, the more you owe to a foreign country the more prosperous you are. Bat we are not the only people in the gamble; we are not the only people in the "corner." What about America?
No doubt the arguments in favour of continuing to buy all the gold that is put before you at a fancy figure apply to America even more than to ourselves. I am told that they are burying the gold which has been dug up in South Africa underneath the green grass of Kentucky. But al] these things have a limit. Next year the increase will be still greater, and there will not be room in Kentucky. What will happen when America says, "No; 100s. an ounce is quite enough for any man who owns gold?" Directly they say that we shall have to say the same, and, directly we say that, while it is possible that other things may happen, one thing is certain to happen—that £700,000,000 will be written down and the taxpayer shoulders the loss. These were the figures three months ago; now they may be astronomical; they certainly will be later if this process goes on indefinitely. There will then be an immense loss to the taxpayers of this country, or, in other words, an immense increase of debt unrepresented by any valuable assets.
I should like to ask the Chancellor of the Exchequer one question: Has he set himself some definite limit as to the amount of unwanted gold that is to be buried in this country? I do not want to know the figure; goodness knows, we do not want to give any more points to those gold hoarders, gold miners, and the rest; but: we want to know that the Treasury realise the danger that is ahead of them, and the fact that everything they do must be in complete unison with the United States of America. It is conceivable that it might come to this, that the Americans might refuse to buy more gold and that we should be left to buy it instead, and that Would put us in an even worse position. We cannot go on carrying the gold baby indefinitely. It is possible to share the burden with America for another year or so, but, if it is going to he left to us, it will be a
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worse burden upon industry here, and a more serious loss to the taxpayers of this country, than anything we have ever faced.
I cannot help being suspicious of the vested interests behind this determination that we should go on buying gold at 140s. South Africa, we know, and the various gold-producing companies, we know, must be in favour of the price of their article remaining high, but the tragedy of it is that, as long as it remains high, more and more gold will be produced. Gold has been exempted from the natural law of supply and demand, and that exemption is continued by promising to buy at a fixed price all the gold that is produced. Where a Government sets itself to act contrary to the laws of Nature, a time comes when the laws of Nature come back like a punching-ball and hit it on the head. Here you are defying Nature, and you are doing it, in the first place, to keep up the book value of the gold that you have. You are doing it, in the second place, allegedly to prevent a break in the exchange, on which it has no bearing at all.
If America and ourselves fix the price we are prepared to pay for gold at some figure below the present figure, it need not alter by one jot the exchange between England and America, but will it be a disaster to trade and industry? Will it, as some of these city financiers say, cause a slump in the price of all other raw materials? Will it end the boom? Will it throw people out of work? Why should it have the slightest effect upon the price of tin, rubber and copper, where the price is fixed by the demand for the article in the market? Why should a change in the price of gold, for which there is no demand in the market, affect the price of all those other raw materials which have a demand, and an increasing demand, at present? The effect might be psychological. A great many people whose reserves are in gold will suffer, but it cannot have any actual economic effect upon the producing industries of the world as a whole, except indeed that there will be less gold produced in future as the price is brought down.
All the Press and the Government have been extraordinarily silent on this point, but it is quite time that those of us who realise that the interests of the taxpayer and of the producer are the ones that we

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should consider, spoke out in order to prevent any sort of injury to trade which might be brought about if these exaggerated stories as to what would happen if we paid less for gold go unchallenged. I do not believe myself that if we bought gold with America at 85s. an ounce instead of 140s. it would affect industry and production in the least, any more than it did when we came off gold in 1931 or when we put an end to the stop on the Exchange in 1919. Every time the prophets of evil and the vested interests painted a picture of ruin, and every time they have been disproved and found wrong.
5.49 P.m.
Mr. Mabane: The House knows the right hon. and gallant Gentleman, who has just spoken as a doughty warrior, but sometimes he appears to us to be rather more concerned with the battle than with the victory and I think, if he were to look back over the last five years, he would have considerable ground for believing that the speeches that he made in 1931 and 1932 had resulted in a very considerable victory. Surely during the past five years we have had a currency which has virtually been a managed currency and not one based on gold. Therefore—and I speak as one who had something to do with supporting his view in 1932—I think we may take to ourselves some consolation in the fact that our currency in the last five years has been so substantially a managed currency and not one tied to gold.
I was delighted to hear the announcement of the Chancellor of the Exchequer to-day with regard to the publicity that is in future to attend the Exchange Equalisation Account. Particularly was I delighted to hear it because that was to have been the main purpose of my speech if I had been fortunate enough to catch your eye, and to that extent I am absolved from making it. As a member of the Public Accounts Committee who had something to do with drafting the Clause on the Order Paper, I should like to say that, as far as I am concerned as an individual member of that committee, the Chancellor's announcement will not only remove some of the complaints that were made in the House in 1932, but will have a further value in enabling the House to judge of the operation of the Exchange Equalisation Account. It has seemed to me in the last few years that
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the position has been really very difficult. It is the duty of the Public Accounts Committee to secure that all money voted by the House is spent for the purpose for which it was voted, but in recent years we have had to take the ipse dixit of the Comptroller and Auditor-General as sufficient evidence that the money in the Exchange Equalisation Account was being applied for the purpose for which it was voted. If that had gone on very much longer, it might well have been a dereliction of duty on the part of the Public Accounts Committee and, I think, on the part of the House, to have submitted to that practice. Therefore, it appears to me that, the Chancellor of the Exchequer having undertaken to convey to the Public Accounts Committee such a very substantial amount of information, the complaints that were made when the Exchange Account was introduced in 1932, and perhaps voiced from time to time since then, have been very fairly met.
I should like to say a word about the general position created by this proposal to-day. The Chancellor referred to the original purpose of the Account and its establishment. I notice that he did not read the whole sentence which indicated the purpose. The account was established "for the purpose of strengthening the currency and checking undue fluctuations in the exchange value of sterling." [Interruption.] In the original Resolution submitted to the House.
Sir J. Simon: I thought I read the words of the Act of Parliament.
Mr. Mabane: I am quoting the original words of the setting up Resolution. The phrase there was, "for the purpose of strengthening the currency." It is interesting to observe the word" strengthening," because clearly since that time there has been a substantial change. Sterling, from being a currency which was likely to depreciate, has become one that is regarded throughout the world as the most stable of all currencies. It is very interesting to observe that in the last five years politics and finance have become intertwined in a way that was not anticipated in 1932, when this account was first established. In those days we spoke of exchange rates being determined by the trading position as between one country and -another. In the last five years we have realised as we never realised before that the political position in the country

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can very seriously upset the exchange of that country, and indeed the exchanges of the world. When we read about the danger of depreciation in the value of the franc, we are hound to come to the conclusion that we are being asked to support the franc against Socialism, and perhaps it is not entirely a party point to say that the fact that sterling is so strong is a tribute to the power of the Government during the last five years in maintaining this country in such a stable financial position.
Mr. Morgan Jones: How is the present position of the franc attributable to Socialism?
Mr. Mabane: I think the hon. Member will agree that French policy in the last few months has been representative of the views of the extreme Left. Such a policy means a great strain on finance and industry. If 40-hour week Bills and so on are to be introduced, then there is an additional burden to be borne by trade and industry, and the effect is to weaken the exchange of the country in which those experiments are being carried out. [HON. MEMBERS: "Why?"] Because in such circumstances those in control of money in France regard sterling as a safer repository for their wealth than the franc. You may disagree with the operations of such people but the fact is there, and, in consequence we are faced with the task of supporting the franc.
May I state the alternatives before us? They are simple. We can either let the price of gold go or we can continue to buy gold. I do not think there are any other courses oven to us. If we let the price of gold go in a manner quite uncontrolled, the consequences might be deplorable. On the other hand, we may go on buying gold. There are many of us who do not like the policy of buying gold, but I am bound to come to the conclusion that, of those two alternative policies, I prefer that we should depend on the one we are apparently going to adopt, provide this additional money, and thus prevent an uncontrolled fall in the price. But I hope the Treasury will not in the future regard the buying of gold continuously and for all time as their only policy, or indeed as a policy at all. I hope that from now on the Treasury will, as has been suggested by the hon. Member for East Aberdeen (Mr. Boothby), think fit
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by some means or other to present to the House a long-term monetary policy, and that the House may have an opportunity of discussing such a long-term monetary policy. I think if we were simply to imagine that we could go on playing a kind of strip poker with the gold producers of the world we should be likely to be broken in the end.
I cannot believe that that is the intention of the Treasury or that it is the motive which led to this proposal being put before the House. I feel that if, on the other hand, we can look forward to the time when the price of gold can be adjusted—perhaps lowered to a figure more in keeping with the trading situation of the world—we shall in the end have no cause for complaint. To let the price go in an uncontrolled fashion seems to me a course of action that would be likely to precipitate a situation not unlike that of 1931, but, with this £200,000,000, surely the Treasury can look forward to the time when the price of gold can be altered, under control and in their own time, to a figure more consonant with the trading situation of the world. With those words, and again thanking the Chancellor for his concession to the Public Accounts Committee, I support the Resolution.
5.59 P.m.
Sir Arthur Salter: I think all of us feel under a rather peculiar difficulty in debating a subject of this kind, because we obviously cannot set out judgment against that of the Government of a matter on which in the nature of the case we have not the information on which their judgment has been formed. For that and other reasons I welcome the promise of further information in future. I am, however, not quite sure that the information that the Chancellor of the Exchequer is going to give us will meet all the purposes that I should like to see served. He is going to give us information of two kinds, one of which will be public, but that is very limited in character; the other information he is going to give confidentially to the Public Accounts Committee and it will therefore not serve to meet some of the dangers which have followed from the complete secrecy which has hitherto attended the operations of the Equalisation Account.
It is obvious that when you have equalisation accounts in operation by different countries, the great danger is that

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they will be used, or be thought to be used, competitively rather than co-operatively. I have been several times in the United States when the whole atmosphere of economic and financial circles was being poisoned by the belief that the English Equalisation Account was being used to hold the pound below its proper level in the interest of the English export trade. I know the difficulty that one had at that time in getting credence for the sincerity of the professed principles of that Account, namely, that it was merely to defeat undue fluctuations. How often have I thought that if I had the kind of information which the Public Accounts Committee, but not the public, would have in the future, one could have dissipated those suspicions. I do not think that the information to be given under he first head will be sufficient to obviate such a danger in the future. I wonder, therefore, whether the Chancellor of the Exchequer would not perhaps find it possible to make public at least some part of the information that he is going to supply to the Public Accounts Committee? I will not make that request more specific because I should like to study rather more closely the proposal which has been made this afternoon, the full implications of which I am not able to judge immediately. But if it were possible for the Chancellor to add some of what he is giving to the Public Accounts Committee to that which he is making publicly available, he might help to prevent the suspicions as to the purposes of the equalisation fund which were current in the early days, though they had been less since the tripartite declaration, from being again revived.
What people in other countries and the public in this country naturally want to know about the working of the fund is, first of all, that it is not being used competitively against similar funds in other countries and secondly that it is not being used so as to run counter to long-term economic trends. If it could be seen from a fairly full account of past operations that the fund had not in fact been so used in the past public confidence in the present working would be greatly increased. One cannot tell that at present, and the information given under the first head of the Chancellor's proposal, i.e., publicity, will not in itself be sufficient for this purpose. That is all I have to say in regard to that particular question, but
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I would like to make a few more general comments on policy.
Obviously, we must accept the position that this extra amount must be added. But the authorised total is getting a very formidable amount. One cannot but be made rather anxious by the fact that the Government thought originally that the purposes for which the fund is necessary could be served by authorising borrowing up to £150,000,000, that after no very great length of time that became £350,000,000, and, now it has become £550,000,000. The rapidity of the growth and size of the total must at least make us wish that we could have a rather fuller account of the general financial policy with which this particular instrument of policy is associated.
May I suggest a few factors that I would like to see in such a policy? First of all, I should like to be quite sure that our fund and the other funds, particularly the American and the French, are really being used co-operatively, and not competitively now and then, co-operatively a little later. I should like to be sure that the three funds are being used consistently to make effective an agreed general policy. I believe myself that that policy should be one neither of unconditional de jure stabilisation of the currencies at unchangeable rates, nor of a mere day-to-day or short-period accommodation of one exchange rate to another. I believe that there is a halfway between what seems to be the policy of the Government at this moment and full stabilisation. I believe it would be possible to arrange a conditional stabilisation agreement between the three countries under which at a given period the three funds would be all buying together or selling together so as to maintain the relations between the three particular currencies within certain limits narrow enough to give a basis for trade transactions but wide enough to enable the three funds, operating together, to come down with decisive effect upon speculative movements that were directed against the common policy. I believe, however, that it would be both dangerous and disastrous to attempt to fix such a relation between the three currencies as would mean new legislation or legal repudiation to make a change in the future.
It is quite clear that if one of the countries concerned embarks upon a social or other policy which tends to increase costs

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in that country out of relation to the increase that may be taking place in the other countries a time will come when the relation between these three currencies must be changed. If you attempt by equalisation funds, whether separately or together, to run counter to a fundamental economic fact of that kind you are sure to come to disaster. I think it would be possible to have arrangements between the three countries under which at a given period they would attempt stabilisation, but with a quite definite understanding from the beginning, that, if the common experience of the three funds so working together showed clearly that one currency had, by virtue of the underlying economic facts, become less valuable, then, after consultation, the ratio would be changed. I believe that that kind of arrangement would be a sufficient basis not only for ordinary current trade transactions, but, equally important, a sufficient foundation upon which it would be possible to negotiate trade agreements.
It is obvious that no agreement for the reciprocal reduction of tariffs can be made between two countries if each of them or one of them is under the apprehension that the advantages to itself may be counteracted by the currency policy of the other country. Such an arrangement as I have suggested, however, would be sufficient to enable trade agreements to be made, and in turn the extension of economic relations by virtue of these trade agreements give an extra safeguard for the monetary policy itself. I believe that the tripartite declaration, which I think every one in this Committee welcomed very sincerely as an indication of co-operation, must either go back or go forward. It it is to succeed it must be developed into greater co-operation on financial policy generally, and, if possible, also on economic policy as well as financial policy. I believe that that could be done and that if it were done, and if the public generally in the different countries knew that co-operation was continuing and developing, all our difficulties in every sphere would be immensely reduced.
I think then that the experience of the last few months has shown, what some of us have believed for some years, that a somewhat greater measure of stabilisation than we have had in the past is possible but that equally it is dangerous, and cer-
1696
tainly premature at this moment, to attempt a de jure stabilisation which would involve legislation before any change in exchange ratios could be made. We have for some time to come to go on in an intermediate position but not, I think, in the precise intermediate position the Government have so far reached. There is a practicable halfway stage between their present measure of stabilisation and full stabilisation either as between the currencies in relation to each other or in relation to gold.
6.11 p.m.
Sir Geoffrey Ellis: May I add my plea to what was said by the hon. Member for Oxford University (Sir A. Salter) in pointing out that little information was being given to the Committee? I would put it to the Chancellor of the Exchequer that the whole question is of much more interest to trade and industry generally than to the Public Accounts Committee. Those of us who have sat on the Public Accounts Committee are well aware of the questions that come before it, and know that when you get to a certain stage you are always met with the reply, "That is a question of policy in the Department concerned, and I am not sure that I ought to publish it." Whatever is evolved from the question and whatever explanation is given and whatever may or may not be put into the report of the Public Accounts Committee, I submit to the Chancellor of the Exchequer that this is rather a different problem. What industry in particular and the country generally want to know—and honestly I do not pay much attention to the currency experts in these matters—is the kind of general policy behind this matter. They do not ask for detailed explanations. A statement on a given day of what the assets and liabilities of the fund may be is not worth much to anyone. They would like to know the sort of general policy the Government have been following with regard to the Exchange Equalisation Account over a period in order to get things straight, and more or less the way in which they have been doing it, and how they have protected industry and exchange in the process. People would be much more interested to know that than they would be to know the mere machinery details.
We have had a great deal of discussion here to-day on a lot of detail. It is

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worth while considering the industrialist's point of view. He regards all these currency questions and what they produce as an unnecessary interference with his business and production, and he looks anxiously forward to the day when all these things will not interfere with him. If you look at the increase which has taken place in the demands of these funds you will find that, as the tally of gold has been mounting up throughout the world, there has had to be more and more protection for it. I shall not go into details to show what one ought to do, but it appears to the ordinary man, and particularly to the industrialist, that the remedy is essentially a political rather than a financial one. He hopes, that, above all things, the Government will direct their attention to throwing off the shackles on international trade because he firmly believes that if they can do that all other things will follow.
6.15 p.m.
Mr. Arthur Henderson: I can assure the Chancellor of the Exchequer that I have no desire to criticise the proposal which he has made. I gladly welcome it in so far as it strengthens the Exchange Equalisation Fund because, like the hon. Member for Huddersfield (Mr. Mabane) I hope and believe that it will give an indirect measure of assistance to the franc. Unlike the hon. Member, however, I do not consider that the franc has been weakened as a result of any action taken by Socialist legislation in France. In so far as it has been weakened it is, according to his own argument, the direct result of anti-Socialists seeking to avoid their social and patriotic responsibilities by transferring their credits to another country. So far as the increase of this fund will assist and strengthen the franc, I am sure that hon. Members on this side of the Committee will be glad to support it.
I was also glad to hear the Chancellor of the Exchequer state that in future there will be a measure of publicity in respect of the fund. I gather that hon. Members who have spoken, and especially the hon. Member for Oxford University (Sir A. Salter) have had personal experience of the working of the fund. I had personal experience of its reactions in the United States of America during the 12 months following its establishment. It fell to my lot to be in New York about six months
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after the fund was established and quite a number of Wall Street financiers and other people interested in its working took the view, as expressed by the hon. Member for Oxford University, that the object of the fund was to enable the British Government to take a mean advantage of the American competitors of British exporters by pegging the pound at such a level as to permit or enable British exporters to have an advantage over American exporters. We know that to be unsound and untrue, but owing to the veil of secrecy that has been wrapped round the fund it was impossible for me to give any explanation of it at that time, because I knew nothing about it. I am sure from my own limited knowledge, however, that it had a very unfortunate effect on wide circles in the United States of America. It is to be hoped that as a result of the measure of publicity that will now be given to the fund that objection will no longer apply.
I was very interested also to listen to the Chancellor of the Exchequer expounding the historical background of this vexed question of exchange. He pointed out that before the War the principal cause of exchange fluctuation was economic, largely due to the desire to move balances from one country to another. He admitted, in reply to an interjection from these benches, that in the post-war years one of the principal causes had become political. I was very interested to hear that admission, because my mind went back to 1931. Whatever may be the differences of opinion in this House as to the financial and economic situation in which we found ourselves during that year, and whatever may be the differences of opinion as to the causes of that particular situation, I have never heard any responsible member of the Government admit that the causes of the immediate crisis in August or September, 1931, were due to causes over which the Labour Government at that time had no control.
We have been told that when there is a desire to remove short-term loans from one Capital to another, that is done through the medium of the gold exchange. That was exactly the position in 1931. Hon. Members will recollect that in June or July of that year there was a political unsettlement in Europe and as a result many people in France, Belgium, Holland and other European countries desired to withdraw their credits from this country.

1699
Many of the bankers in this country who had received those deposits from their foreign customers had in turn loaned the money to Germany on long-term credits at a higher rate of interest, and as a result it became necessary for them to meet their obligations by exporting gold, and that led to an outflow of large quantities of gold during those months. No Government under the present system of banking in this country can be held responsible for that particular chain of incidents. The Government of this country does not control the discount houses in the City, or the Bank of England, or the joint stock banks. Therefore, no Government under the present system can be held responsible, because it has not the control.
If that is the case under the present National Government it certainly was the case under the Labour Government of 1931. Therefore, I hope that in future, when the party on this side of the House have taken the places of right hon. Gentlemen on the other side and if we get into another financial crisis—[Laughter]—similar to the one that we are facing at the present moment; it is not the Labour Opposition which has come to the House and asked for another £200,000,000, it is the National Government who are asking for it. Therefore hon. Members laughed a little too early. They did not allow me to finish my sentence. When the next Labour Government find themselves in the same position as the National Government find themselves in at the present time and come to the House to ask for additional credits in order to permit them to deal with a problem such as we are facing to-day, I hope that the present Chancellor of the Exchequer, when he speaks from this side of the House, will adopt the same generous attitude as was adopted by the right hon. Member for East Edinburgh (Mr. Pethick-Lawrence), who spoke to-day for the Opposition.
May I endorse what was said by an hon. Member who spoke earlier from this side as to the need for international cooperation on this question. The Chancellor of the Exchequer stated in reply to a question that his policy was in line with the policy of the United States. I understood him to say that he was following the line of policy which was taken by the United States Government. I should
1700
like him to explain that a little more fully. It is not merely a question of following the United States. I should like the Government to co-operate with the United States. It is common ground that the tripartite stabilisation agreement in September of last year between the British Government, the United States Government and the French Government was to some extent a success. It was only a partial success because it only dealt with the problem partially. Could not that co-operation be extended to cover the questions which are now beginning to obtrude themselves in the international and economic sphere?
I hope that the intention of the Government is not merely to obtain some sort of fixation of the price of gold. The only country in the world which at the present time has a fixed price of gold is the United States of America. The fact that we have this situation is clear evidence as to the lack of co-operation between the United States Government and our own Government on this particular matter. I hope the Chancellor of the Exchequer will assure the House that he will not only follow in the lines of United States policy but that he will enter into active co-operation with the United States Government in order to deal with this very vexed question. At the present time the United States, Great Britain and France own between them more than two-thirds of the gold supply of the world, and I should have thought that one solution would be to consider whether it is not possible, instead of sterilising gold, to make some use of it through an international bank. A very distinguished member or former member of the staff of the Treasury wrote a very interesting book some time ago on the best way of dealing with this question from the international point of view through an international bank. While that may seem idealistic in these days, I believe that in days to come we shall have to face up to some sort of an international bank superimposed over the various national banks, of the civilised world.
I hope that the Chancellor of the Exchequer will be able to give that assurance to the Committee, because some of us attach very great importance to the value of co-operating with the United States on this particular question. In so far as we on this side of the Committee

1701
have found it possible to give partial support to the proposal for which the right hon. Gentleman is responsible, I hope that in the spirit of generosity which characterises him he will be able to give that assurance to us.
6.28 p.m.
Mr. Harold Macmillan: I think the Chancellor of the Exchequer must congratulate himself on the course of the Debate, which is largely due to the skill and clarity with which he introduced the Resolution. I never heard a more masterly treatment of this difficult subject, and I think all of us felt that for a few moments we understood it. It looked in the earlier stages as if the Debate would fade out in an hour or so, because of the skilful explanation given, but a few economists have revived the Debate and, as always, we have had the right hon. and gallant Member for Newcastle-under-Lyme (Colonel Wedgwood), who can be reckoned on whenever the word "gold" is mentioned. I was delighted with that part of his speech where he represented the Government as having embarked on a vast Birshirgian gold pool; in fact that this Resolution was to promote a kind of punter's paradise.
I should like to put two or three questions to the Chancellor of the Exchequer. He said that the first and primary object of the fund was to check undue fluctuations of the exchange. It is true that at the beginning of this fund its main purpose was to stop fluctuations due to speculation or similar causes. It was not intended to control the general trend of exchange due to natural causes, but to control minor fluctuations due to speculation or otherwise, which largely become mixed up with other causes. He explained the movement of capital for political and other causes, but I hope we shall not fall into the error—I am sure the Government do not intend to fall into the error—of trying to prevent fluctuations of exchange when those fluctuations are right and natural.
There has been some discussion as to the movements of the franc. We must be careful lest in our anxiety to get the benefits of stabilisation we ultimately get into the shackles of stabilisation, as we once got into the shackles of the Gold Standard. In the tripartite agreement the three countries agreed that, given certain conditions in the world and in their own
1702
country, such and such should be the appropriate parity between the currencies. Obviously, the appropriate parity must depend on how these countries are conducting their internal affairs. The French Government have chosen to embark at home on a certain social and industrial policy which will have important effects. I will leave out altogether the flight of capital because it is frightened by Socialism; that is a minor effect, and probably will be transient and can be dealt with satisfactorily. But if the 40-hour week policy, with other social reforms, and a rise in wages, is carried into effect, it must mean that the internal costs of production in France must rise and, therefore, the appropriate parity which was right in September will not be the right and appropriate parity in March unless England and America equally carry out the same social programme. In other words, the franc ought to fall, and any attempt to prevent it falling in such circumstances would be a mistake. Exchange should in such circumstances be allowed to do what it is supposed to do, represent the exchange of goods at the purchasing price of parity between different countries.
In an interesting speech the hon. Member for Oxford University (Sir A. Salter) suggested that there might be a half-way house, in what seems to be a dilemma. Either you will have to give up the idea of controlling these fluctuations and give a perfectly free exchange—perhaps the world will go back to Free Trade—and if you do then you are at the mercy of the speculator and have all the difficulties which the fund was framed to deal with, or the alternative is to have fixed and permanent stabilization—and that is equally dangerous. What we want, and I think it is what the hon. Member for Oxford University suggested, a series of temporary stabilisations at currency levels agreed upon and which properly represent the purchasing power at parity of the different countries. If the bank of international control or the three members of the tripartite agreement could work this out—could work out a co-operative management of world monetary policy—they would avoid on the one hand the disadvantages of absolutely uncontrolled exchanges, and, on the other hand, would avoid what a lot of people in industry to-day equally fear, a fixed stabilisation which will produce the same effect in this

1703
country as was the case when we were tied to the Gold Standard. A series of temporary agreements stabilising exchanges for a year or two, allowing the trader to make his deals knowing what currency prices are going to he, but still allowing for the internal policy of countries to be reflected properly as they should be on the exchanges, is the most hopeful plan on which the world can embark.
Of course there is mixed up with it something which is very different from when the Exchange Equalisation Fund was first introduced. The Chancellor of the Exchequer mentioned it but slid over it with Treat skill. He said that if we do not vote the money we may have to reverse the whole policy of monetary expansion which has saved this country since 1931. Incidentally we only embarked on this policy in 1933, that is after two years of strong pressure from independent Members, when we were still under the leadership of the Governor of the Bank of England and carrying out a policy of deflation, when unemployment rose to the highest level known in this country, 1,000,000 higher than in 1931. We have abandoned, and I hope finally, that deflationary policy. But it is not absolutely logically necessary that a policy of monetary expansion should be linked up with a policy of buying gold at any price. There I agree with what has been said during the Debate. It is perfectly clear that it is an intolerable position, and one that the world cannot permanently maintain. You may get a situation in which so much of this unwanted metal is produced that nobody could possibly require, when the world would really be alarmed at the thought of having to go on paying for it in goods and services at fancy prices. But that does not mean that it would automatically condemn itself to a policy of deflation and gradual decline. That is not so.
I think the Chancellor of the Exchequer and the Government are right, having in mind as they must have this fundamental proposition in the present situation, that there is nothing they can do except to prevent a sudden and disastrous fall in the price of gold by their policy. That does not mean that it is necessarily right as a permanent policy, but it is the only thing they can do at
1704
the present time. They have to restore confidence to the world and I think it is the best thing they can do in the present circumstances. I hope that the Government will lead the world in a policy of a series of temporary stabilisations, getting the advantages of temporary fixation, without the rigidity of the old gold system, and in a policy by which we shall ultimately and finally either increase the use of the existing gold in the world, increase its credit structure, increase its potential wealth, or find another satisfactory method of conducting its currency and monetary policy without being tied to gold. I think it is agreed that the policy of the Government is the only one which can be pursued in the present circumstances, and the character of the Debate has shown that in the general view of the Committee the Government have taken the only right and proper course.
6.39 p.m.
Major Hills: I agree with the hon. Member for Stockton-on-Tees (Mr. Macmillan) that there must be a certain flexibility about exchange values, but I disagree with him that the tripartite agreement is of necessity too rigid. I believe it can be worked with all the flexibility which we want to see in it, and that it will allow a fall of the franc, which I believe is imminent, to a lower level. I would point out to the hon. Member that although exchange stabilisation is good and that no one wants to see a sudden fall in the financial values, the tripartite agreement is to settle the external values of the £ and the dollar. What we want for the benefit of industry is stability in the internal value of the £, some stability of prices, continuity in the value of money and not the wide fluctuations which we have had in recent times. But that is by the way.
The Chancellor of the Exchequer told us that one reason for increasing the amount of the Exchange Equalisation Account is to buy gold. I agree that gold is wanted by the Account. If sterling is bought in New York or Paris we have to redeem that sterling in gold, and so the account requires a certain amount of gold. But I am not sure that the Chancellor of the Exchequer's speech stopped at that requirement. He made a speech of extreme interest and far-reaching importance. He dealt with the whole relation of currency with gold. May I con-

1705
gratulate him on one thing, and that is on the publicity which will now obtain as to the affairs of the Exchange Equalisation Account? The secrecy has done harm. It has given rise to all sorts of rumours, and a certain amount of information which has leaked out has been distorted. The truth and the whole truth can do nothing but good.
But when the Chancellor of the Exchequer said that the Exchange Equalisation Account wants gold I want to ask two questions. If we want gold now why did the account last December get rid of £65,000,000 of gold to the Issue Department of the Bank of England? It got rid of that amount of gold. And why, when all the world is getting out of gold do we want to get into gold? The Chancellor of the Exchequer told us that a marked feature of modern financial conditions was that people who were afraid of changes in the value of their money preferred to hold their money in sterling rather than in gold. Sterling now stands in a stronger position, and its value is regarded as more certain than the value of gold. That has happened since we went off gold in 1931. We are a fortunate country. We did not mean to go off gold, we were forced off gold, and we thought dreadful things were going to happen. Suddenly we found that they did not happen. But why, when the world is going off gold do we want to get into it? Is it a good investment?
We want gold for the tripartite agreement. We have to hold enough gold should there he an unwonted fall in sterling. If sterling is bought in New York or Paris we are under bond under the tripartite agreement to redeem our currency in gold, and we must have enough gold for that purpose. At the moment the opinion is that sterling is overvalued, and there may be a necessity to support sterling. Then of course, as the hon. Member for East Aberdeen (Mr. Boothby) said, there may be an adverse balance of trade and we want gold to pay for that adverse balance. I am not afraid of an adverse balance of trade. I am of the same opinion as the right hon. Gentleman opposite. I do not want to see this country go back to the Gold Standard, for I believe it might well be disastrous for it to do so. If this money is to be used to buy gold at the price of 140s. a fine ounce, it is really
1706
a corner in gold between this country and New York. There is nothing magical about the price of 140s. a fine ounce; a short time ago the price was 142s. and now it has fallen to 140s., and the world has not come to an end.
Let hon. Members consider what is happening. I understand that some South African mining companies are refraining from working their first-rate ores and are working their second-rate ores, in order to take advantage of the high price of gold and to hold back the first-class ores until a time when gold falls to something like its old price. Moreover, the Soviet Government is shovelling out all the gold it can. Russia has now come into the market as a very big producer of gold. According to Messrs. Montagu's figures, Russia's production in 1936 was something like £56,000,000 sterling, taking the price at £7 a fine ounce. If it were the case that in return for this gold we exported manufactured goods to Russia, I should welcome it, but I am not sure that it works out in that way.
I heard the speech of the hon. Member for East Aberdeen: stands Aberdeen where it did? I have heard him declaim against the Gold Standard, and now he tells us that if the gold price is allowed to fall, there will be deflation. I could understand that if gold were the basis of credit, but our currency is not based on gold. Moreover, gold that is bought by the Exchange Equalisation Account is sterilised and does not come into the market or affect the price level. It goes from one coffer, the mine in Russia, to the other coffer, the cellar of a bank; there it is equally sterilised, and I do not see how it affects the price level.
Mr. Boothby: I do not want this country to go back to the Gold Standard again, and I do not want to see deflation, but I want to see gold used as a method of obtaining credit expansion which, I think, is required in the world, and of which, I think, there is not enough. I am afraid that if the price of gold is reduced, we shall go back to the old deflationary game, which some people are only too anxious to play.
Major Hills: I do not see how gold can be used as a basis of credit unless the country possessing the gold is on the Gold Standard. After the Macmillan Report, nobody believes that gold gives value to

1707
an inconvertible currency. Gold has certain very obvious uses, but except for countries that are on the Gold Standard, gold is not necessarily a basis of credit. The hon. Member for East Aberdeen spoke of foreign loans. One thing that we wanted under the pre-War system was to export manufactured goods, and I suggest that that is still one of the great uses which foreign loans possess. In any case, I am very glad that the hon. Member does not want this country to go back to the Gold Standard, although I find it difficult to understand why he wants to keep up the price of gold, because I cannot see that it affects the price of goods. The value of gold, like that of any other commodity, goes up and down, and I do not want to see an artificial price for gold.
I speak subject to correction by the Chancellor, but I think there may be some other object in putting gold into the Exchange Equalisation Account. In an article in the "Times" recently, it was stated that gold had got some mystic quality. That is true. It has a psychological, sentimental, mystic value, and one cannot disregard that, because it carries weight. Gold is indestructible, beautiful, and easily transportable, and it is always received with thankfulness. It has a large part to play in the world's economy, but let us not get the gold obsession to the extent that modern novelists have the sex obsession. Although we have definitely left the Gold Standard, there seems in be a sort of clinging to gold as though it possessed a value which it does not possess.
I listened to the admirable speech of the hon. Member for Oxford University (Sir A. Salter). I wish he would write a book: "Gold, its Cause and its Cure." It is obvious that gold must always be kept in order to meet emergencies, and it will always play its part in the equalisation and the stability of world currencies; but when we are asked to go beyond that and to treat gold as the basis of credit, I do not see how it can be done, unless we go back to the old, unregulated, unmanaged Gold Standard or a Gold Standard under international management, of which I see no chance whatever. I believe that each country, it may be for the time being, has to keep its currency stable in terms of commodities, and to keep continuity in the value of money. In the achievement of those two great
1708
objects, which keep business and employment steady, the Gold Standard would not be a help but a disastrous impediment.
6.54 p.m.
Mr. G. Strauss: During the speech of the Chancellor of the Exchequer, I asked the right hon. Gentleman a question to which he gave me a reply which was inaccurate. That may have been my fault, because I may have put the question in such a way that he did not understand it properly; but I would like to repeat it, with the request that the Financial Secretary when he replies later on, should give me an answer. When the Chancellor was informing the Committee that he intended to give more publicity to the transactions, or at any rate to the position, of the Exchange Equalisation Account in future, he said that he would give a statement of the position of the Account, together with a statement of the profit or loss sustained by it, to the Public Accounts Committee. I asked whether that statement of the profit or loss could not be given to the House and made public, it might be after a reasonable period, and the reply of the right hon. Gentleman was that this figure is now given.
The Financial Secretary to the Treasury (Lieut.-Colonel Colville): I think what my right hon. Friend said was that the fact that there had been a profit had been announced to the House.
Mr. Strauss: Perhaps that is how the misunderstanding arose. I asked whether the figure could not be given and I repeat that question now. I see no reason why, after a reasonable period has passed, the public should not know whether its money has made a profit or loss in the transactions made in order to keep the exchange at a stable figure. The Chancellor's statement to-day was as clear as usual, but he made it as though he were merely proposing some technical adjustment to the Exchange Equalisation Account which arose out of circumstances of the moment, but in which there was no great significance and to which no undue importance should be attached. Indeed, the right hon. Gentleman did not mention—or if he mentioned it, he certainly did not stress it—the whole question of the position of gold in the world to-day, and that the obvious object of this increased amount which is to make it available for the purchase of

1709
greater quantities of gold. He did not refer to the fear which has sprung up during the last six months that gold may be devalued, and that it is the obvious object of the Government to prevent that devaluation by buying all the gold that is put on the market. Therefore, I think we are entitled to accuse the Chancellor of keeping back, in his explanation to the Committee, the most important matter concerning the proposal which the Government have put forward. I do not think the Government have been quite honest to the Committee.
I ask the Financial Screetary why this proposal is put to the Committee in this remarkable manner? What exactly is the urgency in the matter? On the last occasion, when the Account was increased from £150,000,000 to £350,000,000, the proposal was included in the Finance Bill. The Finance Bill for this year has not been printed very long, and I would like to ask whether anything happened between the printing of the Finance Bill and last week that made necessary this increase in the Account. It may be that the explanation is to be found in the situation in France. I do not know whether that is the case, but if it is, we ought to be told. It may be that the fear of a devaluation of gold has made it more urgent that the Government, having decided on the policy of keeping up the price of gold, should implement that policy as quickly as possible.
There may be another reason. At the Imperial Conference, did the representatives of South Africa, who naturally have the interests of their mining concerns at heart, put any pressure on the Government to bring forward this proposal very quickly? If the world fear of a devaluation of gold became a reality, it would, of course, hit the profits of the South African mines considerably. Did the representatives of South Africa, at the Imperial Conference, exert pressure on the Government to bring forward this proposal as quickly as possible? If that was not the sole reason why the proposal was brought forward, was it partly the reason?
The Committee should not consider this proposal as just a technical arrangement owing to certain unimportant causes, but should look at it as significant and symptomatic of the growing instability of the world financial position. One could quite well measure the instability of the world financial position
1710
by the amount provided by this House for the Exchange Equalisation Account. Until 1932, owing to comparative free trade in the world and the vast amount of money which was being lent by England and America to Central Europe, there was no very great instability; countries were on the Gold Standard; and there was no need for any such fund to be set up. In 1932 the fund became necessary, and it was started at £150,000,000, which has been raised successively to £350,000,000 and now to £550,000,000. There is no reason to believe, in spite of the naturally optimistic statement of the Chancellor, that the fund has reached its limit.
Why is the financial situation becoming such as to necessitate the increase in the fund? What is it in the world financial position which has brought this about? Nominally it is, I will not say too much gold, but a severe maldistribution of gold. If the gold were equally distributed among all the countries of the world, it would not be too much to form a proper credit basis for the industrial borrowers of money. But the situation is not that. Gold is accumulating in the United States and to some extent in this country, because of the rapid deterioration of the world situation. Free Trade is becoming less, foreign lending is being gradually abandoned, because there are so few credit-worthy borrowers, and because such a large part of the world is using all its resources in preparing for war and no country likes to lend money when it is to be used mainly for war purposes.
This situation has become acute. Gold has been drained from most countries of the world into the vaults of a few countries, the price has been forced up—it is so high that more and more gold is being produced in South Africa, Russia and elsewhere—and the financial world is fearing that sooner or later devaluation of the price of gold must come about. This fear, on top of the other instabilities which exist, has brought about a state of affairs in which the big financial interests of various countries of the world are spending a great deal of their time and their energy in transferring their money from one currency to another currency, from gold to currency, and from currency back to gold, and so on. It is a pretty picture, and a serious reflection on capitalism is presented to us by this constant and frantic transfer of money from one country to another in the hope of

1711
avoiding partial or complete loss. That is made worse by the usual crowd of speculators—commercial banks, private individuals and so on—who come in and try to swim with the tide and make a little extra profit. As a result of this position—for which the Government as a government are not responsible, but for which capitalist finance and organisation are definitely responsible—the Government can either allow gold to devalue, by refusing to purchase any more, in which case there is likely to be a considerable contraction of trade and the upward industrial curve may come downward very quickly. If they refused to buy more gold, America would be likely to take a similar line and down goes the price of gold and down goes the price of commodities——
Colonel Wedgwood: Why?
Mr. Strauss: If the right hon. and gallant Gentleman desires an explanation I should have thought that it was simple. The rise in the price of gold which took place in recent years coincided with the rise in commodity prices.
Colonel Wedgwood: Surely the rise in commodity prices was due to demand? Is there any demand for gold?
Mr. Strauss: I do not want to argue the case with the right hon. and gallant Gentleman. It is a matter on which there are differences of opinion, and one could go on arguing this for a long time. But may I put it like this? It is definitely the view of the commercial world in America and this country that if there is a fall in the value of gold, it will seriously affect the general level of commodity prices. That may or may not be correct, but the fact that that fear exists suggests that commodity prices would fall. Anyhow, confidence would be severely shaken. If the Government did not increase their fund, America probably would have to take the same line, and there is a serious risk that the present industrial prosperity here and elsewhere would come to an untimely end. The alternative is for the Government to say that they are prepared to purchase gold; to increase the fund from £350,000,000 to £550,000,000 and allow the industrial prosperity to continue for some time, or maybe increase. But in my view that will be only a temporary respite, because all the forces which are
1712
making for a final fall in the value of gold are continuing and, indeed, increasing in vehemence.
The production of gold, in continuing to be very profitable, will increase. There is no likelihood of the distribution of gold becoming better within a year or two than it is at the moment. All the signs show that it is likely to accumulate even more in the future than in the past in the vaults of one or two central banks, and before very long the pressure of events—the increasing gold supply particularly—will make it inevitable that the value of gold will have to be lowered. One cannot go on for ever buying a commodity at an artificially high price, and it certainly is artificial at the moment. If that happens—it may be at a time when the prosperity curve is starting its downward course—the effect on world trade will be very severe indeed, much more severe than if the purchase of gold at the present price were abandoned and a lower price were agreed upon. So that what the Government are doing is to postpone the evil day. They say, "We will go on buying gold and continue the existing level of prosperity." But by postponing the evil day they are making the final day of reckoning very much worse, because there will be larger quantities of gold available then, and the effect on world trade of a fall in the price after prosperity begins to decline, will be very much worse.
Mr. Hopkinson: The whole of the hon. Gentleman's argument seems to be based on the supposition that the Exchange Equalisation Account is used exclusively for the purchase of gold. Is there any evidence that that is the case?
Mr. Strauss: I do not say that it is used exclusively for the purchase of gold. It has been used in the past, and will, to some extent, be used in the future for ironing out day-to-day fluctuations, but I think that it is perfectly clear from what the Chancellor said, from the discussion in the House to-day and from the well-known fact that there is over-production of gold at the moment, with gold being flung on to the world market by owners of gold everywhere, that this increase in the fund will inevitably be used very largely for buying up the gold which is being thrown on the market. There are not many people in the House who can doubt that.

1713
The proposal of the Government to-day is mainly a device to afford an artificial prop to a serious and deteriorating monetary position. By doing that they are postponing the evil day, which will be very much worse for the postponement. I cannot believe, as the right hon. and gallant Member for Ripon (Major Hills) believes, that there is some half-way house or some method by which we can get over this present disequilibrium which exists, by which we can go on to normal prosperity without continuing and recurring crises. All indications show that these crises will continue. All indications show that the crises are likely to become worse as long as the world's commerce is left to the play of what are called natural forces, but really are private interests, and they will continue until the world's commerce is deliberately organised by mankind for the benefit of mankind.
7.15 p.m.
Sir Walter Smiles: The Government ought, I think, to be thanked on behalf of the exporters of this country for their conduct of the Exchange Equalisation Account. Some of the speeches made from the benches opposite would almost make one believe that it was a disgrace to help the exporters of this country. I heard the remark that we were taking an unfair advantage of America. When the Japanese yen fell and the Lancashire cotton industry for six months was nearly wiped out, we did not say that Japan was taking an unfair advantage of us. When the South American exchanges fell at a time when great quantities of textiles were being sold by this country to South America, we did not say that the South American countries were taking an unfair advantage of us. We sympathised with those countries and hoped that they would soon he in a stable position again. I think the manner in which the Government have conducted this fund has been productive of great benefit to British exporters.
As the last speaker said, the fund is being used for the purpose of ironing out difficulties and although the currency of a country may fluctuate a great deal over a considerable period, what affects exporters even more is the question of how they will be paid in three months, six months or a year. Many of my friends were owed considerable sums in South America. They had sold textiles, each
1714
perhaps to the value of £1,000 or thereabouts, and even at the end of five years had not been paid. Only last year a friend of mine told me that he had been paid, but only to the extent of £300. There can be no doubt that the fund has helped considerably. I think we still do more business with India than with any other country in the world. One remembers when the Indian exchange jumped from is. 9d. in 1919 to 2s. Ind. in 1920. There were a number of bankruptcies, and it became impossible to sell goods to India and to get the money for them. It was not that the Indian people did not want to pay. They could not pay, with the exchange in that state. Since then, thanks to the efforts of this Government and the Indian Government we have managed for 15 years now to keep the Indian rupee stable within a few fractions at about is. 6d., and it has been a great benefit to trade between this country and India both ways.
Some of the remarks which have been made about the French franc have been rather unfair. Before the War it stood at 25 to the £; in 1924 it had jumped to over 200. Since then it has come back. The first time the world began to lose confidence in the franc was at the time of the Stavinsky scandal, and it is unfair to the present Socialist regime in France, which came into office only 14 months ago, that they should be blamed entirely for that lack of confidence, even though politicians in France have not an extraordinarily good repute among the workers of that country. Another speaker in this Debate said that when he was in America he found that opinion in Wall Street was that we were trying to take an unfair advantage of the Americans. I, also, was in America recently, but I did not go much to Wall Street. I went to see the yacht race; a good many American financiers took some time off from their offices for the same purpose and I met them in a personal sort of way. The only insult that I heard hurled at this country, if it can be called an insult, was the remark that England was a very wise old country. As a matter of fact I think people in America in 1928 thought they were on the top of the world. Perhaps to-day, in view of the unemployment insurance and the social services which President Roosevelt is going to introduce, they think they may learn something from this country.

1715
I could not follow the last speaker in what he said about gold. I cannot believe that the South African mining magnates, who produce the largest quantity of gold in the world or even Soviet Russia, which produces the second largest quantity, had any effect upon what the Government have done or intend to do with the Exchange Equalisation Account. But I do believe in the desirability of getting back to the position as it was in 1913 when it was possible for an engineer in this country to open his pay envelope on a Friday evening and find a few golden sovereigns in it. If that were the case all over the world, it would be better for the exchange equalisation of the world, and it would be better for trade all round. I look forward with optimism to a return to that position when the British sovereign will no longer be looked upon as a curiosity but a coin of everyday use.
7.21 p.m.
Mr. Bellenger: I think the hon. Member exaggerated a little when he spoke of the pre-War engineer opening his pay envelope to find "a few golden sovereigns" in it. From my knowledge of pre-War wage rates, I should say the engineer in those days who found more than two golden sovereigns in his pay envelope would think that the boss had made a mistake.
Sir W. Smiles: What about overtime? I paid them, and I know.
Mr. Bellenger: Many expressions of approval of this Resolution have been heard this afternoon, but I think they have been due more to the charming manner in which the right hon. Gentleman the Chancellor of the Exchequer introduced the Resolution than anything else. The right hon. Gentleman has a very disarming manner when he is presenting legislation to the House, and for my own part I am never more alert than when I hear the right hon. Gentleman introducing a Measure in that apparently simple, facile and naive manner which he adopts to-day. On these occasions I think it is necessary to examine with particular care the proposals which he puts before us. The right hon. Gentleman said the purpose of this Exchange Equalisation Account was to check undue fluctuations in the value of sterling. If
1716
the checking of those undue fluctuations were for the purpose of fostering British trade, I should be more prepared than I am to support this Resolution but I have a suspicion, supported by a certain amount of evidence, that this tremendous increase in the Account is not principally for the purpose of fostering British trade, but is rather for the purpose of enabling financiers and speculators to transfer capital more easily from one country to another and to make profits in the process.
We must not shut our eyes to the facts. Perhaps as the result of a little intelligent anticipation, I put a question recently to the right hon. Gentleman, and I feel a certain sense of grievance about it. I asked him whether he thought that the £350,000,000, which was then the statutory limit of the Account, was sufficient and he answered confidently "Yes." Yet suddenly the Government propose to add a further £200,000,000 to it. I think we are entitled to know what is the reason for the sudden change in the Government's policy. The right hon. Gentleman on Friday said there was no change but it is evident that there has been a change and I am inclined to think, taking into account the heavy speculation in gold mining shares that has been going on, that this increase of £200,000,000 is for the purpose of maintaining the price of gold round about its present level. I have not the slightest doubt that financial speculation is all a part of the capitalist system and that part of our invisible trade balance arises from it.
I agree with the hon. Member for Ecclesall (Sir G. Ellis) who said that the traders of the country are not so much concerned with speculation in gold shares, as with the original purpose of this fund. That original purpose was to level out fluctuations in the price of sterling, so as to facilitate British trade. If we had any confidence that the fund was mainly serving that purpose we would be more satisfied. The right hon. Gentleman told us that he was advised that the fund was able to withstand all the demands for gold that might be made upon it. He spoke confidently, but what evidence has he to substantiate that statement? He he any knowledge of, or can he give an estimate of, the amount of short-term foreign capital held in this country? That, he has admitted, is the

1717
danger point in our financial system. He told us of huge withdrawals which have taken place at various times and it is significant that the President of the United States has also shown some concern over this "hot money" as it is called. If the right hon. Gentleman would be as up-to-date as the authorities in the United States and try to estimate the amount of this short-term foreign capital in this country and give us that information, we would be better able to judge of his statement that he has sufficient gold in this country to withstand all the demands that might be made upon him.
The right hon. Gentleman told us that on 30th March last there were in round figures 26,000,000 fine ounces of gold in the Exchange Equalisation Account and 73,000,00 fine ounces in the Issue Department of the Bank. The hon. Member for Mossley (Mr. Hopkinson) asked my hon. Friend the Member for North Lambeth (Mr. G. Strauss) how he knew that the object of this increase was the purchase of large stocks of gold. We do not know accurately, because the Chancellor of the Exchequer has not given us information on which we can base an opinion but it is interesting to note that, according to the right hon. Gentleman's figures on 30th March, calculated on a basis of £7 per fine ounce, the gold holding of the Fund represented £182,000,000. There we have some idea of the gold holding of the Equalisation Fund. At that time over 50 per cent. of the £350,000,000 was held in gold and I am inclined to think that that percentage will increase as time goes on. We know the tremendous amount of gold which is going and is likely to go on to the market and if we are to keep the value of gold round about the present figure, we shall have to purchase those stocks or agree with America as to the purchasing of those stocks which are thrown on the market.
The right hon. Gentleman also told us that the difference between the present valuation of 85s. per ounce and the actual price paid by the Issue Department was covered by the Equalisation Account; that eventually when the stocks of gold in the Bank were revalued the profit would be transferred to the Equalisation Account, and that the Account would, in its turn, be wound up and the profit
1718
would then go to the reduction of debt. Has the right hon. Gentleman any idea of what amount of gold will he held by the Issue Department of the Bank when revaluing takes place? If the stocks are large, it is obvious assuming the price of gold to be at £7 an ounce—and it may be even more—that the profits will be considerable and I have no doubt that the country will be grateful for those profits, it they are applied to the reduction of debt. Is it certain that at that time those stocks will be as high as they are now?
I feel that the existence of this fund is a direct incentive to speculation and to the heavy transfers which take place from time to time in gold stocks from country to country. I have a feeling that in certain circumstances the transfer of these gold stocks will be much heavier than has taken place in the past. I do not think that it is right, either in the case of France or of this country, for the prosperity and the security of the people, who, in the long run, are providing the funds with which this Exchange Equalisation Account can be built up. I am very much concerned at the suddenness with which the Government have introduced this Resolution, and I should like to have had a little more information from the right hon. Gentleman. I welcome his statement that he is prepared to give this House and the country more information as to the operations and the transactions of this Exchange Equalisation Account.
In conclusion, I have two questions to ask and one suggestion to make. My first question is, Did any consultation take place with either the South African Government, the United States Government, or the French Government before the right hon. Gentleman introduced this Resolution? The second question is, What is going to be done with the huge stocks of gold which will undoubtedly accumulate in this Account as time goes on? Are those stocks going to be sterilised as they are in America? Here I come finally to my suggestion. It has been said, I do not know with how much truth, that the right hon. Gentleman's popularity in the country among a great many of his supporters is declining, and I have this suggestion to make, that it would assist in regaining a great deal of that popularity if he would decide to convert some of these heavy stocks of gold which he will eventually have, into golden

1719
sovereigns and half-sovereigns, such as prevailed before the War. I believe that psychologically that would be a great advantage for all those fortunate individuals, engineers or otherwise, when they come to draw their pay on Friday evening.
7.33 P.m.
Mr. H. G. Williams: Unfortunately, I did not: have the privilege of hearing the opening speech of the Chancellor of the Exchequer, bit I understand that he has given an undertaking that there shall be more publicity in respect of the Exchange Equalisation Account than has been the case in the past. When this matter was introduced in 1932 by the present Prime Minister, I was one of those who spoke in support of secrecy in regard to the operations of the Account. I was thinking in terms of a fund of a relatively moderate amount at a time when it did look as if a mobile mass of money in the possession of the Government would check certain undesirable features, and if this was to operate with maximum success, on balance, probably secrecy was desirable. But with the very great growth of this fund, first from £150,000,000 to £350,000,000 and now to £550,000,000, it would, I think, be asking too much of the country and the House of Commons to give even to our most competent and most honest Treasury control over such a vast sum to operate without any check from public opinion. Therefore, I think the Chancellor of the Exchequer has been very wise indeed to concede to that sense of public opinion a change in the policy, and I can congratulate him all the more because I took the other view five years ago.
The financing of the Exchange Equalisation Account is the most mysterious financial transaction that has ever taken place. I remember the Debates of five years ago, as to how this money was going to be raised. We all visualised a public issue. There was no public issue. The Chancellor of the Exchequer of the day, the present Prime Minister, took his pen and wrote quickly on a lot of pieces of paper figures which aggregated £150,000,000. It was a sheer piece of credit creation, and there was sufficient faith in his signature, backed, of course, by the Consolidated Fund, which is you and me and all the people whom we represent, to secure that those pieces of paper were exchanged in various mysterious
1720
ways for golden coins and bank credits in other countries. That is, in fact, pure inflation. Then we had the second inflation, of £200,000,000, and now we are presumably having, by the same method of finance, another piece of inflation of £200,000,000. In other words, by the process of credit creation we have produced £550,000,000 out of nothing, apparently. We have only produced it, of course, by altering the value of all the other pounds that were in existence before we carried these transactions through. (An HON. MEMBER: "Capitalism.") No, it is not capitalism. It is the action of the State, not of the individual. If an individual tried to do that, he would go to an unpleasant place called Dartmoor. That is the difference between the State and the individual. All sorts of things when done by an individual are crimes, but when done by the State they are called Socialism and made respectable. If you murder a lot of people, it is called a war, and that is the State in action, or Socialism. All war is Socialism. But I do not want to be diverted——
Mr. Jagger: Nor diverting.
Mr. Williams: I want the Committee to realise that an act of inflation of £200,000,000 at this moment may have in it some risk. Commodity prices are now mounting somewhat dangerously. They have had some check through recent events. The abandoned tax was one, the gold scare was another, and the general European situation was probably another, though the latter to some extent may have stimulated the demand for certain commodities. At any rate, commodities are moving up, and if commodities move up too fast and too far, the cost of living will move up, and we shall be into another period of acute industrial unrest and ultimately an economic crash and widespread unemployment. That has happened before, and there is nothing fresh in these things in this world. We want to guide ourselves by past history as far as we can. I hope the Government are considering this aspect of this problem.
We are to have a little more information on this subject, but we shall never see quite what happens to these Treasury bills. Somehow or another they get into circulation, as a result of which the Exchange Equalisation Account finds itself

1721
in the possession of credits of one kind and another—it may be in the form of gold, or it may be in the form of credits in the central banks of other countries—but as a consequence those very people who place credits at the disposal of the Government in exchange for these pieces of paper, ultimately, through the working round of things, obtain control of credits in our banks. I believe there is a phrase used in the City—"hot money." I think it is used to describe bank deposits which are unduly mobile, which are moved with very great frequency from one financial centre to another, and which are one of the causes of these gold problems that we are now facing.
Where does a lot of this "hot money" come from? It has come out of the Exchange Equalisation Accounts of this country, the United States and France. I notice the hon. Member for Lowestoft (Mr. Loftus), who was approving what I said just now, shaking his head, but surely, if the Government borrow by means of the sale of Treasury bills, they are creating credit, or inflating. I know that the Treasury have sometimes thought, when they were reducing the number of Treasury bills, that they were inflating, but as a matter of fact they were doing the reverse of inflating. If you reduce the number of Treasury bills, you are deflating, and if you increase the number of Treasury bills, you are inflating. The more you borrow, the more you have got in this form of inflation. You create this new credit, you pay foreigners for their gold or for their bank credits, and in exchange they get credits in our banks which they may move about. [Interruption.] We may get gold, but that does not alter the fact that a great deal of this "hot money," as it is called, has, I believe, come into existence through the very operation and action of the Exchange Equalisation Account, and I want to be certain that in what we are doing to-day in building up defences against the trouble with which we are faced, we are not adding to that trouble by simultaneously adding to the strength of the attack.
That is a point of view which, so far as I am aware, has not previously been presented. I am not satisfied—I am not going to commit myself to the statement—that it is a sound point of view, because we are in the realm of experiment. We
1722
are dealing with a problem with which none of us is familiar, upon which no living person can pronounce with complete authority, but it occurs to me that there may be some substance in the argument which I have just presented to the Committee. I present it with some hesitation and some diffidence. I am not asserting that I am right, but I assert that the proposition which I have just made is one which calls for examination, if no more. Here we have this strange situation, of this country and the United States attracting great masses of gold. France is not doing so at the moment, but she may do as soon as she has restored internal confidence. I rather differ from what the hon. Member for Blackburn (Sir W. Smiles) said, that the flight from the franc was due to a certain scandal. With great respect, I think it is due to the fact that the Government of France have passed laws which have sent up the cost of production in France very much. There is no doubt about that, and while it may be a very desirable thing to work a 40-hour week, yet one of the consequences is increased costs, lowered exports, and a tendency for imports to grow when they ought to be checked, and these certainly are some of the causes of the troubles through which they are passing in France.
I was present with a number of other hon. Members of this House in Paris at Whitsuntide, taking part in the International Parliamentary Commercial Conference, and I happened to be privileged to present one of the papers to the conference, namely, that on the future of the Gold Standard. On the basis of that paper, I presented a resolution which deplored the systems of exchange control and of quantitative control of goods which prevailed, and I went on to express the view that a restoration of the Gold Standard at an appropriate parity—I did not want any country to go through sudden inflation or deflation in order to effect restoration—would probably be of enormous advantage to world trade. The curious thing was that after a certain number of amendments and adjustments, primarily for the purpose of assisting the representatives of those countries which have dictatorships, where ordinary public opinion is rather suppressed, we were able to get unanimity on a resolution, the contents of which I have just briefly summarised. There were, I think, alto-

1723
gether over 30 nations represented, and they were unanimous that exchange control is an evil, that quantitative restriction is an evil, and that restoration of the Gold Standard is desirable.
I do not see how those countries which are complaining of their difficulties about raw materials are ever going to get out of their difficulties until they stop inflicting them upon themselves. A system of exchange control is entirely wrong, because what does it mean? It means opening a bank in which you can pay deposits, but in which you cannot cash cheques, and no one with any sense will place capital in any country that has exchange control. Anybody who has any capital there will do his best to get it out. Therefore, all these countries are suffering from the evils inflicted on themselves by the very measures which they are proposing to cure those evils. It really is incredibly stupid that those countries should go on hindering themselves, and then make speeches blaming us for cornering the raw Materials of the world. We have got to help them to adopt the right course, and the restoration of the Gold Standard at this moment, when it is a part of these large equalisation funds in the countries which have the glut of gold, is, as a matter of fact, a much easier proposition than it would have been before those funds existed. I appear to have both praised and done the reverse with regard to the fund, but there it is; it is in existence. It has got to be used, and I hope that there will be the greatest care with regard to its use, having regard to the rise in the cost of living and to the growth of this "hot money."
The hon. Member for Bassetlaw (Mr. Bellenger) said that the object of the Government was to facilitate the operations of speculators. Surely it is the exact opposite. Anything which stabilises the rate of exchange tends to cut out speculation. If any criticism was not very apt, it was that. He went on to suggest that the other object was to assist the people who hold gold mining shares. I do not own any, and I have no interest in that direction, as far as I know, but I would point out to the hon. Member that the largest customer of this country to-day is the Union of South Africa. It is a bigger customer than the Indian Empire. Its vast purchases of British goods, mainly
1724
manufactured, which give employment to tens of thousands of people here, are built up on the prosperity of the South African gold mining industry. From the point of view of employment of great numbers of manual workers, it is worth while to take every risk to make sure that there is not a crash in the South African gold mining industry. If there is a crash, 50,000 or 100,000 workers of this country will lose their employment. I hope that when the Labour party are criticising this bit of State Socialism which the Chancellor of the Exchequer is running, they will criticise it on more valid grounds than those used by the hon. Gentleman. I am not asking the Chancellor to reply tonight to the point I have raised about the danger of the creation of new credits by means of the Exchange Equalisation Account aggravating the disease. All I would ask him is to examine that point with his advisers, and to make sure whether there is anything in it. I hope that I am wrong, but if I am right I trust that due notice will be taken of it.
7.47 P.m.
Mr. Lees-Smith: The Chancellor of the Exchequer opened our discussion this afternoon by giving a careful and fairly complete account of the general features of the Exchange Equalisation Account. We have, however, a complaint to make against his explanation. This legislation is being introduced in unusual circumstances. On Thursday afternoon we knew nothing about it. By Thursday evening something very exceptional had happened. All the week's business was changed, and legislation which is something in the nature of an emergency character is now before the Committee. The Chancellor's speech was not of the nature which that kind of legislation entitled us to expect from him. There must be some circumstances which have led to this change of arrangements, and a speech which merely deals with the principles, details, and history of the fund, and which might equally well have been made a week ago, is not suitable to the present occasion. We do not want great details, but we are entitled to more details than the right hon. Gentleman gave. On that account I wish at the close of my observations to move an Amendment to reduce this sum by £50,000,000, which my right hon. Friend the Member for East Edinburgh (Mr. Pethick-Lawrence) foreshadowed.
The Deputy-Chairman (Captain Bourne): There is one point which the right hon. Gentleman might bear in mind. If he moves his Amendment at the conclusion of his speech before the Chancellor replies, it will very much curtail his reply. Until the Amendment is disposed of the Committee will have before it only the question of the sum. If the right hon. Gentleman moves his Amendment after the Chancellor's reply, the Debate can then go on on the question of the sum.
Mr. Lees-Smith: I thank you for your suggestion, which I shall be glad to adopt. There will, however, be no more debate as far as we on this side of the House are concerned. The Debate has turned not so much upon the reasons for this special legislation as on the long term policy of the Exchange Equalisation Account. It has been clear from the speeches that the two main elements are the increase in the supply of gold and, very closely resulting from that, the situation arising from the policy which is and will be in future followed by the United States. I wish to make a few remarks on that point.
I think that up to the present the United States has this year spent a good deal more than £100,000,000 in stabilising gold. The point which I want to call to the attention of the Chancellor is that, if at any moment the United States decides to decline to continue this process, it not only raises very general considerations but creates also a serious situation for a number of the British Dominions. The hon. Member for East Aberdeen (Mr. Boothby) suggested that we ought to respond to the initiative which is coming from the American administration, particularly from Mr. Cordell Hull, to come to an agreement not only about currency, but about our trade relations in general. The hon. Member has made the proposal before. I may say that I always follow his observations and they seem to me very wise. The position at present is, I gather, that the United States, and Mr. Cordell Hull in particular, is making an offer to try to solve this problem of the accumulation of gold by a natural process, by a reduction in tariffs in the United States followed by a reduction elsewhere, as a consequence of which the problem would be very largely solved, if not entirely eliminated.
Unless we come to some sort of currency agreement, trade can be undermined by changes in currency policy. The facts of
1726
the situation are such that, if one looks at long-term policy, the situation will become more acute, because if we consider the causes of this increase in gold, although some are temporary, others will be cumulative in force in years to come. Undoubtedly one cause of the problem has been the general deflation, with its ancillary results. The effect of that, no doubt, is temporary and has already passed away, but the fact remains that the great volume of gold from Russia has scarcely come on to the European market, and that cause is one which will be a cumulative force in the years immediately in front of us. That is why, it seems to me, it would be wise now, while it can be easily done and this great emergency has not come upon us, to consider the initiative from the United States with a good deal more care than is, at any rate, shown to us in this House.
In all these discussions up to the present—and I note that the proposals this afternoon have come on the whole from the other side of the Committee—the answer has always been that it is other countries which are imposing these trade impediments, and that our country is not mainly responsible. Now we find that the initiative is coming from another country, and coming from another country which, more than any other, is able to control the situation. There are other reasons, of course. Mr. Cordell Hull has made 16 trade agreements. It is well known that in order to fulfil and complete this policy it is very necessary for him to come to an agreement with a great manufacturing country like our own. The problem has been complicated by our obligations to the Dominions, by the Ottawa Conference, the Canadian Trade Agreement, and so on. The position and the interests of the Dominions are now being profoundly modified, apart from the general fact that the Dominions must export outside the British Empire. Apart from that fact, this gold situation is creating a new problem for them.
I have read carefully the article by Sir George Schuster which was referred to in the last Debate. There was another valuable article by Sir Josiah Stamp in the "Times" last Friday on his return from the United States the day before. Both these very careful and experienced authorities point out that, in talking to the administration at Washington, they

1727
found there is considerable disappointment that on this side of the Atlantic we do not seem more oncoming to their initiative. If as a result of the general failure to come to any agreement at all the United States alters its policy in regard to gold, the countries which would suffer most, apart from Soviet Russia, would be Canada, South Africa, and, to some extent, Australia—the British Dominions themselves. It is, therefore, to the interests of the Dominions, taking the Ottawa Agreements into account, themselves now to enter into negotiations—at any rate, to assist in negotiations—which would enable this problem to be solved. Otherwise, it is possible that they may lose far more in the ultimate consequences than they would have to give up by some modification of the Ottawa Agreements. It appears to me that at this moment there is a very favourable situation. It is essential for this country to look forward to a lowering of the tariff barriers in two or three years because, as soon as the trade curve goes downwards and the trade boom comes to an end, we must fill the gap from somewhere, and an increase in our foreign trade will be the line of least resistance. Now we have the United States themselves favourable to the proposal, and we have the Dominions with an element arising which makes it to their interest to take part in this proposal.
Mr. H. G. Williams: Will the right hon. Gentleman say what this proposal is? It is all very vague.
Mr. Lees-Smith: The proposal is to come to an arrangement with the United States for a trade agreement. It has come particularly from Mr. Cordell Hull.
Mr. Williams: But will the right hon. Gentleman tell us what the proposal is? Is it that the Americans should buy more British goods and correct their wrong balance of trade in that way, or sell more American manufactured goods here?
Mr. Lees-Smith: It is that there shall be a mutual reduction of tariffs and that in this mutual reduction the Dominions shall play their part. As has been stated in this House, there is no necessary antithesis between the two things. What I was saying was that, looking forward two or three years, if we fail to take the opportunity which is now offered, due to an
1728
accumulating combination of circumstances, we shall find that we shall greatly regret that the chance has been allowed to go by.
8.2 p.m.
Sir J. Simon: I think all who have been present this afternoon will agree that we have had a very interesting Debate, with one or two speeches in particular which have been full of useful suggestions. Perhaps it would be invidious to pick and choose, but I record my own feelings when I say that I was exceptionally interested in the analysis of the position which was offered to us by the hon. Member for Oxford University (Sir A. Salter) and which was carried further by my hon. Friend the Member for Stockton-on-Tees (Mr. H. Macmillan). The right hon. Gentleman the Member for East Edinburgh (Mr. Pethick-Lawrence) was good enough to say on behalf of those for whom he speaks that the Opposition approve of the principle of our proposal.
Mr. Pethick-Lawrence: No.
Sir J. Simon: I am saving the point as to the reduction of £50,000,000, which is to come later. Judging solely by the first part of his speech, I should have thought his complaint was that the amount we are proposing to borrow is too little. That was the broad effect of his argument, though, of course, for reasons which we all know, he would not be in a position to suggest that the amount should be increased. When he came to the end of his speech and told us that at a convenient moment the Amendment to reduce the amount by £50,000,000 would be moved, I understood him to imply that he and his friends thought we were possibly asking for more than we needed. On that question I wish to be quite plain to the Committee. The right hon. Gentleman quoted what was said four years ago by the present Prime Minister when, as Chancellor of the Exchequer, he asked for the last increase. He said then that he hoped not to ask for more. At least he is justified to this extent, that it is somebody else who is now asking for more. He went on to say that he could not give a pledge that he would not come to the House again, and neither can I give such a pledge.
I invite the Committee to give me authority to this extent because, after considering the matter very fully, I believe this is

1729
a proper and reasonable addition at this time. In the nature of things the future is bound to be uncertain. My right hon. Friend the Member for Keighley (Mr. Lees-Smith) made the point that in my speech earlier in the day I had not specially explained what was the urgency of the matter, and I appreciate that there is justification for saying that my observations were not so expressly directed to the last two or three days. I think, however, that he and the whole Committee will well understand that we came to the conclusion that we should ask for this additional authority now for good reasons connected with the international situation, and I am sure that the very last thing he or anybody would ask would be that we should endeavour particularly to concentrate on one particular quarter abroad rather than another. As the Committee will appreciate, there are times when the movements of funds, very substantial funds, become for the time being exceptionally rapid, and we are now passing through such a time as that, and it seemed to me, and it seems to me now, and I think it will seem to the Committee as a whole, right to ask the Committee to make this provision without any delay.
The fact that this step has been taken has undoubtedly, as my hon. Friend the Member for East Aberdeen (Mr. Boothby) said, been a contribution to the establishment of more confidence, and I think that is a further reason why we should not leave matters in doubt any longer. I must be allowed to say that I thought that my hon. Friend the Member for East Aberdeen, for whose references to myself I am most grateful, was choosing his hero rather oddly when he said, as I understood, that the patriarch Moses was the man who in these matters should be copied and remembered. The patriarch Moses, if I remember rightly, dealt with extreme severity with anybody who happened to worship a calf of gold, and I should have thought there were other persons in the Old Testament whom he would have more naturally selected as his counsellors. I am obliged, also, to my right hon. Friend the Member for North Cornwall (Sir F. Acland), who used a very happy combination of epithets, which I believe were justified, in which he said that the course we were taking was operating both as a sedative and a tonic, which is a useful function for a medicine.
1730
I sincerely hope that in both respects our action will be found to operate with good effect. My right hon. Friend referred to my proposal on the subject of more disclosures, and I must be allowed to say that I am very much gratified to find that my two suggestions have been received with so large a measure of approval. I will carry that matter forward and endeavour to secure that the results in the matter of information are what we intend.
Then the hon. Member for North Lambeth (Mr. G. E. Strauss) made a speech in which, as I thought, he made a certainly unfounded and I felt a rather ungenerous insinuation. He gave us to understand that it was his confident opinion that the reason why this proposal was now brought before the Committee and urged upon it was that pressure had come from the South African Government, and I wish to say here and now quite categorically that there is not a word of truth in the suggestion that that explains in whole or in part our present action. There has been no more pressure from South Africa in this connection than there has been from Soviet Russia. So much for the hon. Member for North Lambeth.
Mr. Strauss: I did not state it. I asked the question.
Sir J. Simon: Then the hon. Member will be very glad, I am sure, to hear the answer.
Mr. Strauss: Very glad.
Sir J. Simon: If anybody did make that insinuation, or suggest that this is a trick on the part of the Government, inspired by concealed motives not revealed to Parliament, the hon. Member will know for certain that there is not one single syllable of truth in it. The hon. Member for Ecclesall (Sir G. Ellis) made some observations as to the suggested extent of the disclosure. It seemed to me that it was not really a suggestion for improving my scheme for disclosure to the Public Accounts Committee, but was really the expression of an opinion, which I thought many hon. Members shared, that from time to time it would be perhaps interesting and of advantage to have a general discussion of this sort on the subject. That, of course, is quite another matter, and I quite understand why they think so.
As regards one or two larger reflections which have been advanced in the Debate,

1731
I do not want, for my own part, to run the risk of making any additional wide and general statement, for the Committee will realise the extreme responsibility that anybody has about this matter, and how a mere turn of a phrase may have reactions or lead to misunderstandings in one quarter or another. Therefore, without going into the matter more at large, but keeping to the practical question of granting this additional authority now, I would say this and I say it more particularly in answer to what was said by my hon. Friend the Member for Oxford University: I do agree that ultimate, deep-seated economic trends cannot be held up and successfully resisted by any artificial interference. I do agree, too, that it is not by rivalry between the different treasuries or nations concerned, but by co-operation between the members of the tripartite agreement and others, that we may hope to bring about a better state of things.
I am glad to repeat what I said at the beginning of the Debate, that I have good reasons for the line I am inviting the Committee to take to-day. It is in accordance exactly with the line of policy of the United States, and I believe that that in itself is a very hopeful feature. I, of course, do not presume to offer them any advice, but I am entitled to make that observation. In answer to what was said by the right hon. Member for Keighley I do not deny at all the connection which does exist between currency policy and trade policy, because undoubtedly they are very closely intertwined. At the same time, when we are considering the subject-matter debated to-day, this very difficult and interesting subject, I do not think it would assist the clearness of our conclusions if we attempted in the last few minutes to turn this Debate into a general discussion of proposals and hopes as regards general trade co-operation between us and other parts of the world.
The hon. Member for Bassetlaw (Mr. Bellenger) asked me several question. In one of them he wanted to be informed how matters appeared to us to stand in view of the quantity of short-term obligations which rests upon us, and the provision which we might be supposed to be able to hold against it. The hon. Gentleman would not expect me to enter into technicalities, which I am trying to
1732
avoid in this reply, but I would observe that there is a certain danger of confusion when one speaks of these short-term obligations to overseas creditors. I know there are references to this subject in the report of the Macmillan Committee, but hon. Members will see on reflection that the claim which could be made upon us by overseas creditors would not be limited to short-term obligations like deposits, bills and things of that sort. We should have to add to them foreign holdings in British securities which, of course, they could, if they were so disposed, sell in the British market and demand the proceeds to be sent away just as easily as in the case of short-term securities.
Mr. Bellenger: I included those in the short-term policy, because, obviously they are liquid debts.
Sir J. Simon: The hon. Gentleman is quite right, and I am not seeking to give him a lecture but only to show that we must be clear on that point. The important thing is to consider whether all those things together are adequately covered. I repeat the answer, which I gave in the House to a question the other day; it is not possible, for technical reasons, to estimate very exactly what the sum total amounts to. Various efforts are made to do it, and I am speaking from the best material available. From such evidence as is available we are satisfied that any increase in our liabilities, that is to say in the last six years, which includes our liabilities to other parts of the Empire, is covered, and indeed more than covered, by the growth of our resources.
There is one further observation. I have presented the proposal as a practical and necessary step which we have now to take, but I have not sought to base it upon ultimate calculations of what, in the long run, may be the nature of our duties and responsibilities. I have not done so for the reason that there is no good ground for adopting the view that this accumulation of gold, at present concentrated in London and New York, is a situation which will always continue. Suppose—here I find myself almost in agreement with the right hon. Gentleman—that the wisdom of the world developed policies which drained back into active international trade, in those countries and areas which at present are not playing their proper part, and encouraged in every

1733
direction, and in the most natural directions, a freer flow of trade; just in proportion as that happened, those areas which at present have sent their gold to us or to New York, would want for themselves, and for their own ordinary purposes, a portion of those resources.
That is the future to which we should work. We ought not to regard ourselves to-day as committed to some particular cast-iron view; we should rather recognise that the present step is necessary in order that we might meet the practical needs of the time, and that all of us should keep in mind that the ultimate development to which we are working is an increase in the general trade of the world and the freeing of barriers which will have the tendency to bring back the accumulated resources to the separate places which naturally need them.
I do not think the Committee would expect me to occupy more time. I understand that it is agreed that at this moment an Amendment will be moved and voted upon. I suggest that £200,000,000 is necessary and I shall resist any future attack on that sum, for the general reasons which I have stated, and I hope that the Committee will be prepared, after the Division, to authorise the full amount.
8.20 p.m.
Mr. Pethick-Lawrence: I beg to move, in line 2, to leave out the second "and fifty."
This is the Amendment which has been foreshadowed, the effect of which is to limit the increase in the Exchange Equalisation Account to £150,000,000 instead of £200,000,000, and I had intended to move it formally but for something which the Chancellor of the Exchequer has just said. At the beginning of his speech he attempted to make a contrast between what he described as my speech and the Amendment which I am moving, saying that my speech indicated that I wanted more than £200,000,000 and the Amendment less. What I said was that, for the immediate purpose, we did not want nearly as much as £200,000,000, but that if the Government contemplated taking gold which would otherwise go to the United States, an unlimited vista was before them, and they ought to come to the House of Commons again before they did so, and demand permission.
Question put, "That the words proposed to be left out stand part of the Question."
The Committee divided: Ayes, 197; Noes, 96.

Division No. 241.]

AYES.

[8.21 p.m.

Acland, Rt. Hon. Sir F. Dyke

Colfox, Major W. P.

Granville, E. L.

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

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

Gretton, Col. Rt. Hon. J.

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

Conant, Captain R. J. E.

Gridley, Sir A. B.

Albery, Sir Irving

Cooper, Rt. Hn. T. M. (E'nburgh, W.)

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

Allen, Col. J. Sandeman (B'knhead)

Courthope, Col. Rt. Hon. Sir G. L.

Grigg, Sir E. W. M.

Aske, Sir R. W.

Cranborne, Viscount

Grimston, R. V.

Assheton, R.

Crooke, J. S.

Guest, Lieut.-Colonel H. (Drake)

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

Crookshank, Capt. H. F. C.

Guy, J. C. M.

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

Croom-Johnson, R. P.

Hannah, I. C.

Balniel, Lord

Cross, R. H.

Hannon, Sir P. J. H.

Barclay-Harvey, Sir C. M.

Crowder, J. F. E.

Harvey, T. E. (Eng. Univ's.)

Barrie, Sir C. C.

Davies, C. (Montgomery)

Haslam, Henry (Horncastle)

Beamish, Rear-Admiral T. P. H.

Davies, Major Sir G. F. (Yeovil)

Haslam, Sir J. (Bolton)

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

Dixon, Capt. Rt. Hon. H.

Heilgers, Captain F. F. A.

Boothby, R. J. G.

Donner, P. W.

Heneage, Lieut.-Colonel A. P.

Boulton, W. W.

Dorman-Smith, Major Sir R. H.

Herbert, Major J. A. (Monmouth)

Bower, Comdr. R. T.

Dower, Major A. V. G.

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

Bracken, B,

Drewe, C.

Hoare, Rt. Hon. Sir S.

Briscoe, Capt. R. G.

Duckworth, Arthur (Shrewsbury)

Holdsworth, H.

Brawn, Col. D. C. (Hexham)

Dugdale, Captain T. L.

Hope, Captain Hon. A. O. J.

Bull, B. B.

Duggan, H. J.

Hopkinson, A.

Bullock, Capt. M.

Dunglass, Lord

Hore-Belisha, Rt. Hon. L.

Burton, Col. H. W.

Eastwood, J. F.

Horsbrugh, Florence

Butcher, H. W.

Elliot, Rt. Hon. W. E.

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

Butler, R. A.

Ellis, Sir G.

Hulbert, N. J.

Campbell, Sir E. T.

Emmott, C. E. G. C.

Hume, Sir G. H.

Cartland, J. R. H.

Emrys-Evans, P. V.

Hunter, T.

Carver, Major W. H.

Evans, D. O. (Cardigan)

Hurd, Sir P. A.

Cary, R. A.

Fildes, Sir H.

James, Wing-Commander A. W. H.

Cayzer, Sir H. R. (Portsmouth, S.)

Fleming, E. L.

Jarvis, Sir J. J.

Cazalet, Thelma (Islington, E.)

Fremantle, Sir F. E.

Jones, Sir G. W. H. (S'k N'w'gt'n)

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

Fyfe, D. P. M.

Jones, Sir H. Haydn (Merioneth)

Channon, H.

Ganzoni, Sir J.

Keeling, E. H.

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

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

Kerr, Colonel C. I. (Montrose)

Clarry, Sir Reginald

Gluckstein, L. H.

Kerr, H. W. (Oldham)

Cobb, Captain E. C. (Preston)

Gower, Sir R. V.

Kerr, J. Graham (Scottish Univs.)

Keyes, Admiral of the Fleet Sir R.

O'Connor, Sir Terence J.

Smith, Sir R. W. (Aberdeen)

Kimball, L.

O'Neill, Rt. Hon. Sir Hugh

Somervell, Sir D. B. (Crewe)

Lamb, Sir J. Q.

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

Somerville, A. A. (Windsor)

Law, Sir A. J. (High Peak)

Perkins, W. R. D.

Southby, Commander A. R. J.

Leckie, J. A.

Pickthorn, K. W. M.

Spens, W. P.

Lindsay, K. M.

Ponsonby, Col. C. E.

Stanley, Rt. Hon. Lord (Fylde)

Lipson, D. L.

Raikes, H. V. A. M.

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

Little, Sir E. Graham

Ramsbotham, H.

Storey, S.

Llewellin, Lieut.-Col. J. J.

Rathbone, Eleanor (English Univ's.)

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

Lloyd, G. W.

Rawson, Sir Cooper

Strickland, Captain W. F.

Loftus, P. C.

Rayner, Major R. H.

Stuart, Hon. J. (Moray and Nairn)

Lovat-Fraser, J. A.

Reid, Sir D. D. (Down)

Tasker, Sir R. I.

Mabane, W. (Huddersfield)

Reid, J. S. C. (Hillhead)

Tate, Mavis C.

McCorquodale, M. S.

Reid, W. Allan (Derby)

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

MacDonald, Rt. Hon. M. (Ross)

Remer, J. R.

Titchfield, Marquess of

Macdonald, Capt. P. (Isle of Wight)

Robinson, J. R. (Blackpool)

Tryon, Major Rt. Hon. G. C.

McKie, J. H.

Ross, Major Sir R. D. (Londonderry)

Tufnell, Lieut.-Commander R. L.

Macmillan, H. (Stockton-on-Tees)

Ross Taylor, W. (Woodbridge)

Wallace, Capt. Rt. Hon. Euan

Maitland, A.

Rowlands, G.

Warrender, Sir V.

Makins, Brig.-Gen. E.

Russell, Sir Alexander

Wedderburn, H. J. S.

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

Russell, R. J. (Eddisbury)

Whiteley, Major J. P. (Buckingham)

Maxwell, Hon. S. A.

Russell, S. H. M. (Darwen)

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

Mayhew, Lt.-Col. J.

Salt, E. W.

Windsor-Clive, Lieut.-Colonel G.

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

Salter, Sir J. Arthur (Oxford U.)

Withers, Sir J. J.

Mitchell, H. (Brentford and Chiswick)

Samuel, M. R. A.

Wood, Hon. C. I. C.

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

Scott, Lord William

Wragg, H.

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

Seely, Sir H. M

Wright, Squadron-Leader J. A. C.

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

Selley, H. R.

Munro, P.

Simon, Rt. Hon. Sir J. A.

TELLERS FOR THE AYES.—

Nall, Sir J.

Sinclair, Col. T. (Queen's U. B'lf'st)

Lieut.-Colonel Sir A. Lambert

Neven-Spence, Major B. H. H.

Smiles, Lieut.-Colonel Sir W. D.

Ward and Mr. Furness

NOES.

Adams, D. (Consett)

Henderson, A. (Kingswinford)

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

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

Henderson, J. (Ardwick)

Muff, G.

Adamson, W. M.

Henderson, T. (Tradeston)

Nathan, Colonel H. L.

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

Hills, A. (Pontefract)

Noel-Baker, P. J.

Banfield, J. W.

Hopkin, D.

Oliver, G. H.

Barnes, A. J.

Jagger, J.

Paling, W.

Barr, J.

Jenkins, Sir W. (Neath)

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

Batey, J.

John, W.

Ritson, J.

Bellenger, F. J.

Jones, A. C. (Shipley)

Rowson, G.

Benn, Rt. Hon. W. W.

Jones, Morgan (Caerphilly)

Sanders, W. S.

Bromfield, W.

Kelly, W. T.

Sexton, T. M.

Brown, C. (Mansfield)

Kennedy, Rt. Hon. T.

Silkin, L.

Brown, Rt. Hon. J. (S. Ayrshire)

Kirby, B. V.

Simpson, F. B.

Burke, W. A.

Kirkwood, D.

Smith, E. (Stoke)

Charleton, H. C.

Lansbury, Rt. Hon. G.

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

Chater, D.

Lathan, G.

Smith, T. (Normanton)

Cluse, W. S.

Lawson, J. J.

Sorensen, R. W.

Cocks, F. S.

Leach, W.

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

Cove, W. G.

Lee, F.

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

Daggar, G.

Leonard, W.

Taylor, R. J. (Morpeth)

Day, H.

Leslie, J. R.

Thorne, W.

Dobbie, W.

Logan, D. G.

Thurtle, E.

Dunn, E. (Rother Valley)

Macdonald, G. (Ince)

Tinker, J. J.

Ede, J. C.

McEntee, V. La T.

Viant, S. P.

Edwards, Sir C. (Bedwellty)

McGhee, H. G.

Walkden, A. G.

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

MacLaren, A.

Watkins, F. C.

Gardner, B. W.

Maclean, N.

Watson, W. McL.

George, Megan Lloyd (Anglesey)

Mander, G. le M.

Wedgwood, Rt. Hon. J. C.

Gibson, R. (Greenock)

Marshall, F.

Williams, E. J. (Ogmore)

Green, W. H. (Deptford)

Mathers, G.

Williams, T. (Don Valley)

Griffiths, G. A. (Hemsworth)

Messer, F.

Griffiths, J. (Llanelly)

Milner, Major J.

TELLERS FOR THE NOES.—

Hall, J. H. (Whitechapel)

Montague, F.

Mr. Whiteley and Mr. Groves.

Question, "That the Debate be now adjourned," put, and agreed to.

Resolution to be reported To-morrow.

GOVERNMENT OF INDIA ACT, 1935.
8.30 p.m.
The Under-Secretary of State for India (Lord Stanley): I beg to move,
"That an humble Address be presented to His Majesty, in pursuance of the provisions
1736
of Section 309 of the Government of India Act, 1935, praying that the Government of India (Federal Court) Order, 1937, be made in the form of the draft laid before Parliament."
I think that, with your permission, Mr. Deputy-Speaker, and with the agreement of the House, it will be convenient if I give now some explanation of all the four Orders referred to in the Motions which stand on the Paper. Those who know anything about these Orders will realise

1737
that there is nothing in them that is in any way of a contentious nature; in fact, they all follow on decisions which have already been taken in this House. The first Order relates to the Federal Court. It will be remembered that last December an Order was approved by the House which brought into force, with effect from 1st October next, the provisions of the Government of India Act, 1935, relating to the Federal Court, and which at the same time fixed the salary and pension of the first holder of the post of Chief Justice, and also the salaries of the remaining judges. It was realised at the time that further provisions would be required to fix the pensions of the other judges and to make provision with regard to leave for all the judges, including the Chief justice. This is what the present Order does; it merely carries out what I understand was the intention when the original Order was moved.
The second Order, which deals with the High Court, simply makes a change in the title of certain judges. The reasons for this are a little complicated. In the framing of the Government of India (High Court Judges) Order, which was approved last February, it was found necessary to avoid the use of the word "additional" in the official designation—"additional judicial commissioner"—of the judges of one of the classes of courts now classed as Provincial High Courts, in order to avoid confusion between this designation and the designation "additional judge," as indicating a judge appointed temporarily by the Governor-General to a High Court, including a judicial commissioner's court, under the provisions of Section 222 of the new Act. With this object it was decided to substitute for "additional judicial commissioner" the designation "assistant judicial commissioner," and two Indian Acts to which the expression "additional judicial commissioner" owes its origin were adapted accordingly by the Government of India (Adaptation of Indian Laws) Order, 1937. It has now been decided that it would be preferable to substitute for this rather long title the simple designation of judges. It is rather a complicated explanation of what is really a very simple thing, which is purely a change of title.
With regard to the third Order, in March last an Order was approved by the two Houses which adapted the provisions of existing Indian Acts, both central and
1738
provincial, so as to bring them into accord with the provisions of the Government of India Act. Naturally at that time we were not able to deal with all the changes that were likely to become necessary by 1st April. In fact the actual Order that was passed dealt only with changes which became necessary owing to the introduction of the Government of India Act up to the beginning of December last. This new Order fills the gap between December and 1st April, when the new constitution came into force. It also includes a few corrections and omissions from the last Order. When hon. Members remember the enormous scope of the last Order and find that only some 22 items are required to be dealt with on this occasion as corrections of errors or the filling up of omissions, I think they will agree that the work has been extremely well done. Exactly the same explanation fits the final order.
Mr. Deputy-Speaker (Sir Dennis Herbert): The House has heard what the Noble Lord has said with regard to taking all four Orders at the same time. If the House approves, I think that will be a convenient course to adopt if it meets the view of the House generally.
8.37 p.m.
Mr. Morgan Jones: The Noble Lord very modestly said that the third Order made some corrections in some slight particulars. I hope he has waded through the Schedule. It seems to me rather hard upon the House to invite it to approve of an Order containing a schedule involving so many cross-references. I do not pretend to understand it. It is much too hard work for any individual Member to wade through all the cross-references. I should have been very glad if the Noble Lord could have afforded the House a short White Paper to indicate the nature of the changes the Government propose and, if there is another batch of this sort, I hope he will do it. Subject to that, I have no objection at all to the Orders being approved.
8.39 p.m.
Lord Stanley: I do not think another Order of the kind is at all likely, as all the laws have now been adapted, but if a similar situation should arise I will certainly bear the hon. Gentleman's suggestion in mind.
Lord Stanley: I beg to move, "That the Debate be now adjourned."
Debate to be resumed upon Monday next.
Motion made, and Question proposed:
"That an humble Address be presented to His Majesty, in pursuance of the provisions of Section 309 of the Government of India Act, 1935, praying that the Government of India (High Court judges) (Amendment) Order, 1937, be made in the form of the draft laid before Parliament."—[Lord Stanley.]
Lord Stanley: I beg to move, "That the Debate be now adjourned."
Mr. Wedgwood Benn: It may be ignorance on my part, but I should like the Noble Lord to explain why, when the House appears to be ready to give approval to these Orders, he proposes at each stage the Adjournment of the Debate?
Lord Stanley: I think it is a procedure that has been generally accepted. The Orders will have to be passed in another place. In case any Amendment is made to them there it is more convenient that the Debate should be adjourned. If any Amendments were to be made, these would be discussed on the resumed Debate, as soon as they have been passed in another place.
Mr. Benn: This is a complete surprise to me. What appears to be happening is that we are asked to give approval, and, if people in another place see fit to make Amendments, it comes back to us for us to give our assent. I think we are a self-governing body which decides Yes or No to Orders which have been carefully drafted by the Government. It is an innovation and comes as a surprise to any Parliamentary hand to learn that all we can do is to send them to another place and ask what their pleasure is, to which, when it is ascertained, we shall give our assent.
Lord Stanley: It is so that we should not close the door. We give a provisional assent this evening and it then goes to another place. If they make any Amendments we get a further chance of discussing them. I think the right hon. Gentleman knows that these Orders must go to His Majesty with the approval of both Houses. I do not think there is any departure from normal procedure. A great number of Orders have been passed since
1740
the Government of India Act, and generally with the understanding and approval of all sides of the House.
Debate to be resumed upon Monday next.
Motion made, and Question proposed,
"That an humble Address be presented to His Majesty, in pursuance of the provisions of Section 309 of the Government of India Act, 1935, praying that the Government of India (Adaptation of Indian Laws) Supplementary Older, 1937, be made in the form of the draft laid before Parliament."
Lord Stanley: I beg to move, "That the Debate be now adjourned."
8.42 p.m.
Mr. Benn: This gives me an opportunity to try to clarify the situation. Is it a fact that, in regard to these Orders relative to the Government of India Act, an entirely new procedure as between the two Houses has been set up?
Lord Stanley: I think it has been followed in the case of all previous Orders. I must apologise to the House. I did not look into the question of procedure because this procedure has been adopted on previous occasions, and I thought the House would be ready to follow it again.
Mr. Benn: I am not complaining of the Noble Lord. We are all anxious to facilitate his work. I am only asking for information. May I ask the Parliamentary Secretary to the Treasury whether it is a fact that in connection with these Orders, which after all are in common form, a new Parliamentary procedure has been adopted? It is a very simple question to answer.
8.45 p.m.
The Parliamentary Secretary to the Treasury (Captain Margesson): I should not like precisely to say that the procedure adopted after the passage of the Government of India Bill was a new procedure or one which had been used before and revived for the purpose of these Orders. All I remember is that some time ago we instituted this procedure and the matter was explained to the House at the time. The Orders are brought before this House. They are then sent to another place, and I believe I am right in saying that they can be amended there and then come back to us for final decision. I cannot give an answer as to whether it is an old or a new procedure, but we have

1741
adopted it since the first Orders came after the passage of the Government of India Bill, when the Under-Secretary of State explained to the House the procedure that we were going to follow.
8.46 p.m.
Mr. Morgan Jones: I took an intimate personal interest in this matter in the earlier stages, and I speak from memory and therefore subject to correction, but my recollection is entirely in conformity with what the Patronage Secretary has said. The Under-Secretary gave me to understand that we were following precedent in taking the line that we then took in respect of this kind of Order, and in practice we have followed that procedure meticulously in respect of all the Orders carried by this House and another place under the Government of India Act, 1935. Whether it has been in accordance with precedent or not, I cannot say, but that has consequently been the procedure during the last two years.
8.47 p.m.
Mr. Lawson: I cannot understand why there should be any different procedure in reference to the Government of India Bill and these Orders compared with any other Orders. The House knows quite well that from time to time important and complicated Orders are taken late at night in this House, and if there was a case for waiting for the learned opinion of members of another place some of the very important Orders from the Ministry of Labour would be useless. I cannot understand why there should be any different procedure in respect of these Orders compared with any other Orders.
Captain Margesson: I can explain the position to the hon. Member. The India Orders can be amended whereas the ordinary Orders of the House are not capable of amendment.
Mr. Kelly: This seems to be rather a curious procedure. Is it to be taken that we have given an assent without voting, and that when the Orders go to another place they can amend them? Are we in the position of having given assent to these Orders, and not being entitled to amend them in the event of their coming back to us from another place?
Mr. Deputy-Speaker: I would point out to the hon. Member that it is perfectly clear that if the Debate is adjourned
1742
without any decision being come to, the House is not bound in any way.
Debate to be resumed upon Monday next.

GOVERNMENT OF BURMA ACT, 1935.
Motion made, and Question proposed,
"That an humble Address be presented to His Majesty, in pursuance of the provisions of Section 157 of the Government of Burma Act, 1935, praying that the Government of Burma (Adaptation of Laws) Supplementary Order, 1937, be made in the form of the draft laid before Parliament."—[Lord Stanley.]
Lord Stanley: I beg to move, "That the Debate be now adjourned."
8.49 p.m.
Mr. Benn: I am very sorry to have to raise this point again, but it is really a very interesting point, and I am not raising it in a vexatious way at all. This is not an Order but an humble Address, and each House must vote its own humble Address. I do not disagree with what my hon. Friend the Member for Caerphilly (Mr. M. Jones) said about it being done; no doubt it was done, but I am still in the dark why we should start to vote an humble Address and then adjourn the Debate in order that another humble Address, which has nothing to do with this, can be moved in another place. Until that is done we adjourn the Debate on our own humble Address. The notion that there is some document that passes from one House to another is, I believe, quite a mistake. I would like the Patronage Secretary to tell the House—because it is a very interesting point to Members of Parliament—why the procedure which I mentioned as a complete innovation has been adopted in reference to these Orders. I can see no reason why an humble Address asking for approval for these Orders should differ from any other Address asking for the approval of the Minister of Labour, or any other Minister. I am not desirous of introducing anything contentious, but I am very anxious to learn the procedure and the reason for it.
8.51 p.m.
Captain Margesson: I hope that the right hon. Gentleman realises that I did not expect this question or I would have refreshed my memory. At the time, some

1743
two years ago, when these Orders were started, I made myself familiar with the procedure. I have now only a general recollection, but I think that it is based on the fact that these Orders can be amended and ordinary Orders which we pass late at night cannot be amended. If this procedure were not adopted we should be in the position, as I understand it, of having to begin our work all over again, if an Amendment were moved and carried in another place. As it is, we simply say we will consider this. We adjourn the Debate, having gone so far. It then goes to another place, and if they agree to the humble Address, it comes back to us and we ratify it. We are not asked to-night to take a final decision. If we are satisfied and the other House is satisfied, then at the next stage the House finally gives its consent.
8.52 p.m.
Mr. Benn: At what stage does this House move Amendments to these Orders, because I would remind the right hon. and gallant Gentleman that we are not debating any Orders to-night but an humble Address. At what stage, therefore, does this House make any proposals it may have to make? What is happening is that the Orders are laid before us and we are asked to vote an humble Address approving the Orders, but before anyone can make any suggestions about the Orders, the Government move the Adjournment. I want to be clear at what stage the function of the House of Commons is to be performed.
Captain Margesson0: As I understand it, an Amendment can be moved now at this stage. The Government do not move, "That the Debate be now adjourned," if there is any hon. or right hon. Gentleman in the House who chooses to carry on the Debate. If the House or any hon. Member wishes to move an Amendment to the Address, now would be the time.
Mr. Benn: Thank you.
Debate to be resumed upon Monday next.

ORDERS OF THE DAY.

  POST OFFICE AND TELEGRAPH (MONEY) BILL.
  Considered in Committee.
  [Sir DENNIS HERBERT in the Chair.]

  POST OFFICE AND TELEGRAPH (MONEY) BILL.

    CLAUSE 1.—(Grant for development of postal, telegraphic, and telephonic systems.)
    Motion made, and Question proposed, "That the Clause stand part of the Bill."
    Mr. Morgan Jones: May we have an explanation of this Clause?
    8.54 p.m.
    The Postmaster-General (Major Tryon): I shall be happy to explain the Clause, but I am anxious not to repeat what I said on the Second Reading. The Clause follows the ordinary course of previous Bills except in the last three lines of Subsection (1), which says:
    "For repaying to the Post Office Fund any moneys which may have been applied thereout for that purpose."
    They are introduced in order to enable us to repay to the Post Office Fund any moneys taken out of it for development.
    Remaining Clauses ordered to stand part of the Bill.
    Schedule agreed to.
    Bill reported, without Amendment; to be read the Third time To-morrow.

    TEACHERS (SUPERANNUATION) BILL.
    Considered in Committee, and reported, without Amendment; to be read the Third time To-morrow.

    HYDROGEN CYANIDE (FUMIGATION) BILL [Lords].
    Order for Second Reading read.
    8.59 p.m.
    The Under-Secretary of State for the Home Department (Mr. Geoffrey Lloyd): I beg to move, "That the Bill be now read a Second time."

    1745
    This is a small Bill but it should be a useful one, and I believe that it will be entirely non-contentious. Hydrogen cyanide is a powerful fumigant, which is used principally for killing bugs and other vermin. It is very deadly. It will kill almost anything with which it comes into contact. I am informed that for the cost of 6d. enough hydrogen cyanide could be manufactured to kill all the Members of this House almost simultaneously. Although it is a very efficient fumigant there ought to be powers for controlling the way it is used. At the present time we have not those powers, and the Bill is intended to give the Secretary of State power to make regulations laying down safety precautions for using hydrogen cyanide in the process of fumigation. There are only two points to which the House would desire me to call attention. The first is that in Clause 1 (2) an exception is made in regard to the fumigation of rabbit warrens and other fumigations carried out in the open air. Hydrogen cyanide is not dangerous as a fumigant in the open air, because it diffuses very quickly in the open. Again, in Clause 4 there will be power by Order in Council to apply these powers to any other dangerous fumigants. That will be a power that will be useful to have. The Bill has been to another place, where it met with a favourable reception. As far as I know, at the Home Office there has been no objection to the Bill from any quarter. I, therefore, commend the Measure to the House for Second Reading.
    Mr. Morgan Jones: I understand that the Bill has been examined by my hon. Friends on this side of the House and so far they find no objection to the Second Reading. If there is any regret, it is that it deprives us for ever of being able to say that the Government have done nothing at all.
    9.2 p.m.
    Sir John Haslam: I have not seen the Bill before and did not know that it was coming forward for Second Reading tonight, but I should like to know whether it has any connection with the sad tragedy that happened at Preston a short time ago. One of my constituents was closely related to the old people who met with a sad death on that occasion, and I should rejoice if this Bill would obviate anything of the sort happening again.
    1746
    We did not want to raise trouble about it, because we realised that it was one of those events that cannot perhaps be foreseen, but the result was that two innocent old people, very admirable people, lost their lives. If the Bill is going to prevent anything of the sort happening in the future I shall receive it with the greatest possible enthusiasm.
    9.3 p.m.
    Mr. Markham: There are two points in connection with the Bill on which I should like to have a little enlightenment. It may be common knowledge that this particular fumigant is extensively used in museums for eliminating beetles and other pests from articles, particularly of wood. I should like to know whether the museum authorities of the country have been consulted, not only the national museum authorities but the provincial museum authorities, seeing that this fumigant is extensively used by museum curators. As I see the Bill at present it gives authority to the Government to make regulations limiting the use of this and other fumigants to specially certificated men. That means that the moment this Bill is passed, no museum curator, unless secially certificated, can make use of this or any other fumigant. Therefore, he may be in this position that having some article of great value which has just come into his hands, he cannot give it proper treatment, because he is not certificated, and, secondly, because expense may be incurred in getting a certificated man to apply the fumigant. I should like some assurance that as far as museums and art galleries are concerned there will be no check on the use of this and other fumigants for purely museum purposes.
    Mr. R. Gibson: Can the Under-Secretary explain the difference between hydrogen cyanide and prussic acid?
    9.4 p.m.
    Mr. Lloyd: I think I cannot do better than adopt the words suggested to me by my right hon. Friend, and that is to say that hydrogen cyanide is the same thing as prussic acid in a gaseous form. In reply to my hon. Friend the Member for South Nottingham (Mr. Markham), I may say that I am informed that curators in museums normally get in firms to do fumigation, so that the point he mentioned will not arise in the way that he

    1747
    put it. Perhaps he will be content with my assurance that we will look into the point between now and the Report stage, with a view to seeing whether there will be any hardship or unnecessary inconvenience to curators of museums. I do not think there would be in practice, but we will certainly look into it.
    I am not sure of the details of the accident at Preston to which my hon. Friend referred, but if it was a case in which some people died as the result of using this chemical it would be covered by the Bill. It is for the purpose of preventing such fatalities that the Bill has been introduced. Considering the highly poisonous nature of this chemical it is remarkable that there have been so few cases. There was a case at Aldershot of two children going into a house after it had been fumigated and being found dead. If, however, there are only a few cases, I think hon. Members will agree that it is proper these powers should be taken to prevent such cases arising.

  NIGERIA [REMISSION OF PAYMENTS].
  Considered in Committee under Standing Order No. 69.
  [Sir DENNIS HERBERT in the Chair]
  Motion made, and Question proposed,
  "That it is expedient to remit any sums which have become or may become payable to the Exchequer under section three of the Royal Niger Company Act, 1899, and to extinguish the liability for the payment of such sums."—[King's Recommendation signified.]—.[Mr. Ormsby-Gore.]
  9.9 p.m.
  The Secretary of State for the Colonies (Mr. Ormsby-Gore): This arises out of a discovery of the Public Accounts Committee, that careful body which examines various matters of State, that there was still on the Statute Book, Section 3 of an Act of 1899, relating to the winding up of the old Niger Company which operated in the hinterland, and which in that year was terminated by Section 3 of that Act. However, that Act is still on the Statute Book and the Section says—
  1748
  "All such sums as the Treasury determine to be receipts from the territories administered by the company at the passing of this Act in excess of the expenses of administration of these territories shall be paid into the Exchequer, save so far as these sums are with the approval of Treasury applied towards the development and improvement of the territories."
  The fact that this Act has been overlooked is largely because separate accounts were never kept for the territories administered by the company. As soon as settled government was established the company gave way to the Imperial Government. The area in which the company operated comprised a series of native areas with whose chiefs the company had made treaties, but the "treaty" area did not coincide with the area administered. In fact the company's administrative activities and expenditure were limited to the vicinity of the rivers, that is the River Niger and its tributaries on which they had established trading stations. This is borne out by the fact that their expenses of administration of the native territories at the date of transfer did not exceed £50,000 a year.
  At no time in the past, however, has there been any precise definition of the territories administered by the company, and after the passing of the Act no such definition was practicable, nor it is practicable at the present time. Fifteen years later, all the territories in this part of the world formed part of the Dependency of Nigeria, and consequently if any sums were due they would be due from the whole of Nigeria. It would be impossible to assess them because the company has long since ceased to exist, and this Resolution is necessary in order to lead up to a one-Clause Bill wiping out to the satisfaction of the Public Accounts Committee and everybody concerned Section 3 of the entirely obsolete Act of 1899.
  Mr. Goldie: Can the right hon. Gentleman say how far the Statute of Limitations would apply to the Royal Niger Company as distinct from the Crown?
  Mr. Ormsby-Gore: The company ceased to exist 38 years ago. The Public Accounts Committee discovered in 1935 that this Section was still on the Statute Book, and it is only right that an obsolete provision of this kind, when found, should be removed.
  9.14 p.m.
  Mr. Morgan Jones: I cannot charge my memory with the actual circumstances in which the Public Accounts Committee came to their recommendation in this matter, but the Government have framed the Resolution on the recommendation we made in our annual report. I hope the House will feel that the Public Accounts Committee in the discharge of its difficult task has to call attention sometimes to irregularities or to something which requires Government action. I am glad the Government have seen fit to take this action.
  Resolution to be reported To-morrow.

  GAS UNDERTAKINGS ACTS, 1920 TO 1934.
  Resolved,
  "That the draft of a Special Order proposed to be made by the Board of Trade under the Gas Undertakings Acts, 1920 to 1934, on the application of the Urban District Council of Sidmouth, which was presented on the 8th clay of June and published, be approved."—[Captain Wallace.]
  9.16 p.m.
  The Parliamentary Secretary to the Board of Trade (Captain Euan Wallace): I beg to move:
  "That the draft of a Special Order proposed to he made by the Board of Trade under the Gas Undertakings Acts, 192o to 1934, on the application of the Stretford and District Gas Board, which was presented on the 24th day of May and published, be approved."
  9.17 p.m.
  Mr. Ellis Smith: I was somewhat surprised when I saw this Order on the Paper to-day. It does not concern the division which I represent, but at the end of last week I received a letter asking me for some particulars with regard to this Order and raising the whole question. I should be obliged if the hon. and gallant Member would consider some of the points that I wish to put to him on behalf of the people who wrote the letter. On looking through the Order, I find that it gives the company very wide powers. For example under Clause 5, the company will have the right to maintain, alter, improve and renew gas works, and it will also have the right to convert the residual products arising out of the manufacture of gas. I know this locality, and I am surprised that the Minister of Health should permit
  1750
  an extension of this nature to take place. This gas-producing plant is in the middle of a residential centre, and it is surrounded by thousands of houses of a fairly modern type. I am not surprised to learn from the letter which I have received that the owner-occupiers there are now represented in an association, and that that association, together with the Stretford trades council on behalf of all the local trade unions, are now taking up the question with a view to having this Order stopped. If the House allows the Order to go through to-night, the legitimate, justifiable and reasonable grievances of the people resident in the vicinity of the gas company's plant will not be considered.
  I think the House ought to be reminded of the seriousness of this matter. We are all familiar with the dust that comes from the latest methods of dealing with coal, the fumes which inevitably come from a gas-producing plant of this description, and the stench that comes from the tanks themselves. We know that that cannot be avoided. We also know that in some districts, where local authorities in particular have been responsible for large capital expenditure, it would be too much to expect them to remove plants on which they have made large expenditure, but it is reasonable to suggest that no further capital expenditure of the type proposed in this Order should be allowed. It is recognised by people of all political parties, and by all public-spirited people, that houses ought not to be built round these gas-producing centres and that gas-producing centres must not he built in localities where people have to spend the whole of their lives. Therefore, if we cannot prevent the Order going through altogether, I hope the hon. and gallant Gentleman will be prepared to consider holding it up so that there may be some consultation with local residents, who are very much concerned about this.
  There is also another side of the matter. A few miles away from the place in question, there is a very large gas-producing plant. At Partington they can produce gas sufficient to meet the needs of the growing industrial centres within many miles of Partington. One would have thought that the local authorities and the Minister of Health, before allowing this draft order to go through, would have made investigations to see whether

  1751
  that gas company, or the Manchester Corporation, could not have provided the increased gas which is necessary, rather than to allow this gas-producing plant to be extended in the area concerned. I hope the hon. and gallant Gentleman will be generous enough to agree to the postponement of this Order so as to give the local residents an opportunity of expressing their reasonable grievances.
  9.22 p.m.
  Captain Wallace: The last thing which the Board of Trade would wish to do on an occasion such as this would be to ride roughshod over the legitimate objections of any body of persons affected by the Order. I will not this evening explain the meticulous and complicated procedure which has to be gone through before these Orders are made. The various stages of procedure are expressly provided to give sufficient scope for the expression of any objections to the making of an Order of this sort under the Gas Undertakings Acts, 192o to 1934. The Order on which the hon. Member for Stoke (Mr. Ellis Smith) has raised some objections stating with characteristic frankness and generosity, that it does not refer to his own constituency, simply empowers the Gas Board to construct additional gasworks on land joining their existing works. I would like the House to be clear that there is no question of putting down a new gasworks in a new residential locality. It is equally fair to say that objections to the application, which was advertised and published in the usual way, were lodged by a number of people who owned or occupied dwelling-houses in the neighbourhood, and in consequence of those objections an inquiry was held at Stretford on 16th April.
  I am sure that the hon. Gentleman opposite will not need to be assured by me that the officer of the Board of Trade who conducted the inquiry was strictly impartial. He made, as always happens in these cases, an exhaustive review of the circumstances, and he reported to the Board, in the first place, that he was satisfied that, owing to the enormously increased gas sales in this industrial district, some further extension of the works was urgently required. The land which the company proposes to use for the erection of their extension is, as I have said, immediately adjoining the existing works.
  1752
  Moreover, it is between the existing works and the Cheshire Lines Railway to the Trafford Park sidings. It is not, so to speak, breaking any new ground. On the other side of the line is the very extensive Metro-Vickers Electrical Engineering Works, an asphalt works and a rubber reclaiming works. The area in question is not only zoned by the local authority as an industrial area, but it is patently industrial at the present moment.
  Another point which I feel bound to bring to the attention of hon. Members is that all the adjacent properties, the owners or occupiers of which lodged an objection to this scheme, have been erected since the gasworks was first built in 1862. Therefore, those people have not bought "a pig in a poke." Most of the houses have been erected since 1900, and some, which are quite close to the gasworks, in 1933 and even last year. Therefore the House will see that there is no question of an inconsiderate gas company dumping down a new gasworks in some area where the residents had no reason to expect such a thing.
  Mr. Kelly: I understand the hon. Gentleman to state that these works, which we were told earlier are to be at Gorse Hill, are to be near the Metro-Vick works. These works are in Trafford Park, Gorse Hill is not in Trafford Park.
  Captain Wallace: I never mentioned Gorse Hill and I do not think that the hon. Member for Stoke (Mr. E. Smith) did.
  Hon. Members: Yes he did.
  Mr. E. Smith: I admit that I do not represent this constituency but I have a great respect for the people living there, because I have worked among them for 25 years. The road through the Metro-Vick Works is a mile long and at one end it is in Trafford Park and at the other end it is at Gorse Hill. These new gasworks will be right in the centre of Gorse Hill, right in the centre where thousands of people are living and are forced to live because their work is there.
  Captain Wallace: That may be perfectly true, but all this property was built there when the people knew what they were in for. All that is proposed is that the existing gasworks, which are there for good or ill, should be extended, not towards the houses, as I understand it, but

  1753
  towards the railway sidings. The objections which have been made were against dust, noise, fumes and smells from the existing gasworks, which it was alleged deteriorated the property; and the objectors fear that if the gasworks were made larger there would be more noise, dust, fumes and smells. Hon. Gentlemen who are familiar with the progress of the gas industry will no doubt appreciate that the gas industry has made great progress in recent years in its plant in order to eliminate what I may describe under the generic term of nuisances, and it appeared to the officer of the Board of Trade who conducted the inquiry reasonably sure that with the new works these objections will be further substantially diminished.
  The hon. Gentleman opposite raised a new point and suggested that the Order should not pass through the House because it would be possible to obtain a supply of gas from some gasworks. I do not think that that is a thing that we can consider here and now. A case came up not long ago in which it was suggested that the corporation of the great city of Glasgow could obtain a supply of gas in a similar manner more cheaply than they could make it themselves. I do not know whether that was so or not, but they decided to make it themselves. Having considered the report of the inspector the Board of Trade decided—and I think the House will think rightly and reasonably decided—that this Order should be put forward in both Houses and that the urgent demand of the people in this district, mostly I imagine small consumers, to get a further supply of gas should be acceded to. I appeal to the hon. Gentleman if he is satisfied with my explanation—and I have made particular inquiries—to let us have the Order and to allow the gas to be provided for these people.
  9.30 p.m.
  Mr. Ede: The right hon. and gallant Gentleman has carefully answered a number of points which the hon. Member for Stoke (Mr. E. Smith) was most careful not to make. I never heard a more careful speech made in opposing one of these Orders than that made by the hon. Member for Stoke, who was careful to admit that he was not opposing it because it was a new place but the extension of an existing works. From time to time we have discussions in this House about pollution of the atmosphere and the necessity for preserving reasonable conditions in which
  1754
  people can live, and the desire has been expressed many times, especially on this side of the House, that the gas industry should be concentrated into bigger units so that the number of isolated communities suffering from the disadvantages which my hon. Friend has mentioned should be reduced in number. On those occasions when we are discussing the thing in general and a plea is made for the preservation of amenities the House is unanimous, but every time we get up against a practical issue there is always some reason for not applying the general principle in that particular case.
  If there is a large plant near, did the Inspector of the Board of Trade make inquiries as to the possibility of an alternative source of supply? I know that if you take the similar public utility of water, when a local authority wants to get water from a particular area it is quite frequently suggested to them that they should try alternative sources. I know one great municipality which is in difficulties because it cannot persuade a neighbouring area to give it supplies. Was the possibility of this comparatively small place getting a supply in bulk from some other area inquired into? I should have thought that in these days the multiplication of small works and the extension of small works ought to be discouraged. I did not hear anything from the right hon. and gallant Gentleman which made me think that we need hurry this matter to a decision to-night, and he might well have postponed this Order for a week in order to consider the representations of the people who have written to my hon. Friend. If not, what is the use of submitting these Orders to the House? We are not here merely to register the decision which has been reached by an Inspector of the Board of Trade.
  The Order is submitted to us—and we are fortunate in being able to discuss this one at a time when it is not necessary to worry about our last trains home—so that the House may have a chance of remedying any legitimate grievance which any subject of the King may have. In view of the careful and moderate way in which my hon. Friend has put the matter before him, I would ask the right hon. and gallant Gentleman to hold this Order up for a week in order to consider the specific points to which attention has been drawn and see whether something cannot be done to meet them.
  9.35 p.m.
  Sir J. Haslam: I only rise to prevent a false impression being created by certain remarks of earlier speakers. I am sorry that the hon. Member for the Stretford Division (Mr. Crossley) is not here, but as one who has known this locality for 30 or 40 years, I wish to say that, next to Dagenham, I do not think any area that I know of in the country has developed more rapidly than this. From being a purely rural area, it has become a satelite town of Manchester. It adjoins Trafford Park which is one of the industrial areas of Lancashire and has developed enormously through the Ship Canal and from other causes. Naturally, this gas-works as a result of this development, has been called upon to provide more gas, both for residents in the neighbourhood and for industrial undertakings. I hold no brief for the company and I should argue in the same way if the Order concerned a municipality. But the needs of the residents and of the industrial undertakings ought to be met. They ought to be able to get a supply of gas, as against electricity, if they so desire.
  Near this place there is a huge destructor owned by the Manchester Corporation—which ought to be a grievance too—and there is also one of the largest electricity undertakings in the country so that it is not a purely residential area. If the people and the council through their elected representative had protested against this Order I should be the first to support the protest. Surely the people of the district are the people to raise objection properly through their representative in this House. If they did so I should be with them, but whatever proposal of this kind any company or corporation brings forward, there are always a few objectors on the ground that the scheme affects an area where they happen to have bought houses. I am not, however, objecting to the postponement of this Order. I think it would be advisable to delay further proceedings for a few days but I do not want the false impression to be given that this is a rural or purely residential area, in which somebody is proposing to erect a huge and disagreeable works. I want to put the matter in the right perspective.
  9.39 p.m.
  Mr. Tinker: We only ask that the Minister should re-examine the position.
  1756
  My hon. Friend who raised this matter has received a dignified protest against this Order from a large body of people. It is from the Stretford Trade Council an important body and what they ask is that before the Order is passed there should be an investigation of the position. I agree with the last speaker that it is difficult for people outside the Division to raise objections in a case of this kind but on the other hand these Orders are not supposed to come before Parliament as cut-and-dried proposals, which have to be accepted at all times. If that were so, it would not be worth while bringing them forward at all. When facts are brought to our notice we have a right to raise them in the House on these occasions. The Minister said the Board had had a report of their inspector which they accepted. That is the ordinary procedure, but if we find that there are certain points which may not have been got hold of by the inspector we have a right to ask the Minister to defer the Order. It may be that the weight of evidence is on the side of the report already made, but in that case the Minister's position, later, will be strengthened and any further objection to the Order will be removed.
  9.41 p.m.
  Captain Wallace: I can only speak again by leave of the House, but if there is a feeling in the House such as has been expressed by hon. Members, I am prepared to accede to their request. I wish, however, to make my position clear. When the hon. Member for Stoke (Mr. E. Smith) gave me notice that he was going to object to the Order he was kind enough to show me the letter which he had received. I made particular inquiries into the case and I was not satisfied that the grounds of the protest were valid. If I had thought that there were valid grounds for such a protest, I would have offered to postpone the Order at once. I do not think there are such grounds, for all the reasons which I have endeavoured to give the House; but I appreciate the fact that it is for the House to decide upon these Orders, and, therefore, without prejudice to the position of the Board of Trade and on the understanding that I shall have to bring the Order forward again in a very limited time, I beg now to move, "That the Debate be now adjourned."
  Mr. E. Smith: May I be allowed to thank the right hon. and gallant Gentle-man for the way in which he has dealt with the matter.
  Debate to be resumed To-morrow.
  Resolved,
  "That the draft of a Special Order proposed to be made by the Board of Trade under the Gas Undertakings Acts, 1920 to 1934, on the application of the Winsford Gas Company, Limited, which Ns as presented on the 15th day of June and published, be approved."—[Captain Wallace.]
  The remaining Government Orders were read, and postponed.

  BUSINESS OF THE HOUSE.
  Motion made, and Question proposed, "That this House do now adjourn."—[Sir A. Lambert Ward.]
  9.43 p.m.
  Mr. Morgan Jones: Some of my hon. Friends are very much interested in the next Order on the Paper—the Inheritance (Family Provision) Bill—which is down for consideration on Report. It is a Bill promoted by my hon. Friend the Member for Central Hull (Mr. Windsor) and I think the Government ought not to have moved the Adjournment, at this stage, when an hour and a-quarter remain to us, without giving an opportunity for its consideration. This is one of the Tare occasions on which private Members have an opportunity of proceeding with a Bill of this kind. The Bill has already been before a Committee upstairs and I understand that all the Amendments which have been put down to it are in the name of one hon. Member. That being so, we think the Government ought to have allowed us to proceed with the consideration of that Bill, which deals with an important subject and interests a large number of people. It would have been a gracious thing on the part of the Government to have refrained in the circumstances from moving the Adjournment at this stage.
  Lieut.-Colonel Sir A. Lambert Ward (Treasurer of the Household): The Bill referred to raises controversial issues and although the business has terminated to-day rather earlier than was expected,
  1758
  it was an understood thing that the consideration of the Bill would not be taken to-night. In those circumstances it would be unfair to hon. Members generally to allow it to be proceeded with at this stage.
  Mr. Jones: On what authority does the hon. and gallant Gentleman say that it was understood that the Bill was not to be taken to-night? All I understood was that Government business was not to proceed beyond a certain point, but there was no understanding about what other business was to be taken if Government bosh ness lapsed earlier than was expected.
  9.45 p.m.
  Mr. Kelly: I am surprised at the statement of the hon. and gallant Member that there has been some understanding. Those who are backing this Bill are determined to make an effort to get it through, and I am sure that not one of them has come to any understanding with anyone even to defer the Bill. I think it is only fair that, the statement having been made that some understanding has been arrived at, we should be told who is responsible for this assumed understanding. This is a Bill which has been before the House time and again, and it has been objected to, and now that we have an opportunity to get it through, we are told that the House must be adjourned. I understood the hon. and gallant Member to say that it was a contentious Bill, but there was only one Member opposing it, and who had Amendments down to it, throughout the whole time in Committee. That does not look like contention, and I hope the House will not adjourn without giving an opportunity for this Measure to be discussed, and perhaps other Measures as well.
  9.47 p.m.
  Mr. Goldie: As one who is strongly opposed to this Bill, may I congratulate the Government on the strong line which they have taken in this matter? What in fact happened earlier to-day was this, that at the conclusion of questions I certainly understood that the later Orders would not be taken, and that is the sole reason why those Members who think as I do are not present now. I think it would be wrong that at this late hour such a highly controversial Measure should be taken.
  9.48 p.m.
  Miss Rathbone: I submit that this Bill, if any private Member's Bill, has a claim

  1759
  on the attention of the House. It is within the knowledge of those who sit on the Government Front Bench that a petition was presented to the Government only the other day praying for facilities to be given for this Bill. That petition was signed by not far short of a clear majority of the Members of this House, including those who belong to the Government itself. There was something between 200 and 250 signatures to that petition. Therefore, the Bill is clearly one in which the Members of the House take a very great interest, and as one who sat on the Standing Committee which considered the Bill, I say that the hon. Member for Rochdale (Mr. Kelly) was right in saying that the opposition to it in the Committee was practically negligible. On one occasion an hon. and gallant Member put down something like 20 Amendments to the Bill, but he did not succeed in getting a single Member of his own or any other party to support one of those Amendments. I think that shows the strength of the opposition to the Bill. So far as I know—and I think I know as much about this Bill as most hon. Members—the opponents can be counted on the fingers of one hand, or almost certainly on those of both hands. I think it is about time that the Government gave an opportunity for this Bill to he considered. We have still an hour and 10 minutes before the ordinary hour of adjournment, yet we are asked to adjourn now without considering this Bill.
  9.50 p.m.
  Captain Margesson: I should not like the hon. Lady to base her case on false premises. It has never been the claim of the Government that this is a question of time. It has always been that we cannot take private Members' Bills before eleven o'clock at night without giving due notice that we are going to do so. Obviously there are a great many Members, who may take one view or another, who cannot be present if——
  Mr. Benn Mr. Benn indicated dissent.
  Captain Margesson: The right hon. Gentleman has been here long enough to know that what I am saying is true, and indeed he has himself been in the Whips' Office and must know that always, when the Government move the adjournment before eleven, private Members' business is not taken because private Members are
  1760
  under the impression that it will not be taken. Therefore, it would not be fair to them, because Government business has come to an end, to say that we will take a private Member's Bill of which no notice has been given. The procedure which we are adopting has been adopted for years gone by.
  Mr. James Griffiths: In reply to a question this afternoon as to why the Eleven o'Clock Rule was being suspended, the Prime Minister said that it was a precautionary measure. He said that the Trade Marks (Amendment) Bill would not be taken, and surely that indicated that all the other Orders might be taken if there was time.
  Captain Margesson: The hon. Member is surely mixing up Government business with private Members' business.
  9.52 p.m.
  Mr. Gallacher: Is it not the case that the Eleven o'Clock Rule is suspended and that we can stay all night if we like? Surely, if the Government cannot supply the House with business when we have so many hours before us, we may be allowed to supply ourselves with our own business. Therefore, in view of the fact that we have until six in the morning if we like, we should be allowed to take this Bill now.
  Captain Margesson: The Eleven o'Clock Rule was suspended only for Government business.
  9.52 p.m.
  Mr. Gallacher: The Eleven o'Clock Rule is suspended, and I suggest that in view of the fact that the Government cannot supply us with anything to work at, we should be allowed, through the courtesy of the Government, to discuss this Bill.
  9.53 p.m.
  Mr. Benn: The case is briefly this: Private Members have very few opportunities for getting legislation through this House. First of all, they have to ballot even to get a place on the few Fridays available, and then they have to run all the risks attendant on the Standing Committee and so on. It is very rarely that they get their Bills as far as the Report stage, which this Bill, introduced by an hon. Friend of mine, has reached. It is a fact that if the Government would permit it, this Bill might now be taken and voted upon, or even partially debated

  1761
  and the Debate adjourned, but we might at least have a Debate on this Bill in the House. The reason that that is not being done is that it is inconvenient to the Government, whose followers have all gone home.
  Sir J. Haslam: Oh, no, they have not.
  Mr. Benn: Except, of course, some of the most important.
  Sir J. Haslam: Thank you very much.
  Mr. Benn: The Chief Whip said that I know very well from old experience that it is customary to warn your own followers what business is coming on. That may be so, but at the same time the fact that the organisation of the Chief Whip's Office, which has nothing to do with me, is defective, and that they have not been able to keep their men here, is a very poor reason for preventing my
  hon. Friends from debating this Bill. This Bill is to be defeated, not on its merits, but because the Government have seen fit to suppress the only chance which it has of being discussed in the House at all. On these grounds, I am sure that many hon. Members in this House will feel that the Chief Whip is not giving, at any rate, the latitude to private Members that they very rarely get, and I ask him to withdraw the Motion for the Adjournment of the House.
  Mr. Patrick: Can the right hon. Gentleman say whether the promoter of the Bill is here?
  Mr. Benn: Several of the backers of the Bill are, I understand, in the House.
  Question put, "That this House do now adjourn."
  The House divided: Ayes, 118; Noes, 71.

  Division No. 242.]

  AYES

  [9.55 p.m.

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

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

  Patrick, C. M.

  Albery, Sir Irving

  Goldie, N. B.

  Pickthorn, K. W. M.

  Aske, Sir R. W.

  Gridley, Sir A. B.

  Ponsonby, Col. C. E.

  Assheton, R.

  Grimston, R. V.

  Raikes, H. V. A. M.

  Barclay-Harvey, Sir C. M.

  Guy, J. C. M.

  Ramsbotham, H.

  Beamish, Rear-Admiral T. P. H.

  Hannah, I. C.

  Ramsden, Sir E.

  Boulton, W. W.

  Haslam, Sir J. (Bolton)

  Reid, Sir D. D. (Down)

  Bower, Comdr. R. T.

  Heilgers, Captain F. F. A.

  Reid, J. S. C. (Hillhead)

  Bracken, B.

  Heneage, Lieut.-Colonel A. P.

  Reid, W. Allan (Derby)

  Brown, Col. D. C. (Hexham)

  Herbert, Major J. A. (Monmouth)

  Remer, J. R.

  Butcher, H. W,

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

  Ross Taylor, W. (Woodbridge)

  Campbell, Sir E. T.

  Hope, Captain Hon. A. O. J.

  Rowlands, G.

  Cayzer, Sir H. R. (Portsmouth, S.)

  Hopkinson, A.

  Russell, R. J. (Eddisbury)

  Cazalet, Thelma (Islington, E.)

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

  Salt, E. W.

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

  Hulbert, N. J.

  Samuel, M. R. A.

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

  Hunter, T.

  Scott, Lord William

  Clarry, Sir Reginald

  James, Wing-Commander A. W. H.

  Shaw, Captain W. T. (Forfar)

  Cobb, Captain E. C. (Preston)

  Keeling, E. H.

  Simon, Rt. Hon. Sir J. A

  Colfox, Major W. P.

  Kerr, Colonel C. I. (Montrose)

  Sinclair, Col. T. (Queen's U. B'lf'st)

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

  Kerr, J. Graham (Scottish Univs.)

  Smith, Sir R. W. (Aberdeen)

  Conant, Captain R. J. E.

  Kimball, L.

  Somervell, Sir D. B. (Crewe)

  Cooper, Rt. Hn. T. M. (E'nburgh, W.)

  Lamb, Sir J. Q.

  Somerville, A. A. (Windsor)

  Cranborne, Viscount

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

  Southby, Commander Sir A. R. J.

  Crooke, J. S.

  Leckie, J. A.

  Spens, W. P.

  Crookshank, Capt. H. F. C

  Liddall, W. S.

  Stanley, Rt. Hon. Lord (Fylde)

  Croom-Johnson, R. P.

  Lipson, D. L.

  Strickland, Captain W. F.

  Cross, R. H.

  Little, Sir E. Graham-

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

  Crowder, J. F. E.

  Llewellin, Lieut.-Col. J. J.

  Titchfield, Marquess of

  Culverwell, C. T.

  Lovat-Fraser, J. A.

  Wallace, Capt. Rt. Hon. Euan

  Davies, C. (Montgomery)

  Mabane, W. (Huddersfield)

  Warrender, Sir V.

  Davies, Major Sir G. F. (Yeovil)

  Makins, Brig.-Gen. E.

  Waterhouse, Captain C.

  Dixon, Capt. Rt. Hon. H.

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

  Whiteley, Major J. P. (Buckingham)

  Dorman-Smith, Major Sir R. H.

  Markham, S. F.

  Wickham, Lt.-Col. E. T. R.

  Duncan, J. A. L.

  Maxwell, Hon. S. A.

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

  Ellis, Sir G.

  Mayhew, Lt.-Col. J.

  Winterton, Rt. Hon. Earl

  Emmott, C. E. G. C.

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

  Wragg, H.

  Fildes, Sir H.

  Mitchell, H. (Brentford and Chiswick)

  Fleming, E. L.

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

  TELLERS FOR THE AYES.—

  Fremantle, Sir F. E.

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

  Mr. James Stuart and Lieut-

  Furness, S. N.

  Munro, P.

  Colonel Sir A. Lambert-Ward.

  Fyfe, D. P. M.

  Nall, Sir J.

  NOES.

  Acland, Rt. Hon. Sir F. Dyke

  Bellenger, F. J.

  Cocks, F. S.

  Adams, D. (Consett)

  Benn, Rt. Hon. W. W.

  Daggar, G.

  Adamson, W. M.

  Bromfield, W.

  Dunn, E. (Rother Valley)

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

  Brown, Rt. Hon. J. (S. Ayrshire)

  Ede, J. C.

  Barr, J.

  Burke, W. A.

  Edwards, Sir C. (Bedwellty)

  Evans, D. O. (Cardigan)

  Kirkwood, D.

  Ritson, J.

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

  Lansbury, Rt. Hon. G.

  Rowson, G.

  Gallacher, W.

  Lathan, G.

  Sexton, T. M.

  George, Megan Lloyd (Anglesey)

  Lawson, J. J.

  Silkin, L.

  Griffiths, G. A. (Hemsworth)

  Leslie, J. R.

  Smith, E. (Stoke)

  Griffiths, J. (Llanelly)

  Logan, D. G.

  Smith, T. (Normanton)

  Hall, G. H. (Aberdare)

  Lunn, W.

  Sorensen, R. W.

  Harris, Sir P. A.

  McEntee, V. La T.

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

  Harvey, T. E. (Eng. Univ's.)

  MacLaren, A.

  Taylor, R. J. (Morpeth)

  Henderson, J. (Ardwick)

  Maclean, N.

  Tinker, J. J.

  Hills, A. (Pontefract)

  Mander, G. le M.

  Viant, S. P.

  Holdsworth, H.

  Marshall, F.

  Watson, W. McL.

  Hopkin, D,

  Messer, F.

  Williams, E. J. (Ogmore)

  Jagger, J.

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

  Williams, T. (Don Valley)

  John, W.

  Nathan, Colonel H. L.

  Woods, G. S. (Finsbury)

  Jones, A. C. (Shipley)

  Naylor, T. E.

  Young, Sir R, (Newton)

  Jones, Sir H. Haydn (Merioneth)

  Oliver, G. H.

  Jones, Morgan (Caerphilly)

  Paling, W.

  TELLERS FOR THE NOES.—

  Kelly, W. T.

  Price, M. P.

  Mr. Whiteley and Mr. Mathers.

  Kirby, B. V.

  Rathbone, Eleanor (English Univ's.)

  Adjourned accordingly at Three Minutes after Ten o'Clock.

  SPAIN.
  SPAIN.
  DOMESTIC SERVANTS (EMPLOY MENT AGENCY ADVERTISEMENTS).
  DOMESTIC SERVANTS (EMPLOY MENT AGENCY ADVERTISEMENTS).
  AIR RAID PRECAUTIONS.
  AIR RAID PRECAUTIONS.
  FACTORIES BILL.
  FACTORIES BILL.
  ROYAL AIR FORCE (AEROBATICS).
  ROYAL AIR FORCE (AEROBATICS).
TRANSPORT.
  OMNIBUS FARES, MIDLANDS AREA.
  OMNIBUS FARES, MIDLANDS AREA.
  BY-PASS, CENTRAL WALES.
  BY-PASS, CENTRAL WALES.
  ELECTRICITY SUPPLY (PRICES).
  ELECTRICITY SUPPLY (PRICES).
  JUSTICES OF THE PEACE (DURHAM).
  JUSTICES OF THE PEACE (DURHAM).
  CANADA (NATIONAL EXHIBITION)
  CANADA (NATIONAL EXHIBITION)
  INDIA (NORTH-WEST FRONTIER).
  INDIA (NORTH-WEST FRONTIER).
Preamble
The House met at a quarter past four of the clock, The LORD CHANCELLOR on the Woolsack.
MINISTRY OF HEALTH PROVISIONAL ORDER (HALIFAX) BILL.
Brought from the Commons; read 1a; to be printed; and referred to the Examiners.
MINISTRY OF HEALTH PROVISIONAL ORDER (HORNSEA) BILL.
Brought from the Commons; read 1a; to be printed; and referred to the Examiners.
ASHDOWN FOREST BILL. [H.L.]
Returned from the Commons, agreed to, with Amendments: the said Amendments considered and agreed to.
NEWCASTLE-UPON-TYNE CORPORATION BILL.
Brought from the Commons; read 1a; and referred to the Examiners.
LONDON AND NORTH EASTERN RAILWAY BILL.
Returned from the Commons, with the Amendments agreed to.
NEWQUAY AND DISTRICT WATER BILL.
Returned from the Commons, with the Amendments agreed to.
METHYLATED SPIRITS (SCOTLAND) BILL.
Read 3a (according to Order) with the Amendments, and passed, and returned to the Commons.

FACTORIES 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 a

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second time. I should like, at the beginning of my remarks, to remind those noble Lords who take an interest in factory legislation that it is thirty-six years since we had a comprehensive measure for amending the whole of our factory code, and although smaller Bills have been introduced from time to time, the whole of our present factory laws are based entirely upon the measure enacted by Parliament in 1901. I think it can be truly said that factory legislation was never a Party question, and although this measure is to a large extent amending and consolidating our existing law, the Government are anxious to give close and careful consideration to any suggestions which may be expounded during the discussions on the Bill in this place. As modern methods of manufacture continue to grow faster and faster, and as it seems to me that speed becomes the god of the day, the strain of manual labour requires more rest, relaxation and recreation than it did thirty-six years ago. If, as I believe, that is a correct understanding of the present conditions of factory life, it is incumbent upon us, in considering amendments to our present factory code, that we should take into consideration the wholesomeness of the buildings in which men and women work, their clothing and cleanliness, the hours of their employment, more especially for women and young persons, the medical and health services, and other safety measures. All those principles in some form or another will be found to be embodied in this Bill.
Probably my best course this afternoon would be to select for explanation those clauses which I think are likely to be of interest to this House, and to include other additional clauses Which were added during the passage and journey of the Bill through another place. It will be remembered by those noble Lords who take an interest in this form of legislation that the earlier Factory Acts dealt practically only with the textile industry, and the law, to-day, does still draw a clear distinction between textile and non-textile factories. In the opinion of the Government this distinction is obsolete, and we propose in this Bill to abolish it for ever. I come now to Part I of the Bill. The first eleven clauses deal with the general provisions as regards the health of factory workers. It is provided in these clauses that additional space shall be allowed for each worker, and that the minimum tem-
790
perature should be fixed at 60 degrees after the first hour's work for light sedentary occupations. A new proposal is embodied in this Part of the Bill dealing with the importance of good lighting in factories, and in view of the extremely bad conditions which prevail in factories to-day this clause is urgently required. The last clause in Part I gives power to the Secretary of State to require that reasonable arrangements shall be made for medical supervision of the workers in the cases enumerated in that clause.
I turn from that to Part II of the Bill, which deals with the safety provisions. Your Lordships will notice that Clause 17 deals with new machinery, and the proposal comes from a recommendation of the Departmental Committee on Accidents which reported as far back as 1912. Clause 20 is one of the chief provisions of the Bill, being directed specifically towards the protection of juveniles against accidents which may be caused to them by the cleaning of certain machinery. Clause 22 contains an elaborate code of requirements for construction and maintenance of all lifts and hoists. In 1935 there were twenty-five fatal and 352 nonfatal accidents in factories due either to lifts or hoists. I do not think it is necessary for me to refer the House to the subsections of that clause for they can be amplified at a future stage of the Bill.
Coming now to Part III, I ask your Lordships to observe Clause 42. Provisions are contained in that clause and in Part IV of the Bill for the setting up of washing facilities. Further proposals will be submitted to the House at a future stage of the Bill in accordance with the undertaking given by my right honourable friend in another place. Clause 43 is another important addition to the Factory Bill. It provides that suitable accommodation shall be provided for clothing not worn during working hours, and that such arrangements as are practicable shall be employed for drying any wet or damp clothing. Part IV of the Bill deals with the health, safety and welfare of those employed in factories. There is an important point here to which I desire to draw the attention of the House. It is in Clause 53, which enables a district inspector to certify an underground room as unsuitable for use in any factory, and not only in specified factories, as was laid down in the Bills of 1924 and 1926. This matter was the

791
subject of legislation introduced into this House in 1913 by my noble friend Lord Salisbury, and I feel that it will be some satisfaction to him to see this provision about to become the law of the land.
I need not at this stage go into Part V, but I must ask your Lordships to bear with me a short time while I give what I hope will be an ample description of Part VI, dealing with the question of the employment of women and young persons. The provisions existing to-day regulating the hours of employment for children in factories are now obsolete in view of the Education Act and the Employment of Women, Young Persons, and Children Act, 1920. The age of entering into industrial occupations has been successively advanced under every Factory Bill enacted in the past. So far as my researches go I find that 1819 was the first year that legislation was passed prohibiting the employment of children under nine years of age, but that Act only dealt with a certain limited number of industries. In 1874 the age was raised to ten. It continued to be raised by other Acts until 1920, when the minimum age of entering employment became fourteen, and the Act also gave effect to certain international labour conventions. Under the Education Act which Parliament approved last year the local by-laws must require school attendance up to the age of fifteen, but local authorities are empowered to grant exemptions for beneficial employment for any child after the end of the term in which he or she attains the age of fourteen, subject, however, to certain considerations which have to be taken into account. Therefore, when that Education Act comes into operation it will be illegal to employ persons between the ages of fourteen and fifteen in industry except on a certificate granted by the local education authority.
I turn from that to Clause 70, which lays down the general conditions of employment for women and young persons. It is, I think, difficult to realise that in this year of grace, although it is still the law of the country, the statutory hours of employment, exclusive of meal intervals, is 60 hours per week in non-textile and 55½ hours per week in textile works. These are long hours, and I venture to think that they are quite unacceptable by modern standards.
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Accordingly, it is now proposed to embody the principle of a forty-eight-hour week which was so widely adopted after the War and is now, by agreement with employers and workmen's organisations, being worked by a great majority of industrial workers in this country. It is, moreover, provided that not more than nine hours can be worked in any one day exclusive of intervals for meals and rest, and the period of employment must be fixed by the occupier of the factory between the hours of 7 a.m. and 8 p.m., or between the hours of 7 a.m. and 6 p.m. in the case of young persons under six teen years of age. On Saturdays the hours are between 7 a.m. and 1 p.m. Your Lordships will observe that that is an advance on the existing law which is in operation to-day, whereby a firm is allowed to employ women and young persons up to 4 o'clock on Saturday afternoons. I hope the House will realise that it is not the purpose of this Bill to fix optimum hours of employment, but only to lay down the protective maximum limits.
The governing consideration in fixing these maximum limits must be the health of the workers and the practical need of the industry. The fixing of forty-eight hours as a maximum does not imply in any way that women and young persons should in all cases be employed up to that limit, for there are undoubtedly very good arguments of other kinds in favour of shorter hours in a number of industries. I have reason to believe that in one or two instances these lower figures are being, or are about to be, observed in certain factories. Paragraph (c) of Clause 70 deals with the intervals for meals and rest and provides the time that should be given to women or young persons in their spells of employment. I now ask your Lordships to refer to Clause 71 which was inserted during the Committee proceedings in another place. It provides that after a period of one year from the date of the commencement of the Act the hours to be worked by any young person under the age of sixteen shall be forty-four instead of forty-eight. There is a saving provision in this clause, however, giving industry the right to apply for longer hours up to the maximum of forty-eight only if it can be established under certain important conditions set out in the subsections of that clause.

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I turn to Clause 73, which is an important one and which deals with the question of overtime employment allowed to be worked by women and young persons over the age of sixteen. I might mention in passing that no overtime will be permissible to any young person under that age. It is important in discussing this point to take account of the fact that the great bulk of our industry is at present organised under collective agreements on the basis of a forty-eight hour week, which can be and is supplemented by overtime employment. These agreements have recognised the need for overtime, but as a rule they do not restrict its amount. The need to-day for it is more widespread, perhaps, than it was in the past, largely due to the modern practice of ordering from manufacturers in relatively small quantities, at shorter notice, and at more irregular intervals. The first subsection of this clause provides that overtime employment for women and young persons over sixteen is to be limited to a maximum of 100 hours in each year. Not more than six hours are to be worked in any one week, and overtime is not to be done in more than twenty-five weeks in any one year. It will interest the House to know that, under the existing law, women and young persons can work 600 odd hours overtime in non-textile factories and 390 hours in textile factories in one year, over and above the forty-eight-hour week.
Your Lordships will observe that it is a very large and substantial improvement which the Government are making in this clause. Subsection (2) limits the hours of work, including overtime, to ten each day and the period of employment to twelve hours. The other subsection to which I should like to refer your Lordships is subsection (5), which gives power to reduce overtime after public inquiry when it can be established that this can be done without causing serious detriment to the industry concerned. I pass from that to subsection (6) of the same clause which gives power to the Secretary of State to vary the hours of overtime employment in certain classes of factory subject to seasonal or special circumstances. Then it can only be for 150 hours in the case of women. I apologise for delaying the House for some time on these clauses, but they do contain provisions of exceptional importance and, by their inclusion
794
in this Bill, they vitally affect the employment of every woman and young person in this country. Therefore they are worthy of the very serious consideration of your Lordships' House. I would mention in passing that there are special exceptions to the employment of young persons which I need not detail at this stage. Your Lordships will observe that there are also two important clauses, Clauses 107 and 108, dealing with the extension of building and engineering works and these, I believe, can be more properly referred to on the next stage of the Bill.
I now come to the end of my remarks on the clauses to which I think it is necessary to draw the attention of the House. I do not for one moment pretend that I have covered all the principles and the new ideals which are embodied in the Bill, for I am most deeply conscious of the difficulty of presenting a Bill dealing with such a mass of detail to this House in any clear light. But I do maintain that by this Bill we are altering and revising the industrial code for some 6,000,000 men, women, and children. We are, by improving their conditions, making for greater industrial efficiency, lessening the number of accidents, and providing for the removal of undue fatigue. In conclusion, I may perhaps be permitted to add a personal note. For some years I was myself employed in factory occupation in the North of England, and I had reason to learn of some of the reforms which were necessary to bring the conditions of factory employment into line with modern requirements. This Bill undoubtedly achieves an enormous advance in factory life, and it does also compel a great amount of industrial reorganisation. I know full well, from the experience I myself have had, that the Bill will be welcomed by both young and old alike and that, for the successful operation of this measure, the support of the workers will be forthcoming. I know, too, that the employers are more and more showing themselves appreciative of the need for a higher standard in industrial and factory conditions, and I am sure that they also will co-operate in every possible way.
I hope the remarks that I have made to your Lordships this afternoon will give the House some idea of the large complexities which are involved in this Bill.

795
I wish myself that I could have taken considerably more of your Lordships' time in fuller explanation of some of the many principal items in the Bill, but I know there is other important work in regard to which many of your Lordships desire to speak, and I have, therefore, endeavoured to confine my remarks within the shortest possible time. I beg to move.
Moved, That the Bill be now read 2a.—(The Earl of Munster).
THE EARL OF LISTOWEL: My Lords, I should like first of all to congratulate the noble Earl opposite very warmly indeed on his performance this afternoon. I imagine it is the first time he has had to deal with factory legislation, and he could not have been presented with a much more difficult beginning than a Bill of 160 clauses containing as much detail as this Bill does. I observe that your Lordships associate yourselves with the expression of appreciation that has come from these Benches in regard to the manner in which the Bill has been explained by the noble Earl opposite.
My next observation is to echo a protest that appeared in The Times of Saturday last under the name of a member of your Lordships' House about the way in which this Bill has been brought before your Lordships this afternoon. This measure is, I suppose, together with the Marriage Bill, one of the two most important Bills to come before your Lordships for consideration during the present Session, and the full text of the Bill was not printed and circulated until the end of last week. I received my copy on Saturday morning, and I imagine that other members of your Lordships' House received theirs at the same time. I do not believe that it would be possible even for the most exceptionally able member of this exceptionally able House to master a Bill of 160 clauses in the course of one weekend; therefore I cannot help wishing that the Government had allowed us to take the Second Reading a little later on. We have, after all, the whole of the month of July in front of us. I cannot help feeling that it is a little unfortunate that most of your Lordships are here to-night to listen to the debate upon another and subsequent Bill. It is rather an unhappy situation that many noble Lords should have to listen to a debate for
796
which they were perhaps not prepared because the Government decided that these two important Bills should be considered on the same afternoon.
Our attitude on the Bill is this. We in the Labour Party have always wanted a Bill to consolidate and amend our factory code. We are exceedingly glad that a Bill has come before both Houses of Parliament, and that when it is passed into law there will be a distinct improvement in existing conditions of work in our factories. At the same time we cannot express sufficient satisfaction to be able to refrain from a great deal of criticism and vigorous amendment when the time comes. We will certainly not try to prevent in any way the Second Reading of the Bill, but when the Committee stage arrives I should like to warn the noble Earl at this juncture that he will have to cope with a vigorous and numerous collection of Amendments.
The only general observation that I have to make before dealing with a few of the clauses of the Bill is this. The noble Earl at the outset said that this Bill does not aim at prescribing optimum conditions for industrial workers but rather at laying down a minimum standard of welfare. That has always been the spirit behind Factory Bills since the year, I think it was 1819, when the first Factory Bill was introduced into Parliament, and that is not our view of the right conception that should inspire a Bill dealing with conditions of work in factories. When one surveys the treatment of factory hands by the successive Parliaments that have met in the last one hundred years one cannot help being reminded that a certain Latin tag would seem to apply to men as well as to animals: "Sic vos non vobis mellificatis apes." We cannot consent to factory hands being regarded. as to a large extent they have been regarded, by legislation as tools or instruments that have to be perfected in order that those who run the factories and those who benefit from the sale of goods made in them may enjoy the greatest possible returns.
We regard factory workers as people whose happiness, comfort and general well-being should be the main object of industry and the whole legislation affecting industry. That is why we quarrel with the principle of laying down a minimum standard of health and wel-

797
fare and safety which is behind this Bill, and which, indeed, has been behind every Factory Bill. We should like to see a Bill which aims rather at establishing the best possible conditions of Work and at bringing up the general level of factory workers to that now enjoyed by those who are employed by the most enlightened employers, and by those who work in countries where factory legislation is most advanced. We have, unfortunately, lost the lead in factory legislation which we enjoyed in the nineteenth century, and it is most lamentable that an example that might inspire countries that are more backward industrially should no longer be available from the practice of the British Parliament.
Now I should like, if I may, to deal as shortly as possible with certain of the more important provisions of the Bill. I was particularly grateful to the noble Earl for dwelling at such length on Part VI of the Bill, which, indeed, contains its pith and marrow. We are sorry that there is no limitation whatever upon the working hours of adult men in industrial employment. The answer given was that such matters should be left to collective bargaining as a very large proportion of male industrial workers is enrolled in trade unions. But that surely is not an excuse for overworking those men who do not belong to such organisations as trade unions. A report of the Chief Inspector of Factories points out cases of men working as many as thirteen hours a day. I know myself a case of a man who works twelve hours a day. We cannot help regretting, on account of the hardship experienced by a certain number of male employees in industry, that this Bill does not impose any statutury regulation or restriction on the hours of men. We should like to obtain a forty-eight-hour week for men and women alike, which indeed is already operative in certain Continental countries. Our ambition soars still higher, because the Trades Union Congress desires in the course of time to reduce the working week to the length of forty hours, and this of course would have to be done without any reduction of wages, without any diminution in the remuneration of the employees.
These are our main objections to the provision regarding the working of adult factory hands, but we are equally dismayed because a working week of forty-
798
four hours is now laid down for boys and girls of fourteen and fifteen. The noble Earl pointed out that it would be necessary under the Education Act for industrial employment to be regarded as beneficial from the point of view of the child before a job could be accepted, but, surely, if the word "beneficial" has any real meaning at all, it must imply that plenty of opportunity is given to the child for physical education and for academic work in the classrooms at school. If there is any meaning in the word "beneficial" which the Government introduced into the Education Act last year, it surely must imply the best possible opportunity for children to obtain a reasonable sort of education. Is it at all conceivable that a child of fourteen or fifteen, who has already worked five or six hours in a factory, will be sufficiently fresh and sufficiently alert to benefit from sport and from instruction from its teachers? Surely the two things are at bottom incompatible. We should like to sec children allowed to stay at school and kept out of industry until the age of fifteen. I am perfectly certain that on educational grounds that would be the only reasonable course to take, and I am equally certain on other grounds, which I think appeal equally strongly to the Government, that that would be the right thing to do.
The Government are apprehensive about the state of physical health of the working-class population. There is a Bill which is to be presented to your Lordships tomorrow providing for more opportunities of physical education in towns and villages generally all over the country. I am perfectly certain that exemption at this tender age from factory work would probably do more, and would certainly do as much, for the physical well-being of the rising generation as physical exercises in gymnasia or games on the playing field. Another reason for the desirability of exempting children of fourteen from industrial employment is this. As the noble Earl opposite is aware, the accident rate for young persons is very considerably higher than the accident rate for adult workers and the reason is exceedingly obvious. The best way to reduce the number of accidents in industry would be to allow this youngest grade of workers to disappear because it would be no longer recruited from below. I cannot believe that the argument so often used, that industry cannot bear the burden of

799
not being able to employ this cheap labour, really holds water. This argument has been used whenever a Factory Bill has been introduced into Parliament and whenever the age of entry into industry has been raised. But I do not think any one would say that the fact that we no longer allow children of nine and ten years of age to go into industry has very seriously diminished the prosperity of this country.
I am sorry to have dealt at such length with this one solitary point about the Bill, but I do feel that it is perhaps the most important thing that might have been done if the Government had been willing to pursue the logic of its own Education Act of last year. We believe the same argument applies fundamentally to young persons of sixteen and seventeen. We cannot consider that overtime is desirable for children of that age, and indeed we would like to reduce their hours of labour to not more than forty whereas forty-eight is laid down, I think, as the figure in the Bill. There is just one word I would like to say about overtime. For the first time in the history of the factory code overtime is accepted as a general rule or principle applying to the factory population. Hitherto, overtime has been regarded rather as an emergency measure permitted to be employed by certain firms at moments when they have some exceptional need of labour. Surely, we ought to stick to the principle of not allowing overtime as a general rule, but simply permitting it on certain occasions when the seasonal pressure of trade or the need of the occupation demands a longer spell of work than the normal spell. I cannot help feeling that it is a retrograde thing in factory legislation to lay down overtime as being a customary and generally acknowledged practice.
There are only two other points with which I wish to deal and I will do so as briefly as I possibly can. The first of these is that we still retain in this Bill the historical anomaly of classifying women together with young persons. That was perhaps comprehensible in the nineteenth century, when women had no political rights and very few legal rights, and had hardly filtered through the net that prevented them from entering the professions. Surely to-day, however, it is ludicrous to put women in the same cate-
800
gory as children. I am not saying that women should be treated in exactly the same way as men; I would not go so far as that. But it seems to me to be even more ludicrous to treat women as in any sense identical with children than it would be to treat women as identical with men, not merely because women are fundamentally adults and therefore have abilities and characteristics different from those of children, but also because children have an educational need, which is their most important need, and which older people have not.
Finally, when this Bill deals with holidays in Clause 78, Part VI, there is no mention of an annual holiday with pay. The only holidays laid down by Statute are the religious festivals and the Bank Holidays, which together amount to less than a week and which do not run consecutively. What we desire is a whole week, one stretch in the year in which working people may obtain recreation and rest and which will also be paid for by their employers. It is obviously necessary that the holiday should be a paid holiday, because otherwise they could not obtain the rest and the recreation that they desire and deserve. This is already the practice in many firms of enlightened employers. It has become a statutory regulation in certain countries. A Private Member's Bill which has received a Second Reading in another place proposes to allow a week's holiday per annum with pay. Surely, in view of these recent trends in legislation and in the actual running of industry, the time has come when the Government might well embody a clause such as that in one of its own Bills. Those are all the observations that I have felt called upon to make this afternoon. The very many detailed criticisms that we on these Benches feel bound to level at the Bill will be formulated in the shape of Amendments when we reach another stage.
VISCOUNT SAMUEL: My Lords, the indulgence which your Lordships are accustomed to extend to a member of this House who addresses it for the first time is needed not less by one who has taken part for many years in the debates in another place. There is the difference in atmosphere, and there are many small and subtle differences in procedure, so that if unwittingly I should err I would ask you of your kindness to extend to

801
me your forgiveness. I have taken this occasion to address your Lordships for the first time for the reason that for nearly six years I had the honour of serving in the Home Office, first for more than three years as Under-Secretary and afterwards in two terms as Secretary of State. During those years I was able to keep in very close touch with the industrial side of the very varied work of that Department, and I count it a privilege to-day to be able to extend a cordial greeting to this Bill, an important measure of social progress explained to the House so lucidly by the noble Earl, Lord Munster, who speaks with a sympathy drawn from personal experience. I feel sure that I am expressing the views of my noble friends on these Benches in extending that welcome to this Bill.
There was a time when the evils of the factory system were a byword and the system itself was regarded as a blot upon modern civilisation. Hundreds of thousands of children were drawn yearly into the mills. During their working lives they were subjected to exhausting conditions; they were often degraded by sordid and squalid surroundings; they were worn out by middle-age. These workers had no effective voice in determining the conditions of their own employment. Your Lordships will remember how Blake, in his most famous poem, spoke of "these dark, Satanic mills" which had been built "in England's green and pleasant land." Thanks to a century of effort, there has been a great change, due partly to the efforts of Parliament in the Factory Acts, partly to the efforts of the workers themselves through their trade unions, and partly to the better standards set by enlightened employers. Now, as we drive along the great arterial roads out of London, we may see, and here and there in the industrial districts of this country we find many modern factories of a very different type from those "dark, Satanic mills": attractive in their architecture, often set in lawns and gardens, light, airy, clean, sanitary, the workers employed for moderate hours, with holidays without loss of pay—work-places that are fit for members of a civilised nation.
So far so good, but in these matters we have to beware of complacency. These modern factories she what is possible, but the average is far below them, and the worst very far below them. There are
802
altogether a quarter of a million factories and workshops, many of which are small and ill-equipped. There are, I suppose, approaching a quarter of a million employers. Some of them may be bad employers, many of them are negligent employers. So that here and there we may find features in the factory system which are a discredit to what we regard as an age of progress and enlightenment, what an indignant Irish orator once called "this so-called twentieth century"! So there is still need for pressure to bring the worse up to the standard of the better, and the State must take a part in that work. This Bill is a measure with that admirable purpose.
But there are defects, which forbid complacency, which run all through the system. For example, accidents are still numerous. There are upwards of 150,000 accidents every year in factories, accidents serious enough to incapacitate a worker for more than three days. This involves a very heavy cost to industry in compensation—many millions—but, far more important, it involves suffering and loss to all these tens of thousands of industrial workers. Further, the factory system as we have it in this country still imposes too heavy a tax upon youth and adolescence. Undoubtedly the time is ripe in this country for all children up to the age of fifteen to devote that time of their life to education. Whether that can best be achieved through the Education Acts or whether a step in that direction can be taken by means of this Bill is a matter which no doubt we shall discuss in Committee, together with the other important particular points which have been brought to the attention of the House by the noble Earl, Lord Listowel, who has just spoken.
There is another problem affecting the factory system as a whole to which the noble Earl who introduced the Bill drew some attention. That is the effect of machinery and of the speed of machinery. The workman has to keep pace with the machine. Its continuous monotonous movements govern the movements of the human being, and this sometimes involves a muscular strain but more often a great nervous strain from the very monotony, continued hour after hour, day after day, week after week, and year after year. It is sometimes said that modern man is the slave of the machine that he has himself

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created. Emerson said: "Things are in the saddle, and ride mankind." There is an element of truth in that, but I believe that as a generalisation it is untrue. On the contrary, machinery does for mankind what slavery did for the ancient world. It has undertaken all the brute labour, and it has supplied us with commodities and amenities, and has brought them within reach of almost all classes of people, in such abundance and variety as our ancestors could not have imagined in their most sanguine dreams to be possible.
Nevertheless machinery does bring a new problem into this aspect of the modern world, and a Bill such as this must take that element into account. In its clauses and regulations dealing with young persons, hours, overtime and holidays, we must always have this important factor in our minds. Part of the nerve strain of factory life is noise—incessant and insistent noise. This is a matter which is seldom mentioned, because I suppose it is usually regarded as unavoidable, and I am glad that a movement has been started, led by the noble Lord, Lord Horder, which seeks to mitigate this very trying feature of modern life. I hope that it will not be long before the Factory Department of the Home Office may find the means to introduce, or promote the introduction of, some remedial and preventive measures into the work of factories.
There is another defect which forbids complacency, which I for one think might be dealt with by legislation. I am, however, speaking for myself and some others—they are as yet not many—when I say that we wish a beginning might be made in this Bill. We often in times of industrial conflict are inclined to say that labour is really a partner in industry, and that the workers should so conduct their affairs through their unions as to fulfil the responsibilities of partnership; but, as a fact, is labour as a rule treated in the factory as a partner? Very often the workman is only able to feel that he is merely a hand, and nothing more. A number of the most progressive firms realise the importance of this matter, and realise that unrest in the industrial world is not only a question of material conditions but also of status and self respect. They have established in quite a number of industrial firms, including
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several of the most important in this country, Works Councils representative of the management and of the workpeople, not interfering with the business conduct of the enterprise but dealing, at regular meetings, with working conditions, and enabling the workmen to feel that their views can be expressed and heard as part of the normal conduct of the business. Within the general rules set by collective bargaining for the whole trade, local and special conditions of work are determined by these works councils. I am one of those who hold that this system ought to be general throughout the larger establishments—it may not be suitable for smaller ones—so that thoughtful workmen may feel that they are not merely subjects in the world of industry, but citizens.
Later, also, one may hope that the system of profit sharing may be introduced much more widely into industry than is yet the case. Some of us who have been studying these problems for a long time past are also of opinion that there should be a Ministry of Industry. It seems astonishing that in a highly industrial country like Great Britain there should be a Ministry for trade and a Ministry for agriculture, while industry is left to be dealt with by three or four Departments, and there is no one in a position to take the initiative with great measures of industrial reform, which is undoubtedly needed in the industrial world. So that if a Government should some day wish to introduce an extensive and bold measure of social progress these are matters to which they will probably be well advised to give attention. Meanwhile, the proposals in this Bill, though less far-reaching than the conditions of our times require, are useful and acceptable, and I have no doubt that the Bill will meet here, in its main lines, with almost universal agreement.
The outcome of the Bill as a Statute will depend upon its enforcement. The Factory Department of the Home Office contains some 250 inspectors and other officers, and the Home Secretary in another place announced that in consequence of the Bill that number would have to be substantially increased. Fortunately, the work of the factory inspectors in these days meets with co-operation rather than with obstruction from employers. There was a time when the inspector was regarded as a sort of inquisitor conducting a persecution. Now

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he is more often regarded as a helper in a common object, that common object being the welfare of British industry, in which the welfare of the workers, who are the vast majority of those engaged in it, must be an integral part.
The close interest of His Majesty in industrial welfare is well known and widely appreciated, but it is not so generally known, though it is no secret, that one member of the Royal House has been actively serving as a factory inspector on the Home Office staff. When I was Home Secretary, five years ago, it fell to me to make arrangements for the introduction of the Duke of Kent to the Factory Department. His work there was not merely formal and perfunctory, but for nearly two years the Duke of Kent worked, for several days a week, the standard hours of an assistant factory inspector. He worked with admirable devotion and perseverance, and visited hundreds of factories, workshops and docks in the London area and elsewhere. Thereby he not only gained practical knowledge, useful himself, but also gave encouragement to the whole of the inspectorate through the recognition so extended to the value of their work to the welfare of the people.
This is a voluminous measure covering 139 pages of print. Of necessity it is complex and technical; it consolidates and modernises a century of legislation. I feel sure that it will receive the cordial approval of your Lordships' House, with gratitude to those Ministers, and civil servants also, who have been engaged for years past in the laborious work of its preparation, and to those who now present it to be finally fashioned and enacted by Parliament.
THE LORD BISHOP OF WINCHESTER: My Lords, we have all listened with the greatest interest to the speech which has been made by the noble Viscount, and we are glad that he has had the opportunity of making his first speech on a subject with which he is so familiar. We hope we shall often hear him on this and other subjects. I propose to take only a very few minutes in addressing the House. I venture to speak on this subject because for many years I have been very interested in the problems with which the Bill deals. I welcome the Bill. It was a good Bill when it was introduced in another place, ii was made a better
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Bill in the Committee stage, and I hope that in this House we may be able to make it a very good Bill. I am the more encouraged in thinking that this may be so because the Government throughout the Committee and Report stages in the other House have always viewed with sympathy the various Amendments which have been moved, and to-day the noble Earl moved the Second Reading in an admirable speech, which was clear and audible—a great merit—and also was obviously very sympathetic.
The Bill, I feel, is really a great step forward. It makes new provisions for the cleanliness and the comfort of those who are working in factories; it sets a higher standard of requirements for health, especially the more thorough ventilation of the factories, and also has new provisions about lighting. There are additional safeguards against accidents, and throughout the Bill there are various regulations which will see that its clauses are progressively carried into effect. But here I should like to endorse an observation which was made by the noble Viscount who has just sat down. It is one thing to have excellent regulations, but these regulations must be carried into effect and they have largely to be carried into effect through the inspectors. The inspectors are doing quite magnificent work, but they are inadequate in number. The noble Viscount mentioned, I think, that there are some 260 inspectors. If I remember rightly there are something like 250,000 factories and workshops to be inspected. Two hundred and sixty inspectors is an inadequate number for supervising and carrying into effect the complicated regulations of a Bill like this.
Now may I turn to the Part of the Bill in which I take the greatest interest, the Part of the Bill in which I think there is greatest merit and also the greatest defect—that Part, namely, which deals with young persons? The present position of the law dealing with the hours of labour of young persons in factories is most unsatisfactory. That is generally admitted. It is, I think, almost a national disgrace that young persons, some of them not more than children, should be allowed to work such excessively long hours in our factories. They have been allowed to do this year after year, and the Chief Inspector of Factories in his last Report pointed out that there is a tendency to

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increase the number of hours worked, a tendency to move towards the maximum allowed by the law. The effect of this on their health and on their energy is simply deplorable. The new regulations made in this Bill are here a great advance. The hours of labour are reduced. They are reduced in the case of those between sixteen and eighteen from sixty to forty-eight per week, and for juveniles, those between fourteen and sixteen, the hours are reduced to forty-four, subject to certain exceptions. In those cases the hours may be forty-eight. Overtime has been abolished altogether in the case of the younger children, but a hundred hours per year are allowed to those between sixteen and eighteen.
As far as that goes it is a real advance, but I think it is a matter of regret that children under fifteen are allowed to work in factories at all. This means that they can work forty-four hours a week—on five days in the week eight hours, and on the sixth day four hours. They start work at eight in the morning and work till twelve, and they work again from one or two o'clock onwards till they have done their eight hours in the day. The children—for they are children, just over fourteen—sometimes have to go a considerable distance to and from their work. At the end of a day like that how can you expect these children to take any part in continued education schemes, and how can you expect them to take any part in the physical exercises which in future are to be provided for them? I think the Government recognise that sooner or later the children will have to be prevented from working in the factories, at any rate till the age of fifteen. But why not stop it now? Every year means that some children are losing the opportunities of education and recreation which are available to those in another class of life. If that is not possible, I should like to see the exemptions removed so that these children never work forty-eight hours, and I should like to see overtime abolished, though this may possibly be an ideal in the case of those who are under eighteen. These matters will of course be discussed in detail in the Committee stage, and I hope that the Government may view sympathetically at any rate some of the Amendments which may be moved. But whether those Amendments are carried or not—and I hope
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they may be carried—I am sure that this Bill, even if it is passed in its present form, will do much for the health and happiness of the six millions who are employed in our factories to-day.
VISCOUNT ELIBANK: My Lords, I regret to have to intervene in this debate, especially with the debate which is to follow, but it would be invidious if nothing were said on behalf of the manufacturers in regard to a Bill of this nature. I should like to say, speaking on behalf of the National Union of Manufacturers, that they welcome this Bill. They welcome it because it consolidates all the Acts which have been passed over many years, and also for the new provisions which have been included in it. These provisions have been arrived at only after very careful consultation, and there is nothing in this Bill to which any manufacturer would take exception. However, there is one point which I am constrained to bring before your Lordships. In this Bill there are two sets of regulations. There are regulations under Clause 60 for health and safety—these are what are called the special regulations—and there are certain general regulations under Clause 129 which refer to ventilation and lighting, a point which was mentioned by the noble Earl in moving the Second Reading. In the past there has been no cause at all for any feeling on the part of the manufacturers against the Home Office for the way they have made those regulations. They have usually consulted them, and regulations have been made with the consent of all parties. But in the Bill as now drafted, in the case of the special regulations, special procedure is laid down in the Second Schedule of the Bill which requires that they shall be published in the manner best adapted for informing persons affected, and the procedure may include an inquiry. In the case of the general regulations, the only safeguards are that notice of the proposal to make regulations has to be published in the London Gazette and that then the regulations are laid before Parliament and can be annulled by a negative vote of either House. So far as the general regulations, therefore, are concerned, there is nothing to determine that the Government shall consult those most interested before the regulations are made and laid before Parliament.
All I am going to ask the noble Earl when he replies is whether the Govern-

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ment will give an assurance that when these general regulations are made they will consult those interested, not only after they are laid before Parliament, but actually before they are laid and whilst they are in draft form. I have confidence in asking the Government to give that assurance, otherwise it will be necessary to move Amendments when the Bill is in Committee to see whether that can be done. This Bill is a very important Bill, as other noble Lords have stated, and there are many points in it to which one would have liked to make reference, but the noble Earl, Lord Listowel, has indicated in his speech that he is going to put down masses of Amendments. Therefore, no doubt, during the Committee stage there will be ample opportunity to go into the other points which one would have liked to mention. All I ask now, therefore, is that the noble Earl will consider giving the assurance I have asked from him.
LORD ELTON: My Lords, I only ask to be allowed to extend a dozen sentences of welcome on behalf of the National Labour Peers who support His Majesty's present Administration. I think it should be said that this is a remarkable Bill to be brought before us at such a time. It is the best possible disproof of the once familiar prophecy that the drive for rearmament was going to stifle the Social Services, and, without undue flattery, it might be said that only a National Government could have brought it before your Lordships. No weak minority Administration could have shouldered the burden of these 160 clauses.
While I am distributing my humble congratulations, I should like to say a word or two regarding those who, outside both Houses of Parliament, have worked for many years to bring public opinion to the point at which it would accept some such measure as this. Many of them were themselves trade unionists, and many of them will be grateful to His Majesty's Government, even although they may not find everything they had hoped to find in this measure. I suppose none of us finds everything he had wished to find. Noble Lords with whom I am associated have, I think, been particularly regretful that it was not found possible to reduce the hours of labour of young persons under sixteen to forty instead of forty-four, but we quite recognise the force of the argument that it is perhaps better to enact
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forty-four with the consent of employers than to enact forty and tie round the clause the deadweight of opposition from employers, which might then develop into excessive use of the exemption clauses. Of course, we remember that this is only a measure to round up laggards. It is a measure for bad employers. The good employer has already reached this standard, and in some cases has gone a long way past it.
The only other observation I should like to make is that I share the doubts of the right reverend Prelate regarding the ability of an inspectorate of 260 inspectors to enforce such a complicated measure as this. I think it was a Labour Member in another place who pointed out how often regulations on these matters, which are hung up in factories, are so obscured with the dust of ages that even the large print of their titles at the top of the placards is not legible. I have sometimes wondered, when in these places myself, whether something might not be done to assist effective inspection by bringing the relevant clauses more directly to the notice of the workers themselves, who are, after all, primarily concerned with these measures in the factories. I shall now content myself with extending a very warm welcome on behalf of the noble Lords with whom I am associated to a measure which, without undue flattery, may be called characteristic of the present Government, in that it is comprehensive, well-balanced, and has provoked the minimum of friction.
THE LORD PRIVY SEAL (EARL DE LA WARR): My Lords, I do not think there is very much for His Majesty's Government to reply to. If I speak with very great brevity, I hope your Lordships will really take it as an earnest attempt to suit your Lordships' convenience in giving the House time to get on to another discussion. I should be very sorry if it went out from this debate, because of the shortness of the debate and possibly because of the shortness of the Government reply, that we do not here consider this Bill to be of the very greatest and gravest national importance. The reason why this Bill has not been debated at very great length is simply that there is such unanimity on the need for it and on the usefulness of its provisions. Practically every point that has been raised is really a point that can be better dealt with at another stage of the Bill.

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Certain Amendments have already been promised to us. These Amendments will doubtless mostly be concerned with the points which the noble Earl, Lord Listowel, and the right reverend Prelate the Bishop of Winchester brought up—namely, the hours of women and young persons. No doubt these Amendments will be very good ones, and His Majesty's Government will, of course, do their best to consider them with the greatest sympathy. I would only make one remark with regard to them, and that is that of course no one would for a moment seek to contend that this Bill is the final word in factory legislation. Every one of us will admit that we would far prefer to have children working in the factories for forty hours than for forty-four, but this introduces the much more important question of how exactly we in this country are to tackle the problem of the improvement of our Social Services. Personally I far prefer to see the provision of forty-four hours in a Bill of this character with the full consent of all the parties concerned—with the sort of consent, for instance, from the manufacturers which the noble Viscount, Lord Elibank, has given—which will ensure to us that the scheme will be worked with the greatest thoroughness and good will by all parties. Then, no doubt, the new system having justified itself, the State and industry will be prepared in due course to take yet one more step forward.
I think that is really all that it is necessary for me to say with the exception of mentioning one point that was referred to by the noble Earl, Lord Listowel. That is with regard to the question of the time which was given to your Lordships for the consideration of the Bill before it was put down for Second Reading. That question was very seriously considered by my noble friend the Leader of the House. We are frequently in the position in this House of very much regretting the length of time which is taken in another place, and the delay which therefore occurs before legislation reaches us, but it was felt, admitting that there was a certain limited time before the end of the Session, that it was more important to have plenty of time at our disposal for the consideration of the Bill at the Committee stage and Report stage than on the Second Reading, particularly in view of the fact that
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the Bill itself and the general principles that are to be enacted in it have been before Parliament and the country for a very considerable period. With those words I beg your Lordships to give this Bill a Second Reading.
VISCOUNT ELIBANK: May I ask the noble Earl whether he could give me the assurance I asked for, as I cannot be here next week during the Committee stage?
EARL DE LA WARR: I must apologise to the noble Viscount for omitting his point. I most certainly can give him that assurance wholeheartedly.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

MARRIAGE BILL.
Debate resumed (according to Order) on the Motion, made by Lord Eltisley last Thursday, That the Bill he now re td 2a.
THE LORD BISHOP OF BIRMINGHAM: My Lords, it may be for your Lordships' convenience if I say that those interested in the Marriage Bill hope that the question may be put before eight o'clock this evening, as not many noble Lords have intimated their desire to speak. I intend to vote for the Second Reading of this Marriage Bill. There is in my opinion nothing in it which can encourage our people to regard marriage lightly. It is, I am convinced, a careful attempt to bring our marriage law into harmony with opinions now held by an overwhelming majority of enlightened Christian people in this country. One of the great merits of the Bill, as it seems to me, is that it will promote morality by lessening the number of irregular unions among working people. I hope that it will also lessen the number of collusive divorces among their fellow-citizens of less narrow means. Some legislation as to divorce is urgently needed at the present time, for people generally—is it not so?—are made profoundly uneasy by present circumstances. It seems to me that the Bill is carefully balanced. No practical alternative to it has been proposed.
Some, of course, dislike the Bill because of the restraints by which it seeks to prevent hasty or collusive divorce. As

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against such I, of course, speak as one who venerates the teaching of Christ. For me a marriage should never be dissolved unless, owing to the misfortune and still more the wrongdoing of one of the partners, it has already ceased to exist except in name. Marriage is in its very nature a restraint, valuable in the ordering of society and more especially for the sake of the children. But do we not all know that it is a restraint to which forbearance and love—sometimes unexpectedly—bring happiness? Some, I say, think the Bill too severe. Others regard it with active or passive disapproval because they think that remarriage after divorce is inconsistent with principles laid down by Christ and accepted by the Church. Now I am convinced that those who maintain this view are wrong, in so far as they assume that the founder of Christianity was law-giver rather than prophet. Christ indeed set forth with impressive emphasis his ideal of the lifelong union of one man and one woman to the exclusion of all others. But he left His followers free to legislate for men and women living in a world where wrongdoing is all too common.
Now I cannot of course weary this House with a lecture based on the critical conclusions of modern New Testament scholars. I will merely say that such inquiries have been pushed further than the point at which the most reverend Primate left them—I regret that he is not here to-day—in his able speech on Thursday last. It must to-day suffice if I assert, as I do without hesitation, that from the New Testament itself we can gather that, in the first century of the Christian era, complete divorce was allowed in the Christian community both for adultery and also when a pagan partner broke the union. Further, it cannot be denied by the historians that in the Christian East complete divorce has always existed. But you will say that the Western Church freed itself in early times from all exceptions and preserved Christ's ideal inviolate in its legislation. In theory, yes; but, of course, a safety valve was found in a practice of nullity, a practice that became so widespread as to be the equivalent of divorce by consent, or, still worse, of divorce at the pleasure of the stronger partner. The grounds of nullity were at one time so extensive that no marriage was safe from possible rupture.
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A certain measure of reform was achieved by the Lateran Council of 1215, about the time of Magna Charta, but grave abuses continued until the Reformation. In the early sixteenth century the reformers were never tired of inveighing against the laxity of the Canon Law and against the frequent decrees of nullity, which multiplied impediments made possible. An English Statute of 1533–34 stated, none too strongly:
"Marriages have been brought into such uncertainty that no marriage could be so surely knit or bounden but it should lie in either of the parties' power to prove a pre-contract, a kindred and alliance, or a carnal knowledge to defeat the same."
After the Reformation divorce with right of re-marriage, as you all know, became impossible under the ordinary law of England. The grounds of nullity were so restricted that abuse of the process ended.
This development was the more remarkable in that the great divines among the Reformers were almost unanimous in allowing that divorce was legitimate for adultery and, in general, for cruelty and after prolonged desertion. For example, the Reformatio Legum of the Commission under Edward VI would have allowed complete divorce for adultery, desertion and cruelty. The proposals, almost by chance, failed to become law, with the result that England was left until 1857 with as rigid a system as any Christendom has known. Did such rigidity, my Lords, promote social morality? No one who has studied the state of English society as it was in the time of James I or of Charles II or during the greater part of the eighteenth century could contend that rigid law prevented sexual licence. If your law is too strict, irregular unions will become so common that they are tolerated by public opinion, and thus harm will be done to public morality.
May I now explain briefly why I am sure those who contend that divorce has never been accepted by the Church of England—and I speak as a Bishop of that Church in your Lordships' House—have against them the weight of historical fact? As I have said, the Reformers and among them Cranmer, to whom more than any other man we owe our incomparable Liturgy, maintained no such attitude. Our Marriage Service enshrines Christian ideals. It was not meant to be, nor is it rightly used as, a reason for disallowing relief to a

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spouse whose marriage has been desecrated. But I will pass from the Reformers to the year 1670 when a Private Act of Parliament revived an old precedent by allowing a Peer to re-marry after obtaining a divorce. Did the English Bishops in this House indignantly protest? Two of the most distinguished Bishops, the High Churchman Cosin of Durham, and Wilkins of Chester, sometime Secretary of the Royal Society, voted for the Bill. Some 450 similar Acts were passed during the next two centuries. There is no evidence whatever that the English Bishops made it a principle to oppose those measures. When at length the Divorce Bill of 1857 came up for its Second Reading in this House, nine Bishops voted in the affirmative. Among them were Sumner, then Archbishop of Canterbury, and his great successor Tait—Tait whom Bryce described as the greatest Archbishop of Canterbury since the Reformation. Finally, in this hurried historical survey, in 1920 Archbishop Davidson in this House allowed, to the discomfort of some of his allies, that a complete divorce might be granted for adultery.
In the face of such evidence I must emphatically challenge the suggestion that as a Bishop of the Church of England I ought not to vote for the present Bill because remarriage after divorce is contrary to the traditions of the Church of England. On the one hand, I am convinced that Christ set forth an ideal and left His followers free to legislate so as to give relief from intolerable unions if thereby they did not harm social morality. On the other hand, there is conclusive evidence that this view was at the Reformation accepted by some of the most representative Bishops of the Church. In fact, the grounds on which divorce with the right of remarriage shall be allowed must be determined by the conditions of the time. Every effort should be made to preserve the stability of family life, to keep the home inviolate so that children may thrive in its wholesome shelter. But when the marriage tie has become unbearable through the wrong-doing or, in very rare cases, the misfortune of one of the partners, then I say the Church should acquiesce in the ending of the union and may rightly bless the other partner's attempt to make a new home.
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My discussion of general principles has left me with too little time to speak of details of the Bill now before us, but I must refer briefly to three matters. The most reverend Primate in the early part of this debate spoke strongly—but I believe by no means too strongly—in condemnation of the recently developed practice of collusive divorce after possibly fictitious adultery. Many of us heard with much satisfaction his statement that those responsible for the administration of the law regarded Clause 4 of the Bill as sufficient to give the Courts power to deal with the evil. The noble and learned Lord, Lord Atkin, urged that the pro-visions of Clause 4 were hard upon the petitioner, but he proposed no alternative machinery for ending a grave and admitted scandal.
I do not know whether I am in order, as this is a Private Bill, in inquiring whether administrative reform could not raise Divorce Court procedure from its present discredit. From time to time we see paragraphs in the Press concerning the rate at which some learned Judge has dealt with undefended petitions. An average rate of four minutes each was given in one paragraph which remains in my memory. Then, too, mention of arrears in divorce cases is frequent. It may be that much patient inquiry goes on behind the scenes. Of such inquiry, if it exists, there should be public knowledge. The average man naturally regards the haste which apparently results from congestion of work as ill fitted to disclose collusion. He sums up the whole thing as a fake and a farce. Now it is useless to take elaborate care with the provisions of such a Bill as that now before us if administration of the law is, and is to remain, unsatisfactory. I suggest that the Government would be well advised to increase the number of Judges specially qualified to deal with questions of divorce. A desire has been expressed that provision for attempted conciliation should be made. I would welcome such a provision, for even though it might seldom be successful it would show that we remained loyal to the Christian ideal. Bit I would also welcome administrative action by the Government whereby—dare I say it in this House?—women would become Divorce Court judges. I believe that a woman, by reason of her sex, would be especially valuable in such a position. A woman of mature judg-

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ment, with, of course, experience at the Bar, especially if she had some medical training, would probably show special qualities which the community would rapidly learn to appreciate.
May I refer briefly to two other clauses of the Bill? I have the greatest sympathy with the object of Clause 1, for too many young people contrive a divorce a few months after marriage. No one who accepts the Christian position can approve the establishment of a system of trial marriage. But I have reluctantly come to the conclusion that during the first five years of marriage a petitioner for divorce must, at the least, be able to apply to the Court on the ground that special circumstances exist. If the clause as amended in this way is retained, I should welcome its retention. I am in favour of the provision that insanity, under the conditions laid down, should be a ground for divorce. It is true that all other grounds are due to the wrongdoing and not to the misfortune of the respondent, but insanity is largely inherited; it is often a mental instability, where the appearance of cure is not maintained on return to normal life. The eugenist, anxious for the future of the race, the geneticist with his special knowledge, regard insanity with a gravity not, I think, recognised by some who have taken part in this debate. I trust that if we have the opportunity of hearing the noble Lord, Lord Dawson, this evening he will give us, out of the range of his own experience, information which must be weighty.
Many of us, however, have known men and women who have deliberately sacrificed the joys of marriage and children because they have known of a taint of insanity in their inheritance. I can conceive of few situations more awful in civilised life than that of a woman expected to bear children to a husband of unsound mind or of a stock which, as she has learned, is mentally tainted. As we remember that children are the chief end of marriage, so we ought, with nothing but pity for the tainted partner, to allow the sane spouse the opportunity of freedom, if desired. In this matter, as it seems to me, the provisions of the Bill err in possibly being unduly strict. I apologise for detaining your Lordships so long. I will merely add that I give general support to this
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Bill, not as a concession to be made to a semi-pagan community, but because it seems to me to be legislation in accordance with the spirit of Christ.
THE MARQUESS OF SALISBURY: My Lords, this most interesting debate deals with a subject of great complexity, notably because while it has, of course, a side of legislation for the State, it also has an ecclesiastical, I might almost say a spiritual, side. Therefore none of your Lordships would complain if most reverend and right reverend Prelates have taken a considerable part in the discussion. They have not always agreed. Far be it from me to attempt to intervene in the subjects upon which they differ. As far as I am concerned, most of the few remarks which I intend with your Lordships' leave to address to the House will be confined to the State side of the legislation. I will, however, just say this. The right reverend Prelate who has just sat down—an out-and-out supporter of the Bill—has dealt with many parts of it but has said nothing about Clause ii. This is the clause which finally relieves the Church of England from any coercion compelling the employment of their clergy or their churches in the remarriage of persons once divorced. He said nothing about it, hut, of course, it is a vital clause in the Bill—vital from the point of view of the Church, but vital also from a broad general point of view, because it marks the dividing of the ways upon this subject between the practice of the Church and the practice of the State. The most reverend Primate, unlike the right reverend Prelate who has just sat down, said that he could not in any way support the Bill, and it is quite clear from the line he took, and, if I may say so, from what I understand to be the line taken by the great body of Bishops and leading clergy of the Church of England, that henceforward no divorced person will be remarried, so far as these leaders can control it, in a church of the Church of England. Your Lordships will please realise that I am not, at this moment, desiring to express any opinion as to whether that is a good new departure or a bad one, but I will say that it is a most notable new departure. It means a profound change in the practical social administration of the marriage law.
I may just say, incidentally, that, humbly following in this respect the most

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reverend Primate, I cannot support this Bill. What is the vital thing? The right reverend Prelate has mentioned it: it is the stability of the marriage law. I need not say that I am speaking from the point of view of the State, for, as I have already told your Lordships, I am not dealing with doctrinal issues; it is not for me to deal with them. But what is vital from the point of view of the State is the stability of the marriage law: that everyone shall know what the law is and the solid basis upon which it rests. Anything else inevitably leads to disaster. Once there is a doubt about the foundation upon which the law stands, there is unrest at once. Everyone who is a little uneasy in his marriage thinks: "Oh, a little political agitation and we may get the law modified again. There is no fundamental reason for a great many of the provisions of this new Bill. They may be good or they may be bad, but many of them are only questions of degree." That unrest, I say, is a most important defect which this Bill will involve, and with unrest of course comes immorality, because people say: "Well, if the law says that I can get rid of my husband in three years, is there anything very astonishing or shocking if I anticipate it and act as if I had got rid of him in two years? There is nothing astonishing in the difference; it is a difference of degree." Your Lordships will find that throughout this Bill there is the same element of vagueness and insecurity, so that no longer will anybody feel that he can rely on the basis upon which the marriage laws stand.
How can I defend that statement of mine? The present marriage law depends upon the doctrine of the Church of England. Not only of the Church of England, but the Christian doctrine, and, as I have said, I am not here, I am not qualified, to discuss the doctrine, but merely to make the statement that it does rest upon it. It is not a question of whether we are going to adopt the text of St. Mark, or the text of St. Matthew, but as a matter of fact the Church of England, and the British law following the Church of England, and following a Church much wider than the Church of England, has founded itself upon certain texts of the New Testament. The essential thing to enable a man or woman to divorce his or her spouse is an
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act of adultery. That is essential. Nothing else will do. That is a solid basis. Now let us examine how far the Bill departs from that solid basis. There are several other causes which can be used in order to produce a divorce under the Bill. There were, it is true, a great many more such causes as the Bill was introduced in another place, but several of them have in the course of the discussion there disappeared. But one or two remain.
There is desertion. People plead for this. They show very hard cases. They ask for our compassion for those hard cases, which undoubtedly we are most willing to accord. But what is to be desertion? Now one of the most notable things in this Bill is that there is no definition clause. As your Lordships are aware, Bills which are laid before us, and which we discuss, nearly always have a definition clause. This Bill had originally a definition clause, but it disappeared, and there is now no definition cause. We do not know what desertion is. Not absolutely.
Let me suggest an ambiguity consequent on this absence of a definition. Your Lordships are aware that one of the great reasons for this Bill is what is called collusive divorce. That is where the act of adultery is pleaded in collusion between the parties, but I do not know whether desertion is subject to the same condition. May there or may there not be collusion so far as desertion is concerned? That gives an example of the vagueness of it. Then, the desertion is to be for three years. Why three years? Why three years more than two years? I find no defence of that particular provision by the noble Lords and the right reverend Prelates who support the Bill. We are always encouraged to follow the Scottish example. In this respect it is four years in Scotland, but for some reason or other three years has been picked upon in this Bill. Do your Lordships think that uneasy partners to a marriage are going to respect a law which has so artificial and arbitrary a rule in it as this? Why should they, against the strongest passions which human nature is capable of feeling? They must wait for three years. Why wait for three years? My Lords, I am sure you must see what a fundamental change this r lust involve in the conception of marriage.

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Then take insanity. The right reverend Prelate who has just sat down is strongly in favour of the provision which makes incurable insanity a reason for divorce. It is on the ground that insanity makes marital relations impossible. Is that the only misfortune that can happen to a married person which makes marital relations impossible? Of course it is not. All sorts of diseases make marital relations impossible. Why then is insanity picked out, and how long do your Lordships think you are going to stand upon a ledge so frail as that? If insanity is to be a reason, why not other diseases which befall mankind and prevent marital relations? Of course they must all follow in due course, and when they come the Bishop of Birmingham will defend them.
It is to be incurable insanity. There is no definition of "incurable." It is a matter of opinion, of course; nothing but a matter of opinion. I suppose the opinion of doctors—of two doctors or perhaps only one. Why should we tie ourselves in a matter of this kind to the opinion of doctors? Do doctors never differ in their opinions, even on the most fundamental questions? Of course they do. There is no definition of "cruelty" either. Of course it is said that there have been definitions in the practice of the Courts, or something of that kind—there have been forms of words used which amount to a definition. Why are they not repeated in the Bill? I am not a lawyer, I am sorry to say—I wish I were—but I should think that one of the things which lawyers would take notice of would be that, whereas in all Acts of Parliament such things are defined, in this Bill there is no definition, and therefore it must be interpreted differently from any other received phraseology which has hitherto prevailed.
Insanity is only a question of degree, again. Take such a pitiful form of insanity as melancholia. I suppose you can have incurable melancholia: yet think of the cruelty of adding to the wretched man's anguish of mind, profoundly depressed as he is, the knowledge that divorce is hanging over him. How can that be defended? How different that is from the conception of marriage as the Church of England teaches it: "For better for worse, for richer for poorer, in sickness and in health." That is the real bond. A partner to a marriage is melancholy, frightfully depressed, and the spouse is
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encouraged by this Bill to add to all the terrible weight of the burden of depression this fact, that he or she would be absolutely deserted.
We are always encouraged to follow the Scottish example. Well, it is a notable fact in this case that we have got a very recent Scottish example, because a Bill has been passing through your Lordships' House and, as far as the decision of this House is concerned, is already law, of which the provisions are very interesting. The noble and learned Lord who was responsible for piloting that Bill through the House, Lord Alness, spoke on Thursday, and he said, speaking of the present Bill, that all the provisions of Clause 2, that is, the causes of divorce, as well as others, are contained in the Scottish Bill. Yes "as well as others," but he did not mention the others. I would invite your Lordships who are asked to follow the Scottish example to consider for a moment what the others were which have, as far as this House is concerned, passed into law. Habitual drunkenness. And then a most wonderful provision—imprisonment; not merely imprisonment in lieu of a sentence of death—that comes in too—but other imprisonment. If a husband, let us say, has been imprisoned three times—I think it is for not less than six months—he may be divorced according to this Scottish Bill.
That is the line we are to follow. So that as time goes by—and I have no doubt there will be many defenders of such a change hereafter—prolonged imprisonment or repeated imprisonment is to be a reason for divorce, because the noble and learned Lord intimated that a man who had been in prison like that was hardly fit to have children. That was his conception, the Scottish conception of the marriage law. The Scottish parallel is blazing a trail which the marriage legislation of this country will follow unless your Lordships and the other House of Parliament take the greatest care to prevent it. Moreover, this Scottish law is not stable. The noble and learned Lord boasted that desertion as a cause for divorce has been the law of Scotland for 350 years. Well, he himself has proposed to alter it. It is no longer to be four but three years. No doubt Scotland is on the move, the marriage question in Scotland is on the move, just as it is in England.
I cannot support this Bill. The foundation of it seems to be utterly unreliable.

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It does the very thing which the right reverend Prelate said ought not to be done. It makes the marriage law unstable, and it opens the door henceforward to repeated change. Let me say one word in conclusion about the best part of the Bill. Well, there are two very good parts of the Bill. There is Clause II to which I have already referred, and there is Clause 4 which is designed to prevent collusion. That clause shares the general vagueness which characterises the Bill. But what is very important is the way the noble and learned Lord, Lord Atkin, addressed himself to this clause on Thursday. He held up his hands in horror that the Court should have to be satisfied that there was no collusion; he thought that was a most unacceptable provision. How could the Court be satisfied? He doubted whether, even if it had discovered a suspicion, it would be able to give any effect to its discovery.
Well, I do not think it is at all astonishing that the Court should have to be satisfied that there was no collusion. After all, if a man is found in possession of stolen goods he has to satisfy the Court how he got them. I am speaking in a learned presence, but I should have thought it was not at all contrary to the ideas of English law that a man who comes lending himself apparently to a suit of divorce from his wife should be asked to prove that there was no collusion. It seems to me very reasonable. When the noble and learned Lord says that he doubts whether it is possible to carry such a provision into effect, just conceive what that means. The noble and learned Lord is a Judge; he is a Judge of the Supreme Court, the highest Court in the land. If we pass the Bill in the form which is now on the Table, is that the way in which the Judges are going to interpret it—that they do not think it is possible to carry it out? It seems to me fatal to the words of the Bill as they stand, unless they are strengthened.
I earnestly hope that your Lordships will consent to strengthen them. It has always occurred to me when I read, as I sometimes do, these unopposed divorce cases in the newspapers, why in the world the respondent is not compelled himself to give evidence. I should have thought it was the simplest thing in the world to put the respondent into the box by the authority of the Court, and say to him:
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"Did you commit adultery with this woman who was suddenly introduced into the inn or the hotel in which you stayed for one night? Did you know her? Have you ever seen her before? Why was she there? Can you tell the Court why she was there?" Suspicion would reek at o ice, even the noble and learned Lord, Lord Atkin, would be convinced that it w as suspicious. I hope that some Amendment involving such a change may be put into the Bill. I have done. I apologise to your Lordships for having kept you so long, but I was anxious that this House should realise how grave a matter this Bill is, what a great departure it is from our hitherto received practice, and how it launches the marriage law of England upon a path of which I do not see the end.
VISCOUNT DAWSON OF PENN: My Lords, it is in the hope that I may be ab1e to contribute something to the fabric of thought behind this Bill that I venture to make a contribution to this debate. It is not true to say that we have reached a condition in which we are compelled either to go forward and amend the Act of 1857 or to go back and abolish divorce altogether in the sense which Roman Catholics and Anglo-Catholics would desire. The present-day evils of collusion, adultery, and perjury, injuring as they do the characters of the people who resort thereto, and having the further objection of damaging respect for the law in the eyes of the public—these are evils, and great evils, fully admitted. Some of the speakers are disposed to say that the causes of collusion and adultery are due to a weakening of the fabric of the moral sense. One speaker even referred to licentiousness as being the cause. I ask your Lordships, is change always decadent? I suggest to you, are not the causes of our present troubles to be found in the changes in thought and in mind which have taken place in the course of the years?
With the evolution of man's mind and heart down the centuries, is it not a fact that standards of knowledge and conduct have changed? Those who are opposed to such changes have often, on previous occasions, appealed to God and the Bible to bear them witness. I need only mention Sabbath-breaking. Did not the pulpits of the last century resound with declamations against Sabbath-breaking?

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Were not the people of those days told that the wrath of God would descend upon the world for the breaking of the laws of the Scriptures? And to go back into the world of thought, let us recall the times when men first suggested that the world was round and not flat. The opponents of that line of thought asserted that to declare the world was round was contrary to the Scriptures, and so it was. It also gave rise to such charges of irreligion that those who ventured to advocate it lost their lives in the cause they wished to espouse. Changes must come, whether they be in thought or conduct, and what is to me so difficult to understand is why the idea of marriage should alone be expected to remain static. Immobility is not the same thing as; stability. With a changed sense of values, has not the view steadily progressed during the last twenty-five years that when the main purposes of marriage have been frustrated—frustrated beyond repair—that marriage ceases to have any spiritual meaning or any spiritual existence? Where the kernel of marriage has been lost, the tendency of the present age is to throw away the husk—and can we say that it is wrong? The law, having lost its social sanction, is increasingly circumvented. Surely the cure is to adapt the law to the prevailing mind of the community, and this is what this Bill seems to do.
I pass for a moment to consider the conditions of divorce. If we exclude a small group of flippant people, with uncharted lives, who have only a notoriety value, I suggest that the majority of people who seek for divorce are serious people concerned with the workaday world. Nor must we think that the increase in divorces means a corresponding increase in marriage failures, because in former clays more married people lived with their failures, whereas in these days these failures are jettisoned when so irremediable as to make family life a pretence and a damage to the children. Further, in past days, married people were better able to live with their failures because the wife was dutiful; she fitted in; she had no more equality in sex than she had under the law. Often she was but the passive recipient of her husband's sex needs, while her own sex life was too often submerged by repeated and alternating periods of pregnancy and lactation. On the other hand, in the years
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preceding the War, freedom and equality were coming to women, and with this, an increase of sex consciousness. The War accentuated these changes, and henceforward men and women had a freedom of companionship hitherto unknown. Time has been needed for the consequent adjustment, and that adjustment has not even yet been completed. The result of women being more sex conscious is that a woman expects a sex-satisfied life, just as she demands equality of companionship, and if deprived of this, discontent and a sense of failure are apt to eventuate.
I do not hesitate to bring in that side of marriage, because, although it is perfectly true that true marriage has ingredients of sex love, parenthood, and companionship, they are mutually dependent one upon the other, and any one of them may be wrecked by the disregard of the other. It follows therefore that women do, in fact, contribute more to marriage failures than they did in days gone by, when the woman was a more submissive partner. On the other hand, it is my belief that marriages which are successful to-day reach a higher level of happiness than at any previous period. And, despite all these difficulties, can it be said that, speaking generally, the institution of marriage is declining in this country? I would beg to urge the opposite view. I would hold that in spite of all our difficulties, the home and the family stand fast. We have only to witness the sane and sympathetic care of children, never surpassed in any previous age.
I pass to the clauses of the Bill which, in my judgment, is so commendable in its purpose. The object of the five-years clause, as I understand it, is to prevent the break-up of marriage for a cause which is transient and curable. I suggest that five years is too long. New attachments would be very apt to arise during the waiting period, and I have my doubts whether they would stand the test of five years celibacy at that period of life. Again, though five years is a reasonable term perhaps for someone in the early twenties, it becomes a much more serious matter if a woman of twenty-eight is asked to wait five years. It would carry with it the grave disadvantage that it would be destructive of the possibility of a second marriage. I suggest that the shortening of the period, at any rate of

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those who have reached a greater maturity, or perhaps better, if that were possible, to give a discretion to the Court would be a more efficient way of meeting the objects of Clause 1.
It is convenient perhaps here to express regret that the Bill does not attempt to deal with or devise means of disentangling and remedying the causes of matrimonial disharmony in their early stages. One of the hopeful aspects of our body politic is the increasing use of preventive remedies. To my own profession belongs the credit of leading the way by having opened out the vast field of preventive medicine; and to-day we witness the idea bearing fruit in many and varied directions—in the tribunals of industry, in the extended use of probation officers in connection with the Courts of Justice, in the establishment of children's courts, and still more recently in the beginning of matrimonial tribunals. Members of my own profession know full well how many are the misfits of marriage—maybe physical, maybe psychical—which come to them in the guise of ailing health, and how often by the imparting of knowledge and understanding an endangered marriage may be put straight. I suggest that ways and means for making such help widely available would be well worthy of exploration.
Passing to Clause 2, surely there can be nothing but praise, alike on grounds of logic and humanity, for the granting of divorce for desertion and cruelty. They both frustrate the purposes for which marriage exists. If they exist over years they destroy a marriage, and that marriage is not worth preserving. The yielding to a chance physical temptation is as naught compared with the cold calculation of desertion, or with a cruelty going on through the years, which can convert a home into a chamber of torments, and in my judgment the community has no right to inflict on any human being the continued torture of such a home for any cause whatever. The noble Marquess in his speech, when he touched upon the subject of insanity, said it was impossible to depend on the opinion of doctors. My answer to that is that, unfortunately, in this imperfect world, we have in all our daily relations to trust to those who are expert in the varied branches of knowledge and experience. We poor citizens
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have to depend on the advice of statesmen. On matters legal, we have to depend on lawyers. And those professions are liable to err. Are we to make no decision because we cannot get perfection? The care with which matters of insanity are considered by my profession, checked and controlled as we are by our colleagues of the law, gives, I venture to say, greater security to the poor sufferers from mental disorders than is given in any other country in the world.
But I agree that when we come to insanity we are up against difficulties. Here the victim may be free from blame, and here we must balance our sympathy and our sense of justice between the spouse with the deranged mind and the spouse, and maybe the children, who have to live with that deranged mind. If we limit the period of continuous treatment to three years, I think we might exclude the chances—and reasonable chances—of recovery. It is all a question of adjustment. You will not get 100 per cent. either way. There is this further reason against making the period too short, and that is that the patient might have a knowledge that he or she is in danger of divorce, and in some instances the patient's anxiety as to a possible divorce might prejudice his or her recovery. I have a suggestion to make and I venture to think it is a substantial one. It would be either a continuous period of five years or—and I regard this as very important—whenever a recurrent form of mental disease has been established. I think if you increase the period and pay special attention to the feature of recurrency you will provide a just solution for both the patient and the patient's home.
There are certain forms of insanity which are cyclical. Imagine the wife of such a patient who is in and out of treatment for ten years. Imagine that home; the dread, whenever the husband comes back, of insistent demand for intercourse; the difficulty of refusal; the fear of pregnancy, and, what is even worse, the fear of mentally-affected offspring. I venture to think—unless you are going to take up the position, and it is to my mind the only logical position, that we are for ever to adhere to authority 2,000 years old, that we are to become slaves to textual authority—that we should attempt to progress with the times in the spirit of a true Christianity, provided we are sure that in all our doings we are

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animated by the spirit of the Sermon on the Mount.
I pass back to one other matter. It is a small one, but it is an important omission from the Bill. In the case of homosexuality I shall ask that this be made a cause alike for men and women. It is time for equality in that matter. I regret for myself the omission from the Bill of inveterate alcoholism and inveterate drug taking. It is only members of my profession who know the desperate state of fear in which homes exist when one of the partners is the victim of inveterate and incurable drug addiction or alcoholism. In the latter case the partner lies awake hour after hour, night after night, waiting for somebody to stumble upstairs, and lives in dread of cruelty being exercised towards the children or towards the partner. Drug addiction, although more subtle, can bring destruction to families with an ease which we all wish to avoid. My Lords, I beg for these reasons to support the Second Reading of the Bill. With certain Amendments it will make in my judgment more firm the institution of marriage and make life more honest, more just, more in accordance with the facts of life with which we have to live to-day. It will thus add to the stability and happiness of our country.
THE EARL OF BIRKENHEAD: My Lords, I have listened with great interest to the speeches in your Lordships' House and I followed with equal interest the progress of this measure through another place. I observe with pleasure not unmixed with surprise the change which seventeen years has wrought in this vexed and most difficult question of divorce law reform. I did not expect the passage of this Bill through all its stages in another place without criticism, nor did I expect that it would pass your Lordships' House without criticism. On the contrary it encountered in the Committee stage in another place several, violent squalls and lost minor portions of gear. Its progress was generally disputed by a small resolute band with great persistence and considerable ingenuity. Yet the general feeling in its favour was immense and at no single point did one feel that it was imperilled. I believe that a similar feeling exists in your Lordships' House.
I believe it is absolutely vital that we should discuss this question of divorce without bitterness. It is far easier for us
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to do so now, because the great gulf of principle which formerly separated the rival parties in this matter has now to a great extent been bridged. Leaders of the Church have told us that in their opinion the time has now come for some further measure of divorce reform. A measure such as this is a hopeful basis on which we can examine the question. I myself believe it to be a perfectly honest and perfectly sincere, although at some points a somewhat obscure, attempt, not only to alleviate the distress of thousands of unhappy people but also to combine a substantial and not excursive measure of reform with the great deference which we owe to the known views of the Church. The promoters themselves would be the last people to pretend that they have not made mistakes or that the pressure of circumstances has not forced them into the drafting of several somewhat ambiguous clauses. I am surprised that they have made so few mistakes when one remembers the trembling delicacy of the tightrope on which they have maintained constant and on the whole dignified equilibrium. This Bill as it stands is far from perfect and there are several clauses which have been already criticised, with which I myself disagree, and to which I should like to draw attention in due course. Nevertheless, I think it stands out after seventeen years barren of reform as a great and sane stride forward out of the mists and vapours of the past. If it becomes law I am sure it will remain as a landmark in the social development of this country.
I should like to turn for a moment to the Bill itself. I did not expect Clause 1 to escape criticism and I wish to associate myself with those noble Lords who have spoken against it. Here is a clause conceived with the best motives which will none the less descend with cruel and savage incidence upon a large number of people. It is quite easy to understand the object of the promoters in inserting this clause. In effect, they said: "This is our great saving clause. If we put this part of the machinery in motion it will be a great check upon those childish and pathetic marriages which start with such eager hope and leave behind them a trail of failure and disillusion." I believe that this argument proceeds from a fallacious interpretation of human nature. How many people are there who in the first flush of love and enthusiasm approach

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marriage in this hedging and cautious spirit? If there are such people how worthy are they of your Lordships' serious attention? This clause appears to me, on the one hand, to offer a broad and reassuring guarantee, and, on the other hand, to deal a most vicious backhanded blow by depriving men and women of a vital right which they enjoy at the moment. I do not know which of the various alternatives your Lordships will decide to take in Committee, and I think it would be better not to speak further about it at this stage. In any case I think it is essential, and indeed only sane, that in the case of a man guilty after marriage of rape or sodomy or bestiality the wife should obtain relief at once without delay.
When we come to Clause 2 we find that the new grounds of divorce substantially follow those recommended in the Majority Report of the Royal Commission. I am amazed that paragraph (b) of Clause 2, relating to desertion as a ground for divorce, should provoke such an amount of feeling. To me its advantages are obvious. The sufferings under the present law are undoubtedly very great. It must be remembered that the present law bears particularly harshly on poor people. What remedy is there open for a poor woman whose husband has left her? She lacks the means to discover his whereabout or to prove his adultery. She is in a cruel and lonely position, neither wife nor widow. What happens? She enters into another relation and probably takes steps to avoid having children. This lamentable result is found in thousands of cases at a time when leading economists predict a crisis at no distant date through a sharply falling birth-rate.
What are the arguments against this provision? It is said that it will lead to a greater number of divorces and encourage collusion. In spite of what the noble Marquess said, I do not think that is borne out by experience in Scotland. I believe I am right in saying that the number of divorces in Scotland has never exceeded 2½ per cent. of the number of marriages in a single year, and no evil result whatever has arisen. I also recall that in all the Dominions divorce for desertion has been allowed for forty years, and in every civilised country it has existed without any of the evils about which we have heard. It is said that
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three years is too short a period. I can only say that when one party leaves the other for three years with intent to desert, that party is callously violating the solemn vows which were sworn in the Marriage Service and is leaving the other party to sink or swim. I take the view that that marriage has broken down in fact, and has become a mockery and a sham. The second point made is that this clause will multiply the number of collusive divorces. I can only say that the number of such divorces, reprehensible as they are, is much smaller than the number that used to take place. Moreover, in the case of desertion particularly, those who will be prepared to collude over a long and difficult period of three years will be a very small minority of those who will be seeking the dissolution of their marriage.
The last ground given, that of insanity, is by far the hardest ground to justify. As the most reverend Primate said on Thursday, insanity is a misfortune and no question arises of its being a conscious injury. It is possible, however, to lay too much stress on this argument. True as it is that the lunatic's mind is deranged through no fault of his own, we are not, after all, giving divorce on the basis of reward and punishment. Divorce is granted on a profound consideration of social policy, and, whether the unsuitability for marriage be mental, physical or moral, the result is the same. I would remind your Lordships that paragraph (d) provides a powerful check. The respondent must be incurably insane and must have been under care and treatment for five years immediately preceding the presentation of the petition. That is to say, he must have been given care and treatment for five years and, at the end of that period, he must be subjected to a medical examination which in the opinion of the Court is sufficient to prove that he is incurably insane. I think that only a very small minority of cases will escape such a finely-meshed net.
A great deal has been said about Clause 4, and the prudent layman will, I think, approach that clause in a spirit of deferential bewilderment. It is undoubtedly a legal labyrinth in which lie lurking a number of formidable legal minotaurs. I hoped I had misunderstood the object of the clause; but, as I listened to the admirable and lucid speech of the noble and learned Lord, Lord Atkin, on

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Thursday, I came to the conclusion that I had not misunderstood it and that in fact this clause is shifting the burden of proof from the Court to the parties. It is involving the petitioner in the extraordinary position of having to prove a negative, to prove as a fact that the absolute bar of collusion did not exist. That is placing the Court in the new and most dangerous position of having to dismiss the petition on suspicion of collusion in the absence of any definite proof. I cannot really believe that this is the intention of the clause, and I shall be very grateful for any subsequent explanation.
The next, Clause 5, seems to me to require even greater care and attention. It provides, first of all, some clumsy machinery for a comparatively simple object. Under the Bill as it stands there is to be no divorce for five years. Therefore you must clearly have some method of releasing the offended spouse from the obligation of living with the offender, and also of enabling her to be maintained. Clause 5 deals with this by the clumsy method of judicial separation carrying the power to get an order for alimony convertible by petition into divorce at the end of five years. I consider subsection (2A) to be most unsatisfactory, because it seems to involve either one of two evils. Either it is going to give magistrates' courts virtually the right to create divorce cases, or, if further evidence is required in a higher Court, it involves re-proving the magistrates' case in that Court with all the attendant difficulties of securing witnesses and proving again facts which have become cold with time.
I do not wish to say anything now which would be more properly said during the Committee stage, but it seems to me possible to remodel this clause in something like the following sense. Could we not say that if during the five-year period an act is committed which, but for the provisions of Clause 1, would be ground for divorce, then a petition may be presented and a decree made, but such a decree shall not become absolute until the end of the five years. This method would have the following advantages: the case would be proved when the facts were fresh, maintenance could be provided, and the union would not be dissolved. Lastly, magistrates' courts would not be given the power to make divorce cases.
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Clause 8 is of the utmost importance, and I hope your Lordships will accept it as it stands. At the present moment only the petitioner can apply to make the decree nisi absolute. The evils of this position would be abundantly clear to any of your Lordships who studied the case of Fox versus Fox in the Court of Appeal. In that case the woman deliberately held up the decree absolute for years because she was not satisfied with the maintenance order. Obviously, that was nothing but blackmail. If this clause is allowed to stand, such cases will be made quite impossible.
The clauses I have criticised do not in any way impair the strength or the goodness of this Bill as a whole. The measure we are considering is rough material of the highest order, carrying with it the desires of thousands and withdrawing its sanctions from many miserable and indeed somewhat shameful years. We are not asking your Lordships to legislate for easy divorce. Nothing is further from the intention of those who take our view than any relaxation of the strength or sanctity of the marriage bond. We should, however, try to remember that sentence of the Majority Report which always seems to me to be pregnant with meaning:
"No law should be so harsh as to lead to its common disregard."
We should also recognise that where a marriage has irretrievably broken down, the parties should be able to obtain relief. It is for your Lordships to shape and polish this instrument into a more perfect form. All over the country men and women are awaiting release from this melancholy bondage. It is within our power to set these people free at last and to bring new life and vitality to those who have for so long been sullen with blighted hope. Seventeen years ago the Matrimonial Causes Bill passed its Second Reading in your Lordships' House by a fine majority, only to go limping on to an inglorious extinction in another place. To-day the omens are for us and the opportunity has come. If we step forward and embrace it boldly, we shall have made a lasting contribution to the happiness of the English people.
LORD WRIGHT: My Lords, I intervene with some hesitation at this stage of the debate, and after the very exhaustive discussion which we have heard from all

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sides on this question I very much doubt whether I can add anything of novelty or value. But I had experience in the administration of the divorce law for seven years while I was a King's Bench Judge, and I think it desirable that I should add my testimony to the weight of approval of this Bill. I do approve of it; I approve of it almost completely. There are certain reservations which I have to make; but these, I think, are mainly matters which would be dealt with in Committee, and I shall only refer to two matters of reservation at a later stage before I finish.
The question of marriage and the question of divorce are obviously questions which arouse great difference of opinion, and involve a great appeal to human emotion, but the real question, the vital question, of this Bill is comparatively limited. I do not refer to those portions of the Bill which deal with nullity and with presumption of death, which are based upon the joint recommendations of the Commission which reported in 1912. These have been passed without comment, and I may regard them as non-controversial, although there are some matters of detail which we shall have to discuss in Committee. The central point of the Bill is obviously that provision which increases the list of conditions which will constitute sufficient ground for a decree of divorce. We must start here with the assumption that marriage in the eyes of the law is dissoluble. By those who regard marriage as indissoluble this Bill cannot be approved—it is inconsistent with that fundamental belief—but to all those others who accept the view of the English law that marriage is dissoluble, then the only question is whether adultery exhausts the whole range of possibilities, or whether there ought not to be certain other grounds added.
This is no hastily conceived measure. It is not launched without mature consideration. The new grounds of divorce suggested in this Bill are set out, fully explained and argued, and I think justified, in the Report of Lord Gorell's Commission. It is a very pleasant feature of this debate that I believe if will be wound up as an act of filial piety by his son, who is with us to-day. The law is so far limited to this one ground, and when I was sitting as a Divorce judge, dealing
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with undefended cases on circuit, I was impressed by two things. The first was that there were many matters which went to the root of the marriage state, which destroyed the soul of that union, other than adultery. I was limited to adultery, but I heard of cases of cruelty and desertion which, it seemed to me, were more mischievous, and more ruinous of happiness, than adultery would normally be.
Another thing that I learned was that it divorce administration we are not dealing with the frivolous, the vain, the pleasure loving, the inconstant. The cases which I had to deal with generally were cases of honest, respectable people who had been betrayed into an ill-fated union, who had perhaps for years suffered the misery of that state of things, and had been unable to get relief for many reasons, one being the impossibility, in the circumstances, of proving adultery. In these cases, I saw no sign of collusion or connivance, a matter which has been so much commented upon, and properly commented upon, in certain circumstances in the Divorce Court. All these latter cases belong to a different class of life. They belong to the better off, and they show, I think, that the present law of divorce is a bad law, because you see people otherwise honourable stooping to these methods of evasion; and where you have a bad law you have the possibility, and almost the certainty, of evasion. I saw nothing of that. I was concerned with a different aspect, and I hope, in view of some things that have been said to-night, that I did my duty and saw that every case which came before me was properly established and that the requirements of the law were satisfied.
As to the actual new grounds of divorce in Clause 2, I only want to say two things. One is that the meaning of "cruelty" and the meaning of "desertion" are well established in the Divorce Court. I do not think there can be any possibility of doubt as to how the law will be enforced if these new grounds are aided. "Desertion" means wilful and malicious desertion. No lawyer would think of it as anything else. "Cruelty" means something very serious indeed, which has been defined as "conduct involving such danger to life, limb or health as to make it impossible for two people to live together." Insanity is, I agree, a difficult question, but that will be very fully discussed in Committee. I do feel

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very strongly that if marriage is to be dissolved at all, it ought to be capable of being dissolved on any one of the four grounds which we now find set out in the Bill, and that adultery should not be the only ground.
The only other things that I want to say are these. There has been some discussion of that part of Clause 4 which deals with the proof of collusion or connivance, and I ought to say that the provision against collusion applies as much to desertion as to anything else in the Bill. The objection from a lawyer's point of view to the present form of Clause 4 is simply this, that it changes the onus of proof. Collusion and connivance are not, perhaps, criminal—I am not sure—but they are quasi criminal acts, and the rule of English law is that everyone is presumed to be innocent unless he is proved to be guilty. Here the petitioner, if the clause is passed as it stands, is required to prove that he is innocent. That, from the Point of view of a lawyer, is very hard. I think the rule that the onus is always on the prosecution is universal in English law. I would like, but it would be improper here, to explain the complicated rules which apply to the case of a prosecution for receiving stolen goods, but I can assure the noble Marquess, Lord Salisbury, that the onus is still in these cases on the prosecution. But much as I object to Clause 5, on theoretical grounds, I am not sure that in practice it will make very much difference. It may give the divorce Judge a better instrument for probing into any case in which he feels that there is suspicion.
THE MARQUESS OF SALISBURY: Do I understand from the noble and learned Lord that he thinks this clause will be ineffective?
LORD WRIGHT: No, I do not think it will be ineffective. What I mean is that in all cases the petitioner has to swear an affidavit that he or she is not guilty of collusion. The Judge would be entitled to accept that, but if he had any reason for doubting it then he would naturally and very properly proceed to probe into the matter, and this clause would operate if at the end of his investigations he said he was not satisfied that the petitioner had not been guilty of collusion. In that way in any case of suspicion or any case of doubt it might be a very valuable weapon for the divorce
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Judge, who of course is looking out for any trace of collusion and very anxious to prevent it succeeding. Theoretically I still object to Clause 4, and it may be that even that will be susceptible of some improvement in Committee.
As to Clause 1 I confess I have felt the strongest objections to that clause. It seems to me to have no relation to the whole scope of the Bill. It is not limited to the new grounds of divorce. It changes the existing law in regard to adultery as a ground of divorce in a manner for which I have heard no justification. We are told that it is the result of a compromise. It would carry with it the most disastrous consequences, to my mind. I am not going to repeat the very distressing instances which my noble and learned friend Lord Atkin gave on Thursday last, but I will point out this, that in every case where there is adultery in the first or second year of a marriage the innocent party will be completely debarred from any recourse to the Courts and will have to remain in a state neither married nor unmarried without being able to present a petition. The clause says five years, but five years really means six and a half years. Presumably these troubles would not arise so soon after marriage, but they may. We know, I think, that 20 per cent. of the divorces are in the first five years of marriage, and I do not think that the country would readily accept a change in the rights of injured parties of so drastic a character. I might easily take cruelty, but I do not intend to enter into any detail. I sincerely hope and trust, and indeed I believe, that if this Bill is to go through it will go through with Clause 1 in some more practical and more equitable, and some clearer guise. However, subject to these reservations such as they are and to any questions which may arise in Committee, I fervently support this Bill. I think it will promote domestic happiness. I think it will tend to cure very grievous ills which unfortunately occur even in this country, which is essentially monogamous, and I think it will promote the happiness and prosperity of the State in these important results.
LORD MAUGHAM: My Lords, following my noble and learned friend I will only add a few words in reference to this measure. I presume we are all agreed

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that we are considering here not the interests of any particular class, and not alone the interests of the Church, but the interests of the State. In addition to other reasons that might be given for taking that view, I would point out—what I think has not yet been pointed out—that just about half the marriages which are solemnised in this country in a year are not solemnised in the Church of England at all, but are solemnised either in churches of other denominations or in registry offices. Accordingly we are legislating here for people as to whom one half of the couples concerned were not married in the Church of England. I would suggest this, that no single man's experience is sufficient to inform him of the conditions under which married life is conducted in all the various towns, counties and walks of life in this country, and those who like to know the facts can at the expense of a little trouble ascertain them by reading the evidence that was given before the Gorell Commission at seventy-one sittings, and with the assistance of 246 witnesses, many of them people of the greatest experience with regard to the conditions of life among the poorer classes.
And that leads me to this observation, which may not have been obvious to everybody who read this Bill, that this is substantially a poor persons' measure. Excepting Clause 6, a clause of very great importance, I think, the clause relating to nullity, against which nobody has so far said a single word, there is really not a great deal in this Bill which will in any way assist what I should prefer to describe as the wealthier classes. The clause as regards desertion of which so much has been said is a clause of the very greatest importance from the point of view of the poor, but it will be of very little use to the rich. The reason why it is of such importance to the poor is not that in truth it alters the grounds of divorce; rather it is that the poorer person, man or woman, who is deserted by a spouse, with probably one or two babes to look after, is in the position that he or she may be perfectly convinced that the deserter is not living a virtuous life but has gone off with somebody else, and in nine cases out of ten commits adultery long before the expiration of the period of three years, if not immediately.
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I am not speaking without some knowledge of the facts when I say that of these poor people who are so deserted there certainly is not one in ten, and I doubt if there is one in fifty, who can go to the expense of getting the necessary evidence to obtain a divorce on the ground of adultery. They have not got ten pounds to waste; they certainly have not got the necessary £100 to have detectives instructed to find out where the man or woman has gone to and obtain the necessary evidence of adultery. What this Bill does for them is to say: "It will be difficult perhaps, but if you are patient for three years you will have a right to divorce without any large expenditure of money." I am sure I am not exaggerating when I say that 80 per cent. of the cases which will be presented by reason of the provisions of this Bill will be cases in which poor persons are taking advantage of the Poor Persons' procedure and are asking for divorce when the time has elapsed on the ground of cruel desertion by the other party.
In the case of rich people it may not be obvious to people who have glanced at this measure that people of means will not often be in a position to take advantage of the desertion clause, and for the reason that most of them, or at any rate a great number of them, have a separation deed providing some payment or other to the person who has been deserted. As soon as there is a separation deed—and, indeed, there may be deeds which do not provide something in the nature of a imony to the other party—the desertion clause will be impossible to apply. Desertion will be applicable only when the other person, the deserting spouse, has, without the consent of the deserted spouse, departed. That will not apply in the case of a separation deed, and it was found—in the other place—impossible to fame a clause which would meet such a case. The result is that, in the case of desertion, you are giving a remedy to poor persons so that they will not be bound for life to spouses who have disappeared, whose whereabouts they do not know, and as to whom they can find out nothing, even of their death. To these people you are going to give the relief of this measure in a proper case. With regard to the rich, in all probability the desertion clause will be of little use. I

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think I am justified in saying that this is a poor person's measure.
I shall not imitate the noble Marquess who observed that people were driven to commit adultery, and who thereby brought down upon himself an apt quotation from Aristotle, but I will say that the hardship on either the man or woman who has been left alone by the other spouse with a child is so extreme that there is, at any rate, some excuse for their forming, as undoubtedly they do form in far too many cases, an illicit connection. Before the Gorell Commission terrible examples were given of the almost necessary result of desertion among poor people, living in small houses, the number of rooms quite limited. The man who has been left with a babe has got to have some woman to look after the child while he is away at work. The woman who has been deserted by her husband has the greatest difficulty in supporting herself and her child, or children, and has to take in a lodger. In either of these two cases where there is very limited housing accommodation, the evidence is—and we must not shut our eyes to it; it may be regrettable but it is true—illicit connection takes place, with results in the statistics of illegitimacy in this country which are almost inevitable. That is the great thing which this Bill, as I think, may help to remedy. I regret if people from the highest motives object to any divorce for desertion, but if they will think it over they will see that, in truth and in fact, in nearly all these cases of desertion, there would be a remedy on the ground of adultery if only the poor people could afford to prove it.
I will add one word on two points which have been greatly troubling some of your Lordships. It is no secret that almost everybody is discontented with Clause 1 in its present form and, to my certain knowledge, two or three or more Amendments to it have already been drafted. It may be that your Lordships, in Committee, will strike the whole clause out of the Bill, but it is quite capable of amendment to such an extent that it will have very little effect in preventing anybody but a very limited class from having divorce if they have a right to it. The figures are of this nature. Of the total number of petitions presented, those which come within the first five years of marriage are only 14½ per cent. That is, if you limit the Bill to five years. If
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it is limited to three years, only 4 per cent. or thereabouts of the petitions which are now presented will be hit by the clause. If, in addition to that, you give the Court discretion, which I think your Lordships are very likely to do, the number of people who will be affected by Clause 1 is very small.
I will just say a word about lunacy, because I do not think everybody who has spoken has fully appreciated what the Bill proposes. In the first place, be it noted, which I think one of your Lordships had not in mind at the moment of speaking, there is an elaborate insanity definition in Clause 3. It applies only in cases where not only has insanity existed continuously for five years, but where there has been detention, as mentioned and defined with great care under Clause 3 (a), or continuous treatment as a voluntary patient under the Mental Treatment Act, 1930. What I want to tell your Lordships is this. The number of people who recover after five years' continuous treatment in one of these places mentioned in Clause 3 is very small. In Committee in the other place it was stated to be one per cent. I think that is a mistake. I think it should be stated as a little bit more than that. But assume that two per cent. recover after five years in a place of detention, the question which you have got to ask is this: How many of this two per cent. are persons of whom the doctors in charge of the institution could declare on oath that they had shown no signs of improvement during the five years? I do not think that the two conditions can possibly be fulfilled so as to leave open cases where there will be future recovery. The number of those who recover after five years being as small as it is, and the fact that if there is ever going to be an improvement it will be noticeable or observable during the five years, I think your Lordships may be satisfied that not one case in a thousand will slip through the two-fold qualification which is necessary in order to fit the case as one within the Act, if the Bill passes in its present form, and enable the unfortunate spouse who is married to such a person to be divorced.
I have not a doubt that the Bill is capable of considerable improvement in Committee. I have not a doubt that even when it is passed with all those improvements not one of us will be satisfied with everything in the Bill. Human nature

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being what it is, we shall all have opinions that we ourselves could have drafted a better Bill, or at any rate could have suggested a better Bill. A thing that one man likes another will not like. We cannot always have our own way. But there will be here, as I think, a measure which on the whole, and whatever personal feelings we may have in the matter, will help the morality of the nation and will add to the happiness of a large number of people.
LORD GORELL: My Lords, we have come to the concluding stages of a memorable debate, and I must thank the noble Lord who moved the Second Reading of the Bill for having graciously agreed that I should take part in it at this stage. I should like to thank those noble and learned Lords who have paid a gracious tribute to the work to which my father devoted so much of his time and which entirely filled the concluding years of his life. I cannot in any shape or degree claim that I have special responsibility in this matter, as the most reverend Primate rightly said that he had. He spoke not only as the official head of the Church of England, but also as the one member of your Lordships' House still alive who was a member of the Royal Commission. But this at least I can say, that I have a special interest in this matter. I can remember thirty-one or more years ago the discussions preceding and following the celebrated judgment delivered by the President of the Probate, Admiralty and Divorce Division in which, on April 27, 1906, he stated that the law he had to administer was "full of inconsistencies, anomalies and inequalities amounting almost to absurdities". That, from a judge upon the Bench, is fairly strong, though the words were carefully weighed and with the one exception of the placing of the sexes on an equality, everyone of those inconsistencies and anomalies and inequalities remain to-day.
We have had in your Lordships' House over the last quarter of a century a number of memorable debates. I have been present either as a younger son at the bar of the House or, since the accidents of the War prevailed, have taken part in them myself as a member of your Lordships' House. But to-night we are concluding a debate which is different
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from all the others. In no other case have we had these reforms, so long discussed, brought up to your Lordships' House from another place, nor have we had in any of those long discussions such an overwhelming expression of opinion all on one side. In the whole course of the debate there have been only three members of your Lordships' House who have spoken against the Bill, and all three have based themselves upon their opposition entirely to divorce of any kind whatsoever. We may, and indeed must, profoundly respect their views, but I think the whole consensus of opinion shows clearly that your Lordships' House no longer feels that the Legislature is bound to accept or follow that point of view. To those who have followed this controversy from the very start nothing has been so remarkable as the extraordinary change in public opinion. The Press, at any rate, is very indicative of what the public is thinking, and some of the major organs of the Press, which were pronouncedly against the Majority proposals in 1912, have now thrown their whole weight upon the side of this Bill.
At this hour it is obviously impossible for me to speak at any length, nor is it necessary, because every point, it seems to me, has been taken up by one or other of the many eminent speakers who have addressed your Lordships, but there are just one or two things I would like to say. I suppose every member of your Lordships' House listened with the most profound attention to the speech of the most reverend Primate. We recognise the special difficulties of his position, but I cannot help feeling that the course which he felt it obligatory upon him to take is one that must bring a very great deal of disappointment to many people. The most reverend Primate said that this measure contained "timely and valuable" proposals for dealing with abuses which, in his own words, were "detrimental not only to marriage but to public morality", and in times past the leaders of the Church have thrown their whole weight upon endeavouring to eradicate the abuses which tended that way. Then the most reverend Prelate the Archbishop of York said he hoped that this measure would pass into law, but that he was not able to support it. One is grateful that they are not opposing it, but one would have hoped that, with that testimony to

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the value of these reforms, they would have felt able to do something a little more positive.
They both of them gave as their reasons for a negative attitude in this matter that the proposals in this Bill were inconsistent with the teaching of our Lord as accepted by the Church. We have had weighty answers from two right reverend Prelates, and it is not necessary for me to attempt to go farther into that than to say that it is perfectly obvious that theological opinion is divided upon this matter. The most reverend Primate might have added that it has been divided for nineteen hundred years, that at no time in history has theological opinion been at one as to what exactly is meant by the text when the ideals of marriage have broken down. At the concluding stages of the Divorce Commission a very long and full appendix was put in dealing with all those controversies. All I would say to your Lordships is this, that the layman sees that there are three distinct and different Christian opinions—that marriage is indissoluble; that it is dissoluble only on the ground of adultery; and, taking note of a great and growing weight of opinion, that it is dissoluble wherever in fact the ideal has hopelessly broken down. He asks why in this matter of divorce alone we should treat the text as laying down a legislative enactment rather than enunciating general principles for the guidance of mankind.
The right reverend Prelate, the Bishop of St. Albans, poured scorn upon moving with modern thought, and the noble Marquess, Lord Salisbury, spoke with some contempt of mankind being on the move. But it is not a question of modern thought. It is not necessary to keep in touch with modern thought, but it is necessary so to adapt legislation that it is in keeping with entirely changed conditions of modern life. If you take desertion I would like to add a word to what was said by the noble and learned Lord who spoke just before me. In the days when the texts were written it was perfectly impossible for any human being to go far or to go untraced. Now, owing to mechanical means of progress, it is perfectly possible for a man to leave this country and go to the other end of the world, and where he has been traced in ninety-nine out of a hundred cases he has been found living a different life, married to some one else, with his wife
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left here in the position of being neither married nor unmarried—a position not at all in keeping with the dictates of public morality.
It is not necessary in view of the many speeches to follow that any further. I turn for the very few moments left to me to what I conceive is the one great difficulty which confronts those who have spoken who are most sincerely interested in passing this Bill into law. If I may, I will take by way of illustration the speech of the noble Marquess, Lord Reading—a powerful and eloquent speech if he will allow me to say so—on lines adopted by other noble and learned Lords, and following Lord Atkin. The first part of the speech of the noble Marquess was devoted to a denunciation of Clause 1. He pointed out the grave hardships that would be inflicted upon many people who now can obtain divorce if that clause came into force. Throughout the discussion we had many speeches of the same kind. The noble Marquess ended by saying that this Bill was a "beneficent, temperate and long overdue measure to which he gave sincere and convinced support." I would suggest that really those are two speeches which cannot be reconciled one with the other.
We are now at the very end of June. Those who have followed this long controversy know very well how over and over again your Lordships have debated measures of this kind and have passed them through all stages, and then they have become like ships becalmed on the seas of time that is the enemy of private members' legislation. This Bill, as the noble and learned Lord, Lord Roche, said, is a balanced Bill. There is in it much with which some people disagree while they like another part. I would ask your Lordships when we come to the Committee stage, if we do, to consider very carefully whether the Bill represents gain or loss, for it is certain that there are some sections with which some noble Lords greatly disagree which in the opinion of others are vital. The most reverend Primate said that he regarded Clause 4 as vital. If your Lordships are going to spend a great deal of time making this Bill a perfect instrument, as, of course, you have every right to do, then you must also weigh carefully in your minds the chances whether that perfect instrument will be used.

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Many of your Lordships can remember what happened in 1923. I introduced the same Bill as had been introduced on July 28th, 1914, by which my brother the secretary to the Royal Commission endeavoured to pass into law all those reforms on which there was general agreement. The noble and learned Viscount, Lord Buckmaster, to whose great zeal and matchless eloquence so much of the education of the public is due, thought that having passed a measure in 1920 through all stages in your Lordships' House testifying your belief that the Majority proposals should pass into law, it was not possible in 1923 to pass a lesser measure. He added with the full assent of your Lordships the controversial clause. The result was, as we know, that that measure proceeded no further. Let us by all means exercise our undoubted right to amend this Bill, but let us bear in mind also that time is our enemy. Every one of your Lordships, with three exceptions, has testified to the need of reform. The most reverend Primate said there was much in the Bill that he desired and that there were scandals that called for immediate reform—ironic words after so many years.
Let us remember that this is June. I would very respectfully urge upon those of your Lordships who have opposed so weightily the provisions of Clause 1 as it at present stands, that it might be possible to keep the principle embodied in that clause but to insert a provision by which the High Court should have power to grant leave to present a petition if satisfied that it was in the interest of the State. I cannot, of course, speak for the promoters, and prophecy in any political matter is very dangerous, but there is at least reason to suppose that if some such provision is inserted, and yet the principle of Clause 1 is retained, it would not be regarded with disfavour elsewhere. I would quote one line of verse:
"The chance is once, With all the links that wrought it in that form."
We can all find much in this Bill to criticise, and I myself have no great love for Clause 1, which formed no part of the Majority Report, but this Bill has reached your Lordships' House only because it meets so many different conflicting views, and I would with such earnestness as is in my limited power urge
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your Lordships not to lose this chance after a quarter of a century of passing into law reforms upon which, with almost no exceptions, your Lordships seem to be heartily in agreement.
LORD ELTISLEY: My Lords, a memorable and intensely human debate has come to its conclusion. The debate has emphasised a feeling of anxiety which every member of your Lordships' House appears to have on this important social question—a feeling that the time has come when something should be done to prevent the gradual breaking down of the marriage tie and to ensure the stability of the great institution of marriage. In view of the general desire that the debate should not occupy more time than is requisite, I know that your Lordships will forgive me if I do not venture to reply in detail to the many points raised. In the main they are Committee points and will receive, I know, the closest attention at a later stage. I will therefore only say one word of thanks for the generous measure of support and sympathy given to me in moving the Second Reading of this Bill.
On Question, Bill read 2a, and committed to a Committee of the Whole House.

HASTINGS PIER BILL. [H.L.]
Returned from the Commons, agreed to.
HASTINGS CORPORATION GENERAL POWERS BILL.
The King's consent signified; and Bill reported from the Select Committee, with Amendments.
BARNET DISTRICT GAS AND WATER BILL. [H.L.]
Commons Amendments considered, and agreed to.

WORKSOP GAS ORDER, 1937.
Special Order proposed to be made on the application of the Worksop Gas Company:
Laid before the House (pursuant to Act.) for affirmative Resolution and referred to the Special Orders Committee.
House adjourned at eight o' clock.