OVERSEAS TRADE (CREDITS AND INSURANCE) BILL.

TUESDAY. 27th JULY, 1920.

259

The Committee consists of the following Members:—

Mount, Mr. (Chairman)

Armitage, Mr. Robert (Leeds, Central)

Banner, Sir John Harmood- (Liverpool, Everton)

Barton, Sir William (Oldham)

Betterton, Mr. (Nottingham, Rushcliffe)

Bird, Sir Alfred (Wolverhampton, West)

*Bridgeman, Mr. (Salop, Oswestry)

*Buckley, Lieut.-Colonel (Lancaster, Waterloo)

Burdon, Colonel (Durham, Sedgefield)

Coote, Mr. Colin (Isle of Ely)

Cope, Major (Glamorgan, Llandaff and Barry)

Davies, Sir Joseph (Chester, Crewe)

Davison, Mr. J. (Smethwick)

Dawes, Mr. (Southwark, South-East)

Doyle, Mr. Grattan (Newcastle-upon-Tyne, N.)

Farquharson, Major (Leeds, North)

Forestier-Walker, Mr. (Monmouth, Monmouth)

Gould, Mr. (Cardiff, Central)

Graham, Mr. William (Edinburgh, Central)

Grant, Mr. (Cumberland, Whitehaven)

Gregory, Mr. Holman (Derby, Southern)

Guest, Mr. John (York, W.R. Homsworth)

*Haslam, Mr. (Newport)

Hills, Major (Durham, Durham)

Hoare, Lieut.-Colonel Sir Samuel (Chelsea)

*Horne, Sir Robert (Glasgow, Hillhead)

Hurd, Mr. (Somerset, Frome)

Jones, Sir Edgar (Merthyr Tydvil, Merthyr)

Jones, Mr. Haydn (Merioneth)

*Kellaway, Mr. (Bedford, Bedford)

Kenyon, Mr. (Derby, Chesterfield)

Kiley, Mr. (Stepney, Whitechapel and St. George's)

Lawson, Mr. (Durham, Chester-le-Street)

Lynn, Mr. (Belfast, Woodvale)

Malone, Lieut.-Colonel (Leyton, East)

Murray, Dr. (Inverness and Ross and Cromarty, Western Isles)

Myers, Mr. (York, W.R., Spen Valley)

Newbould, Mr. (Leyton, West)

Newton, Major (Essex, Harwich)

O'Neill, Major (Antrim, Mid.)

Parkinson, Mr. Allen (Wigan)

Raeburn, Sir William (Dumbarton)

Ramsden, Mr. (York, W.R., Elland)

Robertson, Mr. (Lanark, Bothwell)

Rodger, Mr. (Lanark, Rutherglen)

Roundell, Colonel (York, W.R., Skipton)

*Royce, Mr. (Holland with Boston)

*Samuel, Mr. Arthur M. (Surrey, Farnham)

*Scott, Mr. MacCallum (Glasgow, Bridgeton)

Shaw, Mr. Alexander (Ayr and Bute, Kilmarnock)

*Short, Mr. (Wednesbury)

Sitch, Mr. (Stafford, Kingswinford)

Smith, Sir Allen (Croydon, South)

Surtees, Brigadier-General (Gateshead)

Taylor, Mr. John (Dumbarton District of Burghs)

Tillett, Mr. (Salford, North)

*Waddington, Mr. (Rossendale)

Wheler, Major (Kent, Faversham)

White, Mr. Charles (Derby, Western)

*Willey, Lieut.-Colonel (Bradford, South)

Yeo, Sir Alfred (Poplar, South)

*Added in respect of the Overseas Trade (Credits and Insurance) Bill.

MR. WILLIAMS-WYNN., MR. FELLOWES. Committee Clerks.

MR. FELLOWES. Committee Clerks.

260
261 STANDING COMMITTEE A Tuesday, 27th July, 1920

[Mr. MOUNT in the Chair.]

OVERSEAS TRADE (CREDITS AND INSURANCE) BILL.
[OFFICIAL REPORT.]

The Committee was summoned to meet at Eleven o'clock.

At Twenty-five minutes before Twelve, a quorum of Twenty not being present,

The CHAIRMAN said: We do not look like getting a quorum. Can Members who are here now come back at three oclock?

Mr. DAWES: Some of us have questions in the House at three o'clock, and it will therefore be inconvenient to come back at that time. It is the duty of the Government whips to make sure of a quorum!

Sir ALFRED BIRD: I would suggest that the names of those Members of the Committee who have not attended this morning should be submitted to Mr. Speaker.

The CHAIRMAN: They might perhaps be reported to the Committee of Selection. Would Three o'clock suit members generally?

Committee indicated assent.

Sitting suspended at Twenty-three minutes before Twelve o'clock, till Three o'clock.

On resuming

Mr. WILLIAMS-WYNN (Clerk to the Committee) read the Financial Resolution of the House of 13th April, 1920, in relation to the Bill, as follows: "That it is expedient to authorise the granting of credits and the undertaking of insurances for the purposes of re-establishing overseas trade and the payment, out of moneys provided by Parliament, of any sums required for granting credits for such purpose up to an amount not exceeding at any one time £26,000,000 and of any expenses 262 incurred by the Board of Trade in connection with the granting of such credits and the undertaking of insurances so far as those expenses are not defrayed out of sums received by the Board by way of commission in respect of credits or by way of premiums in respect of insurances."

CLAUSE 1.
—(Power of Board of Trade to grant credits and undertake insurance.)

(1) For the purpose of re-establishing trade or any branch of trade between the United Kingdom and any country, being one of the countries specified in the Schedule to this Act, the Board of Trade, with the consent of the Treasury, may where it appears to the Board advisable so to do by reason of circumstances arising out of the War—

  • make arrangements for granting to persons domiciled in or to companies incorporated by or under the laws of the United Kingdom credits in connection with the export to any country specified in the Schedule to this Act of goods wholly or partly produced or manufactured in the United Kingdom; and
  • undertake the business of the insurance (including re-insurance) of any such goods as aforesaid where risks of an abnormal or exceptional nature are involved, insurance against which cannot, in the opinion of the Board, be otherwise effected on reasonable terms, and for that purpose fix and receive permiums:
  • Provided that no credit shall be granted by the Board under this Section so as to make the aggregate amount outstanding in respect of credits at any time exceed the sum of £26,000,000.
  • Subject to the provisions of this Section, any sums repaid to the Board of Trade in respect of credits granted under this Section may be applied by the board for the purpose of any further credits so granted at any subsequent date.
  • Any sums received by the Board of Trade by way of commission in respect of credits granted under this Section, and any premiums received by the Board in respect of insurances undertaken under this Section, may be applied by the Board in payment respectively of any expenses incurred in connection with the granting of credits and any expenses incurred in connection with the business of insurance.
  • Subject as otherwise expressly provided in this section, any expenses incurred by the Board of Trade under this Section shall be paid out of moneys provided by Parliament, and any excess of receipts over expenses shall be paid into the Exchequer in accordance with directions to be given by the Treasury.
  • Mr. KILEY: I beg to move, in Subsection (1), after the word "Treasury," to insert the words "and after consultation with an Advisory Committee consisting of five Members of Parliament." 263 There may be some Members who, like myself, are somewhat dubious about this venture, but, Parliament having passed the principle, all that is left for this Committee to do is to see in what way it can exercise whatever supervision it is possible for it to exercise in the working out of this very important principle of investing State funds for the purpose of carrying on trade. I suggest that an Advisory Committee should be set up, consisting of five Members of Parliament, so that Parliament may exercise as much control as it is within its power to do. In making this proposal, I do not question the ability of the manager who has been appointed to supervise the working, but, after all, he will be an executive official, and I think both he and even the Department itself would be all the better for having the use of whatever knowledge and experience it might be possible to obtain from such an Advisory Committee. Therefore I suggest this as a principle. I am not wedded to the suggestion that the Committee shall consist of Members of Parliament, although I think the principle is a wise one if it be found to be workable. If the Minister in charge of the Bill desires to alter the composition of the Committee, I am quite open to revise my proposal, but there can be no question that there should be an Advisory Committee, because it will assist the successful working of the proposal.

    Mr. KELLAWAY (Secretary, Department of Overseas Trade): I think it is possible to meet the intention of my hon. Friend, and I am prepared to accept an Amendment in this sense "and after consultation with an Advisory Committee to be constituted by the Board of Trade for the purposes of this Act." I should be glad if we could get on the Advisory Committee one or two Members of Parliament qualified for this purpose. At present the scheme is under the purview of an Advisory Committee, consisting of Mr. Draper, who is a manager of Lloyd's Bank.

    Mr. KILEY: Is he a manager of the Department?

    Mr. KELLAWAY: No, he is a manager of Lloyd's Bank. Then there is Mr. Dickson, who is general manager of the British Trade Corporation, and Mr. Brand, but I should be very glad to add 264 to that Committee and make it a Committee of five members to be constituted by the Board of Trade for the purposes of this Act, I will give the undertaking that if suitable members are willing to serve on the Committee they shall be appointed. I think the appointment of such a Committee is advisable and, if the hon. Member will agree to the Amendment in those words, I will accept it.

    Amendment, by leave, withdrawn.

    Amendment made: In Sub-section (1), after the word "Treasury," insert the words "and after consultation with an Advisory Committee to be constituted by the Board of Trade for the purposes of this Act."—[Mr. Kiley.]

    Mr. W. GRAHAM: I beg to move, in Sub-section (1, a), after the word "of" ["of goods wholly or partly"], to insert the words "raw materials or." When this Bill was discussed in the House attention was directed to the fact that, under the Regulations which had been drawn up, the export of raw materials was not covered; there was only provision for the export of manufactured articles. I think I am correct in saying that the bulk of opinion which was expressed by Members of the House interested in economic questions in Europe was to the effect that they saw no reason whatever why raw materials should be excluded, and they based that argument on information which had come to them from various countries, namely, that perhaps the best form of assistance which we could give was in the shape of raw materials, or partly-manufactured goods, rather than completely manufactured articles. Since that time, in view of what we have read from week to week in the "Economic Review," as applied to the countries of Europe, and in other publications, that argument has been strengthened rather than weakened; and I personally cannot understand, while not forgetting that there are many difficulties in regard to raw materials, why we should specifically exclude them from the purposes of this Bill. After all, the object we have in mind is the economic recovery of Europe, and it is quite conceivable that the best service we could render in such a sphere would be service in the shape of raw materials of some kind. I only propose in this Amendment to include words which will have the effect of not excluding raw materials 265 and I venture to hope, indeed, I believe, that that is an economic argument with which my right hon. Friend opposite will not disagree. There may be reasons known to the Department, but which are not known to us. why the Clause should be limited in this way, but so far they have not appeared. I therefore trust that he will be able to give effect to this proposal.

    Mr. KELLAWAY: I agree with my hon. Friend that there was a strong feeling expressed in the House in favour of including raw materials in the scheme, and one's sympathy certainly is strongly moved in that direction. We have, however, to remember that the scheme is two-fold. It is not aimed only at assisting the devastated countries; it is also aimed at assisting the export trade of this country, which has suffered considerably as a result of the War. My fear is that, if we were to include raw materials, the limited sum of money which is at our disposal would very rapidly be used up, and advantage would be taken of only one side of the scheme—that side which is aimed at re-establishing the devastated countries. I am sorry not to be able to accept the Amendment, because I feel the force of the contention which has been put forward. It is not only raw materials of which these countries are in need; it is agricultural machinery; it is means of locomotion; it is things which we are in a position to supply. Our power to supply those things would be seriously hampered if we were to export to those countries the very limited supplies of raw materials which are available here. With every sympathy with my hon. Friend in his intention, I am afraid that the Amendment would seriously cripple the scheme and would prevent us doing the amount of good which we are anxious to do.

    Mr. KILEY: I do not know whether the Minister in charge of the Bill has any idea of what he defines as "raw materials." For instance, in Czechoslovakia they want clay from Cornwall, and I believe we have abundance of clay of which we would be very glad to dispose. Are tin plates raw material? There seems to be some doubt about it. If commodities such as china clay, of which we have abundance, and tin plates are not raw material, it must be remembered that, for the purposes of the individual users of china clay and tin 266 plates, they are their raw material. If the Department will interpret in a liberal sense any question of that kind, I think it will meet the situation.

    Mr. HASLAM: It appears to me that the Bill as it stands would enable raw materials and manufactured articles to be exported, such raw material as some people would call it, as pig iron, for instance. That is a manufactured article, but at the same time for other trades it is raw material. Therefore it appears to me that the Bill as it stands does cover the point raised by the hon. Member.

    Dr. MURRAY: It occurs to me that the word of the Bill cover raw materials, because there is a distinction made between that which is produced and that which is manufactured. I imagine that certain commodities are produced in this country, and they are not necessarily much manufactured. Therefore I think a good deal of raw material would be covered by the Bill as it stands.

    Mr. KELLAWAY: I agree. I do not want to be drawn into a discussion of the difference between raw materials and manufactured articles; it recalls too vividly old controversies. I had in mind virgin raw material. We are interpreting the Regulations sufficiently generously to allow tin plates, for example, and other material on which there has been a good deal of work done in this country, but on which a good deal of work can be done in the devastated countries, to come under the scheme. With a liberal interpretation of the Regulations, I think the substance of my hon. Friend's point can be met.

    Amendment negatived.

    Mr. KELLAWAY: I beg to move, at the end of Sub-section (1), to add "or (ii) to an alien, or to a firm in which the majority of the partners are aliens, or to a company where British subjects do not form a majority of the directors, or where a majority of the voting power is not in the hands of British subjects." This is an Amendment moved to carry out an undertaking given in the House by the President of the Board of Trade that the scheme should apply only to British firms. I believe it carries out in spirit as well as in letter the pledge which was given by the President, and which clearly was the desire of the House.

    267

    Mr. GRANT: The Amendment certainly covers firms at the present moment, but a firm might hereafter be transferred into a foreigner's hands. Can the right hon. Gentleman put in some words which would cover any company which was dealt with in the future as well as at the present? The Amendment reads "a company where British subjects do not form a majority of directors." Could he put in some words such as "do not or cannot form a majority of directors."

    Mr. KELLAWAY: I should hardly think that is necessary, because the credit can only refer to a completed operation, and any such change in the character of the firm would prevent any further credit being given. If the credit were given at the time in good faith to a firm which was predominantly British I do not think you could do more. Any change in the character of the firm would prevent any further credit being given.

    Amendment agreed to.

    Clause 1, as amended, ordered to stand part of the Bill.

    Clauses 2 (Commencement and operation), 3 (Power to make addition to Schedule), 4 (Exercise of powers of Board of Trade under Act), and 5 (Short title) ordered to stand part of the Bill.

    NEW CLAUSE.
    —(Return of credits granted.)

    "The Board of Trade shall publish quarterly a return showing the amounts of any credits granted under this Act, the names of the persons or companies to whom such credits have been granted, and the countries to which goods have been exported by virtue of such credits."—[Mr. Kiley.]

    Brought up, and read the First time.

    Mr. KILEY: I beg to move, "That the Clause be read a Second time." I have already mentioned that the principle of this Bill constitutes to my mind a new departure, so far as the Government and the trade of this country are concerned, and under such conditions the more publicity we can have, consistent with the objects desired, the better not only for the Government but for all concerned. The object I desire to achieve is quite clear.

    Mr. KELLAWAY: I agree with my hon. Friend as to the advantages of publicity, provided that publicity be not of a kind 268 which is likely to prevent the satisfactory working of the scheme. I should be prepared to accept an Amendment in these terms. I accept the first sentence of my hon. Friend's Amendment— "The Board of Trade shall publish quarterly a return showing the amounts of any credits granted under this Act"; but the second sentence— "the names of the persons or companies to whom such credits have been granted"— I should not be prepared to accept. My hon. Friend is a business man, and he knows how secret business men are. If every business man who got a credit under this scheme knew that his name and the particulars of the credit would be published broadcast, nobody would take advantage of the scheme, and the very thing at which we are aiming would be defeated. If he would agree to delete the second sentence, and then go on— "and the countries in respect of which credits have been granted"— I would accept the Amendment. The Amendment would then read: "The Board of Trade shall publish quarterly a return showing the amounts of any credits granted under this Act, and the countries in respect of which credits have been granted." With the exception of the second sentence, I think that gives my hon. Friend the substance of his Amendment.

    Question, "That the Clause be read a second time," put, and agreed to.

    Mr. KELLAWAY: I beg to move to leave out the words, "the names of the persons or companies to whom such credits have been granted."

    Mr. KILEY: I am not sure that I altogether agree with the Minister in charge of the Bill that people who dispose of their bills would have any rooted objection if it were a case of obtaining credit. This is not a case of obtaining credit: it is a case in which the trader hands over his goods practically to the Government. They make him advances of a substantial part of their value. I do not wish, however, to press the point. The principle about which I was more concerned was that there should be as much publicity as possible, and therefore I will accept with much pleasure the proposal of the right hon. Gentleman.

    Amendment agreed to.

    269

    Further Amendment made: Leave out the words "to which goods have been exported by virtue of such credits," and insert instead thereof the words "in respect of which credits have been granted."—[Mr. Kellaway.]

    Clause, as amended, added to the Bill.

    SCHEDULE.

    Finland.

    Latvia.

    Esthonia.

    Lithuania.

    Poland.

    Czecho-Slovakia.

    Serb-Croat-Slovene State.

    Rumania.

    Georgia.

    Armenia.

    Mr. W. GRAHAM: I beg to move, at the end of the Schedule, to add the word "Russia." I do not suggest for a moment that this Amendment is designed in any hostile spirit, or in antagonism to the scheme. As a matter of fact, it was put down to find out whether, with reference to Russia, the Department had any immediate policy in mind. I am quite sure my right hon. Friend will agree that, for political, apart altogether from economic reasons, it is very important that the industry of Russia should be put on a proper footing at the earliest possible moment. I have been very much impressed recently in reading of the state of affairs in Russia by the thought that what they require in many departments of their activity are precisely the manufactured articles which we are specially providing for under the Regulations attending this scheme. I know that under Clause 3 of the Bill the Board have power to add to the number of countries in the Schedule, and probably there is an intention with reference to Russia under that head. I do not know. I have put down this Amendment because I believe the Russian situation to be of critical importance to Europe, and because I am very anxious to find out what is that attitude of my right. hon. Friend and of the Department in this matter. If it be at all possible to add Russia now to the Schedule, I think for many reasons it might be advisable to do so.

    Mr. KELLAWAY: I think it would be a mistake to include Russia at the moment. Negotiations probably will be 270 opening very soon with the Russian trade representatives, and there is reason to believe that those negotiations will result in satisfactory terms being settled on which trade can be resumed, but, until those negotiations are completed and a decision has been reached, I think it would be a mistake to include Russia. If they are completed satisfactorily, then the Department would certainly add Russia to the list of countries already included in the Schedule. As my hon. Friend has said, the Committee has given us power to add any names to this list. If my hon. Friend will look at it from that point of view, he will see that any prospect of Russia being included is not prejudiced by the fact that it is not included at this moment; and, having regard to the fact that negotiations are going on, I feel sure that the British case will be hampered if, at this moment, it can be said that the Government have already added Russia to the countries to which this credit scheme can be applied. In those circumstances, I hope my hon. Friend will not press his Amendment.

    Mr. KILEY: What would be the effect if the word "Russia" were added to these other names? Surely the Advisory Committee or the Board of Trade would have the power to veto any shipments, even if Russia were included in the Schedule. On the other hand, what are the possibilities? Supposing the name of Russia be not added to the Schedule, and supposing in the next week or so friendly arrangements are made with Russia which would permit of trade being resumed, Parliament would then have adjourned. Would it be possible to take any action until Parliament reassembled? I understand that before any new country can be added an Order must be issued by the Board of Trade, and that it must lie on the Table of the House for a certain period. If there be delay and business be impossible until Parliament reassembles, that would not meet the position; but if the Minister assures us that no delay would be caused by the omission of the name I am satisfied. If there would be a delay, I suggest that no harm would be done by including Russia among the other countries specified, because the Board of Trade have full powers to refuse to make any advance unless they are of the opinion that it is desirable to do so.

    271

    Mr. KELLAWAY: If the negotiations with the Russian Delegation come to a satisfactory conclusion, there would be no delay. If we come to a satisfactory arrangement with Russia, obviously Russia is one of the most promising markets to which the scheme could be applied.

    Amendment, by leave, withdrawn.

    Schedule agreed to.

    Question proposed, "That the Bill, with Amendments, be reported to the House."

    Mr. HASLAM: I would like to ask if we may have some explanation with regard to the Regulations which I hold in my hand. I am sure that most of the members of the Committee, like myself, are not fully aware as to how these Regulations are framed, by what means they 272 may be altered if necessary, and what powers we have over them in the House. The Regulations include, among other matters, the statement that a recommendation must be made by a banker with regard to the provision of these credits. If we could have from the Minister in charge of the Bill some explanation of these Regulations and the powers we have over them, I think it would be advisable that it should be given.

    The CHAIRMAN: I do not think that we can discuss the Regulations. So far as I can see, they are not referred to in the Bill.

    Question put, and agreed to.

    Committee rose at Twenty-three minutes before Four o'clock.

    THE FOLLOWING MEMBERS ATTENDED THE COMMITTEE:—

    Mr. Mount (Chairman)

    Betterton, Mr.

    Bird, Sir Alfred

    Bridgeman, Mr.

    Cope, Major

    Dawes, Mr.

    Farquharson, Major

    Graham, Mr. William

    Grant, Mr.

    Haslam, Mr.

    Hills, Major

    Jones, Mr. Haydn

    Kellaway, Mr.

    Kiley, Mr.

    Murray, Dr. Donald

    Raeburn, Sir William

    Rodger, Mr.

    Roundell, Colonel

    Scott, Mr. MacCallum

    Surtees, Brigadier-General

    Taylor, Mr.

    Waddington, Mr.

    Yeo, Sir Alfred