GIFT OF 
 
" Let all who will, man the boats and save the nation'.' 
 
 PEACE 
 
 and 
 
 RETRENCHHENT. 
 
 THE PRIME MINISTER'S CALL TO THE NATION. 
 
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 ' -" ' ' " ' '" \ * * 
 
 Distributed by 
 
 W. H, SMITH & SONS, 
 

 \ 
 
 Speech delivered by the Prime Minuter in the House 
 of Commons, August 18, 
 
PEACE and RETRENCHMENT. 
 
 
 IN the House of Commons on August 18, 1919, Mr. Lloyd George 
 reviewed the trade and industrial position of the nation, and made an 
 appeal to all classes to co-operate in the economic salvation of the 
 country. The Primer Minister said : 
 
 The country, of which I have to take a survey, is so very wide 
 ind so sweeping that it will be impossible for me in the picture to do 
 anything beyond noting the broader aspects of the landscape. I only 
 propose to deal with the trade and industrial position. That will 
 include a review of the coal-mining industry in this country, and 
 sertain proposals which have been made in respect to it. There are 
 certain advantages in making the review now rather than at an earlier 
 period. Earlier in the year there was a good deal of obscuric}*, and 
 here were a great many uncertainties in the situation uncertainties 
 hat have been cleared up since then. During the time 1 was at the 
 'eace Conference I had the privilege of meeting a good many experts 
 rom many lands, and debating and discussing v ith them the whole 
 ndustrial position throughout the world. Now that I recall some of 
 he things that they predicted, I can see that not even the astutesfc 
 .mongst them foresaw exactly the course that events have taken, 
 
 APPEAL FOR SUGGESTIONS. 
 
 Another advantage is that I am making my statement on behalf of 
 he Government on the eve of the Adjournment, and I propose, after 
 eviewing the situation, to place before the House and the country 
 t series of suggestions and proposals which the Government have 
 ormulated to deal with many of the difficulties which have arisen. 
 .''hey are put forward with a view to discussion. They are put for- 
 ward with a view to enabling Members to consult with their con- 
 tituents, and with others who have first-hand knowledge of the 
 Business comp^cties of this and other countries, and so to come 
 )ack and to assist lu improvement by the adoption of some suggestions, 
 rtid the elimination of others. All I am going to ask at this stage is^ 
 hat everybody, realising the gravity of the position, will give a fair* 
 .nd impartial consideration to the suggestions put forward. 1 ask 
 hem to realise that the future of the land depends upon the way in 
 vhich these difficulties are faced, and the way in which Parliament 
 -ttempts to grapple with them. I do urge that all personal con- 
 ideralions should be set aside when we are dealing with big 
 questions of this kind, that we should remember that this is our 
 ommon country, and that we should do our best to help. 
 
 THE COST OF THE WAR. 
 
 I should like to say one word about those who seemed to expect 
 hat the moment the War was over we should instantly return to the 
 
 08534 
 
norm il- Nay. move than that, that things should be even better than 
 before the AYar, and t'hat immediately on the click of the switch of 
 Peace everything would leap back agaiu to the normal, and be exactly 
 as it was in 1914. No man who imagines that can have realised for a 
 moment the magnitude of the "disturbing events of the last live years, 
 and certainly he can never have read the lessons of history. If a 
 house is shaken or demolished you may build a better structure, but 
 the new structure does not pop out of the ground like Aladdin's 
 Palace on -the rubbing of Aladdin's lamp; you have to build it. 
 The direct cost of the \Var to the world was 40,000,000,000, 
 spent, not in reproductive enterprise, but spent largely in de- 
 struction. If 40,000,000 of able-bodied young men were to take 
 a holiday for four years, and were withdrawn from the task 
 of reproduction and wealth-creation in Europe and America, and 
 for that period, they had had 1,000 placed at their disposal to 
 expend, it would give some sort of a notion of what war on this 
 gigantic scale means. You would not expect at the end of the 
 four years everything to be the same. You would not expect to 
 have 1he habit of industry come back immediately, and you 
 would certainly expect that the difficulties which had arisen 
 would take some time to get over. What are the difficulties that 
 arose immediately on the cessation of hostilities ? Let me summarise 
 them. 
 
 AFTER-WAR DIFFICULTIES. 
 
 First of all, you have the change from war to peace conditions. 
 I remember when I was Minister of Munitions how long it took 
 the industries of this country to change from peace to war con- 
 ditions. It will take them just as long to adapt the machinery and 
 the workshops of this country to peace conditions after they have 
 been working on war material for two or three years. Contractors 
 were shy and even shuddered at orders. Orders were often even 
 shyer. No one quite knew what was going to happen in 
 respect to prices. That had a very paralyzing effect upon business. 
 There was a shortage of labour owing to the fact that demobili- 
 zation necessarily took time. There was a shortage of material. 
 There were great transport difficulties. Then there were stories 
 of great accumulated stocks of manufactured goods in foreign 
 countries, which, on the signature of -Peace, would rush into this 
 country and depress prices. Sir A. Geddes and his predecessor had 
 'to deal with that situation, and to restore confidence. They took 
 the necessary steps, which turned ou-t to be eminently successful. 
 A certain number of restrictions were imposed on imports by 
 Orders terminating on 1st September next. That gave the com- 
 munity a sense of security, at any rate, up till 1st September. They 
 could manufacture and deal in goods without the fear of this great 
 inrush of accumulated stock coming into the country. The contractor 
 could safely launch out without fear of the ice cracking under him. 
 Then the supply of labour considerably improved. From the three 
 Services Navy, Army, and Air 3,600,000 men have already been 
 demobilized. Out of that enormous mass of able-bodied men there are 
 
 
only 350,000 who have not yet been absorbed in industry. I think 
 that is a great achievement, and my right hon. friends are very much 
 to be congratulated upon the successful way they have dealt with this 
 difficult problem. 
 
 WORST TROUBLES TO FACE. 
 
 Trade has steadily improved. But we have still our worst 
 troubles to face. Let us have the facts with regard to these 
 matters. The first fact, then, is I am not sure that the conclusions 
 that will be drawn will suit any particular school of thought 
 the first outstanding 1 fact is the alarming adverse trade balance. 
 Before the War, we had the greatest international trade in the 
 world, looking at the size of the country, looking at its configura- 
 tion, looking at its resources. It is a country which must neces- 
 sarily depend upon international trade always must. Before the 
 War, if you took our export of manufactured goods, we sold 9 per 
 head of the population of the United Kingdom, Germany sold 5 10s. 
 per head of her population, France sold 4 4?. per head of her popula- 
 tion, to customers across the sea. The United States of America sold 
 2 10s. per head of her population. If you add to that the carrying- 
 trade we did half the carrying trade of the world! if you add to 
 that insurance, commissions, banking, all the international services 
 which we rendered in an exceptional degree, you will find that the 
 disparity between us and our very nearest rival is very great, and 
 that shows the extent to which we depended on our international 
 trade. It amounts to 45 per household of the United Kingdom. 
 
 OUR INTERNATIONAL TRADE. 
 
 Realise how important the trade across the seas was to the 
 United Kingdom. We cannot prosper, we cannot even exist 
 without recovering that trade and without maintaining it. I go 
 beyond that and I say without increasing that trade. How 
 do we stand? Before the War our imports exceeded our exports 
 by 150,()liO,000. In January last our exports were 47,000,000, 
 and this last July our exports were 65,000,000, but our 
 imports less re-exports in July were 141,000,000, and if that 
 were the rate that we maintained, instead of an adverse balance 
 of 150,000,000 we should have an adverse balance of very nearly 
 1,000,000,000. But take the average throughout the year there 
 were reasons why the exports for July should be down, I am sorry 
 to say there were labour troubles the adverse balance will be 
 between 700,000,000 and 800,000,000. That is our adverse 
 balance before the War. It was 150,000,000, and our adverse 
 balance at the present rate and I must get this fact home to the 
 mind of everybody in the United Kingdom, because unless it is 
 brought home there is no salvation for this country is nearly 
 800,000,000. 
 
 ADVERSE TRADE BALANCE. 
 
 How did we reach 150,000,000 before the War? We had 
 advanced 4,000,000,000 to the world, and we were getting an 
 interest of something like 200,000,000 per annum. Then our 
 
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6 
 
 shipping trade, our insurance, and commissions and other services 
 came to another 150,000,000, and so we got invisible exports 
 amounting to 350,000,000. Therefore we had a balance on that 
 account of 200,000,000 in our favour. On'mere buying and selling 
 there was an adverse balance of 150,000,000, but on the whole 
 balance of trade, our finance and shipping business, we made, a profit 
 of 200,000,000 a year. We had a balance of 200,000,000 a year in 
 our trading with the world. 
 
 What happened to that? We reinvested it almost every year, 
 and the result was the indebtedness of the world to us was increasing 
 rapidly every year, and more especially during the last seven or 
 eight years before the War. What has happened since the War? 
 We have sold 1,000,000,000 of our foreign securities in payment for 
 war material for ourselves and our Allies. We have borrowed pro- 
 bably another 1,200,000,000 from America more particularly, and 
 Canada, for the same purpose. It is perfectly true that the Allies 
 owe us a very considerable sum, and I think in round figures it 
 amounts to 1,800,000,000, and that includes Russia. We are 
 debtors to the West, we are creditors to the East, the rising sun is our 
 debtor and the sunset is our creditor, and as Kussia is included in 
 the first, I am afraid the stocks of the dawn are not particularly 
 good security at the present moment. 
 
 As far as the receipts are concerned, from our foreign invest- 
 ments we are down 100,000,000. We have got to pay an adverse 
 balance on trade of 800,000,000. We must bridge that chasm, for at the 
 bottom of it is ruin. We are building the temporary bridge now by 
 borrowing, not state borrowing but by traders borrowing, by running 
 into debt for raw materials, and for food. That will only add to the 
 catastrophe by your advancing further on the bridge, which is a shaky 
 one, and you are advancing with increasing weight along it. That is 
 the position with regard to international trade. 
 
 NATIONAL INDEBTEDNESS. 
 
 The national indebtedness is another disquieting feature. Before 
 the war our National Debt was 645,000,000, and we were disturbed 
 by it. Our interest and Sinking Fund was 24,500,000. To day our 
 National Debt is 7,800,000,000, and against that we have the 
 indebtedness of the Allies and the Dominions, and India, of 
 1,800,000,000, but the interest and Sinking Fund together would 
 amount to 400,000,000. That is our debt, and instead of costing 
 24,000,000 it will involve an annual charge of 400,000,000. 
 Pensions, an absolutely new charge, amount to 100,000,000 per 
 annum. I want for the purposes of a review of the position to 
 assume that you cut the cost of the Army and Navy down to the 
 lowest any sane person can figure. Assume that for the moment, 
 and still the pay is treble, the cost of material is double, and 
 whatever you may cut down to within the limits of safety the cost 
 must be enormously increased. Before the war it was 80,000,000. 
 
 PUBLIC EXPENDITURE. 
 
 Then there is another factor. A good deal has been said about 
 public expenditure, but there is not nearly enough said about private 
 
expenditure, which in the aggregate is a much more formidable 
 figure. I say nothing of the expenditure due to a rational uplifting 
 of the standard of living, bat there is another expenditure which 
 would not be justified under the circumstances of the moment. There 
 seems a temptation to rush into prodigality, and I should not be doing 
 my duty in reviewing the position of things unless I alluded to that. 
 To meet these conditions of an adverse .trade balance which is 
 alarming, an increased expenditure which is inevitable from the 
 reasons i have given apart altogether from any criticism which may 
 be directed against this Department or another, pensions, Sinking 
 Fund and interest on debts, there is but one resource and one way of 
 meeting it. and that is by increase of production. What are the facts 
 there ? 
 
 OUR DIMINISHING OUTPUT. 
 
 There is almost a sensational decrease in output. That is true of 
 every branch of production except agriculture, where you have had an 
 increase during the War. I have inquired in every direction and the 
 output is sensibly diminished in every branch of industry. We are 
 spending more, earning less ; we are consuming more, producing less. 
 Those are the facts of the situation, and it cannot last. Take coal. 
 It enters into everything, almost every form of production, every 
 manufacture, iron and steel, textile, shipping. There could be no 
 more serious blow at trade and industry than a diminution in the 
 output of coal. Our trade depends more upon it than upon any other 
 commodity. It fetches and carries, it goes to the shop and fetches the 
 goods, carries them back and pays for them. Food, raw material coal 
 fetches them, and coal pays for them. If you go down to the Argentine 
 to fetch wheat for bread, you pay largely for it with coal. You pay the 
 outward journey with coal, and the man who sells you the wheat pays 
 you half the price of the cost of carrying. A diminution in coal 
 means food must go up in price, raw material must go up in price, aud 
 our shipping will be hit. Every industry will be hit. our international 
 trade will be ruined. Therefore, there can be no more serious facts 
 in the whole of our international trade than the depression in the 
 output of coal. 
 
 - Before the War 287,000,000 tons were produced per annum 
 in this country. At the present rate there will be 200,000,000 tons 
 produced, and that is a diminution of 87,000,000 tons per annum 
 in the output of coal. I believe last year it was 220,000,000 tons. 
 That is not due to the fact that you have fewer men engaged in the 
 coal business. On the contrary, you had 1,110,000 in 1914, and you 
 have 1,141,000 now, so that there has been an increase in the 
 numbers employed. W r ith regard to the price, there has been an 
 increase which is most disconcerting for all who are engaged in any 
 industry that is dependent largely upon coal. A ton of coal raised 
 in 1913 cost 10s. at the pit head; .on 16th July last it cost 265. 
 We are not producing or handling as much per man as we were 
 producing and handling on the 4th August, 1914. This reduction in 
 output is the outstanding feature of the moment. It causes the 
 greatest anxiety and apprehension, and unless by concerted effort it 
 is removed the future is indeed dark. It is partly responsible for 
 
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 abnormally high prices which are the inevitable outcome where the 
 supply is less than the demand, and it handicaps us in competition 
 with other countries where production is greater and- cheaper. I 
 have had reports recently that in the United States, where wages are 
 higher and where the hours of labour are longer, the labour cost in 
 proportion to the article produced is less. If that is the case, then 
 competition is impossible, and let me say at once no tariff would ever 
 remedy that. 
 
 COUNTRY NOT PAYING ITS WAY. 
 
 I should like to say a word about the effect upon the exchanges. 
 Unless you pay the adverse balance by means of goods, it must have 
 the effect of depreciating' the purchasing quality of your coin. At the 
 present momeut in the United States the British sovereign is worth 
 17s. Qd. That is due to the fact that we are not paying 1 for the goods 
 we are getting*, either food or raw materials, by goods that we are 
 producing here. 
 
 The fact that the imports at the present moment are almost ex- 
 clusively food and raw materials makes it mors serious. Under the 
 Order that is still in force most manufactured goods are excluded 
 until the 1st September, so that the adverse balance is upon the actual 
 essentials of existence and of business in this country. That must be 
 redressed if we are to keep our place as a great and prosperous 
 community. We are not paying our way. That is the most serious 
 statement that you can make to a business man. It is the most 
 serious statement that you can make to a country. We shall never pay 
 our way until we increase production, and if we do not do that now, 
 we shall be driven by the stern scourge of events later on either to 
 increase production or to reduce lower than ever the standard of 
 living. I can see no other alternative except quitting the country 
 for which the people have fought so grandly for four years. 
 
 Let me examine the reasons for diminished production, because 
 unless you get at the cause of the diminished production you cannot 
 find the remedy. The first, I am glad to say, is vanishing, or is 
 almost vanishing. It is the change from war to peace conditions. 
 The machinery is being adapted for that purpose, and I do not 
 think at the moment that it is a cause which is responsible for even 
 a perceptible percentage of the under-production. The second is 
 the renewal, the repair, and the cleaning of machinery. All these 
 machines have been ruu during the War to the utmost limit. There 
 was no time for renewing, there was hardly time for repairing, 
 and therefore there was quite inadequate time for cleaning. 
 That is a process that has been going on for the -last three 
 months, but it has slowed dowa very considerably owing to 
 the lack of labour. Take a third cause. Let us talk without 
 seeking for offence. When a country comes to this condition 
 we must talk frankly to each other. Everybody is suffering from 
 the terrible strain of the War. Nerves are jagged and sore. I 
 am not sure that we make sufficient allowance for that, and for the 
 nervous reaction. There is no surer sign of ruffled nerves than the 
 general disposition to grumble and grouse about evei\\ thing and every- 
 body. Everybody is complaining of everybody else. Everybody is 
 
complaining- of the management, whether of the country or of 
 and trade unionists complain of their leaders. 
 
 The people are complaining of Governments ; they complain of the 
 existing order of things ; they complain of Providence. Gradually we 
 shall pass away from that state of things if we exercise common-sense 
 and forbearance forbearance not merely on the part of the grumblers, 
 but also on the part of those who are grumbled at. If they have tlve 
 good sense and the humour to appreciate the situation, and not to get 
 too upset, but to realise that it is the sort of passing mood which you 
 get on board of ship when you have a week's sickness and when every- 
 body grumbles. In time most will have forgotten their fretfulness, 
 and there will be only a few, a wretched remnant, who will be always 
 disappointed that they were unable to take advantage either to upset 
 the Government or the existinc; order and institutions of the country. 
 
 WORLD SUFFERING FROM SHELL-SHOCK. 
 
 All that will pass away. It is prevalent throughout the world. 
 It is not merely here ; it is in France, it is in Germany, and 
 to a less extent you get it in the United States of America. 
 The world is suffering from shell-shock on a givat scale, 
 and the habitude of industry has not been quite recovered. 
 When you have led a different life, a good deal of it wasted, 
 not working, it is difficult, in two, three, or four years after that 
 quite to get .into the frame of mind to make you stand by a 
 machine for eight or nine hours a day. But I wish that were all. 
 It is true that hours of labour have also been reduced. One of the 
 arguments for the reduction of hours of labour that 1 have heard in 
 this Ilouse for the last twenty or thirty years was that yon would 
 not have less production, but, on the contrary, that you might increase 
 it, and that you would certainly improve its quality. I have heard it 
 many a time when I used to vote for the Eight Hours Bill for Miners, 
 I have heard it on the Seven Hours Movement, and I have heard it 
 whenever there has been any discussion on the reduction of hours. 
 Unfortunately, the fact is that with that substantial reduction in the 
 hours of labour you have had a reduction in output almost in mathe- 
 matical proportion to the diminution in the number of hours. As far 
 as I have been able to discover, it is true of almost all the trades 
 where there has been a reduction. It may be merely temporary. 
 
 EMPLOYERS AND MEN. 
 
 Are we quite sure there is not something more ? Is there not an 
 element in some trades, and amongst a certain number of men engaged 
 in those trades, of deliberate and concerted slowing down? I do not 
 think that that is confined to labour. 1 have had some evidence of it 
 among employers and among managers, it is a severe charge to bring 
 against employers that they are " ca'ing canny," but in some industries 
 I have had some evidence of that. It may be due to trade conditions ; 
 it may be due to other reasons which I will not investigate. There 
 is evidence of slackness. The effort has got to be quickened, 
 tightened; employers, managers, foremen, workmen, must put their 
 
10 
 
 backs into it to save the country. One reason why labour is being 
 induced to lend countenance to that policy is a reason which is 
 creditable to its intentions and its desires. It is due to the fallacy 
 that the less you work the more work there will be for others. 
 There never was a more fatal error. You have only got, to look 
 t the coal trade. The reduction in the output of ccal is at the 
 present moment depriving people of employment. It it goes on it 
 will throw hundreds of thousands out of employment in this country. 
 You have only to work it out to its inevitable consequence, and you 
 will find that to deliberately reduce output means in the end all-round 
 unemployment on a gigantic scale. It is important, therefore, that 
 that fallacy should be exploded, especially by those who speak with 
 authority to Labour. It is difficult for them to speak. I know the 
 courage of the Labour Members, and I am perfectly certain that they 
 vvould do so, because they realize as well as anyone else does in this 
 House that it is a very dangerous policy to pursue and encourage, and 
 a disastrous one for Labour. The price of food will go up, the cost of 
 material will go up, and, what is still worse, we will not get food for 
 this country, because you cannot live for ever on borrowed food. 
 You will not get raw materials. There will be no work for those 
 who manipulate and transform and transfigure it into the beautiful 
 things into which British hands can transfigure any material. 
 It is a disistrous policy for all classes. That is why I appeal to 
 employers and to workmen to get rid of this ruinous fallacy which 
 seems to possess the minds of hundreds of thousands at the present 
 time. 
 
 CONGESTION ON RAILWAYS AND DOCKS. 
 
 There are other causes which are contributing. One is the block 
 on the railways and in the docks. The railways are not in perfect 
 repair and cannot be repaired. Locomotives, wagons, have not been 
 kept in repair ; cranes are out of repair. The nation was too busy to 
 attend to them ; it was fighting for its life, and they have all suffered 
 from neglect.' We have not been able to keep up the number of 
 wagons; we ought to have increased them. Tens of thousands of 
 wagons and locomotives were sent to France. Many are destroyed ; 
 many are still there in the essential work of clearing up the country 
 and for the Army of Occupation. The result is the block on the 
 railways and in the docks. Traders also are partly responsible. The 
 trader is not discharging his goods and cargoes from wagons as 
 rapidly as he ought to. He is using them more than ever as ware- 
 houses on wheels. He is sending goods in what are called small 
 packages, instead of filling the wagons to their full capacity ; so that, 
 when you have got the wagons and locomotives of this rountry 
 reduced in number, you have only got two-thirds of the capacity for 
 the rest. 
 
 You will never do that until you put up the railway rates, until the 
 increases in railway wages are paid, not out of the taxpayers' pockets, 
 but by a direct charge upon those who use the railways. We have 
 only just had the Ministry of Transport Bill through which gives the 
 power to de:il with it. 
 
11 
 
 * THE REMEDY. 
 
 I have dealt with the causes of the reduction in output ; now I 
 come to the remedy. I have dealt with the change from war to 
 peace work, with the repair and renewal of plant. The block on the 
 railways will be dealt with under the Ministry of Transport Act. The 
 new Minister of Transport is equipped with full powers to deal with 
 that situation, and I have no doubt at all that, with his usual energy, 
 he will lose no time in coming to grips with it. But in order to 
 enable him to deal effectively with it he must have the assistance of 
 everybody. He must have the assistance of the trader, of officials on 
 the railways, of the officials in the docks, and of the general public. 
 When that is done I have no doubt at all that he will be able to deal 
 quite effectively with the position. 
 
 With regard to war-weariness and the exhaustion which comes from 
 strain, that can only be cured by the effort of the people themselves of 
 all classes. There is no recovery without conscious effort on the part of 
 the patient himself. It is a matter of will and goodwill. 
 
 AN UNDERSTANDING WITH LABOUR. 
 
 Labour demands an understanding as to the future, and, I think, 
 the nation must come to an understanding with Labour. What 
 Labour says is and I have made a good deal of direct inquiry from 
 those who are in a position to know what Labour says now is : 
 "We realise all that you tell us about production. We are not 
 holding up society. We do not believe in direct action" and I 
 believe that that is true of the vast majority of the working classes 
 ' but we are as human as anybody else, and we do not work well, 
 any more than anybody else, unless we work with a will ; and we 
 cannot work with a will unless the conditions of our work are fair and 
 satisfactory." Let us look that statemeut honestly and fearlessly in 
 the face and examine it and see what there is in it. We must examine 
 it in no spirit of challenge, in no spirit of resentment, but in a spirit 
 of justice and fair-play and in the new spirit of comradeship which 
 has been created by the War that spirit of comradeship which arose 
 from a common sacrifice. Let us examine the claims, the grievances, 
 and the complaints of Labour, not merely anew, but in a new spirit. 
 Until that is done I do not believe we shall get a real answer to the 
 problem of production. I make the appeal, not merely to employers, 
 but to Labour. 1 ask the employers to examine th claims of Labour 
 in that new spirit, but I ask Labour to press their claims in the same 
 spirit. Then, I think, an understanding will be arrived at. Let us 
 demonstrate to the world once more that Britain, beyond all lands, 
 has the traditional power of reaching a solution of her most baffling 
 problems without resorting to anarchy, but merely by appeal to the 
 common-sense of most and in a spirit of fair-play. 
 
 INCREASED WAGES-REDUCED HOURS. 
 
 What are the complaints of Labour ? I might almost say, with 
 regard to some of them, what were the complaints of Labour ? The 
 first is that the hours were too long for the human frame to endure, 
 
12 - 
 
 or that they were inadequate to provide leisure to enjoy the amenities 
 or acquire the refinements of life. The second complaint was that the 
 wages were insufficient in a multitude of cases to sustain the strength 
 and vigour of the worker, to maintain the comfort of his home, and to 
 bring* up a family worthy, physically and mentally, to become citizens 
 of a great Empire. Let us confess, whatever we have done in the 
 last two or three years to redress these wrongs, that for a generation 
 we did not pay the heed to them we ought to have done. There 
 were too many sweated trades. There were hundreds of thousands 
 of able-bodied men on the 4th August, 1914, who were labouring 
 hard for wages that were a disgrace to the Flag for which they went 
 to fight. There has been a notable advance during the last two or 
 three years as regards hours and wages. The trouble is that 
 suspicious were aroused by delay and temper exasperated. The air of 
 the workshops was thiok with it, the machinery was clogged with it, 
 and no lubricant could assist it. There is no doubt that the delays 
 which had occurred detracted from the value of the concessions when 
 they came. A good sound piece of advice to men of business and 
 statesmen is, beware of arrears. Still, Labour within the last two or 
 three years has made enormous gains. On an average the wages have 
 more than doubled, and the hours of labour have been diminished to 
 forty-four or forty- eight a week. 
 
 If there had been purely the increase in the wage without the 
 diminution in the hours, I agree that Labour would practically be 
 exactly where it was at the beginning of the War. But what is 
 earned by the hour now is considerably higher. What Labour is 
 doing at this moment is converting these extra hours into overtime, so 
 that the actual wage they are earning is considerably more than double 
 what it was at the beginning of the War. These reductions in hours 
 and these increases in wages will be impossible to maintain if pro- 
 duction remains at its present level. That is obvious. The War 
 taught military men that it was easier to capture a position than to 
 retain it. That is a lesson for Labour. They have captured much 
 more advanced positions than they have ever held before. And 
 I do not suggest that the last word has been said about hours or 
 about wages. 
 
 INDUSTRIAL CO-OPERATION. 
 
 There has been an Industrial Council set up of representative 
 employers and representative workmen who have been sitting for 
 months examining together all these various problems, and I am very 
 glad to say that they have reached a very fair measure of agreement 
 upon two or three of them. Among others, they have reached an 
 agreement upon hours and wages. A measure has been prepared and 
 introduced by the Minister of Labour to deal with both hours and 
 wages. It represents the agreement arrived at between employers 
 and workmen on this important Council. They have taken weeks, 
 1 might even say months, to consider it. They have examined it in 
 every detail. In substance it means the declaration of a forty-eight 
 hour week for all the industries of the country, with two or three ex- 
 ceptions domestic and outdoor servants except where employed for 
 
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 the purpose of gain, masters and crew of sea-going ships, and persons 
 employed in agriculture. That is for reasons which are perfectly 
 obvious. It also provides for a living wage for those engaged in 
 industry. These measures are, I think, the most important measures 
 dealing with Labour problems which have ever been submitted to the 
 judgment of Parliament. An opportunity will be given during the 
 Vacation for employers and workmen to examine them thoroughly, 
 and by the time the House resumes they will be in a position to give 
 their opinion upon the provisions. 
 
 HUMANISING INDUSTRY. 
 
 What more ought to be done ? Steps ought to be taken to 
 humanise industry by the improvement of the conditions in the work- 
 shops. I am not sure that we are as advanced as even many of the 
 workshops in Germany in this respect. We must secure the co- 
 operation of Labour in industry, and make the workmen feel that they 
 have an interest in the industry. You cannot manage finance and ths 
 commercial side of industry by a committee. But, apart from that, 
 there are two aspects of the question which deserve further considera- 
 tion. The co-operation of workmen ought to be secured to a larger 
 degree on the industrial side the conditions under which the industry 
 is carried on which means not merely wages and hours, but a 
 multitude of other matters which affect the comfort and efficiency 
 of the workmen. The Committees with which he name of the 
 Deputy Speaker will always be honourably associated, represent a 
 great advance in this respect. National Committees Whitley Com- 
 mittees, if I may use the phrase have already been set up in 
 industries representing something like 2,250,000 workmen. Unfortu- 
 nately, the local committees, the district committees, and the works 
 committees have not yet been set up. I could have wished it had 
 been possible to begin at the bottom and work up to the top, rather 
 than to begin at the top and work down to the bottom, because until that 
 co-operation is secured in the works themselves, I do not think 
 Mr. Whitley's aim will ever be achieved. 
 
 The second point is that it will be desirable, if possible, to give 
 workers a more real financial interest in the success of the industry. 
 Unfortunately, owing not to the merits of the proposal, but rather to 
 the circumstances under which it was adopted, profit-sharing has been 
 discredited in trade union circles, and it is very difficult to get back 
 upon an old suspicion. I wish that the problem of securing an interest 
 for the worker in the business could be considered anew apart from 
 these prejudices. It must be clear that it is nut to be used as a 
 weapon to fight trade unions. 
 
 PROFIT-SHARING. 
 
 There have been many suggestions. One is that the workers 
 should have an interest in the increase of output. With regard to 
 these two problems, the problem of co-operation of the worker in the 
 conditions of the industry and the problem of giving the worker a 
 more direct financial interest in making the industry a success, I wish 
 
N 14 
 
 that employers and work nen would once more, meeting together, 
 discussing the thing together with such aid as a Government Depart- 
 ment can give in the circumstances, make another real effort to secure 
 the joint action T dislike using the term joint partnership of the 
 worker and the employer in seeing that the industry upon the success 
 of which both of them depend, and upon the success of which the 
 whole life of the community depends, is made one which will bring 
 prosperity to themselves and to all classes of the nation. Until we 
 secure greater co-operation and a greater feeling in the breast of the 
 worker that the prosperity of the industry is something which 
 concerns him, it will be difficult to induce him to regard with the 
 same sympathy appeals for an increase in the production of 8 
 particular trade. 
 
 THE NIGHTMARE OF THE WORKERS' LIFE. 
 
 The other branc'i of this problem to which we have given con- 
 sideration is that of unemployment. Unemployment, 1 am afraid, is 
 as inevitable as bad seasons, and it is the nightmare of every worker's 
 life. When it comes, lurge numbers pass immediately from com- 
 parative plenty to penury. When that time comes, the worker should 
 cot be left to the humiliating expedient of soup tickets, which reveal 
 the extent of the suffering without sensibly alleviating it. We have 
 already established unemployment benefit for certain precarious 
 trades, and we recently extended the application of its provisions. 
 But the amount is hopelessly inadequate, and the trades which it 
 covers are only a percentage of the industry. The industry of the 
 country as a whole ought to protect its workers against the prospect 
 of this terrible calamity. There are many ways of dealing with it. 
 There is the way in which it is dealt with in the cotton industry which, 
 whenever there is a bad time coining, makes arrangements for short 
 time in order to avoid dismissals. But if dismissals come, men who 
 are prepared to work ought not to suffer starvation, and there must 
 be an allowance. Until something is done i am afraid it is idle to go 
 to the workers and try to convince them of the fallacy of the doctrine 
 that less work means more employment. Fear is fatal to reason, and 
 you must remove th.it apprehension in the mind of the worker before 
 you can convince him of the danger of the course to which many are 
 endeavouring to entice him at present. 
 
 I am sorry that up to the present on this subject of unem- 
 ployment, we have failed to secure agreement amongst the 
 members of the Joint Committee of the National Industrial 
 Conference. I am not sure that the division is one between 
 employer and employed. It is rather a difficulty of trades. I am 
 not persuaded that we CAD succeed in getting agreement. It is 
 a question of workers in trades where unemployment is comparatively 
 small helping the workers in trades where unemployment is a larger 
 element. It is an appeal to the solidarity of Labour, and that is an 
 appeal that certainly ought not to fall on deaf ears. Ifc may be the 
 duty of the Government, in the event of complete failure of agreement 
 among the industries, to put forward proposals in the name of the 
 whole community. 
 
15 
 
 REFORMS ACCOMPLISHED. 
 
 With regard to improvements in the social conditions of labour 
 generally, Parliament this year has been busy, and has passed a Hous- 
 ing Act, an Act for the purchase and acquisition of land ; it has passed 
 Acts of Parliament to enable those who are setting up houses also to 
 provide transit for the worker to and from his work. One of the 
 difficulties of providing houses is that you have no sites in the cities. 
 You have, therefore, to take the worker out into the country if jou 
 are going to ret houses fit for his accommodation. In order to do 
 that, you must have some means of carrying him back and forward 
 from his work, and I trust the combination of the Housing Act, the 
 Land Acquisition Act, and the Ways and Communication Act will have 
 the effect of solving this problem, and I shall be very surprised if, 
 when the House meets, we shall not be able to report, in spite of the 
 fact that these Bills have only just become Acts of Parliament, very 
 substantial progress on the lines of providing housing accommodation 
 for the working classes of this country. 
 
 m 
 
 COAL MINING INDUSTRY. 
 
 At the beginning of the year we were threatened with a great 
 industrial upheaval in the mines, an upheaval which would have 
 seriously retarded the re-establishment of industry, and the Govern- 
 ment invited the House of Commons to appoint a Commission, presided 
 over by aivery able judge, to investigate the subject in dispute. There 
 were two separate classes of subjects referred to this Commission. 
 One was an immediate question the hours of labour. The others 
 were great questions of policy relating to the conditions of the 
 industry and the best method of working it, its organisation, questions 
 of waste in the present system, the social conditions under which the 
 miners live, nationalisation of minerals, State ownership and manage- 
 ment of mines, and co-operation of the workers in the control of the 
 industry. These were gigantic questions of policy. Some people 
 seem to assume that when a Government appoints a Commission it is 
 in honour bound to accept all its recommendations and to put them 
 into operation. I never heard of that doctrine in the whole history 
 of the House of Commons. There have been multitudes of questions 
 referred to Royal Commissions. There have been some whose recom- 
 mendations have been legislated upon and many which have not. But 
 even taking those where Government, and Parliament immediately took 
 action it has never been suggested that any legislature was bound to 
 take every recommendation exactly in the form in which it was made. 
 
 I introduced the Coal Commission Bill, and I was present when it 
 went through. I have looked through all the speeches I have made 
 on the subject, and I never uttered a syllable which would commit the 
 Government, and certainly not Parliament, which I had no rigrht to do, 
 to accept any recommendation made by the Royal Commission upon 
 every subject which was referred to it. I said the Government would 
 give respectful consideration and attach due weight to everything the 
 Commission reported, and that I have done. There are certain 
 questions which you can refer to arbitration questions of wnges anil 
 
16 
 
 of hours of labour and the Government treated the Sankey Com- 
 mission as practically the arbitrator in respect of the questions of 
 hours and of wages. But when it came to a great question of 
 policy, that was "a totally different matter. That would have 
 been an abrogation of the functions of Parliament and of 
 Government. I have a high opinion of the capacity of the 
 Chairman of the Commission, and I deeply deprecate any attacks 
 which have been made on him. He is one of the ablest and most 
 highly respected judges on the Bench. His task was very invidious 
 and difficult, and I think he deserves the gratitude of the State for 
 the trouble he took. But there were one or two incidents in the 
 proceedings which I am bound to say detract a good deal from 
 confidence in the findings of that Commission. Take one, which I 
 think is unprecedented. Two of its members left the seat of judgment 
 to go into the witness box. 
 
 It is difficult to treat with respect decisions arrived at by Com- 
 missioners who take that view of their functions. They were there 
 to deliberate upon very vital matters. They were supposed to reserve 
 judgment, whatever their preconceived opinions were, until they had 
 heard the whole of the evidence. What happens? They go into 
 the witness box and express an opinion. It is a most regrettable 
 incident. 
 
 MINING ROYALTIES. 
 
 The Government have given a good deal of attention to the 
 Report and to the evidence of this Commission, and I propose to state 
 the conclusions at which we have arrived, and what we are prepared 
 to recommend, and the proposals we are prepared to make in respect 
 of them when the House of Commons reassembles. The Government 
 accepts the policy of State purchase of mineral rights in coal, on 
 which subject all the Reports of the Royal Commission were perfectly 
 unanimous. The Government have been deeply impressed by the 
 evidence which has been tendered to the Commission with respect to 
 the unsatisfactory social conditions under which the miners have been 
 compelled to carry on their industry in some parts of the country. 
 They bold that a reasonable standard of living should be secured to 
 the miners and their families ; that the deplorable housing conditions 
 that prevail in some of the coalfields of the country should be remedied 
 as rapidly as possible, and that every effort should be made to 
 improve the comfort and amenities of the miners and their families. 
 
 We propose that a fun<l should be raised for that particular purpose. 
 If mining royalties continue we feel that they ought to contrikre 
 towards the well-being of those who work them, and those who risk 
 their lives in working them, and, as the Government propose to pur- 
 chase mining royalties, it feels that the mineral wealth of the country 
 ought not to shirk its responsibility for the welfare of the psople 
 upon whose work its utility depends. We propose that there should 
 be a deduction made out of the purchase value for the purpose of 
 creating a fund to improve the social conditions and the conditions 
 of life among the miners of the country. That is not an empty proposal. 
 It is a substantial contribution. It is proposed that schemes should be 
 submitted for the social improvement of the mining areas. These 
 
17 
 
 schemes can be considered by those who administer the fund, and the 
 fund can be distributed fur that purpose. In Scotland the mining 
 royalties are subject to local and county rates. To that extent they 
 have made their contribution. In this country they have not, and an 
 account will be taken of the difference between the conditions in the 
 two countries in that respect. We will submit the actual amount to the 
 House. I am dealing- with the general scheme now, but the actual 
 figures I am not prepared to give at the moment. It will, however, 
 be a substantial fund for the purpose. 
 
 THE QUESTION OF NATIONALISATION. 
 
 Now I come to the question of the future working of the mines. 
 The Leader of the House stated on behalf or the Government I 
 am not giving the actual words, but they are on record that the 
 Government accepted in the letter and the spirit the Interim Report 
 of Mr. Justice Sankey's Commission. In that Report there is a 
 recommendation in favour of the unification and reorganisation of the 
 industry. In his Final Report Mr. Justice Sankey proceeded with his 
 interpretation of that principle. We accept the principle, but we 
 cannot accept Mr. Justice Sankey' s final interpretation. His scheme 
 for carrying that out we cannot accept. He has a proposal for State 
 purchase and State working of the mines. He bases his recom- 
 mendation solely on the expectation that it will produce greater 
 harmony between emplo} T er and worker in the mines. He does not 
 recommend it, apart from that, as a business proposition. He does 
 not say " The mines will be better worked." Apart from the question 
 of unification and reorganisation he bases it entirely upon the expecta- 
 tion that there will be increased harmony between employer and 
 worker in the mines. But two or three things have happened since 
 Mr. Justice Sankey penned that Report which I think would have 
 induced him to change his mind if he had had them before his mind 
 at the time. In his Report he recommends also a scheme to avert 
 strikes, and that is as essential a part of his proposal as his proposal 
 for the purchase and working of the mines by the State. AVhat is the 
 scheme ? It was not a scheme to deprive the miners of the right to 
 strike. It is simply a scheme to provide that they shall not strike 
 until there is inquiry by the various councils set up under the 
 nationalising scheme. The miners in their report are prepared to 
 accept the nationalisation proposal, but they cannot accept the proposal 
 to avert strikes. 
 
 THE YORKSHIRE STRIKE. 
 
 I am dealing here with the Report of the miners' representatives 
 on the Coal Commission, and they did not accept the scheme which 
 Mr. Justice Sankey regarded as the basis of his recommendation. 
 Now I come to my second reason. Since then we have had the York- 
 shire strike. What is the theory of those who say that nationalisation 
 will promote harmony ? It is the theory that while they would ask 
 the worker to strike against the employer who is making profit he 
 will not strike against the State, which has only the common interest 
 
18 
 
 of all to look after. But there was the Yorkshire strike. The York- 
 shire strike was a direct strike against the Government. It was a 
 strike because the Government said they would only pay a certain 
 percentage. We were told that if we had left it to be settled 
 between the miners and their employers it would have been all rig-lit. 
 The Government intervened to protect the taxpayer and the con- 
 sumer. The Yorkshire miners struck against the State. Where is the 
 promotion of harmony if you have State control and State ownership 
 so long as that is the case ? 
 
 One of the hon. Members for Scotland was speaking at a meeting 
 of the National Union of Scottish Miners. I ask special attention to 
 what he said. It is a speech delivered before the question is settled. 
 
 " If the mines become the property of the nation, the miners 
 would need to be more determined than ever on their policy, and 
 more vigorous in their trade union organisation, because, instead 
 of fighting local employers they would be fighting the Govern- 
 ment. Previously the Government had been more or less secretly 
 behind the employers, but nationalisation would bring them out 
 into the open, and the miners would have to organise both 
 politically and industrially to maintain the position in whatever 
 fight they were engaged with the Government." 
 
 Harmony ! I am told that he is the political organiser of the 
 Scottish Miners' Federation. He was speaking at a miners' meeting, 
 as far as I can see without protest, and this is the interpretation of 
 someone who is a miners' representative, I believe. He said, " So far 
 from there being fewer rights, we will have more fights than ever. 
 We shall want more organisation in order to conduct them, because . 
 we are fighting a Government." 
 
 NATIONALISATION OF MINES NOT PROPOSED. 
 
 With speeches of this kind made and the trouble we are getting 
 with regard to railways, I am afraid that whatever we propose with 
 regard to nationalisation of the mines would not promote harmony, 
 and therefore I think that the whole basis and the whole reason 
 which induced Mr. Justice Sankey to make that recommendation is 
 one which has been falsified by the events of the last few weeks. 
 Now, I am asked, " What about control ? " We have accepted the 
 principle of unification and reorganisation. We think and I think 
 that the mine-owners realise, that there is a very great deal of waste 
 which is due to the fact that you have a large number of different 
 enterprises running in the same area under different management. 
 There is waste of power, of management, and in distribution. 
 
 MINERS AS DIRECTORS. 
 
 A case, undoubtedly, has also been made out for giving the miners 
 a greater interest and voice in the working conditions which affect 
 the industry. We therefore make this recommendation : 
 
 " That in view of the fact that the lives and livelihood of the 
 miners depend upon the way in which the mines are worked, 
 means should be devised for securing their co-operation in the 
 
19 
 
 shaping of the general conditions of the industry without inter- 
 fering with the executive control of the individual mines." 
 
 Now I come to the recommendations with regard to unification : 
 
 " That the industry should ba so organised as to reduce to a 
 minimum the expenses of management and working churges, and 
 that with this end in view the country should be divided into 
 convenient areas in each of which an amalgamation of neighbour- 
 ing mines should bo undertaken within a limited period, say two 
 years. That the workers in and about the mines should have 
 directors representing them on the body controlling the policy of 
 the area groups to which they belong." 
 
 Here is a condition put in for the protection of the consumer, to 
 prevent inflation of capital, over-capitalisation : 
 
 " The schemes of amalgamation should be subject to the 
 approval of the Government and must conform to any conditions 
 laid down by the Government for the protection of the general 
 body of coal consumers." 
 
 The Government propose to prepare a scheme on the above Hues, and 
 will submit it to Parliament with the least possible delay. 
 
 TRADE POLICY. 
 
 I have to say something about trade policy. Here again I have 
 to recall the conditions under \vhich we are operating. I must ask 
 every Member of the House, and all who are outside, to try to forget 
 pre-1914, and just to think of the conditions as they are to-day, and 
 to think of what remedy you are going to apply to those conditions. 
 The conditions may be merely temporary, but for the moment they 
 are dominant ; they dominate the immediate future, and may do so for 
 some time to come. I have already summarised these conditions. 
 Our international trade is in peril, and our home trade is depressed by 
 reduction of output and the increased cost of production. Imports 
 of manufactured goods from abroad have not counted ; there is no 
 immediate prospect of their coming. Germany is crippled. She has 
 been deprived of her iron and coal, and whatever troubles 
 may j be in this c mntry they are not comparable to those 
 under which Germany is labouring. When you come to the 
 United States, which would be a foimidable competitor, the mere 
 fact that the exchange is against us is in itself a protec- 
 tion against the import of manufactured goods. If the exchange is 
 down to 17s., that is equivalent to something like a 15 per cent, tariff 
 against the imports of any goods from the United States. More than 
 that, the freights at the present moment are very high, and I cannot 
 see any prospect of their coming down to anything approximating to 
 pre-war rates, and although you have a great disparity between the 
 cost of production of an article in the United States of America and 
 the cost at which it could be produced here, when you work out the 
 exchange and add to that the cost of bringing the goods over, you 
 will find you have no profit for the Unite! States manufacturer. 
 
 You cannot possibly exclude things altogether, but the mere fact 
 that rails have been delivered in Glasgow and in London under present 
 
20 
 
 conditions, when we have the power of prohibiting them altogether, 
 shows that they were actually needed by the trade. There is com- 
 plete prohibition except with the consent of the Board of Trade. I 
 can give other cases. Fur instance, pig-iron. We are at present so 
 short of pig-iron that there is not enough to employ our steel furnaces. 
 What is the result ? We an? bagging for pig-iron from Lorraine. If. 
 there were any real competition, you have got at the present moment 
 in the exchange and in the freights the highest protective tariffs that 
 have ever been proposed in this country ; in fact, very much higher 
 than any ever proposed. 
 
 These are the salient facts of the present situation. They may 
 change; they may change soon. I can see no prospect of their 
 changing. When there is a change in the conditions I hope this 
 Parliament will be bold enough to provide a remedy that will be 
 applicable to tli3 conditions for the time. We have, therefore, decided 
 t.'iat the interim trade policy of import restrictions should come 
 definitely to an end on 1st September. They were retained to shield 
 during the time of the demobilisation and during the time we were 
 changing from war conditions to peace conditions. There is no further 
 justification for them, and the only result of keeping them after 1st 
 September would be to put up prices artificially, and they are too 
 high already. 
 
 DEFENCE OF ESSENTIAL INDUSTRIES. 
 
 I now come to the provisions which we have to make to defend 
 the industry of this country against unfair competition, or against 
 competition which might destroy certain essential industries that 
 could not be maintained in face of open competition. There will be 
 the obstacles in the way of imports which come from luw exchanges 
 and high freights. 1 am afraid they will remain for some time. 
 We have decided that we cannot put on artificial restrictions ; it is 
 not good business. It is better that we come down to the realities 
 and let the nation face them. It may have the effect for some time 
 of putting up the price of food and of putting up the price of raw 
 materials, especially those that come from America. That is the 
 result of under-production, and it is right that that should be brought 
 home to everybody in the land; otherwise, we will never cure it. 
 Therefore, the Government propose to abandon the support of 
 exchanges, except in so far as some support may for a time be 
 necessary to prevent complete collapse of any important exchanges. 
 It may lead to a further fall in the American exchange until "our 
 output increases, but that will in itself raise a barrier, a higher wall, 
 against American imports. The Government has three other pro- 
 posals to deal with the shielding of our industry under exceptional 
 conditions. 
 
 ANTI-DUMPING. 
 
 In the first place, there is a condition called dumping. What is 
 damping ? I am giving now, not a legal definition, but only my view 
 of what would be a dumping operation. Dumping is the exporting 
 to this country of goods from a foreign land under the cost 
 
21 
 
 beneath the price at which they are sold in their own country. There 
 could be only one object in doing that, and that is to make war upon 
 a particular industry in our country. That is unfair. This country, 
 provided we face our difficulties like men we have always done it 
 in the past, and I have no reason to think we are at the end of British 
 courage has nothing to fear from fair competition from any country, 
 but I do not tiiiuk that our industries ought to be subjected to what 
 is unfair competition and what is organised warfare upon them in an 
 unfair way. That is what dumping, according to the definition which 
 I have laid down, really means. It is true that certain industries 
 may for the time being get great advantage out of it, but they are 
 getting that advantage at the expense ot' neighbours who are carry- 
 ing on an honest trade which is essential to the life and business of 
 the country, and I do not think that is fair. And, in the interests of 
 fairness, as well as in the interests of British industry as a whole, 
 the Government has decided to submit to Parliament proposals which 
 will effectively deal with dumping in the sense in which I have 
 defined it. 
 
 FLUCTUATIONS OF EXCHANGE. 
 
 There is another problem with which we . have to deal. It is an 
 emergency problem. I believe it is a temporary one. It has arisen 
 entirely out of the War. It is something that was not contemplated 
 before the War. <ind in none of the controversies about trade, as far as 
 I can recall them, was there any reference to it. It is the possibility 
 that may arise from the vagaries and fluctuation of exchange. The 
 American market is against us. The German market is simply ex- 
 travagantly in our favour. The sovereign to-day fetches 82 marks, 
 where before the War it fetched 20. If goods were sold to Germany 
 at a price which only approximately corresponded to the nominal 
 value of the marK, it is obvious we could not possibly stand up 
 against what would be a gigantic bonus upon the export from this 
 country of all kinds of commodities. That would be unfair to our 
 industry. You might say we should be making money. Somebody 
 would. Meanwhile the industries that were hurt by this eruption of 
 goods at an abnormally low rate would be thrown out of employment. 
 It is all very well to say that they should stand by until the tide has 
 passed. They could not do it. It might pass on to something else. 
 It is clear that no operation could possibly bridge that chasm, and 
 therefore there must be better means of preventing the possibilities of 
 such an emergency arising. We shall therefore propose that the 
 Board of Trade be equipped w T ith emergency powers to check a sudden 
 and undue importation of goods at prices altogether below the cost of 
 production here owing' to the collapse of exchanges. That is an 
 emergency measure dealing with conditions which have arisen since the 
 War, and which may, I hope, soon pass away. 
 
 SHIELDING UNSTABLE KEY INDUSTRIES. 
 
 I come now to the third proposal, and that is the shielding of 
 unstable key industries. What does an unstable key industry mean ? 
 
22 
 
 x 
 
 I will give four tests, none of which, I think, hon. members will 
 challenge. The first is this, whether the industry was revealed 
 to be essential for war or the maintenance of the country during 
 the War ? The second is this, whether during the AVar it was 
 discovered that that industry had been so neglected that there was 
 an inadequate supply of goods produced in the indjstry for the. 
 purpose of equipping ourselves for the essential task of war ? The 
 third is, whether it was found necessary for the Government to take 
 special steps to promote and foster that industry during the War ? 
 The fourth is, whether if that special Government support were 
 withdrawn these industries could maintain themselves at the level of 
 production which war has shown to be essential to the national life ? 
 The War is the test. I hope there will be no more war, but it would 
 be folly to assume that human nature will never give way to passion 
 again. Those are the four tests which we will apply to the key industries. 
 The two best illus 'rations, although they are not comprehensive, are 
 synthetic dyes and optical glasses and lenses. They may represent a 
 small percentage of the whole industry of the country, but their 
 importance is quite out of proportion to their quantity. It is proposed 
 that the Board of Trade snail have power to prohibit the import of 
 these goods except under licence, and to prevent excessive imports a 
 fee will be charged for the licence. It may even be necessary for 
 some time to continue the assistance given to these industries, but 
 care will be taken that no undue profits shall bs made at the expense 
 of the community. 
 
 Other parts of our trade policy are connected with technical 
 instruction i;i the promotion of industrial research aud invention, 
 with the organisation of the electrical power of the country ; and 
 with the control and development of water power. 
 
 FOSTERING IMPERIAL TRADE. 
 
 I must now say a word about the fostering of our Imperial trade. 
 That is important, not merely from the point of view of increasing 
 our trade, but from the even more important view of the strengtheiT- 
 ing of the unity of the Empire. Civilisation was saved by the 
 British Empire in the last War. 1 have had several consultations with 
 the Premiers and Ministers of self-governing Dominions, and they all 
 attach the greatest importance to the fostering of Imperial trade by 
 means of improving the communication between the Dominions and the 
 Mother Country, and between India and the Mother Country. When 
 I was President of the Board of Trade I ventured to put 'forward 
 certain proposals upon those lines. Sow I am glad to say that every 
 Dominion is pressing for the improvement of transport relations with 
 the Mother Country, improvement chiefly in the quickening of trans- 
 port, and an Imperial Investigation Board has been constantly repre- 
 senting British and Dominion Governments, and representing also 
 commercial interests, with a view to carrying out schemes that will 
 improve and increase the trade betwee i the Dominions and India and 
 the Mother Country by means of improving the communications 
 between the various parts of the Empire. 
 
23 
 
 CREDITS TO CONTINENTAL COUNTRIES. 
 
 We have also proposals with regard to the restoration of trade 
 with the disorganised part of Europe. Europe was a good customer 
 of Britain. We used to sell 180,000,000 worth of our goods to 
 Europe, but the greater part of Europe is disorganised, and for some 
 time, unless special steps are taken, we shall be unable to resume our 
 trade relations with some of our important customers on the Continent 
 of Europe. I am not referring to France or to Italy, or even to 
 .Russia ; I am referring to countries like Serbia, Roumania, Poland, and 
 parts of Austria. There are no credits established at the present 
 moment, and although we have gigantic demands coming from these 
 countries you cannot sell ; there is no confidence. They are rich 
 countries intrinsically, and the Government has adopted a scheme of 
 furnishing credits to the extent of 26,000,000 as a guarantee against 
 risks or absolute loss. We hope as a result of the institution of these 
 credits to those countries that a beginning will be made to restore 
 trade, because those countries have a good deal to sell, and all you 
 want to do is to have a beginning of business, and once it begins the 
 natural course of exchange will enable you to go on, and I venture to 
 predict that on the credits we establish we shall not lose a perceptible 
 amount, while the benefit to the trade of the country will be enormous. 
 I hope the banking- houses will be encouraged to play a large part in 
 what is wanted to be done. 
 
 THE FUTURE OF AGRICULTURE. 
 
 Agriculture is a vital industry it is, after all, the greatest 
 industry in this country and it is quite impossible to make a survey 
 of the trade and industry of the country and leave agriculture out 
 of the reckoning. But I have promised at an early date to address a 
 meeting directly connected with the agricultural industry. All I can 
 say at the present moment is this. As the time is so short before the 
 farmers of the counlry have to make up their minds whether they are 
 to go on with the schemes of cultivation, a Commission is sitting to 
 examine and report as to what would be the minimum prices which 
 would be fixed for the purchase of the crops next year. 
 
 Agriculture is in the enviable position of being the only industry 
 that has increased its output in this country while so many 
 have fallen behind. I hope to submit to the agriculturists of this 
 country on behalf of the Government schemes which will restore 
 agriculture to the position it was in forty or fifty years ago, 
 when there were four or five million more acres under cultivation 
 than now, and will put us in the position which Germany was 
 in, where Germany produced food on a hundred acres to feed 
 seventy-five persons, whereas in the United Kingdom it feeds only 
 forty persons. And that is a condition of things which ought not 
 to exist. 
 
 THE QUESTION OF FINANCE. 
 
 On the important question of finance there has been a good deal of 
 wild talk mixed with much & >und sense. But that is true of every 
 
24 
 
 opio, and finance is no exception. Here again we must face the facts. 
 It is the only sound foundation for any reform. What are the facts? 
 There are, first of all, what I may call the temporary financial con- 
 ditions. What are they ? This year, although we have demobilised 
 millions of men, you could not reduce your Army ami your Navy to 
 their normal s : ze" until Peace had been signed with all the belligerents. 
 We could not have signed the Peace with Germany one hour sooner 
 than we did, but it has not yet been ratified. I hope that Peace will 
 be ratified about the beginning of September. Until Peace is signed 
 it would have been a piece of idle recklessness on the part of the great 
 victorious countries to withdraw the troops to such an extent as not 
 t-) give them an overpowering force in the event of Peace being 
 rejected. 
 
 The Peace with Austria has not been signed. The Peace with 
 Bulgaria has not been signed, and what is more important from our 
 point of view, the Peace with Turkey has not been signed The Peace 
 with Turkey has not been signed, not because of any delay on our 
 part, but because we are waiting for the decision of America. We 
 want to know whether America is prepared to take her share of 
 guaranteeing protection for peoples who, if they aie not protected; will 
 be subjt cted to torture, misgovernment, and massacre. We have not 
 yet had our answer, and until the answer comes you cannot formulate 
 your peace with Turkey. As >oon as it comes we shall have to adjust 
 the settlement to the answer which America gives, but meanwhile who 
 i* to occupy these countries? Therefore, when it is expected that you 
 should cut down Army and Navy expenditure to normal, I want those 
 who urge us to do That to bear in mind that there are vital British 
 interests involved. There is no part of the world with which Britain 
 is more intimately concerned than in the settlement of Turkey. The 
 future of the Empire depends upon the settlement of Turkey. 
 
 APPEALS TO GREAT BRITAIN. 
 
 We have been urged to withdraw troops, and it is said that the 
 withdrawal of troops and demobilisation are the only methods to 
 secure immediate reduction, but the other day I was amazed to get 
 a letter from the International Labour Conference, sitting at Lucerne, 
 and representing Socialists of all rai?.ks. What was the quest r Was 
 it that we should demobilise ? Was it that we should reduce our 
 armaments ? Was it that we should clear out from countries which 
 were not our own and leave those peoples to self-determination ? 
 Not at all. It was a resolution angrily complaining that British 
 troops were withdrawing from the Caucasus. We have 'a division 
 and a half there, and it is costing us millions. Speaking roughly, I 
 should not be a bit surprised if it costs us about 30,000,000 a vear, 
 with shipping and everything else. America appeals to us not to 
 withdraw, the International Socialists appeal to us not to withdraw, 
 and, if that is not sullident, 1 am proud of this fact, that the inhabi- 
 tants teg the British soldiers not to withdraw. There is no prouder 
 appeal ever addressed to any land than the appeal which asks the 
 British soldier to remain there to shield them. It is almost worth 
 the money. But at the same time how can we demobilise? The 
 
25 
 
 same appeal comes from Syria " Do not go away." But we cannot 
 until these questions are settled reduce the expenditure to normal. 
 Let me give the House other reasons. We have got to wind up ; 
 we have got to keep a certain Army in France ; we have 400,000 
 prisoners, whom we cannot restore till Peace is ratified. We cannot 
 restore them till we know that other terms are going to be conformed 
 with. There are conditions of that kind. You cannot, the moment 
 the War is over, suddenly say to everybody, " Go home." It is 
 no use fighting a great war for four or five years unless you see 
 the job right through. 
 
 REDUCTION IN ARMAMENTS. 
 
 But it is the permanent conditions that mostly concern us 
 and the interests of this country. What is the permanent charge 
 going to be? There are certain things you cannot reduce. You 
 must pay interest on debt and sinking fund on your debt, and you 
 must pay pensions, You cannot cut down education that would not 
 be a very good reduction. There is only one direction in which you 
 can effect considerable reductions, and that is in your armaments. 
 What does that mean? The conditions undoubtedly favour it. 
 The great menace in Europe has gone. Who else is to keep great 
 armies ? It is in that spirit we are prosecuting our examination 
 into the Army Estimates, and I think we can effect considerable 
 reductions, but the House must always remember that reductions in 
 armaments will not mean reduction in the cost of armaments. The 
 pay is trebled, the cost of material is doubled, and although you may 
 effect considerable reductions in your armaments, the cost of your 
 armaments will be up whatever you do, as compared, I mean, with 
 the pre-war period. Those are the fundamental facts that you have 
 got to bear in mind. I have another thing which I want to say. 
 Everybody cries economy, and economy in the abstract evokes general 
 appreciation, but economies in the concrete provoke universal dissatis- 
 faction. "Why don't you economise ?" it is said. If you economise 
 on the Army the friends of the Army say, " Why don't you take the 
 Navy ?" If you start with the Navy, they say the Army should be 
 reduced, and even when they agree with economy in the Navy they 
 say, " Why do you take those ships ?" You never can satisfy every- 
 body. Everybody is pleased with economy in the singular, but every- 
 body is in revolt against economies in the plural. We shall put our 
 proposals before the House, and I hope soon after we meet. 
 
 SUPPORT THE LEAGUE OF NATIONS. 
 
 There is one thing that matters in economy, and it is this, that the 
 great nations that promoted the League of Nations should show their 
 confidence in it and trust it. If those who promoted it increase their 
 armaments, it is a sham. It will remain a sham. It will be a scrap 
 of paper. Those who believe in it most must trust it most, and the 
 rest will follow. That is the fundamental first condition of real 
 economy in armaments ip the world Britain is ready. Let all other 
 aaticn-j dc likewise. 
 
26 
 
 SERVICES OF BUSINESS MEN. 
 
 You do not get economy by abusing Government Departments 
 and Government officials and by abusing those volunteers who have 
 given their time to Government work. I am bound to say this. 
 They have all done well. There has been a great attack upon them, 
 as if they had been extravagant, especially the business men, without 
 whose assistance the War could not have been won. I will give one 
 or two illustrations, because I think this is vital. My experience was 
 in the Ministry of Munitions. What was the first step they took ? To 
 reduce the cost of manufacture shells, machine guns, guns, rifles. The 
 18-pounder when the Ministry was started cost 22s. Qd. a shell. A 
 system of costing and investigation was introduced, and National 
 Factories were set up which checked the prices, and a shell for which 
 the War Office at the time the Ministry was formed paid 22s. Qd., was 
 reduced to 12s., and when you had 85,000,000 of shells that saved 
 35,000,000. There was a reduction in the prices of all other shells, 
 and there was a reduction in the Lewis guns. When we took them in 
 hand they cost 165, and we reduced them to 35 each. There was a 
 saving of 14,000,000 there, and through the costing system and the 
 checking of the National Factories we set up, before the end of the 
 War there was a saving of 440,000,000. 
 
 When the National Projectile Factories were afterwards set up, we 
 effected a further reduction of 10 per cent. Take the Ministry of 
 Shipping. By its organisation, by its reduction of rates, the Controller 
 .of Shipping saved hundreds of millions to this country. When you 
 have to spend between 8,000,000,000 and 10,000,000,000 of this 
 country's money, when you improvise great organisations, find your 
 men where you can, find thousands and more of absolutely new men 
 to work out these schemes, of course there will be extravagance, of 
 course there may be errors of judgment. Is there any business in 
 this country which is run without mistakes and errors of judgment ? 
 Of course there is not. But whatever is said except about these little 
 mistakes? I have seen the reports of Parliamentary Committees. 
 They are about comparatively small sums 1 mean comparative to the 
 gigantic expenditure. Those are advertised ; those are flaunted. 
 Leading articles are written about them. Never a word about these 
 hundreds of millions that have been saved by these men! There 
 is no generosity in spearing supermen, who saved hundreds of 
 millio is t3 this country at moments of emergency, and gave their time 
 and energy to the service of the State when they were most needed. 
 
 A WARNING AND AN APPEAL. 
 
 The condition of the nation is grave at the moment. - It can be 
 redeemed by effort. We are suffering enormously from under- 
 production and over-consumption. We are not living as a nation 
 within our means. We must ruthlessly cut down all needless ex- 
 penditure, public and private, and must increase production by every 
 legitimate endeavour. With production, we get prosperity ; without 
 it we starve. To ensure production, the goodwill of all engaged in 
 the task of production is essential. With that goodwill every 
 reasonable cause of complaint must be removed. Confidence must be 
 
27 
 
 * -N 
 
 restored the confidence of the workman in his employer yea, the 
 confidence of the employer in the workman, and the confidence of 
 both. Then their business will be conducted under conditions of 
 fairness. That is our problem, and there is the solution. With effort, 
 with endeavour, the prospects are good. The nations are thirsting 
 for goods. They have gone without them for four or five years of 
 the War, and they are anxious that we should put them on their 
 markets. We must settle down to our daily tasks. Let Europe 
 settle down. Europe is suffering in exactly the same way, only 
 worse. It is tossed about and troubled, and unable to resume its task. 
 It is just like those who live on the seaside, especially on the Western 
 shores, where the sea, after a prolonged period of tempestuous 
 weather, cannot settle down. Then you have continuous waves 
 rolling in from all directions and every direction, thrashing 1 each other 
 helpless, restless confusion. Navigation is difficult and dangerous 
 under those conditions. Some seek help. Some lie prostrate and 
 weary. Some try to upset the boat, either because they dislike the 
 steersman or want to steer themselves, or because they prefer some 
 crazy craft of their own. With a clear eye, a steady hand, and a 
 willing heart, \*e will row through into calmer and bluer waters. 
 But we must know where we are rowing. The Government have 
 done their best to give a direction. Let all who will, man the boats 
 and save the nation. 
 
28 
 
 SUMMARY OF THE SPEECH. 
 
 COMPLETE PROPOSALS IN BRIEF. 
 
 On 22nd August Mr. Lloyd George issued the following summary 
 of the proposals and decisions of the Government. It includes one or 
 two proposals to which the Premier had not time to refer in his 
 speech. 
 
 A. LABOUR. 
 
 1. WAGES AND HOURS. A Bill has just been introduced dealing 
 with bours and wages based upon recommendations of the J^iut 
 Committee of the National Industrial Conference. The principles of 
 this Bill are (a) the establishment of a national maximum working 
 week of 48 hours, except in certain industries with special conditions, 
 such as agriculture, the Merchant Marine, domestic and outdoor 
 service ; (b) the establishment of a living wage throughout industry. 
 
 2. CONDITIONS OF WORK, SHARING in PROFITS, AND UNEMPLOY- 
 MENT. There are three aims which the Government are anxious to 
 see achieved, viz : 
 
 (a) The promotion of a larger degree of co-operation between 
 
 workmen and employers in the determination of working 
 conditions, and in this connection the development of the 
 system of Whitley Committees. . 
 
 (b) Securing to the workers more generally a financial interest in 
 
 the success of the industry in which they work. 
 
 (c) Adequate provision for and satisfactory arrangements 
 
 regarding unemployment. 
 
 The Government would prefer to deal with the question of un- 
 employment on the basis of agreed recommendations bv the Joint 
 Committee of the National Industrial Conference, who have so far 
 failed to agree on any proposals. Failing such agreement, it may 
 become the duty of the Government to put forward proposals in the 
 name of the whole community. 
 
 3. HOUSING. Three Acts passed by the present Parliament, the 
 Housing Act, the Land Acquisition Act, and the Ministry of Transport 
 Act, will in combination provide the means of dealing with the 
 problem of housing along proper lines, by the creation of houses 
 outside congested cities, and the provision of transport facilities to 
 bring the workers to and from their work. 
 
 B. COAL MINES. 
 
 4. STATE PURCHASE OF MINERAL RIGHTS. The Government 
 accept the policy of State Purchase of Mineral Rights in Coal, on which 
 the reports of the C >al Commission (Second Stage) are unanimous As 
 pait oi the scheme tiu the purchase of these rights a levy will be made 
 
29 
 
 upon the compensation to be paid. The proceeds of this levy will form 
 a fund for the amelioration of the social conditions of miners. In the 
 case of Scotland account will betaken of the fact that a Rate Levy on 
 receipts of mineral values exists in that country. 
 
 5. FUND FOR AMELIORATION OF SOCIAL CONDITIONS OF MINKRS. 
 The Government have been deeply impressed by the evidence which 
 has been tendered to the Coal Commission with respect to the unsatis- 
 factory social conditions under which, in some parts of the country, 
 miners are compelled to carry on their industry. A reasonable 
 standard of living should be secured to the miners and their families : 
 the deplorable housing- conditions now prevailing in some of the coal- 
 fields of the country must be remedied without delay; and every 
 effort must be made to improve the comfort and amenities of the 
 industry. Consequently the fund to which allusion has been made 
 will enable these defects to be repaired on a comprehensive plan. 
 
 6. CO-OPERATION WITH LABOUR IN DETERMINING WORKING 
 CONDITIONS. In view of the facts that the lives and livelihood of the 
 miners depend on the way in which the mines are worked, means 
 have to be devised for securing their co-operation in the shaping of 
 the genaral conditions of the industry without interfering with the 
 executive control of individual mines. 
 
 7. ORGANISATION OF THE INDUSTRY. The Government, after 
 careful examination of all the reports of the Coal Commission and the 
 evidence given before it, have come to the conclusion that they would 
 not be justified in undertaking the State purchase and State manage- 
 ment of collieries ; and, apart from any question of the desirability 
 or otherwise of the nationalisation of the coal mines, the financial 
 burden on the country, having regard to other essential obligations 
 on the State, is in itself such as to preclude its adoption. 
 
 In the national interest, however, the industry will have to be so 
 organised as to reduce to a minimum the expenses of management and 
 working charges. With this end in view the country will be divided 
 into convenient areas, in each of which an amalgamation of neighbour- 
 ing mines will be undertaken within a limited period, subject to the 
 condition that the Government have power to veto or modify any 
 scheme of amalgamation which is detrimental to the public interest. 
 as also^ to protect the general body of consumers from possible ex- 
 ploitation by the coal industry. 
 
 Any scheme of reorganisation would be defective which failed to 
 furnish coal in such quantities and at such a cost as to enable the 
 export trade of the country to be maintained and extended. 
 
 8. REPRESENTATION OF LABOUR ON AREA BOARDS. The Govern- 
 ment propose that all workers in and about the mines should have a 
 direct voice on the Board controlling the policy of the Area Group of 
 coal mines. Further, the status of each representative of the workers 
 on the Board shall be in all respects equal to that of the other 
 members. 
 
 9. PROVISION OF OPPORTUNITIES. The industry, both on iis in- 
 dustrial and its educational side, should be so organised as to offer a 
 
30 
 
 free career to talent, and to give to every member concerned in it, in 
 whatever grade of employment, opportunites of improving his abilities 
 and his position. 
 
 10. COMMITTEE ON OUTPUT. In accordance with the unanimous 
 recommendation of the Coal Commissions Committee will immediately 
 be set up to inquire into the diminution of output in the coal mines. 
 
 The Government propose to prepare a scheme on the above lines 
 at once, and submit it to Parliament with the least possible delay. 
 
 C. TRADE POLICY. 
 
 11. IMPORT RESTRICTIONS. The interim policy of import restric- 
 tions established for the purpose of shielding British industries against 
 foreign competition during the transition period will come definitely to 
 an end on 1st September, existing restrictions being then withdrawn 
 except as indicated below. 
 
 12. FOREIGN EXCHANGES. Government support of the exchanges 
 will be abandoned, except in so far as some support may for a 
 time be necessary to prevent complete collapse of any important 
 exchanges. 
 
 13. DUMPING OF GOODS OP FOREIGN ORIGIN. Legislation will be 
 introduced for the protection of goods manufactured in Great Britain 
 and Ii eland against dumping. Power will be taken to prevent the 
 sale in this country of similar goods beneath their price in the country 
 of origin. 
 
 14. POWER TO CHECK ANY EXCESSIVE INFLUX OF GOODS CONSE- 
 QUENT UPON A COLLAPSE OP EXCHANGE. The Government will seek 
 emergency powers to enable the Board of Trade to check any flood 
 of imports (for instance, from Germany), that might arise from a 
 collapse of exchange so disproportionate to costs of production in the 
 country of origin as to enable sales to take place in this country at 
 prices altogether below costs of production here. 
 
 15. PROTECTION OF UNSTABLE "KEY" INDUSTRIES. The Govern- 
 ment will also seek powers from Parliament to prohibit the import 
 except on licence and on payment of a licence fee of the products of 
 key industries which are in an unstable position in this country. 
 Industries which fulfil the following tests will alone be regarded 
 as unstable i{ key " industries for this purpose : 
 
 (a) That the product is essential for war or for the mainten- 
 ance of the country during war. 
 
 (b) That the industry had been so neglected before the war 
 that there was an inadequate supply of the product. 
 
 (c) That the industry is one for the fostering- and promotion 
 of which the Government found it necessary to take special steps 
 during the war. 
 
 (d) That if special Government suppoi t \vere withdrawn the 
 industry could not maintain itself at the level of production 
 essential to the national life. 
 
 It is proposed that the fees charged for the issue of licences to 
 in<port goods produced by such unstable "key" industries will be 
 
31 
 
 r 
 
 fixed with regard in each case to the difference between the price at 
 which the article can be imported and the price at which similar 
 articles can be sold in the United Kingdom. It, may be necessary for 
 some years for the Government to continue to assist these industries. 
 Care will be taken that no undue profits shall be made at the expense 
 of the community. Pending' the grant by Parliament of the necessary 
 powers to give full effect to this policy, the Government intend to 
 continue the existing import restrictions which affect industries 
 qualified to be regarded as unstable key industries. These will be 
 scheduled, and the schedule published at an early date. 
 
 16. TECHNICAL INSTRUCTION AND RESEARCH. Steps will be taken 
 to increase efficiency by encouraging and developing technical educa- 
 tion both for managers and workpeople. Further efforts will also be 
 made along the general lines already laid down to promote industrial 
 research and invention. 
 
 17. PROMOTION OF INCREASED OUTPUT. Inquiry and propaganda 
 with this end in view will be undertaken. 
 
 18. STANDARDISATION. There is growing recognition of the im- 
 portance for the future of British Industry of the principle and practice 
 of standardisation, but so far the State has done little It is proposed 
 to set up at the Board of Trade a Department of Standards, (1) to 
 promote and co-ordinate standardisation generally, and (2) to estab- 
 lish and administer such testing institutions as may be found necessary, 
 and authorise and, so far as may be required, supervise the testing 
 work carried out by technical institutions, trade organisations, or 
 private concerns. 
 
 19. POWER SUPPLY. The policy of the Government with regard 
 to electric power is embodied in a Bill now before Parliament. During 
 the autumn session another Bill will be submitted dealing with the 
 control and development of water power. 
 
 20. FOSTERING IMPERIAL TRADE. On a resolution of the Imperial 
 War Conference an Imperial Investigation Board is being constituted, 
 representing the British Government and the Dominions, together with 
 shipping and commercial representatives, to inquire into and report on 
 all matters connected with ocean freights and facilities and the 
 development and improvement of the sea communications between 
 different parts of the Empire, with special reference to the size and 
 type of ships and the capacities of harbours. 
 
 The Government also aims at developing Imperial supplies. Much 
 work in this direction has been commenced during the war. 
 
 21. EXPORT CREDITS. Steps are being taken to establish a system 
 of export credits for the purpose of facilitating a resumption of the 
 export trade to disorganised parts of Eastern Europe e.g., Serbia, 
 Koumania, Poland, and parts of Austria. In case of loss the drawer 
 of the bill is guaranteed to the extent of four-fifths of the difference 
 between the proceeds of the bill and the prime c jst, plus freight, plus 
 insurance (including the charge made by the office). Credits will be 
 furnished to the extent of 26,000,000 in the aggregate. 
 
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