§ Mr. ALMERIC PAGET
In introducing the subject of aniline dyes, I should preface my remarks with an apology for taking up the time of the Committee when there are other urgent questions, if it were not for the fact that every hon. Member will agree that the situation is a very serious one in regard to the dye industries and the industries with which they are associated. I am not able to approach this question in any way as an expert on the technical side, and I only propose to put forward my own opinions on the broad issues. It is a subject upon which it is very difficult to find two places and hardly any two individuals who are in agreement as to the details. It is a most intricate question in all its phases, and we have it on the authority of one who is fully acquainted with the subject—Lord Moulton—that it is a very grave one. Meetings have been held in all the leading cities in the country which are interested in the textile and colour trades, and meetings have been held in London, and seven months have passed before any actual definite arrangements have been arrived at. The industry is, indeed, a very large one. There are something like a million and a half workers in these trades, and then, of course, must be taken into consideration the enormous number of people who are dependent on the prosperity of these workers.
I have heard it said on considerable authority that there is no large supply of dyes still in the country. Figures vary very much, but I think it might not be unfair to say that probably not much more than three months' supplies are in the country at this time. There are more supplies of one kind than of others, and some are very short, while some will be able to go on for some considerable time. I believed the Board of Trade have been asked for some figures, but, so far as I know, they have never given actual figures of the supplies in the country. The turnover of goods in connection with these dyes is an enormous item in the trade of the country. It is computed at something like £200,000,000 sterling. The actual amount of the dyes consumed in the country I believe to be something like £2,250,000, of which we take into this country from Germany £1,750,000. Switzerland supplies this country with £150,000 worth, although I have seen the figure put as high as £300,000, and this country turns out about £200,000 worth. The exports are 52 almost a negligible quantity in these big figures. I could not say whether they are exports of aniline dyes or some intermediate products, but I do not think they are more than £177,000, of which some £20,000 worth go to Germany.
In view of the size of these industries, it seems as though those who are not in agreement with the scheme which is put forward should urge their own views and appeal to the Government wherever possible to meet those views and alter their scheme accordingly. The Government, of course, have to consider the principles they have been supporting for years past, but in times like these, which are anything but normal, a great many precedents and some principles, I am afraid, will have to be thrown to the winds. We have had many precedents departed from in the various emergency legislation which has passed this House, and principles have been thrown to the winds by those whom we are now fighting, and there is no question that possibly in view of that action on the part of our enemies we may have ourselves to consider whether we shall not have to change some of our own principles. I believe a very large number, if not a majority, of traders believe that the only possible solution and the only way to stimulate these industries is to take into consideration the putting on of duties. The Leeds Chamber of Commerce has passed a resolution in favour of putting on protective duties. There have been meetings in many centres of industry where they have since passed resolutions in support of the Government scheme, believing that nothing better at present could be got to relieve the situation. A great deal of time has been lost, though not entirely wasted, in discussion of the subject, and in the meantime prices have been steadily rising in these materials. One witness said that the prices varied anything from 300 per cent. to 550 per cent., and only to-day I was speaking to a gentleman interested in the trade who told me that in one single instance the price had gone up since the War fifteen times in connection with colouring in the paper trade. In connection with the scheme of the Government there is a very strong obligation upon traders in regard to the money required in addition to that which the Government propose for this new company. We may reasonably hope that these traders will be patriotic and will do their full share in making this a success if this is the scheme 53 which is to go through. I see no reason myself why the investing public also should not be expected to support whatever scheme is finally decided on. In these serious times, when a million or two are required for benevolent purposes and the public come forward and subscribe, I cannot see why, if these great industries are to be supported, when their success involves the fate of such a large number of working men, the public will not come forward and subscribe to a certain extent. At any rate the success of this is something of an assurance for the immediate outlook.
Coal tar is the basis of the aniline dye industry and Germany has prohibited the export of these dyes. There is another product of coal tar which may seriously be taken into consideration. It is called tri-nitro-toluine, which is well known to the fighting services as a high explosive which is now being used. This T.N.T., as it is called, has been for many years produced by our German competitors, but it is only since the War that we have taken up to any considerable extent the production of this chemical. The object lesson of the recent naval battles is sufficient to show that our manufacturers have made very great use of that chemical. The Government set up a Committee on high explosives. Lord Moulton, I think, is chairman of it, and all the tri-nitro-toluine in the country has been commandeered for the purpose of getting the full extract of this T.N.T. There has been a steady increase in its production. Purchases have been made outside the country, but it is not possible to get it in very large amounts. Purchases have been made in the. United States as well. This aniline dye industry is the key for the textile and colour trades, and it seems very extraordinary, in the light of that, that it has been allowed in the years that have gone by to have got out of our hands so that we have been fairly held for many years past in bondage by Germany, and particularly in view of the fact that so far back as 1860 aniline dyes were first discovered by a British chemist—Mr. Perkins. There is another very important product, namely, beta-napthol. The Germans came over to this country twenty-five years ago to make a deal with British producers, and for a cash consideration British producers ceased to produce it, or, at any rate, the Germans got some of them to cease to produce it, and in consideration therefor they on their part agreed with British sellers to supply beta-napthol at a price which 54 left British sellers a profit. There is another industry which I believe might be encouraged in connection with this scheme, namely, the production of drugs. I understand that in certain stages of the operations some drugs, phenacetin, for instance, can be produced from aniline dye. If the Government are going to do anything for the aniline dye industry, they should consider the possibility of producing drugs. There is a scarcity of the dyes in England and India, and many industries are involved. In the whole of the textile trades and the colour trades aniline dyes are absolutely essential. The output of silk, cloth, cotton and wool, are dependent on the supply of aniline dyes, and similarly the carpet trade, the paint trade, the leather trade, the linoleum trade, and other industries in which colours are used, are dependent on this supply. Germany has spent vast sums of money in improving their industry, their resources and output, and it seems to me that we in this country might take a leaf out of their book, and to the fullest possible extent encourage our own industries. I will not attempt to go into the figures at this stage. It is perfectly obvious that what has been done by Germany has been done on an immense scale, and it is of the greatest importance to us that those industries should be taken care of.
I now come to the Government scheme. We know that originally the scheme was for £4,500,000. This scheme was unacceptable, and it was evident from the start that the money would not be forthcoming from the outside. The belief was that there was not sufficient protection as soon as the War was over if this country had to face competition. That scheme was dropped, and afterwards the second one was produced, and it is the second one I am now going to discuss. This scheme was a less large financial one. It involved £2,000,000 of money with power to extend it. The first £1,000,000 was to be found by outsiders, and the second £1,000,000 by the Government. It was on a 4 per cent. basis, payable in twenty-five years, with this difference, that there was to be no compulsory clause and the interest was not to be cumulative, at any rate, for the first five years. If more money was required to still further develop the industry when taken up, money should be found in the relation of £1 by Government loan for every £4 found outside. There is another very important point from the Government point of view. It 55 will be necessary to have the Government debt paid off. I believe I am right in believing that since the scheme was promulgated certain powers have been taken, and arrangements have been made, for the enlargement of the existing plants. We will say, on broad lines, that this is a very distinct advance on the original scheme, and I have no doubt that in view of the large meetings that have been held throughout the country, the resolutions passed by these meetings have been of value in bringing the real issue to its head. The Government propose to have two directors to safeguard the resources and to see that they get fair treatment.
Another point in connection with the scheme is that £100,000 is to be given for research. The sum of £100,000 is to rim over a course of ten years. I should like to say, with all respect—and I think a great many will agree with me—that this sum is utterly inadequate for the purpose. In view of the enormous sums spent in Germany and also the considerable Government assistance given in that country to encourage their chemical producers, I believe more money will be required. With regard to the agreement with consumers, that has been considerably modified and improved since the scheme was introduced. There are some questions which I wish to put in relation to that scheme. The first is, what dyes will the company manufacture? The preamble says they will be those dyes originally manufactured in Germany and sold by Germans. Who is to decide what the company may or shall make? Is that to be done by the directors only, or is it to be done by the Government directors? What is to be the State control in this matter? The second question I wish to ask is: Is the company to manufacture dyes for which there are competitive sources of supply? The third question is: Is the company to be specially debarred from making dyes which other British companies outside the scheme are willing to supply? Then, again, referring to the first clause of the agreement, I would ask what guarantee have we that the dyes required will be produced during the War, and what penalties will be imposed if the companies fail to do so? There has been a provision put in in regard to Swiss dyes. I take it that in the conditions which now prevail there will not be many of these intermediate products which are sent to 56 Switzerland, and which we shall not be able to send away from this country on account of requiring what we have got here for the purpose of these high explosives to which I have referred. There is another question in relation to India. We are given to understand that two at least of the factories in India have been closed through want of the chemicals required. That is partly on account of the fact that two German ships laden with material have, since the outbreak of the War, been interned in neutral ports. I would ask if the Government has conferred at all with the Indian Government in regard to their coming into this scheme provided that the money for it is not all found in this country? There is another question in regard to alcohol—whether, for the purpose of encouraging chemical trade, the duty will be taken off the alcohol? I understand that in Germany there is no duty whatever. If that is so it gives Germany another advantage over this country. I may conclude with a general appeal to the Government to listen with consideration to the arguments which have boon put forward in all parts of the House. I believe that there are hon. Members opposite who are not so wedded to Free Trade on this particular question. There are some, I am given to understand, who will put forward the argument that the only possible method of protecting these great industries will be, not by a scheme which is good as far as it goes, and not by the scheme which the Government are putting forward, but by putting on high protective duties, such duties as will make it possible for a certain number of years, say five years, after the War, to meet any competition which may come from Germany or any other source.
§ Mr. LOUGH
I have been encouraged to say a word or two in this Debate by the remarks of the hon. Member opposite. He said he was not going into the technical figures of the industries concerned, and that he only desired to make some general remarks on the subject. I am to a large extent in the same position. I do not know much about the technical matters involved in this aniline dye industry, but I take the greatest possible interest in the great question, which evidently animated the hon. Gentleman who has just sat down. He has made a clean speech in favour of Protection, and he has used every threat possible as he went along against Free Trade. Of course, there are favourable 57 times for taking sides on the question of Free Trade. It is a great pity that it should be done when the attention of the House is occupied with regard to matters connected with the War. I think that at such a time as this we ought not to discuss any of these questions which cannot be raised on either side without controversy. The present proposal put forward by the Government does, however, offer temptations to Gentlemen on both sides of the House to depart a little from the position which, I think, we ought, if possible, to maintain in regard to this matter. There are some general remarks which occur to me. The first is: Suppose that the great scheme which the Government put forward some time since, and which has been under consideration by a Committee of the Board of Trade and was defended by my right hon. Friend on the last day of last Session, goes forward, will it do any particular good or any good at all during the time that we may reasonably expect the War to last? Shall we effect this great revolution in the production of aniline dyes in this country during the few months, let us hope, though it may be a good many months, that the War will last?
A great many gentlemen to whom I have spoken on the subject doubt that. They think that if the foundations of a great scheme are laid, we could only carry this matter gradually through in the course of years, and therefore it appears to me that in the hurry of these times, when we can hardly think of what is absolutely necessary to do, we are laying foundations which will affect future years, and which, if they are followed up, must profoundly affect the treatment of the great trades and industries in this country by this House. I do not think that this is the time at which we ought to do anything of the kind. We ought to restrict any aid which we have got to give to any industry for any purpose which we have got to accomplish, or any interference with trade, strictly to the period of the War as well as we can forecast it. For that reason I feel considerable doubt about this question. The scheme appears to me to be one that cannot mature quickly, and that will profoundly affect the action of this House as well as of the great trades in future years. I think, therefore, that we ought to hesitate before we proceed with it at this particular time. How are we going to enter into it? I am unwilling to follow the hon. Member opposite and put forward general arguments in favour of Free Trade 58 in the same way as he did in favour of Protection. I am sure that it would be out of place to do so, and yet we are almost invited to do so by the nature of the scheme itself. There is another question. If we are to do this, if the Government is to find this large amount of money for one trade that is affected by the War, one of the industries which are dependent on these belligerent countries, in order to establish a new business in this country, why should it not do the same thing for the other industries which are affected at the same time? How can they draw the line? If the money is to be found by the Government for a new scheme to meet the difficulties of these simple tradesmen, will it not encourage a great many others to come forth with all sorts of claims? [HON. MEMBERS: "What trades?"] I cannot give a list of all the trades affected. I could mention one in which I am engaged myself, but there are many businesses which are affected by the War. There is one which I think I can mention without exciting feeling in any part of the House—the business of lead pencils. The best pencils come mostly from Austria. I think that I could mention twenty trades that are affected, if I liked to trouble the House. I will only say that there are a great many other industries which are affected and for the want of which we are inconvenienced owing to the War. We must put up with the inconvenience.
Dye-stuffs do not appeal to me strongly at all. I know quite well what hon. Members would say. It is a very valuable industry if things go on in a normal way. I see no reason why we should go out of the beaten track on account of dye-stuffs. I am told that we are not nearly so badly off with regard to them as the schemes which are put forward would suggest. I hear, for instance, that Switzerland and other neutral countries have been doing a great deal to relieve the business in this country. The hon. Member opposite said that some ships had been interned conveying vast quantities of these dyes which we may be able to get hold of. Then there are little businesses in this country which are doing a great deal to meet the situation; in short, the crisis does not appear to be nearly so great now, coming towards the end of February, 1915, as it appeared to be in August of last year, when this scheme was first hatched. The fact is that at the beginning of the War we got into a panic. We thought that we should have no sugar and, let us say, no dyes in 59 this country, and that we should want for all sorts of things. We are getting on fairly well in regard to these little matters. My right hon. Friend has had to modify his scheme. Let him modify it altogether; let him put it off further, owing to the great difficulties which have been raised about it. There are great questions involved, and no one can speak about it without putting forward these great questions. I do think that it would be well to hesitate before going further with the scheme. There is one general question also. Everyone of these schemes costs a vast amount of money. My hon. Friend speaks quite airily about giving a million or two million pounds to this particular industry. Where are all the millions to come from that we are devoting to these purposes? I do think that this is a case in which my right hon. Friend ought to consider the matter much more carefully than he has done. There is not nearly so much panic about now as when the scheme was first started, and seeing the great difficulties that appear as it goes on, I would suggest respectfully to the House that it might be postponed for a few months before any further steps are taken in the matter.
§ Mr. HEWINS
I have no intention of following in the course of his remarks the right hon. Gentleman who has just sat down. He took a line during most of his speech which I strongly deprecate. I do not think that we should have anything to do, in this discussion, with what I may call the general matter of Tariff Reform. The Committee will believe me when I say that I am not in the least interested in abstract discussions of that kind. I thoroughly dislike them; they serve only to confuse the issue. We are face to face with a grave practical problem which, in spite of the right hon. Gentleman's apparent ignorance of the facts and figures, does affect a very large number of industries and a very large number of workmen and their families. And the question which the Committee has to consider is this: Suppose that my hon. Friend is correct in his view as to the shortness of the supply of dyes, what is to happen in the course of the next few months when that supply is exhausted, and when people who are employed in industries for which these dyes are necessary, are out of employment. The right hon. Gentleman does not care much about dyes. He may not care very much about dyes, but we do care very 60 much on both sides of the House about the security and stability of society during this great War.
My right hon. Friend below me, and many other speakers, have drawn attention to the fact that we apparently have not yet risen in this country to the conception that, when you are engaged in a great war, you have got to organise your civil side quite as much as your military and naval side if you wish to be successful, and I am certain that the whole of the Committee will agree with me that great anxiety would be caused if there were difficulties in regard to employment of people in the textile and other industries during the course of the next six or nine months. We wish to avoid that difficulty as much as we can. One reason why I have not the slightest intention of raising the general tariff question is that I do not know any Tariff Reformer, who, if it were left to his choice, would think for a moment of introducing a tariff, or dealing with tariffs, merely as applied to specific industries. Let us suppose that the aniline dye industry started in this country will require the security which Protection in the ordinary chance can give. It is perfectly obvious that Protection in that form, for that particular industry, raises considerations of a totally different character from those considerations with which we have formerly dealt in discussing the question of Protection in relation to general industries. For my part, I have always strongly resisted the idea of introducing Tariff Reform merely to meet the claims of a particular industry, and if I can see a way, in this particular case, to avoid that, I shall be only too glad to follow it. I have not the slightest desire to make either Tariff Reform or party capital out of this discussion. If the Government gives way to the advice which I know has been poured in from various quarters, and offers some guarantee of security to the aniline dye industry for a certain period after the War. I certainly should not make party or Tariff Reform capital out of that, nor would I try to.
We are face to face with the great fact of this industry and its requirements, and it would certainly be a breach of the party truce if hon. Gentlemen and right hon. Gentlemen on the other side decide to deal with a great practical question like this in any other way than with a free hand. The sole consideration we have in view, and must have in view at the present time, 61 is the safety and security of the country and its trade, and to see that the steps taken are sufficient for that purpose, and any other considerations which would raise controversial questions would be a breach of the party truce. We have to look at the matter from the point of view of practical organisation. The first question which I desire to ask is: How are you going to give the manufacturers the dyes they require? Obviously the situation is urgent. I understand, on very good expert authority, that at the commencement of the War we then had six months' supply of dyes in the country. There have been various factors which have made that supply hold out considerably longer than anticipated. There has not been the demand for a great many of the commodities which usually consume those dyes. Many factories have been at work on other things, and, what with one circumstance and another, matters have not been at the normal level. My right hon. Friend near me says that there are three months' supply. I do not know that, but what we do know, and what the Government know from the sources at their command, is that this question is extremely urgent. It is that point which we have to consider at the present time. Are we going to get the dyes?—that is obviously the first question to which regard must be paid in any scheme that is to be adopted. I confess that I do not think we are from the scheme of the Government. I think we have wasted a great deal of time. We have been at war more than six months, and we really have made very little use of the potentialities of the country. I cannot understand why the Government did not come to the House of Commons long ago to talk over this question—I do not know even now, precisely, what are the details of that scheme. The right hon. Gentleman made one statement in this House, and I have seen a Circular which was issued that certainly contains details different from those which the right hon. Gentleman gave to the House. I do not know whether this scheme, that we are supposed to know something about, is at all in its final shape or form.
In a great undertaking of this kind which raises large questions, why cannot the Government take the House of Commons into its confidence, and why cannot they allow free discussion? This House after all consists very largely of business men who are engaged in practical affairs, and I cannot conceive why there should 62 not have been a free discussion in this House. It would have resulted in the Government obtaining a large store of practical suggestions, and hon. Members might have been taken into their confidence. Instead of that the Government have taken up this matter as if it were something in the nature of a bogus company scheme that had to be got through somehow. That is our feeling about it. We know very well that the Government are trying to handle a question of very grave difficulty. Will their scheme give us the dyes? I have consulted a great, many people, and I am generally advised that it will not, and that there is no chance whatever of this scheme doing it.
The right hon. Gentleman (Mr. Lough) deprecated the raising of controversial questions, but nobody has raised more controversial issue than the Government in this scheme. Clause 3 of the Agreement in relation to the question of reasonable prices, provides that questions relating to prices shall go before a referee. How are you going to deal with all the delicate machinery of an industry in that way? I have no objection to reasonable prices or proper wages or anything else of that kind, and there is a great deal to be said for them from the point of view of Tory tradition. But if you are going to adopt measures of that kind, do not go back to the expedients of the middle ages without consideration of what they were, and let us have before us a little evidence. Supposing the manufacturing dyers do not meet the prices arranged, how are you going to make them? There are two or three thousand different dyes used at the present time. We have only to take the catalogue of one of the great German firms to see the very nice distinctions which are drawn between one dye and another in different industries, and I think that we might have, what is very often the case, the substitution of the cheaper dye which is available. I do not know how you are going to work it.
Then there is the question of the organisation, of research. The manufacturer may say he had got the German catalogue, and there was a dye he thought suited him, but that when he applied it to a particular product it did not give him the result which he anticipated. He writes to the company asking that an experiment should be made with the dye in his works to see whether it could be adapted to his particular product. There is to be £10,000 a year for research 63 work, but how far would that go in matters of that kind? If you are going to endow research—and no one is more in favour of it than I am—do let it be on what I may call a modern scale; do not go back to the eighteenth century for precedents. Look at what the United States and Germany have done in the direction of research work, and if you are going to endow research for the purpose of adapting dyes to manufacturing products in this country, let us have laboratories in sufficient numbers and endowed on a sufficient scale. But that would absorb very much more than the £10,000 a year which the Government propose to give. I do not see how this scheme is going to work, or who is going to see what dyes this Aniline Dye Company is going to make. There is another matter on which I have heard very serious rumours. I understand the rumour has appeared in the papers that the Government have not obtained the subscriptions wanted, and that it is proposed to ask the Government of India to take up shares in this new company Is there any truth in that?
§ The PRESIDENT of the BOARD of TRADE (Mr. Runciman)
It is the first I have heard of it.
§ Mr. HEWINS
I am very much obliged to the right hon. Gentleman, and I am glad to know that it is not a fact, because to bring the Government of India into a matter of this kind would raise the very gravest issues. The right hon. Gentleman who spoke last deprecated raising the question of Protection. As a matter of fact, I have never seen a scheme which raised the question of Protection in a more objectionable form than this one. This company is to receive Government money, which, by the bye, is not Government money, but our money; they are going to put our money into the company, and then they are going to make it liable to unfair competition from Germany and other countries. Are we going to lose our money? I think no Government would ever exist long which decided to adopt that course, and you may be perfectly certain that from the character of the scheme put forward by the Government you would be very soon forced into the most objectionable kind of Protection, analogous to that by which the American tariff grew up. Whether the Government come forward and meet the claims or representations of a particular industry from their point of view, or whether you do it 64 on the American method, it does not make any difference whatever—you get the same kind of tariff. We do not want that in this country, and I venture to say that if this scheme goes through, and if the manufacturers say that they must have protection or safeguards for the capital invested, it will be very difficult for the Government to refuse that claim. Personally, I do not want the question to be raised in that form.
Supposing this scheme is a bad scheme—and I think it is from every point of view—are we to conclude that you cannot get over the difficulty of the present situation? What are the potentialities? I have inquired into that question, and I have come to the conclusion that you can get over the difficulty. Although after a short period of time you could not make all the dyes, or by any means all the dyes which are at present being used in British industries, still you could make a very large number of them in a short space of time, if you made use of the resources and potentialities of this country. How would you do that? It is not my place to make recommendations to the Government, but I would venture to say that the general principle I would go upon would be that the action of the Government should not be towards State ownership and the State running of this important industry, but it should be regulative and advisory. If, for example, the Government or a Minister of the Government proceeded to organise it as we have organised other matters, then a tremendous lot could be made out of our present potentialities. We have in the country now certain great dye works, and a certain number of smaller firms, and I am also advised that we have great chemical firms which could produce dyes and so help us out of the difficulty, and that if you organise for this purpose both the dye potentialities and the chemical potentialities you could solve the question. I do not know what difficulties there may be in the way of such complete organisation. There was a Liberal organ the other day, I think it was the "Daily Chronicle," which, in a leading article, suggested that there were difficulties of the nature of international agreements which would stand in the way of any complete organisation of that kind. All that I want to say on that is that when it is the safety and employment of our English people that is at stake I should not let international considerations stand in my 65 way, and I think I would make people understand that. If that were done I am advised that the potentialities of the case would be equal to the difficulties we have to deal with. Suppose you want to do that, what question arises?
I have taken steps so far as I could to talk with people of all kinds on the subject, and I should like to remark that I have talked with rabid Liberals and Free Traders in larger number I think than with people from what I may call my own side of politics. I will not say there is universal agreement on points of detail, as there certainly is not, but there is a general trend of opinion outside those points of detail, and there is no mistaking what the trend of that opinion is. It is, both from dye makers and dye users, that if you are to make this a success you must have security after the War. The sole question is, what form that security should take. In a sense the Government admit that. They admit that you must be willing to give security. I would ask the Government if they are willing to give public money in the form of subsidies and bounties, which, from my point of view, are an extremely mischievous form of Protection, why should they hesitate to consider calmly and reasonably the question of reasonable security, and how is that to be given? The question does not arise immediately during the War, and there is no reason at all why you should not get to work organising a larger plan on that model—not the least. The work could go on, and in the course of twelve months, I am informed, there is no doubt whatever that a large proportion of these essential dyes may be produced in this country—no doubt whatever. The question arises later on as to what form of security and guarantee you should give. I have got an open mind on that subject. I am not prepared to stand up here and say, with perfect precision, what method I would adopt of giving that protection. I have already explained to the Committee that I do not look on a question like this as a means of introducing any scheme of Tariff Reform. I do not know what it might lead to; I cannot tell. All we have got to do is to consider this practical matter and to deal with it with a free hand.
Undoubtedly, if you establish an aniline dye industry here and promise it sufficient security, that is an important new fact which would have to be taken account of in the future. I presume there is nobody in this House expects that this great War 66 in which we are engaged is going to leave no permanent marks. It is inconceivable that we can go through a War like this without those permanent marks. I would not undertake to say what particular marks it will leave, or what particular marks this aniline dye question will leave, but I do say you will not get capital in sufficient quantities, and the organisation and efficiency you require, unless you do in the most unqualified terms promise to give security. Is not that reasonable? People concerned say it is a question of business, and as to how you have got to run your business and the security you can offer is part of the business. I do ask the Government to banish from their minds the idea that this is the thin end of the wedge, or that it is part and parcel of some great academic controversy on Tariff Reform versus Protection, and that they will not quote the opinions of economists. That is perfectly irrelevant. This is a practical business question, which we have got to consider on its merits and with a perfectly free hand. I feel quite certain that the Government have had representations of that kind made to them from all quarters, and if they take the line I have suggested I do not believe they will have to consider the question of a Government subsidy, and the capital will be forthcoming. Surely that is a question of the greatest moment at the present time.
I take the Chancellor of the Exchequer's figures given to us the other day, and I ask, does anybody think our financial problems are going to be so easy of solution in the future that we can contemplate subsidies and bounties to individual industries by the Government? I do not think so. Looking at the consideration that you can have more efficient and better organisation and a quicker supply of dyes, and a more complete supply and an incomparably greater amount of business intelligence and enterprise put into it by the method I have ventured to put before the Committee, then I do sincerely hope that the Government will give it their very careful consideration. In no case are we going to carry it to a controversial point. This question is raised merely for the purpose of discussing it from a business point of view; but we do sincerely hope that the Government will not allow pedantic considerations to stand in the way of effective action when it concerns the employment and labour and possible security of so many millions of the population.
§ Mr. THEODORE C. TAYLOR
I cannot plead like some other speakers that I have no personal knowledge of this question, a question which concerns not only my own firm but the great industry of Lancashire a portion of which I represent here, because all my life I have been engaged in an industry which depends on colour. I assure the Committee that I can confirm what other hon. Members have said, that this is a really important question. I will not offer any disrespect to the Government by presuming for a moment that they do not desire a full discussion of this question. The Government are very busy in every Department, but I believe they are only too glad to hear a free discussion of this question in the House of Commons. One advantage of war time is that we can all say what we like. I remember very well in 1902, when we were discussing the Education Act, a very much respected Member for one of the Divisions of the East End of London sitting on the Back Benches here, when a question arose on education which was not religious, said, "Thank God, Mr. Chairman, we can say what we like on this point." I feel that we have the advantage at present of being able to open our hearts freely to each other. There is a distinction that I should like to draw between two aspects of this great colour question. There is the temporary aspect of what is happening and what will happen during this War, and there is the other of what will happen afterwards. I hope the Committee will keep clearly in mind that what might be the best policy during the War might not be the best policy after the War. During the War the question is very urgent, and how urgent I can hardly bring home to the minds of Members of this House who have no connection with the textile or colour industries. We must not forget that it is not only the textile industries which are so dependent on colour. The wall-paper and furnishing industries, as well as several others, are also dependent on it, and, unfortunately, it is a sad thing for Englishmen to have to say, dependent mainly on German colour.
My little business life, which extends over forty years, happens to coincide with the period during which the old colours have been gradually discarded, and the colours from woods have almost been forgotten by the younger generations, and indeed their names are almost forgotten. They are capable of some revival, and let me inform the Committee that there is a 68 revival in the use of woods, and, as the hon. Gentleman who spoke last remarked, there is a large substitution always going on. If the price is very high we get some relief from that quarter partly by using old articles. This is a very great question, pressing very hardly on the poorer classes of dyers and manufacturers during the continuance of the War, because certain colours which are almost necessary to the life of certain trades have gone to really famine prices and bid fair to go higher. One of the best judges in one of the leading firms in Yorkshire told me only last week that he believed that a quarter of the dye houses in the country would have to close by the end of March and half by the end of June if nothing were done. So that the immediate question is very urgent. But, after all, the most important question is: What is going to happen after the War? The formation of this company, I am sure, is intended by the Government—it must be so—mainly with a view to what is to happen after the War, because, after all, it does not require a company to stimulate the industry just now. Prices alone will stimulate it as much as you ever can stimulate the production of colours both in this and other countries. To deal with the emergency we do not need to form a company.
May I, at the risk even of wearying the President of the Board of Trade, who has a great deal on his hands, and with whom I must sympathise in having to meet these controversial questions under present circumstances, may I once more impress upon him that the best way of giving relief to British colour users is to facilitate by every means in his power the sending of raw material from this country to Switzerland and the bringing of the finished article back again? The Swiss firms have been to some extent very competent suppliers of colours of some sorts to this country. They have got some of the same qualities which have given the Germans preeminence in this business, because, let it not be forgotten, and I do not wish to introduce the question of Protection or Free Trade, the German industry is not founded on Government action except in so far as their industry has nothing to fear from Government action. After all, the colour industry in this country has been badly treated by all Governments. No one Government is more to blame than another: they are all to blame. They have deprived the colour industry of the use 69 of free alcohol, which is so necessary for that business, while our patent laws, until lately, have not really helped it as they ought. I feel that even now those who are engaged in this industry can point to many respects in which our patent laws can be further amended with advantage. Let us speak quite frankly on this matter. He is a very bad patriot who flatters his fellow countrymen to their hurt, and I want to say the truth here. Germany, I believe, has excelled in the manufacture of colour mainly because of her application of science to industry—a matter in which we have been behind. She has applied her qualities of perseverance, method, and hard work, and the German colour industry has been established as an efficient instrument of human service more on its merits than by any Government action. Neither this Government nor any other imaginable British Government would wish to establish in this country an industry that could not later on stand on its own merits. I, at all events, would not support the bringing into life of any hothouse plant. What some of us believe is that British brains and British capital will be forthcoming if once the industry can get a start. I have had no communication with the Government; I do not know what their views may be; but I imagine that their object is to pay back, as it were, what we really owe to the manufacturers in this business, and to give them a chance of a fair start. The question is, is this the best scheme for the purpose?
If I criticise the present proposal somewhat, I assure the Committee that it is in no hostile spirit; because, after all, if they cannot carry this scheme, the Government will be able to say to us who criticise it, "What have you better to put in its place?" I think we all ought to admit that. If we are ultimately to compete efficiently with Germany we shall have to build an industry on its merits. I will not go into the question of what may be the best way to help the thing to grow at first. I admit that a bonus of any kind, any development grant, even the money paid to agriculture out of the Development Fund, maybe called, in a sense, Protection; but I am going to make a distinction between money given in that way, or money given even as this scheme gives it, and what we ordinarily mean by Protection. If there is any grant of money at all, I maintain that we must be very careful, and more careful than this scheme seems to be, to avoid giving to 70 one class of the community any advantage that other members of the community do not have. It seems to me that there is a blot on the scheme, and that blot may be found in the principles of coercion and exclusion. I will explain what I mean. The scheme, as we have it, embodies the principle that the users shall make agreements with the company to get their colours for five years from the company alone; they are to subscribe to the capital of the company, and the advocates of the scheme, at any rate in Yorkshire, have been telling us that the users will get colour in proportion to the capital which they subscribe. That seems to be a hard and fast principle of a very bad kind. It is not fair between one consumer and another. At the present time, and during the War, no doubt consumers of colour would make great sacrifices to get certain colours which they fear may be monopolised by this company if the programme as we know it is carried out.
What is proposed to be done? It in proposed to exercise an option or options upon the purchase of colour manufacturers' concerns in this country—some of which have had a very hard and rough time of it, and, as I say, have deserved better of us and our laws than they have received. It is proposed to buy up some of these concerns and to effect an arrangement, during the period of the War only, between the company and some of the Swiss producers, whereby the colour produced by these Swiss producers will come to the company alone. Under present circumstances that is a kind of stick held ever the heads of the consumers of certain kinds of colour, some of whom are notable to subscribe to the company because they have not the money. I say that that is not fair. I am not speaking here as a member of a concern which could not subscribe capital. I am speaking for those members of the dyeing community and no doubt other colour-using people who have only enough capital for their own business. What is to happen to them during this period of stress if they are to be debarred from buying certain sorts of colour because they have not the capital to subscribe to the company? I am not going against the whole principle of the scheme; but I wish most earnestly and respectfully to point out to the Government that this is a very glaring defect, and it is not likely to promote smooth working in the future. What about the dyer who starts business in the 71 future, and is not in business at all now? What is he to do if he wants those colours of which the company may have a monopoly? Is he to buy shares in the company? Or take two men who subscribe £1,000 each. One may not use much of a kind of colour which the company makes, or it may turn out that the directors do not think that it will pay to make that colour in future, while the other man may use twice as much as he expected. Is the one man to buy the shares of the other?
It may be said that these are small niggling criticisms. They are not carping criticisms. They are offered in good faith, believing that there are practical difficulties which ought to be faced before the scheme is put before the public. I agree that something special is called for under present circumstances. Although I am a Free Trader out and out, I recognise that the position of this industry is so exceptional that something ought to be done, and I believe that the Government have started this scheme in good faith. I beg them to strike out from it this five years' agreement. But it is asked, if the colour users of this country will not sign agreements, to give the new company a preference, how can the company get its capital? I am one of those who are quite willing to subscribe considerably to the scheme if this agreement is struck out. I will subscribe from patriotic motives. There is no patriotism in "snuffing out" the poor dyer because he cannot subscribe. That is ntither patriotism or business. You cannot appeal successfully to two diametrically opposite motives at the same time—patriotism and selfishness. I believe enough in the business men of this country to be quite sure that in response to the Government's very fine offer—as I consider it—to the colour users of this country, they will subscribe enough money to carry on the concern if the conditions are not niggling and unfair to those who subscribe, and those who are expected to be the customers of the company. As a business man I have no pleasure in looking forward to my customers being obliged by some kind of agreement to buy their goods from me. I believe that the only foundation for permanent success in business is to make your customers feel that they can buy from you about as cheaply as they can buy anywhere else. Not only is it impolitic to attempt to force the users of colour to buy from the company later on, but such an agreement is 72 absolutely impossible of enforcement. Two absolutely necessary canons of all kinds of laws are that they should be definite and clear in their terms and capable of enforcement. This compulsory element in the scheme, forcing subscribers to buy their colours from the company in future, is absolutely impracticable and impossible of enforcement. I have discussed it with many dyers and manufacturers, all practical men, but I have not found one who believes it possible of enforcement. Let me show the Committee what I mean. There is no possibility of the new company being able during the next two or three years to supply what is required—at all events made by itself; it might if it had power to buy everything that came into the country, if it had a complete monopoly in that way, but nobody proposes anything of that kind—
§ Mr. T. C. TAYLOR
Not yet that I am aware of. I do not think it is started yet. It is not claimed for any company which could be established to-day that within the next two or three years it could possibly supply users of dyes with all, or half, or even one-fourth of the kinds of colour that most dye-houses in the country use. That being the case, let us imagine what would occur. Suppose that any particular firm of dyers, shareholders in the company, having the privilege of getting their dyes from the company, and in return binding themselves to buy from the company, buy 30 per cent. of their dyes, or, to take an extreme case, say, 50 per cent., from the new company, and buy the remaining 50 per cent. from other colour makers, either in this country or in Switzerland or elsewhere. They have these colours in tins or kegs standing side by side in their dye-houses. Everybody who knows anything about dyeing, knows very well that there are half a dozen ways of getting the same shade. Most shades that our manufacturers dye are dyed with two or three or four different kinds of colouring matter. How is it possible to have any system of inspection that will prevent a dyer from taking a little more from this keg and putting in a little less from that tin than he ought? It is utterly impracticable to effect the purpose of such an agreement. Every practical man knows that it is impossible of enforcement. But the question is asked, How 73 are we to get the capital if we cannot force customers' support on the tied-house system? All I can say, as one who has been asked to subscribe, is that I should have much more hope of getting dividends from customers who were not bound to buy from me than I should from customers bound by such an agreement. I do not believe there is a lawyer who could draw up an agreement by which these customers could be compelled to buy in this way.
Then there is the question of price. I understand from reports of speeches in the newspapers that that is to be the only question referred to a referee appointed by the President of the Associated Chambers of Commerce. The task of fixing what is a reasonable price for every little dye-house throughout the country, for every little bit of dye that is bought, is not one to give much joy to the man who has to do it. In a free market what is a reasonable price to-day may be a very unreasonable price a month later. What is a reasonable price to one man who uses very little may seem a very unreasonable price to a large user. These powers are to be put in the hands of the directors, I suppose, and the checking of them will be in the hands of the official referee. I do not believe you could get half a dozen dyers in the trade at any one time to agree upon what is a reasonable price. It is utterly impossible. It is such an arbitrary matter of judgment. If this meant that the shareholders would undertake to buy at the cost of manufacture, I could understand it. It would be intelligible, but it would be incapable of enforcement. As a more practicable plan, I have recommended something on the principle of granting dividends to consumers. I am not sure myself that the people who buy regularly at co-operative stores do not very often pay more for their goods when the profit, or as they call it, the "divi," is taken off. The system appeals to the weakness of human nature. The way to get customers is to get people in, because they think they are going to get something out of it. I mentioned patriotism, because the Government may perhaps say, "Here is our scheme, take it or leave it; it has been amended once, we will not allow it to be amended any more." I hope they will not take that line. I sincerely hope they will not assume that everything has been said on the subject before the House of Commons has said a word. I want to see something done, because I know the 74 difficulties of the present situation, aye, and the difficulties that will come after the War, because Germany, if we are still in German hands mainly, may put some kind of special disadvantage in the way of price against us, and it is quite possible that any scheme will be very difficult to work. But because the situation is difficult, because the Government have done something towards it, I hope that this scheme will go through. I do, however, press upon the Government this: that because, as the House knows, the money of the people will be behind this, and the company will have great privileges—for any company or business with a million of Government money for five years, and in addition £100,000 for research is privileged—because the country's money is behind it, I do beg the Government to see that the scheme is purged of every feature that will bear hardly on any class of users, and that it is made absolutely fair between all colour-users in the community.
§ Sir PHILIP MAGNUS
I am sure that every Member of the Committee, on whichever side of the House he may sit, will have listened with very great interest to the speech of the hon. Gentleman who has just sat down. They will have done so because they will feel that they have listened to the speech of someone who really knows something about the subject. There are two classes of persons who are mostly entitled, as it seems to me, to speak upon this important and highly difficult technical subject. There is, on the one hand, the manufacturers and users of dyes, and, on the other hand, the chemists who have to decide on the best means of manufacturing these dyes. We have just listened to the speech of a practical man, and among all the speeches which have already been addressed to the Committee on this subject it does not seem that anyone has praised to any considerable extent the scheme of the Government. There has been a good deal of criticism, but there have not been many constructive ideas. At the same time we must recognise, as the hon. Gentleman who has just sat down recognised, that the position is very difficult, and that it is desirable that something should be done. I venture to think that no one in the House will agree with the speech of the right hon. Gentleman the Member for Islington, who regarded this as a very small subject, something like the manufacture of lead pencils. I am afraid the right hon. Gentleman 75 scarcely knows that the dye industry affects the production of goods in this country to the extent of £200,000,000, and that more than one and a half millions of working people are, in one way or another, affected by it. If the right hon. Gentleman can point to any other industry similarly situated, I think we shall be prepared to say that any exceptional treatment which may have to be meted out to this industry shall also be meted out to the industry to which he is able to refer. The hon. Gentleman who has just sat down drew one very wise distinction, and one that should be borne in mind in considering this question: that is, as to whether the scheme of the Government is to refer to the colour industry during the War or whether it is to refer to the colour industry after the War?
For my own part it seems, from the little attention I have been able to give to it, that this is too ambitious a scheme for the period of the War only, and that it is scarcely adequate for the period after the War. In either casa it will require to be amended. My claim to address the Committee on this occasion is certainly not that I am a manufacturer, or user even, of dyes, nor can I speak with authority as a chemist on the scientific part of the question. At the same time, I have watched this industry from its earliest growth, and I have given some attention to its rapid development in Germany. More than thirty years ago I had the opportunity, as a member of a Royal Commission appointed by the Government to inquire into the relation of science to industry in Germany and in other countries, to look into the matter. Even at that time, so long ago, this colour industry was well organised and in a position against which this country was unable to compete. The hon. Gentleman who last spoke has ascribed the great success of this colour industry in Germany to the fact that they have paid more attention to the application of science to industry than we have here. I would like to tell them that we in this country are no less capable than are the Germans of providing an adequate number of scientific chemists. More than that, it is in no way due to any superiority on the part of the Germans as regards education that they have been able to obtain and to keep these particular industries with which we have been unable to compete. The great secret of German success 76 has been organisation. That applies to their military, municipal, scientific and industrial work.
In this country we have not been able to organise any single industry in the same way as has been the case in Germany. It would be generally admitted that there is no country in the world which is so distinctly aristocratic as Germany, for this reason: Germany always tries to put at the head of its affairs the very best man it can find. It rules through the best. As regards what is to be done at this particular crisis, it is very difficult for anyone to make any absolutely constructive suggestion. If the Government do not intend to help this industry when the War is over, so that we in this country may be able successfully to compete with manufacturers abroad, then I venture to think that it might almost be better for them to leave the scheme alone, while those concerned endeavour to obtain such dyes as they can obtain during the period of the War. If, however, as I hope will be the case, the Government desire that we shall no longer in the future be so dependent as we are at present and have been in the past in so important an industry as that of dye-stuff—employing as it does so large a number of persons and influencing nearly every other trade in the country—on foreign manufacturers, I sincerely hope they will do what they can to secure for the future of this industry an organisation not altogether dissimilar from that which exists at the present time in Germany. For that reason I say—and I am sure many hon. Members will agree with me—that the sum of money set aside for scientific research, namely, £10,000 a year, or £100,000 over ten years, is absolutely inadequate.
Anyone who has seen how these industries are carried on abroad will know that in every factory there is a large number of chemists who have been thoroughly and scientifically trained. Those factories are thoroughly organised. They have a chemist receiving a large salary at the head, and a number of assistant chemists who receive high salaries, each at the head of a particular department, and under them a very large number of assistants who have to carry out the details of the work. I do not think I should be exaggerating if I say at the present time there are nearly one thousand highly and technically trained chemists engaged in this particular industry. Can it be suggested that the scheme of the Government is such of a character as will 77 enable us, after the War, successfully to compete with industries so organised and so carried on? At the same time we must admit that something must be done in an industry of this great importance to prevent us from being dependent, as we are at present, on Germany for supplies to this industry affecting so many hundreds and thousands of working people in this country. If we are to succeed—as I hope we shall—in keeping this industry in our own hands, certain conditions must be fulfilled. We must, to begin with, have a sufficient number of chemists trained, and also a sufficient number of workmen trained—men who are capable of dealing with the materials placed in their hands. That training cannot be completed in six months, or a year, or two years; it will take four or five years at least before we in this country are in a position successfully to compete with Germany in this important industry. It is absolutely essential that an adequate sum of money should be set apart for research work—that is, research work carried on in the factory, as well as in our colleges and universities. The chemists should be capable of applying the results of their investigations and latest researches at the colleges or universities to the industry concerned.
Thirdly, there must be a governing body, which certainly should not consist of business men only. It is highly important that men of great business experience should be on the directorate of any company formed, but it is of equal importance that there should be chemists or highly trained scientific men on that same directorate who may be able to appreciate the discoveries that may be brought to their notice. I see facing me the right hon. Gentleman the Member for Swansea (Sir A. Mond). I think he will agree with me that the success of the great industry with which he is concerned has been very largely due to the fact that it has been managed by a gentleman of high commercial capabilities on the one hand, and, on the other, by one of the most highly trained scientific chemists. In these circumstances what are we to do? I hope—and here I agree entirely with my hon. Friend on this side (Mr. Hewins)—that we should not in the present crisis discuss any general proposals as to Tariff Reform, Protection, or Free Trade. At the same time I cannot help admitting, and I am sure the hon. Member who last spoke admitted also, that there are crises 78 and there are occasions when subjects must be considered on their own merits, altogether apart from general principles, which might interfere with the discussion of such a subject, and surely this is one of them! We are at the present moment faced with difficulties which we do not know how to surmount. There is no possible way, so far as I can see, of retaining this industry permanently in our own hands unless some safeguard is given to those whom we induce to sink their capital in the undertaking that, after the War is over, they will be able to continue their endeavours until such a time as the industry is able to stand by itself. The question we are considering is not one that can be settled by the known principles of political economy: it is a question of practical importance at the present crisis in which we find ourselves. But if we want the support of a great political economist, we have only to read the interesting quotation which appeared in to-day's leading article of the "Morning Post" to see what advice John Stuart Mill would have given with regard to offering some safeguard to this industry after the War. I do not believe it would be possible to train our scientific men and to organise, this industry as it should be organised in order that we may be able later on to hold our own in competition with foreign countries—with Germany and Switzerland, unless for some short period at least after the War is over some security is given to those working for this industry that would justify them in devoting their energy and capital to make it a success.
§ Mr. WILLIAM PEARCE
I think the House is gradually realising the difficulty and complexity of this great problem. I believe, too, that most of us who have studied the question at all know without doubt there is a great scarcity of dyes at the present time, and some action on the part of the Government is advisable and even necessary. I take it that, under the Government scheme, works will be acquired, and dyes will be selected which are most required and most easily made. It is quite evident that no present scheme can attempt to deal with the two thousand or more dyes that have been supplied by German industry, but a selection will have to be made on two grounds: those that are most required, and those that are easily and profitably made at the present minute in this War. Under such a scheme 79 it would be possible to distribute this work with judgment and discretion. It would also be decided where to extend plant, to take care there is no overlapping, and to secure that the best possible men shall be engaged to make a beginning with what really is a very large and serious attempt. And I am quite sure, after having been, if I may be allowed to say so, engaged for a great part of my life in the chemical industry, and watching the success and failures of many undertakings, that the success of this scheme, and the initial steps, entirely depend on the judgment displayed in taking those steps, arranging your work and securing your men, not going for too much, and going for the right thing. If you do that to-day we shall not obviate the scarcity entirely, but I think we shall take the only steps that really are possible at the present minute.
This subject has to be viewed from two or three different standpoints. Take it from the standpoint of the textile trade itself. It has been pointed out with great force that there are two hundred millions of capital in the textile trade, and one and a half million workers engaged in it. What was the position before the War? The textile trade obtained their colour materials at a lower price than any other country in the world. They have had a full range of all the German discoveries, and the big German firms also took the trouble to send representatives over here; certainly whenever they were invited to give instruction in the use of their productions. It is not possible to imagine a more favourable condition to the textile trade than existed before the War. Of course there was no scarcity if these conditions continued; but now that the War has come upon us the loss of the industry of Germany has of course put us to a great disadvantage. Like the last speaker, I have watched the proceedings in Germany and the whole success of the German undertaking. It is quite true the first aniline dye—magenta colour, a most momentous discovery, but of fairly easy application—was discovered by an Englishman, Mr. Perkin, who was a student at the Royal College of Science, Oxford Street, now absorbed in the Imperial College of Science, South Kensington, and with that particular institution in the late sixties or the beginning of the seventies, I myself was connected. There was a very distinguished professor of chemistry at the head of that institution, Dr. Hoffman, who 80 assisted Mr. Perkin in his work. A year or two later he was tempted to Berlin. He left an enormous reputation in London, and I have heard that when he went to Berlin he took this aniline industry with him. At any rate, it stimulated German intelligence and German perseverance, and the whole industry has been taken up regardless of expense, and now it has a position which it is very hard for this House to realise.
Before finishing, I should like to give the House two or three instances of what German science has achieved in the kindred substances of these dyes. For various reasons the production of colours in this country very much came to a standstill. The opening speaker mentioned beta-naphthol. He said that under an arrangement the manufacture was discontinued. That may have been true thirty years ago, but I set up as a manufacturer of beta-naphthol twenty years ago and spent a considerable amount of money in plant. When I had produced the article I found there was no demand hi this country at all, and it had either to be sold in Germany or America. The dyeing industry had very largely vanished and there was no demand for it in this country. I give this as an instance to show how, once having languished, it is difficult to revive art industry, and the thing went from bad to worse. After the War is over what is going to happen? Before the War the textile trade had nothing to complain of. After the War I do not think anybody can say with any great certainty what is going to happen, and that is one of the difficulties of the Government scheme. I do not think anybody could produce a scheme to-day that is perfectly certain to meet the situation at the end of the War. That is very largely the reason why, in spite of high prices to-day, the individual capitalist is discouraged from going into the industry. He does not know what is going to happen at the end of the War, and, in the case of chemical factories, everyone is occupied, and there is very great difficulty in getting any plant. The whole situation is confronted with great difficulty, and, therefore, I think the Government is right in taking a hand in the matter at the present time. At the end of the War, suppose things go back very much to their old position, and Germany is again producing these colours in the same way and by the same methods which, to a great extent, they have done in the past, what are we to propose to do? If we go for a self-con 81 tained industry it is an enormous undertaking. I am not a hide-bound Free Trader; I am referring to my own personal experience in dealing with the situation one may have to face. Take the case of America. There was already a 30 per cent. ad valorem duty in America on these German dyes, but that is not considered enough to keep the German dye-stuff out altogether, and the manufacturers of America are proposing, in addition, to put 7½ cents per lb. duty on the low-priced German materials as well. But it is quite evident that this country would not pay anything like that. From the dyers' point of view the situation that they would desire, and which would be most to their interest, would be a fairly successful British industry, plus the competition from Germany they have already felt, and that does not hold out great attraction to private manufacturers. The Government scheme, having got fairly under way, will be able to trim its sails both ways, or to ask for assistance both ways. It can take up—and I think the resources of this country are sufficient if wisely guided—a portion of the field of the supply of colour and allow German enterprise to satisfy the other portion, if the country meanwhile has decided it is worth while paying a high price for a self-contained industry, still the Government scheme can be of use under Protection.
As to the sort of problem the country and the House are facing, let me mention two instances of German science and German industry. Fourteen years ago India was producing between £3,000,000 and £4,000,000 of natural indigo a year; last year I believe the total value of the crop was £130,000. Germany had captured by the synthetic process the whole of that business, and the steps they took, and the methods they had to pursue to accomplish this great achievement, were almost a romance. They had to cheapen, and greatly cheapen, the production of two or three reagents, in one of which I have had great experience—fuming sulphuric acid. Fourteen or fifteen years ago fuming sulphuric acid was at an entirely prohibited price. I have heard of it having been sold at prices from £50 to £100 per ton. Very large quantities of this would be required for any possible scheme of making synthetic indigo, and the German scientists set themselves down to conquer this particular manufacture. One German company alone, the Badische Soda and Anilin Fabrik, spent in making experiments and plant during the last 82 fifteen years a sum approaching a quarter of a million, and probably double that amount. The other reagents had to be worked out in the same sort of way. Then they took infinite pains to get hold of the commercial side of the industry.
I heard of a firm of British colour manufacturers complaining that they could not proceed with their business in India Successfully. They sent out a representative to find out the reason, and they found that the German synthetic indigo was everywhere, and it was made up in packages just like the real Indian manufacture. Those were the steps taken by Germany to acquire the synthetic indigo industry but their latest achievement has been the synthetic manufacture of ammonia. To do this they had to produce pure nitrogen and pure hydrogen in very large quantities. The great dyeing firms of Germany have been doing this, and they have erected a plant which, after a great many experiments and enormous expense, is now successfully producing ammonia in very large quantities by catalytic action. This is done at a temperature of 550 degrees centigrade under a pressure of 175 atmospheres. The operation has to be performed in an almost bomb-proof structure with automatic safeguards devised to prevent the introduction of the smallest quantity of oxygen or air, which would explode the whole of the apparatus. Last year the Germans put on the market through this instrumentality 30,000 tons of sulphate of ammonia, and it was then worth about £11 a ton. This year, if the War had not happened, the Germans would have placed 100,000 tons of sulphate of ammonia or the English market, and they would have made a profit of at least £500,000.
I mention these facts to show the House how much time, money, experience, and science has been devoted by Germany to the production of these various colons. To try and knock out under all conditions this industry is a very large undertaking. I do not think it is possible for anybody to say to-day with certainty what are the precise steps and what would be the exact position at the end of the War. I take it, at any rate, that the Government scheme is only a temporary one to meet a situation which could not be avoided, and that is a situation of real scarcity. I approve the scheme as proposed by the Government, always providing that you get a proper scientific and commercial business arrangement such as I started by enumerating for the purchase of works 83 and the selection of dyes, and the allocation of each dye to particular works so that there will be no waste or overlapping. All this would mean the acquisition of the beat business and the best scientific assistance that can be obtained in the country at the present moment. If the Government succeed in doing that they will do a real service to the country, and make a beginning in the direction of bringing back a large portion of this enormous industry into this country.
§ Mr. PARKES
There is no doubt that at the present time the Government scheme has received great praise. [An HON. MEMBEB: "Speak up."] I do not, however, believe that at the present moment we are acquainted with the whole of the scheme. Some hon. Members have asked whether this scheme is to be adopted during the War or after the War. I take it that this is a question to be dealt with after the War and not before then, because the arrangements being made indicate that they will cover a period of twenty-five years. To embark in an industry of this kind, upon anything like the magnitude which Germany embarked upon it means the expenditure of a very large amount of capital, great industry and great perseverance in order to obtain efficiency over a period of years. The great question for us is, are we to make an effort to capture this dye industry or not? Hon. Members know that committees have been sitting on this question for nearly six months. There has been appointed a committee of experts, Government officials and manufacturers, and they have been giving the closest possible attention to this question. Why? Because they look upon it as a most important question affecting large industries in this country, and if this Committee is prepared to praise this scheme and give it a trial, I do not think this House ought to throw any obstacles in the way. I was sorry to hear some hon. Members introduce Tariff Reform in a jocular sort of way in regard to this question. I do not think that is the way which either side ought to approach this subject. I think it will be agreed that, considering the number of men employed and the capital at stake in this matter, this becomes one of the most important, if not the most important, undertaking in the country. When you remember that it means a turnover of £200,000,000 and the employment of 84 1,500,000 men, no one can afford to jest at this matter or say that it is not important.
We have been told over and over again by the Government that now is the time to capture German trade. This has been one of the great cries sent round the country during the last few months, and the people have got the idea that there is a possibility of capturing German trade, and now is the time to do it if we are to accomplish anything in that direction. Now is the opportunity, and if we do not do it now the opportunity may not occur again. In the past the Germans captured the dye trade, which amanated from England, with the assistance of the German Government, and why should our Government not assist in this direction? Several hon. Members who have spoken have said that if the Government assist in this matter they will be committed to a principle which will be awkward in the future and they may have to assist other trades. "Sufficient unto the day is the evil thereof." We have to deal with this great industry at the present time, and it is our duty to do the best we can. With regard to the question as to whether we can make dyes as cheaply as Germany, I was told by a manufacturer the other day that several dye makers in this country have subsisted the whole of the time while the Germans have been selling their dyes in this country, and therefore there is a possibility of the industry remaining in this country even in competition with the Germans. With a larger plant and more up-to-date methods our power to produce dyes ought to be much better than it has been in the past. The Government have been assisting in a variety of ways, and there are times in the history of a country when the Government ought to assist industries in this way. One of the greatest points which the Germans take into consideration in this matter is the assistance given to trades by the German Government, and if the German traders had not been so assisted in the past they would have come out very badly indeed.
As I understand the Government scheme under discussion, it will grow year by year, and I should think the Government once having undertaken this industry will be loyal enough to stick to it. I have heard a remark made about Germany the other day to the effect that they were so disgusted with the conduct of England in this War that they had decided not to go on with the manufacture of yarns themselves. If we make the dyes and the yarns, 85 then we shall have more trades in our hands and that would be a great acquisition. I do not know whether the Government are giving proper facilities to the makers of dyes in respect to the purchase of alcohol for trade purposes in this country. It has been hinted that very hard restrictions are placed upon British alcohol. One of the reasons why the dye industry left this country was the heavy tariff on alcohol. I am told that even now there are several conditions which are very irksome to the manufacturers, and I hope the Government will consider whether they can give any relief in that direction. In regard to the scheme itself I think if the Government does not soon make up its mind it will be too late. I suggest that instead of going on with the scheme now, cognisance should be taken of the remarks made here to see if anything can be done to improve the scheme, and I am sure no harm will be done by letting it wait a few weeks. We are not in a hurry; we do not want to establish this industry for twelve months and then do away with it, but we want it to last for years and years, and we want to establish a scheme which will be able to stand even against German competition. I throw that suggestion out to the Government, and I feel certain that the Committee engaged upon this question, if they feel that the scheme is not perfect, will be prepared to reconsider it again. I say most decidedly that we ought not to give up this question at the present time. Let us have some definite scheme which is workable, and that I am sure will end in producing what we want. For myself, I think that the Government are to be congratulated upon this scheme, although it deals with a complicated and difficult subject, and if they do not shrink away from it I do not think that we, as Members of this House who are in a secondary position, should do anything which would tend to blot out the scheme or discourage it.
§ Mr. RUNCIMAN
The discussion this afternoon has certainly shown great diversity of opinion on the scheme, or so much of the scheme as is at present known, and the views which have been expressed on both sides of the House have been, almost without exception, irrespective of the fiscal doctrines to which the various individual Members adhere, and, I believe, have been addressed mainly to finding a solution along the best and most workable lines of a serious industrial position. My right hon. Friend the 86 Member for Islington (Mr. Lough), made light of the difficulties of dye users, and he did so, I feel sure, without an adequate knowledge of the extent to which dyes are necessary for the industries of this country. This is not a mere matter, as he seemed to suppose, of one corner of one industry. It is a matter of vital concern not only for our textile industry, but for a whole group of industries which are dependent upon the use of colours, if they are to succeed, not only in supplying our own internal needs, but also in maintaining markets abroad upon which our English capital and our English employment depend. Wool and cotton are indeed important enough to necessitate individual treatment, and during this War we should not have hesitated to take steps to prevent wholesale unemployment in either one or the other if those steps had been rendered necessary; but there are other industries which, like wool and cotton, are dependent upon the use of dyes and mainly aniline dyes. The lace industry of Nottingham, the silk industry of Macclesfield and elsewhere, the cotton industry, the making of paints, such small things as ink and wall-papers, the colouring of leather goods, the colouring of hats, and, I would add, the colouring of some foods—they all depend upon an adequate supply of dye-stuffs. It may be that some of these industries, as my right hon. Friend seemed to think, can dispense altogether with the use of dyes, but the textile industry and some others like the carpet and linoleum trades are absolutely dependent upon aniline dyes if they are to succeed.
It has been estimated that something between £2,250,000 and £2,500,000 are spent every year by dye users in the purchase of dyes, and of this large quantity no less than £1,750,000 worth comes from Germany. A very small amount comes from Switzerland, and the remainder is made mainly in this country. If Germany wished to take belligerent action against us in respect of any industry, I do not believe that she could have chosen one that would have hit us harder than that which we are discussing this afternoon, for withdraw the whole of the German supply of dyes from this country and there are no means which we have at our disposal at the present time of filling the gap. One of my hon. Friends suggested that our stocks of dyes were as large now as they were at the beginning of the War. I would say, without any disrespect to him, that we at the Board of Trade have better means of knowing what 87 the stocks are, and, whilst I have no desire to withhold from the House of Commons the result of our census of dye stocks in this country, except in this, that what is stated here is reported elsewhere, I think it would be highly inconvenient that we, in the House of Commons, should declare exactly how low the stocks have run, and, if the House will forgive me, I would rather leave a statement on that subject unmade, except to assure the Committee that they are so low that we should be rapidly approaching the danger point if some steps were not taken for reorganising our dye supply.
I know it is the view in many quarters that we should adequately deal with the position if we merely adopted emergency methods, if we could tide over the time while we are at war, and then leave the future to take care of itself. That is quite a practical view. I take no exception to it at the present time, but I would like to ask my hon. Friend on this side of the House, and others who hold that view, to examine the situation closely and to form their own opinion, if they can, on the methods by which we are to fill the gap during the War. What emergency measures are we to take? Of course, we might turn to Switzerland. The Society of Chemical Industry at Basle are large producers of dyes, and all their produce does not come here. It is suggested that we should make arrangements with the Society of Chemical Industry to send to this country the dyes which we require, and that by arrangements with them we should obtain as much as would be necessary to keep up our stocks during the remainder of the War. That can only be done by working an exchange with the Swiss. The Swiss are short of raw material. They have been faced with the fact that the requisite materials from Germany can scarcely be obtained for them, and, if they do obtain them, they do so under conditions which compel them to return the products not to England but to Germany. The Swiss can only send their finished dye products here provided we send the intermediate or raw materials from which to make those products. That is the only way in which the Swiss can help us during this emergency. If the Swiss are to help us in that way during this emergency, who is to send them the raw products? Is it to be the Government that is to buy up the raw products here and send them out to Switzer- 88 land? Are individual firms to buy them up here and send them out to Switzerland? Is it to be done by men who come fresh to the industry? Are they to buy them up and send them out to Switzerland?
Let us take each one of those suggestions. If the Government is to buy up the raw products here and send them out to Switzerland to be turned into dyes, under what principle is the Government to dispose of the dyes when they come back to this country? There is no distribution which could be made by any Government Department which would not lay itself open to the charge of making unfair selection. We could send some of these Swiss products, say, to the hon. Member for Radcliffe (Mr. Theodore Taylor), who made a most informing and excellent speech; but if we did so, his competitors, I feel sure, would complain bitterly that we were unfair to them. We might send them to some of the calico printers in Lancashire, say, the large concern which has that title. I feel sure that there are many manufacturers who would say that we have no right to support the large concerns at the expense of the smaller ones. We might send those dyes we had to spare to the Bradford Dyers, but, if we did so, some fifty or sixty competitors would say we were taking the side of the large men against the small men. I do not know any conceivable way in which the Government could take the dyes which it had obtained by exchange in this way and distribute them throughout the country without it getting into all the evils which come from the Government being able to confer benefits upon individual traders. The next proposal that individual firms here should buy up the raw products and send them out to Switzerland would mean inevitably that the very evil to which my hon. Friend referred of a small man being cut out would certainly arise. The third idea that new chemical merchants should come on the market and embark on this would have all the same difficulties about the distribution of the finished products when they came back to this country.
For practical purposes and in order that we may get rid of a great many inequalities and difficulties which must arise from any other scheme, we were forced to the conclusion that the only way in which you can do an exchange with the Swiss is through a company of users in this country acting more or less on the co-operative principle. They, purchasing the raw materials and having permission from the 89 Government to export them, would send them out to Switzerland. The finished dye products would come back, and the company would be responsible for the distribution of those dye products on the fairest and most equitable terms. It is necessary, and absolutely necessary that you should have a person or a company—the company would be based, as this is, more or less on the co-operative principle—who would make all the agreements for sale. There is no way, so far as we have been able to discover, of dealing with the supplies from Switzerland without depending upon company organisation in one way or another. There is another way of dealing with the emergency. That is by organising the dye producers at home on such a plan as to prevent overlapping, to prevent the manufacture of some products for foreign markets at a time when we are in urgent need of some other products for our own textile industries at home, for the spreading out of the processes of manufacture, allowing some of the larger chemical companies to produce some of the raw products, making use of coal owners, gas companies, and the like for the production of toluol and other necessary bases for dyes. This can certainly be done by a Government Department, but it can be much better done by an organisation of business men, who know the necessities of the industry and who can have at their command not only the technical but the commercial knowledge without which no success can attend our efforts. There, again, we were driven to the conclusion that in order to conduct this joint transaction, and in order to reorganise the various industries which now make dyes or provide the necessary stuffs for the manufacture of dyes, a company more or less on co-operative lines was necessary. Therefore, we were driven to the conclusion that we must have a company, even if we are to deal only with the present emergency.
If we are to have a company at all, we must next consider whether that company should be brought to an end immediately the War is over, whether the agreements with the Swiss Society of Chemical Industry at Basle and other Swiss companies should all be torn up, and whether the organisation which brought them into being and held them together should disappear. The well-informed expert Committee which examined this problem came to the conclusion unanimously that to dispense immediately the War was over with the 90 company which had seen us through the emergency, and without which we could not have got through the emergency, would be throwing away a good organisation, and would be placing the textile industries and the others dependent upon dyes in the position, probably, of having to meet the same situation in the future with no company which would enable them to survice the strain; and they advised the Board of Trade that the company which worked during the emergency, and without which the industry could not exist on a business basis, should last after the War was over; that in making our plans now we should not attempt to map out the whole range of manufacture, because that is not possible for any man or combination of men during the period of war, but should so make our arrangements that, in the future, they can be extended on lines which technical ability and commercial acumen advise, and that we should now, by such arrangements as are made for the assistance of the company, give it some chance of a successful career. I am not stating anything that may be called high and dry doctrine. I am only telling the Committee how we reached the stage of being compelled, by the mere circumstances of the case in dealing with the emergency, to have a company, and once having a company we decided that we were not going to strangle it immediately peace was signed. These steps appear to us to be essential, but they may well work in what we have up to the present provided for the emergency. Again I find it somewhat difficult to tell the House everything that has been done. Naturally some of the steps we have taken cannot be disclosed at present, but I will give the House, as fully as I can state them, the arrangements that have been made. We have entered into arrangements with the Swiss manufacturers for raw and intermediate products to go out there. Arrangements have been made for those products to pass across France. We have organised at home the production of some of the raw material on wider bases, and although some of these bases are necessary for the production of explosives we have seen to it that the production of explosives, vastly important as it is, shall not altogether exclude the possibility of having some of the surplus products sent out to Switzerland, and returned here as the finished dyes. Lord Moulton, who has done valuable work on 91 the High Explosives Committee during the time he has been at work there, and has extended enormously the possibility of the production of toluol and other necessary ingredients of explosives, has at the same time been giving us great assistance by providing us with additions to the bases for our raw materials. The gas companies are helping us in the great centres, where we have invited them to put up plant, and the tar producers and the coke oven owners have practically turned over to us their whole supply of benzol, from which we draw a very large percentage of toluol. We have done all we can to see there is no wastage of any product. That has placed us in a position to supply the Swiss manufacturers with what they most need in order that they may return to us what we need.
Then we have made arrangements to obtain an option on the works of Messrs. Read Holiday and Sons, at Huddersfield. The reason why we did this was that, in making a survey of the dye works of the United Kingdom, we found in these works all we needed better than in any other works we examined. They already produced dyes and some of the intermediate products. But it is necessary that Read Holliday's should be in the same concern as the organised supply to Switzerland which was to return commodities from Switzerland. For this reason we did not wish the whole works of Messrs. Read Holliday's and their staff to be used in the production of intermediate products when they could be obtained from outside by a wider and better organisation. We wanted the works to be specialised more highly. We did not want them to do every stage in the manufacture of dyes themselves, but we wanted them to specialise on the later processes, while we supplied the necessary bases from which they were to start. Messrs. Read Holliday's have been a well-managed concern, and I should like to refer, if I may, to their comparative prosperity, not with any idea of discussing either Free Trade or Protection, but merely to inform the House that it is possible, even under the hottest German competition, to make a creditable profit out of the manufacture of dye products in the United Kingdom. The option which we have on Read Holliday's enables us to take that firm, if the option is exercised, at a price which shows that the average annual profits during the last six years represent about 6 per cent. on what we 92 propose to pay them. That is, the average annual profit up to June, 1914–6 per cent. Messrs. Read Hollidays, during the period which their books have been under examination, running back for about ten years, have made a very much larger profit than they have divided. They have added to their plant, and have extended their works, and the gentlemen who are proprietors of this concern knew perfectly well that they had a large, prosperous connection, and that they could make a very handsome profit out of their property. I do not think we have made a bad bargain with them, but naturally we have had to pay more than their nominal capital. I will not say what price we propose to pay them, but it represents this 6 per cent. basis, and I think the House will see then, even under pretty hot German competition, there is some chance of this concern, helped and organised as it will be in the future, holding its own.
§ Mr. RUNCIMAN
It is to be paid in cash. We make an outright purchase. An arrangement, however, is made whereby the staff are to assist the new company. We do not break up any of the organisation of Read Holliday's; we merely eliminate the proprietors, and retain their managers and technical staff.
§ Mr. RUNCIMAN
They provide for payments to the reserve fund, depreciation, and other charges. The Committee will realise that whenever there is a discussion on the purchase of any concern there will be all sorts of criticism possible, and as to almost any bargain made, however good it may be for the State, there will be suggestions that individual constituencies or persons have been benefited. I am quite prepared to face that in this case. I realise that in a purchase of this kind you must not be too squeamish about criticism. But the whole transaction is above board, and everything is or will be known. The full figures will be given to the world immediately the purchase is made by the company, and indeed before that if it is necessary. There is not the least reason 93 in the world why everything in regard to their profits in the past should not be known as soon as we have eliminated certain proprietors who are quite inclined to stay on, but we shall not make their figures public before that. We have examined with the greatest possible care the whole of their books and accounts which have been thrown freely open to us, and I venture to submit it will be seen that this prosperous concern has been taken over on a fair and profitable basis.
Then provisional agreements have been entered into with one or two concerns in England for the purchase of intermediate products. We have also made arrangements with gas companies, as I have said before, and coke oven owners, and these must be taken in conjunction with the control exercised by the High Explosives Committee. None of the arrangements in connection with either Read Holliday's, or other concerns, or with the Swiss can go through unless you link the whole of them up together. Indeed, if you did not link them up together, you would not be dealing adequately with the emergency which has arisen, as the only way in which we can bring about an immediate increase in the production of dyes such as we need is by reorganising the concerns under one control. Those dyes which we need most are the ones to which immediate attention will be devoted. We must safeguard the small consumer. We must see to it, when making arrangements with any large consumer that we do not allow the small consumers to be squeezed out. I observe, as no doubt other Members have done, that criticisms have come from Lancashire, Yorkshire, and Scotland. As far as I can see, the most severe criticism which has been addressed to this scheme has come from the three greatest dye users in the United Kingdom. To my mind that does not add, if I may say so, to the convincing nature of that criticism. These great concerns can to a large extent take care of themselves. If this scheme falls to the ground, they will not regret it anything like as much as the small consumers. Indeed, I find one of the greatest of them is making the best of both worlds. I am not giving any secret away when I say they have sent in a provisional application for shares in the concern with this condition attached, that they want to be able to withdraw if, later on, they think it is not worth while to go on with the subscription. There are a great many people who would be very glad indeed to go into 94 public companies on those terms, and I need hardly say that whole-hearted support would be much more welcome to the Government. I find it very difficult to avoid going into details, and very difficult also to avoid telling too much. I feel I owe an apology to the Committee for withholding a good deal which must of necessity have gone on behind closed doors. But everything which it is essential the House should know has been or will be disclosed in one way or another.
The success of the concern must depend largely upon the way in which the German patents are administered. Let me say at once that the Act which was passed last autumn as an emergency measure does provide that the operators of German patents in this country shall have a chance of conducting them on licence. It is our intention not to cripple the companies when the War is over, but to give them every opportunity of making the most of the German patents. We leave open for discussion, as between Germany and ourselves, the payment of royalties in respect of these patents. There are English patents in Germany for which royalties I hope are being collected by the German Government, and will be handed over to the English owners in Germany. In the same way we shall hand over any royalties on German patents in England if the Germans will bargain fairly with us. The operating of these patents which may now be undertaken by the new company will proceed after the War is over, without interruption and without hindrance. The hon. Gentleman who last spoke asked about alcohol. The regulations of the Board of Customs and Excise will enable the company to obtain permission to use alcohol for industrial purposes free from duty, by arranging that the denaturing of such alcohol shall be carried out under conditions which will not hamper the industry. That removes one serious difficulty in the manufacture of dyes, and the Board of Customs will certainly work harmoniously with the company. While safeguarding the Excise it will enable the company to conduct its business prosperously.
§ Mr. CHAMBERLAIN
I assume that the right hon. Gentleman does not mean that the privileges will be confined to this company. Perhaps he will say so expressly.
§ Mr. RUNCIMAN
No, Sir, I do not mean that it would be confined to this 95 company alone. If I am making a new announcement I would say that the same regulations with regard to the manufacture from alcohol free from duty will be applied to other concerns that can manufacture it under the same conditions. No one knows better than the right hon. Gentleman how careful we must be with regard to the manufacture from alcohol as a base in any industries in which it is largely used. The really important criticism this afternoon has turned, not on the organisation of the company, not on the way in which events have forced us into our present position, but on the agreement which subscribers to the company are asked to sign. I take it that the Committee is of opinion that in order to deal with the emergency we must have a company, and I would infer from that that the company must not be destroyed when the War is over. If we have a company which is not destroyed after the War is over and if it be started more or less on a co-operative basis and the capital is to be subscribed by the users, the users themselves have less claim to disagree with giving their own concern a regular business for a period of, say, five years after the War is over than have other people. I know the criticism that is always offered is that if you tie down customers to the concern it removes any incentive from the concern to manufacture cheaply, but the other view is equally important, that if you are starting a concern which is expanding along lines which are well understood, but are to some extent new, the best help you can give it is to ensure custom for a short period of years, and without that custom it naturally follows that the company cannot be able to take the bold steps without which no prosperity can attach to a reorganisation of the dyeing industry.
Five years may be a long time for consumers to tie themselves down to this concern, but already large numbers of them have agreed to do it. That is a fact that is worth mentioning, because it shows how far even the publicity that has been given to this scheme has attracted users of dyes. Before the prospectus is published, before many of these towns have been visited by those who are promoting and are interested in the scheme, we have promises of subscriptions for well over £400,000 out of the £1,000,000. Having already received promises of support for such a large capital, I believe the rest will certainly be forthcoming when 96 the prospectus is published. Combined with that, there has been a signing of this very agreement. Undoubtedly the agreement carries with it many difficult points. I have been asked this afternoon what quality of dyes the company is going to produce, and who is to decide what the quality must be. Obviously those who must decide must be the directors of the concern, for it would be ridiculous for the Government to lay down the law in a highly technical matter of this kind as to the arrangements of a concern, or to pretend to know the business through and through, like some hon. Gentlemen who have spoken this afternoon who have spent a lifetime in the business. I have been asked what would happen to a firm who, having signed an agreement, would be unable to obtain the dye which they desired from the company. Of course, they would be free to buy elsewhere. Why not?
I have been asked, supposing there is a dispute as to whether this dye is suitable for the firm's manufacture, whether, for instance, the difficult and essential products of which my hon. Friend the Member for the Radcliffe Division knows so much should or should not be used by the manufacturer, is he to be open to the charge of having broken faith with the company in respect of the agreement? These are largely technical and business questions, which must be decided, like all modern business points, along lines which are known as common-sense lines. We cannot dictate here; we cannot put into a schedule or a prospectus an exact code of business morals which is to guide the men who have given an undertaking that they will do their best to support their own concern. We cannot do it. If there is any dispute between the users and the company, the best way of deciding that dispute is to call in a third party. One of the criticisms offered was that there might be a dispute as to prices. I think one of my hon. Friends said, "How ridiculous it would be for a referee to have to decide what was a reasonable price." I quite agree. I understand the only reason why a dye user would ignore this company, and might wish to buy elsewhere, and so be freed from this agreement, would be that the price charged by this company was higher than the price charged outside. That very price charged outside is the one thing upon which the referee would fasten at once, and he would inquire whether the price charged was, or was not, reasonable. The company must 97 live in open competition with other people. If its prices are higher than those of other people outside it must run the risk of losing its customers; but on equal terms the promoters are right in deciding that they should have business attached to them on equal terms, and that without business being attached to it it would be impossible for them to get the necessary support.
§ Sir P. MAGNUS
Does the right hon. Gentleman include among "other people" the foreign manufacturers?
§ Mr. RUNCIMAN
Yes, certainly, there is no reason why they should not. For instance, if a firm of calico printers in Lancashire found they could buy indigo from a foreign firm cheaper than from this concern, they would at once say, "You are charging too much in British Dyes, Limited, and I wish to go before the referee in order to see whether your price is reasonable or unreasonable," and the referee would have to go into the question, and if British Dyes, Limited, cannot supply as cheaply as the foreign firm they will lose his custom, and if they can they will retain his custom. The business would be attached to the company, and to that extent would give it additional security. Let me, because I want to be quite accurate in the language I used in regard to the agreement, read over to the House what I understand the agreement to mean. I understand it is not proposed by the Provisional Committee to make the signing of the five years' agreement an essential condition of subscribing capital to the new undertaking.
§ Sir F. CAWLEY
Is the right hon. Gentleman aware that some members of the Committee have made a statement to the contrary?
§ Mr. RUNCIMAN
I was going to mention that, because one member of the Committee has been reported as giving information to the world which, according to what I can see, is not accurate. Perhaps I may be allowed to state the exact position. So long as the amount of dyes supplied by the new company is unsufficient to meet all demands, priority of supply will naturally be given to consumers who had come under the agree- 98 ment. This does not appear to me to be an oppressive arrangement, inasmuch as the agreement—the terms of which have been made public—will have been largely signed as conditional upon the company supplying dyes of good quality, suitable for the consumer's business and at a reasonable price. An agreement of this kind is not altogether new to the industry. I am informed by some gentlemen in the textile industry that they have been asked in the past, and are being pressed at the present moment to enter into arrangements with regard to their future purchases of dyes, and being pressed in some cases successfully, because they will do almost anything to obtain the dyes rather than stop their works.
§ Mr. RUNCIMAN
No, at much higher prices than pre-War prices. The hon. Member for Radcliffe says that compulsion cannot be enforced. I agree with him that any man who wants to slide out of the agreement may find ten or a dozen ways of getting out of it. If it is possible for him to slide out of it, the objection is largely diminished. If compulsion cannot be enforced because there are ten or a dozen ways of getting out of it, I would say that compulsion in that case would be of no value; for unless the subscribers and those who sign the agreement are going to be honourably bound by it and are not going to adopt dodges and tricks in order to get out of it, the agreement is of no value whatever. Among the criticisms offered this afternoon is the one that this company will be given a monopoly. I hope I have shown that it will not be given a monopoly and that it will have to live on its merits, although it will have the advantage of a good start given in times of great stress, and it will also, I hope, have the advantage of large numbers of customers whose enthusiasm will be devoted to its support. It has been suggested that the company is not large enough. No one knows better than the Technical Committee who have been dealing with this matter than you cannot range over the whole question of chemistry and chemical research with a small capital. At all events, we have made a start, and have left the door open for expansion in the future. The arrange- 99 ment entered into by the Government and the company will be of such a nature as to enable it to work with a capital of well over £4,000,000, and the possibility of expansion, if it is successful, is, I need hardly say, unlimited, provided that as soon as possible all Government connection with it is eliminated. [An HON. MEMBER: "Why?"] Because I have no prejudice in favour of Government interference in these matters. I believe that the sooner these concerns are able to stand upon their own feet without Government assistance the more likely they will be to be able to manufacture their products cheaply enough to enable the textile industries to live prosperously.
It has been suggested that the organisation of this concern has been done without the assistance of technical experts. It is true that on the promoters' or rather Consumers' Committee there have not been chemists, but there have been commercial men who are depending upon dyes for the prosperity and, indeed, the existence of their industry. We have taken the best commercial advice we could obtain. They have had at their elbows two, at least, of the greatest chemists in Europe, one of whom, by the way, practising as he does in England, previously to the War was receiving a retaining fee from one of the largest German combines which was mentioned here this afternoon. He is prepared to devote himself enthusiastically to giving advice in the conduct of this concern. When I think of the way in which some of our own chemists have been literally bought up by foreign concerns, I am surprised that anyone should say that we have not in this country an adequate supply of chemical knowledge. The best of our chemists are as good as any we can find in Europe. The difficulty we suffer from to-day is that there is not enough of the second-grade chemists. It is the business of the Government, as in all technical education, to increase the amount of training and instruction for the production of a larger number of chemists in the second grade. Already some of the universities are doing their best to provide them. I do not look upon the Grant of £100,000 for the expansion of chemical training, and especially of the treatment of dyes, as being a bonus or a subsidy given to those concerns. It is a Grant given for technical education which is as likely to be beneficent as technical education in the production of wools, or cottons, or metals. 100 We are told by those who take a real live interest in the training of our chemists that there is no reason in the world why in the immediate future we should not be able to produce the requisite number of chemists for the dye industry, and for those higher branches of the chemical industry provided we pay them enough. Young men are ready to go into these professions as long as they know they have a career before them. It has been said that in some of the German industries there are thousands of young chemists at work, and miserable pay they get. The lower grades are very poorly paid. The chemists at the top of the tree are well paid, but where the German have an advantage over us is that they had such a large group of third-rate and second-rate chemists from which the first-rate can spring. What is necessary in this country is that we should have a much wider training of chemists in order that out of them an occasional genius will come forth who will be able to assist our industries by new discoveries.
The number of young chemists who can be produced in our universities is almost unlimited, but we should not produce them if we only offer them £3 a week, and this concern, if it wishes to be successful, will have to buy its chemical knowledge and skill at a fair price. During the short time I was at the Board of Agriculture I realised that it was almost impossible to get young men to go into the scientific side of agriculture unless you assured them of a career. We first of all gave them scholarships. We then had to provide, as some of them slipped away abroad, especially to America, for the creation of posts for them at home. The county councils and the various educational institutions played their part. This concern being of a national nature, will have to play its part, and if it is to be successful it must of necessity pay for its chemists a good price, have a large staff of them, give the young men in our universities a chance, and see to it that never again is a great discovery lost to this country merely through lack either of commercial acumen or of financial boldness. If we do not take this step, I can only say that we shall be endangering the textile industries of Lancashire and Yorkshire. This is not merely a matter which affects the great concerns which are managed there, but it will affect their employés. £1,000,000 will be provided by the Exchequer for this company. If it were only an emergency scheme, that £1,000,000 101 might be well spent. A single month with no employment in the cotton industry will mop up more than £1,000,000 of national money, and we shall be bound to vote it. It is far better that we should vote this money beforehand and prevent unemployment springing up. It is because we have looked at this question in a large way, and have been anxious to help the industry to safeguard employment and to tide over temporary emergencies, that we have been bound to embark on this scheme. It has the disadvantage of all practical schemes of being full of compromises, but it is none, the worse for that. Anyone who wishes to criticise it will find something that he can criticise. I can assure the Committee that no step has been taken without a good practical reason having been given, and I would ask the Committee to accept this as being the only scheme which holds the field, which is the cheapest that has ever been devised for the object in view, and now being assured of success if this House approves, the approval of the House should be given.
§ Mr. CHAMBERLAIN
The right hon. Gentleman has added another interesting speech to a very interesting Debate—a Debate which is not only interesting, but remarkable. There has been a certain diversity of opinion in minor matters, but it has been remarkable for the extent of agreement on certain main principles. With the single exception of the right hon. Gentleman (Mr. Lough), I think not a single speaker has risen to find fault with the Government for taking action in this matter. Every other speaker has recognised, as I recognise, the character of the emergency with which we are confronted and the necessity for dealing with it by measures which, judged by our ordinary standards, seem to be exceptional. I am not quite sure that the right hon. Gentleman himself attached very much importance to the speech which he made. I think it was the observation or two made by an hon. Friend behind me which drew him into speaking perhaps before he had fully considered the question and caused him to rush rather hastily into the fray. At any rate, I observe that having delivered himself of his speech he has not cared to follow the Debate any further. The Debate was also, with a single exception, practically unanimous in another respect, and in this respect it was the President of the Board of Trade who was the exception. Everyone except the right hon. Gentleman (Mr. Lough) recognises that some- 102 thing must be done. Everyone who has spoken, except the President of the Board of Trade, has recognised that the scheme of the Government is not suitable for the emergency. He has been the sole defender of the scheme propounded by the Government as far as we know that scheme. I should like the House to follow the right hon. Gentleman's reasoning. He said he was asked whether this scheme was for the War or for after the War. He argued that it was necessary for the purpose of the War to form a company, and if for the purpose of the War it was desirable or necessary to form a company, it would be a great pity and a great waste to allow the company to come to an end, or to fall to pieces immediately the War ended. But what was the argument on which he decided that it was necessary at once to form a company? It turned upon our relations with Swiss manufacturers. He said, quite truly, that Switzerland could not supply us with what we wanted unless we supplied her with the raw material which she was to work up, and in order to do this a company must be formed. I do not understand why a company must be formed for that purpose. You only had to issue licences to existing individuals for export under conditions which you would lay down, and which you would watch over by your representatives. You had only to issue licences for export to those who might come to you, and the whole trade might be done by existing concerns, and would be done already if these licences had been freely given. It really does not follow that to deal with an actual emergency, so far as that emergency can only be met from Switzerland, you need a company at all, and if it does not follow that for that purpose you need a company, the whole basis of the structure which the right hon. Gentleman raised is cut away at once.
But I want to deal now with the larger aspects of the question. I agree that it is well in any case to look beyond the mere period of the War. We have found here, and not here alone, that industries which are of vital importance to us are seriously and sometimes almost wholly dependent for some necessary ingredient or subject of manufacture upon foreign countries. We have found that which was well enough in many respects in time of peace, while not always absolutely satisfactory, may put us in real peril in war, and the Government, confronted with such an emergency in this particular case are, in my opinion, quite right to try, not only to tide over these 103 immediate months of crises, though that is the most urgent thing to do, but to relieve the country of a situation which has been shown by our experience in these months of War to be full of peril and into which the country ought not to be allowed to fall back when peace is restored. I am therefore most anxious for the success of the operation which the Government are endeavouring to undertake. I do not criticise their actions in any unfriendly spirit.
Something has been said in regard to fiscal controversies between us, but let me preface all my observations with this appeal to the Committee at large. Do you not know the Opposition well enough by this time to be able to trust them at such a moment to discuss the question without regard to its effect on the party position or their preconceived notions? If we have not by the support we have given the Government from the moment things became critical down to the present day earned that amount of confidence and secured that recognition from you, it is useless to try to secure your approbation in anything you do and it would be useless for us to address arguments to you against which your minds would be closed by prejudice. I assure you that I am content, as my Friends who have spoken behind me are content, to treat this question quite apart from what the policy after the War is going to be and to treat it purely as a practical question how we are to supply our needs in this particular instance. I am anxious to see a concern founded upon business principles which will secure the support, and the willing support, of business men. It is very difficult for those of us who are not directly connected with the trades concerned to judge exactly of the prospects of such a concern as the Government are proposing to establish. What is the best test that we can apply? It would be, Do the men who know most and who are most interested voluntarily put up money for your scheme? That test the Government have utterly destroyed, because this money is not being subscribed voluntarily, but the Government are putting every form of pressure on the people most concerned to force them to put up their money.
§ Mr. CHAMBERLAIN
I did not say you had forced them. I said you were doing 104 everything in your power to force them. It is not quite the same, although the right hon. Gentleman was congratulating himself on the success already attained by the methods he had employed. What do I mean? I am encouraged by the observation of the right hon. Gentleman to assume that he does not mean to force anything. He wants a purely voluntary subscription. No doubt in that case he will modify his scheme if he says it involves any measure of compulsion on a reluctant subscriber. Look at what is to happen. The Government forms a company in order to send certain raw or semi-manufactured materials to Switzerland and to obtain in return dye-stuffs from Switzerland. It issues licences to that company for that purpose, and it encourages the company, and, indeed, before the company came into existence, it has gone far to secure a monopoly in the raw product to be exported to Switzerland. Who is going to have the advantage of the goods which come from Switzerland? The right hon. Gentleman says he must ask the company to distribute, because it would be an invidious task for the Government to distribute them. The company is to distribute them by preferences among its customers, giving, first, a preference to its subscribers, and, secondly, a preference to many of those who bind themselves to buy their supplies wholly from the Government. These are the terms laid down. When the right hon. Gentleman tells us that people have been forced to pay six times the pre-War prices in order to get dyes to supply the immediate demand, when he says that the only source of supply is Switzerland, and when he asks a monopoly for the Swiss source of supply, and for the subscribers of this company, does he mean to tell me that the subscriptions to the company are voluntary? No; there is coercion, and for the moment very effective coercion, and, therefore, for the immediate emergency during the War the pinch is greatest, for pressure is going to be applied on subscribers to subscribe to the company. The fact that they are subscribing is no test of the success of the concern.
Then, after the War, what then? Then, preference having been given to certain people during the War, those people have to come under an obligation to buy, preferentially, from the company—to buy at reasonable prices. These are the terms of the agreement which are suggested. What are reasonable prices? The right 105 hon. Gentleman, in the very interesting speech he made, expressed his sympathy with the Government Referees who were to decide in the countless instances which will arise what were and were not reasonable prices. I do not wish to express my congratulations to the legal fraternity, but it seems to me that they will reap a rich harvest. The President of the Board of Trade told us to-day that reasonable prices mean only one thing. Are they the cheapest prices at which you can buy? If that is so, say it at once, and do not put in the agreement the expression "reasonable prices," which no one can understand, but put into your agreement "that you will buy from us unless you can get the goods cheaper elsewhere." That is what the President of the Board of Trade says they mean. If they mean that, what security do they give the company, and the people who are asked to invest money? What is going to be the position after the War?
Nobody can exaggerate the German organisation, though some hon. Members have tried to give us an idea of the magnitude of the German organisation. I am told that there are some half-dozen gigantic German companies with working agreements among them for preventing what in their eyes would be undesirable competitive trading with certain control of some concerns in this country, and with subsidiary selling companies in addition in this country. To give some idea of these great German organisations I am told that one of them alone makes a net profit of something like a million a year. The hon. Member for Limehouse (Mr. W. Pearce) in his interesting speech mentioned two series of experiments which one of these companies carried out at a cost of, I think, something like a quarter of a million for each series of experiments. Not merely are their other processes of manufacture highly organised, but their works are highly equipped. The methods of sale, as was pointed out by an hon. Member, and the methods for the disposal of the produce, are equally skilled, and these great institutions have been running for years piling up reserves as to the amount of which none of us can speak with confidence, though we know that they are absolutely enormous, and that these institutions can afford out of their reserves, apart from profits—to trade for a very long time if they thought it necessary—to forgo profits in order to prevent serious competition arising with their industry.
This little bantling is to be established and nursed in the crucial period of war, 106 and the moment the War is over it has got to face the full force of competition of these men in their strength, armed with the fullest knowledge, and having all the power and organisation which experience can supply. It is the most tremendous undertaking with which you can well confront the trade of this country, and the only security that investors believe they have for the return of their money, after the War, is contained in that term, "reasonable prices," or the preference to the products of the British company against the products of the German company. The President of the Board of Trade tells us that there is no such preference, and that if the German company offer goods cheaper, every consumer of the goods in this country is honourably free, in spite of any agreement to buy at reasonable prices, to buy goods from the German company. Will he be able to do anything else?
It is not contended that the British company will be able to supply all the articles. It is probable that the British company may not be able to supply the full demand for some of them. Suppose the consumer orders so much of article "A," and so much of article "B," and the company says, "We do not make all you require of "A," and we can only give you 50 per cent." Very well, you take 50 per cent., and the consumer has to go elsewhere to buy the other 50 per cent. of "A." The President of the Board of Trade in his experience may know of the grievance which arises from giving more favourable terms to those who do an exclusive trade than to those who do a partial trade. What is to prevent the highly organised German companies from penalising a company which has to go to them for part of their supplies? What is to prevent a highly organised German company from penalising a British company for not having come to them for its whole supplies? I think the lines of the scheme give no security to the investor of capital, and no security to the user of the dyes. The security for the subscriber, if he be both an investor of capital and a user of dyes—[An HON. MEMBER: "Protection!"]—I think I heard an hon. Member call out "Protection." I ask hon. Gentlemen opposite to put out of their minds, if they can, the question of Protection, and listen to the argument on its merits.
I am going to go a step further. There is a question of Protection or Tariff 107 Reform between the opposite side and this side, but it is not raised by the question we are now discussing. There is no Free Trade about the proposal in regard to the company. There is no freedom to the individual trader, and there is no Free Trade, except by the definition you give to Free Trade. Protection is not merely given by a tariff, though that would be a form of Protection which everybody on the other side would condemn. Protection may be given in other forms. It may be given by a subsidy, or a bounty. Protection can be secured by a monopoly—by a bargain for trade with one man if it can be enforced, and judged by any of these tests, this scheme is as protective as any I have ever seen proposed. I do not condemn it on that ground, and I do not advise others to condemn it on that ground. I do not wish anybody to condemn it on the ground that it is protective.
I believe you have to have Protection in one form or another in regard to this particular business in these particular circumstances. I do not wish to ask you to assent to anything beyond that, and upon that proposition the President of the Board of Trade and I are at one. There is practically no difference between us. The only difference is as to the question whether the particular kind of Protection he has proposed will be effective for the purpose. I wish I thought it would be, although it is not the kind I would have chosen, because, as I have said more than once, I dislike bounties in other connections. If I thought it would be effective, I would not have risen to criticise the proposal of the right hon. Gentleman or to raise any objection to what he proposes in trying to deal with a particular emergency. I only make this criticism because I think that it has substance. I think that those who are most interested have shown that there is substance in it by their hesitation to support the scheme. I think that the Government have shown that they themselves feel that there is substance in it by the pressure which they have tried to put on people to come into that scheme. I do not object to their using public money in a great emergency of this kind, but I want it to be used and not wasted. I want it to be the foundation of an industry, and not to be dealt with so that it is all thrown away. I am convinced—and I have tried to give the House my reasons for believing 108 —that this scheme does not offer the kind of security on which business men, left to themselves and judging the matter as a business proposition, would risk their money.
In this connection I should have said earlier, but that I forgot, that I rather regret the form of agreement which the Government have come to with Messrs. Read Holliday and Company. One would have thought that they would have been the first to put money into the new company, but it seems that they are to be bought out entirely in cash. They are being bought out on terms which the President of the Board of Trade said that he would be prepared to justify whenever he is in a position to lay the whole figures before the House, but which will sound extraordinarily attractive to any manufacturers who have been trying to sell a manufacturing business. I think that there are few manufacturers who would not be attracted by the basis which the Government have adopted in the case of this firm. The President of the Board of Trade—and I have no doubt rightly—praises them for the skill and energy and success with which they have conducted their work. But, if they have confidence in the Government scheme, they would not have asked payment of the whole in cash. They would have taken the larger proportion in shares in order to continue in a business which they had begun, and which is now to be developed under more favourable auspices by the Government.
Wherever I look I see no signs of confidence in those most concerned in the future of the business. I cannot myself see that the Government are giving the kind of security without which it cannot possibly be successful, and not because of any regard to other companies, but purely as a matter of interest in which they are interested as we are also, we almost as much as they, in which the whole people is interested, but they most of all, because these steps are taken on their responsibility, I beg of them to give this question further consideration, and to see whether, in promoting a useful industry, which is almost as desirable after the War as it is urgently required during the War, they cannot find the security necessary for the establishment and continuance of that business without taking these methods of monopoly and exclusion and of preference against particular trades in order to secure support and subscriptions for a scheme launched under Government auspices.
§ Sir ALFRED MOND
The last two speeches which we have heard were extremely interesting and illuminating as regards the course of this Debate. The President of the Board of Trade defended his scheme with all the ability of the promoter, and the right hon. Gentleman who has just spoken made an extremely fair statement. It seems to me that we have been discussing during most of the day two propositions which are not altogether on all fours. One proposition which we are discussing is, "Can we in a certain emergency supply to users of dyes the dyes which they require in that emergency?" The other proposition is, "What is necessary for the establishment in this country of the aniline dye industry equivalent to what they have in Germany?" Those two questions are not necessarily on all fours. According to the speeches which I have heard, the Government scheme seems to me rather to attach more importance to the second than to the first. I must honestly say that I do not yet know how the large sum of £4,000,000 is to be spent during the War in order to produce aniline dyes, or why £4,000,000 is necessary. The President of the Board of Trade argued with some force that it was a convenient way of dealing with the Swiss manufactures to establish a company which could deal with the export of these products to Switzerland, and that may be true. But that company could have been established with a nominal capital of a few thousand pounds. It did not require a capital of £4,000,000. On the other hand, the President of the Board of Trade did not tell us what manufacturing steps were being taken in this country for an enormous sum like £4,000,000 to achieve an immediate object. From my own experience as a chemical manufacturer, I think that it would be quite impossible to expend intelligently £4,000,000 on new plant within the next twelve months or even two years. On what is the £4,000,000 to be spent, and why is it to be found now?
§ Sir A. MOND
Two million pounds now and £2,000,000 later on. We have not been told how much is being paid to Read Holliday and Company. How much of the £2,000,000 cash goes into that? I am very much struck by the statement that the gentlemen directing the one successful aniline dye works in England are selling out for cash and are apparently to be eliminated from the future management. 110 I would have thought that they were the very people whom we would have wanted to have in the management.
§ Sir A. MOND
If the right hon. Gentleman makes the difference between technical managers and the proprietors without knowing all the details, it is very difficult to say. I should have thought that the business experience of proprietors would have been of more value than perhaps the experience of some people on the new board, who know nothing whatever about chemical manufactures. Of course, as I have already said, there are two things which we have been discussing. One is the question of immediate supply, and the other that of the establishment of an aniline dye industry. The scheme which should be pressed for at once is something to meet the present emergency, but the future question is, of course, an infinitely more difficult one. I am not one to take such an extremely gloomy view as the right hon. Gentleman who spoke last as to the possibility of establishing an aniline dye industry in this country, if you get the proper people into it and get the best expert opinion. You will not immediately develop enormous concerns such as they have in Germany, but on the other hand there is no reason to imagine, from what I have known of German industries, that they are likely to sell all their goods at a loss for many years in order to crush out a newly-started manufacture in this country.
We hear a great deal of that in theory, but I cannot say that I have ever known it to come off in practice. A man who has got a certain amount of money is just as little anxious to lose it as a smaller man, and, if there is a company which is capably managed and which he knows ought to be able to produce at a reasonable price, he is much more likely to come to terms with it than to spend a very large sum of money in trying to crush it out, and so I do not think that there is that danger from the business point of view which the right hon. Gentleman made out. On the other hand, we have left for this company a very much larger staff, a very much larger number of scientific men than may be imagined are qualified to do everything that is necessary. You can pick out from the universities to-day, if you like to pay for it, very able men and there is no longer any necessity to go to Germany for chemists in order to run 111 chemical works in England. The point is to see that the management of a business like this is not allowed to drift too much into the hands of purely commercial men. I would like to call attention to some remarkable letters which have appeared in the Press from two or three of the most eminent engineers and chemists in this country. I am very sorry that the right hon. Gentleman did not give us the name of the highly qualified—and no doubt he is an eminent—chemist who has been advising this Committee, and who is going to give all his time to it. I cannot understand why there should be any secrecy on the subject. I cannot see any reason why we should not be informed who he is. Is there any reason why we should not know? Perhaps the right hon. Gentleman would not mind telling us?
§ Sir A. MOND
He is a very excellent man. I am very glad to have drawn that statement from the right hon. Gentleman, but there have been complaints from very eminent men who are engaged in teaching organic chemistry and have been working at organic chemistry in this country for their whole lives, that they have not been consulted and that the scientific body on the whole has not been consulted. But I am very glad to hear that a very good man has been consulted. I speak with a certain amount of experience when I say that it is not sufficient merely to have people, who, however able they may be on the commercial side, are entirely ignorant of technical matters, to control a chemical business. Unless you have people on your board who are themselves capable of appreciating every important invention and discovery in chemical engineering which your chemical engineering staff brings to you, you are very likely to get into the position into which many companies get when the so-called practical men discards all new ideas as being only fads or as being too expensive. If you want to compete with Germany in this industry you must not follow that policy. The hon. Member for Limehouse gave practical instances of the enormous lump sums paid for and the colossal perseverance devoted to some of these investigations which have been carried on in Germany. I believe that in connection with the manufacture of ammonia from the air the investigations lasted for over ten years, and cost, 112 I am informed from a reliable authority, a sum of half a million pounds. It was necessary to have this brilliant work pursued with the greatest perseverance on the part of extremely able men before the thing was brought to a technical practical solution. My experience is that I do not know of a single process of any magnitude that has been an immediate commercial success in much less than ten years from the time when it was started. These are some of the principles which we must get hold of if we wish to make the industry a success.
I quite agree that this is not the moment to discuss Tariff Reform or Free Trade, and I have not the slightest intention of doing so. I think it is absurd and pedantic in these matters, and at a moment like this, to discuss great questions of economic theory. What is the position? The argument we have had adduced is that the tariff on German aniline dyes after the War will naturally lead people to subscribe to this company. That seems to me radically unsound. Supposing someone came to me and said the Government proposed to put a tariff on German aniline dyes competing with ours in this country, the first question would be, "What is the size of that tariff going to be?" At present the company does not know what the cost of production may be, and therefore any tariff that the Government might propose would not prove necessarily successful in competition with German aniline dyes. Nor do we know what the German tariff would be. The German manufacturers might establish works here, and compete with you in England; and that is an argument which, from the point of view of asking me to invest money in this concern, presents a most vital objection. Therefore I cannot agree with the argument which has been put forward that I am to be induced to put money into this concern on the promise that some kind of tariff against German aniline dyes will be imposed after the War. Personally, I much prefer the subsidy, which is a much better form of protection than a tariff. I know, and the Government knows, that we are getting something for this money, and, as a business man, I prefer the proposal of the Government.
§ Mr. CHAMBERLAIN
The hon. Gentleman will observe that this subsidy is to be paid whether we get the dyes or not. There might be a great deal to be said for a subsidy per ton, but that is not the proposal of the Government.
§ Sir A. MOND
The right hon. Gentleman is quite right, and that is a practical proposition; but I cannot myself see the justice of the criticism which has been made in regard to the position of the consumers and the duration of the contract after the immediate crisis. I do not think it is a reasonable position. In regard to price, you must take into consideration the question whether, in view of all the circumstances, the price which is being charged compares with the market price of former years, and whether it is a reasonable price. It is not impossible to fix it, although I do not think it is easy; there are contracts existing on bases of that kind. Surely it is more or less a co-operative scheme, and that co-operative part of the scheme must not be overlooked. If they could not get dyes they could close down.
§ Mr. CHAMBERLAIN
They could not do that, because the Government have given the company a monopoly of the Swiss trade.
§ Sir A. MOND
What is the Government to do? They must deal with this question by means of some organisation, and it would meet the right hon. Gentleman's point if the Swiss dyes were taken on a different basis, and compulsion would be removed. A man might prefer to shut down his works altogether at the end of six months, or after the War was over, and he would be free to buy in the cheapest market. He must take his risk. But what he wants to do now is to have it both ways. He wants the Government to risk money in order to provide him with dyes, and, at the same time, if he can buy the dyes cheaper somewhere else, he wants to be in a position to close his works down. I must confess that does not appeal to me, and, in fact, I should be very sorry on that basis to put any money in the company. You want to know, and it is a very great advantage to know, that if you decide to lay out new works they will really be profitable, and I would not tie my company up. I should rely very much on the fact that I had been able to help in a difficulty, and, after all, business men, on the whole, are more generous to each other than people imagine. On the 114 other hand it is easy to be too lenient, for anyone who is dishonest and wishes to escape from his contract will endeavour to do so. In spite of the criticisms launched against the scheme—and there are many further points—I still say that I have not heard one which is at all explained. An hon. Member on the other side very ingeniously endeavoured to work out a scheme of a more general character, but it was open to the same objections, I think that a number of small works in isolated places and none of them with sufficient money to pay for research, or for experiments to be carried out, would be in a much worse position than one powerful company with a capital of two millions.
I think it is infinitely simpler to do what the Government is doing. You get the advantage of research. There is one joint the right hon. Gentleman did not make clear, but which I think is of some importance. He did not say whether this Grant is to be given direct to the company or whether it is to go to the universities, or in what way it is going to be dealt with. I gather that the advance for research is not going solely to the company, but the right hon. Gentleman did not make that quite clear. I think £100,000 for ten years for research is absolutely inadequate, and it is not worth beginning with that sum. The advance might be made to an advisory committee of the universities for research work by organic chemists, and I do not think it necessary that the company should have the sole monopoly of research work. In regard to the question of patents, I hope the Government will not make arrangements so burdensome as practically to take away the advantage of our compulsory powers. The terms fixed might be so high, and the disadvantages so great, that they would not be able to make use of them. In regard to the German patents, exclusive licences might be obtained for using them in this country; then, of course, the manufacturer would be in no fear of competition from any other source. That is a point which needs to be very carefully considered. I have covered many more points than I intended to do. This is an extremely difficult and complicated industry to be dealt with in the middle of a war, but I think: the Government is making a good attempt. I hope British support will be forthcoming from those most interested, and that this scheme will prove a great success.
§ The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Mr. J. M. Robertson)
On behalf of my right hon. Friend the President of the Board of Trade, I propose to deal with some of the points that have been raised. The right hon. Gentleman who has just sat down speaks on this question with the highest measure of practical authority, and I think his speech throws some light on the whole matter, and will make it more clear to the House the practical soundness of this scheme as a whole. I would call the attention of the Committee first and foremost to this broad consideration, that no working alternative scheme has been offered to the Committee. I shall deal later on with the question as to whether the right hon. Gentleman the Member for West Birmingham (Mr. Chamberlain) has offered one. My argument at present is that he has not offered any clear scheme whatever. It is true that one practical alternative was put forward by my hon. Friend the Member for the Radcliffe Division (Mr. T. C. Taylor). His proposition was that this scheme would be on a sounder basis if you added to the present conditions proposed by the Government the fresh one that there should be a sharing of profits.
§ Mr. ROBERTSON
The question is, what is a binding agreement? If my hon. Friend could show that we could get the capital without anything in the nature of an agreement, he would be in a very much stronger position. At all events, he did make a practical contribution to the Debate by suggesting that a profit sharing arrangement should be made. May I point out that there is nothing in the constitution of the company which prevents the directors from adopting that very expedient. I do not come within the category of business men, but if those business men who are controlling the company find that that is a good way of working, it is perfectly open to them to adopt it. I think if my hon. Friend recognises that, then a really large part of his objection to the constitution of the company falls to the ground. If he could have shown us, and I am afraid he did not make the attempt, that the capital would be forthcoming without anything in the nature of a stipulation, then, of course, his position would be sounder. I think, on the other hand, his profit sharing idea might very well appeal to a board of business directors, 116 and I see no reason why a scheme of the kind should not be adopted. Apart from that, what alternative has been offered? Here we are in the greatest emergency that this nation has ever known in its whole history. We have all sorts of emergency measures. We have not merely had to modify what is called Free Trade, but we have had to a large extent to modify trade, and the question of Free Trade as an economic theory disappears. Freedom of trade is absolutely at an end, and trade can only be allowed to go on under a series of more or less rigorous conditions, and in some cases the interference is absolute and complete. For any one to suggest that this is in any way an abandonment of Free Trade principles would be wholly wrong. It is one of a number of emergency schemes that have been adopted to make the continuance of trade possible on certain lines where otherwise it would not have continued at all. I need not point out parallel cases in the way of emergency grants.
I think the Committee is alive to the fact that the emergency is a very serious one. The only dissentient voice was from the right hon. Member for Islington (Mr. Lough), in regard to whom it is not claimed by himself that he had the means of knowing how serious the question is. All those who are aware of the position are agreed as to the seriousness of the emergency. My hon. Friend the Member for Radcliffe quite agreed as to that, and now the Government comes forward with the second of two schemes. The first had to be abandoned partly in view of the criticisms passed in this House, and it was found that it did not sufficiently recommend itself to those who might have been expected to come in with the capital. The second scheme very carefully dealt with, very carefully considered, and the result of long protracted anxious consideration is before the House and, as my right hon. Friend pointed out, it lies in the very nature of such a scheme, of such an emergency measure, that it should be open to criticism at a variety of points. But I may ask, who has shown us a better one or who has shown us another? The right hon. Gentleman the Member for West Birmingham, and other hon. Members behind him, argued that this scheme is a failure because you do not offer sufficient security to investors to get the capital required.
§ Mr. ROBERTSON
Some hon. Gentlemen opposite made no such limitation. They said we could not get it. The right hon. Gentleman seems to think we might get it, but he does not like the apparent element of compulsion by which it is to be got. I think his argument involves this: that whether we get it or not, if we get it by compulsion it is a bad way of getting it, and therefore the scheme is fundamentally bad on that account. What alternative does he suggest? This is a rather difficult and delicate question. The right hon. Gentleman made a very impressive appeal with regard to the disinterestedness of himself and those who act with him. We ought by this time, he said, to know that their patriotism would make it impossible for them to utilise such an occasion as this for party purposes. I need hardly assure him that we are absolutely satisfied of the disinterestedness and patriotism of the right hon. Gentleman and his colleagues. But what is meant by party purposes? I take it that it is part of the strongest convictions of the right hon. Gentleman and his Friends opposite that a certain line of policy with which they are associated is the only kind of policy that deserves consideration1? I should not in the least accuse them of playing an unworthy game if they did use this opportunity to urge on the House the profound importance of their fiscal policy as they conceive it. I should not accuse them even of a breach of the truce. They might fairly argue, "This is a case in which we are bound to indicate our view of the situation, and our view of the situation involves the adoption of a method that the Government are not adopting." I make no imputation of unworthy motives underlying any such argument; but the right hon. Gentleman seemed to deprecate our making any hypothesis or any suggestion of a tariff policy being involved in the arguments of his hon. Friends behind him.
§ Mr. CHAMBERLAIN
No, no. I never claimed anything of the kind. To be frank, I think the tariff solution of this particular problem is the best. What I did ask the House to believe was that neither I nor my Friends would have raised the tariff question at this time if it were not that the particular issue before us brings that issue on the field, and that we have tried to consider the particular case which is now before us without regard to our general theory as to the best fiscal system, but only as to what is best to be done in a particular emergency and in this 118 particular trade. I do not mean for one moment in saying that, believing as I do that the tariff solution of this problem is the right one, to say that it would be wrong for me to argue or suggest it now.
§ Mr. ROBERTSON
I think we are quite at one with the right hon. Gentleman on that issue. As a matter of fact, the Tariff Reform organisation has issued a very elaborate document on this very point, a document which has very justly and very rightly, and very naturally inspired, and perhaps guided, some of the speeches of hon. Members opposite.
§ Mr. ROBERTSON
Although the right hon. Gentleman admits that he offered no practical or clear alternative to the Government scheme, I suppose he will not think me unfair if I say that the whole drift of his argument amounts to this, that no way of ending this problem will ultimately be successful, save either the imposition of a tariff or absolute prohibition.
§ Mr. CHAMBERLAIN assented.
§ Mr. ROBERTSON
I think the right hon. Gentleman objects to subsidies even on production, although I agree with my right hon. Friend the Member for Swansea Town (Mr. Mond) that if there is to be any encouragement by the Government a bounty or subsidy is in every sense a preferable method, since in the first place it limits the burden on the community and it prevents anything like the exaction of a promiscuous tax from the community from an economic point of view, such as a tax plays in the case of a tariff. That issue, I suppose, we need not argue, because the right hon. Gentleman is not proposing merely a subsidy. I should like to put to him directly this question, does his concluding argument or does it not mean that the proper way to deal with this question is for a certain tariff to be imposed on the imports of these goods in future?
§ Mr. ROBERTSON
The right hon. Gentleman assents to that. He argues that that is the method that would give 119 security, and that our method does not give security. He prefaced his argument by professing to rebut the proposition of my right hon. Friend that this business cannot be properly carried through except by the establishment of a company. The right hon. Gentleman argues that the export of the intermediate products to Switzerland would be a perfectly easy matter without any company at all if you only issued licences. I am not quite sure what was in his mind with regard to the preliminary monopoly.
§ Mr. CHAMBERLAIN make a remark which was inaudible in the Reporters' Gallery.
§ Mr. ROBERTSON
There are two issues in regard to the question of monopoly. I do not know whether the right hon. Gentleman by Government monopoly means the kind of company that is going to be set up, or simply the fact that certain chemicals are already commandeered. Let us assume that individuals were in a position to go into the market and buy up the intermediate products and send them to Switzerland. Does the right hon. Gentleman argue that that would be a better way in the national interests as a whole of securing the resulting dyes that we want? My answer to that would be two-fold. In the first place, you could not possibly guarantee the maximum result in that way. You would have individual dyers going into the market and competing against each other, and you would have no organisation to secure the maximum amount of intermediate products to be exported. You would have also, as my right hon. Friend pointed out, the big men absolutely wiping out the smaller men, and it would be a far worse case than any put forward by my hon. Friend the Member for the Radcliffe Division. If the right hon. Gentleman told us that any private individual in the present circumstances and looking ahead could undertake to promise to the Swiss producers a continuous supply of intermediate products, I should say that he was making a very rash prediction indeed. These things can only be secured—that is the conviction the Government were driven to—by the establishment of a company such as this with a capital large enough for the purposes I have indicated.
The right hon. Gentleman suggested that the scheme of the Government is as protective as anything he ever proposed. 120 I am quite at a loss to reconcile that statement with his admission that what he is in effect proposing is a tariff, unless the right hon. Gentleman is arguing that a tariff is the least protective form of Protection, or a less protective form of Protection than the Government aid which we are giving. I think the right hon. Gentleman will have to admit that his argument has fallen into some confusion. What better security should we be giving if we accepted the right hon. Gentleman's astonishing invitation and undertook in this House that after the War we would impose a tariff to protect that particular firm? I rather doubt whether, if the right hon. Gentleman were himself in office, with no tariff yet in being, he would put a proposal to the House of Commons in that form. That is to say, if he were a Member of a Government in power which had not yet been able to impose a tariff, I very much doubt whether he would say to the House of Commons, under present circumstances, "We will undertake to put a tariff on that particular article." But that is what his argument amounts to. One hon. Gentleman behind him took a very different view. He said that this proposal of the Government was raising the tariff question in the most objectionable form. He contended that the most objectionable form of imposing a tariff was to deal with one industry only. I agree with him. But the right hon. Gentleman apparently wants us to propose a tariff in connection with one industry only. I think if the right hon. Gentleman will reflect he will see that he is asking us to do what he would not venture to do himself, and that his alternative—which he did not directly put, but which he admits was in his mind—is absolutely outside all consideration by this House. It is a course which no Government could rationally take.
Where would the security be even if that course were taken? Suppose this Government were to be so false to its traditions, its history, and its convictions, as to give the amazing kind of promise that the right hon. Gentleman asks for, what security has it that the country would back it up? If I know England in connection with these issues—and I have had some occasion to know the English temper on Free Trade questions—I should say that you would run a very strong chance of having returned, after the War is over, a Parliament that would have nothing to do with any tariff scheme. What, then, would be the 121 claim of those who had invested capital on the strength of that promise? Would the new Government, unable to impose a tariff, regard itself as bound to repay the capital that had been invested? I think the right hon. Gentleman's security argument really comes to nothing. Nor do I think there is any force in his suggestion—although it was, to some extent, perhaps accidentally, endorsed by my right hon. Friend behind me—that the purchase of the Read Holliday concern on a cash basis is a proof that the proprietors do not believe in the soundness of that concern. I think that my right hon. Friend was rather thinking of the kind of control that you want, the value of the services of particular managers, and so on. But the mere proprietors' interest is not an interest of the kind that usually takes the form of holding some of the price as shares in the future. What are the Read Holliday proprietors doing? They are selling their business, not that it shall be conducted on its former ordinary lines, but that it may be carried on under particular conditions with a particular object. It would be absurd that proprietors who have hitherto been makers for the general market should be asked to continue when the management of the business is to be limited in a particular way that was not the case before. I do not think there is anything in the right hon. Gentleman's argument on that head. On the other hand, I think there is decisive force, in the point put by my right hon. Friend (Sir A. Mond) in connection with the security argument, that the policy of the right hon. Gentleman would very likely lead to the establishment of rival German works here. I do not think the right hon. Gentleman can repudiate that argument, because at the very end of this carefully prepared document of the Tariff Commission to which I have made allusion I find this paragraph:—When there is a tariff against them the German manufacturers manufacture their aniline dyes in the protected country. The Badische Aniline and Soda-fabrik, who are the largest producers in the world, told me a few years ago"——this is from the statement of a witness—that they had the option of land here in England to erect works if Tariff Reform came in, but, of course, seeing it has not, they dropped out altogether.If you are going to tell the subscribers to the new scheme that the policy you have in view is going to ensure the planting down of German works here as the result, I doubt whether they will say that the security you give them is any better than that offered by the Government.
122 Apart from these main issues there are one or two minor points which the Committee might like elucidated. Some question arose as to the meaning of what was said by my right hon. Friend the President of the Board of Trade in regard to prices. The question was asked, What would be held to be a reasonable price at which dyes should be sold to subscribers of the new company? Although the matter is essentially quite clear, perhaps a little confusion has arisen in consequence of the comparative brevity of the expression of my right hon. Friend. The right hon. Baronet (Sir A. Mond) said very justly that it would not be a reasonable thing to offer a price below cost price by way of competing with another. "Reasonable price" would be understood in a reasonable sense. The wording of the agreement on that head is really very clear:—The referee shall decide whether the prices charged by the directors are reasonable, and in so deciding shall have regard to all the circumstances, including the fair current, prices at which dyes are being sold by other suppliers.That is to say, a reasonable price over a period. My right hon. Friend could not possibly have meant to suggest for a moment that, if a competitor came along and offered to sell at a dumping price, a price that he could not keep up, that would be regarded as a reasonable price.
§ Mr. ROBERTSON
The referee, I presume, would have accessible to him all sorts of means for knowing the cost. What he would be bound to know and could easily ascertain, would be the current prices.
§ Mr. CHAMBERLAIN
Does "reasonable prices" mean current prices? The President of the Board of Trade said quite distinctly that a man would not be held bound under the Reasonable Prices Clause if he could buy more cheaply elsewhere. Is that the case, or is it not?
§ Mr. ROBERTSON
That is an illustration of the danger of using a brief phrase. The meaning of my right hon. Friend was that the prices should hold as a regular rule and not merely for the moment. For instance, a man might make a corrupt arrangement with someone, to offer him 123 goods at an absurd price. They must be current prices—prices running over a period.
§ Mr. CHAMBERLAIN
Suppose a foreign company sold a certain article at a certain price for a period of six months, and that price was cheaper than the price of the English company, would the consumer be free to buy from the foreigner?
§ Mr. ROBERTSON
I would not commit myself on a hypothetical case. Let us put ourselves in the position of the referee. He is called upon to arbitrate in a kind of dispute which arises hundreds of times in any trade. There is nothing new in the arbitration of trade disputes.
§ Mr. ROBERTSON
Suppose the referee were told, "Here is a consumer, a subscriber of the company, who has hitherto bought from the company; he is offered goods by a rival concern at a lower price, which they have notoriously maintained for a long period." If there were evidence that although that price had been maintained even for six months, it was a dumping price, I think the referee might very reasonably decide that it was not a reasonable price. That is if his evidence were decisive. But I do not take upon myself the position of the referee. I am simply putting it to the Committee that the matter would be settled in a common-sense fashion. Although the right hon. Gentleman (Mr. Chamberlain) might reasonably criticise the brief form of phrase used by my right hon. Friend, I do not see that he can criticise the wording of the agreement:—The referee shall decide.…. and in so deciding he shall have regard to all the circumstances, including the fair current prices at which dyes are being sold by other suppliers.I think that is a sound basis for a business arrangement. Certainly thousands of business arrangements that are far looser are made every day. One other point raised by my right hon. Friend (Sir A. Mond) was the need for research. The whole Committee will be in sympathy with the desire for a larger Grant, and I hope they will not regard the Government, because it makes a frugal Grant under the present conditions—conditions of unexampled expenditure—as lacking in sympathy with the cause, or in recognition of the importance of its adequate support. Further than that it is impossible for me 124 to go at the moment. As to whether the Grant for research will be made to the company or to the Universities, I think the best answer I can give is that it will be made to the Universities with the object of practically promoting this together with other chemical industries. The exact form of the Grant, and the way in which it is to be disposed, will probably be a matter of practical administration.
§ Mr. ROBERTSON
I do not think that need necessarily be at all. The object of the Government will be not merely to help, as such a Grant must help this company, but to promote chemical research in general, more especially in the earlier stages in such a way that this great national undertaking may get some immediate practical help.
§ 8.0 P.M.
§ Mr. BOLAND
Like the hon. Member who has just spoken, I have listened with deep interest to the speeches that have been made, and to hear of any practical scheme, other than that of the Government, at this time of great crisis. We heard two speeches from above the Gangway on this side. One speech was ingenious, and the other was frank. The hon. Member for Hereford (Mr. Hewins) was at great pains to destroy the impression of a desire for what is called the worst form of Protection, and went on to say that he looked forward—presumably under a tariff scheme—to some form of security. On the other hand, the right hon. Gentleman the Member for West Birmingham (Mr. Chamberlain) was more frank, because he made it perfectly clear that no scheme—so, at least, I understood him—could, to his mind, be satisfactory unless it was based primarily on a tariff. One might be perfectly convinced, listening to this Debate, that the setting up of a scheme of this kind, based upon a tariff, would be absolutely hopeless, and would be impossible of realisation. I would go further, and say that if I were an Englishman I should be ashamed, at the present time of crisis, to suggest that a tariff should be imposed in order to form an industry of this kind. We, in Ireland, have a considerable interest in the formation of a suitable dye industry. We have our woollen manufacturers, we have our linen industry, and we have various industries 125 which are dependent on a satisfactory supply of dyes. A conference was held some weeks ago to consider the scheme of the Government. At that conference there was no suggestion of any kind from dye users or manufacturers that the scheme should be based upon anything in the nature of a tariff. On the contrary, so far as I know, the users of dye-stuffs in Ireland, and woollen manufacturers in particular, have no wish to lay it down as a condition that a tariff should be imposed either now or in the future in connection with the formulation of this great scheme.
The absurdity of a tariff scheme is this: that it could not be based upon opposition to mere German interests. If a tariff scheme to maintain the dye industry of this country were imposed, that tariff scheme must operate not merely against German manufacturers, but equally against manufacturers in France—our Allies to-day—or Russia, or against neutral countries like the United States. How can it possibly be suggested that at the end of this War, when we have been fighting with our Allies against Germany, that a tariff scheme should be imposed which conceivably would operate against our Allies? That is particularly the case of great neutral countries like the United States. At the present time, as a result of this shortage in dye-stuffs, you have the chemists of the world—not merely those of France and the United States—looking round and setting to work to try and make up that shortage. Yet we are to be told that the best way to promote a system of setting the dye industry on foot is so to work that the moment the War is over a tariff is to be started against the whole world. From the very beginning such a scheme would not work. A much better way is the scheme proposed by the Government. I say that from practical experience of what we in Ireland have been doing in a cognate industry. When the War broke out there was this great industry. It was thought that our raw-materials were going to be kept away from us in Ireland, amongst them glass. Instead of calling upon the Government to frame a tariff and keep out German or Bohemian glass after the War was over, we got our College of Science in Dublin to make tests on Irish sands. The result of it is that we have utilised the brains of our chemists in Ireland, and we shall in a short time be able to start a glass industry from purely Irish material. That has 126 been the result of research carried on in the Royal College of Science and our universities, without any suggestion whatever that we could not do it without a tariff at the end of the War to keep away competitors. I think precisely the same system as that now suggested by the Government can be carried on with regard to the dye industry. It will be far more satisfactory. To my mind, it will be a far more patriotic method of carrying it out to carry it out from the business point of view. The right hon. Gentleman the President of the Board of Trade and the right hon. Gentleman the Member for Swansea have clearly pointed out that it is not by a system of tariffs based on the future that we are going to meet a crisis of this kind, but by some such scheme as the Government has formulated.
Let me in conclusion point out that the President of the Board of Trade laid particular stress upon that condition of his scheme which deals with research. Like others who have spoken here, to-day I naturally do not consider that a grant of £10,000 a year spread over the United Kingdom as sufficient for the purpose. I make no complaint, and would not even if the grant were only £5,000 for ten years or only £1,000 for ten years; for I say the scheme by itself is worth going on with. But when the research fund is sought to be spread over the colleges of science and the universities throughout the country, I hope the President of the Board of Trade will bear in mind that we have in Ireland trained chemists and laboratories where research work has been carried on, and which if brought into this whole scheme will, I believe, be extraordinarily useful to it. Take the College of Science, take our National University in Ireland with its trained body of chemists, take Belfast University, the Dublin University. In all these universities we have a trained body of men, with students, engaged in chemical research; some there engaged to take part in this research work especially for the dye industry. The Government will find them willing and earnest in this cause, not because they are going to be paid a large sum of money; it is not that that will make them bend their whole energies to bring about a solution of this problem. It is rather that at this time of national crisis a patriotic call is made upon them to make use of all their powers for the advantage of the whole of the United Kingdom. If the research fund of £10,000 127 were to be whittled down to £1,000, still if the Government ask specially for the co-operation of our colleges of science and our universities in promoting throughout the United Kingdom this or any other good cause, they would get a response which would be extremely valuable, and enable them to bring this scheme to a satisfactory solution.
§ Sir F. CAWLEY
As one who at one time was a very large user of aniline dyes, I should like a word or two on this subject. I do not agree with the hon. Member for Attercliffe that the most important question is not the shortage, but what will happen afterwards. Some of the speeches have dealt with what is going to happen after the War is over. For my part I think the shortage of aniline dyes at the present time is the most important, for I am told on very good authority that there will be famine in these dyes within three months, and that possibly thousands of workpeople will be thrown out of work. I think that is a thing that ought to have occupied more attention in this House than anything which relates to what we are going to do when the War is over. We are in a hole and want to get out of it, and I think that is the principal subject to which we ought to confine our attention. I should be in favour of spending money or doing almost anything to relieve the present position.
I am not in favour of a big new scheme being started at the present time to meet a difficulty which will only occur after the War. When I say difficulty, it is not a difficulty, because after the War we shall only be placed, most probably, in exactly the same position as we were before the War. We shall have to get our dyes from Germany. Considering what an enormous organisation the Germans have we are undertaking a very big proposition when we are going to try to wrest this business from them. We propose to manufacture part of the dyes which we now get from Germany. I believe we can do it without a tariff, but if I were going into a business to compete with a big firm already established I would not go in when everything was at the very highest price. I should not go and buy works all over the country at famine prices. What are the Government doing now? They say they have got Read Holliday and Company's works on a fair commercial basis. That may or may not be so. But I should rather 128 like to know what money Read Holliday have made by the manufacture of dyes, and how much by other things. Have you kept one industry from another? Possibly their dyes have not been a very lucrative thing! But this firm is only one. The Government propose to go round buying other concerns. Are these to be bought on a pre-War basis? No, they are going to be bought at a time when they have been making fabulous profits, and the capitalisation will be on that basis.
§ Sir F. CAWLEY
The hon. Gentleman says "not necessarily." Can he point to one that will be bought on a pre-War basis?
§ Mr. ROBERTSON
I would suggest that no business man would ask for purchase on a war basis, for, after all, the War must come to an end. As a matter of fact, Reid, Holliday's made a good bargain, for no doubt the price was higher than in a time of peace.
§ Sir F. CAWLEY
That is my point—at at a very much higher price than it would have been if it had been bought before the War. I say other concerns which have to be bought—and I am speaking facts—are to-day holding out for enormous prices, because their price is capitalised on the War and famine prices of these dyes. It is well known that that is the fact. This new company proposes to buy up these concerns. I say that we ought not to go into the business and to buy up these enormous and powerful and gerrymandered factories when we have to pay a higher price for the concerns that already exist and a higher price for the machinery, the material, and everything. That is not the way to start a business. In my opinion we require to be free from our dependence upon the German people. But this is not the time to start a concern to compete with such a powerful business organisation as theirs. It is perhaps the finest business organisation that was ever known. Their distribution of agencies is splendid. Their scientific knowledge is splendid. It will take any concern in this country all their time to compete with these powerful people, and they should not start at a time like this, when, not only they have to buy through the nose for everything, but have not all the world to go to for their machinery and other things. If the Germans want to start cotton-spinning, what do they do? They come over here to cotton-spinning machinists, buy the right machinery here, and get 129 what manufacturers and experts they want here. By starting this business to-day, we are cutting off the experts, engineers, machinery makers, in the part of the world where this trade has always done the best. I say that by starting this business to-day you are handicapping the prospects in the future of competing successfully with German manufacturers. The President of the Board of Trade has always to me seemed to think more of the future than of the present. I think the energies of the Board of Trade should have been directed to the present difficulties, and should not be mixed up with what we want to do for the future. One of my objects in rising was to get some more information about what has been done to meet the present pressing difficulty. We have been now at war for six months, and the right hon. Gentleman told us in November that at his instigation large quantities of raw material, or intermediate products if you like, such as beta-naphthol and poluol, were being manufactured in this country. I should like to know whether these have been commandeered, or whether the people making them are at liberty to sell them to anybody?
§ Mr. ROBERTSON
I think my right hon. Friend explained that the Government had commandeered all this in that respect.
§ Sir F. CAWLEY
Are we to understand that all the beta-naphthol and all the toluol made to-day is commandeered by the Government?
§ Mr. ROBERTSON
I referred to the toluol of which my right hon. Friend spoke. I am not at liberty at the moment to give detailed information on any other point.
§ Sir F. CAWLEY
I do not care whether it has gone to the North or the South. Has the toluol been commandeered?
§ Sir F. CAWLEY
Sir Mark Oldroyd, speaking the other day at Bradford, said that the company proposed to send £400,000 worth of raw material and to get in exchange £500,000 worth of dyes from Switzerland. This is to come from the Society of Chemical Industry at Basle. That is not the only industry. There are two, or I believe three, other works. I am informed that the two or three other companies in Switzerland can turn out as much dye-stuffs as the Society of Chemical In- 130 dustry with whom the Government are dealing. Well, £500,000 worth of dyes per annum is one quarter of the consumption of this country. Are the Government tied to this one concern, and are they going to prohibit these intermediate products being sent to any of the other manufacturing industries? I should like to know that. If the other people are not allowed to have these intermediate products, they cannot, presumably, send to this country their dye-stuff, and so we shall not be doing our best to meet the great difficulties we are in. I should like to know whether these other people are going to be allowed to have any raw material from this country. I should also like to know whether they are not going to have the same privileges in regard to transport. Are the Government going to help these companies in the matter of transport in the same way as the Society of Chemical Industry? Of course, if the Government are not going to help those other companies they are not doing their best to meet the present difficulty, that of getting colours. It is really a very important point, and if the hon. Member would answer it, I should be very glad.
§ Mr. ROBERTSON
There are two points raised in my hon. Friend's question. One is the dispatch of the intermediate products to Switzerland, and the other the facilities for the finished products coming back. Fart of our argument was that only by means of a strong company here could you guarantee anything in the nature of a continuous dispatch to Switzerland, and the arrangement made with one company is as large an arrangement as, in the circumstances, we could well put our hand to, but the hon. Baronet is himself well aware that that is, at least individually, the most important industry concerned. I am not disputing there are others. If, however, at a later stage—I suppose at present no one else could send these products to Switzerland—private concerns here could send such intermediate products to other Swiss firms, I do not think the Government would put any difficulty whatever in the way, and they would secure the same facilities for the return of the dyes. I do not think any privilege would be held out to the one company under such circumstances, but I need hardly point out that that would be a somewhat delusory promise unless you could guarantee that the intermediates would go to Switzerland, and that could I hardly be a thing anyone could promise.
§ Sir F. CAWLEY
I have a difficulty in understanding the hon Member's answer, but, if I understand anything about it, it is that the Government or the company to be started have commandeered all the poluol in this country and intermediate products, and they are only going to allow one company in Switzerland to have it, although there are other companies who, in the aggregate, can manufacture as much as this one company. Therefore, the other companies are going to be prohibited from sending to this country their dye-stuffs which we want extremely at the present time. I do not think that is the position to take up.
§ Mr. T. C. TAYLOR
The hon. Baronet is not assuming, I hope, it is possible for an unlimited quantity to be sent. Only a limited quantity can be sent.
§ Mr. ROBERTSON
There is only one company with which you can so far make an arrangement of this kind.
§ Sir F. CAWLEY
The President of the Board of Trade in November last said that at his instigation large quantities of these intermediate products were being made. If they were being made and delivered in November, I should think at his instigation a great many more could have been made now, and so they could have been sent to these other countries, and the present position relieved. The hon. Member does not seem to see the necessity of relieving the present position, and the Board of Trade mind seems always to be on the future. As regards this company, the Government propose to lend £1,000,000. They are to have £500,000 as soon as the company goes to allotment. I presume that that means assuming that the whole of the capital is found or applied for. The circular which has been issued says that the Government will find the money as soon as the company goes to allotment. Am I to understand that all the capital is to be found first, or if the company go to allotment on a less amount, will the Government then find the same amount? I want to know if a minimum has been fixed at which they will go to allotment. There 132 is this peculiar thing about the company: while the Government is finding £1,000,000 the company only needs to find £250,000, because in the circular sent out it is expressly put forward as one inducement that only 5s. will be wanted for the time being. There is also a clause that the debenture interest shall not be accumulative. If this company, which may or may not be successful, is not able to make enough money to pay the debenture interest the Government will be finding £40,000, whilst the company will be only finding £10,000. It seems to me that the Government is making a very great advance to this company, and we ought to have something in return.
I should not say anything about the Government losing £40,000 in a company holding £10,000, if there were not other conditions which I strongly object to. The consumers are told that if they do not join the company they will have no colour during the War, and this is being said by a company which is only subscribing one-quarter of the capital, while the Government are subscribing three-quarters. Although three-quarters of this capital is to be found from public money, yet this company will be able to say to the taxpayer, "You shall not have any colour unless you subscribe to our company." It is very like a trade union, and a good many trust funds. Some may disapprove of the scheme for one reason or another, perhaps because they cannot afford, and some because they think it is not a good scheme. A man may employ labour very largely in the dyeing trade, and may be well off, and yet he may not have any money to put into this concern. You tell him that because he cannot afford to subscribe to this company, although he may be employing a great many hands, you are not going to let him have any dyes, and therefore his business may be ruined. That does not seem to me to be an equitable or a just way of treating people. Is this man to be told after this company has bought up all the English works that he is not to be allowed to have any dye goods from this company or from the Swiss manufacturers because he cannot afford to subscribe? He would very likely be ruined, and there does not appear to me to be any justice in a proposal of that kind. What about the other subscribers? After the War what is their position? It is that they are tied for five years to this company if the company can supply them on reasonable terms? I confess that I never knew of a clause which 133 lent itself to so much difference of opinion, and I am afraid it will turn out to be a paradise for expert witnesses, lawyers, and accountants. If you took the right hon. Gentleman's definition of reasonable that would be something definite, but as it is every transaction will be disputed, and, instead of one referee, you would probably want fifty.
Many dye works allot a day for their agents to come and see them. Suppose a dyer is buying from your combine and a German agent comes in and offers a particular article, say, at 2s. What is the buyer's position? Is he to buy the article he wants at 2s. or has he got to write to the company and say," I have had this article offered me at 2s., and you are charging me 4s."? What will the company say then? They will say, "We are very sorry, but we do not think that price is reasonable." The buyer will say, "I can buy it at that price, and you must prove to me that it is not a reasonable price." Then the referee comes in, and how will he find out whether or not the German manufacturer is selling at a reasonable price? He may say that the German manufacturer cannot make it at the price, and we have all heard that statement.
I have bought things all my life that my opponents have said could not be made at the price, but they have been made, and many people have made fortunes out of them. How can a company in Halifax or Lancashire tell what the cost of manufacturing an article is in a German company? It is impossible to do it. The German manufacturer may have discovered some new process and be able to manufacture this particular article at half the cost of the other manufacturer. The whole thing is in the air. There never was a more absurd clause put in an agreement, and it is quite unworkable. I should not object to the Government finding them money, but I wish to know what restrictions are placed on the company, and, above all, there should be no agreement of the sort which I have criticised. I can see a Government monopoly in this thing. I do not say there is a desire to found a company, but the outcome of this thing will be a monopoly and a company differing very little from an American trust company. They propose to absorb all the present makers, and they only propose to allow one company in Switzerland at present to have the raw materials. We must bear this in mind: A Liberal Government may not always be in power, and the Conservative party say openly and fairly 134 enough that when they come in power they will have a tariff. You will then have a combination of all the companies in England with a protective tariff to enable them to get higher prices than they otherwise could do. You will have, in fact, an American trust on the very worst lines by this company being formed by public money. I do not think such a thing can hold water for one minute. We all want to get German trade if we can, and we would all do what we could to get it, but war time is not the time, in ray opinion, to start opposition to these heavily organised German concerns.
The industry, I believe, can be started in this country if it is started fairly. It has never had a fair chance. It has always been handicapped. It was handicapped for years by the duty on alcohol, and it was handicapped still more by our patent laws. I went with a deputation to Mr. Ritchie, then President of the Board of Trade, nearly twenty years ago. I went with another deputation to Mr. Gerald Balfour, and I went with a third deputation to the present Chancellor of the Exchequer. On each occasion the Manchester Chamber of Commerce advocated that our laws should be assimilated to the German laws, and that if we granted a patent to a man it should be worked in this country for three years, or it might be revoked. The present Chancellor of the Exchequer saw the position, and he immediately passed a law for compulsory working. What was the effect? Within two years fourteen new industries were started in this country, and it is a well-known fact that one of the largest aniline dye makers in Germany had bought fifteen acres on an estuary of the Mersey to start aniline colour works. The purchase was not completed because in the meantime Mr. Justice Parker gave a decision which made it unnecessary for the Germans to come and start works in this country. If the succeeding President of the Board of Trade had brought in another Bill amending the Bill brought in by the present Chancellor of the Exchequer in 1907, or carrying out what he thought he was enacting, I am sure that to-day we should have had several aniline colour works in this country, and we should not be in the present pitiful position. I hope really that the President of the Board of Trade will take this question of compulsory working again into his serious consideration. It was very patriotic of the right hon. Gentleman to 135 try and do something to relieve this country from the burden of being always dependent upon Germany, but I think I might say to him, as he said to the Labour party the other day, "Do not try to bring about the millennium in a time of War."
§ Mr. BIGLAND
I wish to confirm what the hon. Baronet opposite has said with regard to the patent laws. It is within my own knowledge that a site was purchased on the banks of the Mersey with the intention of manufacturing aniline ayes in this country, but through the inscrutability of the lawyer's mind the Act of Parliament it seems did not mean that which we all thought it meant, that the man who had been granted the sole right to make a certain article in this country should make it in this country. It seems that the Act of Parliament did not mean that, and none of us have found out what exact proportion he has to make in order to keep his patent alive. It is now thought that if he makes one-sixth of his total sales in this country it enables him to bring in the remaining five-sixths from his foreign works. That is how it is that at the present moment aniline dyes are not being made in the United Kingdom. It is a great pity the whole scheme was not published, and that all Members of Parliament had not a copy of the Government plan before the discussion took place; but, as far as I can see and understand the scheme which is before the Committee, it is not a good one. I would condemn it, because reading this Article 3 in the agreement, it seems to me, as a business man, that it would lead to an enormous amount of litigation and trouble.
I put it to the hon. Gentleman opposite who is in charge of this Bill that the sale of valuable by-products enables the manufacturer to reduce his price to such a figure that it is almost impossible for another to compete. I am not an expert, but, as far as I understand this industry, it would take us years before we could get into the same position as the German manufacturer, and he would be able to undersell us sometimes to the extent of 30 per cent., simply because he has the means of using by-products to great advantage which we have not. I do not believe that until this new company has been at work for at least five years it will be able to compete. If the Government give a monopoly to a patent, or the owner of a process, for fourteen years, why should we not give a monopoly to a company for 136 fourteen years? If hon. Gentlemen opposite do not like tariffs they do like patents. Give them a monopoly for fourteen years and then see what can be done.
If I might suggest something, not in joke, I would urge that when we come to make terms with the enemy one of our conditions of peace should be that the manufacturers of all the Allies should be able to send their goods without any duty into Germany, that the blessings of free imports should be forced upon our enemies, and that for a period of fourteen years we should have a duty of 20 per cent. on this side. Then we should see a wonderful change in scientific knowledge and development on this side of the water, and we should be sending aniline dyes into Germany. It is the conditions under which the two have fought which have brought the two countries into their present positions. I know my right hon. Friend thinks that my views are impossible and impracticable. But I do say this, that the only reasonable plan for a Free Trade Government, a Government believing in the individual effort of its traders, is to give those individuals scope in which to work. In order that they may work under the same conditions we should put 20 per cent. upon all foreign dyes coming into this country; thereby you would encourage competition, individual effort and invention, and you would give all parties in this country a free opportunity to compete one with another.
An hon. Member asked just now what would happen if aniline dyers brought their factories over here. I reply, "By all means let them do so, we should welcome them." Let English and German capitalists come here and compete in open competition; they will be employing English labour, and we have no reason to fear that kind of competition. The competition of which we are afraid is that wherein one man has all the advantage and the other has none. If we are going to have a sound scheme for the future let us put a duty on to-day. We need not wait until the end of the War. The duty will not be effective until the War is over, because there will be no competitors to send goods here. I venture to say if we put a duty on now, no other Government will take it off. It has been suggested that if we went before our constituencies with such a proposal they would throw out the whole scheme. But I deny that. The people of England have come to learn what is the right way to establish industries in this country, and the right hon. Gentlemen opposite will find 137 that when we do go back to the country, public opinion is very different to what it was eight years ago. I am as certain of that as that I am standing here. The effect of this War upon our industries, and particularly on the dyeing industry, has opened the minds of Lancashire and Yorkshire people. How is it a Free Trade town like Leeds, through its chamber of commerce, has passed the resolution it has done? Is it not proof that the opinion of the country has changed?
§ The DEPUTY - CHAIRMAN (Mr. Maclean)
That is rather wide of the special topic to which the House is devoting itself this evening.
§ Mr. BIGLAND
I only want to point out that under this scheme the security provided for our traders is nil, and two years after the War is over we shall have these goods offered us at such a price that the English manufacturer will not be able to compete, and the Government will lose its money. The scheme will be rendered almost impossible through friction; buyers will be writing week after week to say that the price is unreasonable. We all know what will happen. No referee, however clever, could ever possibly say that the prices the competitor asked for were unreasonable or that they were "dumping" prices. I know the business well enough to be aware that a large manufacturer, such as the German aniline dye manufacturer, who has £26,000,000 invested in the industry, with enormous ramifications in his home market and foreign sales all over the world, will always be able to undersell the British company unless it is protected by a tariff.
§ Mr. HIGHAM
Some hon. Members have suggested that the Government have no authority for their scheme. I desire to put forward an alternative scheme, one which I believe will meet the bulk of the objections that have been urged this afternoon against the Government scheme. I do not say that it will not be open to objection itself, but I am the father of the proposal and I cannot tell what the objections are until they are placed before me. The basis of my suggestion is this, that the company to be formed under this scheme shall be formed by Act of Parliament and it shall be the distributing agency in this country for all imports of chemicals, drugs, and dye-stuffs. A customer will come to the company and say: "I am paying you 4s., whereas I am offered the same dye-stuff from Germany 138 at 2s., and I must take it." If the company were the distributing agency that customer's order would be given straight away by the company to a German company; if it was found that the British company could not make the article at 2s. it would import the necessary quantity at that price, but if it could make it at 2s. it would do so and deal with the commodity in a commercial way. Exactly the same argument would apply to every article bought from abroad.
§ Mr. HIGHAM
Cases like that do not occur systematically; they only arise at odd times. Our difficulties in these dyeing matters have arisen from three points. First of all, they have arisen from the unhappy patent laws of this country, which throttle us in the adaptation of new methods to our industries, and especially the dyeing industry. Then there is tin-law affecting the use of alcohol for commercial purposes. Although we can use it by denaturising it, the German Government do not insist upon that process, and chemical works in Germany can use the purest alcohol for the highest essences and dye products. It is absolutely necessary to use large quantities of the purest alcohol in some of the best products, and we are killed entirely in the production of these high-class products because of the necessity of denaturising alcohol in our works. Then the worst influence has been the inertia of the manufacturers of dye-stuffs in this country. In the last two years the bulk of these manufacturers have been men of little capital who cannot afford to put up the best machinery, or to obtain the most expert advice. My hon. Friend the Member for Radcliffe (Mr. T. C. Taylor) has several times interjected the remark that the men engaged in this business cannot afford to take shares in the company to be formed. If they cannot afford to invest £50 or £100 in that company it is quite clear they cannot afford to put in the best machinery or to pay for expert advice. We want expensive expert advice. We want the best chemists in the country in this business, and we want them in in large numbers.
The Government in their scheme propose to devote £100,000 in ten years to expert advice. That is a very little sum. I am identified with a small business in a certain village, carried on on premises for which we pay a rent of £70. We have been employing expert advice, chemists and the 139 mechanics whom they require. We have spent in the last three years over £4,000 a year in a little pettifogging business, and we are not much nearer the end we are aiming at to-day than we were three years ago, although we have spent £12,000. In my opinion, the expenditure of £100,000 in one year instead of its being spread over ten years would not be sufficient for developing laboratories, providing appliances, employing the best analysts in the country, and getting the most expert advice in the interests both of the shareholders and of the customers. It is not possible to-day to magnify the importance of this question too much. I will give an illustration from my own business showing how it is pressing upon cotton manufacturers in Yorkshire and Lancashire. Before the War we were making large quantities of cotton goods for dyeing with indigo blue. We paid for dyeing 2¾d. per lb. Four weeks ago we were still left with large quantities on our hands. The customers did not repudiate their orders, but said that we must wait until after the War. We found a customer in the North—a merchant—and brought him in contact with the dyer, and he offered us, not 2¾d., but 1s. for dyeing these goods. By bringing the merchant into contact with the dyer we obtained practically 6d. per lb. In the case of goods for which we are working looms the difference in cast of dyeing between now and July last comes to over £50. That has to be passed on to the customer. These difficulties are facing the whole of the woollen, cotton, and silk trades, in which these dyes are used in such large quantities.
The alternative scheme I would suggest is that this company should be made a distributing company for the whole of the imports in the United Kingdom of dyestuffs, drugs, and chemicals. The Government might help the company in several ways. It should be formed under a special Act of Parliament, with shares of the nominal value of £5 each, and the capital of the company should be unlimited. The Act of Parliament should provide that no duties should be payable for the registration of the company at Somerset House, by which they would save from £15,000 to £20,000. In all other respects, as regards the filing of particulars, etc., the company should be amenable to the Companies Acts. My second provision would be, that while the shares are of a nominal value of 140 £5 each, only 10s. should be paid on application and 10s. on allotment, and the remainder of the capital should only be called up, as required, at the rate of not more than 10s. per share per year. To meet an objection pointed out this afternoon, the shares should be transferable in the ordinary way, and on the payment of the ordinary Stamp Duties. I suggest these provisions to meet a requisite in the purchasing power of the customers of the company, and to meet a bonus which should be given to purchasers who are shareholders in the company. The company should engage and maintain an efficient staff of chemists, anaysts and experts for research work, and it should be the duty of this staff not only to conduct the research and analytical work of the company, but to give advice and assistance, free of charge, to every customer of the company on any question affecting dye-stuffs, drugs, and chemicals, and on every question connected with goods prepared from those dye-stuffs, drugs and chemicals.
The company should be the distributing agency of all foreign and Colonial importations, and the Act of Parliament should provide that no materials should be imported into the United Kingdom except through the company. Upon these imports the company should be entitled to fix a charge of 10 per cent. to be added to the cost when they are invoicing the goods to non-shareholders, and 5 per cent. when they are invoicing the goods to shareholders. If a shareholder purchases in any one year more than the amount of capital held by him, then upon the amount of such excess purchases 10 per cent. should be charged instead of 5 per cent. That is to provide against a person holding only one share in the company and yet buying thousands of pounds worth of material during the year, and seeking to obtain an advantage from the rate he is paying as a shareholder in contradistinction with the rate charged to non-shareholders. The amount raised from these two percentages, after taking the proportionate share of the cost of this distribution, should be ear-marked and devoted entirely to research and laboratory work and to laboratory equipment. Every business shall finance itself in its own way. Under this method all dye-stuffs industries would pay these percentages, and every user of a foreign product would pay the distributing charge. It would help the 141 poorest man quite as much, or more proportionately, than the wealthy firm, for he is a man who cannot afford to engage experts or to take the advice of good chemists, and in every difficulty he would have placed at his disposal the best advisers in the country, who would be in the employ of the national company. To stop the company having monopoly I would make a fifth provision, that notwithstanding the fact that all imports are to come through this company, any purchaser in the United Kingdom shall not be prevented from buying dye-stuffs, drugs, or chemicals from any part of the world, but they must be purchased by him either on the authority of or through the company and delivered at the company's works or warehouses.
Two other points which were mentioned by the President of the Board of Trade this afternoon will also be provided for in the same Act of Parliament. The company shall be permitted to use any British patents for the production of dye-stuffs, drugs, or chemicals on payment of a royalty to be agreed upon between the patentee and the company, such royalty, in the case of disagreement, to be fixed by some official named in the Act of Parliament. The company shall be permitted at certain of its works to distil and use alcohol of any purity for the purpose of its business, such distillation and use to be under the control of one or more Government officials at each of the works. I mentioned purity because in the finest essences and dye-stuffs you have alcohol of the purest quality, and almost in unlimited quantities, where it has to be evaporated. The company shall have the right to take samples from any material passing through their hands. In that way the company will always know the best production of all foreign countries. The objection has been made that this 5 per cent. and 10 per cent., in spite of the expert advice given by the company, would be a handicap. But I put it here as another argument that from the fact that all purchases of dye-stuffs shall be made in every part of the world and go through the company's books, it will be evident that the company will soon be able to buy in bulk such dye-stuffs as their customers will purchase in smaller quantities, and it is more than probable that the commission which the consumers pay to the company will be more than met by the lower prices the company will be able to get for the larger quantities they buy in the wholesale way.
142 I then come to another objection which has been urged here to-day as well as over and over again in the newspapers during the last three or four weeks. That is that this company, like its predecessors, will not devote sufficient attention to the chemist, the scientist and the research side of its work. I have always said I would insist on the company devoting to that side of its work the whole surplus arising from the 5 per cent. and 10 per cent. I think the board of the company should be a composite board. I have known the scheme work in other businesses where they had committees. There should be a science and research committee, a committee or internal management, and a commercial committee, and the four committees together should form the board of the company. While four committees should form the board of the company, I have no hesitation in saying that the science and research committee, after their money has been voted to them, should have a free hand. I recognise as a commercial man that the ordinary commercial man has not the ability to control a scientific department in works of this description. Sometimes research work has to go on for five, six, or eight years before the result is attained. The commercial man would put his foot down before that time came, and say we must stop wasting this money. And it is only the scientific committee which would know the value of the work which was being done, and the possibility of bringing it to a successful issue.
These are the points I would wish to place before the Government. They do not contravene any of the principles laid down in my right hon. Friend's speech. They do not contravene the principles of Free Trade; they do not give the company a monopoly. They help the commercial man who cannot afford to pay for the best advice he ought to get in such a business as this to-day. They do more than that. They help this company to gradually build up this business. Both sides in the House are agreed that in this question of dye-stuffs we want gradually to build up a company which will enable this country to compete against any other country in the world, which will enable us to have our own dye-stuffs and all these products, and I believe if the company were formed on a basis like this they could gradually cheapen their cost of production until no competition by German or any other nationality could kill it out. But I believe 143 that under the scheme of the Government, solely unfair competition could kill that business. We know that over and over again in German businesses unfair competition has been resorted to. It has been resorted to in the shipping industry and in manufacturing industries. In both cases I have instances in my own mind. The only way to meet that sort of competition is to have such a power as this distributing agency would give the national company if a scheme of that sort were adopted. The money which has been promised has been promised under a sort of feeling of compulsion. Some will take their shares in this business for patriotic reasons. Some of my own friends have declared their intention to do that. But if we could establish the business on a really sound commercial footing, and give it standing which would enable it to go on against all competition, every shareholder would be satisfied, as I am satisfied in my own mind, and far more men would take capital in the company, the investment would be larger and we should get, even without the assistance of the Government, from users of dye-stuffs in this country, a sufficient amount of capital to build the business up and extend it to any dimensions which the country would require in future.
§ Mr. ROBERTSON
I will not attempt to reply to the very able speech of my hon Friend, but there are two points which have been raised to which I think I really ought to give answers. In reply to my hon. Friend (Sir F. Cawley) I ought to have made the statement that the directors of the company do not propose to proceed to allotment unless £500,000 is subscribed. It may be important to the House to have that information. Further, in regard to the question of the endowment of research, I have partly to correct or modify the answer I gave before. I ought to say that the £100,000 is absolutely earmarked for this purpose. I have been told that I knew the University of Leeds was actually doing some work of the kind. That is really a voluntary act on the part of the university and it is not to be regarded as a part of the Government endowment. The £100,000 proposed in connection with the scheme is earmarked for this scheme and for the benefit of the company's work. It will really, therefore, be in aid of and in support of the company's scheme.
§ Mr. ROBERTSON
I cannot say how the Government will propose to spend it. It is earmarked for the scheme and, so understood, it may be regarded as part of the security.
§ Sir CROYDON MARKS
Reference has been made this afternoon to what may be called, on the one side, Tariff Reform and, on the other side, Patent Protection. I want to suggest that the mere fact of introducing a tariff in connection with this would absolutely bring the industry in a very short time to a standstill, because there is a war going on, and when our military war ceases there will still be a war going on in industry. There is no finality in science and there is no finality in research. If, therefore, we put a tariff on that would or might keep out our competitors from abroad, we shall let our industry stand exactly as it is today and we should get the benefit of no improvements which may come from abroad, such as a patent really would give us.
§ Sir C. MARKS
There is no tariff in connection with dye-stuffs, as the hon. Member probably knows. In connection with the industry itself, if this discussion to-day has brought out one thing more than another it has clearly brought out that it is not due to the lack of having in this country scientific men or chemists who are capable of carrying on the industry. It is undoubtedly due to the lack of initiative of British manufacturers. The industry has suffered in the past, not because the skill did not exist in this country, or because the research was not here, because here we are today talking about an industry which was originated in this country, and about a science of which we were the parents. And yet to-day we are here to lament its loss, due solely to one thing. The British manufacturer has not as much pride in his industry as the foreign manufacturer has. There is too much snobbishness connected with our industry and with our social life, so that a man associated with industry does not get that kudos and that social standing if he is in trade that he has if he is in some professional capacity. Hence it is that our business has suffered, not because of our not having the means at 145 hand, but because we have not the application and have not applied ourselves to develop what we ourselves originated. I want to suggest to the Government if it is not too late, that it should revise the suggestion about the one contested point in the whole of this arrangement. Everyone admits that at present we are in a difficulty. Everyone knows that it would be perfectly impossible before the War ceases for an industry such as this to be promoted successfully. But if we never make a start we shall never get in. If we make a start now, we shall get in quite well by the time we want to later on. I suggest, therefore, that we make the proposal for that which is called the reasonable price—the price to be fixed by that which has been previously paid one year prior to the War. If some such term as that could be used instead of the word "reasonable," we should prevent all manner of discussion and trouble.
Another proposal I suggest is that, instead of the Government taking 4 per cent., they should take the rate one-quarter above that which they allow to Post Office depositors—2½. If they took 2¾ and reinvested at 1½ to 1¾ back in the Post Office, they would be doing something to put encouragement into the business, and they would be getting back a little more than from the contributors in the Post Office now. They would be gaining while helping the industry. If there is to be any further encouragement, I suggest it in the form of a subsidy. We shall have some difficulty hereafter, undoubtedly, in attempting to compete with a foreigner. There will be new processes adopted, and unless we have more research institutions in connection with our great work there will be no one competent to decide and take up the new things offered. When that is done, I suggest we have a subsidy on what we produce rather than put a tariff on to keep things out in order to let the new industry get a chance to live.
The hon. Member opposite (Mr. Bigland) referred to the fact that a patented process was about to be introduced and that ground was purchased for the purpose of making anilines. Perhaps he did not know it was to make them on an expired patent. They could start to-day and make all these patents we are discussing, for the patents have expired. That which is concerned is the huge plant, and the reason the firm did not put it down was because they imagined they could well go on and import these materials. Patents did not keep 146 them out, it was the invested capital which they believed the Britishers would not put up.
I want to ask if it is not possible to remove the one criticism urged against this scheme—that is the agreement. I believe if the agreement could be modified, we should have no criticism from any part of the House. There might perhaps be some slight criticism, but the great part would be gone. Everybody knows the industry must be helped, but to bind persons down to buying from this concern makes them feel that in time to come the materials may be dearer than they ought to be, and that there will be litigation as to whether they are bound to continue to buy or not. I have offered the suggestion because I believe at the present time everyone is anxious to help the Government. On both sides of the House it has been shown that we are not endeavouring to play for party purposes. We want to lend a hand, and therefore I suggest that a man should not be tied hard and fast to the prospectus, even if they have to give way on some of their principle. While we are at war some of our views of times of peace must necessarily fall to the ground.
§ Mr. NEEDHAM
I wish to say I am in agreement with the criticism of my hon. Friend in regard to the binding clause to which so much reference has been made. I am not, however, going further on that point now. I wish rather to direct the attention of the Committee to the difficulty of the small man. In Lancashire there are large numbers of dyers who dye for hire—that is to say, who dye on commission—and the great bulk of their purchases are dye-stuff. In contradistinction to such a person there are numbers of large concerns to whom dyeing is an incidental operation, and while large concerns of that sort may be in a position to find the necessary capital as prescribed by the scheme and thereby protect their supply, the small dyer who does no other trade at all may not be in a position to find the capital which would, under the terms of this scheme, ensure the supply of the dye stuff. That is a very serious position indeed in the case of large numbers of dyers in Lancashire and Yorkshire who dye on commission, and I do hope the President of the Board of Trade will find out some way in which fair treatment can be meted out, not merely to the man who puts money into the concern, but to the man who really wants dye in probably greater measure, but who is really not in 147 a position to put money into the concern. I would invite the attention of the President of the Board of Trade to the fact that half this money is being found by the nation at large, and in these circumstances I think it is not possible to exclude from the serious consideration of the board of directors, or those responsible for the circular, the requirements of these persons who are not themselves able to find capital to put into the concern, but who, as members of the community, rank equally in their claims to the use of the public money it is proposed to raise under the terms of this scheme.
The subject is a vastly important one. The Committee has dealt with the subject at great length, and I think benefits will accrue from the discussion. The industry is, in Lancashire and Yorkshire in particular, an immense one, and a vast number of workpeople are dependent on the success of the dye scheme. I was alarmed by one statement of the Under-Secretary. I understood him to state that the whole of the intermediate and raw products going to Switzerland under this scheme would be consigned solely to this chemical society. If I understood him correctly, that means that neither of the two other firms of Swiss manufacturers are going to get any more intermediate or raw products. If that is the case, it is, I think, a very serious blot on the scheme, and for my part I feel I must definitely and strongly oppose such a point. Let me give my reasons. In the first place, to one of these companies, at any rate, this country owes a great deal. It sent a large amount of dye material to England without receiving one ounce of raw material in return, and to say that from the inception of this company onwards no more raw products are to go to that company or its neighbour would be a monstrous injustice. It is useless to say that there is only a limited supply of toluol and so on. There is only a limited supply, it is true, but that should be divided into some well-ascertained and fair proportion. I hope the statement I understood the Under-Secretary to make is not correct. If I have misunderstood him, I think the sooner the misunderstanding is cleared up the better.
§ Mr. RUNCIMAN
Might I clear it up? I think the hon. Gentleman must have misunderstood the Under-Secretary. As a matter of fact there is no exclusive agreement with the society. I think that there 148 are three other concerns. If those take our intermediate products, and return them in the shape of dyes to us, we shall be only too delighted to deal with them.
§ Mr. NEEDHAM
I am very much obliged to the right hon. Gentleman. I think that I am in the recollection of the Committee in saying that the Under-Secretary used the phrase that there was a very limited quantity of toluol, and so on, and that the company was the only means by which the intermediate and such like products could be sent to Switzerland, and the finished products could be forwarded in return. I am very glad indeed to have elicited that explanation from the right hon. Gentleman. The two clauses which have been criticised very much this afternoon are well worthy of the attention of the right hon. Gentleman. During the last week-end I have had illustrations of cases in which large subscriptions of money would be forwarded if the clauses were cut out of the prospectus. It may be perhaps that other people would not subscribe if those clauses were cut out; but there are so many objections to the clauses that I for one urge on the right hon. Gentleman that further consideration should be given to the matter.
§ Mr. BARNES
I desire to appeal to the Secretary to the Treasury, and to leave the appeal on record, with regard to a comparatively small matter that engaged the attention of the House to-day, but which, small as it is by comparison, is an important matter for those immediately concerned. I want to make an appeal for the better payment of certain people in Government employment. First, there are those who are employed as messengers in Government offices. I had a question down on that point before our last Adjournment, and I was induced to take it off the Paper by the distinct promise that wages would be increased. Those wages have not been increased yet. Then in regard to port watchers, I have had questions down more than once, and I would ask for a reconsideration of their case. They are men who are in the main old soldiers, and start at about 40 years of age in the Excise service at 21s. per week, advantage being taken of the fact that most of them are pensioners. It is quite true that they have been told that after a certain term of service they are entitled to more than 21s. per week, but the men for whom I plead join the service at an age when it is almost impossible for them to put in their qualifying period. There- 149 fore, it may be taken that the Government employ these men permanently at this miserable rate of 21s. That is quite unfair. I think that the hon. Gentleman might consider their case. The third body of men to whom I want to refer are those in the Labour Exchanges, who start at about £60 per year. I have had their case on more than once. I suggest that that is a wretched rate of wage at any time, and it is more particularly inadequate having regard to the rise in the prices of food of which we have heard so much recently. I do not know whether the functions of this new body of which we have had information to-day in the newspapers quite cover these cases. If not, it seems to me that the new body might be given powers to deal with them. We are told that rearrangements have been made, and quite rightly, in regard to railwaymen, who have got a bonus of 3s. and 2s. on their wages. Arrangements have been made, I believe, for, and rises given also to, other bodies of men who are in private employment. If it is right to do that with men in the employment of companies, I think that the Government ought to do the same in regard to these low paid men in their service. I trust that the hon. Gentleman will consider these cases sympathetically, and grant them some rise in wages commensurate with the increased price of food.
§ Mr. BOOTH
I do not want to interpose in this question if the hon. Member thinks that it would be more convenient to reply, in the first instance, to the hon. Member for Blackfriars. I desire to refer to the question of the aniline dyes scheme. I do not wish to traverse the ground which has been so well covered, but I could not allow the occasion to pass without expressing my horror, as a Radical and a Free Trader, at the spectacle of the Government putting forward such a scheme. I felt humiliated in the extreme at the discussion which took place to-day. I consider that the right hon. Gentleman the Member for West Birmingham made mince-meat of the scheme. There has been no proper answer vouchsafed to his arguments. There is one point in which I differ from the right hon. Gentleman. He seemed to think that there is no one in the House who dislikes the scheme generally on its merits, but that the question had to be decided mostly on detail. Sir, I detest it root and branch. I have spoken to Liberal Members by the dozen. I have not found yet one enthusiastic supporter 150 of this scheme, leaving out two or three who have identified with it. I feel perfectly certain that the Government and the country will bitterly repent this experiment. I consider that it is tinkering with the question. If it is as serious as they make out they ought to have done more. If they are inclined to patronise a particular industry, let them take it in hand, but this sort of piece-meal plastic socialism is a thing which I have always protested against in this House. The attempt to introduce any collectivist idea into the realm of private competition and private enterprise will not succeed. I do not know whether the Government are prepared to make Grants or recommend the Prince of Wales' Fund to make grants to these shareholders if they lose their capital. I do not know who is altogether responsible for this scheme. I only refer to these points because as far as I can learn this is the first time that a Liberal Government has gone in for company promoting and touting round for shares in a joint stock company. The thing has been so well thrashed out that there is no case left to deal with, but I could not, as a Radical and a Free Trader, allow this opportunity to pass without saying that I loathe the whole scheme, and prophesy that the Government will bitterly repent of establishing it.
§ Question put, and agreed to.
§ Resolution to be reported to-morrow (Tuesday); Committee to sit again Tomorrow.