Budget Disclosure Inquiry.

– in the House of Commons on 11th June 1936.

Alert me about debates like this

4.8 p.m.

Photo of Mr Stanley Baldwin Mr Stanley Baldwin , Bewdley

I beg to move That the Report of the Tribunal appointed under the Tribunals of Inquiry (Evidence) Act, 1921, be now considered. The House will remember, for it is but a few short weeks ago, that certain rumours got afoot and spread rapidly, as to disclosures that had been made of Budget secrets, and they will remember how, in accordance with their sentiments, the Government took immediate action and set up, with the unanimous support of the House, a Tribunal to investigate these matters, and how again, after a period of almost only days, that Tribunal reported, and the House has just witnessed what every Member must feel to be a most painful scene. I propose to speak quite shortly and to deal entirely with the matter of the Tribunal and the honour of this House. Further matters may be raised in the discussion, but I shall confine myself to these. I think it only right, for the purpose of record, to make as clear as I can the difference between the Tribunal which was set up and the ordinary court of law, in order that the House may be clear on points that I think may be apt to be a little confusing.

The Attorney-General is responsible, as the House knows, for instituting proceedings on a criminal charge, and he explained to the House yesterday his reasons for not instituting criminal proceedings. He emphasised, among other things, the necessity of establishing that any disclosure was deliberate. But the question which the Tribunal had to investigate was a wider and a more general one. It was the question whether any unauthorised disclosure of any kind was made of information relating to the Budget for the present year, or any use was made of it for the purpose of private gain. The House will see, therefore, that the Tribunal was not only not bound by rules of criminal procedure and was not concerned with all the ingredients of a criminal charge, but was considering whether there had been a leakage of any kind, whether purely accidental or careless or deliberate, and the unanimous conclusion reached by the Tribunal is that there was in fact an unauthorised disclosure.

There is, of course, no inconsistency between the decision of the Attorney-General and the conclusions of the Tribunal, and it would be very wrong to treat the finding of the Tribunal as a finding that an offence had been committed against the specific terms of the criminal law. I emphasise this distinction because great injustice would be done to two Members of this House if they were regarded as having been found guilty by the Tribunal of a criminal act. They have not been charged with any criminal act. But that, of course, does not conclude the matter as far as this. House is concerned. We have the right and the duty to consider the conclusions reached by the Tribunal, which a Resolution of Parliament caused to be appointed and armed with powers. If those conclusions reflect on the conduct of any hon. Member, quite apart from any assumption or allegation of conduct which the law would punish, I, as the Leader of the House, have the very responsible task to discharge, however distasteful it may be, however grievous the consequences to individuals, of advising the House as to the course which it should take with reference to the finding of the Tribunal.

My right hon. Friend the Member for Derby (Mr. J. H. Thomas), whose long public career is known to every Member of this House, and whose loyal co-operation for the last five years in the Government of which I am now the head, I gratefully acknowledge, recognises—you saw it from his speech—that the House is bound to accept the finding of the Tribunal. The impartiality of the Tribunal's members is beyond challenge, and we all acknowledge the sense of duty under which it undertook this task, and the competence and thoroughness with which it discharged it. We have, I consider, no other course but to accept its findings. My right hon. Friend the Member for Derby, I am sure, realises that, and he has taken a course to-day which deserves, and I know will receive, the full sympathy of the House. While maintaining, as he has a perfect right to do, that he is conscious of no offence, he recognises the unanimous conclusion reached by the Tribunal as one from which the House cannot differ. As I have said, as Leader of the House I am bound to say we have no alternative but to accept it. It is not a finding of guilt under the Official Secrets Act; it is a finding of unauthorised disclosure, however that disclosure was made.

That conclusion is a grave one which, of itself, necessarily inflicts a very heavy penalty, for it ends a long career of strenuous public service, outside and inside this House. There is not one of us who does not feel deep sympathy with my right hon. Friend, and the course he has taken—and, in my judgment, rightly taken—is one in which no further action in regard to him is needed. He has consulted his own dignity and the dignity of the House in enabling us, after hearing his personal statement, to accept the report without further comment. In the case of the hon. Member for Balham and Tooting (Sir A. Butt), who has also decided to resign his seat, the House will feel that he, too, has taken the proper course. In his case, it is necessary to emphasise arid to remember that the finding of the Tribunal is not, and does not profess to be, a criminal verdict. It is a finding that, in his case, use was made of confidential information for the purpose of his private gain, and here, again, the course which I must recommend to the House is that the report of the Tribunal should be accepted.

There are one or two observations I desire to add. The House is always jealous, and properly jealous—all of us—of its reputation and of the conduct of its Members, and where errors have been committed, however serious I would say, the House looks to see that expiation is made. I wish, before I sit down, to tell the House that, in any view, both as Leader of the House and as a man, that expiation in full has been made by those two Members. The finding has gone against them, against which there is no appeal; whatever stigma may remain from that finding remains for all time, with no possibility of appeal. This House they have left for the last time, and it is closed to them. The unthinking cruelty of modern publicity has been theirs for weeks, perhaps the severest punishment which modern civilisation can give; that has been theirs in full measure. There is one other thing, and I think, perhaps, the older I grow the more conscious I am of it; when I see a man put before a Tribunal of that nature, to answer questions on episodes in his past life where anything may be brought up, I ask myself: "Which of us would escape?" They are paying the penalty in full.

Let us hope with all our hearts that we may never again take part in so painful a scene in this House. I am confident that no Resolution of this House will be passed, as no words will be uttered by me, to make more bitter for those two colleagues of ours the bitter experience which has been theirs and through which they have passed to-day. I do not propose of this moment to move any Amendment to the Motion which I have put down, because I do not wish in any way to limit the range of the Debate that may follow, and that can follow, on the original Motion; but I do propose at some time in the course of the after-noon or evening, at a suitable moment, to move, in line 2, to omit the words "now considered," and to insert the word "accepted."

4.22 p.m.

Photo of Mr Clement Attlee Mr Clement Attlee , Stepney Limehouse

In view of the last statement of the Prime Minister that he intends that the Motion which he has placed on the Paper shall be amended, I do not propose myself to move the Amendment which was placed upon the Paper by my hon. Friends and myself. We felt bound to place an Amendment on the Paper because there was no indication of action in the Motion which was placed by the Prime Minister. We did not place that Amendment with any desire to divide this House on party lines. We think that, arising from this report, there are matters which require Government action, and my hon. Friends will move an Amendment later on in the Debate asking for further Government action.

I wish to say that we, too, think how thoroughly painful is this occasion. It is, fortunately, extremely rare that this House has to deal with a matter concerning the honour of any of its Members, and we must all profoundly regret the occasion. I sympathise with the delicate and difficult position of the Prime Minister in having to move this matter concerning those who have worked closely with him in the past, and we all feel the collective feeling of this House for each other. I join in expressing the thanks which are due from this House to the members of the Tribunal for the very fair, very efficient and speedy way in which they carried through a very difficult and onerous task. We had some doubts, on the occasion of the setting up of this Tribunal, as to whether this was the best method that could be adopted. I should like frankly to acknowledge that the Inquiry could not, in my judgment, have been done better. In any case, an inquiry of this kind is bound to raise certain difficulties. I think the Attorney-General indicated some of those difficulties in the fact that while appearing to partake of the nature of a trial of an action at law, it is not in fact a trial of an action at law. Perhaps what makes it a little more difficult, if there were to be any further proceedings, is the fact that the preliminary finding had been come to by an eminent judge and eminent counsel.

In the Motion of the Prime Minister we are asked to consider, and I gather to approve, the report of this Tribunal. We cannot do anything else but accept the report. This House chose the method of Inquiry, and set up a competent Tribunal which has heard and examined the whole evidence and has come to certain findings. The Debate to-day does not raise in any way at all a party issue. It is a mere House of Commons matter, concerning the honour of Members of this House, one of whom was a Privy Councillor, a man who had been a Member of the Government for many years, and the two Members concerned have been found by the Tribunal to have acted in a manner inconsistent with the position which they held in public life. I agree entirely with the Prime Minister that that alone is very heavy punishment. Other consequences have followed, such as the necessity, which they have rightly realised, that they must vacate their seats, and I do not think that anyone of us would wish, by any word of ours, to add to this punishment. We all deeply regret that a long and distinguished career should have had such an ending. We must all sympathise with the families of the Members who necessarily suffer, though entirely innocent, and I think we all have a very natural reluctance to pass judgment on others. We are all conscious of our own faults; at the same time, we must not allow our personal sympathy for men who are down to lead us to condone in any way the seriousness of the offences committed. It is our clear duty to vindicate the honour of this House.

We owe that duty not only to this House but to democratic government and to the servants of the State. There are many attacks made on democratic government to-day, and any action of the nature of utilisation of a public position for private gain cuts at the root of democratic government. The corruption which accompanies dictatorships is generally hidden; the corruption which enters into a democracy is brought to light and must be dealt with drastically, and if there is any suggestion at all, it is that, as a democratic assembly, we are bound to take action. Consequently, we cannot treat an offence, or a mere mistake, in high quarters less severely than we should do if it occurred among those whose responsibilities are far less. We are proud of the probity of our public servants, and exact rightly a very high standard. We cannot accept a lower one for the Members of this House or the Members who hold positions in Government. A civil servant who communicates Government secrets, even if only by inadvertence, suffers a condign punishment. An employé of the Post Office who gambles is dismissed.

The question of the position of the Official Secrets Act has been raised by the Prime Minister. That Act was passed for the protection of the State, and it has been applied very rigorously. Not long ago Mr. Compton Mackenzie, a distinguished author, was heavily fined for revealing secrets that were 20 years old. A short time ago a gentleman was prosecuted for having inserted in a book part of a document which was a State document. The Attorney-General has come to his decision in this case as to whether it is right or wrong to prosecute, and I am not here to challenge his decision, but I would ask him, if he comes to speak in this Debate, to make quite clear his reply with regard to what constitutes an offence under the Official Secrets Act. He stated, as I gathered, that an unauthorised communication must be deliberate. I do not find that in the Act. He further stated that anyone who made use of such unauthorised communication could only be prosecuted if that unauthorised communication was an offence under the Official Secrets Act and, therefore, was deliberate. It seems to me that that opens a very, very wide door in the Official Secrets Act, in that those who commit the far worse offence of utilising a communication that has been unauthorised cannot be prosecuted, because those who have communicated it did not do it deliberately. I am bound to say that I think that is a matter on which we ought to hear perhaps further legal opinion. To my mind, it is a far more serious offence to utilise a communication of this kind for private gain than, possibly through inadvertence only, to have made an unauthorised communication.

I have said that I do not wish to say any word of condemnation of the two hon. Members, but I think a word should be said as to where there is a heavy share of blame for the downfall of the right hon. Gentleman, and that is the corrupting influences of wealth and the corrupt influences that emanate from gamblers in the City, those, I think, who have led astray the right hon. Gentleman from the path of public service on which he was set at the outset of his career. This report reveals that a great institution, Lloyd's, which has its legitimate business in insurance, is also a cover for gambling. It is called insurance, but there is no insurable interest. It is as much a gamble as any of those that come under the ban of the law. I understand that the Committee of Lloyd's have requested all underwriters not to accept contingency risks without satisfying themselves that the assured have a legitimate interest and requiring the name of the assured to appear on the slip. That is good as far as it goes, but it does not, in my opinion, go far enough. I think that all so-called "honour" policies should be made illegal, and also that all insurances based on the effects of possible Government action should be declared illegal, as being a standing invitation to a breach of the Official Secrets Act.

I do not think we always realise enough how finely our public servants stand up to temptation. There are numbers of opportunities, especially to-day, where one has newspapers willing to pay money for sensation and where there are all kinds of interests watching out on the chance of making easy money; but, after all, it is for us to make that temptation as small as possible. It is idle to ignore that in the public Press, not only of the United States of America, but of this country also, there are allegations that there have been other operations on foreknowledge of Government action. I think that a further matter arising from this report which calls for legislation is the system of bank nominees, which goes far to nullify the provisions of the Companies Acts, and we urge that it is high time that there should he a clean-up in the City of London. I am quite aware of the difficulty of deciding where legitimate business ends and gambling begins, but it is idle to deny that there is a widespread feeling that inquiry is needed, not only into Lloyd's, but into the Stock Exchange and the Produce Exchanges.

There have been a good many scandals of one kind and another in recent years. The Hatry case and the pepper case are outstanding. The gambling in armament shares, and especially in the aircraft companies, is another. In the City there are these quasi-public institutions with their legitimate functions, but upon them has been built up a superstructure of mere gambling. I suggest that it is hypocritical for this House to get very excited over football pools, lotteries, and betting on greyhound tracks, and to shut its eyes to the wide facilities for gambling which exist in the City, and of the kind of gambling which not only ruins the individual gambler perhaps, but which may ruin numbers of men, o numbers of businesses, and numbers of national interests. We urge that an inquiry is needed into what goes on in the City with regard to gambling, not only in the matter of Lloyd's, as I have said, but in the other exchanges. It may be that this kind of thing is inseparable from the present capitalist system. If it is not then I hope hon. Members will point us a way to get rid of these evils. If it is, then the sooner we change the system, the better. We live in times in which the actions of Governments extend more widely into commerce, industry, finance, and trade than ever before, and I have no doubt at all that the influences which emanate from the present City activities, from private interests in the City, are inimical to the public weal and to the work that is done in this House.

4.39 p.m.

Photo of Sir Archibald Sinclair Sir Archibald Sinclair , Caithness and Sutherland

The incident which gave rise to the proceedings of the Tribunal of Inquiry was grave, deeply regrettable, and, as the Leader of the Opposition said in his speech, of a kind which is happily rare in our public life. That such incidents are rare is not due to any particularly happy or fortuitous circumstances in which we in this country live, and it is certainly not due, as the Leader of the Opposition has shown, to any lack of temptation to those who are engaged in our public life and in our Civil Service. It is due, in the first place certainly, to the high standard of public duty which prevails in the public service, but it is also due to the fact that the rarity of these occurrences is not regarded by us with passive complacency, and that Members of this House, whether they sit on the Treasury Bench, on the Front Opposition Bench, or on a back bench in any part of this House, are jealous of its honour and quick to act when it is impugned. That is our invulnerable safeguard against chronic scandals and that festering corruption from which other countries have found difficulty in purifying their public life.

In this case, among those whose conduct was impugned, was a Member of the Government whose long record of public service deserves, and always will deserve, our admiration, a man whom no one could work with without appreciating his great qualities and holding him in affection and respect. Therefore, the duty thrown upon the Government was bound to be embarrassing and painful to each one of its Members, and we who are its opponents ought frankly to recognise that it has not flinched but has acted with decision and thoroughness. In doing so, it was supported by Members of this House without distinction of party, and the only difference of opinion which arose was on the question of the form which the inquiry should take. My right hon. Friend the Member for North Cornwall (Sir F. Acland), speaking, I think, with general acceptance in the Debate which took place on setting up this Tribunal, laid down five principles on which, it seemed to us, the inquiry ought to rest. The first was speed of getting to work, the second impartiality, the third thorough and skilful investigation, the fourth full publicity, and the fifth absence of opportunity or temptation for making political capital. I think we must all feel that every one of those requirements has been met by the Tribunal whose Report we are discussing this afternoon, and most amply met, and that the speed, the thoroughness, and the impartiality of the inquiry have profoundly impressed public opinion, both at home and in foreign countries. It has cleared the air of all the foulness which a scandal of this kind, unchecked, would inevitably generate.

My right hon. Friend the Member for Derby (Mr. J. H. Thomas) and the hon. Member for Balham and Tooting (Sir A. Butt) are vacating their seats in this House. In doing so, they have certainly not diminished their own dignity, and they have consulted the dignity of the House as a whole. The hon. Member for Balham said, 'How can I ask this House to acquit me?" We are not a court of morals, and, painful as is this discussion to-day, we have not been called upon, I am thankful to say, to judge our fellow Members. Every citizen of this country is entitled to be regarded as innocent until he is proved guilty, and, as the Prime Minister has pointed out this afternoon, no offence has been proved against these two gentlemen.

The Leader of the Opposition has addressed some questions, in the course of his speech, to the Attorney-General. I shall listen with keen attention to the Attorney-General's answer, if he takes part in the Debate. There was one respect in which I thought the Leader of the Opposition might have gone a little further. I agree with what he said, that the offence of the man who obtains confidential information and uses it for the purpose of private gain is worse than that of the man who imparts it; but the Leader of the Opposition has pointed out that an offence cannot be proved against such a man—indeed the Attorney-General said this yesterday—unless the offence of imparting the information can, first of all, be proved against the man who imparted it.

The Leader of the Opposition said that the Attorney-General yesterday discussed whether such a prosecution was right or wrong. I think he went further. I think he explained to the House that a prosecution was impossible under the wording of the Act as it is at the present time, unless you could produce evidence that a wilful disclosure had been made by one of the parties to the incident. If there is a clear case that one party has obtained, no matter how, secret information and has used it for his private gain, I agree with the Leader of the Opposition that it ought to be possible to bring a case against him, whether or not you can prove the case against the man or woman who disclosed the information to him. I hope the Attorney-General will make the situation clear. If I have misstated the case, I hope that he will explain how I have misstated it, and if I have not misstated it I hope that he will tell us whether or not the Government will consider amending legislation.

The public owes, and we in this House in particular owe, a great dealt to the members of the Tribunal for the skill, the speed and the thoroughness with which they worked and for the courage which they showed in expressing their findings with unambiguous directness. Therefore, we cannot do less than accept and approve the report of the Tribunal.

4.48 p.m.

Photo of Mr Donald Somervell Mr Donald Somervell , Crewe

I have been asked specific questions and it may be for the convenience of the House if I reply now.

Photo of Mr George Buchanan Mr George Buchanan , Glasgow Gorbals

I think it is a perfect insult that the Attorney-General should get up now. Why not wait?

Photo of Mr James Maxton Mr James Maxton , Glasgow Bridgeton

On a point of Order. I think it has usually been the practice of the House on occasions like this to have the views of the various groups and sections before we have two Government speakers. I might on behalf of my friends have put certain points to the Attorney-General. It seems to me that the interests of debate would be best followed if we adopted the customary practice.

Photo of Mr Donald Somervell Mr Donald Somervell , Crewe

I was anxious to consult the interests of the House, but if I misunderstood them I will give way.

4.49 p.m.

Photo of Mr James Maxton Mr James Maxton , Glasgow Bridgeton

I do not propose to delay the House.

Photo of Mr Frederick Cocks Mr Frederick Cocks , Broxtowe

On a point of Order. Does this mean that the Attorney-General will not be allowed to speak again?

Photo of Lieut-General Edward Fitzroy Lieut-General Edward Fitzroy , Daventry

Objection was taken to his rising so early, and he gave way.

Photo of Mr Frederick Cocks Mr Frederick Cocks , Broxtowe

As he has already addressed the House, does it mean that he has lost his right to speak again?

Photo of Mr James Maxton Mr James Maxton , Glasgow Bridgeton

If there is any objection to my rising, I will give way. I will not delay the House on this matter for any length of time. I think the acceptance by the Government of the report of the Tribunal and the acceptance by the right hon. Member for Derby (Mr. Thomas) of the Tribunal's report, and the subsequent intimations of resignation by the right hon. Gentleman and the hon. Member for Balham and Tooting (Sir A. Butt) leave the House with nothing to do. I should have had certain observations to offer if a different course had been pursued by the Government and the hon. Members concerned, but the attitude which has been adopted in the House seems to me to make unnecessary any of those comments. Moreover, this does not seem to me to be the appropriate occasion for drawing general moral lessons, nor does it seem to me the appropriate occasion for cleaning up the City of London.

I have known the right hon. Member for Derby personally for almost 30 years. I was associated with him for many years in the work of the Labour party when we were both members of that party. At no time during that period do I think I ever agreed with his methods or his conduct, or his general political outlook, and my friends and I at any time would have regarded it as a good day's political work well done if, in the ordinary rough and tumble of political struggle, we had driven the right hon. Gentleman out of the political influence that he held in this country. To-day, when we see the end of that political career coming in this way, we can only say that we feel profound regret and sorrow, that instead of going down in the struggle as all of us who come into politics may expect to go down, the end of his political career has happened in such a painful and regrettable manner.

4.52 p.m.

Lieut.-Colonel SANDEMAN ALLEN:

As the honourable name of Lloyd's has been bandied about this afternoon, I feel, as one of, I think, only two members of Lloyd's in the House who have done active work for many years with that institution, that I should like to make one or two observations on the working of Lloyd's and on the facts that we have to study in connection with the definite accusation against Lloyd's honourable work, that on such work there has been built a superstructure of gambling. I should like to remove that impression entirely. Had it not been for the way that Lloyd's work, this inquiry could not have come about so quickly. Nobody would have discovered that such a thing was going on, and the disclosures could not have taken place. The very fact that there was a fairly large amount of gambling insurance being done on the Budget aroused suspicions and led to the whole thing coming out.

There are various methods of business which can be used for gambling. People gamble on almost anything, but the Committee of Lloyd's are determined that as far as they are concerned they are going to stamp out any gambling on legitimate methods of business. Insurance against Budget legislation and risks of all sorts is perfectly legitimate business in a great many cases. For instance, a man who is in the sugar trade, the tea trade, the wine trade, or whatever business it may be, may have made forward contracts and the whole of these contracts may be upset because the legislation of this House on the Budget has increased, or is about to increase or diminish, the cost of his commodities. He has a perfectly legitimate right to insure against his whole business being upset in such an event. The Government might consider closing the market to such risks a short period before the Budget comes on, say, a week before, or some short period like that, thereby cutting down the time during which temptation might be held out to people. That is a matter for consideration later on.

An increase of import duty is a consideration against which many merchants would find it necessary to insure. The outbreak of war between two named nations would upset trade enormously. That is a legitimate risk for the purpose of insurance. The postponing of public functions, court mourning and matters of that kind, make a tremendous difference. There is the non-arrival of goods or vessels on a named date, which is known as a time penalty risk. That, again, is a risk which is an insurable interest. There is the non-arrival of documents on a given date. All these are legitimate subjects for insurance protection. Insurances against increases of taxation and matters of that kind are negligible. It was because a largish amount of insurance was being taken out on this occasion that suspicions were aroused. Anyone who wanted to place £5,000 of Budget insurance risk was a fool if he thought he could get that business done quickly.

I could go along with £750,000 of insurance on a steamer; indeed, I could have six slips for £750,000 each in my hands at Lloyd's and everybody would say that that was perfectly right and no suspicion would be aroused, but if anyone went and asked for £5,000 of Budget insurance, everybody would ask, "What is this about?"

I worked for 10 years at Lloyd's and during the whole of those 10 years I had only twice any slip of insurance risk to show against taxation, and it did not amount to £500. That is a fair sample from one man of the size of the market, and I think I have shown that the amount of this kind of gambling is very small indeed. The Leader of the Opposition read a letter from the Committee of Lloyd's. It showed the steps which the Committee have taken to stamp out as far as possible any possibility of gambling. With that object in view they require the name of the assured to appear on the slip. That is a very proper precaution. I think that in certain events if the name of the assured is not on the slip misrepresentation undoubtedly takes place. I will not go into details, but it is perfectly obvious that the name of the assured might, in certain eventualities, make a tremendous difference as to the underwriter's assessment of the rate that he ought to receive upon the risk.

Among other insurable risks which one might mention is a particularly interesting one that happened the other day. An inquiry was made as to the rate against His Majesty being married before the Coronation. It might be said that that is a gamble. No such thing. The inquiry was a genuine business inquiry by a well-known manufacturer of china Coronation mugs. If a marriage took place bfore the Coronation two portraits would be necessary on the mugs instead of one, and it would mean that all the expenditure and the work would have been wasted. That, surely, is an insurable risk. If you are going to do away with P.P.I. policies you are going to destroy a great many perfectly legitimate risks. For instance, take the position of drapery firms in the event of Court mourning arising. They lay in stocks of modern fashions and they find in that event that their fashions, their colours and their designs have altered and the work and the money that they have put into their stocks are lost and wasted. They have an insurable risk against things like that.

Again, there are weather policies, the value of which cannot be assessed. They are taken out for agricultural shows and so on, and even the promoters of Socialist fetes like to insure against weather destroying the profits that such fetes may make. That is a perfectly legitimate risk. A large expenditure has been laid out, against the loss of which people are entitled to insure. I could quote a great many more cases, but it is not necessary to do so; but policy-proof-of-interest insurance is an essential part of the business of insurance, both for companies and for Lloyd's. It is especially so in the case of marine insurance, where there are disbursements, increased values of cargoes, and so on. In such cases it is very difficult to estimate the amount of the possible loss, and so policy-proof-of-interest insurance is necessary. I would recommend the Opposition to look at the legislation which already exists to deal with this matter, such as the Gambling Policies Act of 1909. A tremendous amount of gambling has been cut out by that Act, and the small amount which still remains can be dealt with by the Committee of Lloyd's. On Lloyd's, at any rate, there is the smallest amount of gambling of any sort. There is much worse gambling in commodities and on the Stock Exchange than anything that takes place to-day at Lloyd's. In explaining some of the difficulties in which legitimate business will find itself if action is taken on the lines suggested by the Opposition, I hope I have made it clear to the House that the honoured name of Lloyd's still stands high in the business life of this country.

5.3 p.m.

Photo of Mr William Gallacher Mr William Gallacher , Fife Western

The evidence submitted to the Tribunal, and the Report presented to the Tribunal on the basis of that evidence, call for plain speaking. Two Members of this House are being placed in the dock before the House and before the country. The one thing that the House has to do is to accept without any hesitation the findings of the Tribunal, and, on the basis of those findings, to make the strongest possible condemnation of the Members affected—Members who have shown, according to the evidence, an outstanding case of moral and political decay. But it is not enough to condemn these men, important as that is. Everyone can only hope that this example of moral collapse will be a warning to those who have been travelling, or are attempting to travel, the road which has been travelled by the ex-Colonial Secretary, in whom I am specially interested.

It would be folly to condemn the ex-Colonial Secretary as though this particular act on which the Tribunal has founded a decision had been some sudden aberration, dissociated from his past or from his colleagues. What has the genesis of this present Government to do with this moral and political collapse that is evident on the part of the ex-Colonial Secretary? Has the formation of the National Government nothing to do with it? Here is one who, we are told, was an honoured Member of this House. Men and women suffering in poverty spent their shillings and sixpences and pennies to make him a leader of his union, and you corrupt him and take him over there. Has that nothing to do with what has been going on? Not just now should he have been prosecuted, but when he openly, callously and deliberately betrayed those who had spent their money and pinned their life's hopes on him.

The Prime Minister tells us about the blare of publicity in the Press. Is he the only one that suffered from a blare of publicity in the Press? There was the hon. Member for Dumbarton Burghs (Mr. Kirkwood), there was myself, and there were others. Did anyone ever get up and protest against the blare of publicity, the lies and slanders that were made against us? What are you dealing with? You are dealing with corruption. Every Member who comes here immediately has temptation put into his path, and the very men to whom you are most considerate are the men who are subject to corruption. But, while there may be one or two in the ranks of our movement who can always be corrupted, because the weakness is there, the main body of this party will never be corrupted, try as you may. [HON. MEMBERS: "Which party?"] This party here. It may be information to hon. Members opposite to know that I am a member of this party, and pay my dues regularly to this party—the Labour party. But the Lord President of the Council and the man who wept for himself in this House were the men who were responsible for getting me denied my rights within the movement.

When you are attacking the Communists, remember that in 1921 the Communist party of this country performed a miracle such as the world has never known before. We succeeded, according to an intelligent jury, in libelling the right hon. Member for Derby (Mr. J. H. Thomas) by calling him a traitor. At that time, unfortunately, he was receiving support from many Members on this side of the House in every attack he made on us. The hon. Member for Dumbarton Burghs will tell you that it was possible for him and others to be corrupted when the War was on. The opportunities were put in front of us, but we refused to be corrupted. Then the Press came out with a blare of publicity to say that we were corrupt any- way, that we were engaged in what right hon. Gentlemen on the other side call subversive activities. But we were always open; we were very simple. When the police came to ask us, "Did you do this, that or the other?" we replied, "Yes." We were so honest. We did not know that we had been too honest until we found ourselves in gaol.

What was behind our subversive activities? Look back in the files of the Press, and you will find references to German gold. Is there an honest man anywhere? No, not according to your standard. When the Germans were defeated, and had no more gold, there were still subversive activities, and it became Moscow gold. The Moscow gold has gone the way of the German gold, and I still carry on my subversive activities, but the kind-hearted Chancellor of this country provides the gold. If the German gold and the Moscow gold had been less of legend and more of substance, I should probably have been on the way to dealing on the Stock Exchange myself.

I want to return to the question of the association of the ex-Colonial Secretary with the Government, and to the fact that the Government was started on a basis of the betrayal of the working-class movement of this country; and, where you have a Government built up on a basis of betrayal, every encouragement is given for the development of corruption. Therefore, while I condemn in the strongest possible manner the ex-Colonial Secretary, and while I am 'prepared to take the most offensive action against him because of his whole career, which has only culminated now, I declare it to be a shame on the part of the House that it can condemn the ex-Colonial Secretary and leave his colleagues alone. His colleagues are associated with him, and have known of his conduct all along—all of them. He talked of his vices, "if they are vices," but whatever he was addicted to in the way of gambling or anything else, they were all conscious of it and encouraged him in it, because they knew that, the more he played about and frequented racecourses, and the more he got into society, the more he was in their hands. If you could get the hon. Member for Dumbarton Burghs and other hon. Members here to come into your net—a tea-party here, a tea-party there—you would corrupt them if they came in contact with you, and you know it.

You corrupted the ex-Colonial Secretary. He was once an engine driver—an honest occupation, an occupation to be proud of. He left that because his colleagues had confidence in him, and he was made a leader of a great trade union, a man in whom his colleagues had confidence. What went wrong with him to corrupt him? He did not suddenly develop corruption in himself, but he got into contact, as a result of being a trade union leader, with captains of industry, and politicians representing captains of industry. They took him to the bar and they patted him on the hack—[An HON. MEMBER: "And dressed him up."] The expert in corruption may well smile. He knows his own handiwork, and, when his handiwork is cast out, he is ready to go on with the job with somebody else. Members on this side of the House have had a great lesson; let us hope that it will affect every one of us.

The working-class movement ought to be protected against the corruptive influences of capitalism. What does getting on in life mean? It means "Get property, get money, get into society." There are some of us here whom all the gold that was ever minted would not induce to leave our class, because we are proud of our class. It is the only constructive class in the country. Take away the Royal family, the aristocracy, the Stock Exchange and all the great financiers and ship them off to Timbuctoo, and society would go on. Industry would go on. There would be no corruption. But by the waving of some magic wand get rid of the working class and where are you? The ex-Colonial Secretary has gone and we must see that the Government of which he was a part goes. I do not want to deal with individual Members of the Government, but the Lord President of the Council should be associated with the ex-Colonial. Secretary and should be with him now. The ex-Colonial Secretary was always known as the "Artful Dodger" in the Labour movement, but the Lord President of the Council was a Fagin who knew how to dangle before the eyes of his victims the delights of illicit activities. "A career" was always on his tongue. Never any suggestion of coming into the Labour party to get an opportunity of fighting the workers' enemies, but "careers." We do not want careers. We want a great united movement which will put those responsible for corruption out of business, and we will put them out of business.

I want to make a few remarks about the Attorney-General. I have never studied law in the schools or technical colleges, but I study it quite a lot from practical experience in the dock. I have never heard, in any case with which I have been associated, such remarks as were made by the Attorney-General yesterday. I never heard such palpable absurdities. There has been talk about the necessity of being soft-hearted when a man is down. I am a bit of an Irishman and there is a story of an Irishman who knocked a man down and, when he was told to let him get up, he said "No, I will not. I had too much trouble in getting him down." That is how I feel about the ex-Colonial Secretary. I am not soft-hearted, but the Attorney-General seems to think that we on this side are soft-headed when he comes forward with such arguments as he presented yesterday. Lawyers are chuckling at the best legal joke for years. They are laughing at the Attorney-General. How can he tell us that it would not be fair to have a prosecution because all the material has been before the Tribunal and everyone knows all about it? What sort of story is that? We were not told that it was not desirable to prosecute Dr. Ruxton. Was there a man or woman on the jury who had not been reading all about it day after day?

Can the hon. and learned Gentleman be serious in putting forward such a proposition, that there is no evidence to go to a court, and that the Tribunal has accepted all kinds of stories which would not be admissible in a court? The Tribunal was composed of a Judge and two barristers, men of experience in all that is acceptable in the Law Courts. Do they not tell us in the report that they very carefully swept aside all that was not permissible and sifted out the evidence that was permissible and on that basis came to their decision? The Attorney-General's statement yesterday is an insult to the Judge and the two barristers who weighed the evidence and decided that there had been an unauthorised disclosure.

The Attorney-General says that a man is innocent until he is proved guilty. Are we to understand that a man has to be proved guilty before he can be arrested and put in prison? I have been arrested on many occasions, and the hon. Member for Dumbarton Burghs and I have been in prison in cells next to one another. We were held there week after week, though we had never been proved guilty. When we were tried, I was found guilty and my hon. Friend was found innocent. What sort of story is this that a man is innocent until he is found guilty? That is what we are generally told but, when an act is committed and some one is suspected of it, he is accused and then the onus is on the authorities of preparing the case against him, and the jury has the responsibility of deciding on it.

I demand that these men be tried. It is the duty of the House to accept the report of the inquiry and condemn these men and compel them to resign. At the same time they have a right to appeal. If they feel that there is any possibility of injustice, they cannot be condemned for life. With all the corruption that is going on, with all the insidious and insistent corruption that one feels, one gets very suspicious that there are reasons why the Government wants no prosecution. It may be that, if there is a prosecution, other things will come out. The hon. Member for Balham and Tooting (Sir A. Butt) is right. He demands a prosecution, and I back up the demand. He wants it in the hope that he will be cleared; I want it in the hope that both of them will go to gaol as a warning and an example to the people of the country and to Members of this House. But a prosecution is demanded. The people of the country have demanded a prosecution. I ask the Attorney-General to give up this foolish playing about with phrases which have no meaning, and to take the responsibility of making a prosecution against these men on the basis of the Official Secrets Act. I demand a prosecution in the name of the people of this country. Men and women in buses and trams, wherever you meet them, want to know why others are prosecuted and these are not. They want to know, down in the south where there have been acts of sabotage, why a number of shop stewards against whom there is nothing are dismissed from their jobs because of their Labour sympathies. They want to know why men have been thrown into prison on the most circumstantial evidence. Are you afraid of something coming out? Make a prosecution or, if you do not, open your prison doors.

If you are not prepared to make a prosecution of these two, there is not a man who should be in prison. Men have been hanged on less circumstantial evidence than you have in this case. Deny it if you can. Make a prosecution and, when you make it, understand that you are making a prosecution which will expose and end the rule of the National Government, which was founded on corruption and the betrayal of the working class. [Interruption.] Laugh at your handiwork. The ex-Colonial Secretary was not laughing when he walked out to-day. The other fellow was not laughing when he sat there. [An HON. MEMBER: "You were the only one to laugh."] Yes, I had the right to laugh. For years and years he carried on every kind of duplicity, and when any charge was brought against him he could always get out of it by saying, "It is the Communists. I have not done anything wrong; it is these dirty Communists who are spreading these stories." It was riot the Communists who spread the stories about the Budget leakage, and he cannot use the Communists to-day to get out of that. What a happy man he would have been if he could have got up there and, instead of talking himself to tears, an old practice, had said, "Oh, it is these dirty Communists who spread the story." He could not do that to-day, and now he is finished. I want to say that if there is a prosecution—

An HON. MEMBER:

"Swine."

Photo of Mr George Griffiths Mr George Griffiths , Hemsworth

On a point of Order. Has an hon. Member the right to call an hon. Member who is speaking a swine?

HON. MEMBERS:

"Withdraw."

Photo of Mr Robert Bourne Mr Robert Bourne , Oxford

It is certainly not Parliamentary.

HON. MEMBERS:

"Withdraw."

Photo of Mr James Griffiths Mr James Griffiths , Llanelly

May I ask that the hon. Member who made use of that unparliamentary expression should be named?

Photo of Lieut-Colonel Hon. Glyn Mason Lieut-Colonel Hon. Glyn Mason , Croydon North

I apologise to you, Sir, for using that unparliamentary word.

Photo of Mr James Griffiths Mr James Griffiths , Llanelly

The hon. and gallant Gentleman has apologised to you, Sir. May I ask you to ask the hon. and gallant Gentleman to apologise to the House?

Photo of Mr Robert Bourne Mr Robert Bourne , Oxford

The hon. and gallant Gentleman must withdraw the expression formally.

Photo of Lieut-Colonel Hon. Glyn Mason Lieut-Colonel Hon. Glyn Mason , Croydon North

In deference to your Ruling, Sir, I withdraw the expression forthwith.

Photo of Mr William Gallacher Mr William Gallacher , Fife Western

I know that I have a very provocative manner, and therefore I did not myself feel like taking any exception to the remark. So long as such remarks are directed towards me, it can be taken for granted that I am free from corruption. I want to demand a prosecution, but while I demand it, I must make it clear that a prosecution would so expose this National Government, which is founded upon corruption and has carried on a career of corruption as evidenced by subsidies and what not—[An HON. MEMBER: "What about murders in Russia?"]. I am dealing with this particular matter, but if there is any occasion to make a discussion on Russia, please arrange with your Front Bench, and I shall be only too happy to discuss it. If there is a prosecution, this Government, which has been based upon corruption and which threatens the country with wholesale corruption and destruction, will come to a speedy and a well-deserved end. I am glad that the ex-Colonial Secretary has gone from the scene, and I shall be happier still, a thousand times happier, when his colleagues have been forced to follow him into obscurity.

Photo of Mr John Simon Mr John Simon , Spen Valley

I beg to move, in line 2, to leave out the words, "now considered" and to add instead thereof the word "accepted."

I have no desire to speak in the Debate, but it may be for the convenience of the House if I now move from this bench the Amendment to the Motion on the Paper which the Prime Minister indicated at the end of his speech.

Amendment agreed to.

5.36 p.m.

Photo of Mr Thomas Johnston Mr Thomas Johnston , Stirlingshire and Clackmannanshire Western

I beg to move, in line 2, after the word last added, to add: and this House, in view of the definite findings of the Tribunal and the disclosures of the gambling practices in the city of London, calls upon His Majesty's Government to take appropriate action. I understand that the procedure which has been adopted is for the general convenience of the House, and that an opportunity will be taken by the Attorney-General at a later stage in the proceedings to answer any points raised by previous speakers. I should like at the outset to add my word to the commendation of the Tribunal of Inquiry uttered by the Leader of the Opposition. Probably, with the exception of the Attorney-General, I spent more time during the sessions of that Tribunal at the Law Courts than did any other hon. Member of this House. While I was one of those Members who most strongly believed that the proper course of procedure in the sifting of the allegations was not to set up a judicial Tribunal, but a Committee of Inquiry, I want frankly to concede that members of the Tribunal sitting at the Law Courts fearlessly probed to the uttermost all the evidence brought before them, and, in my judgment, without fear or favour or regard to those in high places. They pointed in their report to a Cabinet Minister, to a wealthy Member of Parliament, and to a wealthy newspaper owner as the guilty parties chiefly concerned, but they also referred in scathing terms to the evidence offered by a number of lesser fry, some of whom they have openly accused of perjury.

We have heard nothing whatever today as to whether any action is to be taken with regard to those who openly and deliberately perjured themselves in the Law Courts during the hearing of the evidence on the Budget leakage. This House, obviously, does not desire to seize any opportunity to show vindictiveness to individuals. It is clear that there is a general consensus of opinion that the two Members of this House concerned have been punished probably more terribly than by any punishment that could be inflicted by a prosecution in the Law Courts, and as far as we on this side are concerned we have no desire whatever to add to the misery and wretchedness which these hon. Members must be suffering. But there must obviously be no suspicion created in this House or outside it of any condonation by the Members of this House of the practices, not the offences, of individuals, which have aroused outside this House wholesale condemnation in the Press, in the street, and wherever men and women discuss public affairs.

There must be no suspicion of any affaire Stravisky in this land, and it is, therefore, our duty to see to it that not only the two hon. Members found guilty should resign—that is a small matter—but that this House should take whatever steps are open to it to erase from our public life the practices and courses of conduct, which, as I hope to show before I sit down, are making the name of the City of London stink in the nostrils of decent men and women in this country. It has been said that those who enter this beggar-my-neighbour system and are robbed by more cunning manipulators than they are themselves deserve all they get. In this relentless financial war dog eats dog, and we are not very much concerned whether brokers get the better of underwriters or underwriters get the better of brokers. What we and, I hope, every Member of this House are concerned about is the gambling system, the something-for-nothing system which has grown up, not only in Lloyd's and the Stock Exchange, and the produce market, but, as I hope to show, in the banking system and all over the money market, and which has not only grown up in recent years, but is a part of the financial business system which the vast majority of the Members of this House still politically and economically support.

The late Lord Russell of Killowen, when he was Lord Chief Justice, addressed some stinging observations on the commercial morality of the City of London which ought to be remembered. Speaking on the 9th November, 1898, he said: Fraud is rampant, fraud of a most dangerous kind, widespread in its operations, touching all classes, involving great pecuniary loss to the community, loss which is borne by those who are least able to bear it. That is not the comment of a Socialist or a Communist, but of a Lord Chief Justice, made deliberately in the City of London to an audience of those who were best able to appreciate the truth of his observations. Since 1898 we have had a steady stream of Factors, Hooleys, and Lee Bevans. Year after year there has been some larger vulture who has succeeded in skimming off the savings of hundreds and thousands of poor people who can ill afford to lose this money. No one can dispute what Hooley did to the Lancashire cotton industry. The effects are felt even to this hour in the industry. Millions of money were swept away almost in a night. The Balfour Committee set up by this House reported that: It was a disquieting phenomenon that a great staple industry should fall so easy a victim to the speculative company promoter. And the Macmillan Committee, which reported in 1931, said that in one year, 1928, when investments amounting to £117,000,000 were put in by the British people, at least 47 per cent. of it had disappeared, vanished utterly, in 30 months. Now another corner of the curtain has been lifted on the doings of the underworld. One Sunday newspaper described the city as a casino. On page 38 of the report of the Tribunal you will find a financier, a company promoter, promoting companies with £500,000 capital. He himself had no assets whatever beyond a court judgment. He is described by the report as an impecunious speculator. Yet this impecunious speculator with no assets can walk into Lloyd's and speculate £2,500, which he has not got, upon alleged Budget contingencies. On page 97 of the evidence given before the Tribunal you will find people betting on a rise of Income Tax who have never paid any Income Tax at all, and who admitted in court that they had never been called upon to pay Income Tax. On page 88 you will find a bank this time intimating that it wanted a policy for £4,000 against a rise in Income Tax for a client, and that this transaction had to be put through in the bank's name there was to be no disclosure of the client's name.

On page 135 you will find a Cabinet Minister netting £632 9s. clear on a bet of a General Election being held in 1935, when he was a member of the Cabinet which presumably had something to say in fixing the time at which the General Election would be held. On page 131 you will find a Member of Parliament netting in one year £12,343 on Budget contingencies. The hon. Member for Clackmannan and East Stirling (Mr. MacNeill Weir) appears to have been premature when he apologised for certain references to Members of Parliament hurrying out on Budget day to speculate on the Budget. In the light of later findings his apology has some appearance of having been premature. We find in full swing a great system of gambling on what are called honour policies, unstamped, unenforceable at law, with no personal interest of the assuror. Other people are chivvied off the streets, football pools are subject to the anxious attention of this House, church raffles frowned upon and banned, but in the City of London, the heart of the Empire, there is a wholesale and retail system of gambling upon contingencies, in which the bettor has not the slightest discoverable insurable interest.

Since the report the Committee of Lloyd's has bustled forward to say that upon their honour there would be no more of this contingency gambling. They are going to take steps to enforce a rule to prevent it for the future. We have had these promises before. In 1720, that is a long time ago, an inquiry was authorised by this House into the projects carried on by subscription in and about the City of London and Westminster—activities dangerous to trade and to the subjects of the Kingdom. In 1734 an Act of Parliament was passed, and for all I know to the contrary, is still on the Statute Book, for the prohibition of all insurances on the course of the public funds. In 1769, 35 years afterwards, we find that gambling policies are still issued at Lloyd's on the prospect of two Peers of the Realm losing their heads within a year, and also on dates for the dissolution of Parliament. I regret to say that most of these speculators seem to have been Scotsmen. In the same year, as we are informed in the official record of Lloyd's, all the ingenuity of the professional stock jobber was devoted to manipulating the prices of the public funds by spreading false reports, the suppression of news and every other method that unscrupulous rapacity could suggest.

That is ancient history. We come to 1909, when an Act of Parliament was passed to prevent the issue of gambling policies. That Act was passed, it is true, but it dealt with marine insurance only. Every other form of speculation and gambling at Lloyd's is still permissible. There is no collective guarantee behind a policy at Lloyd's. There are only individual assurances granted by the individual assuror. I am told that there has been no failure for 40 years at Lloyd's to implement a promise. If that he so then there is more reason on the part of the Committee of Lloyd's to agree with the Amendment which we are asking the House to accept. We are not accusing Lloyd's or any member of Lloyd's of defaulting. We are prepared to pay a tribute to them that they seem to act on a higher standard or code of honour than do their comperes in the United States of America, but at Lloyd's an individual assuror may accept more than he is able to fulfil. They certainly have in the past, even down to this hour, been engaged in speculating upon contingencies in which they have no insurable interest one way or the other, and as far as Lloyd's are concerned the case is proved that an inquiry ought to be held. I trust that the Chancellor of the Exchequer will be able to indicate that the Government are prepared to accept our Amendment.

But it is not only Lloyd's. If that were the case it would be a small matter. We come to the responsible banking systems of the country. Here we find a curious state of affairs. Under the Companies Act of 1929 every limited liability company must keep a register of its members, the names and addresses of shareholders, open for inspection. But what do we find the banks doing now? For the last six years or so they have been busily engaged in erecting a system of what they call banking nominees. Large blocks of shares in companies are held by these nominees of banks, and it is now virtually impossible in the case of many public companies to discover who are the beneficial owners of the shares. References were made during the recent Inquiry to the fact that the local manager of the Bank of Athens was busily engaged in arranging that speculators who were taking out policies on Budget risks should not have their names and addresses disclosed, but that the policies should be held by nominees of the bank.

There is an even more sinister and dangerous feature of this nominee system. Let us suppose that the director of a public company obtains advance information as to what are the prospects of his company paying a dividend. He knows before outside speculators what his company is likely to do. Through this nominee system the director can speculate in the shares of his own company; he can buy and sell through bank nominees, and his name is never disclosed. He can raise or depress the shares of his own company and make profits in the process. I see an ex-Financial Secretary to the Treasury in his place. He has repeatedly asked questions in the House as to whether the Government would take steps to stop this nominee system by which the Companies Act is being rendered vain and ineffective. His questions have been dodged by the President of the Board of Trade and he has obtained no satisfactory answer, although the facts are admitted. I submit it is high time that this practice, which is being deliberately carried on by the great banking corporations of this country, should be stopped by the House of Commons in the interests of public morality.

The Provident and Friendly Societies Act, with which I am even more familiar, is also being dodged. They have already discovered a trick. They have obtained a legal judgment under which they are compelled to give only the names of the shareholders and not their addresses. We have had comments by judges in the High Court to the effect that the Act is being destroyed through this evasion, which is being carried on in a wholesale and retail manner in this and every other city in the land. If the Chancellor of the Exchequer desired, I could give him references to judgments in the Court on this matter. I believe I am right in saying that if the members could get the addresses of their fellow members, steps would be taken to clean up some of the less reputable concerns which are now operating safely because they are not compelled to give the addresses of the members.

To-day at Question Time the Prime Minister answered a question by my hon. Friend the Member for Shoreditch (Mr. Thurtle) about the Newfoundland loans. I accept at once the Prime Minister's assurance that the firm of brokers mentioned in the American journal "Time" deny they were concerned in speculation on advanced news in connection with the Newfoundland loans. I would beg the Chancellor, however, to set somebody to the task of looking up the movements of two Newfoundland stocks prior to the Government's announcement on the eve of 21st November, 1933, of their intention to convert the old stocks and to give the holders new stocks in their place. I am not depending upon the American magazine at all, and these facts which I am about to give can be checked by anyone who will refer to the files of the "Times." There were no dealings in the market in this 3 per cent. Newfoundland stock for three or four months prior to the Government's announcement. Then on 20th November, two days prior to the Government's announcement, it suddenly without any excuse became an active market. Any number of people was prepared to buy this 3 per cent. stock and it rose in one day—

Photo of Mr Neville Chamberlain Mr Neville Chamberlain , Birmingham, Edgbaston

To which stock is the right hon. Gentleman referring?

Photo of Mr Thomas Johnston Mr Thomas Johnston , Stirlingshire and Clackmannanshire Western

The 3 per cent. loan. On 20th November it rose from 70½ to 72. On 22nd November, when the Government's announcement was made, it jumped miraculously to 95. My point is that for months there was no movement, and that two days prior to the Government's introduction of the Bill, this stock suddenly became an active market. I would also like the Chancellor to be good enough to have inquiries made into the operations in connection with the 3½ per cent. Newfoundland stock. On 31st October transactions took place in this stock at 79¾. On 15th November it jumped to 81; on 16th November to 81¼, and on 21st November it was 83. Here again there was a slow but steady increase in the value of this stock for several days prior to the Government's announcement. I repeat that we accept unreservedly the Prime Minister's denial that the firm of brokers mentioned in this magazine had any dealings in these stocks, but I beg the Chancellor of the Exchequer to cause inquiries to be made into the sudden and inexplicable price movement and the active operations in the market several days prior to the announcement made by the Government that they proposed to take over the Newfoundland stocks.

Photo of Mr Irving Albery Mr Irving Albery , Gravesend

Before the right hon. Gentleman leaves that matter, he would make his point much better if he would quote the marking of the dealings on those days.

Photo of Mr Thomas Johnston Mr Thomas Johnston , Stirlingshire and Clackmannanshire Western

I do not intend to be led into that, and I have very skilled advice that I should not be led into it. I prefer to ask the Chancellor of the Exchequer to cause inquiries to be made, and if the hon. Member has any advice he can give to the Chancellor in this matter, I am sure the Chancellor would be glad to have it in due course. There are also operations in the produce market which ought to receive anxious inquiry from all sections of the House concerned with the morality, such as it may be, of our commercial system. Nobody can justify what happened on the pepper market and nobody attempts to justify it. Nearly £1,000,000 of capital disappeared in a few months and surely nobody is prepared to justify that. There are sudden increases in prices, there is bleeding of the consumer, there is irregularity of supplies and there are cheating and finessing in the necessities of life of our people. Surely all that has nothing to do with ordinary trading, with buying and selling and with the supplying of markets. How far are these practices necessary and how far are they pure gambling? How far are they hostile and derogatory to the more honest and useful processes in our commercial system? Surely there ought to be inquiries made into these matters.

In this country a great block of our insurance business is already more or less subject to Government intervention and control. There is an Industrial Assurance Commission which has the duty of supervising types of policy and the interests of the insured. It has the duty of looking after the interests of the policy-holders. If it be right that the great Prudential Assurance Company, so far as its policies under £300 are concerned, should be subject to careful scrutiny by a Government official, on what grounds should its operations in the case of policies above £300 escape supervision? In the United States they have a system—and I am not now seeking to justify it—whereby there is an insurance commissioner for each State in the Union whose duty it is to supervise all types of insurance and to protect the insured and the insurer alike. Whether that is the best system or not, I am not prepared to say. My own view is that the whole business should be converted into a public service. In so far as it has any utility, it ought to be run as a public service and in so far as it has no utility and is a pure gamble or speculation, a "beggar-my-neighbour" business, it ought to be stopped forthwith.

All the mischances and hazards of life ought to be shared co-operatively. That is the view held by those who sit on these benches. We ought to share in each others misfortunes. We ought to protect the merchant who adventures in the national interest. We know that great blocks of our trade could never be carried on unless the venturer or merchant had adequate safeguards and guarantees. But the practices disclosed in the Tribunal Inquiry, the practices condemned by the Balfour Committee, by the Macmillan Report, by Lord Russell of Killowen, the late Lord Chief Justice of England, and by every decent man and woman in the land, are growing day by day and week by week in strength, and spreading into places where they have never been before. Surely, while there is yet time and for the sake of the good name of this land, all this calls for an urgent inquiry set up by the Government, and that is what we press upon the House by our Amendment.

6.19 p.m.

Photo of Mr Donald Somervell Mr Donald Somervell , Crewe

I have been asked two or three questions which I shall try to deal with shortly at this stage of the Debate. The right hon. Gentleman the Member for West Stirling (Mr. T. Johnston) asked me whether I had considered proceedings for perjury against certain witnesses whose evidence was adversely commented upon and who were not believed by the Tribunal. I have considered that matter. The House will, of course, appreciate that it is one thing for a judge or tribunal to say, having heard conflicting witnesses, that they disbelieve particular witnesses, but it is quite a different thing to have evidence available which is likely to lead to a conviction for perjury. I have considered the comments made by the Tribunal on various witnesses very carefully and I am satisfied that there is no evidence which would justify proceedings of the kind suggested by the right hon. Gentleman. The hon. Member for West Fife (Mr. Gallacher) addressed some remarks to me but as I feel that the gap between our legal opinions is, if possible, even wider than that between our political opinions, it would be hopeless for me to attempt to bridge that gap in the time at my disposal.

I was asked two questions by the right hon. Gentleman the Leader of the Opposition. First, he asked what was my justification for stating yesterday that, in my opinion, for an offence under Section 2 (1) of the Official Secrets Act to be proved, the communication must be deliberate, and he pointed out that the word "deliberate" does not actually occur in that Section. It is, of course, the general basis of our criminal law that in order to establish an offence you must establish evil intent. It is true there are certain offences which have been made offences by Statute, in regard to which it has been held that evil intent is not a necessary ingredient. I am, however, completely satisfied that evil intent is a necessary ingredient in the offence created by Section 2 (1) of the Official Secrets Act, and that is my justification for what I said yesterday. The right hon. Gentleman also drew attention to what I said yesterday to the effect that the offence of receiving under Section 2 (2) of the Act could not be proved unless the evidence established as a condition precedent an offence under Section 2 (1). The right hon. Gentleman the Member for Caithness and Sutherland (Sir A. Sinclair) referred to the same point. That is my view of the Act as it stands, and if any hon. or right hon. Gentleman cares to look at it again he will find that in Section 2 (2) the relevant words are: If any person receives any … information knowing or having reasonable ground to believe at the time when he receives it, that the … information is communicated to him in contravention of this Act"— That I think supports the proposition which I made. I agree with the suggestion made by the right hon. Gentleman that it discloses a possible gap in the Act. That is to say, it leaves uncovered a case in which somebody gets possession, say of a document through the inadvertent omission or act of the person to whom it was entrusted—a case where someone, outside that area, gets possession of a document, realises that it is a secret document of which he ought not to be in possession, and proceeds either to communicate it to somebody else or to make improper use of it. I think there is a gap there. I do not want to state too categorically at the moment how far the gap goes or what would be the proper method of dealing with it, but I certainly give the House an undertaking that I will consider that position and see whether the law requires amendment in order to deal with that matter.

Photo of Mr Clement Attlee Mr Clement Attlee , Stepney Limehouse

That gap would also extend to someone who deliberately made a public servant drunk so that he gave away secrets and who then used the information so obtained. Again, no proceedings could be taken against him?

Photo of Mr Donald Somervell Mr Donald Somervell , Crewe

I think that is so. I do not want to deliver myself of a dictum on the effect of intoxication on the question of whether an offence has or has not been committed. It is an exceedingly difficult branch of the law, although I think principles have been laid down on the question by higher authorities. But I think there is nothing between us. The point is clear. A communication might easily get out, in circumstances which would not create an offence under Section 2 (1) as the Act stands. A person might get the information and make improper use of it, and as the Act stands it would not, I think, be an offence. It is that possible gap which I am undertaking to look into, in order to see whether action should be taken.

6.25 p.m.

Photo of Sir Stafford Cripps Sir Stafford Cripps , Bristol East

I do not, I am afraid, accept the view which the hon. and learned Gentleman has put forward in regard to the Official Secrets Act. There are two points with which I want to deal regarding the advice which he has tendered to the House and the action which he has decided to take. I realise that he had an extremely difficult and onerous task in arriving at a decision on this matter, which is of very grave importance, and the gravity of the matter is my excuse for venturing to set my opinion against his on the interpretation of the Statute and on the action to be taken. I think it very desirable that, however much sympathy we may feel for those people who are suffering as a result of the decision of the Tribunal, we should not allow our action to be determined by that sympathy because those two persons are Members of this House. It is of the utmost importance that precisely the same measures should be meted out to those two individuals as would be meted out to office boys in the Treasury, did a similar occurrence happen in respect of them. Let me first deal with the question of the Official Secrets Act. The first observation of the hon. and learned Gentleman with which I differ is his statement that evil intent must be shown under Section 2 (1). I gather that he does not mean evil intent in the ordinary way in which that phrase is used, and that he means the mens rea.

Photo of Mr Donald Somervell Mr Donald Somervell , Crewe

My remarks related to justifying the word "deliberate," which I used yesterday and which was quoted by the right hon. Gentleman opposite.

Photo of Sir Stafford Cripps Sir Stafford Cripps , Bristol East

People sometimes misunderstand the words "evil intent." I knew that the hon. and learned Gentleman did not mean it in the way in which it might be understood, and I therefore ventured to correct him in case a mistaken idea should get wider publicity. His contention is that under Section 2 (1) you must not only prove the communication but prove that the communication was purposely made. He stated that that was the ordinary implication as regards a common law crime, but he also observed that there were statutory offences in connection with which that requirement had not been imposed. Now this is a statutory offence with which we are dealing, and one has to look at the words of the Statute to see what was the intention of Parliament in laying down this circumscription of this new crime. One thing clear is that no such words as "deliberately" or "with evil intent" are inserted before the word "communicates" and it would have been perfectly simple to have done so had that been the intention. Again, if one looks at Section 12, which is the definition Section, it becomes clear from the part dealing with communicating and receiving that the expression is not limited to an intentional or deliberate communication, because the expression "communicate" is said to include any communicating, whether in whole or in part, and whether … the information itself or the substance effect or description thereof only be communicated or received. Those words show that the word "communicates" used in Section 2 (1) is intended to have the widest possible meaning, and I suggest that even if it were not possible or likely that in a case like this the communication could be proved to be deliberate, yet it would be perfectly proper to bring it before a court to test whether or not this came within the Act. The hon. and learned Gentleman is not asked to decide this question. All he is asked to do is to say whether it is a proper matter to go to the court for decision. I must say that I sympathise with one very small part of what was said by the hon. Member for Balham and Tooting (Sir A. Butt), and that was that he wished the right to be tried in a court. That is a right to which he is entitled, and the right hon. Gentleman the Member for Derby (Mr. J. H. Thomas) is entitled to that right if he wishes it. The fact that the hon. and learned Gentleman thinks that it is difficult to prove the case has no relevance as regards the right of those accused persons to be tried if they desire to be put upon their trial.

The difficulty of proof, no doubt at the present moment, may seem to some lawyers fairly considerable, but let it be borne in mind that no inquiries have been made as far as I am aware as regards what other evidence can be obtained. This matter has not gone to the Director of Public Prosecutions to see what other evidence is available. The only thing that has been done is to hold a court of inquiry. It has done its best, it has sent for everybody who, it thought, might be useful witnesses, but it has not been able to use the resources of Scotland Yard to make inquiries whether other witnesses can be obtained from people at the golf club during the Easter vacation and other people who were about the Colonial Office, and matters of that type. Clearly, inquiries might show that there is further evidence. It seems to me that the question for the hon. and learned Gentleman to decide merely comes to this: Suppose he had been sent this dossier of evidence, with no decisions upon it at all, from a source which he considered absolutely reliable, would he not then have sent it to the Director of Public Prosecutions in order that he might initiate a prosecution? I venture to think that if this had never come before a Tribunal but the information had been supplied there would not have been the slightest doubt, in the case of a low placed civil servant, that a prosecution would have been initiated. That is the test which, in my submission, the hon. and learned Gentleman has to apply.

Let me come to the second paragraph of the Section. The Attorney-General says that you cannot bring proceedings against Mr. Cosher Bates or the hon. Member for Balham and Tooting unless you could first prove there had been a breach of Sub-section (1). Again I join issue. The Section, omitting the immaterial words, reads as follows: If any person receives any information knowing or having reasonable ground to believe, at the time when he receives it, that the information is communicated in contravention of this Act, he shall be guilty of a misdemeanour. It is only a reasonable belief that it was communicated in contravention of the Act that has to be proved. Nobody has to prove it was communicated in contravention of the Act. It is entirely a question of whether Mr. Bates or the hon. Member for Balham and Tooting thought, when they got the information, that it was being communicated in contravention of the Act. It is absolutely certain, as certain, I should think, as anything can be, that if these people got the information and utilised it, as they did, they must have known it was being communicated in contravention of the Act—certainly the hon. Member for Balham and Tooting, who cannot say he does not know anything about the Official Secrets Act. Every Member of the House is aware of it. It is definitely not a question of the prosecutor proving that it is being received in contravention of the Act. It is a question of whether at the time the man believed it was being given him in contravention of the Act.

Therefore, it would be perfectly possible to prosecute the receiver of the information even if you do not prosecute the giver of the information. I am not suggesting that that course should be adopted, but I do deny the premise of the hon. and learned Gentleman that you cannot proceed under Sub-section (2) unless you can convict under Sub-section (1). That clearly must be wrong, and I think the hon. and learned Gentleman ought to reconsider this matter in the light of what I suggest to him is a perfectly clear interpretation of Sub-section (2) of Section 1. The guilty mind in the second Sub-section is the mind that believes it has received information in contravention of the Act. That amount of guilt must be shown. That is almost easy to assume if the person gets information to which he knows he is not entitled, from a person who, he knows, is not entitled to give it to him.

So much on the question of whether there ought to be a prosecution in consequence of the Tribunal Report. There is one other observation that I wish to make on that. There seems to be some implication in what the hon. and learned Gentleman said yesterday that the Tribunal have suggested that this communication might have been casual and not purposeful. If one looks on pages 17 and 23 of the Tribunal's Report one finds that there is no suggestion of that sort at all. After saying on page 17: Mr. Bates was also in our view guilty of misstating and suppressing the truth and for the same reason"— which is a fairly powerful statement to he said about a witness, although the hon. and learned Gentleman does not consider it sufficient for a charge of perjury—the Tribunal says: Having regard to the matters set out above we, having heard the witnesses and observed their demeanour, find that there was an unauthorised disclosure of information relating to the Budget for the present year by Mr. J. H. Thomas to Mr. Bates, and that use was made of this information by Mr. Bates for the purpose of his private gain. I do not know how anyone can say more strongly or with more intention to show that it was a deliberate disclosure. The Tribunal says that someone has made an unauthorised disclosure of information relating to the Budget, and the implication is that, unless he was acting in his sleep or under the influence of drink, it was a disclosure of which he was conscious, and, if conscious, undoubtedly deliberate. Exactly the same applies if one reads the paragraph on page 23, where the Tribunal, after saying that they do not believe the explanation which was given by the hon. Member for Balham and Tooting, states: On the contrary we find that there was an unauthorised disclosure by Mr. J. H. Thomas to Sir Alfred Butt of information relating to the Budget for the present year. Anybody who reads the rest of the report knows that that unauthorised disclosure was made at the Colonial Office in the Colonial Secretary's room on the morning of the Budget. That is the only time it could have been made. To say that it was casual, was not thought of, was not deliberate, is at least something which, in my submission, ought to be tested by a court of law and as to which the Attorney-General ought not to constitute himself the judge as be has done. He is taking a very grave responsibility in withholding this matter from the courts and himself being the judge as to whether or not this is a matter which, if his interpretation is right, is or is not deliberate. I can imagine no better thing to refer to the court, if it be the case that it must be deliberate, as to whether this unauthorised disclosure was deliberate or not.

I pass to the second part of the Attorney-General's explanation. He said, in the answer which he gave yesterday: I am not, of course, suggesting that in no case should a prosecution follow on the report of such a Tribunal, but it would be somewhat foreign to our general methods that information which results from the existence or exercise of wide powers of compulsory interrogation and discovery of documents of this kind should be made the basis of a subsequent criminal charge."—[OFFICIAL REPORT, 10th June, 1936; col. 207, Vol. 313.] I profoundly hope that that is not going to be introduced as an incident in the life of this country. The whole of our administration is full of methods of inquiry. District auditors are sent down to make wide inquiries for the very purpose of discovering whether there is any criminal act which would result in prosecution. There are mining inquiries, in one of which I have been engaged, and I profoundly hope that it is not going to be suggested that, because in the course of such an inquiry wide publicity is given to certain facts or figures that are ascertained, therefore you cannot prosecute as the result of it. If you take wreck inquiries and such an inquiry as that into "La Crescenta," is it going to be said that, because of the wide publicity in the Press, you cannot prosecute as a result of it?

This produces the most fantastic results: the more important the crime the less the possibility of prosecution. If this had been some little leakage through some minor official which had resulted in someone making £50, it would never have come to the House, there would never have been a tribunal of inquiry, but it would have gone straight to the courts for prosecution. Because it was important, because important people were concerned in it, because large sums were concerned, we are told that, having set up a tribunal to ascertain whether anything was wrong, and having ascertained that something was wrong, nobody must be prosecuted. It is going to be a most unfortunate incident in the public life of this country if, whenever an inquiry is made to ascertain whether public servants or other people are guilty of crimes as regards the public interest, we are then to be told that, because we have made the inquiry, the Attorney-General does not think it the right thing to do to proceed with a prosecution.

I devoutly hope that the hon. and learned Gentleman will reconsider his opinion on this matter. I hope that he is going to be, as I know he is, a big enough person to reconsider his opinion, because the repercussions of this in the country will be very different from what some hon. Members imagine. I do not think that there is any feeling of vindictiveness in the country, and I hope sincerely that there is not, but I do think that there will be a feeling that the ordinary man gets prosecuted and that, for some reason, because these persons are Members of the House of Commons, they are not prosecuted. That may be entirely wrong, but there will be, I believe, that feeling in the country, and these excuses which the hon. and learned Gentleman has put forward for not going forward with this prosecution are excuses which cannot possibly hold water. His final one was: There is a further point. In a criminal trial the fundamental principle is that the jury should act and act only on the evidence called before them at the trial. It would, of course, in this case be impossible to obtain a jury who were not familiar with the findings of the Tribunal, and indeed with much of the evidence called before them."—[OFFICIAL REPORT, 10th June, 1936; col. 207, Vol. 313.] That arises in every cause célèbre that comes before a magistrate. It may be a good reason for getting rid of preliminary proceedings as we have them in England and for adopting the Scottish method, but it is certainly no good reason for distinguishing between this preliminary inquiry held before a Tribunal and that which is carried on at Bow Street day after day in such things as, for instance, the great fire conspiracy case, when every evening paper in London had full accounts of what happened before the magistrate. Everybody who could have been picked for a London jury would have read all about it. That may be a misfortune, but with wide publicity in the Press it is one of the things we have to accept in connection with the administration of the criminal law, and as regards that there is no distinction between this case and any other cause célèbre.

Photo of Mr Donald Somervell Mr Donald Somervell , Crewe

The magistrate is bound by the rules of evidence, and this Tribunal was not. The magistrate does not make definite findings, as this Tribunal did. The magistrate merely decides that it is a proper case to go to another court.

Photo of Sir Stafford Cripps Sir Stafford Cripps , Bristol East

I understood, from what the right hon. and learned Gentleman said yesterday, that the jury would be familiar with the findings of the Tribunal and, indeed, with much of the evidence called before them. The magistrate finds that there is a prima facie case. That is all that has been found here, as I understand it, according to the Prime Minister. [Hon. MEMBERS: "No!"] Well, that is what I understand. He distinguished very carefully between these people being found guilty of a crime and their being found by this inquiry to have done something which they ought not to have done. I put it in that form. There is no suggestion here that this Tribunal has found them guilty of a crime. I understood that was emphasised by the Prime Minister, and that I think, everybody understands. They have been found guilty of doing something they ought not to have done, in much the same way as when a magistrate finds a prima facie case against someone he has found that prima facie he has been doing something or other. In such a case the persons accused generally reserve their defence. In this case they had the opportunity to call evidence and speeches were made upon the evidence, and although it is quite clear that this Tribunal is different from a magistrate's court, so far as the incidence of publicity is concerned there is substantially no difference between the one and the other. If it is an excuse in this case not to proceed with prosecutions because of the publicity that has been given to the matter, it would be a very valid excuse in a great number of other cases.

In conclusion, let me say of the three reasons put forward by the hon. and learned Gentleman there is none of them that I can accept, and I do ask him to reconsider this matter, because I believe it is of the utmost importance both that these individuals should be prosecuted, as any other individuals would be, and that they should be given the opportunity, if they want it, of that prosecution.

6.48 p.m.

Photo of Sir Alan Anderson Sir Alan Anderson , City of London

We have been taking part in a sad Debate, which was started and which has been for the most part kept on a high level of dignity, and I feel sure it is the wish of all of us that the Resolution to which we come should be on the same high level. I myself very much share the view expressed by the hon. Member for Bridgeton (Mr. Maxton) that it would be a pity to tack on to this Resolution any comments on gambling proceedings in the City of London or elsewhere. I sit for the City of London. The House is proud of its dignity, and the City of London is proud of its dignity. The great institutions of the City are very proud of their dignity, and we are very proud of them and we ought to be. Those institutions have been a great part of the machinery which has built up and maintained our trade, and we want them; we wanted them never more than we want them now. It may be said, in fact I think it has been said this afternoon, that we should tack on to this Motion a condemnatory clause about one of these institutions because it has led, apparently, some innocent people into the vice of gambling.

What actually happened? Two men, regular gamblers, as near to being professional gamblers as you can be, according to the findings of the Tribunal acquired exclusive information of great value to them. It was a "tip." When a gambler gets a "tip" what does he do? He at once seeks to use it. As well expect an ice not to melt on a boiling hot day as expect a gambler not to make use of a "tip." They resort to the City, they go to the Stock Exchange. We all know that it is possible to gamble on the Stock Exchange. We have not anything like the habit of gambling on the Stock Exchange which they have in many other countries, but I personally have no hope that we shall prevent gambling on Stock Exchanges in the life of this Parliament or in the life of the next, even if there be a change in the Government. That is one of the inherent troubles of humanity; we cannot get out of it, and what we must do is to support the committee of the Stock Exchange and see that they do their job well and truly.

Those two men, with their "tips," went to the Stock Exchange, and they did not come off very well on the Stock Exchange. They speculated, but they did not make the fortunes they had expected. Then they committed a cardinal error. They went to Lloyd's, separately, apparently. They thought it would be easier, because Lloyd's is a very open place. They can go to a broker and can make a direct speculation on the direct risk, which they did. And that was their undoing. Notice how Lloyd's protects itself. First, the amount was too large. There are some small risks covered on events of this kind—for which, generally, there is a reason—but the amount of speculative cover is so small that even the comparatively few thousands of pounds which these two gamblers invested at Lloyd's was enough to draw attention upon themselves and to start this inquiry. Would the House blame Lloyd's for that? It is to Lloyd's that we owe the whole cleaning up arising out of this inquiry.

Let me call the attention of the House to another fact. When these gamblers went to the Stock Exchange they had exclusive information, they had picked someone's brains, they had got something which gave them the key of knowledge, and they could take money out of the pockets of people with whom they dealt without risk to themselves. On the Stock Exchange they made the impersonal approach. No one could say whose money they took and no one could come down upon them. They could get away with it. But when they venture into the insurance market two things happen. The first is they take the money of a specific man, the underwriter. He begins to think, he looks round. The second thing is that they break the law of insurance. If any person, a shipowner for example, has an insurable interest but conceals from his underwriter an im- portant factor in the risk, the insurance is void. It is a different atmosphere altogether; it is not gambling. I beg hon. Members to believe that it is the precise reverse of gambling.

Lloyd's is an institution set up to enable people who are engaged in a very risky business, with risks which one cannot always calculate or define, to cover and spread their risks. Some hon. Member here spoke of co-operation, said we ought to have co-operative insurance. That is precisely what we have got. I am a shipowner, and my firm are also insurance brokers. I have been for more than a quarter of a century an underwriter. I have never sat in the room, I have never begun to think about taking a risk on my own, but we spread out among ourselves the risks to people who are in the trade and know each other, and if any strange person comes in to gamble he is, as we have seen, rapidly spotted. Is not that good? Can you consider such a place as a gambling hell, or a place with a gambling atmosphere? Precisely the reverse.

Photo of Mr Thomas Johnston Mr Thomas Johnston , Stirlingshire and Clackmannanshire Western

I understand the hon. Member is replying to a. point which I put. Is it not the case that the Act of 1909, which prohibits gambling policies, refers only to marine insurance, and to no other class of insurance?

Photo of Sir Alan Anderson Sir Alan Anderson , City of London

That is so, and there are policies in marine and in other risks which are called P.P.I., meaning Policy Proof of Interest, in which the insurer does not disclose his interest. He generally has an interest, but it is very difficult to define. I cannot pretend to be an expert in the intricacies of insurance, but if we were going at length into this question we should find that there is very good reason for 99 out of every 100 P.P.I. insurances, and the number that are really speculative, as in this case, is extremely small. This is a very important Debate, and what I strongly urge is that we should present ourselves to the world after a most unpleasant incident, with a dignified, square Resolution. It would be deplorable to tack on to it a pendant which I submit is not justified by the facts and which would be much better left, if inquiry is needed into dealings in the City—it is, I agree, constantly needed, if done by the right people in the right way—to a season when we can do it quietly and not when we are discussing such a terribly grievous affair as we are discussing to-night.

6.58 p.m.

Photo of Sir Richard Denman Sir Richard Denman , Leeds Central

The House is at present engaged in considering the Amendment moved to the Motion, but perhaps the House will allow me to refer back to the Motion. Anyone who speaks in this Debate must be oppressed by a sense of the personal tragedy which runs through our proceedings. I entered this House in January, 1910, with the right hon. Gentleman the Member for Derby (Mr. J. H. Thomas). Whenever the House has divided we have normally been found in the same Lobby, and I served from 1929 in a Government of which he was a distinguished Member. It is inevitable, therefore, that one should feel a sense of tragedy at the way he goes from politics to-day. At the same time I think the House will agree that his manner of departing is not the least of the services he has performed to Parliament. He has departed from us with something of a sense that the welfare of the State and of the House is of more account than his own personal interest. May I say that I accept absolutely the findings of the Tribunal? Like hon. Members opposite I was critical of the process of setting up some tribunal other than the House itself to consider what was a domestic matter, but the result shows that we who were critical of the tribunal were wrong. The tribunal has undoubtedly reached conclusions with more definiteness and greater sense of certainty than any Select Committee of this House would have achieved. In a way I regret that, because I felt strongly that this House should keep in its own hands the washing of its own dirty linen. We are the high court of Parliament, and we should exercise our function when occasion arises. It have become clear from this episode that the House will not be likely again to be asked to set up a Select Committee for such a case.

The Amendment that has been moved has been used as a vehicle of attack on certain institutions which, I am sure, do not deserve that attack. I agree entirely with the spirit of the right hon. Gentleman who moved the Amendment in his attack on gambling in general. He was expressing a widely felt senti- ment that there is in commercial and social life in this country a degree of gambling that is inimical to social welfare, and the more examples of that kind that are made public the more deeply the public is stirred with a sense that there is a great deal that is rotten in wealthy society. But when we come from that general proposition to a particular attack on Lloyd's, which both he and the Leader of the Opposition made, I suggest that it is barking up the wrong tree. If you examine this report, and the evidence, Lloyd's comes extremely well out of it. My hon. Friend the Member for the City of London (Sir A. Anderson) has put the case as well as it could be put. The total amount of these insurances, according to the evidence, was some £27,000, both legitimate and illegitimate, and when my right hon. Friend suggests that what is needed is some protection for the public against City sharks, I would ask him to realise that what happened in this case was that the City sharks were themselves fleeced. They suffered because they were doing business which they thought was legitimate but which was not legitimate, and because they were not as suspicious as they should have been. The fact that this insurance was done in this way so soon caused Lloyd's to have suspicions that they at once made protests and the whole matter was inquired into, with the result that we see.

Both the right hon. Gentlemen made a further point which I want to answer. They suggested that honour policies should be made illegal. If they realised the facts they would recognise that that is not a solution of the difficulty. Honour policies are an extremely useful fragment of our commercial machinery. I used to underwrite this kind of business more than 30 years ago, and I do not suppose there has been much change in Lloyd's practice in the interval. It was not the kind of risk that was popular in the Room, but we took it because we felt a certain obligation to the public. l have always taken the view as an underwriting member of Lloyd's that it was our business to relieve the commercial community of any extraordinary risks that they could not meet themselves. The ordinary trader has enough risks in the day-to-day conduct of his business, and when he is confronted by some ex- ceptional risk he cannot go ahead with confidence unless he can cover it.

The hon. and gallant Member for West Birkenhead (Lieut.-Colonel Sandeman Allen) gave some examples of the kind of risks that are entirely legitimate that are covered at Lloyd's. There is the example of a death in the Royal Family. He pointed out how many retail establishments have stocks of coloured goods which become practically unsaleable if there is a death in the Royal Family. You cannot cover these risks by means of ordinary policies of indemnity, because you cannot prove the precise amount of loss. How can a big retail establishment which has stocks of coloured goods unsold, and sells them at a rather lower price, prove that they would have been able to get the full price for the whole lot How can they measure the precise volume of their loss in the event of the contingency occurring? It is understood between the underwriter and the insurer that, in the event of the risk occurring, the policy shall be paid for an amount previously decided. That is the whole basis of the honour policy, and it is a. useful and convenient method of business. Take the simple case of the agricultural show that has to undertake a good deal of preliminary expense, and that may find its receipts heavily damaged by bad weather. If that event arises they cannot reckon exactly how much they have lost. They cannot say that a particular shower caused them to lose so many hundreds of pounds. They take out a. policy so that they shall be paid so much if it is a wet day, and it is honoured by the underwriter, who understands that it is a legitimate risk.

It is true that this inquiry has revealed that it is possible for underwriters to be approached to accept risks where there is no bona fide interest, and the committee of Lloyd's has taken steps to prevent that. In my time I do not think it would have been worth considering any such protection, because the underwriters were able to protect themselves. Lloyd's committee has decided that there shall be additional protection, and has set up a committee which is able to advise underwriters if there is or is not a legitimate interest. We all agree that where there is legitimate interest we want insurance to take place, and where there is not we want it to be stopped. I believe the practice of Lloyd's under the new conditions imposed by the committee, and the common sense of the underwriters, will effectively achieve that, and I trust that the House will not think it necessary to add this Amendment setting an inquiry.

7.12 p.m.

Photo of Mr Neville Chamberlain Mr Neville Chamberlain , Birmingham, Edgbaston

I have a good deal of sympathy with the view put forward by my hon. Friend the Member for the City of London (Sir A. Anderson), that after we have been discussing affairs of such tragic and solemn character as those which occupied our attention a short time ago, it seems inappropriate that we should mix up an incident which we all hope may be closed with a discussion which has ranged over a wide field, and which, I should have thought, could be more properly settled on some other occasion. But I must make some reply to what the right hon. Gentleman opposite has said, and I will deal with one or two of the instances he gave, because I think he built up a top-heavy structure on what he said of the rapid growth, day by day, of reprehensible practices in the banking system, the produce markets, and the Stock Exchange as well as on Lloyd's. We must recognise that we are always liable to scandals like those connected with the names of Hatry and Bevan, which occur in every country, and I suppose will continue to occur, whatever we may do here, as long as people are credulous and are anxious to take opportunities which they think they see of making money easily.

But do not let us forget that these people are generally caught, and that punishment is meted out to them sooner or later. We cannot put a stop to gambling by legislation. Efforts have been made in that direction before now, and nobody has found how to suppress an insuppressible instines in the human race. The right hon. Gentleman does not specify in his Amendment the kind of legislation or any particular method of dealing with the matter, although I understand from what he said that he desires that we should proceed by way of inquiry. But what sort of an inquiry? Is it to be a roving inquiry into all the practices on the Stock Exchange and the other institutions I have mentioned with- out anything in the nature of a prima facie case to show that gambling or fraudulent operations form any major part of the business of those institutions? I cannot see how anything of the kind can be justified by anything the right hon. Gentleman has told us.

I want to refer to one particular matter he brought forward, namely, the allegations in an American newspaper about the Newfoundland bonds a few years ago. The right hon. Gentleman did not found himself upon the scurrilous observations in that paper, which were, in fact, cut out of the paper before it was published in this country to avoid any possible action for libel, but he founded himself upon certain quotations for the bonds and the changes in those quotations, before and after the announcement of the Government had been made. What is the implication of the right hon. Gentleman's observations? He says that there were no dealings in those bonds at all for months—which is not surprising when you consider the nature of the circumstances—until, he said, a few days before the publication of the Government's report, when they slowly rose. The figures that I have do not accurately correspond with those of the right hon. Gentleman, but the trend, which is, I think, all he wishes to lay stress upon, is very much the same. He says that the three per cents. rose from 70½ to 72 before the publication, and that after the publication they rose to 90.

Photo of Mr Neville Chamberlain Mr Neville Chamberlain , Birmingham, Edgbaston

The right hon. Gentleman is quite right. They did rise to 95, but that shows precisely what I wanted to show. The supposition in the mind of the right hon. Gentleman is, apparently, that the fact that those bonds rose at all before the announcement of the Government's decision shows that it must have been because those who were buying them had prior knowledge of the decision which was going to be made. In that case I should think they would have risen very much more than they did. They only rose 1½, but they rose from 72 to 95 immediately publication took place.

Photo of Mr Thomas Johnston Mr Thomas Johnston , Stirlingshire and Clackmannanshire Western

Perhaps I did not explain myself clearly. In regard to the 3 per cent. stock, I attempted to say, if I did not, that there was no market at all for months, and then, suddenly, on 20th November, two days before the Government's announcement was made, there was an active market. It is not a question of how much they rose; there was an active market.

Photo of Mr Neville Chamberlain Mr Neville Chamberlain , Birmingham, Edgbaston

The right hon. Gentleman's mind at once presents a sinister interpretation of that fact, and he can see only one possible explanation of it. Surely there is an obvious one. I have no knowledge of what was in the minds of those who bought those stocks, but a very probable explanation is that the public knew that the Government's report was to come out, and that there was a considerable presumption that when it did come out there would be some provision which would raise the value of Newfoundland bonds. That there was very little certainty about it is shown by the very small rise compared with the very large rise which took place as soon as everybody knew what had happened.

The right hon. Gentleman says that very improper transactions take place because it is possible for chairmen and directors of companies to know what are going to be the dividends declared, and to buy shares and put them in the names of the banks and of nominees. I am not going into the question of whether it is necessary to introduce legislation to correct that state of affairs, but I do say that it is not necessary to have an inquiry. We have all the information that we want. Personally—I must be careful to say that this is only my personal opinion—I think there is some need for the reform or amendment of the present company law, but I do not think that this is the occasion on which we should take that matter into consideration.

There is, however, one matter which I think we might consider in this connection, and which is much more closely connected with what we have been discussing than some of the matters mentioned by the right hon. Gentleman. What happened, as was pointed out by my hon. Friend the Member for the City of London (Sir A. Anderson) has not affected a great number of people and does not involve a very large amount, but, at the same time, it is a deplorable instance, which affected the honour of the House as well as two individuals, and we wish that it had never occurred. We wish that we could make it impossible for it ever to occur again. I have been in communication with the Committee of Lloyd's who, after all, are the people who can best regulate their affairs, so as to see that legitimate interests are not interfered with, while illegitimate interests are dealt with, and I have been informed by them—what, indeed, has already been made public property—that they have considered the position of what are known as insurance of contingency risks and that they have appealed to all their underwriting agents not to accept risks of that kind without first satisfying themselves that the assured has a legitimate interest which has to be covered by insurance.

As has been pointed out by various hon. Members, interests not only vary very much, but it is sometimes extremely difficult to know whether there is interest at all and how much that interest is. To provide for that, the Committee are going to set up a special permanent sub-committee, from whom underwriting agents can, at short notice, obtain a ruling in cases where there is any doubt whether there is or is not an insurable interest in a risk offered. That, I hope, will give complete control of these contingency risks. When you come to the particular risks that were in question in this case, namely, Budget risks, there is, I think, another way in which we can make it impossible for any repetition of what has occurred now, accepting the findings of the Tribunal that there was a. disclosure of information as to the contents of the Budget, and that was made use of for improper purposes. I asked the Committee of Lloyd's to consider whether it would not be possible, without injury to the legitimate interests, to make a sort of close season just before the Budget statement was made, and to undertake that no Budget risks should be accepted during that close season, which, I suggested to them, might extend from the end of the financial year, 31st March, until the date when the Chancellor of the Exchequer makes his Budget statement. The Committee of Lloyd's have expressed to me their readiness to do their utmost to adopt that suggestion, and I have not any doubt that the members of Lloyd's will readily and loyally comply with any request that is made to them by their committee. I have also ascertained, because I thought it was possible that this might occasion some inconvenience to the commodity market, that there is no reason to suppose that the proper and legitimate insurance of risks against taxation on commodities will be affected by this provision. I think the House may take it that this suggestion will be carried out and that, by carrying it out, we shall secure that it will be impossible that what has happened on this occasion will ever occur again.

Photo of Mr David Logan Mr David Logan , Liverpool Scotland

Would it not follow that you must also have a policy not to give any information to the Cabinet also, in regard to the proposals?

7.25 p.m.

Photo of Mr Herbert Morrison Mr Herbert Morrison , Hackney South

The Chancellor of the Exchequer said at the beginning of his speech he regretted that a discussion which had arisen out of the personal matters dealt with at the beginning of the sitting should have developed into wider considerations of alleged speculation and gambling in connection with certain institutions of a commercial and economic character in the City of London. I totally disagree with him. We have witnessed this afternoon a great human tragedy. There are certain lessons to be learned from that human tragedy, and there may he no better time than when we are considering the Report of the Tribunal upon the Budget disclosures, for this Opposition to draw the moral and to give the explanation and to paint to the House and, I hope, to the country, the picture which lies behind the Budget. Inquiry and the human tragedy. That picture shows that there is something wrong with the economic, financial and social organisation of our country that these things are possible.

I have no doubt that it is inconvenient to the Government, and certainly to the Chancellor of the Exchequer, that we should point out the political and economic moral of this situation, but we are not here to study the convenience of the Government, and certainly not the convenience of the Chancellor of the Exchequer. We are here to do our duty, and if something happens of importance in the life of our country and if, behind that, there is something infinitely bigger and more profound than the personal issues, something wrong in the social and industrial life of our country, perhaps it is more profitable that we should dis- cuss the social, economic and financial implications of this business than that we should confine ourselves to the individual issues that are involved. I totally fail to understand why the Chancellor of the Exchequer and the Member who represents the City of London (Sir A. Anderson) should deprecate that, in the course of this discussion, my right hon. Friend the Member for West Stirling (Mr. Johnston) and the Leader of the Opposition have drawn the Debate rather more wide. I think it was essential and important that that should be done.

The Chancellor has said that such cases as the Hatry case will continue to happen as long as people are credulous, and that those people must take the consequences; but if we take the Hatry case, there were people much beyond the sphere of the gambler who were sufferers as a result of it. There were great municipal corporations in the country who were victimised by it, and there were hundreds, perhaps, of those small men for whom the Conservative party is supposed to be the principal spokesmen, the little man and the small investor, who were stung by that adventure in the City of London. We say that if the financial business and the industry of our country were properly run, with a sense of public responsibility and proper public control, these victimisations of poor little men who have saved their money and invested in these concerns, would not happen. To suggest that it is only the Hatrys themselves who get stung, is wrong.

The thing goes much wider than that. There are speculations and gambles in the food of the people, in the necessities of life of the millions of the people of this country. They are gambled in and prices are influenced by these gambles. The very necessities of life of the people are influenced in their availability. The Chancellor of the Exchequer said that this gambling does not matter, that it affects certain credulous people, and that if people will continue to be credulous, they must put up with the result. He went on to deprecate a roving inquiry into all the practices of the City of London in these speculative and gambling spheres. We demand from the Government a complete and comprehensive inquiry into all the speculative and gambling operations that go on in the City of London and elsewhere as affect- ing the daily industrial and economic needs of the people of our country. Why should we not have it? Why do the Government resist this inquiry? They resist it for the simple reason that they are afraid of what will come out of it. They know that there are bound to be considerable revelations as the result of any such impartial inquiry. If His Majesty's Government were not afraid of the result of such an inquiry, the Government to-day would be the first to say that, in view of these matters, in which two of their own supporters are involved, they would welcome any inquiry in order that the facts might he fully given.

As a matter of fact, it never appears to be the proper time to make inquiries into these operations. My right hon. Friend the Member for Hillsborough (Mr. Alexander) reminds me that in 1928 and 1929 the Labour Opposition in this House made vigorous and valiant efforts to secure Amendments to the Companies Bill then before Parliament that would have prevented some of these things happening. Those Amendments were resisted by the Conservative Government of the day simply because Conservative Governments then and the Conservative Government now regard themselves as the instruments and the protectors of capitalist interests, and they are going to champion and protect those interests as long as they can. We saw it on the Mines Bill, when the Government had to collapse because of the opposition that came from the Mining Association and the Federation of British Industries. The only reason why the Government to-day will not consent to this inquiry is because the Government function as protecting the interests of the capitalist and financial classes. The right hon. Gentleman the Chancellor of the Exchequer says there is no evidence of the Newfoundland business but my right hon. Friend the Member for West Stirling is not convinced about that on the facts of the market movements at the time.

In any case would it not be desirable for the Government to consider whether they should or should not take powers to inspect the books of the brokers and jobbers to see what the facts are in this matter? I gather that the Government have no such powers and that the Chancellor does not want any such powers. Why does he not want these powers? Because he does not want the Government to know too much about the internal business of these institutions, because he knows that the result would be damaging to the capitalist system that he and his Government exist to protect and further. We are told to be satisfied with the fact that Lloyd's themselves have taken the matter up, but why be satisfied? If there were weaknesses at Lloyd's and in these insurances, why should Lloyd's have waited all these years in order to take action? Why have scandals to occur in our national life before this institution takes action that really ought to have been taken years ago? The fact is that it has not been taken before now, and the fact is that the Chancellor even now does not know what is going to happen, for all that Lloyd's have said is that they will do their utmost. It is almost like a Ministerial reply in this House—it is equally guarded and careful—that they will do their utmost. That is all that has been said, but why wait till now? Why must there be a great Parliamentary scandal before action is taken, why must it only be a conditional promise, and why must it take place only at this stage? Because, if it takes place at all, it will be a slight concession to public opinion and the Chancellor will be very much obliged, because it will help him to refuse to bring legislation before this House or to institute a Royal Commission or other appropriate form of inquiry.

The hon. Member for the City of London said that the amount involved in this business was very small, but that does not in any way vitiate the principle of the thing. He says, "When we do this business of inquiry, let us do it quietly, gently, with not too much noise about it." I want all the noise I can get about it. I want all the facts to be revealed, as to how private interests in the City of London, and in other cities as well—probably the City of Birmingham, if you could only know—gamble and speculate contrary to the public interest and irrespective of the social wellbeing. Why should we wait quietly? Let it come out in the light of day. Let the people in the country see how capitalist society works. Let them know the facts. Why should hon. and right hon. Gentlemen be afraid of the facts being known? Why is the hon. Member afraid of the facts about the City of London being known? Why does he want to keep it so quiet, and under the surface, and sub rosa? No; we say, "Let us have it out."

I venture to say that if this speculation that has been going on in the case which we are now considering had been speculation that had stung the domestic housewives of the working classes, there would not have been so much indignation in Conservative quarters about it. This was a case of the rich robbing the rich, and it is much more easy to get indignant about that; it is outside the rules of the game. I say that that is the reason for a great deal of the indignation in Conservative quarters and in Conservative meetings. I see no indignation when it is the working classes who are the victims of capitalist speculation and capitalist gambling. That is natural, that is understandable, but when the rich rob the rich, outside the rules of the game of the rich, then the Conservative party become one of the greatest moral forces in the country. I have never been more convinced of the soundness of the doctrine of the materialist conception of history and of economic determinism as promulgated by Karl Marx than I have been when I have watched the moral activities of the Conservative party. Why are their morals so restricted? Why do they only function within a strictly defined sphere? Why do they not extend to the slum landlords taking rents out of tenants when their property is scarcely habitable? Why does it not extend to profiteering in the food of the people? It does not extend to these things because the people who are gaining are the rich people who are the mainstay of the Conservative party and the victims are the poor, but when it is a question of the rich themselves becoming the victims, then the moral character and the ethical standards of the Conservative party go up to a very great height indeed.

The right hon. Gentleman the Prime Minister said—and I admired his speech; it was a very good speech, made in difficult circumstances and very well done—that there was agreement on both sides that Cabinet proceedings and Cabinet secrets ought to be respected. I think some of my hon. Friends would regard me as even old-fashioned on the point, but I, personally, think it is vitally important that the sacredness of Cabinet secrets should be maintained, that if Governments want to announce anything that they have done, they should announce it as a corporate body, and that individual members should not do it. If individual members do it, it only leads to abuse, to political manoeuvring, and to the furtherance of private interests in one way or another. Personally, I attach the greatest importance to the privacy of Cabinet business being fully maintained, and when I made an oath as a Privy Councillor and as a member of the Cabinet I kept it, but I am not sure that hon. and right hon. Gentleman opposite have very much room to shout.

I remember, at the end of the Parliament of 1931, when the right hon. Member for Derby (Mr. J. H. Thomas)—and I want to say no more about him than I can help; he is down, and I am not going to kick a man who is down—was put up by the Cabinet of that day for the deliberate purpose of giving his version of the internal proceedings of the Labour Cabinet. Lord Snowden, then Mr. Snowden, did the same when he was Chancellor of the Exchequer, and he was encouraged to do it by right hon. Gentlemen who are now on the Treasury Bench, by Privy Councillors who had taken the oath of secrecy to His Majesty. They encouraged Lord Snowden, then Mr. Snowden, and they encouraged the right hon. Member for Derby to get up in this House for the specific purpose of revealing, according to their own version, the private and internal proceedings of the Labour Government. Do not hon. Members opposite who were here then remember how they cheered? Do they not remember the great scenes of enthusiasm with which the former very distinguished Members of the Labour movement were greeted, the enthusiasm with which they were cheered, the enthusiasm with which they were goaded on to make more and more revelations and more and more breaches of their Privy Councillors' oath to His late Majesty? They did, and who are the Conservative party to talk about the sacredness of oaths?

I do not want to go back to Ulster, but who are the Conservative party to talk about the sacredness of oaths? They deliberately encouraged and used those men for political reasons against us, and deliberately encouraged them and incited them and put them up in this House for the purpose of revealing private Cabinet information in this House. I had the same experience across the water when a Conservative Member of this House who then led the Council asked me questions about the Labour Cabinet proceedings—Was this true, was the other true?—and I made the answer that I had made an oath of secrecy to His Majesty the King and that I proposed to keep it; and I was laughed at by the Conservative party, scorned, because I respected my oath of secrecy. I venture to say that it is not for hon. Members opposite to be too shocked. It is for us. Is it the case—I can quite believe it, for the morals of the Conservative party are very adaptable indeed, and they should really understand the materialist conception of history—that it is dishonourable to break the secrecy of Conservative Cabinets, but that it is honourable to break the secrecy of a Labour Cabinet? Is that it? What other explanation is there? They know as well as I do that Privy Councillors there deliberately encouraged these things to be done and that every Tory Member then in this House cheered them to the echo.

Not only that, but at the beginning of this Parliament too, in the Debate on the Address, precisely the same thing took place. I am almost tempted to think that the principal function of the so-called Labour Members of the Cabinet was to be used as revelationists of the proceedings of the Cabinet of which they used to be members. I take the view that all Cabinets should keep their secrets. I was a little surprised that the Chancellor of the Exchequer should have revealed his Budget statement to this Cabinet, of all Cabinets, at the early date that he did, and then have allowed them loose, to go on holiday. It was a terribly shocking, blundering judgment, and all because they would not come back from their holidays two days earlier. This is a holiday Government. It is always engaging in holiday reflections. It seems to me a ridiculous thing that the Chancellor of the Exchequer, knowing his colleagues a good deal better than I do, should have made his Budget statement to the Cabinet about 10 or 12 days before the statement was made in this House, and then to have let them loose, wandering all over the country, doing all sorts of things, and meeting all sorts of people. It was a most risky and injudicious thing to have done. The motive for it is obvious. The Cabinet is very sticky about its working conditions, and it was not coming back to work one minute before it was essential.

We take the view that there ought to be an inquiry. We think that the inquiry that we demand and the appropriate action by the Government that we demand are necessary. It is not appropriate that there should be delay until some nebulous time, because we are certain that if the matter is left over the Government will do nothing about it. We demand from the Government a decision now as to whether further action shall be taken by them, or whether they are merely to receive the report, agree with the report, note the intended resignations of the right hon. Member for Derby and the hon. Member for Balham and Tooting, and then to pass on, to let the world go on, to let the City of London go on, just as they were going on before. That is not what the country expects of us. The country is pained about this business. The country is concerned about it. The honour of the City of London is as dear to me as it is to anyone associated with the City of London. I want the City of London to be able to hold its head erect and not to be ashamed in the face of the world of any of its proceedings. I am not talking about the City Corporation. It would be grossly unfair to associate the City Corporation, the municipality, with the financial and economic institutions of the City itself. I am concerned about those economic and financial institutions.

On behalf of my friends, I say that we are all concerned, and the country is concerned. Things are revealed which are not good for the economic and social life of our country. Things are revealed which at any time are liable to affect the purity of our public life and the decency of our public administration, which is as dear to us as it is to anybody in our country or in the whole world. Therefore, we shall divide the House on the Amendment. We shall ask the House to ask the Government to take further action, instead of leaving the matter where it is. If the House declines to ask the Government to take further action, we shall be bound, and the country will be bound, to draw the conclusions which are obvious therefrom.

7.49 p.m.

Photo of Mr Charles Williams Mr Charles Williams , Torquay

I will delay the House only a minute. It is not my custom to interrupt people when they are speaking. I rose in perfect courtesy to put a question to the right hon. Member for South Hackney (Mr. H. Morrison), and I will now put it in the form of a statement. I think my memory is right. The right hon. Gentleman said that the Government of the day used Lord Snowden and the right

hon. Member for Derby (Mr. J. H. Thomas) during or just after the financial crisis of 1931, for the purpose of their making improper revelations of Cabinet secrets. If I remember rightly—and I was in the House at the time, I only bring it up now because I consider that the right hon. Gentleman was making a very unfair point—they were used on that occasion to controvert gross inaccuracies which had been made by other ex-Members of the Cabinet.

Question put, "That those words be there added."

The House divided: Ayes, 135; Noes, 227.

Division No. 230.]AYES.[7.50 p.m.
Adams, D. (Consett)Griffith, F. Kingsley (M'ddl'sbro, W.)Parker, J.
Adams, D. M. (Poplar, S.)Griffiths, G. A. (Hemsworth)Parkinson, J. A.
Adamson, W. M.Griffiths, J. (Llanelly)Pethick-Lawrence, F. W.
Alexander, Rt. Hon. A. V. (H'lsbr.)Groves, T. E.Potts, J.
Ammon, C. G.Hall, G. H. (Aberdare)Price, M. P.
Anderson, F. (Whitehaven)Hall, J. H. (Whitechapel)Pritt, D. N.
Attlee, Rt. Hon. C. R.Hardle, G. D.Richards, R. (Wrexham)
Banfield, J. W.Harris, Sir P. A.Riley, B.
Barnes, A. J.Henderson, A. (Kingswinford)Ritson, J.
Batey, J.Henderson, J. (Ardwick)Roberts, W. (Cumberland, N.)
Bellenger, F.Henderson, T. (Tradeston)Robinson, W. A. (St. Helens)
Benson, G.Hills, A. (Pontefract)Rowson, G.
Bevan, A.Jagger, J.Salter, Dr. A.
Broad, F. A.Jenkins, A. (Pontypool)Seely, Sir H. M.
Bromfield, W.Johnston, Rt. Hon. T.Sexton, T. M.
Brooke, W.Jones, A. C. (Shipley)Shinwell, E.
Brown, Rt. Hon. J. (S. Ayrshire)Jones, Morgan (Caerphilly)Short, A.
Buchanan, G.Kelly, W. T.Silkin, L.
Burke, W. A.Kennedy, Rt. Hon. T.Simpson, F. B.
Cassells, T.Kirby, B. V.Smith, Ben (Rotherhithe)
Chater, D.Kirkwood, D.Smith, E. (Stoke)
Cluse, W. S.Lansbury, Rt. Hon. G.Smith, Rt. Hon. H. B. Lees- (K'ly)
Clynes, Rt. Hon. J. R.Lathan, G.Smith, T. (Normanton)
Cocks, F. S.Lawson, J. J.Sorenson, R. W.
Compton, J.Leach, W.Stephen, C.
Cove, W. G.Lee, F.Stewart, W. J. (H'ght'n-le-Sp'ng)
Cripps, Hon. Sir StaffordLeonard, W.Strauss, G. R. (Lambeth, N.)
Daggar, G.Leslie, J. R.Taylor, R. J. (Morpeth)
Dalton, H.Logan, D. G.Thorne, W.
Davies, S. O. (Merthyr)Lunn, W.Thurtle, E.
Dobble, W.Macdonald, G. (Ince)Tinker, J. J.
Edwards, Sir C. (Bedwellty)McEntee, V. La T.Viant. S. P.
Evans, E. (Univ. of Wales)McGhee, H. G.Walkden, A. G.
Fletcher, Lt.-Comdr. R. T. H.MacLaren, A.Walker, J.
Foot, D. M.Maclean, N.Watkins, F. C.
Frankel, D.MacNeill, Weir, L.Watson, W. McL.
Gallacher, W.Marklew, E.Westwood, J.
Gardner, B. W.Marshall, F.White, H. Graham
Garro Jones, G. M.Mathers, G.Williams, D. (Swansea, E.)
George, Major G. Lloyd (Pembroke)Messer, F.Williams, E. J. (Ogmore)
George, Megan Lloyd (Anglesey)Milner, Major J.Williams, T. (Don Valley)
Gibbins, J.Montague, F.Wilson, C. H. (Attercliffe)
Graham, D. M. (Hamilton)Morrison, Rt. Hon. H. (Ha'kn'y. S )Young, Sir R. (Newton)
Green, W. H. (Deptford)Morrison, R. C. (Tottenham, N.)
Greenwood, Rt. Hon. A.Muff, G.TELLERS FOR THE AYES.—
Grenfell, D. R.Oliver, G. H.Mr. Whiteley and Mr. Charleton.
NOES.
Albery, I. J.Baldwin-Webb, Col. J.Boulton, W. W.
Allen, Lt.-Col. J. Sandeman (B'kn'hd)Baxter, A. BeverleyBowater, Col. Sir T. Vansittart
Allen, Lt.-Col. Sir W. J. (Armagh)Beaumont, Hon. R. E. B. (Portsm'h)Bower, Comdr. R. T.
Amery, Rt. Hon. L. C. M. S.Belt, Sir A. L.Boyd-Carpenter, Major Sir A. B.
Aske, Sir R. W.Bennett, Capt. Sir E. N.Brass, Sir W.
Assheton, R.Bernays, R. H.Brown, Rt. Hon. E. (Leith)
Astor, Hon. W. W. (Fulham, E.)Birchall, Sir J. D.Brown, Brig.-Gen. H. C. (Newbury)
Atholl, Duchess ofBlaker, Sir R.Burghley, Lord
Baldwin, Rt. Hon. StanleyBlindell, Sir J.Burgin, Dr. E. L.
Burton, Col. H. W.Jackson, Sir H.Rathbone, Eleanor (English Univ's.)
Campbell, Sir E. T.James, Wing-Commander A. W.Reed, A. C. (Exeter)
Cary, R. A.Joel, D. J. B.Reid, Sir D. D. (Down)
Castlereagh, ViscountKeeling, E. H.Reid, W. Allen (Derby)
Cayzer, Sir C. W. (City of Chester)Kerr, J. Graham (Scottish Univs.)Remer, J. R.
Cazalet, Thelma (Islington, E.)Keyes, Admiral of the Fleet Sir R.Rikhards, G. W. (Skipton)
Cazalet, Capt. V. A. (Chippenham)Kirkpatrick, W. M.Robinson, J. R. (Blackpool)
Chamberlain, Rt. Hn. Sir A. (Br.W.)Lamb, Sir J. O.Ropner, Colonel L.
Chamberlain, Rt. Hn. N. (Edgb't'n)Lambert, Rt. Hon. G.Ross Taylor, W. (Woodbridge)
Clarke, F. E.Leech, Dr. J. W.Rowlands, G.
Clydesdale, Marquess ofLees-Jones, J.Russell, A. West (Tynemouth)
Colfox, Major W. P.Leighton, Major B. E. P.Russell, S. H. M. (Darwen)
Colman, N. C. D.Liddall, W. S.Salmon, Sir I.
Colville. Lt.-Col. D. J.Lindsay, K. M.Salt, E. W.
Cook, T. R. A. M. (Norfolk, N.)Llewellin, Lieut.-Col. J. J.Samuel, M. R. A. (Putney)
Cooke, J. D. (Hammersmith, S.)Lloyd, G. W.Sassoon, Rt. Hon. Sir P.
Cooper, Rt. Hn. A. Duff (W'sf'r S.G'gs)Locker-Lampson, Comdr. O. S.Savery, Servington
Craven-Ellis, W.Loftus, P. C.Scott, Lord William
Croft, Brig.-Gen. Sir H. PageLovat-Fraser, J. A.Selley, H. R.
Crossley, A. C.Lumley, Capt. L. R.Shaw, Captain W. T. (Forfar)
Crowder, J. F. E.Mabane, W. (Huddersfield)Smiles, Lieut.-Colonel Sir W. D.
Davidson, Rt. Hon. Sir J. C. C.MacAndrew, Colonel Sir C. G.Smith, Bracewell (Dulwich)
Davies, C. (Montgomery)McCorquodale, M. S.Somerset, T.
Davies, Major G. F. (Yeovil)MacDonald, Rt. Hn. J. R. (Scot. U.)Somervell, Sir D. B. (Crewe)
Davison, Sir W. H.Mac Donald, Rt. Hon. M. (Ross)Somerville, A. A. (Windsor)
Dawson, Sir P.MacDonald, Sir Murdoch (Inverness)Spears, Brig.-Gen. E. L.
De Chair, S. S.Macdonald, Capt. p. (Isle of Wight)Spens, W. P.
Denman, Hon. R. D.McKie, J. H.Stanley, Rt. Hon. Lord (Fylde)
Dorman-Smith, Major R. H.Maclay, Hon. J. P.Stanley, Rt. Hon. Oliver (W'm'l'd)
Dugdale, Major T. L.Macmillan, H. (Stockton-on-Tees)Stewart, J. Henderson (Fife, E.)
Dunglass, LordMacnamara, Capt. J. R. J.Storey, S.
Eales, J. F.Maitland, A.Stourton, Major Hon. J. J.
Elliot, Rt. Hon. W. E.Manningham-Buller, Sir M.Strauss, E. A. (Southwark, N.)
Emmott, C. E. G. C.Margesson, Capt. Rt. Hon. H. D. R.Strauss, H. G. (Norwich)
Emrys-Evans, P. V.Markham, S. F.Strickland, Captain W. F.
Erskine Hill, A. G.Mason, Lt.-Col. Hon. G. K. M.Stuart, Lord C, Crichton- (N'thw'h)
Evans, D. O. (Cardigan)Mayhew, Lt.-Col. J.Stuart, Hon. J. (Moray and Nairn)
Fox, Sir G. W. G.Meller, Sir R. J. (Mitcham)Sueter, Rear-Admiral Sir M. F.
Fremantle, Sir F. E.Mellor, Sir J. S. P. (Tamworth)Sutcliffe, H.
Fyfe, D. P. M.Mills, Major J. D. (New Forest)Tasker, Sir R. I.
Ganzoni, Sir J.Mitchell, H. (Brentford and Chiswick)Tate, Mavis C.
Gilmour, Lt.-Col. Rt. Hon. Sir J.Mitchell, Sir W. Lane (Streatham)Thomas, J. P. L. (Hereford)
Glyn, Major Sir R. G. C.Moore, Lieut.-Col. T. C. R.Thomson, Sir J. D. W.
Goldie, N. B.Moreing, A. C.Titchfield, MarQuess of
Goodman, Col. A. W.Morgan, R. H.Touche, G. C.
Graham, Captain A. C. (Wirral)Morris, J. P. (Salford, N.)Train, Sir J.
Gretton, Col. Rt. Hon. J.Morrison, W. S. (Cirencester)Tree, A. R. L. F.
Gridley, Sir A. B.Muirhead, Lt.-Col. A J.Tufnell, Lieut.-Com. R. L.
Grimston, R. V.Munro, P.Turton, R. H.
Guest, Capt. Rt. Hon. F. E. (Drake)Neven-Spence, Maj. B. H. H.Wakefield, W. W.
Guest, Maj. Hon. O.(C'mb'rw'll, N.W.)Nicolson, Hon. H. G.Ward, Lieut.-Col. Sir A. L. (Hull)
Guinness, T. L. E. B.Ormsby-Gore, Rt. Hon. W. G.Ward, Irene (Wallsend)
Guy, J. C. M.Orr-Ewing, I. L.Wardlaw-Milne, Sir J. S.
Hamilton, Sir G. C.Palmer, G. E. H.Warrender, Sir V.
Hanbury, Sir C.Patrick, C. M.Waterhouse, Captain C.
Hannah, I. C.Peake, O.Wedderburn, H. J. S.
Hannon, Sir P. J. H.Penny, Sir G.Wickham, Lt.-Col. E. T. R.
Harbord, A.Percy, Rt. Hon. Lord E.Williams, C. (Torquay)
Herbert, Captain S. (Abbey)Perkins, W. R. D.Williams, H. G. (Croydon, S.)
Hills, Major Rt. Hon. J. W. (Ripon)Petherick, M.Windsor-Clive, Lieut.-Colonel G.
Hoare, Rt. Hon. Sir S.Pilkington, R.Withers, Sir J. J.
Hope, Captain Hon. A. O. J.Ponsonby, Col. C. E.Wood, Rt. Hon. Sir Kingsley
Horsbrugh, FlorenceRadford, E. A.Wragg, H.
Hudson, Capt. A. U. M. (Hack., N.)Ralkes, H. V. A. M.Young, A. S. L. (Partick)
Hudson, R. S. (Southport)Ramsay, Captain A. H. M.
Hume, Sir G. H.Ramsbotham, H.TELLERS FOR THE NOES.—
Hunter, T.Ramsden, Sir E.Commander Southby and Dr.
Inskip, Rt. Hon. Sir T. W. H.Rankin, R.Morris-Jones,

Main Question, as amended, put, and agreed to.

Resolved, That the report of the Tribunal appointed under the Tribunals of Inquiry (Evidence) Act, 1921, be accepted.