Geneva prepared to urge some definite scheme of disarmament. In regard to the Navy, he reminded the House that they must do nothing to endanger their power of being able to protect their trade routes, but he hoped that submarines would be included in the principle of limitation in future. The size of the British Army was not regulated by the size of the army of any other country, but was only large enough to suffice for the duties it had to carry out, but here, too, the Government was anxious to cooperate in any general scheme of limitation. Finally, in regard to the Air Force, while it was true that development programmes were being carried out, the Government would welcome any scheme of limitation which would result in a measure of equality being established between their own Air Force and that of any other country. The Under-Secretary's statement made a good impression, and procured from so stalwart a Socialist as Mr. Dalton the commendation of being "moderately satisfactory."

Affairs in China were the subject of questions in Parliament on various occasions during this session. On February 11 Sir A. Chamberlain stated that the Government were giving careful and constant attention to the serious problems arising out of the antiBritish strike and boycott in South China. From the way in which negotiations between Hong-Kong and Canton had broken down, it was clear that the Government of Canton was, for the time being, under influences so blindly anti-British that it was not open to reason. In the rest of China, however, the British attitude of patience and conciliation was bearing fruit in the slow but steady restoration of friendship and goodwill between the British and Chinese peoples. Asked whether the Government would consider the question of appointing a special representative to confer with the Government of Canton, Sir Austen said that he did not think any good purpose would be served by such a step. In answer to a further question he stated that compensation had been offered by the Hong-Kong administration to those whose relatives had been killed in the Shanghai riots in the previous May, but had been refused on the ground that the Foreign Ministry had not been consulted; still, he thought that the ill-feeling caused by the incident of May 30 was gradually dying down.

On March 31 Sir A. Chamberlain further informed the House of Commons that the instructions sent to His Majesty's Minister at Peking were that armed force should only be used in the last resort for safeguarding the security of foreigners. It was not, he said, the intention of the Government to advocate any action by the Powers to stop the civil war, as this would involve a reversal of their agreed policy of non-intervention in China's domestic affairs, and would entail the use of armed force. Asked whether some check could not be put on the importation of arms by sea, the Minister answered that he did not feel inclined to take any

active steps unless the check could be applied to all countries, by land as well as by sea. He also denied that the British in any way assisted the soldiers of Marshal Chang Tso-lin to occupy Tientsin.

The financial year 1925-26 ended on April 1 with a deficit of 14,038,6581. The revenue for the year amounted to 812,061,658l., or about 11,000,000l. more than the estimate and over 12,000,000l. more than in the previous year. Super-tax, in spite of the reduction, produced 5,000,000l. more than the estimate and 6,000,000l. more than in the previous year; but income tax was 3,000,000l. below the estimate and 14,000,000l. below the previous year. The chief gain was under the heading of special receipts, which, aided by a windfall of 2,000,000l. on account of the Italian debt, were nearly 7,000,000l. more than the estimate and 10,000,000l. more than in the preceding year. Customs, with the aid of the silk tax, produced 4,000,000l. more than in the previous year. Expenditure amounted to 826,099,7781.-nearly 30,000,0001. more than in the previous year, and slightly more than the final estimate, even when swollen by some 26,000,000l. of supplementary estimates. The Sinking Fund, in accordance with the decision of three years previously, took 5,000,000l. more than in the previous year, and the Fighting Services cost nearly 5,000,000l. more. But the heaviest item on the debit side was the quite unforeseen coal subsidy of 19,000,000l., which turned what would otherwise have been a surplus into a deficit. The Floating Debt had been reduced during the year by 37,899,000l. from 742,195,000l. to 704,296,000!.

Contrary to general anticipation, the Liberal Party came through the session very little changed. The defection of Sir Alfred Mond was not followed by any "landslide," and only two Liberal members--one of them Mr. Hilton Young, who was regarded as a financial expert--imitated his example. The Liberal Land Conference, which was held in London on February 17 and 18, neither ended nor mended the party, but left it much as it was before, neither more nor less divided, even on questions of land policy. A programme was indeed worked out, but only a minority of those present voted for it, and it failed to satisfy the genuine agriculturists in the Liberal ranks. Mr. Lloyd George's Land Organisation continued to work independently of the Liberal headquarters and to impede the progress of the Liberal Million Fund. It roused little enthusiasm in the country, and at byelections which took place during the session Liberal candidates fared disastrously.

In his restless endeavours to improve his political position, Mr. Lloyd George, in the early part of this session, turned to another expedient which met with even less success. Just before Parliament met in January he made a speech at Carnarvon in which, going back on his former views, he declared that the

Liberal Party made a mistake in 1924 in putting Labour into office. This did not prevent him from sending out feelers shortly afterwards for a rapprochement between the Liberal and Labour parties in preparation for the next election. His gestures received a guarded acknowledgment from Mr. Snowden, and Mr. Spoor, one of the Labour Whips, wrote an article in the Press openly advocating Liberal-Labour collaboration. The idea, however, did not find favour with the rank and file of the two parties, and was soon officially repudiated by Lord Oxford on one side and Mr. Henderson on the other. Mr. Spoor paid the penalty for his Liberal leanings by forfeiting official support for his Parliamentary candidature. At the annual conference of the Independent Labour Party on April 5 a protest was raised by some speakers against this piece of "heresy hunting," but the action of the Labour Party Executive was upheld by a large majority.

CHAPTER II.

THE GENERAL STRIKE.

WHILE the Chancellor of the Exchequer was seeking to obtain Parliament's consent to his schemes for reducing public expenditure, the Prime Minister was again engaged in an endeavour to avert from the nation the economic catastrophe of a stoppage in the coal-fields. On March 10, after labours extending over a period of five months, the Coal Commission had presented to him its Report, thereby transferring to him once more the responsibility for dealing with the situation. The Report, in addition to a mass of well-digested statistical information, contained an able statement of the problems of the industry, and definite and farreaching proposals for dealing with them.

The Commission first recommended that there should be no extension of the coal subsidy beyond the period for which it was already authorised, i.e., beyond April 30. It condemned not only the general subsidy, but also subsidies limited to collieries on the margin of profitability or to the exporting branch of the trade. It next pointed out that if, in the coming May, proceeds and costs remained near their present levels and the subsidy stopped, the results would be disastrous; a large proportion of collieries would be compelled to close, and hundreds of thousands of miners would be thrown out of work, while the best collieries would remain at work and get for their coal higher prices which would intensify the depression in the iron and steel trades and in shipbuilding and cause the loss of export markets. The gap between proceeds and costs could, in the near future, be filled in one of two ways—either by a sudden contraction of the industry to much smaller dimen

as

sions, or by an immediate lowering of the cost of production. Some contraction of the industry was probably inevitable, but in any case the second way of filling the gap could not be avoided, the costs of production with present hours and wages were excessive. The Commission was therefore of opinion that the minimum percentage addition to basic wage rates provided for by the 1924 agreement needed to be revised, subject to the position of the worst-paid men being, as at present, safeguarded by subsistence allowances. It advised that the general principles of wage agreements should be laid down nationally, and that, as the first step towards the making of a new agreement, the Mining Association and the Miners' Federation should meet nationally. The Commission was of opinion that the standard length of the working day should remain unaltered.

The Commission gave prominence to the recommendation that "revision of the minimum percentage should depend upon acceptance by all parties of such measures of reorganisation as will secure to the industry a new lease of prosperity leading to higher wages." The scheme put forward by the miners for reorganisation was subjected in the Report to detailed examination, and the conclusion was reached that it was unworkable and did not offer a good prospect of a clear economic and social gain. The Commission believed that the legitimate demand for large changes in the organisation and improvements in the efficiency of the industry, and for an expansion of the miners' influence over the conditions that governed his working life, could be met without embarking on an operation so vast and so hazardous as nationalisation. As alternative means it suggested the acquisition by the State of the ownership of coal by purchase where it had a national value, and by a declaration of State ownership in the case of unproved coal or coal at deep levels which had at present no market value; the amalgamation of many of the present small units of production, by legislation where necessary; promotion of a closer connexion between mining and the allied industries, and the establishment of a National Fuel and Power Committee to survey the heat, power, and light requirements of the country; extension of provision for research by the industry with the support of the State; and the formation of co-operative selling agencies, especially for the export trade. The Report concluded by saying that the way to prosperity in the mining industry lay along three chief lines of advance the greater application of science to the mining and using of coal; larger units for production and distribution; and fuller partnership between employers and employed. all three respects progress must come mainly from within the industry. The State can help materially in various ways, but the future depends primarily on the leadership and the general level of opinion among the mine-owners and miners of Great Britain." Desiring that the Report should be as widely read as possible,

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the Government instructed the Stationery Office to issue it at a price of one shilling, instead of the five which would have been charged ordinarily for a document of such dimensions. The demand was so great that the first issue was exhausted almost immediately, and after a brief delay a reprint was published, this time at a price of sixpence, which also found a ready sale.

On the same day on which the Report appeared, the Prime Minister, replying to a question in Parliament, stated that he had asked members of the Cabinet to examine the Report with the greatest care and sense of responsibility, with a view to arriving at definite conclusions with regard to the numerous questions in which Government action was involved. A little later in the same day he met the heads of the Mining Association and of the Miners' Federation at No. 10 Downing Street, thanked them for the reticence which they had so far shown, and begged them to give their most earnest consideration and study to the Report and not to jump to conclusions on it. The Industrial Committee of the Trade Union Congress also, along with the Executive Committee of the Miners' Federation, held a meeting on the same day at which it unanimously decided that the best interests of all parties would be served by giving adequate time to all concerned to study the Report before coming to any definite conclusions, and reaffirmed its view that public expression of personal views on the Report by members of the Labour movement was highly undesirable.

As a result of these appeals and decisions, some little time elapsed before any of the three parties concerned announced its definite attitude towards the proposals contained in the Report. The first to break the silence was the Government. On March 24 the Prime Minister, accompanied by the Minister of Labour and the Minister of Mines, again met representatives of the Mining Association and the Miners' Federation at 10 Downing Street, and read to them a statement defining the attitude which the Cabinet had finally adopted on the Report, after numerous meetings and discussions. The statement ran as follows: "The Government have considered with great care the Report and conclusions of the Royal Commission. The conclusions reached by the Commission do not in all respects accord with the views held by the Government, and some of the recommendations contain proposals to which, taken by themselves, the Government are known to be opposed. Nevertheless, in face of the unanimous Report of the Commission and for the sake of a settlement, the Government for their part will be prepared to undertake such measures as may be required of the State to give the recommendations effect, provided that those engaged in this industry -with whom the decision primarily rests-agree to accept the Report and to carry on the industry on the basis of its recommendations." In other words, as the Prime Minister added, the