The question of outdoor relief to miners' dependents, which was raised in the Trade Union Council's manifesto of July 2, was one which caused the Government considerable perplexity. On June 12 a deputation from the Labour Party, headed by Mr. Sidney Webb, had waited on the Minister of Health to complain of the continued enforcement of the instructions sent out by the Ministry to Boards of Guardians on May 5 during the general strike. The Minister replied that a long stoppage in the coal industry would gradually bring about the same state of affairs as a general strike, and he could not take the responsibility of withdrawing the letter. And, in fact, there could be no doubt that if some Boards of Guardians were too niggardly in the provision of relief, others went to the opposite extreme. The borough of West Ham, though not a mining district, was notorious for this failing, using for the purpose not its own money, but money borrowed on the guarantee of the Ministry of Health. The Minister protested repeatedly against the extravagance, but in vain, and at length, in order to prevent national money from being squandered both in this and in other places, he sought additional powers from Parliament. On July 5 he introduced a Bill providing that where it appeared to the Minister of Health that guardians of the poor had failed to exercise their functions properly, he might substitute other persons to act for them for a year. The Bill was strongly criticised by Labour and Liberal members on the ground that it was contrary to the constitutional principle that local government should be vested in the local representatives of the people. It was explained on behalf of the Ministry that for the present there was no intention of applying the Bill anywhere except in the particular case of West Ham, and that in respect of other places it was merely precautionary. In the Committee stage amendments were proposed that before a Board of Guardians was superseded there should be an inquiry by a Select Committee of the House of Commons, and that the operation of the Bill should be limited to the period ending January 1, 1928, but the Government refused to entertain either proposal, and the Bill passed its third reading by a large majority on July 9.

The first effect of the coal stoppage on the national finances was seen in the introduction, on July 7, of a supplementary estimate of 3,000,000l. to cover the cost of purchases of coal. The President of the Board of Trade refused to disclose at that juncture the sources from which the coal was obtained, but Labour members assumed, without contradiction, that the bulk of it came from Germany, and Mr. Wheatley commented sarcastically on the spectacle of a Tory Government eight years after the war seeking the support of German capitalists to crush British workers. The Government was also twitted with adopting the methods of Socialism, and the Home Secretary admitted the

charge, pleading in extenuation that in times of emergency theories had to be set aside. In answer to other strictures, the Minister informed the House that the Government would not sell its coal to big undertakings or corporations, which could import for themselves, but only to small people.

In the course of the next week, a Labour member-one of a group which made a point of going into the private financial transactions of members of the Government-drew the attention of the House to the fact that the Minister of Health was a director of one company and a shareholder in another which had received contracts from the Government, and demanded from him an explanation. The Minister had no difficulty in showing conclusively that his conduct had been strictly in accordance with established precedent. The Labour Party, however, was not wholly satisfied as to the propriety of his actions, and pressed for the appointment of a Select Committee to consider how far it was allowable for a Minister of the Crown to be associated with a public or private company during his term of office, especially with any company in contractual relations with the Government.

The Prime Minister consented readily to discuss the matter, and on July 12 Mr. A. Henderson moved in the House that "in view of the statement of the Minister of Health," such a Select Committee should be appointed. Mr. Henderson disclaimed any intention of attacking Mr. Chamberlain personally, but his speech was tantamount to a charge, which was put in so many words by a subsequent speaker, that the Minister had broken the spirit, though not the letter, of the regulations laid down by Sir H. Campbell-Bannerman in 1906 regarding the holding of company directorships by Cabinet Ministers. The Conservative Party saw in the motion a Labour vendetta against the Minister of Health for his speech of the previous week accusing the West Ham Board of Guardians of corruption. Accordingly, Lord H. Cecil moved. an amendment that the House, while willing at any time to review by Select Committee or otherwise the rules and practices guiding Ministers in respect of their private interests during their tenure of office, declined to do so by way of concession to an organised campaign of calumny and insinuation which had no justification in fact; and this was eventually carried by a large majority. But though the motion was defeated, it was generally felt that the Labour Party had laid its finger on a weak spot in the Cabinet system, and that the obligations of Ministers in this respect required to be defined afresh.

On July 12 M. Caillaux, the French Finance Minister, visited London to discuss with Mr. Churchill the funding of the French debt to England. The preliminaries having been arranged by the officials, who had been at work for some weeks on the subject, M. Caillaux was able to sign an agreement on the same day, a few hours after his arrival. The agreement followed the broad

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lines of the one which he had made with Mr. Churchill twelve months previously (vide ANNUAL REGISTER, 1925, p. 87), and which had proved abortive owing to the failure at that time of M. Caillaux to come to a settlement with America. It was now arranged that France should pay England 4,000,000l. in the financial year 1926-27, then 6,000,000l., 8,000,000l., and 10,000,000l. in successive years; 12,500,000l. annually from 1930-31 to 1956-57, and then 14,000,000l. annually till 1987-88. In this way the total indebtedness was computed at 600,000,000l. to be paid off in sixty-two years. In describing the settlement next day in the House of Commons, Mr. Churchill drew attention to the fact that it contained no "safeguard clause," i.e., that it in no way made French payments to England dependent on German payments to France under the reparations scheme, but rested upon the sole credit of France. The refusal of Britain to insert such a clause had long been a stumbling-block in the negotiations, but M. Caillaux had at last waived his demand for it on receiving from the British Government written assurances that in the event of a complete or very serious failure of German payments France would be entitled to ask for a reconsideration of the terms. It was further stipulated, in conformity with the Balfour Note of 1922, that in the event of British receipts from war debts and reparations at any time exceeding what Britain herself should have paid since the end of the war to the United States, the surplus should be divided between the various allied debtors in reduction of their future contributions.

A debate on the French debt settlement was initiated by the Liberal Party in the House of Commons on July 19, and Mr. Churchill took the opportunity to explain the considerations which had guided the Government both in this matter and that of the Italian debt settlement. He denied that the object of the Government in coming to this settlement at this time had been, as some had suggested, to save the franc and other foreign currencies from depreciation; it was simply to obtain the best settlement they were likely to get in the interests of this country, and also one that conformed to their ideas of a fair settlement, taking all the circumstances, moral and material, into consideration. It was, he admitted, arguable whether it would not have been better to have gone on asserting their rights and claims in full and refusing to accept any modification. But the Government did not take that view, believing that the interests of this country no less than of Europe required the clearance of these matters from the field of international discussion. Apart from this, the arrears of interest were rapidly raising these debts to fantastic figures which would eventually have made them impossible to cope with. The settlement with France, he maintained, departed very little from the pari passu principle, as on a basis of present value it meant that France was to pay 47 per

cent. of her debt to England, while by her agreement with America she had undertaken to pay 49 per cent. of her debt to that country. The Italian settlements, he admitted, showed a greater discrepancy to England's disadvantage; but he pointed out that during the first ten or fifteen years England would be receiving much larger payments both from France and Italy than America would, and it was the opinion of the Government that by that time there might well be a revision or review of the whole of the relations arising out of the Great War. Finally, Mr. Churchill pointed out that if England succeeded, by her various arrangements, in obtaining from reparations and debt payments the sum of 33,000,0001. a year after 1930 while having to pay to the United States 38,000,000l. a year, she would be nearer to carrying out the principle of the Balfour Note than would have been thought possible by the Cabinet which issued the Note.

Mr. Churchill's statement was accepted by Parliament as representing the best which could be made of a bad bargain. The debate produced several expressions of resentment at America's conduct in insisting on the payment of her European debts, a feeling which had become more and more prevalent in the country as continued bad trade made the burden of taxation heavier to bear. Some traces of this feeling were discernible in a letter which Mr. Churchill, shortly after this debate, addressed to the Secretary of the United States Treasury, correcting certain misstatements which he had made regarding the debt settlement. Attention was called to the letter in Parliament, and Sir A. Chamberlain, in order to remove all misapprehensions, took occasion to state definitely that there was no thought in England of repudiating the debt, and that, however much they disliked it, they would discharge their obligations without complaint.

Whatever soreness the Treasury may have felt over America's exaction of her debt, it was not allowed to embitter AngloAmerican relations in other fields. At this very time most amicable negotiations were proceeding in London between officials of the two countries on the enforcement of the American liquor prohibition laws. Experience had shown the American authorities that the "rum-running" Treaty of 1924, which allowed American officials the right of search up to 12 miles from the coast, required supplementing, and an American representative had come over to England to seek for further facilities on behalf of his country, chiefly in the matter of search in the Bahama islands. The British Government showed itself highly accommodating, and the negotiations were brought to a successful conclusion on July 27, General Andrews expressing his deep appreciation of the spirit of fairness and good sportsmanship shown by the British officials.

During the last few weeks of the Summer Session Parliament, as usual, completed the discussion of the Finance Act and the

Appropriation Bills. In submitting the Vote (of 18,117,0687.) for his Department on July 13, the Minister of Health was able to give an encouraging report of the progress made in tackling the housing problem. In the twelve months which ended in the previous March the number of houses built had been 173,000, against an average of 61,000 in the five years before the war, and of these about 153,700 might be taken as working-class houses. The grants for housing had amounted altogether to about 8,500,000l. The Minister expressed concern at the rate at which liability, both national and local, was mounting up in respect of housing, and stated that he was engaged in conversations with the local authorities on the question of continuing the subsidy. He informed the House that the Pensions Act of the previous year was working with wonderful smoothness, and had afforded relief to the rates to the extent of 1,750,000l. a year.

In making his annual statement on the Post Office Estimates the next day, the Postmaster-General informed the House that in regard to broadcasting the Government had accepted, in general, the recommendations of the Crawford Committee, viz., that the broadcasting service should be conducted by a public corporation to be licensed by the Postmaster-General for not less than ten years, and to consist of not more than seven, nor less than five, commissioners, to whom the undertaking of the present Broadcasting Company should be transferred on January 1, 1927, and that the fee for a receiving licence should be maintained at ten shillings. As for the setting up of the new company, the Government had come to the conclusion that there were drawbacks in doing this either by Act of Parliament or by incorporation under the Companies Acts, and had decided to apply for a royal charter for the incorporated body to hold a licence from the Postmaster-General and conduct the service. The Minister further made the interesting announcement that they had that year opened at Rugby the biggest wireless station in the world, by means of which it would be possible to send messages from any telegraph office to any ship in any part of the world equipped with wireless apparatus.

The Report stage of the Finance Bill was finally disposed of on July 15. A number of Conservative speakers opposed the safeguarding duty on wrapping-paper on account of the hardship it would inflict on trades in which they were interested, and the Government majority fell to 97. Mr. Churchill announced that the Government had decided to reduce the proposed tax on betting from a uniform 5 per cent. to 3 per cent. on office betting and 2 per cent. on racecourse betting. The reason for this was that since the introduction of the Budget he had had the opportunity of examining the books of some of the largest betting firms, and he had been led to the conclusion that the total turnover of legal betting was nearer 275,000,000l. than 170,000,000l.,