THE HOUSE l

Dominion, Volume 10, Issue 3171, 23 August 1917, Page 6

THE HOUSE l

' Tho House of Representatives met at 2.30 p.m. A week's leave of absence was given Io Mr. J. V. Brown (Napier), three days' leave to tho Hon. A. T. Ngatn (Eastern Maori), and one week's leave to' Mr. E. ' W. Smith (Waimarino). FINANCIAL DEBATE SUGGESTIONS ABOUT ! - TAXATION ! Mr. E. A. WEIGHT (Wellington Suburbs) resumed tho debate on tho ■ ; Budgets He congratulated the Government and the Finance Minister on tho Budget. It would impose heavy taxation : on the people, but he believed that the load would be cheerfully accepted by them. It was true that the Government was unnopular, but iu these times -unpopularity must be tho portion cf any Government. This was the experience of Mr Lloyd George in England. Tho taxa-tion-issue was the great question of the hour. The Minister must have the money; there was room for doubt only as to ' whether tho money was -being taken in the right wav. He approved of the principle of graduated income tax, but lie did think it was unfair that the small shareholders in big companies should have to pay income tax at tho highest Til Sir Joseph Ward: I'am submitting proposals to meet that difficulty, reasonMr Wright made a suggestion that there should be a standard dividendlot, say, « per cent.,, exempt from taxation, in ordc£ that people of small means with their all invested in shares should some reasonable return for then- rawer. Mr. Lee: What if thev bought the shares at a premium? "Mr Wright-. "I can't provide for every difficulty. Therenuistbe anomalies. He wished the Government had in taxiiiß I fei interests taxed U. mortgagee™her than the mortgagor The taxing of a mortgagor upon his deTjts was unfair? and the principle was dangerous Inferring to the beer duty, no said that the revenue was less last year a.thongU more beer bad been brewed.. It was dua to the new method of levyng.tax on worts. The brewing trade was the luckiest in all the world. It was trr-ntcd very gently in Eneland, J lis t . M bere - ■ Mr! Lee: Money tells. ' Mr Wright said that in .Wellingtonthe big brewery corporation raid .i per cent, at least to its shareholders. Tho profits made by breweries were from tied houses, on which hiiiro 'goodwill was charged.-' Ho would like to see the finance Minister levy some direct tax en these big payments for goodwill, the House certainly had "fallen in by altering tho method of levying tho tax on Mr. Lee: W,e were forced to. under the Standing Orders of the House. Mr M'Combs: The Government-dirt ll on advice. But who gave the advice? ~ ■ Mr. Lee: We won't fall in again. ■ Mr Wright said he was old-fashioned enough to believo that if this country was to get out of its financial--difficulties after the war it would do so by the saving of the people through the practice, of rigid economy. Tho inevitable result of borrowing must be all-round inflation, and for this reason he would have preferred to see the Government raise revenue enough to pay some of tho cost of tho war.' He approved of the amusement tax, but he advised the Minister of Finance to impose a duty on films. He had no fault to find with the taxing of cigarettes, but he thought the Government should have imposed such an nddi'tional duty as could have been passed ton exactly. It was impossible to•' pass on a. fraction of a penny. Ho had heard, a rumour that the Government did not intend to introduce six o clock closing. "Sir, I refuse to believe that rumour." he said. Mr. Hornsby: You are very optimistic.

Mr. Wright'said that ho-thought members of the Government were shrewd enough men to realise that (ho majorits- of tlie people wanted 'thisreform. If tliey brought in any compromise they would bn in a very awkward position. The Polics Report presented to the House showed' that there was a shortago in the Police "Force.' Perhaps this was the reason why bookmakers flourished in Wellington like the green bay tree! They carried on their business rtuite openly, and they wej\e assisted in it by tho Post Office, which delivered correspondence to thorn, and by the Tele-' phone Exchange, which gave them telephone facilities. Mr. Isitt: Which hotel is it that, is Scott ,and Ifartindale's place of business? "Mr. Wrigbt said-that he had no knowledge of this, and ho would" not speak of ■what he did not know. Mr. Isitt: I- know. Canons of Taxation. STR JOHN FINDLAY (Hawke's Bay) said that.thero had been waste in tho expenditure of the Defence Department. Sir James Allen: Give us an instance of this -waste. " Sir John Findlay. I can,'t give details. Sir James- Allen: Then why do you make the statement? Sir John Findlay: It cnniiot bo denied that until Mr. Myers took charge of tho Munitions Department there was very serious waste there. Sir James Allen: Give one instance of waste before that time. You are making this statement without any justification at all. i Sir John Findlay proceeded to discuss tho taxation proposals of the Government generally, speaking first of principles ~Tather tihan particulars. The canons of taxation, as defined and accepted bv all economists, fixed the order of taxation as follows: (1) Unimproved value, (2) rent of land and improviuicnts combined,. (3) inheritance, (4) income'

tax, (5) indirect taxes. This order had not been closely followed. It was considered advisable to leave one method of taxation and proceed to the next as 60011 as the source tended to become exhausted. Ho did not think that sufficient had been taken from land. Only .£1,600,000 was to be collected from land, and was being collected from inconios. This was not in accordance with the canons of taxation.

Mr. Nosworthy: How much more would you put on land?

Sir John I'indlay: If I were Finance Minister I would be in a position to tell you. Mr. Okey': He ouglit to. go back to Hawke's Bay now! Sir John JTiridlay said it had been stated that land was unsaleable at present. But at what price? The fact was that the presont nominal values of land were inflated values due to the war. What source could better be placed under tribute than this war-created value of land? The worker aiid the professional man made no money out of the war, while the honourable gentlemen who were interrupting him wero growing fat out of the war. The next source of taxation was cent, economic rent, and this tax, like that on unimproved, value of land, could not be transferred. Mr. Pcarce: Are you a single taxer?

Sir John Findlay: Certainly not. Mr. Pearce: Mighty near it, then! . Sir John Findlay: "Sir, it is easy to raise -the. cry of single tax, but this should not deter a man from giving his opinions to a representative assembly as to how taxation ought to be imposed." "The third source of taxation .was on inherit- : ance,\and he urged that it was eminently desirable that inheritances .should lie taxed, reasonable coemption being provided for bequests to widow and children. This tax also could not be transferred. Income tax, the fourth source, ought to be levied in differentr'ratio on earned and unearned incomes. The tax on earned income was a tax on effort, and.was unscientific. In levying the in-., come tax on companies he would havo liked to see the Government follow tho Australian plan of taxing \>nly the vim distributed profit, allowing the tax to lie collected on the dividends to 1m paid by the persons receiving them. He advised the Government to charge a duty on motor-cars, in preference to taxing tea. The House had committed itself to the principle of a war profits tax, and, he thought, rightly committed itself to this principle. But the instrument by which the. tax was levied proved to be bad, and the Government had dropped it altogether instead of improving it. He would advise the Government to impose a new war profits tax on tho lines of the price tax suggested by Mr. Anstey—a tax on the added value of produce due to the war. This might act in substitution of income tax for tho small farmer, who found it difficult compile a proper income tax return, but the big wool kings could well bo left to pay this new tax as well as tho income tax. He did not think sufficient had been rienie/by the Government in administering legislation already existing for the regulation of trade for keeping down the cost of living. He was of opinion that the Government could not check tho growth of monopolies and the spoiling of the people by them, unless by taking control of all foodstuffs. Onlv by buying all our meat for export couW the Government keen the Meat Trust out of Now Zealand.

The Pries of Victory. Mr. G. E, SYKES (Masterton) said that the cost of tho war to New Zealand was now about ,£2,000,000 a month. In addition there was an incalculable price to be paid in human lite. Tho people of the Dominion were ready to pay the price ox victory in money and life, and he regarded the Budgot proposals, as reasonable in .view of the necessities of the situation. One effect of tho new taxation would bo io slop the aggregation of iand; which had been proceeding in recent years. A man was a fool to buy land at current prices under wav conditions. Regarding the terms of the loan, he had been opposed at first to tho "free of income tax" provision, but British experience had shown that tho principle was sound. The alternative was to pay a relatively high rale of interest during the whole period of tho loan. Tho British' investors had been offered a' choice of methods in connection with tlo Victory War Loan, and the vast majority of them had invested'under tho "free, of income tax" scheme. He was glad that tho Minister of Finance was following the sound practice of providing for a portion of war expenditure from rev, enuc by placing taxation in excess ,of actual requirements, and so accumulating a substantial reserve. The provision made for the settlement of returned soldiers on tho land was not adequate. Tho figures showed that njost of tho meu already setlleU had been placed on secondclass land. Tho Government was not finding it easy to secure first-class land at'reasonable prices, and measures would have to be devised to render land available for the many hundreds of men who would want holdings when the war was over. The amount of the advance made to the soldier-settler for stock and improvements outrht to be • increased from ,£SOO to .£750 or even .£IOOO. The addition by wav of war bonusvto the old-ape and widows' pensions should be at least. ss. per week.

The Married Men. Adequate pay and allowances would have to be provided for the Second Division men and their dependants. The Second Division men wero not shirkers, as they had shown by thoir protest against the enlistment of lads of nineteen year;, and they wero entitled to fair treatment, from the nation whose battles they were to fight. The. war bonus paid to Civil' Servants in 1910 had beon distributed in. a haphazard fashion. His own idea was that the bonus for the present year should bo allocated on a differential scale, according to tho extent of tho family obligations of the Public Servants. This nrrangement would meet with the approval of tho men concerned. The Government should be giving more consideration to heads of families in various ways. The Dominion needed children, but parents were not encouraged to increiuse their families. Children wero treated as "encumbrances." The Government should lighten the burdens of the people who were performing national duty by raising children. Ho paid a tribute to the work of the Plunket nurses in aiding mothers throughout the country. The prohibition of the importation of foreign motor-cars would eft'eot important national economies. The 'injudicious importation of motor-cars from America and elsewhere was hampering the importers of essential articles. The motorcar was not altogether a luxury, but the purchase of a car .war not always to the advantage of tho farmer. \ The increase of the taxes oa silks and satins was a move in the ,-ngh.t direction, but he did not approve of the tax on -tea, which was an essential of life. The tea tax would increase tho cost of living. Tho duties on beer and spirits could be advanced with advantage. He anticipated a serious decline in primary production in New Zealand. The ploughs j were largely idlo owing to shortage j of labour, and thousands of cows I were being sold off tho daily farms to the freezing works or the producers of beef. : There would be reduced lambing this year owing to'the effect of the shortage of labour in reducing flocks, Mr. Sykes paid a tribute to the work of tho New.Zealand troops at the front, and added'that ho was r.uite sure the flag would not be lowered until victory had been achieved.

Lessons Unlearned. Mr. L. M. ISITT (Christchureh North) said that in the fourth year of the war Parliament whs accepting legislation that throe .years earlier it would havo resisted strenuously. Statesmen had been dull' and unimaginative, in the early days of the war. They had required to learn, as was the -way of British people, by experience, and ono result'- was that the eloso of the war was still far distant. It seemed to him that even today the Government and Parliament of New Zealand wcro refusing to recogniso the lessons of the war,, throw off all impedimenta, and take a grip on tho tasks of victory. The National Government was pushed into action by the need of the hour, but it. did not lead the people. It would not clear decks for action; it would not strip the nation for war. Ho wanted to insist again on the urgent need for economy, and on tho criminality of waste. There were four great sources of waste—drink, gambling, pleasure and display. Liquor and Waste. So far from initiating any reform in heading tie people off from waste on

liquor, the Government hnd 'done as little as it dared do along this lino. Tho Government had urged economy on tho people, but had .hesitated to put any of its precepts into practice,' He had no prejudice against moving pictures, but in this war time tho people had gone mad about pictures, and tho Government had done nothing lo check this eveniie of waste. If tho National Government had been alive to its duty it would linve prohibited the erection of any new picture shows, or. any facing buildings. He heartily approved of .the tax proposed on picture theatres. By three years of agitation tho Government Jiad been dragged, and hustled, and booted int6 doing as little as it dared do in the reduction of racing. Tho majority of the pednle. and most of the racing men'—all of the best racing men—were, in favour of 50 per cent, reduction. But tho Government had declared for "a third .reduction, and all the benefit of the reduction had been destroyed by tho administration of it. All the

"innocent little country picnics" had been abolished. In this he had the Rnorts with him. He did not wish tho National Government to go in for n policy of relrenchmcnt in development work. Side by side with the two millions a month we were spending on the war wo were wasting two millions a month on drink and gambling and. pleasure and display. We could, not lean on Britain much -longer because Britain was gettiug near to the bottom of the stocking, and soon might have to resort, to the German expedient of raising fictitious paper loans. And vet Britain was following the same path of pleasure and reckless' extravagance. Why was the Government bossed bv Clifford in this racing matter?

Mr. Russell :•' Kir George Clifford wasn't in favour of reduction by a third, I can tell yon. t ' ' '

Mr. Isitt: "No. T wouldn't l>e. He wouldn't reduce' racing by a' ninetieth if he could hcln it." He asked the Government whether thcy°all thought the 'advocate* of .reduction wre all such sow lemons that thev wanted racin? reduced because they didn't want.peonle to have a good time. Their only object was to prevent waste. Tf five Government wished to keen'up efficiency they should, havo ruled that no race be run earlier than 2 o'clock in the dar, and that nn meetings be held in the harvest months. These would have been measures of real value. Taxation Proposals; Hb approved cordially of the taxing proposals of the Budget/ especially the repeal of the excess profits' tax, and,the imposition of a graduated tax on lirad. But he was sorry that, air attempts had been dropped of levying tribute on war profits. He did not approve of the tax on tea.. He admitted that the men of the Second Division were entitled to demand full justce for their dependants, but he did not admit that Second Division men were entitled to say they would not fight until they-got this concession. Such a doctrine would be much like tho act of the man who stood idle while his'house burned, because ho was not getting the same wago'as the captain of tho fire brigade, or because the water rate was too high. The statement that the Military Service Act was not an emergency law to meet war necessities, but a cunning device to ensnare and' beat down Labour, was a wicked lie—(bear, hear)— and the nian who made it was an absolute traitor, and the worst foe to the Empire.. A Tax on Liquor. ; Mr. Isitt surprised House by moving an amendment, saying that he wished tho Government not to consider it hostile. The amendment was as follows:— ' "To omit i all the words in the motion after 'that,' and l insert these words:—'This House being deeply desirous of aiding the National Gov- 1 ernmont in coping with the expenditure entailed by tho war, and in making the fullest possible provision for soldiers and their dependants, is of'opinion, that in order to augment the funds at its disposal, the Government should take into its earnest consideration tho advisabily of substantially increasing tho duty on beerand spirits.'" i , Mr.. Massey's Appeal.

Tho Wight Hon. W* F. MASSEY (Prime Minister) said that ho did not intend to discuss the amendment. Ho hiul risen |for the purpose : of referring to somo matters that had been raised in the course of the debate. .

THE ..SPEAKER said that thodobato would hava to bo confined to tlio amendment until it had been disposed of. Tho Prime Minister could spent to tlio amendmentwithout losing his right to speak to, the. main question. Mr. Massey said lie was quite certain every member, of the Houso had .made up his mind how he would vote on tho licensing question, and there was no need to discuss tho matter in detail.' The Government's liquor legislation would be laid before Parliament as soon as the Budget and the Bills arising from it had been disposed of. Ho would ask the House to recollect that' there was a proposal in the Budget to increase tho duty on .bear and spirits. The Bill containing that proposal had' not yet come down. He could not commit tho Government to any particular lino of policy, but he would ask the members till the Bill came" down before putting a decision on record. Ho could promise that tho Bill would come down as soon as the Financial Statement had been disposed of. ' , ; Jlr. Wilford: But tho member cannot move his amendment on tho Bill.-

Mr Massey: A member can always get n. division if he wants one.

Mr. Wilford: But he. rnnnot propose an increased duty.

Mr. Massey: Tluro is another way. Any member can move that a respectful address be presented to His Excellency the Governor-Gonerivl.

Mr. Lee (Oamaru): That would be 1 a .motion of no-confidence.

Mr. Mnssey: It would depend on the attitude taken up by the Government. Mr. Isitt: I would withdraw this amendment if 't was regarded as a motion 'of no-confidence. Amendment Rejected, Mr. Massey: I want to say to members that it would be a very dangerous thing to embarrass the Minister of Finance by parrying this amendment. I realise tiiat tho motive of the member for Christnhurch is a fair one, but. I iippon! to the good sense -of the House not to carry the amendment. Mr. T. Wilford (Hutt) said he would like to point out to the mover of the amendment that under the Standing Orders ho had no power whatever to move in the way he desired on the Bill. Tho Prime Minister was not treating the amendment as a no-confidence motion, and members were free therefore to vote as they pleased. The procedure suggested by the Prime Minister had not been used in tho Houso during the last seventeen years. Mr. Massey: I have done it myself. Mr. Wilford: If this amendment is lost on the voices there is 'an end of the matter. If the voices are given in ■favour of the amendment I take it that the Prime Minister will accept tho decision as the will of tho House in regard to the Bill that is not yet down. Mr. Massey: That is a matter for tho Cabinet. Mr. Wilford added that he would vote with the Government on a no-confidence motion, but members wore free to vote according to their opinions on this subTl'ie amendment was declared lost on the voices. The Primo Minister thanked the House for Teposing confidence in the National Government. He thoroughly agreed with what the member for Ohristohnrch North had said regarding the treasonable conduct of men who were trying to create nn impression that the war was a "capitalists' war." and to mislead their fellow-citizens in a time of national crisis Mr. Nosworthy (Ashburton): They oueht to be hanged. Mr. Massov said he agreed also (hat waste and fxtravngnnce "should be discouraged. He did not advise the wearing of sack-Moth and ashes, but the nitinn should take its pleasure mndnr.itelv 'All waste and careless expenditure should be avoided in order that Hie maximum effort could be devoted lo the winnlni? <f th? war. Sir John Flndlny had talked of waste in the Defence Department, but. he had not qnot«d instances. Tt was not denied that there had been some of the waste that seemed to be inseparable from war, but eveiw effort had'been made to reduce it to n minimum. The National Government. Then Sir John Findlay had said that the National Government was formed of

men holding divergent views on political questions. That was admitted. But tho Ministers were united on ouu subject, and that the most important subject qf all, the winning of the war. ' The successful prosecution of the Dominion's share of tho war was the duty of the National Government and tlulfirst plank of its platform. :,

Unimproved Values. Referring to mutters «of taxation, Mr. Massey said only an inexperienced man could say that the unimproved value oi laud was not due to the efforts of the owner. Every farmer knew that tho effect of improvements was to increase the unimproved value, livery section of laud in New Zealand had had its unimproved value increased by improvements. Air. Hhidmarsh (Wellington South): Roads and bridges have done Ithat. <

Mr. Massey: ."Tho energy and industry of the holders have gone to put up unimproved values." Tho man on the land ought to pay his fail- share of'taxation, but he was doing that, lie was paying both land tax aud income tax. and hiu total contribution was a very large one. Then tho land paid heavy local rates. It should be remembered always, moreover, that land was in a sense a raw material'. It could produce nothing, without labour and capital. Sir John Findlay had said that a professional, man should not bo taxed to the same extent as a man who drew an unearned .income. But what about .the man who by long, years of arduous labour had acquired a competence? Was he to suiffer in comparison with the professional maft who was receiving a .largo salary?. An export tax would be very easy to collect. But surely New Zealand should encourage exports. An export tax would hamper production, and onco imposed it would bo very hard to remove. ..

The Cost of Living. A great deal had iSSn said about the cost of living. Nobody denied that the prices of commodities had increased: But it was a fact obvious to everybody that the war had put up the price of production and distribution. There was nothing strange or unusual about a rise in prices in war time. The operations of the Meat Trust had not proceeded unheeded. The Government had been" active both here and in Britain. Reference had been" mado to the increase in tho price«xOJ\,bread since'the establishment of the Board of Trade. Tho fact was that, when the board took office in . March, 191G, the Christchurch price of wheat had been 4s. 4d. to Is. 7d. per bushel, •of flour .£l3 per ton, and of bread SJd. per loaf. The corresponding prices today were: Wheat ss. 10d., flour*.£ls. bread BVd. The price of bread was ono of the matters that would receive tho consideration of the Cost of Living Committee. He had attended a meeting of that committee, and had found it to bo working earnestly and well. . He believed it would secure useful results. The committee would show 6ome of tho difficulties relating to the regulation of the cost of living, and probably would make some regulations tha* Tie, as head of tho. Government, wonld be ablo to accept. The Burden After the War.

With tbe enormous expenditure now going on, and likely to : continue for somo'timo at an increasing rate, there must bo an enormous burden for the people to carry. If the .people wero not to be crustied bj the burden there would have to bo a vigorous development policy. There would, he believed, bo an exodus from Britain after the war, and it would bo a thousand, pities if tho men did not come to lands within' tho Empire. If they did, Now Zealand should get its share. . The member for Hawke's Bay hnd said that -aggregation was going on. He had a return before him showing that in the !ast five years an area of 3,185,576 acres had been subdivided into 56,636 sections.

Mr. "Wilford: How many ate occupied I Mr.. Massey said he - believed tfte usual percentage of them were occupied.

' The Unpopular Government. ' There had been a good deal of critioism of the Government, some of it carping criticism. But the country _ was more prosperous tiian at any time in its history. This was remarkablo in war timo. And in any case, tho criticism did not affect the Government very seriously. Mr. Lee: That's just the trouble. You won't take advice.-

Mr. Massey said ,that the Government was bound to become unpopular, becauso it had had to .do very many unpopular things. For the cost of living the Government had been very much criticised, but 'the fact was that an increase in the cost of living was unavoidable in war time/" Was there a country in which a policy of fixing prices had been entirely successful? He had not heard of it. It was the duty of tho Government if possible to keep down profiteering and exploitation, but it was extremely hard' to do. The Board of Trade had been much maligned, but it had done much good work, as tho report which he would present to the House shortly would show. This was not tho only country in which the cost of living had been raised. In the United Kingdom the cost' of living had increased_by 04 per cent., in Norway by 84 per cent., in Holland 70 per cent., in Sweden GG 'per cent., in the United' States 31 per . cent., in Canada 44 per cent., in Australia 25.0 per cent, and in Now Zealand 25.79 per cent. In view of the increases in all other countries, it was impossible to avoid an increase in the cost of living here. Thero had, ho feared, been_ some profiteering, but he had no hesitation in describing the man who used the- war to make exorbitant profits as an enemy to his country. _ He referred to a. series of acts, of the' Government for which he considered the National Government deserved some credit, mentioning chiefly the passage of the Conscription law. His only regret was that this Bill had net'been passed a year earlier. It would have been better for the men who were fighting for us and better for the people remaining a-t home. New Zealand had been the first of the Dominions to adopt this law, and in answer to those who still objected to the. law he would noint out th'nt. America, reputed to be the most democratic country in the world, had decided upon conscription as soon as she entered the war. , ■ Mr. M'Combs: What about Austral".-; ? Mr. Massey: "I am sorry that Australia has not passed conscription." Ho would not make comparisons between this country and others, for he was quite sure Australia would find no fault with New Zealand. Those who complained of the cost of living were in the .habit of saying that the producers were being allowed to make too much out of the war. H», thought that when a balance was struck at the end of the year the balance would be against the producer, staking into account the difficulties of production, tho increase of taxation, and the burdens the land would have to carry.

The Loan. He spoke of tho loan now on issue. They had not heard so much in the House during the last few days about the' terms on which the loan. was being floated. Members were agreed at least on this—that they hoped the loan would bo a success. His own opinion was that the loan was not such an extraordinarily good bargain for investors that it was a bad bargain, for the country, His appeal to investors would be on the ground of patriotism, and he hoped and believed that their response to this appeal would be ready and sufficient. Ho would be particularly glad to see a largo number of small investors putting savings into tho loan.

The New Brigade, It had been said that New Zealand hud formed two brigades from reinforcement-;. He wished to give this an emDhatic denial. Wo had formed one brigade from the surplus reinforcements, and if honourable members would think for a moment they would know why we had a surplus of men at time- the brigade was formed. From the time of the Battle of the Somnie in September until the Battle of Messines in the beginning of June, the New Zealandcrs were in "o big fight. Our reinforcements had accumulated, and wo had in London five thousand men doing nothing. In the beginning of the year there came along the trouble in Russia, and the men at the head of affairs wanted every possible, man. Eveiy Dominion in the Umpire was asked to send extra men if possible, and it was only right that Now Zealand should do more. The Neni Zoalandors in Dugland, under long training, were only too anxious to go to tbo front to moot the

r~ ~i enemy, He v was satisfied that tho right thing was done in forming the new brigade.

General Godloy. Ho wished to say a word about the speech made by tho member for Eden regarding General Godley. Ho knew that in making tho statement tho member for-Eden was actuated by a strong senso of public duty, but he did not agreo with tho opinions tho honourable member had expressed. Ho (Mr. Mas.sey) had had tho opportunity of meeting many hundreds of New Zealand soldiers in Loudon and in different parts of England. He had mot General Birdwood in England on several' occasions, and ho wished to inform tho House that General Birdwood spoke of General Godley in tho highest possible terms. Ho (Mr. Massev) did not mean 'to suggest that General Godley was a popular man. Ho was' certainly not popular in the sense that General Russell, General Richardson, and General Birdwood were popular. General Godley did not appeal to the men in tlie samo way, but for' all that he was a good' soldier. Ho (Mr. Massey) had heard from a soldier in London who had formerly been a Wellington journalist /ho opinion expressed that there was no ground • for tho statement that General Godley lacked courago in tho faco of the enemy. This man, a sergeant by rank, had declared that there was not a braver soldier in the British Army than General Godley. He had noticed attempts being made by members of the'Houso to disparage officers of tho Forces .here and at tho front. He said this was a .wrong thing to do. It would not matter if there was.no-war, but while tho war lasted anything of this sort tended to undermine tho confidence of the men in their officers. For this reason alone he thought this sort of thiDg ought to be avoided.

When the Soldiers Come Back. Last of all,- Mr. Massey spoke of tho preparations mado by the •Government for the time when tho soldiers would return from the war. Already tho Government had placed 519 soldiers on the land; There was a proposal to sottle tho Crown lands in the North of Auckland. These bush lands in the north'were to ba cleared mado ready for subdivision, and this work wonld.be done by the soldiers. The men would got wages while they were doing the work, and afterwards would get first chance of selecting the land. There was employment there, he had been informed, for 1000 toldier settlers. The Railway .Department had reported that it could -find work for 2000 men for a good number of years after tbo war. Tho Public Works Department would bo able to find employment for. 5500 men nt-least, and arrangements wero being made to have here sufficemt tools and implements for such work as roadmaking. The Lands Department hoped to be able to emplov 3000 men on irrigation works, drainage, tree-planting, and similar works. This brought the total for whom provision was being made up to 11.500 men. Ho was- quite certain also that, these promises he was making would be fulfilled". . ' i

The Beer Duty. Mr. E. P. LEE (Oaninru) said that the Government must be very blind, or. very much interested in the liquor trade, if it had not realised that tho membors of the House demanded a substantial increase in tho beer duties. A largo ma- . jaritv of the people of New Zealand were demanding that beer should bear its fair share of taxation. • The Honsehad been, misled on two occasions on this subject. Assurances had been given that the beer duty would produce certain sums of money, but tho estimates had not been realised. The tax on beer should be at least sixpence per gallon, and if the Government did not raise tho tax to that level there would be —trouble in the House. The consumption of beer was increasing, and the Treasurer's estimate of revenue from the beer tax showed a decrease. That was a state of affairs the House would not tolerate. If a vote had been taken on the amendment moved that night, many members would have felt impelled to voto against the Government. "There is, throughout tho , country., a feeling that somo members of the National Cabinet do not desire to put this fresh taxation on beer," said Mr. Lee. "Wo are asking them now to amend their* ways and change theiv views. It is no use the Attorney-General saying that the anti-shouting regulations are carried out. Ho is not in sympathy with tho reguk,tiorj. He has told the House that ho is not in sympathy. Mr. Buick (Palmerston): Who is?

Mr. Parata (Southern Maori): You want a standing army to enforce the regulation. - Mr. Lee: "The fact is that the regulation is not carried out." Tt is openly admitted that these regulations are broken. It is a sorry thing when a war i regulation is openly floutfd from one end of the country to the other. If the regulation cannot be enforced, then it should bn repealed. Mr. M'Callnm (Wairau): Bo you observe the regulation? Mr. Lee: I do. Mr. Buick (Palmerston): He has never shouted in his life. Hon. A. M. Myers: Hoes the hon. gentleman know that hundreds of pounds have been collected in fines under this regulation? '• '• i • ' Mr. Lee: Ten times as much would have been collected if the'regulation had been enforced. Uo you believe that the anti-shouting regulation has been enforced ? Mr. Mvers: I do. Mr. Lee:' Then ynu aTe unique in this Parliament. (Laughter.) Mr. Myers: Tlo you know that the taxation of nrr .firm "under the new taxation will be 13s. Gd. in the oound. Mr. Lee: Mine will not be anything like that. General Godley Again. Beferring 'to Defence matters. Mr. Lee said that the Minister of. Defence had worked hard and consistently in the national interest. He had made mistakes, but nobody questioned his.earnestness. Sir James Allen had said that Mr. Parr should not have made statements regarding General Godley unless he was in a position to, produce evidence. How would it be possible to produce evidence? No man could get the opinion of the whole army. Yet nobody doubted that. General Godley was unpopular. Mr. Massey himself had admitted that Hie General was unpopular., Mr. Lee added that ho himself had enjoyed the same opportunities as Mr. Parr of meeting members of the New Zealand Expeditionary Force at tho front, in the hospitals, and in the camps. He had spoken to very many of the men. and he had found everywhere 'that General Godley was very unpopular. He had not started out with any prejudice, and it was "not fair to suggest that Mr. Parr, had a prejudice The trouble with General Godley seemed to have began in Egypt. No doubt many of the things said against General Godley were ! untrue and were based on mere hearsay. But tho trouble had existed in Egypt, and it had spread like infection'. The feeling against the General existed throughout the Expeditionary Force, and it had been properly mentioned in the New Zealand Parliament. The maintenance of discipline was all important, but a lack of sympathy between officers and men was not conducive to discipline. - If the trouble could be remedied by some adjustment of commands, then the remedy would be in the interests of the forces. Mr. Parr had not suggested that General Godley had' failed to show courage at Galhpoli. Sir .Tames Allen: That is the basis of the statements made by the men. _ Mr. Parr: That is not the basis of mv charge. Sir James Allen: I think it was. Mr. Lee said that Mr. Parr must be given credit for having acted with the very best of intentions, and with the object of serving the interests of the New Zealand Expeditionary Force.

The Second Division. Mr. Lee- askod the Government to protect shareholders in companies from an unfair burden of taxation. The Government shouHl I'ace'the claims of the Second Division men in a courageout and generous spirit. The married men were leaving behind very heavy responsibilities, and they must be assured that their wives and families would not suffer. The financial problem was not insuperable. Experience of the war had shown that a Government could spend money in its own country on a scale deemed impossible in pre-war days without producing disaster. The debato was adjourned, on the motion of Mr. Okey (Taranaki), and the Houso rose at 11.5 p.m. ■