§ THE EARL OF CLARENDON rose to move the following Resolution—
§ Whereas His Majesty's Government and the German Government have agreed that the existing procedure under the German Reparation (Recovery) Act, 1921, shall be suspended and replaced by an alternative method not involving payments by individual merchants in such a way as to be without prejudice to any right enjoyed by His Majesty's Government in respect of this Act under the Dawes plan, the London Protocol of 30th August, 1924, or otherwise:
§ Now, therefore, it is hereby resolved that the operation of Sections 1, 2 and 5 of the German Reparation (Recovery) Act, 1921, shall be suspended on and after the tenth day of April, nineteen 1021 hundred and twenty-five, until His Majesty shall revoke any Order in Council which He may be pleased to make for giving effect to this Resolution.
§
The noble Earl said: My Lords, the Resolution which I have the honour to move this afternoon in your Lordships' House is based on the provisions of Section 6 of the German Reparation (Recovery) Act, 1921. That section reads as follows:—
If a Resolution is passed by both Houses of Parliament for the repeal or suspension of this Act, it shall be lawful for His Majesty in Council by Order to repeal or suspend the operation of this Act to such extent, and, in the case of suspension, for such period, definite or indefinite, as may be specified in the Resolution.
As your Lordships are probably aware, a Resolution similar to this is being proposed this afternoon in another place, and if this Resolution is agreed to by both Houses of Parliament an Order in Council will be issued to-morrow providing for the suspension of the levy under the Act on and after April 10, and until further notice.
§ There are two reasons for proposing the suspension of the sections mentioned in the Resolution upon the Paper of the German Reparation (Recovery) Act, 1921. In the first place, in connection with the negotiations for the Anglo-German Commercial Treaty, a promise was made by His Majesty's Government to the German Government to examine the possibility of revoking the old system by which a levy is made upon individual consignments of goods from Germany to this country and replacing it in this way—by a payment of twenty-six per cent, of the total value of goods remitted to this country from Germany, this amount to be calculated on a statistical basis. Secondly, the existing procedure has led to a certain amount of difficulty in so far as the Transfer Committee is concerned, inasmuch as the receipts which have been received in this country have exceeded the British share of payments under the Dawes Annuity Scheme. It therefore became necessary either to reduce the amount of the levy, which would have caused great inconvenience to trade, or to adopt an alternative method of payment under which the British receipts could be made to correspond more easily with the British share of German payments.
1022§ In the view of His Majesty's Government, there is no particular value to be placed upon the present plan provided that, in the putting into effect of a new scheme, British interests could be safeguarded to the full. In addition to that, from the trade point of view it was considered that if the complications and annoyances caused by the levy to which I have referred could be removed it would be all to the good. But the levy under the Recovery Act occupies a recognised position in that it has always been treated as a delivery in kind under the various inter-Allied Financial Agreements and is officially recognised as such not only by the Dawes Report but by the London Protocol of August 30, 1924. It was necessary, therefore, to secure not only that the British Treasury should get the same amount of money as it gets under the present plan but also that that money should be recognised as being in the same position as the money which was obtained under the levy. The British Government accordingly approached the German Government and invited them to produce a scheme which could be accepted not only by the Transfer Committee but by the Reparation Commission, and if they were willing to put that into operation the British Government pledged itself to invite Parliament to modify the existing procedure. This led to somewhat lengthy negotiations, but a draft Agreement was submitted and was agreed to by the Transfer Committee. That draft Agreement was also submitted to the Reparation Commission which approved it on the, second of this month. This Agreement has been submitted to Parliament in the form of a White Paper.
§ One word as to the effect of the new plan. By that the principal German exporters deliver the sterling they receive for the goods consigned to this country up to an amount to cover the British share in the Dawes annuity available for the purposes of the Recovery Act of 1921. The Reichbank collects the sterling from the German exporters, paying them on receipt and recovering from the Agent-General in due course. In addition to this the German Government have set up a special reserve fund, amounting to half a million sterling, which will be available in case any of the amounts payable by the German firms have not yet been paid in. The German Government is most anxious 1023 to collaborate and co-operate with the British Government in endeavouring to make this new scheme a success, and they have given His Majesty's Government an assurance that they have the collaboration also of all the great German exporting firms.
§ One final word. I should like to assure your Lordships that the British position and interests are amply safeguarded by this new scheme. His Majesty's Government is bound by arrangements made in connection with the Anglo-German Treaty negotiations to give this new scheme a fair trial, and the trade, we are informed, will undoubtedly welcome the abolition of a system which causes some inconvenience. It is confidently expected that the new plan will succeed. If, however, at any time defects are disclosed in its operation, it is undertaken that experts on both sides will meet to consider those defects before any reversion to the old plan is reimposed. I beg to move.
§ Moved, Whereas His Majesty's Government and the German Government have agreed that the existing procedure under the German Reparation (Recovery) Act, 1921, shall be suspended and replaced by an alternative method not involving payments by individual merchants in such a way as to be without prejudice to any right enjoyed by His Majesty's Government in respect of this Act under the Dawes plan, the London Protocol of 30th August, 1924, or otherwise:
§ Now, therefore, it is hereby resolved that the operation of Sections 1, 2 and 5 of the German Reparation (Recovery) Act, 1921, shall be suspended on and after the tenth day of April, nineteen hundred and twenty-five, until His Majesty shall revoke any Order in Council which He may be pleased to make for giving effect to this Resolution.—(The Earl of Clarendon.)
§ On Question, Motion agreed to.
1024§ [From Minutes of April, 6.]