§ Considered in Committee.
§ [Mr. J. W. LOWTHER (Cumberland, Penrith), Chairman of Ways and Means, in the Chair.]
§ (In the Committee.)
That Her Majesty be authorised to guarantee the payment of an annuity not exceeding £3 12s. per cent. on the nominal amount of securities to be issued by the Government of Greece for the purpose of raising a Loan not exceeding £6,800,000 in pursuance of a Convention to be signed between Her Majesty and the Governments of France, Russia, and Greece, and that provision be made out of the Consolidated Fund, or the growing produce thereof, for the issue of such sums of money as may from time to time become payable by Her Majesty, under the guarantee of the said Convention."—(Chancellor of the Exchequer.)
§ THE CHANCELLOR OF THE EXCHEQUER
In moving the Resolution which has been placed in my hands, it will not be necessary to detain the House at any length with the history of the events of 821 the past two years, so far as they have affected the relations of Turkey and Greece. It is in the recollection of all of us that the result of that unhappy war of last year left Greece practically at the mercy of Turkey, with finances which had been before in a disordered state reduced to practical bankruptcy, with a defeated army, and in a condition perilous to her future existence as a nation. Sir, in these circumstances, the Committee will remember that the European Powers felt it necessary to step in. A peace was made involving the payment of a large indemnity from Greece to Turkey. The European Powers, seeing the desperate condition of Greece, and recognising the necessity of delivering the province of Thessaly from Turkish occupation, appointed a Commission in which each of the six Powers were represented, to inquire into the financial state of the Greek Kingdom. That Commission held a thorough and exhaustive inquiry, and made a Report early in the present year, which, I think, fully stated both the present circumstances and future prospects of Greece. It appeared from that Report that, owing to the great expenditure on the war, owing to the loss by Greece of one of her best provinces, the finances of the country could not be expected to revert again to a state of equilibrium until 1903, and that, in the meantime, large sums would have to be provided, not only for the indemnity to Turkey, of about £3,700,000 in our money, and the further sum by way of compensation for injuries to private persons done by the Greek troops amounting to £92,000, but to make provision for the deficit in the Greek Budget for 1897–98, and for the conversion of the floating Debt, and for future possibilities between 1898 and 1903. It has been calculated, after full examination by this Commission, that in the year 1903 the revenue of Greece may be expected to amount to £2,495,000, or thereabouts, that the necessary expenses of administration will amount to about £1,618,000, which would leave a sum of £877,000 for the payment of interest and sinking fund on the existing Debt of Greece, and for the same purpose on the Debt which would now have to be contracted for the purposes which I have described Provision has been made by a law, which has been passed by the Greek 822 Parliament, for the institution of a Commission of International Control over the finances of the country. To that Commission will be allotted certain definite sums arising from some internal revenues, and also from the customs of certain places which will provide a total amount adequate for the service of the existing Greek Debt, the interest on which will be very largely reduced, and also for the service of the Debt which it is now necessary to contract. It is estimated that the service of the existing Greek Debt will require the sum of £625,000 a year, leaving £250,000 for the service of the new Debt. Now the amount of the new Debt, it is proposed, shall be the sum of £6,800,000. Of that £3,800,000 will be required for the indemnity to Turkey and compensation to persons injured during the war by Greek troops, and £1,200,000 will be needed to meet the deficit of 1897–98, making a total of £5,000,000. It is proposed that a loan of that amount shall be issued at once, as soon as the necessary arrangements can be completed, leaving a sum of £1,000,000 to be issued for the purpose of converting the floating Debt of Greece—of course, to those who hold the floating Debt—and a further sum of £800,000 to be issued by such future instalments as may be necessary for deficits expected to arise subsequent to 1898. Well, it will be obvious to the Committee that, looking to circumstances that have occurred, the credit of Greece in the market could not by any possibility raise the sum of £6,800,000 on an annual payment of no more than £250,000. Therefore, the case that was presented to the Powers was this: that unless some of the Powers were prepared to extend the advantages of their credit to Greece, it would be practically impossible for Greece to recover her position as a nation and absolutely impossible for her to fulfil the terms of her Treaty with Turkey, under which, on the payment of the indemnity, Thessaly was to be evacuated by the Turkish troops. Therefore, having taken this matter into consideration, Her Majesty's Government, together with the Governments of France and Russia, have agreed to give Greece the benefit of their credit by guaranteeing a loan of the amount I have stated. It is proposed, as I have said, that the maximum amount of the loan will be £6,800,000. 823 This will cover the whole amount of Greece's borrowing requirements, and will effect the conversion of the floating Debt. The amount immediately raised being £5,000,000, it is proposed that it shall be raised in bonds bearing interest at the rate of two and a-half per cent., to be issued at a fixed price at the highest rate which the state of the market at the date of issue will permit. Greece shall pay an annuity of two and a-half per cent. for the first five years, and thereafter three and three-fifths per cent., by which the loan will be repaid in about 53 years from the date of issue. The sinking fund will be applied in annual drawings of the bonds at par, and the loan will be convertible at the end of 20 years. I do not know that on the financial side of the question I have much to add to what I have already stated. From what I have said the Committee will see the extent of the responsibility of the country. The guarantee is proposed to be joint and several, and the payment to Greece will be secured by the Commission of International Control, to which the revenues I have referred to have been assigned by the law passed by the Greek Parliament. There is a further point to which the right hon. Gentleman the Member for West Monmouth has already alluded, and to which all of us will attach the most vital importance. Is it reasonably secure that the payment of the indemnity will result in the evacuation of Thessaly? Now, Sir, on that I may state to the Committee that it is provided by Article VII. of the Law of Control, which has been passed by the Greek Chamber with the approval of the six Powers, that the proceeds of the loan for the war indemnity, and for compensation to private individuals, will be held in their entirety at the disposal of the International Commission, which shall employ them for the payment to be made to the account of Turkey, in conformity with the arrangements effected by the Greek Government, so that it is not possible that the indemnity shall be paid to Turkey otherwise than as settled by agreement between the Powers and Greece. It is notorious that Greece is not the only impecunious Power in this matter, and that even for the purpose of enabling the evacuation of Thessaly to be effected it is necessary 824 that Turkey should be put in funds. It is quite clear, consequently, that Turkey cannot obtain the indemnity without the evacuation under the provisions I have referred to, and she will have every interest in fulfilling her engagement and effecting the evacuation at as early a day as possible. But I have further to add that we are now in communication with the other Powers, who are working in complete harmony with us in this matter, with a view of fixing beforehand the exact date of the payment of the indemnity, so that if it be necessary, as I do not anticipate, to exercise any pressure on Turkey, that pressure will be unanimously exercised by the European Powers. I hope I have explained sufficiently what are the terms of the proposed loan, and I shall be glad to give any further information on the subject which may be in my power. I may add that the terms of the Convention will be affixed to the Bill, so that the House will, when the Bill is printed, be able to see precisely the nature of the obligations by which it is proposed this country shall be bound.
MR. GIBSON BOWLES
asked whether the obligations of Greece towards Turkey, under the Convention of 1881, had been taken into account, or whether the engagements entered into 17 years ago were nugatory and of no effect. If, he said, nothing had been done towards fulfilling that engagement, it threw rather a lurid light upon the prospects of the new Loan.
§ THE CHANCELLOR OF THE EXCHEQUER
I am afraid I have failed to make myself clear to my hon. Friend. What has been done is this: The financial position of Greece by the institution of the proposed Commission of International Control will be absolutely different from what it has been before. Sufficient revenue will be assigned to the Commission to be collected by the monopoly company—which will be practically placed under their orders—and handed over to them without any intervention by the Greek Government, for the service, not only of the new Loan, but of the previous international obligations of Greece.
§ MR. F. S. STEVENSON (Suffolk, Eye)
It is clear from the statement of the Chancellor of the Exchequer that a later stage will be more convenient for discussion, when the exact text of the Bill is before us. I wish to ask two questions which, perhaps, he will be able to answer. He referred to the fact that the text of the Bill will be printed in the Convention. Will the Convention include the dates of the payment of the money to the Turkish Treasury? The second question I wish to ask is this: The Greek Chamber has decided that a Loan of 8,000,000 drachmas is to be incurred for the purposes of meeting certain aspects of the distress in Thessaly. I take it that that will only be employed after the evacuation by the Turkish troops. Does the total amount of £6,800,000 include that 8,000,000 drachmas, or is it in addition?
§ MR. T. WODEHOUSE LEGH (Lancashire, S.W., Newton)
I do not desire to continue the discussion; but there was one important phrase dropped by the Chancellor of the Exchequer. He asked whether it was certain that payment of the indemnity will secure the evacuation of Thessaly. Well, it was very difficult to be certain on such a point. But certainly, from the information I gather, I am under the impression that there will be no difficulty made by the Turks themselves, provided no other question is mixed up with the evacuation of Thessaly. I believe most of the Turkish troops are as anxious to evacuate Thessaly as the Greeks are to see them depart. If any difficulty should arise—and a difficulty may arise, because the Sultan is not a person who is wanting in ingenuity—it will be owing to the fact that the candidature of Prince George of Greece for the Governorship of Crete has been pressed forward at an inopportune moment. That may indirectly cause a postponement of this most desirable thing. The necessity of the evacuation is recognised by both sides. Everybody will be pleased when the evacuation takes place. I believe my hon. Friend the Member for King's Lynn has no objection to the proposals which are made. I am convinced that they will meet with the approbation of the country 826 generally, and I think we ought to be able to calculate upon the permanent gratitude of the Greek nation.
§ SIR CHARLES DILKE (Gloucester, Forest of Dean)
One question has been raised by the hon. Member who last spoke—a question of singular importance—in connection with this Loan. He says that, provided no other question is mixed up with the matter, the evacuation of Thessaly will take place, under the provision of the Agreement; but if, he says, the candidature of Prince George of Greece for Crete is mixed up with this matter at an inopportune moment, then the negotiations for the evacuation will break down. [Mr. LEGH: Might break down.] The policy which has been followed in connection with this Loan is the policy of three Powers, although six Powers are in a degree concerned in demanding the evacuation at a given date. The Chancellor of the Exchequer in another portion of his speech says, "some of the Powers," by which he must mean three Powers, but in the name of six. Now, it is a notorious fact that a particular choice has been made by one of the Powers for the Governorship of Crete. That difficulty, it is now suggested by the hon. Member, may prevent the evacuation of Thessaly. That is to say, that it will be the policy of one Power or, perhaps, two Powers, to thwart the majority of the Powers who are guaranteeing this Loan. I think this is an occasion when some of us who are by no means favourable to a general alliance between this county and Russia, or between this country and France, should put it clearly before the House that, in regard to the affairs of the Eastern Mediterranean, the traditional policy of this country of acting together with Russia and Franco is the one which we are bound to follow. There can be no doubt that the bulk of French independent opinion has followed with anxiety the difficult negotiations for the creation of this Loan, and that it is popular in France. However great the difficulties are of our acting with France in many questions before us at the present time, this is a matter in which we can safely and prudently act with France and Russia. I hope the Government will go 827 forward with the support of these two Powers, and will follow the traditional policy which has brought the kingdom of Greece into existence.
§ LORD E. FITZMAURICE (Wilts, Cricklade)
Is it intended to present any Papers to the House on this subject? I wish to point out, with regard to what has fallen from my right hon. Friend below the Gangway that even in 1888 the Turkish Government took steps precisely of the kind which he rather hinted at in order to use the negotiations in regard to the evacuation of the Montenegrin territory in such a way as to secure a pledge that they would not be called upon by any other Power to evacuate territory which they had undertaken to evacuate on the Greek frontier. As many hon. Members, I am sure, will recollect, these negotiations in consequence were spun out, owing to the ingenuity of the Turkish Government, for a time which, I think, altogether astonished our own able diplomacy, accustomed as it has been to Turkish tactics. The matter is, no doubt, especially familiar to one eminent member of Her Majesty's Government—I mean the First Lord of the Admiralty. I only allude to that to show that it is a reason for feeling confident, for it was very largely owing to his great energy and ability that eventually those most troublesome negotiations were carried to a successful end. What happened is this: the Turkish Govenrnment entered into an agreement for the evacuation of a certain territory in Albania, and when the Montenegrin troops arrived to take possession they were received, not in the manner they ought to have been received, but they were fired upon, and no less than seven men were killed, and then the whole of the negotiations had to commence again. The papers show that the Turkish Government then went round to one Power after another, attempting to get an understanding that if they gave way about this territory, and finally handed it over, or some other territory, then they might receive an assurance that no pressure would be brought by any other Power to bear upon them in regard to Greece. Now, the danger is that the Turkish Government will do exactly the same 828 thing with regard to Crete; they will try to arrange that if they evacuate Thessaly they need not consent to the candidature of Prince George for the Governorship of Crete. There is one other reason, and I am sure it will appeal to my right hon. Friend on the other side of the House who has just returned from these regions. There is not only the Turkish soldier to take into consideration, because no doubt he is anxious to get out of Thessaly, but there is the Turkish tax-gatherer. Formerly one of the most important items of Turkish revenue was the sheep tax of Thessaly, which used to bring in £1,000,000 sterling a year. But the Turkish tax-gatherer has lately descended on Thessaly, and although the Turkish soldier is anxious to go, the tax-gatherer is anxious to stay as long as he can. Thessaly has been ravaged, and no doubt the revenue would not produce anything like £1,000,000 sterling a year now. This tax is levied upon large herds of sheep driven from the northern territory, some of which have never been touched by war, and which are Turkish territories. Still, there may be a minor temptation to the Turkish Government to delay the evacuation as long as possible, and I think it all the more likely, because it was well known in 1880 and 1881 that at that time one of the reasons why the Turks did not surrender the territory which they knew they would have eventually to give up, was that they desired to push the fulfilment of their obligations as far forward into the year 1880 as possible, in order that the sheep tax should pass into the hands of the Turkish tax-gatherer before they handed it over to Greece. I mention these few facts, because there is a very great anxiety that this matter should be carried through successfully, and that the unfortunate inhabitants of those regions should be allowed to return in peace to their desolate homes.
§ SIR E. ASHMEAD - BARTLETT
I notice that the noble Lord who has just sat down has dealt with great force upon the evacuation of Thessaly, and I noticed that he used the expression that "Thessaly had been ravaged." Well, Sir, I should like to know by whom Thessaly has been ravaged. No occupied province has ever been so well treated 829 before by European soldiers, and statements of that kind should not be made in this House.
§ SIR E. ASHMEAD - BARTLETT
Well, the word "ravaged" is not applicable to what has happened in Thessaly. Well, Sir, this loan of £4,000,000 marks a very interesting—[An hon. MEMBER: It is not £4,000,000.] Well, whatever the amount of the loan is, at all events it is simply the outcome of the action and policy pursued by Her Majesty's Government. This is one of the direct proofs of the atrocity scare; it is absolutely the effect of the atrocity agitation upon Her Majesty's Ministers, because, but for the action they took in concert with the rest of Europe, especially with regard to Crete, there would have been no Cretan trouble, no Greek war, no suffering to Greece or Turkey, and no loan. This is the absolute effect of atrocity-mongering of the Radical Party in this country upon Her Majesty's Government, whose representation and action produced the weakness of the Government in refusing to blockade the Piræus and Volo, so as to prevent the mobilisation of the Greek army. That is the direct cause of this loan, and of the unfortunate financial position in which Greece finds herself to-day. Well, now, I heard the Under Secretary not long ago use a most remarkable expression. He said that the question of paramount importance in Europe now was the evacuation of Thessaly by the Turks. Sir, I have never heard a more astounding statement. If that really is the view of Her Majesty's Government, if in view of the tremendous problems and difficulties which at present surround this country and all Europe, the view of Her Majesty's Government is that the question of the evacuation of Thessaly is of paramount importance, then the policy of Her Majesty's Government must be regarded as almost hopeless. It is a question of interests, it is a question of sentiment, and a thing which we all desire to see done, and which the Turks are as anxious to see done as anybody 830 else; but to describe this as the one question of paramount importance is simply to say that the Gentleman who used the expression is devoid of all sense of proportion. [The FIRST LORD of the TREASURY: No, no!] I am sorry the Leader of the House does not agree with me; but that is the fact. I heard the Leader of the Opposition, a little while ago, dealing with the action of the Government in allying themselves to France and Russia in order to secure the evacuation of Thessaly. Well, Sir, we know perfectly well what are the views of right hon. Gentlemen opposite, in spite of the attacks that France and Russia are continually making against British interests in every quarter of the globe. The one idea in the minds of some right hon. Gentlemen opposite is to secure an alliance with France and Russia against the Turkish Empire. It is a most distressful feature of this position that the Leaders of the Opposition should also show that they are without sense of proportion, and that my right hon. Friend should have allowed such an expression to pass from him, which also goes to show that he too is without that sense of proportion. The important point in all these questions is that we should not alienate from us the support of the Ottoman power and Mussulman feeling throughout the world. That is the question of paramount importance for our interests in the Far East or the Near East, and I say that this policy is tending to alienate the Mussulman people, but I think there are signs of a much wiser policy and feeling on the part of this House, and on the part of Her Majesty's Government, towards Turkey; but to place the evacuation of Thessaly as the question of paramount importance makes one think that great interests in the Far East—I am speaking of the Northern Pacific and of China—should not possibly be sacrificed in order to secure this practically worthless concession, though perhaps from some points of view it is sentimentally a valuable arrangement for France and Russia with regard to Greece and Thessaly. I quite admit that indirectly, and perhaps directly, this loan will not be a disadvantage to Turkey. I have no doubt that the securing of the payment of the war indemnity will be of very valuable 831 service to the depleted exchequer of the Porte, and therefore this action on the part of Her Majesty's Government need not be regarded as hostile to Mussulman interests, and I do not for one moment place it in that light. The point I wish to call the attention of the House to is this: that it is most undesirable that our great interests in the Far East should be sacrificed in order to secure what is, as regards British interests, a perfectly useless combination on our part with France and Russia, and it is an arrangement which will have to be very carefully worked. The Turkish Government will have to be dealt with with great consideration in all these matters, because great pressure is being used with Turkey to induce her to join with Russia against us, and these negotiations with regard to Greece and Thessaly are being used as a lever to force an alliance against us. And, Sir, with regard to the Cretan question, I do not know whether it would in any sense come under this loan as part of the general Greek question I am referring to. I take quite a different view to the Leader of the Opposition as to the supposed abandonment, or, at all events, of the cessation of negotiations in support of the candidature of Prince George for the Governorship of Crete. He is, no doubt, a superior and able Prince, and he might be a good Governor, but it is very undesirable, when Mussulman feeling is so great, that we should force upon Turkey the appointment of Prince George, who will naturally be objected to by the Sultan and by the Turkish Government. It was really unfortunate that the Government should have been misled into supporting the candidature of Prince George, because he could never be acceptable to the Porte. I really cannot see why a suitable Christian Governor of Crete could not have been found amongst the subjects of the Porte. I think everybody would admit, from a Turkish point of view, that that would be a reasonable demand, and it is difficult to understand why the Government would not accept a suitable Christian Governor for Crete.
THE CHAIRMAN OF WAYS AND MEANS
Order, order! The hon. Gentleman is now wandering away from the Question before the House.
§ SIR E. ASHMEAD - BARTLETT
I will now, Sir, cease with reference to that subject. I hope in the arrangements that are made for this loan that consideration will be paid to the feelings and interests of the whole population, and that Her Majesty's Government will never lose sight of the fact that has been ignored by both sides and both Parties during the past three years, that it is absolutely essential for us to maintain and keep on our side the good feeling of the Mussulman population of the world, and especially of the Mussulman population of India.
§ Resolution agreed to; to be reported to-morrow.