KING'S SPEECH (MOTION FOR AN ADDRESS).

HC Deb 18 February 1903 vol 118 cc216-47

Order read, for resuming adjourned debate on Main Question [17th February], "That an humble Address be presented to His Majesty, as followeth:—

"Most Gracious Sovereign,

"We, Your Majesty's most dutiful and loyal subjects, the Commons of the United Kingdom of Great Britain and Ireland, in Parliament assembled, beg leave to offer our humble thanks to Your Majesty for the Gracious Speech which Your Majesty has addressed to both Houses of Parliament."—(Mr Gretton.)

Main Question again proposed: Debate resumed.

MR. JOSEPH WALTON

When the House adjourned I was referring to the necessity of safeguarding our Indian Empire by taking adequate means for upholding the integrity and independence of Persia. And in this relation, having regard to the much greater importance to our Indian Empire of the Persian question, it seems to me it might be by no means undesirable that the affairs of Persia should be undertaken rather by the Government of India than by the Foreign Office of this country, partly because of the nearness of Persia to India, and therefore India would have a much better knowledge of everything that was happening in Persia than it was possible for the British Foreign Office to have. With regard to the question of British interests in Persia and the Persian Gulf, it was with satisfaction that I heard the noble Lord the Under Secretary last January say, as an announcement of the policy of the Government— There is no change in the attitude maintained by the British Government in the affairs of the Persian Gulf. Our position in the Persian Gulf, both commercially and politically, one was of a very special character and His Majesty's Government had always considered that the ascendancy of Great Britain in the Persian Gulf was the foundation of British policy. This was not merely a statement of theory; it was a statement of fact. Our trade interests there far exceeded those of any other country. Our recognised maritime supremacy secured our political ascendancy. And I am glad to be able to quote another high authority as to the importance of our maintaining our ascendancy, and that is our present Viceroy of India, who wrote in 1892:— I should regard the concession of a port upon the Persian Gulf to Russia by any Power as a deliberate insult to Great Britain, as a wanton rupture of the status-quo, and as an intentional provocation to war; and I should impeach the British Minister, who was guilty of acquiescing in such a surrender as a traitor to his country. I am glad to say the noble Lord the Under Secretary of State, after his statement of last January which I read to the House, will stand in little danger of impeachment by the Viceroy of India in this matter. But the question we have seriously to consider is, how we are to maintain our commercial position in Southern Persia, and to maintain the status quo throughout Persia? With regard to our commercial interest in Southern Persia, I am glad to find they are in a more favourable position than in Northern Persia. The predominance of British ships in the Persian Gulf in 1900 was that of 766,000 tons out of a total tonnage of 960,000, or 90 per cent.; but we are threatened with rivalry and competition on the part of Russia. She has agreed to subsidise a line of steamers from Russia to the Persian Gulf, in order to develop her trade there. The system of bounties to steamers is, of course, objectionable to us, but we have to face the fact of this increased and keen competition on the part of Russia.

To promote British trade in South Persia, it appears to me necessary for the British or Indian Government to take precisely the same steps as the Russian Government have taken in the North. The British or Indian Government should assist British enterprise by the construction of roads from the Persian Gulf up into Southern Persia in order to develop British trade. One route requiring improvement is by the Karun River, and from Ahwaz, via the Bakhtiari country to Ispahan, and another should be made from Baadar Abbas via Yezd and Kerman to Ispahan, and another from Kum to Ispahan, with connecting roads from Kermanshah and Sultanabad. There should be from the Foreign Office or the Indian Government some subsidies given for this purpose. A nominal subsidy is given to one trade route, but I think it would have been much better had advantage been taken of the presence of the Shah in this country to present him with the Garter, and the expense of the Mission sent to Persia for that purpose could these have been devoted to facilitating our Persian trade. It is a matter of satisfaction that the Quetta-Nushki railway is already under construction. A Keen interest is taken by the Viceroy of India in the development of that route. The trade there has developed most satisfactorily. In five and a half years it has risen from five lacs to sixteen lacs a year, and I should be glad to know from the Under Secretary that the interference by Russians with British caravans going by the Quetta-Nushki route to Persia has ceased, and that there is now no hindrance to the free trade of our Indian subjects, on that route. In addition to obtaining the necessary concessions from Persia for the construction of these roads, there should undoubtedly be obtained the right to construct railways along the line of these commercial highways.

One most objectionable feature in connection with the Persian situation today is the fact that in connection with the loans which Russia has made to Persia, she has imposed conditions which are unfair and unequal, as affecting other nations. As a condition of her loans, she has compelled Persia to bind herself not to borrow money from any foreign Power until 1912. The security for the Russian loans expressly excepts the inclusion of Customs receipts at Persian Gulf Ports and Faristan. I hold that Russia, being a party along with us to repeated declarations of our respective policies, and those policies being identical—namely, that the integrity and independence of Persia should be maintained, we should not tolerate any interference on Russia's part with the right of British banks and British subjects to make a loan to Persia on the security of the Customs receipts that are not pledged to Russia.

Russia has also debarred Persia from granting concessions for building railways until 1912, and the reason of her doing so is obvious. She is engaged with her great Trans-Caspian Railway, and it is not convenient at present to push railways in Persia, and, therefore, she has debarred Persia from granting any concessions. But I hold we have an equal right with Russia to lay railways in Persia, and we ought not to be bound by any conditions imposed by Russia when making a loan which will prevent our doing so. We should maintain for this Empire rights to build roads or lay down railways in Persia equal to those enjoyed by any other Power. Reverting now to the new commercial treaty made between Russia and Persia; we are now trading under the Most-Favoured-Nation clause with Persia, but under the new treaty between Russia and Persia there has been an attempt to impose higher import duties on products coming from the British Empire than on products sent from Russia. Every nation now pays a 5 per cent. ad valorem duty on imports into Persia, but in the case of tea we find under the new treaty a duty of 100 per cent. is fixed. On Manchester cotton goods the import duty has been raised 4 per cent. I do not know whether His Majesty's Government has yet received a copy of the Treaty, but if they have, I hope the House will be informed to-night how far it operates against our trade and in favour of Russian trade. The bulk of the tea which goes to Persia comes from the British Empire, and such an increase must greatly cripple our trade with Persia in tea. I hope we shall have from the noble Lord to-night a satisfactory statement that British trade will be protected, and that we shall not only enjoy the Most-Favoured-Nation terms but that we shall not be subjected to additional import duties on products we send to Persia as compared with those levied, our products sent by other nations. I raised this question in January last year,† and the Government made a sympathetic reply on that occasion. I then had the honour to have my Amendment seconded by the noble Lord the Under Secretary for India, and I can only hope that now, when in office, he may hold the same open and enlightened views he held then; and that we shall have from him great assistance in upholding British interests in Persia. What I have to complain of is that words have not been followed by deeds. Although the Under Secretary of State's statements have given satisfaction, they have not been followed by any action on the part of the Government. I should desire to have to-night from the noble Lord some assurance that the Government's policy is to be an active policy, though not of an aggressive character; a policy of firmly promoting and upholding British commercial and political interests by the insistence upon our full political and commercial rights.

MR. CALDWELL (Lanarkshire, Mid)

In rising to second the Amendment moved by my hon. friend, I only desire to say a few words. I think he has done good service in bringing to the notice of the House the affairs of these countries. So far as the Amendment is concerned, it is one with which the House will cordially agree, though probably great difference of opinion will arise as to what is the best method of promoting our interests in these countries. Hitherto we find there has been a tendency on the part of the Government to try and make political capital out of some of these events with regard to China. This was apparent when Russia got possession of Port Arthur. There was no need to make any apology for allowing Russia to take possession of Port Arthur. It is what we should have done, in spite of all resistance, if we had made a railway down to it of our own; but the Government then told us that, in order to equalise the matter, they had acquired Wei-hai-wei, which we were told was a much superior place. Now we find, after all the money that has been spent upon it, it is of no use, but is merely a health resort. It is injudicious to try and make political capital out of these matters, because if Russia thought we had the † See (4) Debates, ci., 574. better of her she also would strive for more. When Russia got hold of Port Arthur we are told that we ought to rejoice because the British Government had secured a sphere of influence in the Yang-tze Valley. But not long afterwards the Government came down and said that the Yang-tze Valley was to be the "open door," and that the United States and Germany had agreed to it. That means that we have no advantage whatever. Of course the United States and Germany would agree to the open door, because we have everything to lose, and they have everything to gain by it.

How has the matter worked with regard to Shanghai? At one time there was a little difficulty about the landing of troops. The House has not sufficiently considered that Shanghai is not a British port at all. It is a treaty port, and every other nation has the same right there as we have. Consequently, when we landed troops at Shanghai for the protection of British interests, Germany, Japan, and every other country landed troops also, and they were only withdrawn on the condition that the Chinese Government should not grant any special advantages to this country. German trade in the Yang-tze Valley has increased from 2 per cent. to 17 per cent. of the total, while ours has correspondingly fallen, while everybody knows the enormous advance the Germans have made in Shanghai. Military prestige is very important in China, but where were our forces at the time of the insurrection? We had to apply to India for Indian troops, and even then we were at the bottom of the scale as regards numbers. Now that the British Army is relieved, the Government should take care that nothing is done to lower our military prestige in these quarters. It is all very well to talk about pressure being brought to bear on the Chinese Government. It is undoubtedly a weak Government, but it is to the interest of the European Powers to keep up its prestige, because you have at any rate a Government with which you can deal.

The missionaries are the great difficulty with regard to disturbances in China. The Chinese have no objection whatever to missionaries preaching the Christian religion in China. The lives of missionaries would be as safe there as anywhere in the world, were it not for the fact that they take the part of their supposed converts in regard to their relations with the civil power, and interfere in matters which really concern the civil government, and thereby come into collision with the authorities. I hope the Under Secretary of State will take this matter into consideration, and that the Government will instruct the missionaries to restrict themselves to matters of religion, and not to intervene in the matter of civil rights. You cannot turn Russia out of Manchuria. Past events have shown that such a thing as a rising is possible in China, and Russia is justified in putting an armed force there to protect her railways. She will probably be as unwilling to leave Manchuria as we are to evacuate Egypt. Russia cannot annex Manchuria; the population would be sufficient to prevent her conquering by force; but she may make Manchuria prosperous, and thereby acquire such an influence over the people as to give her a great hold. As to Niuchwang, that port is doomed. It was of importance before the construction of the Manchurian railway, but it is of little importance now.

The Government should awaken to the importance of having a speedier communication with China by the sea route. The mail route by the Siberian railway will probably reach Peking in fourteen days, and Shanghai in eighteen, and if we are to maintain our position, it is necessary that we should do all we can to quicken the means of communication. We know that British shipowners enter into rings and combinations, so that the Government will have to ensure not only a speedy route, but also that the rates are not excessive, and that foreign enterprise in not allowed to beat us. I am not surprised at the success of Germany. The German ships are the fastest on the station, and the best equipped; they are always full, while the P. & O. boats are about one-third full. If we lose our prestige in commercial competition, I do not see what the Government can do to restore prosperity to men who throw it away themselves. The activity of the Germans will have its reward, and, so far as the German subsidies are concerned, I think they are an immense advantage to this country, because they ensure usagainst the high rates charged by British shipowners. I beg to second the Amendment.

Amendment proposed—at the end of the Question to add the words: And we humbly represent to Your Majesty that it is essential that adequate measures should be taken for the safeguarding and promotion of the commercial and political interests of the British Empire in both China and Persia."—(Mr. Joseph Walton.)

Question proposed, "That those words be there added."

MR. GIBSON BOWLES (Lynn Regis)

said the history of China was extremely discreditable to this country, but much more discreditable to her allies, especially to Germany. In China, as elsewhere during the last forty years, Germany had been the disturber of the peace, and he should have thought that our experience there would have taught us never again to have anything to do with Germany. That lesson, however, had not been learnt, and we had entered into another adventure with that Power, with even more doubtful results. As to Wei-hai-Wei, that had been admitted to be a little mistake, made by the present Prime Minister during his apprenticeship to foreign affairs in the absence of Lord Salisbury; the mistake had been redressed as far as it could be by giving up the pretence of a naval station, and the sooner it was forgotten the better. The question of Persia was of the utmost importance to this country so long as we held India. Lord Curzon, with that amiable appreciation of everybody which always distinguished him, in his book Problems of the Fur East, had descanted on the absolute ignorance and incapacity of the House of Commons in regard to foreign affairs. But Lord Curzon had learnt many things since he went to India; he had learnt that the forward policy was a bad one, and would probably be ready to acknowledge now that the calling of attention in the House of Commons to matters connected with Persia was not wholly without advantage. Since Lord Curzon went to India tremendous changes had taken place in and about Persia, and it needed only a look at the map to realise the great importance of Persia to India.

Persia had always been one of the most interesting countries of the East. She had produced some of the greatest poets, some of the finest works of art, and some of the most marvellous manufactures of the East, but she had now reached that stage of decadence that her importance lay rather from the political than the artistic point of view. The importance of maintaining the independence and integrity of Persia had always been recognised. He still believed that as long as England maintained her predominance at sea she would always be more powerful in Persia than any other country. The heart of Persia could be got at through the Persian Gulf, and as long as we held the Arabian Sea, and had access to the Persian Gulf, if it came to a question of force, we should always be the "upper dog" in Persia. But in Persia it was particularly important that meantime we should obtain and retain "influence." Influence meant all sorts of things; in Persia especially it meant money; in short, it meant all that was summed up in the word "prestige." The House of Commons and the country had somehow been led to believe that England and Russia had an engagement to maintain the integrity and independence of Persia. That was not the case. No agreement, no engagement to that effect, existed. The only thing that existed was the expression, on the part of Russia, of "a sincere desire to maintain the independence and integrity of Persia." That desire was expressed in 1834, and nothing else or more, nor had anything else or more been expressed by Russia since then. It was true that, in 1888, Lord Salisbury did speak of an "engagement," but there was no such engagement, and what could have induced Lord Salisbury so to characterise the expression of a desire, he could not imagine. There was no treaty or conventional engagement whatever for the independence and integrity of Persia. That country had been, and was, the sport of diplomatic struggles between those who were endeavouring to secure predominance in Persia; and up to the present, especially lately, Russia had so bested us that even Lord Curzon, were he in the House, would probably be inclined to second the Amendment to the Address.

The ignorance of the House of Commons, arose not from any indis- position on the part of Members to inform themselves if they had the opportunity, but from the reticence and indisposition on the part of Ministers to give information, from the disposition to give information not always understood in the sense in which it was given, and the disposition to use words with great dialectical ability, so that they did not give exactly the impression with which they left the mind of the Under Secretary of State. So great was the preponderance of Russia that she had absolutely forbidden Persia to fly her own flag on the Caspian. The bordering Persian provinces of Ghilan and Mazanderan were almost absolutely Russian in every way, and the whole of Persia was becoming almost entirely under Russian influence. He thought that was largely our own fault. There were other matters. Hon. Members were all aware that foreign potentates were as proud of honours and distinctions as English nobles, and he did think that it was a very great pity when His Majesty the Shah was in this country that he was not accorded the honour which he was believed to desire. The result was that he and his suite went away disappointed and discontented, and went to Russia to make the best arrangement they could. But after the mischief had been done, and his arrangements made with Russia, it was discovered that there was no such objection as had been supposed to giving the Garter to a non-Christian sovereign, and then a special mission was sent to him with the Garter which had been withheld while he was here—sent when it was too late.

As to railways, he believed it was a fact that there was an arrangement between Russia and Persia the practical effect whereof was that no one but a Russian could build railways in Persia. That was a very serious state of things, which ought not to occur in any country where they kept up an Embassy, and where they had, let him say, a most able Ambassador. The fault lay with the Government, and it was a most unfortunate thing that the English had been driven out of Persia as railway makers. As far as the military aspect of the question was concerned, he believed that the command of the sea would enable England to put more men there than Russia and Germany by land.

He came now to the question of trade.

He held that trade itself in Persia was a secondary question, but influence went with trade, and influence was created by trade. Where they had British merchants and British interests well established, there they were likely to have more influence. As to trade with Persia, British trade had undoubtedly declined in the most alarming manner, and Russian trade had as greatly increased. He had asked the noble Lord on a former occasion if there was a commercial treaty between Russia and Persia, and he replied that he knew nothing about it at that time; he trusted he knew more about the matter now. He was told that it was one of the most tricky treaties that ever was made. It professed to give no more favoured treatment for Russian than English goods, but in fact all the favouritism was for Russia and none for England. There had been recently some strange and ominous Consular appointments, there had been also an importation of Belgian Custom-House officers, but no English; for in these days in Persia everything went to somebody else and never to a Briton. If a Russian could not be got a Belgian was appointed, and if they could not get a Belgian he supposed they would get a Venezuelan, but never an Englishman. He had drawn attention to these facts from time to time, and had asked questions as to the effect of this treaty on British trade; and recently it was acknowledged as fully as one expected an Under Secretary to acknowledge it, that this treaty was likely to do some injury to British trade, and the noble Lord was good enough to say that this matter was receiving and would receive the attention of the Government. He wanted to know how far that attention had gone. What had His Majesty's Government done in answer to this Russian commercial treaty? Had they done anything? Had they made a treaty or come to any agreement with Persia to be put upon the same terms as Russia, had they got a treaty as cleverly drawn as the Russian treaty, or had they been amused with mere nothings?

He wished to know if the Government had submitted to the unfavourable position in which that treaty had placed English goods. He had been assured that the duties placed upon Indian tea were such as to make it impossible to go on importing that tea into Persia. If that were true, so great was the importance of the trade in Indian tea that it would be a most serious matter. The Persians were very great tea drinkers, and if Indian tea was practically prohibited and entirely replaced by Russian tea that was very serious. He wanted to know what the Government had done. Had the noble Lord got a copy of the Russian commercial treaty, and would he lay it on the Table? And, secondly, what steps was the Government taking in order to secure the trade between India and Persia and between Great Britain and Persia? Had they taken any steps, and if they had, what were they? Those were the two special questions he wished to ask. He thought the noble Lord must feel that under the circumstances which had arisen now and promised to arise, and in view of the decrease of British trade and the corresponding decrease of British influence, that it was neither possible nor desirable that he should keep silent upon these points.

*MR. KESWICK (Surrey, Epsom)

said the statements which were constantly being made as to the decline of our trade with the East were not entirely correct. Statistics proved that the volume of our commerce with the Far East had not diminished; but what had happened was that we had not been able to maintain that percentage of the entire trade—the enormous increase of which was one of the features of recent times—which was ours before foreign competition began. The opening of the Suez Canal, the introduction of telegraphy, the general advancement in the construction of steam-ships, the improvements in machinery, and above all, the extension to the Continent of Europe of the power of producing machinery which in the earlier stages the genius of British engineers had made almost exclusively English, had enabled Continental Powers and nations to take a share in a trade with which they were previously unacquainted. Our seafaring instincts had led us to extend our trade into the far regions of the earth, because we were the first to grasp what those foreign countries required, and for a long period we possessed the trade of those countries. But with the opening of the Suez Canal there was an altered state of things. The great position which London occupied when goods had to be brought round by the Cape of Good Hope was entirely changed by the opening of the Suez Canal, and London was no longer the great depot from which the whole of Europe drew its supplies.

He did not believe that our people were less enterprising, less energetic, or less desirous of accumulating fortunes than our forefathers; nor did he think that there had been any falling off in the desire of the mercantile community to promote the interests of the country while advancing their own individual interests. He regarded the recent commercial treaty between this country and China as most valuable in the interests of our trade. It was a treaty which had been formulated with great skill, evidently with immense patience, and an extraordinary amount of study of every feature connected with it, and every obstacle to the carrying out of the intentions of the parties to the treaty had been as far as practicable, guarded against.

Reference had been made to native opium and salt not being included, but there were many other productions which could not possibly be included in the tariff connected with an independent country which collected its own taxes and was responsible for its own administration. It was absolutely impossible for any one Power to dictate to China what it should do in connection with its own native trade. As to Wei-hai-wei, he should deeply deplore its abandonment, for he regarded it as a most important position. He did not mean that money should be spent upon it immediately, but it was well to possess it, and to be able to make it an important naval or military station at any time, if necessary. Touching Persia, a country in which he took a great deal of interest, both commercially and otherwise, he suggested the great importance of the Government devoting extreme attention to our position there. There was a danger, and it was this. The people were intelligent, and the country only required good government in order to go ahead, but the Government of Persia was not equal to its duties and.

responsibilities, and a powerful Government like that of Russia could undoubtedly take advantage of the situation. It therefore became, in their own interest, a matter of extreme importance that great vigilance should be observed in matters affecting British influences and commercial interests in Persia.

*THE UNDERSECRETARY OF STATE FOR FOREIGN AFFAIRS (Lord CRANBORNE,) Rochester

I am sure the House and the Government ought to be very grateful to my hon. friend who had just sat down, because, speaking as he does from a peculiar position of knowledge and experience of trade in the Far East, he had been able to inform the House both that the recent commercial treaty with China has met with the approval of himself and the commercial community, and also that the position of our trade in China is not so gloomy as some hon. Members would have us believe. Before I deal with China, if hon. Members will allow me, I will address myself to the other part of his Motion and deal with the affairs of Persia. Reference has been made to the difficulty which the Government find in opposing the text of this Amendment to the Address which the hon. Member has put upon the Paper. No doubt he asserts very little more than the truth, but I think the House is very well aware that it is the duty of a Government to resist an Amendment to the Address. I remember that last year when a similar Amendment was moved to the Address by a friend of the Government, we were equally bound to resist it upon that occasion. There is no change in our policy in Persia. I do not quite know why the hon. Gentleman who moved the Amendment thought it necessary to challenge our policy in Persia.

*MR. JOSEPH WALTON

Because it is passive instead of active.

LORD CRANBORNE

So far as I am able to judge passing events, the circumstances have not changed in Persia to any great extent from the time when I spoke last year. We hold to the declarations I then made on behalf of His Majesty's Government. We see no reason whatever why our interests and those of Russia should clash in Central Asia. The field is wide. The objects which we severally have in view are quite sufficient to occupy all the energies we can devote to them. There appears to be no reason in the world why Russia and ourselves should get in one another's way. But I agree with my hon. friend the Member for King's Lynn that our position in regard to Persia is one of great strain. My hon. friend made a notable admission as coming from so candid a critic of the Government, for he pointed out that after all the position which our maritime ascendency gave us in the Gulf was so great that we might consider with comparative calmness the position of any other Power in those regions. If our position is materially strong, so is it strong by treaty. My hon. friend tried to persuade the House just now that the exchange of Notes under which, as we claim, Russia and Great Britain have mutually agreed to respect the integrity of Persia were so many cobwebs, that they had no value and no validity whatever, and that, as a matter of fact, from his inspection of the words of the text of these notes they do not amount to an engagement at all.

*MR. GIBSON BOWLES

They amount to a sincere desire and no more.

*LORD CRANBORNE

My hon. friend is an authority on many things; in fact there is hardly anything on which the House would not be prepared to believe him an authority; but I do not think he is an authority on diplomatic English.

*MR. GIBSON BOWLES

Or French?

*LORD CRANBORNE

Well, or even diplomatic French, and I do say that all those who are experts in the science of diplomacy have recognised, and always must recognise, that the terms of the Notes which were exchanged between Great Britain and Russia amount to a mutual engagement to respect the integrity of Persia. As far as I know, the Russian Government, like our own, have never attempted or desired to repudiate the interpretation which had continually been placed upon those Notes—the interpretation which was placed by the late Foreign Secretary of this country, placed by the representatives of the Govern- ment in this House on more than one occasion in the most public manner possible, and never called in question until my hon. friend spoke. A part from that general treaty position, we have a strong case. My hon. friend, for example, spoke of the railway situation in Persia. It is true that the Russians have certain rights in respect of railway construction in Persia; so have we. We have the right, when railways are constructed in the north of Persia, to construct a railway in the south.

I turn to another part of Persia—the eastern frontier. Last year I reminded the House and the country that we thought it to be our duty to maintain our position in various parts of Persia, and especially among others in those provinces which border on our own frontier. Any one who has watched recent events, will recognise that the presence of a certain Commission which has been sent to that part of the world had demonstrated, if it required demonstration, that our power and position must be seriously reckoned with on the south - eastern frontier of Persia. In the provinces which border on the Persian Gulf, in the same way we have treaty rights of great importance; for we have the engagements of the Persian Government not to pledge the Customs of southern Persia. It will be seen that, when we come to examine the subject, in many directions our position is very strong. My hon. friend the Member for King's Lynn has referred to our commercial policy. We are pursuing in Persia, as we do everywhere else, a policy of commercial development. But before I say a word upon that, I must refer to the observations of my hon. friend and others in respect to the Russian commercial treaty with Persia. There is no doubt of the fact that there is a commercial treaty between Russia and Persia, and I am afraid that that treaty is so constructed as more or less to hamper the trade of the British Empire with Persia. We took very serious note of that. We have made strong observations to the Persian Government, and we have given certain instructions to our representative at Teheran. On the present occasion I am not going further; but I hope within a very short time to make a fuller statement as to the result of these representations and instructions than I can do at the present moment.

The hon. Gentleman who moved the Amendment spoke of roads. I think the road of which he spoke is really in working order. Besides that, there is an important concession, which has hitherto been held by the Imperial Bank of Persia, with which I know the hon. Gentleman is familiar; well that has entered, as we hope, on a new chapter, and it is anticipated that the concession will be fruitful before long. There are certain Customs difficulties which have arisen on the Karun river attracting some attention. Our diplomacy, I am glad tosay, has been able to overcome those obstacles, and, to a large extent, the old state of things under which it has not been necessary to break bulk as complained of by the merchants has been re-established. Lastly, our Government have thought it right to despatch a commercial mission to Persia, which has for its object the duty of investigating the commercial possibilities of Persia and the openings which the Persian market, properly studied, might be able to afford for the development of British trade. The hon. Gentleman has called that a passive policy. How much does the hon. Member expect the Government to do in twelve months? I do not say it is a hasty policy, but it is certainly not a passive policy. The House may believe me that in dealing with the very delicate questions which undoubtedly present themselves to us in Persia, a hasty policy would be a profound mistake. A firm, active, moderate, temperate policy, and, above all, not a hasty policy, is that which His Majesty's Government desire to pursue.

I turn to the other branch of the hon. Member's Amendment which deals with China. I am sure he will forgive me if I do not go back right to the beginning. I know that it is very difficult for an hon. Gentleman who, like himself, is familiar with Chinese questions. to abstain from carrying the House back to the earlier controversies in which we have been engaged in that country. Things are not so bad as the hon. Member has stated.

*MR. JOSEPH WALTON

I quoted your own statistics.

*LORD CRANBORNE

Yes, but the hon. Gentleman carefully selected those statistics—naturally enough. There is. however, the broad fact that during the troubles in china in the last few years the proportion of British trade to other trade has hardly diminished at all. Upon the whole, the bulk of trade has greatly increased. I do not mean to say that other countries have not also had their share in the improvement of trade. The hon. Member for Lanark said that while formerly the German trade at Shanghai had been 3 per cent., it was now 17 per cent. of the whole. But did the hon. Member really expect that the trade of a great commercial country like Germany would permanently remain at the figure of 3 per cent.? Does the hon. Member think it unreasonable, or anything of which this country ought to be greatly afraid, if, with all the energy and skill which German commercial interests can put forward, they have increased their trade during the last few years from 3 to 17 per cent.? I should think that our trade at Shanghai was probably well over 50 per cent. As to the commercial treaty, I do not propose to go into wearisome details. Our reliance upon it depends on the treaty's own merits. It's most important clause is, of course, not effective until the other Powers accept a similar provision with China. I mean the clause which abolishes the oppressive inland taxation. But what we rely upon is that other commercial Powers will, like ourselves, be convinced, as no doubt they will be convinced, of the superiority of the improvement which China has been induced to accept in its fiscal policy, and that, being so convinced, other Powers will themselves accept a similar provision.

MR. JOSEPH WALTON

Have any of the Powers accepted it?

*LORD CRANBORNE

No, Sir; I do not think that any other Power has as yet accepted the commercial treaty. As to the position at Niuchwang, the Russian Government has not at present altogether removed their authority from Niuchwang. But they have promised to do so, and the period by which they engaged to evacuate that part of Manchuria to which Niuchwang belongs does not expire until the middle of April, so that it would be premature to make any observations on their continued position there at present. I may remark that the Imperial Customs at Niuchwang are under Sir Robert Hart, and the native Customs are collected by men under the same authority; and therefore, there is no very great ground of complaint for the position which now exists at Niuchwang. I have nothing to report about the railway siding at Tientsin. As the hon. Member is aware, the question was referred to arbitration, and the award has not yet been received. As to Shanghai, I do not think we have any reason to be displeased with what has taken place in regard to the evacuation of Shanghai about the end of last year. We did not agree in that respect, it is perfectly true, with the German Government. Our belief in the open door is deeply founded, but it does not date from the moment when it was thought advisable to evacuate Shanghai. It dated from long before that; and we saw no reason at all why the withdrawal of our troops from Shanghai should be made the occasion of any fresh declaration on the subject. Such a declaration had the appearance, as Lord Lansdowne wrote, of being directed against one Power only, and that Power Great Britain.

The hon. Member for Barnsley has said the that German Government made certain arrangements with the Government of China, and that those arrangements remained, inspite of the attitude we adopted. Well, we do not recognise those arrangements, and it will be seen from the Bluebook that the Chinese Government themselves assure us that they will allow nothing that had passed to prejudice the rights of Great Britain in the Yang-tze Valley. So that if we differ from Germany, as Powers do differ from time to time, we have no reason to be in any way displeased with the results of circumstances as they turned out in November of last year.

As to the question of Consular jurisdiction in Shanghai, I am glad to say that a modus vivendi has been agreed upon between the Powers. I hesitate to give it to the House at such an hour of the night, because it is rather a complicated arrangement, and it will be better to communicate the terms by way of answer to a Question. But the general effect of it is this. In any criminal prosecution where the prosecutor and defendant are both Chinese, the trial will take place in the concession where the crime was committed. Where the defendant is Chinese and the prosecutor is a foreigner, then the trial will take place in the concession, either international or foreign, to which the foreigner belonged. There is every reason to hope that, when the proper regulations for carrying out the arrangements have been agreed to, a way out of the difficulty will have been found.

As to the indemnity, I have already told the House on more than one occasion that His Majesty's Government cannot admit that the indemnity was anything but a gold debt. It was definitely arranged to be so in the protocol, and we must insist that it should be recognised by the Chinese Government as a gold debt. But we do sympathise with the difficulties which the great fall in silver has thrown upon the Chinese Government, and, as I have before told the House, we shall be very glad if, in some way or other, some mitigation—as, for example, some postponement of the payments which are due—can be given to China in order to assist her to meet her difficulties. But the one concession which we will not make is to admit that the debt, which it was agreed should be a gold debt, should become a silver debt.

There is only one other matter to which reference has been made—the position of Wei-hai-wei. As my hon. friend has pointed out, we have not abandoned Wei-hai-wei. It is true that for the moment we have not continued to treat it as a naval base; but I do not think the House should conclude that we will never treat it as a naval base. I do not say that we shall never treat Wei-hai-wei as a naval base. Circumstances may alter, and we may find it necessary in the future to alter the provisional decision that has been come to. But my reply to the criticisms of hon. Gentlemen opposite, and my hon. friend behind me, is that Wei-hai-wei is no longer so necessary to us as it formerly was. And the reason for that is that owing to the policy of His Majesty's Government we have enormously strengthened our position in China by the Japanese agreement, and that we are in a situation now, at least, which makes it quite possible, at any rate temporarily, to dispense with Wei-hai-wei as a naval base. Under these circumstances I think that the House will recognise that the taunts levelled against the Government in respect to this matter are undeserved. We have attempted in our Chinese policy, in the same spirit as I have tried to describe our policy in Persia, to study the interests of this country with moderation and firmness; and we believe that, on the whole, the Government have deserved and will receive the support of the House and the country.

*MR. NORMAN (Wolverhampton, S.)

I must be allowed to say that a more unsatisfactory reply to great and wide-reaching questions of foreign affairs I have never heard than that which has fallen from the noble Lord. The same questions have been previously put by my hon. friend beside me, by the hon. Member for King's Lynn, and by myself, and precisely the same answers, couched almost in the same words, have been made by the noble Lord. In the discussion of foreign affairs in this House we are really like the countryman with the claret, we do not get any "forrarder." The defence which the noble Lord put forward is ludicrous. He says that our policy has not been hasty. Good heavens! has anybody ever charged the present Government with being hasty in their foreign policy, except perhaps where Germany is concerned? The noble Lord says that there has been no change in our policy in Persia. That is precisely what everybody complains of; and no more fatal condemnation could have come from the Opposition side of the House. The noble Lord says in all we have done in Persia there in nothing hostile to Russia. We wish that there had been something hostile or friendly to Russia in it. We wish that there had been anything in regard to Russia rather than this constant dead level of shilly-shally, and constant drift, with no possibility of knowing where this country stands really until we see it in black and white, in a treaty between Russia and some other nation to our disadvantage. The noble Lords gets behind an exchange of Notes, which dates from 1838 or 1839. He says the agreement in this exchange of Notes was never called in question. He means that Russia had never called it in question. Why should Russia call it in question?

She has got the right to build railways and has obtained concessions to build a road to the capital of Persia itself on which she will run motor cars. Our position, says the noble Lord, is very strong! Is it respectful to this House, after all that has taken place in Persia, to simply fob us off with the remark that our position in Persia is very strong, when every human being outside the Treasury Bench, and when even one noble Lord on the Treasury Bench, who has only recently come there, knows that it is very weak?

LORD CRANBORNE

I was only repeating, with cordial assent, what the hon. Member for King's Lynn has just said.

*MR. NORMAN

I may be very dense and obtuse, but I did not gather that there was any cordial agreement between the hon. Member for King's Lynn and the noble Lord. The noble Lord admits frankly that this Commercial Treaty between Persia and Russia hampers our trade seriously, but then what have we done? We have taken a strong note of it! We have been taking strong notes in every part of the world ever since this Government came into power, and I think that we are likely to keep on doing so, and not likely to do anything more. The hon. Gentleman who introduced this discussion drew a dismal picture of Russia coming down to the Persian Gulf. I find myself in a small minority in this House on this question, but I hope it is a growing one. The hon. Member spoke of the terrible things that would happen when Russia got down to the Persian Gulf. Well, that is, of course, as may be. Russia coming down to the Persian Gulf would be a matter of arrangement. It might possibly be a matter of taking strong note of it, but it ought to be also a matter of bargain, to settle under what conditions and circumstances Russia would come down there. But without going into that, I would repeat my opinion, and that of other people, that our relations with Russia should be conducted face to face in frank, direct arguments and diplomatic discussion; and that we should tell Russia what is our irreducible minimum of national and international necessity, and that we should learn from her what is her irreducible minimum, and see in what way we could harmonise these two, and seek to prove in reality, and most leave it in the empty words of the Prime Minister, that there is room enough in Asia for both nations. The Government is simply saying to Russia, "Hands off, hands off," and getting no "forrarder "; and next Russia will be there, and the noble Lord will take a strong note! The hon. Member for King's Lynn says that no matter who is inland in Persia, we shall always be the "upper dog" there if we have command of the sea. I can only say that anyone who believes that will believe anything. I think that is a most mistaken view, and that whoever gets possession of Persia by land, and builds railways, will gain the trade of Persia.

I pass for a moment to the question of the indemnity to be paid by China. I am extremely sorry, and I think every friend of China must have been extremely sorry, and anyone who has studied the financial question of the Far East, must be very sorry to hear the extremely unsympathetic, and, if I may say so, empty form of words with which the noble Lord dismissed the subject of indemnity. The schedules in which the conditions of the indemnity were first laid down specified taels. Now, a tael is a piece of silver. It is not a figure of varying value, as we are accustomed to look at values in a newspaper. It is an actual, solid thing, and when a Chinaman has got to pay so many taels it is so many taels of solid silver. At the time the indemnity was fixed the gold price of the tael was 3s. It is now 2s. 3d., and every penny of the fall in the price of silver means from 13 to 15 millions of taels extra payment of indemnity by the Chinese Government. I ask, could anything be more unfair to them? This fall in the price of silver has followed from causes with which the Chinese Government have had nothing to do. As an Englishman, I am ashamed that the only Government in the world which has been enlightened enough to see the cruelty and injustice of such an arrangement is the Government of the United States. I was hopeful that our own Government would have seen it first. It must be remembered that the people who really pay these millions of taels are not the Chinese Government, but the population of China. That population has already 90,000,000 of taels extra to pay. Not only that, there is that peculiar thing in China called the "squeeze," because the collection of the indemnity will go down through official after official to the people whose unit is not a tael, or a franc, but a very small debased coin called a "cash." When the lowest collector of all comes to the poor masses of the people, do you suppose that he will collect only the sum required by the Government? Not at all; he will insist on taking not one "cash," but ten "cash," and he will say that it is all the fault of the wretched foreigners. Everybody who knows China will tell you that that is what will happen; and given a bad spring, a dry season, and other concomitant causes, I do not hesitate to say that we shall have a vastly greater anti-foreign rising in China than that which was recently put down with so little credit, but with so much difficulty.

But there is another matter more important than any of those I have mentioned, and that is the treaty negotiated by Sir James Mackay. I desire to speak with all due respect of Sir James Mackay, who has formerly rendered great services in Imperial financial negotiations; but I do not think that that gentleman knew very much about China. It is one characteristic of the present Government that when they send someone to China, they send a man who has not had any experience of the country. At any rate, Sir James Mackay got his treaty signed, but it was signed by some Chinese officials—I am speaking within my own knowledge, so far as it can be within the knowledge of anybody who was not on the spot at the time—because they knew that it was never going to be ratified. The Likin or inland taxation of China is a vested interest compared with which all the vested interests in a country like this are things that could be swept away by a breeze. To abolish Likin in china would be nothing less than a revolution. I do not think you can find anyone, except perhaps the hon. Member for Epsom, who believes in the reality of this treaty negotiated by Sir James Mackay.

LORD CRANBORNE

I think the hon. Gentleman must be aware that the Government were in close contact with the representatives of the commercial interests and with all classes who do business with China; and so far as I know, the treaty was received with universal approval by everyone.

*MR. NORMAN

I happen to know certain commercial men in England who are in constant touch with China, and they do not believe in the treaty. But there are Chambers of Commerce which know much more about China than the Chambers of Commerce in this country. The Shanghai Chamber of Commerce may be said to know a little more about the prospects of the treaty than any Chamber of Commerce here, and I believe that Chamber expressed an adverse opinion to the treaty by a majority of seven. I gather that the noble Lord was not aware of that, and his quotation in favour of English opinion is not conclusive on this matter. Is the noble Lord also aware that a large number of Chambers of Commerce in the United States have passed resolutions urging the American Government not to assent to these new relations with China on this subject; and is he aware that the Japanese Government are entirely opposed to this treaty? If not, he will soon become aware of these facts. Is he aware that quite recently—for so I am informed by commercial men who are in a position to know — upwards of £3,000,000 worth of goods have been sent out to Shanghai, Hankow, Tientsin, and other places in China? Does he think that these orders would have been sent out if 7½ per cent. import duty was going to be added, with entire uncertainly about Likin? I should be very glad indeed if the Likin could be abolished in China, and I range myself in that respect with the hon Member for Epsom. But the treaty has not yet been ratified by any other Government. It is not going to be ratified in its present form. It is a failure, as everybody in China admits and regrets; and yet the noble Lord comes down to the House and defends this treaty as if it were a living, vital, international document for the advancement of British trade! This is a painful example of the way in which foreign affairs are treated by the Government in this House. We are all grateful to the noble Lord for the courtesy and diligence with which he treats these subjects; and I think it would be unwise, and unfair to those whose interests we represent, if we did not say that the noble Lord, in replying on this and other questions, often speaks without the information and knowledge which alone can make his statements valuable.

SIR EDWARD GREY (Northumberland, Berwick)

I do not desire to go at any length into this subject. The discussion can only be carried on under considerable restrictions, because the statement of the policy of the Government, while being so extended in scope, is so restricted in details that it is impossible to examine it very closely. The question of our trade with China has been discussed very considerably in the House several times, and one of the points presented with great force by the hon. Member for Barnsley was the kaleidoscopic changes that have taken place in the manner in which agreements in reference to China are regarded. I will not go into that question, and I have no wish to speak in a pessimistic tone in regard to the prospects of our trade with China. I agree with the hon. Member for Epsom that we should not regard with jealousy the progress of the trade of other countries as measured by percentages. We need not be alarmed at the percentages. We need not be alarmed at the percentages of the trade we should look at; the question is whether the total amount of our own trade is diminishing or increasing, If the trade of other countries, it does not follow that it is increasing at our expense.

The most important recent event is the new commercial treaty. There are differences of opinion with regard to the merits of that treaty, but I freely admit that if that treaty secures entire immunity from Likin, it will be the great practical advantage to trade which has been held up as the great object of the British Government. But are we going to secure this? The hon. Member for Epsom spoke of the abolition as secured; but he must know the vast difference between what is secured in China on paper and what is secured in practice. What the treaty does is to propose to secure the abolition; and it seems to me that the battle has only just begun when immunity is secured on paper, and the question is whether the ingenuity of the Chinese, and the incentive to every Chinese official to keep it, will succeed in cheating the treaty and getting round its provisions. Just now China has to meet heavier expenses than she expected in connection with the indemnity, and that fact alone seems to be an ill-omened augury of what the result of the treaty is likely to be.

We have continually had held out by the present Government prospects of advantages to be secured in China. Some years ago, when great anxiety was expressed in the House, and Lord Curzon was Under Secretary, it was stated that arrangements had been made by which British steamers would visit riverside towns in China. The House was pleased at that time. We know what has happened since, but the statement was a relief to the anxiety, and the House relapsed into satisfaction, but things went from bad to worse. The House was also pleased at that time to be told that we had secured our position more than ever in the Yang-tze region. Our position in the Yang-tze region is no better today, however, than before these assurances were given. On the contrary, competition is stronger, and the rivalry—apparently exceptional and designed rivalry—on the part of other nations is more marked than ever. In some other regions, such as Manchuria, the prospective British position has suffered. what is to be feared with regard to China is that we are continually securing paper advantages which do no more than float on the stream of events. The mention of Wei-hai-wei almost always raises a smile in the House now. The noble Lord told us the necessity for Wei-hai-wei had ceased to exist for the present. It used to be said Wei-hai-wei was the resort of diplomacy in despair. Now that diplomacy has ceased to be in despair it is no longer of importance. I have always held that Wei-hai-Wei was not the best choice we could have made. If we were to have a second naval base it ought to have been Chusan. It has been said, I think it was by the hon. Member for Epsom, that the choice of Wei-hai-wei did not prejudice that other selection on a future occasion. The right to select Chusan may remain in theory, but everybody knows that when we selected our second naval base it meant practically that we could not have another naval base in the same region.

The Persian question, however, raises more apprehension than the Chinese question at present. The noble Lord has said there is no change in the policy of the Government in regard to Persia. Was there no change of policy in any other part of the world with regard to Persia? Are things as they were four or five years ago?

LORD CRANBORNE

I said there was no change in our policy since I declared it from these Benches a year ago.

SIR EDWARD GREY

Some other things have changed during the past year. The policy of the Government is, I think, defined as respecting the integrity of Persia. Persia is nominally an independent State; but the financial bonds are being drawn closer around Persia every year, and the independence of Persia is really slipping away. The independence of Persia is a Phrase. It is becoming less independent every year; and when the noble Lord tells us that we and the Russian Government are equally bound, and remain bound year after year, to respect the integrity of Persia, I fear this means that we are bound to respect a vanishing quantity, and that thet ime may come when, if we are restricting our policy to respecting the integrity of Persia, we shall find ourselves respecting nothing at all.

The same process is going on with regard to the railways. Russia has certain rights, and the House is told that we have certain rights also; but the time may come when we shall find that Russia has the railways and we are left in the lurch.

MR. A. J. BALFOUR

Or vice versa.

SIR EDWARD GREY

The right hon. Gentleman says "or vice versa", but our experience in China in regard to these things is that as far as we are concerned it has always been versa rather than vice.

Then with regard to our commerce in Persia, I think the hon. Member for Wolverhampton did not quote the noble Lord quite accurately. The noble Lord stated that a commercial treaty had been made which he apprehended might prejudice British commerce in Persia, and my hon. friend the Member for Wolverhampton said the noble Lord "had taken a strong note of it." I think the actual words were, "he had taken a serious note and made strong observations to the Persian Government.

LORD CRANBORNE

And given instructions to the Minister at Teheran.

SIR EDWARD GREY

I believe that would be included in the strong observations. The noble Lord said he expected to be able to declare considerable results to the House at some later date. Strong observations used to be addressed in similar circumstances to the Chinese Government, but they never produced much result, and there is a great parallel between the position in China then, when we were on the eve of recent developments, and that in Persia to-day. I am very doubtful whether the strong observations to the Persian Government will be more productive of result than the strong observations to the Chinese Government. The observations in this case ought to be addressed really to the Russian Government direct, not with any provocative object, but with the object of arriving at an understanding. I hold, as strongly as any one can hold, that there is room for both Russia and us in Asia; but we must agree; or we must make up our minds what is to be the essential minimum of our interests. There is room in the Atlantic for all the ocean-going steamers, but they find it convenient to arrange with one another what routes they shall take; and, unless we are in communication with Russia as to the spheres in which we shall operate in Asia, there will always be a danger of conflict.

Russia seems undoubtedly, as the hon. Member for King's Lynn said, to be carrying on a process of absorption in Persia, and it is being done by what, I think, a French writer has called peaceful penetration. It is not for those on this side of the House, who believe that a friendly understanding with Russia is possible, to impress on the Government how much they should give Russia to understand we are prepared any jealousy or regret on our part. We on this side have consistently refrained from pressing on the Govern- ment any forward or provocative policy. What I personally would like to see done is this. I would adopt the phrase of the Government themselves and say, with regard to this part of the world, that we want no new territory. I would gofurther, and say: We do not want to extend our sphere of influence, but we want it made perfectly clear what our interests are, and that the Government shall make up their minds as to what are the needs of our strategical position, and what the essential minimum of our interests. What we are afraid of is the possibility or our finding the situation changed by-and-bye, and that not to our advantage. All I would press on the noble Lord is this, that things are changing rapidly in that part of the world. Russia is expanding, and she means to expand further. There is time now, while Russia is still in the north of Persia, for us to make up our minds what is the essential minimum of our interests in that part of the world, and we should be frank with Russia with regard to it. I would like the noble Lord to say definitely on some future occasion whether the Government has adopted the position taken up by the hon. Member for King's Lynn—namely, that our strategical position is secured by maintaining supremacy at sea, and whether the policy of the Government with regard to Persia is to be restricted to maintaining what is essential to our strategical position. I hope that while there is time the Government will consider carefully what is our essential minimum of interest in that part of the world, and that they will secure that minimum by directly communicating with the Russian Government, and not by making strong observations to the Persian Government.

MR. JOSEPH WALTON

After the statement we have had from the Government, I ask leave to withdraw my Amendment.

Amendment, by leave, withdrawn.

Main Question again proposed.