HC Deb 07 July 1914 vol 64 cc1032-55

Resolution reported,

"That it is expedient to authorise the issue, out of the Consolidated Fund, of such sums, not exceeding in the whole two million two hundred thousand pounds, as are required for the acquisition of share or loan capital of the Anglo-Persian Oil Company."

Motion made, and Question proposed, "That this House doth agree with the Committee in the said Resolution."


The matter of expending a large sum of money on Persian oil was debated at length in Committee of the House, but there were certain aspects of the question, which were not in the time available, thoroughly investigated on that occasion. We have learned since that Debate took place two weeks ago that one of the most important oil wells, which was held out as an inducement to make an investment of a very large sum of money from the Sinking Fund, has been transferred to Turkish territory, and in the course of questioning of the First Lord of the Admiralty on 29th June, he made two remarkable statements. He was asked by one hon. Member as to the pipe-line from Chiasurkh to Bagdad, and the First Lord stated that it was not proposed that that pipe-line should be constructed or made available for the wells at Chiasurkh. Another hon. Member immediately afterwards asked the First Lord as to the pipe-line in Turkish territory, and the First Lord then stated that the Commissioner in Persia had informed him that there were insuperable difficulties in the construction of a pipe-line from Chiasurkh to the sea within the boundaries of Persian territory. It therefore appears that portion of the particular supply of oil upon which the Admiralty has been relying, and upon which the Admiralty has asked the House to invest a sum of £2,200,000, is no longer available, owing to the decision of the Government on account of engineering difficulties not to construct the pipe-line. I should think that under these conditions the investment of this sum of money becomes a speculative adventure in which there is only one well of limited capacity to justify that expenditure. It is true the First Lord has issued a Blue Book, and that there is a very large region which is believed to be capable of supplying oil. A map which has been issued is covered with a large number of green dots, showing the places where oil is stated to be, but where no wells have been bored and no supply of oil has actually been proved to exist. This investment of £2,200,000 upon one well and one proved supply is an investment which the House ought not to accept without further inquiry. The First Lord has based his case entirely upon the fact that certain oil companies have formed a ring or trust, and that the Admiralty, in consequence, has not been able to buy oil on fair terms. Any business man going to an assembly of business men to obtain sanction to an investment of this magnitude would have given some figures, at any rate, to support such a statement. The First Lord has absolutely abstained from doing so. He has never told us at what price he would have been forced to buy oil in con- sequence of the operations of this trust. The whole matter is covered with a veil of impenetrable secrecy, and the First Lord appears to glory in the secrecy with which he has shrouded this operation. He has not stated, as other Governments have stated frankly to their Parliaments, at what price he is able to make contracts with the Anglo-Persian Oil Company. We do not know at what price he would have been obliged to buy oil from the companies which are now available. These are elementary facts, and there is no reason why secrets should be made of them. None of us would expect an exact statement of the quantity of oil that the Admiralty would require to buy, but surely the right hon. Gentleman might have stated clearly the price at which he is able to buy oil in the market. It is contrary to the traditions of this House, and certainly not in the interests of straightforward business, that there should be this veil of secrecy and withholding of elementary facts. The House ought to be informed on these questions before it finally passes this Resolution.

There are, it is true, large areas marked as being available for an oil supply. I conclude that if that oil supply had been proved by any wells capable of delivering oil for commercial purposes the First Lord would have stated the fact. If a supply has not been obtained, and the wells have not been bored, a great deal of time will be expended before the oil supply in that region, however sure you may be that it is there, can be developed and delivered for commercial purposes. Would it not have been better and more businesslike to have said, "We believe that we have a region capable of delivering a large quantity of oil. Will the House allow us to expend £50,000 or £100,000 in proving whether or not the oil is there?" But that is not the case of the First Lord. He assumes that the oil is there. Upon that assumption he asks for £2,200,000 to be expended upon one well and upon forming a depot in one harbour at the head of the Persian Gulf, which is blocked by a formidable bar, can only be entered by steamers of a limited size and draught, and then only at certain states of the tide. It is not a business proposition, as it has been stated to the House of Commons. We should have further information.

There is another aspect of the case. The First Lord of the Admiralty has stated that the Government of India and the War Office have been consulted as to this investment in Persian Oil. I put the question pointedly: At what date and at what time respectively was the Government of India and the War Office in London consulted as to this Persian Oil adventure? Were they consulted after the Admiralty had decided to make this investment? Were they consulted when the thing was fait accompli or when the matter was under consideration? If they were consulted after the Admiralty had taken its decision, of course the opinion given was of less value than if it had been given freely on the open question. One word upon the financial aspect of the case. It is proposed to find £2,200,000 out of the Old Sinking Fund. The House of Commons passed a Resolution in 1912 setting aside £1,750,000 for additional provision for ships, material, and ammunition for the Navy. That money was not expended. This year the Government are going to ask the House of Commons to agree to the spending of £720,000 upon this Persian oil adventure, the surplus of the taxes of last year, which, if the House does not decide otherwise, will go into the Old Sinking Fund and be used for the redemption of debt.


There is another Committee dealing with that matter which comes up in the ordinary way, Order 27. I do not think the hon. Member is entitled to anticipate the discussion which will take place upon that Committee.


I will reserve what I have to say on that point till the Committee stage. I submit, without going into strategical and diplomatic questions, that I have put objections which are worthy of consideration by the House, and I think the questions I have put are deserving of a serious and considered answer by the Government before this Report is agreed to by the House.


I would like once more to raise my protest against what I consider a gambling transaction—a transaction in which we have no security whatever, because the First Lord of the Admiralty himself acknowledged that the Mediterranean route might probably, or possibly, would be blocked and we should have to send the oil derived from this new source round by the Cape. This is a very serious admission. The First Lord himself made out an excellent case; nobody can deny that. But is his case founded on fact? What the First Lord said was that there was now oil rings formed which prevented him getting oil at a reasonable price. He picked out the Shell Company. The Shell Company have publicly offered to state what the price was which they demanded for their oil from the Admiralty. I think it is only fair to the House and fair to the company before spending this large sum, that we ought to know whether or not there was an oil ring. The First Lord got oil from nine different companies, and none of these companies, so far as I know, is connected the one with the other. There is another point—that is the security of the pipe-line. I believe it is true that at this moment there is some sort of battle going on in the vicintiy. Anyway, I saw it this morning in the Press. There is no doubt that that locality will be the focus of disturbance for some very considerable time; and there is no doubt that friction may occur with Russia with which at the moment our relations are perfectly amicable. I think the sum of money is far too large and I do not think there is any security for it. I think the First Lord of the Admiralty ought first to tell the House where the oil ring is and who forms it; and what he has had to pay for oil? It is only fair the House should know that, so we should know whether the basis and the contention put forward by the First Lord in the case he made out, which was an excellent one, is true. We should also know the price he paid for oil. The Shell Company is perfectly agreeable to allow the price to be stated to the country. I protest against this large sum of money being expended upon theory. I maintain the Admiralty will not get the oil from that locality for six months; the locality is not properly protected. One of the wells is claimed as Turkish property now, and altogether I think the thing is most unsatisfactory and is a mere speculation and gamble without any adequate reasons whatever.

Another point is that the question of the defence of the oil-fields and the routes by the Mediterranean and Persian Gulf should be explained by the First Lord of the Admiralty before the House of Commons is asked to sanction the expenditure of this enormous sum of money without knowing whether the oil routes will be adequately protected once this becomes British property. I did not divide last time against the First Lord, because I know the Admiralty want oil, and that they must get it wherever they can. I know the Fleet is short of oil, and that many ships have been laid up for many months—I do not mean laid up exactly—but that they have not gone through their ordinary courses in order to save oil. I am aware that there is nothing like the proper reserve of one million and a half tons which we ought to have. There is nothing like the storage for what is necessary, and which we ought to have in this country for reserve in case of emergency, and I ask the First Lord if he will be good enough now to answer the question I put to him this afternoon?

Colonel YATE

There is one question I should like to ask the First Lord of the Admiralty. It is a question I put to the Secretary of State for Foreign Affairs the other day, namely, will he give the country a distinct guarantee that this £2,200,000 now to be paid over to the Anglo-Persian Oil Company will be devoted by that Company wholly and solely to the development of the works in Persia, and not used for any other project in any other country whatsoever? I do not wish to touch on any point regarding the Mesopotamian Oil Company. I only ask that we shall have, before this agreement is come to, a distinct assurance that a stipulation or guarantee will be given by the Anglo-Persian Company that this money provided by the British Government will be solely devoted to the purposes in Persia. Personally, I am entirely in favour of this agreement politically. I believe that the interests we are now taking in Persia will tend to the development of Persia and to the pacification of the country where these oil wells are situated. I believe that the more we enable Persia to develop her own resources, the more we shall strengthen her and enable her to maintain her independence. Persia cannot stand alone. Far from believing that these concessions will lead to the partition of Persia, I think they will lead to its strengthening and its development. I agree with the Foreign Secretary that we should rely for the protection of the pipe lines on the tribesmen themselves. Properly paid and subsidised and given an interest in the concern these tribesmen will find it to their interest to protect the line. If there should be any doubt upon the point, I agree that the loan of a few British officers to discipline the tribesmen to protect the pipe lines will give us all the protection we require. The more we help Persia in this respect the more we shall enable her to maintain her independence. I ask the First Lord of the Admiralty to give us a definite assurance that the money now being granted will be devoted solely to the development of these works in Persia.

Mr. GEORGE LLOYD (Staffordshire, W.)

I wish to refer to a statement made by the Foreign Secretary in reference to the oil contract. The right hon. Gentleman said he wanted one question answered, and the contention he put forward was—"I must have oil, and unless anybody could show me a better and less dangerous place than the one we are now going to our proposition holds good." I do not think the Foreign Secretary quite understood the remarks which I put before the House. The whole criticism directed against this contract was not against the contract itself, but we wanted to be assured that the Government understood that the steps they were taking was a very big one, and a far wider one than the contract itself. We asked whether the Government really meant to defend the position once they had taken it up. We are still not quite clear on this point, which some of us think is a very difficult question. Do the Government absolutely intend to defend the whole of this £2,000,000 and all it involves once they have gone into Persia? The First Lord of the Admiralty made some remarks which were very significant indeed. He spoke of the alternative route for the transport of oil as opposed to the Suez Canal route, and he suggested that in case of war it was possible that the Suez Canal route might not be available for the transport of oil. He could not have meant anything else but that.

Does the right hon. Gentleman realise that the investment of this money in Persia, quite apart from the strategical position in Southern Persia, is adding to our liabilities in the Indian Ocean? What is he going to do in the Mediterranean Sea to counteract that additional liability which is occurring in the Indian Ocean? Our fleet has never before been so weak in the Mediterranean. While other fleets there are being strengthened very rapidly our strength is proportionately lower than it has ever been before. At this moment when other navies are increasing to our detriment in the Mediterranean, and when we are pro tanto much weaker, the First Lord—admitting that we may not be able to hold that route—goes and invests £2,000,000 in Persia. He does not tell us what the Indian Government say about it. We have never to this moment had an answer to our question as to whether the Indian Government were ever consulted. There was nothing in that rather odd Blue Book, which gave a very curious map of Persia, about the views of the Government of India. Is not that very odd? What do the Government of India think about it? Did they agree, and could we have an answer to-night as to what their views were? I have only three questions to ask, and I should be very grateful if we could have them answered to-night. The first is whether the Government of India were consulted before the conclusion of the contract, apart from the general conversation which we are told Admiral Slade had with various officials in India? Were they consulted as a Government before the contract was concluded? If so, why was the report of their views not embodied in the Blue Book? This is a fair question and one which this House ought to have answered. Secondly, was the War Office consulted, not after the contract was concluded, but as a body before the contract was concluded or was it not? This again is a perfectly fair question to which we ought to have a perfectly clear answer. Thirdly, was the Board of Admiralty unanimous in this policy with regard to the oil company? The first two, I think, are vitally important questions. We should not get the third question answered in any case; at any rate, I do not lay great stress on it.

The FIRST LORD of the ADMIRALTY (Mr. Churchill)

I will answer it now. The Board of Admiralty were and are unanimous in regarding this contract as of paramount importance.


I am very glad to have that assurance. I should like the right hon. Gentleman to give us some definite assurance that the position taken up with regard to oil in Persia will be defended in case of need. We have a right to ask that three million of our import trade year by year going up into Persia has been neglected and has been allowed to be attached and very largely lost because the Government did not think it fit or proper to defend it in the years gone by.


I do not desire to go into the merits of oil and coal further than to say that I think that the Admiralty were well advised in selecting oil for the purpose. I want to ask why we are to be kept in the dark? Why are we to be treated like schoolboys and not as a business assembly? Are we to have no figures put before us as to what price the Government are paying for oil at the present time? The House has not been told. It has been kept, as it always is kept by all Government Departments, in absolute darkness as to the price which is paid for all supplies bought by the Government. We are told that it is not in the public interest that the Government should disclose to the House of Commons, that is ourselves, or the country what they are paying for different classes of commodities because the price would be put up against the Government if they did so. What are they paying for oil to-day? I know they will not answer it, but I should like to ask whether they have had offers made to them for a term of three years of oil at 35s. per ton, and whether the First Lord of the Admiralty is not aware that a very large steamship company is to-day in a position to buy oil at that price not only for a period of three years but of five years.

What is the estimated price of thick oil suitable for using, not of course in Deisel engines, but in boilers in place of coal? The amount named in the contract is £2,200,000, but it will probably amount to £2,500,000 before we have finished. The Admiralty decline to tell us the price that they are going to be charged for this supply of oil. Why is the House—why is the country not entitled to know the price of a commodity for which they are called upon to find the money? Surely in this case you cannot use the argument that it is not in the public interest to disclose what you are buying. I always have raised my voice in protest, when contracts are made by the Government, against the House of Commons being kept in entire darkness as to the price paid. If it were in the interest of a particular Department at any time that the price of a commodity should not be published no one could be more desirous than I am to save the taxpayers' money by assenting to such a proposition, but in this case, so far as I can see, no such consideration arises and we are not even told what price is to be paid for the oil.

I understand that the Government have had an offer of oil at a very much lower price than it has been offered in the past. Can the First Lord justify his refusal to give us that price? Is it possible for us to know whether the statement is or is not correct? On the other hand the Shell Company have, in a letter to the "Times," definitely stated that they have no objection to the price being stated at which they offered to supply the Government with oil, and when the Shell Company say that how can the First Lord get up and justify and maintain holding this veil of secrecy over the transaction? The Shell Company have definitely stated that they have no objection to the price at which they offered to supply oil to the Admiralty being published, and I hope under these circumstances—I am sorry the First Lord of the Admiralty is not listening to me—


I have heard every word uttered by the hon. Baronet.


The right hon. Gentleman was engaged in conversation with the Foreign Secretary, and I do not know how he could be listening to me and talking to other people at the same time. If a thing is to be well done only one thing can be done at a time, but perhaps the right hon. Gentleman is able to do two things at one and the same time. I want to know how the right hon. Gentleman justifies the maintenance of this veil of secrecy over this contract when the Shell Company has definitely stated in a letter to the Press that they are anxious and desirous their price should be stated. Why should Parliament in these circumstances be kept in ignorance? If the right hon. Gentleman continues to refuse to give the House this information I shall go into the Division Lobby against him.


I hope the hon. Baronet who has just spoken will induce some of his hon. Friends around him to join him in the Division Lobby if he is unable to persuade the First Lord to give us some further information. It is only fair that the House should be told something more about this matter, which is one of paramount importance to the country. The First Lord of the Admiralty spent a great deal of his time when he introduced this measure to the House in casting aspersions on certain people interested in the oil industry, but he expended a very little time in supplying information as to the contract entered into. I imagine that from the public point of view it must be as difficult for him as it is for us to justify the position he has taken up at the present time. First of all he is assuming the right—it is a growing habit with him—to say that he will give no information because it is not in the public interest. I do not know how far he is going to carry that; but at present it is carried thus far: that information is now actually refused as to the prices paid in the past. What possible objection can there be to telling us what prices have been paid for oil during the last two or three years, even if he feels he must decline to say what prices are being paid on forward contracts? I appeal to hon. Gentlemen opposite to join with us in trying to force the First Lord to give us this information. The important point is this: that the only excuse he has given us, so far, for entering into this contract in this troubled territory is because the right hon. Gentleman is afraid of a ring.

The difficulty, as the right hon. Gentleman told the House in March last, is not in obtaining oil, but in getting it at a fair price. If there is no difficulty in obtaining oil in other places then the only excuse for dragging us into this expensive and speculative enterprise must be as regards price, and we are refused any information on this point. Another thing the First Lord should tell us in connection with the pipe lines, on which a vast amount of British capital is being expended, is whether British firms are to have the preference in carrying out that work, or if it is to be given to foreign firms. We are told that the Government is to have the controlling influence on the board. Will that controlling influence have effect before that contract is given out; has the contract being given out, or have tenders been received? Another question I ask him to answer is, when does he expect to have a large yield of oil from these wells? I am told by those who know a great deal about it that it must be at any rate two or three years before we shall get any considerable quantity from this source. If that is the case, there does not seem to be any excuse at the present moment for entering on this vast scheme before we have tried to get the oil in a more peaceful region and in our own territories. I hope the right hon. Gentleman will answer my hon. Friend (Mr. George Lloyd) as to whether or not the India Office and the War Office were consulted before this contract was entered into. I hope that hon. Members on both sides will stick to their word and divide if the right hon. Gentleman will not give us this information.


When I had the honour of presenting this proposal first to the Committee I made a very long speech and endeavoured to give a comprehensive and connected argument, stating the case in its entirety which had led the Admiralty to press this matter first upon the Cabinet and, after they had been convinced of the propriety and necessity of the measure, then pressing it upon Parliament. I certainly do not feel, although I have been asked a great number of questions ranging over every conceivable aspect—military, commercial, Parliamentary and technical—connected with this subject, that I could present the arguments for the Anglo-Persian oil contract by answering all those questions in any manner which would do justice to the subject equal to that contained in the original arguments which I submitted to the House. I have taken the greatest possible pains to lay the argument in its fulness before the House. Now I find, of course, that there is the noble Lord (Lord Charles Beresford) who says it is a gambling transaction; the hon. Member (Mr. George Lloyd) who says the tribesmen are very dangerous and that we shall be led into great military ventures, from which he recoils; the hon. Member below the Gangway (Sir A. Markham) who wants to know all about the price; the last speaker, who asked a number of questions, and the hon. Member who opened the discussion, all of whom raised a great number of questions and objections to our doing anything in this direction. [An HON. MEMBER: "No, we only asked for information."] If any of these five excellent speeches to which we have listened were to be accepted by the House, although they have all ranged over different aspects of the controversy, then unquestionably we ought to drop the whole business and buy our oil in the open market and pay whatever price is necessary, and forego any real permanent and assured source of supply in an independent quarter.


I do not wish to be misrepresented again. Quite unwittingly, I am sure, the right hon. Gentleman has done it. I do not recoil from going into Persia. I only ask that the Government should not recoil when they are in. That is a very different point.


I am quite willing to frame my remarks in a different way. The hon. Member recoils at the prospect that we shall recoil from taking measures. It does not alter the general line which I was pursuing. Here are all these innumerable objections; if any one of which is seriously entertained by the House the whole thing drops. [HON. MEMBERS: "Hear, hear."] That applause would seem to indicate that the House as a whole would like to see this contract dropped. I do not believe for a moment that Parliament would allow a proposal put forward in this manner, and dealing with issues of such importance, and offering prospects so promising and so assured, to drop. The financial provision the House is asked to make would secure for the State the control and development of this enormous metalliferous area and this great region of natural oil supply for the Fleet over routes which we can control and in a country which compares in the particular circumstances with any other competitive area. If the House found a difficulty in finding this money do you suppose for one moment that it would not be possible to find it from other quarters by going upon the market? It would be a perfectly easy thing to do, but then we should not get the advantage of having the control which is so essential to our arrangement, nor would the State get the fair returns and profits which they are entitled to in virtue of the supply contract which they are bound to make for Persian oil. We have been asked why we do not disclose the price which we are paying in the supply contract connected with the Anglo-Persian agreement and which we have been paying under other contracts. I stand here to administer the business of the Admiralty according to the regular custom approved by Parliament for a great many years past.


We want you to break that. You are a strong man.


My hon. Friend has no right to accuse me of having initiated any new practice. All I have done is to carry on the practice which Parliament has approved for Government after Government for as long as any of us can remember. This practice is not so unreasonable and foolish as might at first sight be supposed. The Admiralty buy a great quantity of supply which intimately affects our preparedness for war. Ammunition, armour, the supply of the usual products used in the manufacture of various commodities, oil, and coal—they keep reserves of these commodities which are all of a strictly secret character. They have always declined, and Parliament has always approved of their refusal, to publish openly to the country details as to prices and quantities, not only for business, but for military reasons. The business reasons are very strong, but the military reasons are very much stronger. We do not disclose the amount of ammunition we possess, and we do not disclose the reserves of oil we possess. We listen to assertions of all sorts as to these reserves, but we regard these reserves as secret.

Parliament is all powerful, and if Parliament says it wishes these details to be made public, they will all be made public, but I can only express on behalf of those I consult on naval matters, and of other expert advisers, that it would be detrimental to the public interest to do so. But while I would be bound to demur to the publication of our prices and the details of the quantities of our secret stores to the House and the public, I do not object in the least when the time comes and on the proper occasion to give any information which can be given. I see the hon. Baronet opposite in his place. He knows very well that only last year all the affairs of the Admiralty were overhauled by a Committee of the House. The representatives of the Admiralty attended and gave their evidence. He knows that we disclosed everything in regard to oil. We would be perfectly willing to disclose what we have done as regards coal as well as oil. The conclusion the Committee came to was that the affairs were managed with a fair and reasonable regard to efficiency and business economy. So much for that.

As to the disclosure of prices and quantities of commodities, it is for the House to determine. Let a Resolution of the House be passed that we are to disclose them, but if the Government have to take the responsibility, they will all be made known afterwards in proper course to any Committees appointed to investigate the work of the Department. If they ask full details, these will be laid before them. There is no secret about them as between Ministers and a Committee of Parliament, but in the public interest it is not desirable that they should be disclosed in the way hon. Members have suggested. The noble Lord began his speech by saying what a gamble it was and how unwise it was to enter into the Persian contract, and he concluded by pleading my case. I do not know that he was conscious of it. I do not think he would take that line of argument if he thought that by any twist or turn of logic he could be regarded as giving me assistance. But the whole, of the noble Lord's address to the House on the subject went to show that there was urgent need for getting oil. He referred to the great scarcity there was in the Fleet. He spoke of the vessels laid up, and of the deficiencies in the reserves. What he alleged I have not at all denied, but all that shows the necessity for our obtaining oil.

I have shown in my argument that we have not only obtained oil, but an independent supply of oil scientifically developed and controlled in its production in the interest of the Navy. That is a matter in which very few alternatives are open to us. My right hon. Friend (the Foreign Secretary) in the Debate asked hon. Gentlemen opposite to state where else but Persia we could go for an independent supply. As to the disadvantages of Persia, I am bound to say that they have been extraordinarily exaggerated by those who have spoken on the subject. But granted that all these disadvantages exist, what alternative sources of supply can be found at the present time? The hon. Baronet who spoke produced, as he always does, some cases of which he had all the details at his fingers ends, but nobody else had those details. He said we are offered great quantities of oil at 35s. a ton for the next three years, and so on. But what kind of oil? What specification? Where from? On what conditions? We cannot possibly attempt to judge of these matters without all the details being laid before us. In our opinion there is no other area of supply which offers advantages comparable to those which exist in Persia. We have never relied in Persia only on the pipe line which exists in the northern parts of the field, though that will be a direct, immediate and important source of supply, and large quantities are being delivered along that pipe line in the course of the present year, but we rely on the power to develop the whole of this enormous petroliferous area.

We wish to be able to guide the development of this area. We wish to bring the company, by the controlling power which we have, to develop the oil near the coast, and in the British zone, and in the islands. Only this week the boring machinery has arrived in the island of Kishin, where there is the best prospect of a good supply of oil, and though we do not anticipate any serious difficulties in obtaining over a long period of years abundant supplies from the Chiasurkh district, we would never have gone in for this arrangement if we had not felt that apart from the definite supply of which we have evidence, there are all these possibilities of supply near the coast, capable of development, which by this contract alone we obtain power to develop. The hon. Member for Melton (Colonel Yate) asked for, and I can give him, an assurance that the money voted by Parliament shall be devoted to development exclusively in the Persian areas. The Admiralty and the Treasury representatives will have the control of the affairs of the Company in these districts, and we shall instruct our delegates that this money is to be expended in developing the oil in the Persian sphere alone. Further, we shall instruct them as far as possible to make the development tend towards the coast and the British zone, so that we are dependent for a supply not only that comes from the northern district, but that which is more readily accessible.

I do not understand why the right hon. Gentleman spoke of the Mediterranean as if it were a sea that it would be impossible for us to carry our trade through in time of war. This is not the time for explaining the position in that sea, but we are reorganising our forces in the Mediterranean. In 1915 we shall have a battle-squadron of eight battleships in the Mediterranean, which is a very powerful squadron. And we are not to be considered in the Mediterranean as confronted by all other Powers and alone. If we have more than one enemy it is possible that we shall not be alone ourselves. We certainly have no reason at all to suppose that our position in the Mediterranean will in the future be less capable of being defended than it has been in the past in times of which we have had experience. But although, as I have said, I believe that the Mediterranean can be used for the purpose of bringing home this oil in time of war, yet, if necessary, we can use the Cape route. The Cape route is only a fortnight longer, and it only means two more oil ships on the route, two more cargoes in transit, and the extra cost of that would be very nearly balanced by the saving in other directions. There is absolutely no difficulty whatever in getting that oil in large quantities from the parts of the Persian field under our control. We will be bringing this oil safely and surely home by the Mediterranean routes, or by routes over which we have control. I am arranging contracts in such a way as to obtain a continued and independent supply of oil from those regions, so that we shall be not only in possession of this supply of oil, but we shall be able to purchase the rest of the oil we require—only half being drawn from Persia—on terms which will be the result of fair and independent bargaining on each side, and not on terms which are those usually imposed upon a forced purchaser in a close and cornered market.

12.0 M


I think the right hon. Gentleman was not justified in the manner in which he has treated the House in what he has said. Everybody who has spoken on this question, as far as I have heard, has simply asked for information, and I do not think the right hon. Gentleman was justified in saying that the remarks which were made by those who have spoken—if they were taken in the sense in which they were delivered—suggested that this proposal should be dropped. Everyone feels—I think the First Lord must realise it—that this is a new departure, and that great risks are being run, and the House is naturally very anxious to have its doubts on this point relieved. I for one, as the House knows, believe that the gaining control of this oil field is worth the money and worth certain risks, but I must protest against the attitude of the First Lord in resenting—as his speech showed he did resent—the friendly questions which were put to him by my hon. Friend behind me, who did not move the rejection of the proposal. If the First Lord of the Admiralty, tells us that this supply is of great importance to the Navy, I do not suppose he could adduce a more important argument, or one which more directly appeals to the House; but he is not entitled to resent anybody on either side asking very pointed questions on this matter, and in my opinion not one of the questions from either side was an unreasonable one. The First Lord should give the best answer he can to the simple question of whether there are one, two, or three wells. I think it would have been just as well if he could have given an answer straight away, and to have satisfied the House that there was not only a probable supply but a really developed supply on a sufficient basis to make it a certainty and not merely a possibility that the oil the Navy require is there.


made an observation which was inaudible in the Reporters' Gallery.


A Blue Book is also a long question. I am bound to say a great many questions are asked in this House the answers to which could be found by studying Blue Books and speeches, but I think it is generally better that an answer should be given to the questioner. I did rather hope that the First Lord would have found it possible to tell the House what the prices were. I cannot see any insuperable objection to those two prices being stated, but as the First Lord does not think it possible to give them I suppose that will not be pressed. I only rose to protest, to protest on behalf of any one on this side of the House, that this proposal is being fought or attacked on its merits.


Are you going to divide?


I do not know if there is going to be a Division.


I am going to divide the House.


This is not a party matter. If there is a Division I shall vote in favour of the Motion, but every individual Member has a right to his opinion. The risk is certainly a serious one and the proposition has many novel aspects. I do not think it is the kind of proposal in which anyone should resent the asking of a question and the desire to obtain assurances and information as to doubtful points raised in this proposal.


I only wish to draw the attention of the House to the fact that the right hon. Gentleman has not answered certain very specific questions put to him. My hon. Friend, the Member for Eastbourne, asked for some indication as to the date at which these properties would be producing oil, and there was no answer. There was a still more important question from my hon. Friend the Member for West Staffordshire (Mr. George Lloyd), and my hon. Friend beside me, who asked very definitely the most important question whether either the War Office or the India Office had been consulted about this matter before an agreement was made. It is impossible that the right hon. Gentleman should have overlooked that matter, and the only inference that the House can draw is that those two Departments were not consulted on this most important matter. Like my hon. Friend (Mr. Pretyman) I am not opposed to the agreement at all, but it does seem to me that it has not been entered into with that care and thought that a matter of this importance requires. It is not a satisfactory arrangement, nor is it the invariable arrangement that we should have this complete water-tight isolation between the Departments. Only a little while ago we had the right hon. Gentleman in closest consultation with the late Secretary of State for War, under the presidency of the late Secretary of State for India, with an object we were informed which referred to protecting certain spare ammunition and reservists' stores at Enniskillen and Armagh.

If the Departments could keep in constant touch on that matter, I submit that they might keep in constant touch over this far more important question of the defence of these sources of oil supply in Persia. The Foreign Secretary said—I do not know on what information—that it would take two brigades to defend this business. Where are we going to get two brigades? The Indian Army has not two brigades to spare, and the British Army certainly has not. I am perfectly prepared to support any steps that may be necessary to provide two extra brigades. But right hon. Gentlemen have not found their two brigades, and yet they enter upon a policy which will bind their successors to do so. Nor did the right hon. Gentleman answer my hon. Friend's question with regard to the Suez Canal. Our position in the Mediterranean may be such that not only may we be unable to protect the free passage of traffic through the Suez Canal and through the Mediterranean, but we may not be able to prevent the Suez Canal itself from falling into the hands of our opponents. In that case there would be nothing to prevent hostile ships making their way through the Suez Canal and endangering the supply. To these very reasonable questions we have had no reply from the First Lord.


This is not a political matter; it is a matter of business. Fresh information has come to the House since the question was last voted upon, and as business men we have to consider whether it is wise to confirm the vote we then gave. As one who has had some experience in this matter for many years, may I give a word of advice to the House? There is an old saying that it is bad business for a greengrocer to grow his own cabbages. I say that it is bad business for a Government like ours to become producers of a necessity which they want. It is better for us to go into the market and buy our oil. The position is that whereas a month ago it was shown that certain supplies of oil were certain, we now know that certain supplies, as far as our possibilities of using them are concerned, have been cut off, and we do not know what supplies are available. I have been in this trade on and off for forty years.

I have nothing to do with the petroleum trade at this moment, having entirely resigned my interest in it, but I was a fourth-owner of the first cargo of petroleum ever brought to this country in a tank steamer, so that I know something about the trade. However rich a territory seems, you have no guarantee of any long continuance of the supply from that particular spot. Wells give out in the most extraordinary way, and it is bad business for us to invest £2,000,000, and we do not know how many millions more, to back it up. If the House is well advised it will buy its oil in the open market. There is no doubt we shall get all the oil we want. In all parts of the world fresh discoveries of petroleum are being made at the present time. There is no fear whatever that there will not be petroleum in 1920. The First Lord of the Admiralty says that to keep our warships afloat we must ourselves be producers of oil. That is nonsense. We can be quite satisfied to feel, and it is safe to say, that the Navy can obtain a sufficient oil supply without us being producers.


This is a matter of two and a quarter millions, and the House has given sixty-five minutes to it. I propose to ask the House to give five minutes more to it, and I do not think that is asking too much, seeing the enormous sum we are going to vote. The First Lord of the Admiralty has told us very little—practically nothing in addition to what he told us in his first speech. He says there are innumerable objections to doing so. I am going to give him another one. He has rather scoffed at the idea of a gamble. It may surprise the First Lord to know that it is not only amongst Members of this House, but amongst the people in the country that there is a distinctly uneasy feeling with respect to this contract. This feeling is not allayed or lessened by what has preceded it I need not specially mention the Marconi business. The First Lord seems to scoff at the idea of a 35s. per ton guarantee for three years. What price are we likely to pay for Persian oil? We talk now of £2,000,000. We may ultimately have to spend £200,000,000.

It is not so many years, I may add, since the statesmen of this country thought that we should not allow the Suez Canal to be built; it would mean that this country would have to establish herself in Egypt. By a fortunate stroke of business we obtained a large financial interest in the Canal. Later on, under Mr. Gladstone, we found ourselves in Egypt. We may find ourselves in a similar position in relation to Persia. We have on the one side Turkey; on the north we have Russia; and then there are the Persian tribes. It is said that the fighting power of these tribes is not great. But people said the same of the Mad Mullah, and he has given us sufficient trouble. The First Lord to-night made play of the question raised by the Foreign Secretary—if we did not get our oil from Persia where else could we get it? I told the First Lord where we could get it, and he at once shifted his ground, and said what he meant was where we could get it immediately.

Instead of sending Admiral Slade and his engineers to the north side of the Persian Gulf why were they not sent to the south side, which is under our protection? We did not take the trouble to examine the places that belong to us, and which must be—probably are—full of oil. Instead of that we are going to invest our money in Persia to get a cheap and certain supply, which will, I think, be neither cheap nor certain. This adventure may cost this country a great war, and if the Mediterranean is closed to us the price of oil will be, instead of 35s. per ton, a very much larger sum. At the same time I shall not vote against this proposition because I am not opposed at all to our Protectorate over the southern shores of Persia. I agree with my hon. Friend that it will be to the advantage of Persia, and the world, if we are able to do this thing. That is not the point of view of the First Lord. The point of view of the First Lord is that the oil is there and we shall get it cheaply and regularly. My point is we may get it regularly, but we will pay a much larger price than for oil in the open market.


This matter vitally affects the economic position and the country I represent, and I want to call attention to a point on which no hon. Gentleman who has spoken on the other side has touched. The First Lord of the Admiralty ignored again to-night the very serious economic effects of this reckless haste upon the resources we have at home, and upon the future development of the industries of this country. In the Committee Stage the right hon. Gentleman brought off a good deal of opposition by certain promises. He made a statement about some wonderful prizes the Admiralty were to offer as to the resources of coal. We have not heard a single word about that since he found he has his big majority. All these things are buried; no statement has been issued as to what these prizes are to be or the amount of them. I put several questions to the right hon. Gentleman, and by means of these questions I discovered the Admiralty are not possessed of adequate information

as to what is going on nor as to the resources in this country. I found the right hon. Gentleman get up and with that exuberance he displays on this matter declare for instance that there is no coal in South Wales that could distil oil. It is a most ridiculous assumption to any man who knows anything of that part of the country.


I did not say that.


The right hon. Gentleman did say so.




If this matter goes to a Division I shall oppose it, and I can assure the right hon. Gentleman that unless his promises are going to materialise in some form that is satisfactory I shall offer the most unflinching opposition at any further stage of this matter. If the Government likes, in this crowded Session, to waste three or four days on a matter for which no one is anxious except the Admiralty, they must face the facts. I shall oppose this Bill at every stage unless the right hon. Gentleman is going to do something to counterbalance the evils he is causing.

Question put, "That this House doth agree with the Committee in the said Resolution."

The House divided: Ayes, 228; Noes, 48.

Division No. 155.] AYES. [12.18 a.m.
Abraham, William (Dublin, Harbour) Clancy, John Joseph Essex, Sir Richard Walter
Acland, Francis Dyke Clough, William Falconer, James
Adamson, William Collins, Godfrey P. (Greenock) Farrell, James Patrick
Addison, Dr. Christopher Collins, Sir Stephen (Lambeth) Fenwick, Rt. Hon. Charles
Agg-Gardner, James Tynte Compton-Rickett, Rt. Hon. Sir J. Ffrench, Peter
Allen, Arthur A. (Dumbartonshire) Cornwall, Sir Edwin A. Field, William
Allen, Rt. Hon. Charles P. (Stroud) Cory, Sir Clifford John Fitzgibbon, John
Arnold, Sydney Cotton, William Francis Flavin, Michael Joseph
Baker, Harold T. (Accrington) Cowan, W. H. France, Gerald Ashburner
Balfour, Sir Robert (Lanark) Craig, Ernest (Cheshire, Crewe) Gladstone, W. G. C.
Barnes, George N. Crooks, William Glanville, Harold James
Barran, Sir John N. (Hawick Burghs) Crumley, Patrick Greig, Colonel J. W.
Barran, Rowland Hurst (Leeds, N.) Cullinan, John Grey, Rt. Hon. Sir Edward
Beck, Arthur Cecil Davies, David (Montgomery Co.) Griffith, Rt. Hon. Ellis Jones
Benn, W. W. (T. Hamlets, St. George) Davies, Timothy (Lincs., Louth) Guest, Hon. Frederick E. (Dorset, E.)
Bentham, George Jackson Davies, Sir W. Howell (Bristol, S.) Guinness, Hon. W. E. (Bury S.Edmunds)
Boland, John Pius Dawes, James Arthur Gwynn, Stephen Lucius (Galway)
Booth, Frederick Handel De Forest, Baron Hackett, John
Bowerman, Charles W. Delany, William Hall, Frederick (Yorks, Normanton)
Boyle, Daniel (Mayo, North) Denman, Hon. Richard Douglas Hancock, John George
Brace, William Donelan, Captain A. Harcourt, Rt. Hon. Lewis (Rossendale)
Brady, Patrick Joseph Doris, William Harcourt, Robert V. (Montrose)
Buckmaster, Sir Stanley O. Duffy, Wiliam J. Hardie, J. Keir
Burns, Rt. Hon. John Duncan, C. (Barrow-in-Furness) Harmsworth, Cecil (Luton, Beds)
Carr-Gomm, H. W. Duncan, Sir J. Hastings (Yorks, Otley) Harvey, A. G. C. (Rochdale)
Cawley, Harold T. (Lancs., Heywood) Edwards, John Hugh (Glamorgan, Mid) Haslam, Lewis
Chancellor, Henry George Elverston, Sir Harold Hayden, John Patrick
Chapple, Dr. William Allen Esmonde, Dr. John (Tipperary, N.) Henderson, Arthur (Durham)
Churchill, Rt. Hon. Winston S. Esmonde, Sir Thomas (Wexford, N.) Henry, Sir Charles
Hewart, Gordon Muldoon, John Roche, Augustine (Louth)
Higham, John Sharp Munro, Rt. Hon. Robert Ronaldshay, Earl of
Hinds, John Murphy, Martin J. Rowlands, James
Hobhouse, Rt. Hon. Charles E. H. Murray, Captain Hon. Arthur C. Russell, Rt. Hon. Thomas W.
Hodge, John Newton, Harry Kottingham Samuel, J. (Stockton-on-Tees)
Holmes, Daniel Turner Nicholson, Sir Charles N. (Doncaster) Scanlan, Thomas
Holt, Richard Durning Nolan, Joseph Seely, Rt. Hon. Colonel J. E. B.
Hope, John Deans (Haddington) Norman, Sir Henry Sheehy, David
Howard, Hon. Geoffrey Nuttall, Harry Sherwell, Arthur James
Hughes, Spencer Leigh O'Brien, Patrick (Kilkenny) Simon, Rt. Hon. Sir John Allsebrook
John, Edward Thomas O'Connor, John (Kildare, N.) Smith, Albert (Lancs., Clitheroe)
Jones, H. Haydn (Merioneth) O'Connor, T. P. (Liverpool) Smyth, Thomas F. (Leitrim, S.)
Jones, J. Towyn (Carmarthen, East) O'Doherty, Philip Stanley, Hon. G. F. (Preston)
Jones, Leif (Notts, Rushcliffs) O'Donnell, Thomas Stewart, Gershom
Jones, William (Carnarvonshire) O'Dowd, John Strauss, Edward A. (Southwark, West)
Jones, Williams S. Glyn- (Stepney) O'Kelly, Edward P. (Wicklow, W.) Sutherland, John E.
Jowett, Frederick William O'Malley, William Sutton, John E.
Joyce, Michael O'Shaughnessy, P. J. Taylor, John W. (Durham)
Kellaway, Frederick George O'Shee, James John Taylor, Theodore C. (Radcliffe)
Kelly, Edward O'Sullivan, Timothy Taylor, Thomas (Bolton)
Kennedy, Vincent Paul Palmer, Godfrey Mark Tennant, Rt. Hon. Harold John
Kenyon, Barnet Parker, James (Halifax) Thorne, G. R. (Wolverhampton)
Kilbride, Denis Pearce, Robert (Staffs, Leek) Toulmin, Sir George
King, Joseph Pease, Rt. Hon. Joseph A. (Rotherham) Trevelyan, Charles Philips
Lambert, Rt. Hon. G. (Devon,S.Molton) Phillips, John (Longford, S.) Verney, Sir Harry
Lambert, Richard (Wilts, Cricklade) Pirie, Duncan V. Walsh, Stephen (Lancs., Ince)
Law, Hugh A. (Donegal, West) Ponsonby, Arthur A. W. H. Ward, John (Stoke-upon-Trent)
Leach, Charles Pratt, J. W. Waring, Walter
Levy, Sir Maurice Pretyman, Ernest George Warner, Sir Thomas Courtenay T.
Lundon, Thomas Price, C. E. (Edinburgh, Central) Webb, H.
Lyell, Charles Henry Price, Sir Robert J. (Norfolk, E.) White, Patrick (Meath, North)
Lynch, Arthur Alfred Priestley, Sir W. E. B. (Bradford, E.) Whittaker, Rt. Hon. Sir Thomas P.
Maclean, Donald Pryce-Jones, Colonel E. Whyte, Alexander F. (Perth)
Macnamara, Rt. Hon. Dr. T. J. Radford, George Heynes Wiles, Thomas
MacNeill, J. G. Swift (Donegal, South) Raffan, Peter Wilson Wilkie, Alexander
MacVeagh, Jeremiah Reddy, Michael Williams, Aneurin (Durham, N.W.)
McKenna, Rt. Hon. Reginald Redmond, John E. (Waterford) Williams, Penry (Middlesbrough)
M'Laren, Hon. F.W.S., (Lincs.,Spalding) Redmond, William (Clare, E.) Williamson, Sir Archibald
Manfield, Harry Redmond, William Archer (Tyrone, E.) Wilson, Hon. G. G. (Hull, W.)
Marshall, Arthur Harold Rendall, Athelstan Wilson, Rt. Hon. J. W. (Worcs., N.)
Meagher, Michael Richardson, Thomas (Whitehaven) Wilson, W. T. (Westhoughton)
Meehan, Francis E. (Leitrim, N.) Roberts, Charles H. (Lincoln) Wing, Thomas Edward
Meehan, Patrick J. (Queen's Co., Leix) Roberts, George H. (Norwich) Yate, Colonel Charles Edward
Molloy, Michael Roberts, Sir J. H. (Denbighs) Yeo, Alfred William
Mond, Rt. Hon. Sir Alfred Robertson, Sir G. Scott (Bradford)
Montague, Hon. E. S. Robertson, John M. (Tyneside) TELLERS FOR THE AYES.—
Mooney, John J. Robinson, Sidney Mr. Illingworth and Mr. Gulland.
Morrell, Philip Roch, Walter F. (Pembroke)
Amery, L. C. M. S. Falle, Bertram Godfray Rawson, Colonel R. H.
Baldwin, Stanley Goldman, C. S. Samuel, Samuel (Wandsworth)
Banbury, Sir Frederick George Goldsmith, Frank Sanders, Robert Arthur
Barlow, Montague (Salford, South) Gretton, John Scott, Sir S. (Marylebone, W.)
Barrie, H. T. Hamilton, C. G. C. (Ches., Altrincham) Smith, Harold (Warrington)
Bennett-Goldney, Francis Hibbert, Sir Henry F. Thomas-Stanford, Charles
Beresford, Lord C. Hope, Major J. A. (Midlothian) Tickler, T. G.
Bigland, Alfred Hunt, Rowland Touche, George Alexander
Campion, W. R. Jones, Edgar (Merthyr Tydvil) Tryon, Captain George Clement
Cassel, Felix Lloyd, George Butler (Shrewsbury) Walrond, Hon. Lionel
Cautley, Henry Strother Locker-Lampson, G. (Salisbury) Wheler, Granville C. H.
Cecil, Evelyn (Aston Manor) Macmaster, Donald Wilis, Sir Gilbert
Clay, Captain H. H. Spender Malcolm, Ian Wilson, Maj.Sir M. (Bethnal Green,S.W.)
Courthope, George Loyd Mason, David M. (Coventry) Wood, John (Stalybridge)
Dalrymple, Viscount Morrison-Bell, Major A. C. (Honiton)
Dixon, C. H. Perkins, Walter F. TELLERS FOR THE NOES.—Sir
Eyres-Monsell, Bolton M. Peto, Basil Edward A. Markham and Mr. Rupert Gwynne.

Bill ordered to be brought in upon the said Resolution by the Chancellor of the Exchequer, Mr. McKenna, Mr. Churchill, Sir Edward Grey, the Solicitor-General, and Dr. Macnamara.

The remaining Orders were read, and postponed.