HC Deb 02 April 1919 vol 114 cc1304-49
Lieutenant-Colonel CLAUDE LOWTHER

I beg to move: "That this House do now adjourn."

I do so in order to call attention to a definite matter of urgent public importance, namely, the proceedings at the Peace Conference, and to ask for information more especially with regard to the question of indemnities. May I say, first of all, that it is not my wish for a moment to in any way embarrass or hamper the Government, and I feel certain that I am expressing the opinion of those who are interested in this matter when I say that they do not approach this subject in any obstructionist spirit. But we have come to the conclusion that there should be some means—and this is the only means which have been given to us—of bringing pressure to bear, if it is possible to do so, and, anyhow, of forcibly reminding the delegates at the Peace Conference that a large majority of Members of this House are solemnly pledged to their constituents to do everything in their power to exact from Germany the uttermost farthing that the country is able to pay—I mean, of course, to pay subject to reason. In the first place, I have never for a moment doubted, since I gave a minute examination to the assets of the enemy countries, their ability to pay the full Allied war- bills under certain provisos. I mean provided first, that time should be given for those countries to recuperate and to pay; secondly, that an International Commission should be set up in Berlin in order to collect the money; and, thirdly, that while that International Commission were acting that the chief strategical points of Germany should be occupied by an inter-Allied Army of Occupation, as to which I hope to say a word in a moment. I said that in examining the assets of the enemy countries I had no fear but they could with time discharge the whole of the liabilities. But I hear of very grave doubts, and I am beginning to fear that our delegates at the Peace Conference have been swayed from what I consider to be their bounden duty to this House, and their bounden duty to the country—that is, to exact every farthing from those countries, according to the promise of the Prime Minister, that they can possibly pay.

Also I cannot help feeling some alarm at what I call the subtle, indirect influence of international financiers—I mean the men who will certainly be heavy losers if a just and right and full indemnity were to be placed on Germany, because they have not only money in that country, a great many of them, but they are also largely interested in German concerns and German companies in Peru, Chile, the Argentine, and, indeed, every part of the globe. Those professional money mongers have evidently left no stone unturned in order to prove that the self-vaunted riches of Germany are purely imaginary. May I here give to the House an estimate made in 1914 by Dr. Helfferich, a director of the Deutsche Bank, who stated that the value of the national property, public and private, of Germany was £15,000,000,000, and placed the annual income at £2,000,000,000. That was in 1914, and I see no reason whatever to doubt the accuracy of those figures. I see that those international financiers have done everything possible to prove that the assets of Germany, her great mineral resources, her chemicals, her potash, her great dye factories, are mythical, while I suppose Tier vast and valuable forest lands are all fairy lands, and her coal deposits valued at £2,000,000,000 are fables. Do not let us confuse the issues; do not let us mistake the fables. Those fables are stories woven by those twentieth-century knights of romance. The fables are the excuses made whenever they can be to prove that Germany is able to make next to no contributions to the Allies' war debts. After all, we know these men. Who are they? They always come forward on the crest of every crisis. They are those anti-English Englishmen who right through the War predicted that Britain, with her hastily-trained conscript Army had not a chance to bring the mighty hosts of Germany to their knees. They are English for profit, but as far as Motherland and as far as patriotism are concerned they are pariahs. Their names, often biblical, they prefer to change, but they are none the less dangerous, and they are people who undoubtedly are using every influence to prove that Germany is on the verge of bankruptcy. I must say that I was astounded the other day by the answer which was given to me by the Leader of the House, when we discussed this matter on the occasion of the Adjournment in a very few minutes a fortnight ago. He seemed to think that neither the Prime Minister nor any responsible Minister of the Crown had ever said that Germany or the enemy countries could make any large contribution towards our war debts. Surely the speeches of the Prime Minister must be known to him, and also the speeches of his colleagues. May I read one speech, or rather an extract from one speech, made, I believe, at Bristol by the Prime Minister two days before the election? Speaking to the electors of Bristol he said, and I am perfectly certain he was sincere: Now I come to the second question I mean to talk about and that is the question of indemnity. Who is to foot the bill. [A Voice: "Germany!"] I am going to talk to you quite frankly about this. By the jurisprudence of every civilised country in the world in any lawsuit the loser pays. It is not a question of vengeance, it is a question of justice. It means that the judge and the Court have decided that one party is in the wrong. He has challenged judgment. By the law of every civilised country in the world the party who is guilty of the wrong pays the costs. There is absolutely no doubt about the principle. What we hope for in the future is that in dealings between nations the same principle shall be established as in dealings between individuals—the same principles of right and wrong. If you do that it is inevitable that the nation that does the wrong and challenges a law suit to determine it must pay the costs. A Voice: In full. Mr. Lloyd George: I am coming to that. Certainly, in full, if they have got it. But, if you do not mind, listen to what I have got to say to you right through to the end. He proceeds to emphasise this, but I want to be perfectly fair to the Prime Minister. In every speech that he made he never pretended Chat he was certain that Germany could pay in full. He always said that Germany could and should pay to the fullest extent of her capacity to pay. That is all that any reasonable person could ask. Nobody in their senses would ask Ministers to saddle a country with a debt which they would never be able to discharge, but what I want to know is what has happened to make the Leader of the House, and other Ministers, depart from their repeatedly stated pledges. The phraseology of the Prime Minister was not in the least ambiguous, but concise and clear. It was not one of those cryptic, obscure, veiled utterances which the right hon. Gentleman himself sometimes uses when he wants to convey one thing to the House without being detected of any terminological inexactitude. There was only one interpretation to be put on this by the man in the street, and that was, "If you want Germany to pay to the utmost limit of her capacity, you have only one thing to do, and that is to send the Prime Minister back to the Peace Conference and to send the Coalition Government back to the House of Commons with a direct mandate to that effect from the people of this country." I believe that the Prime Minister is perfectly sincere, but I am not so certain about the sincerity of some of his colleagues, nor am I certain that he is being thoroughly well advised, and that is one of the reasons why I have brought this matter forward, because I think it is right that he should know that in exacting the uttermost farthing that Germany can pay he has behind him, if not the whole-hearted support of this House, the support of 400 Members pledged to get every penny that these rountries can pay. I sincerely hope that we are not in this matter truckling to America. We have had enough placating of America, and I do hope that our delegates are in no way being influenced by the higher philanthropy of that great philosopher President Wilson, that great philosopher who is able to bear with such perfect equanimity and such splendid fortitude the financial embarrassments of every country but his own. At the request of the Leader of the House I sent him the other day, and I took the liberty to send it also to every Member, a short memorandum, in which I endeavoured to show that if we compelled them to do so, Germany and the enemy countries could in time be made to pay the whole of the War bill. There are far more important questions before the House than whether or not my figures are absolutely accurate, but I did think that this might serve as a point of departure from which at an opportune moment the assets of Germany and her ability to pay could be discussed. But the point that I want to emphasise is this, that in view of the conflicting opinions as to her ability to pay, the fact of whether right or wrong is on the side of the pessimists or the optimists does not matter. Surely it is obvious that at a moment when Germany has turned her Constitution upon its apex, when the poison of Bolshevism is permeating that country, at a moment when even the well-ordered minds of her people have no man to look to as a leader, surely that would not be the moment to decide when and how and how much Germany can contribute towards the Allies War bill. But just as that is not the moment, so I say it is the moment for the British Empire to formulate her full claims and to say, "Here is the bill in full," to lay it on the peace table, and then to enter into ways and means of getting it.

Germany may plead bankruptcy. She may do so with some right to-day. I think she has done so before, but if the House will look upon Germany for a moment as in the position of a vast and rich estate, momentarily crippled and unable to meet her obligations, but possessed of immense resources and of property which if developed intelligently cannot fail to be of great potential value; if they will do that, I think it will be perfectly right for us to present the bill, as I say, in full. How do we get the money? Let us, as I said at the beginning, appoint an International Commission, and let the commissioners come in as receivers or administrators of this estate. It would be the duty of these commissioners to allocate and apportion certain specific assets to the repayment of the respective creditor countries, and, of course, they would be warned against killing the bird that laid the golden eggs. It would be the quintessence of futility to impose on Germany any taxation which would impede her commercial development, but in six or even eight years it will be time to consider whether Germany can discharge the whole of her liabilities or not, but whatever diminution we make, whatever we let her off at short of 20s. in the pound, should be regarded as an act of grace on our part. It may be said that Germany will never consent to this, but I take it that this is a peace by dictation, and not a peace by negotiation, and I think a few words from Marshal Foch would make Germany alter her opinion if there was any recalcitrancy. As I mentioned also in that little memorandum, side by side with the establishment of an international commission it is essential that we should put an Army of Occupation in the field. But that Army need not be a big one. It might have to be a certain size at first, but when law and order are restored a very small Army would be required, especially if two salient facts can be relied upon—first, that Germany is going to be relieved of her own army and navy, and, secondly, that she will be deprived of every big gun, every war aeroplane, all the commissariat transport, and different engines and paraphernalia of war necessary for moving and manœuvring an offensive army of 50,000 men.

In conclusion, do let us remember that this question is one of paramount importance, one upon which all other questions hang. The question of whether we are able to give adequate pensions to the relatives of our gallant dead, whether we can give our soldiers and our sailors decent attentions, whether the State will be able to aid agriculture, whether we will be able to subsidise certain tottering industries—all these questions depend upon whether the British taxpayer or the German taxpayer is put into that intolerable financial position which certain members of the Government said would never be the case. If one of the two countries have to be in that intolerable financial position for fifty years, I pray God that that country may be Germany and not England. Do not, above all things, in this case let our sentiments run riot. Do let us remember the past. Do let us remember what Germany has been, what Germany has done to us, the way they have treated our prisoners—I do not want to harrow up the feelings of the House—but the poor and starved prisoners, and the attempt to put our prisonrs to death. Do not let us forget that even then we were dealing with a subtle, cunning, crafty race, who for years have been looking upon British ascendancy in commerce and British supremacy upon the sea as the only bar to their unbridled ambitions. If we allow Germany the chance of completely recuperating, if we allow our pity and sentiment to run riot, as sure as I stand here that country will never rest until she has-ground us underfoot. Let us never give her the chance.


I am afraid my political career will be a very short one, inasmuch as I promised the electors in my Constituency that I was being returned to support the Prime Minister in his demand that Germany should pay the War bill. If he fails to exact the very uttermost amount of the bill I shall have to send in my resignation. I had no Parliamentary ambitions until the war-cry went throughout the land to support the Prime Minister in making Germany pay for the War. Then I came into the arena. I fought one of my oldest and best friends, and I am very glad that I beat him so that I might be able to support the Prime Minister. And here I am! I shall be very disappointed, indeed, if when the Prime Minister returns from Prance we hear that he has consented to any reduction of the bill. I had intended to read from the speech of the Prime Minister at Bristol, but the hon. and gallant Gentleman in front of me has anticipated me. I know, however, that in this country most people have very short memories. We are inclined to forget, all too soon, the horrors of this late War, and for what Germany is responsible. Very few people realise that, reckoned in dead-weight, Germany with her submarines sunk 23,737,080 tons of shipping. Ought she not to be made to pay for them? Seventeen thousand men of the Mercantile Marine—of whom we have heard too little—lost their lives, sunk by order of Count Luxembourg, with instructions to leave no trace behind! Have we forgotten that? That ought to come home, not only to this House, but to every man, woman, and child in this country. Have we forgotten the Lusitania? or the "Belgian Prince," where forty men were told to take off their lifebelts on the deck of the submarines, and then the brutes in control of the submarines submerged and drowned those men? Can we forget that? Sailors-cannot!

Again, the Merchant Seamen's League has sworn that they will not trade with Germany; that they will neither carry to nor bring from Germany anything in the shape of commodities or cargo; that they will never sail with a German until reparation is made and compensation paid' to those who have been left behind. These are serious, too serious questions. Again, remember the hospital ships. Are we to forget those? If we do, we all ought to be very much ashamed of ourselves. Germany should be made to pay if it takes fifty years. She will and can pay. I contend that this great Empire is strong enough to stand alone and to make her pay. It may be spread over many years. The great financiers, of which there are many in this House, can tell us the best means of making her pay. But pay she must. I never made a speech in my life, and I do not intend to break that record to-night; but I do want to impress upon the House, and upon the Government, as much as ever I possibly can, the necessity of coming to no quick and final settlement of this war indemnity without the Prime Minister realising that if this country does not get that indemnity, that they will want to know the reason why. And the life of the Government, I contend, will be a very short one.


The vast majority of Members of this House who are, I believe, determined that Germany shall pay, should feel grateful to the hon. and gallant Gentleman opposite for securing this opportunity for a discussion of this subject. I say that because, while it is asserted that events are marching quickly forward in Paris, it is not, to my mind, at all certain that they are marching Forward to what four months ago we should have considered a satisfactory peace. To-day, when the Conference is being conducted with a secrecy unsurpassed in the history of peace conferences, it might be asked why one should have formed that opinion. To my mind there are omens and signs. I asked the Leader of the House the day before yesterday whether the amount of indemnity to be exacted from the enemy countries had been arrived at. It has been so stated in Paris. I asked him whether that was so, and he said it was not so. I wonder what his reply would have been if I had asked him whether the question of indemnities had been discussed and no agreement had been arrived at as to what amounts should be allotted to the various countries, or what his reply would have been if I had asked him whether the question of indemnities had been discussed and no agreement had been arrived at as to the amount that was to be exacted from Germany? I think if he had been inclined to answer me he would have had to say that there was a reasonable ground for such a belief. I think, further, that if he had been making full confession he might have had to add that there was some likelihood of the question of indemnities, as apart from reparation, not figuring in the preliminary peace terms—terms which are promised now every Monday and expected every Saturday.

The really important point which this discussion ought to elicit from the Government is, Do they still adhere to the pledge given by the Prime Minister that Germany should be made to pay the cost of the War to the limit of her capacity, or is Paris to-day dallying with the new idea of being moderate in the demands it is going to make on enemy countries? I ask that question because a very remarkable interview appeared in a reputable London newspaper on Monday evening. The interview had taken place in Paris on Sunday, and, according to the writer, it was an interview with a high authority who was able to give what he said could be taken as the authentic British view, and he added it was fully shared by America, as to the sort of treaty now being prepared. Later on in this interview the writer refers to the views put forward as being those of one of the most distinguished British authorities, and he expresses his regret that he cannot give the views set forth by this authority their full weight and significance by lifting them from the anonymity in which they are shrouded.

He said the diplomatic instrument—the preliminary peace terms now being drawn up—must be essentially moderate. The interviewer underlines the word "moderate" and says that "moderate" is the word that the high authority kept on insisting upon. "Indemnities to the full" said the interviewer. "No," said the distinguished authority "we must be moderate. We shall get something. I think it will be something worth having, but certainly the question of indemnities, in the sense of going beyond the mere repairing of material damage, is not even posed." That is what the high authority says, whoever he is. Just let us get that into our minds for a moment. Here is a gentleman said to be representing one of the distinguished British authorities in Paris who is able to give us the authentic British view, stating nearly five months after the Armistice, and at a time when preliminary peace terms are being finally drafted and prepared, that the question of indemnities in the sense of going beyond mere reparation for material damage is not even posed.

He goes on in the latter portion of the interview to say that it is apparent from a close examination of all the facts that the talk about Germany paying to the utmost of her capacity must be abandoned. This high authority gives his reason for saying so. He says, Obviously, Germany cannot pay in gold. She has only accumulated £120,000,000. She cannot pay in goods because that would rob our own workpeople of their livelihood. Neither can she give us raw materials to any extent because we have to consider the obvious effect of depriving Germany of her very means of subsistence. Finally, this high distinguished authority says: Certainly there will be some disappointment, but it is inevitable. I think that is a very remarkable document, which demands some attention from the Leader of the House. I do not know who the high and distinguished authority is, but I am certain of this, that the "Westminster Gazette," in which the interview appeared, and which is a journal of considerable reputation, would not have published the article unless it had been privately informed by its correspondent that the gentleman interviewed was in fact speaking on behalf of a high and distinguished authority, an authority which the "Morning Post" yesterday and to-day say they have no great difficulty in recognising as none other than the Prime Minister. That, to me, is unthinkable, and I dismiss it at once, because, if that were so, it is strange that there should not be one word in the interview about justice, the stern, unrelenting justice, we were going to exact, and not a word about the quotation which my hon. and gallant Friend made about the loser having to pay, and to pay to the utmost. It would be still more remarkable to me if this interview in any way represented the views of the Prime Minister, because at the Queen's Hall, just before the election, the Prime Minister said: It must be a just peace, a sternly just peace. If it is to be an easy peace it will not be just. An easy peace will admit of the renewal of war. Having regard to that statement, I refuse to believe that the Prime Minister is the distinguished authority in question, but I think, considering what British national sentiment on this question of indemnities is, and remembering the election pledges of nine-tenths of the Members of this House on which they were returned, I think we are entitled to have an assurance from the Leader of the House that there is no weakening of the original intention of the Government to exact to the utmost from enemy countries the full cost of the War. Germany caused the War deliberately, and to-day, just at the conclusion of hostilities, no one, in my opinion, can doubt that to whatever extent the enemy can pay it is right and proper that she should pay. Of course, my right hon. Friend the Leader of the House, in replying, may say, "No, there is no weakening in the Government desire to exact all they can from the enemy. We have been going into detail in this matter, or at least Lord Cunliffe has." It is an extraordinary fact that Lord Cunliffe is always the financial adviser of the Government. Lord Cunliffe's Commission has gone deeply into this question, and he is the director of the Bank of England, and he might even be the distinguished authority who was interviewed. He is not only the director of the Bank of England, but he is also a member of a great firm of bill brokers and bill discounters.

My right hon. Friend may say, "Lord Cunliffe and his Commission have gone deeply into this question, and they are veering round to the conclusion that it is a very difficult matter to get a large indemnity from Germany without hurting her or without hurting ourselves." My right hon. Friend may reply, like the distinguished authority that I have already quoted, "Supposing Germany refuses your conditions and becomes Bolshevik. Supposing actively or passively she opposes all that you put forward." My right hon. Friend may answer like the distinguished authority—I hope he will not, and I do not think he will—but if he does, my answer to all these fears and supposition would be to say, as was said by my hon. and gallant Friend, "Let us first of all, without fear and certainly without favour, determine the amount of our full bill, and let us present it to the enemy." Germany must be made to recognise her debt. If she cannot pay it in gold, or with dividend yielding investments in securities existing outside her own country—and that certainly she cannot do—she can pay it, I am certain, by services or commodities spread over many years. You may describe her as an insolvent debtor, but she remains a debtor by the simple fact that she has recognised her debt. It seems to me that at this juncture it is not our business or the business of our delegates in Paris to decide how much Germany can pay. That is Germany's affair. If there is imposed upon Germany the obligation, say, of raising £600,000,000 a year—I only give it as a figure—this country last year raised nearly £900,000,000 in taxation—for the purpose of paying the indemnity, it is not at all necessary at this moment for the Allies to consider in what manner Germany should do this. Let the German Government settle that for themselves.

9.0 P.M.

My right hon. Friend may say—I am certain that the distinguished authority would say—"Supposing Germany did arrange to raise annually so vast a sum for the payment of her war debt, the indemnity could only pass from one nation to another in the form of exports, and that could not happen without inflicting considerable damage upon our own trade and commerce." I had imagined in my innocence that all these matters had been thought out when the Prime Minister and my right hon. Friend were assuring the country that Germany would be made to pay. I had thought them out for myself, not I confess in any great or deep detail, but with sufficient clearness to make it apparent to me that there was a reasonable possibility over a number of years of obtaining a very substantial sum towards the whole cost of the War. If I might detain the House for a moment or two, I would like to say how the situation appeared to me. The Prime Minister, in his speech at Bristol, put the Allied war bill at £24,000,000,000. It seemed to me, to be just, sternly just as he advised us, that you might from that amount deduct the value to be placed upon the forfeited German Colonies, upon Turkey's forfeited interests in Asia, and upon Alsace-Lorraine, at least so far as the money Germany has expended there since 1870. For instance, the value of the potassium mines in the region of Mulhausen which she developed ought to pass to her credit. I am talking now of what I think would be a just and fair settlement of the war bill. There would be a certain value, perhaps a very large value, to be placed upon the Saar Valley, the exploitation of which France demands, and which I understand she is to get under suitable guarantees. If you make Germany restore the industrial plants that she has destroyed in France and in Belgium, the work and material that they represent should also go to her credit side. Then there is the matter of the Mercantile Marine, the greater portion of which could be taken over and ought to be taken over. All these matters ought to be valued and go to the credit side of the account which you would open with Germany and the enemy Powers. I have not been able to work out the values. I have not the detailed information available to permit me to be able to work out the value of these various things. It is a matter for the international commission which my hon. and, gallant Friend opposite said should be appointed. But all these credits, when they had been fixed, would mean a substantial reduction from the £24,000,000,000.

What is left to meet the remainder of the Bill? Let me say what I had in mind when I insisted at the election, not in my own Constituency but in other people's constituencies, as I did, that Germany should be made to pay to the limit of her capacity. I thought that Germany might be called upon to hand over her foreign investments, which are estimated at £1,000,000,000 or £1,250,000,000. Some people place them as high as £2,000,000,000. I thought, also, that the ex-Kaiser's personal property and estates—his estates are of immense value—and the estates of all the other ex-kings and ex-princely personages in Germany, could be confiscated and the money derived therefrom go to a further reduction of the account. Then beyond this and among other things which might be given in detail there are the coal, the timber, and the other raw materials in which Germany is rich and which under international control could be drawn on to guarantee the repayment of the bill. Just one word about Germany's coal resources. She has considerably more coal than all the other Continental States combined. She has more than twice as much coal as the United Kingdom, and she has ten times a much coal as France. Her Westphalian area is the richest of all her coal areas, and in that district in 1913 she produced nearly 90,000,000 tons, and it is estimated, even if the production were increased to 400,000,000 tons per year, that, theoretically, the field would last 350 years. It seems to me only logical that Germany should pay part of her indemnity to the Allies by drawing upon her superabundant stores of coal. It may be urged that English coal-owners and miners would object to German coal replacing English coal in neutral markets. [HON. MEMBERS: "Hear, hear!"] I thought that would be put forward. But let me point out that, although British mining interests might object, and although they might conceivably suffer from large exports of German goods sent to Allies, or sent to neutrals against the Allies account, this nation would be a gainer, inasmuch as it would obtain a large proportion of indemnity from coal, and would be preserving the rapidly decreasing stores of coal here.

The same with regard to potash. The German store is so vast that it cannot absolutely be estimated. Its production has increased from 2,000 tons in 1861 to 10,000,000 tons in 1911, and it has been estimated by experts that in potash alone Germany could pay an enormous amount towards the War debt. It was from these and other raw materials—beet sugar is another product—that I saw the possibility of drawing vast sums from the kinds of commodities we had to import towards the reduction and the repayment of the Allies' war bill, and I have only gone into these details now—briefly sketching them, as I have done—because I do not want it to be imagined that I supported the cry "Germany must pay!" without having some general idea of how it might be achieved. It is not for a private Member to formulate, or to enter into, minute details as to the conditions under which the Government should carry out their pledge of making the enemy pay to the utmost of her capacity. That is the business of the Prime Minister and his colleagues in Paris. It would be the business, as I imagine, of an international commission, which ought to be set up the moment we have presented, and obtained, the recognition of our full debt. But it is the business of a private Member, I think, in view of all that has been happening, and all to which I have referred, to ask from the Government an assurance that there has been no weakening in the declared policy of the Government to obtain from the enemy the full cost of the War, or, if there is a weakening on that point, to ask that the reasons and the causes for it should be stated here in full open discussion before the final settlement is arrived at in the secrecy of the mansion which President Wilson inhabits in Paris.

One word more. There has been in certain newspapers a great deal of talk about Germany becoming Bolshevik, if her credit is impaired, her trade injured, or if she is overburdened with debt. What about Britain if the peace settlement fails to redeem the pledges of the Government, and leaves Britain with a depleted Treasury, staggering under a load of taxation twice as heavy as Germany? I refuse to believe in any such possibility. But if it should happen that the Government has veered round, and are seeking to be moderate to Germany, I say you can only be moderate to Germany at the expense of this country, and at the expense of all our Allies, and to be moderate to Germany after the crimes she has committed, after the misery and ruin she has brought upon the world, would be to belie every pledge given by the Prime Minister, and by every one of his colleagues.


We received an assurance from the Government recently that there was no weakening on the part of the Government, and that they intended to insist on the payment of our claims to the utmost capacity of the enemy. I will not pretend to say that at this moment there is a weakening on the part of the Government, but I say that to make a statement before this House that there is no weakening on the part of the Government to insist on the payment of our claims to the utmost capacity of the enemy does not meet adequately the situation that is presented to us. Now, the notice on the Paper relates to two things: One is with regard to the indemnities or the reparation that can be obtained, and the other relates to the proceedings at the Conference itself, so that both these subjects are under consideration. To-day I have had the advantage of a short conversation with a leading financial man on the Continent, and I asked him what people on the Continent think about the War situation. He said, "I will tell you frankly what they think, and what I have heard over and over again. What we hear there is this: That the Entente has won the victory and lost the peace." With regard to losing the peace, I do not pretend to say that we have entirely lost the possibilities of a peace, but what I do say in that connection is that every day of delay has been an advantage to Germany and our other enemies and a disadvantage to us, that we are losing consistently by the delay, and that the delay is continuing to strengthen the position of those with whom we have to negotiate for a peace.

As regards the question so very ably dealt with by my hon. Friend who has just addressed the House with regard to, the assets of Germany, all I would say is this: The Government is in a far better position to tell the capacity of Germany to pay than we are. I freely concede that. But what about this international commission? Was there not appointed by the Conference some Commission to investigate the assets? What investigation has been made, and what do we know of the results of their investigation? I hope the Leader of the House will tell us what is known—and definitely known—with regard to the actual capacity of Germany to pay. With regard to that, without going into details, because I wish to be very brief, as there are others more capable of speaking on the subject than I am, I say we must beware of accepting German statements. We cannot forget that within as recent a time as one month before the collapse of the military situation in Germany, the German Chancellor was threatening us that if we did not accept the terms that were then offered, we would take upon ourselves the responsibility of carrying on the War. That was all bluff. They were on the point of collapse, and to-day we have to ask ourselves whether this cry of poverty on the part of Germany is not a deliberate piece of German propaganda suggesting poverty in order that they may get off better.

The Leader of the House the other day gave us an illustration which in commercial and financial life may be very apt, namely, that if you had had to deal with a debtor who was going into the Bankruptcy Court or against whom an order was being made it was very much better that you should come to terms with him and make a composition and take as much as you can reasonably get, having regard to his assets. That is quite true, but it must be remembered that under normal circumstances the debtor has the watchful eye of the Official Receiver upon him and the business man has a good opportunity of seeing whether a fair return is made of his assets. No general statement and no off-hand statement can be accepted as regards the assets of Germany. It was shown clearly by the hon. Member who has just spoken (Mr. Kennedy Jones) that there are immense potentialities in respect of German assets. Seeing all that this country has suffered in treasure, and in blood, the enormous debt which the nation has incurred, and which will hang like a dead weight on our necks and on the necks of our children and our grand-children, and the great slaughter of men that has taken place, we should not be too mealy-mouthed in regard to our treatment of Germany. What better application could be made of their money than to pay us in instalments for fifty years, and by their paying these instalments you would prevent those military preparations which Germany will certainly make if she gets the opportunity of recuperating and seeking revenge in future.

In regard to the proceedings at the Peace Conference, I think they have been very dilatory. We do not know all the difficulties, but we do know that it is perfectly obvious that a number of the delays that have occurred in the Conference must have arisen from differences amongst the Allies themselves. If they had been in better agreement and more prompt they would have been ready to prepare their bills and present their terms to Germany before the lapse of four and a half months. Other things have caused delay, and notwithstanding my respect for the American President and the American nation I must be perfectly frank and say that I am convinced that a great deal of the delay has been caused by the manner in which the League of Nations has been cast into the arena. I have nothing to say against the scheme of a League of Nations, but in certain respects the associations with which it is proposed to effect it are, in my view, impracticable. The immediate problem before us and before the world is the attainment of peace between the nations that are at war, beween our enemies and ourselves, and what right have we to drag neutrals into consideration of that peace? What right have we, on the other hand, after dragging in neutrals, to say that our enemies who have to pay, should be bound by the conditions that may be imposed by a League so constituted? It seems to me that it is elementary that the question of peace is one thing and the question of the League of Nations is another. If we deal with these questions on proper lines we should settle the terms of peace and conclude peace and instantly thereafter, and in a separate document, put down rules in regard to the League of Nations, and after that is done we and our Allies should go into the League of Nations, and Germany and other enemies should come in later.

To deal with the two things at the same time is to provoke difficulties and to prevent peace. That is the view taken by the American Senators, and it is the view taken by the bulk of legislators in America. It is a very reasonable view. We must also remember that it is the view intimately associated with American politics, and American politics are on a very different basis from our politics. If our King assents to peace it is conclusive, and if we do not like the Government which has advised the Sovereign to conclude peace we have no remedy except one, and that is to turn out the Government. But that is after the event has been consummated. It is very different with the United States of America, because there, under the Constitution, if the terms of peace and the Covenant of the League of Nations are to be dependent upon each other they will come before the United States Senate and no treaty of peace can be concluded without the full assent of the Senate. Therefore, we may very readily find that though they may be willing to conclude peace they are quite unwilling to enter into the Convention in regard to the League of Nations. Already—and I have seen some of the speeches recorded in the Official Reports and we know also from our Press—leading men in America object to the Convention on the ground that it is a transgression of some of their sacred political doctrines or of their traditions, and as the party that is objecting to this has a majority in the House of Representatives and in the Senate it is possible that when the Peace Treaty comes before the Senate for approval political considerations may weigh so strongly that both the Peace Treaty and the Covenant may be defeated. Therefore, I think, it is our duty and the duty of our representatives in Paris to endeavour even at this late stage to keep these important considerations separate.

There is another thing which I see is much urged in the United States Press. It is that no treaty can be concluded without "the advice and consent" of the Senate, and I see it urged on the highest authority in the United States that the President has not taken the precaution in the first instance of asking the advice of his Senate. When he returned to the United States a few weeks ago he did not even then ask the advice of his Senate. He has gone off his own bat and has consented to an arrangement in connection with which he never received the advice of his Senate. That, in all probability, will be urged against the assent of the Senate to the Peace Treaty. I submit that we should endeavour, even at this late hour, to separate the Peace Treaty from the Covenant of the League of Nations. I trust that the Covenant of the League of Nations may prove a reality, but not as depending upon the Peace Treaty, but as something side by side with it which shortly afterwards may be secured, and when we have the Covenant of the League of Nations all the Allies, and all the neutrals who have had nothing to do with the War, may enter it on terms that are just, leaving Germany, Austria, and Turkey to join the League whenever they are ready to repent of their misbehaviour and to give their consent to the maintenance of the peace of the world. The object of the League is to maintain the peace of the world, while the object of the Peace Treaty is to secure peace. They are two distinct things, and the sooner we realise that they are completely separate the better.


I am sure the House was greatly impressed with the sincerity of the hon. and gallant Gentleman who moved this Motion, and I think he spoke to an entirely convinced Chamber as to the necessity of every Member of this House being true to the pledges he gave during the election, that he would support the Government in getting all they could get out of Germany by way of indemnity. But just as he pointed out that it will be a most unfortunate thing for the Government should the country feel that the Government had failed them in not demanding the whole of that amount, so I think it will not be less unfortunate if hopes are raised by speeches in this Chamber which can never be realised. I have sympathised with every speech that has been made. I had hoped that some hon. Members here, who take such a deep interest in this matter, would have been prepared with arguments and facts to enable us to say to the Government, "It is possible for you to do this if you are really in earnest." I do not think the Government does need gingering up in this respect. I absolutely trust the Prime Minister to play a true British part in this matter and to obtain all he can. But what I have risen to ask is that the House should consider this question: Hew can Germany pay? To say that that is Germany's business and not our business is absolutely futile. If Germany owes us money, surely Germany owes equally, both in morals and in business, to all the other Allies. What, then, is the total sum? I think I should not be putting it above the mark if I said that the bill that ought to be presented to Germany would come to a total of, say, £40,000,000,000. I do not think it is less.


The Prime Minister in his speech put the probable total at £24,000,000,000.


Very well. I am surprised it is so low, but £24,000,000,000 will do. But I will cut off £16,000,000,000, because we are talking in such big figures that the whole thing is getting ridiculous. The hon. and gallant Gentleman said that in 1914 a German authority calculated that Germany was worth £15,000,000,000 and that she had an annual income of £2,000,000,000. If she was worth £15,000,000,000 that was when she was a going concern. [An HON. MEMBER: "She will be again !"] Not if what you propose is done, she will never be a going concern. This is a policy by which you are to ruin her with one hand and extract £10,000,000,000 or £24,000,000,000 with the other. I am entirely in sympathy with the hon. and gallant Gentleman, but at that time Germany was a united people, with the entire population working on an economic basis. What is her capital of £15,000,000,000, in 1914, worth to-day? Where is her £2,000,000,000 a year income? Does anyone suggest that she is at this moment on an economic basis producing anything? [An HON. MEMBER: "We do not say so."] Then how in the world are you going to collect that sum?

Lieutenant-Colonel LOWTHER

By putting in an international committee, as administrators and receivers, who know something about the management of a great big country, with tremendous, titanic resources. That is how it would be done, only we should take particular care to see that we should exact nothing for a year or two—indeed, I said for four or six years.


I am much obliged to the hon. and gallant Gentleman, but I do not see how we are going to collect £24,000,000,000. Is it really considered, and is it the idea of the House that, having endured what we have endured for nearly five years, we really have the purpose of taking over a people of the greatness of Germany—a people of nearly 80,000,000—by putting in a receiver and leaving him there, if need be, for fifty years? [An HON. MEMBER: "Why not?"] I am glad to see that is the idea. I say it is physically impossible, and I say it is morally wrong. [HON. MEMBERS: "Why?"] I will say why it is morally wrong. [An HON. MEMBER: "What did the electors say?"] The electors have elected us on the assumption that we have common sense enough only to press her to pay what she can pay, and not to talk in this airy way about £24,000,000,000. The first duty of our Government is to stand with all our other Allies in determining to have peace as early as possible, and a settlement that is a final settlement. The idea that we are going to carry on a sort of war, economic or otherwise, for fifty years against an enemy country is, to my mind, an idea of a world in absolute ruin. All the Allies want indemnities paid. We have heard it said, "Let us present the bill." To whom shall we present the bill? To the Chancellor of the Exchequer for Germany? His position is not a very secure one. We are told that there was 100 millions in gold. That has all come out month by month in buying food. [An HON. MEMBER: "An international commission!"] An international commission composed of statesmen who find it difficult to manage their own countries, and who propose to add to their difficulties and to the world's difficulties by administering Germany! It is to my mind a most incredible proposal. Then we hear about the coal mines. The proposal is, "Germany has coal: make the German workmen hew the coal and send it abroad for our own credit, or send it here for our use." When the hon Member suggested it, and said that the mine-owners and miners would like it, I replied that I expected that. We should be getting an indemnity paid while we should be ruining our own mining industry. [An HON. MEMBER: "No."] This talk of coal and potash and other deposits is really not talk in business terms to-day. The amount of potash which has a current value is the amount that can be used at a given moment. You cannot hew a thousand million pounds' worth of coal or potash because, if it is worth that, you have got to have a customer for it, and all the stuff required from year to year is being produced at present to meet our economic requirements.

We have heard of our Prime Minister failing in his duty to his people because he is under duress or under some pressure from the President of the United States, and when we hear remarks in this House unfriendly to the United States, I venture to say it is a very unfortunate thing. I believe it is playing the game of Germany. I think I should say this, I have no special knowledge, but I am of opinion from what I am told, that the Prime Minister and the President of the United States are working absolutely hand-in-hand, and are of the same mind. I do not think that there ought to be remarks made casting reflections upon President Wilson. All I have to say is that my dream of this settlement is a settlement that shall bring to the world the thing it needs most, namely, an instant, solid, and permanent peace. When the League of Nations is sneered at I say that every hon. Member in this House will live to realise that if there is no League of Nations there is no civilised world, and no prospect to which any of us can look forward with hope. War is a bad bargain; it is unsound from the beginning to the end. We have been engaged in a bad thing economically, and we have got to cut our lass. I would ask this House not to send the impression out from the House that the Government is failing in its duty because it is not collecting the utmost demands, but to stand by their effort to get all they can, and to realise that one of the greatest blessings that will come out of this War will be that the world will be taught that, whether victors or vanquished, war is a bad game and does not pay.

Lieutenant-Commander ASTBURY

I hope the House will bear with me in making a few remarks. I entirely disagree with the major part of what has fallen from the last hon. Member. It would be rather interesting to know if he put the views which he has set before us to-night before the electors at the election. We are in this position, that we gave two definite pledges to our Constituents last December. The first was indemnities from Germany, and the second the bringing to justice of the Kaiser and all his murderous gang. In the majority of cases huge majorities were obtained on these two points, and these two points alone. What authority had we for giving those pledges We had the authority of the Prime Minister. He told the country that Germany should be made to pay the full cost of this War to the utmost limit of her capacity, and it was on that fact that we gave our pledges. Surely the Prime Minister is clever enough to have known when he made those speeches whether we could get any great amount if not the full amount of the cost of the War out of Germany or we could not. Turn back our minds to 1870 when Germany started her aggression against France. She stole from France her two provinces Alsace and Lorraine. She never asked France what she could pay. She demanded from France an indemnity of £250,000,000, and France had to pay that amount, though France was not the aggressor. Germany was the aggressor. This War has been the blackest page of devilry in the history of the world. No one in this country has the slightest sympathy with the German nation, either now or in fifty years, and if it takes Germany fifty years to pay off this debt I would make her do it. What would Germany have done to us if she was in the position in which we are now? Do you think for one moment she would have left us with a shirt to our back? One of her great commercial magnates, Herr Ballil, has said: If we had won this War we would have occupied Paris and London. We would have dictated terms of peace in Buckingham Palace, and we would have annexed the whole Continent of Europe. Speaking as a business man, I would not talk in any airy fashion of getting indemnities from Germany which she cannot pay. We know we cannot get blood from a stone. But I do believe that all this talk of starvation and Bolshevism in Germany is the old Teutonic cunning and is merely camouflaging the issue to get the Allies to let her down lightly. I cannot speak as an economist, but there is no doubt that Germany is a country of huge potential resources. It has huge potash mines and coal mines. We have not heard a word to-night about Austria, Bulgaria and Turkey. They have got unlimited wealth in their forests and in other ways. Besides that, Germany has got an industrial population of seventy millions, and every business man in this country knows that if she cannot pay the full cost of the War she can pay a very substantial amount. I may refer to the words which fell from my hon. Friend. I am sure that nothing which has been said in this House could offend the United States. We are working with them to get the best terms possible out of Germany. But I do think that a grave error has been made in first of all discussing and bringing into the peace terms the question of the League of Nations before you have fixed your terms of peace with Germany. I feel, though I may be wrong, that, to a great extern, that has been the one question that has been dragging these peace terms along, and I believe that if the peace terms had been dictated to Germany first, then after we had settled with Germany we could have set up a League of Nations, because it is unthinkable at the present moment that we are going to let into this League of Nations a nation of brutes and blackguards. We will not let them in. We will have nothing to do with them until they have proved that they are fit again to come within the comity of civilised nations.

Lieutenant-Colonel Sir S. HOARE

My hon. and gallant Friend so worded the Resolution as to enable me for a few moments to raise a question which, to my mind, is so equally urgent as this question of indemnities. That does not mean that I do not feel as strongly as he does with reference to that question but it does mean that when events move so fast in Paris this may well be the only opportunity I can have of bringing another matter to the attention of the Leader of the House. This afternoon I asked the Under-Secretary for Foreign Affairs a question with reference to an Allied mission that, so far as my information goes, has recently been visiting Bolshevist Russia. In his answer the hon. Gentleman informed me that he knew of no such mission. Knowing the frankness and courtesy with which the Under-Secretary for Foreign Affairs always answers hon. Members, I am quite confident that he had no such information. All I can do, therefore, is to put before the Leader of the House such information as I have, and to ask him, when he comes to reply, to give in a few sentences an answer to various questions which I propose to ask him.

The information that I have comes from several sources, but it bears out in material respects certain statements that during the last two or three days have been made in three or four London papers. They come to this, that two distinguished Americans, one a Mr. William Bullet, who, I understand, is attached to the American Delegation in Paris, the other a certain Mr. Lincoln Steffins, a journalist, who is a friend of Trotsky, and last year, I understand, published an edition of Trotsky's works in the United States, have during the last few weeks visited Bolshevist Russia with American diplomatic passports, and have recently returned to Paris with an offer of peace, definite or indefinite, from the Lenin Government. If my information is correct, the terms of that offer are, roughly speaking, the following. First, Lenin offers on securing peace with the Allies to revoke the decree made by the Bolshevist Government for the repudiation of the foreign debts of Russia. In that connection I will only say that it seems to me to be the height of futility to consider an offer of the kind from the head of a Government which has plunged the country into such a state of bankruptcy that it cannot even meet its interest on its own internal loans. The second term which I understand Lenin offers is the cessation of official Bolshevist propaganda in all countries outside Russia. I would remind the Leader of the House that in the Treaty of Brest-Litovsk, Lenin and Trotsky gave an undertaking exactly to that effect. They undertook to make no propaganda in Germany. Yet within two or three days of the signature of the Brest-Litovsk Treaty they were sending into Germany Bolshevist agents and Bolshevist money. The third term I understand is the withdrawal of Bolshevist forces from the border States of Russia. It seems to me that it would-be the height of unwisdom to enter into such conditions with a Government that at this present moment is being driven out of these border States by the force of arms. I am told—of course, the information at the disposal of private Members is very limited—that this offer is meeting with a favourable reception with certain highly-placed persons in Paris. If that be the case, let me say this. In Russia, at the present time, there is one of two choices to be made. In the first place, there is the Government of Admiral Kolchak—a Government which represents all the parties in Russia true to the Allies during the War. In the second place, there is the Government of the Bolshevists. I do not propose, even if I had the time, to say a word about the atrocities the Bolshevik Government have committed. I do not propose to say a word as to their treason to the Allies in connection with the Treaty of Brest-Litovsk. All I desire to say is that in three separate ways the Bolshevik Government have outraged to such an extent the law of nations that no civilised Power with self-respect can possibly entertain friendly relations with them. They have repudiated their national debts; they have launched an aggressive propaganda into every one of the Western countries of Europe; and they are held responsible for the murder of a British naval officer in the British Embassy at Petrograd. Since that time they have committed outrage after outrage on British men and women who have, unfortunately, found themselves at their mercy in Russia. I should have thought, in view of that, that no responsible person in Paris could for one moment contemplate entering into negotiations with such a Government. Even if the claim of loyalty did not carry weight, I venture to urge that no such action is possible on the ground of any expediency.

Only this evening I saw a telegram from Russia stating that on the Siberian Front Admiral Kolchak was making a most brilliant advance and that the Bolshevists were flying so fast that he could not maintain contact with them. At the same time there is news from Petrograd that serious risings have taken place there against the Lenin Government, and I would urge that it would be the height of folly at the very moment when the wave is turning in favour of Admiral Kolchak and when Lenin's Government is tottering to maintain any kind of relations with Lenin. I hope the Leader of the House, when he comes to reply, will be able to tell me that there is no such idea in the mind of any one of the Allied representatives in Paris. I hope that the rumours that are heard and the information I have received are wrong. I would ask the right hon. Gentleman, therefore, when he comes to reply to the general Debate to assure the House that there is no intention whatever of entering into any relations or negotiations with these people. If the right hon. Gentleman will pardon me, I would also like to ask him two or three more detailed questions. In the first place, is my information correct that these Americans have recently been in Bolshevik Russia? Secondly, if it is the case, were our other Allies aware of this matter? I would further ask whether our delegates in Paris were aware of it, and whether our Foreign Office in London was aware of it? Had our French Allies any knowledge about it? I am sure the Leader of the House will pardon me for speaking freely on this matter, but I feel that events are moving so quickly that one must speak frankly. I raise this question, not because I wish to make trouble at the Conference at Paris, but because I feel it is so serious that it is the duty of any Member to raise it at once, freely and frankly, and to ask the Leader of the House to give the assurance which I hope he will be able to give.

Rear-Admiral Sir WILLIAM W. HALL

It requires no words of mine to emphasise the speeches made by hon. Members in favour of getting from Germany the maximum amount of indemnity. But I would, with the permission of the House, refer to the subject discussed by the last speaker, the question of dealing with the Bolsheviks in Russia. I do not know if the information which has reached us is correct, but if one of the terms offered is that that they will cease their active propaganda, I can only say there can be but one reason for that, and that is that the active propaganda is already in progress. It is common knowledge that there is a movement in Great Britain which has been termed "Bolshevik." Whether it is so, time alone will prove. But behind that movement there is another. There has been since the General Election a distinct movement in favour of direct action, and the object of that movement has been to substitute a dictatorship for the constitutional assembly which we here represent. One of the tendencies is a system of economics which is directly opposed to the system to which this Kingdom is accustomed. It is a system of trading by communities instead of trading individually. I venture to think that this is a matter into which special inquiry ought to be made. There ought to be an investigation into the source, size, and actual progress made by this movement, which tends to substitute self-nominated dictators for the constitutional system. I have heard it said there is nothing to hide and nothing to be afraid of—that one of the two systems is right. It is only fair to the people of Great Britain that they should have laid before them a full report of what is meant by direct action and its methods, and how it differs from the constitutional system we now stand for.


I shall only detain the House for a few minutes. I do not propose to go into the question of what Germany is able to pay, for it seems to me that information on that point can only be got from the Front Bench, and it would be almost folly for me to attempt to discuss whether she ought to be made to pay £10,000,000,000 or £20,000,000,000. The election pledges have been referred to. I have found those up to now a little embarrassing. But I am glad that the Prime Minister gave us in this case a correct formula, which was that Germany ought to pay up to the measure of her capacity. With that I am content. At the present time, however, there is great uneasiness in the country regarding indemnities. What this House has a right to expect is that the Leader of the House should give us to-night a frank declaration of the Government's policy in this matter. I shall be interested to hear what he has to say on that particular subject. There are various statements in the newspapers just now with regard to what we may or may not expect. I suggest to my right hon. Friend that if there is a cold douche ahead of this country he ought to administer it to us to-night in the frankest possible way and let us know where we are.

I wish to raise one special point on the question of reparation. The House is aware that there are many British firms who hold property in Germany, and there are many German firms who hold property in this country. The amount of British property in Germany is something like £115,000,000, and the German property in this country was in the region of £140,000,000. I would like to ask the right hon. Gentleman whether in the final settlement these two particular sets of figures are to be worked off the one against the other? I have in mind at the present moment a very large business in Germany —I have no financial interest in Germany myself—and I am sure my right hon. Friend will be interested to know that that business was begun there in order to get over the German tariff walls. What I should like to know, and what many people in this country would like to know, is whether the property which is held here that has now been liquidated by the Government is to be treated as an offset against the amount of English property in Germany I would also ask whether the British subjects who are resident in Germany, who hold property there, and who invested their money in German undertakings, are to be reimbursed in any way; whether, for instance, there is to be any system of priority in dealing with these various claims? Any information which the right hon. Gentleman can give on these matters will be welcomed not only by this House, but by a great many people in the country.

10.00 P. M.


I wish to associate myself with the hon. and gallant Gentleman who moved this Motion. I am proud to think that the Adjournment of the House on this subject has been moved by a Member for a Lancashire Division, and as I am myself a Member of one of the Divisions of Lancashire I am proud to support him. There was an old saying years ago that what Lancashire thought to-day England would think to-morrow. If there is one part of the country that is keener on this subject than any other that part is Lancashire. There would be no alarm and no dissatisfaction in the country on this subject but for the fact leaking out, or at any rate coming out of the Peace Conference, that a Subcommittee or Sub-conference was sitting to ascertain the amount that Germany could pay. It does not-require even a statesman to make a statement that we are only going to get from Germany what she can pay, because it would be impossible to get from Germany or any other country more than she was able to pay. Consequently, a statement of that sort is quite unnecessary. But we are justified in presenting the bill for the full amount of the cost which this country and the Allies have incurred. It is because of this difference of procedure that the whole of the dissatisfaction and uneasiness in this House exist. If any Member of the House were to purchase, say, a piano for £100, is it likely the dealer would begin to think how much the purchaser was going to pay? He would, of course, send in his bill for £100, and he would follow it up with letters and representations in order to obtain payment of the full amount. That is the ordinary procedure which any business man would adopt. I suggest it is the only procedure we can adopt in dealing with Germany. There are hon. Members and other people who think that we are pressing for the payment of the full cost of this War on Germany because of our hatred of Germany. That is far from the truth. It is not that we hate Germany, but because we love justice. It is not only in the cause of this country and in the cause of our Allies, but also in the cause of freedom and justice that Germany should be made to understand that she is indebted for the full cost of this War.

One hon. Member has suggested that we cannot carve out a piece of coal or of potash that will represent the full cost of this War, and that the value of the coal and of the potash only comes from its market value on the day of sale on the particular day it is required. That is exactly the policy we wish to pursue. We are convinced that it will take a good many years to pay off this indebtedness. We do not want the whole of Germany's coal or potash next week. We are quite prepared to wait for a considerable time until the full amount is paid. The longer we give Germany to pay her indebtedness, the better lesson it will be for all posterity. Unless we have made Germany contrite for her deeds this War has not been won, and the first condition of a contrite heart is restitution. Germany, unless she is contrite, I am afraid ought to endure further suffering. We ought to be prepared to show her that we are ready to receive her with open arms into the League of Nations, and to consider her as friendly as any other nation if she is truly contrite, but that until she has paid off her indebtedness we cannot look upon her in that light. If we put the case in that light before Germany she would see that it is to her advantage to set about paying this indemnity. I am pleased to have had this opportunity of addressing the House. This is my first attempt to speak in the House. With regard to the measures which the Government brought before the House during my short stay here, I feel that this matter is far more important than any of them. The Government are trying to appease the country by Socialistic legislation. We have a scheme for subsidising houses, and we have a scheme for nationalising railways and so forth. If there is one question at the last General Election which was more important than any other and which the working classes are more inteersted in, it is that Germany shall pay.

Mr. BONAR LAW (Leader of the House)

I should like to say a word or two first on the point raised by my hon. and gallant Friend behind me. When I heard of this I personally, like the Under-Secretary for Foreign Affairs, knew nothing of it—the idea that some Embassy had been received from the Bolshevist Government, and that terms were to be made with them. I did not think there was a shadow of foundation for it or I should have heard of it, and indeed the proposals which it is said are coming from the Lenin Government were so like those that were issued some time ago in the Wireless Press, about their readiness to pay off the debt and all the rest of it, that on the face of it it seemed improbable, for everyone knew that the object of the wireless message was not to make peace but to make propaganda in European countries by trying to convince the working classes that what these Imperialistic Governments were after was money and nothing else. I therefore thought there was no foundation for it, but I have to-day telephoned to the Prime Minister, and he also knows nothing about it, therefore I do not think it is necessary for me to say more on that subject.

As regards the subject which has occupied so much of our attention to-night, and upon which a number of most interesting speeches has been made, I shall have more to say, but I am afraid I shall not have much that is new to say. A good deal has been said about election pledges, and my hon. and gallant Friend behind me, much to my regret, said he had given a definite pledge that Germany would pay the whole cost of the War, and that if she did not he would have to resign, I do not know what influenced his mind in making that statement, but certainly it was not anything said by any member of His Majesty's Government. My hon. and gallant Friend who moved the Motion tonight quoted a speech of the Prime Minister, and quoted it quite correctly. He did not quote the whole of it. He quoted the substance of it. The one part he did not mention was the part which was the basis, I believe, of all the Prime Minister's speeches, and that was not that he would make Germany pay the whole cost of the War, but that we should exact from Germany whatever Germany was able to pay. Every time this subject has been raised I have had the feeling that I am more out of sympathy with Members who support the Government on this subject than on any other which has been raised. If that is due to any real difference of opinion it cannot be helped because everything I have said in this House is precisely what I have said during the election. I have not changed my view. Let me read for example part of a speech, which happened to be one of the last which I made before the election at Mile End, where a number of my hon. Friends who are now Members of the House were present. What I said then was precisely what I thought then, what I think now, and what I have said on every occasion the subject has been raised in this House It was this:— The first thing is to find out what she can pay, and we have already proposed to our Allies that an expert scientific committee should be appointed to examine into the amount which can be paid, not without injury to Germany. The country is responsible for its Government and for the crimes of its Government, and has a right to suffer for them. What this committee will do, if we have our way— and we have had our way for that is what the Allies have done— is to examine this question with precisely the same amount of scientific skill and energy as an accountant examining the books of a bankrupt to find out how much he could pay his creditors. I have no doubt there were differences of opinion among members of His Majesty's Government, as among other people, as to what amount could be paid, and some were more sanguine than others. I was not amongst the most sanguine, and in this same speech I said this:— Whatever amount we get, it would be holding out a hope, the fulfilment of which I cannot conceive, to suggest that Germany could pay our whole war debt. Whatever amount we get, the burden upon this country will only be met, in my opinion, by something in the nature of a different way of living and reduced expenditure. So far, therefore, as I am concerned the view which I express in this House is precisely the view which I expressed during the election. That view has not changed. There is no change whatever up to this hour in the attitude of His Majesty's Government on this question. The intention still is to obtain, as part of the debt which Germany owes, whatever amount can be got from Germany. That is our case. But there are very great differences of opinion as to what that amount may be, and we have had an illustration of what these differences are in the Debate to-night. If there is a difference of opinion I think I can safely say that it would be an entire mistake to assume that the views of the British Government have been influenced in their desire to obtain anything which Germany can pay by any action on the part of the President of the United States. It would be unfair to that great country to suggest that our action was influenced by this reason, and I think it is right to say that if we are looking on the whole problem of the War, and the whole issue resulting from the War, one of the aims which was set before the Government as our end in the War was to secure peace now and to secure peace in the time to come, and, personally, I believe unless as the result of this War we have in future the closest possible understanding, not only with France, with whom we have always in my time been more or less on a good footing, but with America, where there has been much misunderstanding, one of the best possible results from it will have been lost. With regard to the amount, our aim is to get everything that Germany can pay. There has been a great deal of discussion about the use of the words "reparation and indemnities." My view, and the view of the Government, has been that in any logical meaning of words there is no difference between the two, so long as you mean by indemnity the cost of the War. As far as I am concerned, I do not care in the least whether you call the amount reparation or indemnity, provided you get all you can get from our enemy. But there is a difference in the use of the words, or a possible difference, which has no relation whatever to our dealings with Germany, but has relation to our dealings among the Allies themselves. If you were to draw a hard and fast line between one kind of cost of the War and another the result might be that whatever was obtained from Germany would not be distributed in a way which was fair to the Allies as a whole and fair to this country in particular. Suppose one of us had owned a house which was destroyed by enemy action and at the same time had an unearned income of a certain amount. The damage to him, the civilian, would be of precisely the same kind, whether it took the form of the destruction of his house or of the payment for the rest of his life of an Income Tax of 6s. in the £ instead of 1s, as it was before the War. There is, therefore, no logical difference between the two.

I cannot, of course, discuss now any question as to the way in which whatever amount is received will be divided, but I would think it is obvious that the British Government, while recognising in many respects the greater suffering of some of our Allies and desirous of being fair to them, will feel also that in this question no representative of the British Government can fail to be just also to the British Empire as regards the disposal of this money. As to the Commission, I think my hon. Friend who spoke last rather sug- gested there ought not to be any Commission at all to inquire into the amount, but that was clearly one of the statements made at the time of the election both by the Prime Minister and all his colleagues. You must in some intelligent way try to find out what amount can be paid. We have done that, and, as I have said, we have appointed this Commission. Up till yesterday it had not reported, and no decision had been taken as to the amount to be claimed. Up till yesterday that was the case. Surely the hon. and gallant Gentleman (Lieutenant-Colonel Lowther) knows it is an Inter-Allied Commission. The Commission up till yesterday had not reported, and I do not at this moment know what amount will be put forward by the Allies. But I would put this to the House. Unless you assume that our representatives in Paris are less interested in getting as much as any other Member, yon must also assume that they are as keen as the Members of this House are to get the largest amount possible, and that the subject is being examined from that point of view, and that whether the amount is small or great it is surely right for us to assume that it has been arrived at by careful examination of all the facts and fancies which have been put forward in this Debate to-night. It is not the British Government only that is interested in this question. Our Allies are equally interested in getting as much as possible, and it is necessary to assume that they are acting with a desire to get as large an amount as can be got.


Does the right hon. Gentleman include America as one of the Allies?


In this question America has not at all the same interest as we have. Of course America is one of the parties to the Peace Treaty. What we do will, I take it, be done by all, but our interests and that of France are more direct in this matter, and in what we are doing we are considering what can be got from Germany. What is the amount? There are two things which the House and anyone who discusses this subject have to keep quite clearly and distinctly in their minds in examining this question. The first is what amount Germany can pay in Germany—that is to say, exactly what amount of taxation or anything else she can be made to impose in order to obtain a tribute which will be paid to the Allies in Germany. But that is a very different thing from paying it to the Allies. Everyone in this House knows that the question of transferring money from one country to another is one of the most difficult problems of finance. When I was Chancellor of the Exchequer, at one time—I have said this before in the House and there is no harm in saying it again—it looked as if within a very short time we would be at the end of all the ordinary methods of making purchases of munitions and the rest of it in America, and everyone who has given any thought to this subject at this moment knows that, terrible as our war debt as a whole is—and nobody doubts that, every one of my hon. Friends who have spoken pointing to the burden inflicted on this country by taxation—great as that may be, my own belief—and I believe it is shared by most people who have examined the subject—is that probably our external debt of a thousand millions that we owe at this moment outside this country will prove possibly a greater handicap upon our trade and a bigger obstacle to the recovery of our prosperity than the whole of the rest of the debt which has been incurred. It is necessary, therefore, to keep perfectly distinct the amount that can be paid by Germany in Germany and the amount that can be transferred to the Allies.

As regards the amount which can be collected in Germany, I really do not specially wish to argue this, because there seems to be a curious idea that if you have doubt about arithmetical figures you are friendly to the Boche. That is a mistake. We have got to look at this thing, not from the point of view of sentiment, but from the point of view of what is possible. My hon. and gallant Friend who introduced this Motion referred to a memorandum which he sent to me. I did not intend to refer to it. I wrote to him that I had read it with interest and that I had forwarded it to our representatives at the Conference. I have not heard whether it has been of any assistance to them. But I think it would be wise, as showing the difficulty of this problem, if I examined the amount for a moment. He first of all puts the total at £25,000,000,000, and his first method of meeting that is to say that the Germans have a debt of £8,000,000,000; they can certainly pay that, so we will wipe the £8,000,000,000 off the £25,000,000,000.

Lieutenant-Colonel LOWTHER

That is grossly unfair. I said that we could transfer the means by which they could pay the interest on their debt to pay off the interest on our debt. That is a very different thing.


Not at all. It is precisely what I said.

Lieutenant-Colonel LOWTHER

It is not.


I beg the hon. Member's pardon. It is precisely what I said. I said he put the debt at £8,000,000,000 and that the Germans must obviously have the means to meet it, and therefore we can wipe oh this £3,000,000,000 from the £25,000,000,000. [Lieutenant-Colonel C. LOWTHER: "Hear, hear!"] I am not misrepresenting my hon. Friend in the least; at all events, I am giving his arguments as I understand them. The House will understand that I am not now finding excuses for making the amount smaller than it is. As I remarked in my Budget statement a year ago with regard to the financial position of Germany, which I analysed as closely as I could, if British finance were in the same position as that of Germany I would consider that we were on the verge of bankruptcy. Therefore it does not follow that because they have a debt they are able to pay it. But it does follow that if you are deducting this £8,000,000,000 from the total of £25,000,000,000 you must take the means to meet that debt into account. My hon. Friend's next point is that Germany will have no Army now—

Lieutenant-Colonel LOWTHER

May I have the chance of answering this, be cause I particularly left out the explanation of these figures. I thought—


The hon. Member must not be so susceptible to criticism. He must, like everybody else, harden his skin.


Well, Mr. Speaker, if my hon. and gallant Friend—


On a point of Order. I would like to inquire whether the Leader of the House is entitled to deal in detail with the memorandum which was not referred to at all by my hon. and gallant Friend?


The Leader of the House invited the hon. and gallant Member for Lonsdale Division to send him a copy of the memorandum. That memorandum was sent, and that memorandum has properly formed a basis of discussion.


Really, I do not think I am treating my hon. Friend unfairly. But let me go on—

Lieutenant-Colonel LOWTHER

May I answer this?


If the House would rather that I dropped this aspect of the matter I will do so.


Tell us what you are going to get?


It is only an illustration of mine of the difficulty of dealing with the subject when you come to concrete statements. The next point made by my hon. and gallant Friend is that Germany has no large Army to pay for, and in those circumstances £40,000,000 ought to be enough to run the government of the country. That ii if she raised £200,000,000 before the War, there is £160,000,000 available now. That is rather difficult to believe if there is to be any government at all of any kind. When we remember that the civil expenditure before the War was £150,000,000, and I suggest that something will have to be found for pensions, etc., I think it is very evident that the civil government will not cost less than it cost before the War. I really will not go on with this examination. Now, I will really try to put the actual facts as I see them. First of all let me say, as regards the arguments of my hon. Friend (Mr. K. Jones), that I do not disagree with any of the suggestions he put forward. What is more, to my certain knowledge, every one of them has been carefully considered by the Commission, and whatever can be got from Germany will be the factors of which note has been taken. One of them was foreign securities. That has already been examined. At the time of the Armistice we made it one of the conditions that they were not to be allowed to be exported, and to whatever extent it is in our power we will get control of these securities. I know that very strong steps were taken to secure that this asset should not disappear. With all that I agree. But then the difficulty comes when you have to translate it into actual figures and amounts. We have got so used to talking in thousands of millions that we can hardly value what that means. There was a suggestion that a large part of that £1,000,000,000 could be got by labour in the devastated countries. I do not think that anyone who uses that figure can have grasped what it means. If you pay £2 per week to a workman that amounts to £100 a year, and you can imagine how many million men it would take to get these large sums. When one thinks of getting labour on a scale of that kind is it not obvious that if there is unemployment, or a possibility of unemployment, in the country to which it is proposed to send that labour the people will say, "This is bread being taken out of our mouths." I do not believe that there is any country in Europe that would stand the presence of a large number of Germans doing work of this kind, which could be done by the people of that country, and I think it is the same all round.

When we are trying to bring up a large total and we are faced with difficulties of that kind, it is difficult to arrive at figures. One of the items mentioned was shipping. Obviously that is a proper subject for the Allies to secure. I think the value is something like £180,000,000, but I have not got the exact figures. It takes a great deal of that to arrive at these gigantic figures. If you take the first side of the problem, the amount that could be raised by taxation in Germany, I think that there is a limit to the possibility of internal taxation, and what that limit is requires an amount of examination with which only very expert people can deal. That is only half of our problem. Supposing we could get a very large indemnity raised in Germany, how is it going to be transferred to Allied countries? I most certainly should not argue in this way if I thought what I was doing would have any effect in reducing the claim which the nations will make upon Germany. I wish it to be as large as possible.

In what way can money, or the value of money, be transferred from one country to another? I know of only three ways. You can send it by gold or securities; you can send it by goods or services; or you can get it, to some extent, by credit in foreign countries. Beyond these there are no other methods. Will the House consider what the possibility of a transfer of large amounts in that way means? It can therefore in reality only be secured by the export of goods. How is that to be done on a scale which would enable us to get anything like the amount which we would all like to get? I put this to the House: It can only be got by the surplus of German exports over German imports. There is no other way. Taking the average of five years before the War, there was a balance of £70,000,000, or about that, of German imports over German exports. The balance was the wrong way from this point of view. Of course, that included what are called invisible exports, such a the returns of shipping and foreign business. These, to a certain extent, will still remain, but if, as I hope, her ships are taken from Germany, and if, as we know—and I hope that this will continue, at least, in British Dominions—a great many of the businesses which Germany had abroad are taken away, these invisible exports will disappear. You are reduced, therefore, to what can be done by the balance of exports over imports.


How did the French pay the indemnity of £200,000,000?


My hon. Friend knows that as well as I do. The amount of £200,000,000 or thereabouts was paid partly in gold and partly in credit, extending over a certain length of time, and I am going to deal with credit in this connection too. It can only in the long run be paid for by exportation. How is it possible on a balance of exportation to pay anything like the amount which is involved in talking of paying our War Debt? Before the War the balance wag the other way. In addition to that, the total exports from Germany before the War were about £500,000,000. Therefore, to pay a tribute of £500,000,000 you have to change a surplus the wrong way into a surplus the right way to the extent of the whole of the exports of Germany before the War. That is difficult, and in facing that difficulty you have to remember that this country at least will not want to receive these goods if they are in a form which will compete with our own productions and deprive our own workpeople of employment. But that is not the whole of the difficulty. I recognise that what Germany may pay to us is not restricted to the exports of Germany direct to us. If she exports to Russia or any other country, the nature of the world's exchange is such that it can come to us. It is not therefore a question of what she exports directly to this country, but it must be exports to some country.

The other method of getting the money transferred is by credit. That is a real method, and it might last a long time—at all events, that is my view. Take an illustration. For something like a generation America were in that position. She was unable to export anything like enough to pay for the capital which we sent for the development of her country. That was sent largely from this country. America at that time could not pay for it by exports; she paid for it by credit; and it extended over many years. The credit was possible be cause the people who sent the money to build her railways believed that ultimately America would be able to pay in a form that could be transferable. They were willing to give that credit and buy the rail way securities. That is possible in Germany too, but it is only possible if the amount is not so enormous as to make it plain that at no time will Germany be able to transfer the amount to other countries. I put before the House my views of the difficulties. They are very familiar to everyone who has been studying the question. It has been the duty of our experts to try to get over these difficulties, and they have been spending weeks in going into every conceivable method by which Germany can be made to pay what she ought. I do not know, as I say, what the amount will be. I hope it will be an amount well worth having, and I might say that I never heard anything more unjust in a way than the reference of my hon. Friend to Lord Cunliffe. I do not know what Lord Cunliffe thinks now, but I know he went to that Conference in the belief that Germany could pay a very large part of the bill.


Do you suggest that Lord Cunliffe is the distinguished authority?


Oh, no. It may be my hon. Friend for all I know. I do not know who is the distinguished authority. I quite realise that in dealing with a complicated economic subject like this it is impossible to grapple with it in a speech such as I have delivered. I have simply tried to put before the House considerations that have been in my mind from the beginning, and which considerations prevented me at the election, or at any other time, holding out the hope that Germany would be able to pay anything like the whole cost of the War. That is the position. I put this to the House. This sub- ject is being examined. The French and the Italians in Paris have just as much interest in getting the largest possible amount as any of us. You have got to trust to somebody and to believe that they are examining this in the interest of this country as much as any hon. Member, and I am prepared to say that when the amount is announced, whether it is smaller or larger than I hoped, I will be prepared, in my own mind, to say that they are in a better position to judge of the matter than I am, and I shall assume they have got at the correct amount.

I should like to say something else before I sit down. This is not the moment to go into a complicated question connected with the peace Treaty. At the election one of the things that were pointed out by the Prime Minister and by myself so far as I know was that in the nature of the case the Peace Treaty could not be discussed either on the platform or in the House of Commons. In the nature of the case that is impossible and what we asked the country to do was to return to power a Government which they would trust to act for them and in their interests at the Peace Conference. That was the pledge. Whether or not, when the result of the Treaty is known, it satisfies my hon. Friend or the country I do not know, but at least I am sure that the Government in dealing with it are acting in what they believe is the best interest of this country, and for no other reason. I do not ask the House to give us credit for acting in that way, and to believe that, whether our arithmetic is right or wrong, our feelings and sentiments on this subject are just as strong as those of any hon. Member who has spoken, and if we cannot come to the same conclusions it is simply because our minds will not allow us. Let me conclude by saying this. I said that on this subject I seemed to be out of sympathy with some of my hon. Friends. I do not think it is my fault. I am perfectly sure my desires are precisely the same as theirs. I remember reading in one of Carlyle's works, I forget which, he was describing a very bitter controversy about something—I think it was probably religion—and he said the protagonists-were shouting at each other, "God confound you for your theory of irregular verbs." In this matter there is no difference of principle, and I hope my Friends neither outwardly, nor in their hearts, will be inclined to say, "God confound you and your rotten arithmetic."

Brigadier-General CROFT

The speech to which we have just listened is rather a serious warning, in that the right hon. Gentleman has tried to let the country down gently in regard to what is going to happen when we hear the results of the Peace Conference. He made a very great deal of the fact that the British Government was not alone interested in this matter, and that the other Allies have also good reason to make their claims with equal strength as our delegates. There is a feeling, not only in this country, but throughout the British Empire, that our delegates do not press their claims sufficiently, having regard to the position of the British Empire on the day that the Armistice was signed. We all know the right hon. Gentleman's modesty in regard to this question, and we feel that our Government is too modest and too ready to agree with President Wilson in whatever he may suggest at the Peace Conference. The British Empire ended up this War with the greatest military power in the field, with a naval power which admittedly alone made victory in this War possible, and in addition to that we were the financial power which alone had sustained the Allies during the War. Therefore our delegates went to the Peace Conference in such a position that they could truly declare that the British Empire had a greater claim than any other Power in the consideration of peace terms. Our complaint is chat the delegates of the British Empire at Paris have been too ready to listen to a Power for which we have the greatest feelings of friendship and respect, but who has not borne the burden and heat of the day, and has not suffered appalling sacrifices which have been those of the British Empire. The right hon. Gentleman said that our action at Paris was not influenced by President Wilson. I would remind him of the fourteen points. Fourteen points were uttered by President Wilson at a time when apparently he imagined that it was doubtful if there was going to be any certain victory one way or the other in this War. President Wilson definitely stated that it was not desirable that there should be a definite result in the War. He wanted peace without victory, and he uttered these fourteen points, and they were rather too readily agreed to by some right hon. Gentlemen on that bench. But the people of the country at the election showed perfectly plainly that they "were not bound by these fourteen points and they did not regard them as commandments that were inviolable simply because they had been uttered by a distinguished Ally. On this question of indemnities the whole difficulty can be divided into two points. First, there is a school which says that Germany is unable to pay; and there is another school which says that such payments, even if they are possible, would react against ourselves, and, therefore, would be no use to the British Empire. The hon. Member who sits for the Eye Division of Suffiolk—although he might sit for Wurtemburg or Bavaria—and who said that we must not speak in this way because it would be a terrible thing if we had any ill-feeling in Germany after the War.

We are here this evening to demand justice for our people, and whatever the financiers may say, whatever the international gentlemen who control our affairs may say and advise our Ministers, it stands to reason that as you are building your League of Nations, that if the criminals of this War are allowed to emerge unpunished, then the League of Nations cannot be a real thing in days to come. With regard to the arguments which have been put forward, the first is that Germany is unable to pay. I think that is easily disposed of. I do not think there are many Members of this House who doubt Germany's capacity to-pay. The right hon. Gentleman is aware—indeed, he mentioned the fact this afternoon—that the £8,000,000,000 debt of Germany has been spent within the Central Empires, while at the same time our expenditure has been very largely dispersed. The consequence is that Germany emerges from this War comparatively stronger than we do in that sense. In 1915 Dr. Hellferich stated in Germany that the savings of Germany before the War were £400,000,000 a year. To this you can add the savings on naval and military expenditure in Germany. I regret I did not hear the figure given earlier, but I think it was roughly £80,000,000 sterling. By economising, just as we have been taught to economise in this country, it stands to reason that Germany could save another £120,000,000 a year. This makes a total of £600,000,000 sterling a year at present values.

I think it is not on outside estimate if I say that thirty years hence that will be a value of something like £900,000,000 a year. If we take two-thirds of that, and leave Germany one-third, with the incen- tive to work, without which one realises that she cannot go on, I think it is a very substantial figure. If we add to that £150,000,000 sterling, on the same basis, taking it as the proportion of Austria-Hungary, Bulgaria, and Turkey, it is not unreasonable to assume that that would come to the very respectable figure of £750,000,000 sterling a year. I submit with all respect to the right hon. Gentleman that that is sufficient to pay the interest and the sinking fund of the debt which we are likely to get year by year. If that is not sufficient, there is another means which has not been discussed. That is, that you should collect an export duty from all German manufactures leaving the German and the Central Empires, of 20 per cent., which would, at pre-war figures, bring into your coffers £120,000,000. I believe that these items, added together, are sufficient to pay the interest and the sinking fund of a reasonable contribution of indemnities from Germany. I believe really the right hon. Gentleman admits the capacity of Germany to pay. His real difficulty is how that payment is to be transferred to the Allies. But before I leave that point may I quote, in order to remind the right hon. Gentleman, the Prime Minister's statement in the election, which rather varies from the replies which the right hon. Gentleman has given to us in recent weeks. On 12th December, the Prime Minister made a long and interesting speech, from which I do not propose to quote at length. He said: Let me summarise. First, as far as justice is concerned, we have an absolute right to demand the whole cost of the War from Germany. The second is: We propose to demand the whole cost of the War. The third is a side issue I need not go into. The fourth is: The Committee appointed by the British Cabinet believes it can be done. The fifth is: Our demands, whatever they are, must come in front of the German war debt— which supports the view of my hon. and gallant Friend (Colonel C. Lowther). The Prime Minister at that time took a different point of view, and was advised differently from what he is at the present moment. That is one of the reasons why we are uneasy as to what is going on, because that was an emphatic statement. Our only fear is that in the meantime the international financiers, the men who are Imperial bankers, and whose interests lie entirely in keeping Germany in as good a state of prosperity as she was before, are whispering in his ear. The manner in which we must collect these payments, I frankly admit, is a far more difficult subject. That is the really difficult question. Obviously, the British Empire ought to demand, as a first contribution, £500,000,000 for the mercantile shipping illegally sunk by Germany. That is a contribution on account. We have got to face the fact—I agree with the right hon. Gentleman—that the principal amount of this payment has got to be made in goods. That is obvious to anyone. But the pundits of finance warn us that this means flooding our country with manufactured goods. My answer is, that we will only take such goods in payment as we require, and though there are the difficulties of competition this country, from whatever point of view we look at it, benefits if we get any kind of goods for nothing. The country is enriched thereby. From coal, potash, timber, iron ores, iron bars, from all the unhealthy and dangerous trades, those of us who have discussed this matter believe we could in this country collect at least £150,000,000 to £200,000,000 a year as interest on the amount of the indemnity due to ourselves. We believe that that would be sufficient to pay sinking fund and interest. But you must have security in addition to this, and we submit that coal and potash provide that security. The right hon. Gentleman, the other night, laughed at the hon. and gallant Gentleman the Member for Bury St. Edmunds who had quoted some figures with regard to German coal and potash. But the right hon. Gentleman should remember that these were German estimates which were generally accepted in Germany, not as the wealth of the coal and potash mines working at the moment, but as the potential ultimate value of these minerals in Germany. Even if the German estimate were not accepted by our Chancellor of the Exchequer let him halve it, and that would be quite sufficient to provide ample security for the ultimate payment of the indemnity from Germany. The house of Rothschild, I believe I am right in saying, arranged for the 4 per cent. loan to Spain, and as security received the quicksilver mines not far from Madrid. We are in precisely that same position. We ask for security, namely, coal and potash, that ultimately—

It being Eleven of the Clock, the Motion for the Adjournment of the House lapsed without Question put.