HC Deb 17 June 1920 vol 130 cc1602-21

Resolution reported, That it is expedient to authorise the payment, out of moneys to be provided by Parliament, of the share of the United Kingdom of the compensation payable in pursuance of any Act of the present Session to confirm an agreement made on the 2nd day of July, 1919, between His Majesty's Government in London, His Majesty's Government of the Commonwealth of Australia, and His Majesty's Government of the Dominion of New Zealand, in relation to the Island of Nauru and of other expenses in connection therewith.

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

Lieut. - Commander KENWORTHY

I asked a question of the hon. and gallant Gentleman in charge of the Resolution yesterday, and I have no doubt he can answer it. I particularly wished to know what was the price paid to the purchasers of the German and other enemy shares in this company when it was sold by order of the Public Trustee after the outbreak of War, and I want to know what we are paying now for those shares, because I would urge that if those shares were sold to a very small amount during the uncertain period of the War, when the issue was in doubt, and the value, I think, could not have been very high, and we are now asked to pay a very high price, it is not fair to the British taxpayer, and I think there ought to be some special arrangement made. The sum we are asked to provide is not much as things go to-day. We have got used to thinking of tens of millions of pounds, but I submit the financial position is so serious that it is time, at any rate, we began to think of millions of pounds. The amount to be paid is £3,500,000, of which this country pays 42 per cent., Australia 42 per cent., and New Zealand 16 per cent. There is not this money in the Treasury. Last week Treasury Bills were issued to the extent of £16,000,000 odd. We got in Treasury bonds to meet those in that week of £6,000,000. That meant we piled up a Floating Debt to the amount of some £10,000,000. If we pass this Resolution, and if we afterwards pass the Third Reading of this Bill, we add another £3,500,000 to our Floating Debt, and that is going to put up the price of every article of common use of the ordinary man and woman. The hon. and gallant Gentleman may say the Commonwealth of Australia and the Dominion of New Zealand are going to pay their share. They happen to be in debt to us, as was pointed out by the hon. Member for Wrekin (Mr. Palmer) in the Debate yesterday. We are going to affect values through an increase of the Floating Debt to that extent. Under these circumstances, I do not think this House should pass this Resolution without the most careful examination. I am going to endeavour to point out to the House that we are making a thoroughly bad bargain. This company before the War was, I understand, prosperous. It was doing a flourishing trade in this chemical manure. It then had a free market. I think I am right in saying that Australia could not take anything like the annual production of this island. When during the War, this island was taken, there were great rejoicings in Australia—this was before the days of the League of Nations—for this island contained sufficient phosphates so supply the Australian farmers for 200 years. In future, therefore, the market is going to be restricted. As the Bill says, the only countries to which phosphates may in the first place be sent are Great Britain and Australia. It is quite true that after the wants of these countries are satisfied that the phosphates can be exported, but we are going to take these phosphates and put them on the market for British agriculturists, or those of Australia, at practically cost price, less the very small cost of administering the island, the population of which is about 1,500. Therefore, these phosphates are not going to fetch the market price. Therefore, the company which we are now taking over and going to work as a national concern is not going to pay us anything like the dividend paid to the original shareholders. That is obvious.

The hon. Gentleman in his reply will probably point out—as I would if I were in his place—that what we lose in the swings we will make up in the roundabouts, so that the British farmer will gain by getting cheap phosphates. That is a complete fallacy. Phosphates from this Pleasant Island are three times the distance of our natural sources of supply, Florida and French North Africa. The factor of the situation is that we shall have to carry a heavy bulky thing like this rock—for we have to convert it into super-phosphates when we get it here—which means distance and freight. I am going to make this statement on chance—not having been able to verify it, as the Bill was only printed three days ago—that during the War practically no phosphates were brought to this country from this island, when they were badly needed, for the simple reason that we could get them from Florida and North Africa in a third of the time and at a third of the freight.

I believe that, in spite of this artificial price, we shall get our higher phosphates from Florida and North Africa and not from this island. From the point of view of business we are paying a highly inflated price for this product. Not only this, but the company was run on business lines, and who is going to run it now? It will be run by an Australian Commission, and who will they be? These representatives will be given some sort of a post which probably their political services have earned and they will run this company and it will not be run on business lines. It is not going to pay. I submit to the House that this is an extremely bad bargain. I may be wrong, but I am giving my view according to facts which I have been able to obtain from a gentleman who has been 25 years in this very trade of artificial manures, and I am giving my own view from such facts as I have been able to gather from him. I shall be very glad to hear the reply of the hon. and gallant Gentleman. To allow this proposal to go through as it is presented would not be acting up to our duty, and unless the explanation is more satisfactory than it was before, I shall be compelled to vote against it.


I want to enter my protest against this financial resolution on what are not exactly business grounds, but moral grounds. We have spent the whole sitting to-day discussing the virtues of and the possibilities of the League of Nations. If we pass this Resolution and give the Government financial power to make this bargain, then we fly in the face of the League of Nations, and put ourselves in an equivocal position which we shall find ourselves very difficult to justify. The Leader of the House made the amazing statement that if the League of Nations did not approve of this bargain they could negative it. I could imagine nothing more harmful to this country and the practical ideals of the League of Nations than that one of their very first judgments should be to reverse a decision of the British Empire. [Interruption.]


Is it in order for hon. Members to give imitations of animals?


If the House has any sincerity in this matter, and if the Government really mean the things said by a distinguished and much respected Member of that body, we cannot without very serious consideration pass this resolution. I do not think it is necessary to spend the money of the taxpayers in this way at a moment of great financial stringency. I am not a believer in State management. I think we should leave this enterprise to the company which has carried it on with great success before and since the war. We are in a position to-day in which every penny we can save we ought to save. It may be we will make money out of this, but it is a speculation, and, although there are gentlemen in this House who do not know the difference between an investment and a speculation, I do. I protest against the House passing a resolution putting on the British taxpayer a new charge in circumstances which have not been thoroughly examined. We know nothing of this agreement. We have the statement of the hon. Gentleman, in the admirable and lucid speech which he gave us last night, that this is a good bargain. I have not sufficient confidence in the business ability of the Government to believe that they know a good bargain when they see it. It is our duty to examine this matter very closely. On two grounds I object to this Resolution. On two grounds I object. First that if there is any meaning in the League of Nations—and the speech of the noble lord, the member for Hitchin (Lord R. Cecil) last night has not been adequately answered—we are cutting athwart the League. I object secondly on the ground that we know nothing of this bargain and we are not entitled at this moment when the British taxpayer is borne down by expenditure to put a new halter round his neck and a new burden on his back. I shall vote against this in the division lobby.


If my hon. and gallant Friend the member for Central Hull (Lieut.-Commander Kenworthy) had not risen so rapidly, I had intended at once to answer the question which he put to me last night as to the price paid to the German shareholders for these shares. I informed the Committee yesterday that the shares were sold by the Public Trustee in the year 1917 and that they were bought by British people. In actual number the shares consisted of 187,179 £1 ordinary fully paid shares; 186,006 £1 ordinary shares 10s. paid up; 42,610 £1 seven per cent. First Preference shares and 19,535 £1 six per cent. Second Preference shares In 1917 these shares fetched the sum of £574,818, and as I informed the Committee yesterday at that time the company was paying somewhere about 7 per cent., although before the War, when shipments, naturally, were larger, the Company had been paying anything between 25 and 50 per cent. My hon. and gallant Friend the member for Central Hull (Lieut.-Commander Kenworthy) has, apparently, shifted his ground of attack on this measure. All the attack brought against it yesterday was on the ground that we were acting selfishly and trying to make something owing to the Mandate of this island having been given to us. Now, apparently, the ground of attack is that we have made a bad bargain. I can add little to what I said yesterday, when I dealt very fully with this point. It is agreed, I think, by everyone who has studied this question, that the price we are paying, while not unfair to the company, is undoubtedly a good bargain for the Government. It has been said that people do not know anything about the agreement. The agreement between the three Governments concerned is attached to the Schedule of the Bill, and that between the Governments and the Company is in the Library of this House. It is, therefore, open to hon. Members to study the agreements in every detail.

My hon. and gallant Friend said that before the War this Pacific Phosphate Company had a free market, and that, because of this agreement, it is likely to lose money, because it has been arranged that Australia, New Zealand and the United Kingdom—which is putting up the money—are to have this phosphate at the cost of production, plus administration expenses, the necessary cost of reduction of capital, and interest due on capital. He puts forward, as a reason for that, that Australia cannot take a sufficient quantity of the phosphate. If Australia cannot take the full 42 per cent. to which she is entitled, there is all the more to be sold in the world market at a commercial price, which, undoubtedly, will be higher than the price at which Australia, New Zealand and the United Kingdom will receive their proportionate shares. It is also said that it is no use because of the distance of Nauru, and that you can get these phosphates from Florida and the North African Coast. In the first place, however, this is a very different grade of phosphate, and, secondly, Germany in the past got a very large amount of her phosphate—in 1913 she used 3,500,000 tons—from Nauru. As my hon. and gallant Friend knows, the distance from Nauru to Stettin is further than to the United Kingdom. If Germany could do that before the War, at a profit to herself, surely we should be able to do it after the War. The hon. Member for the Wrekin (Mr. Palmer) said that the Lord Privy Seal stated to the House yesterday that this agreement would be negatived by the League of Nations. I wish to make it clear that my right hon. Friend never said anything of the sort. He interrupted the right hon. Gentleman the Member for Peebles (Sir D. Maclean), who said: But the whole point of this purchase being concluded is that it follows from a mandate properly given in the League of Nations. And then my right hon. Friend the Lord Privy Seal said: No. I think this is so vital, that I would like to make it clear to my right hon. Friend. The two questions are quite distinct. One is the administration of territory, which the League of Nations has a perfect right to see is properly done. The other is the purchase of a trading company. I do not think that is a subject which would properly come under the League of Nations at all."—[OFFICIAL REPORT, 16th June, 1920, Col. 1331, Vol. 130.]


Administration of the territory is included in the agreement.


Will the hon. and gallant Gentleman read what the Lord Privy Seal said in column 1326?

Colonel WILSON

Column 1331 comes after column 1326. This is the statement of the Lord Privy Seal. I do not think anything can be more clear than that. If my right hon. Friend misunderstood in his previous statement this makes it clear. There are two definite and distinct undertakings. One is the administration of the island, which properly would come under Article 22 of the League of Nations and on which probably a report would be made annually to the League of Nations. But the purchase of a private company by the three Governments is obviously a commercial undertaking and I do not see the difference between the purchase of this trading company by the three Governments and the purchase by an individual. It is a purely commercial business and my right hon. Friend said he did not see that it could come under the League of Nations at all. I think the House agreed yesterday that, whatever the opinion be on the question of the propriety of this agreement as regards the League of Nations, it was unanimously of opinion that it was really a sound investment for the British Empire.


Whether the bargain be a good or a bad one does not seem to be to affect the rightness of the question under Clause 22 of the League of Nations, because there we are distinctly told that in the administration of the Governments of any mandatory Power we must secure equal opportunities for the trade and commerce of other members of the League. Can the hon. and gallant Gentleman say that in the administration of the island we are going to afford the other members of the League equal opportunities of trade and commerce in these phosphates? Because, under Clause in of the Bill, it was distinctly stipulated that these phosphates should be sent in certain agreed proportions to the United Kingdom, to Australia, and to New Zealand, and that if any one of those three countries wished to veto the sale of the phosphate elsewhere they had power to do so. Therefore, the agreement that we passed yesterday provides that if Australia, New Zealand, or ourselves care to say they will take all the phosphates which are produced in any one year, no other country, whether a member of the League of Nations or not, can have any share whatever in it. That is distinctly a contravention of the League of Nations to which the House has been for the greater part of the evening doing lip service, with one notorious exception, and it is somewhat of a travesty that within the next half-hour the same House should be asked to sanction an agreement which is distinctly a violation of Clause 22 of that agreement. The hon. and gallant Gentleman suggested that the Lord Privy Seal was incorrect when he said this purchase would not come under the League of Nations. We may accept that the purchase as between the Pacific Company and the Governments could not be interfered with by the League of Nations, but that does not alter the question of the administration of the island and of the sale of the phosphates afterwards. You cannot surely differentiate and say that as administrators, as a mandatory Power, we can prevent other countries getting these phosphates, and at the same time act under the League of Nations. If a private company made that distinction, it is a question whether we morally, as a mandatory Power, could support it in such a stipulation, which is a distinct violation of Article 22. It is impossible to carry out Article 10 of the Bill that we passed yesterday, which provides that none of this phosphate shall be sold elsewhere, if the three nations say they will take it, and square that with Article 22. As to whether it is a good bargain or a bad bargain, we have been told that the amount paid for the shares was £574,000. We are asked to sanction the payment under this Resolution of £3,500,000 for shares that are only worth a little over £500,000.

Colonel WILSON

I was dealing then with the German holdings which were sold by the Public Trustee.


What was the total price paid for the whole holding, because that is the material point on which we are asked to say whether this is a good bargain or a bad bargain?

Colonel WILSON

Of the total price of £3,500,000 Australia will pay 42 per cent the United Kingdom 42 per cent., and New Zealand 16 per cent. Our part is £1,500,000.


On the showing of the hon. and gallant Member, we are asked to pay £3,500,000 for £1,200,000 of share capital, on part of which only 10s. per share has been paid. On his own showing, that is not such an excellent bargain. But the point as to whether it is a good bargain or a bad bargain is not really germane to the issue as to whether as the mandatory Power we are seeking to reserve for ourselves and our Colonies privilege which we are not giving to others. [HON. MEMBERS: "Why not?"] Because in the Debate which preceded this we practically unanimously pledged ourselves to support the principles underlying the Covenant of the League of Nations which, in Article 22, provides that the mandatory power, as we are in this case, shall not take any privileges to itself, but that any trading rights in the territory subject to the mandate shall be shared equally in regard to trade and commerce by other members of the League. I fail to see how you can possibly square the agreement which we are asked to sanction now with the lip service that we pay to the principles of the League of Nations.

Major-General Sir N. MOORE

I do not want to argue whether this agreement is or is not a contravention of the Covenant of the League of Nations. Is it a good bargain? We get 420 million tons of superphosphate for £3,500,000, which works out at 2d. a ton. I know something about superphosphates, and what it means to Australia and to agriculture generally. The State-owned railways of Australia carry superphosphates at a farthing a ton, although their working costs are 1½d. a ton. They do that because they know that for every ton of superphosphates they carry they get five or six tons of wheat. Not only the British Empire, but the whole world, is starving for wheat. Under the circumstances, this agreement is good business. I am glad the Government have shown that they have some desire to improve the finance of this country, and that they realise that, in acquiring these eight acres of rock which we have heard such a lot about, they are really making a good bargain. I congratulate them.

Captain BENN




Captain BENN

If hon. Members are impatient, they had better go elsewhere. I hope the Government is gratified at the support of their candid friend (Sir N. Moore). We have got the real truth now. The Lord President of the Council this afternoon told us of the great advantage of having what is called a red-hot conviction. I do not think anyone will accuse the Government of having a red-hot conviction in this matter. It is what the hon. Gentleman whose knowledge of Australia is unequalled, called good business. The Lord President of the Council told us that we must not put too much work on the League of Nations. Here is a little bit of work that might be done by ourselves, but we are not prepared to do it, because this agreement is good business. Anyhow, it does give an insight—that is the value of the whole of the Debate, and that is the reason that we are opposing the Resolution, and shall divide against it—into the practical support which the Government are prepared to give to the ideal to which all day they have been paying only some lip service. Incidentally, it is a commentary—I hope that the Members of the Labour party will take note of the fact—upon the subject of nationa- lisation. We are told that whenever an industry in nationalised and run by the State it is always a failure. That is supposed to be a great issue which divides parties. This is a small example of what the Government will do in the way of running industries by means of a National commission if it suits their purpose and they think it is good business. The hon. and gallant Gentleman (Colonel Wilson) seemed to think that there was something contradictory in the argument that it was a bad bargain and also a wrong bargain. I venture to think that it is both. It is arguable that it is a bad bargain, and it is certainly morally wrong to make it. I go further, and say that all bargains which are morally wrong are bad bargains. Let us look at the finance of it. The Clouse is asked to vote its share of—3,500,000 to take up shares in a Government speculation. The question is whether the shares are worth the money. The total sum that is being paid is £3,500,000, and the total share capital is £1,200,000, of which we are told 375,000 shares are only paid up to the extent of 10s., and 225,000 are not called up at all. Really, therefore we are paying £3,500,000 for a capital approaching £700,000 in value. It is arguable that it may not be good business, especially when you consider that though in a free market the company may have been making high dividends, the conditions of this agreement are that they shall not have a free market. Indeed, the argument put forward is that this is a way of getting cheap phosphates for the farmer.


For the world.

Captain W. BENN

If the phosphates are cheap.


Cheap wheat.

Captain BENN

Then what becomes of the high dividends for the company. You cannot have it both ways. You cannot pretend that it is going to be cheap phosphates and high dividends. When we hear so much about the great boon being conferred upon the farmers and the great benefits that are going to come in the direction of cheap wheat on account of this agreement, we are entitled to ask whether it is a wise thing to take shares in a company which has to supply its products at a compulsorily cheap rate. What is going to happen to the dividends? Are they going to appear with the dividends of the Suez Canal shares, or what form will they take? Probably the Government have considered that question. We should like to know what provision they have made for showing the country from time to time the result of this new speculation. There are so many of them now; we have shares in dyes and all sorts of things. It would be interesting for the public and for the House of Commons, which largely consist of business men—


And lawyers.

Captain BENN

It would be interesting to know what has been the result of the speculation into which the Government has invited us to enter. This resolution covers every branch of the working of the agreement. We are paying compensation to the old employés. We are paying the expenses involved in the transfer, and of course under the agreement the whole administration of the island will be provided for. I do not know whether the assets of the company are going to be solely the produce of the sales or are going to result partly from customs dues.

What are the expenses going to be? In the very attractive prospectus which is given to us by this nationalising Government we are told that the education of the natives is to be provided for, and a police force, courts and jurisdiction are to be set up. What is it all going to cost? It is quite proper when we are asked to take shares in a company to bring those subjects under review, for to attempt to divide the business of the island from its administration is to carry refinement too far. It is one business, one island, under one control, and you cannot say that it is a company exploiting the phosphates and that somebody else is running the island. Are we only pursuing a policy of vulgar grab? Is it a wise policy even from the point of view of wheat production? Where the phosphates before used to go to Germany, or they may have gone to Russia, now the policy of the Government, not only in this respect, but its general policy is founded on the totally mistaken idea of grabbing everything for ourselves and forcing things to be grown here under the impression that somehow by doing so we are increasing the food supply of the world. I am old fashioned enough to imagine that the best way to get wheat is to grow it in the place that is best able to grow it without any artificial stimulus I was in the House at the time when it held that view. My right hon. Friend sat in the House with me, and he used to vote—

The MINISTER of HEALTH (Dr. Addison)

I never sat in a House of Commons which voted that artificial manure was not good for growing corn.

Captain BENN

The right hon. Gentleman sat in a House of Commons which believed that the best way to get full supplies of wheat was to let it grow where it was best able to grow, of course with the assistance that was necessary from manures and so on. But what I object to is forcing farmers to grow wheat, I do not mean with phosphates, but with special subsidies and assistance, whereas what we should do is to free all sources of wheat supply in order to have the advantage of the world's supply of wheat. We are going to take away those phosphates from Germany. That is the whole point. If hon. Members read Professor Starling's report on Germany, they will find that artificial manures is one of the first things they require to get back into a state of economic health. I am not interested in the German point of view very much, but I am interested from the world point of view. So long as you are pursuing this policy of trying to destroy Germany economically—this is a severe blow—you are aiming a blow at the economic health of the whole world, including ourselves most of all. Will hon. Gentlemen read the report as to the effect on the health of the people and the children in Germany of insufficient feeding due to insufficient wheat, and also the report of Professor Starling which months ago pointed out that one of their chief needs was artificial manure?

We are sending delegates in a few weeks' time to a financial conference of the League. It is one of the great achievements to which the Lord President of the Council referred. We are having a great conference, in which the United States and the enemy Powers will be represented, to deal with the economic reconstruction of Europe. It will meet with the knowledge that one of the chief sources of supply of fertilisers for Germany has been, in defiance of our pledge, diverted to another course altogether. Of course, the whole thing will be a farce. Our good faith will be impugned, and, one is bound to say, impugned with good reason. This arrangement should, of course, have been subjected to the criticism of, in fact it should have originated from, the Council of the League. [HON: MEMBERS: "Why?"] Because we have pledged our word that it should. [HON. MEMBERS "When?"] I will come to that, and deal with it fully in order to meet hon. Members' wishes. The hon. and gallant Gentleman spoke of it as "a solution which commended itself to us." Who are "us"? It should have commended itself to the League of Nations, because it is undertaken that we would be bound in respect of the mandated territory. If hon. Gentlemen will read Article 22, which is a solemn engagement, they will see that the mandates must be agreed to by the members of the League. What is the defence for making a private arrangement behind the back of the League and then coming to this House to confirm it? The reason is, of course, that, in the words of the hon. and gallant Gentleman, it is "good business." It is valuable, this little bit of earth, only because it happens to have this commodity so that all the farce about the trusteeship of the natives and the little backward peoples has gone by the board. No one would have thought of the island if it had not happened to possess this commodity. From the business standpoint we are entitled to ask, will this agreement be confirmed? This is a prospectus; this is the great flotation of the company at the nation's expense, and it is a business-like question to ask whether the title is good. Supposing we vote the money and then find they have not a title, what is going to happen? The Leader of the House said: "Our passing this Bill does not in any sense preclude the League of Nations, if they think the arrangement is an unfair one, from refusing to confirm it." My right hon. Friend the Member for Paisley (Mr. Asquith), than whom there is no more distinguished lawyer in the House, spoke of this as "an arrangement which has no legal or international validity of any sort or kind."

Is it wise to take these shares in a company which has no legal or international validity of any kind? I suggest what has happened many times before has happened this time and that it is not morally defensible and I intend to divide on it.


We have been listening the whole of the afternoon to a debate as to the desirability of the League of the Nations and placing our future in the hands of an International Council, and here we are an hour later endeavouring to vote money to the Government in order that they may perform a duty in the interests of the nation, because presumably phosphates are necessary for Australia, New Zealand, and ourselves. Assuming that the League of Nations becomes a real thing, we shall be the first transgressors against the laws laid down by that body, in endeavouring to corner for ourselves what the League of Nations say should be reserved for the whole world.


I would remind the hon. Member that he is repeating arguments which have been used before he came in, and there is a Standing Order against repetition.


Am I to understand that any argument put forward cannot be supported by another hon. Member?


If that were to be so, we might have six hundred Members each repeating the same arguments. The arguments which the hon. Member has been using have been used in his absence.


I bow to your ruling. If we support the Government in this Motion we may be grievously humiliated by the League of Nations if ever that body become a real thing.


When we have pointed out the difficulties which prevail in our own country regarding even those individuals who have been broken by the War, and who are in many cases in distressful circumstances, we have been repeatedly told that the Government has no money to establish or start schemes at home. Only to-day I accompanied a deputation of men from Plymouth who waited on the Admiralty with the object of enlisting the sympathy and support of the Admiralty in a scheme for providing work in that town, and they pointed out to the Sea Lord, who received them, that in Plymouth alone there were 4,000 men who had served in the Army or the Navy unable to find work and signing on every day at an employment exchange, and the purpose of their visit was to get the Admiralty to start schemes there of breaking up the ships which will be, or would have been, sold to private contractors to break up.


Plymouth is a long way from Nauru. The question of Plymouth and work there ought to be dealt with on a Navy Vote.


I wanted to point out that we are going to spend in Nauru money which would be much better spent here on our own people.


Let the hon. Member see where that argument leads. It will lead to the fact that we can discuss any matter on this money resolution—the Army, the Navy, the Civil service, or anything else. The hon. Member must confine himself to the discussion of the Resolution.

12.0 M.


I will confine myself to the question of the spending of national money. We have been told repeatedly by the Government that they had no money to spend in this country, but here they are going to spend £1,500,000 on this Nauru scheme. In their own scheme they tell us that the expenses of the administrators whom they are setting up need not all be met out of the profits of the company, and I believe the money can be better spent on the inhabitants of this country. In regard to the individuals who are going to benefit in this country, if this were a Socialistic scheme I might welcome it, but it is not a Socialistic scheme; it is nepotism. You pass a Bill in this House to give bounties to farmers, and then you bring in a Bill for this island of Nauru, and what is the object of it? It is that Australia, New Zealand, and this country shall have the phosphates at the cost of production, that they shall confine that material to this country and that if they sell it outside this country they shall charge the full market price. That means that if you sell it in this country at a little above cost of production and below the market price elsewhere in the world you are giving a further bounty to the farmers of this country; you are providing them with cheaper manures than they can get elsewhere—a very good thing for the farmers, preferential tariffs, if you like, bolstering up the agricultural industry at the expense of all other industries.


Providing you with food, too.


If you, on the one hand, withdraw the subsidy for the consumer and provide the producer with a subsidy on the other hand, I object to that. If you do away with subsidies at all, do away with them altogether. Another point was raised by an hon. Member regarding the objections raised about the League of Nations not being consulted, that the League of Nations had no authority. He maintained that the mandates had been given by the Allied Powers for the three countries—Australia, New Zealand, and this country—to take over this Island of Nauru, but the hon. Member forgets that, while the Leader of the House said that the League of Nations had nothing to do with the purchase of the island, and could not interfere, the scheme for the taking over of the island does not finish with the purchase of the island from the company. It sets up Administrators and gives them certain powers and judicial functions in the island. Surely that is a matter which comes within the scope of the League of Nations, and you are taking to yourselves powers which, on your own showing, on the statements made to-day, rightly belong to the League of Nations, which every right hon. Gentleman on the Treasury Bench is so anxious to uphold on public platforms, but not in actual practice. Here, if they wish to prove their faith in the League of Nations, is a practical case in which to put that faith to the test. We have no objection to socialising anything of this kind. I, personally, would support the Government were they to come forward with a sane scheme of socialisation, and not a hare-brained scheme of plunder for the men who have already done very well out of the War, but here you are giving an additional bounty to men who are being given a bounty already, and who have done very well out of the War, in order to provide food for the people who have to pay the bounty.

Major-General SEELY

I have voted against the Bill in its other stages, and, even at this late hour, I hope the House will give me a couple of minutes to explain the reason why I must oppose this last stage, especially in view of to-day's proceedings. It was explained to us today by the Lord President of the Council that the League of Nations could not interfere in various matters, notably Poland, because the League of Nations was constituted to deal in a normal way with normal things. In the case of Nauru we have a normal situation which the League of Nations could surely have dealt with? The whole of the arguments addressed by the right hon. Gentleman to the House fail to the ground in the case of this Bill, and at this eleventh hour I would plead with the House to reconsider its decision. It does seem to me that this is a very wrong thing to do. It gives a handle to the enemies of the League of Nations and all outside this country who believe that the League of Nations is a farce and that we are taking the first opportunity that falls to our hands to take this little island with its valuable deposits, instead of handing it over under Article 22, and the following articles of the League of Nations to do a just deal all round. I dissociate myself from what has been said, or suggested, by some hon. Members on this side of the House that this is not a fair and honourable deal. I am sure it is all that. It is, I am sure, perfectly straightforward and honourable. There is nothing wrong in the deal itself. But it does seem to me to be wholly wrong. I am sure the Leader of the House did not realise how strong is the feeling in this matter when he agreed to it. Let him take this opportunity to set us right with the world, and to show, whenever we get the chance, that we are people who believe in the League of Nations. America has not come in. The French are suspicious. The Germans are excluded for the moment. We believe in it. The heads of our League of Nations Union are the Prime Ministers, past and present. I appeal to the Leader of the House, at this eleventh hour, if he cannot withdraw the Bill, at any rate to give the House an assurance that he means to exert his influence to use the League of Nations so as to prevent any idea that we are exploiting the victory we have obtained. I ask him to assure the House that the Government do mean to use the League of Nations. If he can give that assurance I shall not vote against this; otherwise I shall, or any similar proposal that is at variance with the principles of the League of Nations.


Two-thirds of the supporters of the Government on the benches opposite do not believe in the League of Nations. There is, therefore, no use to say very much to them about the matter. What I do object to, however. is that industry should come into the economic system of this country by the back door. I am surprised that hon. Members opposite, who have all these years held up their hands in holy horror at the Government having anything to do with the management of industries here, in this matter, strongly supporting nationalisation—for that is what it is! I am specially surprised that the hon. Gentleman the Member for Hampstead (Mr. G. Balfour), who has been one of the strongest opponents of the nationalisation of industry, should be so actively enthusiastic in support of the Government with respect to this distant island. Is this fair to the private trader of this country, because there are private traders, I suppose, in phosphates in this country? The Government are here going to introduce phosphates and sell at the cost price, and so cut out the private trader! The hon. Gentleman has been fighting the Government for interfering with the electrical industry. I am sure if it was midday instead of midnight, and the hon. Gentleman's brain was clearer, he would be opposing this action on the part of the Government. I hope hon Gentlemen opposite, who have been threatening to support the Government, will now reconsider their intention, and ask whether this proposal is in accord with their views on nationalisation. They should not do mere lip service in this case as they did in regard to the League of Nations. I am surprised that my hon. and gallant Friend has such a great fondness for islands which are so distant I have been trying to get the Postmaster-General interested in islands much nearer home, and I could not get a penny out of him, and he refused me even a pillar-box in a particular island which is two miles from a place to post a letter.


I confess that I am at a loss to know why the last speaker should have concentrated his attention upon me. May I say that this is certainly not a matter of nationalisation, and if it were I should oppose it tooth and nail. The acquisition of this island is entirely in the interests of the working classes, in order that farmers may be supplied with fertilisers to enable them to produce a more abundant supply of food. Some hon. Members have argued that this proposal has something to do with the League of Nations, but surely they are aware that it is merely a commercial transaction and an outright purchase of everything in