Commons Sitting of 14 December 1922

Preamble
The House met at a Quarter before Three of the Clock, Mr. SPEAKER in the Chair.
INTERNAL DEBT.
Return ordered showing, approximately, the composition of the Internal Debt, other than Treasury Bills and Ways and Means Advances, as at the 1st day of October, 1922.—[Mr. Hannon.]
ORAL ANSWERS TO QUESTIONS.
  NAVAL AND MILITARY PENSIONS AND GRANTS.

    WARRANTS AND REGULATIONS.
    Mr. DARBISHIREasked the Minister of Pensions if he is aware that the request that copies of the regulations governing pensions should be issued to local secretaries of the British Legion has been refused; and will he arrange that they may be obtainable in future?
    The MINISTER of PENSIONS (Major Tryon): The warrants and regulations governing the grant of war pensions are published and are on sale. I am afraid I could not agree to such a large free distribution as the hon. Member suggests.
    Mr. DARBISHIREasked the Minister of Pensions if he is aware that, owing to ignorance of the regulations, many applications for pensions are refused for no other reason than that they have not been made within the prescribed time; and if he will allow such applicants another opportunity of making a claim?
    Major TRYON: Full publicity has been given to all time limits affecting claimants to pension from my Department. Advertisements and announcements have been published in the Press throughout the country and, in addition, large numbers of leaflets and posters have been widely distributed. In these circumstances I am
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    not prepared to adopt the suggestion in the last part of the question.

    OVER-PAYMENTS.
    Mr. TREVELYAN THOMSONasked the Minister of Pensions if, in those cases where over-payments have been made to pensioners through errors, clerical or otherwise, on the part of the Ministry of Pensions or some other Government Department, and for which the pensioner or his dependants are in no way responsible, he will see that such overpayments are not deducted from the amount of the pensions which have been duly awarded?
    Major TRYON: I have no power to pay pensions or allowances at rates in excess of those authorised by the Royal Warrants and recovery of over-payments is a principle of administration common to the whole public service. In every ease, however, the most careful consideration is given to the individual circumstances of the case, and where it is clear that the over-payment was one of which the pensioner could not have been aware, and hardship would be involved, recovery may be waived.
    Mr. LAWSON: Is the right hon. Gentleman aware that several legal decisions have been given against the recovery of excess payments to ex-soldiers, particularly in the case of officers, and will he take steps to have regulations, by Royal Warrant, if necessary, to bring himself into line with such legal decisions.
    Major TRYON: I am not prepared to maintain that money that has been wrongly paid from the taxpayer to people who are not entitled to it should not be recovered, but we have placed a limit on the distance that we can go back, a recent concession which is to the advantage of the pensioners.
    Mr. MACPHERSON: Is it not a fact that no recovery is made in any case beyond a year?
    Major TRYON: That is the concession which has been recently made, greatly to the advantage of the pensioners.
    Mr. LAWSON: Is the right hon. Gentleman aware that it sometimes takes these pensioners more than a year to repay the moneys that are asked from them?
    Major TRYON: We do not now go back beyond a year, except in cases where a man has obtained some money by misleading the Pensions Ministry, a case which I am glad to say is rare.

    DEPENDANTS' PENSIONS.
    Mr. WILLIAM GRAHAMasked the Minister of Pensions whether he is aware that large numbers of relatives and dependants of deceased sailors and soldiers have recently applied for pensions; that they have been refused on the ground that a considerable time ago they were awarded a gratuity in full and final settlement of their claim, as they were then regarded as not being incapable of self-support or in pecuniary need; that they now fulfil one or other of these conditions and would undoubtedly have depended for support on the sailor or soldier had he survived; and whether, in view of the fact that in many cases they are left entirely without resources, he will give instructions to have such cases reopened and awards made, even if the gratuity granted has to be taken into account?
    Major TRYON: In the circumstances mentioned the temporary pension which may be granted under Article 22 (1) is under the terms of that Article terminated in favour of a "final gratuity." The provisions of the Royal Warrant do not admit of a renewal of the former pension, and this is in accordance with the meaning and intention of the Warrant as approved by Parliament. I regret that I am unable to recommend any amendment of the Warrant in the sense suggested.

    DOCTORS (FEES).
    Colonel NEWMANasked the Minister of Pensions whether medical men when visiting patients of the Pensions Department, whether in hydropathic or other institutions, receive as their fee the sum of 10s. 6d. per head per visit; whether in many cases such visits are almost formal, and that a medical man could visit 10 such patients in half an hour and receive a fee of five guineas; and, if so, whether he is prepared to effect such economy in public expenditure in this direction?
    Major TRYON: When whole-time medical officers of the Ministry are not available, local practitioners are employed to examine and make detailed
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    reports on pensioners accommodated in institutions not under Ministry control. These medical men receive a fee of 21s. for one case and 31s. 6d. for two or more cases. No higher fee than 31s. 6d. is paid for a visit to any one institution irrespective of the number of pensioners examined and reported on.
    Colonel NEWMAN: Is there not a fee of 10s. 6d. for each visit?
    Major TRYON: No. It only means that no one visit is paid more than 31s. 6d., however many cases are inspected. We are in agreement with the hon. Member on the question of economy. Sometimes people are better examined by a local doctor than if we had to send one of our own officials a long distance.

    LANCASHIRE FUSILIERS (CAPTAIN J. H. ROGERS)
    Lieut.-Colonel Sir J. NORTON-GRIFFITHSasked the Minister of Pensions if he will make inquiries into the case of Captain John H. Rogers, D.C.M., late Lancashire Fusiliers, of 19, Swaby Road, Karlsfield, Wandsworth, who has been informed by the Ministry of Pensions that his retired disability pay of £41 6s., composed partly of service and partly of disability payments, will not be paid to him until June, 1923, and will then be subject to deductions leaving him £8 2s. 1d. in debt to the State?
    Major TRYON: I am looking into this case and will communicate with my hon. and gallant Friend.
    Lieut-Colonel POWNALL: Was it not usual in the last Parliament that these cases referring to specific individuals were dealt with as a general rule as unstarred questions; and, in view of the fact that we have nearly 200 questions on the Paper, would it not be better if we followed that rule in future?
    Mr. SPEAKER: It was not a rule in the last Parliament, but it was the custom of hon. Members to put unstarred questions where they could properly do so.
    Sir J. NORTON-GRIFFITHS: Out of 2,000 cases I have only put down two as starred questions.

    ROYAL FIELD ARTILLERY (DRIVER G. JENKINS).
    Sir J. NORTON-GRIFFITHSasked the Minister of Pensions whether he will

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    facilitate a decision being arrived at in the case of Driver George Jenkins, No. 8169, late Royal Field Artillery, of 3, Lyddon Grove, Wandsworth, who enlisted on 3rd September, 1914, and was discharged as medically unfit in October, 1917, and who is married and has six children; and whether he is aware that he received a pension until November, 1922, when the same was discontinued, and since which time nothing has been heard from the Ministry in respect of the discontinuance?
    Major TRYON: The Medical Board which examined this man in August, 1921, assessed disablement at less than 20 per cent, and, accordingly, a final weekly allowance, which has now expired, was awarded under Article 1 (3) of the Royal Warrant. This award has been declared final under the War Pensions Act, 1921, subject to the man's right of appeal to the independent Pensions Appeal Tribunal.

    CANCELLATION OF ALLOWANCES.
    Mr. RILEYasked the Minister of Pensions if he has received a resolution passed by the Dewsbury County Borough Council protesting against the callous treatment meted out by the Ministry of Pensions to ex-service men with regard co the cancellation of their Government and weekly allowances and the stopping of the pensions of war widows whoso husbands' deaths were not directly attributable to war service with the result that these men and women will be pauperised and dependent upon ratepayers who are unable to meet the demand; and if he will take the necessary steps immediately, either by legislation or otherwise, to secure the renewal of the Government maintenance, weekly allowances, and pensions?
    Major TRYON: I have seen the resolution referred to. I would remind the hon. Member that the fundamental principle of the Royal Pensions Warrants is to provide compensation for disablement or death due to war service. Exceptional provision of a temporary and compassionate nature was made, with the approval of Parliament, under which my Department was authorised to give medical treatment and pension, for the period of the War and one year after, in
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    certain cases in which the disablement or death was in no way due to service. The Government do not see their way to alter the Royal Warrant in the sense suggested.
    Mr. RILEY: Does the right hon. Gentleman give it to the House as his opinion that nothing further can be done in such cases?
    Major TRYON: My opinion is in accordance with the answer which I have given. The benefits must be confined to those cases where the disability or death is due to war service.
    Mr. A. V. ALEXANDERasked the Minister of Pensions whether his attention has been called to the case of J. Giles, of 3, Hollins Top, Stannington Road, Sheffield, who joined the Army in 1915 as an Al man, and whose category on discharge was as low as possible, as a result of shell-shock; whether he is aware that this man has been treated in various hospitals with little result: that he was awarded full pension in August, 1921, which continued until he was sent to a convalescent home and training centre at Blackpool in October; that he was obliged to return home in April last through the illness of his wife; that, on applications to pensions offices at Ecclesfield, Brocco Bank, and Castle Street, he was told repeatedly that nothing could be done; that one official suggested that the man should go to the workhouse; that subsequently he went before an appeal board and was turned down without medical examination; that he eventually obtained another appeal board and was then promised a further medical examination; and that, not having received any pension since last April, this man, his wife, and two children are faced with the workhouse or starvation; and what steps does he propose to take to give immediate assistance in this case and to prevent a recurrence of such circumstances?
    Major TRYON: This man has had repeated medical examinations at his own request, and I am satisfied that the case has received adequate consideration. As recently as the 11th instant the man was examined by a neurological board, who could find no remaining disablement due to service. Further compensation cannot therefore be granted, but the man has been informed that he has a right of appeal to the Pensions Appeal Tribunal.
    Mr. ALEXANDER: Is the right hon. Gentleman aware that this matter has been ventilated in the "Yorkshire Telegraph and Star," and that the matter was inquired into by a reporter who satisfied himself that the man was seriously ill?
    Major TRYON: Under the rules laid down for the Ministry of Pensions, we have to award disablement pensions according to the degree of disability. If a man is examined and nothing is found to be the matter with him, it is difficult to justify the taxpayers' money being spent on a disablement pension.

    OFFICERS (TOTAL DISABLEMENT).
    Mr. MARDY JONESasked the Minister of Pensions if he will state the number of young officers who were trained at Sandhurst, and in like military colleges, from 1912 onwards, and who undertook active service in the Great War of 1914–1918, and who have since been totally disabled and who are now entirely dependent upon their Service pensions, and who, owing to their War service, are unable to find openings in any other professional or commercial spheres; and will he, in such cases, place such regular officers on the same scales of pensions as temporary officers who were also totally disabled in the said War?
    Major TRYON: I regret that I am not in a position to give the information asked for in the first part of the question. With regard to the second part, regular officers receive disability retired pay at rates which are never less favourable than those granted to temporary officers, and generally are higher.

    APPROXIMATE NUMBER OF PENSIONERS.
    Mr. GILBERTasked the Minister of Pensions the present approximate number of pensioners, men, women and children, in charge of his Department; and whether there has been any reduction in numbers since last year?
    Major TRYON: The approximate number of beneficiaries under the Royal Pension Warrants administered by me on the 31st October last was 2,620,000 as compared with 3,135,000 twelve months previously.

    LANCASHIRE FUSILIERS (J. W. TOMKINSON).
    Mr. SHORTasked the Minister of Pensions whether he is aware that J. W.
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    Tomkinson, No. 5747, 10th Lancashire Fusiliers, residing at 2A, Union Street, Wednesbury, is in receipt of a pension of 12s. per week and 3s. per week for his wife; whether he is unable to work and his wife is an invalid; whether 15s. is the total income; and will he cause investigation with a view to seeing if the pension of Tomkinson or his wife can be increased?
    Major TRYON: The current award corresponds to the degree of disablement as last assessed by a medical board, and cannot be increased unless the pensioner's condition has become substantially worse, in which event the man should apply to the local area office.
    Mr. SHORT: Cannot the pension for the wife be increased?
    Major TRYON: The pension for the wife depends on the degree of disablement of the pensioner. That is known to everyone.

    PENSION CLAIMS REJECTED.
    Mr. SHORTasked the Minister of Pensions whether he is aware that William Smith, case 6/MS/7064, late of 71, Meeting Street, Wednesbury, recently died from pulmonary tuberculosis in the Moxley sanatorium, Wednesbury; whether the medical board of 10th June, 1921, stated that his disability was 100 per cent, and attributable to war service; whether his application for a pension was rejected by the Pensions Appeal Tribunal; and whether, having regard to his death from pulmonary tuberculosis, he will have this case fully investigated with a view to his widow being granted a pension?
    Major TRYON: As I informed the hon. Member on the 30th November, the decision of the Ministry rejecting the late soldier's claim to pension was confirmed on appeal by the Pensions Appeal Tribunal. Any application for pension made by the widow will receive full consideration.
    Captain WEDGWOOD BENNasked the Minister of Pensions whether his attention has been called to the case of an ex-service man who, with long service in the Territorial Force and being passed fit at the outbreak of War, has on developing tuberculosis since his discharge been refused pension, although there is no

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    family history of the disease; whether the medical board who refused his appeal was able from the evidence to suggest any more probable cause than exposure in the trenches for contracting the disease in this case; and whether there is no provision for helping, through the Pensions Ministry, this man who is now very seriously ill?
    Major TRYON: In the particular case which the hon. and gallant Member has in mind, the Ministry were unable to find that the disability was connected with service, and the claim to pension had accordingly to be rejected. This decision was subsequently confirmed by the independent Pensions Appeal Tribunal, and I regret, therefore, that I am precluded from granting assistance from Ministry funds.
    Captain BENN: Can the Ministry do nothing for this man who was in perfect health when the War started, and is now dying, and cannot last many months longer?
    Major TRYON: If my hon. and gallant Friend will communicate with me, I will see if anything can be done. But under the law our efforts are limited to cases in which the disablement is due to War.

    ASSESSMENT (J. MCKECHNIE).
    Mr. JOHNSTONasked the Minister of Pensions if he is aware that Private James McKechnie, 28, Anderson Terrace, Longcroft, Bonnybridge, has had his pension reduced from 34s. 6d. to 9s. 6d. per week; that this man has been certified by the Army medical authorities as suffering from chronic rheumatism; that he has a wife and family of three dependent upon him; and that it is impossible for him to follow his occupation of coal mining owing to his disability; and if he will enquire into the extreme hardship of this case?
    Major TRYON: A medical board which examined this man recently found only very slight disablement remaining, and the final compensation which has been granted corresponds to that assessment. There is, however, a right of appeal to the Pensions Appeal Tribunal, which may be exercised through the local office.

    ROYAL IRISH FUSILIERS (JAMES REILLY).
    Lieut.-Colonel Sir W. ALLENasked the Minister of Pensions whether he is
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    aware of the case of the widow of Sergeant James Reilly, No. 14636, late 23, Bridge Street, Lurgan, who enlisted in September, 1914, in the 9th Royal Irish Fusiliers, and served until 1919 in France and Belgium, was demobilised in March, 1919, and on demobilisation had to have the attendance of the local doctor for heart trouble as the result of War service, and was granted a pension for self and wife of 11s. 4d. per week, afterwards increased to 17s. 4d. as the result of a medical board examination; that his pension was granted up to the day of his death, 4th July, 1921, and after his death 28s. per week was granted to his widow: that his medical attendant certified death as due to cerebral hæmorrhage as the result of affection of his heart and arteries, and that there was no doubt that his death was caused by War service; will he say if his widow received a dependant's allowance until November, 1921; if this pension ceased, and why; and if the tribunal before which the case was heard examined the local doctor as to the cause of death before pronouncing his widow ineligible?
    Major TRYON: The cause of death m this case was cerebral hæmorrhage, which my medical advisers were unable to regard as being connected either with the man's pensionable disability or with his military service. When the widow appealed against the consequent refusal of pension all the available evidence, including the opinion of the man's private doctor, was placed before the tribunal, which confirmed, and thus made final, the decision of the Ministry. With regard to the latter part of the question, I may explain that it is the practice of my Department to authorise advances, in certain cases, pending consideration of a widow's claim to pension. These advances are bound to cease as soon as a decision is reached.
    Sir W. ALLEN: Was the local doctor examined before the tribunal?
    Major TRYON: I understand that the local doctor was not examined, but a long report from the local doctor was placed before the tribunal.
    Sir W. ALLEN: As this answer is so unsatisfactory, I give notice that I will raise the matter on the Adjournment.

  GOVERNMENT DEPARTMENTS.

    MINISTRY OE PENSIONS.
    Colonel Sir ARTHUR HOLBROOKasked the Minister of Pensions the names of the salaries paid to, and the duties performed by, all senior officers of the Navy and Army who are in receipt of Service pensions now employed in administrative positions at the Ministry of Pensions, together with the amount of pensions drawn by them in each case?

    Name.

    Rank.

    Salary.

    Service Pension.

    £

    £

    Col. Sir A. Lisle Webb, K.B.E., C.B., C.M.G.

    Director-General of Medical Services.

    1,800

    525

    Lieut.-Gen. Sir W. Furse, K.C.B., D.S.O.

    Regional Director

    1,000

    1,040

    Capt. H. G. Alston, C.B., R.N.

    Ditto

    900

    285

    Maj.-Gen. F. H. Kelly, C.B., C.M.G.

    Ditto

    900

    1,000

    Lieut.-Col. C. H. Townsend

    Ditto

    900

    180

    Maj.-Gen. Sir J. Adye, K.C.M.G.

    Deputy Regional Director

    800

    1,000

    Surg.-Gen. H. B. Beatty, R.N.

    Deputy Commissioner of Medical Services.

    850

    600

    Fleet Surgeon F. Bradsbaw

    Ditto

    875

    365

    Fleet Surgeon H. X. Browne

    Ditto

    900

    547

    Col. R. J. Copeland

    Ditto

    890

    800

    Fleet Surgeon G. E. McLeod

    Ditto

    1,050

    510

    Surg.-Captain E. H. Meaden

    Ditto

    875

    600

    Surg.-Commandant J. A. Moon

    Ditto

    875

    600

    Major G. B. Russell

    Ditto

    900

    396

    Surg.-Lient.-Col. C. R. Kilkelly

    Medical Superintendent, Leopardstown Park Hospital.

    800

    396

    Mr. R. RICHARDSONasked the Minister of Pensions whether he is aware that large numbers of women on the staff of his Department, especially those who by reason of their entry through the Medical Research Council Office, were. Grade IV, and have not since been re-graded, have to subsist between the hours of 7 a.m. and 7 p.m. on paste sandwiches, one cup of tea and a bun, travel long distances to their work, and receive only 5s. a week to cover all expenditure other than that of board and lodging, fares and meals out; and whether, in view of the impossibility of getting efficient service under such conditions, and of the fact that men employed in the Department on Grade IV work receive Grade III rates of pay, he will endeavour to secure that for the women also no lower rate of pay than that of Grade III shall exist for adult workers in the Pensions Issue Office?
    Major TRYON: There are 194 Grade IV women clerks employed in the Ministry
    Major TRYON: As the answer is a lengthy one, involving a number of figures, I am circulating it in the OFFICIAL REPORT.
    Following is the answer:
    As far as I am aware, the following is a complete list of ex-officers with service pensions occupying posts in the Ministry at a salary of £800 a year or more:
    in London, 119 being stationed at Chelsea, and 75 at Acton. These clerks are employed on the simplest routine work, and are paid at rates ranging from 38s. 10d. to 44s. 3d. a week. These rates are common to the Government service generally for adult women performing work of that kind. The clerks attend for eight hours daily. Hot luncheons are obtainable at cheap rates at the various Ministry canteens.
    Mr. PIELOUasked the Minister of Pensions the number of permanent established officers of the rank of principal clerk and above, and the number of these who served in the Army or Navy during the War and at present employed on the staff of the headquarters of the Ministry?
    Major TRYON: The number of permanent established officers of the rank of principal clerk and above at present employed at the headquarters of the Ministry is 59, of whom 9 served in the Army or

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    Navy during the War. I may add that of the 45 most highly-paid officials, 29 are ex-service men.
    Mr. GILBERTasked the Minister of Pensions what is the present approximate staff of his Department; and whether the number has been increased or reduced during recent months?
    Major TRYON: The total staff paid by the Ministry, including the staffs of local committees not yet absorbed under the Area Reorganisation Scheme, is now 25,769. In July of last year, the corresponding number was, approximately, 32,000, showing a reduction in staff of over 6,000. Further reductions are being made.

    STATIONERY OFFICE (PRINTING WORKS).
    Sir A. HOLBROOKasked (1) the Chancellor of the Exchequer if, in view of the criticisms of the Auditor-General on the new method adopted in placing work with the Stationery Office printing works without obtaining competitive tenders and the desirability of having the work done under the most economical conditions, His Majesty's Government will give instructions that no further orders are to be placed with the Government printing works without first obtaining competitive tenders from printers and the Government factories according to the former practice;
    (2) whether the new system referred to in the Auditor-General's Report on Trading Accounts, 1920–21, by which work is placed with the Stationery Office printing works without first obtaining competitive prices for work, has the approval of His Majesty's Government?
    Mr. BALDWIN: My hon. and gallant Friend is, I think, under a misapprehension. The Comptroller and Auditor-General merely called attention to the change without offering any criticisms. The new arrangement has been adopted after full consideration of all the circumstances as the best method of ensuring that the Harrow Printing Works are run at the most efficient level; and I am not prepared to revert to the previous arrangement pending the result of the inquiry into the whole matter which will be undertaken next year.
    Sir A. HOLBROOK: Is it not a fact that Harrow Printing Works are costing
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    the nation several thousand pounds a year loss?
    Mr. BALDWIN: I do not think that is so. It has shown a loss, but at present it is not showing a loss.

  EX-SERVICE MEN

    TRAINING CENTRE, SALTASH.
    Colonel BURNasked the Minister of Pensions, if he will reconsider the decision to close the training centre at Saltash, Cornwall, which was formed for the instruction of disabled service men, in view of the fact that it is the only training centre in the West of England and the trainees there have only had a few months' instruction?
    Major TRYON: I would refer my hon. and gallant Friend to the answer which I gave on Tuesday to the hon. Member for Bodmin (Mr. Foot). I would add that in no case will a course of training which has been commenced be terminated prematurely on account of the closing of this particular centre.
    Colonel BURN: What will happen to those men who are partially trained I Will they have no other refuge except parish relief?
    Major TRYON: I am afraid that my hon. and gallant Friend did not hear the last part of my answer, which was that in no case will a course of training which had been commenced be terminated prematurely on account of the closing of this particular centre.
    Colonel BURN: Where are these men to be sent to complete their training?
    Mr. FOOT: Will the right hon. Gentleman postpone the closing down of this centre until reassembly of Parliament, having regard to the large number of ex-service men in this country who are excluded from training and treatment because they failed to make application by 30th September, 1921; and, as in many cases these applications were not made through inadvertence, will he have regard to their position?
    Major TRYON: I will consider the point raised by the hon. Member with regard to the general question of these

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    men, but I cannot give any definite undertaking in regard to this particular institution.

    MENTAL CASES.
    Mr. LANSBURYasked the Minister of Pensions how many of the 700 mental cases his Department proposed to transfer to the pauper class under the Poor Law authorities were passed as fit for service when joining the forces, and how many of these served overseas; and whether it is his intention to put into operation the principle that a man passed fit for service and disabled during service should without question be classified as fit for pension or maintenance for himself and his dependants from national funds?
    Major TRYON: As I have already stated, appeals to the tribunal are pending in a large number of these cases, and those in respect of which no appeal has been lodged are being carefully reviewed in the Ministry. Until the appeals have been decided and the review completed, I shall not be in a position to give definitely the particulars asked for in the first part of the question. As regards the last part of the question, I would point out that it has always been a fundamental principle of the Royal Pensions Warrants administered by me that compensation is due to those officers or soldiers only who are disabled in and by their service.
    Mr. LANSBURY: In deciding these cases, will the right hon. Gentleman take into consideration the fact that a man who served overseas must of necessity have been passed as fit to serve overseas, and that if, when he came back, he is mentally deranged, that must have been caused by his war service?
    Major TRYON: Going overseas is strongly in favour of the claims of a man.
    Mr. LANSBURY: Is the right hon. Gentleman aware that in the case I put before him a week ago the man had served overseas and his father is now called upon to maintain him in a pauper lunatic asylum?
    Major TRYON: That is a case on which the hon. Member asked me a supplementary question a week ago. He suggested that this man had been enlisted as A 1, but I find that he was enlisted as C2.
    Mr. LANSBURY: Yes, but he served overseas. That was the point of my question. He was fit to serve overseas, therefore his father ought not to be called upon to pay for him as a pauper lunatic. It is a disgrace to the right hon. Gentleman's Department to allow it. You cannot wriggle out of that.

    FUNERAL EXPENSES (HAILSHAM).
    Mr. GWYNNEasked the Minister of Pensions whether his attention has been called to the case of an ex-service man who, whilst suffering from neurasthenia due to War service, committed suicide at Hailsham, and, although the local war pensions committee had arranged for his funeral, this was stopped by the authorities at regional headquarters, who declined to sanction the payment; and will he explain the reason for this action?
    Major TRYON: The circumstances of this case were exceptional, but the full facts have now become available, and I am glad to inform my hon. Friend that the Ministry will refund the funeral expenses under the usual conditions.

    EVICTION (HITCHIN).
    Mr. AMMONasked the Minister of Pensions whether he is aware that a pensioned ex-service man now in the employ of the Post Office has been compelled to live in a four-roomed house in Hitchin which has been condemned with a view to demolition, but for which he pays a rent to the Hitchin Urban District Council; whether the back room downstairs cannot be occupied as part of the wall has fallen down, leaving the room to be exposed to the weather; that one of the outside walls has bulged and left the ceiling of the same room and the floor of the bedroom above entirely unsupported along one side; that the bedroom can only be crossed with extreme caution as there is danger of collapse; that the rain comes through a hole in the roof of the same bedroom; and that this house is occupied by a man and his wife with a family of eight children, the wife being pregnant, and one daughter and two sons are adults; and whether, under these conditions, he will bring pressure to bear upon the local authorities to provide better accommodation?
    The MINISTER of LABOUR (Sir Montague Barlow): My right hon. Friend has no information on the matter to which

    3123
    the hon. Member refers, but he is making inquiries and will communicate further with the hon. Member.
    Mr. AMMON: Will the Minister of Labour or his Department bring pressure to bear on these people to provide accommodation?
    Sir M. BARLOW: I will communicate with my right hon. Friend.

    LAND SETTLEMENT.
    Lieut-Commander KENWORTHYasked the Prime Minister whether the Government proposes to carry out the late Government's pledges to ex-service men under Sections 1 and 2 of the Soldiers' and Sailors' Land Settlement Act of 1919, to enable them to take up small holdings?
    The UNDER-SECRETARY of STATE for the COLONIES (Mr. Ormsby-Gore): Action under Sections 1 and 2 of the Irish Land (Provision for Sailors and Soldiers) Act, 1919, has been taken by the Estates Commissioners in a limited number of cases, but the conditions prevalent in Ireland during recent years and at present render any wide application of these provisions impossible in the interests of the men themselves.

    CIVIL SERVICE (PAY).
    Sir H. NIELDasked the Prime Minister whether he is aware that in certain Departments, of which the Ministry of Health is one, it has been found necessary to make a monetary advance to ex-service, Lytton, candidates on account of their monthly salaries, so as to enable them to provide food and other necessaries for Christmas; whether he realises that the boy clerk rate of pay is inadequate for men who have a wife and children to provide for; and whether, in view of this state of affairs, he will set up afresh the Committee of Inquiry to consider the question of adequate pay?
    The CHANCELLOR of the EXCHEQUER (Mr. Baldwin): I am informed that in the Ministry of Health it is proposed as a matter of convenience to the staff to make small advances in respect of salary for December, normally payable at the end of the month, to members of the permanent staff with basic salaries not exceeding £300 a year. These
    3124
    advances are not confined to ex-servicemen or to recent entrants to the clerical class, and I see no justification for the inference drawn from them by my hon. and learned Friend. The answer to the latter part of the question is in the negative.
    Sir H. NIELD: Does the right hon. Gentleman appreciate that we are still paying £80 a year to men with families? Does he justify it?
    Mr. BALDWIN: That is a long subject to deal with by means of question and answer.

    AIR MINISTRY, SECTION R.D. 3.
    Mr. PIELOUasked the Secretary of State for Air (1) the number of ex-service men and the number of non-service men employed in Section R.D. 3 of the Air Ministry;
    (2) whether non-service men are employed in the most important positions in Section K.D. 3 of the Air Ministry; whether the ex-service men employed in subordinate positions can be given an opportunity to prove by test their greater qualifications for holding the more important posts at present held by non-service men; and whether an inquiry has been held into the staffing of the said section?
    The SECRETARY of STATE for AIR (Lieut.-Colonel Sir Samuel Hoare): As the answer to these questions is somewhat long, I will, with my hon. Friend's permission, circulate it in the OFFICIAL REPORT.
    Following is the answer:
    The numbers of ex-service men and non-service men in the Section referred to are eight and three respectively. The head of the Section, in receipt of £925 per annum, is an ex-service man. Three officials next in rank in receipt of £650, £540 and £500 per annum are non-service men; in addition, there are two posts at £450 per annum, two at £425 per annum, one at £400 per annum, one at £350 per annum, and one at £300 per annum. These are all held by ex-service men. It is the general policy to secure to ex-service men in such positions opportunities for qualifying for advancement, and the work of those in this Section has been under close observation for some time with this object in view. Qualification can,

    3125
    however, only be established by experience of the work done over a considerable period, and great care has been taken to ensure that only the best qualified men are being retained. An inquiry has been held into the staffing of the Section. My hon. Friend will, I think, agree that in the interests of efficiency it is not right to keep men doing responsible work under constant threat of displacement. I would add that I am hoping to meet shortly representatives of the Association of Ex-service Civil Servants and to take up with them any outstanding questions of this kind relating to my Department.

    CIVIL SERVICE.
    Lieut.-Colonel Sir RAYMOND GREENEasked the Chancellor of the Exchequer whether it is the intention of His Majesty's Civil Service Commissioners to hold any further examinations for ex-service men on the lines of that held last August?
    Mr. BALDWIN: It is not intended to hold a further limited competition for the general clerical class, but competitions on similar lines may be necessary for certain Departmental clerical classes.
    Sir H. NIELDasked the Chancellor of the Exchequer whether he is aware that the majority of ex-service, grade 3, temporary clerks who have passed the special clerical class competition, and also had three to five years' temporary clerical service in their Departments, were upon their permanent appointment compelled to start at the bottom of the salary scale, viz., £80 per annum plus bonus, and were then called upon to forfeit their temporary increments, and consequently are considerably worse off financially than the candidate who failed to qualify by examination; and whether, seeing that boy clerks receive the same salary and increments as these men, he will reconsider the position of the latter?
    Mr. BALDWIN: This question was fully considered by the Lytton Committee, who came to the conclusion, in which I concur, that it would not have been equitable to base starting salary on establishment either on the age of candidate or on the length of their temporary service. Boys are not at present being recruited for the clerical class, and, in
    3126
    any case, a boy would normally enter that class at about the age of 17 with starting pay of £60 plus bonus. This hypothetical comparison was fully considered by the Lytton Committee, and I see no reason to vary their recommendation on account of it.

    NOTICE TO QUIT (EASTVILLB, LINCOLNSHIRE).
    Mr. SAMUEL PATTINSONasked the Minister of Agriculture whether he is aware that several smallholders on the Eastville estate, Lincolnshire, have received notice to quit; whether he is aware that they are ex-service men; and whether he will use his influence to prevent these men being turned out before sufficient inquiries have been made into the conditions which have rendered it impossible for them to meet their liabilities?
    Major BARNSTON: I have been asked to reply. The Ministry is informed by the Lindsey County Council that nine notices to quit were served on smallholders at Eastville either on account of bad farming, or, in certain cases, because the Small Holdings Committee considered that, as the tenants showed no likelihood of making a success of their enterprise, it would be in the best interests of the men themselves that the should be required to give up their holdings. The holdings were in each case previously inspected by a Sub-Committee, and the tenants attended and were heard at a meeting of the full Committee. As the result of a further inspection by the Sub-Committee, three notices were withdrawn, and the Committee have offered to withdraw the notice in another case if the smallholder's father will give a guarantee. Two other tenants have become bankrupt, while in another case the father and brother of the late tenant are now in occupation. The action of the county council was taken only after the most careful consideration, and with the concurrence of the Ministry's District Commissioner, and my right hon. Friend is not, therefore, prepared to intervene in the matter.

  EDUCATION.

    PHYSICALLY DEFECTIVE CHILDREN.
    Mr. SHORTasked the President of the Board of Education the number of schools now provided for the education of

    3127
    physically-defective children; and what increase has taken place since 1914?
    The PRESIDENT of the BOARD of EDUCATION (Mr. Edward Wood): There are now 199 certified schools for physically-defective children, of which 108 have been certified for the first time since 1st April, 1914.

    ADMINISTRATION.
    Sir W. DAVISONasked the President of the Board of Education whether his attention has been called to a memorandum issued by the Incorporated Association of Headmasters of Secondary Schools, calling the attention of Members of Parliament to the urgent necessity on grounds of economy of an immediaate restriction of the costly bureaucratic system, local and central, which is extending its hold over the whole educational system of the country, and further pointing out that officers, both central and local, not content with discharging their proper function of supervising financial expenditure, are also endeavouring to control in detail the internal organisation of the educational institutions which they were intended to assist, whereby the individuality of schools is being destroyed, the powers of governing bodies crippled, local interest alienated, and the enthusiasm of teachers deadened; and whether he intends to take legislative action in the matter?
    Mr. WOOD: I have received the manifesto in question, which appears to be more remarkable for vigour of denunciation than for constructive suggestion. It is indisputable that the receipt of public money involves a measure of public control. How far that control should go is a fair matter for discussion, but I cannot say that for its proper exercise a knowledge of what may be called the internal administration of a school is unnecessary. It is impossible to define a reasonable degree of control by Statute, and I am not prepared to undertake legislation to reverse a principle that has found expression in every relevant Act of Parliament. I can, however, assure my hon. Friend that, consistently with this principle, I recognise that it is the duty of my Department and of local education authorities to have all possible regard to the individuality of schools,
    3128
    and the great value of the voluntary service given to them.
    Mr. BARKERasked the President f the Board of Education if he is aware of the strong feeling existing against the action of the Board in forcing authorities to charge fees in secondary schools, this being absolutely opposed to the spirit and the letter of Section 14 (4) of the Education Act, 1921; and will he withdraw this educational barrier?
    Mr. WOOD: I cannot admit that the charging of fees in secondary schools is contrary either to the letter or the spirit of Section 14 (4) of the Education Act, 1921; and I would remind the hon. Gentleman that, in spite of the difficult financial circumstances through which the country is passing, the number of free places in grant-aided secondary schools to-day is about double the number in 1914.
    Mr. BARKER: Is the right hon. Gentleman aware that the very poorest ratepayers have to pay rates and taxes for these secondary schools? Why should they be debarred through monetary causes?
    Mr. WOOD: I am well aware of that fact. I am also aware of the fact that the poorest ratepayer has the right to send his children to the considerable percentage of free places in these schools.

    TEACHEES' SALARIES.
    Mr. HARRISONasked the President of the Board of Education what would be the year's saving to the rates and taxes if teachers' salaries in London were reduced to the next term scale; and what would be the saving if the present scales were reduced by five per cent.?
    Mr. WOOD: On the number and composition of the total teaching staffs of public elementary schools at present employed in London, it is estimated that if Standard Scale III were substituted for the present Standard Scale IV the difference in cost would amount to, approximately, £600,000; and if for assistant teachers employed in aided and provided secondary schools in London the provincial salary scale were substituted for the London scale, the difference in cost would amount to, approximately, £71,000. The savings which would be effected by a 5 per cent. reduction in existing salary scales

    3129
    would, in the case of teachers in public elementary schools, amount to, approximately, £335,000; and in the case of assistant teachers in aided and provided secondary schools to, approximately, £35,000. I cannot give comparable figures for teachers in technical, etc., schools, as for several classes of them no scales of salary were recommended by the Burnham Committee.
    Mr. HARRISON: Owing to the financial magnitude of this question, I hope that the right hon. Gentleman can give us some assurance that he will keep in touch with the London County Council—[HON. MEMBERS: "Order!"]

    TECHNICAL SCHOOLS.
    Mr. BURGESSasked the President of the Board of Education the number of boys who attended the technical schools in England and Wales in 1914 and 1922, respectively; and the number of technical teachers employed in the schools during those years?
    Mr. WOOD: The nearest figures I can give are for the school year which ended on the 31st July, 1913, and on the 31st July, 1921. In the year which ended on the 31st July, 1913, the total number of boys and young men under 18 who attended during the day or evening at technical, art or continuation schools in England and Wales was 273,212. The corresponding figure for the year which ended on the 31st July, 1921, was 286,460. Not less than 40,000 persons are engaged in the teaching given in such schools, but the great majority of these are part-time teachers. On the 31st March, 1921, 3,384 teachers were in receipt of full-time salaries as technical school teachers. In 1912–13 the corresponding number was estimated at 2,000.

    PROVISION OF MEALS.
    Mr. R. RICHARDSONasked the President of the Board of Education what local authorities besides those of Hull, Portsmouth, and Sunderland exceeded between April and August of this year the limit of expenditure upon school feeding laid down by the Board for the whole of the financial year 1922–23?
    Mr. WOOD: The only period of the current financial year for which I have figures of the net expenditure of local education
    3130
    authorities upon provision of meals is the period, 1st April to 30th November. During that period the net expenditure of 47 local education authorities exceeded the sums specified for each of them in the Board's first allocation. The names of the authorities concerned are as follow:

    Barrow-in-Furness.

    Keighley.

    Birkenhead.

    Lancaster.

    Bradford.

    Macclesfield.

    Burnley.

    Stalybridge.

    Bury.

    Taunton.

    Chester.

    Workington.

    Derby.

    Barking Town.

    East Ham.

    Edmonton.

    Halifax.

    Enfield.

    Kingston-on-Hull.

    Erith.

    Leicester.

    Felling.

    Portsmouth.

    Hebburn.

    Preston.

    Kettering.

    Reading.

    Kadcliffe.

    Smethwick.

    Tottenham.

    Sunderland.

    Wood Green.

    West Ham.

    Willesden.

    West Hartlepool.

    Brecon.

    York.

    Monmouthshire.

    Ashton-under-Lyne.

    Cardiff.

    Chorley.

    Abertillery.

    Colne.

    Bath.

    Dukinfield.

    Leigh.

    Ilkeston.

    Mr. T. THOMSON: Is the right hon. Gentleman aware that that means that in 47 districts an extra burden is thrown on the ratepayers, and cannot he give some assistance to these necessitous areas?
    Mr. WOOD: It does not necessarily mean entirely that, because, as I have explained, in answer to a previous question, the Board have a small sum still available under the Votes, which we propose to allocate in accordance with the revised Estimates.
    Mr. RICHARDSONfurther asked the President under what statutory provision the Board is limiting the grant payable to local authorities in respect to the feeding of under-nourished school children; and if he has consulted the Law Officers of the Crown as to the legality of such limitations?
    Mr. WOOD: With regard to the first part of the question, I may refer the hon. Member to the answer I gave on the 4th December last to the hon. Gentleman the Member for East Bradford. The

    3131
    answer to the second part of the question is in the negative.

    SCHOOLS (ACCOMMODATION).
    Mr. T. THOMSONasked the President of the Board of Education the total number of elementary and secondary

    1. Accommodation in Public Elementary Schools, Special Schools, and Certified Efficient Schools in England and Wales.

    —

    1911.

    1914.

    1921.

    Public Elementary Schools

    …

    6,820,837

    7,017,408

    7,093,300

    Special Schools

    …

    24,407

    28,511

    38,344

    Certified Efficient Schools

    …

    8,165

    7,173

    5,164

    Total

    …

    6,853,409

    7,053,092

    7,136,808

    2. Number of pupils* in Grant-aided Secondary Schools in England and Wales.

    1911

    …

    …

    …

    …

    166,831

    1914

    …

    …

    …

    …

    198,884

    1921

    …

    …

    …

    …

    364,244

    *Note.—There is no figure of "accommodation" for secondary schools comparable with that for elementary schools.

    3. The population in England and Wales between the age of 5 and 16 according to the 1911 Census returns was 7,866,455. For the year 1914 the Registrar-General estimated the population between 5 and 15 at 7,377,574 [Cmd. 8206 of 1914, p. 4]. The detailed Census returns for 1921 are not yet complete.

    WELSH LANGUAGE.
    Mr. EDWARDSasked the President to the Board of Education whether he will consider the advisability of setting up a Committee to inquire into and report upon the question of teaching Welsh in elementary and secondary schools in Wales and Monmouthshire; and whether he is aware that the Shrewsbury Conference and the Central Welsh Board are in favour of such teaching?
    Mr. WOOD: I understand that some representations may be made to the Board of Education on the subject referred to, but they have not yet reached me. The hon. Member may rest assured that if occasion arises I will give the matter careful consideration.
    school places provided now and in the years 1914 and 1911 and the total number of children there were between 5 and 16 years of age in the same periods?
    Mr. WOOD: The latest figures possessed by the Board in each case are as follow:

    TEACHERS (WAITING LISTS).
    Mr. MARDY JONESasked the President of the Board of Education what is the total number of male and of female teachers who have completed their educational training as qualified teachers in England and Wales, and who are now on the waiting lists of the local education authorities for positions in the teaching profession, both elementary and secondary; and what steps does he propose to take to facilitate their employment in the profession for which they have been equipped by great personal effort and expense, and often at great sacrifice by their parents?
    Mr. WOOD: I may refer the hon. Member to the reply I gave on the 11th December last to the hon. Gentleman the Member for Caerphilly, which contains the latest information the Board possess on this matter. The whole question of the absorption of students from training colleges is engaging my very close attention, but I cannot at present make any statement upon it.
    Mr. JONES: May I ask the right hon. Gentleman as a Minister of a Government which has given so much prominence to the sowing of unemployment, whether, if he reduced the number of children in the classes and employed the unemployed teachers, it would not help to solve the unemployment problem and increase the efficiency of the teaching of the children?
    Mr. WOOD: I do not wish to be drawn into a debate with the hon. Gentleman on these wider issues. I can assure him that they will all be present to my mind when I consider the matter.
    Mr. R. RICHARDSON: Was it not the policy of the Board a short time ago to reduce the classes in our elementary schools to 40 pupils, and does not a unique opportunity now arise to carry out that policy?
    Mr. SPEAKER: That question would involve a repetition of the answer given.
    Mr. BUCKLE: If the Minister is to communicate with the teachers who are on the list, will he include all the teachers in Gateshead, where none of the schools have been working and 23,000 children have not been educated for the last two months?
    Mr. SPEAKER: That does not now arise.
    Mr. W. JENKINSasked the President, of the Board of Education whether he is aware that a large number of boys who have reached the age of 14 and are leaving school cannot find employment; that no provision is made for further education for these boys; that there is a large number of fully-trained teachers at present unemployed; and what proposals has he to make to meet the needs of the boys and the unemployed teachers?
    Mr. WOOD: As regards the first and second parts of the question, I would refer the hon. Gentleman to the reply given by my right hon. Friend the Minister of Labour on the 7th December last to the Noble Lord the Member for South Nottingham and the hon. Member for Colne Valley. As regards the third part, I would refer him to the answer I gave on the 11th December last to the hon. Member for Caerphilly.

    QUEEN MARY'S GRAMMAR SCHOOL, WALSALL.
    Mr. W. M. ADAMSONasked the President of the Board of Education whether he is aware of the action of the governors of the Queen Mary's Grammar School, Walsall, who have notified the parents of scholars that they must have their children vaccinated, otherwise they were not to send them to school until
    3134
    sent for; whether this action has his approval; and what steps he intends to take in the matter?
    Mr. WOOD: My attention had not previously been drawn to this case. I will make inquiries.

    LOCAL AUTHORITIES (GRANTS).
    Mr. BARKERasked the President of the Board of Education if he is aware that the Abertillery education committee on the 20th November passed a resolution against the power exercised by the Board to curtail grants payable to local education authorities below the limits prescribed by Section 118 of the Education Act, 1921; and will he, having regard to the heavy burdens due to industrial depression, give effect to this resolution by relieving local authorities of these added burdens?
    Mr. WOOD: The Resolution referred to by the hon. Gentleman has reference to Clause (4) of the Economy (Miscellaneous Provisions) Bill, introduced in the last Parliament. I am fully alive to the difficulties of local education authorities resulting from industrial depression.
    Mr. BARKER: Cannot the right hon. Gentleman do something to alleviate the position of these districts?
    Mr. R. RICHARDSON: Will the right hon. Gentleman tell the House under what part of the Statute of 1921 he has the power to deal with these grants other than to pay 50 per cent.?
    Mr. WOOD: I have already answered that in reply to a previous question. My action is limited by the amount of money that Parliament places at my disposal.
    Mr. RICHARDSON: Is the right hon. Gentleman aware of Section 118 of the Act, and is not the Board's action annulling that portion entirely?

    ESTIMATES COMMITTEE
    Lieut.-Colonel POWNALLasked the Prime Minister what decision has been arrived at with regard to the setting up of an Estimates Committee in the next Session; and whether, if one is to be set up, it can be given wider powers under its reference than has been the case hitherto?
    Mr. BALDWIN: The necessary Motion will be moved next Session setting up the Select Committee on Estimates. The terms of reference will be
    "to examine such of the Estimates presented to this House as may seem fit to the Committee and to report on what, if any, economies consistent with the policy implied in those Estimates may be effected therein."
    Lieut.-Colonel POWNALL: Will my right hon. Friend see that this Committee is set up immediately after the House meets?
    Mr. BALDWIN indicated assent.

    RIO DE JANEIRO CENTENARY EXHIBITION.
    Major Sir GEORGE HAMILTONasked the Prime Minister when he anticipates the British pavilion at the Rio de Janeiro Centenary Exhibition will be handed over to the Brazilian Government; and whether he will take steps to secure that the presentation will be made by a personage who will emphasise the importance of this national gift?
    The PRIME MINISTER {Mr. Bonar Law): No date has yet been announced by the Brazilian Government for the closing of the Brazilian Centenary Exhibition, and I am, therefore, not in a position to say when the British pavilion will be handed over to Brazil. As regards the last part of the question, I can assure my hon. Friend that every endeavour will be made to secure that the ceremony of presentation shall be worthy of the occasion.

    RUSSIA (BRITISH TRADE).
    Lieut.-Commander KENWORTHYasked the Prime Minister whether His Majesty's Government has received any representations from business men, merchants, or manufacturers to the effect that trade between this country and Russia would be made easier if the relations between the two Governments were regularised; whether any further steps have been taken to re-open negotiations with the Russian Government, or to clear up questions outstanding between the two Governments; what these steps have been; whether he intends to continue
    3136
    the Russian policy of the late Government; and whether a statement of policy can be made before the rising of the House?
    The PRIME MINISTER: I have no information of any such specific representations. Since the Conference at The Hague no steps have been taken to reopen negotiations with the Russian Government on the questions there dealt with. With regard to the last parts of the question, I would refer to the answer which I gave to the hon. and gallant Member for Newcastle-under-Lyme (Colonel Wedgwood) on 29th November, and to the answer which the President of the Board of Trade gave to the hon. and gallant Member oh the 27th November.
    Lieut.-Commander KENWO RTHY: Will the right hon. Gentleman specifically answer the fourth part of my question, as to whether it is proposed to continue the Russian policy of the late Government?
    The PRIME MINISTER: If the hon. and gallant Member will describe it, I will see.
    Lieut.-Commander KENWORTHY: In view of the answer of the Prime Minister, I give notice that I will raise this matter on the Consolidated Fund Bill to-night.

    STREET TRADING.
    Sir W. DAVISONasked the Prime Minister whether he is aware of the inconvenience and loss which is being occasioned to shopkeepers in various districts in London, who have to pay heavy rates, taxes, and rent, in respect of their premises, by reason of street traders, who pay none of these charges, vending similar goods from barrows in the street immediately in front of or adjacent to the premises of shopkeepers selling similar articles; whether the promised Bill for the regulation of street trading will be introduced early next Session; and whether he will see that the granting of licences to street traders is placed under the control of the borough or district councils throughout the country, who have knowledge of the trading conditions and requirements in their areas not possessed by the police?
    The SECRETARY of STATE for the HOME DEPARTMENT (Mr. Bridgeman): I have been asked to reply to this question. With regard to the introduction of the Bill, I would refer to the reply I gave on the 12th instant. With regard to the remainder of the question, I would refer the hon. Member to the passages on pages 8 and 9 of the Report of the Street Trading Committee and their recommendation on page 14.
    Sir W. DAVISON: Has the right hon. Gentleman considered the suggestion in my question, that the police are not familiar with the requirements of these individual neighbourhoods, as the men often come from long distances into the various boroughs of London?
    Lieut.-Colonel ARCHER-SHEE: Is the right hon. Gentleman aware that the police have had control of these men for 100 years, and that a very large number of shopkeepers welcome the presence of these men as bringing large crowds to their neighbourhood; and whether any legislation such as suggested will not be strenuously opposed in this House?
    Mr. BRIDGEMAN: Various considerations have been brought to my notice through the Report to which I have referred my hon. Friend the Member for South Kensington (Sir W. Davison). He may rest assured that I will consider, in the light of that Report, the points which have been made.
    Lieut.-Colonel ARCHER-SHEE: Does the right hon. Gentleman know that the Departmental Committee, set up by the Home Office, did not call evidence from the street traders themselves and that, therefore, this is a very unfair Report?
    Sir W. DAVISON: Is it not a fact that many of these so-called street traders are not bonâ fide street traders at all?
    Mr. SPEAKER: The matter cannot now be debated.

    WALES (HOME RULE BILL).
    Mr. MARDY JONESasked the Prime Minister whether he will introduce and pass into law in the next Session of Parliament a Welsh Home Rule Bill similar in scope and character to the Irish Free State Constitution Act just ratified by the present Parliament?
    The PRIME MINISTER: The answer is in the negative.
    Mr. JONES: Is the right hon. Gentleman prepared to consider the advisability of appointing the late Prime Minister to visit Ireland during the Recess and make investigation into the working of the Irish Constitution?

    MINISTRY OF DEFENCE.
    Rear-Admiral SUETERasked the Prime Minister whether he will appoint a representative committee to inquire into the question of setting up a Board or Ministry of Defence, with executive powers, for the more efficient and economical administration of the Navy, Army, and Air Services, as briefly outlined in the Ministry of Defence (Creation) Bill, introduced by several service Members last Session?
    The PRIME MINISTER: As this question is under consideration by the Committee of Imperial Defence, I do not think any useful purpose would be served by setting up a committee such as is referred to in my hon. and gallant Friend's question.
    Captain BENN: Are the Cabinet Committees which were set up by the late Government to consider the coordination of the Services, continuing their labours?
    The PRIME MINISTER: That has not been done. It is being considered, as I have already said, by the Committee on Imperial Defence.

    ARMISTICE DAY.
    Mr. ROGERSONasked the Prime Minister whether it is the intention of His Majesty's Government to inaugurate the 11th November as a national holiday?
    The PRIME MINISTER: No, Sir. We propose to continue the arrangements adopted in the past, which, I believe, are approved by the nation.
    Major PAGET: Will the Prime Minister consider making it a day of penance for all conscientious objectors?
    HON. MEMBERS: Do not be offensive.
    Mr. SPEAKER: The hon. Member (Major Paget) should not interrupt questions with such remarks.

    EASTERN GALICIA.
    Mr. NOEL BUXTONasked the Prime Minister whether any protest has been made by His Majesty's Government to the Polish Government regarding the compulsion exercised on the people of Eastern Galicia to force them to take part in the elections for the Warsaw Diet; and whether he will consult with the Allied and associated Governments regarding measures for defining the status of Eastern Galicia in accordance with the will of the population?
    The UNDER-SECRETARY of STATE for FOREIGN AFFAIRS (Mr. Ronald McNeill): The answer to the first part of the question is in the negative. The Allied Powers have the question of Eastern Galicia under consideration, but no definite decision has been taken with regard to the ultimate status of the territory.
    Lord ROBERT CECIL: Can the hon. Gentleman indicate when the Allied Powers are likely to arrive at a decision in this matter, which has been under consideration, not only for many months, but for years?
    Mr. McNEILL: I am afraid I am not able to inform my Noble Friend on that point.

    FRANCE AND GREAT BRITAIN (PROPOSED PACT).
    Lieut.-Colonel Sir F. HALLasked the Prime Minister whether he will arrange for the papers relating to the offer of a pact of alliance submitted to M. Briand at Cannes in January last by the late Prime Minister, on behalf of the British Government, and of the reply of the French Government, to be circulated; and if, for purposes of comparison, he will arrange for the terms of the original offer of a defensive pact made to France on behalf of Great Britain and the United States, when the Treaty of Versailles was being negotiated, to be circulated at the same time?
    The PRIME MINISTER: In present circumstances I do not think that it would be desirable to lay papers on this subject.
    Sir F. HALL: Can the right hon. Gentleman say, whether a little later on, when perhaps certain circumstances may be different, he will undertake to lay papers on the Table?
    Mr. SPEAKER: That is a hypothetical question.

  PEACE TREATIES.

    GERMAN REPARATION.
    Mr. SHAKESPEAREasked the Prime Minister the total amount already paid up to date by Germany, either in cash or in kind, towards reparations; and the total paid by Germany to the Allies in respect of the Armies of Occupation in cash and cost of supplies or building accommodation for troops?
    Mr. BALDWIN: With the hon. Member's permission, I will circulate a statement in reply to this question.
    Following in the statement promised:
    The following is an estimate of the payments made by Germany under the heads referred to by my hon. Friend as at 31st October, 1922, the latest date for which information is available. Firstly, in respect of the costs of British, French and Belgian Armies of Occupation, 2,670 million gold marks. Secondly, in respect of reparation, 5,063 million gold marks. The first item includes the value of paper marks requisitioned by the British, French and Belgian Armies of Occupation amounting as at the date in question to a sum of approximately 448 million gold marks, but does not include the cost of buildings, billets and other supplies furnished free of charge to the Armies of Occupation under the Versailles Agreement of 28th June, 1919. These supplies are furnished directly by the German Government and I am not in a position to give any authoritative estimate of their value.
    The second item includes estimates of the value of various categories of deliveries in kind and of State property ceded by the German Government which have not yet been finally settled by the Reparation Commission, and to this extent must be regarded as provisional. The costs of the American Army of Occupation are not included in the foregoing statement, as the method for the recovery of and accounting for these costs has not yet been settled.

    FRANCE AND GERMANY.
    Mr. TREVELYANasked the Prime Minister if he will undertake not to commit this country to diplomatic support of any military action against Germany by

    3141
    France before this House has had an opportunity of registering its opinion as to the economic and political consequences involved in British diplomatic support of such policy?
    The PRIME MINISTER: I cannot add anything to what I have already said on this subject.

    RUSSIAN SAGHALIEN (JAPANESE TROOPS).
    Mr. TREVELYANasked the Prime Minister whether the Government will approach the other Powers represented at the Washington Limitation of Armaments Conference with a view to joining in friendly representations to the Imperial Government of Japan to withdraw its troops from Russian Saghalien, in accordance with the declaration made by the Japanese Delegates at that Conference?
    The PRIME MINISTER: His Majesty's Government do not consider that they are called upon to initiate any action in this matter.

    LEAGUE OF NATIONS (REGISTRATION OF CONVENTIONS).
    Mr. PONSONBYasked the Prime Minister whether the Franco-Belgian Military Convention and the Franco-Polish Military Convention have both been registered with the Secretariat of the League of Nations; whether he is aware that it is stipulated, under Article 18 of the Covenant, that all agreements between signatory parties to the Treaty of Versailles shall be published; whether any modifications to this provision which would invalidate it have been assented to by the Council of the League of Nations with the approval of His Majesty's Government; and whether the Military Conventions in question have been published and are accessible to Members of this House?
    Mr. McNEILL: Notes exchanged between tho French and Belgian Governments in September, 1920, approving the Franco-Belgian Military Convention were registered with the League and published in the League of Nations Treaty, Series No. 56, but the text of the Convention itself has not, so far as I am aware, been registered with the League. The Convention between France and Poland, to which the hon. Member is
    3142
    presumably referring, is not, properly speaking, a military Convention, but a political agreement with a military clause, and in this connection I would refer to the answer on the subject which I gave on the 11th instant to the hon. Member for Dundee. I am not aware whether the agreement has been registered with the League or not. The answer to the third part of the question is in the negative. The exact interpretation of Article 18 of the Covenant is still in dispute. A Commission of the League of Nations reported on the subject to the Assembly in September last and the latter decided to defer consideration of possible amendments to Article 18 till a later meeting.
    Mr. SCRYMGEOUR: If there is a military clause in the agreement, might it not as well be called a military agreement as a political agreement with a military clause?
    Mr. McNEILL: That is a question of interpretation.
    Mr. HARRIS: Will the hon. Gentleman make representations to the respective Governments to get this Convention registered with the League of Nations?
    Lieut.-Colonel ARCHER-SHEE: Is it not a fact that Article 18 merely states that if these agreements are made and not registered with the League of Nations, they are not valid?
    Mr. McNEILL: No, I do not think that is a correct reading of Article 18. In reply to the supplementary question by the hon. Member for South-West Bethnal Green (Mr. Harris), I cannot undertake to do what he asks; I do not know that there would be any power to do so.
    Lord R. CECIL: Is there any real doubt as to the interpretation of Article 18? Has the Assembly not settled the meaning?
    Mr. McNEILL: I do not think so. I understand the matter was referred to the First Commission by the Assembly, and that they have not arrived at any definite decision as to its meaning.

    NAVAL ARMAMENTS (WASHINGTON TREATY).
    Mr. PONSONBYasked the Prime Minister if he has any knowledge as to the

    3143
    intention of the French and Italian Governments to ratify, or not to ratify, the Treaty on the Limitation of Armaments signed at Washington in February last?
    The PRIME MINISTER: The answer is in the negative.

    LAUSANNE CONFERENCE.
    Mr. PONSONBYasked the Prime Minister whether this House will be afforded an opportunity of expressing an opinion on the Treaty which may issue from the Lausanne Conference before that Treaty is ratified?
    The PRIME MINISTER: The answer is in the affirmative.
    Mr. MORELasked the Prime Minister why a reversal of our traditional policy with regard to the Straits has been adopted by the Foreign Secretary at Lausanne?
    The PRIME MINISTER: While I do not admit the accuracy of the statement made by the hon. Member, I am unable to make any announcement on the subject while the Conference at Lausanne is still sitting.
    Mr. T. P. O'CONNOR(by Private Notice): May I ask the Under-Secretary of State for Foreign Affairs a question of which I have given him verbal notice, and perhaps the House will be glad to have the information. It is with regard to a telegram, stating that Ismet Pasha has agreed to join the League of Nations, and to let them take up the questions affecting minorities. I am afraid my hon. Friend has no confirmation, but, if so, may I repeat the question some time during the evening, when he may have some official information with regard to things which would give satisfaction to us all?
    Mr. McNEILL: As my hon. Friend knows, he communicated with me only a few moments ago verbally in the House. Although I have no reason to suppose that the report is untrue, I have no official confirmation of it at the moment. But I shall be glad later to give any information which is at my disposal.

    AGRICULTURE.
    Mr. SHEPPERSONasked the Prime Minister whether, seeing that at the economic conference of the Allies, held at Paris, 1916, a definite undertaking was given by our representatives that agriculture should be defended against economic aggression; that a similar undertaking was given by our representatives at Genoa this year; that agricultural produce is excluded from the provisions of both parts of the Safeguarding of Industries Act; and that, in consequence of the failure of successive Governments to adopt any method for the carrying out of the Paris resolution in respect of agriculture, the industry is in an acute state of depression, he will say what action he proposes to take in the matter?
    The PRIME MINISTER: I would refer my hon. Friend to the statements which have recently been made in this House, indicating the steps which are being taken to deal with the agricultural problem.

  UNEMPLOYMENT.

    NECESSITOUS AREAS.
    Mr. T. THOMSONasked the Prime Minister whether his attention has been drawn to the statement recently submitted to the Cabinet Committee on unemployment on behalf of necessitous local authorities; and can he state what steps the Government are prepared to take to deal with the pressing financial needs of these industrial areas where unemployment continues abnormal?
    Sir M. BARLOW: The statement referred to is being considered by the Cabinet Committee, and I am not yet in a position to announce the Government's decision in regard to it.
    Mr. THOMSON: If legislation is found necessary, will it be retrospective, so that the local authorities may have the benefit of it?
    Sir M. BARLOW: I cannot make any statement, because I do not know what the decision may be. It is a very natural course to take in certain circumstances if it be found necessary that the legislation should act retrospectively,

    AGRICULTUBAL WORKERB.
    Mr. NOEL BUXTONasked the Minister of Agriculture whether he can make any statement, however inexact it may necessarily be, of the amount of unemployment in agriculture in the Eastern counties generally, in the agricultural counties of Scotland, and in Norfolk?
    Major BARNSTON: I have been asked to reply. From such information as is at my right hon. Friend's disposal, there is at present no abnormal unemployment among regular farm workers in the eastern counties generally, or Norfolk in particular. Such unemployment as exists is believed to be mainly amongst unskilled and casual labourers. With regard to Scotland, reports received on 1st December indicated that the supply of labour was more or less in excess of requirements in practically every part of that country. Considerable numbers are reported to be unengaged in Aberdeen, Kincardine, Inverness, Nairn and Ross, but no estimates of the actual numbers involved are available.

    ANGLO-JAPANESE ALLIANCE.
    Mr. MORELasked the Prime Minister whether, if the Washington limitation of armament treaty is not ratified, the Anglo-Japanese Alliance is ipso facto revived, or if it will be renewed; and, in the latter event, if this House will be given an opportunity of discussing the conditions of renewal before ratification?
    The PRIME MINISTER: It is really impossible to answer a hypothetical question of this kind.

    NON-AGGRESSION PACT, GENOA.
    Mr. PRINGLEasked the Prime Minister by what British plenipotentiaries the so-called pact of non-aggression at Genoa was signed; how many States have ratified the pact; and where the authentic copy of the document is deposited?
    The PRIME MINISTER: The pact of non aggression was in the form of a general resolution of the Conference, assent being given verbally by the delegates, including the British. There was no signed document and no ratification.

    ROYAL AIR FORCE (AIRCRAFT ORDERS).
    Rear-Admiral SUETERasked the Secretary of State for Air whether he is aware that the considerable orders which the late Prime Minister stated, on the 3rd August, 1922, would be placed with aircraft firms in the current calendar year have not yet been placed; and whether he is in a position to state by what date the remaining orders will be given out to the air industry?
    Captain Viscount CURZONasked the Secretary of State for Air how much of the extra grant for aeroplanes has yet been paid; how much still remains when the orders for the remaining machines have been given out; whether he is aware that Messrs. Napier and many other firms concerned with the manufacture of aircraft and engines will soon have to close down altogether unless more orders can be given out; and whether he is in a position to make any statement about the matter?
    Sir S. HOARE: Under the authority given by the late Government, as announced in this House on the 3rd August, orders for aircraft and engines to the value of about £280,000 were placed with a number of private firms during the autumn. As deliveries will not be completed by the 31st March next, only a part of this liability will fall due this financial year. Since the present Government assumed office no further orders have hitherto been given, as the expansion of the Air Force was one of the commitments of their predecessors which they felt bound to examine. The preliminary examination which has already taken place enables me to inform the House that the formation of the additional regular squadrons for home defence will now proceed. As I am aware of the serious position in which certain firms are placed, I am glad to be able to assure my hon. Friend that definite orders for additional aircraft and engines will be immediately placed. Pending a fuller review of the situation, however, no further progress will be made with the scheme for an Auxiliary Air Force. I would add that, apart from this, I am making a further close scrutiny of the shetch Estimates.
    Viscount CURZON: Will the right hon. Gentleman carry out the examination, if he has not already done so, of the con-

    3147
    dition of many firms in the industry, and see to it that they are not allowed to go under, such as the firm mentioned in the question?
    Sir S. HOARE: I have already done so, and I can assure my Noble Friend that I am fully aware of the difficulties in which they are placed, and I have dealt with that point in my answer.
    Captain BENN: Do the Government adhere to the policy of their predecessors, to find any money which may be required for the Air Force by economies on the other two Services?
    Sir S. HOARE: Certainly, so far as possible.
    Mr. LEACH: Would it not be possible to cancel the remaining orders and spend the money on housing?
    Mr. WALLHEAD: Will the right hon. Gentleman see that no orders are placed with private manufacturers of munitions of war while the Government factories are short of work?
    Viscount CURZON: What about the workers?
    Mr. WALLHEAD: Look after our own workers.

    AIR POWER.
    Lieut.-Commander KENWORTHYasked the Secretary of State for Air the relative strength of the Air Force stationed in Europe of Great Britain, the French Republic, and the kingdom of Belgium; the relative numbers of fighting, spotting, and bombing machines, respectively, of modern construction and fit for service maintained in Europe by these three Powers; and what are the numbers of trained pilots, observers, and mechanics, respectively, maintained by these three Powers in Europe on the active list?
    Major ATTLEEasked the Secretary of State for Air the total number of military and civil aeroplanes built and building in France, in French possessions, and in European territory occuped by France; the number of squadrons; the number of aircraft in each squadron; and the number and weight of explosive and chemically charged bombs carried by the latest type of French fighting plane?
    Sir S. HOARE: The information asked for in these questions involves a detailed examination of varied and voluminous data and the collation of a number of statistics. I would, therefore, ask the hon. and gallant Gentlemen to allow me to send them as full a reply as is possible as soon as it can be prepared.
    Lieut.-Commander KENWORTHY: May I ask the right hon. Gentleman whether he has the information in the question, and whether he can state these numbers for which I have asked?
    Sir S. HOARE: We have got some of the information, but not all of it. I will send the hon. and gallant Member as much as I can.
    Lieut.-Commander KENWORTHY: May we take it that we have the means of ascertaining the air strength of the European Powers accurately, and that we have an efficient Intelligence Service?
    Sir S. HOARE: Yes, that, certainly, is so; but exactly what information I can give the hon. and gallant Member I am not quite certain till I have had further time to consider it.
    Colonel WEDGWOOD: Could we not have the information for all the Members, instead of for a few specified Members, say, in answer to a question next Session?
    Sir S. HOARE: I am quite ready to answer a question next Session, or to publish the answer that I send to the two hon. Members, as soon as it is ready.

    THAMES AIR STATION.
    Sir H. BRITTAINasked the Secretary of State for Air which is the length of notice which must be given to enable machines to alight on the Thames at Westminster; and whether it is the intention of the Ministry to give any further facilities to seaplanes making use of that permission?
    Sir S. HOARE: The answer to the first part of the question is that applications to alight on the Thames at Westminster, if approved by the Air Council, would then require consideration and approval by the Port of London Authority. The length of time required to obtain the necessary permission would, I understand, depend upon the circumstances of each individual case. With regard to the

    3149
    second part of the question, no requests have up to the present been received to make use of the Thames at Westminster for a regular air service, and the establishment of a permanent air port in this part of the river is not, therefore, immediately contemplated. In these circumstances I do not think that expenditure upon the provision of any special facilities could be justified at the present stage.

    IMPORT DUTIES (FRENCH GOODS).
    Mr. HOUFTONasked the Chancellor of the Exchequer whether there is in existence at the present time any commercial treaty or understanding between this country and France which precludes the imposition of import duties on French goods entering the United Kingdom; and, if so, will he give particulars of such treaty or understanding and what notice is required to abrogate same?
    The PARLIAMENTARY SECRETARY to the BOARD of TRADE (Viscount Wolmer): I have been asked to reply. The answer to the first part of the question is in the negative, and the second part, therefore, does not arise.

    NATIONAL DEBT.
    Mr. HANNONasked the Chancellor of the Exchequer if he will state approximately how much of the interest on the National Debt returns to the Exchequer in the form of Income Tax, Super-tax, and Corporation Profits Tax?
    Mr. BALDWIN: I regret that the statistical information available on this subject is insufficient to permit of any reliable estimate being made.

    WAR LOAN (INTEREST).
    Mr. HANNONasked the Chancellor of the Exchequer whether he has considered the possibility of spreading the payment of War Loan interest more evenly over the year with a view to avoiding the abnormally heavy credit movements now involved, particularly on 1st June and 1st December?
    Mr. BALDWIN: I am afraid that this is not practicable, as payment of interest
    3150
    on particular dates is one of the conditions on which the various loans were raised.

    OLD AGE PENSIONS.
    Sir A. HOLBROOKasked the Chancellor of the Exchequer whether he will consider an amendment of the present Regulations as to old age pensions by a provision that the benefit payments to members of friendly and other thrift societies shall not be regarded when considering the assessment of old age pensions to persons over the age of 70 years?
    Mr. BALDWIN: I would refer my hon. Friend to the answer given by the Prime Minister to the hon. Member for Peebles (Mr. Westwood) on the 4th December.
    Mr. LANSBURY: May I ask if earnings and other income are taken into account when assessing and paying pensions to ex-Cabinet Ministers and Lord High Chancellors?
    Mr. BALDWIN: I should want notice of that.
    Mr. D. SOMERVILLEasked the Chancellor of the Exchequer whether any representations have been made to him with regard to the inadequacy of the pension to blind persons; whether he will consider the possibility of making a slight increase in it; and, in that case, if he will give the House some idea as to how much this would cost?
    Mr. BALDWIN: The Act of 1920 rendered blind persons eligible for the ordinary pensions under the Old Age Pensions Acts, 1908 to 1919, at the age of 50 instead of 70, and I do not feel able to alter this provision.
    Dr. J. WILLIAMSasked the Chancellor of the Exchequer whether he will consider the case of the old age pensioners being assessed justly according to the amount of interest they receive in the Post Office Savings Bank instead of being credited with receiving 5 per cent.?
    Mr. BALDWIN: It would not be equitable to assess old age pensioners means as if they were a permanent investment for all time. Under the existing statutory provisions the first £25 of capital is ignored, the next £375 is assessed at 5 per cent., and any excess over £400 at

    3151
    10 per cent. These terms compare extremely favourably with the value of a life annuity at 70, and I am not prepared to alter them.
    Mr. MARDY JONES: Will the right hon. Gentleman consider the reasonableness of not assessing old age pensioners at all for Income Tax?

    MILITARY DUMPS (FRANCE).
    Mr. D. SOMERVILLEasked the Chancellor of the Exchequer, as representing the Disposal Board, if he can state the present ownership of the still existing military dumps in France, and give the facts relating to the large dump near Calais whose sale is understood never to have been completed?
    Mr. BALDWIN: I would refer my hon. Friend to the answer which I gave on the 12th instant to my hon. Friend the Member for Holborn (Sir J. Remnant). I presume the large dump near Calais, to which the question refers, is the dump at Audruicq, and that was included in the sale referred to in my reply of the 12th instant.

    INCOME TAX AND EXCESS PROFITS DUTY (FRAUD).
    Mr. LEACHasked the Chancellor of the Exchequer the number of cases of fraud discovered by the Inland Revenue authorities during the past 10 years against Income Tax and Excess Profits Duty; what were the total sums involved under each head; how many cases under each head were brought into Court and what were the total sums involved in these cases; in how many cases was the matter settled by the delinquent's payment of a sum of money in addition to the back duty; what was the total back duty and the total additional sums in these cases; in how many cases was the matter settled by payment of the back duty alone; and what was the total sum involved?
    Mr. BALDWIN: The information desired by the hon. Member has not been assembled and could not be obtained without laborious and costly investigation, which I could not authorise. Apart from other considerations, no exact
    3152
    division could be made between cases in which there was an element of deliberate evasion and those of mere negligence or mistake.

    POLICE PENSIONERS (INCOME TAX).
    Mr. R. YOUNGasked the Chancellor of the Exchequer whether the amounts deducted from the pay of the police for their superannuation fund is included as income for Income Tax assessment; whether police pensioners who have paid Income Tax on the amount of these deductions are again subject to Income Tax on their pensions without any relief for the deductions previously made; and, if so, whether he will make arrangements to exempt such deductions from wages from Income Tax charges?
    Mr. BALDWIN: The answer to the first part of the question is in the negative; the remaining parts do not, therefore, arise. If, however, the hon. Member has in mind any cast in which the deduction has not been allowed for Income Tax purposes, I will cause inquiry to be made, if he will let me have particulars.

    FISH SUPPLY (PRICES).
    Mr. FOOTasked the Minister of Agriculture if his attention has been called to the gross disparity existing between the prices obtained by fishermen for their fish and the prices paid by the consumer; and whether he will cause an inquiry to be made as to this disparity on lines similar to the inquiry which is being made as to the grievance of agriculturists in this respect?
    Major BARNSTON (Comptroller of the Household): I have been asked to reply. My right hon. Friend is aware of the disparity referred to, which constantly engages the attention of his Department. A considerable part of it may be attributed to the risks inevitably associated with trade in so perishable a commodity as fish. My right hon. Friend is carefully studying the other causes which may contribute to it. He does not think that at the present time the appointment of a Committee of Inquiry would be justified by results.
    Mr. FOOT: Would it not be possible to include this inquiry in that which is being made as to the grievance of agriculturists?

    BOYAL DOCKYARDS (REPAIR WORK).
    Sir C. KINLOCH-COOKE(by Private Notice) asked the First Lord of the Admiralty when the acceleration on reconditioning work on vessels and repair of dockyard machinery in His Majesty's Dockyards will be started; will he explain what the Government mean by "effective orders"; and, further, can he make any statement with regard to Devon-port Dockyard?
    The FINANCIAL SECRETARY to the ADMIRALTY (Commander Eyres-Mon-sell): The Admiralty intend that the work mentioned in the statement made by my right hon. Friend the Minister of Labour on 12th December shall be begun at the earliest possible date. As stated, Devonport will receive its share.
    Sir C. KINLOCH-COOKE: While thanking the hon. and gallant Gentleman for his very kind reply with regard to Devonport Dockyard, will he say on what date the work will be begun?
    Viscountess ASTOR: Does the Admiralty realise the great feeling that is created in Royal Dockyards by giving all the shipbuilding work to places from which the Socialists come?

    AMERICAN CONSULATE, NEWCASTLE-ON-TYNE.
    Mr. DOYLE(by Private Notice) asked the Under-Secretary of State for Foreign Affairs whether he is aware of the great hardship and inconvenience to the citizens of Newcastle-on-Tyne caused by the closing of the American Consulate in that city; whether he is aware that all persons requiring passports are now, and have been for some months past, obliged to go to Hull to obtain them; and whether he can take immediate steps to bring about an amicable settlement of the unfortunate disagreement between the Foreign Office and the United States Government?
    Mr. McNEILL: I am quite aware of the circumstances mentioned by the hon.
    3154
    Member, and much regret the inconvenience caused to citizens of Newcastle-on-Tyne. Proposals for an amicable settlement were made to the United States Government last month, but were not accepted; and the question is now under further consideration with a view to settlement being arrived at.

    WESTERN THRACE.
    Lieut.-Commander KENWORTHY(by Private Notice) asked the Under-Secretary of State for Foreign Affairs whether he has any information as to a revolution in Thrace; whether a Provisional Government has been formed under Nuri Bey; whether fighting is taking place with the Greek troops, and with what result; and whether His Majesty's Government has any representatives in Thrace?
    Mr. McNEILL: Reports from Turkish sources have announced an insurrection of Moslems in Western Thrace and the establishment of a Provisional Government, but, in the absence of any confirmation, His Majesty's Government regard these reports as greatly exaggerated, if not unfounded. The Greek Government claimed at the end of last month to have driven back into Bulgaria bands led by Turkish officers, and Fuad Bey, a Turk notorious for the organisation of bands, whom the Bulgarian Government expelled at the instance of the Allies, is admitted to be again in Bulgaria. There is no British representative in Thrace, but His Majesty's representatives at Constantinople, Sofia and Athens are in touch with the situation.
    Lieut.-Commander KENWORTHY: Have we not a representative at Salonika?
    Mr. McNEILL: No.

    LIQUOR TRADE (INCOME TAX DEDUCTIONS).
    Mr. CHARLES ROBERTSasked the Chancellor of the Exchequer whether any persons engaged in the trade in alcoholic liquors are allowed to deduct from their Income Tax assessment contributions to associations or funds formed for the defence of the interests of their trade; and, if so, what is the total of the amounts so deducted?
    Mr. BALDWIN: In arriving at their liability to Income Tax the traders

    3155
    referred to deduct contributions to trade protection associations, but only under conditions which apply to all other traders, namely, that the association undertakes to pay Income Tax on the contributions received by it less any expenditure which would be allowable in computing the Income Tax liability of the individual members if the expenditure had been incurred directly by them. These arrangements are made with the various trades concerned in the interests of economy. They involve no sacrifice of revenue; they only obviate troublesome adjustments which would otherwise be necessary under the law in ascertaining the liability of the individual traders. It is not possible to state the total of the amounts deducted under these arrangements either generally or in the particular instance of the trade in alcoholic liquors.

    COMPANIES (REGISTRATION).
    Mr. G. W. H. JONESasked the Chancellor of the Exchequer how many companies were registered under the Companies (Consolidation) Act, 1908, and the amount received in capital duties in respect of the same during the financial year prior to the last increase of such capital duties; and the same information in respect of companies registered under the said Act for the financial year following the said increase?
    Mr. BALDWIN: The duty on the share capital of limited liability companies registered under the Companies Acts was increased from 5s. to 20s. per £100 on the 20th April, 1920. In the financial year ended 31st March, 1920–a boom period— the number of new companies registered in England and Wales was 12,003 and the amount of capital duty paid on their registration was £1,545,747. The corresponding figures for the year ended 31st March, 1921, were 7,975 and £2,569,386.

    HAMPSTEAD TUBE EXTENSION.
    Captain BRASSasked the Chancellor of the Exchequer whether he is aware that the Foundation Company, Limited, to which a contract has been given for a portion of the Hampstead tube extension under the Trade Facilities Act, is an offshoot of the Foundation Company
    3156
    of New York; whether the contract for this work was offered in open competition in this country; and, if not, whether a list of those invited to tender can be given?
    Mr. BALDWIN: I understand that 13 firms were asked to tender; and that the tender of the Foundation Company was not only the lowest but favourable as regards dates of delivery. The company is a British firm separate from the New York company, and undertakes to fulfil all the usual stipulations with regard to the use of British materials.
    Mr. HANNON: What is the date of registration of the Foundation Company?
    Mr. BALDWIN: I shall want notice of that question.

    BANKRUPT FARMERS' ESTATES.
    Mr. ROYCEasked the Minister of Agriculture if he will consider the advisability of introducing legislation to prevent the wasting of available assets, to the detriment of all other creditors who agree to an assignment, during the abnormal agricultural depression, and the right of any creditor over £50 to place the farmers' estate in bankruptcy?
    Viscount WOLMER: I do not think it would be practicable to amend the Bankruptcy Act purely in respect of farmers.

    QUESTIONS TO MINISTERS.
    Sir J. REMNANT: May I ask, Mr. Speaker, if some arrangement could be made on the last day of the Session for there to be some small extension of time in respect to ordinary questions on the Order Paper, so that they may be cleared off? I have had two special questions on the Paper for five days, three of which were allotted days. The matter to which the questions related has to be settled before 1st January, and I wanted to bring the matter before the House. I have now no opportunity, unless questions be cleaved off on this the last day of the Session.
    Mr. SPEAKER: The time for questions is governed by Standing Order, and I have no power to extend it. I notice, however, that to-day we have gone

    3157
    through 102 questions, owing, if I may say so, to the good understanding and restraint of hon. Members. In respect of the order in which questions are put, that is a matter arranged by the Government, and docs not come within my control.
    Sir J. REMNANT: And, following that arrangement, I have tried to get these questions answered and, so far, have not been successful.
    Mr. SPEAKER: If the hon. Gentleman would refrain from putting supplementary questions, perhaps we might get the main questions answered.
    Sir J. REMNANT: I was not aware that I had asked any supplementary questions at all to-day.
    Mr. SPEAKER: The hon. Gentleman has shown a good example.

PARLIAMENT (DATE OF REASSEMBLING).
Mr. RAMSAY MacDONALD: Can the Prime Minister inform the House when he proposes to call us together again?
The PRIME MINISTER: Yes, Sir. Although the time before the day I propose leaves, in my opinion, too little time for the work of the Departments, I am anxious that the first Session of Parliament should not begin by any restrictions on the rights of Private Members, if I can manage it, and I propose, therefore, assuming that we prorogue tomorrow, that we shall meet again on 13th February.
Mr. LANSBURY: Is there any means, Mr. Speaker, may I ask, by which Members of the House who think the House ought not to adjourn to-morrow and ought to meet earlier than 13th February, are there any constitutional means by which Private Members may exercise the privilege of Members of this House of entering a constitutional protest, recording, it may be, by vote what they think on the matter?
Mr. SPEAKER: The matter of the Prorogation does not lie in my hands, and no Motion can be made in that respect. Members desiring to take their seats—
Mr. LANSBURY: May I ask another question, Mr. Speaker? Is it not the fact that we are being prorogued tomorrow, not by the King's action, but action taken under the advice of Ministers. [HON. MEMBERS: "Order!"] What I want to find out is this—and I do not want to be disorderly—how I can raise the question constitutionally; that is all I want to know?
Mr. SPEAKER: I am afraid that I cannot go further. Members desiring to take their seats—
Mr. LANSBURY: I shall have to ask you again, Mr. Speaker?
Mr. T. P. O'CONNOR: Will you allow me, Mr. Speaker, to make a personal explanation? It is only to say—
Mr. SPEAKER: The time has passed for that.
Mr. O'CONNOR: I only wanted to save the time of the House.

NEW MEMBER SWORN.
Lieut.-Colonel LESLIE ORME WILSON, for the Borough of Portsmouth (South Division).

MESSAGE FROM THE LORDS.
That they have agreed to—
Trade Facilities and Loans Guarantee Bill, without Amendment.
Amendments to—
East Lothian (Western District) Water Order Confirmation Bill [Lords], without Amendment.

ORDERS OF THE DAY.

  CONSOLIDATED FUND (APPROPRIATION) BILL.
  Considered in Committee, and reported, without Amendment.
  Motion made, and Question proposed, "That the Bill be now read the Third time."

REPARATIONS AND INTER-ALLIED DEBTS.

  PRIME MINISTER'S STATEMENT.
  Sir J. SIMON: On the Third Reading of the Consolidated Fund Bill and on the eve of the Prorogation, I desire to invite the attention of the House to a subject which profoundly affects the future life of this country and of Europe as a whole. It is a subject which is closely related to the question of unemployment in this country, and, therefore, I conceive it to be a subject which is within the rules of order and may be debated on the Third Reading of this Bill. I noticed the other day the report of a speech made by the present Foreign Secretary, I think the only speech which he made in the course of the late General Election. In that speech he claimed that foreign affairs, rightly understood, were really domestic affairs, and, indeed, the most domestic of all our affairs. The Secretary of State for Foreign Affairs went on to say:
  "They touch the life, the interest, and the pocket of every member of the community. It is in relation to our foreign affairs that every man and woman in this country secures immunity from war, relief from the heavy burden of taxation, and prosperity of trade and industry."
  4.0 P.M.
  If it be justified when speaking of foreign affaire as a whole, it is the central truth when, we come to consider the long-drawn-out and still unsettled question of reparation. During the last three weeks there has been much discussion in this House on the subject of unemployment, and quite rightly so, but the duty of the House of Commons is not so much to demonstrate its sympathy as to search for causes and to pursue remedies, and I submit that we should be gravely failing in our duty to the country and to our constituents if we separated without examining, in the light of the most recent events, this subject of reparation upon
  3222
  which trade and industry, the prospect of peace, and the hope of prosperity so fundamentally depend. This proposition, that there is a close and intimate relation between the prompt and practical settlement of reparation on the one hand and the recovery of Europe and of trade on the other, has now become a commonplace. The fact that it has now become a commonplace shows what a long distance we have travelled since December, 1918. There was reported in the "Times" two months ago a speech by Sir Eric Geddes, and I choose it as an illustration of this change of view, because that right hon. Gentleman went as far as most people in the view that the Allies both could and should set no bounds to their demand. I see from the "Times" of 12th October this year that, speaking as President-Elect of the Federation of British Industries, Sir Eric Geddes used this language:
  "It is no use chasing a mirage. You can only get reparation out of Germany by either money or goods. She has no money, and, if you take her goods, it will mean unemployment. If the leaders of thought could bring that home to our people it would be a great thing. I have just come back from Germany, and I tell you they are desperate to-day. You will never get a strong Government there until the people know that they can run their own affairs. Until we and our Allies can come down to rock bottom and find out what Germany can pay and then tell her so, there will be no improvement. When we do that, Germany, as a great and a proud nation, will try to pay if possible, but you cannot enslave a nation of seventy millions for generations."
  This is one of the cases where it is easy for all of us to be wise after the event, and I take leave to say that I very much doubt whether there was any large body of opinion in any quarter of the country who appreciated to the full the gravity of the miscalculation four years ago. It is quite useless to go back or to recriminate. The only question of real importance to-day is what attitude the present Government are going to take upon the question now. That leads me to the principal matter which I wish to emphasise. Notwithstanding what the Prime Minister said at the end of question time yesterday, I do submit that this Debate cannot be an effective Debate until the Prime Minister has made a statement as to the Government's attitude and intention. The House of Commons is not a debating society. It is the Commons of Great Britain recently elected by

  3223
  the people, whose future may be involved in the action which may be taken before this House re-assembles on 13th February next year.
  Therefore, I propose to formulate three questions, which I have taken the liberty of sending to the Prime Minister, and which I am authorised to say have been inspected and approved, not only by my right hon. Friend the Member for Paisley (Mr. Asquith), but by my right hon. Friend the Leader of the Labour party (Mr. Ramsay MacDonald) and by my right hon. Friend the Member for Carnarvon Boroughs (Mr. Lloyd George). The questions are framed for the purpose of securing that we may in this Debate have in good time information, so far as the Prime Minister feels it is consistent with the public interest to give it, on the broad issues which arise out of the present situation and the recent discussion on reparations, and, with the greatest respect to the Prime Minister, having put the three matters briefly before the House, I would ask him to be good enough to consider whether he could not take the earliest opportunity of putting the House in possession, so far as the public interest permits, of the views of the Government.
  There are three special reasons why that course appears to be a desirable one. First of all, this is a new Government with a new Prime Minister, and up to the present, so far as I have been able to discover—and I have endeavoured to make myself acquainted with what exists in print on the subject—there have really been no deliberate and authoritative declarations by the present Government of their policy in this regard. I have not omitted to notice that the Prime Minister, in the course of the Election, made a speech—one passage of which he was not able to recollect very exactly in the course of yesterday—at St. Andrew's Hall, Glasgow. There is a passage in that speech of 26th October last which, coming from him, is, of course, of great importance, and which bears very directly on this matter. With the leave of the House, I will read the passage. Referring to the Election of 1918, the right hon. Gentleman said:
  "At the last Election in this country everyone, not merely Mr. Lloyd George and those who supported him, but everyone of them, spoke as if they
  3224
  thought Germany could pay the whole of the War Debt. Personally, I never thought so, and I was very out of touch with my own followers in the House of Commons in the Debate at the time the Treaty of Versailles was being arranged on this particular subject of reparation. I am not myself over-sanguine. I knew from the first—I think I can honestly say I never raised these hopes—that any vast sum like that was impossible. But now I do feel the tendency is rather turning too much the other way. The tendency here at home is rather too much to assume that it is the easiest thing in the world for us to pay £1,000,000,000"—
  referring, no doubt, to the debt to America—
  "it will not be an easy task—and that to get anything out of Germany is impossible. I do not agree to that. The position of Germany is very difficult, and the needs of France are very crying, and it may be that agreement will be impossible. I hope not, but it may be. But France and we go into this matter with the same object in view. We need something from Germany if we can get it. France needs it perhaps more, but remember, though our suffering is not shown in devastated areas, it is shown in our factories and workshops and in the unemployed throughout the land. France needs it perhaps more, but we go into it with this common object—to get anything that Germany can reasonably be asked to pay."
  That is the first reason why it appeared to some of us that it was desirable, if the Prime Minister thought fit, to get the advantage of his statement early in this Debate. There is a second reason. It appears to be clearly established that a statement is about to be made in the French Chamber. I read in the papers to-day the message, "Tomorrow, at the beginning of the sitting, M. Poincare will explain the position of the negotiations." There is a third reason, perhaps the most important reason of all. The action which in some quarters is said to be contemplated by France—possibly to be undertaken before this House again meets —be that action wise or unwise, is of a kind which may have consequences which cannot be recalled. May I add this? The question really is not so much one between the British Government and the French Government as a question between two communities who have the strongest possible reason for mutual respect and regard—a question between the British people and the French people.
  We read, and there is nobody in this House who does not read with pleasure, the French declarations made within the last few hours that no difference of

  3225
  opinion can affect the cordial understanding based on the common sacrifice for a common cause which binds together our two peoples. In this anxious and difficult crisis it is with profound feelings of reciprocal sympathy that we read a declaration of that sort. I venture to make this one remark, and it is that anybody who makes any observations on this subject must do it vender the pressure of a sense of the fullest responsibility. It is perfectly true that the relations between Britain and France rest upon a basis which is something which no present difficulty or difference can alter. If there be any Frenchman who doubts that let him go through our towns and villages and in almost every town and every village he will find at the side of the road recently erected a monument to British dead, most of whom fell in France or in Flanders. I venture to say that you can no more eradicate from British minds and hearts the memory of this joint sacrifice, and all that it stood for than you could take up that British dust from French fields, and remove it to our cemeteries here at home.
  It is in that spirit that we claim in this Debate to deal frankly and soberly with the differences which it is suggested might arise. Mr. Gladstone, in one of his most famous speeches on foreign policy at West Calder, made more than 40 years ago, laid down one of the fundamental principles of British foreign policy when he declared for a recognition of the equal rights of all nations, coupled with the admission of special sympathies with those communities whose circumstances and sufferings appeal in a special degree to British hearts. Our object is not, indeed, to promote exclusive agreements, but by maintaining the most friendly feeling and understanding to secure a comprehensive arrangement which may be widened and enlarged even beyond the present bounds of the League of Nations itself. There is, I submit, complete solidarity of feeling in Britain in this regard, and if we criticise or if we oppose any methods that may seem to be recommended by our late Allies, it is because true friendship does not consist either in nerveless acquiescence or in baffling ambiguity, but true friendship requires a straightforward statement of the view which we hold, for we hold it not in the interests of our own country
  3226
  only, but in the interests of the restoration of Europe and the peace of the world.
  I now come to the three questions which, after consultation with my right hon. Friends, I am anxious to put before the House. The first question is this. It deals with the attitude which His Majesty's Government adopts towards certain proposals and suggestions which have been much canvassed in recent days. I have formulated them in these terms:
  (1) What is the attitude of His Majesty's Government in regard to the proposals or suggestions that a moratorium agreed to be granted by the Allies in respect of reparation payments should be accompanied or conditioned by further Allied control; whether that control takes the form of management of German finances, the seizure of German mines and forests or of the occupation of further German territory, and in particular of the occupation of the Ruhr Valley.
  I think it is clearly stated there, and all I wish to add about it is that it proceeds upon the assumption that there will be found to be general agreement on some moratorium. Some of us are anxious lest the value and effect of a moratorium, even of an agreed moratorium, may be lost and frustrated by action which will be very difficult to recall, but may be found to be inconsistent with the very purpose of the moratorium itself. I have included in this question a reference to the external management of German finance. As regards the management of another country's finances, may I point out that there is a very great deal of difference between control and supervision. It is one thing to make the Reparation Commission responsible for seeing that when a moratorium is granted Germany shall really make an honest effort and do her best, under a penalty, that the moratorium may be withdrawn. That is quite a different thing from what has been recently canvassed in some quarters for the alternative suggestion is not a suggestion of supervision but one of control, and it is quite another thing to attempt the task of exercising direct control and management over German finance, for, obviously, such a scheme may result in the refusal of the German Government to function at all, and in progressive collapse and decay.

  3227
  There is a special reason why the distinction between supervision by the Reparation Commission should be sharply distinguished from any attempt to control and manage German finance. The Prime Minister is accustomed, in addressing and persuading the House of Commons, to draw upon his business experience, and to appeal in a commonsense and commercial way to the judgment of the House to see the force of his argument. What is the real object which is presumably to be served by this interference with German finance? It is to improve German credit. I put this simple proposition that you never can, and never do, raise the credit of your debtor when you are giving the debtor time to pay if at the same time you insist upon putting in a receiver and manager of his affairs.
  The improvement of German credit, and the possibility of financial assistance really depends upon the world at large growing to believe that it is Germany's intention, because it is Germany's interest, to pay. That is the real reason, I think, why the success of the new policy, whatever that policy may be in point of form, will depend upon whether it is a settlement by agreement or whether the payments in the future, if they are to be made at all, are payments which are merely to be made as a result of constant force and pressure. A moratorium is not, at the best, a solution. It is only a postponement; but if we accompany a moratorium by ill-advised forcible action, then it may lose the very merit which, I understand, in certain circumstances the proposers of a moratorium generally agree it should have. That is my first question. If I may, I will repeat it without further comment:
  (1) What is the attitude of His Majesty's Government in regard to the proposals or suggestions that a moratorium agreed to be granted by the Allies in respect of reparation payments should be accompanied or conditioned by further Allied control; whether that control takes the form of management of German finances, of the seizure of German mines and forests, or of the occupation of further German territory and in particular of the occupation of the Ruhr Valley."
  The second question I propose to submit to the House without any comment of my
  3228
  own. Everybody must see that it raises a very grave matter, but we should do no good if we do not ask to be given the opportunity of facing this grave matter. The question is
  (2) What is the attitude of His Majesty's Government in the event of France desiring to take such action on her own account?
  Lastly, I wish to put to the Prime Minister this third question. He has, as we know, been engaged during the last few days in conversation with the Allied representatives upon the subject of the settlement of inter-Allied debts and kindred topics. What the House is anxious to know, and what I think it is entitled to know, on that subject is this: Is it the view of His Majesty's Government that they can carry on these negotiations and discussions on that topic as a subject which stands by itself and apart; or is it the view of the Government that the offers we can make and the settlement that we can propose on the subject of inter-Allied debts and the adjustment of reparations are connected with or are conditional upon the adoption of a policy by general agreement in other respects?
  I do not pause to discuss this difficult question, which I do not think anybody would be disposed to give a confident answer to, as to whether the language of the Treaty of Versailles, on its true interpretation, really does authorise independent action by any one member or the other. This question of interpretation may be of vital importance, it seems to some of us, in carrying on the discussions which the right hon. Gentleman is about to take up after the Prorogation. I formulate my third question in these terms:
  (3) What, in the view of His Majesty's Government, is the relation between the discussion and settlement of the question of reparations and inter-Allied debts on the one hand, and the taking of independent action by France on the other hand?
  In other words, does His Majesty's Government regard the pending negotiations in respect of the conjoint problem of inter-Allied debts and reparations as independent of or as conditioned by and related to the reaching of a satisfactory agreement between the Allies as to further action against Germany.

  3229
  I hope that in putting these questions I have made clear to the House where the centre of anxiety of some of us is, and I trust I have presented them to the House and to the Prime Minister in twins which, in themselves, do no injury to the great overwhelming public interest and which will enable him to deal with them as fully and frankly as circumstances permit.
  May I just say this one word in conclusion? Our submission to the Government is that this Debate is likely to perform a more useful service, and that public opinion will be better guided to a consideration of the real issues, if he can see his way, by intervening now, to put the House in a position to consider and to debate the actualities of a situation so grave and so important both for ourselves and for the world.
  The PRIME MINISTER (Mr. Bonar Law): As I mentioned to the House yesterday, I had not proposed to intervene in this Debate so early, but, in view of the feeling which has been expressed by my right 'hon. Friend that all the Opposition desire I should speak, it is always my wish, so far as I can, to meet the general convenience, not only of those who are my supporters, but of the House generally. My right hon. Friend has put his questions in such a way that, I think, enables me to give as complete a reply as in any circumstances it would be possible for me to give. I am going, not to make an appeal to the House, but to point out that there must be much greater freedom in discussing this and similar questions on the part of my right hon. Friend and other Members of the House than can possibly be taken by me, and I hope they will bear that in mind in the observations which I am now going to make. It is not like giving an account of a Conference which has taken place. It is quite true that the interval is a long one, and that makes it extremely difficult—more difficult for the French Prime Minister than for me, because the House of Commons has always shown exceptional indulgence in cases of this kind. It makes it difficult for the Government to approach, if not to actually dwell upon the points that are raised in the course of our discussions. I shall try, in fact, to give as complete an answer as I can to my right hon. Friend to-day, but I am sure he will not expect, nor will the
  3230
  House expect—because it is much easier to put questions in a case of this kind than to give answers—will not expect me to give categorical replies. That cannot be done within the limits by which I am bound. I have no fault whatever to find with any part of the speech of my right hon. Friend; indeed I am grateful to him for reading an extract from a speech of mine which seemed to me to express an extremely large amount of common sense, if I may say so, and in regard to which there is not one word which I would take back to-day. Let me try to deal with this question in a way which will do the least harm, because I must think more of the effect outside this House than of its effect here.

  FRENCH POSITION.
  The best way to deal with it is to consider the position as it presents itself to France and to ourselves. What is the position? The French, and, indeed, we did also at one time, had great hopes in regard to the amount of money they would get from Germany. They had built upon those hopes to such an extent that the financial system of France is based on receiving very large sums from Germany. Now what has happened? I am putting the French point of view, and I think it is right, whatever our own point of view, that we should try to look at this question from the point of view as it strikes our Allies. This is their view. Germany undertook to pay a certain amount. Almost nothing has been paid.
  Sir J. SIMON: What was the amount?
  An HON. MEMBER: £11,000,000,000.
  The PRIME MINISTER: It was a very large amount. I am not in the least defending the amount. I was always sceptical of the possibility of getting these immense sums transferred from one country to another, but that is the position. Germany undertook to pay these large amounts. The French say, "We have had Conference after Conference and what has been the result? The result has been that in every case, in one form or other, we gave what was equivalent to a moratorium, and at the end of the period of moratorium we found we were in a worse position for getting anything out of Germany than we were before we had our discussions." That is undoubtedly the view of France "It has always been the

  3231
  tradition of our people," which I share, "that when we make peace with our enemies we really mean it and if they deal fairly with us we will deal fairly with them. "The French view is that this result is largely due to the action—as they think the deliberate action—of Germany.

  INFLATION, GERMANY.
  What was that action? There is nobody in the House who will doubt the fact that the German Government have allowed a tremendous inflation to take place, which has had the effect in itseif of making it impossible to meet any claim for reparation. The French go further. I am no quoting anything said by the French Prime Minister or any other Prime Minister. I am going to put what I think to be the general French view. They say that was deliberately done by Germany. Well, honestly, I cannot myself think that true, and I cannot do it for this reason. It is perfectly true that by the method of passive resistance they can avoid for ever paying any indemnity. But they can only avoid it by what is very like suicide for Germany, and I can hardly believe that any sane Government would deliberately adopt that course.
  There is this to be said for the French view. The effect of the inflation has enabled great industrial groups, who have exercised tremendous power in Germany, to make enormous profits and to put those profits beyond the reach of the German Government, although it was part of the arrangement with the German Government that this should not take place and that the money should be available for reparation. There is a very serious charge and, in my judgment, there is no doubt whatever that, if there had been a Government strong enough in Germany to face the real position, it was their clear duty, not only in their own interest, but in order to fulfil their obligations, to stop that inflation, at whatever cost, and to try and put their finances on a sound footing. They have never tried to.
  I want to put the case fairly as regards the German Government. It may be it was not their fault and they had not the power, but that is the result. I have put the French case so far, but we come up against something else. They say: "We have made all these accommodations to Germany and the result of every one of
  3232
  them is that we have got nothing, and we are further off than ever from getting anything. We are tired of it and must take stronger measures."

  BRITISH VIEW.
  I think I can answer these questions in a way that will do the least harm by treating them in this general way by putting against the French view what is in my opinion the British view. Take, first of all, the question as to the relationship between the inter-allied debts and reparations. That question I think was unnecessary. The answer was given in the statement I read yesterday, and in which I made it perfectly clear that anything said by me on the subject was bound up—and I put it as plainly as words could put it—was bound up if not with the certainty with the great probability that there would be a final settlement and that the question would not be opened again. It follows from that, that, the concession does involve our not doing anything which, in our opinion, would make a final settlement impossible. It does imply that it will only come into effect when we have a chance of a settlement which will be a settlement. Let me look at the other aspect of it from our point of view. It is assumed very often—and in what I am going to say now I am thinking of the public, not within this House, but outside—it is assumed that we have no interest, in reparations. It has been suggested, I do not say by anyone in this House, but it has been suggested over and over again that, from the point of view of getting on with our business, what we ought to do is to wipe off German reparations and our Allied debts, and at the same time pay this enormous sum to America. I will look at it from two points of view—firstly, the justice of it, and secondly, our ability to do it.

  DEUT TO UNITED) STATES.
  First, as regards the justice of it. Do not let the House imagine that I am saying anything in criticism of the United States of America. I was one of those who always believed, and believe to-day, that the United States of America are nearest to ourselves— if it is not national egotism to say so—in ideals; that they entered into that War with absolutely no prospect or hope of gain of any kind, but with the desire to help the world in a great struggle. I therefore say nothing

  3233
  against America, but I cannot forget the fact which I mentioned once before, I think at the Guildhall the other day. I was Chancellor of the Exchequer at the time when the United States came into the War. My right hon. Friend will remember that the Overseas' Prime Ministers were present. We were having an Imperial Cabinet meeting every day, and on each day the heads of the particular Departments gave their views in regard to the Departments which they controlled. It so happened that, on the very day that we had the announcement that America had come into the War, it would have been my duty to explain the financial position of this country to the Dominion Prime Ministers. Before that day came I discussed the situation, as he will remember, very seriously with my right hon. Friend, who was then Prime Minister. It was the fact that I should have had to say to that Imperial Cabinet, "We have exhausted all our resources. I do not say that we shall not get help from America"—I did not mean the American Government, but munitions from America—" but all the means of payment which we have had hitherto are gone, and we do not know what the position will be." It is an undoubted fact that we were in that position, because we had used all our securities and pledged them already to secure munitions for carrying on the War; and we had pledged them without any regard whatever to whether it was for the British Armies or for the Armies of our Allies. I am sure there is no one in the world who will doubt that, from the point of view of justice, it cannot be right that we alone should make payment as the result of this.
  Now let me look at the matter from the other point of view of our ability to pay. I do think that many people who have been speaking so freely about this—speaking as if we could get nothing from Germany, and yet as if we could pay that money—have not realised in the least what it means. I am convinced that to make that payment without receiving anything from outside sources would reduce the standard of living in this country for a generation, and would be a burden upon us which no one who talks of it now has any conception of. We cannot do it. Now let me consider what was said by my right hon. Friend. I am going to dwell upon it a little more. He said that we
  3234
  have had great discussions about unemployment. We have, indeed, but not more than the seriousness of the subject deserves. What is the position? We have got our central financial position strong. Our Budget position is very strong. It is unlike that of almost any other country which was engaged in the struggle. But how have we got it? The central financial organisation is strong, is rich, because we have made the tax-payers poor. That is the real reason. Can anyone imagine that we could have taken, as we did take, these enormous sums from industry, such as the Excess Profits Duty—can anyone imagine that we could take them without seriously weakening the possibility of industrial expansion, or even of continuance of industry, in the times after the War? The sums were enormous; and it is not only the actual money that we have taken; it is even more serious than that. The bulk of big business is carried on by credit, and the knowledge that, in addition to all that firms have already paid, they may be liable to pay more, is one of the obstacles in their way when they have to go to the banks and ask for credit for further expansion of business.
  Can there be any doubt about that? I do not believe that anyone who has given study to this question will doubt it. If we had made our deflation much more slow—and it is an arguable question whether we ought to or not; I think we were right to do it as we did, but I say it is an open question—no one can doubt that, if we had adopted the other course, there would be far less unemployment today, because public money would be spent in paying wages. But more than that— and this is the unfairness of it—if we had adopted that course, the world would have recognised that we were not in a position to pay these sums. As a matter of fact—I am not talking of Governments, but, in the public opinion of many foreign countries, we are supposed to be in a position to meet these obligations and to help our friends, when in reality we are in no such position. I am going to repeat, if I may, what I said yesterday, in the Debate on the Coal Industry. Apart from contributions from industry and from the men themselves, we are paying something like £100,000,000 a year to the unemployed. The number is terrible, and the evil is not confined to the money; the effect on our people is terrible. I repeat what I said yesterday, that, unless

  3235
  there is a distinct improvement in trade in a reasonable time, we shall reach a condition which, in my opinion, will be worse, almost, than that in any of the Allied countries. I say this as a reason why we cannot be so generous as people would wish us to be.
  I come now to what is the most difficult thing for me to say without doing harm, and yet it is something which I think I must say. My right hon. Friend spoke about whether we would make any conditions for granting a moratorium. It is obvious that no one could ask us to say, with a Conference still in front of us, that we will consider nothing, whatever it is, which makes any alteration in the present system. That is obvious; but I shall try to put what is the policy of His Majesty's Government in a way that I think will be clear to the House, and that, I am sure, or at least I trust, will not give offence to our French Allies. The British position in regard to reparations at this moment is this: We do not think of past mistakes, of enmity to Germany; we simply look at the problem in this way— what is the best method of getting the amount which Germany ought to pay? That, to my mind, is our sole question. There is difference of opinion, of course, as to what that amount is. I do not know that I disagree with what my right hon. Friend read from Sir Eric Geddes. He was very careful not to state any amount either. But I would put this to the House. If Germany ever does recover, she will be in a far better position to pay these indemnities than we could be to pay our debts. That is the fact. Owing to what I regard as the terrific misfortune of what has happened in Germany, the result has been that, by destroying the middle class—for that is what has happened—the internal German debt has been wiped out. If they ever do recover, therefore, they are free from that terrible burden of internal debt which falls upon us. They are certain to recover some day. Surely, the sole problem for us ought to be to consider in what way we can got these legitimate debts most satisfactorily and with the least injury to the rest of the world and to Germany herself. That seems to be our problem.
  But, looking at the facts as they are, we have something else to do. All the information I receive—I am sorry to say it, but I believe it to be true—is to the
  3236
  effect that Germany is very near a complete collapse. All the information I get tends in that direction: and the tragedy of it is—I have not seen or heard this stated, but it is obvious—the tragedy of it is that, while it is undoubtedly certain that there can be no improvement in Germany at all until they have stabilised the mark, yet, by all the experience of the world, including ourselves, in the last few years, by the opinion of every authority, the very effort to stabilise the mark will in itself bring about that collapse in industry from which we have suffered recently. We have to look at all these things—and this is almost the last word I am going to say, but I think it answers the question. Obviously, it would be improper for me to say anything about the Ruhr or any other subject that might possibly have been discussed. The House will have noted that M. Poincaré is not going to make any definite statement as to what his idea is on that matter, and it would not be right for me to say anything of that kind; but I will lay down this general proposition, which, I believe represents the opinion of every quarter of this House. We cannot look with equanimity on any action which seems to us likely to, or which we believe will, have the effect, not of producing reparations, but of making it more difficult to get them, and, perhaps, making it impossible altogether.
  5.0 P.M.
  I am not going to refer to that further, but I do wish to say something more, and it is all I wish to say. There is a feeling of friendship to France throughout the whole of this country, which, as my right hon. Friend said, is not expressed by self-interest. It is expressed by common suffering in a common cause. More than that, I believe, and I think almost everyone believes, that in the terrible trouble in which Europe is, there is almost no hope of a solution unless France and we can act together. We are not going to make the thing easier, difficult as it is, by adding to all the other troubles vital differences between us. I am perfectly sure that I and the Government which I represent will be acting according to the wishes of the whole nation if we make every effort, and I am sure the French Prime Minister himself and the French Government realise that this is a far more serious thing than differences between Governments, for my right hon.

  3237
  Friend was right when he said the difference liable to happen is a difference in public opinion between the two countries. Looking at it from the point of view of retaining good relations, that makes it far more dangerous than if it were only a question of difference between individuals and Governments, and for that reason I am certain that both we at home and the French Government also will utilise the time—and I am grateful to M. Poincaré for having given it— that still remains to try to find some method by which we can together deal with this problem.
  Mr. RAMSAY MacDONALD: I am sure the Prime Minister having responded to the invitation made by my right hon. Friend and myself yesterday, will see no cause for regret in that response. He has made a speech which covers the ground very carefully and which, nevertheless, gives an indication of what the mind of His Majesty's Government is. So far as we are concerned, although responsible, we are freer than he is himself, and we hope in the course of the Debate that we may utter, at any rate, certain expressions of opinion which will be useful to him in the negotiations which he is about to conduct. He has said a great deal about reparations, but there is one, thing he has omitted to say, one point of the very first importance that I should have liked him to deal with. The real fundamental point about reparations and debts and all that is time. They have to be fixed without delay, and when they have been fixed a scheme can be adopted which will enable them to be met. If the right hon. Gentleman comes back from Paris with uncertainty and unsettlement, with sum that everyone who knows anything about finance knows cannot be honoured by Germany fixed in the Agreement, if he comes back telling us that we are going to have another Conference to supplement the one he has attended, if he comes back with all the questions really open, I warn him that, whatever other agreement he has come to, he has not come to an agreement that is going to help this country, France or Europe out of their difficulties. The great point is time. Settle now, fix now, and then begin a scheme which will enable Germany to meet her obligations and which, I hope, she will accept
  3238
  I quite associate myself with what the right hon. Gentleman said about the effect of German inflation. What, is the use of trying to apportion moral praise or moral blame for that? Everyone knows that every country at the time pursued precisely the same policy. Nay, more, everyone knows quite well that in 1918–1919 no other policy was possible except the policy of inflation. What happened was that whilst the conquered countries, like Germany and Austria, never had a chance of recovering themselves and beginning the process of deflation we had a chance of beginning a process of deflation with the result, I do not believe designed, I do not believe contemplated, which the right hon. Gentleman described in perfectly accurate language, that if we were going to make a settlement immediately, if we were going to let Germany off with payment in useless paper, as soon as the transaction was completed Germany would be in a very much stronger economic position, on account of the development of her potentialities, than we should be ourselves. We must take care that that is not going to happen, and I am very glad the right hon. Gentleman indicated that he had his eye upon that point.
  But in associating myself with another point, I should like to indicate that the Government is partly responsible for the position in which Germany is found today. Again, I think the right hon. Gentleman is right when he said that if Germany had had a strong Government in 1918–19 much of the inflation could have been stopped. That is very familiar language to some of us. That is what we were saying in 1918–19, and the great mistake which was then made was that the Supreme Council never saw that one of the real obligations imposed upon it on account of the condition of Europe was to help a strong Government to find its feet in Germany and to find some security of tenure. I should say, without the least hesitation, that Dr. Simon's Government had all the promise of a strong Government. They could have discussed the matter with him in Berlin and found out what his intentions were at the time. He came to London with certain proposals which were themselves unacceptable, and rightly unacceptable, but proposals which, nevertheless, could have been made the basis of further negotiations, but owing to the mis-

  3239
  handling of our affairs in those days the Simon Government fell, and the chance of a really strong Government, which would have stopped the inflation of the German currency, disappeared. Therefore I hope at Paris we are to have, not merely a discussion of finance, but the beginning of a new political policy between France and ourselves regarding the whole of Central Europe.
  The general question of reparations, though complicated in its detail, is, as a matter of fact, vary simple in its principles. We can have no reparation until Germany has begun to trade. The economic and industrial potentialities of Germany are simply enormous. No one who has been there during the last two years can have failed to be struck with the enormous economic developments which are lying there latent—new buildings, new factories, chemical industries— if not actually as an industrial proposition, nevertheless schemes of developing, developing, developing every month, and yet unless Germany is very carefully handled she will go hopelessly into bankruptcy, just as Austria has gone.
  Therefore, the first essential of reparation is to pursue an economic and industrial policy which will enable Germany to begin to trade, so that from German trade whatever reparations are to be paid may be paid. That means time, but time alone will not do. The amount has to be fixed. I am afraid that when we begin to consider the amount, both France and ourselves will have to lower our expectations very substantially of what we are going to get. The reparations, in the ordinary course of economic possibility, must be very small. They are not to be had, they cannot be had, and if they were to be had, it would not suit us, nor pay us, to receive them. It is not only a question of what Germany can pay. It is a question of what we can receive. My hon. Friend the Member for Colne Valley (Mr. Snowdcn) said the other day that reparations both curse those who give and those who receive. As an absolute statement, perhaps it can be replied to, but as the statement of a relative truth no reply can be made to it. You cannot by political force receive imports which would not come to you in the natural economic course of exchange. You cannot receive those
  3240
  imports by force without throwing out your own gear of industry and without punishing yourselves even more than you punish the people whom you compel to give these things.
  Then the question is, when are they to be paid? Again, there is not the least doubt that the moratorium must be a long one. Germany cannot begin paying next month or the month after. If we are going to give Germany the chance of being a part of the necessary economic machinery of production and exchange in Europe, 6he must have considerable time to enable her to pay the reparations we impose upon her. The right hon. Gentleman in that connection referred to a question which cannot be separated from reparations. That is the question of our own debt. It is well known that my hon. Friends by me regard the problem of our debt as being something which has to be faced separately.
  I can lay down two propositions regarding that debt. I do not know how-far I carry the Prime Minister with me. First of all, you are not going to wipe out your debt by reparations. You cannot get Germany to pay such a substantial part of your debt as to make it weigh substantially less upon the shoulders of your taxpayers. The second proposition I make is, that you cannot deal with your debt by Income Tax or by annual income. The problem of national debts, especially the problem c f our debt, has to be faced as a separate proposition, and it must not be mixed up, at any rate too much, with the problem of German reparations. Moreover what is the use of this House even imagining that if France owes us a very large sum of money—I forget for the moment how much it is—and Italy owes us a very large sum of money, those debts are going to be paid. We know perfectly well that France cannot pay us her debt. We know that Italy cannot pay us her debt. We know that as soon as France really tackles her own financial problems, and as soon as the French Finance Minister really faces his Budget problem, and faces his annual surplus, on the wrong side, and begins to produce a Budget that will balance, he will be up against a financial problem and difficulty that is of the very first class in French public affairs. When he begins to pay us, he will so increase his difficulties, and he will so increase the friction between the two countries, and

  3241
  will so disturb the good relationship between the two countries, that a wise Chancellor of the Exchequer here will say to him, "Postpone the settlement of these debts, and let us go on as we are" We are not going to get our debts paid immediately. The whole essence of the thing is its immediateness. We are not-going to get our debts paid by France, by Italy, or by Belgium. There is not the least doubt that America holds the key. So far as our external debt problem can be dealt with immediately, in order to relieve our own internal taxation, the only country that can come in and help us is America.
  Therefore, when we take a survey of the right hon. Gentleman's problem, as I see it, in Paris, it is this. He has to come to a settlement to which France agrees. That settlement must not deal with reparations only. It must deal with reparations in relation to other debts. I am now talking of external debts. He must also come to an agreement with France and Italy if he can, so that the conditions imposed upon the payment of reparations will not exclude the immediate opportunity of German's industrial recovery. He has to try to solve that problem.
  The PRIME MINISTER: To square the circle.
  Mr. MacDONALD: I know the difficulty that the right hon. Gentleman will have, but not facing the difficulty does not make it simple. I am attempting to make it quite clear that on this side of the House that is our view. The right hon. Gentleman has to do something more. He spoke, and no hon. Member will object to the tentative and careful way in which he spoke, of the occupation of the Ruhr. He spoke of that, but hardly referred to it. Perhaps we can go a little further than he could go, and I hope that in going a little further we shall strengthen his hands rather than weaken them when he goes to the Conference in Paris next month. Nobody who has followed the affairs of Europe during the past four years can still hold the view that you can mix up military threats and economic programmes. It cannot be done. The moment you lay down an economic programme and ask Germany to accept it, and then put as an addendum to that programme that military operations, military guarantees, military sanctions
  3242
  will be used in certain events, by that simple act you throw the mind of Germany and you throw the mind of Austria—and hon. Members know perfectly well that if we were in their position it would throw our minds—more off an honourable economic settlement and into the question of the military operations that will follow in certain eventualities. What happens is that, on the one hand, you create an economic psychology among the people of Germany, while, on the other hand, by the threat, you create a military psychology in the people of Germany. The two are constantly at war, and we create problems that their most honest and the strongest German Government could not successfully overcome.
  It is a well-known fact that these military threats have done more to revive Monarchism in Germany than anything else. It is a well-known fact that if one goes to the occupied areas, and if one goes to the districts adjoining the occupied areas, one finds talk of reprisals and talk of the restitution of the old monarchy. The reason always given is not that we have defeated them, not that we are pressing reparations upon them, not that we are punishing them, but that we are pursuing military methods against them and constantly compelling them to think once again of the sword. You cannot mix up the two. It will do no harm, indeed I hope it will do good, if France knows that in the minds of the vast majority of people in this country there is the very strongest resentment to any proposition that military guarantees in the shape of the occupation of the Ruhr shall follow any delinquencies on the part of Germany. The Entente is not only a matter of Governments. The Entente must rest in the hearts of the people of France and England. The Prime Minister can go to Paris next month and he can come to any agreement he likes and can get it carried out by a majority in this House. He can seal it and sign it and deliver it, but he knows perfectly well that if that agreement does not have a hospitable harbourage in the hearts of the people, he has done a thing that time will break and destroy.
  Therefore, the French Government must not only make an agreement with our Government, but they must clearly (understand that the minds of the British people, I think of the great majority of the British people, in fact I think

  3243
  I may say all the British people, are bent upon a final settlement of this matter, a closing of this old chapter and the opening of a new book which will enable far better relations of a political and economic kind to be started. That is a wise policy. We cannot go on as we are. Germany cannot go on as it is going on. Austria cannot go on as it is going on. We do not know whether the Allies are going to settle Europe or the League of Nations are going to settle it. There is no recognised, accepted system of arbitration and co-operation and the promise of peace and the creation of new relations in Europe to-day. That cannot go on. There is nothing that has so damaged the moral of our people, there is nothing that has defeated the very finest and highest moral sentiments of the men who fought for us during the War than the policies that have been pursued with such little effect as those that have been followed since 1918.
  Why can we not tell France quite plainly that it is to the interest of this country that this new policy should be inaugurated? We must trade. Why should we not say so? We are not ashamed of trading. We are not ashamed of the position that this country by historical accident, perhaps, and as a matter of fact, has become a great producing nation for the world, and that this country carries a population the industrial distribution of which his beer, determined by the fact that while this country has neglected its agriculture—[HON. MEMBERS: "Yes!"]—certainly, we all know that it has specialised not for internal production and internal consumption, but has specialised for imports of food and exports of finished materials. That policy may have been wise or foolish, but there it is, and, at any rate, until we have had time to change the policy we must assume that the policy is going to be carried on. Surely France, a friendly nation, an enlightened nation, will not ask us to commit suicide in order to prove our friendship for France. Therefore, I would say quite plainly to France that our trade has to be considered, and that His Majesty's Government must consider the interests of our own unemployed as well as the emotional interests of friendship with a foreign nation
  3244
  We want peace. We want not only tranquillity, but peace We do not merely want nations not fighting because they cannot fight. A month or two ago I had a conversation with one of the greatest and ablest of the Foreign Secretaries of a new State created as a re suit of the War, and when he was describing to mc certain conditions in Europe, I asked him why there was no war. He looked at me with a smile, and said. "Because we cannot fight."
  Lieut. - Commander KENWORTHY: Because the soldiers will not fight.
  Mr. MacDONALD: Because we cannot fight, he said. That is not peace. We want real peace, and until we get peace which is peace and contentment, a peace of whole-hearted acquiescence, a peace which means co operation in the attempt to arrive at I wise and fruitful reconstructive policy, we cannot be satisfied that we have done our duty. Whilst we have this mixing up of military sanctions and economic aims, whilst one day a statesman talks about reparations and the next day about military occupations, the whole fundamental conditions upon which such a peace as I have in mind must be built up are being rucked up every time a wise man goes to lay a substantial boulder in the foundation. Therefore I do not see why we should not state the position perfectly frankly and with emphasis to France. Any agreement we come to with Germany ought not, to contain in its wording or in any of its clauses the assumption that Germar y is not going to carry it out. There is nothing more devastating to any honest man than that.
  Hon. Members know perfectly well how devastating it would be to them if that policy was pursued in regard to themselves, if an agreement was come to and they discovered at the end of the agreement a very careful condition setting forth the punishment that would be imposed upon them if they refused to carry it out. The enc thing we want is as agreement which Germany will accept, which our own experts have advised us is satisfactory for ourselves, and which will lead to the agreement being carried out by goodwill. We should have no control— supervision if you like, but certainly not control—a guarantee that the Government is doing everything it can to carry out the agreement, but no power to step

  3245
  in and take control so that we can carry out that agreement within the sovereignty of the German State.
  There is another point which I would like to make. There was a speech delivered in another place yesterday which seemed to contemplate the revival of the agreement between the United Stats, Prance, and ourselves protecting France against German aggression. The statement was there made that, if that agreement had been carried out, France would have been in a far better frame of mine' than it is now, and the whole economic condition of Europe would have been improved. There is no shadow of ground for a statement like that. I hope the right hon. Gentleman is not going to embark on any loose foolish military adventures which are only the beginning of new alliances, new liabilities, and new enmities, of which Europe has certainly had enough.
  I speak with more freedom than the right hon. Gentleman, but still I hope I have said nothing that will in any way hamper the work which he has got to do when he goes to Paris. I say that the friendship of France, great as it is and sincere as it is, must not be demonstrated by any surrender of our own interests and must not be demonstrated by allowing any French policy to be let loose upon the Ruhr or any other part of Europe. We have to make up our minds what our policy is, and what we think is the right thing to do. Let us be alongside of Prance, in any agreement come to between the two of us, but it is not safe for us to go without a firm determination to have regard to our interests, our ideas, and our policy, the policy which we think best, and not to go into a Conference like this without any clear ideas in those respects. I hope that expressions in this House are not going to be suppressed. They will not be suppressed in the Chamber of Deputies to-morrow. I hope that the friendship between the two nations is sufficiently sound and sincere to bear honest criticism and suggestions, such as those which I have made.
  Lord EUSTACE PERCY: I think that it will be noticed by the House that in the speech of the right hon. Gentleman the Member for Spen Valley (Sir J. Simon) and of the Prime Minister no mention was made of the fixing of the amount of reparations, and the question was only
  3246
  referred to by the Leader of the Opposition. That, I think, indicates something which it is important to have realised at the present moment. Two agreements were necessary in order to carry out any sound reparations policy. One was an agreement between the Allies as to the amount of reparations to be fixed. The other was an agreement with Germany as to the method by which and the date at which those reparations were to be paid. Because the first kind of agreement between the Allies as to the amount of reparations was not arrived at in Paris, and because agreement on that point was found certainly difficult and perhaps impossible, the whole weight of our policy for the last four years has been thrown into the effort to fix reparations.
  The Reparation Commission was set up with that sole object. I do not mean to say that the Reparation Commission had not the business and duty of negotiating with Germany the means and methods by which reparations were to be paid, but its permanent function, and the thing for which its constitution fitted it. was a settlement of the amount of reparations, and in my judgment nothing has harmed so much the whole treatment of this question as the fact that the Reparation Commission, having fixed reparations—whether they fixed them too high or too low is another matter—have remained in charge of negotiations on this subject both between the Allies and between the Allies and the Germans. If it is true, as I believe it is, that at the present moment the difference of opinion between the Allies themselves and between the Allies and Germany is no longer about the amount of reparations but that all clearly have recognised the necessity of scaling them down, then we have in a very real sense entered upon a new phase of this question, a phase in which the Reparation Commission should not occupy the place which it has occupied, and a phase which offers a completely new hope of arriving at a settlement of this question.
  For what has been the effect of the action of the Reparation Commission during these last four years? I agree entirely with the Leader of the Opposition that the effect of their action has been to make it impossible that any strong Government should exist in Germany. There has been, when you think of it, the most extraordinary contradic-

  3247
  tion in terms in the whole of our policy. There was a question, after the establishment of the new German constitution, as to whether that constitution was going to develop in the direction of greater centralisation or a looser form of federalism. Largely because of the existence of our reparations demand it became constitutionally necessary for Germany to concentrate power in the hands of the central Government, to centralise taxation, and, with taxation, to centralise the main powers of administration. And having done that, having contributed a certain amount towards insuring that Germany should not have any looser form of association but should remain a strongly centralised nation constitutionally, we are then dependent on the central Government to pay us any reparations we might settle on, and having made it inevitable that we shall depend on that central Government alone, we made it impossible for that central Government ever to be a strong one.
  Demand after demand and ultimatum after ultimatum were presented. I do not say the Reparation Commission could have done anything different. I am not criticising the officials of that Commission, but the result was that Government after Government fell and there was no continuity, and there is no hope now of ever getting any continuity, of financial policy. After all, the fundamental reason of the attitude of France at the present moment, and the difficulty of this reparations question, is not the difficulty of fixing on the amount. I believe that all parties have now come to a point where they are agreed to reduce the amount. The main difficulty is that you can get no offer from Germany, and no willingness to examine any figure put by the Allies or any method of payment suggested by the Allies, and no willingness on the part of the German Government to bind itself in any way. The leader of the Opposition has spoken about finality, but finality is the thing against which the German Government have stood out all along. Finality is the one thing which we cannot get the German Government to look at, and until we get a Government in Germany which is prepared to bind itself absolutely to the payment of a reasonable amount of reparation and to bind itself as to the method of payment we shall not advance one step further in this matter.
  3248
  It is all very well saying that it is invidious for the French Government to demand pledges, guarantees and control. I may mention, by the way, that the are constant misunderstandings with France in the public discussion of questions involving control by reason of the fact that the French word "contrôle" means supervision and not what the English word means. But it is all very well to say that France should not demand control. So long as the German Government shows no disposition whatever to enter into a definite binding obligation as to either the amount or the method of payment, so long we cannot blame France for demanding some absolute pledges on this subject. But here, I think, we enter upon the new phase of the question. So long as the emphasis was put on the amount of reparations, so long as the question of scaling down the reparations was the main question, so long was it impossible to enlist the co-operation of the United States or any other nation, outside the immediate Allies, in the solution of this question.
  We have heard many proposals that the whole of this question should be handed over to the League of Nations. My Noble Friend the Member for Hitchin (Lord R. Cecil) has often advocated this, but it has always been impossible to consider it in the past, because to France the handing over of this question to the League of Nations meant throwing into the melting pot again the whole question of German liability. But when once you are on the verge of agreement as to the amount, you can approach both the United States and the League of Nations to act, if they are willing to act, as guardians of the security which France demands for the carrying out of reparation. I throw out that suggestion because I believe that it will be found to be valuable in future. The United States has insisted on standing outside this whole question mainly because of the question of the amount of reparation. There is no reason to think that the United States will continue to stand aside and refuse to enter into conference with us when it becomes a question not of fixing the amount but of ensuring that that amount shall be paid by a certain method, with a moratorium if you like, and that certain securities shall be taken for the payment of the amount.

  3249
  The Leader of the Opposition spoke in very strong terms about the impossibility of any guarantee of integrity of French territory against German aggression. I do not know why. I have never been able to understand this extraordinary nervousness on the part of many people as to undertaking an obligation which everyone knows we would be bound to undertake in our own interests and for our own security should we ever be faced by a situation such as we were faced by in 1914. It is said that it would be contrary, in some way, to the idea and the terms of the Covenant of the League of Nations. I cannot understand why. We are at present, whether wisely or not is another matter, bound by the Covenant of the League of Nations to protect the integrity of France's territory against aggression. The only question which we are considering now is whether, besides undertaking, in the event of such aggression, to break off relations with Germany, to subject her to an economic boycott, to do the other things which all the members of the League are bound to do in such circumstances, we should take the obligation when the situation foreseen under Article 10 of the Covenant arises, to contribute not only economic but military support, and immediate military support, to the protection of France. We know that we should have to do it in such circumstances.
  It is worth while reminding hon. Members opposite that the reason why at the Paris Conference France demanded such a Treaty of guarantee from "America and ourselves was that we had refused so to strengthen Article 10 of the Covenant as to make the obligation of military assistance a part of the Covenant itself. It was only after they had tried to get that thing from the Allied Commission at the beginning of the Conference that they appealed for the Treaty of guarantee separately. What I am advocating is what, so far as we are concerned, France originally asked for, namely, a guarantee of military assistance, and, therefore, of course, a military convention—that phrase which so terrifies hon, Members opposite—and therefore, of course, a military convention to protect France in the circumstances foreseen under Article 10 of the Covenant of the League. This is not a question in which it is any good to try to make conditions. I say that unless we offer such a Treaty for a sufficient period unconditionally to France, there will
  3250
  never be a feeling of security in France sufficient to induce France as a matter of fact to come to an agreement with us or with Germany about reparation. I feel absolutely convinced on that subject. It is all very well saying that we must agree with France and that we must agree with Germany, but, especially at the present moment, when feelings have been so wrought upon in connection with this question, when so many suspicions of the policy of this country have been raised in the minds of Frenchmen, as in the minds of Germans, it is useless to talk of agreement unless you are prepared to take the steps that are necessary to reassure those with whom you wish to enter into an agreement.
  I feel convinced that the mass of the people of this country are perfectly prepared for such a Treaty of guarantee, and are perfectly prepared to give France those assurances. I do not share the fear of public opinion in this country. I do not share the fear that public opinion, or the opponents of the Government, would say that we are beginning a new era of militarism or group alliances. On the contrary, I believe that public opinion would support the Government in giving such an assurance to France, and I certainly would not only pledge my support to them on such a question, but I say that unless they are prepared to make such an offer to France the agreement which is the essential condition of any settlement in this question of reparation, the free and willing agreement of France, will be absolutely unattainable.
  Major-General Sir ROBERT HUTCHISON: As a new Member I must crave the indulgence of the House for my natural nervousness in addressing it for the first time. I am sure that I voice the wishes of all Members of this House in expressing the hope that the re-assembly of the Inter-Allied Conference in Paris, which is to take place next month, may lay the foundations at last of a final settlement of the question of reparation. I may tell the House that after having lived three and a half years in Germany, and having only recently left that country, I have had occasion to absorb the atmosphere of reparation, not only from the German point of view, but from the point of view of our Allies, the French and the Belgians. It seems to me that the chief difficulty in dealing with reparation has been

  3251
  missed by a great many of those who have spoken on the question. The real difficulty that our chief ally, France, has in marching alongside of us towards a settlement of this reparation question is the fear that that country has of Germany. Although I am well aware that possibly French politicians would hesitate to put that forward as a definite reason why they pursue any particular policy, yet I know from intercourse with all kinds of French men and women that that fear does exist in their minds. Whether that fear is a real one or not does not matter. It exists there, and I am satisfied that until the fear of Germany is driven out of the minds of these French men and women you cannot get them to come forward to solve the reparation problem.
  It was quite evident to me during the time I was in Germany that Germans generally are anxious to carry out some reparation. But the indefinite burden that has been placed upon their shoulders has moved a great many of their industrial leaders to do everything they can to prevent their Government from making such payment. I know of many firms in Germany which to-day are openly avoiding paying their profits into their own country. They are trading in a very large way through corporations situated in neutral countries. Their goods are sold for mark value to those corporations, who re-sell the goods to the rest of the world on a sterling or dollar basis, and so large credits are built up in neutral countries and do not come inside the taxable amount of which the German Government might get hold. I am afraid that the German Government know that this is going on. It appears to me that in order that the industrial people of Germany may be induced to come forward honestly to give their quota towards reparation, you must first of all fix some definite burden on Germany, To that burden Germany will work. In my talks with various industrial owners of large works, all the complaints I have heard have been that the Germans do not know what they will have to pay ultimately. The result is that they say, "The more we work, the more we accumulate for our Government, and the more they will take from us." Therefore, naturally, they try in every possible way to avoid payment.
  3252
  6.0 P.M.
  The next point that struck me in Germany was that no German Government in the near future will be strong enough to move towards the re-construction of German finance or to stabilise the mark. The reason for that is obvious. As soon as any German Government tries to stabilise the mark, it creates unemployment and bad trade. In a moment that Government will be swept out of power. It seems only reasonable to suppose that in order to keep in power a German Government that is to do its best towards stabilising the German currency, you must have some form of control, some body in power in Berlin with which the Government privately may agree but to which it may point publicly and say, "There is the body that is causing all your unemployment and all your bad trade." Therefore, I see no hope for the stabilising of German finance without some agreed form of Allied control in Berlin. Another thing I would suggest is that in the Conference at Paris there might be considered the possibility of the Germans coming forward and saying, "We cannot reconstruct our finance without, some guarantee that we will get an international loan." After talking to many people in Germany, I am satisfied that there is a very large amount of money in Germany and in the hands of Germans outside, which could very quickly come to the help of Germany in the form of internal loans, firstly, if the security was guaranteed: secondly, if the Germans were assured that a definite sum was fixed for the reparation payment, and thirdly, if they could be assured that commissions in the interior of Germany—as opposed to the occupied territory—would be remised and that they would be allowed to go about their own business in their own way. There is no greater irritant in the interior of Germany than the Commission of Control as it is constituted and as it goes about now. I am quite satisfied myself, talking as a soldier, that there is no fear in the near future of Germany becoming a menace to France or anybody else, and the mere idea of a Commission going round and breaking up various small factories and small collections of arms hidden here and there, is only an irritant and tends to put up the backs of a great many who would really help to solve the problem.
  At the present moment in Germany there is a very strong movement—I am

  3253
  talking of the Rhineland Provinces—to separate from Germany. I am glad to be able to talk on this subject with a little more freedom than the Government, and I am sure my French friends will not misunderstand me when I say freely what is on my mind. I am satisfied that French policy is directed towards breaking Germany up into different units and, as the first step, they wish to divide the Rhineland from the rest of Germany. If, as is possible, as a result of the non payment of the amount due on the 15th January, France should unfortunately go forward and occupy the Ruhr, and possibly put a customs ring round the "Ruhr and Rhineland it will certainly do a great deal towards separating that part of Germany from the main country. If that should occur, possibly Bavaria may go the same way, and the result will be that Germany as a unit will be broken up. From our point of view, from the point of view of trade: with Germany, and from the point of view of stabilisation in Europe, that result would be deplorable, and I am convinced that it is one certain way of having future wars.
  I hope when the Conference assembles in Paris they will go to the maximum limit of risk in order to do two things. The first is to prevent France taking independent action. We must do everything possible to act together with France. In the second place, we should go to the maximum of our finances to try to guarantee Germany some form of stability by guaranteeing loans, and I am perfectly certain the Americans would come in and help us. I do not suggest that loans should be guaranteed to Germany for nothing. I do say we might ask, as an exchange for the guarantee of money to Germany for reconstruction, that we should have freer trade and more trade facilities than we have at present. The one thing that will pull Germany back into the fold, if I may say so, with ourselves, is more trade between ourselves and Germany, and the freer that trade can be made, the better for us and for our employment. Finally, what Germany requires at the present moment and what Europe also requires, is that we should try to give the German people some confidence in their own country. At the present moment no German has any confidence that Germany is going to go on, and our object should be to re-
  3254
  establish the confidence of the German people in their own country. I am perfectly satisfied that there is great wealth and real wealth in Germany to-day. The only thing is that it is not available for the purpose of reparation, but once you establish confidence in Germany between the German people and the German Government, I think you will find it will go a long way towards the solution of the reparation question. I thank the House for the indulgence shown to me.
  Mr. MOREL: There is a very wide measure of agreement in the House, as indicated by the right hon. Gentleman the Member for Spen Valley (Sir John Simon) that unemployment in the appalling dimensions in which it exists at the moment—dimensions almost constituting, from the human point of view, a catastrophe, with results which cannot be exaggerated in horror and intensity—is very largely the result of the collapse of our European markets. On these Benches we feel that the Government's duty is to do all they possibly can to revive those markets and to prevent their further restriction by discouraging policies and events which may lead to that restriction and to a further development of unemployment here. That is a question of foreign policy, and we feel strongly that the Government's foreign policy should be directed consciously, and not merely consciously, but purposely and actively, to the re-establishment of real conditions of peace in Europe, and the healing of the wounds left by the War and the even deeper wounds left by the political settlements after the War. If our foreign policy be not consciously directed to these purposes, then it is doing grave injury to the people of this country and is highly detrimental to the interests of the State. There are two main questions which confront us in the domain of foreign policy at the present moment. One of them has already been the subject of debate, and I shall return to it presently. The other has not been mentioned at all. It is the subject which is being threshed out at Lausanne, and with the permission of the House I should like to refer to it.
  It would seem that we have reversed the traditional policy of this country for very many years prior to the War, the policy of keeping the Straits closed to war ships. As far as we on these benches realise the policy of His Majesty's

  3255
  Government, as represented by the Foreign Secretary at Lausanne, there has been a complete reversal of that policy. If the Prime Minister were here, I should like to ask him what are the reasons for that reversal, and I should like to indicate to him what, in our view, will be some of the results. In the first place, it will undoubtedly involve Russia, rightly or wrongly, taking up the attitude that with our preponderance of sea-power in the Mediterranean, we are trying to superimpose upon herself and upon all the countries and peoples bordering the Black Sea, a kind of British dictatorship—that we are in fact trying to make the Black Sea a British lake. That may not be our intention, but if we were in the position of the Russians we should undoubtedly hold that view. That is a very great risk to run, and the House has a right to know the reasons which have induced, or which are inducing, the Government to run that risk. There is a further risk. Our relations with Russia to-day, as hon. Members know, leave very much to be desired. If, on the present situation, you are going to graft a Russian fear that our policy in the Near East is absolutely anti-Russian, you are going to accentuate the unfortunate situation already existing, and you are going to turn the eyes of the existing Russian Government in an Imperialistic sense, to the East and South-East. We are running a third risk by this change of policy. The Prime Minister, answering a question of mine yesterday, remarked—and I was very glad to hear him express his disappointment at the fact—that the Washington Naval Limitation Treaty had not been ratified by certain Powers. He, I imagine, was thinking of France, and I was thinking of France when I put the question. It is already pretty doubtful whether France will ratify that Treaty at all. If His Majesty's Government can get France to do so in ordinary circumstances, we shall all be very pleased, but it is certain that if Russia is driven to building a fleet in the Black Sea—Russia, which was not invited to the Washington Conference—then France will certainly not, under any circumstances, ratify that Washington Limitation Treaty. The result will be that the race of armaments will begin once more, and we shall be committed to the folly which helped to bring about the catastrophe of 1914.
  3256
  I should like to ask the Prime Minister for the precise reasons which justify, in the mind of the Government, the taking of these risks through our reversal of policy in connection with the Straits and the Black Sea. What are our precise aims? What are we pursuing? Is our aim strategic? Do we look forward to the time when in case of war we shall have the ability to cut the Russian communications with the Caucasus and Persia? Is our aim Imperialistic—the old type of Imperialism linked with the idea of building up a new Empire in the Middle East, which is still cherished in many minds, and, perhaps, in the mind of the Foreign Secretary? Or, again, is our interest an economic one? In one of his earliest speeches this Session, the Prime Minister used words to this effect, that we on those benches were quite mistaken if we supposed for a moment that the system of government in this, country permitted of any economic interests directing its foreign policy. I have no doubt the right hon. Gentleman was perfectly sincere, so far as he was concerned, when he said that, but I could hardly refrain from asking him whether he had ever heard of Mosul, or Baku, or whether he had ever read the economic partition agreement attached to the Treaty of Sevres, and I should like to have asked the Prime Minister also—he would have corrected me if I had made a misstatement—if it was not a fact that here in London, within a few hundred yards of this House; a few weeks ago a series of Conferences was being held between representatives of the Anglo-Persian Oil Company, in which the Government is interested, and the representatives of the American Standard Oil Company and the French Government, in the presence of the head of the Petroleum Committee of the Board of Trade. I should also have asked him whether, as a matter of fact, that same official was not in Lausanne the other day. I hope the Prime Minister later on in the Debate will be able to indicate some kind of answer to the questions which I have put in connection with this complete reversal of our traditional policy in the Near East, and the explanation of it.
  In the course of the Debate to-day, the Prime Minister very naturally pointed out that he could only speak with a certain amount of reticence, and while I agree

  3257
  that a certain amount of reticence is required on this subject from anybody who speaks, yet at the same time I think the time has come when some of us who have not got executive responsibility and yet who have a clear duty to our constituents and, as we conceive it, to the country, should be allowed to use plain language on these very grave questions. There is no doubt that what we are- faced with—and I must confess that the statement of the Prime Minister to-night did not in the very least degree allay my anxiety—is a revival of the policy, or, rather the clamour, because the policy has been long existing in France, for the carrying out of a policy which, not to go into ancient history, was the policy of French Imperialism before the War and has been pursued relentlessly and ceaselessly since the War. It is set forth in the secret Treaty between the French Government and the Government of the Czar in March, 1917. It is set out in innumerable documents, but particularly in the correspondence between M. Tardieu and M. Poincaré which appeared in the "Temps" of October last year. It is set out in the still more remarkable report published in the "Manchester Guardian "the other day by M. Darriac, now, I understand, head of the Finance Commission of the, French Chamber, who was sent specially out to the Rhine—this is what adds much significance to the report—by M. Poincaré and, of course, reported what M. Poincaré wanted him to report. I think I must read to the House a short extract from M. Darriac's report. It says:
  "The whole of the French policy in the Rhine is at all times subordinate to the primary condition of the prolonged maintenance of our Army of the Rhine in the occupied territory. … A Customs barrier placed on the East facing Germany and razed on the West facing France, a well-thought-out course of action which little by little will detach from Germany a free Rhineland, under the military guard of Prance and Belgium."
  After all, acts speak louder than words. The Rhineland has been treated—and I am not now referring only, or even principally, to German reports, but to a mass of reports which I, personally, have, and many others have from Englishmen and Americans—like a conquered Province in the last 3^ years. I venture to say that, whatever the opinions of individual Members may be, the House would be horrified if there were time to
  3258
  read out the reports of events which are daily taking place in the Rhineland, and which are certified by witnesses of unimpeachable integrity, as the policy, not of the French people, because I do not believe they either desire it or support it, but the policy of the French militarists who have got the Rhineland in their grip. In no way has this policy been more marked than by importing into that unfortunate country African troops, and in compelling the municipal authorities to build brothels for them, and to supply those brothels with white women—an abominable thing, which will raise complications in the future, in Europe and in Africa, which are appalling to contemplate.
  Sir R. HUTCHISON: That is quite untrue as regards the British area of the Rhine.
  Mr. MOREL: I was merely speaking of the French occupied area. We certainly have not imported a single African soldier there. That is the policy, a policy of separating the Rhineland from Germany. The policy might not be carried out at once, but little by little, first one step and then the other. That is the policy which this country is asked tacitly to endorse, because the alleged obligations under reparations have not been met. I believe I am speaking for every hon. Member on these benches when I say that that is a policy which the Labour party repudiates, a policy from which, in our own vital interests, as I hope to show the House presently, we should absolutely dissociate ourselves, and a policy with which we should express our entire disagreement. What are the pretexts upon which this policy of severing the Rhineland from Germany, and possibly occupying the Ruhr, are based? My own feeling is that the Ruhr is put forward merely as a mask for the real policy, which lies behind, of separating the Rhine. The pretexts are two. There is the pretext which the Noble Lord the Member for Hastings (Lord E. Percy) had a good deal to say about, although I could not help thinking, when he spoke, what a curious vision he seemed to have of the international situation. Germany, if not to-day a dying nation, is very nearly a dying nation, and it is not a question to-day, and it will not be a question to-morrow, of protecting I France, with her Army of 700,000 men,

  3259
  against stricken Germany, but perhaps of protecting Germany against France. Reverting to the pretexts, there is the pretext of fear, and the pretext of security. I ask hon. Members opposite, What can France conceivably gain, from the point of view of security, by having the Rhine as a frontier? What are rivers going to be in the next war, for which the victorious Powers are so busily preparing? What will the Channel be, for that matter, or what will the North Sea be? The real and the only security for France lies in helping to make the League of Nations, or some association of a similar kind, a real, effective, powerful instrument for peace. That is the only security for France, and that is the only salvation for all of us.
  The argument of fear leaves me cold also on this account. I dare say hon. Members opposite will disagree, perhaps fiercely, with what I am going to say: nevertheless, I must say it, because it is the truth. It leaves me cold because, after the diplomatic disclosures of the past three and a half years, and especially the opening of the Russian archives, the publication of the Franco-Russian military agreement, to say nothing of the book of General Buat, the head of the French Military Staff, and the books of such men as that distinguished ex-French civil servant, M. Georges Demartial, M. Pevet, and others—after all these, the idea, the myth, that France was the victim of wanton aggression in 1914 is blown sky-high—[HON. MEMBERS: "NO"]—I am perfectly certain that hon. Members who say "No" have not read that evidence. I am perfectly certain that any man who is capable, whatever his views may be, of weighing evidence, who is capable of appreciating evidence, cannot read that evidence and retain the views which he, quite rightly, no doubt, held on the evidence ho then possessed, in August, 1914.
  The other pretext for this contemplated military action against Germany is the question of Germany's non-fulfilment of reparations. I have felt during all this Debate to-day on reparations the extraordinary fog of misconception in which the whole question is enveloped. There has been recently a brilliant discovery made, that you cannot separate the problem of reparations from the problem of inter-Allied debts. That is right, but
  3260
  the discovery has yet to be made that you cannot separate the problem of reparations from the problem of the Treaty of Versailles as a whole. It is most amazing to me that in all these Debates in this House, in 13 Conferences between the most enlightened brains in Europe, in discussions in the Press, you never see it suggested that Germany has paid, and is paying, vast sums to the Allies. If not paid under "Reparation," what are they, if they are not reparations? The mere upkeep of the Allied armies on the Rhine has cost Germany £297,000,000, or £47,000,0000 more more than the total indemnity imposed upon France by Germany in 1870. Those are figures which are not, I believe, disputed. [HON. MEMBERS: "Gold marks?"] No, not gold marks, but sterling—£297,000,000 sterling, which is £47,000,000 sterling more than the total indemnity imposed upon France by Germany in 1870. Then Germany has made cash payments for this year alone in bills of exchange, and under the British Recovery Act, amounting to £75,000,000. She has handed over, according to the French official figures, £.30,000,000 worth of coal to France, and if you divide by one-half—which, for the purpose of argument, I am perfectly prepared to do, although I have never yet seen anything but arbitrary dismissal of the accuracy of the German figures: I have seen no detailed statement showing why these figures are wrong—but if you divide by one-half the German estimates of what Germany has paid in the value of her mercantile marine, German property outside Germany expropriated, the rolling-stock and the live-stock taken away under the Treaty, I say, if you cut it in half, you arrive at the enormous figure of £516,000,000. This by no means exhausts the list, and yet you have an admitted figure—because my cutting it down by half is using an argument against myself—of £1,000,000,000, or four times as much as was paid by France to Germany. It is ridiculous, therefore, to say that Germany has not paid anything.
  What I want to know is this. Why is the fact of these immense payments always hidden? Why is it when M. Poincaré comes over here on visit: after visit and wrings his hands about the devastated areas, we are never told that ever since 1919 the German Government and the German Trade Unions have been clamour-

  3261
  ing to rebuild? Ever since 1919 the Germans have said, "Let us rebuild those devastated areas, "and there has been agreement after agreement, notably the Wiesbaden Agreement, under which the Germans undertook to clear the land and re-afforest, rebuild the houses, furnish them with furniture, stoves and so on, and, as my hon. Friends hero know, the great international labour bodies have taken up those German offers, which have been approved by the French Socialist parties and the French trade unionists. The general international labour bodies have taken up those proposals, have amplified them, have suggested co-operation on certain lines with the local municipalities, and have made suggestions for the French and German workers to work under their respective guilds. Why have these offers perpetually been turned down? Why has nothing been done, and why is it always concealed from us, hidden in the Press, mentioned nowhere? I do not believe there is one Englishman in 100,000 who has any idea, owing to this systematic concealment, that the Germans have been clamouring to rebuild the devasted areas for several years past. There is not the slightest doubt of the two causes why these facts have been kept, and continue to be kept, from us. One of those causes, no doubt, hon. Members opposite, who seem sceptical in these matters, will be interested to hear set forth by the celebrated French economist M. Gide. He said:
  "Furthermore, so far as Prance is concerned, there was a quite natural mode of payment, the reconstuction of the devastated regions at Germany's expense. This solution would have offered incomparable advantages. …This much justice must be rendered to the German Government, that it suggested this mode of reparation itself, and it is regrettable that the French Government should have opposed it. It must be confessed that the principal cause of this opposition was nothing but the avidity of manufacturers and speculators "—
  I may remind the House that M. Gide is not a Socialist—?
  "anxious to reserve to themselves the monopoly of this vast enterprise, each ruined town being a gold mine to them."
  That is one of the reasons why these things are never mentioned. Another reason is, I am sorry to say—and I think there can be- no doubt about it—that there is a desire on the part of certain persons in France to keep open this
  3262
  running sore, and to prevent French and German workmen coming together on that unfortunate land and helping to put it right. I want to make it clear, as I did in addressing the House a month ago, that we on these benches are inspired with feelings of the deepest sympathy for the French people. We have the greatest sympathy for the ruin which has been wrought in their country, and for the terrible losses they have sustained. We look forward to the day when there will be a Chamber in France which will represent more truly the French people, represent that France which we know most, and which we so greatly admire and love. I would even go further. I would say that we should be willing to do our utmost, on definite, specified conditions, to help to relieve the* French from the debt under which they are staggering. I would go even further than that. I would admit that the French are entitled to feel that they have not altogether been well treated by the previous Government ruling in this country. There is no doubt that a tremendous encouragement was given to the French Government, in their fantastic illusion that they could make Germany pay the whole cost of the War, by the utterances of the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) at the Armistice and during the Peace negotiations.
  Mr. LLOYD GEORGE: I understand the hon. Member to say that I gave encouragement to France that she could receive the whole cost of the War from Germany?
  Mr. MOREL: What I said was, that the French Government was encouraged to believe that the whole cost of the War could be recovered from Germany by the fact—I will amplify it now, if I may— that the utterances of the right hon. Member for Carnarvon Boroughs during the Armistice, and during the Peace negotiations, induced the French to believe that Germany would be in a position to pay the whole cost of the War.
  Mr. LLOYD GEORGE: I do not know in what respect that differs from the statement already made. I should like the hon. Gentleman to point to a single utterance in which I ever encouraged the French Government, or anyone else, to expect that the whole cost of the War could be paid by Germany. Quite the

  3263
  reverse. I could give the hon. Member quotation after quotation in which I expressed great doubts on that subject, including the speech I made, shortly before the Election, at Bristol in 1918.
  Mr. MOREL: I really thoughts [HON. MEMBERS: "Withdraw!" and interruption]—I really thought it was a matter of common agreement, from the right hon. Gentleman's speeches before the last General Election, that one of the main causes which got him back into power was the belief of the country—
  Viscountess ASTOR: that he won the War. [Interruption.]
  Mr. MOREL: I think if you ask 99 electors out of 100 who voted for the return of the right hon. Gentleman at the last Election why they voted for the Coalition Government, they would say it was because they believed from the speeches of the right hon. Gentleman and his friends that Germany would be made to pay for the War.
  Mr. LLOYD GEORGE: I submit it is customary either to accept a contradiction, or to give a quotation to prove that that contradiction is wrong.
  Mr. MOREL: What is going to happen—[HON. MEMBERS: "Withdraw!"]—if the French policy is carried out? What is going to happen to Germany as an indispensable part of the European system? What is going to happen to the world's peace? What is going to happen to ourselves? If this policy is carried out, you will have a period of confusion in Germany, leading perhaps to bloodshed and revolution, followed by a complete swing to the Extreme Eight. Economically, Germany will go to pieces, and psychologically, and, worst of all, you will turn every German democrat into a raving nationalist; as for international peace, if the Rhineland is taken away, every German will live for one thing and one thing only, as we would do were we in their place, and then you may put up the shutters of the League of Nations.
  Economically, what is going to happen? I venture to make a prediction—which is usually a very rash thing to do—and it is this, that if you have this political and economic collapse of Germany as a result of French action that within four months from now you are going to add 500,000 to
  3264
  your unemployed. Politically, if I wanted to make a sensational or a scare speech, I should add a great deal more to what I am about to say now. [HON. MEMBERS: "Go on!"] I merely want to try and defeat an evil policy which, should it materialise, would, in my opinion, be disastrous to this country and to the world. We cannot fail to consider, in regard to this problem, the fact that you have an enormous French Army of 700,000 men. and the fact that you have two other armies as it were within the ambit of that army, in a military convention, the armies of Poland and Belgium, and with the intensifying of the conscription laws in Africa—if the right hon. Gentleman the Under-Secretary for the Colonies were here, he would follow the import of that statement—the tightening up of the French conscription laws in Africa to such an extent that, according to the latest military report of the French, it is anticipated that the existing establishment of 200,000 African troops, which is now provided for and is actually in operation, shall be increased to 800,000 men. Add to that fact that France is undoubtedly leading in aircraft, leading in submarines, leading in, or at any rate, equal to, the other Powers in chemical warfare, and I say that you cannot, in the vital interests of this country, apart from any question or any other considerations, wash your hands of the situation and allow France to trample Germany under foot. An hon. Member has kindly given me extracts from the speeches of the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) which he made before the last Election in 1918. Here is the speech at. Bristol. "Let me summarise."[HON. MEMBERS: "Bead it!"] If hon. Members will allow me to proceed: I am reading it—
  "First, as far as justice "is concerned, we have an absolute right to demand the whole cost of the War from Germany. The second point is that we propose to demand the whole cost of the War.…The fourth point is—
  [HON. MEMBERS: "Bead the third!"] All right, I will:
  "The third point is that when you come to exacting of it you must exact it in such a way that it does not do more harm to the country that receives it than to the country which is paying it."
  [HON. MEMBERS: "Hear, hear!'] I am really flattered that hon. Members

  3265
  should find this amusing. The third point is a point of method which has nothing to do with my case. I will proceed:
  "The fourth point is that the Committee appointed by the British Cabinet believe that it can be done."
  Mr. LLOYD GEORGE: The lion. Gentleman has not quoted another part of the speech in which I said that, on the contrary, while certain officials of the Treasury advised that it could be done, other officials of the Treasury advised that it could not be done, and the Government proposed to investigate how much Germany could pay.
  Mr. MOREL: I said the right hon. Gentleman the Member for Carnarvon Boroughs had led the French to believe, by his own utterances, that Germany could be made to pay the cost of the War. He asks me to withdraw, and I have read those statements. Is the right hon. Gentleman prepared to deny the accuracy of these quotations? If not he has no case.
  Mr. LLOYD GEORGE: What I deny is that that is a complete statement of what I said. The hon. Member gave a quotation as to one of the Committees that said this could be done. He has left out the statement I made that there was another Committee that said it could not be done. I said that in the same speech. Then I proceeded to say that it would be the business of the British Government to find out how much Germany could pay.
  Mr. MOREL: Before we come to the extract about the Committee, this quotation, from the December speech—from the "Times" of 12th December—before we come to the question of what the Committee said or did not say, there is this sentence alleged to be by the right hon. Gentleman:
  "The second point is that we propose to demand the whole cost of the War."
  Did he say that or did he not? Everybody knows that the Election of 1918 was won on two great cries: that Germany would be made to pay the cost of the War and that the Kaiser would be tried. [HON. MEMBERS: "Hanged!"] I regret that my references have led to so much hilarity in the discussion, but I think I have made plain the point I wanted to make.
  3266
  The last point I want to make is: that we cannot afford to allow France to smash Germany into smithereens, as she will do if she carries out this policy. Already France and her Ally possess between them 33 per cent, of the iron of the continent of Europe, and 31 per cent, of the coal. If France occupies the Ruhr, she will have 60 per cent, of the iron and 68–76 per cent, of the coal. That is to say, you are going to create an economic hegemony in Europe by one Power which was never dreamed of by Napoleon in his wildest dreams. I regret very much the Prime Minister is not here; I would have liked to have asked him a few questions. There are very sinister rumours going about as to the character of the conversations which took place in Paris the other day between M. Millerand and Sir William Tyrrell of the Foreign Office, and regarding the conversation in Paris between M. Poincaré and Lord Curzon on 18th November. I do not know one need usually attach importance to rumours. [HON. MEMBERS: "Hear, hear!"] Yes, I am admitting that, but in this case they come from such such sources that they cannot be dismissed. They point to the fact of a bargain having been arrived at under which French interests in the East become subservient to British, provided France has a free hand in the Rhine. I hope hon. Members of this House will not be in a position to read before the House rises the opinion of one of the participants in the Conference of the last few days, that that agreement, that secret bargain was practically completed before the Conference began to sit, and that there was no intention, as a result of it, that the Conference should, end in definite results. I sincerely hope that hon. and right hon. Gentlemen will not sec that in print.
  How are we to get out of this horrible policy which has led us to the edge of the abyss? If this bargain is concluded, or about to be concluded, it cannot be done! If it is not, and I pray God it is not, there is only one way out, and that is, there should be an Anglo-American cooperation without reticences or reservations and with all the cards on the table. I, for my part, fully comprehend American psychology with regard to the debts. I have spoken to a great many leading Americans on the subject. But can America, whose past is studded with such

  3267
  noble monuments to human wisdom, can America not produce a statesman who would say to the victorious nations of Europe: "We will forego your debts to us, provided you will forego your debts to one another, that you will cease to prey upon the conquered peoples, provided that you will not use these debts which we will forego in building new armaments for destruction, provided that you will join with us in a great international conference representative not only of the Governments but of the peoples of the world, to put an end to war and the manufacture of armaments of war?" Would that appeal not receive a response in Europe? Of course it would, and is there no statesmen broad-minded enough and with vision enough to see into the future here in this country, which, as no other country has ever done in its history, has before, on four or five occasions, admitted national error and endeavoured to correct that error, is there no statesman in this country sufficiently broad-minded to say to France and to Italy: "We will forego your debts, we will abandon our share of reparations"— which is, after all, mainly pensions and allowances which never ought to have been put in, according to the terms of the Armistice—"if you will do the same: we will do there things, provided that you, France, will be prepared to participate in an international loan, will be prepared to agree to a moratorium, will be prepared to cease this recrudescence of designs against Germany, and to withdraw your troops from the Rhine."
  7.0 p.m.
  Would there not be an echo to this in Italy and in France? Of course, there would. The people of France would before long realise that those of their rulers who turned their back on an offer of that sort were the enemies of France itself. France cannot afford to remain isolated in Europe if the rest of Europe and America are determined to put an end to these insanities. Britain seems to be waiting for America to take the lead, and America seems to be waiting for Britain to take the lead. Cannot they both take the lead and in common, take the initiative, and lead the nations along the road which would take them away from bankruptcy and from ruin and from
  3268
  that most terrible tragedy of all—the fate that the young children of to-day, after this ghastly War and this horrible holocaust of human life, shall themselves be made the cannon fodder of to-morrow?
  Lord ROBERT CECIL: We have listened to a speech of an interesting character and of very varied temper. The end of it was an appeal, not perhaps altogether founded on tact, to America and to ourselves to arrive at a settlement of the Reparations question. I am one of those who profoundly agree that there is no greater interest for this country, for Europe or for the world than the settlement of that question. I believe, as Lord Grey said so well last night, in another place, that the settlement of that question is intimately bound up with that of a reduction of armaments. It is on the settlement of those two questions, more than anything else, that the peace of the world depends. I cannot help feeling, however, that the preface to that allocution of the hon. Member for Dundee (Mr. Morel) was rather oddly chosen if he really desired to bring the nations of the world together. I have not much sympathy with the kind of point of view which sees in everything that Germany does a threat to the peace of the world. I have even less sympathy with that point of view which sees in everything that France does a threat to the peace of the world. The hon. Gentleman said there were people in France who desired, for their own ends, to keep open this running sore. Are there not people in Germany who desire to keep open she running sore! [An HON. MKMBER: "What about this country?"] I do not know of any people who desire to keep it open in this country: it is possible there may be some lunatics of that kind. When the hon. Member for Dundee talks about keeping open a running sore, does he really think that he is promoting a settlement of international questions by making & violent, and, I must say, a rather intemperate attack on the occupation by France of some of the territories of Germany? I am not here to defend everything that has been done. There are certain things I profoundly regret. I think it has been a profound mistake to utilise black troops.
  Mr. MOREL: May I ask the Noble Lord why, in calling attention to that and to other things which really ought to be known by the world, and when one points out what the Noble Lord himself admits

  3269
  to be a great scandal, one is making a violent attack?
  Lord R. CECIL: There are two ways of doing things. [An HON. MEMBER: "A tricky way and a straight way!"] You may call it a straight way. There is also a provocative way; such a way as to create a violent sentiment in the French people that they are not being judged fairly and are being held up to obliquy and scorn on the part of a friendly nation. By that you are not doing anything to bring the nations of the world together.
  I am not going into the question of the guilt of Germany. There the hon. Gentleman will forgive me for saying that I am wholly unconvinced. I have read a good deal of the very natural propaganda put forward from German sources to convince the world that she was not guilty—substantially guilty—of the world War. To my mind, the broad, great facts of the international situation are much stronger than any logic chopping as to who was guilty. No one really can doubt the fact, if he chooses to keep his eyes open, that Germany, for years and years, was building up a great military machine, the only purpose of which could be ultimate aggression. [An HON. MEMBER: "What about your Navy?"] I should have thought the hon. Gentleman must have known that the Navy we built up was not built up for aggressive purposes.
  Mr. NEWBOLD: Rubbish!
  Viscountess ASTOR: What do you know about fighting?
  Lord R. CECIL: The Navy is not capable of being used for aggressive purposes in the way that the German army was capable of being used. The hon. Member for Dundee will forgive me if I say that I regret those passages in his speech, because there was a great deal in that speech with which I was quite in agreement—when he said he felt that the French seeking after security by military measures and military preparations —I think what they often call "military guarantees"—the occupation of the left bank of the Rhine, and so on. That all that kind of policy, so far as it really is the policy of the French Government, is mistaken I do not doubt. Of course, I entirely agree with the hon. Member that the only ultimate hope is by breeding up amongst the nations of the world that
  3270
  spirit on which the League of Nations is founded. The hon. Gentleman read a passage in the notorious report of M. Darrac, indicating that part of the French policy was to establish an independent Rhine province—or, rather urging that it should be a part of a French province. It may be that there are some people in France who would like to see the establishment of an independent Rhino province. I agree with the hon. Gentleman that that policy is a hopeless one from the point of view of the peace of the world. I doubt very much whether responsible people in France really entertain it. Certainly, if they do entertain it, it is singularly inconsistent with the policy and the proceedings of which the hon. Gentleman also accused them, namely, of governing the Rhine districts which they have occupied in such a way as to render themselves hateful to the population of that province. It seems a very difficult thing that both charges against the French Government can be true. If they mean to separate the Rhine province from Germany, that is one policy; but to wreak their vengeance upon the German population of this province is another policy. The two policies cannot be carried out at the same time, and I venture to think there is nothing in that.
  I should like to say one other word about the earlier part of the hon. Gentleman's speech, in which he complained of the change of policy of the British Government in regard to the Straits. If the policy of the British Government—I am not talking of the present or of the preceding Government, but of the general course of British policy—has changed, it is because the circumstances have changed. Our policy in the old days—I think it was a foolish policy—of shutting up the Straits—the policy of 1856 and so on—was adopted because we were afraid of the Russians issuing from the Black Sea and attacking us. During the War, and before that, we became convinced that that was a chimera, and that there was no longer any serious danger of it happening. It then became part of our general policy, which we have pursued all over the world, to have the greatest amount of freedom of transit we could secure. It is part of our policy, undoubtedly, and a right part of our policy, to open up the Black Sea territories freely to trade and to take away the

  3271
  possibility of their being cut oft from trade owing to disturbances with which we have no concern. I see nothing discreditable about that. On the contrary, I think it is an admirable policy. Whether it is worth great sacrifices is a different thing, and there I am not much in disagreement with the hon. Member.
  It so happens I have just received a telegram from Lord Curzon, which seems to indicate that the negotiations at Lausanne are proceeding in a satisfactory way, and in a way which even the hon. Gentleman will approve. We ventured, from the League of Nations Union, to send him a telegram of congratulation this morning. This is Lord Curzon's reply:
  "Greatly obliged for your telegram. You will be interested to hear that in reply to my speech yesterday Turkish delegation this morning announced their intention to apply for admission to the League of Nations immediately after conclusion of peace."
  That shows that nothing has been done against the policy of the League of Nations by our representative at Lausanne.
  I desire to say a few words about the main topic we have been discussing this evening. I agree most fully with everything that has fallen from other speakers, particularly from the Prime Minister, as to the enormous difficulty and danger of the position. There is the great difficulty of getting the money. Really, however, that is the smallest part of the difficulty and danger that surround this question. There is the great danger of a German collapse. Both the right hon. Gentleman and the hon. Member who last spoke feel it to be an imminent thing. Neither of them, I am sure, will underrate the enormous and far-reaching consequences such a collapse will have on the whole economic situation in Europe. There is the very serious danger that the course of the negotiations may prove such as to result in a serious difference with our French Allies, a difference which I should deeply deplore. I agree very much with the statement that if the two most important Powers in Europe to-day are really pursuing divergent policies, it is very difficult to see how any peace or any settlement can be arrived at in this controversy.
  Those are very great dangers. They have always been there. Undoubtedly,
  3272
  they have been enormously aggravated by the unfortunate delay in arriving at a settlement of these questions. I believe they were easier of settlement three years ago than they are now. I very much believe that if they are delayed still further—it may be only a few weeks further—settlement may become absolutely impossible. My Noble Friend the Member for Hastings (Lord E. Percy) made a very interesting speech, with almost all of which I agreed. He said one thing, however, which, I think, stated his point rather too strongly. He said that he thought there was no disagreement now between us and France as to the amount of reparations that were to be paid. With great respect, I venture, to say that I think that is a mis-statement, and all you can say is that everybody is agreed that the gigantic sums talked about a year or two ago are quite out of the question. Therefore the statement that we have arrived at an agreement as to the amount is not true.
  Lord E. PERCY: the figure which I mentioned as the point to which reparations should be scaled down to I think would probably be agreed to by all parties.
  Lord R. CECIL: I think it was a very fair estimate of what we might expect to get two or three years ago, but I doubt whether you can get as much as that now. I do not want to be led away by that figure. What we have to consider is the difference as to the amount which can be paid by Germany, and that is the only point we have to consider. The controversy as to what the late Prime Minister did or did not say makes no difference. I am sure the right hon. Gentleman (Mr. Lloyd George) will not think me impertinent if I say that that was not the main reason for the result of the last Election, and there were other considerations had to be taken into account. I know the right hon. Gentleman is able to take care of himself in regard to that matter, and all I will say is that there are others who said nothing of that kind at the Election, and there was not a great deal of difference in the result where it was said and where it was not said.
  The real trouble is about the sanctions that are to be put into force against Germany and the pressure to be put upon her. This really brings us back to the question, are we asking something which

  3273
  Germany can reasonably be expected to pay? If so, I doubt whether any hon. Gentleman opposite would think there was anything unjust in putting considerable pressure on Germany to pay once you had rightly made, up your mind upon an agreed figure that it was reasonable to ask Germany to provide. After that, if Germany did not pay I am sure hon. Members opposite would not have any reticence about putting on pressure. The underlying difference between us and France is, what can Germany pay? That is the most important thing the French have to realise as well as us. It is not a question of what Germany ought to pay or whether we did or did not make a fair demand in the Treaty of Versailles. Personally, I wholly disapprove of the financial Clauses of that Treaty, but the question now is what is it Germany can be reasonably expected to pay. Our advisers take one view, but the French advisers take another.
  It is a great mistake for us to assume, as the hon. Member opposite (Mr. Morel) did, that everyone who disagrees with you is dishonest, because that is not so. The French believe that, the Germans can pay a great deal more than they are paying. On this point we are agreed on the principle. We are agreed that the principle we have to work upon is ability to pay. Surely that is a case which might be referred to some impartial tribtinal. I daresay that course has been suggested. I do not want to pry into the negotiations which have gone on recently, but is it not reasonable to say to the French, "Before you ask us to make concessions about this or that we must see the prospect of finality and a settlement." The thing that keeps us apart is the difference as to the amount Germany can pay. But why cannot we refer that question to some tribunal?
  Mr. NICHOL: What about ability to receive?
  Lord R. CECIL: That is not a question I wish to enter into at the present moment. My point is, why should we not ask the French to refer this matter to the League of Nations? Let us agree upon a tribunal to be appointed by the League of Nations to settle this question. And why not? If we can agree on that, if we can agree upon a fair method of ascertaining the amount Germany is able to pay, our difficulties are at an end, and
  3274
  then we can discuss how to recover the money. In that case our position will be entirely different. I feel that the whole thing is not quite fair, because we have tried to assess these damages, not by a fair and impartial tribunal, but by imposing the amount which one party thought was right on the other party. From the German point of view, that is not what you can expect them to accept. I press this suggestion on the House, and all the more strongly because last September, at Geneva, one of the French delegates suggested that this matter should go to the League of Nations if it proved impossible to arrive, during these conversations, at an agreement. I submit that to the Government as a suggestion which they might very well consider themselves.
  I agree with my Noble Friend that that still leaves a question how to get the money when you have arrived at the amount. I would go a very long way with hon. Members opposite in their contention that force is not an efficient agent in this respect. There are some things you can do by force. There are some things you can stop people and nations from doing by force, but when you want to make nations or individuals do something which they do not approve of and which they think is unjust, then force is a very feeble agency. In the case of a nation of 70,000,000, when you say to that nation that they shall be so compelled to order their lives and their industries as to be able to pay something which they utterly reject the justice of and which they are determined not to pay, then I believe that mere force alone will not bring you to an end of your trouble. On the other hand, my suggestion is that you may say to Germany, "Here is the decision of a perfectly impartial tribunal. You admit yourselves that you are bound to repair the devastation you have caused. You admit that you are bound to make some payment towards the cost of the War and the damage you have done. How can you refuse now that this amount has been assessed as a fair amount which you can pay?"
  Then we should be able to enter upon negotiations for the purpose of finding a loan for them in return for some supervision over their finances on the lines we have adopted in the case of Austria. Once you have got the amount fixed, you

  3275
  are in a much stronger position to go to Germany and say, "Discuss with us now the method by which you are going to pay what all reasonable Germans themselves must admit is a just debt." I was glad to hear what the Prime Minister said with regard to any separate action which might be proposed by France, and I admire greatly the choice of words by which the right hon. Gentleman expressed his opinion on that point, and I entirely agree with him. I am one of those who always stood for an Entente with France, but I am quite satisfied that separate action of a coercive character, whether in Germany or elsewhere, to enforce Treaty obligations would be a very serious blow to the very foundation on which the Entente stands. Therefore I am in very hearty agreement with what the Prime Minister said on that point.
  The right hon. Gentleman spoke of the immense difficulty of the financial position in this country. I think by the policy we have pursued in the past we have given a somewhat fictitious air of prosperity to our own finances, and I think that there are elements of weakness in our financial position which may easily have escaped the notice of the casual critic. I agree that from a point of view of justice the right hon. Gentleman's argument is unanswerable, but may I say that while I agree with the point of view that he takes, I think that delay in settling this question will be a far greater loss to us than any of those financial dangers which he very rightly anticipates. We must settle this question now.
  When M. Poincare went back to France after his recent visit some of his friends said to him, "We want to settle this question. That is what we are anxious for before anything else." I know that that is the opinion of certain very competent French minds, and I know that they feel that a settlement is what is wanted, and I am sure it is what we want in this country. I very respectfully assure the Government that they need be under no misapprehension in this matter, and they have merely got to go forward boldly, and even generously, and if they produce in that way a settlement of this question they will have done a great deal towards allowing Europe to get back to a real peace, and the work of reconstruction which has been so long delayed.
  Mr. LLOYD GEORGE: I did not pro-pose to take part in this Debate, but I heard, with very great satisfaction, the speech delivered by the Prime Minister, and I am in very cordial agreement with the line of policy which he has placed before the House. I do not think I should assist in any way in promoting a settlement if I were to enter further into the discussion, or, indeed, if I made any suggestions or contributions of my own. I am exceedingly anxious that the negotiations which have started should have a good issue. I agree that finality cannot be achieved, nor can we hope to achieve it, but I hope that when the Conference is resumed in January the right hon. Gentleman will be able to register a further step on the road to a settlement. It is because I think it will be very difficult for me to say anything at this stage which would be of any assistance to the right hon. Gentleman— I might easily say something which might interfere with the success of his policy— that I do not propose to take any further part in the discussion, because I am satisfied with what he has said.
  I wish, however, to correct a statement which has been made by the hon. Gentleman sitting near me (Mr. Morel). He made a statement about something I said in the course of the Election. Naturally, I have not my Election speeches here. I do not carry them about with me, but he quoted a part of the speech which I knew perfectly well was a very partial and consequently a very misleading quotation. I asked him to quote the other part, but he obviously had not got it. It was something supplied to him by an hon. Friend, not from the speech, but from some propagandist pamphlet which he has always at his command. I am perfectly certain from what I know of that hon. Member that if he had read the whole of the speech, he is much too fair-minded and chivalrous to have passed it on to the hon. Gentleman. I will quote the passage to which I refer from the same speech. I only made one speech in the course of that Election on the question of indemnities or payments by Germany.
  Mr. PRINGLE: You made two.
  Mr. LLOYD GEORGE: My hon. Friend is always very anxious to find me in the wrong, but if he will allow me for a minute I can assure him that his leader approved of my statement the following

  3277
  day. I will read the other passage to which I refer:
  "It is inevitable that the nation that does the wrong and challenges the lawsuit should pay the costs. [A VOICE: "In full."] I am coming to that. Certainly in full if they have got it, but listen to what I have got to say to you on that point. I am coming now to the reason why Germany should pay to the utmost limit of her capacity. Why have I always said, 'up to the limit of her capacity?' I will tell you at once. It is not right for a Government to raise any false hopes in the community and least of all is it right to do so on the eve of an election, and I am not going to do so. If I were to say to you not only ought Germany to pay, but that we can exact every penny I should be doing so without giving you the whole of the facts."
  I then quoted at length the Treasury Report. There was a meeting of experts to consider the matter, and they decided that in their judgment Germany could not pay the whole. I read the whole of that out to the audience at Bristol. I then went on to say:
  "I want you to bear these facts in mind as to the reason why I have always said we will exact the last penny up to the limit of her capacity. But I am not going to mislead the public as to the amount of her capacity until I know more about it, and I am not going to do so in order to win votes. It is not right, it is not fair, it is not straightforward and it is not honest."
  I then stated there was another Committee. There was a Financial Committee winch had been appointed outside the Cabinet My recollection is that there was only one Cabinet Committee. This Committee was appointed by the Cabinet. There was only one Cabinet Minister on it, but there were on it several very important financial gentlemen from the City of London who were not members of the Cabinet, and I am not sure they were supporters of the Government; indeed, I am sure some were not. They came to the conclusion that Germany could pay. I stated quite fairly the two Reports which we had had, one saying that Germany could not pay and the other saying that Germany could pay. I then said:
  "I am not going to tell you Germany can pay until we have gone into the matter more thoroughly, and I am not going to mislead the public."
  That is very different to the statement made by the hon. Gentleman. I may specially remind my hon. Friends here who are so pleased when there is anything which in the slightest degree disparages
  3278
  the part that I have taken that the right hon. Gentleman the Member for Paisley (Mr. Asquith) who was then in Fifeshire, when asked on the following day what was his view of my speech, said:
  "I agree entirely with the statement made by the Prime Minister yesterday."
  I only want to make it perfectly clear that I never misled the public on the subject. I stated quite fairly the facts as they came before me. At the Peace Conference, so far from maintaining that Germany could pay the whole cost of the War, I came to a different conclusion, and as a result it was the British delegation of which I was the head who insisted upon inserting in the Peace terms a Clause that the Reparation Commission should decide from time to time what was the amount Germany could pay.
  Colonel WEDGWOOD: How we have misunderstood the right hon. Gentleman! How grateful we ought to be for the speech of my hon. Friend the Member for Dundee (Mr. Morel) and for the opportunity of this Debate to-day! For four years, day after day, and night after night, the whole public of this country have been accusing the right hon. Gentleman falsely. But now we know that he never said that Germany could pay for the War.
  Mr. LLOYD GEORGE: I am very sorry to interrupt, but I have repeatedly made that contradiction, both in this House and outside the House. I have come to the conclusion that it is really of no use contradicting charges which some hon. Gentlemen make, as they always repeat them.
  Colonel WEDGWOOD: We may congratulate ourselves that the ex-Prime Minister has returned to this House and that we have him here making the contradiction instead of outside. I quite agree it is a very important contradiction to be made, because now we are entering upon the re-incarnation of the right hon. Gentleman. In the old days, it was the right hon. Gentleman against Germany, now it is the right hon. Gentleman against M. Poincaré. We have seen in the last few days an animated correspondence between the right hon. Gentleman and the French Premier as to the aims of France in occupying the Rhine Provinces. I am bound to say we all welcome the right hon. Gentleman back to a more liberal point of view on that. We realise that in

  3279
  taking up the line he has he has come back to his own. We welcome him here. We realise the difficulty he has in squaring his past declarations with his present policy. Henceforth we shall regard the right hon. Gentleman the Member for Carnarvon Boroughs as the mainstay of the sane policy of evacuation. We know quite well, we have known it all along, that he was in favour of a settlement with Germany on such lines as have been laid down by the Noble Lord the Member for Hitchin (Lord R. Cecil). At last he has come forward to support such a settlement and to support, I hope, the declaration of the Noble Lord that a settlement of that sort ought to be handed over to the League of Nations to decide. He has come over to our principles. He has likewise come over to our principles on the Russian solution. All along we have known he was right on reparations only, unfortunately, he was tied by his associates on that bench. All along we have known he was right on Russia, but again he was tied by the right hon. Gentleman who was once Member for Dundee (Mr. Churchill). Now he is free, sword in hand, but his followers are not so free as he. Unfortunately they have been induced to give pledges which they will find it very difficult to carry out. However that may be, we do realise that we now have on the more sane policy for settlement in the reconstruction of Europe, the valuable help of the late Prime Minister.
  I am only sorry he did not take part in the Debate to-day to strengthen those portions of the Prime Minister's speech of which we approve, and to deprecate those parts which we do not approve. After all, it is possible that the present Prime Minister in good time will see the German position in the same light as we do. I think it is not at all impossible that in a few years' time be may even sec the Capital Levy as we view it, let alone the necessity for settling the German problem once and for all. My hon. Friend the Member for Aberavon (Mr. Ramsay MacDonald) pointed out that this was a question of time, and so it is, seeing that this House rises to-morrow and before we meet again action will have been taken in one direction or another which may have within its womb the whole future of humanity. Is it possible that we can state emphatically enough on this occasion the necessity of
  3280
  the British Government preventing the occupation of the Ruhr valley and the occupation of any further territories in Germany, which would be, it is believed on all sides of the House, the inevitable precursor of the collapse of Germany, a collapse which will be infinitely worse than the collapse of Austria, because Germany is far more of an industrial country. The problems in Austria were fairly easy. Germany has problems which will be almost impossible of solution. I believe that the situation has got to be looked at entirely with British eyes and on our lines. We stand for one purpose only, and that i3 the reconstruction of Europe so that our customers in Europe may again be able to buy British goods and employ British labour. That is our object in resettling Germany. But on these benches we also believe something about the brotherhood of man and the desirability of living in peace and amity with all nations. Still, our position is that, unless our customers are restored, unemployment will continue and grow worse in this country. That is why we want a settlement.
  We have, in the Gallery to-day, listening to our Debates, not only the French people and the French Republic, but also the American people and the American Republic. They are listening to the Prime Minister, and their view of what he says is infinitely more important to us than any view that may be taken by M. Poincaré, because it is essential, if we are to extricate Europe, if we are to put an end to both the pressure on Germany and the depreciation of the mark in Germany, there should be co-operation between America and ourselves. How far has that co-operation been sought already? If there is one question I would like to ask the right hon. Gentleman it is this: Has there been, or will there be, any consultation with America as in the attitude we ought to take in co-operation with her in the event of France taking independent action in the Ruhr Valley or elsewhere? It seems to mo that on policy must be shaped towards co-operating with the only other nation that is suffering as we are suffering from unemployment, and suffering for exactly the same reason. In America they are unemployed because their European customers are no longer able to take their goods, just as we are suffering here in this country to-day. Therefore, we have a common object, a

  3281
  common financial interest, in re-establishing Germany in Europe. If that be so, let us by all means draw closer to the American policy and get the Americans to work with us. I look back upon American policy and see that, during the last two years, the constant tendency of America has been to use the fact that they are in a financially strong position to bring pressure to bear, not only upon ourselves, but more particularly upon the other European powers, in order to induce them to adopt a sensible European policy. For instance, when they learned that we and the French Government were proposing to devote the reparations paid to the maintenance of troops in the Rhineland, they put in their claim for their slice for their troops in the Rhineland—not because they wanted the money, but because they wanted to have a weapon to use in order to bring pressure to bear upon France.
  Not only do they use that weapon, but they have hitherto, for the same reason, refused entirely to scrap any claim they might have to the repayment of debt. They have said quite clearly, and Senator Borah has, I think, perhaps made it more clear than any other leading American, that they will not consider any question of cancellation of debt so long as the European Powers, firstly, continue to spend enormous sums of money on armaments, and, secondly, fail to balance their Budgets. Indeed, they are using their financial position in order to force Europe into sanity. I think that we might use our position—the fact that they owe us money, the fact that we also are financially sound—in exactly the same way, instead of attempting, by inducements, to get France to adopt a, sensible policy, such as by offering them a pact, and prospects of a military alliance. Instead of offering inducements to the French, I would have them bring pressure to bear upon the French Government; in exactly in the same way that the American Government is bringing pressure to bear upon European nations to-day. It is no use imagining that, if the reparation problem could be settled with Germany, thereby Europe would be saved. In addition to settling reparations, it is necessary also to bring these European Powers to scrap their armaments, to extend the Washington Agreement to other arms besides the Navy, and to balance their Budgets. Those are all steps which are essential to the recon-
  3282
  struction of Europe. The fixing of the reparations at an amount which Germany can pay; the bringing to an end of the swollen armaments of Poland, Italy, France, and Czecho-Slovakia; the balancing of all the Budgets by collecting revenue sufficient to meet outgoing expenditure—those are all necessary to the re-establishment of Europe. Not one alone is necessary, but all are necessary. Those steps cannot be brought about simply by using an Entente between England and France; they all depend, in the long run, essentially upon the co-operation of England and America. If we can use this Debate, if we can use the action of the Government in regard to the inter-Allied debts, as a means of bringing our policy more into co-operation with America, so that we can act together on these matters, we shall be taking what I believe to be the only step that can save Europe at the present time. Even now it may be too late. Even now it may be that Germany has got to go through it, just as Austria is going through it to-day. It-may be that in a year's time the mark will be 300,000 to the £, and we shall be considering, not reparation, but a loan to Germany, in order to tide over the difficult times. It may be that we shall have to go through all that, but, whenever we settle this problem, it can only be, in cooperation with the other financially sound country in the world: and the sooner we bring our policy into line with theirs the better it will be, not only for ourselves, but for the whole of civilisation.
  Mr. MOSLEY: The House, I know, will forgive me if I confine myself for the most part, not to the speeches which the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) delivered in the year 1918, but rather to the very interesting speech which the present Prime Minister of the country has delivered this afternoon upon the momentous issue which now confronts us. We are, of course, all quite ready to admit that the right hon. Gentleman, in making such a statement at so crucial a point of international affairs, was in a very difficult position, and could not possibly, as he himself pointed out, speak with that freedom which is the prerogative of those who address the House from a back bench or from an unofficial position. The speech of the right hon. Gentleman, however, inadequate as it was to the whole field of

  3283
  this discussion, did go some way towards clarifying the Government's attitude towards this very great question. I was very happy to hear the right hon. Gentleman dismiss as obviously absurd the ridiculous suggestion that the German Government is deliberately debasing its currency in order to avoid the payment of its debt. It is, surely, an absurd proposition that any country will ruin its finance, will destroy its industry, in order to avoid the payment of a debt which, on the thesis of those who advance this argument, can easily be paid. It is equivalent to saying that a man, rather than pay debts which he can pay and yet live in some measure of prosperity, will deliberately put a bullet through his own head.
  The right hon. Gentleman did, however, say, and in this he rather surprised me, that if the German Government had adopted stronger measures, they might have been able to check the process of inflation, and that they were culpable in this respect, Really, it seems to me that telling the German Government to stop printing paper money is equivalent to telling a drowning man to stop swallowing water. What else could they do in the situation in which they were placed? With huge and uncertain commitments hanging over them, their credit consequently shattered—for no one will lend money to a man whose total profits are to be seized the moment he makes any profit at all—with these great commitments hanging over them, and, more than that, the necessity for making immediate payments to this country and to France, what other policy could they adopt instead of that of inflation? Inflation in a nation's currency is equivalent to a declaration of insolvency in an individual. Further, while they had to make immediate payments, they had no exportable surplus of commodities with which they could pay their indemnity. The only way in which they could pay was by an exportable surplus, and they had no exportable surplus. They had no gold, they had no services in which they could pay; their only recourse, in order to pay this instalment of indemnity, which alone could forestall an occupation of their remaining industrial areas, was by the printing of paper marks and their sale outside Germany. Of course, when such a policy was rendered necessary, there followed a period of great inflation and debasement
  3284
  of their currency, from which, whatever measures they might take, whatever might have been their will to avoid this catastrophic condition, they could not possibly have saved themselves.
  To a certain extent the right hon. Gentleman's statement was reassuring in this respect, in that he admitted that, under present conditions, with this question still outstanding, it was almost impossible for the finances of Germany to be remedied or for her currency to be stabilised. That is a long step in the direction of sanity. When, however, the right hon. Gentleman came to the real crux of this matter, to the point where he had to say what this country was prepared to do, what sacrifices, what concessions, it was prepared to make in order to secure sane conditions in the economic, system of Europe, which alone can restore prosperity to our industries—when he arrived at that point, his utterance was not only ambiguous, but, to a detain extent, disquieting. He advanced the old argument by saying, "Why should this country of ours be the only country to pay an indemnity? We have to pay the debt which we owe to America, and yet we are told that we are not to receive any of the debts that are owing to us." The first weakness of that argument impressed me as resting in the fact that we do not really expect, in any case, payment of the debts that are owing to us. I would ask the right hon. Gentleman—he will not answer in this House, but he will answer in the recesses of an intellect peculiarly acute— does he really conscientiously ever believe that, at any rate, for many years to come, we shall see a single shilling of the money that is owing to us? Of course, the right hon. Gentleman knows perfectly well that he is in pursuit of a chimerical ideal.
  Further, he might, perhaps, console himself with the reflection that in history those nations that have paid indemnities have prospered rather more than those who received them. It is always reputed of Bismarck that, when he observed the effect of the payment of an indemnity by France to Germany, he said that on the next occasion when he beat the French he would insist upon paying them a very large indemnity. Apart, however, from any consolation that we might derive from these historical reflections, I would ask the right hon. Gentleman, in facing this question of the cancellation of inter-Allied debts in return for a scaling down of the whole reparation question, and

  3285
  possibly also a reconsideration of the armament question and the putting of the whole tiling on a reasonable basis, to face it as a question, not of abstract justice, but as a question of practical realities in a world which, alas, very rarely considers questions of abstract justice. Of course it is quite true that it appears to be very unfair that this country should pay all the debt that we owe, and that in return we should receive nothing of what is owing to us; but really the right hon. Gentleman and the country must face the practical realities of this situation. We are in the position, as it seems to me, of a man in business who has owing to him some bad debts which he is never likely to collect—it is universally admitted that we are never likely to collect these debts —but which he may employ to open up great new fields of commercial activity and enterprise for the engagement of his business activities. I ask the House, what business man in such a position would hesitate for a moment to cast aside, if necessary, his utterly useless bad debts, such as these which, on the admission of everyone, we are never likely to collect, in order to open up the great new field of business activity and enterprise which these bad debts can be used to open up? The right hon. Gentleman did not touch upon any of the important matters which affect this question. He held out, as I have just said, no very definite hope of the solution of the general question through a grand deal in relation to the whole question of reparation and of Allied debts.
  8.0 p.m.
  But more than that, he did not even hold out any hope of putting the present system of reparation payment on a scientific basis. He did not touch upon the question of the receipt of these payments He did not explain whether he was going to receive them in gold, in services, in commodities or in specified commodities. He did not explain how this country was going to receive payment in goods which we are ourselves manufacturing here without suffering a great displacement of labour in this country. Under the present system of reparation, if we do receive any reparation paid in commodities, we are in the position of a nation drawing the unemployment dole from another nation. Instead of producing the goods ourselves, we are receiving them from another country. The effect
  3286
  is neither healthy nor dignified, especially when we are standing at the tail of a queue that is headed by France. I am for the moment dismissing altogether the wider consideration and addressing myself purely to putting all these reparation payments on a scientific basis under the present arrangement. Of course, there is only one way in which this country can receive an indemnity without detriment and dislocation of our industries, and that is by payment in specified commodities such as potash, timber, almost negligible, sugar, not so negligible. Before the War we received £10,000,000 worth of sugar annually from Germany. Expressed in present values, that would amount to nearly £20,000,000. It would be possible in such specified commodities as that to receive considerable payment even if the right hon. Gentle man insists on continuing the present basis of reparation. [Interruption.] I know the arguments my hon. Friends will advance would be that these special payments would have to be compensated by special exertions in neutral markets. I do not think that is quite true. To a great extent payment in these specified commodities would be made by special exertion in other fields, particularly by an intensified cultivation of sugar in Germany, which would not, I think, lead to any corresponding competition in neutral markets, which my hon. Friend fears. All this is a very intricate problem. I would rather put it upon this basis, that the most innocuous way in which you can receive an indemnity is by specified commodities. I would not say even in that case you can entirely dispense with any danger of dislocation to your trade through its reaction in other markets. If we are to persist in the present system of reparation, let us have it on a more scientific basis than that which prevails at present.
  I have dealt with the broad question of inter-Allied debts and of reparation. I ask the right hon. Gentleman if he will not accept these proposals which are put forward from these benches. If he persists in the attitude expressed by the late Prime Minister, that this country cannot afford to have a settlement of Europe through giving up debts which it never will collect, how does he propose to proceed in this matter? What is his plan? Supposing it is necessary, as it will be necessary under the present

  3287
  system, to take some further steps or to sit down under the fact that you are going to get nothing at all, what is the right hon. Gentleman going to do? He did not deal at all with the question advanced by the right hon. Gentleman the Member for Spen Valley (Sir J. Simon) as to what measure of control or supervision was to be exercised over the finances of Germany. He utterly ignored that question. Surely it is a very vital question. It impresses me as one of the most ludicrous paradoxes in our political system to-day that a party which stands primarily for the individualist principle, which insists upon the most rigid individualism in every sphere of our own national life, should come forward and argue that the only way to get money out of Germany is to impose State Socialism from without. What an extraordinary argument. These people say, If a country by its own will imposes Socialism upon itself that country will be ruined, its industries and its prosperity will decay and fall into chaos. Then they say it is possible for one country to impose upon another a socialistic and bureaucratic system and that is the only way to bring its finances into order. What is the method of the right hon. Gentleman? By what means does he hope to get payment from Germany under the present system I He has got to the point where people will not work if they know that all the results of their labour are going to be taken from them. If there is a Nemesis hanging over every man who is called upon to labour in any capacity which he knows the moment he produces any profit will descend upon him and take it from him he says, "If I have- to starve anyhow I will starve without working," and that is what the Germans are saying to-day. More than that, right hon. Gentlemen opposite are always saying, the only way out of the difficulty is to get a great loan for Germany which is to be supplied by the financiers of the world, who will only supply it if they have some confidence in the future credit of Germany, which is its capacity to produce wealth. Who is going to lend money to a man when you know that he will have all his profits taken and the result of his labours seized the moment he produces anything? Certainly the imposition of a system of State Socialism imposed from
  3288
  this country upon Germany for the seizing of these products is not going to induce the German to work or other people to lend him the money to set going his industries again.
  If only the right hon. Gentleman would apply some of the principles which he advocates with such force and such sincerity, if he would give the German an incentive to make good, if he would hold out to him some hope that if he discharges a fixed obligation he will ultimately be able to recover his prosperity and be restored to the economic comity of nations, perhaps this great question might be upon the road to solution. But there is no plan of any kind such as that. The right hon. Gentleman comes forward with no proposal for inducing a settlement by the cancellation of these debts, which he and everyone admits are practically worthless to us. He has no proposal for compelling Germany to pay under the present system. This is one of the many great questions which to-day are afflicting this country and the world, and which cannot be settled by sitting still. It is all very well to talk about tranquillity. It is all very well to loll back in your armchair if you are sitting in a comfortable house, surrounded by every amenity of life. But when your house is on fire and the flames are mounting around this country and around Europe, and the roof is threatening to fall in at any moment, it, is merely an affront for the right hon. Gentleman to turn round to the people of the world and say the only safe course is to sit still and to keep quiet. What an argument to advance. And yet there is no policy advanced from those benches of any kind. The right hon. Gentleman talked at the Election of letting private enterprise alone and giving our traders, with their great stamina and enterprise, an opportunity to go forward and recapture those old markets of the world which we formerly commanded, unhampered by State interference. But you have produced in Europe and in the world a condition of affairs, owing to your political blunders, which render it absolutely impossible for the economist, the financier or the merchant to function. How can you in the present condition of Europe tell your merchants to go ahead and recapture their old markets—half your old markets—without any purchasing capacity of any kind, with mil-

  3289
  lions of people not working but starving, and the remainder of your markets adversely affected by these conditions, by wild fluctuations of exchange dislocating commerce and industry for our competitors throughout the world and placing fortuitous commodities on the market at impossible prices. The putrifying corpse of Germany and the Central European countries is poisoning the whole commercial atmosphere of the world, and even if you could by any system of tariffs, which you cannot, keep their efforts out of your homo markets, you could not sell your commodities in the neutral markets, even where there is a purchasing capacity, and English industry would be still dislocated and the unemployed would continue to throng our streets. You cannot sit down in face of conditions like these, in face of these menacing difficulties, in a state of paralytic tranquillity, like some rabbit in front of a boa constrictor waiting to be swallowed.
  You have to get busy. We must have a policy. We must have a plan for things such as this. You cannot just throw private enterprise into a sea of difficulty with a millstone round its neck and tell it that it is its duty to swim to dry land. You will never do any good until politicians set about removing the political blunders which they have made. Then, whatever your system be, commerce, trade, and industry will have its opportunity again. I ask the House what plan has been advanced from those benches? The plan was advanced at the Election. Is there any plan that holds the field to-day? Whatever system we had in this country, Socialist, Communist, or Individualist, it would not be effective so long as these conditions prevail on the Continent. We cannot produce at home all the food we require though we might produce more. We have to keep up our export trade and receive commodities in return, and so long as these conditions prevail throughout the world, whatever system you have in this country, and however well it works, you will still have suffering and misery in this country as long as you have it in the world. What policy has been advanced by the Government to-day? What, policy is there holding the field in Europe to-day except that this country should take the lead by exercising a great economic lever in the shape of these debts which it holds and by this going forward with a great plan for a solution of this whole problem and difficulty which to-day
  3290
  besets mankind. I deplore that this nation should just sit still and turn appealing eyes towards America. America replies with a great deal of force: "You ask us to remit the debts which you owe us, and you ask us to supply credit. What is this money going to be used for? For the construction of bombing aero-planes and submarines?" You are never going to get America to participate, and if salvation is ultimately to be found I believe America must participate, because she has the credit and the money, but you will never get her to participate, and it is not reasonable to expect that you will, until you have a European settlement and until you have found the solution of the European difficulty. It is no good trying to bluff America into the European madhouse. You have to set things straight at home. You have to have a European settlement, to restore Continental life to a sound economic basis before the American people will touch it, and I believe once you have established that security, which can only be won by this country taking action, the moral as well as the material pressure upon America will be so immense that that country will be compelled in its own interest to come in and participate in the general settlement of the world's affairs, and also, I think, that settlement would lead to the remission of the debt which this country owes to America, But be that as it may, it is surely the paramount duty of this country, faced as we are with a position in which we are primarily concerned, because we are a great importing nation and are affected more closely than any other country, not to blind ourselves any longer, not to live in a world of catchwords, hanging on to paper assets which are worth nothing, mouthing phrases about us being the only people who pay indemnities, which means nothing, because on the present showing we are-the only people who are never going to collect money from these people. It is our duty rather to go forward with a real settlement, to proceed on the basis which I believe is most conducive to the restoration of the commercial and financial prosperity of this country, and to further a plan that would set an example to the world, an example which in future, I believe, might illuminate the pages of history.
  Mr. MATHEW: I want to underline a point made at the end of the speech of the Noble Lord opposite. Nothing can

  3291
  be done until the amount of reparations is definitely settled. I have spent a considerable time in Germany recently, and my firm belief is that there are a vast number of people in Germany, I think the majority, who are ready and willing to pay, if a sum is fixed which they believe to be reasonable. At the present moment we are saving their souls by asking too much. There is no public opinion in Germany, because they are in despair. They say, "You are asking more than we can possibly pay." Once we get to a figure which Germany thinks she can pay, I mean the honest section of Germany, there would be a strong public opinion which would force their Government to come to terms and to make an effort to pay.
  I have seen a good many politicians of different kinds in Germany, and to one or two of them I said, "Can you suggest a figure which you can pay?" They all shied away from it in a way that demonstrated quite clearly that that was the last thing they wanted. That convinced me, if I wanted convincing, that that was the first thing that we want. I am not at all clear that politicians can ever settle the amount of the indemnity, because there are so many things that they have to think about, so many things that sway them. I believe that business men could settle the amount of reparations in a very short time, if they were business men representing England, our Allies, and Germany. Business men know pretty well what the external credits of Germany are, and they know fairly well what the internal credits of Germany are, and I believe they could come to a proper and reasonable conclusion which would bind the soul of Germany. I do not think there is any chance until that is done. The present position has a very wide effect. An American financier put it in a very terse way to me. He said, "I do not think that any business men will do anything for Germany until they know the extent of the mortgage on Germany." I believe the whole financial position is coloured by that. Nobody knows the extent of the mortgage on Germany.
  From whatever point you look at it, whether political or financial, nothing will be done effectively until we have come to a reasonable figure, and a figure that can be demonstrated to be reasonable. Then
  3292
  we shall be able to make Germany pay. I believe the soul of Germany will make Germany pay, but if not, we can use our means, and we can deal with the financial position, because the business people will know what is the charge on Germany. At present they do not know. Before we get to higher thought and higher ethics we had better get back to practical bedrock. Once we can get to a definite figure which Germany can pay, we shall be very near to the peace we all want.
  Mr. D. J. SOMERVILLE: I had not intended as a new Member to speak this Session, but knowing France very intimately, and realising the very difficult position our ally is in, and considering that she is being blamed by a large body of public opinion both here and in America for holding up reparations, I venture very respectfully to put forward certain views to the House. There has been no subject more discussed than the question of reparations, with so little result, and for this France has been blamed. For the last seven years I have spent a great deal of time in France, and during the last four years I have been engaged continuously in reparation work in the devastated regions. I have had many conversations with my workmen there, with traders, with bankers and other people working in France, and I think I have a very good idea of the general opinion in France, and more so than many hon. Members here who have not had the same opportunities that I have.
  I do not think the average man in this country or in America has any idea of the tremendous damage which the War has caused to Franco. Ten of her most prosperous departments have been entirely laid in ruins. These 10 departments before the War formed the manufacturing centres of France, and constituted one quarter of her revenue. So apart from the colossal material damage done France has lost since 1914, 25 per cent, of her revenue. Since the Armistice, France, entirely at her own expense, has carried out an immense amount of reconstruction work, and she has expended, by means of loans, bonds, etc., raised in France, a sum of 75 milliards of francs, which is equivalent to £1,250,000,000. It is estimated that to put right the Test of the damage, and to finish the restoration, it will cost another

  3293
  £1,250,000,000 to £1,500,000,000. It must be remembered that the value of the damage has been arrived at by taking the value of the properties, the factories, works, etc., at their pre-War value, and multiplying thorn by a co-efficient four or five times, so as to get at the present value of the damage.
  It must be realised that France when she has entirely rebuilt these places will have a very great asset in her provinces in the north. Enormous factories, works, mills and other buildings are springing up, fitted with the very latest, most efficient appliances for competitive output. Therefore France, as a manufacturing and competing nation, will have a very great advantage when these works are giving their full output. It must also be remembered that France has recovered two very valuable and wealthy provinces in Alsace and Lorraine. These provinces have an area of 5,604 square miles, which represent an increase of wealth to France of something between £800,000,000 sterling and £1,000,000,000. France has also got in the Saar basin coalfield something which enormously increases her resources.
  To summarise the account, France has lost 25 per cent, of her revenue. She has had ten of her manufacturing Departments laid in ruins. She has lost 2,700,000 of her best men in killed and maimed- Her investments in Russia, amounting at pre-War rate to £600,000,000, have been lost. She has lost a military ally in Russia. She owes Great Britain £584,000,000. She owes America £650.000,000. Her internal debt amounts to £4,214,000,000, as against £1,200,000,000 pre-War, and she has an estimated deficit for 1923 of £400,000,000. Against this, on the other side of the ledger, she has recovered Alsace and Lorraine. She will have the benefit of a rebuilt Northern France, and also the coal district in the Saar Basin. France realises all this and, while she is anxious to make the best bargain she can on the question of reparations and inter-allied debts, a great number of people in this country and America cannot understand why she is imposing such stringent terms on Germany. I do not think that the reason is far to seek. If you consider what France has undergone during the last 50 or 60 years, the whole reason to my mind is plain.
  France is in deadly fear of the future. At the present moment she has a popula-
  3294
  tion of under 40,000,000 who are diminishing. At her door she has a nation which, France asserts, rightly or wrongly, by trickery with her exchange has got rid entirely of her internal debt, and is evading all her other responsibilities. In addition to that Germany, in spite of her war loss, has got a population of 62,500,000. This population is increasing at the rate of from 600,000 to 700,000 per year. Can it be wondered that France wants to know where she is and what security she has got for the future? Her internal debt is piling up. Her defeated foe is refusing to do anything to help in the reconstruction of the devastated area.
  Mr. WALLHEAD: She offered to.
  Mr. SOMERVILLE: I am certain from the intimate knowledge which I have of France that she does not wish to crush Germany from the point of view of her own gratification. She simply wants to be certain of her own national existence in future. I am so interested in the problem that last Saturday I went over to Paris to meet the director of one of the most important French banks in Paris and put my views before him, and, rightly or wrongly, he agreed with these views. I suggested that if a buffer State were formed, if only temporarily between Germany and France, and this State were administered by the League of Nations, France would then be able to withdraw the enormous army which she has got in Germany, for which she has to pay, and also reduce her standing Army of over 700,000 men, and the problem would be, to a great extent, solved for France. She would then have security for the future. This province, or series of provinces, would be free provinces something like Luxembourg, to be held as security until the reparations were paid. Then I would suggest that if Germany were to take over the restoration of the devastated region, and supply all the materials required and such labour as France asks for—France naturally looking after her own workmen, for France has no unemployment at present, because she has not enough labour, or anything like enough labour, to carry out the work of the devastated regions.
  To give an example of what Franco has got to do with regard to these reparations at the present moment, I am buying bricks from Holland, cement from Belgium, oak from Austria, and timber from Roumania and Czecho-Slovakia because

  3295
  there are not enough materials in France to enable the works to be carried out. I am assured that if these two things were effected, if France were given sufficient security so that 6he could reduce her armies, and that Germany carried out the reparation, so far as supplying material and a sufficient number of men to supplement the French is concerned, France would be prepared to accept this as a settlement for the whole of the reparation question, and withdraw the remainder of her claims. If this country had an assurance that France would accept such security and reparation as final, this country could withdraw from Germany the military forces which she has there and which have cost up to date about £60,000,000, which, it seems to me, there is very little chance of getting back. Germany, on the other hand, knowing the limit of her liability to France, would, I think, be prepared to fix a sum which she would pay, and the sum I would suggest is in the neighbourhood of £2,500,000,000. France, having obtained security, and, having had the devastated regions repaired, would be prepared to discount the amount of the indemnity which she would receive from Germany to, say, a figure of £1,500,000,000, to be paid in kind, and I would suggest that the balance of £1,000,000,000 could be divided up among the rest of the Allies. Germany would then know that her entire liability was £2,500,000,000, and, knowing what she had to pay ultimately, I think that, if given a moratorium, she would be prepared to stabilise her currency and work to pay off the sum that had been agreed on.
  Captain BERKELEY: I think that this discussion must have convinced us all that there are far greater issues involved in the question of reparations than the mere payment of debts in cash or kind. We have had most moving arguments by a number of speakers as to the economic collapse with which the German Republic is threatened and the disorganisation of trade, finance and industry that seem to be imminent there, and the Noble Lord the Member for Hitchin (Lord R. Cecil) told us of the inter-connection of the subject with that great international problem of land disarmament. I would like to refer, if I am not wearying the House— because I think the matter one of great
  3296
  importance—to the particular resolution in the Assembly of the League of Nations, which, I think, the Noble Lord had in mind when he was speaking. The most interesting part about this resolution is the fact that it was put forward by the delegate of France. It is a resolution drafted for the approval of the Assembly of the League as a whole, and in the course of it he says that the only method of remedying these evils— unemployment and other economic ills— is to put an end to the uncertainty which prevails regarding the means for restoring the devastated regions and the settlement of inter-allied debts, and he goes on to suggest to the Assembly of the League that these questions can be regulated by the unaided efforts of the European nations, and the signatories of the international treaties, and agreement dealing with these questions within the framework within which they must be considered must achieve as soon as possible a general settlement of the problem of reparations and inter-allied debts
  I think that that is a very significant intimation of the far reaching nature of this problem and of the dependence upon it of the whole problem of land disarmament. Indeed, it makes the question more than a European question; it makes it a world question That being so, I would ask whether it is right to regard it solely from the point of view of the creditor States of Germany. That, of course, is how the problem is regarded at present. Anyone who consults the reparation clauses in the Treaty will satisfy himself that, although there is certainly an effort made to safeguard justice and fairness towards the defeated foe, it is from the point of view of the victorious Allies, the principal Allies and Germany alone, that, the problem is considered. I do not think it is an exaggeration to say that at present the problem is regarded more or less as the private property of France, Italy and Great Britain. But there are other States in Europe which are very deeply affected. I do not refer to former belligerent States, but to ex-neutrals They are certainly affected economically —because any great trade disorganisation in Europe must affect all the States in Europe—but they are affected politically They are affected politically for the same reason of disarmament.
  Without wishing to impose a great number of quotations on the House, I would

  3297
  like to draw attention to the very significant remarks on this subject which have been made by the head of three of the smaller European neutral States, namely, M. Granting, of Sweden; M. Loudon, of the Netherlands; and M. Motta, of Switzerland. M. Branting described the problem as the most vital now troubling humanity. He said that Sweden had not suffered less than many of the countries which had actually taken part in the War, and would support any resolution which would improve economic conditions. He went on to say that the unanimous opinion of the League was that Germany should make reparations and that a just method that making that payment must be found. M. Loudon associated himself with those remarks on behalf of Holland. He said he hoped he was expressing the opinion of all the former neutral countries; and M. Motta, the ex-President of the Swiss Republic, said that it had been intimated that in examining the question of disarmament the Committee would also have to consider the questions of reparation and inter-Allied debts, because they were bound up one with another.
  It is difficult, in face of evidence of that kind, to deny the paramount importance of an early and just settlement, not only to ourselves, but also to those countries which are not directly concerned. That raises a further question in my mind. Are they not entitled, because they are so closely interested, not merely to a speedy settlement, but to a voice in securing that that settlement shall be just, not vindictive, and in addition economically sound? I mean by that, are they not entitled to see that there are proper safeguards in the reparation settlement, that there are no seeds being sown for future wars, that there is not being prepared a battleground for the future, because of a vindictive or unworkable solution? Let me put a concrete case of what I have in my mind. There has been a great deal said about the possibility of the French Government considering an occupation of the Ruhr Valley. In so far as that occupation was undertaken as a joint step by the Allied and associated Powers, it is quite clear from the provisions of the Treaty that Germany would have no right to regard it as an act of War. But what I am not so clear about is whether Prance is entitled to act independently under the Treaty. The Clause in question is a sub-Clause of the second
  3298
  Annex on the subject of reparation. There are two Clauses which are material, the 17th Clause, which I do not propose to read—that is the one which throws upon the Reparation Commission the obligation of giving notice of default to the Powers in order to enable them to determine what steps they would take — and the 18th Clause, which I will read:
  "The measures which the Allied and Associated Powers shall have the right to take, in case of voluntary default by Germany, and which Germany agrees not to regard as acts of war may include economic and financial prohibitions and reprisals, and, in general, such other measures as the respective Governments may determine to be necessary in the circumstances."
  It seems to me to be clear from the terms of that Article, that the intention of the drafters of the Treaty was that any such coercive action as it might be considered necessary to impose upon Germany should be joint action. For the purpose of my argument, let us assume that I am right in believing that under the terms of the Treaty it is not within the province of France to undertake isolated action. If she acts alone, that amounts to an act of war against Germany. If it is an act of war on the part of France against Germany, clearly the ex-neutral States are legitimately interested to prevent it. They are expressly authorised to do so, because under the second paragraph of the 11th Article of the Covenant of the League of Nations it is declared to be the friendly right of any member of the League to bring to the notice of the Council of the League or of the Assembly any international circumstance which is disturbing the peace of the world. Those are not the exact words, but that is the effect of them. Indeed, the first part of the Article is also relevant, because it lays down that any act of war or threat of war is to be regarded as a matter of concern to the whole League, and the League must meet and consider the necessary preventive measures. It is quite clear that in such extreme cases as that the neutral States are entitled to a voice in the matter. That leads to the conclusion that their general interest in a speedy, just, equitable and proper solution of the reparations problem ought to be watched.
  With the permission of the House I would like to present a rather different consideration. I wish to raise the question whether the existing machinery for

  3299
  dealing with and determining the reparation question is the best we could have. It consists at present of the Supreme Council and the Reparation Commission. I have nothing whatever to say about the personnel of either body. I am quite sure they do their best in all the circumstances, to arrive at a just solution, but it seems to me that those bodies by their very position, are definitely biassed, and I cannot believe they provide the best machinery for dealing with a debtor nation. I do not think, for instance, they are likely to be productive of the re-establishment of confidence and goodwill within Germany itself, and I am sure it is now the opinion of the House, that if we are going to get any considerable sum as reparation out of the German Republic, we can only get it with the co-operation of the Germans themselves. In this connection may I point out that in the case of Austria, exactly what I am contending, was proved to be the case. It was found that the Austrian Government could not bring its people to co-operate until an impartial and independant League of Nations Committee had restored a feeling of confidence and security to the Austrian people.
  If that be so, it is a very significant fact and it is particularly significant because I saw reported, during the progress of the negotiations in London a few days ago, that M. Poincare suggested that the Allies should apply the League method of dealing with Austria to the case of Germany. I hope it will not be thought an impertinence on my part, if I say it seems to me the French Premier has missed the point. The point is that it was the League of Nations and not the Allies, which dealt with Austria and enabled the Austrian problem to be met. It was a case of the League acting after the Allies had failed. It will be within the recollection of everyone who has studied the papers that the Austrian Government addressed a despairing pica to the Supreme Council to come in and save them. After the Supreme Council had considered the matter deeply at a number of meetings the late Prime Minister of this country addressed a reply to Austria, in which he said virtually that the Supreme Council was powerless to do anything, and the best they could do was to hand the case over to the League. The League, as
  3300
  we know, acted, and appears to have acted very wisely and very efficiently.
  That brings up to the consideration of the League of Nations in connection with reparation. It has been suggested by more than one speaker, that we ought to make use of the League to deal with the matter, and the foregoing arguments have been designed to bear on that point. Two further questions arise. First, assuming that it is desirable that the problem should be dealt with by the League of Nations, can it be referred to the League of Nations? We are dealing with a very carefully worded and very complicated legal document, with a multiplicity of provisions, when we are dealing with the Treaty of Versailles. One should not put forward proposals in regard to it lightly, and one must not put forward the proposal that the reparation question may be referred to the League, unless one is satisfied that such a course can be taken within the provisions of the Treaty. The second question is this. Assuming you refer the problem to the League, what machinery is there to deal with it? How does it compare with the existing machinery. Is it better or worse? I propose to deal with the second question first.
  I would suggest that the machinery utilised in the case of Austria should be utilised in this case also. There is the Economic and Financial Committee, with a skilled secretariat. Its members are answerable, not to their national Governments, as is the case with the Reparation Commission, but to the League. In the ease of the Reparation Commission, the members are not responsible collectively to the Allies, but each is responsible individually to his own Government. That is not the case with the secretariat or the members of the Economic and Financial Committee appointed by the League. They, as I have said, are responsible to the League itself, and in my view that is a very important and beneficial difference. Behind that Committee you have the League Council itself, which is a world body, or as nearly a world body as in our present imperfect political development we seem able to get. That body has representatives of the ex-neutral States upon it. In addition, aside from the Council of the League, for deter mining important legal questions or specific questions of fact which may arise, such, for instance, as questions in connection with the capacity of Germany to pay,

  3301
  there is the permanent Court of International Justice. In the last resort, you have behind all these bodies the Assembly of 51 nations.
  On the face of things, surely an organisation of that kind promises better for a just and permanent settlement than the Supreme Council. Let us consider the advantages which it possesses over the Supreme Council. I have referred to the collective responsibility to the League as a whole and not to national governments, which is one great advantage. Bound up with that there is the impartiality of the League, from which can be derived a sense of security and justice, and the debtor nation will thus be enabled to feel that it is getting a fair and square deal. Then there is the very important responsibility of the various bodies concerned, in the last resort, to the Assembly. The Council of the League of Nations has to make an annual report to the Assembly and has to face the responsible criticism of the world if it fails in its duty. That provides a great check against obstruction and selfishness in the course of negotiations. If the negotiators feel that behind their negotiations there is this power of criticism in the Assembly, they will want to face the Assembly and justify what they have done.
  Again, there is the pressure of publicity which can be brought to bear against any State which wilfully holds up a settlement, and, perhaps, the most important advantage of all is that it affords relief from the kind of deadlock which seems to have been reached in the Supreme Council on this very matter. I read recently an extract from the "Matin," which stated that the real difficulty was that the Prime Minister of this country knew what the people of this country wanted and was unable to budge from the country's point of view, while the Prime Minister of France knew what the people of France wanted and was unable to diverge from that point of view. That is exactly the sort of deadlock which arose in the case of Upper Silesia. It was to remove a deadlock of that kind, where the late Prime Minister was urging one point of view and could not depart from it, while a former Prime Minister of France was urging the point of view of the French nation and could not depart from it, that reference to the League of Nations was made, and success-
  3302
  fully made. The problem was considered de novo by the League, within, of course, the four walls of the Treaty which had to be administered, and a settlement was very speedily arrived at.
  As to the question whether this problem is capable of reference to the League, I have very little doubt about it in my own mind, though there are difficulties raised by the multifarious provisions of the Reparation Clauses of the Treaty. They seem to tie the question up very considerably, but I have very little doubt in my own mind that the second paragraph of Article 11 of the Covenant, to which I have already referred, is wide enough to cover the question, even if Article 233 of the Reparation Clauses themselves did not itself authorise a reference to the League, which I certainly think is arguable, but I base myself on the second paragraph of Article 11. All that it is necessary for one State or another, ourselves or the French, to do is to bring the thing forward as a matter of pressing concern to the peace of the world. There is one possible criticism I have to meet, and that is this. What about the consent of Germany, who is not a member of the League? Will she consent? That is a very important criticism, and I would refer to the Treaty itself. Article 213 of the Treaty, in the general provisions, says:
  "So long as the present Treaty remains in force, Germany undertakes to give every facility for any investigation which the Council of the League of Nations, acting, if need be, by a majority vote, may consider necessary."
  That particular Clause refers to the reduction of armaments and that kind of thing, but it seems to me that that is a consent in advance which would entitle us to assume that the Germans would accept such a reference- As a matter of fact, I do not think it is necessary to find any authority for Germany accepting a reference to the League, because it is quite clear that, to get out of the impasse at present existing in the Reparation Commission, she would agree to refer the question of reparation debts to any impartial body that might be suggested.
  There is one thing I should like to say in conclusion. It is all very well to talk about referring the problem to the League, but it is not a bit of good invoking the League without the consent of

  3303
  France, I am quite sure of that. In my own view, the best possible solution would be for the French to invoke the League themselves, but in any case the French must be consulted, and their agreement must be obtained. I was rather sorry to hear a great deal of criticism to-day directed against the state of mind, the attitude, of the French towards the Germans. It is quite true that the French have not been very progressive with regard to the question of reparation. Lord Grey yesterday referred, in the House of Lords, to the meeting of the Bankers Commission in Paris.
  Mr. J. JONES: Good old Bankers!
  9.0 p.m.
  Captain BERKELEY: They were doing their best to solve the problem, anyway, which is what we are all doing. The Bankers Commission put forward proposals in Paris which, had they been accepted at that time, would probably have resulted in stabilising the mark and solving the problem. He pointed out that it was true that the French discouraged and paid very little attention to these proposals. By the irony of things, those proposals would be accepted in France to-day, or so I am assured, and the truth is that French opinion on this subject of reparation is moving considerably more slowly than that of the rest of the world. It is moving, but it is moving much more slowly, and I believe that Lord Grey and my Noble Friend the Member for Hitchin (Lord R. Cecil) are perfectly right when they say that the reason for this slowness on the part of the French is primarily their fear of the Germans. They do not seem to believe that the monster which attacked them before, twice in living memory, is really harmless to-day. I think they are honestly afraid that the apparent economic collapse of Germany at this moment is really part of some malign device to catch them unawares and turn the tables again. That is my own point of view, and I base that upon my own observations of the situation, not only here, but on the Continent. I am afraid I have taken up the time of the House much longer than I should have, but I want to say one thing more. I want to make a proposal which I am afraid may not commend itself to the Treasury Bench, but which I should like them to
  3304
  consider, because it is as well to be as constructive as one can. I would say this — Could we not go to France—
  Mr. J. JONES: Or to Jericho.
  Captain BERKELEY: My hon. Friends are only taking up the time of the House with these interruptions, and I can assure them they are not disturbing me in the slightest. Could we not, I say, go to France prepared to forgive her her debt in full, negotiate on that basis for modification of the reparation proposals, and particularly negotiate for the fulfilment by France of the Washington Treaty for naval disarmament? If those negotiations should come to a deadlock—as it is, I admit, quite possible that they might, because the situation is extremely difficult—could we not propose to refer the matter to the League, and link up the whole question of reparation with land disarmament and inter-Allied debts, as proposed in the Assembly Resolution which I read to the House at the beginning of my speech?
  Sir A. STEEL-MAITLAND: I am quite sure that on this side, and I think also on the side of the Opposition, hon. Members will agree that there was a great, deal that was very interesting in the arguments which have been put forward by the hon. and gallant Member for Central Nottingham (Captain Berkeley). This was particularly so of his argument, which was very carefully worked out, with regard to putting the question of reparation under the League of Nations. I can assure the hon. and gallant Member that I, for one, am not likely to be unsympathetic to any such proposal. I listened at Geneva to the speeches, to which he alluded, from M. Loudon, M. Branting, and the other members of the smaller nations. It was exceedingly interesting there to hear them placing their view before the League, and stating quite openly that, of course, the settlement of the reparation question affected the smaller nations which had been neutral just as much as the larger nations which had taken part in the War. That may be the ideal solution, on which I should look with delight if it were practicable. But I think it is really excluded by the very urgency of the case, and that is the reason why I trouble the House with a very few remarks tonight. The ease is really so urgent that I

  3305
  am not sure that ideal solutions, desirable in other eases, are possible here. If we had the time, it is possible that a reference to the League of Nations would be the proper solution. I am not quite sure. The analogy of Austria was not really quite apposite, and again, in any matter of that kind, one- has to decide what are the criteria on which you are going to judge the amount of the reparation together with the hardship involved on the payer. All that might make a reference to the League of Nations rather difficult, but, given time, it might be done.
  My own opinion is, that I think such a possibility is excluded by the urgency of the case. I think we sometimes in this House tend to work towards ideals when we have got a danger confronting us that ought to make us take the second best. I have had a little experience just recently of the state of affairs in Germany. I do not say that the collapse will take place next week or the week after. It is nearly always the case that where we think a thing will come in weeks, in the end it comes in months. Where we think it will come in days, it comes in weeks. But there is no question that we are drawing nearer and nearer to a real collapse in Germany. It is quite clear to anyone who has practical dealings with Germany, to anyone who deals with any of the great German firms which have a big international trade, that they can perfectly easily pay for the materials which they import from outside. Their market is international. They get payment for their goods in foreign currencies which are good, and, therefore, they are able to pay for their imports in return. But just latterly, for the first time, it is different with firms who trade inside Germany. There is a growing difficulty for them to find their finances in order to get their raw material. At this moment, internal industry in Germany is getting dislocated for that reason, and the moment you begin to get a collapse of these industries inside Germany which only make for the internal market, it will mean that an upset is coming which will sooner or later involve the whole of German industry. Therefore, for that reason, I do beg the House to consider, not what is ideally good, but what is absolutely necessary, owing to the very urgency of the danger, is because of the urgency of the danger that I suggest that measures have got to be
  3306
  taken quickly, and, if possible, by an agreement with France. The sum has got to be fixed, perhaps, on much more rough and ready methods, but it can be fixed, and, it may be hoped, with agreement on all sides.
  I pass on to one of the other great subjects intimately bound up with the question of reparation and debts. It was not mentioned in the first two or three speeches this afternoon. Anyone, however, who is really conversant with French conditions realises that in the French mind, at the back of all things, the need for an assurance as to their own security is just as important as their need for reparation, or their desire for it. To us, in this country, it may seem that those fears are groundless. The hon. and gallant Member for New-castle-under-Lyme (Colonel Wedgwood) said that we ought to look at this matter with British eyes and British notions, and with a view to British labour being employed and British goods being sold in Germany. But I think he would agree that when it comes to questions closely bound up with reparation, we have got to try to put ourselves in the position of the French as well. We may not think much of the danger of Germany, but they have been living under that nightmare for years. We hope that the German character has changed, or we hope, at any rate, it may be peaceful, but they are, from their own point of view, quite reasonable in asking that security against attack in the future may be given, and security also, that whatever figure of reparation may be fixed, they can be certain of being paid. I remember a man in an official position in France telling me—and he had every reason to know— that one of his apprehensions was that even if a quite moderate figure of reparation were fixed, unless we were ready to stand beside France, the Germans might take up the attitude, "It is true that that figure of reparation is fixed, but come and exact it if you can."
  Therefore I would ask all Members of this House to consider, along the lines set by the Leader of the Opposition—I think it was he who said it, or it may have been the right hon. Gentleman who opened the Debate—that it is not so much a case for Governments as for communities. If it be a case for

  3307
  communities, how are we going as a community to meet the French wish, which, from their point of view, is fundamental, that they may be secured in their position against a possible future attack by Germany, and secure also in the payment of reparation at whatever figure may be ultimately agreed. I frankly say that I would dislike to sec a Three-Power Agreement of the kind contemplated at Paris between France, the United States and this country, unless no better solution could be found. I think it would be a step back if the world were again divided into groups that might be set against one another, leading to another catastrophe. But the House has got to face the position that there must be security for France. If we do not want to give it by some such pact as was suggested at the Paris Conference, it has got to be found in another way, and I would suggest that the other way is by application to the League of Nations and by just such a, Treaty of mutual guarantee-as was discussed there last September. Only I would once again urge upon all Members of the House that if we want the Prime Minister, when he again meets M. Poincaré, to try to get to a solution of this question, we must be prepared to support him if he meets the French in what I believe to be one of their quite fundamental needs.
  There is one more point, and that is the question of the debts themselves. We have been talking about the amount that Germany can pay, the amount which we should be prepared to give up, the amount which France could concede. It is perfectly clear that all three countries are in different degrees of indebtedness. I believe that it is possible to find what amount can be given up by ourselves, what amount France possibly can give up, and what amount Germany can give. Only again I would ask the House to come down to realities. It is no use pleading with Providence for an American statesman to come on the scene and give peace to Europe by settling it in an ideal way. We know what an ideal settlement would mean if the Governments of the five great countries could meet together without the electorates to be considered—they do make a great difference—and with full knowledge of the conditions. Three-fourths of the troubles in Europe could
  3308
  be put right in six months, and a great deal of the unemployment would go. But, dealing with the practical situation, we have got to realise that the debts to America are payable, Recognising that they are payable, what can be done in fact? What can we give up? Are we going to abandon everything, and can we afford to give up both reparations and debts? Are we to abandon nothing, or what can we do? I would venture to suggest that the following is a possible solution.
  I suggest, in the state of finances in this country, we ought not to abandon everything, but that we could quite well agree to some such solution as the following. Reduce the German reparation to a figure which by now has become a matter, I will not say of common agreement, but so well known that it may easily be a matter of common agreement, i.e., between £2,000,000,000 and £2,200,000,000, that is, reducing it to a third of the big figure of £6,600,000,000. We should agree, first of all, to have a reduced quota; then we should take that figure of reparation due to us, the debt due from France, Italy and other Continental countries, and taking the whole sums so payable to us, we should reduce them to a figure that would just cover our debt to America and no more, and remit the whole of the rest. That, from our point of view, would be reason able, from the point of view of our finances, and, indeed, would be generous both to our Allies and to Germany. If I were to consider the position of France under the case like that, it is difficult quite to speak confidently, for French finances are a most difficult problem, but by a solution of that kind they would be eased to that extent by the further remission of part even of one reduced share of the German indemnity. Their position would be eased enormously. In my opinion they would sooner accept a settlement like that than go to an extremity with Germany. This would mean a collapse in Germany and would mean that in the end they would get no indemnity of any sort or kind at all. They are a very reasonable and logical people, and I think they would accept a settlement which, if not the utmost of their desires, would be one that would meet the necessities of the case. As regards Germany, I think it is tolerably agreed now that the figure of

  3309
  £2,000,000,000 is about the sum they could pay. If that is so, I think it is the sum they ought to pay.
  I was one of the earliest to say that I did not myself like indemnities. I agree, with the Leader of the Opposition that the payment of large indemnities is only hurtful to the receiver one degree less than, it is hurtful to the giver. It means you have to force them into underselling your goods either in your own or neutral markets. That consideration is quite true; but I remember some of the supporters of hon. Members opposite giving me an extraordinary lively time at the election of 1918 when I urged that upon my audience. While however it is true, it is much more true when you have an enormous figure of an indemnity; because of the dislocation that such indemnity causes as well as the actual selling of the goods. It would not be true to a tithe of the extent if the indemnity were reduced to a figure of something like £2,000,000,000. Therefore, I would urge that, if possible, a figure of an indemnity like £2,000,000,000 should be settled, and settled as quickly as may be. Every week that passes increases the urgency of the situation. It is perfectly true that recommendations which were made a year ago and which, had they been accepted, would have been a solution, are no longer possible. Every day you put off the solution it gets worse. What is possible now will not be possible six months hence. Therefore, I say, as we are most of us now within agreement of what the figure ought to be, let us give our support to the Prime Minister, in dealing with this, to deal with it with very considerable latitude, as everybody has to do when they are meeting with another party with whom they have not yet discussed a question finally.
  I say, then, if we are to deal with it in that way we can come to a solution. I myself do not believe in a control that means ordering the German Government about. I think it is quite possible, however, from what I hear that the Germans would accept supervision, just as Austria has done. It only means that the moratorium is continued so long as they are paying, balancing their budget, and introducing necessary reforms. Supervision can act either by refusing to continue the moratorium or by refusing to
  3310
  give them the credits they need. But that sanction is quite enough without interferring with the internal working of the German Government. Provided we do not do that, I think some agreement on supervision, as apart from interference and control in that sense, would be successful. I would press once again upon the Government the need for an absolutely early decision. It is not so much that we will reach an absolutely ideal agreement. If the House can come to a right judgment, so far as possible in accord with the principles of fairness on the one side and the other; if we are prepared to be before instead of about six months behind the times; not only do I believe that three-quarters of the trouble in Europe could be put right within four or five months, but the mark could be stabilised without a breakdown in Germany, and our unemployment, which all of us in this House deplore, would very soon follow the other problems of Europe into the limbo of the past.
  Mr. PONSONBY: It is a source of gratification to me on my return to the House, after a brief interval, to find foreign affairs occupying the attention of hon. Members to the extent that I have noticed during the last three weeks. I feel it is a thing that is justified. I believe, Sir, that you would find it difficult to rule out of order foreign affairs in almost any domestic question or any question of importance that we were discussing within these four walls. I have listened to the speeches to-day with particular interest, because, in dealing with the questions before us, we are dealing with one of the vital reasons for what I regard as the greatest calamity we have to face at the present moment in this country, that is the question of unemployment. The hon. Gentleman who has just sat down has put forward his idea of a constructive scheme for a solution of the problem of reparation. To a large extent I am in agreement with what he has said, but I do not believe that this is really only a matter of figures and of business. It is the spirit behind that requires altering. There is no difficulty in coming to an agreement if the people who meet are of the same way of thinking, and are facing the matter in a spirit of conciliation. The Treaty of Versailles is founded on the doctrine of punishment. So long

  3311
  as that doctrine remains you cannot have peace. You can have either punishment or peace, but you cannot have both. The Treaty has successfully carried out its doctrine of punishment. I think hon. Members on the other side believe that Germany is in really a very prosperous condition, and with the slightest encouragement given to her would become once more a menace to the world.
  Sir A. STEEL-MAITLAND: I hope that that was not inference drawn from anything I have said, because, on the contrary, I think that a great many people inside Germany are in a most miserable condition.
  Mr. PONSONBY: I was not for one moment referring to anything said by the hon. Gentleman. I was gathering my observations from certain interruptions made in the course of the afternoon's Debate. I do not think that hon. Members realise quite sufficiently that while the War wrought very heavy material damage in France, the blockade and the peace wrought a kind of damage to Germany which is very much more serious than material. That is damage to human life, and that is likely to leave a scar on Germany for generations to come. I think that this problem of Germany and France is being faced in the wrong spirit. I fully understand the French point of view. Their desire is they must get security. That is what they want. This wrangle has been going on between these two great nations, not just in our generation, not 100 years or 200 years ago, but you could date it back from the year 800. It has always been settled by the statesmen, in their wisdom, by handing over the territory conquered to the conqueror of the day and leaving the vanquished with a feeling of dismay and a desire for revenge.
  That is never going to bring a settlement of the question. That is only going to produce a frontier between these two countries, which will satisfy neither the one nor the other. I would urge on the Prime Minister—whose task, I fully appreciate, is a most complicated and difficult one—that he should approach the French Prime Minister and say to him, "Security is what you want. Security is what you cannot get by exactions forced by the sword." Unless you can
  3312
  get a conciliation between the two peoples, between the two Governments, you cannot get a settlement between the two countries. That is where, as one looks at it in the broad point of view, the lessons of the last years seem to tell us that it is Governments that make the differences, the quarrels, and the wars, and the poor unfortunate people behind them are only praying for peace and conciliation. The German workman has got no quarrel with the French workman. Our workmen had had no quarrel with the German workmen. The quarrel is made by the Governments, in the dark, behind closed doors, and we are never told until the last moment what the reason for conflict is, and then it is too late for us to interfere.
  We, on this side, are going, inside this House, on every conceivable occasion we can, to assert our desire to control foreign policy and to prevent secret diplomacy, which has caused so much of the misery of the past. I believe the feelings amongst the French people and the German people to-day could be adjusted and brought together in such a manner as to bring about a settlement, if only the statesmen, the Ministers, and the diplomatists would take some of that spirit from the people and bring it into the Council Chamber with them. Perhaps that is asking a great deal. We never seem to learn a lesson. The Treaty that concluded the Napoleonic Wars was supposed to be a masterpiece of statesmanship. Not one single Clause of it was valid 25 years after it was signed, except that which deliminated the frontier of Switzerland. This great Treaty of Versailles, of which the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) is so proud, is going the same way as that, and more rapidly. We ask that it should be revised, but it is being revised all the time. Until it is revised it is a stone, and a heavy stone, round the neck of the League of Nations.
  I listened with very great interest to the hon. and gallant Member for Central Nottingham (Captain Berkeley), who was advocating an intervention of the League of Nations with a view to their bringing a solution to this vexed problem. I, in principle, entirely agree with him. I should like to see the League of Nations become a real League of Nations, because it has about it, and has hitherto

  3313
  had about it, far too much of the nature of a committee of the victorious Powers. It has been very much handicapped by having tied round its neck the Treaty of Versailles. It has not been treated with respect by many of the Powers who have been signatories to the Covenant. To-day, at Question Time, I had an instance of that given me in a reply to a question in which I asked whether the Franco-Belgian Military Convention and the Franco-Polish Agreement had been registered and published under Article 18 of the Covenant of the League of Nations. That is a very important Article, because it means that every compact between nations shall be registered and made public, and is virtually putting an end to secret treaties. Nothing could be more important, but on the very first opportunity of testing it, which was the Franco-Belgian Convention—I do not know if it is registered or not—it was never published.
  If the chief signatories to the Covenant of the League of Nations pay so little respect to the Articles to which they have attached their signatures, it is impossible to hope that the world in general will give trust and confidence to the League. In spite of the many mistakes made about it, I have hopes, and I always have had hopes that the League of Nations would prove, in time, to be a body which might settle some of the more serious disputes between nations. You cannot prevent Governments disputing; nobody says you can; nobody pretends you can arrange human affairs in such a way that there will be no disputes. You can, however, prevent disputes from leading to armed conflicts. The League must cut itself away from the Treaty of Versailles and get within its body all the nations of the world. I was very glad to hear from the Noble Lord the Member for Hitchin (Lord B. Cecil) that Turkey has applied to join the League. We shall make a great deal faster headway when Germany and Russia become members of the League of Nations as well.
  We have got these two Conferences hanging over us. There is a Conference in Paris at the beginning of January, and there is the Conference at Lausanne, which is still sitting. Even then, that does not cover the whole field by any means, because we have got the question of getting on to normal relationship with the Russian Government. Until all these
  3314
  questions are settled, until there is some feeling of security in the world, until real amity and conciliation take the place of triumph, of revenge, of hatred, and of punishment, we are not going to have the establishment of peace in the world, or to get recovery here in this country. I am one of those who believe that even if you were to get normal relations and recovery in Central Europe, a re-opening of the Russian markets and a revival of trade, you would not get rid of the evil of unemployment. It is, I believe, inherent in the system under which we live. I know that a change of our social system and any reference to it is always greeted with smiles on the other side of the House. This question of unemployment, however, appears to me to be of such vital consequence that, watching the Debates as I have, very attentively, during the last three weeks, I have been amazed that the Government have thought fit to treat it so lightly, to come forward with such an inadequate remedy, and to believe that tranquillity and doing nothing are going to allow this problem to pass away. I really think there are some people who believe that unemployment is a sort of device of the Labour party to bring about disturbances. This great evil is inherent in our system, and even if we got a revival of trade I do not believe we should get rid of it
  Hon. Members opposite have frequently stated that sympathy with unemployment is not a monopoly of the Labour party, and they are perfectly right. I am quite convinced that hon. Members opposite are as sympathetic as anybody else in regard to unemployment. It is not, however, a matter of sympathy, but it is a question of the angle from which you look at it. The angle of hon. Members opposite is that of those on a pedestal looking below them, while the angle adopted by the Members of the party to which I belong is on a level with the problem. I know very well the angle of those on the pedestal, and it is because I think that is the wrong point of view that I am sitting on these benches. They regard it from the point of view of patronage and charity, and we look at it from the point of view of independence and justice, and that is a very fundamental difference.
  The great evil of unemployment is very closely linked up with deplorable housing conditions that exist, and that problem

  3315
  cannot be dealt with any longer by palliatives. On this matter we are tired of sticking plaster and poultices, and we want something far more drastic. It was a great disappointment to me, in the face of this great evil, to find that the Government had brought forward most inadequate measures. I think on this question that we have, to some extent, come to the parting of the ways. We want to devote our energy, enterprise, our genius, and our money to fighting the enemy here at home. We are told that one of the ways of getting rid of the pressure of unemployment is to build move warships. I have to go to Sheffield on Saturday, and I shall have to tell my constituents why those warships are going to be built. I think we are proceeding by this policy on wrong lines. Instead of building houses the Government are going to build warships to occupy the time of the men who are unemployed, and this is a sterile and destructive form of industry in order, I suppose, to prepare for the next war.
  Considering what the state of Europe is to-day, perhaps this preparation is necessary, but, on the other hand, I do not suppose that there are many now who hold the doctrine that the best way to preserve peace is to be prepared for war. That is a very foolish doctrine, and it is just about as sensible as saying that the best way to promote temperance is to brew more beer. This is a temporary palliative which I do not think will impress my constituents when I have to face them, and when I shall be obliged to tell them that houses cannot be built for them because the foreign position is causing such apprehension that all the attention of the Government must be devoted to it. These problems are very closely intertwined, and those who think they can deal with the domestic troubles we have at home without regarding the foreign situation make a great mistake. On the other hand, those who concentrate on the foreign situation without seeing how it affects our life at home also make a mistake.
  I want to see an end to the time when we have Debates, as we used to have, on detached foreign problems, attended by very few hon. Members, which seem to cut off into little watertight compartments various foreign issues, without
  3316
  realising how they are linked together in one world problem, and forming an integral part of our international life. Those days are over, and we have learned a great lesson from the War, and more especially from the so called peace. I urge the Under-Secretary for Foreign Affairs to put that point before the Prime Minister when he reports on the Debate. I hope he will ask the Prime Minister to emphasise, with all the eloquence he has at his command, the great importance of asking France whether her security does not rest on conciliation and friendship with Germany. It seems an almost foolish thing to say to some people, but I am confident that on that basis, and with that change of spirit, all their plans and calculations will fall to the ground. It is because I believe that only by a change of spirit you will be able to get a better issue to these great questions that I have intervened for a few moments in this Debate.
  Mr. T. P. O'CONNOR: I had intended to go at some length into the question of the Near East, and especially the subject of the future of the Christian minorities there. I am glad to say, however, that for the last two or three days it appears to me that any necessity for my dealing with that subject has been considerably diminished. I read the speeches of Lord Curzon the Foreign Secretary which have appeared in the London newspapers, and all I have to say is that I say "Ditto" to everything his lordship has said on this subject, and I think he has made a splendid defence of the Christians in the Near East. I congratulate him on the success which has attended his efforts in endeavouring to solve what, to many people, seemed an almost insoluble problem in connection with the Christian minorities in the Near East. I also congratulate him on having induced the Americans, who were only represented by an Observer at the Lausanne Conference, to come into close association with us in advocating the protection of these Christian minorities. I may tell the Under-Secretary that I do not think there is any question in the whole world on which we can more confidently hope for really serious American intervention than this question of the Christians in the Near East. I may go the length of saying that the Government at Washington has been forced by public opinion into this. There have been gatherings all over

  3317
  America of the different Christian churches, pleading for these oppressed Christians. I have seen evidence of what I may call a nation-wide movement in America in favour of the relief of those Christians, and I do not believe that the present Government at Washington, strong as it may be, returned as it was by a large majority, could have resisted the growing tide of commiseration and sympathy for the Christians of the Near East.
  I am glad to find that Lord Curzon has not forgotten the Chaldeans, who have been subjected, like other Christian nations, to great suffering. One of their bishops recently told me he had passed through 70 villages which had been destroyed, and I am glad that special mention has been made of their case. I am glad, also, that Lord Curzon fought so firmly the monstrous proposition that the Christian minority in the Turkish communities should be deported or exchanged. I am supposed to be a violent enemy of the Turks. I am not. I wish them well so long as they govern themselves and do not interfere with others. But this I can say, that in their interest nothing could be more fatal than the deportation from their dominions of Christian subjects. The Armenian Christians, the Jews and Chaldeans, have been the people who have done most of the mechanical and commercial work in Turkey in the old days, and although I believe the modern Turk, as now represented at Angora, has made some progress in these matters, and has shown more business aptitude, I say that, so far as the prosperity of Turkey itself is concerned, nothing is more necessary than a contented and happy Christian minority among the people.
  I have been specially interested in the Greeks and the Armenians. To suppose that any civilised government would consent to the expulsion from Constantinople of the three or four hundred thousand Greeks in that city would be absurd. The same may be said with regard to the Armenians. I do not think the case would be adequately met even by a similar transportation of the Mahommedan population from Greece and other parts where the Christians form the Government. As a matter of fact I am equally in favour of the protection of Mahommedan minorities under Christian rule as of the protection of Christian minorities under a Mahommedan Gov-
  3318
  ernment. For both I see a solution in an independent control of the Governments of those countries. The case of Armenia has been before the House on many occasions. I have been talking on that subject for more than 40 years. I see that Lord Curzon calculates that of the 3,000,000 Armenians who were in Turkish Adriatic territory before the War only 130,000 remain, and that is a matter which cannot be ignored.
  I only wish to put two points to the hon. Gentleman opposite, not of criticism, but rather in elucidation of what Lord Curzon said. I congratulate him on the news which has come to-night, that, after a fairly stubborn resistance on the part of the Turkish representatives at Lausanne, they have consented to join the League of Nations. That is the best news the world has received for many a long period, and I cannot sufficiently recognise the skill and ability with which the Foreign Office has been able to accomplish this most excellent result. But may I ask the Under-Secretary for Foreign Affairs, does this mean that when Turkey comes into the League of Nations the protection of the minorities will be, so to speak, in the custody of the League of Nations or under its guardianship? I think unless that is implied the case would not be met. I should like to ask also about the fundamental question of the Armenian home. It is no use suggesting that any further numbers of Armenians should be sent to the Caucasus. That territory is already overcrowded with Armenians. I was told a short time ago that there is extermination of the Armenians going on to-day, not merely in Turkish Anatolia, but also in the Caucasus, by hunger and by disease, which is almost as bad as if the people were being butchered. These are the only observations I desire to make at this moment. I conclude by expressing my profound joy that I have lived to see the day when there is a ray of hope for the preservation of these Christian populations.
  Mr. HARNEY: I avail myself of this Debate to make my first plunge into the unknown waters of this House. The question of reparations and inter Allied indebtedness is undoubtedly one of the highest importance. It is not the less so because of the present situation, which demands forthwith a definite settlement of some kind. The difficulties of the problem really arise in this

  3319
  way. On the one hand, it is most desirable that nothing should be done to interfere with the present good relations that exist between this country and France. Apart altogether from general considerations, there can be little doubt that the rival antagonisms of the several Balkan States are held in check, and only held in check, by the united front presented to the East by France and England. That is one factor of the problem. The other is that the interests of Great Britain and of France are, economically and financially, almost diametrically opposed. The dominant consideration with France is either cash or security for cash. The dominant consideration with us is the revival of trade. [HON. MBMBEES: "Cash!"] Cash is, of course, desired by every nation, as I think it is by most individuals, but with France cash, or security for cash, comes before all other considerations.
  10.0 P.M.
  France depends very little upon the commerce of the world, but she is absolutely dependent, for the balancing of her Budget and for finding the necessary means to repair her devastated areas, upon receiving ready money. With us, the whole problem of employment is based upon the revival of our trade, and, in my submission, it will be impossible to revive trade and at the same time give full effect to what I may call the security requirements of France. In these circumstances, the solution of the problem seems to be one of compromise. But, whenever two parties are negotiating a compromise, the first essential is that each of them should know what exactly it is that he desires. What is it that we would desire, if we could have it all our own way? I listened, as I think the whole House did, with rapt attention to a closely-reasoned speech some days ago delivered by the hon. Member for Colne Valley (Mr. Snowden), and I was struck with a phrase that he used in that speech. He said, paraphrasing the words of Shakespeare, that reparations were twice cursed; they cursed those that gave and those that took. I agree thoroughly with that observation, and if the House will permit me—and I am sure it will be understood that I am pretending to no special knowledge of the subject—I shall, in my maiden contribution to the Debates of this House, endeavour to put before it such thoughts
  3320
  as have occurred to myself. Why is it bad, why is it a curse for Germany to have to give reparations? I think it is so on the grounds, firstly, that the giving of reparations denudes that country of a portion of the industrial life-blood that is already so badly needed by it in its anæmic condition; and, secondly, that it forces that nation into a policy of inflation. Nations, after all, have to carry on their business on exactly the same lines as private individuals. Before an individual can sell he must buy, and it is the surplus that he obtains from his sales, over what he has to pay for his purchases, that represents the gross profit that can be taken from him. As long as you take that profit and no more, you may make him poorer, but you do not stop his business. It is precisely the same with nations. Their exports are their sales, and their imports are their purchases. As long as you take the balance of exports and that only, you may add to the discomfort of the people, but you do not seriously injure, you do not necessarily jeopardise their trade. But if you take more, you are inevitably driving that nation, as in similar circumstances you would drive an individual, along the road to bankruptcy.
  What is the fact? Ever since the War ended, Germany's imports have been greater than her exports. She has bought more than she has sold, and, therefore, she has never up to this moment been in a position to pay over any surplus in the form of reparations. Yet, in fact, we, England, have so far received as our share, I understand, about £51,000,000. As was pointed out to-day by the hon. Member for Dundee (Mr. Morel), probably she has paid four or five times that amount; but, taking by way of illustration the £51,000,000, where did that come from? It did not come from any surplus of her trade—it could not. That £51,000,000 had directly or indirectly to pass from German hands to the Reparation Commission, and, ultimately, to our Government. Where did it come from? In my submission, it can have come only from one source, namely, that they bought our pounds with their marks. How did they get the marks? From the printing press. It is no use our crying out and saying that they should not have done so. They did it, and will continue to do it; and, as each issue from the printing press

  3321
  was exhausted, the value of the mark, of course, fell. The next sale of marks for pounds involved a greater number of the marks going to the £ and so the system has continued. The whisky in the decanter was watered, and the more it was watered the larger nobblers were needed, and we are now in the position that, the mark is 40,000 under proof.
  I want to put to the House on this point one or two thoughts which have occurred to me. First, where have these £51,000,000 which have been purchased from us Britishers gone to? We know where they have come from. They have come from the capital resources of this country, resources that we badly wanted to fall back upon for the purposes of financing industry, which would give employment. We have taken £51,000,000 from these sources to keep up our share of the Army of Occupation on the Rhine. Fifty-one million pounds have therefore left this country, and left it the poorer, in order to be distributed largely among shopkeepers and storekeepers in Cologne and elsewhere. It has cost us £55,000,000 to collect, so to speak, that £51,000,000. Suppose that £51,000,000 that passed into German hands had not been transferred in the form of reparations to the British Government, what would have happened? It would have represented, so to speak, calls to that extent for manufactured articles in this country. They would have had to come back at some time or other, and each portion of them that came back would have necessitated manufactories in this country to make the goods in exchange for them. We are therefore £51,000,000 worse, as regards the giving of employment by utilising these pounds for the payment of reparations, than we should be if those pounds were utilised for the purposes of trade. My deduction from that is that certainly, theoretically speaking, it never can be good, as regards employment, for any country to receive large sums of money from a foreign country for nothing. That seems rather a contradiction. How can it be bad ever to receive something for nothing? It can be if you look at it from the employment point of view. If I say to a German, "I want to buy a bicycle for £20," he sends me the bicycle and I send him my £20. That £20 represents work in Sheffield if he asks for plate, in Lancashire if he asks for cotton goods. It represents employment given to the
  3322
  extent of £20 somewhere in this country. But if instead of buying from him a bicycle for £20, the German gives me a present of a bicycle, it is true I have the bicycle but it is equally true that, there is £20 less of employment given.
  That is one side of the picture. Now take the other. I am only dealing with what has occurred up to date. We have traced the destination of the £51,000,000 that so far Germany has parted with in the form of reparations. It only became possessed of these pounds by giving in exchange many thousands of millions of marks. What is going to happen to these? They are all in this country held in British hands. They are only scraps of paper as marks. At some time they will have to go home to roost. At present they are doing so slowly because war antagonisms and the prejudices of the last eight years still run high. But these will subside, and as they subside we are undoubtely laying up in store for ourselves a stream of cheap goods coming into this country. May I comment here upon what occurred to mc to be a fallacious statement made by the President of the Board of Trade the other day in the Safeguarding of Industries Debate, on the dumping point. He said we on this side of the House were always crying out for cheap goods. In my submission there is the greatest possible difference between goods that come in cheaply because of the exchange and goods that come in cheaply in the ordinary way of trade. The Free Trader says, "I like cheap goods in the ordinary way of trade because the cheapness implies that they are made by outsiders who are more efficient in that class of work than we are." We on this side approve of cheap goods because the Free Trader says: "Let Britain do those things it can do best and let it not waste its time upon things it can only do second best." Therefore we encourage the taking of cheap goods because that is an indication that in that class of commodities outsiders are better than we are. But when goods come in cheaply by reason of the depreciation of the currency it may be, and in fact it often is so, that goods that we are far more efficient in making than outsiders will still beat us in the market because of the exchange being in their favour and against us. Therefore, I would have been quite in favour of any system that would stop that, but I was opposed and am

  3323
  opposed to the system adopted in the anti-dumping provisions of the Safeguarding of Industries Act.
  Mr. SPEAKER: This is a long way from the subject under discussion.
  Mr. HARNEY: I will say no more upon that matter. I was led away. On the question of reparations, it is said that, even if at the present time Germany takes up the position that she is unable to pay reparations out of her surplus, we still should put upon her the pressure that France is demanding, because that pressure would expose assets that are now concealed. Is there the slightest real reason to believe that any such assets are concealed? It is said that she has deliberately watered down the mark in order that thereby she might reduce to a trifle the payment of her foreign creditors. It must be remembered that if Germany has foreign creditors she also has, to a far greater extent, home creditors. Just as we have contributed to the National Debt the sale proceeds of our foreign securities, she has done likewise, and can it be supposed that she would deliberately inflate the mark in order to get out of paying some millions of foreign debts when the very same process would compel her to rob her own people of many multiples of the same amount?
  There are many other thoughts which one might have touched upon, but it is not a proper thing for a new Member to make a very long speech. It is not to our interest to insist upon getting reparations to a greater extent than are compatible with the maintenance of the industrial life of Central Europe. What that would work out in concrete figures I do not know, but it certainly is capable of ascertainment. Some have put it, I think, at £2,000,000,000, but the first thing is to ascertain how much Germany can nay on the basis of her trade circumstances. You must do it in round figures. Having ascertained a definite sum, then say to France, "We, Great Britain, are not ourselves desirous of taking even our share of that sum from Germany, but we can understand your necessity, and if you will agree to limit your demand to a figure that is consistent with the maintenance of Germany's industrial life in its full activity we, as a quid pro quo, will wipe out your debt to us. In fact, we would be prepared to draw the pen
  3324
  through all the Allied European debts to ourselves if you, France, are willing to take the sum that will be ascertained as really within Germany's capacity. Having that sum definitely fixed once for all, then let there be no threats of the occupation of the Ruhr Valley or otherwise putting pressure on Germany, because these threats are really worse than their realisation.
  When you have a country in the position in which Germany has been for some years past, at one moment its hopes rise high because the late Premier, or somebody else, makes a speech in which he says "there is going to be another Conference, and everything is going to be all right." The Conference, of which we have had so many, and which always resulted it seems to me in very little more than what the papers used to call complete accord, takes place, and then M. Poincaré makes another speech, and says, "I am going to send my army to occupy more of your territory." It is this fluctuation even more than the depreciation of the currency that injures the trade of this country, because hon. Members who are in business know far better than I that there is practically always a period of time between the making of a commercial contract and the payment for it, and if, in that interval, the currency in which the payment is to be made varies, a merchant may be involved in very great loss. In these circumstances they are not prepared to do business at all, and that is why the trade of this country has fallen so low, and will continue low while this uncertainty as to indemnities and reparations continues. These are the practical lines upon which compromise can be reached. France says, "We want money or security for money." Let us say, "You can have all the money that is available compatible with the existence of healthy trade in Germany, and we will ask from you no payment of your debt if you will combine with us in reducing the £6,000,000,000, or whatever it is, to some sum which can be paid."
  Mr. LEACH: May I crave the indulgence of the House a little while in begging them to listen to my first speech. I had the felicity in 1918 to be a candidate, and a defeated one. On that occasion I shared, I suppose with every other candidate, the pleasure of having to answer two questions. The first was,

  3325
  Whether I would be prepared to hang the Kaiser? The second was, Whether I would be prepared to pledge myself to make Germany meet our war bill? My answer to the first question lost me a good many votes, because I always said that, while I was not greatly interested in seeing the Kaiser mount the scaffold, I should certainly take no measures in the matter if he was to go there unaccompanied. In regard to the second question, my answer lost me still more votes, because I said that the terms of the Armistice, upon which we and our Allies induced Germany to lay down her arms, did not honourably permit any promise to the electors to make Germany pay the cost of the War. One of the interesting side issues on this matter was that the electors did not seem in the least degree interested in making anybody pay except Germany; no mention was ever made to me of Austria or Bulgaria or Turkey, and I did not hear of any candidates interesting themselves about making any of the other beaten foes pay our war expenses.
  From the late Prime Minister downwards most of the candidates answered these questions to the satisfaction of the electors, and the House of Commons was filled to overflowing with a body of men pledged to make Germany pay. In 1922, with the pledges both unfulfilled, we have had another Election. Again I had the felicity of being a candidate, and this time of securing election. But fchei curious thing was that on no single occasion during the contest, despite the unfulfilled pledges on those two subjects, did I hear anything about the two questions. I imagine there is no Member of the House who in the recent Election had the two questions addressed to him. Why was that? Surely it was an attractive notion that Germany could be made to shoulder our financial burdens to this extent? I know that the elector is a confiding person, especially in the South, and the prospect of having his taxes relieved to the extent of £335,000,000 a year was surely a very attractive one. He voted for it in 1918. He believed it would be done, but in 1922 a mysterious change seems to have come over his psychology and he believes it no longer. Four years of attempts to make the pips squeak, and of exercises in the gentle art of picking pockets have had no result that I can discover, except to increase unemploy-
  3326
  ment. Whilst my economic basis may not be very sound, I have certainly come to the conclusion that whoever may win from any successful work in the direction of making Germany pay, the bread-winner loses every time.
  We started with a very high demand on our beaten foes. I suppose some candidates even went to the length of suggesting that the amount to be levied on Germany would be at least £50,000,000,000, because that would be the total cost of the War to all the Allies who fought in our interest. If that amount could have been divided among all the peoples of the Allies who suffered material damage through the War, my calculation is that it would have run up to about £300 per head of all the inhabitants. It was an exceedingly alluring picture for a confiding electorate. Ever since that time, however, we have been reducing the figure. We began by changing the numeral and continued by lopping off a cipher every now and again, when nobody was looking, until at last the lowest estimate has been arrived at by a prominent banker who used to be a Member of this House. He has fixed the maximum amount which, in his judgment, Germany will ever be able to pay, at £200,000,000. That represents eight ciphers as well as the numeral. In my judgment it is exactly eight ciphers too many. I have listened nearly every morning since I reached this Chamber to the very beautiful prayers of this House, and I do not believe the policy of indemnities fits in with those prayers. It may be that the absence of hon. and right hon. Gentlemen from the Front Bench has something to do with the failure to realise that, but I believe the time has come to bring this question of reparation more into consonance with those very fine words. The right hon. Member for Carnarvon (Mr. Lloyd George) has told us that Germany can pay only in goods, and I think that is true, but I believe that that contains an economic fallacy. I come from a city which will have very strenuous objection to that payment being made in textile goods. I think it makes little difference whether those goods come here or whether they go to countries with which we trade. The effect all the time, so far as I can see, is going to be bad for the recipients.
  There is one matter which I would like to discuss for a few moments bearing on

  3327
  this great work which the Prime Minister has undertaken, and which has for its object the rebuilding of Europe. I think the Prime Minister might now choose an emissary and send him to Russia. He would have precedents for that. There are plenty of capable men in his entourage who would go like a shot—I almost said, like a Bullitt—and if that emissary was duly selected he would have to interview the most honest and candid head of a Government in all Europe. Whatever may be the faults of the head of the Russian Government—and no doubt they are many—he has frankness and honesty. I believe that if the Prime Minister could be induced to follow my advice in this matter, the first part of the message which his emissary should deliver ought to begin: "Forgive us our trespasses." I would like him, after delivering this important preliminary message, to be given powers to negotiate. He would tell the Government of Russia that they needed—a fact which they well know—thousands of locomotives, hundreds of miles of steel rails, vast quantities of agricultural machinery, and hundreds of miles of cloth, which interests me rather, because I come from a city which has many idle looms. I have not the smallest doubt that if our Government would officially recognise the Soviet Government, the emissary would be given orders on an extensive scale for these supplies that I have named, along with many others, and I believe that our engineering shops and our machinery producing factories could easily go on full time almost at once. I understood, from an answer given by the Prime Minister last week, that before Russia could be officially recognised, one of the conditions was that she herself must recognise her debts. This seems to me to be a proposal to make the Russian peasant pay the debts of his late masters. I do not believe that such a proposition is quite fair. Certainly, I believe that it is not in our interests that it should be made, and I wish the Prime Minister would see his way to drop that particular stipulation. The Soviet Government, after all, has a heavy debt against us for damages, and I would say. Let the dead past bury its dead, and its debts also.
  Our Government should make itself responsible for the business relationships of the two countries. Even there war ex-
  3328
  perience provided us with ample precedents. The British Government during the War did make itself the largest trading agency that the world has ever seen, and it did supply direct to the Russian Government huge quantities of goods which that Government required for the prosecution of the War. I know that this would mean putting money into the pockets of the captains of industry, and therefore in that matter I speak as their friend. I would ask the Prime Minister further to reassemble that very clever body of experts who arranged these matters for the Government during the period of the War, who fixed up the costing prices in order to provide that the prices of the goods required for Government purposes should not be unreasonable. We know that Russia's transport is disorganised. We know that her processes of production are handicapped for the want of those very things with which we, of all nations of the world, are the best able to supply her. I think that the taxpayer ought to be prepared to take whatever financial risk may be involved in business processes of this character. I believe that it would be worth it. We have already spent, I understand, something like £100,000,000 of taxpayers' money in trying to pull down the Russian Government, of which we have disapproved. Surely, then, some similar amount spent in the effort to build her up might conceivably be a good risk. Russia's capacity to produce, and to pay for the goods that we might be sending her, is boundless, if we only help her in that way. We have invested long enough in ill-will; surely now is the time to try a little good-will.
  Before the War, one-fourth of the world's exportable wheat supplies came from Russia, Her resources in oil, timber and flax are illimitable. In agriculture, in minerals and in forests Russia is the richest country in Europe. Industrially, she is our ideal complement. The two Governments, acting together, could almost make a new world, and if this co-operative scheme which I have briefly outlined could only be brought to pass, that new world might almost appear on the horizon. I am sure that Russia, after she had got over her first shock at the discovery that at last we were treating her well, would respond to treatment of this description. Then the Prime Minister's emissary would come back full of

  3329
  orders and full of honour, he would take breakfast with the Prime Minister, and I am perfectly sure the Prime Minister would not disown him. There are things that no gentleman would do. I understand that the late Prime Minister, when he moved the seat of Government to a beautiful spot in Scotland, talked of sharing the last crust in the nation's cupboard with the unemployed man. It was a great and high aspiration, but, unhappily, it has never been acted upon. The best parts of the loaf have gone elsewhere. Some of the parts have gone to the Income Tax payer. Some of them have been dropped in Iraq. We have been casting our bread upon the oil wells. I want some of it to be cast in the direction of Russia. In conclusion, I am certain the Prime Minister is actuated by a spirit of goodwill and is anxious to play his part in the rebuilding of Europe and of the world at large. I am certain that he is seeking peace, and I wish him every success in the work he has in hand.
  Lieut.-Commander KENWORTHY: The hon. Member for Central Bradford (Mr. Leach) will permit me to congratulate him not only on his maiden speech but in introducing a new subject at the end of a long discussion. I venture to say that that speech is most relevant to the question of unemployment which is at present occupying our attention. I must just say one word about another part of the Debate, and I will put it as briefly as possible. [HON. MEMBERS: "Hear, hear!"] Yes, it is comparatively early, but, if necessary, I can always make my remarks longer. The hon. Member for South Shields (Mr. Harney) in the admirable speech that he made said that what France wanted was security. To judge from the speech made by M. Loucheur, just about a week ago, and which has not been mentioned in this Debate, but which is worthy of mentioning, if France had to choose between reparation or gold—cash he calls it—and national security, she would choose national security. That is the whole difference between us and France. M. Loucheur went on to say—and this was the remarkable part of his speech—that he would be prepared to support the demilitarisation of the Rhine area and the supervision of it—not the administration—but the supervision of that area, by the League of Nations.
  3330
  May I say that I was extremely disappointed that the Prime Minister furnished no answer in his speech to the speech of M. Loucheur. I believe it is quite possible that M. Loucheur will succeed M. Poincaré. In these troublous times Ministries in France do not last long. I would have liked to know that that admirable speech of M. Loucheur had been met from the English point of view by a straightforward statement, and by a step forward, on the part of the Prime Minister. We have to get this problem solved. I quite agree with the hon. Member for South Shields—that we should be prepared to forgive France her debt—and never mind the cheap gibe that this country is the only one to pay—on condition that she shall withdraw her armies on the Rhine; and we should let her understand that no section of any party here is prepared to advance to further military adventures in Germany. I believe if we did that we should arrive at a sensible solution for France, and that it would be arrived at without bitterness or quarrel. We are told that we must not be the only nation to pay. I am not certain that our debt to America may not prove a blessing to us rather than otherwise. [HON. MEMBERS: "Why?"] I will explain. I believe when we begin to pay it that we will give a great deal of work to this country, and I am afraid that the business men of the States and the politicians will unite in a demand to let us off. Anyhow, I should like to see the experiment that I have suggested tried. For what happened when the Germans began to pay? The Government introduced the Safeguarding of Industries Bill! I believe the Under-Secretary of State for Foreign Affairs is going to reply later in the evening. I want to repeat the questions put by the hon. Member for Dundee (Mr. Morel) about the talk which has been going on for months, and which comes from all sorts of quarters, of a deal between our Foreign Office and the French Government, under which the French will give way to us in the Near East on condition that we give way to them on the Rhine. That is the sort of corrupt bargain which discredited the old diplomacy. The present Government, I believe, asked for support, and ask for it now, on the ground that they would restore the methods of the old

  3331
  diplomacy. Some of those methods, I admit, were superior to what we have become used of late to calling the new diplomacy; but that sort of corrupt bargaining, that sort of log-rolling, "You scratch my back and I will scratch yours," was one of the worst features. Some of the worst bargains and arrangements that we have seen occurred in that way. I am not biased in this matter. As an instance, I will refer to the partition of Persia, which was one of the most iniquitous things done. That was part of a bargain in order to keep Russian bayonets at our call because of our fear of German battleships in the North Sea.
  If there has been any bargain of this sort—and it is not very clear to the people of this country—I hope it will be fully understood that any subsequent Government will not be bound by it. We are supposed to be a democratic country; let us, at any rate, have a democratic Government where foreign affairs are concerned. I wish to ask for a denial of these rumours. There are many sinister rumours about, not only rumours, but a lot of remarkable articles have been appearing in the Continental newspapers on this matter. The hon. Member for the Scotland Division of Liverpool (Mr. T. P. O'Connor) is not a fair-weather friend. He has espoused the cause of Greece, and he will continue to do so, in good repute and in ill repute. I admire him for it. We have dropped Greece. The Government have withdrawn their patronage from Greece. Have they discovered a new protégé? Is Rumania our new pawn? Is that to be the new ally in the Black Sea? [HON. MEMBERS: "There is oil there!"] She has oilfields, and we are going to pay the companies that operated in those oilfields a very large sum of money, in conjunction with the French. However, I am talking of the strategical value of Rumania. She has ports that could be used as naval bases for our Fleet. I wish to ask the hon. and learned Gentleman if there is any intention of establishing a permanent Fleet, a British squadron, in the Black Sea, based on Rumanian ports? So respectable a paper as the "Yorkshire Post," not unfriendly to the Government, has printed a very circumstantial account of these proposals, and the excuse given is that this squadron in the Black Sea is
  3332
  required for the defence of Iraq. It is an extraordinary idea, but there it is in print, in a very respectable organ, most friendly to the Government. Are we sending, are we going to send, or have we been invited to send a Naval Mission to Rumania? We sent a Naval Mission to Greece. We see the results, not of sending a Naval Mission, but of our unholy patronage of Greece, for very unfortunate reasons. Are we sending warships to Rumania? Is there any truth in that?
  These are things that are being talked about on the continent. They appear in continental papers, and in some of our journals. We should know whether there is an aggressive policy of this sort in the Black Sea, and whether Rumania is to be the instrument of that? I hope, as a friend of small nations—Rumania is still a comparatively small nation—and for the sake of Rumania that she is not going to have fair-weather friends in the shape of the Marquess Curzon or the present Prime Minister. We have admitted Turkey to the League of Nations or we are going to do it. That is a pretty commentary on the success of force in the diplomacy of the present and the late Government. Turkey could have wept bitter tears in vain for admission to the League of Nations but for the great victories of Mustapha Kemal and his army. Now Turkey has formed an alliance with her hereditary enemies. The great success of the ex-Prime Minister's policy was the way in which he patched up friendships between hereditary enemies, such as Turkey and Russia and Germany and Russia which, unfortunately, have been aimed against us. The Prime Minister used some rather cryptic words in his reply to the right hon. Gentleman the Member for Spen Valley (Sir J. Simon). He said:
  "Unless we can restore trade we shall have reached a state when we shall be in a worse position than any of the Allied countries."
  It is not the way to restore trade to deliberately go out of your way to still further alienate Russia. Are we taking any steps to invite Russia to enter the League of Nations, or must we recognise her first; and, if so, why not recognise her at once? Russia covers an area of one-seventh of the world's surface. Her people number 120,000,000. They are

  3333
  people with great gifts whose number is increasing, and they are of a stock unspoiled by a too long residence in cities. Russia is bound to recover. At present she is down, but she must recover. How long is the present Government going to continue the policy of doing nothing with regard to Russia or when anything is done it is generally of a most irritating and annoying character such as we have seen recently. I suppose the most foolish thing we could have done was to exclude Russia from the Lausanne Conference. We made a mistake in trying to keep Russia out of those vital discussions in regard to the Dardanelles and the Straits. We have tried to make amends for that, but, if that be a sample of the Government policy towards Russia, then Heaven help us. I asked the Prime Minister at Question Time whether he was going to continue the policy of the late Government, and the right hon. Gentleman replied, quite properly, that he did not know what the policy of the late Government was. May I ask what is the policy of the present Government towards Russia. On this subject, the policy of the late Government was a policy of wobble, and I would like to know if the same policy is going to be adopted by the present Government. Have they yet found a policy on this question, or is it wrapt in the bosom of the Marquess Curzon?
  11.0 P.M.
  May I make a very friendly suggestion to the Prime Minister? It is that he should resort to the old Tory tactics of dishing the Whigs. In this case the Whigs would be our hon. Friends on the Opposition benches above the Gangway, together with a few of us below the Gangway who believe that the interests of this country are bound up with friendly relations and trade communications with Russia. I urge that because I want to see something done for trade. Let the right hon. Gentleman steal our clothes; let him adopt our policy and follow the example of M. Poincaré, and get into closer relationship again with Russia. Let him follow that part of the policy of the late Government which was represented at the Genoa, Hague and Cannes Conferences, and drop that which was represented by the boycott and the interference which ultimately resulted in the defeat of Mr. Winston Churchill at the polls. We are told that the Government is waiting for
  3334
  three points to be dealt with by the Russian Government. The first is that they are to acknowledge their debts. They are prepared to acknowledge their debts, as the right hon. Member for Carnarvon told us on 27th July. Of course, they make no pretence of being able immediately to pay them, but neither do the French. The French say: "We have the honour to owe this great amount of debt, but we make no attempt to pay." We recognise the honesty of the French. Why not recognise the honesty of the Russians also'? The second condition is that they must restore to foreign owners their private property in Russia or compensate them for their loss. They are prepared to do that on condition that their counter-claim against us for the property of Russians seized by us and for damage committed through our intervention there is admitted. I do not see why that matter should not be re-opened. Further, they are told that they must give up attempts to influence opinion in this country by propaganda and subsidies to agitators. I ask the right hon. Gentleman in all seriousness if there have been any actual cases of the violation of the Trade Agreement during the present year in the way either of sending subsidies to agitators or of subversive propaganda being sent in by the Russian Government?
  If there are actual cases, let us hear about them. I believe that the Russian Government have loyally kept their part of the bargain, that they have stopped this agitation in this country, and also, for that matter, in India. If there are any actual proofs, let us have them. We have had only vague innuendoes and vague statements, and I should like to nail down the fact, if I may. I do know that we have, as a relic of the War, a vast Secret Service. It has to justify itself. I do not say that it invents evidence, but it makes the most of any little piece of evidence, and exaggerates it, in order to justify its existence. In any case, the best way to stop this propaganda—[Interruption.] I would remind hon. Members that this is the last opportunity we shall have of raising these points. The matter is one which intimately affects my constituency, the greater part of whose trade is bound up with the Baltic. I have waited the whole day to raise these points, and I waited the other morning till seven o'clock

  3335
  also, in an attempt to raise them. Let us demand that propaganda should be stopped, should it exist—which I do not believe—and change our policy. We should be able to approach the question of negotiating with Russia on quite a different plane if we recognised their new Government—that is to say, their new system of Government, for their Government is the oldest in Europe. They do not like being snubbed any more than other people do.
  If we would recognise facts as they are, by recognising the Russian Government, the whole system would be changed. The Urquhart agreement was the beginning of a Russian boom, that is to say, capital would have been forthcoming in the City for investment in Russia; but that was stopped by the non-ratification of the agreement, partly as a protest against the continued non-recognition of Russia, and partly against the exclusion of Russia from the invitations to the Dardanelles Conference. I suggest to the Government, firstly, that they should follow the example of Germany, Poland, Esthonia, all the Baltic States, and Finland, and recognise Russia; and secondly, that they should extend the Overseas Trade Credits and Insurance scheme to Russia. If we can extend it to Poland, why not to Russia? Thirdly, I would suggest that the Government should make one more attempt to get these outstanding questions (Settled. I believe that if we came to negotiations after recognition we should get a much better result. It did not take the Germans long to come to an agreement with Russia after Germany had recognised Russia; and we are going to lose much trade in the next few months to German, and for that matter to French, merchants and manufacturers, which ought to come to this country.
  The debt of Russia is £800,000,000, which is a mere bagatelle compared with the resources of the country. Dr. Nansen told me at Geneva the other day that he had been all over Siberia, and the internal resources of Siberia are greater than those of the United States and Canada put together. What is a debt of £800,000,000 to them? I suggest that the Russian Government be invited to float a conversion loan of £1,200,000,000 on their security, supported by ourselves and the other nations interested, and that
  3336
  £800,000,000 of it should be exchanged for this debt. I believe it would stand at at least 50, and, as the Russian bonds to-day-stand at about 5 or 7, it would be a very good thing for the French peasants and others who hold them, and who have a great grievance in consequence. It can be secured on the Customs and railways of Russia. I would use that for financing supplies from this country to Russia, for transport, machinery, implements of all kinds that could be made in our factories. The men who could be making them are now either trying to exist on 15s. a week or are being put to road work or other work which is unsuitable for skilled mechanics. When Rumania entered into the War, we at once asked her, "What do you need in the way of transport, saddles, medicines, arms, boots, clothing, and so on?" There was no question of payment. Why cannot we say the same to Russia to-day? It is true that that was during War, but there is war going on now. We are fighting to-day in Europe famine, unemployment, discontent, unrest, despair. Let us look upon all these people who can trade with us as allies in that war, and we shall win the victory.
  Mr. WALLHEAD: I have listened to the Debate with a great deal of interest and with some amazement. I am interested because it has proved that at last common sense is making itself felt in the councils of this country with regard to this vexed question of our relationship with Germany. J know there was laughter on the benches opposite when my hon. Friend the Member for Dundee insinuated that the wonderful result of the election of 1918 was due to the fact that it had been declared that Germany should be made to pay for the War, but I think, in spite of the hilarity of hon. Members opposite, that in the last Parliament there were not 10 per cent, of those who sat in this House who did not owe their seats primarily to the fact that they stood for making Germany pay the cost of the War. I think that is perfectly true, and the right hon. Gentleman the Member for Spen Valley (Sir J. Simon) declared that in his opinion there was no considerable section of the people of this country who did not think that in accord with the Government. I listened with some amazement, however, to the cheers that greeted the statement of the Noble Lady the Member for the Sutton Division

  3337
  of Plymouth (Viscountess Astor) that the result of the 1918 election was due to the recognition of the right hon. Gentleman the Member for Carnarvon Burghs (Mr. Lloyd George) was the man who won the War.
  Viscountess ASTOR: You said the election was the result of having promised to make Germany pay and hang the Kaiser. I said it was nothing of the kind. The country was grateful to the Government that had won the War, and I meant it too.
  Mr. WALLHEAD: I misunderstood the Noble Lady. At any rate, the country was led to believe the right hon. Gentleman won the War. My amazement was caused by my knowledge of the events of the last two or three months. It would appear that the gratitude of hon. Members has not lasted very long, because I might quote Mark Anthony and say,
  "But yesterday the word
  Of Cæsar might have stood against the whole world."
  Now sits he there like another Shakespearean character,
  "With this small poor halfpennyworth of bread to all this intolerable deal of sack."
  It would appear to me that we are still fumbling about trying to find a way out of our undoubted difficulties because the world refused to do what, in my opinion, was the sensible and the right thing four years ago. We are all wondering how we can pay your debts. I sometimes stagger when I think of my share of the National Debt. At any rate, we are wondering how we can pay America. Can France pay us? Can Italy pay us? Can Germany pay us? Can Germany pay for the restoration of the devastated areas? Can the smashing of the War be made good? However, it has got to be paid; it must come from the world's common stock. From the economic point of view it can only be the result of the common production of mankind. It can only be paid by means of the product of the labour of the workpeople of the world. All those who render service in the administration and management of business are also included in the term "labour." The restoration of the world must be made from the world's common stock, and if instead of forming a punitive peace or founding a peace based upon the idea of punishing the delinquency of a sinning and erring people, the world had regarded the War
  3338
  as the tremendous catastrophe, the overwhelming tragedy that it was, and we had produced men big enough to have come together and have said, in the phrase that was used so freely during the War: "Never again, in God's name, never again." Let us formulate a peace that will quench the fires of revenge, rebuild a shattered world, and save humanity from its past errors," it would have been a sublime thing. Instead, we have been intent on punishing a scapegoat, and we are to-day punishing those who are as guiltless of the War as we are. Even then we cannot make them pay. No doubt they could pay in time, but in what period of time? Let us take the German Empire and base our calculation upon the surplus she piled up in years of peace. If we take the figures of her foreign investments we shall find that from 1870 to 1910, a period when German trade was developed, in which she had a period of profound peace, she invested £1,250,000,000. That represented her national savings in 40 years.
  Mr. H. H. SPENCER: Because of the cost of her preparations for war.
  Mr. WALLHEAD: What about our preparations? The amount she spent in preparation for war was less than we spent in this country. In this period of profound peace she saved £1,250,000,000. The War came, and she had her killed and maimed. She has also lost ten millions of her population by cession of territory. She has also lost a large amount of her raw material sources of supply. Her mercantile marine has been taken from her. If it took her 40 years of peace to save £1,250,000,000, how long would it take her to pay £2,500,000,000 under worse conditions? The whole thing keeps the world so unsettled that it is not worth the candle.
  The Prime Minister, facing an undoubted economic crisis, told us that if we were to pay our debt of £1,000,000,000 to America it would lower our standard of living in this country for the next twenty-five years. If the payment of £1,000,000,000 lowers our standard of life for 25 years, what is going to happen to those people in the centre of Europe if you are going to compel them to pay twice the amount? You are going to lower the standard for fifty years. If you keep their standard lowered for fifty years you will inevitably lower your own

  3339
  standard. [HON. MEMBERS: "That is what they want."] This is not the day at which you can do that. There was some slight dissent from the remark of my hon. Friend the Member for Dundee (Mr. Morel) when he referred to the efforts made by the German trade union movement to deal with the ease of the devastated area in France. Almost two years ago I took part in a conference, as representing my organisation here, with representatives of the French Confédération du Travail and all the great German trade unions, and we met in Amsterdam for the purpose of working out a scheme whereby the German workmen would rebuild the shattered areas in Northern France.
  The socialists of the German trade union movement said "We are not responsible for the evils that were done, but we recognise that France has a claim. We recognise the justice of her claim to re-house her people and rebuild her broken factories, and we are prepared to work through our respective Governments in conjunction with the French trade union movement. We will supply the raw materials and 50,000 trained workmen on condition that there shall be no profit on production, or distribution on our building itself, but that it shall all be done at cost price, and we will do our level best." A noted French economist has told us why that scheme broke down. That scheme was based upon the idea that the goods supplied by the Germans should not come into competition with goods produced for the market. That would not have produced dislocation or unemployment. They would be something in excess of and in addition to, but not in competition with, the commodities produced by the French or British workman.
  That scheme was turned down, but when Herr Stinnes and the French representative came to an agreement it was arranged that the Stinnes group should supply materials to the French, and the French accepted them, but on condition that a profit was made. And not long ago I interviewed in Berlin Herr Hirsch, the economic Secretary of State for Foreign Affairs in Germany, and he told me that had that plan come to fruition Stinnes would have made £2,000,000,000 in the one year's working, and the French were willing that that should be done, provided
  3340
  that a profit were made, rather than allow the German workmen with the French workmen to carry out through their respective Governments the work of restoring the ruined areas in France.
  It is not good enough for hon. Members of this House, who may not be conversant with these facts, to assume that the German working classes at present are not desirous of solving this problem equally with ourselves, and upon just and fair lines. The French working classes have tried to work in harmony. If that scheme had been carried out the conditions would have been vastly different from what they are now. How does this affect us? Is it not clear that if we were to give up this idea of payment it would be better? I have here an extract from a South Wales newspaper which tells me that in April, 1921, a former German ship which was handed over as reparation, a ship of 3,290 tons dead weight, then lying at Cardiff, was sold by the order of Lord Inchcape—the Geddes Committee again—on behalf of the Government to Sunderland buyers—I do not know who the buyers were—for £1,000, or less than 6s. per ton dead weight. That is, 6s. per ton for a first-class ship at a time when it was costing £15 or £20 a ton to build ships in British shipyards. Yet we wonder why our shipbuilders are idle! If the Government had taken the German mercantile marine and sunk it, as the German sailors sank their warships, it would have been infinitely better than the foolish game of selling ships at 6s. a ton. That instance is indicative of a good many more.
  It is about time that we began to consider, not how much we can take or how much Germany can give, but how soon we can eliminate the whole foolish business from practical politics. As to the cancellation of debt, I have something to say. There is the American point of view, held by Liberal opinion in America. I have seen the matter dealt with in the New York "New Republic," a paper of a Liberal class and favourable to this country. What is the point of view expressed there? They say in effect, "It is all very well for Great Britain to come to us and to ask us to cancel debt on condition that she cancels the debt of France, but if you cancel the French debt and we cancel yours, your debt and theirs cancel one another, but we are doing all the cancelling, and there is no one to cancel our debt." The Americans say also, "It

  3341
  is all very well for you to come to us asking ns to cancel your debt when as the result of the War you got several colonies." We got Kenya Colony, part of Togoland and Mesopotamia. [HON. MEMBERS: "NO!"] A mandate is only an elegant phrase for possession. That is their point of view—that we took whatever we could. They say that we have got territories with a potential worth of thousands of millions of pounds and then we talk of being let off the payment of a paltry £1,000,000,000. [HON. MEMBERS: "Oh!"] It is paltry, considered in terms in which we speak of money nowadays. It is only about one-tenth of your own internal debt, and you assume that the people of this country can pay that.
  You will keep us up to the scratch in that connection, I am sure. The point of view that has to be considered is that you can get out of the United States debt by showing that you are sincere. I believe the United States would willingly meet us; they know the need of Europe, just as surely as we know it ourselves. It is abundantly clear, they will come to the rescue of Europe the moment Europe shows it is prepared to help itself by acting with some little wisdom. I hope the points to which attention has been called will be borne in mind when the Prime Minister enters upon his difficult task with M. Poincaré. What will happen if an attempt is made to detach the Rhineland? Does anyone think you can tear away from Germany the millions of Germans living in the valley of the Rhine, the home of their legends, their traditions and their poetry, the centre of their history? Does anyone think for a moment that such a policy can be carried out and peace continue in Europe? It is an absolute impossibility. This is an old, old dream. It has been a dream from the days of Charlemagne down to now, and wars have been fought to establish it as a reality. It was the dream of Cardinal Richelieu, of Louis XIV., and of Napoleon. Where they failed shall M. Poincaré succeed? History says he will not. Our own relations with Ireland prove that you cannot permanently hold a people down by force. We had better not play that game. It means devastation for Europe. As sure as French troops march to occupy the Ruhr or French politicians attempt the detachment of the left bank of the Rhine from the Reichsland, as surely will peace disappear from Europe
  3342
  and devastation—and worse—take its place.
  The UNDER-SECRETARY of STATE for FOREIGN AFFAIRS (Mr. Ronald McNeill): The Debate has ranged over a very wide field and there have been a great many interesting speeches on economics and history and so forth. I cannot pretend that I am going at this late hour to indulge in anything like a, general reply on the whole Debate, and I do not think I should have attempted to intervene at all, had it not been that questions have been directed to me on matters which specially concern my Department. I noticed with great pleasure the tribute—only a just tribute, I think—paid to my Noble Friend the Secretary of State for Foreign Affairs by my hon. Friend the Member for the Scotland Division of Liverpool (Mr. T. P. O'Connor). The hon. Member has followed more closely, perhaps, than most people, the particular matters with which Lord Curzon is dealing at Lausanne. Therefore he is able to appreciate more than most the great difficulties with which my Noble Friend has had to contend, and the very large measure of success with which, up to the present moment, he has been able to meet those difficulties. My hon. Friend asked me two particular questions in this connection. I am sure the Whole House heard with very great pleasure the information which was conveyed to it in the telegram which was read by my Noble Friend the Member for Hitchin (Lord R. Cecil) earlier in the evening, but my hon. Friend the Member for the Scotland Division asked me, with reference to that, whether it means that when Turkey shall have joined the League of Nations the custody of the minorities, whether Christian or Moslem, will be committed to the League. I am not able at this moment to answer that question positively. I know that that is what we desire. I do not know whether the word "custody" does not go a little too far.
  Mr. O'CONNOR: I think I substituted the word "superintendence."
  Mr. McNEILL: That, I think, would more accurately describe the policy which it is desired to carry out. Certainly it is the desire that the machinery of the League of Nations should be used in order

  3343
  to supervise, and if possible guarantee— though that, perhaps, goes rather further than it is possible to hope for, but so far as possible to guarantee—any provisions which may be entered into in the Treaty for the protection and preservation of these minorities, whether Christian or Moslem. My hon. Friend also asked me with regard to the national home for the Armenians. I do not think I can say anything more than has appeared in the speech of my Noble Friend the Secretary of State, which was published in the Press yesterday. My hon. Friend and the House will remember that he there brought to the attention of the Lausanne Conference the pledges, or at all events the expressions of hope, in this matter which had been made earlier by ourselves and our Allies, and he hoped that the Turkish representatives would be able to provide in the Peace Treaty for a territory set apart for Armenians, either in the north-east of Asia Minor or, at the other extremity, along the coast of Cilicia, but I am not able to say at present whether those proposals are or are not acceptable to the Turkish delegation, still less to those whom they represent, and I can only assure my hon. Friend that, as he will have gathered himself from the speech of Lord Curzon, it is the earnest desire of this Government, and of our Allies, I may say also, that that idea of a territory set apart for the Armenian race may be realised.
  I was startled rather by something which fell from the hon. and gallant Member for Central Hull (Lieut. -Commander Kenworthy), especially as it seemed curiously to harmonise with something which earlier fell from the hon. Member for Dundee (Mr. Morel). They both appeared to me, if I may say so, to be filled with the most extraordinary suspicions. I think both hon. Members used the strange phrase "sinister rumours." I should have thought, to begin with, that neither lion. Gentlemen would have paid any attention to what could be described merely as "sinister rumours." I should have thought they would have wanted something more to go upon than that, but the hon. Member for Dundee was rather the more specific of the two hon. Members. He said, if I recollect rightly, that there were sinister
  3344
  rumours with regard to negotiations—he will correct me if I am misrepresenting him, as I am speaking entirely from memory—which had been carried on recently in Paris by Sir William Tyrrell and someone, I suppose, representing the French Government.
  Mr. MOREL: I used the word "conversations." I said there had been conversations between M. Millerand, the President of the Republic, and Sir William Tyrrell.
  Mr. McNEILL: I cannot say whether there was or was not. All I can say is that Sir William Tyrrell was not sent to Paris by His Majesty's Government to carry on negotiations with anybody. Sir William Tyrrell, as a matter of fact, went to Paris, with which he is very familiar, and where he has many friends, on a private visit, and if he had an interview with the President of the Republic, which I do not for a moment assert or deny, all I can say is that sinister rumours have a very slender foundation to rest upon if they are all built upon the fact, if it be a fact, that Sir William Tyrrell, while visiting Paris, had called on the President of the French Republic.
  Colonel WEDGWOOD: Does the hon. and learned Gentleman know if he did or did not? [An HON. MEMBER: "He said he did not know."]
  Mr. McNEILL: I can find out if the hon. and gallant Gentleman wants me to find out. The hon. Member also found other sinister rumours n the interview which took place, I think, in November between Lord Curzon and the French Prime Minister. So far as that is concerned, there, I think, the information is fairly complete. All that happened was that it was thought desirable that the Foreign Ministers of the two Allied Governments, and the representative of the Italian Government, should, as is common in all cases, have a preliminary meeting to see how far they were in agreement on the main principles. That is the head and front of the whole thing out of which the hon. Member raises the idea of sinister rumours. The hon. and gallant Member for Central Hull (Lieut.-Commander Kenworthy) raised one or two other terrors. He wondered if we were going to have an aggressive policy in the Black Sea, whether we were going to

  3345
  have a Naval Mission to Rumania, and seemed to imply that there was some new policy of aggression in the Black Sea, but aggression against whom I did not quite catch.
  Lieut. - Commander KENWORTHY: Against Russia.
  Mr. McNEILL: All I can say is I do not pretend that, up to the present, I have got a complete grasp of all the information that it is possible to have in the great office which I have the honour to represent. There may be something of which I am not yet informed, but I have been endeavouring to get hold of the various threads of the policy of this country, and all I can say is that I have found no trace anywhere, and I do not believe for one instant there is any new policy of aggression towards Russia or anywhere else. The hon. and gallant Gentleman also said, apparently as one of the indications of something which was new and sinister, that we have dropped Greece. Well, we have not dropped Greece at all. In point of fact, we are endeavouring to carry out the policy which the last Government, also professed to carry out, namely, to be perfectly neutral as between the Greeks on the one side and the Turks on the other. That is the object in view, and, at all events, it is certainly not the case, as the hon. and gallant Member seemed to think, that we have dropped Greece.
  Those are the actual questions which have been addressed to me. I would have liked, if the hour had been earlier, to follow the hon. and gallant Member for Hull into what he said about Russia, but I hope that he will excuse me from doing so to-night, because I really do not think it could be very profitable. So far as our policy in that regard is concerned, he said that he hoped this Government were not going to wobble. Well, we are not going to wobble; in other words, the policy, as he knows, which has hitherto been pursued in that matter, and in which he is so interested, remains unaltered at the present moment. Therefore I do not think I need attempt at this late hour—I question if the House at all desires it—to go at any length into the bearings of that policy. I go further, in fact, and recognise the very natural impatience of the House, and, therefore, I will curb my anxiety to afford informa-
  3346
  tion. I will appeal to the House that, having covered a very wide field and a great many subjects, we now go to a Division, if necessary, or, still better, that we should get the Bill without a Division.
  Question, "That the Bill be now read the Third time," put, and agreed to.
  Bill read the Third time, and passed.

ELECTRICITY (SUPPLY) ACTS, 1882 TO 1922.
Resolved,
"That the Special Order made by the Electricity Commissioners under the Electricity (Supply) Acts, 1882 to 1922, and confirmed by the Minister of Transport under the Electricity (Supply) Act, 1919, in respect of the Burgh of Dumfries, in the County of Dumfries, and the Burgh of Maxwelltown, in the Stewartry or County of Kirkcudbright, which was presented on the 12th day of December, 1922, be approved."—[Lieut.-Colonel Ashley.]

MILK (SPECIAL DESIGNATIONS) ORDER, 1922.
Mr. A. V. ALEXANDER: I beg to move,
"That an humble Address be presented to His Majesty praying that the Milk (Special Designations) Order, 1922, made by the Minister of Health under Section 3 of the Milk and Dairies (Amendment) Act, 1922, be annulled."
I am anxious not to detain the House more than a moment or two to say that when I put down this Motion I thought it might be necessary to say a great deal about this Order. Fortunately we have had some conversations with representatives of the Government, and I understand a statement on behalf of the Government will be made that will render it unnecessary for me to say as much as I thought might be necessary. I do want to say this, however, that it would be better if we had a little less Government by Order and Regulation and a little more by Act of Parliament; it would then not be necessary to detain the House at a time like the present. This is the only way we can deal with this question, that is the difficulty with which we have been faced, by a singular handicap that will be placed upon the milk distributors of the country, and in many parts of the

3347
trade, if some parts of the Order made under Section 3 of the Act were to remain in force after 1st January. I would ask the Solicitor-General, who is replying for the Government, to be kind enough as to advise us exactly as to how the conditions laid down in the Order are to be applied in the case of Scotland—because the Order cannot be applied to England only—also, will he advise us, or ask the Minister of Health to do so, in due course, what those will have to do who will have to deal with pasteurisation? We are faced with a situation almost of chaos in the selection of the machines that are necessary for the carrying out of the Order. You may have local authorities making different Orders on the matter of the machines. What is the machine that comes within the terms of the Order?
Mr. SULLIVAN: I beg to second the Motion.
The SOLICITOR - GENERAL (Sir Thomas Inskip): The hon. Gentleman who has raised this matter was good enough to indicate to the Minister of Health the particular point to which his criticism was directed. The matter—if I may say a word in order to explain the statement I am going to make—is one which arises upon Section 3 of the Act passed in the last Parliament with reference to the regulation of milk supplies. By Section 3 it was enacted that the sale of "Certified," "Grade A" or "Pasteurised" milk shall be impossible except under licence granted by or with the authority of the Minister of Health, and it was provided that that illegality would begin on 1st of January. It was, therefore, incumbent that the Minister of Health should make an Order regulating the conditions under which licences should be granted. The Minister of Health made the Order, which was laid on the Table of the House, in accordance with Section 6 of the Act, "as soon as may be" after it was made. The Order was made the day before yesterday, and laid upon the Table of the House yesterday. It provides that "Pasteurised" milk shall be milk which has been treated in a particular manner. In the past, milk has been placed on the market which has not been treated in that manner; in fact, in the opinion of authorities upon that subject, some of what was called "Pas-
3348
teurised" milk was really milk that had been sterilised. The difference between the two kinds of milk is that sterilised milk is milk that has been subjected to a heat much greater than in the case of pasteurised milk, and the qualities of the milk and the taste—which is very important to some people—are very different.
There appears to be a difference between rival experts as to the best means of Pasteurising milk. It was thought that if a little more time were given a new method might be tested, and approved by the Minister of Health and the local authorities, which would be lees expensive than the only known method, that is, the positive holder. The Order, as drawn, however, made it necessary that the only known method at the present time should be at once introduced. The Minister of Health has been anxious, if possible, to give a little more time for trial of the Nielsen method, which it is suggested may be used with great advantage. The Minister of Health has been anxious to meet the criticism of the hon. Gentleman and those associated with him. Although the Order provides that licences shall only be granted to persons in respect of milk, which is
"retained at a temperature of not less than 145 degrees and not more than 150 degrees Fahrenheit for at least half-an-hour, and immediately cooled to a temperature of not more than 55 degrees Fahrenheit,"
he proposes to add at the end of the Order the proviso that—
"until the 1st day of July, 1923, the provisions contained in Paragraphs 1 and 2 of the Conditions shall be deemed to be satisfied if the milk is treated not more than once by a suitable heating process and immediately cooled to not more than 50 degrees Fahrenheit."
If that variation be made in the present Order, it will be possible for the existing organisations to continue their present method and to assist the Ministry of Health and the experts in trying the new method, which, it is hoped, will secure satisfactory results. I understand that addition will be acceptable to the hon. Gentleman. I will undertake that an Order shall at once be made, and that it shall become effective on 1st January in exactly the same way as the Order to which exception has been taken.
My hon. Friend asked me two questions. He inquired how this Order would apply to Scotland. The Order does not apply

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to Scotland, as it is made by the Minister of Health for England. No doubt my right hon. Friend will get into communication immediately with the Scottish Board of Health, with a view to action being taken in Scotland on the same lines as those I have indicated. Of course, I am not in a position to give any undertaking on behalf of the Scottish Board of Health, which has its own ideas as to how Scotland should be governed, but I have no doubt action will be taken which will secure the result aimed at.
The last question I was asked was, whether it is possible to secure that the local authorities shall act in the same way with regard to compliance with the Order. The answer is that the Order itself provides that the refusal to grant a licence shall be subject to an appeal to the Minister of Health. If anybody
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thinks that he ought to be granted a licence because his apparatus is satisfactory, he can appeal to the Minister, and it will be made plain to him what the Minister of Health thinks is unsatisfactory. Although local authorities may have different opinions, the Minister of Health will settle those differences, and I hope, to the satisfaction of everybody connected with the industry.
Mr. ALEXANDER: I beg to ask leave to withdraw the Motion.
Motion, by leave, withdrawn.
It being after Half-past Eleven of the Clock, Mr. SPEAKER adjourned the House, without Question put, pursuant to the Standing Order.
Adjourned at Five Minutes before Twelve o'Clock.