HC Deb 14 December 1922 vol 159 cc3232-346

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 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 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 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 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. 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.


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

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- 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 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 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.


To square the circle.


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 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 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

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.


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 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.


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 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- 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.

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.

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 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.


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 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.

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 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- 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.


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 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.

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 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 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.


That is quite untrue as regards the British area of the Rhine.


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, 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 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- 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 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.


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?


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.


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 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.


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.]


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.


I submit it is customary either to accept a contradiction, or to give a quotation to prove that that contradiction is wrong.


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 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 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.


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.


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.


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.


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.

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 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 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?


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.


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 to be a great scandal, one is making a violent attack?


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.



Viscountess ASTOR

What do you know about fighting?


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 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 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, 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.


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.


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 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?


What about ability to receive?


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 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 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.


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.


You made two.


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 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 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.


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.


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.


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 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 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 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- 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.


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 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 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 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 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 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 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- 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 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.


I want to underline a point made at the end of the speech of the Noble Lord opposite. Nothing can 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 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.


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 £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- 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.


She offered to.


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 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.


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 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 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 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 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 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, 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- 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 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.


Good old Bankers!

9.0 p.m.


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 consider, because it is as well to be as constructive as one can. I would say this — Could we not go to France—


Or to Jericho.


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?


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 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 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 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 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 £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 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.


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 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.


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.


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 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 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 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 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 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.


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 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- 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.


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 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.

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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 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 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 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 opposed to the system adopted in the anti-dumping provisions of the Safeguarding of Industries Act.


This is a long way from the subject under discussion.


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 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."


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, 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- 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 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- 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 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. 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 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 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 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 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 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 £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.


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 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.


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 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.


Because of the cost of her preparations for war.


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 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 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 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 and devastation—and worse—take its place.


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.


I think I substituted the word "superintendence."


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 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 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.


I used the word "conversations." I said there had been conversations between M. Millerand, the President of the Republic, and Sir William Tyrrell.


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.


Does the hon. and learned Gentleman know if he did or did not? [An HON. MEMBER: "He said he did not know."]


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 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.


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- 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.