PRIME MINISTER'S STATEMENT. (Hansard, 14 December 1922)

§ Sir J. SIMON

On the Third Reading of the Consolidated Fund Bill and on the eve of the Prorogation, I desire to invite the attention of the House to a subject which profoundly affects the future life of this country and of Europe as a whole. It is a subject which is closely related to the question of unemployment in this country, and, therefore, I conceive it to be a subject which is within the rules of order and may be debated on the Third Reading of this Bill. I noticed the other day the report of a speech made by the present Foreign Secretary, I think the only speech which he made in the course of the late General Election. In that speech he claimed that foreign affairs, rightly understood, were really domestic affairs, and, indeed, the most domestic of all our affairs. The Secretary of State for Foreign Affairs went on to say: They touch the life, the interest, and the pocket of every member of the community. It is in relation to our foreign affairs that every man and woman in this country secures immunity from war, relief from the heavy burden of taxation, and prosperity of trade and industry. 4.0 P.M.

If it be justified when speaking of foreign affaire as a whole, it is the central truth when, we come to consider the long-drawn-out and still unsettled question of reparation. During the last three weeks there has been much discussion in this House on the subject of unemployment, and quite rightly so, but the duty of the House of Commons is not so much to demonstrate its sympathy as to search for causes and to pursue remedies, and I submit that we should be gravely failing in our duty to the country and to our constituents if we separated without examining, in the light of the most recent events, this subject of reparation upon 3222 which trade and industry, the prospect of peace, and the hope of prosperity so fundamentally depend. This proposition, that there is a close and intimate relation between the prompt and practical settlement of reparation on the one hand and the recovery of Europe and of trade on the other, has now become a commonplace. The fact that it has now become a commonplace shows what a long distance we have travelled since December, 1918. There was reported in the "Times" two months ago a speech by Sir Eric Geddes, and I choose it as an illustration of this change of view, because that right hon. Gentleman went as far as most people in the view that the Allies both could and should set no bounds to their demand. I see from the "Times" of 12th October this year that, speaking as President-Elect of the Federation of British Industries, Sir Eric Geddes used this language: It is no use chasing a mirage. You can only get reparation out of Germany by either money or goods. She has no money, and, if you take her goods, it will mean unemployment. If the leaders of thought could bring that home to our people it would be a great thing. I have just come back from Germany, and I tell you they are desperate to-day. You will never get a strong Government there until the people know that they can run their own affairs. Until we and our Allies can come down to rock bottom and find out what Germany can pay and then tell her so, there will be no improvement. When we do that, Germany, as a great and a proud nation, will try to pay if possible, but you cannot enslave a nation of seventy millions for generations. This is one of the cases where it is easy for all of us to be wise after the event, and I take leave to say that I very much doubt whether there was any large body of opinion in any quarter of the country who appreciated to the full the gravity of the miscalculation four years ago. It is quite useless to go back or to recriminate. The only question of real importance to-day is what attitude the present Government are going to take upon the question now. That leads me to the principal matter which I wish to emphasise. Notwithstanding what the Prime Minister said at the end of question time yesterday, I do submit that this Debate cannot be an effective Debate until the Prime Minister has made a statement as to the Government's attitude and intention. The House of Commons is not a debating society. It is the Commons of Great Britain recently elected by 3223 the people, whose future may be involved in the action which may be taken before this House re-assembles on 13th February next year.

Therefore, I propose to formulate three questions, which I have taken the liberty of sending to the Prime Minister, and which I am authorised to say have been inspected and approved, not only by my right hon. Friend the Member for Paisley (Mr. Asquith), but by my right hon. Friend the Leader of the Labour party (Mr. Ramsay MacDonald) and by my right hon. Friend the Member for Carnarvon Boroughs (Mr. Lloyd George). The questions are framed for the purpose of securing that we may in this Debate have in good time information, so far as the Prime Minister feels it is consistent with the public interest to give it, on the broad issues which arise out of the present situation and the recent discussion on reparations, and, with the greatest respect to the Prime Minister, having put the three matters briefly before the House, I would ask him to be good enough to consider whether he could not take the earliest opportunity of putting the House in possession, so far as the public interest permits, of the views of the Government.

There are three special reasons why that course appears to be a desirable one. First of all, this is a new Government with a new Prime Minister, and up to the present, so far as I have been able to discover—and I have endeavoured to make myself acquainted with what exists in print on the subject—there have really been no deliberate and authoritative declarations by the present Government of their policy in this regard. I have not omitted to notice that the Prime Minister, in the course of the Election, made a speech—one passage of which he was not able to recollect very exactly in the course of yesterday—at St. Andrew's Hall, Glasgow. There is a passage in that speech of 26th October last which, coming from him, is, of course, of great importance, and which bears very directly on this matter. With the leave of the House, I will read the passage. Referring to the Election of 1918, the right hon. Gentleman said: At the last Election in this country everyone, not merely Mr. Lloyd George and those who supported him, but everyone of them, spoke as if they 3224 thought Germany could pay the whole of the War Debt. Personally, I never thought so, and I was very out of touch with my own followers in the House of Commons in the Debate at the time the Treaty of Versailles was being arranged on this particular subject of reparation. I am not myself over-sanguine. I knew from the first—I think I can honestly say I never raised these hopes—that any vast sum like that was impossible. But now I do feel the tendency is rather turning too much the other way. The tendency here at home is rather too much to assume that it is the easiest thing in the world for us to pay £1,000,000,000"— referring, no doubt, to the debt to America— it will not be an easy task—and that to get anything out of Germany is impossible. I do not agree to that. The position of Germany is very difficult, and the needs of France are very crying, and it may be that agreement will be impossible. I hope not, but it may be. But France and we go into this matter with the same object in view. We need something from Germany if we can get it. France needs it perhaps more, but remember, though our suffering is not shown in devastated areas, it is shown in our factories and workshops and in the unemployed throughout the land. France needs it perhaps more, but we go into it with this common object—to get anything that Germany can reasonably be asked to pay. That is the first reason why it appeared to some of us that it was desirable, if the Prime Minister thought fit, to get the advantage of his statement early in this Debate. There is a second reason. It appears to be clearly established that a statement is about to be made in the French Chamber. I read in the papers to-day the message, "Tomorrow, at the beginning of the sitting, M. Poincare will explain the position of the negotiations." There is a third reason, perhaps the most important reason of all. The action which in some quarters is said to be contemplated by France—possibly to be undertaken before this House again meets —be that action wise or unwise, is of a kind which may have consequences which cannot be recalled. May I add this? The question really is not so much one between the British Government and the French Government as a question between two communities who have the strongest possible reason for mutual respect and regard—a question between the British people and the French people.

We read, and there is nobody in this House who does not read with pleasure, the French declarations made within the last few hours that no difference of 3225 opinion can affect the cordial understanding based on the common sacrifice for a common cause which binds together our two peoples. In this anxious and difficult crisis it is with profound feelings of reciprocal sympathy that we read a declaration of that sort. I venture to make this one remark, and it is that anybody who makes any observations on this subject must do it vender the pressure of a sense of the fullest responsibility. It is perfectly true that the relations between Britain and France rest upon a basis which is something which no present difficulty or difference can alter. If there be any Frenchman who doubts that let him go through our towns and villages and in almost every town and every village he will find at the side of the road recently erected a monument to British dead, most of whom fell in France or in Flanders. I venture to say that you can no more eradicate from British minds and hearts the memory of this joint sacrifice, and all that it stood for than you could take up that British dust from French fields, and remove it to our cemeteries here at home.

It is in that spirit that we claim in this Debate to deal frankly and soberly with the differences which it is suggested might arise. Mr. Gladstone, in one of his most famous speeches on foreign policy at West Calder, made more than 40 years ago, laid down one of the fundamental principles of British foreign policy when he declared for a recognition of the equal rights of all nations, coupled with the admission of special sympathies with those communities whose circumstances and sufferings appeal in a special degree to British hearts. Our object is not, indeed, to promote exclusive agreements, but by maintaining the most friendly feeling and understanding to secure a comprehensive arrangement which may be widened and enlarged even beyond the present bounds of the League of Nations itself. There is, I submit, complete solidarity of feeling in Britain in this regard, and if we criticise or if we oppose any methods that may seem to be recommended by our late Allies, it is because true friendship does not consist either in nerveless acquiescence or in baffling ambiguity, but true friendship requires a straightforward statement of the view which we hold, for we hold it not in the interests of our own country 3226 only, but in the interests of the restoration of Europe and the peace of the world.

I now come to the three questions which, after consultation with my right hon. Friends, I am anxious to put before the House. The first question is this. It deals with the attitude which His Majesty's Government adopts towards certain proposals and suggestions which have been much canvassed in recent days. I have formulated them in these terms:

(1) What is the attitude of His Majesty's Government in regard to the proposals or suggestions that a moratorium agreed to be granted by the Allies in respect of reparation payments should be accompanied or conditioned by further Allied control; whether that control takes the form of management of German finances, the seizure of German mines and forests or of the occupation of further German territory, and in particular of the occupation of the Ruhr Valley.

I think it is clearly stated there, and all I wish to add about it is that it proceeds upon the assumption that there will be found to be general agreement on some moratorium. Some of us are anxious lest the value and effect of a moratorium, even of an agreed moratorium, may be lost and frustrated by action which will be very difficult to recall, but may be found to be inconsistent with the very purpose of the moratorium itself. I have included in this question a reference to the external management of German finance. As regards the management of another country's finances, may I point out that there is a very great deal of difference between control and supervision. It is one thing to make the Reparation Commission responsible for seeing that when a moratorium is granted Germany shall really make an honest effort and do her best, under a penalty, that the moratorium may be withdrawn. That is quite a different thing from what has been recently canvassed in some quarters for the alternative suggestion is not a suggestion of supervision but one of control, and it is quite another thing to attempt the task of exercising direct control and management over German finance, for, obviously, such a scheme may result in the refusal of the German Government to function at all, and in progressive collapse and decay.

3227 There is a special reason why the distinction between supervision by the Reparation Commission should be sharply distinguished from any attempt to control and manage German finance. The Prime Minister is accustomed, in addressing and persuading the House of Commons, to draw upon his business experience, and to appeal in a commonsense and commercial way to the judgment of the House to see the force of his argument. What is the real object which is presumably to be served by this interference with German finance? It is to improve German credit. I put this simple proposition that you never can, and never do, raise the credit of your debtor when you are giving the debtor time to pay if at the same time you insist upon putting in a receiver and manager of his affairs.

The improvement of German credit, and the possibility of financial assistance really depends upon the world at large growing to believe that it is Germany's intention, because it is Germany's interest, to pay. That is the real reason, I think, why the success of the new policy, whatever that policy may be in point of form, will depend upon whether it is a settlement by agreement or whether the payments in the future, if they are to be made at all, are payments which are merely to be made as a result of constant force and pressure. A moratorium is not, at the best, a solution. It is only a postponement; but if we accompany a moratorium by ill-advised forcible action, then it may lose the very merit which, I understand, in certain circumstances the proposers of a moratorium generally agree it should have. That is my first question. If I may, I will repeat it without further comment:

(1) What is the attitude of His Majesty's Government in regard to the proposals or suggestions that a moratorium agreed to be granted by the Allies in respect of reparation payments should be accompanied or conditioned by further Allied control; whether that control takes the form of management of German finances, of the seizure of German mines and forests, or of the occupation of further German territory and in particular of the occupation of the Ruhr Valley."

The second question I propose to submit to the House without any comment of my 3228 own. Everybody must see that it raises a very grave matter, but we should do no good if we do not ask to be given the opportunity of facing this grave matter. The question is

(2) What is the attitude of His Majesty's Government in the event of France desiring to take such action on her own account?

Lastly, I wish to put to the Prime Minister this third question. He has, as we know, been engaged during the last few days in conversation with the Allied representatives upon the subject of the settlement of inter-Allied debts and kindred topics. What the House is anxious to know, and what I think it is entitled to know, on that subject is this: Is it the view of His Majesty's Government that they can carry on these negotiations and discussions on that topic as a subject which stands by itself and apart; or is it the view of the Government that the offers we can make and the settlement that we can propose on the subject of inter-Allied debts and the adjustment of reparations are connected with or are conditional upon the adoption of a policy by general agreement in other respects?

I do not pause to discuss this difficult question, which I do not think anybody would be disposed to give a confident answer to, as to whether the language of the Treaty of Versailles, on its true interpretation, really does authorise independent action by any one member or the other. This question of interpretation may be of vital importance, it seems to some of us, in carrying on the discussions which the right hon. Gentleman is about to take up after the Prorogation. I formulate my third question in these terms:

(3) What, in the view of His Majesty's Government, is the relation between the discussion and settlement of the question of reparations and inter-Allied debts on the one hand, and the taking of independent action by France on the other hand?

In other words, does His Majesty's Government regard the pending negotiations in respect of the conjoint problem of inter-Allied debts and reparations as independent of or as conditioned by and related to the reaching of a satisfactory agreement between the Allies as to further action against Germany.

3229 I hope that in putting these questions I have made clear to the House where the centre of anxiety of some of us is, and I trust I have presented them to the House and to the Prime Minister in twins which, in themselves, do no injury to the great overwhelming public interest and which will enable him to deal with them as fully and frankly as circumstances permit.

May I just say this one word in conclusion? Our submission to the Government is that this Debate is likely to perform a more useful service, and that public opinion will be better guided to a consideration of the real issues, if he can see his way, by intervening now, to put the House in a position to consider and to debate the actualities of a situation so grave and so important both for ourselves and for the world.