HC Deb 18 July 1922 vol 156 cc1917-22
Sir ROBERT BALFOUR

With your consent, Mr. Speaker, and by the leave of the House, I should like to make a personal statement with regard to certain charges which were made in this House last evening by the hon. Member for Canterbury (Mr. R. McNeill). I left the House at about 7 o'clock, and I had no intimation whatever, nor had my partner, Lord Forres, who was in the Lobby at about that time, that any such question was to be raised, and it was quite a surprise to me this morning to find that so long, so numerous and so grave charges had been made, for which, I beg to state, there is no foundation whatever. Before going further into the matter I should like to thank my light hon. and gallant Friend the Member for Ilkeston (Major-General Seely) for the remarks that he made, and for asking that the House should not accept the statements without further consideration. Also, if I may, I should like to thank my hon. Friend the Member for Plymouth (Sir A. Shirley Benn) for the personal remarks which he made, and which I appreciate very greatly.

Two main statements were made by the hon. Member for Canterbury, and I will read one of them. The hon. Member stated that my partner, the recent Member for Moray and Nairn, had written to our firm in Chile stating that it was quite unnecessary for them to pay too much attention to the Government Regulations against trading with the enemy, as he was in a position to see that they did not get into trouble. That statement was absolutely untrue. It is more important, in one sense, than the other charges relative to the delivery of oil to German consumers, because it suggests that my partner was in a position to use, and would have used, influences to prevent certain measures being taken. Obviously, that is a charge which cannot be too strongly repudiated, both on my partner's behalf and from the point of view of the Government interest in the matter.

But the more important of the charges, and those, perhaps, which will dwell more particularly in the minds of the House, are those with regard to the delivery of oil to German consumers in Chile. I should mention that those German consumers have been for a very long time situated in Chile. They are German companies producing nitrate, and we all know that nitrate is an essential factor in connection with warlike operations. Some years before the War, our friends there had entered into contracts running for a considerable period with a number of consumers in Chile for fuel oil, not for their own account, not for our account, but for account of an important company in the United States which I need not specially mention. As the hon. Member for Canterbury will admit, such contracts made in Chile are subject to Chilean law, and they had to be fulfilled in any circumstances, or, at all events, it was a question for the Chilean courts to decide whether they should be fulfilled or not. The fulfilment of those contracts spread over a considerable period—some four or five years—and they were continued after the War commenced. Subsequently, some of those contracts fell out and were renewed, but they were renewed with the consent of the British Government. I will read a letter here which bears on that particular point. We asked for the approval of continued delivery of oil to these German nitrate companies. We pointed out that, if we did not do so, we should be subject to claims for damages, and the American sellers—the United States not being at that time in the War—would have made the deliveries themselves. In June, 1915, we received a letter in the following terms, written from the office of the Parliamentary Counsel, Whitehall: Further, in reply to your letter of 17th June, no objection will be taken under the Acts and Proclamations relating to trading with the enemy to the fulfilment by the firm of Williamson, Balfour & Company, of Valparaiso, of a contract for the sale of Californian fuel oil to be consumed in Chile to representatives in that country of a German nitrate Company or to the negotiation of a new contract for the delivery of such oil over a period of three or four years. (Signed.) ARTHUR T. THUING. At a later date, under the Trading with the Enemy (Extension of Powers) Act, 1915, a system of licences was introduced for the purpose of permitting transactions in neutral countries, and the Foreign Trade Department was set up at Lancaster House. We thereupon again approached the Government with regard to that, and we received a letter, written under the instructions of Earl Grey, and signed by the present Secretary of State for War, authorising us until further notice to act as agents to transact the business of the supply of oil to any person or body of persons whose name is or may hereafter be on the Statutory List for Chile, Peru, Bolivia or Ecuador, so long as the transactions with such persons or body of persons are in the ordinary course of business and do not include the supply of oil for shipment abroad. Subsequently, when the United States came into the War, the situation changed, and the Government refused to allow deliveries to be continued. We cabled to our firm to stop deliveries, with the result, as was foreseen, that the German companies in question sued for the fulfilment of the contract, and placed an embargo on the tanks of oil which were in existence on the coast. The result was that other consumers could not obtain supplies, and a very difficult situation was created. Ultimately—I rather think as the result of discussions between this Government, the United States and Chile—arrangements were made to remove that embargo, and deliveries were continued. If I am not mis-informed, the nitrate manufactured from that fuel oil was actually used for war purposes, both by this country and the United States. I believe that is true, though I am really not personally familiar with these matters, because my time and thought are almost fully occupied with our business in other parts of the world, and I am dealing with these matters, having had very little time to make the necessary inquiries. Anyhow, the embargo was raised, and deliveries were continued. As I have already stated, the German companies had brought suits against our friends who were parties to the contract, and these were defended with the assistance of the ablest lawyers in Chile, in consultation with the late Mr. Hanna, an eminent lawyer and ex-Minister at Ottawa, and Sir Francis Stronge, the British Minister in Santiago. The case was not settled when the War ended, but it has since been compromised at considerable cost, which course, I may say, was strongly recommended by Sir Maurice de Bunsen on his visit with the British Trade Mission to South America. These explanations, I think, will show—and the Government are in a position to verify them—that the charges which have been made by my hon. Friend have no foundation, and I think it was most unfair to bring up a charge in this House without giving notice to those interested. I do no wish to dwell on any services which may have been rendered by our people during the War, but a number of our employés on the West coast of America, and on the North-West coast also, came home and joined up. There was no obligation on them, and they could not have been brought home under any law. Practically every young man in our own office joined up. Two sons of Lord Forres joined up. My own two sons joined up, and one, unfortunately, lost his life. I may say here that we, like many other firms in London and elsewhere, paid full salaries to those men who left our office to join up, and they were reinstated in their places when they returned.

I would like to add one word, if I might crave the indulgence of the House. I think the House is familiar with the fact that caterpillar tractors were largely used in the early part of the War. I myself went to see the chief of the Ordnance Department in the early part of August, 1914, with a cablegram from my partner at San Francisco, Mr. John Lawson, who took an active part in the matter. He had seen the British Consul-General there who had sent a cablegram to the Foreign Office here, which cablegram I saw in the office of the chief of the Ordnace Department. That cablegram recommended that arrangements should be made to obtain these tractors which were used for agricultural purposes—for ploughing soft and uneven land—and the result was that the War Office obtained several of those tractors which happened to be on the way to this country and Europe, and, further, they entered into very large contracts for similar tractors. I hope that I shall be pardoned for going into these matters. There is one more matter. Mr. John Lawson, of whom I have spoken, took steps at the time that the German Fleet was at large in the Pacific to do what he could to stop supplies from going from San Francisco. One vessel did go, and he informed the Consul-General in San Francisco and gave him all the assistance which he could in order to en- deavour to stop that steamer, which, however, was not accomplished.

I hope that I may be pardoned for making these remarks, but very grave charges have been made, and I feel very strongly that they should have been verified before they were made. I thank you, Sir, for giving me the opportunity of making these remarks, and I thank the House for listening to me so patiently.

Mr. RONALD McNEILL

After what has fallen from my hon. Friend, I shall be glad of the opportunity of repeating what I said last night with regard to the obligation of giving notice to my hon. Friend of my intention to refer to his firm —that I had not the slightest knowledge, until after I had spoken, that the hon. Member was a member of the firm in question. The Leader of the House, in the course of his speech, charged me with carelessness. I do not in the least mind pleading guilty to that extent. It may have been that I ought to have found out how many gentlemen of the name of "Balfour" have seats in this House. I know of two now. There may be more, and I might have asked them if they had had any connection with this firm I admit that did not occur to me at all. With regard to giving notice to anyone outside, so far as my knowledge of the etiquette and proceedings of this House is concerned, which now extends over some years, I have never heard it suggested that there was any obligation on any hon. Member of this House to give notice of what he was going to say to anyone outside this House. With regard to what the hon. Gentleman has said, I never intended, and I did not in fact say, anything reflecting in the slightest degree on the patriotism of my hon. Friend. I have followed as closely as I can the statement which he has made, and I do not understand him to contest what was the main feature of my remarks, that an indictment of the proceedings of this firm was prepared in the Foreign Office here, was sent out to South America for confirmation, was there confirmed, and was sent back to this country, that legal opinion was obtained from Chile with regard to the action which was brought in the courts there, and that that legal opinion confirmed the suspicion that was entertained in this country, rightly or wrongly, as to the bonâ fides of the proceedings out there. Those were the two main points which I brought to the notice of the House last night, and of which, so far as I understand my hon. Friend, he does not contend the accuracy.

Sir R. BALFOUR

I do not know anything about the alleged indictment which was sent out to Chile and which was mentioned in the House yesterday. I do know that my partner and I were asked to interview the present Attorney-General (Sir E. Pollock), who then occupied a position in connection with war matters, and he showed us certain official communications which he had received from Chile. We made our explanations with regard to these, and, so far as I know, he was perfectly satisfied with the explanation which we gave.