HAGUE CONFERENCE.

HC Deb 26 July 1922 vol 157 cc491-639

Sir P. LLOYD-GREAME (Secretary, Department of Overseas Trade)

Probably it will meet the convenience of the Committee if at the outset of this Debate I attempt to give hon. Members a general review of the work of The Hague Conference and an appreciation of the situation that exists now that the Conference has terminated. I would say at once that I think the Conference has made a long step forward on the path towards a Russian settlement. At Genoa a serious attempt was made for the first time, by frank discussion, to arrive at such a settlement. That settlement was impossible there, partly because of the unwillingness of the Russian representatives to face economic facts and partly through the impossibility of reconciling conflicting political principles. Though a settlement could not be reached at Genoa it was the unanimous desire of all countries who were represented at that Conference that an attempt should be made at The Hague to see whether a practical solution could not be found apart from political considerations. I think all those who took part in The Hague Conference are entitled to say that it served its purpose, for it marked a further step on the road. The next and final step rests with the Russian Government.

The work of the Conference falls into three stages. In the first there were the preliminary meetings of the non-Russian countries. In the second there were the detailed negotiations between the Russian Commission and the non-Russian Commission. In the third there was a plenary session with the Russian Commission, and the final plenary session of the non-Russian Commission. The arrangements made at Genoa were that the representatives of the countries present at the Conference, other than Germany or Russia, should assemble at The Hague on 15th June, and the object of that meeting was to afford an opportunity for a preliminary exchange of views to determine the composition of the Commission of Experts that was to meet at The Hague and to determine also the line of action that was to be followed by the Commission in its meetings with Russia. The Governments had agreed that in the light of those discussions they would intimate whether they were prepared to take part in the Commission or not. The preliminary conference was very short. It had the advantage of being presided over by Dr. Van Karnebeek, the Dutch Foreign Minister, and the rapidity with which it did its work was in no small measure due to his admirable chairmanship.

4.0 P.M.

The work was short, because it was clear at the outset that all the countries who were represented—and there were 26 of them—were anxious not only that The Hague Conference should take place, but that they should have direct representation upon the Commission. It was clear, if you were going to have a Commission of that size, that it was far too large a body to engage in detailed negotiations of a technical kind, and it was readily agreed that the size of the Commission and the nature of the work which it had to undertake made it desirable, and indeed necessary, that it should divide its work into three sub-Commissions dealing respectively with the three outstanding questions—property, debts, and credits. That was accordingly done, and the representation of the various countries upon these sub-Commissions was arranged by consultation with the President and in a way which gave complete satisfaction to everybody concerned. Once that had been done, it closed the whole of the work of the preliminary meetings, the preliminary Conference dissolved, and the main Commission then took its place and proceeded with its preliminary work of electing a President. A very distinguished Dutchman, M. Patijn, was selected, a choice which was not merely a compliment to the country whose hospitality we enjoyed, but was one prompted and justified by the admirable qualities which he displayed throughout as Chairman. There were then a few days before the Russian delegation was due to arrive, and those days were spent on the various sub-Commissions in mapping out the order of the work and collating the material which the different delegations had at their disposal, so that each sub-Commission would be able to take up the discussions with the Russian delegation as soon as they arrived.

I should like to say one word about the spirit in which the Commission undertook its task. We met as experts and not as plenipotentiaries. We were not concerned with any political issues, but with purely practical questions, and from start to finish the whole of the work of the Commission was conducted in that atmosphere. Politics were left in the cloakroom, and the Commission throughout worked with a determination to subordinate questions of principle to practical considerations and with a firm intention of finding, if it were possible, a solution which would meet the realities of the position. On the arrival of the Russian Delegation the President of the Non-Russian Commission at once met them and explained the procedure which had been adopted by the Non-Russian Commission, and the formation of the various sub-Commissions, and he proposed, if that suited the Russians, that the three sub-Commissions should meet concurrently and proceed with their work as rapidly as possible on the understanding that we should assume that each Commission would arrive at a definite conclusion.

That was obviously desirable, because we did not want the work of one Commission held up because it was waiting for some decision which might be taken hereafter by another Commission. It made for convenience and expedition. That proposal was at once very readily assented to by the Russian Delegation. I mention that fact, because at the close of the Conference the Russian Delegation adversely criticised that procedure and even suggested that it was in some way responsible for the temporary impasse at which we arrived. That certainly was not the fact. The procedure was not in any way forced by one party on the other. It was a procedure which both parties agreed upon as essentially practicable and convenient. It was a procedure which was, in fact, successful, because in that way, and in that way only, was it possible to clear up the whole of the practical issues concerning the different problems with which the sub-Commissions were confronted. It is also incorrect to state, as has sometimes been stated, that the sub-Commissions arrived at their conclusions dependently one upon another. They did not; their conclusions were arrived at independently upon the facts which were before each Commission. These sub-Commissions were in continuous session, sometimes with the Russians and sometimes by themselves, for more than a fortnight. The great value of that work was this. It enabled all the relevant facts to be clearly set out and weighed, possible solutions were considered practically without prejudice, misunderstandings were removed, and, in the result, we obtained the considered and unbiased judgment of practical men on practical issues.

Let me take, as shortly as I can, the work of the three sub-Commissions. On the Property sub-Commission we approached the problem not merely from the point of view of trying to find a practical settlement of outstanding claims, but equally from the point of view of the reconstruction of Russian industry. Anyone who knows Russia—indeed, most people who do not know Russia—can realise that the whole history of Russian industry shows how great a part foreign capital and foreign enterprise have always played in the development of Russian resources. In normal times, even, that capital and that enterprise was the dynamic force behind all the development, and, when you come to the present condition into which unhappily their industry has fallen, the one hope of the re-creation of that industry lies in bringing back that foreign assistance and foreign co-operation. We proposed on the Property sub-Commission to take the various industries in which foreign enterprise had had a great share, to consider the extent to which foreign owners could be enabled to resume possession, to consider the general conditions which would govern the operation of their undertakings, and then to consider the mode of assessment and discharge of other forms of compensation. A former owner of property in Russia whose property has been nationalised is without doubt entitled to demand either restoration or effective compensation. That is not only good law; it is good sense. It is quite obvious that nobody would go to the country and lend it money again if the whole of the old obligations of the past, the old loans of the past, are repudiated. That is axiomatic in any business transactions. It is equally obvious that no property owner, old or new, can afford or risk going into a country, whatever the general conditions offered may be, if the whole of the rights of those who were engaged in similar enterprises in the past are to be wiped out altogether. He would have no security and he could not possibly dare to take that risk.

It is quite apparent that the real compensation—and compensation must be real; compensation does not mean waste paper—which it is to-day in the power of the Russian Government to give, apart from the possession of property in some form or other must be very limited. On that, I want to make it quite plain that the Commission, in dealing with restitution and the question of restitution, was not in any way insisting upon a juridical right of property. It was faced with a practical issue. The main form of compensation which it is in the power of the Russian Government to give is possession, and the only hope for the restoration of Russian industry lies in bringing back into it as many of those who built it up as they can possibly get back. That being so, the sub-Commission was most anxious to discuss any form of possession, whether by lease or whether by concession—whether it was possession of a property which the man had previously enjoyed or possession of some alternative property which would be afforded to him—which would meet the realities of the position. I think it well to make that clear, because the British Government has always taken up the position that it is the right of a country to nationalise property, if it pays compensation. That is a perfectly right position to take up, but the compensation must be real, and, when you ask practical men to sit round a table and see whether they can get a practical solution on a compensation issue, they must look at it in a practical light and see what it is within the capacity and power of the Government with whom they are negotiating to give.

Let me state briefly what was the position in which the Property sub-Commission found itself when it adjourned. It is very important to recognise and appreciate that position, first of all, in order to see why it was impossible for us on that Commission to proceed further, and, secondly, in order to appreciate the very marked advance which the Russian Delegation made in the course of the last two or three days at the Hague Conference. Unless you relalise the position taken up during the first three or four weeks, it is impossible to realise the step which they took, and it would be very wrong to minimise the importance of that step. When the Property sub-Commission adjourned, the position was this: The Russian Delegation had produced a list of properties which they said they were prepared to grant, either on lease or by concession, or in the form of mixed companies, to foreign nationals. That list contained only a relatively small proportion—a very small proportion—of the properties which had originally been owned by foreign nationals. Whole classes of property were excluded. The textiles, largely built up by foreign enterprise, engineering, one of the most essential things for Russia, and in which this country had been a pioneer, and coal were excluded, and there were others. But it did not rest there. Even within that limited list there was no guarantee whatever that the former owner would receive a preference over any competing concessionaire, notwithstanding the fact that the whole value of the factory or property might be directly attributable to the capital which he had invested in it. Moreover, no right was admitted to compensate at this stage, either in the form of possession or in any other form. Indeed, it was contended that compensation must depend upon credits, and that the country should pay for its own nationals' compensation. That proposal would have left the owner in exactly the same position as he was before the Genoa Conference assembled. If that had been the position he would have been in no better position than he was a year or two years ago. He would have been invited to negotiate without any acknowledgment of his rights, or any practical guarantee that he would be given either possession or any other form of compensation.

I think it will be admitted, in almost all quarters of the Committee, that three conditions are essential to any general agreement on property. The first is that there must be an acknowledged right to restoration or compensation. The second is that the compensation must be real. The third is that you must establish effective working rules and effective machinery, which will automatically secure that the obligation will be fulfilled. To leave an owner to negotiate at large, without the security of such rules, would preclude the essential basis of an agreement. In these circumstances, and in the position in which we found ourselves on that Commission—a position in which, as I say, the owner was really left in exactly the same condition as he was before even the Genoa Conference assembled—it was clear that an agreement was impossible, so long as that attitude was maintained. Moreover, from the point of view of reconstruction—we were looking at this, as I have said, just as much from the point of view of Russian reconstruction as from the point of view of satisfying property claims—the outlook was hopeless as long as that restriction was maintained. It meant that great fields of industry, which before had been worked by foreign enterprise, and which had been reduced to a condition of chaos, were still to be retained in the hands of the Russian Government. Therefore, apart from all question of the rights of foreign owners, a prospect like that was bound to destroy any hope of industrial revival.

Those were the circumstances under which the Property sub-Commission decided that it could not negotiate further. That conclusion, and their reasoning, are set out in their Report. It was a unanimous conclusion; it was a Report unanimously adopted, and unanimously confirmed by the whole of the Commission. I am convinced that any practical man, finding himself in that position, would be bound to come to the same conclusion. While we came to that conclusion, however, and while we could come to no other Conclusion upon the facts before us, we declared our readiness and our anxiety to consider any new proposals which the Russian delegation could bring forward. We were bound to close the door on the impossible suggestions which had been brought before us, but we were anxious to open it to any new proposals.

The Debts sub-Commission had a somewhat similar experience. The acceptance of the obligations of previous Russian Governments was declared by the Russian Delegation to be conditional upon the grant of credits, and, apart from this, it appeared that it would be impossible to agree upon any independent tribunal which could decide the length of the moratorium and similar questions. The situation which had developed in those two Sub-Commissions, in respect of property and in respect of debts, would in itself have been enough to make the work of the Credits Sub-Commission abortive. It was obvious, if the position were maintained, which had been taken up on those two Commissions, there could be no basis of confidence which would justify credit, and there could be no real future prospects which would induce anybody to advance money. Apart from that, the proposals which the Russian Delegation submitted to the Credits Sub-Commission were of such a character that, even had an arrangement over debts and property been possible, they would have precluded all chance of an agreement. The position was very clearly set out in a speech of my hon. Friend the Financial Secretary to the Treasury, which is annexed to the Report in the White Paper.

The whole idea—and I want the Committee to appreciate this, partly in order that they may see why the work of the Credits Sub-Commission resulted as it did, and partly, again, in order that they may appreciate the real advance that was made from this position at a later stage—the whole idea with which the Russian Delegation approached the question of credits was founded upon a complete misconception of facts and actual possibilities. In the first place, the Russian Government was determined not to seek credits from private capital, but only from Governments. Yet it must be private capital to which Russia has to look for her credit. The most that any Government can do is to assist the wheels of private credit; but it can only do that if conditions are forthcoming which will induce the private investor to invest his money. All a Government can do—all the use of the Government credit, all the machinery which we have employed in this country and which has been employed in other countries for the use of Government credit—is simply and can only be to stimulate the flow of private credit; and—and this is essential—there is no difference in the conditions which must command the confidence of a Government in the use of its credit and the confidence of a private investor in his investments.

In the second place, the Russian Government insisted that credits, if they were found, must be credits directly to the Russian Government, and not to private individuals or foreign nationals engaged in trade. That, again, was a fatal bar. In the conditions which exist in Russia to-day no one will be found to invest money to any large extent, unless either the investor has some control over his investment, or at least has confidence in the efficient management of the undertaking in which he invests. It was, therefore, perfectly clear, from the plans submitted by the Russian Government, that there were no conditions which would protect the private investor or would justify the Government in pledging its credit.

That, then, was the position at which the Conference had arrived when the three sub-Commissions terminated their negotiations. It was a position in which it was plainly impossible to negotiate further with any hope of success so long as the Russian Government maintained the attitude it had adopted throughout the discussion. If matters had rested there, I am bold enough to say that The Hague Conference would still have been of value, because it would have established clearly and plainly the reasons why an arrangement was impossible. It would, as a very distinguished American banker put it, have for the first time laid all the facts plainly out upon the table, facts unanimously established by practical men, trying to work out a solution in an atmosphere of practical common sense. Had that been the last word, however—though it would have cleared away misunderstandings and would have made the economic position plain, not only to us, to whom it was plain before, but to the Russian Government also—the immediate future would have held little hope of a solution, either for Russia or for any foreign interests. It would have appeared as impossible to resolve practical difficulties as it had been to reconcile conflicting theories. Happily, that was not the last word, and the matter does not rest there. Though The Hague Conference was unable to recommend any basis of immediate agreement, the final phase does offer a real hope of concrete results. That phase could certainly have never been reached but for the long and detailed discussions and the clear conclusions which had taken place and been reached in the various sub-Commissions.

As I have said, the sub-Commissions had all expressed their desire to consider any fresh proposals of the Russians which might be forthcoming; and the Russian Delegation was invited to submit new proposals. In reply to this invitation, they stated that they would like an opportunity for a further meeting. It appeared that the questions which they wished to raise were questions relating principally—if not exclusively—to property, and, therefore, it was proposed that they should have a further meeting with the Property sub-Commission. They replied that the questions they wished to raise, or were prepared to discuss, went beyond that, and covered other matters. It was accordingly arranged that there should be a Plenary Session of the full non-Russian Cora-mission, with the Russian Commission, to consider any of the new facts or proposals that could be put forward. The attitude which the Russian Commission adopted at their meeting constituted a very distinct, and, indeed, a remarkable, advance from the position which they had hitherto maintained at all previous meetings with the sub-Commission. The proposal, or rather the suggestion which they made, is set out in paragraph 6 of the Report of the non-Russian Commission, which is the first document in the White Paper. It is this: If the other delegations represented at The Hague agree to refer the proposal at the same time to their Governments, the Russian Delegation will at once refer to the Russian Government the question whether the Russian Government is prepared, assuming that credits to the Russian Government in the sense intended by the Russian Delegation cannot be given:

1. (1) to acknowledge the debts due by the Russian Government or its predecessors to foreign nationals; and
2. (2) to agree to give effective compensation to foreigners for property previously owned by them which has been nationalised by the Russian Government; provided that terms of payment of the debts and terms of compensation, whether in the form of concession of properties or otherwise, be left to be agreed between the Russian Government and the persons concerned, in the course of two years."

I do not wish to place, and I am not entitled to place, upon that suggestion a higher construction than it is actually entitled to bear. It was not a firm offer and it was not a formal recommendation, but, at any rate, it was a statement that the Russian Delegation were definitely prepared to invite their Government to consider the policy set out in the paragraph which I have just read, a policy which included a formal acknowledgment of her debts, and a formal acknowledgment of an obligation to pay compensation where property was nationalised by the Russian Government. The fact that that suggestion was made wads a great advance by the Russian Delegation upon the position which they had previously taken up, and it showed a real appreciation of the realities of the position. Above all, it shows an appreciation of the fact that credit must rest on confidence, and the obligations which it was suggested the Russian Government might undertake were, according to this suggestion, to be undertaken irrespective of any question of granting credits. I would say more than that. They were based on a recognition of the fact that the investment of new capital in Russia and the re-establishment of her credit must depend upon the extent, the thoroughness and the promptitude with which the proposed obligations should be discharged. The Commission immediately proceeded to consider this suggestion. They considered it upon the assumption that the Russian Government would adopt and approve the proposal made by the Russian Delegation; and on that assumption they unanimously passed the resolution which is set out in paragraph 7 of the Report, which is as follows: The non-Russian Commission concluding its labours at the point reached in the exchange of views with the Russian Commission which have taken place at The Hague and which are contained in the Reports prepared and approved by the three sub-Commissions, notes with satisfaction the proposal of the Russian Delegation to submit to its Government the contents of the declaration read by Mr. Litvinoff at the Plenary Session of 19th July. Although the non-Russian Commission cannot find the basis of an agreement within the terms of this declaration, it considers that the line of conduct indicated in this declaration can, if it is accepted by the Russian Government, and if it is loyally carried out, contribute to the re-establishment of the confidence which is necessary for the co-operation of Europe in the reconstruction of Russia. The non-Russian Commission also considers that this declaration is calculated to create a favourable atmosphere for such further negotiations as may be considered opportune by the Governments here represented. The non-Russian Commission at its Plenary Session was unanimous in regard to the views expressed in that resolution and the reasons which prompted it. It was clear to all of us that we could not recommend such a proposal as the basis of an immediate agreement. We all felt that if we were to recommend to our Governments a definite and final agreement it must be an agreement which carried with it, not merely an acceptance of these obligations, but the necessary working rules and machinery to ensure the due performance of the agreement made. The Russian proposal excluded by its very nature the possibility of such an arrangement. In place of a comprehensive agreement complete in itself and containing definite rules and machinery which would secure its execution, the Russian Delegation envisaged a formal acceptance of the obligation, and a proposal that the Russian Government should carry out its obligations by individual negotiations in the course of the next two years. This, in place of the present arrangement, would substitute a test of future action and the proof of the capacity of the Russian Government to carry out its obligations and the proof of its good faith were both to rest upon the independent action of the Russian Government in the future. While, therefore, it was clear to us that such a proposal could not form the basis of an immediate agreement, we welcomed it warmly as a great advance upon any proposal that had hitherto been made, and because it foreshadowed a policy which, if adopted and carried out by the Russian Government, would go far to solve the practical difficulties upon which we could not agree.

It would be idle for me to prophesy what will be the result or what action the Russian Government will take; but I think I can say with certainty that The Hague Conference has brought the Russian Government face to face with the realities in a way which it has never been brought before.

Mr. NEIL MACLEAN

You are four years too late.

Sir P. LLOYD-GREAME

I hope also, if hon. Members opposite will study the records of The Hague Conference, they, like the Russians, will for the first time be brought into touch with realities.

Lieut.-Commander KENWORTHY

We have been for four years.

Sir P. LLOYD-GREAME

I appreciate that, while some of us have been working to try and put things right, others have been talking. It has also shown to Russia the willingness of other countries to cooperate, while at the same time showing the inevitable character—and this I would commend to hon. Members opposite—of the economic forces which must govern the co-operation which other people can give. The future of Russia lies in the hands of the Russian Government. It is unnecessary to elaborate the grave economic position of her industries. That is as well known, and better known, to the Russian Government than it is to us. Time is an essential factor, and if the Russian Government are to act, they must act without delay. As time goes on, month by month, factories become more and more decayed, mines fall in and mines are flooded, transport deteriorates, and therefore time is an essential factor. The need is great. The policy must be thorough. We went to The Hague Conference anxious to co-operate, and they will find us so still. It is not only that capital will not be forthcoming unless obligations are recognised and discharged, but the sole hope of Russian industries lies in bringing back the skill and experience of those who did so much to build them up in the past.

If ever there was a case where honesty is the best policy, it is the case in Russia. I sometimes wish that hon. Members opposite would give the Russian Government advice more in consonance with the interests of that country than with the immediate prejudices of their own views. If Russia decides to accept and pursue the policy which was foreshadowed by the delegation, she will not. be merely entering upon a path which will bring her back into the community of nations, but she will be setting out on the one road which can lead to the restoration of her economic life. If she takes that step, I am convinced she will find that, not merely persons who cannot render her assistance except in the form of gratuitous advice, but practical people whose help she needs will be ready to assist her. She is mistress of her own fate. The facts are plain and the way is clear, and while she is considering her course, I, at any rate, am optimistic enough to hope that her decision will be wise and right.

Mr. CLYNES

There was a single lapse in the speech of the hon. Gentleman, into which he was no doubt tempted by an interjection from this side of the Committee. I think he has placed us under an obligation to him for the clear manner in which he has recited to the Committee the main events which transpired recently at The Hague. What he has dealt with is only part of a very big subject, but to that part we must limit ourselves during the course of this discussion. It may be that, before the House rises, an opportunity will be given for again considering the larger issue, both of reparations and our relations to other allied countries and France in particular. In to-day's discussion, however, we are confined to events at The Hague and, as the speech of the hon. Gentleman has shown, the transactions there were limited to three definite points. Firstly, the question of compensation to owners of property in Russia who have been dispossessed; secondly, the question of debts as between Russia and ourselves and as between Russia and France; and, thirdly; to the question of credits with a view to assisting Russia with both agricultural and industrial restoration.

Frankly, I cannot trace in the speech of my hon. Friend any definite obligation which has been placed upon Russia except to carry out the next step to which he has referred. If the next step rests with Russia I think we are entitled to offer some comment and to ask what advantage has already accrued either to Russia or to ourselves from the previous steps taken by the Government, or any one of those recent steps indicated at the various conferences which have been held. The greater part of the speech of the hon. Gentleman dealt with property, and it was limited to the question of how far private property owners could secure guarantees which could be made effective for compensation for the property which they have lost.

Closely related to this question of property is the question of our political attitude towards Russia; our general policy in relation to that country since ever the beginning of the first Revolution in Russia. Before the second, or what might be termed the economic Revolution, before the Lenin and Trotsky regime, it cannot be said that this Government maintained anything like the attitude to the Kerensky Ministry which had been maintained towards the Government of the Tzar, either during the years of the War or before. Our guilt rests in our past actions in relation to the Russian nation during the War and since its close. Military and political resistance was offered by us to the Russian Government. We have been guilty of sustained refusals to treat with that Government. We have been guilty of delay in repairing the effects of that policy and of resistance to those who, for the time being, are in authority in that country. It is because of our conduct under these several heads that our efforts in these recurring Conferences are rendered less effective, and that Conferences are required, and evidently are to continue without end. I shall show before I conclude that there is a proved relationship between the things I have referred to and the nonsuccess of this last effort of The Hague. I agree with much that has been said by the hon. Gentleman (Sir P. Lloyd-Greame) in his pronouncement as to the obligations on Russia regarding compensation to our dispossessed nations, but I think, in the speech which has been delivered, we might well have expected to hear something about the Russian right to claim compensation and to press for consideration of the enormous losses she has sustained, and sustained, to a large extent, as a result of our action.

This is not a one-sided affair at all. The claims are similar. They are similar in character if not in degree. I submit to the Committee that enormous losses of man-power, of wealth, and of property were sustained by Russia as a result of the assistance which we gave for a considerable period to those who attempted a counter revolution and by means of arms and armies resisted the established Government of the day. It must not be forgotten that the Government and the methods by which it acquired power were imitations—no better and no worse—of the methods by which for long the Russian people had been controlled. Let us not forget that the Russian Government were our Allies and continued with us as long as they were physically able to do so. The economic breakdown internally in Russia which brought her to her knees had a bearing on it, but undoubtedly there were political influences as well as economic facts all of which hasten the inability of Russia any longer to continue, to fight on our side. No wonder there were political influences at work in a country where such incompetence and corruption were supported by the Throne and by those who upheld it. Naturally insidious principles were at work there which produced very serious results. Russia was our ally. She suffered enormously, and much of her misery is attributable to her partnership with this country in the earlier years of the War.

I remind the Committee of these facts because it appears now that the theory of our Government is that if Russia is to secure credit and to borrow money in the world's market, she must borrow from individuals or corporations having the control and possession of wealth. I ask the Prime Minister, on the assumption that he is to speak later in this Debate, how does he expect that a nation placed by us and the other Allies in the position of a political outcast not yet recognised by us or being permitted to resume diplomatic relations with us, how does he expect such a country to secure credits, or to inspire that confidence without which it is admitted advances or credits cannot be obtained at all. The Russian Government could not hope to secure any large sums by way of credits in the ordinary private market. If we could throw Russia on the mercies of those who control credit, there would be no need to meet her representatives again. We could leave her alone to negotiate with those who have control over national or international finance, but the very fact that we have had these conferences is proof of the necessity for us to enlarge our political association with Russia, to bring her properly into the family of nations, and to restore her to the state of a friendly ally in which she stood before she fell out of the War. I suggest, that so long as we do not diplomatically recognise her, so long as we do not resume normal relations with her, it is idle to talk of Russia being able to go into the market. She could not secure that confidence alone which would enable her to raise any considerable sum at a time when she is not in a real state of political association with the rest of the allied countries.

There have been no inconsiderable changes of policy or of conduct on the part of the Russian representatives. At the conference of July, 1919, a very much modified Russian view was expressed by M. Litvinoff. The Russian Government, he said, were prepared to acknowledge debts. They had declared, in the first Sub-Commission, that the Russian Government was prepared to give compensation to owners of property in Russia for property which had been nationalised by the Russian Government. In regard to compensation, the Russian Delegation had not declined to discuss the questions raised, but they had said, on the contrary, that the question of the terms of payment should be left to some future tribunal or some other organisation. The Russian Delegation insisted that these questions should be fixed by agreement by the Hague Conference. They said further they could not carefully discuss these questions and make proposals with regard to the main details until they knew in what way and when the Russian State would be placed in a position to carry out the obligations and liabilities which it would take over. A reply to that was necessary, but with a little good will on one side the gap could be bridged. I submit that that is not obdurate, unreasoning language. It is language of a representative explaining that this is a two-sided question where the obligation and the acceptance of the finding of a way out must be mutual. M. Litvinoff, in fact, told the representatives at the Hague that if they were to be expected to undertake to pay compensation, means must be provided in order to assist them to do so. That, surely, is a reasonable proposition, and it will be interesting to hear what the Prime Minister has definitely to say on that aspect of the question.

It is said the Russians must recognise the rights of private property. But these rights always are limited by the interests of the community. That is not merely true of Russia; it has been true of all countries in the modern, world. Property has no unlimited rights, its rights must be measured by the necessities and general condition of the State itself. Even in capitalist communities, private property has not been allowed unlimited rights, and no one has more pointedly challenged those rights in former years than the Prime Minister himself. If it were proper to reinforce my point by a wealth of quotations, it would be enlightening, I think, in these days, to the Prime Minister himself. It has yet to be proved in practice what the recognition of private property means. It is nonsense to speak of the Soviet policy to-day as though it was the policy of 1920. A new economic policy was adopted last year by the Soviet Government and was publicly proclaimed. Industry and commerce have, in some measure, begun to revive in Russia, and there has been a limited recognition of private enterprise and private property. This is no mere abstract statement. It is a fact. The new economic policy provides ground for this country to promote the issue of credits and to offer further assistance to Russia. Upon what ground is it claimed that we are justified in continuing the present lack of recognition of Russia? Indeed, the political aspects of this question are so linked up with the economic that they cannot be separated. If the questions of the recon- struction of Russia, the economic condition of Russia, and the building up of the internal state of Russia upon economic conditions are to be considered, they cannot be considered apart from the political issue, which is at stake also in this matter. Our recognition of the old Government of Russia before the War, bad as it was, was never made conditional on the Tsar's recognition of democratic institutions or upon the Russian Government not slaying, as it so often did, its Russian subjects.

Mr. J. JONES

Five thousand in one day!

5.0 P.M.

Mr. CLYNES

The association of this country during many years with the old Russian Government was the subject of criticism in this country and in other parts of the world. Nevertheless, public opinion in this country then said what, indeed, quite recently the Prime Minister of this country has said in regard to the Soviet Government, namely, that we cannot interfere in the internal affairs of another country. Whether we differ from its form of government or not, and however much we may censure its conduct, it is the Government of the country, and it is with that instrument that we are obliged to deal in any relations that we may have with them. This failure to settle, not merely between Russia and ourselves, but between other countries and ourselves, is a source of mutual and very serious loss. We cannot limit the discussion of this matter to any question of proportion of mutual interdependence. I put that view because I have so often heard statements to the effect that Russia needs us more than we need Russia. I suggest that it would be fatal to an arrangement to measure points too nicely in that manner. Let us consider that we are mutually interdependent, that, if there is a difference in degree, the needs of both are so urgent that we cannot or ought not to fall back upon an argument of that kind.

It may be true that Russia needs our help more than we need Russian products, but that view will only stand in the way of an arrangement. Russia's industries are for the present secondary to Russia's agriculture, anti the assistance which this country could give in the revival of Russian agriculture would be a source of great trade and profit to this country, if it were given speedily and in the right degree. The revival of agriculture in Russia is, of course, dependent upon transport and improvement in transport, and on the supply of materials which can be provided by this country. Our mutual needs, therefore, should hasten a settlement. I am not leaving the question of security out of account; I am submitting to the Rouse that we have a, choice between leaving things alone, letting them drift, and hoping that something will be done in the way of improvement, or giving the only form of substantial assistance which will hasten the state of security that even the Government, I am sure, now desires to set up in that country. The question of security, like all others, is a question of policy, a question of what we are going to do to produce it. Russia's economic position is urgent, just as our own unemployment problem makes urgent for us a settlement in Russian relations. Russia cannot afford to stand by a policy which alienates her from the rest of the world, and we cannot afford to stand by a policy which Russia is determined to resist.

This, therefore, is a question of accommodation. It is a question, so far as Russia is concerned, of a complete departure from the methods which for long she followed. Her internal condition, no matter what sacrifices for the moment her people may be able to endure, cannot be improved in any large measure unless she does recognise the methods by which the world is governed, unless she comes more nearly to the point of amicable agreement between herself and the Allied countries. I suggested earlier in this discussion that to sonic substantial degree Russia has done that. Indeed, one point that was made more than once by the hon. Gentleman, in the course of his speech, was that a. very considerable change had taken place in the attitude of the Russian representatives during the last few days of the Conference. Part of the way, as I think, of making this effort a success is to encourage and to nurse towards perfection tendencies of that kind. We are, perhaps, older, that is to say, those who are acting for our Government in these matters are, perhaps, older, and, perhaps, more experienced, in the arts of governing than some of those who may be acting for the Russian people. If that be true, the obligation on us is all the greater. At any rate, we can lose nothing by assisting Russia to come more nearly to the methods by which great tasks of negotiation of this kind have to be carried on.

I repeat that, in my judgment, there can be no revival without credit, that some method must be found whereby Russia can be financially and economically assisted to her feet. That assistance it would be worth our while to give because of its immediate and, as I believe, its sustained benefit to us in the improvement generally of our trade interests. Our interests, in fact, lie in arranging substantial credits, if we are to secure Russian recognition of the debts and of the compensation which we claim should be made to cover property in Russia of which our citizens have been dispossessed. We have, of course, rather different interests—it is no use disguising the fact—from some of the Allies whose representatives so often act with us in these recurring conferences. The French investments in Russia before the War were exceptionally large, and that, no doubt, has much to do with certain lines of French policy in these negotiations. The French have special reasons for the emphasis which they place upon this question of restitution and compensation. They may have just complaints to make against the policy of the Soviet Government, and it is right that our Government should show an appreciation of the French point of view; but nothing is to be gained by pretending or assuming that the British point of view is identical with the French point of view. French investors in Russian bonds are not receiving their interest, and they are uncertain about their capital; but the British working man has not enough to invest savings anywhere. That is a difference which necessarily compels different treatment of these questions, or a different point of view in dealing with them. If France has her grievances, Great Britain and the working people in it have their present sufferings. A million and a half of unemployed are, waiting for the restoration of world commerce. The British Government should stand by these, whoever may stand by the bondholders.

I would, therefore, say that while, up to the moment, no definite result has come from the decisions at The Hague, and there has been no actual change on questions of credits, compensation or any of the other matters touched at The Hague, our chance of getting results from any future decision must necessarily depend very largely upon whether Russia can feel that we are to help her substantially to discharge the obligations into which we are asking her to enter. Is this the last of these Conferences? I trust not. It may be that if at this stage the Prime Minister fails completely he will not be discouraged, but will try further Conferences. Indeed, should it befall us that Russia drifts further away, and becomes less disposed to arrange with us, it may be that our efforts towards further Conference will enable us to do little. The high hopes of Genoa have at The Hague fallen low indeed. Whether they may be revived by some further statement or announcement by the Prime Minister this afternoon, I shall be curious to hear. At any rate, he may depend upon it that, while we cannot forget what we regard as the Government's follies and failures of the years towards the end of the War and of the years since its close, anything that can be done from this side of the House to assist in improved relations with Russia and with other countries will be done; for, if we have a difference of opinion on methods, we have a mutual and, I hope, an even interest in speedily, if possible, reviving the trade of this country.

Sir WILLIAM PEARCE

The interesting speech of the Secretary to the Department of Overseas Trade did a good deal to bring the Committee face to face with realities. If The Hague Conference has done nothing else, I think it has cleared away many things and made the Russian Government really recognise the realities of the position. I would venture to put before the House my view of the realities of the position to-day. Firstly, there were two Commissions, one of which dealt with the debt of Russia and the other with the question of property. Whatever we may all desire to do in regard to the debt of Russia, it seems absolutely certain that in the immediate present no satisfaction can be obtained with regard to money payments from Russia on account of the old debt, until there is industrial restoration in Russia. I am not suggesting this with any want of appreciation of the French attitude, but until the industrial position in Russia is restored, the question of the old debt becomes of secondary consequence. The prime question to-day is what we can do to help the industrial restoration of Russia. We are all greatly concerned, and have the utmost sympathy, with the disastrous position in which our old Russian Allies are to-day, and I am sure that every party in the House of Commons is anxious to do everything that it can to rescue a great people from a difficult position.

Upon what does that depend? Two or three things which were brought out by the Secretary to the Department of Overseas Trade are really fundamental. The hon. Gentleman pointed out, first of all, that industrial Russia has always depended upon foreign capital. The Russians themselves needed German, American and British capital in order to arrive at prosperity. Another thing which the hon. Gentleman pointed out, and which I think is perfectly clear, is that this could not be done to-day by any Government system. Every Government in Europe to-day is full of its own troubles. I am sure that our Prime Minister is anxious to do everything he can to help the Russian Government, but look at the position at home. I think that any Government will find it very difficult to embark in direct Government action, and will have to rely upon the assistance of their own nationals who are able to undertake some portion of the industrial restoration of Russia. Therefore, effective help to Russia is not likely to come by an Act of Parliament. It can only come through the assistance of our own nationals who are willing to give that assistance. That means that it is through private enterprise rather than through Government action that the restoration of Russia is likely to be arrived it; and that is an entire contradiction of what has been the policy of the present Russia Government. So long as the gospel of the Russian Government is Communism and the destruction of the capitalist system we are in fundamental disagreement. The right hon. Member for Platting (Mr. Clynes) says the view of the Russian Government has been modified. I think to some extent it has, but until you can make European and American capital believe that it is going to be altered for good, you will not get individual assistance for the deplor- able Russian situation. It may not be what hon. Members opposite would like, but I am trying to point out what I think are the realities of the situation to-day. Until private enterprise and the industrial resources of the world are assured, and until the Russian Government abandons its policy and really means not to make its fundamental position the destruction of the capitalist system, but is willing to he assisted by it, I think Russia will fail to get the real amount of capital assistance that is required. To my mind that is fundamental. The Soviet Government may possibly be willing to restore and to give compensation, but more than that is required. What is required besides is the belief in the future that there will be no return to the old methods in which confiscation of private property was accepted by the Russian Government as being quite legitimate. Until you get those two facts firmly established, that is, restoration and compensation and the belief that there will not be future interference, you will not get the proper amount of European capital into Russia which is needed to restore that great country.

As far as we are concerned ourselves, I am sure everyone in this country would be only too glad to assist in promoting the industrial recovery of Russia. After all, are we in the best position to do it? I have no doubt we shall do what we can, but I remember the inquiry into, industrial conditions after the War when a very full inquiry was made into the position of the various nations with regard to trade with Russia, and it was remarkable how great were the advantages Germany possesses over this country. First of all Germany is close to Russia. For every Englishman who can speak the language a thousand Germans can. They have enormous advantage in carriage. In those days it was £1 a ton for the whole of Russia except the extreme South, and I imagine to-day those advantages are greater still. So we must not expect, as sometimes one hears from the other side of the House, that enormous trade advantages are going to come to this country from the restoration of Russia. To my mind when the restoration of Russia comes we may have some share, but not the chief share. I do not think our trade and industry is likely to receive the advantages which are sometimes expected on the other side of the House. May I tell the House which were the points which were brought home to me in the speech of the Overseas Secretary. I believe they are the foundations of the situation. Russia cannot be restored by Government assistance. It will be restored only by the ordinary old-fashioned capitalist system which is so much decried on the other side. Capital will not flow into Russia until the Russian Government have really made the commercial world believe that the change of attitude they appear to have adopted is going to be persisted in and until security is established, and then and only then will Russia get the full aid and the full benefit from the commercial resources of the world, to which she is entitled, and which I believe is the only way in which she can be rescued from the lamentable position in which she is to-day.

Lieut.-Commander KENWORTHY

I beg to move to reduce the Vote by £100.

I congratulate the Parliamentary Secretary on the speech he made so ably. [Interruption.] I am not complaining, I am congratulating him—I am sorry my remarks are misunderstood—especially on the first few sentences of his speech, in which he completely buried Genoa and stamped his foot on the sods on top of the grave. He told us that Genoa had been a complete failure and nothing had come out of it, but that, at any rate, a little had been done at The Hague, and, reading the White Paper which was issued yesterday, I think they have accomplished something and I make every allowance for that. But from one point of view The Hague Conference was an enormous success, that is the point of view of the wheat producers in the Argentine, in the United States, in the Middle Western States of Canada and in South America. We are paying through the nose for our wheat, and the rest of Europe that imports wheat is also paying through the nose. From their point of view the Conference was admirable in every respect. We shall now for some years, I suppose, go on paying for our wheat, with the exchange against us, and we shall turn our backs on the wheat-producing possibilities of Russia. May I first of all make a small complaint about the White Paper. It contains an admirable speech by the hon. Gentleman who represented the Treasury at The Hague. I do not know who wrote the appendices. They are extremely interesting. But there is something missing. There is nothing from the Russian Commission. I should have liked to read the arguments put forward by the Russians. They are extremely interesting, no doubt. We are only presented with one side of the case. I am not conversant with the Russian side. I am speaking here on behalf of about 1,750,000 British citizens who are to-day without work. It is from that point of view that I approach this whole subject, and from that point of view alone I should like to have seen what the Russians had to say, and I hope those Papers will be forthcoming at no distant date. I know my hon. and gallant Friends opposite have only just come back, and I am not making this complaint in any carping spirit, but I hope those Papers will be laid as soon as convenient.

During the sittings of the Hague Conference, everyone I met and talked to about it in this country, on the Continent, in Germany arid Belgium, and one or two Russians who, I happened to meet and talk to about it, of various political opinions, were all unanimous in one opinion, and that was that they did not expect the Conference to make any great success. They did not expect any great results to come from it. I have met no one really who had a different opinion. Those who expect very little are not disappointed, and I am not a bit disappointed, because I did not expect very much else to happen. It is very remarkable, however, that that should have been the general opinion, and I think the reason for it is really not very far to seek. At Genoa it was practically laid down that nothing in the shape of Government credits or expenditure for the reconstruction of Russia should be given. The Prime Minister answered a question to that effect across the Floor the House soon after his return from Genoa before the Conference commenced. Under those circumstances, if no Government credits were to be given, there was really nothing to discuss further, because the only other source from which credits could come was from private financiers, bankers and capitalists, and for them it was not necessary to have a Hague Conference. They could go to Russia, or they could meet Russian representatives here, at Berlin, Vienna or Rome, and discuss their business with them, and if it was possible and practicable for those people to give credits to Russia, they could have given them without any Hague Conference at all. Therefore, it is not a bit surprising, when you start by laying down that under no conditions, whatever Russia does in the way of acknowledging debts and trying to pay them back, restoring property, and so on, even to overthrowing the whole revolution and, I suppose, setting up a Tsar again—under no conditions are you to give any credit to Russia for the reconstruction of the country, it was impossible for The Hague Conference to succeed as an international conference, and the only sort of conference which would have any hope of succeeding would be a conference, not of Government experts, but of representatives of financiers, capitalists and property owners in Russia and here of various nationalities. If you start by saying Governments are on no account to give credits, it is no use conferring at all with the Russian experts and representatives.

Let me immediately challenge, as I propose to do in the Division Lobby presently, the theory that on no account must we give Government credits. I think that is a short-sighted and a criminal policy. We found plenty of credits for purposes of destruction in Russia. Any miserable adventurer who set up his standard in Siberia or in the Baltic Provinces or in the Ukraine could get stores, money, munitions, clothing, shipping, transport—anything he wanted. Before the Bolshevists came to power at Moscow at all, before there was any property nationalised or confiscated in any way in Russia, Korniloff was backed against Kerensky by the Allies, as public documents show, and has been admitted in the main by the Colonial Secretary frankly at the Treasury Box. We can always find credits for destroying life and property and injuring the natural wealth of that great country, but when it comes to finding credits for reconditioning, for transport, for making it possible for our merchants to trade and for our ships to carry goods to Russian ports—ships which are lying idle, with their officers and crews wondering where their next meal is to come from in many cases, we button up our pockets. We say, "It is impossible; we have not the money; we cannot find it. You can only look to private enterprise, and Governments are not to help." That is a policy which must be met on this aide of the House and combated here and in the country. I only hope the gentleman who is now an hon. Member of the House, and will take his seat to-morrow for Pontypridd, preached that openly and honestly in his constituency, as I have done in mine. I think that Pontypridd is a very good answer to Genoa, and, with all respect to the hon. and gallant Members opposite, to The Hague and all its works.

There is an idea which is being sedulously put about in very high quarters and by Members of the Cabinet, that whereas we may deplore the decay of the European market, and of the ancient centres of civilisation, and the ancient centres of culture and so forth, we really need not bother much about it or about European trade with this country, including Russian trade; but that we must develop the Empire, become a self-supporting Empire, take in our own washing, and that we need not find other markets for our goods, and other sources of supply for our businesses. That is a very dangerous doctrine. I do not want to enlarge upon it now, but I may say in passing that to-day we are suffering because Russia is not buying Indian tea, and because of that the Indian market is not so much Open to our goods. We are suffering also because Russia is not buying Brazilian coffee. The Brazilian coffee farmers are feeling the loss of the Russian market, with the result that we are sending less British goods to Brazil. I mention these facts to show that world trade is interdependent. However much we may succeed in Russia, it will be useless if Germany is going to be allowed to collapse and go the way of Austria. It is no use our salving one country; it is no use pursuing successfully the efforts which the hon. and gallant Members opposite tried to pursue at The Hague when they tried to restore trade with Russia, if the German market is going to be allowed to collapse.

I should like to ask two questions. First of all, is there any secret agreement other than is given in paragraph 5 of the White Paper, as to discouraging our nationals not to trade with Russia? Paragraph 5 lays it down that the Governments concerned shall not encourage their nationals—I am quoting the words very widely—to acquire concessions including the property of other foreign nationals. That is perfectly fair. Is there any other agreement to discourage our nationals, or is there any agreement amongst other countries to discourage their nationals, from trading with Russia, or from going into Russia and developing concessions that are not claimed by other foreign nationals? That is very important. At the present time it is a fact that there is a sort of understanding, apparently, amongst the banking circles in this country to refuse credit to people who wish to do business with Russia. Not only that, but if they find that certain people are embarking upon enterprises in Russia—I do not mean developing property belonging to other foreigners—they cut off credit, not only from that enterprise, but from those peoples other enterprises in other parts of the world. That is an unfortunate state of affairs, and if this or any other Government recognises it, it is a very criminal policy to pursue.

Secondly, have the Government any intention of extending the Overseas Trade Credit Insurance scheme to Russia. This scheme has been in operation for two years, and Russia has always been cut out of the list of countries to whom credit could be extended in this way. Are the Government going to alter their policy and extend it in that respect? I do not think that the Overseas Trade Credit Insurance scheme goes nearly far enough. It is only of limited use. It has been of use to some countries, and it might be useful in Russia. It may be asked what proposal we can make from this side of the House. I am not going to repeat the proposal made by the right hon. Member for Platting (Mr. Clynes) that we should recognise the Russian Government de jure, because I have always done that. I suggest that we should consider first of all the granting of credit to Russia in a certain form. The debts owing by Russia to foreigners—I am counting both Government debts and municipal debts—amount to about £800,000,000. I may be wrong in my figures. Has the question of a conversion loan for that amount of money been explored? I am not a financial pundit; I do not pretend to be, and I put forward with diffidence the proposal of a conversion loan, to convert the whole of that debt into a new issue, not of £800,000,000 but of £1,200,000,000. At the present moment it is only waste paper. The Russian debt to us for war services, and the various municipal debts, are waste paper; but the Russian Government that is apparently prepared to acknowledge the debt in principle, and to my knowledge has been so ready for many months.

What I suggest is that there should be a new loan of £1,200,000.000 supported by the countries interested, and that the £800,000,000 should be new paper. Of course, what would make the value of the paper would be the credit and backing behind it. We must always remember that our trade in this country is languishing. The £800,000,000 would replace the old debt, and the old debt could be cancelled. The other £400,000,000 could be expended in five years in providing the necessary transport and machinery and the other goods which Russia must have, and have quickly, if the country is to be developed. That would be the beginning of the revival of Russia. The need is very great for new transport, the repair of existing transport, the re-conditioning of the ports, agricultural machinery, fertilisers, etc., and the £400,000,000 spread over five years would be a credit for the supply of those goods, and would make work possible. [Laughter.] Can hon. Members suggest anything better? As things are at the present we are at a complete deadlock. If hon. Members say this scheme is impracticable, can they suggest anything better?

We have to think of the great numbers of unemployed people in this country. We have the makers of agricultural machinery and transport, and of the goods Russia wants, idle to-day, and drawing unemployed pay at the rate of many millions a year. I think they are drawing about £1,500,000 a week, or something like £80,000,000 a year, in unemployment pay, and that is likely to go on for years. If this scheme had been adopted two years ago, we should have saved this country much of the unemployment compensation that is being paid now. I suggest that the £400,000,000 is not to be supplied by this country entirely, but that France, Italy, Germany, and possibly the United States would come in with us in such a scheme. It need not be in cash. If that conversion loan is guaranteed by the countries I have mentioned, no actual cash need pass, if people will take the bills at not too great a discount. I always regret embarking upon credit discussions, because it is an extraordinarily complicated subject; but in the meantime Russia is crying out for the goods that we and America and Germany could make, and our people who could make them are idle. I hope that we shall encourage our people to go to Russia and to do as much business as they can, and to take up concessions which are not held by other foreigners, and, if necessary, we should give them financial backing, as we do other capital undertakings in other parts of the world.

It was said by the Secretary to the Overseas Trade Department that the Conference at The Hague had brought Russia a great step forward. Our Government has come a great step forward. It is a very far cry from the speech which the hon. Member made to-day and the sort of speeches that were made by the Government two or three years ago. The bloodstained Bolshevik has sat down at a table with the hon. Member, and I believe that he honestly tried to help this country. We have come forward a great deal, and I hope that it is not, because of any false cry or false prejudice that we are prevented from taking the next step. It is also true to say that the policy of the Russian Government has been enormously modified. They are allowing houses and offices to be owned, bought and sold; their citizens are allowed to enter upon private business, and they are allowed to hire labour for wages. They allow the banks to hold deposits, and they are rapidly restoring free markets in the great towns. These are great departures, and it is due to us to make still further steps forward in response. I hope the Conference at The Hague will have been the beginning of some real opening up of trade with that great country. I feel that the Government's attitude on credits is absolutely wrong, wrong with regard to the credit for the famine district, and wrong with regard to the whole of the Russian market, and it is as a demonstration against that that I beg to move to reduce the Vote by £100.

Mr. HOPKINSON

I will not attempt to follow the hon. and gallant Member for Central Hull (Lieut.-Commander Ken-worthy) in his great conversion loan scheme. Since the time of Mr. Micawber, no such notion was ever put forward seriously. When Mr. Micawber felt it impossible to take up the bills which he had issued, he used to collect them together, then issue a further bill for the total amount, and, having done so, he felt that he had paid his debts, and could go about his business in security. That is exactly what the hon. and gallant Member for Central Hull (Lieut.-Commander Kenworthy) proposes to the Powers of Europe.

I merely rose to ask the House to consider seriously what was said by the hon. Member for Limehouse (Sir W. Pearce). He pointed out that the economic development of Russia must come from Germany rather than from this country or from France. My only complaint is that he did not, as it were, insist enough on that point. If we may look at that particular point from another aspect, I should like the Committee to consider for one moment exactly how, in actual practice, that economic revival of Russia is going to take place.

Over a great part of Russia it is impossible to suppose that, for a long time ordinary trading can take place. Mr. Lenin himself has apparently recognised and said publicly, that to abolish capitalism in a country means to reduce that country to a. state in which the inhabitants are bound to live upon its unimproved natural resources, inasmuch as any improvement of natural resources involves the capitalist system. Having come to that conclusion, he seems to think that he has merely got to allow the ordinary capitalist system to re-establish itself and all will be well with the Russian people. But he has forgotten apparently that having destroyed the capitalist system in Russia it is impossible to restore it in the modern sense because during the restoration the whole of the population of Russia is bound to die of starvation, that the present capitalist system of free competition in industry has been built up during a very long series of generations, and that having reduced Russia to all intents and purposes to the condition of a thoroughly primitive country, with a population living upon its unimproved natural resources, it is impossible to restore the modern capitalist system in time to save the inhabitants from starvation.

Therefore it seems to me that the situation will have to develop somewhat on the following lines. Russia will be split up into great concessions which will be ruled autocratically by foreign capitalists of some nation or other. In other words, we shall have a form of capitalist feudalism in Russia for a period. The position is that over great portions of Russia the main desire of the inhabitants is to have enough to eat, and to be protected from their neighbours. In those conditions, where the population of the country is simply longing for protection against its own neighbours, and the possibility of being able to sow and reap its corn in safety, you are bound to have some form of feudalism as a temporary measure. That being the case, the development of Russia surely will be somewhat along the following lines during the next few years. The Soviet Government would be obliged to grant concessions involving the whole resources of great districts of Russia, and involving also the inhabitants of the districts which are the subject of the concession.

It is easy for the Soviet Government to hand over districts of Russia including the soil and the people. It is easy inasmuch as the people already are in the same position as the serfs in the Middle Ages. They are not allowed to leave their trade or their villages and are truly adscriptus glebœ. Therefore, it is easy to hand over to the concessionaires not only the districts, but the inhabitants as well. It is possible to do so also for this reason, that the state of destitution of the inhabitants in many parts of Russia is such that they are willing to give up political and economic freedom entirely to anyone who will really protect them. If there is going to be any development of Russia, and if the development is going to be along those lines during the next few years, until ordinary capitalism can be re-established, I for one should be glad that German or American capitalists should do it and not our fellow-countrymen.

The process will involve the complete negation of liberty for the inhabitants of Russia. It will probably involve a brutal autocratic rule by those concessionnaires, and I should be very sorry if fellow-countrymen were in any way involved in a system of that sort. Again, it is not necessary for capital in this country to seek employment in Russia at the present time. We have not been reduced to anything like the state of poverty of Germany. Therefore we should not be justified in investing our capital in any but much safer risks than those which are to be found in Russia. On the other hand, the capitalist industrialist of Germany is in a very different position. He has got to turn over his capital extremely rapidly at the present time, and he has got to take extremely grave risks in doing it. Therefore, from every aspect, it is desirable, in fact it is inevitable, that it shall be German capital and German capitalists who will be the saviours of the economic life of Russia in the long run. I only rose to impress upon the House the very wise words of the hon. Member for Limehouse and to put forward certain other aspects of the question in addition to those to which he has referred.

Mr. WISE

I would like to congratulate the Secretary to the Overseas Trade Department on his statement that, having met the delegates from Russia face to face, with the Financial Secretary to the Treasury, he feels that the Conference has taken a long step forward and that something may fructify from it. The hon. and gallant Member for Central Hull (Lieut.-Commander Kenworthy) referred to unemployment. I do not see that there is any possible chance of solving our unemployment through Russia unless the credits required wore under a scheme organised by the Government. It is not often that economic forces furnish a story so dramatic and so ironical as that afforded by the course of the rouble or the kronen or the mark. I should be out of order in referring to the latter two, but I propose, in a few remarks, to refer to the rouble and to endeavour to show the chaotic position of the financial affairs of Russia. I am in agreement with the hon. Member for Limehouse that nothing can be done in Russia, in a large way, without Germany. I feel that the German understands Russia better than we do, and that if we were to go into Russia alone it would be a mistake.

This Conference really started at Genoa. At Genoa the Russians demanded a credit of two milliards of roubles. The Conference continued at The Hague, and the Russian delegates appeared with a demand for three milliards of roubles. The White Paper which was issued last night states on page 13 that the credit demand was to be split up as follows: 1,000,000,000 for transport, 924,000,000 for agriculture, 750,000,000 for State industries and 500,000,000 for trade and banks. The Conference at Genoa came to an end because the Prime Ministers refused to allow any credits to Russia, and I do think that for the Russian delegates to come forward again at The Hague and to demand not only the same amount as before but 50 per cent. more was hypocrisy. With regard to currency in Russia, I feel that there can be nothing stable or satisfactory until we get the currency on a sound basis.

Within the last few months the rouble paper currency has expanded by leaps and bounds. Up to August, 1921, and the 18 months previous to that, the total amount of currency was about three milliard roubles, but since August, 1921, the expansion has been tremendous every month. The issue for September of last year was one thousand milliard roubles; in the month of October it was two thousand milliard; in the month of November it was 3,365 milliard; in December it was 7,700 milliard; in January it was 12,000 milliard; February 18,000 milliard and in March 24,000 milliard paper roubles. I apologise for giving these figures to the House. They are very important as showing the position of Russia, so far as credit is concerned. No nation on earth has ever got into such a chaotic position in its currency as Russia is in at the present time. They issue these currency notes to pay for their State industries. Russia is made up of a nation of valueless multimillionaires.

Colonel WEDGWOOD

Were those enormous issues of notes limited to the payment of State industry? Were they not used for all State purposes, the payment of salaries and everything else?

6.0 P.M.

Mr. WISE

No. I understand from the Deputy Commissioner of Finance, Sokolnikoff, that they were all for State industries. That was his statement. Whether it is right or wrong I leave it to the Committee to decide. There is one benefit which Russia has brought about recently. I hope that the Secretary to the Overseas Trade Department will be able to confirm this. It is that they have brought in a new type of rouble. After 1922 one new rouble is to be equal to 10,000 old roubles. The equivalent of the old rouble was 20,000,000 to the pound sterling and that of the new rouble is 2,000 to the pound sterling. That is a big asset. It shows that Russia is endeavouring to get her domestic policy into some sort of shape. It is difficult, but it is a move in the right direction. It is more than has been done by Austria, Germany and other countries. In spite of this the country is faced with a financial crisis that is unparalleled. The Government owns everything but yet owns nothing. At a meeting of the Eleventh Communist Congress when the Deputy Commissioner of Finance, Sokolnikoff, was present, he stated that the only cure for Russia was to get her industries going and to develop trade and commerce. We are all agreed with that view. It is a right view. But it is not right that the Russian Government should undertake the task. The only possible chance is for the individual to do it. The Government is there to govern, to give security to the individual, to give security to trade and commerce; and only when you have that security can you expect credits to go into Russia. The right hon. Member for Platting (Mr. Clynes) referred to the necessity of credits going into Russia. I feel confident that the right hon. Gentleman would not invest, his own funds there. Nobody should invest their funds in Russia until Russia is in a position approaching the balancing of her Budget.

I want to refer to the White Paper again. On page 9 it says: A certain number of questions was asked by the non-Russian sub-Commission about the Budget and the economic situation in Russia. The more precise information which was elicited in this manner was sufficient to make quite clear that the Budget proposals hold out no hope whatever that it will be possible at an early date to balance revenue and expenditure in Russia. Those are very important words. Until you get some possibility of Budget balancing, and confidence restored, I shall be against any organisation for putting credit into Russia.

Mr. J. JONES

I cannot, of course, claim to have the expert financial knowledge of the last speaker. My knowledge of finance is limited by my lack of it. I always like to hear the hon. Member for Mossley (Mr. Hopkinson) trying to teach his grandmother to suck eggs. He has tried to-day to teach those of us who sit on the Labour Benches that because we advocate the reopening of Europe we are committing an offence against economic science. I may remind him that we do not know everything, and that the youngest of us does not know it all. We stand for the reopening of Europe after the greatest catastrophe in the history of the world. We all know who started the issuing of paper money. What is the English pound note worth from the standpoint of intrinsic value? It is hardly worth the paper on which it is printed from the standpoint of real value. [HON. MEMBERS: "Eighteen shillings!"] Where is the 18s.? It is in the blood, the sinew and the brawn of the workers of Great Britain. You are banking on the possibilities of the future. None of you can afford to throw bricks at Russia. What has happened in Russia? Up to the present moment you have never recognised the fact that Russia made greater sacrifices to save the Allies than any other country which took part in the War. What are we fighting about now? What is the quarrel at the conferences, at Genoa, at Washington, and at The Hague? Fagin's kitchen—who is to get most of the swag. All the people who run Europe and the world, the hook-nosed patriots who sing "God Save the King" in broken English, meet round the table to decide what shall become of Russia, of France, and of Germany. And the hon. Member opposite, who says he hated Germany during the War and joined the Army to fight her, now turns round and tells us that we are going to hand Russia over to the Germans.

Russia is the greatest potential market of Europe. I do not believe that you can strike 12 o'clock at 11. I happen to be one of those terrible characters, a Social Democrat—a Democrat in politics and a Socialist in economics. I do not believe the hon. Member for Mossley understands what that means. We have always preached the doctrine that until a country is economically developed you cannot have a real democracy. The hon. Member says we have to go back to feudalism. Russia is in a feudal state to-day, autocracy based upon agriculture, a country with a small industrial population, of whose people 85 per cent. can neither read nor write. How can you expect democracy in such a country? You cannot have democracy until you have educated democrats. The kind of Government that Russia has is a matter for the Russians themselves to decide. What are we doing? We would sooner pay £1,500,000 a week to keep the unemployed walking the streets in Great Britain than vote a similar sum to develop the resources of one of the greatest countries in the world. We Labour Members stand for the opening up of Europe and the breaking down of the barriers that divide countries. Hon. Members say, "Let Germany monopolise Russia. If she does, God help her." If Germany and Russia get together, God help Britain in the near future. The Germans have the industrial organisation and the military sense, and they have the power and opportunity of expressing the revenge that they would like to express. If you hand the people of Russia into the arms of Germany you are not the patriots that you pretend to he, but the enemies of your own country.

We want to break down the harriers. Russia is a great country, with great possibilities and great natural resources, and if the brains of Great Britain cannot develop those resources and help Russia, we shall suffer in the immediate future for our neglect. It. is not a question of politics; it is a question of common sense. The rouble has been mentioned. I have 5,000 in my pocket now. I do not suppose they are worth a farthing. After all, the people of Russia do not live on roubles, but on food, when they can get it. I have had money in my pocket in this country and with it could not get anything to eat, great people though we think ourselves to be. The question is not the amount of money which you may have. Real wealth is life. Real wealth consists of men and women capable of producing wealth. Russia is a country starving to-day for the want of development. The Russian Government, have been prepared to meet you. They have come to your conferences and have placed their cards on the table. What do you want? You want them to foot the bill. You are asking the people of Russia to pay the debts of the Czarist Government before the revolution of 1917. You ask them to pay for their own murder. What about the 5,000 men, women, and children who lost their lives in the squares of St. Petersburg before the revolution of 1917? What about the thousands who, fighting for political liberty in their own country, were shot like dogs in the street? Who found the money for the Czar and his Government to murder the Russian people? Now you ask the people of Russia to foot that bill. They say they will not do it. Because they will not do it, you reply that there is "nothing doing."

You may go on with this policy. I have been in South Wales, among the workers there and elsewhere, and I say that the people of Great Britain are sick and tired of this non possums policy, this game of beggar-my-neighbour. Because you do not like the Government of Russia you are not prepared to open international relationships. We say that, whatever the Government of Russia may be, we should not quarrel with it. It is a matter for the people inside that country to settle for themselves. We are a country which lives upon exports and upon international trade, and if this House, because it is prejudiced against Soviet Government, is not prepared to shake hands with Russia in the economic sense, our difficulties must continue. I do not ask you to sleep in the same bed as Lenin or to shake hands with Trotsky, but I ask the House to realise that throughout Russia there are 200,000,000 people, that a country naturally rich is now cut off from civilisation, and I demand the restoration of international relationship. The Government of Russia say they are prepared to meet you, and they have laid down the conditions which you say you are prepared to accept. If you do not accept them, I cannot understand the position. It seems that the decision is to remain with the die-hards and the lie-hards. They say they believe in the Empire. They are always waving the Union Jack in front of the Union Jackasses.

We stand for the re-opening of international relationships. The Parliamentary Secretary to the Overseas Trade Department has been to The Hague Conference. I suppose they sent him there because, possibly, the Government would not be committed to anything that he said or did. It is a very peculiar way we have of doing things. The Hague Conference was proposed as a means of settling the Russian question and the Russians were given a special invitation. They went there. They modified their policy, but we have not modified ours. The big five still put their foot down and said, "So far shalt thou go and no farther." You may say what you like about Russia, but I predict that before many years are over the people who are now opposing international relationship with Russia will be sorry for the attitude they took up. Russia will recover herself. If you think that you are going to force the Russian Government into a revocation of existing policy you are wrong. The only result of your policy up to now has been that you have driven the majority of the Russian people to the support of their Government. Whatever chance there was for the re-organisation of Russia on democratic lines, and for a different kind of Government to be established in Russia, has become almost hopeless because of the attitude adopted by the rest of the Governments of Europe. Therefore, the Russian people have rallied to the Soviet Government more than they would have done otherwise. That is the only triumph you have achieved.

We on the Labour Benches want the world to be restored to industry, because we have nothing to gain by international difficulties and differences, and we have everything to gain by international co-operation. We do not wish to hand Russia over to Germany. We are not going to say that we are less capable of managing the affairs of Europe than the Germans. We are told by hon. Members opposite that the only hope for Russia is to throw her into the arms of Germany. If you do that, before many years are over, you will have to spend the money you are now being asked to give to Russia, in defending yourselves against an organised Russia controlled by a militarist Germany. If that is what you want, then say so. We, on our part, do not wish that that should happen. We want to restore the international relationship which ought to exist between all countries, no one country taking advantage of the other. We hope that The Hague Conference, although not the success which some people hoped it would be, will have good results. We hope the principle behind it will develop, and that the next time the representatives of the nations meet at The Hague, they will be able to come to some understanding as to the restoration of real economic relations between Russia and the rest of Europe.

Lord EUSTACE PERCY

I should apologise for speaking at all in this Debate, in view of the fact that I was unfortunately unable to be present at its earlier stages, and did not hear the speech of the Secretary to the Department of Overseas Trade. There is one question, and one only, which I desire to put to the Government in relation to this matter. Genoa has passed: The Hague has passed. Certain progress has been made at The Hague, although there may be a difference of opinion as to how much. What is to happen now? We are discussing or supposed to be discussing the Vote for the Diplomatic and Consular Services, and perhaps it is an irony that this Debate should arise on that Vote, since I fancy no development of foreign policy, within the memory of the present generation, has had less to do with the Diplomatic and Consular Services of this country than the Conferences of Genoa and The Hague. I have expressed my opinion on that subject before, and I am not going to reiterate it. I think it is agreed that, while the Genoa Conference was fully prepared for, so far as the advice and recommendations of the economic experts from various countries were concerned, that Conference was in no way prepared for, as regards any preliminary sounding of the Governments with whom we had chiefly to deal at Genoa and on whose opinions and tendencies and policy, and on the trend of public opinion in whose countries the success or failure of the Conference depended. That, I think, will be generally admitted.

Now, what is to happen as a result of The Hague Conference? If we have made any progress, how are we going to ripen these half-ripe fruits which we have secured at The Hague? We are going back for the moment to the ordinary international relations with Russia—ordinary to this extent, that we are going to deal with the Russian Government during the next few months through intermediaries, through trade representatives, diplomatic representatives, and others. Are we going from henceforth to make a real attempt to do what, after all, the machinery of foreign policy exists for, namely, to exert an influence on the tendencies of the Russian Government and the Russian people through representatives who may be unofficial and not accredited by the Government, so long as we have not recognised them de jure, but representatives who nevertheless are there already, who know the status quo and who are able to exert influence, or should be able to exert influence, if they are the right representatives? Are we going to use the machinery of our representation at Moscow, or strengthen the machinery of that representation, so that we may be able to conduct in, however non-committal a manner—I ask for no official communications—continuous relations and discussions with the Russian Government? That seems to me to be the most important question at the present time.

Are we, on the other hand, to go back to the situation as it was a year ago or six months ago? What was the situation for two or three years before the Genoa Conference? We conducted discussion with the Russian Government. We did not abstain from discussing matters with them, but we carried on the discussions by means of wireless telegrams which were subsequently published. That procedure may recommend itself to the minds of some hon. Members of the Labour party as open diplomacy. But open diplomacy does not consist of Press propaganda, and it has always seemed to me that the most hopeless feature of our foreign policy during the last two or three years has been the violent conversion of the Noble Lord the Secretary of State for Foreign Affairs by Lenin to the custom of conducting all negotiations by published wireless telegrams and preaching long lectures to the Russian Government, which have no force, so far as any conviction can be conveyed or any influence can be exerted on the Russian Government by such communications. Are we going to go back to that system, or are we going to really use the machinery of our foreign relations for gradually and continuously persuading the Russian people? I hope sincerely that is the course we are going to pursue. It is by that course only we can make any future conference bear fruit. Conferences are useful when you bring Governments to the point where they are prepared, in principle, to come to an agreement if means can be found of devising such agreement. Until you have brought the Russian people up to the point where they are prepared to make an agreement in principle, any future conference will be futile, and the only way to bring them to that point is by continuous negotiation through what are, in essence, diplomatic channels.

Lord ROBERT CECIL

The speech of my Noble Friend adumbrates what I think would Ire a very useful step for the Government to take, namely, to appoint a regular representative in Moscow.

The UNDER-SECRETARY of STATE for FOREIGN AFFAIRS (Mr. Cecil Harmsworth)

We have a representative there.

Lord R. CECIL

There is a representative there, I believe, but as to how far he is a regular representative, and how far he can be termed a diplomatic representative, I am not sure. If you are going to try to arrive at any kind of a solution of this question through Governmental action—and I am not myself very sure that it is the best policy to pursue—then it is essential you should have the ordinary machinery of diplomatic negotiation in Russia as elsewhere. As my Noble Friend has referred to the regular practices of diplomatic negotiation, may I say to the Government I regret that they have not returned to the pre-War practice with regard to the publication of papers. I am very grateful for the fragment which the Government have laid on the Table in this instance—the papers relating to The Hague Conference. They are, of course, nothing but a reprint of what I believe has already been published, and the substance of which, certainly, has been in the newspapers. Before the War, it was the custom of all Governments to present, not merely the jejune resolutions of a conference of this kind, but documents containing a history of what led up to the Conference, and any other documents which would throw light, not only on the Conference itself, but on the policy of the Government in attending the Conference, and what the Government hope to accomplish. I respectfully suggest the time has come when we might return to that practice, and when the House of Commons might be taken more into the confidence of the Government in foreign affairs. After all, it is the duty of the House, not to direct foreign affairs—that I do not think it could do—but to pass judgment on what has been done by the Government of the day, and in order to do that it is necessary that it should have full information as to all the circumstances of the case. In the interesting speech with which the Secretary to the Overseas Trade Department opened this Debate, he gave us an account of what actually took place at The Hague, but as far as I heard it, there was very little to indicate what had been the policy of the Government leading up to The Hague, and still less to indicate what the policy of the Government is now—what they propose to do, and what action they think they might usefully take to deal with an admittedly serious and grave situation. The Secretary to the Overseas Trade Department said with great emphasis that we had taken a great step forward at The Hague, but later on he said that the step forward had led us to a temporary impasse.

Sir P. LLOYD-GREAME

I said that the final stage was a very definite advance, but that a temporary impasse was reached in the course of the long negotiations leading to that final stage.

Lord R. CECIL

I am obliged to my hon. Friend for correcting me. I do not wish to misinterpret him, and my observation for what it was worth is disposed of. There was a temporary impasse, and then there was a final advance. I am not quite sure about that advance. Let us bring to our minds the real situation in Russia as far as we know it. I agree fully with what everbody wishes, namely, that we should reopen commercial relations with Russia, and that that great country, with its enormous resources, should once again come into the commercial community of the world. All of us, Russia included, would gain by that re-entry. For the moment what is the position? The currency of Russia is absolutely gone, as was pointed out, by the hon. Member for Ilford (Mr. Wise) who, after making his speech, has left the House.

Mr. WISE

No, I have not.

Lord R. CECIL

I beg the hon. Member's pardon. I did not observe him. I should say that the hon. Member for Ilford, who sets such a very good example to some other hon. Members, who after making their speeches leave the House, has illustrated with great knowledge the fantastic condition in which the Russian currency now finds itself. Another fact is that so far as we know the Russians have no goods to sell. There are no manufactured or semi-manufactured products to be sold. As far as I can guess, there is no gold. The knowledge of the hon. Member for Ilford on this question is greater than mine, but as far as I can guess, all the gold which the Bolshevist Government once had, or practically all of it, has been spent. Therefore, that is the situation, and when we talk about reopening trade with Russia, let us be quite clear what are the possibilities. I am not talking about reopening trade with the Government or anybody else, but there is only one thing that the Russians can give, so far as I can see, and that is concessions in some form or another. That is the situation, and what we have got to consider is how to induce people to invest money in Russian concessions. That is not a very easy problem, and I have a further observation to make which I am afraid will not make it any easier. I put aside the malicious suggestion that we went to The Hague to cover up the ill-success of Genoa, and I am prepared to assume that we went to The Hague for a definite purpose, that we went to The Hague in order to discuss in a practical manner the guarantees that we might ask from the Russians. I should be very glad to know what really were the guarantees which the Minister thought he could obtain from the Russians. He read—and I share in the pleasure with which he read it—the statement made at the very end of the Conference by the Russian Delegation. It was a statement that the Russian Delegation, in spite of the fact that they were to get no credits, were prepared to acknowledge the debts due by the Russian Government or its predecessors to foreign nationals, and that they were agreed to give effective compensation to foreigners for property previously owned by them, on terms which were to be arranged in each case by the people who had lost that property.

The Conference apparently unanimously regarded that as a perfectly hopeless suggestion, and I am not saying they were wrong, but what did they expect to get at The Hague, more than something of that kind? What kind of guarantees did they expect? The hon. Gentleman said there were no regulations, but what kind of regulations did they want? What was it that they wanted? From the paper which I have read, I gather that they rejected the plan of looking into every specific case of confiscation and suggesting the compensation that ought to be given. I quite agree that it was hopeless to do that, but what did they want? What was it that they asked from Russia which at any rate could not have been worked out from that statement, if they really thought there was any guarantee which the Russians could give which would be any use? I rather agree with The Hague Conference in their conclusion that any statement, or guarantee by the Russians world not really help matters very much. Personally, I agree with them, but why did you go to The Hague? What were you going to do there? What was your purpose? All you could get at The Hague was some guarantee, or statement, or promise from the Russians, but what promise did you want? I should be very glad to have an answer to that. I feel myself that there is a great deal of difficulty, if you are going to proceed by negotiations with the Russians, in hoping for a successful result.

After all, let us recognise the economic foundation on which the present Russian Government is built. As I understand it, it is built on the Communistic theory of property—that is to say, that they distinctly reject private property as an institution. Our theory is, on the contrary, that all our economic system is ultimately based on the acknowledgment of private property, and we say, and say with great force, that you will never get what the Soviet Government would call capitalist Governments, or people living in a capitalist economic system, to trade in Russia unless Russia is prepared to recognise private property. I think that is true, but really what you are saying to the Russian Government is this, that the guarantee, if you want any guarantee, is an abandonment of the very foundation on which the whole of their economic system is based. Is that a thing which you are likely to get from their experts at The Hague? It seems to me that the real foundation of the matter is that, as far as the Russian Government is concerned, it is impossible to have trade relations between a system which rejects private property and a system which is based on private property. If that be the truth—and, as far as I can see, it is—I do not see myself what on earth is the use of all these conferences with them. I think there is a great deal to he said for the view which, as far as we in this House are allowed to know it, was put forward by the French and Belgians at Genoa. They said, What is the use of talking to these people unless they recognise private property? And they were very much disposed to say, Until they do, nothing is to be gained by negotiations with them, and if you are to restore—I do not know whether the French and Belgians went as far as this, but I submit it—if you are to get back, as I earnestly desire that you should, into something like commercial relations with Russia, it can only be done, not by asking the Russian Government to abjure the fundamental tenet of their economic faith, but by getting somehow or another into some actual, commercial relation with the actual people of Russia.

That being so, I wish to call attention to what seems to me to be the latest of the failures of this Government to deal with the Russian situation. There is nothing more melancholy, in my judgment, than the history of our relations with Russia during the last three years. They have been unbroken failure. There was, first, the period of Prinkipo. There was a great deal to be said for entering into negotiations with the Russians, in some form or another, at the time of the Peace Conference, with a view to putting a stop to the actual fighting then going on, but that failed, and the next phase was the Koltchak-Denikin phase, when we spent vast sums of money in fostering attacks on the people with whom we had just before asked to negotiate. I am not going into it now, but there is a kind of defence—and to some extent it is a good defence—for assistance to Koltchak and Denikin, but there is no defence whatever, in my judgment, for the money we spent and the assistance we gave to Yudenitch and Wrangel, that almost filibustering procedure, without the slightest justification. But, justifiable or unjustifiable, it was another complete failure. Then came the Polish war. I think it was a disaster to allow the Polish fighting to proceed. It added enormously to the economic difficulties that no effective steps were taken to stop it. I know the Government say they did something to stop it, but I say that they did nothing effective to stop it, and I believe something effective could have been done. In any case, they did not stop it—another complete failure. Now come Genoa and The Hague, and I am afraid we must add those to the Russian failures of the present Government. The worst failure of all has been the failure of the Government in dealing with the Russian famine. I think it is a terrible thing, because the Government undoubtedly knew what they ought to do. The Prime Minister, in August last year, told this House what ought to be done. They knew what ought to be done, they knew the crisis which they were up against, and they deliberately failed to do what they might have done. It was not only a question of providing food, though I do not believe you will ever get Russia back until you get some kind of restoration of its starving population, but what you wanted to do was to take the opportunity of the Russian famine to re-open trade with the Russian peasants. I see, in the speech of the Financial Secretary, which is quoted on page 18 of the White Paper, that he says this, and, if I may say so, perfectly rightly: Restore to the peasant practically and without qualification his power to control, to sell, to pledge the whole of his produce, and he will readily be able to obtain for himself the credit which he needs for the purchase of agricultural machinery and so on. Those who know him have confidence in his goodwill, if he has the ability to fulfil his obligations. I believe there was an unrivalled opportunity for reopening, with the machinery of relief, relations with the Russian peasantry, about whom everything that I hear absolutely accords with what the Financial Secretary tells us. I believe that would have been a right policy, and that it would have done a great deal to help the situation. We did not deal with it. I see that some of these Commissions rejected—I have no doubt wisely rejected—the optimistic statements made by the Russian Delegation as to the condition of Russia, but in the result three million people have died, in great misery, and many, many more have suffered and have been reduced to powerlessness and in ability to restore their custom. But I still believe that even now, when all these opportunities have been missed, your best chance of re-opening commercial relations with Russia and restoring something, slowly—and it must be done very slowly—of the old commercial intercourse between the two countries is by utilising the entry you have got into Russia by your relief organisation. There is a statement in this White Paper, a statement with which I heartily agree, and which points out the great difficulty of restoring Russia and the inevitable slowness with which any restoration can take place. It intimates in no uncertain terms grave doubts as to how long it will take to do this work, and what will be attained in the end. This is what it says: The derelict condition of Russian industry to-day, the chaos into which it has been plunged by those who have seized control, convinced us that there can be no hope for the restoration of that industry and of the industrial life of Russia, unless the Russian Government is prepared wholeheartedly to seek the co-operation of foreign skill and foreign capital. It will at best be a long and uphill task. I am sure that is true. I do not believe that you will restore Russia readily or that we can help in the alleviation of European economic difficulties in the near future without the restoration of Russia. Though we are entitled to do what we can, I do regret very much what I think has been the mistaken policy of the Government. I earnestly hope that they are not going to proceed on the lines of further aimless—as I think—Conferences, but that they will try now to see whether it is not possible and practicable to reopen intercourse without raising those difficulties and controversial questions as to the proper economic basis of property. Only in that way, in fact, by building up from the very foundations a system of barter and exchange, can you hope, as I think, really to get any restoration of Russian commerce and Russian industry.

Though it is right we should do what we can to restore Russia, there is another urgent question that awaits us in regard to European restoration. That is on this Vote, as other questions, I believe, dealing with foreign policy, but by tacit agreement we are discussing mainly the Hague Conference. I trust I may be allowed, however, to say a few words here on what seems to me to be the very pressing economic danger which confronts Europe at the present time. I am afraid I have taken an anxious view almost ever since the summer of 1919 about what may be called "the margin of economic safety" which still remained in Europe. That seems to me to have diminished very greatly in the last few months. I confess that unless we can take more vigorous and rapid steps to restore confidence in Central Europe, and the countries of Central Europe of which Germany is the most important, it does appear to me that there is not any reasonable hope of avoiding a very serious economic collapse.

I should welcome it if the Government were able to say later that they were prepared to face the facts boldly and clearly, to state what I believe to be the truth, that the economic policy for which they are very largely responsible in the Versailles Treaty has turned out to be a profound mistake, and that considerable changes will have to be made. Since our signature is attached to that Treaty they can only be made with the good will of the other parties. Since we have placed ourselves in that unfortunate position, we must be prepared to deal generously with the situation. Above all, let us face the facts. Do not let us go on trying to buoy ourselves up with unrealities in this matter. We must recognise where Europe is going to, and the urgent necessity of something being done to prevent this great economic danger which seems to be confronting us. Perhaps the Government have information which will enable them to say that the danger is not so urgent as it seems to me, but let me remind them that this danger has in the mind of some of us always been threatened, and it is coming nearer and nearer, and it is only a question of time when it will arrive at a climax. I do earnestly hope that we shall hear from the Government, at any rate before the House rises, that they are determined to take a vigorous and courageous course, to meet their Allies fairly, to recognise that they have Treaty rights which must be respected; to meet them as you can only meet people who have treaty rights by making concessions, so that it will enable them to modify the position at present laid down.

Mr. MALONE

This debate is crippled by the fact that complete papers have not been laid on the Table. We have been given what is entirely ex parte documents containing speeches made by one side. I believe if it had been possible to provide us with the Minutes we should he in a better position to-day to give a considered judgment on The Hague Conference. It is like so many other occasions in connection with this present Government to whom one phrase can be, as it was once, applied: "Too late, too late"—too late is the action of the Government in this case. Was there ever a more deplorable sight than the Member for Hendon (Sir P. Lloyd-Greame) coming down and from that Box to-day praising The Hague Conference. Let me remind the hon. and gallant Gentleman of three years ago when he was on the back benches below the gangway, and when he and others, led by the hon. Gentleman the Member for Chelsea (Sir S. Hoare) opposed those of us in this House who suggested another such Conference to see if a solution of the Russian question could not be found! Was there any more despicable sight than the hon. Member coming down here to-day and eating his own words? I do not like to dwell on personal references, but I cannot help passing this observation: "I told you so."

It is very nearly three years ago, in November, 1919, that I went to Russia and came back here and endorsed the policy of the Prime Minister and his suggestion that another attempt should be made to hold another Conference. May I remind hon. Members of the manner in which certain Members of the Government have utilised every opportunity both inside this House and outside to express their displeasure at the attitude I took up in showing up their policy in Russia? I certainly hope that any effort I have been able to make in trying to break down the barriers between these two countries may also be carried out in a similar manner by the hon. and gallant Member for the Wrekin division (Sir C. Townshend) who is now, at his own risk, trying to break down similar barriers which this Government have erected between the British Government, and the Government of Turkey, and Angora. If the Government had accepted our advice three years ago to try to bring about peace between this country and Russia, millions of money and thousands of lives would have been saved. The £200,000,000 which we have poured out in the deserts of Russia under Denikin, Koltchak, Yudenitch and Wrangel might have been saved, and might have been put to the building of houses and other social improvements which were required here. Hon. Members jibe us on this side for having done the talking. Having done talking in the last few years one may draw a comparison between talking and action. Consider the action that has sent money to kill other people. If your action means sending secret service agents to do all this work that has been done it is a pity, and for my part I prefer to be on the talking side in this House, and to have clone a little to make matters better. I myself take credit for having addressed from 200 to 300 meetings in the course of the last few years on this matter. What is the result of this continued policy of inaction of the last few years? We are losing trade with Russia.

The Noble Lord who spoke last said there was not very much to come out of Russia. Every day we go on there is less and less, but, as a matter of fact, I believe a certain amount is even now, at this present time, trickling into the ports and harbours of this country. I believe that in the Port of Hull very nearly one shipload of timber is coming per week. Cannot we do something to increase that? I heard a few days ago that a contract for a thousand locomotives had been put out by the German Government. I understand the arrangement was made for it to be shared between Messrs, Krupps and Messrs. Vickers—that this contract should be halved; but how can any firm in this country without proper recognition add to that trade? What is the state of affairs? I believe that Krupps have taken over the whole of that contract and have already turned out nearly all the locomotives asked for.

There is a very much more serious aspect of this case, and a very much more serious result is likely to come. It is the whole re-orientation of European policy. At the Genoa Conference we heard of a secret military pact between Germany and Russia; we heard a good deal about the massing of troops on the Polish frontier. It may or may not have been true—we have heard little about it since. But there are, very ugly rumours going about on the Continent which I heard only a few days ago. Whether these be true or not, they show the sort of intrigues likely to take place if the present policy continues. The rumour that I heard was that there had been a secret military pact between the Russians and between certain sections in Germany, and that, simultaneously with the rising in Bavaria, or somewhere in that part of Germany, there would, possibly, be an attack made on Warsaw and Poland from the other side, that later, probably, a new monarchy would be founded out of Bavaria, and, subsequently, there would be brought about an amalgamation of Austria and Western Germany. These stories may or may not be true. They at least show that something is going on. There is no smoke without fire. The longer we go on adopting a policy of isolation as regards Russia the longer shall we force these countries to intrigue and scheme to the detriment of Great Britain.

7.0 P.M.

There is a great deal of employment in Germany. Everybody is working, but with the state of the market as it is to-day by the end of this year unemployment will be setting in in Germany probably on a scale a great deal bigger than it is in this country now. This is what the British policy of isolation will lead to. I feel that The Hague Conference and the Genoa Conference have definitely done some good. They have definitely broken down barriers and have begun to remove misunderstandings between different peoples. I believe they would have been carried out more quickly with any other form of government than the present one. I say, without wishing in any way to apologise to the Prime Minister, that I believe the greatest obstacle with which he has had to contend during the last three years has been certain sections of the Press. On every occasion when an understanding with Russia has been tried—when Prinkepo or some such other solution has been in sight—the Northcliffe Press has started a campaign throughout the whole of this country and has jeopardised the chance of success of an undertaking which I believe the Prime Minister, or at least part of him—the part of him which sees what is true and right—would have wished to have put into effect if he had not been stopped. We all regret, no doubt, the sad illness which has now befallen Lord Northcliffe, but it may well be that the misfortunes of that Press will turn out to be of inestimable benefit to the peace and prosperity of this country and to the salvation of Europe.

What is the next step? I would like to know, when the Prime Minister replies, what is going to be done. I feel we are not very far off arriving at a solution. Both sides—the Russians and those opposed to them—have tried to achieve certain goats. When you do not achieve your goal, you have to aim nearer home. You have to try not to go quite so far; you have to modify your ambitions and what you are trying to achieve, if you are going to achieve anything at all. That has got to be done by both sides. Nobody—and I am only able to read what is written by the other side—has been more frank in admitting their failures, so far as failures have occurred in putting their system into operation, than those who represent the present Russian Government, We have got to admit our failures. We can no longer overthrow what still exists in that country; we have got to give up any principle of that sort. What is really wanted is a greater amount of good will on both sides; a greater desire to come to terms between the two contending principles which are meeting at these Conferences. One of the best ways of achieving that would he for the British Government to give the fullest possible recognition to the Russian Government. There are business men—I saw one only to-day—who are coming to a successful agreement with the Russian Government with regard to their pre-War concessions. I saw a very big business man, who controls very many hundreds of thousand pounds of pre-War capital, and I believe he is quite satisfied with the negotiations he has been able to carry out with the Soviet Government. These can only be concluded if the Government recognises the Soviet Government. Therefore, in conclusion, I urge that the Government should do all in their power to give the fullest possible recognition to the Soviet Government.

The PRIME MINISTER (Mr. Lloyd George)

The very lucid statement made by my hon. Friend the Secretary to the Overseas Trade Department (Sir P. Lloyd-Greame) with regard to the business of the Hague Conference renders it quite unnecessary for me to dwell upon the proceedings there by way of explanation. All I would say is that I think, having followed this matter very closely now for years, The Hague Conference represents a very distinct advance towards a final solution. Whether it will be a final solution or not will depend, not upon the action which is taken by this country, or by its Allies and Associates, but upon the action which is taken by the Russian Government as a result of these two Conferences. I am glad that my right hon. Friend has made it quite clear that, whether the Conference be a failure or a success, that is no reason why these discussions should come to an end. I rather regret that the Noble Lord the Member for Hitchin (Lord R. (Cecil) took up the position to-night—as I understood him—that if a conference does not achieve all you hope for, you should suddenly become discouraged, allow things to drift, and by that means take risks which the world cannot possibly face at the present moment. The Noble Lord at this moment is engaged in conferences himself. If he thinks he is going to succeed in one conference or in two conferences, in one year or in two years, he is very sanguine. May I say that he will not criticise his own conferences in the spirit in which he criticises the conferences attended by us. I am not saying that as a retort, but am making it as an appeal. I trust, if the Noble Lord fail the first time, I shall certainly not taunt him. If he fail a second time, I shall not chide him; if he fail the third time, I shall not criticise him; and if he fail seventy times seven, I shall then rather admire him, because it will show that he tenaciously clings to his purpose, and hopes in the end that he will achieve something.

I say the same in regard to your dealings with the very troublesome situation in Europe. You are not going to bring that to an end in one Conference or two, or perhaps even in a dozen, and whoever may succeed this Government, I hope they will not be embarrassed by any criticisms or jeers that they may have directed at the present Government because they attended Conferences. Let them be quite oblivious of their part in that respect. Let them take care not to live up to it; on the contrary, let them live it down, and go on "conferencing" until peace be established in Europe and the world has been restored to order. I am saying that in all sincerity, as one who thoroughly realises what the difficulties are, and how impossible it is, except step by step, to achieve the end we all desire. We are too apt to forget that we are only three years from the greatest War the world has ever seen. When I think of that, I am amazed that such progress has been made—I do not mean to say by this country, but by the world as a whole. I do not accept the view of the Noble Lord that affairs are getting worse in Europe. If you compare Europe as a whole to-day with the Europe of three years ago, affairs are better. There are parts of Europe which may perhaps be conceivably worse, but, taking it as a whole, the well which was exhausted by the War is gradually filling.

I do not want to enter into a discussion as to the past in Russia, not that I am in the least afraid—not in the least—of that discussion, but it is barren. I have never been an apologist for the, corrupt ineptitude of the Czarist régime. As an old Minister of Munitions and a Minister of War, I know how much Russia and the Allies suffered from it—how millions of the most devoted, loyal and submissive peasantry in the world were sent to the-slaughter by the million without any arms in their hands, and without any artillery to protect and support them. Therefore, I axe not defending that system, with its pogroms and Siberian prisons. I have never been a defender of it, but when my right hon. Friend says that we are partly responsible for the, miseries of Russia as Allies through the War, I think he cannot possibly have remembered the story a the War. Russia was first in, and first out. We did not start it. It was not we who dragged Russia into it. I do not say that Russia dragged us into it, but Russia fired the first shot, and the first declaration of war was by Russia, and not by us. Therefore, so far as Russia and the Russians are concerned, we certainly have no responsibility for any of the disasters that befell her. On the contrary, we did our very host to repair the deficiencies in the Russian organisation right through the War. At considerable expense—expense that ran into hundreds of millions—we involved ourselves in liabilities in America, in order to support Russia. Therefore, I hope that my right hon. Friend will not do the injustice to this country of saying that we were responsible for the great disasters that befell the Russian arms.

Mr. CLYNES

The Prime Minister is not touching the point which I tried to make. That point is that, after Russia fell out of the War and following the revolution in Russia, our attitude towards the Russian Government, and our support to military excursions within Russia, was to a great extent a contributory cause of the Russian misery.

The PRIME MINISTER

I am coming to that point; but that is a totally different one. I took a careful note of it at the time. The right hon. Gentleman went on afterwards to make other points, and I am going to deal with them shortly—very shortly—because I think it is rather futile to discuss these past episodes. If my right hon. Friend says he did not mean that we were in the least responsible for dragging the Russian peasantry into the War, with disastrous effect, I have nothing more to say. I am dealing categorically with the statements that the right hon. Gentleman made. His next statement was that we did not give the necessary support to Kerensky. We gave every support in our power to Kerensky, and if he failed it was not our fault. There was no request that he made for any material support to which we did not accede. We sent him whatever he requisitioned, and the failure was due to causes to which I do not wish to refer, as I am afraid it would look like a criticism of the Kerensky régime. I come to the third point—that we were responsible for what happened afterwards. I have never been able to accept that point of view. Hon. Members opposite assume that there was a Russian Government established in Russia—something which was called a Soviet Government, controlling and governing the whole of Russia—and that we wantonly invaded Russia in the face of that Government, and stirred up strife, civil tumult and rebellion. [HON. MEMBERS: "Hear, hear!"] I am afraid my hon. Friends have read their history in the columns of the "Daily Herald." It has absolutely nothing whatever to do with the facts. What were the facts? The Soviet, or the Bolshevists, by a coup d'état—by force, not by an appeal to the Russian populace, not by an election, not by seeking the suffrages of the country, but purely by force—overthrew a Socialist Government. The minority which you always have in a revolutionary movement, a small, resolute, extreme minority, prepared to resort to force, and, while their opponents were hoping to quell them by speeches, attacked the Socialist Government, and overthrew it by the sword. Some of the Socialists, undoubted Socialists, seized certain provinces, and had the support of the population there. In other provinces there were con stitutionalists, not followers of the Czar, but men who were in favour of a constitutional monarchy, and there were others, like Koltchak. You had more than half Russia following one régime, and the other half under the heel of a junta, who were governing, not with the consent of the people, but by the sword. Among the former were men who supported us in the War, who organised Russia's resources in the War, who prevented Germany from seizing the national resources of Russia, who were in possession at that very moment of those very territories which they had defended on behalf of the Allies.

Mr. A. M. SAMUEL

They asked for our help.

The PRIME MINISTER

Yes. How can you put that in the category of the invasion of a friendly territory, governed by an established Government, which is there with the will of the people? It is no use treating this question as if we went there in order to overthrow a Government which the workmen and the other people of Russia wanted. Let us be quite frank. They are the de facto rulers of Russia, but Russia lies never asked for them. There is no evidence that Russia ever wanted them. Russia has acquiesced in their rule, and you cannot put it beyond that. But it is only acquiescence in their rule after they had, by sheer force, conquered the provinces of Russia which were attached to other forms of government. I only want to correct the theory that we invaded a friendly country. I regret that it should be necessary to go into this question, and I would not have done it had it not been that two right hon. Gentlemen, speaking from the Front Bench opposite, thought it necessary to take up the bones of the past, and to fling them at the head of the Government.

I come, therefore, to a much more genial task, and that is the consideration of the present. For five years there has been a Soviet régime in Russia. During the whole of that time the enormous resources of Russia have been practically inaccessible to the world. It is idle to pretend that is not a loss to civilisation. It is, The trade of the world is suffering from the fact that the world is impoverished. You find that India cannot buy from us, because she cannot sell to Russia and to other countries, and that China cannot buy to the same extent. Trade is interdependent, and the moment you lock up the resources of a great country like Russia, then to that extent you deplete the resources through which the trader does business, and provides employment for the multitude. The only question is, Is that to continue? How long is it to continue, and is there anything that Governments can do to accelerate the restoration of normal conditions? That has been frankly examined by conferences, attended by about 26 different nations, who have thought it quite worth while to come together twice, in order to examine the conditions upon which their own peace and prosperity so much depend. There are people in Russia who imagine, as my right hon. Friend very fairly stated, that an arrangement with us and other Powers is entirely to our advantage, and there are people in this country who think that an arrangement of that kind is entirely to the advantage of Russia. It would be to the advantage of both—if it could be done.

What is the condition of Russia? It could not very well be worse. It is a country of infinite resources, which, during the last few years, has been visited by every conceivable calamity. There was war and war which inflicted greater losses in killed and. wounded than were suffered by very nearly all the allied countries put together. The losses were terrific. If you put all the dead of all the other allied countries together, you would find that the Russian figure would surpass it. We must not forget that in our reckoning of the. Russian peasantry when we are out to criticise them for a premature peace. That was the first fact. Then came a revolution. A revolution may be necessary; people may be driven to it, but, nevertheless, a violent revolution is a calamity to a country. If a country cannot save itself without a. revolution, it is just like an operation—it may be necessary, but it is debilitating, it is destructive, and it is very terrible. There were two revolutions; and then civil war. What greater disaster could happen to a nation than civil war? It raged for two or three years, tearing through the vitals of Russia. Another calamity was that Russia has had every form and kind of bad government, a succession of had government. Think, of every conceivable kind of bad government! It has been inflicted on Russia. [An HON. MAMBER: "We have got one, too."] Well, it has many faults. Then there were pestilence. drought and famine. It is difficult to think of any category of disaster to which Russia was not subjected in the, last seven years. That is the country with which you have got to deal.

Are things going to get better? Things will not get better in Russia, and it is no use pretending they will, until Russia falls in with the civilised world. I have been reading a very able document, placed in my hands by an Englishman who has just. returned from Russia. It gives a very vivid and striking account of the country. I think it represents the real state of things. There is an appearance of plenty in some districts. You find some people well-dressed; you find them even daintily dressed, and wonder where those good clothes, and excellent boots and those dainty fripperies come from. You say, "Here is a prosperous Russia; its factories are working—its textile factories, its boot factories." Then you begin to discern what has happened.

Undoubtedly a change has come over government in Russia, and the people are bringing out their hoards of old clothes. Russia. is dressing in the fashion of pre-War, in clothes which have been hidden all that time. But there is nothing behind. The shops have got everything in the windows; there are no reserves. The factories are becoming derelict; every month is making them drop into decay. They cannot run factories. I said, on coming back from Genoa—and I am still of the opinion—that they are bound to restore the factories, because they do not know how to work them. Getting the Western capitalist as they are called—what I call Western brains, the Western trader, and Western skill—is essential to Russia, to enable her to run her manufactures. What has happened to the railways? They cannot build locomotives, they cannot repair locomotives. The result is that the rolling stock is getting worse and worse; and unless the West come in, you will have permanent ways which are wearing, and along which you can run nothing. If you had the permanent way, the sleepers are rotten, the permanent way is worn out, the locomotives and wagons are out of repair, and in a very short time they will be short of even that which is necessary for the very minimum of requirements. That is the condition of Russia, and that is her need. As for her cur- rency, it is a joke. The gentleman to whom I have referred was held up by a couple of porters and he handed to them 3,000,000 roubles. The porters said, "Is that the sort of payment you are giving to an honest Bolshevist?" He paid 5,000,000 roubles for a little stick of chocolate, and there is no doubt that the ordinary medium of currency is rapidly disappearing. Unless something be done, and done soon, Russia will be reduced to something like primeval conditions, property owners will have no property which can be restored, and there will be nothing but the sites of the railways which will be of no use.

It is idle to talk about "recognition" in these conditions until you restore the country. On the other hand, there is the need in this country for orders for the very things of which Russia stands in need, such as locomotives, engineering, and all kinds of agricultural implements, so that the two needs together make one common opportunity, and the question is how can it be done? My right hon. Friend the Member for Platting (Mr. Clynes) asked: "Why do you not give recognition to Russia first, and all the rest will follow? Send an Ambassador to Moscow, to be followed by a train of bankers, financiers, manufacturers, traders, and so on." If you sent out the best Ambassador we possess, he would not be followed by a single banker or trader until the necessary conditions were established, and to say otherwise is really misleading the public. Russia should understand the only conditions under which it is possible for the West to come to her aid, and until she thoroughly comprehends that fact, no business will be done.

Misleading statements of that kind only encourage Russia to hesitate. They say, "Let us wait. There are people coming who will put all these things right. They will advance us credit, and give us the necessary things we want." But they will not do it. As a matter of fact, they dare not, and until normal conditions have been restored in Russia, it cannot be done. Therefore, in so far as my feeble voice can reach, I want the Russians thoroughly to comprehend, to appreciate and understand that until those conditions have been restored it will be idle for them to seek any credits or any aid from the West.

In my judgment, one of the greatest advantages of these Conferences, in a very large measure—in fast I think it was our greatest achievement—was the process of educating Russia to an understanding of the facts. As my hon. Friend has already said, the Russians are getting to realities. They have among them some very able and intelligent men. I have had a great deal to do with Russians during the last e or six years, and I do not think that I ever knew Russians who were more able men than those I met at these Conferences. As long as you have conflicting statements made by other people, there will be delays but when they once realise what has to be done, then they will act upon our advice. We cannot give credits to Russia until she has established security. Until that has been done, Russia is not going to get Government Loans from us, because that is impossible. The loans were only granted to Russia during the War when it was a necessity, and before the War the Russian Government had to seek its loans in the ordinary market like any other Government. It is no use trying to draw a distinction between the Czarist régime and the Socialist régime. The Czarist Government had to go upon the strength of its own credit to the markers in France and here, and the present Russian Government must do the same. although it would be idle for them to attempt to do so under present conditions.

I put it in this way to hen. Gentlemen opposite. Here we have the only people who can restore Russia. As my hon. Friend (Sir P. Lloyd-Greame) has already said, the only people who can really restore Russia are those who were engaged in Russian trade before the War. Unless their interests be made secure. and encouraged, I do not know of any other agency by which you can do it. Our Government cannot do it, and who has to do it? The people who are interested in that kind of trade. But how can anybody expect them to do this when the investment in private property in Russia is not regarded as a sacred trust to be undertaken by the Government? [Laughter.] Hon. Members on the Labour benches laugh, but supposing, instead of this being property that has been confiscated, it had been wages. I will put the ease quite fairly. [An HON. MEMBER: "The same as South Wales!"] Yes, there were workmen from Wales who went to Russia, and founded a town with a Welsh name. Supposing they went there as workmen in Russia, and were turned adrift, without their wages being paid, their cottages were confiscated, their furniture either burned or destroyed, and they were sent away without a penny in their pockets, and suppose it was a question of asking a number of these workmen to go back to Russia under such conditions. How many would be prepared to go back! I do not think you would get a single bus load to leave the most unemployed area in England under those conditions.

Mr. SUTTON

That has been done in Lancashire.

The PRIME MINISTER

That is not the question at issue. I am trying to show that there is no difference between the confiscation of private property and wages. But this is not so much a question of property as a question of security. Men are not going to invest their capital or their labour unless they feel that there is security for both in that country, and that is the first fact which the Russian Government have to recognise. The next point is, how is security to be established? My hon. Friend stated quite clearly what is the position of the Allied experts at The Hague, and he has laid down the only conditions which will make it possible for credits with Russia to be established. Russia must first of all accept her liability for credits granted to her before and during the War, and I understand that she has expressed her willingness to do that.

Lord R. CECIL

When?

The PRIME MINISTER

A statement to that effect was read out by my hon. Friend. The difficulty has not arisen over that matter, but over the question of the restoration of property. With regard to property, Russia must either put the owners of private property back into their old position, under some workable terms, or she must give real compensation in one form or another. Is Russia prepared to do that? I understand they are taking those propositions back to their own Government for consideration, and we are awaiting their reply. If they are prepared to do that, and to carry out loyally their undertaking, then it is not a question of waiting until the very last transaction has been fulfilled, because that is not the point. It is a question of Governments being satisfied that Russia is likely to carry out her ender-taking, that she is willing to carry out her promises and pledges, to carry out the agreement she has entered into, and put back the owners of property into their former position wherever it be possible, and to show us that they intend to do it as rapidly and effectively as they can.

As I stated here before I went to Genoa, and as I have stated several times since, that will be the time for recognition. The time for recognition is when the Russian Government has not merely given an undertaking and verbal guarantees, but has given some practical example of her intention to carry out such an undertaking. That will be the time to accord to Russia full diplomatic recognition. Until then, it will be impossible for us to do that. It would be a mistake. It would be a mistake on the Russian part; it would give them nothing unless they established their bona, fides, and they have to do that either by restoration or by compensation. I believe their representatives at The Hague realise that. They are taking back these propositions to their Government, and if their Government, profiting by the terrible experiences of the last six years—which have shown how impossible it is to govern a country on these disastrous principles—if they profit by this experience, they will give us that guarantee, and they will not only do that, but they will proceed instantly to put the guarantee into operation. Once they do that, there will be an inducement for the capitalist to go there. There will be an inducement for men seeking for investment to place their money in Russia. It is no use hon. Members smiling at that; it is a purely business proposition.

These people have tried the other experiment, and have failed. They have now, I am perfectly certain, enough discernment to realise that they must proceed on other lines. If they do it courageously, well and good. Every time we have discussed this matter, instead of giving plain, simple, straightforward answers, they produced a brilliant piece of writing, which gave great satisfaction to the person who wrote it, great satisfaction to the unthinking man in Russia, and to some people here, who said, "How they score!" These "scores" have been fatal, and I earnestly hope that Russia will give an unequivocal and a simple answer. Then peace will follow. It is not a question of the success of The Hague Conference, or of the Genoa Conference. That is not what we are looking after. What we want is to restore the normal life of Europe. I believe that can be done. It can be done if there be bona fides on both sides. There is already a better spirit. The mere fact that all those nations which were arming and intriguing against each other have sat round one table, and discussed their common interests, has already produced good results. When there was a danger of the break-up of the Conference at The Hague—and some people wanted to break it up—all the Powers along the frontier which a short time since were arming against Russia, signed a paper begging that the Conference should not be broken up. And the mere fact that you have this new desire to work together is worth something. If it is only on that basis, and that basis only, that peace will be restored to the world, and there will be a restoration of prosperity to many millions of people.

Colonel WEDGWOOD

The Prime Minister congratulated the Noble Lord the Member for Hitchin (Lord R. Cecil) on the tenacity with which he sticks to his guns, and told him that if he did not achieve disarmament at present he will be forgiven for his non-success, and that forgiveness will be extended to him seventy times seven if necessary. Surely these words directed to the Noble Lord might well be addressed by the Prime Minister to himself. For the last three and a half years he has been striving, he has told us, in one way or another, to bring Russia back within the comity of nations. It is related of George IV that towards the close of his life, so often had he told the story of the part he took in Waterloo, he came to believe that he really had been there. The Prime Minister has been trying to achieve the enormous result of bringing Russia back to the Coalition Government. He has told us that so often that he will really believe that all along the Coalition Government of Great Britain has played a noble part in trying to restore peace to Russia, The tragedy of it is the right hon. Gentleman's heart throughout has been in the right place. Prinkipo was his true self, Ever since then he has been seeking, with his hands tied more or less, to settle the Russian question, even when his colleagues have dragged him at the chariot wheels of Denikin and Koltchak. He knew it was wrong, but he could not. help it. When it was a question of a Polish war, he knew what the frontier ought to be, but it was altered to the disadvantage of Russia against the wishes of the right hon. Gentleman. Again he knew it was wrong, but he could not help the French policy. Even within the last six months at Genoa he again would have made peace; he knew peace was possible, he knew a settlement was possible, and he might have achieved the result in spite of his evil companions had it not been for the wickedness of M. Poincaé. It is always somebody who prevents the great and good man doing what is just. I am afraid there will always be someone to prevent justice being done as long as the. Prime Minister of England lacks the moral courage to do what is right in spite of what his colleagues may think.

I ventured to ask the right hon. Gentleman what his policy was. Apparently we are to go on with this endless vista of conferences until they reach seventy times seven. We are to go on educating the Russian people bit by bit, at intervals of six months giving them a fresh lesson, and an expensive one, too, as Under-Secretaries do not go out to these conferences for nothing. We are going to carry on this series of educational conferences until the Russian Government puts on a white sheet, takes a candle in each of its two hands and apologises for the crime of being socialistic. I really do not see what good is going to be gained by forcing a Government to apologise for its past. The right hon. Gentleman himself, with the wonderful ability be has in reconciling two parties who will not sit down together, might from his experience elsewhere have drawn the conclusion that it is possible to get right results out of a country without forcing it formally to apologise and recant. Apparently those wicked people who fomented civil war have only to say, "We will allow the capitalist to come back and give him assistance," and in spite of their lurid past the right hon. Gentleman is willing to shake hands with them, to embrace them, and to forget all the bloody incidents of the Russian rebellion.

If the policy of the Government in connection with Russia is to consist of waiting to see whether they apologise, then I say it is the feeblest policy that even this Coalition Government has ever adopted. To wait until the Russian Government apologise means to wait until more and more people in this country are on the brink of starvation. I can quite sympathise with the right hon. Gentleman when he is pressed to lend money to Russia or Austria or Germany. I understand all these suggestions are being made to him at the present time. I can quite sympathise with him in refusing to look at any of them, for, after all, if there is any money to invest the people of this country would prefer that it should be so invested as to give employment here. The only thing we say is if you open up diplomatic relations with Russia, if you again will treat Russia, in spite of her Government not meeting with approval in Downing Street, as a civilised Government., although she has a Soviet ruler, then in time the educational process which you are going to promote by conferences will take place through ordinary diplomatic exchange and commercial exchange, and will gradually extend.

I admit that for a long time you will not get any capitalists to put their money into Russia. But that will come sometime. They will not put money in unless they can be pretty sure of a big return. The lack of security means a demand for a higher rate of interest and the people of Russia will have to pay in high prices for the foreign goods which they buy for the lack of security now existing. That security has to be built up again. No dramatic act by the Russian Government will induce the ordinary investor to put his money into Russia. He is considering very dolefully his other foreign investments, and he is not likely to spring into Russia and put his investments there, merely because the Russian Government have signed a document saying that they are going to be good boys in the future.

8.0 p.m.

It seems to me that the only policy which can be of service to Russia is the policy advocated by my right hon. Friend the Member for Platting, of sending your Ambassador to Russia; to give her recognition and to treat her as one of the ordinary civilised countries. I do not believe there will be much trade done with Russia for many years to come, but, at any rate, we shall be doing the right thing, and we shall not be deflected into dubious courses by the pressure of foreign administrations which cannot have the interests of Great Britain or the interests of Europe at heart as much as we whose whole trade depends on the recovery of Europe. The right hon. Gentleman startled me by suggesting that really the position of Europe to-day is far better than it was two years ago. Surely he does not really think that the position is improving. Surely he realises that his administration has not resulted in saving Europe, although it may have resulted in preventing England herself sinking into the same bottomless pit of insolvency. He has only to look at. Europe a year ago to see how far, far worse we are to-day than we were then. A year ago the Austrian crown was worth just about what the German mark is worth to-day; and, where the Austrian crown is to-day, if this system of letting Europe-rip continues, the German mark will be this time next year. The gradual "rouble-isation" of the coinage all over the East of Europe has been progressing throughout the last three years. There has been no check; things are getting consistently and continually worse. The reflection of this continual deterioration upon the trade and industry of this country is becoming so marked that even the children of the electors recognise it, as has been shown at Pontypridd. Trade is getting worse. The right hon. Gentleman has not got any cure for it. He does not know what to do. He is at his wit's end. Is it not really about time that he considered whether his whole policy during the last three years, of allowing British policy to be chained to the chariot wheels of French Imperialist diplomacy, has not had something to do with the lamentable result that we see in Europe to-day?

This consistent, perpetual pressure upon Germany, hanging a gigantic and undefined loan for reparations over the head of Germany, makes it, first of all, impossible for the German nation to recover, so that our best customer in Europe may again be able to buy our goods. It also makes it impossible for the French Government to balance their accounts. As long as they go on reckoning upon getting vast problematical sums from Germany, they do not balance their Budget, and now, as the right hon. Gentleman knows, the only question is, when France at last becomes disillusioned as to the possibility of getting real substantial reparations out of Germany, whether the franc will not suffer from the same disease that is already affecting the currencies of the rest of Europe. The reparations have been a curse both to the country which was to pay and could not, and to the country which was to receive the reparations and did not. There is complete instability in both cases. This policy is not only bad for Germany, and we know it; it is bad for France, and we know it; it is bad for the whole of the rest of Europe, and we not only know it but are suffering from it more and more.

Is it not possible, even at this late hour, for the Prime Minister to deflect his course into a different direction? Nothing can be clone unless the economic Clauses of the Versailles Peace Treaty are altered. That must be done somehow. I quite admit that it is difficult, when you have signed in conjunction with many other parties, to alter a Treaty. But the Prime Minister knows that pressure can be brought to hear upon the other signatories to that Treaty, owing to the financial control which we have, owing to the financial obligations which are owed, not only to this country, but to America. The position of England and America, so far as any alteration or revision of the Peace Treaty is concerned, is comparatively simple. I would beg the Prime Minister if and when—I am sure it must come sooner or later—he comes to the conclusion that the Versailles Treaty must be revised if civilisation is to recover once more in Europe, to get closely into touch with America on the question. Let us see that the two Anglo-Saxon races of the world, who are the financial centres of the world, who really are the only two Powers that count in the world now—let us see that they pull together in order to attempt the salvation of civilisation.

Our interests and the interests of America at the present moment are one. In both countries there are millions of un- employed— unemployed because their customers are unable to buy their goods. It seems to me that the whole trusteeship of civilisation rests upon them. Civilisation in Europe is dying, and its death can be measured by the gradual fall of the currency its salvation, if it is to be brought about, depends upon the Anglo-Saxon races. Our interests are one, and our joint power in forcing any revision of the Versailles Peace Treaty that we desire to see is certainly far in excess of that of any other combination in the world. Indeed, when England and America together are aiming at a financial policy to save civilisation, it would be worth bringing a certain coercion to hear in order to achieve that result. I do not think the Prime Minister sees that the alternative is a desperate one He thinks we are getting better. He cannot think, although if he consults his experts, he must realise, that, as each country successively goes down the bill, the opportunities and the hopes of saving civilisation get less and not mere. The trade of this country, while it may have some temporary spurts, due to special circumstances across the Atlantic, must consistently get worse and worse as Europe gets less and less civilised. The people there will not buy our goods. The whole trade which was built up in the nineteenth century is vanishing. The danger is getting daily more imminent. The time must come, sooner or later—by this Government, if it is wise if not, by some other Government in this country—when the Government. of Great Britain, in conjunction with the only other Government in the world whose interests are the same as ours, will have to revise the Financial Clauses of that Treaty, in order to do away with the hopeless rush to ruin which is the curse of Europe and the result of the Versailles Peace Treaty.

Mr. JAMESON

The speech to which we have just listened is an instance of the unfortunate habit of conceiving beforehand what your opponent is going to say, composing your line of criticism upon what you expect and hope is going to be the line of his speech, and then firing it off. Of course the result, in such a case, of your own speech, depends on whether your opponent has actually said what you hoped and expected that he would say, because, if he has not, you find yourselves throwing sticks at an Aunt Sally of your own putting up, and not criticising in the least the speech which has just been delivered. As I understand it, the main attack of the hon. and gallant Member for Newcastle-under-Lyme (Colonel Wedgwood) upon the Prime Minister was that the Prime Minister had said, as he put it, that he was not prepared to have any dealings at all with the Soviet Government until the Soviet Government stood in a white sheet and cried mea culpa. What the Prime Minister did say was exactly the opposite. The Prime Minister was appealing to the House and to the country to bury the past altogether. He was appealing to this country not to think of the unfortunate history and circumstances of the Soviet Government in the War, and its unfortunate relations with the civilised world ever since; and, on the other hand, he was appealing to the Soviet Government to forget its theories and its ideals, whether practicable or not, and to come down to business, to set its house in order, so that it might invite decent people to come into its house with a sense of security—so that, if they came into its house with full pockets, they might do so feeling that they would not have their pockets picked. It was common sense to say that, unless they had that feeling of security, they would not come into the Soviet house and carry their riches into it.

That was the burden of the Prime Minister's speech, and it is a complete travesty and misrepresentation of that speech in toto to say that it constituted a demand upon the Russian Government that it should appear in the guise of a penitent and ask that its sins might be forgiven. The hon. and gallant Gentleman went; on to say that these Conferences were vain as an attempt to educate the Russian Government, to bring the Soviet to some sort of co-operation and good will, and to convert it to the idea of entering into relations with the civilised world. But when one listened to his own suggestion as to how this necessary educative process was to be carried out, it certainly did not compare very favourably with the Prime Minister's, because he said that the educative process was only going to be carried out by sending an Ambassador to Moscow with the whole train of an embassy. He quite frankly admitted that he was even more -pessimistic than the Prime Minister. The Prime Minister looked forward to good will and co-operation and a manifestation of willingness to enter into honest dealings upon the part of all Governments, so that trade might be resumed at some not remote date. The hon. and gallant Member for Newcastle-under-Lyme, while deploring, and blaming the Prime Minister and the Government for the fact that trade was not being resumed with Russia, said that there was no prospect of trade being resumed with Russia for many years, and that, therefore, there was no question of commerce at all, and the only glimmering of hope that was to come must come through the establishment of a British Embassy in Moscow. To my humble mind, the common sense of the Prime Minister's appeal, in view of the situation, was much more cogent. What he said, and what is obviously the truth, is that Russia has no particular use for ambassadors; that what she wants is capital to build up the civilisation of the country again; that she does not want a train of attachés; what she, wants are locomotives, and rails, and generally engineering works arid goods of all descriptions. The task of the British Government, and of every Government of good will, ought to be to bring these things to the door of Russia, and if the individual people of this country are not encouraged by the Russian Government to give Russia bread, it is in vain for the Government of this country to offer them a stone in the shape of an embassy at Moscow. It strikes me that that is obviously sound sense. I was very glad to hear the optimistic note which was sounded in the speeches, as far as I have heard them, which have been delivered, that something had been carried away from The Hague Conference, and that relations with the Bolshevist Government were not absolutely going to be broken off. The Prime Minister really went much further than that, because he indicated that he disapproved entirely of the old Tsarist régime. I think the restoration of a Tsarist régime in Russia would obviously be a tremendous misfortune at present. The first thing a Tsarist régime would be likely to do, with the Imperialistic traditions of Tsarism, would be to start a war against Poland, Esthonia and the other countries which have broken away from Russia, and try to join hands with Germany and inaugurate a new partition of Poland and all the rest of it. It is rather a curious result, but I am convinced that the continued peace of Europe depends in no small degree upon a Republican Government and a purified Russian Government, but not a revolution in the present Government. I think we are much more likely to find friends in such a Government than in a Tsarist Government if it was restored, and, as far as I can understand, the trend of the Prime Minister's remarks, it was in no way an appeal to get back to the old régime or to humiliate the present Russian Government, but it was a proffer of friendship and renewed trade upon the only terms that trade can be renewed with Russia, and that is that Russia shall convince the private trader in this country that he will not lose everything he has if he invests and carries his money to Russia.

Mr. RHYS DAVIES

I have listened with considerable interest to the Debate from the very commencement. We, on the Labour Benches, have always evinced a general interest in Russia. We are interested in the subject because we have a faith—it may be a simple one—and a belief, that if this country could once more be connected with Russia and could trade with Russia, as was the case prior to the War, our unemployment problem would be partly solved. We have come to the conclusion that very little can be done within these shores to solve this great problem of unemployment. We are conscious of this fact, that the world must produce more of the necessities of life and produce them on a cheaper scale than has hitherto been the case. That will probably appeal to hon. Members opposite. But those goods can only be produced cheaper when international goodwill prevails. We who negotiate conditions on behalf of the workers are told that our people must accept, as a consequence of the War, as a penalty for the War, as a payment for the War, that during the next generation, at any rate, they must be satisfied with a standard of life at least 25 per cent below that of 1914. We are of course not accepting that philosophy. We are going to demand that our people shall be employed under good conditions in manufacturing goods required by other countries; that in the main is our interest in Russian affairs. One important point has emerged from this Debate, and that is that there was a conflict of attitudes at The Hague. Our representative, whatever ability he might possess in arguing the case for this country, after all represented Western civilisation, in the words of the Prime Minister. Western civilisation, said the Prime Minister, and brains from Western countries must restore Russia. He meant by that that Russia would not be restored at all, until Western capitalism went to its aid. Some of us on these benches do not believe that unbridled, unbarnessed capitalism is such a good thing. When the Prime Minister was speaking, as he is capable of doing, with the instinct of his nationality, perorating in this House, I was reminded of a spot in the little country to which he and I belong, and when he pictured, as only he can, the. poverty and destitution in some parts of Russia it reminded me of the Blaina and Nantyglo districts of South Wales. There are spots in this country, under a capitalist régime, which will compare with almost anything by way of poverty and destitution in any other part of the world. I think that the value or otherwise of capitalism is the main fact which has emerged from The Hague Conference.

Let us pursue this point for a moment. Here was the representative of a first-class capitalist Government—not only a capitalist country, but a capitalist Government. The present Cabinet does not represent the economic theories or the view of the British people in relation to capitalism at all. In going about the country one finds that there is a distinct change of attitude among the British people, as witnessed it the two recent by-elections in South Wiles: the working people have no longer that faith in private capitalism that the present Government seems to have. In speaking of The Hague Conference, and the work our hon. Friend did there, I was very interested in a part of the speech delivered by the Parliamentary Secretary to the Treasury. One would almost imagine that this paragraph is taken from the speech of a Labour agitator when he says: The British Delegation came to The Hague willing, nay, eager to find some means for the restoration of the productive power of Russia and the re-institution of her foreign trade. They desired to do so for the sake of the Russian people. I can stand a great deal of hypocrisy, but it is sheer, colossal hypocrisy that a representative from this country should go to The Hague and say that the British Delegation went there to try to reestablish trade between this country and Russia for the sake of the Russian people. Nothing of the kind. I can remember the attitude of the Prime Minister towards Russia when he spoke in quite different language from that which he talked this evening. I can remember the opportunity occurring to myself at a Labour conference calling upon the workers of the country, if the Government of the day declared war on Russia, to down tools as a protest. At that time the sentence which was on the lips of all our statesmen was that we must set a sanitary cordon around the whole of Russia in order to prevent Bolshevism spreading to the rest of Europe. It is a truism to-day, as it ever was, that you can go to all the forests of the world, you can cut crosses for all your agitators and your prophets, you can crucify the agitator, you can kill him, you can destroy him, you can bury him, and you can burn him, but he will always resurrect on the third clay. That is the case with ideas, irrespective of where they emanate.

I want to proceed with the main reason why I rose to speak. I am informed on very good authority that at The Hague Conference, on the 7th July, the Russian Delegation presented a memorandum to the representatives of the Powers, setting forth in full detail the concessions offered by the Russian Government. There is a point in this connection that I fail to understand. The White Paper says nothing about concessions that were offered by the Russian Delegation to the Powers. In listening to the Debate I have been convinced that Russia has very little to give to any country except concessions, and in this connection I agree with the statement made by the Noble Lord (Lord R. Cecil) when he spoke about concessions. The memorandum placed before The Hague Conference by representatives of Russia stated: One of the modes of reconstruction of Russian industry proposed by the Russian Government is the direct participation of foreign capital in the administration and direction of this or that enterprise or combination of enterprises. As a general rule the Soviet Government considers that the most convenient form which this participation can assume is that of mixed companies or associations in which there participates on the one hand foreign capital and on the other capital that can be invested directly by the Soviet Government. Then follows the concessions the Russian Delegation was prepared to make to the Powers, and I repeat that I have been somewhat surprised that scarcely anything has been said about it by the Prime Minister or by the Secretary for Overseas trade, because in these concessions, strange to say, there are these provisions: There shall be concessions in regard to petroleum, in the areas the positions of which are clearly specified in Baku, Grosny, Ural-Emba, Kuban, and Turkestan. Following those concessions there are others in relation to minerals, forests, butter, sugar, cement, phosphates, and manures. Surely, if the Russian Delegation were prepared to offer concessions by way of minerals, forests, and other things this House ought to be informed what those concessions were, and what was the attitude of our representatives towards those concessions when they were offered. I do not think it is fair to the House that nothing at all has been said in that connection. It has been discussed pretty freely in the, House as to whether we are to teach the Soviet Government the good things that appertain to capitalism or whether they must die without our help. That is the main fact that emerges from the Debate.

It would have been very difficult even for the Prime Minister, if he had lived in Russia from 1917 onwards as an ordinary citizen, and had found out the attitude of the British Government towards Russia, not to have been a leader in the Bolshevist cause in Russia. His spirit is such that he would naturally have been one.

Mr. HOPKINSON

Hear, hear!

Mr. DAVIES

And the hon. Member for Mossley (Mr. Hopkinson) would be in opposition to him even then.

Mr. HOPKINSON

He is now.

Mr. DAVIES

The hon. Member understands economics so well that I am sure he could settle the Bolshevist problem in a very short time. We have been told in the discussion that the Government, through the Prime Minister, desire to bury the past. That is a very noble sentiment. We would all like to bury the past. The past of some people is better than the past of others, but we would all like to bury the past. But I think the Government ought to be reminded occasionally of one or two things that have transpired in the past. I cannot see in any statement that has been made this evening on behalf of the Government that our representatives have in the least changed their attitude towards the Soviet Government. Why is it that the British Government affects to be more moderate and more modified in its attitude towards Russia to-day than hitherto? Not because our Government has come to believe that the Russians have changed their attitude, but because of the statement made by the Prime Minister the other day that you have to accept the fact, whether you like it or not, that there are 3,000,000 men in the Bolshevist army on the frontiers. That is the thing, unfortunately, that has convinced our Government. I am one of those who believe that we ought to have good relationship and goodwill between peoples, not because peace is cheaper than war, but because business, trade and employment in all countries will be better if we establish peace and goodwill all round.

We are asked whether the Soviet Government will give up the idea of communism or socialism in favour of capitalism. That is one problem before the House this evening. I am not enamoured of the Soviet régime. But I am confident of one thing, that if the statesmen of this or of any other country had been thrown up as leaders in Russia after the War, after two or three civil wars, after famine and pestilence, I am not sure that even the Prime Minister would have conducted himself much better than the people who have controlled Russia during the last two or three years. I dislike those references to bad Government in Russia. What about our own Government? Under very much better auspices what have they done? We have in this country, under the delights and pleasantries of capitalism, people in Lancashire, which I know very well, and people in South Wales, absolutely on the border of starvation. That is happening under all the glories of capitalism and then we are told that all the trials and troubles of Russia arise because of socialism and communism. Socialism and communism have never yet been tried in any country in the world. They have never had an opportunity, not even in Russia. I am hoping that some day they may have an opportunity, and then the hon. Member for Mossley will presumably be in opposition still. I trust, however, after the criticism that has been levelled that these Conferences will continue. It is a good thing for representatives of our Governments to see, face to face, the men who have been painted in so much red by the Press of this and other countries. It is a step forward, and I was glad to hear the Prime Minister say that the representatives of the Bolshevik Government were as intelligent as any others. Imagine the discovery, that a Bolshevik can be as intelligent as a Welshman! It is a strange discovery. I trust we shall continue the Conferences, and I should like to know what is the next step we can take, because if we can secure trade with Russia, the engineers in Woolwich, on the Clyde and in Manchester will find some work to do. It is the duty of statesmen and of the Government to sink their prejudices about forms of Government. To them the comfort and prosperity of the people of their own country ought to be their first consideration.

Sir GODFREY COLLINS

Having listened to the major portion of this Debate, and read the White Paper circulated by the Government, I am anxious to put some questions to the Financial Secretary. As I understand, the Conference at. the Hague broke down mainly because the Russian Government would not recognise the private property of the nationals of different countries. There appears to have been some reason to hope that the question of public debts contracted by Russia might have been settled. On page 6 of the White Paper there appears to have been drawn up a statement by the non-Russian Sub-Commission of the amount of claims by the nationals of dixerent countries against the Russian Government. Can the Financial Secretary tell the Committee the total amount of these claims I have heard it stated that the total amount is only some £6,000,000 to £7,000,000. I hope that before the Debate closes the Committee may have some information on that point, so that the public may judge the total extent of the claims of the different nationals against the Russian Government for the property of their citizens in that country.

The speech of the Prime Minister dealt with the future. What is his policy? Is it not that he is waiting on events? We heard much in the early months of the year of the Genoa Conference, of the glorious hopes that that Conference was going to realise, of the peace between nations, of the great trade which would result. These hopes have not matured. The Genoa Conference has failed and the smoke screen of the Hague Conference has gone the way of the conferences of the last two years. I rise to appeal to the Government with a definite suggestion. We can no longer wait on events. The people in Russia to-day are stricken with disease. During the last 12 months and more I urged that the British Government should help the Russian people in the famine districts. To-day disease is rampant throughout Russia. The Government are aware that in February or March this year the Polish Government called a Conference at Warsaw to consider this matter. The parties who met at Warsaw published a unanimous report. Their appeal was to the Allied Governments to come into Russia and help them to stamp out the cholera and typhus raging there.

If we are to succeed in securing the assistance of the Russian Government and the Russian people to trade with us in future, I would suggest that an enlightened self-interest in this respect would hasten that day. Russia in this matter is eager to co-operate with Europe, and in the report to which I have referred to it is stated clearly that some £2,000,000 or £3,000,000 spent in that way would go a long way to stamp out, if not entirely, the cholera and typhus which are raging in that country to-day. In that connection, I noticed a speech made by the President of the Board of Education the other day, in which he urged that there should be what he described as a sanitary cordon put around Russia. That policy, I suggest, is a mean policy. It may secure health insurance so far as Western Europe is concerned, but it will not stamp out disease inside Russia itself. The Noble Lord the Member for Hitchin (Lord R. Cecil) earlier in the Debate appealed to the Government on this subject. I am anxious to supplement his remarks. My appeal to the Financial Secretary is this. Having been in close touch as he has been with the Russian representatives at The Hague for three or four weeks, is he not of the distinct opinion that if this country, moved by a humanitarian spirit, is willing to assist and give credit to the extent of some £2,000,000 or £3,000,000 to stamp out disease in that country, it will hasten the day when the Russian Government, composed as it is of men holding views which seem to many in this House, and outside-it, strange, may, through our readiness to assist them in this matter, be more willing to face the practical question which the Financial Secretary and the Parliamentary Secretary put to the Russian members at. The Hague.

I wish also to point out to the Financial Secretary that while this disease is raging in Russia to-day it is difficult to trade. We know that many men associated with Dr. Nansen have lost their lives in trying to stamp out disease in Russia during the last 12 months. Surely, by granting credits to the extent of from £2,000,000 to £3,000,000, the money, which would be spent in that Country in stamping out disease, would be well spent. There are the two points on which I wish information. What is the total suns which the nationals of all countries claim against the Russian Government, and will the British Government take into consideration the question of giving a grant of from £2,000,000 to £3,000,000 to Russia, through the League of Nations, to help Nansen and his colleagues to stamp out the cholera and typhus which are raging in that country?

Mr. JOHN MURRAY

I had not intended to intervene in this Debate, but some of the things which have been said, especially from the Labour Benches, have provoked me to make some observations and try to present the case of Russia as to the prospect and possibility of our being able to help Russia in the way in which it appears to my mind. With regularity, unanimity and emphasis speeches come from the Labour Benches blaming the Government and the British people for all the sorrows and difficulties of the Russians. The less one knows about the political problem the easier it always is to blame the Government, and the opponents of the Government have taken and will take the line of least resistance in this matter, which is to put aside the facts, to ask no questions of themselves or others regarding the objectivities of the case, and simply to pile up blame and accusation against the Government. This is the problem of helping a nation. The prime condition of the beginning of that help in effective ways is confidence. From the Labour side of the House there come accusations against the Government that the British nation, British policy and the British Government are solely responsible for the lack of confidence in this matter. I would ask hon. Members to look elsewhere for this great lack of confidence, for great it is. I would ask the Committee to look at Russia as Russia really is and as what she really is.

We hear a great deal about Communism, Bolshevism and tyranny, and these things are true names for much of what exists and what goes on in Russia to-day. But I would like, if possible, to get down to a simpler and more human and more recognisable description of the state of things in Russia. Before the War Russia consisted of many millions of people, 85 per cent. of whom were not illiterate, as the hon. Member for Silver-town (Mr. J. Jones) suggested, but merely peasants. The remaining 15 per cent. included the upper classes, the middle classes, the bureaucracy and the industrialised masses in the towns. I do not know how much of the 15 per cent. is represented by the industrialised masses in the towns. A just estimate would be, perhaps, 5 per cent. of the whole of Russia. Of that 5 per cent. a great part has already perished. Communism, Bolshevism and unconstitutionalism are fatal to industry, and they have been fatal to Russian industry. The middle classes have perished; the aristocrats have been killed. The bureaucracy, I believe, on the whole is still there. More than ever before the solemn and steadfast mass of the peasantry is Russia.

The position in Russia is not that this Government, or any other Government, has damaged Russia, although damage may have been done, but that a great breach of confidence has taken place inside Russia between the Government of Russia and Russia, namely, the peasantry. That loss of confidence has led to other losses of confidence, the most obvious and serious of which is the entire loss of confidence which outside Governments and peoples and capitalists show towards Russia. Earlier in the evening the hon. Member for Mossley (Mr. Hopkinson) suggested that the only possible way in which Russia could be rebuilt would be that feudal concessionnaires on a capitalistic basis should take over great tracts of Russia. That seems to me to be a fantastic idea. Those who know Russia, those who look at Russian affairs and conditions from a position nearer than this House, know that the hope of Russia lies in Russia itself, in the 85 per cent. or 90 per cent. of its peasantry whom the present Government has antagonised. and between whom and the present. Government there is no proper confidence. The problem inside Russia is to restore that confidence; the problem outside Russia is to do the necessary things, to afford the necessary materials and services when that confidence has been restored.

Each time Members of the Labour party speak of the British Government and the Government's policy, not a personal note or sign of personal knowledge of the situation comes from one of them. The rest of the House understands from them that confidence can be built up by charity from here. The Government is to have confidence. The Financial Secretary to the Treasury is to have immense confidence; he is to have the confidence and boldness and brass to put his hand still deeper into the pockets of the impoverished British people and to hand out this money to Russia. That is what is called confidence on the Labour side. It is charity in reality, and wasteful charity at that. The confidence that is wanted to start a reconstruction of Russia is a new degree of confidence between the peasants and their Government. Who has bottled up Russia? Who has crushed and weakened her energy? Who but the Government of Russia based on the towns, based upon the industrialism which it has ruined? Who but the Government of Moscow, and all the subordinate Governments that draw their strength and armed forces and baleful inspiration from Moscow? There is the problem inside Russia. The peasantry are all individualists. The leadership for them will not come by a capitalist feudalism from the outside, but from the natural leaders of the peasantry. Who are they? They are the big peasants. The movement is there; it is flickering into flame. One day it will rule in Russia and the peasantry will make short work of the pretensions and the preposterous theories of those who now rule in Russia. Observers nearer Russia than this House look to the bigger peasantry to take their natural lead, and to bring Russian policy hack to sanity and safety for Russia and the rest of Europe.

A good deal has been said regarding the share that this country and this Government may take, perhaps in cooperation with the Germans, in reestablishing Russia. It has been suggested, falsely, I believe, that the German nation and ourselves are rivals in the exploitation and re-establishment of Russia. That view will not be borne out in the events that are coming. As regards Germany, it is fair to say that she has not the money to develop Russia. In Germany the scarcity of capital is extreme. All business men are embarrassed. They have enough to do to keep their own businesses running, to pay the immense wages that have to be paid, and to pay immense prices for foreign goods, as there is a shortage of all raw materials in Germany itself. The German industries cannot look forward to developing Russia by themselves. In my opinion, they can do it best or rather they can only do it, by close co-operation with this nation.

If I may suggest a combination of functions between the two nations that seems to correspond to the situation and to the powers of the parties, it would be that this nation, having money, should play the part of banker or capitalist to Germany, which is closer to Russia and has a thousand Germans who know Russian to one Englishman who knows it —that Germany being near, with its costs of transport low, should be the manufacturing and distributing agency, and should have behind it the strength, stability, and sanity of English capitalists. There are difficulties about the plan. There is the political policy of the Bolshevist Government in Germany. Moscow has placed in Berlin an important missionary centre, in the hope of working from that centre towards the conversion of Western Europe to Bolshevism. That mission is ably rim, has money at its command, has the support in Berlin of many thousands of Russian Bolshevists, and is a serious embarrassment and difficulty to the German Government in a political sense. If we hope that Germany is going to co-operate with us in the re-establishment of Russia, and if we think that without such co-operation Russia cannot be re-established, we have to take account of the disturbance and embarrassment caused in the minds of the business men of Germany, by the presence and the activities of that Bolshevist mission. I make bold to say that to-day the missionary zeal of Bolshevism is not exhausted; that it is active in Germany and that it is a real difficulty in the way of Germany taking part with us in the rebuilding of Russia.

9.0 p.m.

I could say more about Germany. The subject is unpopular, it is a little difficult, indeed it is dangerous. But I am persuaded that only on the one hand by the re-establishment of confidence between the population of Russia, that is the peasants of and their Government, and on the other hand by the cooperation of these nations which are most able to help from the outside, can Russia be set on her feet again. We know our own conditions, we know what we can do, and what we cannot do, and what we should shrink from doing in the way of any cooperation, having for its object the re-establishment of Russia. We know little about the state of Germany. A visit of three weeks to Germany recently gave me two great impressions. There was the first-gla[...] impression, that all is well with Germany. The sun still shines there, the people wear clothes and go about their work and seem to have something to do, the greets are swept and clean and life go on and Germany, so seen, on its superficial aspect is a fit co-operator in the re-establishment of Russia. But our must look below the surface in order is realise the truth of the matter. The with I will try to put without wander[...] outside the bounds of order, and in as few words as possible. I would say that many at this moment is torn by strain, and by strife. It is torn by strife of a deep though not a dangerous kind—dangerous for the unity of Germany—any of the Federal States which make up Germany; by strife among the nine or ten or eleven political parties represented in the German Parliament; by strife among the social classes; by severe strife between town and country and by strains of all sorts. There is the domestic strain of attempting to live when the cost of living runs up fortnightly, so that workmen's wages have to be revised once a fortnight. There are the difficulties of finding food, the absence for long days at a time of supplies of meat in any adequate quantity for the population, and the fact of the supplies, when they do come, being present only at prices which the masses in Germany cannot pay. I would mention too, the severe housing crisis in Germany, the painful condition of congestion in which not only the former population of Germany, or what is left. of it, has to live, but also all the incomers, the Germans banished back to Germany from many countries of the world, and from the regions that were taken from Germany by the Treaty of Versailles. I put forward the housing congestion in Germany as a condition of life which tends to create a serious state of nerves. Then there are the political questions of what the reparations are finally going to be; of what steps the French are eventually going to take; of what are the real, final, definite intentions of the Allies. There are a thousand questions which Germany, still undernourished, still striving beyond her strength, still living and working upon her will rather than upon her strength, has to face. There are a thousand things which combine to build up in the mind of Germany a state of nervousness, anxiety, touchiness, alarm, suspicion, and doubt, which is a danger to herself and a danger to Europe.

That is the Germany with which we have to deal as a conquering Power. That is the Germany with which we have to deal as a co-operator in the reestablishment of Russia, if that be a good end to pursue. I put it to the Committee that we ought to think objectively, putting away names as far as they have caused strife, and realising that the internal difficulty in Russia comes first, and must first be relieved. Let us realise that the peasantry must be made or induced, or in some way got, to trust their Government, and that their Government. must be the kind of Government that the peasantry of Russia can trust, and that there must be outside help, coming predominantly, I believe from us, through Germany and through German industry into Russia—we to act as the bankers and the Germans as the undertakers. There I point out again the difficulty for this scheme, which the Bolshevist mission and the Bolshevist machinations in Berlin constitute. I would sum it up in this way. No British Government can put the Germans in funds to trade with Russia. That is for private British persons. Nor can German traders, o r any other traders, deal with the Russian Government. They are not Russia; it is the peasants who are Russia. The true policy is: Hands off the peasants of Russia, so that the private capitalist in England or elsewhere, working directly or working with the help of Germans, may reach the real Russia without interference of any kind whatever from the Government of Russia.

Mr. MORGAN JONES

I desire to apply myself to some of the remarks which have fallen from the last speaker prior to discussing the larger issues. I followed with great interest his Contribution to the Debate, but I cannot accept the opinions which he ascribed to these who sit on these Benches when he said that we desired to attribute all the blame to the Government for all the ills which hive fallen upon the unfortunate Russian people. No speaker on this side has given him any right to assume that, except only that I will admit that I for my part, and probably others of my colleagues, would quite frankly say that in one opinion a good deal of the trouble that has fallen upon Russia is due to the present Government. May I say, in passing, that when the hon. Member delivers himself of this piece of wisdom it would be well if he would apply his remarks to his own friends. He said that the less one knows about the point of view of the Government, the easier it is to blame the Government. That presumably explains why the Russian Government is so much blamed—because of the colossal ignorance that people have of the print of view of the Russian Government. I row understand why it is that they are blamed so much. Neither is the hon. Member entitled to assume that we include the British nation in our indictment of the Government in the matter of responsibility for the state of affairs in Russia. Indeed, we draw a very sharp distinct inn between the opinions of the British ration and that of the present Government and if present indications are anything to go by, the divorce between the nation and the Government is likely to become rather more accentuated as time goes by.

In my humble judgment, the problem that arose for discussion at The Hague is one and the same problem that has been discussed repeatedly at ether Conferences. Indeed, The Hague was very largely neces- sary because of Genoa, and Genoa was necessary because of the failure of Cannes, and Cannes was necessary largely because of the failure of Versailles. The failure of one probably requires the putting in of another, and it seems to me that when we come to examine the present condition of Europe, there is no possibility of denying that the fundamental error which has been committed was the error which was committed at Versailles. [HON. MEMBEES: "Why?"] There is no reason to enter into a detailed discussion. It is absolutely clear

Sir W. LANE MITCHELL

No.

Mr. JONES

I am not hoping that I shall be able to percolate through my hon. Friend's brain, but I will do my best. After all, the people of this country depend, in the main, upon the happiness of their relationships with other countries abroad. Indeed, the persistence, the survival, of English trade depends on those harmonious relationships. When, therefore, a Peace Treaty is signed such as was signed at Versailles, which had the effect, temporarily, at least, of ruining our foreign market for coal— [HON. MEMBERS: No!"]—It is true. In my own part of South Wales, men have been out of work to the tune of tens of thousands because their foreign market was lost and signed away. That foreign market has only been able to be restored to them by compelling the miners of South Wales to accept a wage far below a living wage, in order to enable the owners to send cheap coal abroad. The same thing applies to the shipbuilding trade We had reparation ships coming ever here, bought at a cheap rate, and because of that, there was no call for building new ships. That is not a statement of my own, but I recall that very same statement being made by the hon. Member for Central Cardiff (Mr. Gould), who spoke in this House soon after me in October last on this very question.

I gather from the Prime Minister that he is prepared to conduct this business of holding Conferences even seventy times seven. For my part, I entirely agree that there is no other way of restoring equilibrium in Europe than by the Conference method, but I think, after all, that you cannot expect complete success with these repeated Conferences unless you recognise that you must start upon a road that does give some sort of chance of restoring that international good faith that is so necessary. The Prime Minister said—and I thought quite truly—that before you can have normal relations between us and Russia, you must have what are called bona fides. I entirely agree, but you must show good faith on both sides. That cuts both ways. It is not merely the Russians who have to be called upon to show good faith; you must do the same, and, after all, if hon. Members would only put themselves in the position of the Russian people, they would find very little to encourage them to believe in the good faith of this country, even at this moment. Let us review some of the things that have happened. I believe I am right in saying, though I speak subject to correction, that before the Parliamentary Secretary to the Overseas Trade Department left this country to attend The Hague Conference, I believe I saw a report in the Press that he attended a social function at which there were present a good number of capitalists interested in Russian finance. That may be significant or insignificant, but I am quite sure that the Russian people will not draw from that any evidence, at any rate, of the good faith of the people who went to The Hague. On the contrary, they are very likely to argue that the people who went to The Hague had primarily, before going there, some consultation with those whom they regard, rightly or wrongly, as their enemies.

Moreover, may I ask what deduction they would draw from the subsidised attacks that are being made against Russia? They have been conducted. No one can deny that, and, moreover, we do not acquire our knowledge of this from the "Daily herald," as we can get it in the repeated demands for taxation from the people of this country. The repeated demands of the Treasury show to us what the 'various attacks on Russia have involved in the matter of money. We have not read it only in the "Daily Herald," though incidentally that gives us far more information than the Government gives. How much encouragement is the Government of Russia to draw from the mean and contemptibly small support which this Government gave to the starving people of Russia during the famine? How far is that to be regarded as evidence of bona fides? I think it can scarcely be regarded as encouraging, to say the least of it. I have read briefly the Memorandum which has been placed in the possession of Members of this House to-day for the purpose of discovering whether we have a record there of the questionnaire that was sent out to the members of the Russian Delegation. I admit having read it very cursorily, but I do not see that questionnaire reproduced here, and I should be very glad indeed if some speaker on behalf of the Government later would tell us what exactly was involved in that questionnaire. How far were the questions put before the Russians economical questions, and how far were they political questions? How far did they concern the matters over which this Government has no right at all of supervision? How far did they inquire as to the state of the internal Government of Russia? If I am right in assuming that, and that the Government did subscribe to the questionnaire, might I ask this: Was it done by way of encouraging the Bolshevists to send a questionnaire to this country, to inquire how we govern this country, how we treat our prisoners, how we control our courts, how we deal with the unemployed, what do we do with our starving people? If we are entitled to ask these things, then they, too, are entitled to ask them. You have no right to expect special treatment for yourselves, and to deny that same treatment to the Bolshevists.

I should like to say this further: I am not satisfied that this is as full an account of what took place at The Hague as it might be. I am somewhat inquisitive perhaps. I confess I am sufficiently inquisitive to inquire whether it is not possible for us to have a fuller and more detailed account of what happened, and not only the points of view of the representatives of this Government at The Hague. We ought to have the point of view of the Bolshevists. I am given to understand, as a matter of fact, that there is very grave reason to believe that at The Hague discussion the opposition and the obstruction came as much from the associates—not perhaps the colleagues—but the associates of the British representatives as it came from the Russians themselves. I have come to the conclusion, after a very careful watching of these affairs for some years, that our own and the Allied and associated Governments who are now trying to discuss affairs with Russia are not in the least degree anxious to restore normal relations between our country and Russia. The real fundamental reason for that, I believe, is this: that there are some people in this country—from their point of view probably they are quite right—who are very much more concerned about the rights of private property in Russia than about anything else.

Let me say, quite frankly. so that I shall not be misunderstood—that personally I should be very glad indeed to see some sort of arrangement made concerning the rights of those people who have lost their property tin Russia. But I say this at the same time, that I conceive that those who invested their money in Russia invested it with the full knowledge of the risks involved. if they did not invest with that in their mind's eye, then they were very foolish investors indeed. If they invested with the full knowledge of how matters stood, then, obviously, they have no right to ask us to come along and pull the chestnuts out of the fire for them. [HON. MEMBERS: "Oh, Oh!"] I repeat, I would like to see some arrangement made, because I think if some of the difficulties were removed out of the way there would he a far better chance of re-establishing relations with Russia. But I want to ask the House very earnestly: By what right is the well-being, the prosperity, and the future of England being jeopardised merely to safeguard the interests of men who have speculated somewhat wildly in distant parts?

Sir H. BRITTAIN

What about guaranteed bonds?

Mr. JONES

There are millions of children in our own country—I may be wrong, but I think I can prove my point —who are suffering hunger and starvation from the absence of the international market. We decline to re-establish commercial intercourse with Russia because there are certain people who have lost money in Russia. I admit that is unfortunate, but why, simply because a number of people have lost money in Russia, should the millions of children go on starving? [Laughter.] Doubtless it is a very humorous question to some hon. Members. But perhaps hon. Members will explain in what way it is humorous.

Sir W. MITCHELL

I will.

Mr. JONES

Go on then!

Sir W. MITCHELL

I will afterwards.

Mr. JONES

After all, may I put this point: You have no right, not merely not to keep your own children in this condition of starvation, but you have no right to impose a condition of famine upon these children of Russia. That is an elementary thing to say, I admit, but bad as the Bolshevists may be they require boots. The Bolshevists wear clothes. The Bolshevists want ploughs and railways—and a good number of them from what the Prime Minister says—and we are people who can supply them. [HON. MEMBERS: "Who will pay for them!"] Establish decent relationships between yourselves and Russia and I have not the faintest doubt but what there is sufficient ingenuity to discover a method of getting payment for goods supplied. I think hon. Members may be trusted to see to that! After all, there are people trading with others in Germany, trading with people in Austria, and with people in other countries, not quite as bad, perhaps, but almost as bad as the Russians. You do not raise these difficulties in those cases. Why do you raise them in the case of Russia? Is it against the Russian Government because it is the Russian Government, or because it is a Bolshevist Government? Is the nature of that Government worse or more demoralised than the nature of the German capitalist? I cannot see why! After all, what is required is a sufficient belief in the good faith of both sides. If you establish that condition of good faith, I have not the faintest doubt that normal relationships will come in time—not perhaps immediately—between ourselves and that very much distressed country.

There is only one further point I want to put. I was very grieved to hear—I had almost said heartless, but I will not say that—the pitiless reply of the Prime Minister this evening. He said in effect—I do not want to misrepresent him, but to state it accurately—and if I am wrong I shall quickly withdraw it—that we are or were refusing to reestablish normal relations with Russia in order to teach the Russians a lesson. Imagine a Bolshevist child in the midst of poverty and hunger, the gaunt spectre of disease and hunger standing at its very elbow, appealing to the Prime Minister of the leading nation in the world and the most civilised—so they say!—appealing for food, and the Prime Minister turning on him, and saying, "Ah, my boy, I am very sympathetic with you, but, you know, I am teaching your father a lesson." That is the most pitiless language I think I ever heard, and the most disgraceful. I hope I am wrong in my interpretation, but certainly that seemed to me to be the effect and meaning of what was said by the right hon. Gentleman. In that way there can be no hope for the world. If that is the way we are re-establishing and reconstructing Europe, then Europe is going to become merely a graveyard. You have no right to go on in that way. The children of to-morrow have a right to expect something better from you. You can never give it to them unless you approach these problems in a more humanitarian spirit than you seem to be doing at the present moment

The FINANCIAL SECRETARY to the TREASURY (Mr. Hilton Young)

The hon. Member who spoke last is always very hard to please. He appears to be very displeased with the peace. I believe he was also very much displeased with the War. He is always hard to please, but the particular point of interest to us at this moment is that in this matter of Russia he is very much harder to please than are the Russians. He objects, apparently, to a questionnaire having been addressed to the Russian Government by the non-Russian Delegation, of which I formed one, at The Hague. In fact, no such questionnaire was addressed A questionnaire is a formal and alarming thing, which we should have carefully thought out. Certainly, a number of questions were asked of the Russian Delegation at The Hague, the answers to which were relevant in order that a just judgment might be founded on the present state of Russia and their present ability to meet their engagements. The hon Member appears to take the most violent objection to that. The Russian Delegation at The Hague took no objection to it.

Mr. M. JONES

I objected to it because it was not included in this White Paper.

Mr. YOUNG

The hon. Member will pardon me. His objection was that it was offensive to the Russian Delegation.

Mr. JONES

No.

Mr. YOUNG

This matter was looked at by the Russian Delegation at The Hague in a large-minded and commonsense manner, which might be an example to some others. Apparently, the hon. Member is difficult to please in the matter of the associates of my hon. Friend the Secretary for the Overseas Trade Department before he went to The Hague. He said that he and I associated with these financiers, who are acquainted with the country and connected with the development of capital and of undertakings in Russia. That was for the very obvious reason that they have the very best opinion on the subject. The hon. Member referred to these people as the enemies of Russia—a curious designation. They have been the truest friends of Russia and of Russian civilisation. It is to foreign capital and foreign brains, as is, surely, very well known, that the dawn and growth of an industrial system in Russia is due. It is upon their return to the assistance of Russia that its restoration and future depend. The Russians themselves do not look on these men as their enemies as described by the hon. Member. Again, he is harder to please than the Russians. So far from looking upon these men as their enemies, it is the most urgent desire of the Russian Government at the present time to persuade those who have the most intimate knowledge and the widest experience of industrial circumstances in Russia, to return to the assistance and development of that country.

Throughout this discussion I thought I observed a tendency on the part of hon. Members opposite to be more Russian than the Russian themselves. An unreasonable attitude was taken at one time by the Russian Government in the matter of the bargaining of the recognition of obligations against credits. We begin to see, as has been described twice, over today, an inclination on the part of the Russian Government to give up their unworthy and useless attitude on bargaining, and to make a voluntary effort to restore the credit of Russia: but I have not seen any recognition, in the speeches of hon. Members opposite, that they have begun to see the error of their arguments in that respect. On the contrary, if I understand the criticism advanced against the Government by the right hon. Member for Miles Platting (Mr. Clynes), it is, "You have failed in your duties and obligations for the solution of the Russian question by failing to arrange substantial credits for Russia." I believe one of the most substantial results of The Hague Conference is this, that the Russian Government have begun to understand that it is idle to ask the Government of any foreign country to arrange substantial credits for them. If that alone had been gained by the Conference, it would have been a great gain. I believe it has been gained.

The first step in the approach of the Russian attitude toward common sense in this matter was the demand for the assistance of inter-State credits. That has always been explained to be impossible. The second step was a demand, as a feature in a bargain, of guaranteed credits. That was the stage at which the matter was left at Genoa. I believe that the effect of the exposition of the practical state of affairs, by the unanimous resolution of the 25 nations represented—and not represented by theoreticians only—at The Hague, was to convince the Russian Government of the true state of affairs its regards the possibility of guaranteed credits. It was this, that in any scheme of guaranteed credits there are three parties: the recipient, the guaranteeing Government, and the private holder of capital, who must come in and take his part in the scheme. The bedrock of the matter lies in the private holder of capital, who must be converted to embarking on the risk before the wheels of the scheme can begin to turn. What was effected at The Hague in that respect was to make it clear, as a practical it matter to the Russian Government. that it was necessary for them to look beyond Governments, anti what Governments can do by way of agreement, to the private holder of capital, and to restore confidence in him before even that approximation to their desires which is the scheme of guaranteed credits can be expected to yield results in their behalf. Let me make this point clear. There-was no recession in our attitude at The Hague from that taken up at Genoa. It was mentioned there—what had been said at Genoa—that those things which the Government can do for the assistance of trade, by guaranteeing trade, would be done by us for Russian trade in the. same manner as for foreign trade of any other sort. as soon as the general con- ditions of the Russian problem would allow. There was no recession from that.

Lieut. Commander KENWORTHY

Does that mean that all we offer is the same scheme of trade facilities as we have given to Esthonia and Poland?

Mr. YOUNG

The same machinery for assisting foreign trade which is in employment as regards the foreign trade of other nations can and would be extended to the foreign trade with Russia as soon as the general conditions of the Russian problem permit of it being done. I have no doubt. about that attitude being maintained, and it is maintained to-day. If the suggestion finally put forward by the Russian Delegation at The Hague were to be adopted; if the Russian Government were to make some sort of voluntary reparation, recognising their obligations in respect of debts and in respect of the rights for private property previously held in Russia; if those obligations were to be faithfully and loyally carried out; if an earnest of the intentions of the Russian Government were to be given and shown by their being carried out from step to step, then, when the time came for the recognition that the credit of Russia had been re-established by these measures, the same facilities for the encouragement of the granting of credits could, and would, be extended to Russian trade that, at the present time, is extended to trade with other nations.

But until that time comes, until Russian credit is so restored by the voluntary action of the Russian Government as to make it possible for the schemes of guaranteed credits to work, it would be illusory, it would be idle, it would be merely deceiving the Russian Government, and would be deceiving the people of this country, to profess by a formal act to extend the benefits of those measures to Russian trade, because even though the Russian Government were willing enough, as goodness knows they are, to receive the credits, even though on the same assumption, the British Government were willing to guarantee the credits, the necessary third party would be wanting—the private holder of capital, who, having no confidence in the undertaking of the Russian Government, would refuse to fill his necessary part in the scheme. Let me take the argument advanced by hon. Members opposite on their own ground. They say, "Here is Russia needing goods." It is so. They say, "Here are we wanting to manufacture goods, and to sell them to Russia." So be it. We recognise throughout this problem not only the miseries of a foreign nation, but their direct reaction upon our great problems here. Russia is desiring to buy; and we are desiring to manufacture the goods and to sell to them.

The argument from the opposite benches assumes that these are the only two elements necessary for bringing together the parties and opening up trade. The point is always made against us "Why, with the need there, and the possibilities of supply here, do we not bring the twotogether and gettrade going? Because there is nothing to pay for the goods with. It is not proposed that we are to manufacture goods as a present for the Russian nation. Trade cannot be conducted upon those lines. That would lead to the more direct impoverishment and misery of people in England and to unemployment in England.

The necessary third step in order to bring the parties together is that there should be a means of payment for our supplies. Do not let us confuse our minds and get the problem concealed by any loose ideas on the subject of credit. The machinery of credit cannot conceal the essential fact that you cannot get trade to move unless there is to be payment and you are confident that payment will be made. Supposing we were to sell them goods on credit without any confidence that they would pay? What does that mean? Somebody has got to provide the credit. Suppose the British Government provide the credit. Would the British Government be justified in providing credits unless they thought those credits were going to be liquidated by payment? Supposing they did provide the credits and they were not liquidated by payments from Russia. Let us rid ourselves of the confused stop-short form of thinking which thinks that by providing credits by the Government you will enable trade to be carried on for the benefit. of the country. If the Government provides the credits and they are not liquidated from Russia, it means only that you are paying out of the pockets of the taxpayers for the goods sent to Russia. Is that good business for this country As far as any return goes, you might as well throw them into the North Sea. The only effect of such a credit scheme would be to distribute the loss over a greater number of people instead of accumulating it on the shoulders of those who actually manufacture the goods. The whole root of the matter is that you cannot sell goods to Russia unless and until you begin to have some measure of belief that Russia will pay for them.

Let me reject absolutely the idea that has been advanced against us from benches opposite that in the negotiations at The Hague we were considering properties, and properties first. Far from it. We went there, recognising to the full that not only in the general interests of humanity and those vast suffering millions in Russia, but for the sake of our own people also, the primary task of any conference was to find some means by which the joint resources of Europe could be placed at the disposal of Russia for the reconstruction of the shattered and ruined civilisation of Russia. That was the primary object. If this question of properties and debts came up for urgent, continuous, arduous, practical discussion, it was for the reason, first and foremost, that until some settlement of the question of property and debts can be obtained, the stream of credit cannot be expected to flow again. Until then Russia cannot expect to have her industries restored to prosperity, and we in this country cannot expect to have Russian orders and a Russian stimulus to trade for the benefit of our unemployed. It would be untrue to allege that at any stage of these negotiations they have been conducted in the interests of this class or that.

It is the absolute duty of every Government to protect the interests of its nationals abroad, I recognise, hut there is a wider import to the interests of bondholders and of property holders, because they are the test of that confidence, that recognition of common obligations which must be accepted by the Russian Government if it expects to restore its credit and to place itself once more in a position to take advantage of the assistance which can be given to it by the joint resources of Europe. Let me refer here to a criticism thrown across the Table by the Noble Lord the Member for Hitchin (Lord Robert Cecil). In criticising the pro- ceedings of the conference, he asks, if I understand him rightly, "What guarantees did you expect to get out of a Communist Government?" It is a difficult question to answer because all the delegates of the Russian Government refused to discuss the practical nature of those guarantees. We asked for guarantees for the return of property, and they might have found them in an actual list of properties the return of which the Russian Government would be willing to consider. They might have found them in a reasonable and ready approach to other possible forms of compensation, the simplest of all being in cash, because there is no guarantee so good as the cash guarantee. They might have found them in the erection of machinery, or in the establishment of some tribunal whose decision would be binding as to the amount of compensation or the manner in which it is to be provided.

The Noble Lord the Member for Hitchin asked how we could expect a. Communist Government to agree to any guarantees of that sort because, he says, "it would be contrary to their principles." I have some doubt as to his conclusions in regard to that argument, but one of them seems to be that no negotiations of any sort or kind would be of any use with the Russian Government, but, personally, I shrink from such a despairing conclusion as that. I think the first answer to that argument is that whether or not there is a possibility of giving guarantees for a binding agreement in accordance with the principles of Communism is a question for the Russian Government to decide. That is precisely what we went to The Hague for. We wanted to find out whether any reasonable approach to the ordinary standards of the West of Europe was possible in accordance with the principles of Communism or whether it was not. We did eventually discover that, there is hope for a reasonable approach in accordance with the principles of Communism as they are professed by the present Government of Russia.

What has taken place at Genoa and The Hague are steps which may lead the Russian Government back from the clouds to the solid earth. At Cannes certain rules were formulated for future negotiations, which are the underlying rules which must be recognised by any nation which desires to join the community of civilised nations. At Genoa the Russian Government came to within an approximate distance of conforming to those rules, and as a result of discussion, not at arm's length, but close at hand, we succeeded in shattering some of the delusions of the Russian Government as regards the possibility of its relations with the rest of Europe. At The Hague that process was continued, not in the region of high political questions and principles, but. on a practical plane, and we had the invaluable result of proving and demonstrating and, if I may say so, educating the Russian Government as to what it is possible for business to do and for capital to do, and how Russia must go to work if it desires to turn the streams of trade once more into their old channels in Russia. As a. result of that useful work of discussion, which, I can assure the Committee, was by no means hostile or unfriendly to the Russian delegation, the Russians themselves have now got hold of the idea that they cannot have their credit restored by somebody else outside, but they must restore their own credit. That hint was the result of these discussions, and, if it is followed out, we may confidently assume that it will lead them to that high place in the community of nations to which the great Russian nation is entitled by its past attainments and its present genius.

Mr. THOMAS SHAW

I should not have intervened in this Debate but for the speech delivered by the hon. Member for West Leeds (Mr. J. Murray) who apparently gives very little credit to these benches for a study of the Russian situation, and he went on to advance a most peculiar theory. After all, there are one or two hon. Members on the Labour benches who have tried to understand the Russian situation, and who have come to a totally different conclusion from that arrived at by the hon. Member for West Leeds as to the actual state of Russia. The hon. Member painted a state of things in which you had a population of 90 per cent. of peasants opposed to the other 10 per cent. who formed the Government. May I call the attention of the hon. Member and the House to the fact that the history of Russia since the Soviet Revolution is quite contrary to that statement. As a matter of fact, it was the Russian peasantry who smashed Koltchak and who smashed Denikin, and the Russian peasantry stood like a rock behind the Soviet Government when we were attacking Russia and trying to make her have J Government of which we approved. That is a historical fact which admits of no contradiction whatever.

Lieut.-Colonel J. WARD

Nothing of the sort!

Mr. SHAW

I was in Russia myself and I spoke with all types of the Russian people. [An HON. MEMBER: "With Lenin and Trotsky!"] Yes, I spoke with them and highly intelligent men they were, and I think lessons might be taken by hon. Members opposite even from Lenin and Trotsky. I spoke with men of all types and opinions in Russia, and I will venture to put the opinions of the men with whom I spoke even against the opinion of the hon. and gallant. Member for Stoke (Lieut.-Colonel Ward). I found a unanimous opinion amongst all sections of Russians that our attempts to conquer Russia from outside had put practically the whole of the Russian people, including the peasantry, behind the Soviet Government. That is a matter of fact.

I want to speak for a moment in regard to the theory advanced by the hon. Member for West Leeds (Mr. J. Murray) that Russia might be developed by Britain acting as capitalist and banker and Germany acting as manufacturer and merchant. He painted a picture of Germany with a huge web of Soviet propaganda in Berlin and of the danger that existed to the German Government from that Soviet propaganda. I venture to think there was justification for the picture he painted. If my information is correct there is very great uneasiness in Berlin, and very grave danger indeed that Germany may be driven into a revolution, and if the revolution takes place whether Germany goes to the right or to the left, it will be a very serious menace to the future peace of Europe.

It is said in Germany, and it is stated by the Communists as well as by the Monarchists, that the next move of the Allied Governments is to take control of public expenditure in Germany, whether local or national, if the sum to be ex- pended exceeds 500,000 marks, which at the present rate of exchange is equal to about £250 English. I know the difference between the real value of the mark and the value we put upon it in the rate of exchange. If the statement be true that all capital expenditure for public purposes of sums over that amount in Germany is to be controlled and permitted by Allied functionaries, let the House realise what that will mean in Germany. In the first place, Germany will cease to hold the position of a sovereign State governing her own expenditure. Secondly, thousands, and even millions, of schemes in the huge country of Germany are to be reviewed and permitted by foreign civil officials. If the statement be true, and I am informed it is, we shall have a swarm of officials in Germany, a swarm of locusts that will eat all that Germany can produce, and reparations to France from Germany may be bidden good-bye to. There will be no possibility of anything being left after the Civil Service officials of the Allied Powers have been satisfied. I am sure the right hon. Gentleman the Member for the City of London (Sir F. Banbury) sympathises with me in trying to secure that there shall not be inflicted on Germany that of which he so bitterly complains in this country. If the statement be true, it means another added danger to the existence of Germany, and another imminent danger of revolution either to the right or to the left. While the Communists are working there is no doubt that the Monarchists are equally active.

Once the German Republic is destroyed, good-bye to all chances of reparation, and all chance of peace in Europe. The worst possible thing that could happen to Europe would be a Bolshevik revolution in Germany. Russia and Germany joined thereby would be a permanent menace to the future of the continent in which we live. I suggest that these things need careful inquiry and attention, and the urgency of the matter is admitted. It is almost impossible for this Government or for any other to solve the problem of future relationship with Russia. I am one of those speaking from these benches who welcome Conferences. I do not care if they do number seventy times seven—

It being Ten, of flee Clock, the Chairman proceeded, pursuant to Standing Order No. 15, to put forthwith the. Questions necessary to dispose of the Vote under consideration.

Question, "That a sum, not exceeding £751,843, be granted for the said Service," put, and negatived.

The CHAIRMAN then proceeded, pursuant to Standing Order No. 15, to put severally the Question, "That the total amounts of the Votes outstanding in the several classes of the Civil Services Estimates and of the other outstanding Votes, including Supplementary Estimates, and the total amounts of the Votes outstanding in the Estimates for the Navy, Army, and Revenue Departments, be granted for the Services defined in those Classes and Estimates."

1. CIVIL SERVICES AND REVENUE DEPARTMENTS ESTIMATES, 1922–23.
cc592-5
1. CLASS 1. 3,414 words, 2 divisions
cc595-9
2. CLASS II. 2,226 words, 1 division
cc599-603
3. CLASS III. 2,089 words, 1 division
cc603-7
4. CLASS IV 2,014 words, 1 division
cc607-11
5. CLASS V. 1,928 words, 1 division
cc611-2
6. CLASS VI. 193 words
cc612-5
7. CLASS VII 1,926 words, 1 division
c615
2. ROAD GRANTS (UNEMPLOYMENT RELIEF). 44 words
c615
3. UNEMPLOYMENT GRANTS. 61 words
c615
4. RELIEF OF UNEMPLOYMENT. 50 words
cc615-6
5. EXPORT CREDITS. 64 words
c616
6. PROPERTY LOSSES (IRELAND) COMPENSATION. 56 words
c616
7. CRIMINAL INJURIES (IRELAND) COMPENSATION. 56 words
cc616-9
8. NORTHERN IRELAND GRANT IN AID. 1,818 words, 1 division
cc619-23
9. DISPOSAL AND LIQUIDATION COMMISSION. 1,716 words, 1 division
cc623-5
10. SHIPPING LIQUIDATION. 1,726 words, 1 division
c625
11. RAILWAY AND CANAL (WAR) AGREEMENTS LIQUIDATION. 97 words
cc625-6
12. TREASURY SECURITIES DEPOSIT SCHEME. 49 words
c626
13. COAL MINES DEFICIENCY. 67 words
cc626-7
14. PRIZE CLAIMS. 55 words
c627
15. COAL MINING INDUSTRY SUBVENTION. 50 words
c627
16. GRANTS FOR COMPENSATION FOR DAMAGE BY ENEMY ACTION. 51 words
c628
17. REFUGEES (IRELAND) GRANTS. 44 words
cc628-9
18. REVENUE DEPARTMENTS ESTIMATES, 1922–23. 89 words
cc629-33
19. NAVY ESTIMATES, 1922–23. 3,113 words, 2 divisions
cc633-5
20. ARMY ESTIMATES, 1922–23. 1,451 words, 1 division
cc635-8
21. AIR ESTIMATES, 1922–23. 1,451 words, 1 division
c639
22. WAYS AND MEANS 56 words