HC Deb 12 July 1923 vol 166 cc1584-90

May I ask the Prime Minister if he will now make his statement on the European situation.?


It cannot be made too clear, in the interests alike of the Powers concerned and of any who may hope to profit by exploiting differences between them, that the sole ground of possible divergence is as to the most effective means of reaching the ends which are vital to all and upon which all are in greement. These ends are, as they have remained throughout, the payment of reparations, and the recovered security of Europe. To ensure them, the Allies have grudged nothing in the past, nor will they grudge anything in the future. This responsibility is acknowledged and is shared in equal measure by France, by Italy, by Belgium, and by ourselves. Perhaps it may be held to devolve in a more special measure upon the French and British nations by virtue of the great sacrifices which they made side by side in the years of trial, by the intimacy of fact and memory which unites them to-day, and not least by the experience which these two ancient civilisations have shared throughout the centuries.

A similar community of thought and action binds us in the present emergency to our other Allies, whose interests are in no respect divergent from our own. In the common desire for settlement and pacification, and still more for no further or unreasonable delay, we can speak together frankly and with the full comprehension of partners bound by an equal destiny to the same task. The whispers of interested parties cannot be allowed on either side of the Channel or in any part of Europe to deflect us from that duty by any reservations, or by carefully fostered misunderstandings.

In all that we are about to say or to do, His Majesty's Government are moved, as we know the heart of France to be moved—and the same applies equally to our other Allies—by the single desire that goodwill between the nations who have endured together shall be maintained and that each shall obtain what is her due.

We are as determined as any of our Allies that Germany shall make reparation for the damages done in the Great War up to the fullest extent of her capacity. We have never wavered on this point, I do not believe that our people ever will.

Indeed, we go further, and we are ready as we have said on many occasions and as was repeated at Paris in January last, to use every measure to compel Germany to pay up to the amount of her capacity.

We are conscious, however, as a business nation that if we ask Germany to pay in excess of her capacity we shall not succeed. We and our Allies will be the main sufferers, and we are firmly convinced that methods which can only result in the ruin of Germany will be fatal to this country, to our Allies and to the whole of Europe.

From the beginning we have made it clear that in our opinion the occupation of the Ruhr was not calculated to produce the maximum amount of reparation payment for the Allies. In January we made in Paris an offer which we regarded as a very generous settlement in order to avoid what seemed to us to be an economic disaster. That offer was rejected by our Allies, and since then we have stood aside animated by a spirit of sincere loyalty to the Alliance which has been and continues to be in our opinion the main security for European peace. Many of the consequences which were then anticipated are in course of fulfilment. The Allies are obtaining less reparation than they did before the occupation. What reparation they are receiving is being exacted at the price of the growing dislocation of the German economic system and as seems probable of the future total collapse of that system itself.

The French and Belgian Governments assure us that their sole object in occupying the Ruhr is to secure the payment of reparations. If that be so, the difference between us is one of method rather than of aim, but we are convinced that an indefinite continuation of this state of affairs is fraught with grave peril. Germany herself appears to be moving fast towards economic chaos, which may itself be succeeded by social and industrial ruin. The local populations are in many cases suffering severely, and there are genuine apprehensions of a shortage of food.

Nor is this a situation that concerns Germany alone. In proportion as the productive power of that country is exhausted, so does the recovery of her credit and the payment of her debts recede into a dimmer distance. Every country in Europe is paying the price for this condition of affairs. One country pays it in a steadily falling exchange, another in diminished trade, a third in increasing unemployment. If we were called upon to state or to defend the case of our own country alone, we could without difficulty demonstrate the serious effect that has already been produced upon British trade.

In spite of very great expenditure by the State (the figure is some 400 millions sterling since the Armistice) we still have unemployment on a large scale in this country. Not only does our devastation continue instead of being repaired, but it continues increasingly as the moral effects spread among our people. Public opinion throughout Europe, and not least in Great Britain, is becoming more and more sensitive to these conditions and alarmed at their continuance. It is not too much to say that the recovery of the world is in danger, and that peace, for which so many sacrifices were borne, is at stake.

It is in these circumstances that the necessity for action has been increasingly impressed upon His Majesty's Government. The exchange of friendly conversations, useful as they are, does not appear to lead in all case to positive results. It is becoming evident that the attitude of the principal parties concerned must be more clearly defined.

If the situation has been at all correctly described in the preceding paragraphs, it cannot be left to right itself.

There will, I believe, be general agreement to these propositions—that the period of conflict should as soon as possible be terminated; that the indefinite occupation by one country of the territory of another in time of peace is a phenomenon, rare and regrettable in itself to which an honourable end should as soon as possible be found; that the debtor should not merely be called upon to pay his debts, but should be placed in a position where he can do so; that his capacity, where it is in doubt, should be tested and determined, and that united efforts should be made to accomplish these ends.

Peace will not finally be obtained and recovery will not be ensured until a solution has been found to three great questions. They are (1) the payment of Reparations, (2) the settlement of inter-Allied Debts, and (3) the security of a pacified Europe. It is to these questions that the attention of the world should be turned.

In the pursuit of these aims, His Majesty's Government are so far from desiring to deprive France and Belgium of their legal claims that they wish to assist them in their realisation.

Our desire is for advance, if it can be made, and for finality if it can be attained. And in these aspirations, as well as in our view of the general situation, we are hopeful of obtaining the concurrence of France and Belgium, no less than that of Italy. Indeed, we have every reason to believe that the views of the Italian Government are in substantial agreement with our own.

What, then, are the steps which we think ought to be taken? The German Note of 7th June, in reply to a definite suggestion which had been addressed to the German Government, proposed an investigation of Germany's capacity to pay by an impartial body, coupled with an engagement to pay the amounts determined in the manner that might be proposed.

It further contained the offer of a series of concrete guarantees. We do not think that these suggestions, whether they be adequate or not, should be ignored. We are unable to agree that a correspondence of this nature upon matters affecting the interests of all should be wholly one-sided, or that proposals, which may be found to contain in them the germs of a possible settlement, should be treated with indifference.

We hold that they should be examined and explored in order that we may discover whether there lies within them the possibility of progress. Understanding that the French and Belgian Governments are not disposed to take the initiative in suggesting a reply—although we would gladly have welcomed any such action on their part—we have informed those Governments, as also the Italian Government, that we are willing to assume the responsibility of preparing a draft reply ourselves. Adhering, however, as we do to the view which we expressed on the last occasion that united action is better than separate or isolated action, we shall submit the reply with the least possible delay to our Allies, for their consideration and remarks, and we indulge in the hope that we may be able to arrive at an agreement with them as to the terms.

What the exact nature of the reply should be it will be premature to discuss at the present stage.

In formulating these views, His Majesty's Government are not without hope that they may be expressing Allied sentiments as well as their own. We do not believe that in principle we are widely separated, if at all, from them. Divergence of method should not be incapable of resolution. So far as united action is possible, we shall continue to pursue it, as we have endeavoured to do all along, and we shall confidently invite the sympathetic consideration of the whole of our Allies and of all interested States to proposals which will have no other aim than the pacification of Europe and the recovery of an exhausted world.


The circumstances, of course, forbid any comment, but I should like to ask three questions. Would you allow me, before asking those questions, to say that on this side of the House there is a most frofound hope that the efforts made by my right hon. Friend will be successful in disentangling the terribly entangled scheme of European politics. My questions are these: Are we right in assuming that the latter part of the declaration relating to the preparation of a reply to Germany will be proceeded with at once? May I also ask whether the Government have any intention of communicating, at any rate for the purposes of information, that reply to the United States; and, finally, am I right in assuming that it is the intention of the Government to give an opportunity for a discussion at a convenient time, but before the House adjourns for the Recess?


In answer to the first question, the reply to Germany will be proceeded with forthwith. In answer to the second question—


Whether it will be communicated to the United States?


I think probably, but I should like a question put on that point definitely to-morrow. With regard to the third question, the House will certainly expect to have a discussion before it rises, and I hope that it may be possible to utilise, as has often been done before, the Second Reading of the Consolidated Fund Bill.

Lieut. - Commander KENWORTHY

May I ask one question? [HON. MEMBERS: "Oh!"] Well, I have postponed my own question on the Paper. May I ask whether we have approached or have been approached by the United States in any way at all up to the present time? I am not asking now about the reply being communicated to the United States, but have there been any conversations at all, and, if not, could the right hon. Gentleman tell us why not?


I must have notice of that question.