FOREIGN OFFICE.

HC Deb 07 July 1924 vol 175 cc1801-920

Motion made, and Question proposed, That a sum, not exceeding £92,594, be granted to His Majesty, to complete the sum necessary to defray the Charge which will come in course of payment during the year ending on the 31st day of March, 1925, for the Salaries and Expenses of the Department of His Majesty's Secretary of State for Foreign Affairs, including the News Department."—[Note: £85, 000 has been noted on account.]

4.0 P.M.

The PRIME MINISTER (Mr. J. Ramsay MacDonald)

I regret very much that I have considered it necessary to intervene and, perhaps, some what upset, at any rate for a time, the programme that had been arranged for to-day's business, but I think the circumstances necessitate what. I am about to do. I believe the business was to be a discussion on the Russian Conference first of all, and then a discussion on the situation in the Sudan; and that the situation in France, more particularly on the question of putting the Experts' Report into operation, should be taken next Thursday. But the Committee will be aware that at the end of last week a certain storm blew up, and I think it is essential that the Committee should be left in no doubt as to what did take place.

May I suggest, before making my statement, that it might be convenient if no reply were made to me now, but if the Committee let it go on until Thursday, and I will say why. I am not going to allow, if I can help it, any mischief maker on either side of the Channel to destroy the prospects of a settlement between France and ourselves—that is a thing which is too horrible to contemplate—and I propose to accept a suggestion made by the French Prime Minister this morning to go to Paris to-morrow morning. I shall travel back on Wednesday night in order to be present at the meeting of this House on Thursday and make such further report, as may be necessary. I hope to convince this Committee before I sit down that the whole thing is not even a storm in a teacup, but that there is absolutely no foundation whatever for what has been alleged, and I regret very much that either here or elsewhere domestic political controversy should endanger a very promising international situation.

Mr. AUSTEN CHAMBERLAIN

Whom are you criticising?

The PRIME MINISTER

Certainly not you. There have been certain newspaper statements. The position is this: If we are going to have a settlement with France, we must not only understand, but we must feel both French susceptibilities and French interests, and it is absolutely essential that the suspicion that has existed for such a long time between the two countries should be dispelled. The only way to dispel it, I think, is by perfect candour. We found relations between France and ourselves a little weather-beaten and my task, since I came into office, has been to try to restore them. Where did we stand with them last week? Conversations took place between the French Prime Minister and myself. They were not for the purpose of coming to agreements. They were not for the purpose of making any settlement between France and Great Britain preliminary to a more general settlement that we hoped might be effected at the Inter-Allied Conference on the 16th instant. What was the purpose? If one gets into a difficulty, a somewhat entangled difficulty, surely the Committee will agree that the first thing to do is for the two principals to meet and consider what the actual facts of the situation are. That is the first thing that has got to be done.

What was done at that Conference? It was clearly understood, as the result of that Conference, what we had to agree about. That was, we had to agree upon the problems that beset us in attempting to bring the Experts' Report into active operation. That was the first point. We agreed upon a second point which naturally followed. We agreed that, whatever form that agreement took, it was possible to draft it in a variety of ways, some of them probably more suitable to one Ally than to the other. But we agreed in the end, after a consideration of the various possibilities, that we could come to a common understanding upon the form which the agreement should take. The third point on which we agreed was that a conference should be held on the 16th July for the purpose of settling all these things, and that this preliminary exploration should form the scope of the Agenda of that Conference. That was all we agreed. We found, in surveying the problems, that we were in general agreement as to how they ought to be approached, and how they ought to be settled, and, so complete was the understanding in this respect, that it became purely a matter of Departmental operation in summoning the Conference for the 16th July. The heads of both the Foreign Offices were present. They both took part in the discussion, and they were there specially and specifically so that, when it was agreed that the Conference should be held and agreement was reached regarding the scope and purpose of the Conference, the rest of the matter should be purely Departmental routine.

A document was despatched to Belgium, Italy and Japan informing them that the proposed Conference would be held on the 16th July in London. That document did not merely say, "There is an Inter-Allied Conference going to be held on 16th July, and it is going to be held in London." It indicated what the business of the Conference would be. It indicated the character of the problem that the representatives at the Conference would have to discuss, and would have to settle; and who is to blame the Foreign Office for that? Is the suggestion—I should like to know it on Thursday—that what should have been done was merely to send a bald, uninformative document, saying, "Come to London on the 16th July to take part in a Conference, and when you get here you will understand what the business is to be?" Of course not.

Mr. A. CHAMBERLAIN

Will the document be laid upon the Table of the House, so that we may know before Thursday?

Mr. LLOYD GEORGE

Hear, hear!

The PRIME MINISTER

If my right hon. Friend will wait until the end and then see if it be necessary to repeat the question, I shall be very glad to consider it. The first trouble about this document, I understand, is that it was not sent to France, and that France was not invited to this Conference. What was the situation? The French Prime Minister agreed to the Conference before he left. He agreed to the date. The representative of the Quai D'Orsay came to the Conference and agreed to the date. There was no question of sending an invitation there. The only question was to send to Paris asking them to tell us who their representatives were to be, and how many were coming, and that we did. [Interruption.] My right hon. Friend's interjections are very interesting. It is not really a Memorandum at all, but a record of the conversations. The whole substance of the conversations was, as I have said, to consider what the business would be. That having been agreed upon—not any specific proposals, but the general nature of the business—and certain other points having been produced, not for the purpose of agreeing but for the purpose of surveying them, all the possibilities had been raised with the French representatives present, and it was accordingly unnecessary to send them the Memorandum which only repeated the conversations. The right hon. Gentleman smiles.

Mr. MASTERMAN

I did not smile.

The PRIME MINISTER

I think I can satisfy the right hon. Gentleman on the point. As a matter of fact, the conversations took place on the 21st and 22nd June. On the 24th a summary, on the lines of the Memorandum, was sent to the Quai D'Orsay so that there should be no mistake about it. But that is not all. The record of the conversations was taken by their translator, and they accepted the record of the conversations as being accurate. There is not a single point in what is called the Memorandum—as I have said to-day, there was no special Memorandum—there is, I repeat, not a single point that was stated in the letter announcing the meeting of the Conference which was not covered in those conversations and of which the representatives of the French Government were not fully seized. On the 27th we received a reply to that summary of what was to be brought up at the Conference. We received that reply from Paris, and we are studying it. First of all, France was a party to the proposal. I do not think that any person who approaches this with a fair and open mind will say that there is the least substance in the complaint that has been made.

But that is not all. If there is any objection to France not being invited in a formal way, it is following the precedent of the last three or four Conferences that have been held according to the records of the Foreign Office. Over and over again, some have been invited by telephone, others by letter, and the parties who initiated the Conference have never invited each other. That is the substance of this matter. As I said, this invitation, to the form of which objection has been taken, and which is supposed to be a most awful document, was sent to Belgium, Italy and Japan. Now the test is this: How did the Powers receive it? I do not think that any hon. Member is going to dispute that it is an absolutely formal document. Belgium was not represented at Chequers. There has been no misunderstanding with Belgium. We have official information on that subject. I am authorised to state that the Belgian Foreign Minister, after the matter arose in Paris, summoned the French Ambassador and told him he could not understand what all the trouble was about. He had been perfectly satisfied with the form in which the Conference had been called. As regards Italy—to a certain extent. Belgium had been more fully informed because conversations had taken place supplementary to the written document—no objection was taken to the form of the invitation sent to her. Here, again, I am authorised to state that signor Mussolini has been good enough to address me through the Italian Ambassador expressing the most profound surprise at the way in which the document has been used and offering to assist in every way he possibly can to show that it is a perfectly regular document so far as he is concerned. And now I come to the question of Japan. The Japanese Ambassador has repudiated the idea that the document contained anything which could be objected to. I say that all these complaints are not on the merits or demerits of the case, but they are for purposes which require further explanation.

Then this House and the public are asked to believe that there is some extraordinary secrecy about all this. I do not object to catch-penny coinage going about, provided that it does not seriously damage national interests. What is the position? I explained the purpose of the conversation. It was not a solemn transaction, it was not a binding undertaking, as I shall show a little more fully before I sit down. It was an attempt by two men, who felt their responsibilities and the delicacy of the situation, to understand each other and to explore the ground that they had to try and get over without coming to wreck. That was all. The procedure followed with the French Prime Minister was precisely the same as was followed with the Belgian Prime Minister and the Belgian Foreign Secretary, and it is very curious that on the latter occasion we were rather praised for our tact. The previous Chequers conversation with the Belgian Prime Minister and Foreign Secretary followed exactly the same lines as that of the other day. The purpose of the Conference was the same, the method was the same, and, as to the so-called secret diplomacy, there was no secret diplomacy about it. It was a sort of personal attempt, so far as two Prime Ministers could have anything purely personal attaching to them at all—it was a purely personal attempt made by two men who were sincerely determined to help their countries and Europe to understand each other before the moment came when they had to speak as official representatives, and when every word they said, every bargain they proposed to put their name to, committed not only themselves but other people. I do hope this is going to be a consideration which will be borne in mind, and when I say that I think that the way the House has always treated me makes it almost unnecessary for me to make that observation.

I see in various papers and in various quarters that the British Government has been accused of trying to engineer a plot to get rid of the Reparations Commission—and otherwise to make alterations in the Treaty of Versailles. Again, a plain and unequivocal statement on that matter will show how very false that accusation is. What is the position? We were not dealing with the Versailles Treaty for the moment. We were dealing with the Experts' Report. Anyone who has studied the Experts' Report and the Versailles Treaty will, I think, agree with the Government that there are certain obligations imposed on Germany by the Experts' Report which are over and above the obligations imposed on Germany by the Treaty of Versailles. We interfere with her Budget if we put into operation the Experts' Report and we undertake certain controls over the German financial and commercial position which were not contemplated in the Treaty of Versailles. I am very anxious, as I am sure this Committee is, that if we can come to an agreement about the Experts' Report we should supplement that by an agreement between the Allies that in the event of a wilful default on the part of Germany after she has accepted the Experts' Report, then we should stand shoulder to shoulder in imposing her responsibility upon her. If we are going to do that—I do not believe the House would excuse me if I failed to do my duty in this respect—surely it is right we should raise the question who is going to decide, in respect to the Experts' Report, whether Germany has wilfully defaulted or not?

I raised that question, and when it was raised it was very specifically stated that it did not interfere with the powers of the Reparation Commission under the Versailles Treaty, and that any agreement come to on the point I had raised would be in addition to, and not in substitution of, anything than had been agreed to or imposed on the occasion of, or by reason of, the Versailles Treaty. Therefore, confining our attention to the one point of the Experts' Report, what was raised was this? Does this report impose more responsibility upon Germany than the Versailles Treaty, and, if it does, how are those obligations going to be met, and if we are going to join in forcing those obligations on a Germany that has wilfully defaulted, how are we going to agree about the authority that is going to declare a default as defined and provided for by the Experts' Report and that alone?

On the general position as regards the Versailles Treaty, how could any sane Government suggest that a Conference at which only a small portion of the signatories of the Versailles Treaty were present should decide to alter the Treaty at all? Of course, that is impossible, and the very constitution of the Conference shows that we are going to have nothing whatever to do with alterations in the Versailles Treaty. Can anyone imagine a Government which has done its level best to get an American Representative into this Conference agreeing to the raising of the question of the Versailles Treaty in the presence of that Representative and expecting to retain him there? The whole suggestion is absolutely impossible. The Conference is categorically, specifically and definitely intended to consider how to bring the Dawes Report into operation. Take the Agenda. The Agenda is, as it must be, first of all, that we must agree to the Dawes Report being put into operation. It is not enough that I should say from this box, or even that this House should say that we are going to put the Dawes Report into operation, or that the French Prime Minister should say the same thing in the French Chamber, and so on right through. It is not enough that the German Government should say, "We will put the Dawes Report into operation." We must have an agreement which must be put into proper form, an agreement which is sealed, signed and delivered, that the Dawes Report, with all its implications, is to be put into operation. In order to do that we must get the German signature, and in order to get the German signature we must have the German representatives somewhere or other, and treat with them somehow or other. They must be there to put their names to the document.

I think that I am again interpreting the desire of this House that we should try to get from Germany in the future something more than a more legal document. The time has come now for us to get from Germany a document, a signature, an obligation which has been undertaken under conditions which really impose moral obligations upon Germany, and not merely the instrumental obligation of having been compelled to put her signature to a document. Therefore, it was suggested that when the time came we should be able to have a discussion with the German delegates. There was no agreement. There is nothing fixed. The fact was that M. Herriot went away and I went away and that we left the position in this way—that, pending the Conference on 16th July, the matter should be considered by both Governments, and that we should come prepared to give our views upon it.

There is another point. There is the question of how we are to start operations on this Report. France is in the Ruhr. A large sum of money has to be floated by ways of loans, a sum equivalent to about £40,000,000 sterling. Securities have to be given. Germany must pass important and very controversial legislation before the Report can be put into operation. Therefore, we have to consider what is the best means, the best expedient to get all the preliminary work done and to bring the matter up to that point when the machine can be started and the Dawes Report put into full working order. Our proposal was that an appointed day should be fixed by the Conference, not by us. That is the position in which the matter was left.

Mr. A. CHAMBERLAIN

Whose proposal was that? Was it the proposal of M. Herriot or of the British Government?

The PRIME MINISTER

The British Government. We suggested that the best way to do it was to fix an appointed day, say, in August or September, by which day all the preliminaries could be done. The German legislation could be passed and so on, and upon that day the whole machine could be put into operation, the changes necessary could begin to be made, and the Dawes Report from that day would be in working order. I see again that it is stated that all that has been fixed I wish to assure the Committee that nothing of the kind has been fixed; absolutely nothing of the kind. It is under consideration by the French Government, and it it under consideration by the British Government. All that has happened is that on the 16th July, having considered all these question, we shall proceed with the negotiations, with all the necessary experts present.

I hope that what I have made clear to the Committee is this: first of all, that there is no question of any fault as far as our Foreign Office is concerned in the, invitation to France. It is absolutely unreasonable to make any such accusation. As far as these more or less controversial questions are concerned, I should say that there are very few of them that are really controversial. All that it amounts to is a sort of first position of two friendly Governments, one saying, "We would like that, "and the other saying, "We would like that"—a sort of first statement of the position upon which negotiations should take place, and upon which I believe an arrangement can be come to.

Mr. RONALD McNEILL

Did the right hon. Gentleman make it apparent to the French Government that, in the right hon. Gentleman's judgment and in the judgment of the British Government, a declaration of default under the Dawes Report is not a duty that could be entrusted to the Reparation Commission?

The PRIME MINISTER

I pointed out the great difficulties attaching to that, for instance, if the agreement meant anything at all, it would be impossible for any one Government to mortgage the whole of its national power on a majority decision against which it had, perhaps, itself voted. All that happened was a statement of these difficulties—difficulties which nobody understands better than my right hon. Friend himself. There is the difficulty, for instance, that has arisen because America did not ratify the Treaty of Versailles, which left the Reparation Commission with four members instead of five as originally proposed. All these difficulties have been the cause of a great deal of friction between ourselves and France and I wish to remove that friction. We must face the difficulties, not with regard to the Versailles Treaty—I wish to emphasise that, because it seems to be one of the great difficulties in the way—and not regarding the Reparation Commission's, power under the Treaty of Versailles, but on this new point where new obligations are imposed. I think it is advisable, and I am sure it is wise, that the matter should be mentioned in order to see if we can come to an agreement upon it.

I cannot insist too strongly that all that has happened is merely that the point was raised, that discussion will take place and that nothing can possibly be agreed without the consent of France in regard to this particular matter. I hope that this brief survey of all that has been done, a sort of tentative—

Mr. A. CHAMBERLAIN

May I repeat the question which I put before? Will the right hon. Gentleman publish before Thursday the document which has been the basis of his whole statement and which has apparently been the cause of the whole trouble, so that we may know what it is that he is talking about and what we shall have to talk about on Thursday?

The PRIME MINISTER

Yes, I have no objection at all to publishing the document. I understood, as a matter of fact, that a great deal has been written about it, although I have not seen very much of it myself, and that this statement, and more particularly the point of how it affected the three Powers which were concerned in the matter—Belgium, Italy, and Japan—would be quite satisfactory without publishing the document. [HON. MEMBERS: "No!"] If the Committee desires it, the document will undoubtedly be published. [HON. MEMBERS: "Before Thursday?"] Yes, that is possible. I venture to say that the whole position is exceedingly simple.

The whole difficulty, in so far as any difficulty has arisen, is due entirely to a misunderstanding, and the whole matter is a mere storm in a teacup. I only look upon it as a very serious incident because these misunderstandings, however innocent they may be, or whatever their origin may be, sometimes do damage of an almost irretrievable character. I should be very sorry if anything of this nature should, either on account of its influence on the French political situation—I think a great deal of that—or its influence here, either postpone the Conference, which is the least of the evils, or make its success impossible. That would be an exceedingly great calamity. I had no doubt at all, after the very friendly exploration, where neither side are committed, and after reaching a common understanding upon the problems that we would have to solve, and the contents of the problem, that an agreement would be come to which would satisfy French interests and British interests and be a real beginning of European pacification.

Mr. BALDWIN

I think it will be essential now after so much has been said that the document of which we have heard so much should be published. With the utmost good-will on this side, I find myself with far less grasp of the whole subject than I had when the right hon. Gentleman began to speak. I do endorse thoroughly what he said at the beginning of his statement that it would be far better, after what has occurred, and in view of the fact that he has to meet the French President of the Council to-morrow, that the Debate should be proceeded with to-day on the lines that have been agreed through the usual channels, and that, when we have had time to consider his speech and to examine it, and when he has returned from Paris, we might have the Debate as originally arranged for Thursday. There are a great many things in his speech which I fancy will require a great deal of explanation and examination. I am sure that he will regret, after closer study, the distinction that he made, more than once, between the Foreign Secretary and the Foreign Office.

The PRIME MINISTER

May I take the very earliest opportunity of correcting that. If I slipped into any language which indicated that distinction, it was not in my mind. If my language did in any way indicate that such a distinction was in my mind, then I did myself an injustice, because I am the very last to accept such a distinction, or to make any use of it.

Mr. BALDWIN

I am sure that the Committee will have heard that with great satisfaction, and I am very glad that I gave the right hon. Gentleman the opportunity of saying it. I do not propose to say anything further this afternoon about the speech which we have just heard, save that, so far as this side of the House is concerned, I am sure that the desire to-day is to proceed without delay to the Debate as originally proposed.

Mr. ASQUITH

I am in full agreement with the Leader of the Opposition. I think that it is impossible to have an intelligent, discussion, let alone an intelligible speech made by the right hon. Gentleman as to the position of the Government until we have this document in our possession and I cannot for the life of me conceive why there should be any difficulty in its production and circulation at the earliest possible moment. Having listened—and again I find myself in the same mental condition as the right hon. Gentleman opposite—with the greatest attention to the Prime Minister's speech, I am in a state of absolute bewilderment—unilluminated, complete bewilderment, as to what has happened or what is going to happen. The one thing which emerges perfectly clearly is that the Prime Minister is going to Paris. Why he is going to Paris or what he is going to say when he is in Paris, and still more what he is going to say when he comes back, all lies on the knees of the gods. Meantime, for Heaven's sake, let us have this document, and be able to read it to-morrow, so that we may get some light and be able, intellectually, to digest the meaning of the right hon. Gentleman's speech in order that on Thursday we shall all be prepared to approach the question in a reasonably informed state of mind.

Sir A. STEEL-MAITLAND

I understand from what has just fallen from the right hon. Gentleman that the ordinary course of the Debate, as previously arranged, is to be proceeded with. At the outset of his remarks he apologised to the Committee for disturbing the normal course of the Debate. I am sure that no apology was needed. The only remark that I would make in that connection is that I wish he were here again in order to make a statement on the subject to which I am about to refer before the Debate instead of at a subsequent period, if at all. I hesitated a moment in rising, because I had hoped that either the Prime Minister or the Under-Secretary of State for Foreign Affairs would have taken this opportunity to enlighten the Committee as to what has been happening with regard to the Soviet Conference. I carry my mind back to the time when the same subject was debated a year ago. The right hon. Gentleman the Prime Minister was then himself opening the Debate. He was then in the position of a critic and not of a responsible Minister. His first words were words of regret in which he said that it would have been an advantage if the Minister had opened the subject by a statement. If that were true with regard to the Debate on foreign affairs last year, there are much more cogent reasons why a statement should be made by the Prime Minister or the Under-Secretary to-day. These Anglo-Soviet negotiations opened nearly five months ago. We were then promised that we should have a speedy settlement of the whole question. We have had continual promises to keep the House fully informed of everything that was necessary. I would be the last to say that in any negotiations every single word that it uttered at the negotiations from day to day should be published. I quite agree that that is not a request that should be made, but at the same time I think that we can fairly complain that the Government have not kept their promise to keep this House fully informed.

We have had interviews published in the papers by members of the Russian delegation. We have had a promise by the Prime Minister to the House that, if we wished for an opportunity, we should have such a discussion before the Adjournment, and he proposed to make a statement. Now we are still in the position of having, so to speak, to administer interrogatories because it appears that the Under-Secretary of State has got nothing to report. Is not this surprising? or perhaps not so much surprising as noteworthy of remark because, great as no doubt are the issues about which the Prime Minister has spoken to-day, there is no subject on which one can get a better test of the fitness of the Government to conduct the international relations of the country. I say that advisedly for this reason. In other parts of the world the circumstances have changed without either the fault or the virtue of the Government having produced the change. When it has come to a question of Mexico, difficulties have arisen, not of their making since they came into power. When it comes to a question of Central Europe, they are heirs to a better situation created by the Dawes Report. They are heirs to a more favourable situation created by a change of Government in France, and neither of those changes was of their making. But with regard to Russia, there has been no real change in the situation, except so far as it has been in consequence of the action of His Majesty's Government itself.

I hope that the Committee will bear with me if I deal very briefly with the state of affairs as it was when they took over the charge of the negotiations. I do not wish to speak for a moment with any feeling of hostility whatever to Russia—far from it. I do not pretend to like, to respect, or to approve of either the Bolshevist Government or its principles or its practices. Is there anyone in this Committee who does? But I do speak with the most complete feeling of friendliness towards the bulk of the inhabitants of Russia, the peasants throughout the land and the workers in the towns who bore the brunt of the War on the Eastern Front on the side of the Allies. For them the absence of good Government in Russia has led to the absence of trade, and the absence of trade, at the beginning of this year made the ordinary common necessities of life in Russia beyond the possibility of purchase by the ordinary peasant and the ordinary workman. I take, for example, the appalling lack of clothing. I have heard of the situation from observers in Russia who speak Russian, who have been about Russia, and who have seen the facts for themselves, and they have told me what they have seen.

Take other necessities of life. Take, as a practical type of what happens, the case of a chest of tea. It is worth £4 at the time it reaches a Russian port. The taxes put upon it by the Russian Government are 10 guineas, making the price up to £14 10s. £2 is added by the British company which imports the tea. The reason is that it has been asked to conclude the ordinary type of agreement with the Soviet Government whereby the profits are shared half and half, so that £1 of that goes without any risk to the Soviet Government, and the other £1 goes to pay for the risk, which is no small one, and any profit which there is in the transaction. That makes the price £16 10s. The chest is then sold to the State retailing institution in Russia, which disposes of it at £33 to the consumer. I take particular cases because they carry conviction. The £4 chest of tea reaches the consumer at a price of £33, or something over 19s. per lb. for the tea. This is an illustration of the state of affairs which exists this year.

Turn to another factor in the situation. A great deal was made at the last election of the effect on unemployment which there might be if trade with Russia were developed. In nearly all the statements of that kind which I have seen there was the most gross exaggeration. It was the kind of exaggeration that is indulged in by men who are merely thinking of the electoral effect without having examined the facts and figures for themselves. Russian trade, for example, has always been only a small fraction of British trade. Our exports to Russia have never been more than 3 per cent. of our total exports, and our imports from Russia have once or twice, I think, risen to 6 per cent., but have never touched 7 per cent. of the volume of our imports. The imports and exports of Russia were not more than 4 per cent. of our total volume of foreign trade, so that there has been gross exaggeration in this matter. On the other hand, anything that will improve our trade, to however small an extent, is desirable, and I would be the last person to minimise its value.

Then at the beginning of the year we had the hard state of the British creditors whose property in Russia had been lost, or whose obligations from Russia, had not been honoured. Again a trickle of trade was running at the time. Why it was not more than a trickle is illustrated by the words of the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George), who said that "the time for recognition"—the time not only for recognition, but for trade and credits—"is when the Russian Government has given not merely an undertaking and verbal guarantees, but some practical example of an intention to carry out such an undertaking."

That was the state of affairs at the beginning of the year, and then the New Diplomacy set to work. The new diplomacy was ushered in by the Prime Minister in a speech with a flourish of trumpets at the Albert Hall. There is an old verse which I call to mind— Let not him that girdeth on his harness boast himself as he that putteth it off. The Prime Minister has no need of such a caution of prudence. He is too confident. He stated his new diplomacy with regard to Russia with talk of the pompous folly of standing aloof from the Russian Government. He is not as other men are, pompous, foolish, undiscriminating, in foreign affairs, or even as his predecessor. He said, in effect, "We have no direct dealings with Russia. I have to whisper to another behind my back to tell somebody, to tell somebody to tell somebody else to tell Moscow." [An HON. MEMBER: "Hear, hear!"] I wonder whether the hon. Member who cheers that statement realises that it was untrue to the facts. There had been, as everyone knows, constant correspondence between the two countries, and when any important matter really had to be dealt with personally there were personal interviews between members of the British Government and representatives of the Russian Government. There were interviews co-operation on trade with M. Krassin, there were interviews on political questions as regards Poland, interviews on personal questions as regards British subjects, all taking place between the representatives of the two Governments at the time, and that was an entirely misleading statement. So we get the start of the new diplomacy with a number of statements which are unfounded in fact. Then we reach the next stage—the Prime Minister's dispatch on the question of recognition, including, among other things, the stipulation against propaganda, and on 12th February we had a statement of policy in this House: It is a very big job to settle all the outstanding points between Russia and ourselves. It is a job that somebody sooner or later had to face, and I made up my mind to face it and to tackle it— and so on. Then he talked about the negotiations which were to start, and he said, on 12th February:

5.0 P.M. The preliminaries to the agreements have already been made, and before this week is out, I hope that Mr. Rakovsky will be on his way to Moscow to get final instructions from the Government regarding the opening up of these negotiations. After that happens, I feel perfectly certain we shall be able to settle all these question in a very short time."—[OFFICIAL REPORT, 12th February, 1924; col. 769, Vol. 169.] It is now five months afterwards.

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

Three months since the negotiations began on 4th April.

Sir A. STEEL-MAITLAND

Everyone knows that perfectly well, but I have read the Prime Minister's own statement, made on 12th February. I am going to deal with the arrival of the Soviet Delegation. The preliminaries to the agreements, he said, had already been made. That was stated on 12th February or five months ago. He then said that he felt perfectly certain they would settle all these questions in a very short time. The Soviet Delegation came over here in April, and then a veil came down over the proceedings. We have been left in the dark or in a sort of misty twilight. From time to time we have a wonderful series of communiques. I wonder if hon. Members opposite have read these communiques from end to end and word by word. If there was wanting a new edition of "Alice in Wonderland," they could not be surpassed for the purpose. Then once again we asked when we were likely to have some of the speedy results that were promised. The Deputy-Leader of the House gave us an answer. That was on 8th May, to be precise for the benefit of the Under-Secretary for Foreign Affairs. He said: I regret that I am unable to foretell the duration of the Conference, but my right hon. Friend proposes to take an opportunity immediately to hurry it up."—[OFFICIAL REPORT, 8th May, 1924; col. 624, Vol. 173.] Evidences of the hurry are not yet apparent. Now we ask when we are to have a statement made as to the results that so far have actually been attained—results which are not eye-wash, results which are not a sprat to catch a whale, not £1,000 given in order to get £1,000,000 of credit, but actual results which will produce concrete trade or concrete reparation to the people who suffered loss.

We have had no statement this afternoon, and this makes discussion much more difficult for the Committee in a Debate of this kind than if the Under-Secretary had given us a statement of the offers already made to British creditors. I am not sure that the Committee have knowledge of the offers. Therefore, I will try to usurp the functions of the Secretary of State by stating what those offers have been. If I am mistaken I hope that the hon. Gentleman will, without hesitation, correct me, because it is naturally difficult for anyone who has not access to official information to be correct in every word in a matter of this kind. The Committee are probably aware of what these claims consist. We have the sterling bondholders, British citizens who lent money either to the Russian Government or to Russian municipalities, and so on, whose claims are said to amount to a total of about £56,000,000, of which £40,000,000 has been admitted by the Russian delegation. We have the rouble bondholders, British citizens who lent money to the Russian Government, not in debts which are measured in sterling, but debts measured and payable in roubles. Their claim is about £25,000,000 of sterling. Then we have the property owners the estimates of whose claims have been placed by them at £180,000,000. Lastly we have the miscellaneous claims and the claims for personal injury, of which the total is somewhere between £30,000,000 and £35,000,000.

I have mentioned these personal injury claims last, not because I do not wish to lay stress upon them. The trouble in a matter of this kind is that we are so accustomed in this country and in this House to hear of cases of personal maltreatment that in the end we are becoming, I will not say callous, but so accustomed to them that the same notice is not taken of them as would have been taken in the years before the War. I assure hon. Members that if they were to go through the details of what has happened to British subjects out there they would realise that the case for reparation for personal injury and personal maltreatement was one of the most urgent, even though it was not the largest in amount. I have here a list containing a number of such cases. I do not propose to trouble the Committee with them all. I will take one of them at random. Here is the case of a lady who was imprisoned for 270 days. She was arrested in July, 1917, was detained in seven consecutive prisons which are mentioned. She had dysentery and typhus, and was a month and a half in the prison hospital. She was constantly threatened with execution. When arrested she asked the reason for her arrest, and was informed that it was due to the fact that she was a wealthy English woman. Her nervous system and general health appear to have been permanently impaired by her treatment. I take that type of case, not because it is the worst of the cases, but because it is one that came on the first page of the list ready to my hand. There are other cases which are worse than that, in which British citizens have suffered maltreatment in Russia and for whom so far not one penny of compensation or reparation has been forthcoming. Those are the classes of British claimants.

Before I come to the offers actually made, may I again call the attention of the Committee to the Russian property which is in our hands? Under Article 10 of the existing trade agreement there is certain Russian property in this country which may be claimed, but which the Russians cannot take so long as Article 10 remains in force. We have had the total of Russian Government balances given as £4,000,000. I am not sure whether the Under-Secretary for Foreign Affairs will correct me, but I understand that there are considerable additional sums besides that £4,000,000, which are also in this country lodged with banks—sums which belong, it is said, to institutions, whether banks or partnerships or businesses, which were in Russia and which have been confiscated and nationalised by the Russian Government, and that the total of these has been variously stated by the City to be anything from £10,000,000 to £13,000,000, the larger figure being supposed to be nearer the mark than the smaller. Let us now come to the question of the offers that have been made. One thing is remarkable. I understand that no recognition whatsoever as of right has been made of any of these claims. What is the reason for that? I can surmise only one reason, and it is this—that if recognition as of right was made of these claims, the claimants in other countries who have, so to speak, a most-favoured-nation position in this matter, might claim that they should have compensation paid to them also. Perhaps that is the reason. Will the Under-Secretary tell us?

Now as to the offers. First, there are the sterling bondholders, the British owners of obligations payable in sterling. Mr. Rakovsky gave an interview which was published in an evening newspaper either on Friday or Saturday last. He made a number of statements with regard to the offer that had been made to sterling bondholders. He regretted that while they had refused his offer no counter offer had been made by them. There was one point which he omitted to give in his interview. He omitted to say what were the terms of the offer that was made. As far as I can make them out they were these: The total claim of sterling bondholders was admitted to be £40,000,000. An offer of 15 per cent. was to be made. That is £6,000,000. Do not let anyone run away with the idea that the £6,000,000 was to be paid off. In the first place, certain conditions were imposed. There were certain classes of bondholders whose claims were to be excluded from consideration. The larger bondholders' claims were to be excluded. [HON. MEMBERS: "Hear, hear!"] Those cheers are certainly most illustrative of the attitude of mind which is displayed by some members even of this Committee. All I ask is that justice be done to any bondholder whether he be rich or poor. When you get cheers for the statement that the larger bondholders' claims are to be excluded, what sense of justice is to be found in a mind of that kind? Suppose that you get a man who has £100 of these bonds and is reduced to beggary. He is to be compensated. If a man has a large sum, £10,000 or £100,000, and he is to be reduced to beggary, is he to get no consideration whatsoever?

The next class of bondholder to be excluded includes those who have been in active participation against Russia. What is to be the tribunal? Perhaps the Under-Secretary will say. I put a question on this, and I can get no answer What is supposed to be the tribunal, and what are to be the criteria for the judgment? I can well imagine a tribunal in which no one except a conscientious objector would have a claim recognised. Lastly, all claims are to be excluded which were brought after March, 1917. So, to begin with, that total of £6,000,000 will be whittled down to half the amount and probably less. But further conditions are attached to the payment. First, there is to be a loan raised in the City of London. Also even of the amount so reached not all is to be paid for, but only a slight proportion down in cash, and the rest is to be settled out of the low rate of interest at which the loan is to be raised in the City and the high rate of interest at which it is to be re-loaned in Russia. The British investor is asked to be satisfied by biting a piece off his own tail in order to feed himself. That is the situation as regards the sterling bondholder. Next as regards the rouble bondholder. Frankly, the only proposal is that they should be wiped out altogether, or, if I may say so—and it is adding insult to injury—that whereas they lent their money to the Russian Government in pre-War roubles worth ten to the £ they should be paid off in depreciated roubles worth 1,000,000 to the penny.

Mr. HAYCOCK

Francs.

Sir A. STEEL-MAITLAND

I can deal with francs, but we are dealing with roubles at the moment. I know what the hon. Member is thinking of. He is thinking of the fact that people who lend money to the French, on French bonds, in France have to stand the risk of the franc depreciating. [HON. MEMBERS: "Hear, hear!"] Exactly, and so they do, but since the franc depreciated to 110 to the £ it has appreciated to 80 or thereabouts to the £, and the people who lent have had the benefit of the subsequent appreciation. Now the rouble has appreciated to its pre-War value with the introduction of the Chervonzi currency so why not pay off these bondholders in the appreciated roubles? That is the answer to the point about the French francs. There is another consideration, however, which I should like to put to the Committee. There might conceivably be an argument in the case of people who invested in rouble bonds entirely of their own free-will, but what about the people who were forced to invest in them because they were not allowed to and could not transmit their money from Russia, and had to invest it in this way as the best method of keeping it.

Mr. HARDIE

When was that?

Sir A. STEEL-MAITLAND

That was in the early part of 1917. Further, what about the British citizens, men and women in quite humble stations, employed in Russia, who were encouraged by the British Ambassador to put their money into the Russian rouble loan?

Mr. HARDIE

Not forced.

Sir A. STEEL-MAITLAND

They were not forced.

Mr. HARDIE

You said just now they were forced.

Sir A. STEEL-MAITLAND

No. That was of the previous class. That was in regard to the people who could not transmit their money.

Mr. HARDIE

They were not forced.

Sir A. STEEL-MAITLAND

They could not send the money out of the country.

Mr. HARDIE

They could have kept it.

Sir A. STEEL-MAITLAND

Yes, they could have kept it, and had it nationalised. Were they to be subjects for com- pensation if they had had their money nationalised, but not if they invested it with the Russian Government?

Mr. HARDIE

That is another question.

Sir A. STEEL-MAITLAND

There is no difference of principle between the two. There are other classes of people who deserve consideration. There are people, as I say, many of them in quite humble stations, who were encouraged by the British Ambassador, as a sign of friendship to our Allies, to put some of their savings into the Russian rouble loan and who put money in. What is to be done for them? That is the case as regards the rouble loan. Next, as regards the property owners. The Russian delegation has, I believe, refused an impartial arbitration into the question of settling the case of the property owners. They prefer to make an offer of cash. The property owners' claims are estimated at 180 millions but it may not be the final figure. The Russian delegation offer £10,000,000 in cash, but that is not all, for the £10,000,000 is not to be handed over as such. Do not let anyone run away with that idea. They want to keep some of the British property owners in Russia if possible, and for that reason they are willing to make arrangements with them and give concessions to them or other property owners, British or not. So that if any out of the British claims were dealt with separately, the £10,000,000 would be reduced proportionately and the estimate of what would be forthcoming on that score is about £8,000,000.

Even that does not complete the whole transaction. In the nature of things, one cannot get positive information, but the talk is so current that it is hard to believe there is not a considerable body of truth at the back of it, that negotiations have already been started by the Soviet Government for the transfer to new owners or concessionaires of this confiscated property by which they would get a sum estimated at about £10,000,000 in cash down to themselves, thus transferring for £10,000,000 a part of the property for the whole of which they propose to pay £8,000,000 in compensation.

Lieut. - Commander KENWORTHY

Who are these new concessionaires?

Sir A. STEEL-MAITLAND

Lastly, I come to the case of the miscellaneous claims for compensation.

Lieut. - Commander KENWORTHY

May we know who are the people who propose to take over the property of private persons?

Sir A. STEEL-MAITLAND

I do not know. The hon. and gallant Member will bear me out that I stated in this case it was perfectly impossible to have absolutely accurate information. It is a perfectly fair question, but I never know quite whether the hon. and gallant Member speaks as the accredited representative of the Soviet Government—

Lieut.-Commander KENWORTHY

The hon. Baronet chooses to be insulting. I ask for protection. I represent the city of Kingston-upon-Hull, Central Division, and I asked the question for the perfectly proper reason that I was trying to get information. I asked it in a friendly manner, and if the hon. Baronet wishes to be unfriendly, I request him to continue insults of that description.

Mr. J. J. O'NEILL

On a point of Order. I wish to ask the hon. Baronet—

The CHAIRMAN

The hon. Member cannot raise a point of Order by asking a question of another hon. Member.

Mr. O'NEILL

May I ask you, Sir, if the hon. Gentleman opposite is in order in quoting figures which are utterly misleading, and for which he has no basis.

The CHAIRMAN

That is not a point of Order; that is a matter of opinion.

Sir A. STEEL-MAITLAND

The hon. and gallant Gentleman the Member for Central Hull (Lieut.-Commander Kenworthy) knows perfectly well that the last thing I ever want to do is to insult him, and if he wishes me to withdraw that statement which was meant as a joke, I am perfectly willing to withdraw it.

Lieut. - Commander KENWORTHY

Yes, please withdraw it, joke or not.

Sir A. STEEL-MAITLAND

I hereby withdraw it fully and absolutely. I no longer regard the hon. and gallant Member as that, and will never say so again, but only—if he will not take this too seriously—as a perambulating providence which looks after these matters. As regards the miscellaneous claims, there is a question of compensation generally for miscellaneous claims and for injuries, and the offer in this case I understand is a payment of £5,000,000 spread over 20 years, or a quarter of a million a year.

That is the total of the offers as far as I know, and I ask anyone to make up a balance sheet of the amounts of payments and receipts respectively proposed by the Soviet Government. There is a payment in cash at once of £8,000,000 in respect of property; a quarter of a million as to miscellaneous claims, and a certain amount on account of a fraction of the bonds, or a total sum that can hardly exceed £9,000,000 at the most. There is the possibility of the Soviet Government getting sums back again which, as I already said, I believe to be a real possibility, though, in the nature of things, it is impossible at present to get any accurate data. On the other hand, not only do they get these sums back to set against their payments, but I presume they demand to have the whole of their property under Article 10 of the present Trade Agreement set free and then to get a loan as well. That is £9,000,000 to pay, an indeterminate amount to get back, the whole of their claims wiped out, an amount estimated at from £10,000,000 to £13,000,000 here set free and a loan to be raised in the City. If they ever argue us into this, it will be an amazing piece of diplomacy on their part, considering the reasons which they have put forward. Perhaps it was in a prophetic anticipation of this that the Prime Minister described them some little time ago when he said: We have in Russia a dictatorship of the intelligentsia; it is Plato's philosophy in operation, beginning its reign with force and hoping to secure it with reason. It is quite true they will secure it if they make these reasons hold water with the ordinary British public. I know a statement on this subject is complicated, and may I give an instance of an almost exact replica of the situation which might occur in the case of an individual. Let us suppose that the hon. and gallant Member for Central Hall has made up his quarrel with me, so that I can use him as a protagonist, without wishing to be insulting—

Lieut.-Commander KENWORTHY

I have no quarrel with the hon. Gentleman at all.

Sir A. STEEL-MAITLAND

I am delighted to hear that, because the hon. and gallant Member is infinitely better at the noble art of self-defence than I am. Suppose I were to meet him or any other person superior to me in physical prowess in a lonely place, and I had in my possession cash and valuables to the extent of £100. Supposing I was despoiled of them all, and the person who despoiled me found afterwards he had some need of my services, and said to me, "I am willing to let by-gones be by-gones and make a settlement, and I hereby make you an offer. I have had £100 from you in cash and valuables, and in complete settlement I give you £5 down. I know I can pay it, because I have your watch for which I can get more than £5 in the nearest pawnshop. What is more, I will give you 10s. a year for half-a-dozen years if you are good and trust me. In return, of course, I expect you to wipe out any claim you have against me, to give me a sum of £7, which I remember is lying in your house and under your control, and as I am rather short of money, to make me a loan of £25 under easy conditions."

Proportion for proportion, that is exactly the proposal as far as I have been able to work it out, which has been made to the different classes of claimants. I said the official communiqué reminded me of "Alice in Wonderland." It does so all the more when one reads of the offers which have been made and the statements which have been made. It was said on behalf of the delegation of the Soviet Government that they were apprehensive lost they should be put into the position of people who only assumed obligations in return for good wishes, which though appreciated as such, need not necessarily lead to concrete results. They assuming obligations in return for our good wishes! Again we read in the same communiqué that "something would have been accomplished if the Soviet Government were put in the position even to begin payments to bond-holders who have not received a penny for over five years." Such an expression of sympathy with the bondholders! Yet one, which somehow, had to be made compatible with leaving the large bondholders out of consideration. Talk of "Alice in Wonderland." I think of the carpenter, who with sobs and tears he sorted out Those of the largest size. Holding his pocket handkerchief Before his streaming eyes. Lastly, as regards the loan, we are told that a loan of from £50,000,000 to £60,000,000 is wanted. Why not more? Why not £300,000,000?

Mr. HAYCOCK

Hear, hear!

Sir A. STEEL-MAITLAND

The hon. Member would doubtless subscribe his little all in order to increase it.

Mr. HAYCOCK

We paid £100,000,000 to Koltchak and Denikin.

Sir A. STEEL-MAITLAND

I can well understand how large credits might easily be forthcoming. You can get the sort of business which has been done already. Some company or corporation formed for the purpose will make an agreement with one of the co-operative societies to lend it some money for a month or two to finance the purchase of grain and bringing it down to the port, When it is brought down to the port the property in grain is transferred, the debt liquidated, and it is brought to Europe and sold. This sort of business, on short credit, is intelligible, when people can get the article and when they can get a profit, but a loan of £60,000,000 for a period of years under these conditions is perfectly ridiculous. A loan to the Japanese Government, yes; and why? Because, when they are overtaken with disaster, we know quite well that when they need money to rehabilitate themselves they can always be relied on to keep faith in their payments. But in this case with whom are we dealing? We are dealing with nobody else than the representatives of the Third Communist International.

Mr. HAYCOCK

It is not true.

Sir A. STEEL-MAITLAND

The hon. Member opposite says it is not true.

Mr. HAYCOCK

I say it again.

Sir A. STEEL-MAITLAND

He says it again. The odd thing is that the hon. Member seems to know more about Russia than the Russians themselves. I have read a speech by the Chief Commissar in Russia, Rykoff, in which he described the negotiations in England as nothing else than a struggle between the Third International and the Second International. As regards who represent England, that is for us to decide, but as to who they are who represent Russia, he at least is an authority that I would prefer even to the hon. Member opposite. Indeed, everybody who really knows Russia knows quite well that at the centre of the Third International you have three men of outstanding influence, Zinovieff, Stalin and Kameneff. Those three exercise power similarly in the Central Executive of the Russian Communist Party. When you get to the Central Council of the Russian Government you have a certain number of members on the Right, or what may by contrast be called the Right, an indeterminate number on the Centre, and the same group of men on the extreme Left, who dominate the whole situation. Therefore, it is perfectly intelligible why we have a statement that the Conference over here is nothing else than a struggle between the Third International and the British Government, or the Second International. Is it safe under those conditions, or is it conceivable, that a loan could possibly be granted? I take the speech of Zinovieff in that connection, and in this he is like the hon. Member opposite: Let England offer us a loan of £500,000,000, and they will see how much we hate foreign capital. If capital wishes it, we will guarantee that there will be no revolution in Russia, but we will not guarantee that revolutions will not occur in other countries. MacDonald knows the power of the Communist movement. He will not ask guarantees from us for the repayment of loans, and we will not give guarantees. I know that statements of that kind may be explained away by representatives over here, but what I would lay before the Committee is this. A speech of that kind, made by a person of that influence, takes more than a speech to explain it away. It takes action to explain it away. We judge their good faith in another way? There was the stipulation, to which I alluded, about propaganda. There is one country about which I have some information, and that is Persia. The right hon. Member for Paisley (Mr. Asquith), in a Debate last year, referred to the previous agreement with Russia about Persia as being one of the most wise and statesmanlike measures, because it ended a reign of propaganda by Russia against Great Britain and introduced peace as between the two countries in the matter of propaganda in Persia. Here we have a statement now made to us by the Russian representative that all those sort of treaties are now at an end. "We have annulled the old treaties providing for the partition of Oriental States into spheres of influence." In other words, those old agreements, I presume, are no longer needed, because there is now no danger of propaganda. Yet, when I look into the question, I find published in Persia in the local Press, in Resht, and further up into Persia, the following news from Baku on the 29th April: Information received from different parts of Persia states that British are trying to keep off the great factor of Persia's national movement, Reza Khan, from the scene of politics, and schemes of British agents are being divulged one after the other. They want to create a reactionary movement, especially among the semi-wild nomadic tribes. British agents are making propaganda and distributing guns and arms among Kurds and Lurs, and the latter have started pillaging the neighbouring districts. I would ask the Under-Secretary for Foreign Affairs, Is there any truth in those allegations whatsoever? If so, they refer to matters under his control. Those are the statements that are spread through Persia, emanating from Russia, and sent by the wireless from Moscow to that country.

That is the type of Government with which we have to deal, and if that is the chief difficulty in this matter, let me conclude, as I began, by asking, What share of responsibility have the Government? Did they know, or did they not know, the type of person with whom they were dealing? It is open to many people to say, when they assume office, that they find that there is information which they had not got before, and that they realise matters which they never realised before. That is a perfectly natural explanation, but it is not one that is open to the Prime Minister. He made the confident statement, "I have myself too intimate a knowledge of international movements to be deceived by false distinctions." So at least that defence is not open to him.

I wonder why it is that the Government have taken this line? Is it not an extraordinary contrast with the line that they have taken with their own Dominions? When it comes to our own Dominions, they "live but in the suburbs of the love" of the Government, but the Government take the representatives of the Bol- shevik Government to their heart. See what has happened. By the action that was taken earlier, by the invitations that were issued at the time when they were issued, the perfectly natural, obvious and inevitable result was to create a false impression in Moscow itself as to the degree of our gullibility and the amount to which credit would be easily forthcoming. When their representatives come over here, and they realise the facts that they are up against more closely, you have made their task the harder for convincing their Government at home.

That is one mistake that has been made. Another is that once a question of this kind is taken up it can never be dropped in the same situation as it was in the first instance. It is altered, for good or evil. Therefore, we ask you, What are you going to do now, after five months? The tragedy of it all is this, that in addition to the losses and the injuries to our own citizens, in addition to the loss of help that might have been given to British industry, and, though I say it, I do not want to exaggerate, because it has been too much exaggerated, in addition to the loss to workmen in this country who might have got orders by extended trade, the restoration of Russia itself has been retarded by action of this kind.

Money is really needed there, just as much as it is in Japan. In Japan you have a spectacular catastrophe, in Russia you have a general economic disintegration, of which the results are just as bad as they have been in Japan, though of a different kind, and money is really needed if only the people who would have to administer it could be trusted. I do not know whether or not the Committee will believe me, but I have been consulted by some who are interested in Russia, and I have done my best to help them to try and think out schemes by which trade could be resumed with Russia, in order to increase the volume of trade, and to do good, not only to this country, but, as I say, in the matter of prices and commodities to the Russian peasantry and workmen as well. I hope at least the Committee will believe also that, if I have spoken pretty freely, I have done so only because I think it is best under the circumstances that the situation should be clear to everyone concerned in a matter of this kind. There is one way, and one way only, in which trade can go ahead in Russia. I end, as I began, with a quotation from the speech of the right hon. Member for Carnarvon Boroughs; as true of trade and credits as of recognition— The only time when trade and credits can grow is when the Russian Government has not merely given an undertaking, but has given some practical example of her intention to carry out such an undertaking. Those are the only conditions, and it is only in that way that you will get the small trickle of trade growing into a large stream of trade. In no other conceivable way, moreover, can you ever hope to restore the shattered fabric of Russian national life.

Mr. J. J. O'NEILL

I want to take the discussion out of the political into the economic sphere. The hon. Baronet the Member for Erdington (Sir A. Steel-Maitland), who has just sat down, quite frankly and knowingly has given to the Committee figures which are absolute travesties of the true figures. In the first instance, he has quoted the £60,000,000 bonds as if the figures were really £60,000,000. As a matter of truth—and this he knows perfectly well—the £60,000,000 bonds could have been bought in the City at any time during the last two or three years for 6, 7 or 8 per cent. of their face value. If, as a matter of truth—and some speculators have done it—bonds have been bought by speculators, it would be in effect that the actual purchaser of a bond who paid 100 per cent. for it was not profiting at all by a complete settlement on the part of Russia, but that some speculator who paid 6 or 7 per cent. was profiting by your efforts to force Russia to pay a bigger price in the market than those bonds are actually worth.

Sir A. STEEL-MAITLAND

I am not certain whether, as I have been accused of an untruth, I may just answer the hon. Member quite briefly. I mentioned the exclusion of bondholders who bought their bonds after March, 1917, and I made no comment or criticism on that. I commented and I criticised on the exclusion of other categories beside those—not those who bought them since March, 1917. Again, I would point out this fact for the consideration of the hon. Member, that there is something to be said for the post-March, 1917, bondholders also. There are arguments to this extent, that if you at once conclude that they ought to be given nothing, you are really giving encouragement to the Government to depreciate its credit, in order that, when it is depreciated and some unfortunates have to get rid of their holdings for what they are worth, there will be no market for them whatever.

Mr. O'NEILL

I make no such conclusion. I simply say that in the City, where these things are better understood than in political circles, the offers which have been made by the Soviet delegation have been seriously considered, and in quarters which are very influential have been regarded as very fair and reasonable offers. As a matter of truth the bondholders themselves—and I should say my information may be just as accurate as that of the hon. Gentleman who has just sat down—actually suggested that the bonds should be reduced one-half, that is, to £30,000,000, and new ones issued at 3 per cent., and that these should be redeemable yearly in units of £1,000,000, so that in 30 years the claims would be fully paid. The bondholders understand a good deal better than the politicians, who are trying to embroil us in some miniature war with Russia, that the bonds are only worth a given value. Nearly everybody who has Russian bonds has written them off as utterly worthless. I have heard a distinguished banker say—[Interruption.] I assure the Committee that, as a matter of fact, not a single banker is carrying any Russian bonds. Can any hon. Member show me any balance-sheet in which Russian bonds are advanced as an asset? It is a matter of figures; it is not a matter of politics. I suppose one stands to be shot at by our friends opposite as being a pro-Bolshevik or agent of the Bolshevik Government if one takes an opposite view to that taken by hon. Members opposite. I do not care twopence what the Russian Government thinks of our handling of the question, but I am concerned with the interests of this country and of the working people of this country, and not of the Russian people. Are we going to prevent bondholders accepting a reasonable settlement by advancing arguments such as the hon. Gentleman opposite has advanced, or are we going to encourage bondholders to accept a reasonable sum from Russia in acceptance of their bonds? After all, Russia has lost 40,000,000 of her population by desolation and secession since 1914. Russia admits quite frankly that she is a bankrupt nation. The Russian Delegation came here and quite frankly admitted Russia's obligations. For a long time there has been discussions going on with people, and they will not be helped by speeches of the kind we have heard this afternoon breathing more or less an amount of hate and fire against extremists in Russia. There is no doubt there are people in Russia who breathe fire and hate against this country, but we have the same thing here. We have the same kind of idiotic newspapers. We have the same people here as the Zinovieffs there, and would you expect any serious man to quote these irresponsible statements in Russia as giving expression to the views of the whole of the Russian people? The trade delegation which is here—and I have met some of them—are serious business men, and not politicians in any sense of the word. In every industry they have sent men experienced in the industry, and they have sent bankers who understand banking.

I want to ask this Committee utterly to discredit—I will not say disbelieve—the figures given by the hon. Gentleman. He said that the claims of the private traders amount to £180,000,000. As a matter of truth—and the hon. Gentleman must know it—those claims could be settled for £1,000,000 or £2,000,000 payment in cash, and for the return of the property on lease, and the individual industrialists, who are involved in these figures, would be prepared to accept this settlement if you did not spike the settlement by the kind of speech that has been made to-day. After all, has it occurred to the House or to the country that Russia is the only one of our debtors whom we are endeavouring to force to pay at the present moment? Has anyone mentioned the amount that France owes us, or the amount that Italy owes us? Are any of our debtors being pressed so hard as we are pressing Russia, and must it not occur to Russia, and to Europe in general, that there is something more than an economic reason which forces us to endeavour to exact ungenerous terms from Russia, when we make no effort at all in the case of France and some other countries? When all is said and done, any money we lend Russia will inevitably come back to this country.

Here, by the way, are some of the orders which the Russians are prepared to place right away in this country. There is an order for 47 timber ships each of 3,000 tons, for six grain ships of 6,000 tons, for six oilships of 10,000 tons, for 16 trawlers—well over 200,000 tons of shipping—and for steel rails, grain elevators and things of that kind, involving many millions of pounds being spent in employment in this country. I would ask the hon. Gentleman who has just sat down, and who speaks for the Conservative benches, does he not realise that all the figures advanced have been false figures, and that he is doing a very serious injury to the settlement of the Anglo-Russian differences? Does he realise that he is presenting to the country figures which have no real basis in fact, when £180,000,000 can be literally wiped out by the acceptance in cash of £1,000,000 or £2,000,000, and the return of the property on lease? The speech of the right hon. Gentleman was very unfair, and will do a great deal of harm, not only to Russia, in which I am not concerned, but to this country and to the people in industry here.

Mr. MOREL

The interesting, informative speech to which we have just listened is a very useful corrective to the speech of the hon. Baronet. I wondered when he was speaking what he really wanted. The gravamen of his complaint, as I understood, was that we had been a long time on these negotiations, forgetting, no doubt, that the Noble Marquess who dealt with Turkey took something very nearly approaching 12 months to conclude the Lausanne Treaty.

Lieut. - Commander KENWORTHY

And then did not settle it.

Mr. MOREL

And, as my hon. and gallant Friend says, did not settle it. We have taken three months in these negotiations. Why this anxiety to settle the claims of the bondholders? What did the Government, which the hon. Baronet adorned, do for the bondholders? Nothing whatever. The bondholders, great and small, those whose claims are just, and those whose claims are unjust, have only one means of elucidating the accuracy or otherwise of their claims, and only one means of getting a settlement, and that is the means we have brought by beginning to recognise the Russian Government. If the hon. Baronet can tell me how those who have just claims can get back their money from Russia without having a Russian Government with which to negotiate, I should like to hear what it is. The hon. Baronet said, if I remember aright, that the situation had to be made crisp and clear. He did succeed in making one situation crisp and clear, and that is that if we are to credit that he represents those with whom he is associated on those benches, then the situation he disclosed was that his primary object was not to get satisfaction for the bondholders, was not to settle our trading difficulties with Russia, but was to smash the Anglo-Russian negotiations. In my opinion that is the real object behind this kind of attack. I think I may say that if we on these benches desired to make party capital out of the question of foreign policy, which we do not wish to do, and which always used to be an honourable tradition on that side, then we should be delighted with the attacks made on Russia from those benches this afternoon, because if there is one thing that millions of voters in this country will not readily forgive, it is these determined, these persistent, these implacable efforts to sabotage the Anglo-Russian negotiations. I may be pardoned for claiming to know something about it—[HON. MEMBERS: "So do we!"]—because I was one of those who was successful in driving out of public life for the time a public man who was the chief protagonist of that anti-Russian policy.

Commander O. LOCKER-LAMPSON

When the right hon. Gentleman, Mr. Winston Churchill, was ill in bed, and could not go to Dundee.

Mr. MOREL

I am not going to be led astray by that, except to say that for fully half the time Mr. Winston Churchill was in the field, and I can assure the hon. and gallant Gentleman that my sole regret was that he was not there the whole time, because, if he had been, my majority against him, instead of being 10,000, would have been 15,000. I say that millions of electors in this country will not readily forgive the kind of thing that has taken place to-day, and that for three reasons. One of them is that they know very well that the sources from which these attacks come are the same sources as those which caused nearer £200,000,000 than £100,000,000 of the national money to be wasted in an attempt to smash the Russian Revolution by subsidising civil war in Russia, and by a prolonged blockade, which destroyed tens of thousands of innocent people; and they will not readily be forgiven, because they know that behind this whole attitude, although it is not avowed, to a considerable extent lies the wish and desire to re-establish the old regime in Russia, and the masses of this country detest the remembrance of the old Czarist regime there, not only because of what it was, but because they shrewdly and rightly suspect that it had more responsibility than any other belligerent for the Great War.

Commander LOCKER-LAMPSON

rose——

The DEPUTY - CHAIRMAN (Mr. Entwistle)

The hon. Member knows very well he cannot interrupt unless the Member who is speaking gives way. He must wait till he gives way.

Commander LOCKER - LAMPSON

rose——

6.0 P.M.

The DEPUTY-CHAIRMAN

The hon. Gentleman the Member for Dundee has not given way and, therefore, the hon. Member is out of order in standing. [HON. MEMBERS: "Do not give way."]

Mr. MOREL

I am not opposed to hearing what the hon. and gallant Gentleman has to say.

Commander LOCKER-LAMPSON

I apologise for interrupting the hon. Member, but he speaks of the old regime. Which old regime did we want established? [HON. MEMBERS: "The Tsar's."] We wanted to establish the republic of Kerensky.

Mr. MOREL

And the third reason, to conclude, as to why they object is this: that they have got enough common sense—although some hon. and right hon. Gentlemen on the other side do not credit it—to realise that when you vote against Russia, and the existing Russian Government—though it had all the sins in the calendar upon it—and I am by no means a whole-hearted admirer of it, I can assure hon. Members—but when you have done all that, the people of this country have enough common sense to realise that a settlement of the Anglo-Russian dispute will mean a very large increase of trade in this country and a decrease of unemployment, especially in machinery and engineering, the two which have been most hard hit. I wish, if I may, to switch the Debate on for a time to another question on which, I hope, there may be common ground instead of this controversial ground—common ground between all parties in this House, although perhaps my opening remarks may not receive the approval of the other side.

While on the one hand we are, as I think, adopting this lamentable attitude —in certain sections of the House—to this Russian matter, while on the other hand the Allies, despite their experience of the last five years, are apparently determined that another great nation shall be treated as a pariah and go on paying damages for an unnumbered period of years, held in leading-strings, its industry, trade, commerce, shipping and finance under strict alien control; while these two running sores in Europe are kept open with an unwisdom which it seems to me to be hard to parallel, the bulk of Europe is feverishly arming for war, and we are getting near the rocks. I say that deliberately, because it is true, and because it ought to be said in this House.

During the last five years a state of affairs has been allowed to grow up which in some respects is more serious, even if that be possible, than the state of affairs which existed in the years before the Great War. The armament interests in Europe—and outside it—which, according to the Covenant of the League of Nations were to have been curbed, if not eliminated—the private armament interests are to-day as strong as ever, and are reaping golden harvests. They are flooding the Near East, the Far East, parts of North Africa and the greater part of Europe with material for war. The disarmament of Germany continues to be treated as a unilateral obligation, instead of being what it was meant to be according to the Treaty of Versailles, to render possible the initiation of the general limitation of the armaments of all the nations. That multilateral obligation has remained a dead letter. No one single nation on the Continent except the ex-enemy States under compulsion, have abolished conscription, and incredible as it may seem, I think I shall be able to show to the House to-day that the very Allied machinery which exists in the ex-enemy States to deal with ex-enemy armaments is using one of those ex-enemy States as a purveyor of armaments on an enormous scale to certain countries in Europe. In fact, Europe resembles nothing so much to-day, it seems to me as a drunken man smoking a cigar on a barrel of dynamite. In my opinion, the time has come—and this is the particular moment—when my right hon. Friend is struggling with a legacy of inherited evil—the time has come when this House must discuss, within limitations, the situation which has been produced; must face it with open eyes, and must realise to where it is likely to lead; and see if we cannot get collective effort on the part of all the nations, those who were victorious in the Great War, those who were conquered, and those who were neutral, if we cannot get the nations to come together and to take collective steps before the momentum to disaster has passed beyond control.

For some time time past I have been studying all the reports I could get hold of, and from, I think, the best sources, on the state of armaments in Europe to-day. I have come to the conclusion, after careful checking and counter checking, that the armed forces of Europe to-day are slightly greater than 2,000,000 in excess of what they were in January, 1914.

Captain Viscount CURZON

In Russia?

Mr. MOREL

At the moment there are between 8,000,000 or 9,000,000 men drilling for war in Europe, many of whom are fully equipped for war. [Interruption.] This, of course, does not include the fact to which I would draw the respectful attention of the Committee, that there are at the present moment, grown up during the past five years by yearly contingents, just over 1,000,000 men from North and West Africa, recruited at the present time at the rate of 200,000 per annum, who could be shipped over here at the outbreak of war if they could be got safely across the Mediterranean.

Sir W. LANE MITCHELL

On a point of Order. Is the hon. Gentleman in order in discussing this matter of preparedness for war? We understood the discussion was to be on Russia—although I am not hostile to what the right hon. Gentleman is saying. But it was understood that Russia was before the Committee. Would not what the hon. Gentleman is saying be more appropriate when the discussion on the Dawes Report takes place?

The DEPUTY-CHAIRMAN

The hon. Gentleman is not out of order on the particular Vote before the House. It certainly was understood that the discussion should be concerning Russia, but I cannot rule the hon. Member out of order, or say that he is beyond the scope of the Vote.

Mr. MOREL

I understood that I should be in order in raising this question of armaments as it would be extremely difficult to raise it on Thursday, and although I may be keeping the House a little longer, I will not keep it longer than necessary. I was referring, when interrupted, to the number of the armed forces in Europe, and was touching, for the moment, on the armed forces which are rapidly developing in Africa. But that does not adequately portray the situation. The insecurity under which civilisation is undergoing is an insecurity which is increasing every year, and is increasing more and more with every new application of industry, physics, chemistry, electrochemistry, thermo-electricity and thermodynamics and so on. That, I say, is the situation, five years after the most annihilating victory ever known in the history of war, and when the victorious statesman had an entirely free hand to make that new world which they so confidently predicted. I shall be called upon to make some remarks in the course of going into greater detail to the Committee, and the present state of Europe as to the activity of French armament firms and French—[Interruption.] Hon. Member might let me go on. I shall only be longer if they interrupt, for I am going to say what I have got to say. Having to refer to French armament firms I wish, at the outset, in order to avoid any possible misconstruction of what I say, to express my sincere belief in the pacific intentions of the present Government, the present majority of the French Chamber, and of the mass of the French people. It fell to my lot several times here, last year, in this House, to animadvert somewhat severely on the French policy followed by the Poincaré Government. On each occasion I declared my belief that that policy was not the policy of the French people as a whole, and that as soon as they got a chance they would repudiate it, that the France to whom we were asked to "take off our hats" was not the real France, but a caricature of France. That statement has turned out as I have described. Therefore, I shall not raise to-day the question of French armaments so that, although they are most formidable in Europe to-day, because I do not desire to suggest any doubt whatever as to the genuine pacific desire of the French people and the new Chamber which they have elected to express that desire.

During these five years of violence and confusion forces in Europe have been allowed to grow up rapidly, and to get out of hand. The fact of the matter is that the last five years Europe has given carte blanche to the armament makers, so that she has got herself once again in the grip of the armament rings, whose policy and whose influence on policy is incalculable, and is getting stronger and stronger the closer the armament interests are identified with the steel, iron, and the coal combine. By far the most influential of these producers of war materials to-day, and of the raw material making for war modern war, are organised and financed by French interests. It is these French interests which were at the back of the late French Government. It is these interests which are covering Central and Eastern Europe with a network of French loans for the purchase of war material. It is these interests which are grafting upon the unfortunate populations of the new and enlarged States set up by the Treaty onerous war expenditure. These interests, and their kind elsewhere, are actively working to-day, and may be trusted to do so, against the pacification of Europe. That is the price which civilisation pays for allowing the traffic in arms to continue to be regarded as a legitimate form of commercial activity.

In reality, what is it? Legally I suppose it is legitimate, but what is this traffic in arms? It is traffic which exists simply for the purpose of destroying life for profit. It does not matter where the life is or where is its origin. Legally and socially it may be legitimate, just as the slave trade was legitimate, until the public conscience awoke under the influ- ence of Denmark and Britain, and smashed it. This traffic in arms is organised and industrialised murder which weighs upon the policy of all Governments, and distates their policy more and more. As a result of all these events the preparations for war to-day in Europe and the output of war material have reached an extension never attained since the peace.

Yugo-Slavia, Czechslovakia, Rumania and Poland—and let us remember these four States, the names of which are yet so unfamiliar to the mass of people outside, number more than 70 millions of people, and cover an area of one quarter of Europe outside Russia—and possess armies on a war footing of 4½ millions—these four States are now rivalling the old great contending groups which existed before the War, and they are being used as the Balkan States were used as the agents of mightier interests. French armament firms and the Skoda works in Czechslovakia are the two main purveyors of war material apart from the Austrian State factories, which I will deal with in a moment. The Skoda works, which own their own coalmine and are making fabulous profits, are largely owner by French armament firms, and the firm of Creusot-Schneider own nearly three-quarters of the shares and direct the whole management of the works. This great firm can turn out a large amount of material, such as railway material and motors, which can be used for peaceful development or warlike purposes, but they are equipped with facilities for turning out every kind of material on a large scale, such as aeroplanes, guns and military bridges.

The DEPUTY-CHAIRMAN

I think the hon. Member is going too deeply into this question of armament firms abroad. We are now discussing the Foreign Office Vote, and I cannot see how all these details have any connection with the Foreign Office.

Mr. MOREL

Perhaps, then, I may now leave the armaments preparations of the States and of the French armament firms and deal with a matter upon which I have addressed questions to the Government recently, and that is the armaments now being turned out by the Austrian State factories.

Sir W. MITCHELL

On a point of Order. May I ask what the Austrian State factories have to do with the Foreign Office Vote?

Mr. MOREL

If the hon. Member will wait he will find that they have a good deal to do with it.

Sir W. MITCHELL

I think this is wasting the time of the House.

Mr. MOREL

I have recently been putting a number of questions to the Government with reference to the war material manufactured by the Austrian State factories. Where we come in is, that Austria happens to be one of those ex-enemy States for whose armaments the Powers, under the St. Germain Treaty, are responsible, and at the present moment the armaments of the Austrian State factories are supposed to be supervised by the Organ of Liquidation, on which we are represented. That is my justification for dealing with this matter. The astonishing fact has been admitted that the Austrian State factories are producing and illicitly exporting war material. I would like to ask how it is that the Treaty of St. Germain, to which we are one of the signatory Powers, can be used in this way, and that Austrian armament factories are acting with the knowledge of the Organ of Liquidation, which is under the control of the Conference of Ambassadors, and how is it those factories can export war material to foreign countries when according to the Treaty of St. Germain Austria has not the right to export even a single gun or a cartridge. In August, 1923, this large output began, and in that year large quantities of war material were exported from Austria to Yugo-Slavia, Poland and Rumania. In May this year the factories in Austria have forwarded to Yugo-Slavia 2,000 machine guns, and enormous quantities of gunpowder and explosives, and very many wagons of infantry and artillery ammunition. Austria is forbidden by the Treaty of St. Germain to export a single cartridge, and yet in spite of this she is exporting over the border enormous quantities of war material. Those are facts which I deem it necessary to bring to the attention of the Government.

Despite the interruptions to which I have been subjected, I believe that I have endeavoured, not as fully as I could have wished, to place before the Committee information which it is only right that the Committee and the country outside should have. If I may be allowed to say, in conclusion, a few words free from interruption, I should like to say that I should be untrue to the beliefs which I hold and to the views to which I have given expression during the last five years, that in my firm belief this state of affairs in Europe, where the greater part of it is armed to the teeth, is due to the whole conception and practices followed by Allied statesmanship from the moment that the last gun ceased to boom on the battle front. The Prime Minister, with the acknowledgment and consent of us all, I think is doing his best to get off that wrong road which was taken, but he will not succeed, and no one in this House can succeed, not even the greatest genius that ever lived can by any possibility succeed, if a decisive and fundamental break is not made with the policy which Allied statesmanship is responsible for. That statesmanship has concealed facts which ought to have been stated, and it has concealed truths which ought to have been uttered, and it has kept the whole peoples in a kind of miasma of falsehood, false history and false economics. It has based its whole war policy on the futile and immoral idea that you can make one nation pay for the sins, not only of its own rulers, but for the sins of the whole world. It has attempted, and is continuing to attempt, the impossible task of raising a structure on the ruins of the War inspired by the philosophy of collective sin involving collective punishment. Until and unless the peoples of this country and other countries make up their minds to start on a new road then I am afraid there will be no peace in Europe.

Lieut.-Commander BURNEY

May I ask the hon. Member if he can take us a little further? The point he has left upon my mind is that Czechoslovakia and other countries are arming and that it is our duty to stop them. May I ask the hon. Member how is it possible for this country to stop them? Will he make some practical suggestion as to what this country can do to stop those countries arming?

Mr. MOREL

What this country could do and take the lead in is to have a new Conference on Disarmament. Until you have a real and complete League of Nations and a conference on disarmament you cannot stop it. We are all living on a volcano. All these facts are being suppressed, and the sneers I have had from some hon. Members opposite is the kind of thing which is preventing the people realising the danger which they are in. I will finish with a quotation from an admirable book recently published by a British soldier: If you want peace you must begin with an act of oblivion and indemnity which will blot out on both sides the bitter memories of transgressions and iniquity. I would add to this, if you want peace you must face the truth, proclaim it and act upon it.

Commander OLIVER LOCKER - LAMPSON

We have heard a great deal from recent speakers about the benevolence of the Soviet Government and the amount of money which they are ready to pay. May I ask one question? Not very long ago we had a representative in Russia, Captain Cromie, who fought most gallantly for the Allied cause in the Baltic, who saved many lives, and did a great work. He became, at a time of difficulty, our plenipotentiary in Russia. He was murdered; and he was murdered, as is believed, by Soviet officials. Then, when some of his friends wanted to bury him, he was denied the right that every man ought to have, of being buried according to the rites of his own church, and his body was desecrated in the streets of Petrograd. What I want to ask is this: If M. Rakovsky and his present Soviet delegation are such humanitarians as we are told to-day, will they compensate the widow of our envoy and plenipotentiary and apologise for what was done?

Lieut.-Colonel Sir P. RICHARDSON

As we have got back to Russia, I should like to refer to an observation made by the hon. Member for Dundee (Mr. Morel), who, if I understood him aright, said that the object of those on this side of the Committee was to smash the Anglo-Russian Conference.

Mr. MOREL

Some of them.

Sir P. RICHARDSON

Some hon. Members on this side of the Committee. I think that that takes an entirely false and partisan view of the feelings of Members on this side of the Committee. It is a view which I, for one, and, I believe, most of my friends here, would not take of Members on the other side. I do not think the object in anyone's mind is to smash the Anglo-Russian Conference, but rather to bring it down to a state of sanity and to an understanding of the problems that are before us. Figures have been submitted to us by the hon. Baronet the Member for Erdington (Sir A. Steel-Maitland), to which exception has been taken on the other side of the Committee by the hon. Member for Lancaster (Mr. J. O'Neill), but I myself have been given those figures from a very authoritative source, and, whether they are the true figures or not, they give an expression of the confidence that Britons felt in Russia in pre-War days. I want to make that point because, although debts are spoken of as though they were mere matters of money, those debts are an expression of something more material, and I should approach them from that point of view.

It is immaterial for the purposes of this argument whether bonds in the market are valued at £10 or £100 per cent. The question I would submit is that they exhibit a former confidence measured in terms of money, and that confidence no longer exists. [An HON. MEMBER: "What about Consols?"] I am not dealing with Consols; I am dealing with the desire of everyone, in the House of Commons and out of it, to set our relations with Russia upon a better footing. I think it is very greatly to be regretted that there is so great a tendency here to make debating points and score off one's adversaries, rather than to get down to what is the business of the House of Commons, and particularly what we are discussing at the present moment, namely, the Foreign Office and our relations with foreign countries. I hope that the Under-Secretary will take up this question and give us some of the figures which have been disputed, in case those which were quoted by the hon. Baronet the Member for Erdington were wrong. I have no reason to suppose that they were materially wrong. The total indebtedness of Russia towards this country is something in the neighbourhood of 280 to 300 millions. Whatever may be its present-day purchasing value as between a seller, willing or unwilling, and a buyer, which may determine its present market price, that represents operations in the past which all of us would like to see resumed in the future, and the Foreign Office will, to my mind, the better discharge its function of regulating our relations with foreign countries if it will put before those with whom we negotiate the fact that it is quite useless to talk about the regulation of debts in a manner such as is to me, at any rate, reported to be. I hope the Under-Secretary will give later and more authoritative information to the House as to exactly the offers that have been made and received.

There is no doubt that Russia at the present moment is in a difficult position financially. It may be even that she is in a bankrupt condition. But the one thing that will restore our relations with Russia is a recognition of her indebtedness. There may be some postponement of payment; there may be some reduction of payment; there may be even a recognition of a change in market value, as in the case of Consols, to which an hon. Member referred. One thing, however, is quite certain, and that is that ships will not be built in England, and orders will not be undertaken for locomotives or anything else, until the British manufacturer has confidence that he will be paid now and hereafter; and there will not be that confidence if the manufacturer is met at every turn with a mere repudiation of past debts and purely farcical proposals for repayment. Those proposals have been dealt with, and I do not propose to go into them, because it is very easy to answer back in matters of detail; but the fact remains that we English people used to have confidence in the inhabitants of the Russian Empire, and to trade with them to a large extent. They are the same Russians that existed before. The Russians have not changed merely because there has been a change of government, and it is as possible to deal with the Russians to-day as it was in 1914 or at any other time.

It will not, however, be possible for English manufacturers to deal with the Russians unless those manufacturers have confidence that they will obtain some payment for the goods which they deliver. Therefore, I hope the Under-Secretary will deal with these figures that have been put forward, and which, apparently, underlay the objections raised by hon. Members opposite. I am quite certain That the Under-Secretary will join with all of us in hoping that some basis may be provided for the re-establishment of credit between manufacturers in this country and consumers in Russia, which will lead to an even larger development than there was before. We were told, at the time of the last election, that one of the keys to the relief of unemployment was to resume relations with Russia. To my mind it is not altogether the key, because it cannot possibly affect more than 3 per cent. at the outside, and I think everyone will agree that now, in the case of Russia, it would probably be smaller; but it is for the House of Commons and for all the departments to strive to build up our pre-War state of prosperity, and Russia is one of the items. I trust the Government will not be drawn aside into any false view which, perhaps, in the heat of an election, some persons advanced with undue emphasis, that the key to the solution was Russia. It is not the key to the solution; it is, in all probabiliy, 3 per cent. of the solution; but it is for all of us to co-operate in trying to obtain that solution, and I maintain that the first service that can be rendered by the Foreign Office to the trade of this country will be to see that proposals are not considered and drawn out over many months which can lead to no resumption of confidence whatever on the part of manufacturers in this country.

Mr. LESSING

I only desire to intervene in this, Debate for a very short time, and, before I address myself to certain points that have been raised in the Debate so far, I should like, if I am in order, to refer to something which fell from the hon. and gallant Member for the Handsworth Division of Birmingham (Commander O. Locker-Lampson), who referred in rather pointed terms to the death of Captain Cromie.

Commander LOCKER - LAMPSON

The murder.

Mr. LESSING

I will deal in a moment or two with the question whether it was a murder, and I think that possibly it may be of interest to the Committee if I throw a little light on the subject, because, first of all, I was present on the occasion of the alleged murder of Captain Cromie. There has been a great deal of misconception about a good many of the happenings since the Russian Revolution took place, and particular reference has been made before in this Chamber to the death of Captain Cromie. Whatever doubt there may be as to whether it is to be described as a murder, I should like, if I may, to correct the hon. and gallant Member for Handsworth, and to say that there is not the slightest doubt that Captain Cromie was buried in a proper way, because, as a matter of fact, the pallbearers of his coffin were all neutral Ministers in Petrograd, as it was called at the time. I can hardly think that he could have been denied a proper burial, considering the presence of all, or nearly all, of the neutral Ministers who were resident there at the time. Then I do not think it is out of place to say—I am only expressing my own opinion—that the death of Captain Cromie would never have occurred had it not been for the fact that, admittedly owing to the unwarrantable attack on the British Embassy which took place, Captain Cromie was carrying fire-arms, and, as a matter of fact, shot two of the assailants before he was shot himself.

Commander LOCKER - LAMPSON

I am sorry to interrupt the hon. Member, but I do not think he can deny that women in the Embassy were attacked and shot at before Captain Cromie tried to defend them. He was denied burial, and it was only with the greatest difficulty that his friends were allowed to bury him later on. In the first instance he was denied burial for several days.

Mr. LESSING

As to how far he was denied burial I am unable to state, because I was in the hands of the assailants, and was imprisoned in the Peter and Paul Fortress at the time when the burial took place, only receiving the information from the neutral Ministers after I was released. What I can say, however, is that I do not remember—and I was within a few yards of Captain Cromie when he was shot—I do not remember any shots being fired until he had first fired. I think that that is a point which should be clearly made.

Rear-Admiral SUETER

I apologise for interrupting the hon. Member, but may I ask whether Captain Cromie was defending women and children when he was shot? The hon. Member says that he ought not to have been armed, but was he defending anyone else? As the hon. Member was there, he can give the Committee the information.

The DEPUTY-CHAIRMAN

I cannot allow any more of these interrogations. The point is not strictly in order, and I presume the hon. Member will bring his remarks upon it to an end.

Rear-Admiral SUETER

The hon. Member was making certain statements with regard to a naval officer.

Mr. LESSING

I, of course, pass from that point. As it was mentioned, and as I was able to throw a little light upon it, I thought it was as well that I should do so.

Lieut. - Commander BURNEY

On a point of Order. As I think it is the general wish of the Committee that a point of this kind, which, after all, is very important and relevant, should be cleared up, would it not be in order that the hon. Member should be able to proceed upon it?

The DEPUTY-CHAIRMAN

I did not actually stop the hon. Member. What I said was that I could not permit the series of interrogations which was going on.

Mr. LESSING

Before I pass from the question, I would merely say this—

Brigadier-General Sir HENRY CROFT

You saw the actual death; let us hear the facts.

Mr. LESSING

To the best of my recollection, in fact to my knowledge, there was a large number of people in the Embassy building including women, but as far as I know, no shot was fired within the Embassy until Captain Cromie shot the oncoming agents of the Bolshevik Government. As a matter of fact, they did not fire first. I do not mention these facts in any defence of the Soviet Government. I merely state them, because I think that, in generally discussing Russian affairs, there has never been sufficient light let in to the question.

I should like to refer to the speech of the hon. Baronet (Sir A. Steel-Maitland) who opened the Debate. As one engaged for a great number of years in business in Russia, I do not think, however, you can quarrel in detail with the figures he gave the Committee, nor can you quarrel with the principle which underlay the major portion of his speech. It was a perfectly businesslike statement, dealing with the situation as not only the City of London finds it, but as every trading community throughout Europe must find it when they come to deal with the representatives of the Soviet Government. But I do not quite agree—I probably take rather different grounds from most hon. Members—with what I assume were his conclusions. I am one of those who heartily supported the idea of a trade agreement in 1921, and I am one of those who have suffered materially, as well as personally and morally, to a greater extent than probably any Member of the House from the confiscations and hardships generally inflicted by the Soviet Government.

I welcome the decision of His Majesty's Government to call this Conference which is now sitting on two grounds: First of all, because unless you confer, and keep conferring, you can never get anything in the form of a settlement to the advantage, first of all, of this country, and, in the second place, to the advantage of Russia, because without mutual advantage it will be of no advantage to this country. But I particularly welcome the decision of the Government to hold this Conference, because it will show to all the elements existing in this country and that really believe business eon be carried on in the way the Soviet Government presumed it could be, that it is impossible. A very great number of hon. Members above the Gangway really believe it is physically possible to conduct international trade on the basis of the Soviet Government's methods. I think the longer the Government sits in conference with the representatives of the Soviet Government the clearer it will become that there is a dividing line which cannot be bridged until the Soviet Government realise that they must alter their decrees and laws, many of which do not, as a matter of fact, operate at all and merely exist on paper, in order to carry on trade with the rest of the civilised trading community. The great advantage which this country can obtain from trading with Russia is not so much that oft referred to 3 per cent. of manufactured exports which we can send into Russia, but that Russia is a great reservoir of raw material which it is of great advantage to this country to be able to tap. The exaggerated promises of hon. Members above the Gangway of relief to unemployment from the export trade resulting from the resumption of ordinary trading conditions with Russia is still, as it was, very misleading. It would be far better—and I present this to them as an election cry if they want it—to say they want to resume trade with Russia under ordinary conditions because it would cheapen the food of the people. They would then have a fair argument and a basis on which no one could quarrel with them.

I do not wish to press the personal side of the question, but I have had a good deal of negotiation both in Governmental and in private affairs with Russians of every sort of regime which we have known during these last 10 years, and I have always found that it is far better not to attempt to do what the Russian diplomatist has always done with considerable effect, and that is to try to bluff his opponent. I think it would be far better for the Government to inform us whether they have definitely asked specific questions of the Soviet Representatives who are at present in London. They have, undoubtedly, asked us to make arrangements to procure them a loan. In return for that, it would be only fair for the Government to put certain questions to them. I would ask them frankly what they are doing with any moneys which it is in their power to hold at present. It is a well-known fact that Russia has been exporting grain for the past year or so—very little to this country, but in very large quantities to the Continent. It is also well-known that the Russian peasant is not paid by the Soviet authorities to any great extent for this grain which is exported to all the Continental ports. Many of us would like to know what the Soviet authorities outside Russia actually do with the gold values in various currencies which they receive for these very considerable exports. Have the Government definitely asked for that information? It is no use saying that is not a diplomatic way of dealing with this question. The sort of diplomacy which the Russian mind appreciates in a far greater degree than is generally believed is a frank question, to which they themselves may not desire to give an answer, but which they certainly will answer in the end if sufficiently pressed.

I think it would be a pity to adopt anything in the form of a negative policy. If this Conference is coming to an end through no settlement being arrived at, it would be a pity to do more than suspend its operations, and, if its operations could be suspended, perhaps there would be an opportunity for doing the one thing which, in my belief, would get us a little nearer a settlement with Russia, and that would be joint action with France and Belgium. I will go further, because in this matter you require the technical advice of the country that is best educated in the trade and commerce of Russia, namely, Germany, and say we should make common cause with these three countries who are sufferers in the calamity which has overcome Russia equally with, and in many cases in a greater degree than, this country. I have always felt that it is only by what you may term international action in this way that we can really obtain what we are after. If there should be any possibility of the present Conference coming to an abrupt end, it would be a wise thing for the Government to consider whether they should suspend it with the idea of combined action in the near future, and the nearer the future the better.

7.0 P.M.

Mr. E. C. GRENFELL

I should like to congratulate the last speaker on securing the attention of the House with his particular knowledge of this subject. He has contributed more to the Debate than anyone else. We business men want, if possible, to extract from the Under-Secretary some statement of what has been going on for the last three months, and what view he takes of the Russian Delegation. Before the Russian Delegation arrived, the London bankers thought it wise and necessary to put their views before the Chancellor of the Exchequer and the Prime Minister, and later they were sent to the Press. That letter to the Chancellor of the Exchequer had been very carefully considered. It was not the result of any form of propaganda against the Soviet Government, as suggested by the hon. Member for Dundee (Mr. Morel). It was suggested purely because the bankers, being men who thought they knew their own business, wished to prevent the Soviet sending a delegation here which would come with any misapprehension. It was done from no desire to prevent the delegation coming, but in order to save considerable time and argument. What was the result? A storm raged on the part of the Government in Russia at what they considered an attack by the money trust in order to prevent the Russians coming to any agreement with us. That was not the case in any sense. When we drew up and sent to the "Times" that document it was in the hope that we could get the Russian mind back on to sane ideas of finance. I have tried, even since 1919, to start industries in Russia. I cannot say that they have in any case that I know been satisfactory. I myself am connected with a very great company which wished to encourage trade in Russia. It is one of the few companies that opened a branch in Moscow, and I have the highest, authority, I think, for saying that that branch was extremely ably managed, was doing good work, and was a credit to this country.

I have a letter from the hon. Member for Central Hull (Lieut.-Commander Kenworthy), who, after visiting Moscow and seeing that branch, wrote to the chairman praising its management and describing the great pleasure which it had given him to be received by them and the services which they had rendered; and he at one time in the Lobby here said that it was a model of management, and yet by the 1st of July we were compelled to close that branch. In the South of Russia the same thing has happened. A small company was formed there to trade and did trade in the articles described by the hon. Member (Sir A. Steel-Maitland) who opened this Debate. It imported tea and other things, we will say, at a cost of Is. 6d., and when these things reached the consumer the cost was 19s. Part of that was money taken directly by the Government and part was taken indirectly.

It may be said that that was done to discourage the consumption of what to-day is a luxury, namely, tea, but what before the War was a necessity. But having discouraged this, what did they do with the exports which presumably this intelligent Government might wish to increase? The same people who imported the tea endeavoured to export other articles. While those articles were in the train the export duty was increased by 200 per cent. That, I admit, was upsetting, but it was still more upsetting that when they got them on board the ship, and had paid this 200 per cent. increase, the duty was put back in two weeks to where it had been before. I think the House will agree that this form of trade is not going to increase the trade of Russia, and it is a distinct discouragement to many of us to start trading institutions there.

When we come to this outcry against the banker, let me explain that the deposit bankers receive deposits from everyone in this Chamber, and they can only lend that money on what they believe to be good security. They will not make long loans to be put into Russian railways which might or might not fail. The only thing which the bankers of deposit, or the issuing bankers, can do is to recommend securities to their customers, and until Russia and other countries come back to the old ideas of honesty and respectability in their issues I think that the bankers are justified in taking the action which they did. When it comes to a question of supporting the trade and, in supporting the trade, giving money to exchange goods with Russia and other countries, it is for the trade to settle what is the rate of profit which they ought to receive for their trouble, and for the risk that they run, and if our traders are of opinion that no profit which they can make is sufficient to repay them for the risk that they have to run, it is not for the bankers, it is not for the Government, it is not for the export credit scheme, or for the trade facilities scheme, to support Russia in any way.

We are not now in the time when the lender of money abroad is the servant of the borrower. It may have been the case in pre-War days that the borrower settled the terms. To-day we, as a country, owe a great deal of money abroad. We have to pay as before for our imports of materials and food, and we have the American Debt as well to pay interest upon. We therefore have a much reduced sum, estimated at from £80, 000, 000 to £90, 000, 000 a year, which we can lend the foreigner if we so choose, and I think that during the past year, especially, this country has not been niggardly in the amount which it has lent abroad. But I think that we are justified in calling the tune. We are justified in looking very carefully among the borrowers and choosing those whom we think deserve credit.

What have we done? Our Government has sent messengers abroad, our bankers and our professors have gone abroad to study various countries which have suffered grievously during the War and after the War. Austria looked quite helpless when, thanks to the League of Nations and thanks to the efforts of others—it was originally, I think, due to the League of Nations—Austria was restored, and will soon, we believe be able to carry the weight of the debt which it incurred. But before giving that money to Austria the League of Nations and the bankers and the Governments made strict rules as to how that money was to be spent, and how the budget was to be balanced. Only last week the same thing has been done with regard to Hungary, and England has taken more than half, almost three-quarters, of the whole of that loan. Is it wrong that, in lending to Russia, if we do lend, again we shall adopt the same attitude which has been adopted with regard to Hungary? If Austria and Hungary can follow advice, why should Russia be too proud to accept advice, and to follow it? And if you like to call it going into the receiver's hands, well, it will be into the hands of a very friendly receiver in this case.

The Member for Lancaster (Mr. J. O'Neill) has asked for a business statement, and I hope that nothing which I have said is provocative. I resent the idea that the bankers have in any way been antagonistic. They are ready to help in every way, but they would be wanting in all common sense if they did not make conditions, and if they did not give advice which must be taken before they help Russia. I therefore ask whether, before we export brains as well as capital, the Under-Secretary of Stale will warn these gentlemen who are here that we bankers, the people in the city, the investors and the traders, are not joking, and we are not bullying, and are not trying to be offensive, when we make these rules. They are the ordinary rules that have governed the world, and have governed the relations between borrower and lender since history began, and there is no way of getting around them.

In the case of Russia there are two things they have imported in the past—brains and capital. Since the time of Peter the Great I do not think that there is any big enterprise in Russia that has not been due to the imported brains of foreigners, and the material resources of the country have been developed by foreign capital, and I look forward sometimes to the day when it will be safe for foreign brains again to be employed and exported into Russia. It is not easy now, but I look forward to the time when those brains will be able to be used to develop foreign capital in that country for the general benefit of the world. I hope that the Under-Secretary will be able to give to the Committee some information as to the progress that has been made.

Mr. MILLS

Before making my very slight contribution to this Debate, I would like to add my small modicum of congratulation to the hon. Member for Abingdon (Mr. Lessing) on his maiden speech. That speech, coming as it does from a captain of the Grenadier Guards, who served on the Military Mission and went to Russia during the period 1916–18, and speaks with exact knowledge of what occurred during that tragic hour in the Russian Embassy, which has given rise to countless questions in this House, and which has aroused an enormous amount of prejudice against the Russian Government, was a very timely contribution as a maiden effort in this House. If I may say so, the speech of the hon. Gentleman (Mr. E. Grenfell), who represents the bankers' interests and those of the City, was no less welcome. In effect it gives to the Russian Government that cold douche of capitalistic common sense—this is the moment for candour—which measures human need in no other terms than those of money value.

I hope that before this Debate concludes we shall have a few words, utterly divorced from the problem of looking at things from the point of view of money from the hon. and learned Member for the English Universities (Sir M. Conway), who could, if he will, give to this House some of the facts as to the very careful way in which to the present day the Government of Russia, within the knowledge of the hon. Gentleman within the last few weeks, have preserved with meticulous care, and with the most care- fully selected attendants whom they could possibly obtain, every single jewel that was ever in the possession of the Russian Royal Family, because then our Debate would have reached a new stage in the matter of our relationship with Russia.

When I came home from Russia in 1921, and spoke from that side of the House and tried to tell the then Prime Minister that there was a field for British labour and British capital in Russia, and that there was a disposition on the part of the Communist Government of Russia to institute a new economic policy, and that all that was necessary was to send our own representatives and the representatives of other countries as quickly as possible, so that they could get the maximum information and the maximum of criticism levelled directly upon their institutions, we were laughed at and regarded as being specially paid to come forward with a certain message. I hope that the people who think that I have been paid will look at my bank balance. If somebody could reduce my overdraft of £180 for a couple of years I should be happy.

Is the speech of the hon. Member for Erdington (Sir A. Steel-Maitland) to be understood as representing the official Tory attitude towards this country? It is now many years since the tragedy when Russia set up a new set of rulers. But that did not commence the history of Russia. Surely hon. Gentlemen who understand the problem realise that on the third floor of this building there is a room reserved for the files of the "Times," and if they want to get a dispassionate view of the genesis of this case they might profitably spend an hour or two there. In the columns of the "Times" for 1905 there is a note of warning addressed by the Financial Editor of the "Times" to hon. Gentlemen opposite, and I may add that M. Clemenceau, the editor of a great French paper, who subsequently became a President of the French Republic, endorsed the warning which told the investors in Russian loans that the money was being borrowed by the Russian Tsar in order to be used to damp down the movement towards political liberty and the free institutions of the West. This may be a subject for amusement among hon. Members opposite, but some day they will have to understand this problem and they will have to realise that the genesis of it dates back earlier than the political revolution. They must realise that it began at the moment when Sir H. Campbell-Bannerman, standing at this Box, after £80,000,000 had been subscribed by investors in France and Great Britain, in spite of the warning of the "Times" and of the French newspapers, stated that 48 hours after the money had been subscribed a troop of Cossacks had closed the first Russian Parliament. The British Liberal Prime Minister standing at this Box was crying, "The Duma is dead! Long live the Duma!" The "Times," in a leading article on 21st July, 1906, said the loan had been obtained by fraud, but the Russian Government could not live on it for ever.

These are facts. Surely when hon. Members opposite appeal to Members of the Labour Government and complain that that Government has not produced within a few weeks all those gigantic results which they had hoped to secure, they ought to have some sense of proportion. We have been talking about the Lausanne Conference. Do hon. Members remember how long that Conference went on? Do they remember the end of it? It lasted nearly 12 months, and was in a country with a population of 6,000,000 people. At the end of that Conference all sorts of things had been given away, but the question of Debt had been adjourned. In this case the Conference has been sitting about six weeks and 130,000,000 of people are represented by the delegates sent here. They have tried to impose on those with whom they have to deal a new idea of relationship. They say we will negotiate, we will do our own exporting, we will deal with a new theory of our own conception. It may turn out that experience will prove that Russia by a more gradual system of trustification of industry is making collectivism inevitable. But are we meeting them in the right way in view of what has happened, in view of our failure to smash their Government by force of arms and by every conceivable adventure? It is not right we should attempt to damp down this Conference, that we should predict its failure, that we should throw cold water on it. I say that the party which is pursuing such a policy as that is acting against the advice of the best men and of the best section of their own Press.

Take an article in yesterday's "Observer," written by a man who rendered yeoman service in the days when his very name to the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) spelt anathema. Here is the Sunday "Observer"—and I may say in passing that of all the Sunday newspapers in Great Britain, this more than any other has an ever-growing clientele and backing which is having its effect on the mentality of those who represent Labour in this House. It is giving us a view of that side of Toryism and capital which makes it worth while to study the other man's point of view. No doubt hon. Members came on to these benches with pre-conceived ideas, determined to put their point of view and to brook no difference, no compromise, and no alteration. Many of us have come here prepared to make speeches this evening, but having listened to points of view with which one may not agree, one is yet forced to the conclusion that the various sentiments expressed in the Debate by different people contain points of view which may in themselves be right, and it is up to us to do the best we can with them. It is in an institution such as this that one finds the best method of evolving the type of man who will see all round a problem and not only the points which come from his own party.

We say that this Conference in London is the mightiest attempt, the greatest attempt yet made in modern history to evolve a new relationship between the producer and the importer, and any criticism of it should be not hostile necessarily but should be considered and informed criticism. The speeches which we have heard delivered to-night constitute admissions that somehow or other the original conception of the position was wrong. I would ask the attention of hon. Members to the latest book issued by the Andrew Carnegie University at New York. It is not yet, I believe, on sale in this country, but there you have a board of economists selected from all over America in order to study economic questions, and they have come to the conclusion, quite rightly, that the Czarist Government was hopelessly bankrupt in 1916. It is well known that in the Strand to-day you buy a suit of clothes and have it wrapped up in rouble paper for 40s., and I suppose we are going to have gentlemen who bought the Russian bonds at a thousandth part of their face value claiming to be treated with every consideration. I claim that after all said and done your criticisms come back to this, that there are 130,000,000 people with needs who ought to be brought face to face with those who understand and represent the problem of production. At the present time we are wasting energy in our own country, while in Russia, Poland and Austria, and other countries east of Berlin, there exists a problem of human need, and it ought to be our task to bring human energy here into relationship with those human needs.

But it always comes back to the question of money value. Is there anyone who sees good cause for shouting from the housetops that we have come to the rescue of Austria-Hungary when the terms under which our assistance was given are known? When one considers the advantage that has been taken of the terrible necessities of Eastern Europe, then one is not quite so proud as some of those who talk about our having come to the rescue of these people. Let me conclude with a quotation from that British crusted Tory organ the "Spectator"—an article written by that very old crusted Tory, J. St. Leo Strachey, on the 21st June this year. It is well worth reading. It is really an endorsement of the policy advocated by "The Times" to which I have already referred. The whole article is really summed up in these few sentences: In our opinion it would be perfectly right for the British Government to intervene, taking, of course, the best precautions they can, and to say we will give Russia the credits which she tells us she cannot do without. The initial sum required will not be very great, and we shall soon prove whether the Russian Government will keep faith. If they do not, we shall shut down and cut our losses, but if on the other hand, as is far more likely, trade begins to revive, our Treasury will certainly be the gainer. We shall get much more employment, local and Imperial, and the Government will at the same time have a remunerative investment. Let me come to my last point. This time last year I was in one of the most prosperous towns in Northumberland—Blyth—where the Duke of Northumberland is keeping very comfortable on the income he derives from royalties on coal ex- ported to the Bolshevik Government. He is still enjoying a comfortable income from those royalties. A coal exporter told me that pressure was put on them last year to cease sending coal to Russia, but seeing that they had never had to wait a day for payment, they decided, against the backing of the bank and against the advice of the bankers, to continue their dealings with the Russian Government. A member of the Advisory Committee sits on the benches opposite. I want to put this challenge to him. This afternoon, at Question Time, the Financial Secretary to the Treasury, when asked if the Advisory Committee would guarantee a certain sum of money—£2,500,000—for ships to be built in this country for Russia for this trade, turned down the proposals on the ground that ultimately it would be in competition with British shipowners. If hon. Members will look at the trade that takes place now, they will realise that the only thing that will happen if these ships are not built here for the use of the Russian Government is that Russia will continue to use the ships that they have always used. The ships that are used in White Sea timber trade now are Norwegian and Scandinavian, no British at all, and they are charging increased rates. Freightage has gone up over 12 per cent. in the last few weeks, because there is a shortage of vessels to carry the timber here. I suggest to the Minister of Health, who is the only Cabinet Minister present, that he should have something to say at the next meeting of the Cabinet as to why the Advisory Committee is allowed to come to these decisions, and why the Cabinet should buckle clown to them.

The Debate so far from having been a washout—owing to the fact that the Prime Minister has indulged in one of those speeches common to his predecessors, saying just what he wanted to say until he had been to Paris and come back, when it will be too late for his critics to put a spoke in his wheel—has been well worth while for several reasons. First of all, we have had a maiden speech which showed a new idea and a new application of certain views in Russia which have led many people to refuse to look at Russia with other than eyes of blind prejudice. Then we have had the half-diagonal march of the banking fraternity and the indication that, given certain safeguards, they are prepared to act. These are facts which we can welcome.

We on these benches who have suffered from the defects of the Communist philosophy in every division we represent, because they believe that, somehow or other, their ideals can only be obtained by civil war, ask hon. Members to look at the point of view that we put forward. Here we have people thrown up by one of these mighty convulsions which always follow government by force. The government that preceded the present government in Russia lived by force and died by force. Every change that has taken place all over the world up to now has been violent in proportion to the manner in which the population in that country was allowed to participate in the ordinary arts of government. In our own country things are different. We are rapidly marching forward to a new change in the conception of individual relationship to government, and we are doing it almost without loss of temper, to say nothing about loss of life. If we can do that and justify every step forward that we are taking, and bring our Russian friends into closer relations with us, well and good.

There is that in the Russian temperament which only those who have seen it at close quarters can appreciate. The nearer we get to the East, the more reluctance there is to start work or to think about work. To-morrow, the day after, or the day after that is quite time enough for these people. Those hon. Members who come from Lancashire or Yorkshire would certainly not appreciate an appointment which was fixed for to-morrow if that appointment, in quite a usual way, were put off until the 1st of October. That is the difficulty that faces every negotiator. The people who are representing the Government at this moment are representing the Government with as much credit to the nation and themselves as any preceding band of negotiators, and I hope that if they do not reach finality at this stage of the negotiations the advice which has been given in the maiden speech of the hon. Member for Abingdon (Mr. Lessing) will be followed and that the Conference will be adjourned, following the precedent of the Lausanne Conference. In that event I am certain we shall come a stage nearer to mutual satisfaction than when the Conference started.

Lieut.-Colonel J. WARD

We have listened to three very remarkable speeches, one by the hon. Member for Abingdon, another by an hon. Member from this side who, I understand, spoke for the financial interests of the City of London, and one from the hon. Member for Dartford (Mr. Mills). The speech of the hon. Member for Dartford was the more remarkable, having regard to some of the speeches that he has delivered on this subject. At last, it is quite clear that we are getting dawn to brass tacks and that this wonderful ideal of the millennium that was illustrated to the rest of the world how all the evils of the human race could be cured, as exemplified in the Soviet system of Russia, is now even from the hon. Member's point of view a very serious and doubtful question. If we can only get rid of the stupid highfalutin ideas that used to be employed in discussing this subject it would be all the better. The hon. Member for Dartford still hankers for the old thing. Somehow, he does not like to desert the idea that Moscow has shown the world how to cure all the evils from which society suffers. Behind that, however, I must confess that he has admitted that while it is an ideal, and while desperate efforts have been made by the people who are endeavouring to make it practical and successful, it will take a very long time before that idealism is likely to take practical effect.

The hon. Member referred to the "Times" report of what took place in this House in 1905 over the abolition of the Duma by the Cossacks of the Czar. That was a thing to be deplored. It was a positive injury to Russia. That all the representative institutions of Russia, according to Western ideas, should be destroyed so ruthlessly in 1905 was a catastrophe not only to Russia but to the world. No one disputes that now. Even some hundreds of years ago when this House was closed, locked and barred against its Members, I do not think that a single man lost his life. Life was lost afterwards in the disputes that occurred outside, but even those disputes were carried on in the quaint. English fashion of real fighting and not by murder and massacre. Even when the Russian Duma was destroyed or closed in 1905 I do not think the hon. Member will find in the "Times" report that a single human being was wounded or injured.

We all deplore the fact that the beginning of representative and democratic Government in Russia was nipped in the bud in that way, but I would ask the hon. Member to recollect that the Duma was closed a second time, and closed by the men that he says are the saviours of Russia, or may be the saviours of Russia. It was closed in an entirely different manner. There were machine guns in the galleries. Men of the hon. Member's own political faith were members of it, and one man who was Prime Minister, and quite as good a Socialist as the man who is Prime Minister in this country to-day, was driven from the country. Hundreds, maybe thousands, of the hon. Member's own faith in politics were brutally massacred. Was that done in order to set up representative Government? Was it done to re-establish the Duma which the Czar had destroyed and which had been recreated? Nothing of the sort. The Duma was destroyed in 1917 by massacre, it has been kept in its grave until now by massacre, and it will be a long time, provided the present rulers of Russia maintain their position, before the Duma, or anything like it, will be resurrected in that unfortunate country.

One of the things which set me against the Labour party was that when I came home from the War I was astounded at what transpired at a. Labour Conference. I attended that meeting in my uniform, as I had only just arrived home. An attempt was made at that Congress to shout me down and expulsion was threatened, but as I was a representative of an organisation they could not do that. The present Colonial Secretary, who presided over the Congress, called attention to the fact that I was a representative delegate to the Congress, and that whatever my views were I should be allowed to express them. When I came back, knowing that the Zemstvo had been destroyed, and knowing that any man who either thought or talked about representative institutions was immediately shot or otherwise murdered, and I went to the Labour Congress, fresh from Russia, where every semblance of liberty and democracy was being ruthlessly massacred and destroyed, and I heard my Labour colleagues glorying.

[Interruption.] It is useless to try to drive me off the track. I shall go back again.

Mr. CLIMIE

I am not trying to drive you off the track.

Lieut.-Colonel WARD

I attended the Congress as representing my own society, because they told me that they had elected me as their delegate, thinking that I should be home. I heard at that Congress eulogies of a wonderful description about the awakening of liberty and democracy in Russia. "Good God," I said, "our people are being completely humbugged." The whole thing so far from being an upheaval towards democracy was then and is now, after four or five years without any outside interference, the most horrible, tyrannical oligarchy that the world has ever seen. Nothing in the Star Chamber is equal to it. Nothing in the history of any of the States of Europe, not even the French Revolution, is so terrible. [Laughter.] Hon. Members opposite may laugh or interrupt me as they will, but I shall come back to my subject. Hon. Members are only showing that they do not like the truth to be told. You can go through the French Revolution, terrible as it was, but the brutality of the French Revolution only lasted so long as outside interference was making some impression upon the discontented elements in its own country. It never lasted for five years after all that outside interference had disappeared.

This brutal system in Russia is a system that can show nothing to the Western peoples as to the means of curing their social and political difficulties, and these men are so infatuated with the policy that they have put upon their own people, which has reduced the population of Russia anything from 140 millions to not more than 112 millions to-day. Russia has been one graveyard from end to end, and not by the War. There have been more people destroyed in Russia during a couple of years of the Revolution than during the whole of the real warfare carried on in the Great War. These men were so infatuated with this idea and they tried it five years without outside interference. And such a country to experiment on! They think, after their hopeless failure, that their duty is to spend the money. My hon. Friend wanted to know whether the Financial Secretary would tell him what they did with the gold they got for the export of corn since 1920 to date. They are infatuated with their method of Government, they have a sound belief—there is no doubt they have a real belief; men cannot, unless they are brutes, murder deliberately, without having a complete belief in what they were doing. I will give them that credit. The Home Secretary knows where some of it is going now.

Mr. MILLS

He ought to tell us.

Lieut.-Colonel WARD

The hon. Member knows perfectly well where some of it went some time ago. I do not know the number of the inhabitants per square mile in Russia, but from Vladivostock right over the Urals the country is scarcely scratched. It is probably the wealthiest country in the world so far as material wealth is concerned. It is scarcely scratched more than 14 versts each side of the railway over 6,000 miles of territory. It can be self-contained entirely both for food and for all the raw materials for industry. For every enterprise of every description Russia has illimitable supplies. It had, at one time, about 140 millions of people. Spread over this immense territory there could be only very few per square mile. You can experiment with a Soviet system or a Communal system such as they are doing in a country like that because you are not hampered much by the necessity of finding work for your industrial population in foreign trade. You have the means of keeping your people alive in your own country without outside interference. You could not make a similar experiment with any chance of success in a country like this, because if a violent upheaval were to destroy our institutions suddenly you could not sit down as the Russians are doing to re-establish and build up some other system. Your foreign trade must be kept going on or within a fortnight or three weeks millions of your people would be starving. Yet in that country with illimitable resources, where Communism, if it ever could be, should be successful, it has proved one of the most ghastly failures ever seen in the history of the world. [An HON MEMBER: "Not Communism."] Let the hon. Member go and tell Trotsky that at Moscow and see how he gets on.

This country, before the Revolution, had most ancient representative local institutions. It had, so far as its com- munal life was concerned, all the elements of making a communal system almost from the beginning. Although I have read many books on Russia, I learned more in five months while I was administering the Maritime Provinces. There disputes occurred about land and property, and I used to have to take a squad of men into the villages, call the chairman of the old Zemstvo together and the priest, and, as far as one could with the translators, get at the real root of the trouble. One learned so much about the domestic life of Russia that it is impossible to read in any book. I say quite clearly that if ever Communism, as Communism, stood a chance of success, it was in that country. Most of their land is communal. It was not owned by the Czar, as some people imagined. These men had a piece of land here, another little bit over there, and another little bit, Heaven knows where. We discovered that all these peasants knew perfectly what each district's land was worth. It looked so simple to carve them out and say, "This is your whack," but oh, no, they wanted a bit of the best as well as the worst. If it had been Communism that the Soviet Power was after, and not really an orgy of human and material destruction, they should have been successful, if any one in any part of the world could have been successful. It has been a ghastly failure. Why? Along the border most of these committees and Soviets are in the towns. Out of 60 or 80 millions of peasant population I do not suppose there is one per million who is a supporter of the Soviet.

Mr. POTTS

Who drove you out?

Lieut.-Colonel WARD

Nobody ever drove me out of anywhere. The hon Member is a most formidable antagonist, but not even he will shift me from anywhere I want to stay. It is a fact that the whole of the Soviet power is in the towns. The towns could not produce food. The first thing the Soviet did was to requisition all the food, or as much as possible. It amounted to 70 or 80 per cent. in the first year. This is the unfortunate thing. I do not blame the Soviet Central Government for this, but their agents, in making these requisitions, in the first two years involved them in a loss of nearly 8, 000 fighting men. They took, in the second year, not 70 or 80 per cent., but everything they could find. The peasants saw that there was no security for the crops they planted.

Mr. MILLS

Would you deny that requisitioning started in 1915, and was carried on right to the end?

8.0 P.M.

Lieut.-Colonel WARD

And I saw a good deal of the money paid to the community for the goods that were requisitioned. But I never saw such a thing in the requisitions by the Bolshevist Government. A man could stand to have his corn or his cattle taken from him, if necessary, provided he were given some token. The unfortunate thing is that the Bolshevists did not believe at first in money. They did not believe in anything except themselves, and I am doubtful whether they believed in themselves sometimes, considering the things they did. The peasant would not till the land under such conditions. Could anybody blame him? This peasant population all along the Volga, the richest valley even beyond the dreams of the Mississippi; the richest valley in the world for an agricultural population—thousands and millions were collected to keep these people alive who inhabited one of the wealthiest and most luxuriant spots on the earth. It depends absolutely on the security, the forms of government, the stability that is given so that a man who works may know that if he is working for somebody else he will get what he bargained for, and if he is working for himself no one will be allowed to rob him. That is the whole system as I see it, and why, when I came home, I was so utterly disgusted. When you come to political liberty, there is none. Nobody has a vote in Russia. Nobody has the right to criticise the Government. No newspaper can be issued except under the authority of the Government, and, rightly, if it is carried out properly. If a Communist Government really goes out to nationalise and publicly own every kind of wealth in the country, why should anyone be able to keep type, printing machines, a huge house, all sorts of things that are necessary to run a newspaper? Why should anyone under a Communist scheme be allowed to express views except through the Government Press? If one who owned a private paper should derive wealth by publishing one's private views there is an end to Communism, and that is why it is that you can get no opinion from Russia. It does not matter where it comes from. Not even a Russian living here dare express his real opinion on affairs in his own country.

You read occasionally such phrases as "Co-operative societies are over here to trade," and occasionally at Labour meetings you will see that the Russian trade union representatives are over here to confer with some trade union representatives, not in England as a rule, but, I think, on the Continent, where they meet in conference. You know it is all damned hypocrisy. It stands to reason. We want to get down to the threadbare facts of the situation. If a Government controls all the land and everything by which men are to be employed, do you think that that Government is going to allow men to organise themselves into independent combinations to fight that Government? The Government would be a fool if it allowed such a thing to exist, and it does not allow it. It gives sanctions to their secretaries. It even appoints them sometimes. It takes good care to hold any money they may possess.

I have seen that peculiar old die-hard paper, the "Morning Post," declare that the Soviet trade unions had sent certain trade union representatives on the Continent. They know perfectly well, or they ought to know, that that could be only a Soviet delegation, sent by some authority under either Lenin, when he was alive, or Trotsky and the others since Lenin's death. There is no real representation of the trade union movement in Russia. That stands to reason. If we were to adopt Socialism and the Communist system, and if we were to declare that every form of work in this country was national property, owned and controlled by the State, its managers and its profits secured by the State, do you think that we would allow combinations of workmen to hold up the State in any department whenever they chose? You would not allow anything of the kind, and you would not be carrying out your principles if you did allow such a thing, because sooner or later that combination would dethrone you and your system. Those are some of the essential facts. I am not so much concerned with money values, but I do hate to find my old trade unionist friends—[Interruption.] I am a trade union official; there is no doubt about that. I do hate to find my fellow-workmen, alongside whom I have worked, being deceived by ignorance of the facts. There are many men on the other side who call themselves Labour. There is the Under-Secretary of State for Foreign Affairs, who is high up. In the making of the Manchester Ship Canal I worked for 4½d. an hour. The hon. Gentleman is a Labour man and I am not.

Mr. PONSONBY

indicated assent.

Lieut.-Colonel WARD

It is not now a question of poverty even. They tell me that the Labour party has actually some of the wealthiest men in the country on its side. It is, therefore, no longer a question of money.

Mr. MARLEY

Intelligence.

Lieut.-Colonel WARD

If you are an illustration of it, God help you!

Mr. MARLEY

A high level of discussion!

Lieut.-Colonel WARD

Let me say at once that I regret my statement. I was drawn into it by the hostility displayed on the Labour side of the Committee. But you cannot scrape an old bear without getting clawed occasionally. The Under-Secretary for Foreign Affairs may think that he can patch up an arrangement by which he can make trade with Soviet Russia. I know that he cannot. He can make the nicest agreement he likes and lend the Russians all the money that he likes. Someone suggested cutting our losses. Be sure you will have to do that sooner or later, if the present rulers of Russia remain in authority. I am not concerned about that. You can make all the agreements that you like, if it suits the purpose an election, and you can blazon them forth, but I know that it is so much bunkum in the end. You can trade only with a country that has a stable system of industry and commerce and regular lines upon which that commerce is conducted. My hon. Friend the Member for Dartford (Mr. Mills) said, "You reduce everything to money values." How can you measure? It is true that the ultimate measure of value is the amount of human labour put into a thing.

Mr. COVE

Then you are a Marxian.

Lieut.-Colonel WARD

There is no doubt that labour is to a certain extent the full measure of value, but when you come to expressing that value in some terms by which you can exchange one commodity for another, you must have some nomenclature, some name. Call it money, call it what you like. What I am afraid the Under-Secretary is going to get is a piece of paper. He is going to lend £20,000,000, £30,000,000, or even £40,000,000 to the Soviet Government, or guarantee that sum, which is just the same. If a man does not pay, the guarantor usually has to do so. You will be transferring, not money, but that amount in value in British labour, and you will be handing it over to someone else. You can do it if you like; I am not concerned about that. But I am concerned that British workpeople should know exactly what kind of system exists in Russia and of what kind of system hon. Members of the Labour party are so very much enamoured. I defy even the hon. Member for Dartford to dispute any of the main principles which I have put forward, relating to the underlying system of Russia. Trade is not possible. There was one part of the speech of my hon. Friend the Member for Abingdon (Mr. Lessing) to which I wish to refer. It was a very good speech and I liked listening to it, but although it was a maiden speech I am sure he will not be offended if I criticise one part of it. It was his reference to the Cromie incident. I have just read a description of what occurred in a book written by General Knox, who was there.

Mr. LESSING

But certainly not there at the time.

Lieut.-Colonel WARD

You had better square that up with General Knox. I will take the hon. Member's statement just as he delivered it. I will put the facts to myself and state exactly how they appeal to me. Hon. Members who have been in the Army will follow exactly the principles on which I judge the statement made by my hon. Friend. I understood that he was a Captain in the Grenadiers, or at least attached to the Grenadiers for the purpose of being attached to the Military Mission in Russia. He was, therefore, a soldier. I would put the case in this way: I am a soldier, and I am at the British Embassy. A whole host of my countrymen, who are entitled to protection, seek the Embassy. I say to myself, "If there were women and children and others, business men in Russia, who sought the protection of the Embassy, and I was a combatant officer there, and an attack was made on that Embassy, I would be a disgrace to my uniform if I did not meet the assailant blow for blow." That is my candid opinion about it. To begin with, why should these people attack the Embassy unless it was to do some violence to the people who were there? That is the thing.

The speech of my hon. Friend to-day has raised Captain Cromie in my estimation immensely, beyond anything that I have heard about him before. The statement of the hon. Member, an eye witness, that when the onslaught was being made on the Embassy there were women and children there whom it was Captain Cromie's duty to defend, and that Captain Cromie began to fire on the mob that was attacking the Embassy, impels me to admit that I should have done exactly the same thing. I understand that my hon. Friend was taken to prison and that he did not understand what happened afterwards, except that there was no opposition to the burial of Captain Cromie. You can read reports from other members of the Commission in which there is a different story. You find, as a matter of fact, that Captain Cromie's body was even mutilated.

Mr. LESSING

The hon. and gallant Member for Handsworth (Commander Locker-Lampson) referred to the fact that the body was mutilated or desecrated. When I was set free six weeks later I saw the neutral Ministers who were present, and I put the question to them as to whether there was violence of that kind after death, and they told me there was not.

Lieut.-Commander KENWORTHY

The hon. and gallant Member for Stoke must admit that he has been misinformed.

Lieut.-Colonel WARD

Not I, and for this very simple reason. My hon. Friend states that he was taken prisoner and was not there during the period or until some six weeks later, whereas I have had the statement of eyewitnesses who were actually there all the time. [HON. MEMBERS: "Name!"] The names have been published hundreds of times. After what we have heard about Captain Cromie and his gallantry in looking after the people in his charge, I hold that if the Soviet Government do not recognise their responsibility, at least the British Government ought to do everything possible in the way of assistance and compensation, if only for the sake of keeping in memory the deed of a very gallant British officer. So far as this discussion is concerned someone has suggested that the Conference between the Russian Delegation and the British Government should be suspended for a period or adjourned sine die. The Soviet delegates are finding something which is much more profitable to do, so far as their country and objects are concerned, while the delegation is here. We hear of the capture in the Thames of arms and of gun-running to Leningrad. I dare say it is all being managed by this wonderful deputation. If you really want abuse of the Labour Government, and especially of the Foreign Secretary, who is conducting these negotiations on behalf of the Government, you have only—

Mr. WALLHEAD

On a point of Order. Is it in order to suggest that a delegation which is here on an obviously friendly mission is engaged in gun-running from this country?

The CHAIRMAN

I think the hon. and gallant Gentleman should avoid those references.

Lieut.-Colonel WARD

I do not wish to refer to that subject again. Hon. Members opposite know my opinion about it, and they know my opinion about some of them. Terrible as their opinion may be of me, it is nothing compared with the contempt which I have for some of them. So far as this subject is concerned, the suspension of the Conference does not matter one way or the other. It is a moral certainty that, unless the Bolshevist Government show themselves capable of honest dealing, they will never get the assistance of other States. They are incapable of securing the voluntary assistance of their own people, and that being the case, they have no reason to complain if foreigners hold similar ideas as to their character.

Lieut.-Commander KENWORTHY

We have just listened to the longest speech delivered, so far, in the course of this Debate. It was very interesting, like all speeches form the hon. and gallant Member, as an historical study of what happened in Russia in 1917 and 1918, but it had no relevance whatever to the matter under discussion. Its value may be judged by the statement of the hon. and gallant Member that "Russia was a graveyard from end to end." Some half-dozen hon. Members in the Committee have been in Russia within the last year or two, and they will know from this the value to be placed on the rest of the hon. and gallant Member's speech. Yet this is the hon. and gallant Member who attempts to guide the Committee and show it what it should do with reference to the present negotiations. The hon. Member for the City of London (Mr. E. C. Grenfell) made a thoughtful speech, which was, I suppose, the official apologia of the bankers for their extraordinary manifesto. I was asked my opinion about that manifesto by the correspondent of the "Yorkshire Post," and I said I thought it was a piece of gratuitous impudence, and I repeat that expression now. It was uncalled for, it was an attempt to sabotage the negotiations, and probably to embarrass the present Foreign Secretary before the negotiations commenced. I hope that the bankers in future will stick to their business and keep out of politics.

It is necessary to approach this question in a businesslike manner. The Debate was opened by the hon. Baronet the Member for the Erdington Division of Birmingham (Sir A. Steel-Maitland) who gave us a very one-sided account of the offer made to the bondholders. As a matter of fact, I believe, so far as the Russian bondholders are concerned, they would be prepared to accept the offer which has been made. We have travelled thus far, that the Russian Government which a few years ago was repudiating any idea of recognising any debts or paying anything on account, is now prepared to recognise them to the extent of paying a solid amount in cash for the relief of the people who held Russian securities. I think it is a very great pity that the Russian bondholders cannot now receive something. The main responsibility of this Committee is to our own nationals, and, undoubtedly, in the Russian revolution—whatever its causes, and whatever its past—British nationals have suffered, and when we have a chance of helping Them it is a great pity we do not do so. I understand the committee of bondholders—not necessarily Russian bondholders, but the holders of bonds in other countries who form this, very powerful body in the City—are opposed to the Settlement, and it is their opposition which is holding up that part of the negotiations. If that be the case it is most unfortunate, and I think we may trace it entirely to the influence of those same bankers represented by the hon. Member who spoke for the City of London.

The hon. Member for Dartford (Mr. Mills) referred to a very weighty work on Russian finance and economics recently published, and he quoted it to the effect that the Russian Empire was already bankrupt in 1916. He is not quite accurate. I have studied that same work, which points out clearly, and documents all its evidence very well, that the Tsar's Government was literally bankrupt before the War began at all. Further, although the book does not say so, I rather think that was one of the reasons why certain sections in the Russian General Staff were not at all sorry to see the War commence, and in fact the opinion is held that probably it had a good deal to do with the outbreak of the War. In the case of Turkey we have not settled the question of bondholders at all. We have made a political settlement. We have brought about peace with Turkey apart from Mosul, and the other question is to be settled at a later date, and I rather think that is what we shall have to do in the present case. We can settle many political questions, such as questions of fishing rights, but the questions of bonds, of compensation for damage, of compensation for loss of property, and so forth, will have to be settled at a further conference. I do not think any successful result will cone from the present conference on those questions, but I think in the future a further conference may be held and an equitable arrangement come to by which our people who have suffered may get something.

The hon. Baronet who opened the Debate spoke, I presume, for the Conservative party, but I could not make out what he was driving at. Does he wish the Conference to break down? Are we to break off all relations, and send the trade mission packing? Two years ago, Con- servative Members—Diehard Members, if I am not insulting them by so calling them—asked for the breaking off of the Trade Agreement altogether and the expulsion of M. Krassin from this country. Now the intention of the Conservatives apparently is to have the present negotiations broken off, and every vestige of a Russian Government employé turned out of the country. I observe two hon. Gentlemen who were Whips in the last Government on the Front Opposition Bench, and I do not know if they can reply. Is that the policy of the Conservative party? As there is silence, apparently it is, and that was my reading of the speech of the hon. Baronet. If that be the case, I wish hon. Gentlemen opposite would look at the trade between Russia and this country. The Department of Overseas Trade has given very remarkable figures in this respect which show a continued increase. For example, in January, 1923, we imported from Russia £589,000 worth of goods, exported £414,000 and re-exported £70,000. Yet these are the people to whom the hon. and gallant Member for Stoke (Lieut.-Colonel Ward)—who has gone out for necessary refreshment after his long speech—refers as people with whom it is impossible to do business. In January of this year the imports had increased to £1,217,000. The exports were down to £138,000, and the re-exports were up to £369,000. The figures for May, 1924, show that the exports have increased and are £385,265 in that month. These are the latest figures I have had from the Department of Overseas Trade and may be taken as official.

Sir FREDRIC WISE

Are these values?

Lieut.-Commander KENWORTHY

Yes, values in pounds sterling.

Sir F. WISE

What are they converted at?

Lieut.-Commander KENWORTHY

I asked a question of the President of the Board of Trade as to the figures of exports and imports in April and May last. I will only give the main figures. The exports consigned to Russia in May were valued at £143,213, in the case of domestic produce and manufactures. I think those are very substantial figures, but, of course, they are not to be compared with the trade done before the War with Russia. They are, however, showing an increase, and undoubtedly they could be greatly increased in the future. If the advice of the Conservative party, or certain members of it, had been taken two or three years ago and the Arcos and all its employés sent packing out of the country, because it was supposed to have been indulging in propaganda against the simple British workman, none of that trade could have taken place, and so many more men would have been drawing unemployment pay, or parish relief, or working on relief works. I see an hon. Member opposite who, I think, will speak later, and I would like him to give the policy of the Conservative party with regard to this matter. Do they want to break off the present relations, to cancel the trade agreement signed by the Coalition Government with Russia? Do they want to expel the Amos Banking Company and all the other trading concerns that have been established here, and do they want to prevent this trade being carried on? if so, I would like them to go up to Blyth, and Hull, and to the East India Docks—[An HON. MEMBER: "And Halifax"]—and even to Halifax, that makes certain goods for Russia, and tell the working men there, who are at present getting employment from this trade, that they want to stop the whole thing.

There was great alarm in Germany when there was a talk of this loan being guaranteed by the British Government and floated in London for the Russian Government. The Germans were very frightened that their very lucrative trade with Russia, which is nearly twice ours, was going. A very prominent German business man is quoted by an eminent authority on Russia, Michael Farbman, who is well known as a well-informed person, as saying that if we lent Russia even £10,000,000 of money we would monopolise the Russian market. Apparently, the German alarm is not justified. It is quite true that the payment that has been offered to bondholders, the actual cash for people who suffered—I believe a lump sum has been offered to those who lost furniture or who suffered in health as a result of imprisonment—that has been offered to the British Government, and the other arrangements that were being made, were conditional on a loan being available in this country. The terms offered were that The interest and sinking fund on that loan, the service of the loan, at three years at a time, should be lodged 'in a British bank in London, and as interest was paid out so a fresh amount would be put in to replace that sum of money paid out, so that always we should have three years' service for the loan in this country. Furthermore, the greater part of the loan was to remain here for direct purchasing of goods, and the remainder would certainly go to Russia in order to set up the goods, in the form of machinery and so on, in their factories, but I think most economic students will agree that all loans really always go out in the form of goods. Apparently, the British Government are unable to do this, and the wretched bondholders, therefore, will go on whistling for their money.

I suppose the British Government will receive support in that attitude from the Conservatives who have just cheered the hon. and gallant Member for Stoke-on-Trent, who, if he was preaching anything, was preaching red war and further bloodshed and suffering. [HON. MEMBERS: "No!"] Oh, yes. Old Members of this House have heard the same speech again and again by the hon. and gallant Member for Stoke. It leads only to one conclusion: Send even a greater army than before, spend another £100,000,000, in addition to the £100,000,000 which we cheerfully spent in that country. No other conclusion is open to reasonable men. I think it is a great pity that the British Government—represented on the Front Bench now, I think, by only one member of the Cabinet, namely, the First Commissioner of Works—are prepared to see spent, perhaps, £150,000,000 a year on unemployment insurance payments, which, after all, come out of the pockets of the employers, or the workers, or the Government, or upon local relief in the form of poor relief or relief works for the unemployed, they are prepared to see ship builders, riveters and engineers put on to road making, digging reservoirs and boating ponds, and that sort of thing, they are prepared to see the deterioration of workmen who are not working at their own trades, rather than come, to this House, take their political lives in their hands, and ask us whether we are not prepared to guarantee a moderate loan to Russia, the greater part of which would remain in this country, and a part of which, at any rate, would go to compensate our unfortunate nationals who lost money in that country.

I suppose that they think they would not get the support of the Liberal party, but have they sounded the Liberal party? Have they done us the honour of asking what we think about it? If the matter were properly explained to the House, as I hope the hon. Member who is going to speak for the Foreign Office will explain it, I think an excellent business case could be made out for this guarantee. [Interruption.] My hon. Friend the Member for West Woolwich (Sir K Wood) is not one of the most reactionary of his party, but he never questioned the vast sums that have been spent during the last few years on the destruction of life, and of towns, and of wealth; he never protested against the causing of suffering and distress, but the moment that it is suggested that a loan should be guaranteed, the interest and sinking fund of which would be in this country for three years, in a British bank, when it is to be extended to agricultural implements, peaceable merchant shipping and railway material, at once, I am afraid the hon. Member for West Woolwich and, I am sure, those round him raise an objection. I am not sure that the Liberal party would object.

Sir KINGSLEY WOOD

Where are they?

Mr. WALLHEAD

Where are yours? I can see all nine of you.

Lieut.-Commander KENWORTHY

We have had two excellent speeches from Liberal Members on these Benches, which, I think, have contributed something to the Debate, and the Liberal party is usually not behindhand in these affairs. Let me quote the comfortable words of the present Under-Secretary for Foreign Affairs, who, I am sorry to see, has been called out of the House. I do not blame him, after the speeches to which he has had to listen. He wrote a preface to a little pamphlet called "Export Credit Schemes and Anglo-Russian Trade," which was published a year ago. There was a preface by "Arthur Ponsonby, M.P.," in which he said: It is not enough to leave off impeding and insulting the Russian Government. We must go a step further; we must help and encourage it now that it has shown itself capable of turning the corner in the face of hostile attacks, obstruction and opposition. This can be done in two ways: by extending Export Credits, which will materially assist British trade with Russia, as this pamphlet shows, and, further, by officially recognising the Soviet Government. The second has been done, and I give all credit to the Government for doing it, but they have held up the first proposal. Why have we not extended the overseas trade credit and insurance scheme to Russia? Why have we not extended the trade facilities scheme to Russia—not so much to help the Russians as to help British merchants who would trade with Russia, and British shipbuilders, manufacturers and engineers who would build machinery and ships for Russia? Those are all people who would be helped. Why have they not been extended to Russia? He goes on to use the perfectly sound argument that Russia is a rich country, and that the Russians are a great people and have a great future. Yet all he has offered is what the Government of the right hon. Member for Carnarvon Boroughs offered at The Hague and Genoa. Nothing more has been offered to the delegation that has been invited over here—and I am sorry hon. Members sometimes forget the courtesies due to representatives of a foreign country invited here, however much they may differ from the religion, morals, politics and internal affairs of the country. All they have been offered is exactly what the Coalition Government offered them at Genoa and The Hague. The present Government have not gone one step further. That is my complaint. I hope I am making now a very reasonable and courteous attack on the Government for not going further. I have here a statement by the Minister of Education, who, I am sorry, is not in his place. It was made on the 1st January, 1924, not in a speech made in the emotional atmosphere of a public meeting on Sunday night somewhere in Wales, but it is a preface by the Minister of Education to another pamphlet entitled, "Why Russia should be recognised." This is what he says: The principal illusion of our anti-Russians has been that no country could flourish which refused to bow the knee to capitalism. Since the Workers Republic has refused to collapse in accordance with their economic dogmas, they now fall back upon their historic fallacies. They declare that Russian democracy will destroy itself, like French democracy, by becoming a military menace to the peace of the world. Here it will be the opportunity of Labour to prove them wrong. The Red Army is highly efficient, but compared to the numbers of the Russian people is very small. It is not the weapon of an offensive people; it is the insurance of a people still menaced by neighbours, who still answer readily to the provocations of the Churchills, the Curzons and the Poincarés of Western Europe. This is from a preface to a pamphlet by the Minister of Education.

Commander BELLAIRS

As Minister of Education?

Lieut. - Commander KENWORTHY

Not as Minister of Education. Of course, my right hon. Friend does not change his opinions because he is in office. If that were right in January of this year, it is right in July of this year. My complaint is that the Government have not implemented these great ideals and have not carried out these plans. They have met the Russian Delegation here, they have carried out certain arrangements, and we have received, as a matter of fact, £30,000 or more in payment for the loss of our sailors in our trawlers on the Murmansk coast. We have come to certain arrangements with regard to passports and consuls, and so on, but we have done nothing really to help that trade more than the last two Governments have done, and I say the Government have been lacking in imagination and in enterprise, and most disappointing to me personally. At the present moment there is a great deal of trade going on between this country and Russia, but it is much hampered by the high cost of discounting bills and getting approval for trading agreements. At the present moment the Russian Government is paying as high as, and sometimes more than, 24 per cent. a year for ordinary acceptances on their goods sent to this country.

Mr. SAMUEL SAMUEL

Where?

Lieut.-Commander KENWORTHY

In the City of London.

Mr. SAMUEL

That is absolutely untrue, as I can say. Will the hon. and gallant Gentleman give me one financial house that is paid anything like that amount?

Lieut.-Commander KENWORTHY

The bills of the Russian State Trading Organisation.

Mr. SAMUEL

What institution?

Lieut.-Commander KENWORTHY

The Gostorg, which is the Interior Trading Department of Russia. It buys ploughs for the peasants, horse-shoes and implements for farms.

Mr. SAMUEL

The hon. and gallant Member said in the City of London.

Lieut.-Commander KENWORTHY

I am sorry if I did not describe the operation properly. They want to purchase over here certain things for sale in Russia. They cannot pay at once, but have to get credit as most merchants have to do to-day, and the people who sell the goods will not discount their paper at less than 2 per cent. a month or 24 per cent. a year even with an English name at the back of the Bill, namely, Arcos or the Arcos Banking Corporation, which is domiciled in London. That means they have to pay very high for their goods and it makes it much more difficult for us to sell goods to them. In the past, if a British timber merchant wanted to buy logs he had to advance so much at the beginning of the cutting season, so much when the wood was cut, so much when brought to the saw mills and so much when it was brought to the ship. The same is done in buying grain from Canada. Russia always had to do that in the past, and she cannot now get credit except at an enormous amount, because the banking interest have put their veto—

Mr. S. SAMUEL

I contradict that. I do not think the public should be led to believe that British bankers are charging these extortionate prices. I am a director of one of the biggest banks, and we are doing business for Russia on the ordinary commercial terms.

Lieut.-Commander KENWORTHY

I am very surprised to hear that. The City men I asked told me that no Russian paper is negotiable in London. One or two smaller houses will take a smaller amount, but their limits are soon reached

Mr. S. SAMUEL

rose——

The CHAIRMAN

The hon. and gallant Gentleman must not be continually interrupted.

Lieut.-Commander KENWORTHY

The hon. Member knows more than I do, but my information is that Russia has to pay very high for her finance, which is making trade more difficult between the two countries, and if she is getting a loan, which, I admit, has to be granted by the British Government, it will make that trading easier. There is something beyond bonds, and compensation to our nationals, important as that is, and even trade, and that is the peace of the world, which has not been mentioned in the Debate, which might have been a Debate on the salary of the President of the Board of Trade. Russia will one day recover; there is no doubt about that, and if we are on good terms with Russia, we shall really preserve the peace of Europe. At the present moment the whole balance of Europe is upset. The great military power of France is overwhelmingly strong, and she has a number of satellites, allies, who are bound with her because of her military strength. A friendly Russia, friendly with this country, not clashing with us, not threatening our Indian frontier or attacking our interests in Persia and Mesopotamia, a country which is trading with us, and on the best terms with us, will be a guarantee against the next war, and I do not believe, unless we get this great Russian problem settled, another great European war can be avoided. I agree with what the hon. Member for Dundee (Mr. Morel) said about the appalling armament traffic going on in Eastern Europe, and I wish he had said something about our own Government building unnecessary warships, but let that pass. With Russia prepared to keep the peace, we need not trouble about little countries like Poland arming and raising fresh troops. With a great Russia peaceable, and brought into the League of Nations, as I hope it will be, peace can be preserved, and I am astonished and disgusted at the levity of the party opposite in the spokesman of the hon. Baronet, who opened the Debate, in apparently trying to sabotage these negotiations, preventing any settlement, and, in fact, breaking off relations with a country which means so much for us in the future.

Major KINDERSLEY

I have listened with a great deal of interest to the speech of the hon. and gallant Gentleman the Member for Central Hull (Lieut.-Commander Kenworthy), and I shall deal with the question of trade later, and I hope in a satisfactory manner. I may be able to show the hon. and gallant Gentleman why things are as they are. I understood him to ask that the British Government should guarantee a loan to Russia. I do not know whether he heard the speech of the hon. Gentleman the Member for the City of London (Mr. E.C. Grenfell).

Lieut. - Commander KENWORTHY

Yes!

Major KINDERSLEY

Then the hon. and gallant Gentleman is asking the tax-payers of this country to do a thing which the business people, which business men of the very highest standing, say is not a business like thing. What the business people are not prepared to do I maintain that the taxpayer ought not to be called upon to do. We have not yet touched upon the question of the recognition of Russia. There has been no opportunity to touch upon it. I propose, therefore, if I may, to ask the Under-Secretary for Foreign Affairs one question in connection with this matter. I want to ask him to tell us whether, before the Government recognised Russia, they considered the reasons why the United States of America refused to recognise Russia? I have already quoted in the House a Report of a Committee which was appointed by the American Senate. It is a Government publication, and at the end it gives the reasons why the Americans refuse recognition to Russia. I have mentioned this report on a previous occasion, but perhaps hon. Members will forgive me if I read some of it again. Here is one quotation: It is believed that the evidence presented by the Department of State at this hearing has conclusively established three facts: first, the essential unity of the Bolshevik organisation known as the Communist Party, so-called Soviet Government and the Communist international, all of which are controlled by a small group of individuals technically known as the political bureau of the Russian Communist Party, second, the spiritual and organic connection between this Moscow group and its agents in this country—the American Communist Party and its legal counterpart, the Workers Party. Not only are these organisations the creation or Moscow, but the latter has also elaborated their programme and controlled and supervised their activities. While there may have existed in the United States individuals and even groups imbued with Marxist doctrines prior to the advent of the Communist International, the existence of a disciplined party equipped with a programme aiming at the overthrow of the institutions of this country by force and violence is due to the intervention of the Bolshevik organisations into the domestic political life of the United States. The essential fact is the existence of an organisation in the United States created by and completely subservient to a foreign organisation striving to overthrow the existing social and political order of this country. I should like to ask the Under-Secretary for Foreign Affairs whether in January, 1924, he, or the Government, read that Report, and whether, if so, they had any cause to suppose that the reasons which sufficed the United States Government to refuse recognition of Russia had no application to this country? Personally, I hope to be able to show that there is, in the words of this Report, the same "spiritual and organic unity" between the Moscow group and the Communist party in this country as this Report alleges exists between the Moscow group and the Communist party in the United States. In order to do that I must ask the indulgence of the Committee while I just analyse what the Russian Government really is, and who are the men that compose it, because there is a great deal of ignorance and misunderstanding on the subject.

Mr. B. SMITH

Caused by your Press!

Major KINDERSLEY

I am not going to talk about any Press, but the facts. There may be said to be six divisions in the Soviet Government. The first consists of the Russian Communist party; that has two sub-divisions, a political bureau and a central committee. Secondly, there is the Russian Soviet Republic, which is the Government we have recognised. It consists (a) of the All-Russian Central Executive Committee; (b) Præsidium of Central Executive Committee; (c) Soviet of Peoples' Commissars; (d) Soviet of Labour and Defence. Then there is the third group. This is a Federation of Soviet Republics the four autonomous Republics, which, as the House knows, are the Russian Soviet Republic, the Ukranian Republic, the White Russian Republic, and the Caucasian Republic. When these meet, it is called the All-Russian Congress of Soviets, and this Federation of Soviet Republics has exactly the same organisation as I have described. It has these four sub-committees of which I have spoken—but I need not detain the House to go further into that. What I want to point out is this, that from November, 1918, to December, 1922, at the meetings of the All-Russian Congress of Soviets over 90 per cent. of the members were Communists, that is to say, members of the Communist party of Russia. I give that statement to the House, and they can take it from me that the figures are correct. These figures point conclusively to the fact that these congresses are entirely controlled by the Communist party of Russia.

Mr. PURCELL

Whose business is that?

Major KINDERSLEY

What I want to emphasise is that the Communist party in Russia has never been strong, and to-day it does not probably number more than 400,000, while there are 120,000,000 people in Russia! The hon. Member sees the point.

Mr. PURCELL

No, I do not!

Major KINDERSLEY

The Government recognition is not a recognition of the people of Russia, but a recognition of the Communist party of Russia which rules Russia.

Mr. CLIMIE

Just in the same way as the Government recognised the Tsar's Government.

Major KINDERSLEY

I am not arguing one way or another in that matter. I am simply telling the facts of to-day. We are dealing with the present Government of Russia. The last three divisions of this government system are as follows:—the Communist International, the Russian Labour Union, and the Trade Union International. I want to examine in some detail the membership of these various bodies. It will be found that there is a complete system of what is known as "interlocking directorates" Take the case of Lenin, although I know he is dead. He was a member of nine of these bodies which I have mentioned, and the President of four of them. Take Kemeneff. He was a member of nine and Vice-President of two. Trotsky was a member of eight, and Kalinin was a member of six and President of two. These four men, and seven others I have not named, are all members of the four controlling branches of the Russian Government. The four branches are the Political Bureau of the Russian Communist party, the Central Committee of the party, the Central Executive Committees of the Russian Soviet Republic, and the Federation of the Russian Republics. Those 11 men are in fact the Government of Russia, and they control the Communist party. You get back to this, that when you recognise Russia you do not recognise the Russian people but the Communist party of Russia and not the people at all.

Mr. CLIMIE

Just as you recognised the Tsar.

Major KINDERSLEY

I am not talking about the Tsar—he is dead.

Mr. CLIMIE

So is Lenin.

9.0. P.M.

Major KINDERSLEY

You will find one or more of these eleven names appear on the 14 sub-divisions of the Russian Government. This small group of men, only 11 in number, have absolute control of the Communist party, and they are found in all the key positions in the sub-divisions of the Russian Government. That is the Government of Russia, and the Russian Communist party controls the Russian Government, and when you recognise that Government, however much you may try to deceive yourselves and the nation, you recognise the Communist party of Russia and nothing else. That party in Russia is not political as we know it in this country. It is a very close organisation and a very rigidly disciplined body, and they are all picked men. I think the nearest comparison you can make with any other organisation is the Jesuit Organisation. What is the relation between this group and the Communist International? It is simply the child of the Russian Communist party. I have here a quotation from the speech of a man called Radek, and it was made at the ninth conference of the Russian Communist party. He said: The Third International is the child of the Russian Communist Party. It was founded here in the Kremlin, on the invitation of the Communist Party of Russia. In our hands is the executive committee of the Third International, and, therefore, until the political frontiers are eliminated which hinder our comrades from talking with us, the congress of the Communist Party is the place at which it is proper to bring up for discussion the result of the work of the Third International. I think that is sufficient proof that the Communist International is the child of the Communist party, and the function of the Communist International is to carry out the policy of the Russian Communist abroad exactly as it is carried out in Russia itself by the Russian Soviet Republic. I will now give a quotation from the official printed Report of the Fourth Congress of the Communist International. It was published by the Communist party of Great Britain: You are aware that we have been accused of using the International as a weapon of the Russian Soviet Republic. There are even some 'friends' who make this assertion. It is, of course, self-evident that there is, and there ought and must be, an interaction between the first proletarian republic and the Communist Party which is fighting against the bourgeosie. From our Communist view-point it is perfectly clear that the Communist International is of the greatest importance for Soviet Russia, and vice versa. It is utterly ridiculous to ask who is the exploited, who the subject and who the object. The Republic and the International are as the foundation and the roof of a building; they belong to each other. This is my next point—the identity of the Communist International and the Communist party of Russia, one is simply the child of the other. The object of the Communist International is quite simple, it is the creation of a world revolution. You will find it here in the Resolutions of the Fourth Congress of the Communist International of 1922, published by the Communist Party of Great Britain, and this is a quotation from those Resolutions: The Fourth World Congress reminds the proletarians of all countries that the proletarian revolution can never be completely victorious within one single country, but that it must win the victory internationally as the world revolution. The work and struggle of Soviet Russia for its existence and for the achievement of the revolution, is the struggle for the emancipation of the proletarians, the oppressed and exploited of the whole world, from slavery and servitude The Russian proletarians have done more than their duty as the revolutionary pioneers of the world proletariat. The world proletariat must at last do its share. In all countries the workers, the disinherited and the enslaved must show morally, economically and politically the most active solidarity with Soviet Russia. Their own interest, and not only international solidarity, demand that they should engage for this purpose in the most energetic struggle against the bourgeosie and the capitalist State. In all countries their watchword must be 'Hands off Soviet Russia.' de Jure recognition of Soviet Russia. Those words, "Hands off Russia" and "de jure recognition of Russia" seem to have a familiar ring. The third part of the programme is in process of being carried out. It is: Active support for the economic reconstruction of Soviet Russia. Is it a mere coincidence?

Mr. B. SMITH

It is not a bankers' manifesto.

Major KINDERSLEY

I want to point out that the Communist International works in this country through the Communist Party of Great Britain. Rule 1 of the Communist Party of Great Britain reads as follows: The Communist Party of Great Britain is a section of the Communist International, and is bound by its decisions. At a session of the Congress of the Communist International in 1920, it was laid down in Rule 16 that one of the conditions of joining the Communist International should be as follows: All resolutions of the Congresses of the Communist International, as well as the resolutions of the Executive, are binding for all parties joining the Communist International. In other words, they are binding upon the Communist party of Great Britain. Let us look at some of these Resolutions. On page 30 of the Theses and Statutes of the Second Congress, held in July and August, 1920, it states:— The working class cannot achieve a victory from the bourgeoisie by means of a general strike alone and by the policy of folded arms. The proletariat must resort to armed uprising. By that decision the Communist party of this country are bound. Then, on page 21, of the Theses and Resolutions of the Third Congress, held in 1921, it states:— The Communist Party must in this manner"— that is, by propaganda— influence the widest circles of the proletariat by word and deed, that every economic or political conflict, given the necessary combination of circumstances, may develop into civil war, in the course of which it will become the task of the proletariat to conquer the State. To that, also, the Communist party of Great Britain, as a branch of the Third International, are committed. I claim to have proved quite conclusively by documentary evidence that there is no distinction between the Communist party of Russia, the so-called Soviet Government, and the Communist International. Such distinction as exists is purely in name. The Communist International is seeking, through the Communist party in this country, who are its agents, to subvert our institutions. In other words, I say that the Russian Government, to which recognition is now given, are in this country, through their agents, trying to subvert the institutions of this country.

The CHAIRMAN

I have had to call the attention of another hon. Member to the fact that a delegation from the Russian Government is in this country, and that we should be careful what we say about the representatives of a friendly nation.

Major KINDERSLEY

I bow to your ruling, naturally, but I think it is somewhat unfair that a great step like the recognition of Russia should have been taken, and then, on the first occasion when any of us have an opportunity of protesting against it, we should not be allowed to say exactly what we think, and to call attention to the facts, which are unquestionable.

Lieut.-Commander KENWORTHY

Is it not a rule of the House that diplomats in this country are immune from criticism by Members on the Floor of the House, and, recognition having been given to the Russian Government, are not its representatives in a diplomatic position?

The CHAIRMAN

I think it is understood that when representatives from other countries are in this country, we should not criticise them.

Mr. ERSKINE

Are these gentlemen diplomats?

Major KINDERSLEY

I hope I have not been misunderstood. I was not criticising the representatives who are here. I was saying that the Russian Government was working through the Communist party in this country. That was my criticism. I do not know anything about the gentlemen who are here. No doubt they are very excellent people. My point was rather misunderstood. The question should have been, not a question of our recognising Russia, but of Russia recognising us—recognising our right to have our own institutions and carry on our Government in the way that we like. The question of making trade links with the Dominions is cast aside because it gives a commercial taint to the relations of the Empire; but, for the mere mirage of trade with a country which has been absolutely reduced to bankruptcy by—I was going to use a word which, however, I will not use—by an unscrupulous camarilla, the Government of this country are prepared to enter into diplomatic relations with the Communist Party of Russia, who, by their constitution and tenets, must be the avowed enemies of what we know as civilisation in this country. There is no getting away from that; it is absolutely clear.

Now I come to the question of trade. I have some information here about a company called the Russo-Caucasian Company, with regard to which there have been some questions in the House already. I should like to give the Committee some of the facts. The Russo-Caucasian Company was formed under very good auspices in the autumn of 1922. It was a trading company, and its intention was to sell manufactured goods of all kinds to Russia, and to sell Russian raw produce to this country in return. On the 29th May of this year a decree—Decree No. 21—was issued by the Supreme Economic Council of the Federation of Soviet Republics, and it was published in a newspaper in Tiflis on the 5th June. By that decree this company was told that it must wind up its affairs. There is no complaint that we know of against this company at all. It was formed, as I have said, in 1922, and the Soviet Government in Moscow, and, I believe, also the Russian Trade Delegation in London, have been in full possession of information as to all the business done and of the facts concerning the company, and whatever business has been done has been done hitherto with the full knowledge and approval of the Soviet Government.

Owing to this decree which has been issued by the Supreme Economic Council of Russia, these people are prevented from carrying on their business, and they and 12 other foreign firms, of whom two, I think, are British, have to liquidate their business; and the time given to them in which to do this is one month. I would ask any business man in this Committee, how can a company, with large stocks of goods worth many thousands of pounds, liquidate its business in a month? And if it has to liquidate its business in a month, and if it is known in Russia that it has to liquidate its business, what price is it going to get for its goods? That is most extraordinary treatment, and, in addition, the manager was told to leave within seven days. Then representations were made by our Foreign Office, and I believe an extension of a month was obtained. Since then I believe the order was supposed to have been cancelled altogether, but, according to the information that I have as late as to-day, that is not correct. All they have got is a month's extension, and, after all, it would not be of much use even if the manager could stay there, because there will be no business to be done. There is also some doubt whether, when the goods have been liquidated, the money can be got out of the country. Surely, if the Soviet Government really want to encourage trade between this country and Russia, their action does not seem to be in accord with the desire.

I think, however, I can explain to hon. Members opposite why it is that they are bound to take this action. It is just because they have a nationalised system of industry. If you have a nationalised system of industry, it is quite obvious that you must stop other people from coming and competing with your factories. A privately-owned business can produce goods which, in the first place, are probably of better quality, and, secondly, are far cheaper, than those produced by nationalised industries. If those goods are allowed to come in and compete with their nationalised industry the nationalised industry will not sell its goods, and the moment you nationalise industry you are bound also to have this prohibition of goods coming in from outside except in so far as they do not compete with your internal trade. In other words, the moment you nationalise your industry the people of the country have to be told, "You are only to buy what we produce and at such price as we choose to sell it" You are completely in the hands of your nationalisers. That, I am certain, is the sole reason why the Russian Government have to do this, because if they are to keep their State factories running they cannot allow competition from outside, and probably better goods, to come in. I believe there are in this country something like 80,000 Russians. Many of them are engaged in business. If these 13 firms are expelled there will not be a single British firm in Russia.

Mr. B. SMITH

You do not want to trade with Russia.

Major KINDERSLEY

Every business man is anxious to do business. Hon. Members opposite have extraordinary ideas about business. Every business man will do good business if he can do it. It is what he is there for. It is quite certain that if business can be done with Russia it will be done. If the Russian Government left things alone and did not interfere there would be very much more business than has been done, and what has been done, has been done in spite of the Russian Government.

Mr. CLIMIE

And in spite of the bankers!

Major KINDERSLEY

No, by the bankers. You cannot do business without bankers. If these traders are not going to be allowed to carry on, what was the use of the Anglo-Russian Agreement? I will read the first Clause of the Anglo-Russian Trading Agreement, which deals with this point: Both parties agree not to impose or maintain any form of blockade against each other and to remove forthwith all obstacles hitherto placed in the way of the resumption of trade between the United Kingdom and Russia in any commodities which may be legally exported or imported in their respective territories to or from any other foreign country, and not to exercise any discrimination against such trade as compared with that carried on with any other foreign country or to place any impediment—

Notice taken that 40 Members were not present; Committee counted, and 40 Members being present——

Major KINDERSLEY

The last part reads: subject always to legislation generally applicable in the respective countries. If that simply means that the Soviet Government can pass legislation preventing any British subject from carrying on trade in Russian territories, all I can say is that the whole trading agreement is an absolute farce. I want to know if that is the way they read it. Do they rely on that Clause for what they have done? There is no doubt that time and again British subjects have gone to Russia to try to trade and have been thrown into prison, their employés have been put into prison, their offices closed and their goods confiscated. Have we ever treated in the same way one single Russian who came here? Of course not. We want reciprocal treatment. This is a most extraordinary thing. I do not think hon. Members opposite quite realise one of the great difficulties of trade with Russia. If a business man goes to Russia to develop trade he is looked upon with suspicion. He is regarded as a spy and is watched by secret agents, just as the Russian Delegation here are watched by their secret agents. They cannot understand a business man going out to do business honestly, and think he is a spy. There are extraordinary offences in Russia. They are described as "economic espionage" and "economic counter revolution." They are unknown to the law of any other country in Europe, and are entirely Russian. No one knows what they mean. For instance, if you supply information about Russia to persons abroad on any economie subject, that is regarded as espionage. A large part of any business consists of going to a country, finding out its needs, its manufactures and its economic conditions. In Russia that is called "economic espionage." If you talked to anyone in Russia about getting back property which has been confiscated, that would be called "economic counter revolution." It is almost incredible, but there is no question that these are the facts. Therefore there are all kinds of offences which a man might easily commit without knowing he was committing them which make it impossible to carry on business as we know it.

There is another point. The whole staff of the Russian Trading Company in this country are the paid servants of the Soviet Government, and those trading organisations are the channels through which the Soviet Government conduct their political propaganda in this country and make remittances to people in this country who are working for them. The Soviet authorities of Moscow are afraid of having similar people in their country, because they think business men will do the same thing that they are doing here through their trading organisations. They cannot understand that a man goes to Russia for business, and not for political propaganda. If these facilities are given by us to Russian traders in this country, we should demand reciprocal facilities for our people. I do not believe we are doing ourselves any good by adopting the attitude we are adopting in allowing our people to be treated as they are in Russia. We do not gain Russian respect. They simply despise us. I should like to ask the Under-Secretary for Foreign Affairs, "Will the Russo-Caucasian Company and the other companies ordered by the Soviet Government to liquidate their business in Russia, be allowed after all to continue trading?" If not, why not? Have the Government received any explanation yet from the Soviet Government as to the extraordinary manner in which it acted towards the Russo-Caucasian Company and its manager and the other British firms ordered to liquidate their businesses in Russia? I suggest to the Under-Secretary of State that our position towards the Russian delegates should be this: that we should say to them, "Gentlemen, unless you are prepared to give to our traders in Russia the same facilities we give to your traders here, there is nothing further doing. Goodbye!" Here is the moment to make conditions, and one of the conditions of these gentlemen being allowed to stay here, wasting the time of the Government and the time of everybody else—for that is what they are doing, unless they are engaging in propaganda—should be that they must remove this embargo on British companies trying to do business in Russia.

Mr. PURCELL

I am sure there must be some difficulty for my friends on this side in any effort they may make to understand what is the matter with the Opposition. I have sat for nearly five hours, and I do not quite see what it is they are driving at. Some of them seem to think that, because the condition of affairs inside Russia is not to their liking, that is a reason why this country should not trade with them at all. That seems to be the first, that owing to their system of election, if there is any system of election at all, and owing to the murders that have taken place, and owing to the horrors that seem to exist in that country at the present time—I admit we have a number in this country, and even in this House—but I have never yet heard that that was a very good reason why we should not trade with another country. There are people who have stated on platforms in this country, I think the Leader of the Liberal party himself has said that we were not concerned as to the religion, sex, creed or colour of people with whom we traded so long as we do trade. They were certain care would be taken to give them security with regard to their trade relationships. In that connection there has been a great extension of trade with many countries.

I think the trouble in this instance is that our friends are more concerned about the bondholders than about the working classes of this country. I am not a bit concerned about the bondholders. [HON. MEMBERS: "Why not?"] Because most of them have backed the wrong horse and lost, and now they want to get their money back. Many of them supported Denikin, Wrangel, and, indeed, the good one-time trade unionist the hon. and gallant Member for Stoke (Lieut.-Colonel J. Ward), who spoke to-day, even supported Koltchak at our expense. Nevertheless, it is pretty clear that the Bolshevists, as our friends term them, are prepared to meet them to some extent. If they are prepared to meet them to some extent, they should be recognised and we should get on with what I believe to be really the business that matters. The business that matters is not the bondholders. The business that matters with regard to Russia, so far as the people of this country are concerned, is that before 1913, or up to 1913, we took huge quantities of foodstuffs from Russia. A large quantity of the food we to-day get from other places costs us much more than in 1913. Our point is that you should set yourselves the task without delay of meeting Russia's requirements in connection with agricultural implements and in connection with all that machinery which she so much requires: locomotives and new rails, and supplying those things in order that she might be again a competitor of other people of the world for our benefit that she was in 1913.

Sir W. MITCHELL

How are you going to pay it?

Mr. PURCELL

I will tell the hon. Member how it could be paid quite easily. If you could afford £8,000,000 a day for a war of destruction, you should get £1,000,000 a week to put our skilled engineers into work in this country. You never asked how that was to be paid. You get the money from where it is. You never get it from any other place. If we were in Russia at the present time I dare-say many of our Russian friends would say that the Tory party, for example, in its Primrose League gatherings did not quite represent the British people, and, as a consequence, they might be very careful how they dealt with them. The point is, it has no effect so far as the trade is concerned. Neither of your Governments have, so far as I am able to judge, tied themselves down to a particular class of government before they would trade with them. They have said if the trade was there, let us get it. Men in Lancashire, in connection with our cotton textile machinery and big firms which they built up near Petrograd, were not concerned whether it were a Tsarist Government. Though they were Liberals and strongly opposed to Tsarist methods, that did not prevent them from trading with Russia. The most important thing with us on this side is that the men who are to-day unemployed in places like Lincoln and Grantham, skilled men and indeed the very men who have been unemployed in this country longest, the most highly skilled engineers, to be found on our North East coast, are the men who can provide the agricultural implements and engineering products generally that Russia demands. And if you ask "How are you going to pay for it," I repeat that whatever way can be devised, not even excluding taking money from our Insurance Funds. It would still be a good thing to put those engineers on doing skilled work they understand rather than digging holes and filling them up again. It would pay us if we used money for that purpose alone. It would give them each a full week's wage, which in itself essentially would be spent and would reproduce itself over a very large field throughout the country. It therefore seems to be quite a practical proposition. I do not think for a moment that the Opposition has put its case to this House quite fairly. It is not an honest case; it is a complaint against certain people—a complaint that they have changed their form of Government. You do not want to deal with these people, although you have dealt with very much worse people. In days gone by you were in a great hurry to deal with the Serbians after the horrible murders committed at Belgrade. You recognised them and traded with them. Then again you are trading with your friend—not our friend—Mussolini. You do not ask whether he is acting in accordance with British ideas and British institutions. If they want our goods you are willing to trade with them. The only trouble seems to be that in the case of Russia you are asking that the country's paper should be given a value greater than it possessed a few months ago. You are asking that its bonds be made more marketable than they were. I know many of these men. I have met them during past years. I should imagine, after they have read the speeches made to-day, they will be encouraged to get a loan of £60,000,000 or so and see whether it is possible to avoid paying it back. You have accused them of not being honest; if they are dishonest they will probably take you at your word and do what I say.

This question has not been handled in a fair way. At this moment when so many decent men who have passed their best years in an industry trying to make themselves as skilled as possible are out of work, here you have a great stretch of territory that is demanding the very thing they can produce. If this problem is solved in the way we suggest it will give these men the relief they desire, and I think it is a sad reflection on the politics of this country that that is not being done. If we had any decency we would not waste a day in dealing with this problem. I know of no words strong enough to condemn this absolute waste of time.

I cannot conclude without saying a word in regard to the attitude of our own Government. I think they should have speeded this thing up. The Opposition has been as bad as anyone could possibly be, because they had their opportunity and never used it. But I repeat that our own Government might have done much more in this connection. The reply we had to-day with regard to a guarantee for ships is, I submit, a foolish one. To suggest that the ships which the Russians are needed at this moment will eventually compete with British shipping is most foolish. The ships they want in Russia would not compete with British ships. They want, mainly, flat-bottomed boats to be used on the rivers. They are not ordinary sailing vessels. They are used for the purpose of running through both deep and shallow rivers. I am surprised that the Advisory Committee should have been so foolish as to suggest that these vessels would compete against British ships, and I think my restatement of the case should be sufficient to justify the Government in making further inquiries. I urge the Government to take up this matter of Russia with greater speed. Let them see that some credits are conceded in order, for instance, that the textile machinery may be supplied and the necessary guarantees forthcoming. The agricultural machinery which is needed could also be put in hand at once. I believe this would be far better than any number of other schemes—including the Channel Tunnel scheme—as a means of dealing with unemployment, because you have any number of skilled men idle in the engineering and shipbuilding trade. Here is your chance; seize it and do not stand on any dignity at all. I believe if the Government would make inquiries in the big industrial centres of this country they would find that they had the working classes behind them on this question of doing business with the Russians.

Sir VICTOR WARRENDER

I should like to refer to what the last speaker said on the question of unemployment. I happen to represent Grantham, and a good deal of the surrounding country as well as some of the working men in Lincoln, and I was a little interested to hear how the hon. Member proposed to deal with unemployment in his own district. But unfortunately he left that out of the picture altogether.

Mr. PURCELL

What I said applied to my own district as well.

Sir V. WARRENDER

The speech of the hon. Member is another instance of the misapprehension which exists in the minds of people regarding this question. Many hon. Members seem to think that this Conference has been called together more with a view to recognising the Soviet Government than with a view to securing trade with Russia. If the Conference is a success, or if it is a failure, the recognition of the Soviet Government will remain. We must remember that the two parties concerned in this question have approached it from diametrically opposite points of view. The Prime Minister has done so with the view of changing the fashion of not redeeming pledges given at elections He was pledged to call a Conference to try and get a business footing established between the Soviet Government and this country. But what did the Soviet representatives come here for? Purely and solely to raise money. They want to get a loan, and when hon. Members are discussing this subject they must remember that the two parties concerned are approaching the problem from an entirely different aspect. They are each playing a game of bluff, and trying to hide the cards up their sleeves. Remembering this, it might be just as well to look down the items of the Agenda put before the Conference and see what are the merits of each individual item. This Conference has not been called purely and simply to get compensation for the bondholders. It is typical of the outlook of the Labour party that hon. Members opposite say that they are not in the least concerned whether the bondholders get compensation or not, and that what they are out for is to get employment for the working classes. On this side of the House we are anxious not only for the workers of this country in regard to employment, but we are anxious to get compensation for the bondholders. We do not distinguish between class and class, between rich and poor. We want the whole nation to get what is due, and that is justice.

I feel very sorry for the Under-Secretary who will have to answer this Debate, because he knows perfectly well that the only statement he can make is one of a very abortive character, quite useless from any sound practical point of view, and one which is not going to carry any weight. I have been picturing to myself what I would do if I were in the hon. Member's shoes, and if he will allow me, with great respect, I will tell the Committee what I would do if I were in his shoes. No doubt he will tell us that the Conference has done invaluable work in sitting out a whole heap of Treaties made in the past between the British and Russian Governments. He will tell us what invaluable work this is, and how it has cleared up the atmosphere and laid the foundation for further proceedings.

I have taken the trouble to look through a list of these Treaties, and I find that about 90 per cent. of them are completely obsolete. They deal with such subjects as the dowry to the Russian Grand Duchess who married the Duke of Edinburgh in 1874, the Treaty about the Baltic Fortresses in 1831, and of the election of Prince William of Denmark to the throne of Greece in 1863. A few of these Treaties are of substantial importance. One relates to the Hague Convention. How on earth the Government think they can discuss a matter like the Hague Convention with the Soviet Delegation, when there are something like 40 signatories to that Convention, and none of the other signatories are represented at this Conference, I cannot understand. There are other Treaties which deal with certain zones in Persia and that part of the world.

Does the Government really mean to say that it can seriously confer with the delegation at present in London on these questions, when the Soviet Government daily disclaims all responsibility for the activities of the Communist International in those districts? It is known perfectly well that the Communist International and the Soviet Government are one and the same thing. These things may be all very well for window-dressing, but they will not cut much ice in the making of a commercial Treaty between Russia and this country. I imagine that another point to be mentioned by the Under-Secretary will be the claims of the fishermen in Arctic waters, and we shall be told that there is going to be a Treaty regarding the claims of these men. No doubt the good ship "Magneta" will be mentioned, and credit will be taken for this Conference in regard to that. I find a certain amount of humour in this matter, because when these claims have been definitely settled, the person who will deserve the credit will be the Marquis Curzon. That the Labour party should take credit for a piece of work instituted by the Noble Marquis is one of the most humorous things possible. If that ship had been armed and had been able to reply to the attack made upon her on the high seas, she would have been quite entitled to send the Russian ship to the bottom, and it would have been a good thing if she had.

When we have gone through all this delightful window-dressing, we shall come down to the rock bottom of some form of draft that has been prepared regarding a commercial treaty. No doubt a vague formula has already been made out which it is hoped will satisfy not only this House but those people who are interested in this subject. Clauses and draft Clauses are all very well, but I want to ask the Under-Secretary whether this Treaty, if it ever gets to the state when it can be signed by both parties, is going to contain a Clause in which it is plainly and definitely stated that British subjects trading in Russia will be afforded the same rights and privileges which are afforded to Russian subjects in this country. If it does not, the whole Conference will have been useless and any commercial treaty that is signed will be useless. If the Agreement contains a Clause of that kind, which must be as definite and explicit as human language can make it, the Conference will have been of some value.

Hon. Members opposite must not run away with the idea that I am against this Conference. Perhaps I may introduce a personal note. This is a subject in which I am particularly interested. I happened to be in Russia from the beginning of the Revolution until seven months after the Bolshevists had been in power, and I had the honour, which I know will be envied by hon. Members opposite, of being given an audience by Mr. Lenin, when he had only been in office six hours. Therefore, it is a subject on which I can claim to have some slight knowledge. What makes me very doubtful as to whether any such Clause can be incorporated in this Agreement is the following fact, and it is only one instance, among many others. I have here a publication, issued by the Soviet Government which contains what is known as the Code of Civil Law. Clause 4 in the Civil Procedure reads as follows: If there are not sufficient laws and decrees to decide a case, the Court will come to a decision on the subject, guiding itself by the general principle of Soviet law and by the general policy of the Government of Workers and Peasants. In other words, where the code law does not happen to fit the particular case, the Judges are to base their judgment on Government policy, which may change from year to year, month to month, or even from day to day. [HON. MEMBERS: "The same here"!] Can hon. Members tell me of a single Judge who will give a judgment based on Government policy? That shows the tremendous gap which lies between the system prevailing in this country and the system prevailing in Russia, and I do not believe that you can in a few months bridge a gap as big as that by a conference of the two Governments. Until you have bridged that gap and given to British traders who go to that country the same privileges and the same protection as their Russian confreres get in this country, you will never get any trade done. No one is more anxious than I am to see trade resumed between this country and Russia.

I wish to deal with the attack that has been made upon hon. Members on this side. It is suggested that as a party we want to see this conference come to an unsuccessful conclusion. [HON. MEMBERS: "Hear, hear!"] What a mistake hon. Members opposite are making! It shows their ignorance on this point. Do hon. Members opposite realise that it is greatly to our interest to keep this Conference going as long as we can? Do they realise that it is greatly against our interest to see this Conference come to a speedy conclusion? I do not think they do. It is commonly supposed that the Conservative party are the inherent enemies of the Bolshevists and that hon. Members opposite who belong to the Socialist party are their friends. I will give one quotation, and one only, which will show them how wrong they are. At a meeting, the fifth meeting I think it was, of the Communist Internationale not long ago in Moscow, Mr. Zinovieff, one of the moving lights in that august assembly, made the following remark about the Prime Minister and about his party. They are not very complimentary, but hon. Members opposite must not blame me, because I am not responsible. [HON. MEMBERS: "We have read them!"]

Mr. PURCELL

You are wasting time.

Sir V. WARRENDER

This is what Mr. Zinovieff said: The Socialists are doomed to disappear politically. There is no doubt of this. For this reason we must fight MacDonald immediately and with all our energy. Our party must fight MacDonald immediately because when the masses will come to understand the baseness (podlost) of MacDonald, they will remember that the Communists have said so, long ago. The right hon. Gentleman the Prime Minister is described by the Russian word "podlost," which is one of the most insulting Russian words you can find. It means a man so devoid of honour and any high spirit whatsoever that he is as mean as a cur dog in the street. This is the opinion of the Communist party regarding hon. Gentlemen who sit opposite, and their leader, and yet they have the impertinence to come down here and tell us that we are the enemies of the Bolshevists. I commend the Bolshevist Press to hon. Members who sit opposite.

Mr. PURCELL

We are not Bolshevists.

10.0 P.M.

Sir V. WARRENDER

I never said that you were, but I suggest that hon. Members opposite should read the Bolshevist Press. They have quoted from what they call Tory papers, and they include among them the "Observer"—I do not know why—but if they would read the Bolshevist Press they would not see any mention of my party, but they would find a lot of interesting views about themselves. There has been a certain amount of discussion about the murder of Captain Cromie. Captain Cromie was a friend of mine and was a most gallant naval officer. He was decorated with the Victoria Cross and a finer specimen of mankind it would be hard to conceive. Whether Captain Cromie was shot after he had been an aggressor or not is not the point at the moment. He was in British territory. The Bolshevist forces had no business to come into that territory. An Embassy abroad is British territory. I happen to know from one of my constituents who is a personal friend of mine, and who was in the Embassy at the time, that Captain Cromie was shot while sitting in a chair at his desk, before he had an opportunity of defending himself. He w as shot while he was fingering in his hip pocket getting his gun out. But the fact remains that he was murdered in our Embassy in St. Petersburg by men in the pay, whether soldiers or not—I think that they were—of the Soviet Government, and I think that it is a crying shame that this country should allow one of her sons to be murdered in that way, and not do something to see that his relatives and dependants are given some compensation.

Mr. PURCELL

Why was not this raised before?

Sir V. WARRENDER

It was raised dozens of times.

Mr. PURCELL

You are raising it now to—

The CHAIRMAN

The hon. Member for Coventry has made his speech, and he must allow other hon. Members to make theirs.

Sir V. WARRENDER

The longer the conference continues the more advantage it will be to the Bolshevist Government. The Bolshevists know this. They know that they will be unsuccessful in raising any loan in the City. Therefore they know that if they can continue this conference as long as possible the more embarrassing it will be for the Government, and the greater the pressure which they will be able to bring to bear upon the Government to get more favourable terms. Therefore, unless the Government are convinced that they are going to get some new concession out of this conference, to find some employment for the unemployed men of this country, it is their duty to close down this conference as soon as they possibly can. They are only going to find themselves in a bigger mess than they are in now if they continue it. One has sources of information from quarters which are disinterested in a sense and yet vastly interested in another. There must be some gains, and I would say to hon. Gentlemen opposite that, unless they can come here and say that they are convinced that this conference is going to be of value and going to produce employment, the best thing is for the Government to break up the conference at once and see what is the situation which developes itself after that.

Mr. R. McNEILL

The Debate which has occupied the Committee since 4 o'clock has been on a subject that excites very strong convictions if not strong feelings. I think that the Committee must congratulate itself on the fact that the Debate throughout has been admirably free from heat or passion and that attention has been devoted to a dispassionate examination of the subject. There are one or two misconceptions, as it appears to me, which have found expression on the opposite side. One or two hon. Members—I can only think that they hardly meant it; the hon. Member for Dartford (Mr. Mills) was one and I am not sure that the hon. Member for Dundee (Mr. Morel) was not another—suggested that the attitude that we take up on this side of the House really springs from the desire to see a restoration of the old regime in Russia. Nothing could be more absurd than that.

There has been a great deal of talk throughout the Debate about our dislike of the present Government of Russia. Of course, we admit freely that we dislike intensely the present Government of Russia. I want to do complete credit to hon. Gentlemen opposite, and if they are sincere, as I have no doubt they are, in their declarations, they just as much dislike that Government as we do. An hon. Member interjected just now the remark, "We are not Bolshevists' We freely admit that; we are not accusing them of it. My position is that, strongly as we dislike the form of Government now in Russia, it is quite as much disliked by hon. Gentlemen opposite, and, so far as that goes, we are on common ground. The second misapprehension is that, because of the Debate which we have raised to-day, we are anxious to sabotage the Conference. As two of my hon. Friends who have spoken have very forcibly pointed out, nothing is further from our desire than that. It would be very strongly against our interests, and we have no ulterior motive whatever beyond what we have put forward as our object in raising this Debate.

Our object is twofold—first of all to obtain information as to what is going on and what is the attitude of the Government; and, secondly, to assure ourselves, if we can by assurances from the Government, that what we regard as vital British interests are not to be sacrificed as the result of this Conference. I think I am entitled to complain of the treatment that the Committee have received to-day from the Government. I am the last person in the House who would depreciate in any way the importance of the office of Under-Secretary of State for Foreign Affairs, and I should be very sorry to say anything disrespectful of its present occupant. But at the same time I do suggest that it is putting rather much responsibility on his shoulders when he has to bear the entire burden of the Government case, and still more so when, at 10 minutes past 10 o'clock, he has not yet said a word and no Member of the Government has spoken in this Debate or given us any indication whatever of the attitude of the Government. As my hon. Friend who opened the Debate reminded the Under-Secretary, it was in this corresponding Debate last year that I myself was reproached by the present Prime Minister, among others, for not opening the Debate by making a statement. In those circumstances I think we have very grave and legitimate grounds for complaint against the Prime Minister for not being here during any part of this Debate and for not giving us any guidance on the matter. We are anxious to get information. The hon. Member for Dundee (Mr. Morel) seemed to think that there was almost impropriety in raising this Debate at all. That, I thought, was a most extraordinary attitude for a leading light in that egregious body known as the Union of Democratic Control.

Mr. MOREL

My point of criticism was not that the Debate was improper, but that if the Opposition really wanted a conclusion to the Conference, the right way to set about it was not to attack violently one of the parties conferring.

Mr. McNEILL

I do not think that there has been any such attack, but if there has been, I certainly do not intend to repeat it. I do not think it is a question for attack; it is a question for getting information. I have lately examined the questions which have been addressed to the Prime Minister with reference to this Conference, and the answers to those questions have been most skilfully framed so as to conceal as far as possible any information from this House. My hon. Friend who opened the Debate reminded the House of the speech which was made by the Prime Minister on 12th February. There have been some criticisms directed to us on the ground that we have been too much in a hurry for results. I do not think we are pressing unduly for results. What we point out is that the Prime Minister more than five months ago led the House of Commons to expect that he would settle all these questions "in a very short time," and we do think that when we are almost on the eve of adjourning for the Summer Recess it is not unreasonable that we should know whether any results whatever have been reached. The Prime Minister said that on all these questions he expected to have a settle- ment. I want to direct the attention of my hon. Friend the Under-Secretary to what these questions were. One of the most important of them was the question of propaganda. I want the Under-Secretary to tell us how that matter stands, because the Prime Minister on that occasion said: One of the most important of these questions is that of propaganda against us, upon which I shall certainly insist."—[OFFICIAL REPORT, 12th February, 1924; col. 769, Vol. 169.] In an earlier part of his speech he talked about propaganda "North, south, east and west." Evidently at that time he was very much impressed with the gravity of the case in regard to propaganda. Will the Under-Secretary tell us exactly how the matter stands, whether propaganda has in any way abated since the Prime Minister spoke, and whether anything has been arranged with regard to it in the Conference that is now taking place? The other questions that the Prime Minister on that occasion said were to be very quickly settled by the Conference were these: All outstanding points between Russia and ourselves, debt, foreign relations, treaties of doubtful validity, disagreements which were threatening war almost every day, propaganda north, south, east and west. And the preliminary for the settlement of these matters, he said, was recognition. We have had recognition. I will not stop to argue now, though it might be argued, that recognition was a totally different matter, that these questions might have been arranged without recognition, and that recognition was not a necessary preliminary. But there are several matters there of very great importance about which I wish to ask some questions. What about territorial waters? That question is one of very grave importance indeed, and it is not a new question. It has been in dispute between this country and Russia under successive Governments since long before the Russian Revolution and long before the War.

The Russian Government have for a long time past claimed that a larger limit than three miles should be regarded as territorial waters, and the attitude which His Majesty's Government have always taken upon that question has been that, as a matter of International Law, the three-mile limit could not be departed from except as a result of the decision of a Conference of Maritime Powers and His Majesty's Government have on several occasions expressed their willingness to discuss the whole matter at a Conference of Maritime Powers, but have altogether refused, by any other method, to allow the three-mile limit, as a principle of International Law, to be departed from. Unless the Admiralty have very much changed their view within a very short period, that is a matter to which the Admiralty attach very great importance, and I should like to, know whether anything has been done with regard to the matter at this Conference. According to the official communiqué, there has been a discussion of a Treaty of Commerce and. Navigation, and also a discussion of a Fisheries Convention. I wish to know whether either of those Treaties purports to deal with the question of territorial waters, and, if so, what attitude His Majesty's Government are taking up, and whether the country can rely upon them to maintain the time-honoured principle of the three-mile limit, unless it is abrogated by a Conference of Maritime Powers, all of whom shall be free to discuss it?

The next question I wish to ask my hon. Friend is this. Is the Treaty of Commerce which is being discussed at the Conference to replace the Trade Agreement of 1921? If it is, and if that agreement is to disappear, a question of very considerable importance will arise. I refer to Article 10 of that Agreement. As my hon. Friend who opened the Debate pointed out, there are important sums of money in this country which the Soviet representatives are reported to be anxious to dispose of, because they have asked for the repeal of Article 10. It is very satisfactory to be told—I think it was in answer to a question—that the Prime Minister has refused to consent to the repeal of that Article, but if the whole of the Trade Agreement is to disappear, and if it is to be replaced by a Treaty of Commerce in accordance of course with the preamble to the Trade Agreement, which contemplated ultimately having a final settlement by a permanent Treaty; if the Treaty now being negotiated is to be the Treaty referred to in the preamble of the Trade Agreement, and if, consequently, Article 10 is to disappear as soon as that Treaty is signed, then I do not Think there is as much value as I was hoping for in the refusal of the Prime Minister to consent to the repeal of that Article. It is quite possible that this contemplated Treaty may be signed and Article 10 may disappear before any satisfactory arrangements have been made for dealing with the funds which are at present protected by that Article.

Another question which has been the subject of a good deal of debate this afternoon is: What is to be the position with regard to the debts which are due to us? The Prime Minister said that recognition was intended to be a preliminary to a settlement of these matters. I asked a question to-day of the Prime Minister with regard to the figures of these debts under various categories, and, as far as I could gather from hearing his answer, they practically confirmed the figures that were given in his speech by my hon. Friend who opened the Debate. But the Russian Government borrowed from us during the War a sum of £655,000,000. That, of course, stands in a category by itself. That is a war debt, and when they were discussing at the Genoa Conference how that debt was to be dealt with, the representatives of the Soviet put forward a counter-claim, which amounted to the gigantic sum of £5,000,000,000. That counter-claim, in principle, was repudiated at Genoa, not merely by the representative of His Majesty's Government at that time, the then Prime Minister, but it was repudiated by him in agreement with the other Allies, and I want to know whether, in the negotiations now taking place, any such preposterous counter-claim is being put forward, and, if it is, whether His Majesty's Government are taking the same attitude as was taken at Genoa, or whether the Prime Minister has been weak enough, as I think it, would be, to admit in principle that any of these counter-claims can be put forward. In addition to that, there are private claims which amount to about £200,000,000, and there are, I believe, I do not know how many separate claimants, but I think there are no fewer than 300,000 claimants represented by the Association of British Creditors, and, of course, it is a matter of very great importance to know how these claims are to be dealt with.

I was amazed by the speech of the hon. Member for Coventry (Mr. Purcell) just now, when he said that he—and, I suppose, his friends—did not care in the least what happened to bondholders; all that they were concerned with was the question of employment. It is difficult to deal with a statement of that sort, because it appears to me to involve so complete a misapprehension of the whole economic condition which is raised by this question. The whole of this question of the revival of trade with Russia is a question of ways and means, a question of method. We all want to get back to trade with Russia; we all want it for the sake of employment for our own people. If we could revive our trade to such an extent that our manufacturers could find a market in Russia, that is a consummation which we all tremendously desire, but how are you going to bring that about if you do not care for bondholders? The Russian Government, as it appears from the communiqés, are pressing for a loan. That is what they chiefly want, and they want a loan for very intelligible reasons. I wish they could get a loan, I wish the conditions were such as would make it possible for them to get a loan, but hon. Members who talk about sabotaging the Conference, hon. Members who say at this juncture that they have no concern whatever for bondholders, are, I think, more likely to sabotage the Conference, if by sabotaging the Conference they mean making it impossible for the money market to supply a loan. I am sure they have no such intention, but it seems to me that that must be the inevitable result of what I think is a very deplorable misapprehension of the whole position.

We want a fair settlement of the bondholders' claims, because we want, first of all, justice done to them, because that is a British interest, and we are not in a position to afford to give up large debts that are owing to us and to our nationals; and, secondly, we want it because we know that by that alone is it possible to bring about a condition of affairs in which the Russian Government or Russian nationals can go into the London market and ask for a loan with the slightest prospect of getting a sixpence. The Prime Minister, in reply to a question recently, gave an answer which, I must say, caused me some apprehension. On the 18th June, he said: Throughout the present negotiations the Soviet attitude has been that while they cannot agree to the cancellation of their Repudiation Decree, they are prepared to pay some compensation in respect of the claims of British nationals in return for counter concessions."—[OFFICIAL REPORT, 18th June, 1924; col. 2095, Vol. 174.] Now why should there be any counter concessions? These claims of ours are debts due either to the British Government or to British nationals. It is not a question of concessions, and I think it is an extraordinary attitude that the Prime Minister should sanction a statement of that sort, that the Russians are prepared to deal with these claims of ours in return for counter-concessions. I understand there has been a general agreement with regard to claims for personal injuries. I want the Under-Secretary to give us a little more information about that. I think it is very inconvenient that the Government have not spoken earlier in the Debate, in order that some of us might have been in a position to express satisfaction or dissatisfaction with what they are doing, and I am afraid the policy of the Government is to give us this information when it is too late to make any comments upon it, and then, in a very short time, to send Parliament into the Recess, when it will have no control over them at all.

What is the present position with regard to our claims for personal injuries? What is the nature of the general agreement that has been arrived at, and has any conclusion been arrived at as to the amount of claims, or the mode of settlement? Then with regard to confiscated property. There, I gather, the proposals made by the Russians are that a lump sum should be paid. What is the lump sum, on what principle has it been arrived at, and what relation does it bear to the amount of the claims that have been put forward? I understand—and I think my hon. Friend the Member for Erdington has already stated—that what we are told is that the Russians have offered something like 15 per cent. of the total value with regard to these claims, and, with regard to sterling bonds and rouble bonds, they have made conditions—to which reference has already been made—which, I think, are entirely unacceptable, and about which I hope my hon. Friend will be able to give us some further information. Why should these bonds not be paid at their face value? What possible reason can there be for paying them off at a depreciated market value? Is it not obvious that the result of such a transaction as that would be to create a precedent by which any Government, by merely waiting until they saw their securities depreciated, could then pay them off on a depreciated value, putting a premium upon depreciation, with the consequent effect that that country, or any country that follows that example, could not get any credit in the money market of the world. I say that those are entirely unacceptable terms—so far as I understand what they are. I do not know? whether my hon. Friend opposite can throw any further light upon them, but I want to repeat that our object is not camouflage or sabotage. We want to see successful terms arranged. But we do not want to see British interests sacrificed by arranging terms for the sake of reaching a result which will be far short of what our nationals are entitled to claim. We have heard from one speech of a right hon. Gentleman this afternoon of the illimitable potential wealth of Russia, that Russia is one of the most wealthy countries in the world. Her debt, I believe, is small. I have tried to get from the Prime Minister, by questioning, the total of Russia's total external debt, but he was not able to give me the total figure. About £800,000,000 was the National Debt of Russia before the War. She owes us £600,000,000. I think it is probably the right figure that has been given to me as an estimate, that the total external indebtedness of Russia does net exceed £2,000,000,000.

If that be so, her debt is a mere bagatelle compared with ours. In comparison with her total wealth it is a mere trifle. Some of our critics have complained that we were trying to press Russia for payment of sums she cannot meet. One hon. Gentleman, I think in an interruption, said: "Why, Russia is the only country, the only debtor, that you are pressing for payment, although other countries owe you money." Our attitude is not that at all, of pressing for immediate payment. But other countries who owe us money do not repudiate their debt. There is a very great difference between requiring immediate payment, and allowing a repudiation of liability. What we do claim is That Russia should acknowledge, as any other civilised nation, their liability for the debt that they have incurred. If they do make that admission, then it should be in their case, as in all other cases, a matter of friendly negotiation as to the best manner, method and time of repayment. I mean to conclude as I began by a complaint. I do not know whether the way in which the Government have handled this question is to be taken as an example of that new spirit of which we hear so much, that new spirit which now comes out on an average about three times a fortnight. It is a perfectly harmless matter to talk about the new spirit. It forms the stock-in-trade of the right hon. Gentleman in the matter of his perorations; and I am not at all sure it is not already exciting the jealousy of the rising sun over the hills of Wales. But whether or not this is an example of the new spirit, and an improvement upon the old spirit, I do earnestly press upon the Government, upon my hon. Friend opposite who represents the Government to-night, that whatever they may do in this Conference, they will not do what some of us have some apprehension about—that they will not for the sake of showing some result of the Conference give away any vital British interests—to some of which I have alluded—or what is just as bad that they will not mislead us as to the actual results, or involve them in an anbiguity which always leads to greater trouble.

Mr. PONSONBY

I do not believe that there is a single hon. Member present in the Committee to-night who wishes to be standing where I am now, and be in my place. I apologise to the right hon. Gentleman who has just sat down, and to other right hon. Gentlemen sitting near him that the Prime Minister has not been able to be present and has not been able to make a statement on what I quite admit is a very important matter indeed. There is considerable disadvantage in an Under-Secretary venturing to address the Committee on a subject of this sort, because somehow he is always regarded as a legitimate Parliamentary target. I would, however, ask hon. Gentlemen and right hon. Gentlemen opposite to forget if they can that I am an Under-Secretary and regard me just as an ordinary mortal.

While I have been listening to the whole Debate, except part of the speech made by the hon. and gallant Member for Central Hull (Lieut.-Commander Kenworthy), I was wondering exactly what advice I should be given. I should be the first to admit that there are many hon. Members here and many outside who are far better equipped to carry on these extremely difficult negotiations. There fore, I wondered which of the speakers I should be able to copy either by way of method or manner or argument. On the whole, I came to the conclusion that a judicious mixture of my hon. Friend the Member for Watford and the hon. Member for the City of London (Mr. E. C. Grenfell) were the best to give me guidance and help. I cannot say that many of the other speeches were very helpful, and I was wondering whether the six hours I have spent here would not, so far as these negotiations are concerned, have been better spent in deliberations at the Foreign Office. I am dissappointed that this Debate has come at a very awkward moment. I have been working, not for five months, but not yet quite three months, on these negotiations. The hon. Baronet who opened this Debate said these negotiations had been going on for five months, but it is only three months, and, considering the extreme perplexity of the subject, I consider that is a very short time.

During those three months we have had to cover a very large field. My right hon. Friend who has just sat down said this was a very heavy burden on my shoulders. I have found it so, and I am only glad to be able to relieve the Prime Minister who has still heavier burdens on his shoulders. These burdens we found in the archives of the Foreign Office when we arrived there. We started negotiations on 14th April, and there has been a certain number of sessions of this Conference, and the sub-committees have also been working. I found, like everyone else, I think, who has had anything to do with these Conferences, that you can cover a very great deal more ground in informal conversations than by formal conferences, and I have adopted that method to a large extent. We are accused of concealment and secret diplomacy, but I do not think it really would have helped matters very much for representatives of the Press to sit round in a sort of arena watching M. Rakovsky and myself conversing. My feeling on this subject has always been—and I was one of the first, I think, to come forward many years ago and object to secret diplomacy—my argument has always been that all agreements, all understandings, and all treaties, should be submitted to the House of Commons. I have not said, to adopt the simile of the game of cards, that all the players should show their hands, but that they should tell us what game they are playing, because the stakes for which they are playing are very large.

In this instance, I soon saw that we should have to negotiate a good deal by sub-committees who could thresh out matters, and by conversation between myself and M. Rakovsky and other Russian delegates; and, when the agreement was arrived at, it would be laid before the House of Commons fully for their approval. That will be done, and I hope it will be done before we adjourn for the Summer Recess. During the last three weeks we have reached that critical time when, as everyone knows who has had any dealings of this kind, whether business, commercial, social or political, you come to a stage when you are picking up the various threads that have been dropped, and are trying to come to your full agreement, and at such a time it is impossible to discuss matters in this House. My object in this matter from the start has been, and it will be to the finish, whatever the finish may be, to try to be fair—fair to both sides. I have had to steer between those who regard the Bolshevists, in all that they do, feel or think, as saints, and those who regard the Bolshevists in every aspect, at home and abroad, as bloody murderers. Let us have no misunderstanding on this. Those two opinions do exist, and the latter opinion is very strongly represented in the Press. Paragraphs are brought to my notice, generally emanating from Riga—which is a very tainted source—the object of which cannot be to help the negotiations, but rather to hinder them, because there is undoubtedly a very strong desire that these negotiations shall break down, in order that the present Soviet system of government in Russia shall fall to the ground. I do not for a moment say that the hon. Member, who has just sat down, or the hon. Baronet, who introduced the discussion, share it, but that view is very strongly held A good deal of emphasis is laid on the fact that in these Press notices and in reports of speeches attacks are quoted in the Soviet Press against the Labour party against the Prime Minister, and against my hon. Friends behind me. I admit that that is so. Why is that so? They are more frightened of the Labour party, as a bulwark against extreme revolution and Communism, than they are of hon. Members opposite. That is certainly clear from the utterances which are directed against the Prime Minister because, when the Leader of the Opposition sat in his place here, there were no such attacks against him. It was in those days that those who looked forward to universal Communism and the spread of Soviet ideals thought they were going to come in for palmy days, then when the Conservative Government was in power. Now that they have a strong bulwark against the advance of Communism, they direct all their vituperation against it.

I want to excuse a certain amount of delay. I am just as much in a hurry as anyone else, perhaps a good deal more so, and I should very much like to see negotiations go faster. But let me give an instance of a delay which has recently occurred, which has occupied rather more than three weeks. We started on the discussion of the debts under the headings which were quoted by the hon. Baronet who opened the discussion—pre-War debts, property claims, miscellaneous claims and personal injury claims. With regard to the pre-War debts, it occurred to me it would be a good thing if the Soviet Delegates were to meet the bondholders. In my ignorance, I am sorry to say, of the organisation of the City and the financial interest—I am beginning to have a larger experience of it now—I suggested that the Soviet Delegates should meet the committee of the foreign bondholders. I introduced them to one another at the Foreign Office and gave them a cup of tea, at the expense of His Majesty's Government, and negotiations began. There were two subsequent meetings in the City. I found that this Committee of the Council of Foreign Bondholders, after all, did not represent the bondholders. It did not speak on behalf of the bondholders; it could not promise anything on behalf of the bondholders. It could not accept anything on behalf of the bondholders, and it could not recommend anything to the bondholders. I had asked the Russian delegates to meet them and, to my dismay, I found that the negotiations were abortive. The scheme which the hon. Baronet elaborated in his opening speech had features of which I had not heard of before. He had drawn on sources closed to me, or he was drawing on his—[HON. MEMBERS: "Imagination!"] I came to the conclusion that the hammering out of any scheme giving a specific percentage of payment was out of the question. We could not put such a scheme into a treaty, and the bondholders would be quite unable, unless they found somebody who could represent them, to hammer out such a scheme in months and months with the Soviet delegates. I am not willing that negotiations which, in other respects are drawing to a conclusion, should be held up. I shall therefore fall back on my original idea of working more or less by getting admissions of liability, and getting rid of the repudiation which would stand if our settlement fell to the ground. The hon. Gentleman very rightly attaches importance to the question of territorial waters, and so important do we think it that we have set up a special Committee to deal with it—the commercial treaty is drawing to a conclusion now. There are just one or two points which have to be tidied up. There are the treaties which have been gone through, and those which have to be continued have been singled out and revised.

The Committee will realise that this has not been a very easy matter. The Prime Minister has been fully occupied with other business and with the extraordinarily complex character of the European situation at present. I have been guided all the way through by having in mind first and foremost British interests of all kinds, the small men as well as the big men, and seeing that no British subject with a legitimate claim will feel that his interests have been neglected. I am guided in this policy by the principle which has guided the party behind me, namely, the principle of conciliation, and not talking to these delegates, as the hon. Gentleman who opened the Debate said was the tone to adopt. He spoke of them, and the simile he gave was "simply to treat them as highwaymen."

Sir A. STEEL-MAITLAND

I never suggested that with regard to the Russian delegates who are over here. I was contrasting the action of the Government, and the attitude they have taken up towards Russia, with their action in another case.

Mr. PONSONBY

I accept the hon. Baronet's explanation. I do not want to be unfair, but he mentioned a simile of a man taking his watch, and he said that that man was representative of the Russian nation. I want to steer clear of any sort of inference on one side or the other. The middle course is a difficult one. I believe the policy which the Labour party has always advocated, the policy of conciliation, ought to guide us for the sake of British trade and for the sake of the revival of Russia itself. I have a great belief in the future of Russia, and it is with this consideration in view, and for the sake of healing the wounds of Europe, that we are desirous of bringing Russia into the comity of nations. The settlement of this question is of vital importance, and the question of propaganda will be dealt with as promised by the Prime Minister.

Mr. McNEILL

Will my hon. Friend say what is the position with regard to the Trade agreement? Will it be separate from the other agreements?

Mr. PONSONBY

If we get this settlement it will comprise a complete commercial treaty, an arbitration treaty and other Clauses with regard to debts, and so on. The commercial treaty will be a separate matter.

Sir PHILIP LLOYD-GREAME

Are we to understand that if this Commercial Treaty is made, all rights we may possess under Article 10 will be given up, and no compensation will be available for any British subject?

Mr. PONSONBY

All these matters are closely knit together, and I cannot go into the various details now. I want to assure the Leader of the Opposition that this agreement, line by line and word by word, will be laid before the House, and there will be full discussion upon it. It is only because this Debate happens to catch me at a moment in the negotiations when I have a very difficult time to get through that I appeal to the House not to regard my action to-night—non-committal though it may be—as unfriendly or discourteous in any way. It is only my interim Report, and the House must in the nature of things wait until the full Report is available.

Mr. J. JONES

I am pleased to be able to say that I am not one of those who have been to Russia. Evidently, Russia contaminates all those who come into contact with it, particularly ex-Labour Members. I leave the Russians to stew in their own juice. What I want is to see our people get their own. They are going to get their own, but not by playing the game of the bondholders. They are going to get their own by playing the game of the worker, the man who produces things, and not the chap with a long nose and a top hat. Therefore, I want to get our people back to realities.

It being Eleven of the Clock, the Chairman left the Chair to make his Report to the House.

Committee report Progress; to sit again to-morrow.