FOREIGN OFFICE.

HC Deb 14 July 1924 vol 176 cc128-72

Question again 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.

Captain BENN

When we were interrupted I was proceeding to make one or two observations in connection with the Dawes Report itself. I need not say that it is not my desire—and I am sure it is not the desire of any Member of this House—to hamper the Prime Minister, and while, rightly, expressing our views on the matter—for it would be a dereliction of duty if we did not do so—to wish him Godspeed in his task. I think we are all at one in that. Still, I think we should not be doing our duty if we did not lay before him the view that we hold, and a view for which we have fought for years, ever since peace was declared. In one of the paragraphs of the Report it speaks of a figure of £125,000,000 annually or it may be more. Be it observed that the Report says this is merely a Budget surplus. It does not speak of an exportable surplus at all. It says that this £125,000,000 is the Budget surplus. Then it proceeds to say, what is often said by well-informed men, that in some way Germany has profited enormously by the collapse of her currency, and that if she is in great need, as soon as this Report is in operation she will be in a position of greater industrial strength. I confess I have never been table to understand how bankruptcy can put people in that position. What has happened to people who held Government script? People who held mortgages and debentures? They are all valueless. If, on the one hand, somebody has gained by the wiping out of the National Debt, on the other hand someone has lost by losing security in the matter of capital, or whatever it may be, in the carrying on of business; and if true, assuming, as do some hon. Members that the total depreciation means nothing but Government debt, and that wiping out or repudiation of Government debt is a good thing, then, surely, it is time we tried the result of a 100 per cent. capital levy? [An Hon. Member: "Hear, hear !"] The hon. Member on the Labour Benches agrees so far, but he will not go with me the whole way. He thinks it is bad in Germany, but good in England.

I observe that the Dawes Report does not speak of an exportable surplus. It speaks of a budget surplus. We must form our own judgment as to what exportable surplus is to be expected or got from Germany. The hon. Member for Farnham (Mr. Samuel) who has just spoken dealt with this matter, and Mr. McKenna's own report—a twin report to the Dawes Report—explains that since the Armistice there has actually been a deficit of exports, taking into account also the Treaty payments which were considerable—nine or ten milliards gold marks. That does not very much look as if Germany was in a position to produce this large exportable surplus. We have got also to answer this question. Will the surplus we hope to get take the form of goods? If so who is going to take them? It means £125,000,000 worth of goods. I remember quite well that in 1921 the first sign of revival in Germany's export trade was disturbing and we found good free traders—at least they considered themselves so—several of them who proceeded to bring in a Bill for making it impossible, or almost impossible, or difficult, for these German goods to be admitted into this country. There is no reason to suppose that people will be prepared to welcome such a surplus of German goods if it is forthcoming.

Further than that, we must envisage the situation I think—always assuming the Dawes Report will work—when, under pressure, we have reduced the industrial area in Germany capable of producing the surplus of £125,000,000. Will it also go for nothing that these goods, which are to be sold in the markets, are in competition with our goods? If it is a natural growth which increases the German exports and our own exports in a reciprocal way, then it is a wholesome thing. But these violent fluctuations by artificial means will not be welcomed by the manufacturers or the workers of this country. That is merely a general observation, but all the nations which are parties to the reparation arrangement have intimated that they are willing to enforce the Dawes Report and desire to see it accepted, and I shall confine myself to that problem.

8.0 P.M.

The first question I wish to ask is, does the Prime Minister really contend, or does the Under-Secretary for Foreign Affairs contend, that the obligations which are laid upon Germany by the resolutions of this Commission are within the Treaty? There is in Annexe II a very general Clause which says that Germany shall undertake to pass what legislation is necessary for this purpose, but there is no mention of such a thing as denationalisation of the railways, which is a constitutional change in Germany, and not an industrial change, and there is no mention of debentures on industry or any such device. The welcome expression of opinion in the first Note I thought set forth ideals with which I found myself very much in sympathy and they were quite clear. They used the phrase, "These demands went far beyond." Anyone who has studied them must come to the conclusion that they do. Incidentally it is true that these are merely demands made under Annexe II. The bondholder has to realise that he is handing over to the Reparation Commission control of all the money he lends to Germany because it is held that, with such exceptions as they make, the Reparation Commission has a complete hold upon German assets, and, in America, they were informed by the Reparation Commission that that Commission had the first lien.

The Prime Minister under stress of the desire to make an agreement—I can well understand his difficulties and the importance of making the agreement—said that while holding his own view on the subject he is going to refer this question to experts as to whether the demands of the Dawes Report are inside the Versailles Treaty. Supposing they decide that they are not, are we to understand that these other proposals are going to go forth, although the body charged with the execution of the plan will be dealing with something which is not within its function, or the terms of the Treaty, at all? I must say that while I have no desire to say anything to cause any difficulty, I look with some apprehension as to what will be done in this respect. We have heard some talk about revising the Versailles Treaty, but I will put the question which the present Prime Minister put to the Prime Minister of that day, and I will ask him, "What is your opinion about the Ruhr occupation?" Is that within the terms of the Treaty? It is all very well to talk about a treaty being sacrosanct, but it is no good having a treaty which is to be observed to the letter when it is in our own interests, and which can be flouted when it is against the interest of our defeated enemy. These are points which certainly demand attention.

The essential hope of the Dawes Report was that it was intended to be a voluntary engagement by Germany. The time for dictated decisions has really ceased, for it has been tried ever since the end of the War. Terms have been thrust upon Germany, and it has never been a voluntary act. I agree that they deserve to have hard terms for their guilt in bringing on the War, but at the same time if you want money you must have a voluntary engagement by Germany, and there is no question in the Treaty of a voluntary engagement, because Treaty terms are dictated terms, and we hope the terms of the Dawes Report will be negotiated and agreed terms. With regard to the Reparation Commission it has not a very successful record. Ever since the terms it concocted in 1926 fixing £6,600,000,000 as the German debt, all through the times of the moratoriums and the new demands, and the whole story down to January, 1923, when the Ruhr was occupied is not one of success, and it has not produced very much cash as far as the Allies are concerned. Right down to December, 1922, they declared that the 2 per cent. of wood delivered for telegraph poles was a default, and that opened the doors of all the horrors of the occupation of the Ruhr. I would like to know how such a body is to be strengthened

I understood for this purpose Great Britain, Italy and Belgium are to be members of the Commission and an American representative is to be added. We learn that an American has been appointed by the American Government and he is to have a vote, but he is only to have a vote when default is in question. Those who read the Dawes Report will see that there is no hope of payment by these proposals unless certain things are clone in the interest of Germany, namely, the restoration of the complete sovereignty of Germany over her own territory as laid down in the Treaty of Versailles. A great many other things have to be done, and all the filibustering in the Ruhr must cease. These people must be withdrawn and the sovereignty of Germany must be restored. That is the proposal of the Dawes Report.

What is the good of putting on this Commission an American representative merely to judge what is called a default unless he is there to judge whether the terms of the Dawes Report have been properly executed or not. We want to know whether that sovereignty has been restored or not. The American representatives will be interested in the £40,000,000, but he is also interested in seeing that the French clear out of the Ruhr, that the Germane have control of the traffic, and that the Regie gives up control of the railways. To say to the American representative. "We will call you in because we thought we would get so many hundred millions and we have not succeeded," is ridiculous. This Commission was supposed to be a fair and equitable Tribunal for deciding these matters.

There is just one final point and it is this. What about default when it occurs in the guarantees? Paragraph 18 of Annexe II says it may include: Economic and financial prohibitions and reprisals, and, in general, such other measures as the respective Governments may determine. It is laid down that the interpretation of that paragraph must be unanimously made by the Reparation Commission, and despite that provision there was independent action taken by the French in the Ruhr when Great Britain was unanimously opposed to it. Is there to be no safeguard against such action in the future? The Prime Minister says the default would be judged by the Reparation Commission and this is to be done in a left-handed way by making some American a member of that Commission. M. Poincaré and M. Herriot said the other day that France reserved the absolute right to independent action. In conclusion, I sincerely wish that the Prime Minister will be successful in arriving at the settlement of this question, and it is no good pretending. Debate after debate has taken place in an atmosphere of pretence, and we are told if everybody will be quiet and agree everything will be all right. In my view silence is useless if dangers are being incurred. I contend that it is oar duty to point out to the Prime Minister that unless it is very much strengthened, the plan he has agreed upon for the working out of this Report with the French will not work at all, and it may drag us at the tail of a policy of which we disapprove.

Mr. MOREL

Until the hon. and gallant Gentleman who has just sat down made his very interesting speech this Debate might have been divided into two sections, realities and unrealities. The realities came from the back benches and the unrealities came from the front benches. It has been a most amazing thing to some of us who have been very violently attacked for years for condemning the whole reparation policy to find hon. Members opposite and below the Gangway endorsing statements which we have been making for a very long time. I think many of us here can claim having denounced the whole of this system at a time when nobody else ventured to do so. There is just one point that I should like to touch upon before coming to the Dawes Report. We have heard a good deal about secret diplomacy. If there is one thing upon which Members who sit on the back benches in this part of the House are agreed, without any difference of opinion at all, it is that never again, if and so far as we can prevent it, will a Government of this country, whatever its complexion, be in a position to commit us without our knowledge and behind our backs in secret treaties, or, what is more dangerous, diplomatic and military agreements which happen before the treaties. That is what we mean, and that is what we have always meant, by secret diplomacy, and if it were conceivable—which I do not think for a moment it is—that a Labour Government would act against that conviction of the Labour party, I have not the least doubt that it would be broken by its own followers within 24 hours. But we have never described as secret, diplomacy conversations between statesmen, and if, as is very regrettable in this case, there have been misunderstandings as to what took place during the conversations at Chequers, you may describe that as you like, but you cannot describe it as secret diplomacy. It, does not lie in the mouths of some hon. Members of the House to do so, and certainly it does not lie in the mouth of the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George), an article and a speech by whom read the other day in the papers, and who was one of the principal authors of the Versailles Treaty, in which secret diplomacy received its apotheosis, to gibe at my right hon. Friend for what appears to have been a regrettable lack of proportion, but certainly not more than that, in issuing a report of the conversations.

With regard to the Dawes Report, it would be dishonest and it would be quite idle to pretend that the Dawes Report is not regarded by many of us on these benches with a most profound apprehension, and that apprehension has not been lessened by what we have heard from the Prime Minister to-day. 'We, have seen, within the past few days, renewed evidence of the power of M. Paincaré over French politics. We have seen French politicians coming to heel at the crack of his whip, the sound of which we on these benches are thoroughly tired of hearing. We have also seen the proposal put forward by the Government that these new claims upon Germany went so much beyond the Versailles Treaty that they needed an impartial authority to determine whether there was a default, and we have seen that very wise stipulation whittled down until it has in fact practically disappeared, because we have been given to understand to-day that, as a matter of fact, the counter-proposal that there should be an American representative will not take effect. Finally, we have also observed within the last few clays an absence—to put it no stronger—of any indication of an intention on the part of the French to evacuate militarily the Ruhr, and that is the most alarming symptom of all, because I think the only serious justification for accepting the Dawes Report would be if that Report puts an end to the latent state of war which has existed in Europe ever since Allied statesmanship admitted the prin- ciple, and ever since the French and Belgians put that principle into practice, that it was tolerable that there should be an invasion of German soil, an abrogation of German civic law, and an elimination of German sovereignty, in order to force payment of reparations. If the Dawes Report does not bring that principle to an end, there is no justification whatever for this country, at any rate, accepting it.

One thing is certain—I think it has been stated in this House, and I think it ought to be stated again—and that is that the Dawes Report is not going to solve the problem of reparations. How many times has the statement been made in the last few years that the salvation of Europe depends upon a settlement of the reparation question? But the salvation of Europe has been prevented, is being prevented, and will be prevented, by the reparation policy, and for my part if we were called upon to vote in this House on the Dawes Report, I should vote against it unless I had an absolute guarantee from the Government that our acceptance of the Dawes Report did not in any way tie its hands from adopting, at any moment it chose, a decisive and distinct national policy with regard to the whole question of reparations so far as our share was concerned. I do not say that that national decision ought to be expressed at this precise moment, but what that policy ought to be I have not the least doubt. We should abandon, for our part, our share of reparations. Some hon. Members opposite, though not, perhaps, as much as they used to do, are inclined to suggest that any talk on reparations policy from this side of the House has been dictated purely and solely from the desire to be fair to the German people, but I say, and always have said, that we ought to abandon reparations—I do not exclude the other point, to which I will come in a moment—from the point of view of our own economic interests primarily, and from the point of view of, perhaps, the greatest of all our interests in the ultimate resort, the preservation of peace in Europe.

This reparation policy does not make, for a peaceful settlement; it makes for dislocation and war. Indeed, my own feeling in this matter is that, if the Dawes Report receives the support, as it does, of a certain number—shall I say a large number?—of financiers, business men and economists, it is because they entertain the, view, although, perhaps, it is discreetly hidden, that it will show, after a year or two, that the whole idea of obtaining these vast sums of money from Germany is impracticable in practice, because the Transfer Committee will not be able to transfer to Germany's creditors, either in Gorman currency or in deliveries in kind, the vast sums which are laid down. That hope may mature, but on^ thing is perfectly clear, and it is the most dangerous aspect of the whole Report, namely, that he whole of this stage-managed Conference, base upon the still continued partial ignorance of the. British people of the essence of the reparation policy, and the complete ignorance of the French people of the essence of the reparation policy, is based upon the expectation held out to the British and French peoples that these huge sums of money will, in fact, be obtained. That is the, most dangerous thing, because, after those expectations, the reaction of disappointment will come about when it is found that they cannot be realised. That will lead once more to a revival of feeling, and the whole thing will again be thrown into the melting pot. One of the most remarkable statements in M. Harriot's recent speech is that he is holding out—and he may be sincere; I do not question his sincerity—to the French people the hope that for 40 years these sums will continue to be paid, that, a from the fourth year £125,000,000 a year will be obtained from Germany. That is midsummer madness, and it is midsummer madness of the most dangerous kind. So far as the effect upon reparations and upon ourselves is concerned, let us look at the past and endeavour to estimate the future.

This dislocation in Europe, which has brought such enormous national losses in providing for our unemployed and such enormous expenditure on armaments, has been due to the chaos and confusion aroused by this policy of punishment embodied in the Treaty of Versailles, which apparently is now sacrosanct, but which all of us on those benches have been denouncing for four years, and I hope the back benches will continue to denounce it. The economic result upon this country of this policy of punishment, the corner stone of which is reparations, I reckon we can all rightly and without exaggeration put down at £500,000,000. The national loss that we have incurred in the last five years has been brought about by the confusion and chaos introduced in Europe by this policy, and I am sure those figures are very much below the mark, and against that., according to a reply which was given me by the Secretary to the Treasury on 29th May last, we have had a receipt of £15,000,000. £500,000,000 on the wrong side, and £15,000,000 on the right side. That is a kind of bookkeeping which does not appeal to me. One might say the Germans have paid for the upkeep of the small British Army on the Rhine for the last five years. That is true, and those who like to put that in the balance sheet can do so. But the British Army on the Rhine represents to my mind a credit of a totally different character, the credit which attaches to the conduct of our troops there—the only decent page in the whole history of the foreign occupation of the Rhineland. So much for the past. We know that after these five years of confusion we have got £15,000,000 out of reparations and we know that the policy of which reparations is the cornerstone has cost us hundreds of millions.

Mr. HANNON

Will the hon. Member indicate how he arrived at this £500,000,000 of economic loss to this country?

Mr. MOREL

That would take much longer than the Committee would care to hear, but if the hon. Member attributes, as I attribute, a very large portion of our unemployment to the confusion and chaos produced in Europe by this policy, and the incidental expenses connected with that, and the loss of trade and so on, he will find that the figure of £500,000,000 is not excessive. We have pursued this Will o' the wisp of reparations—I am dealing now purely with the economic point of view—for five years, and it has produced £15,000,000. Now there appears to be in the mind of someone, according to the Dawes Report, a chance of getting large annuities out of Germany. My contention is that if we succeed in getting those large annuities, the last state of this country will be worse than the first, and this for perfectly simple reasons. Surely every economist will admit that it is axiomatic that those reparations can only be paid by a surplus of exports over imports. That means that the whole enormous machinery of German production is going to be driven in the direction of enormous expansion in her export trade. Experts estimate that even under ordinary circumstances, in view of her loss of territory and in view also of the partial loss of her foreign investments, Germany must export in order to provide for her essential needs at least £140,000,000 more in terms of current values than she did before the War—that is before you come to reparations—and on the top of that essential increase of exports we are going to put a further demand upon her which will compel her to produce £125,000,000 more. How is she going to do it, and what will be the effect upon the world and upon us if she can do it? She can only do it, of course, by producing goods cheaply by very high organisation, by mass production, and by driving down the condition of her working classes, decreasing their wages; in other words, realising a large scale production at the cheapest possible cost.

May I pause here to ask the right hon. Gentlemen on the Front Bench what kind of posture is a Labour Government going to be in which is demanding tribute from Germany at the expense of driving the German working man down the scale, which inevitably means a reaction upon our working men. That is a loyal Member of his party who has the right, in present circumstances, to ask that of the Government. Everyone knows what will happen. There will be a series of strikes in Germany against starvation wages and abominable conditions forced upon the German working classes by this Dawes Report. What is going to be the posture of a Labour Government in the face of strikes of German working men in order to pay tribute to us and to other nations? The general effect of Germany being forced to this enormous expansion of her export trade is going to make Germany the workshop of the world, driving out her competitors in the neutral markets everywhere. The effects are going to be particularly disastrous because the materials which Germany can more easily export to meet this demand upon her are just in those very trades, the metal trade and the steel trade, in which she is already a direct competitor with our- selves, and as the tendency progresses there is every fear that those long-established and, under ordinary circumstances, permanent trades in this country will be crippled, if not ruined, and may be replaced or may not by other trades, more or less parasitic trades, dependent for their continuance upon the continuance of this cheap material from Germany, which may stop at any moment—a most precarious condition for our industry to be placed in. In fact if this insane policy is persisted in there is not the least doubt that Germany will virtually get hold of all the great metal, electrical, chemical and other so-called scientific industries in which she has already a relative superiority to us in expert knowledge, trained labour, and equipment.

I was amazed when I heard the speech of the Leader of the Opposition, because he has in my opinion gone nearer to telling the real truth about reparations to the British public than any British statesman has done. He made a very remarkable speech in this House in November, 1923, just before he opened his Protectionist campaign, and I have always believed that at the back of his mind in starting that Protectionist campaign was this very fear. Speaking of Germany and German reparations he said: What I want to know is, where are those exports going? The most obvious place for them to go first is into the openest and freest market they can get, that is to say, ours. Unless there happened to follow a period of world expansion such as followed the introduction of Free Trade into this country—an expansion partly due to discovery in industry, and partly due to discoveries of gold—unless you could have some world expansion of that kind, you will have an immense amount of suffering in every industrial country in the world that receives those exports, but principally in our country. Theoretically, it is perfectly true that over a period of years the position may right itself, but the process of absorption may take many years, and the dislocation that will be caused in the highly-developed industrial communities is a dislocation that will ruin them before the absorption takes place."—[OFFICIAL REPORT, 15th November, 1923; cols. 484–5, Vol. 168.] In order to show the absurdity to which this statesmanship of economy or this economy of statesmanship has reduced us, the right hon. Gentleman produced his tariff. What for? To keep out the very reparations from Germany which he is demanding. He wanted his tariff to protect the home market. Even assuming that a tariff would protect the home market, no tariff is going to prevent the German reparation goods from swamping the neutral markets and from swamping China, South America and Russia. May I venture to suggest to my hon. Friends below the Gangway, who are Free Traders, that if this policy of reparations is continued their demand for the continuation of unrestricted imports into this country goes to pieces. They will never be able to sustain it. A reparations policy means no Free Trade.

The whole of this scheme from the economic point of view is an attempt to rebuild the economy of Europe upon absolutely unsound lines using this enormous human machine production in Germany in an abnormal way; abnormally forcing its output and abnormally restricting its imports. We are going to be the chief sufferers. In fact, the more we screw reparations out of Germany the harder we are going to be hit. It really is time that an appeal was made, not only to my right hon. Friend the Prime Minister, but to the leading statesmen of all parties, to tell the country the truth about reparations, to tell the country the truth of the tremendous danger from the economic point of view—heaven knows, there are other tremendous dangers—of maintaining a policy which, if it be successful, will ruin us.

May I say a word about the arguments which are put forward in favour of maintaining this reparations policy? The arguments against are so tremendous that the whole House, in spite of our differences of views, both on domestic and foreign policy, appreciate them, that one would think the arguments in favour would be correspondingly strong; but when you come to examine them they are deplorably weak. They are practically all based—the point was urged by the hon. Member for West Birmingham (Mr. A. Chamberlain)—upon the view that owing to the fact that Germany's internal debt has disappeared we have to set against that a great external burden or she will compete with us disastrously in the markets of the world. There is a double fallacy there. If the disappearance of Germany's internal debt makes her a more powerful competitor against us, it is even more true that if you put a great external burden upon her, which means an artificial increase in her exports, you will be adding an additional power to the power which she already possesses as a competitor by having got rid of her internal debt. You are doubling your danger instead of removing it. That seems a queer way of dealing with an economic problem.

There appears to be a continual confusion as to the effect upon national resources of internal and external debt. I speak with deference in the presence of the hon. Member for Ilford (Sir F. Wise), who is a much greater authority than I am on this financial question, but, surely, an internal debt does not involve a reduction of the national income. In other words, it makes the rich richer and the poor poorer. The interest and sinking fund raised in the country are spent in the country; the money remains in the country in the case of an internal debt. In the case of an external debt the money goes out of the country.

Sir F. WISE

My point was that Germany should have an internal debt equal to our debt on the industry and commerce of the country, and that the coupon should be paid to the gold banks and not cashed.

Mr. MOREL

My hon. Friend is an expert on this matter and knows a great deal more about it than I do, but it seems to me that there is general confusion as to the effect of an internal debt and the effect of an external debt. An internal debt does not make poorer the country that pays it. An external debt does make poorer the country that pays it. Nearly nine-tenths of our national debt is a domestic debt. That is a fact which seems to be very often overlooked in these comparisons between Germany's external debt under the Treaty and our internal debt. Nine-tenths of our debt is an internal debt and only a little over one-tenth of our debt is for services abroad, especially for the United States. What we are asking Germany to do is to pay more than three and a half times the amount of our annual tribute to America. Therefore, the comparison between our internal debt and the external debt which is sought to be forced upon Germany under the Dawes Report is not analogous.

For the rest, is it to be seriously argued that the condition of Germany to-day is better owing to her having got rid of her internal debt and having suffered from the effects of inflation, which have ruined a large section of her middle classes, and caused terrible poverty and distress? Is it seriously argued that her condition, having got rid of her internal debt, but having suffered from the results of inflation, is better to-day than it would have been if she had not got rid of her internal debt and had not gone through the process of inflation, then, surely, the right policy should be not to place this burden upon her, but to get rid of our own debt, which we could do by much less harsh measures than inflation. The fact is that this terrible burden of our internal debt is not a problem of foreign policy at all, but a problem of domestic policy, and we are not going to solve it by trying to cripple one of our numerous competitors abroad. Our true economic policy is to give up our claim for reparations provided, of course, that the total demanded of Germany—whatever that may be, for nobody seems to say definitely what Germany is expected to pay—is decreased by an equivalent amount, and a bargain is made with our Allies to decrease their demands on Germany in proportion to the decrease in our debt demands. If that be our policy economically, it is also our policy, strategically and politically, not to allow Germany to go on being treated as the outcast of Europe. I am very much afraid from that point of view—I do not propose to go into it to-night—that Englishmen and Scotsmen will live to anathematise the statesmanship which allowed Germany to become absolutely impotent in Europe.

In conclusion, I have said, and I repeat, that the acceptance of the Dawes Report by our Government is justifiable only if it puts an end to the state of latent war which has existed in Europe for five years and if we preserve, despite our acceptance an absolutely free hand to adopt a decisive distinctive, national policy with regard to reparation. I will be no party to inducing, by my silence on these Benches, the British public to believe that this last attempt to square the circle, and to make economic truths compatible with the violation of economic truths, is going to settle this tangle in the days to come. Even if the Dawes scheme were economically unassailable that would be only half the problem. I am about to make remarks which, I dare say, will jar on many hon. Members. That cannot be helped. I maintain that no economic problem that ever was, or ever will be, can be decided without considering the psychological factor.

In all these debates and calculations about what Germany is going to pay the psychological factor is left out. Consider what kind of psychology you are going to create in that great country by this vista of enmities to which apparently there is no end. For 40 or 50 years Germany is to go on paying £155,000,000. Think of the psychology that that is going to produce. Think of the basis on which that demand is made, that Germany was solely responsible, that she plotted the War, and that all the other belligerents were as innocent as lambs. Does any sensible intelligent man outside Germany, let alone inside Germany, believe that to-day? It has been rejected by every historian both in this country, and in every country, I think, except France. If in that connection Germany is invited to join the League of Nations as an equal, then we certainly ought to give her the right, if she asks it, the right which our civic jurisprudence refuses not to the lowest criminal, to state her case in reply to this charge which is made against her.

But, putting that aside, who is going to pay the reparation? It is not the ex-rulers of Germany, who are living in comfort in Holland and other places. It is not the industrialists of Germany. It is the common men and women and children of Germany, the working classes of Germany. What offence have they committed that this burden should be laid on them from year to year and from generation to generation? We had a remarkable speech made the other day by Senator Owen in which it was pointed out that 20 per cent. of those people in Germany on whom reparations fall were born since the War broke out, and that 80 per cent. were women or children when the War broke out. How can you build a temple of peace upon such a rotten moral foundation as that? I suppose that I am a very stupid person, in fact I have come to the conclusion that I must be, because it is incomprehensible to me how any statesmanship worthy of the name can imagine that this policy of punishment, going on again, now restarted under the Dawes Report, can have any end but that of another European war, and yet we had the speech of Lord Ypres to the school children at Deal the other day.

Every nation is preparing for war because the political law of Europe which prevails to-day is an unjust law a law which inevitably makes for a revolt of the people who suffer against the conditions imposed upon them, and that end will come unless some man big enough to rouse the conscience of Europe, and unless some man with executive power, can rise sufficiently to stake all on facing the acceptance of the truth on the people of the world. Short of that, then the peoples will say to their Governments, "Go on with your play acting. Go on with your make-believe. Go on with your dishonesty. Go on with your absurd conduct. Lead us to massacre one another. Put into our hands again your murderous weapons for that purpose, and the hour that you do that will mark your doom and the doom of your senseless, your criminal and your inhuman institutions."

Sir A. SHIRLEY BENN

I have listened with great interest to the speech of the hon. Member for Loughborough (Brigadier-General Spears), as a Liberal Free Trader, and to the speech of the hon. Member for Dundee (Mr. Morel). Both of them referred to the danger that would accrue to England if German exports for reparation came into Great Britain. The object of the Dawes Report is to bring about the pacification of Europe, and in order to produce this result it devises methods by which Germany may he made to pay some of the reparations for her misdeed during the War. I do not believe that it is going to produce pacification. The Dawes Report puts German taxation into the zone of Allied taxation. Those of us who know the difficulty that is felt by those in the Allied countries, who have to pay the present taxation, realise fully that Germany, if there is to be that taxation, must go in for greater manufacturing. No country can be prosperous unless it has unlimited mineral resources or very fertile soil, unless it has successful commerce. It ought to be able to produce sufficient manufactured goods for its own requirements or sufficient to send abroad to get the money with which to buy her imports.

Germany was our great competitor before the War, but, during the War, other countries sprang up. America doubled her manufacturing plants, and to-day we have not got sufficient markets in the world for the manufactured goods that are offered. That is not recognised by all. If Germany should, as the last speaker has stated, push forward her manufacturing, there will be more goods for sale in the world than the world can absorb. What will be the result? We shall have our working men standing idle, because we are buying goods at a price lower than that at which they can make them, while we are giving the gold with which to pay reparations to other countries. I feel very strongly that this is a time when every effort should be made for the pacification of Europe, but I do not believe that that will ever be accomplished until some great man comes to the front and says, "There must be a neutral line drawn between France and Germany under the League of Nations, and that line must be held sacred." Hon. Members may recollect that it was suggested to Germany after the Franco-Prussian War that Alsace-Lorraine should be neutralised. Bismarck would not agree to that, because it meant that he would find a line of neutral States running direct from the North Sea to the Swiss Alps, and in the case of trouble between France and Germany it would be impossible for Germany to bring her troops into France. That is why it was not done then.

All that France needs to-day in protection of her frontier, and if someone could devise a means by which she could have that protection I believe there would be the pacification of Europe that we all want. We do not want to go back on the past. I do not agree with the last speaker in wishing to see the question of the War revived. The thing is done; it is ended; and the sooner people of the coming generation forget about it and go on and work, the better it will be. As far as reparation is concerned I think it is a very dangerous thing for the country which advocates it. Let us recollect what happened to Rome. After her victories Rome brought back her captives as hewers of wood and drawers of water. And what became of her power? I hope that this Pact may bring the leaders of the different countries together, and that they may not be bound altogther by the Dawes Report, but may suggest some scheme by which the pacification of Europe can be accomplished.

Lieut.-Commander KENWORTHY

I congratulate my hon. Friend who has just spoken not only on the admirable substance of his speech but on his admirable brevity. I cannot equal him in the first, but I shall try to equal him in the second, or very nearly. My right hon. Friend and Leader the Member for Paisley (Mr. Asquith) has declared himself in favour of the treaty of mutual guarantee, and I am sorry that we have had no encouragement on the question from the present Government. It may not be a perfect treaty, but there have been two years in which to put it right, and I see no signs of a constructive policy with regard to this or any other scheme for bringing about that security which has been referred to, and its collateral result, a general reduction in the armaments of Europe. There have been two years and the present Government have not done very much and have not declared themselves. They have had time to do wonders. At least we could have had some clear lead. I am sorry to say that I heard only the concluding sentences of the very eloquent speech of the hon. Member for Dundee (Mr. Morel), but what I heard him saying was not very complimentary to his Leader, the Prime Minister. He said "Go on with your absurd conferences. Oh! for a man big enough to give a lead to the suffering peoples of Europe." I agree with him. Would he have said that last year? He would have said "No, we have the man, the future Prime Minister, the first Prime Minister of a Labour Government." I do not despair of the Prime Minister, however, and if he gives a lead—

Sir KINGSLEY WOOD

Hear, hear!

9.0 P.M.

Lieut.-Commander KENWORTHY

I never despair of a man till he is dead. If the hon. Member for West Woolwich (Sir K. Wood) will give a lead in this question, I will follow him gladly, and so will the peoples of Europe. What sort of lead do we want? It is no use insisting on the disarmament of Germany while all other nations remain armed. With the advance of science, of chemical discovery, with the greater use of aircraft and of mechanical means of warfare, it is becoming easier and easier for great industrial nations to arm themselves quickly and in a very deadly way. We cannot expect the other nations to follow the German and Austrian example of disarming unless we have some system of mutual guarantees. I do not agree with certain Members of the Liberal party who attacked the Treaty of Lausanne because we were committed by that Treaty to defend the demilitarised zone in Turkey in case of unprovoked aggression. If you ask people to reduce armaments you must guarantee them assistance in case of unprovoked assault. That fact will have to be accepted if we are to make any progress at all. In the finally agreed version of the letter of 9th July, the questions of security and inter-Allied debts are apparently to be raised concurrently with the present Conference or perhaps by some other body. At any rate they are not finally ruled out. Undoubtedly an attempt will be made to raise the two questions. This is all bound up with the question of reparations, and the question of armaments also.

If we are to forgive France her debts to us, is she to spend the money, as she is doing now, in arming her satellite States, the new nations and little Powers of Europe? I do not think the British people will approve any such policy. At present France is more heavily armed, comparatively, than any nation has been in Europe for hundreds of years. Her actual military power is overwhelming. The danger is not on the French frontiers, but in the minds of the French people. I know that the real danger to-day is to Germany—the danger of being overrun by the black hordes which France can throw into German territories. As long as that fear remains you will have counter-arming and secret arming. The present Government should declare themselves on this question, and very clearly. That will be a lead which we could follow. Their record is not good. We have had a lead from the Senate and from the Congress of the United States. The United States has neglected deliberately to pass its Navy Appropriation Bill, and in consequence the whole shipbuilding programme of America is held up for 12 months. Owing to the earthquake the naval programme of Japan has been postponed for at least 12 months, and probably longer. What is the answer of the British Govern- ment? Are they dropping a single ship under construction? They are not.

Mr. HANNON

Thank God!

Lieut.-Commander KENWORTHY

I do not know whether the hon. Member for the Moseley Division of Birmingham (Mr. Hannon) is now voicing the opinions of the majority of his constituents or those of the members of the Federation of British Industries. We are to have armaments and more armaments; that is all we will get from the bulk of the Conservative party. The enlightened members of it, such as the hon. Member for Plymouth (Sir A. S. Benn), who has just spoken, and the hon. Member for Farnham (Mr. A. M. Samuel), are in a minority, but the tail that wags the dog is composed of members of the type of the hon. Member for Moseley.

Sir A. S. BENN

The hon. and gallant Member must remember that I represent Plymouth.

Lieut.-Commander KENWORTHY

Of course the hon. Member represents a dockyard constituency and, like the Noble Lady his colleague in the representation of that ancient and beautiful port, he says, "By all means disarm in everything, but do not touch the British Navy."

Mr. HANNON

Hear, hear!

Lieut. - Commander KENWORTHY

Yes, the hon. Member opposite applauds that sentence. The British Navy can dominate the trade routes of other people. It can threaten the lifeblood of other people, but it is to be kept free. I am not in favour, however, of any uni-lateral disarmament. We have to show that we are prepared to do our part in this matter. As a matter of fact, our two principal naval competitors, if you like to put it that way, are the United States and Japan. Theirs are the only two navies which can in any way Imperil us, and they have dropped all shipbuilding for 12 months, but no reply has come from the. Government of my hon. Friends above the Gangway.

Mr. JOHNSTON

Singapore.

Lieut. - Commander KENWORTHY

Yes, Singapore is good, but the arguments used for dropping the Singapore scheme were that it was strategically unnecessary.

Mr. WALLHEAD

It is postponed.

Lieut.-Commander KENWORTHY

In any case I am referring to shipbuilding programmes and we have had no answering note from the Government to this very chivalrous action of the United States. I say it is chivalrous because they can afford these naval luxuries and we can not. Every day the Chancellor of the Exchequer has to refuse concessions to the aged poor, or to blind persons, or has to refuse to grant widows' pensions, and in such circumstances we cannot afford the luxury of cruisers which are not really required. The Government should endeavour to pass a Resolution of the House upon the same lines as the Resolution of the United States Congress, calling for a fresh Conference for the purpose of limiting those armaments which were left outside the Washington Convention, namely, cruisers up to 10,000 tons, the deadly and murderous submarines, and naval aircraft. It we can get such a Conference it might produce a great saving and a better atmosphere by stopping the new race in this type of armaments. Side by side with any concession we make to French feeling with regard to debts, reparations or security, we should continually bring up to France and to all our friends in Europe, the question of the mutual reduction of land armaments in Europe. Until we do that we cannot say that we are in any way removed from the danger of another terrible upheaval.

A real effort should also be made to prohibit the private manufacture of and the sale and traffic in arms and ammunition. Anyone who knows anything about these matters is aware of the enormous influence wielded by the armament-making industry. [Interruption.] The hon. Member for the Moseley Division, who speaks, I presume, for the Federation of British Industries, at once raises a protest when I refer to this question, but we know that hon. Members in this House quite openly speak on behalf of the armament industry in their constituencies. Perhaps I should not refer to him in his absence, but we know the hon. Member for Barrow-in-Furness (Mr. D. G. Somerville) advocates warship building for the relief of his constituents. It is not only a case of the capitalists who have money invested in armament-making firms being concerned, but there are also the employés and the satellites and all the people for whom they provide work and wages interested in this matter, and until the private manufacture of and traffic in arms can be controlled, or, better still, abolished, there will always be an agitation for more armaments, which in the long run means an agitation for war. The Government should recognise that danger and take the necessary steps to meet it. At the present moment money which should go towards paying off perfectly just debts owed to us, in the same way as we at great sacrifice are paying off our debt to the United States, is in fact going to keep up armaments in France and in other countries with French money.

That is a matter which affects the British people very closely, and in regard to which we have a right to be heard in these Conferences. I should like to see a lead given in this matter by the Prime Minister or by the Under-Secretary for Foreign Affairs. They might not succeed at first in getting a response from the governing classes in those countries, but they would get a response from those whom President Wilson used to call the common people. That, man had the art of appealing to the masses and to the man in the street—to whom, in the end, the present Government, if they are friends of peace, and all friends of peace will have to appeal. May I conclude by quoting from a newspaper called the "Daily Herald," which cannot be accused of special hostility towards the Government? On the 29th March, in a leading article on the then reported resignation of M. Poincaré, that paper stated: The policy of all capitalist countries 1s, in the last resort, controlled and determined not by the politicians but by the economic and financial powers whose creatures they are. I ask my hon. Friends above the Gangway is that true? If it is not true let us have a lead from the Government in the direction I have indicated; let us have a real attempt to bring about disarmament by mutual agreement with a treaty of mutual assistance, and let us above all make a real frontal attack on this wicked armament making industry to which much of the evil of the present state of Europe can be traced.

Mr. WALLHEAD

I would have refrained from breaking in upon this Debate after the many eloquent speeches which have been made and the effective way in which various points have been covered, were it not for the fact that this is the only occasion upon which a Member can make himself heard with regard to certain questions and I do not propose to allow this discussion to conclude without making my position perfectly clear because of the attitude I have taken up on platforms in this country for the last seven or eight years regarding these questions. Reading the newspapers of this country yesterday and this morning one gathered that we were going to have a most important Debate and it was pointed out that at least one Premier and three ex-Premiers would take part. Well, the Premiers and ex-Premiers have spoken and the amazing thing to me is that not one of them got down to the crux of the question. It has not been touched upon as far as the Front Benches were concerned. We have had eloquent speeches upon the ethics and the methods of conducting political conversations; the fringe of the curtain was lifted with regard to Chequers; doubt was cast upon the accuracy of certain communiqués and reports and in the earlier stages of the Debate I was reminded of a game of battledore and shuttlecock. As the right hon. Gentleman the Member for West Birmingham (Mr. A. Chamberlain) pressed home his point I was reminded of a line of Omar Khayyam Ah, make the most of what we yet may spend. It struck me that the Opposition Benches were making the most they could of the little bit in the French Government's position with which they disagreed, because, to judge from the speeches from the Front Bench, one would think that the present position occupied by the Labour Government was merely a continuation of the foreign policy to which we have been accustomed, and as the Debate has proceeded it has appeared to be so except for what has been said on the Back Benches. I want to touch on a point or two with regard to the question discussed by back benchers, and it is gratifying to men like myself to listen to the growing volume of opinion backing up what we have asserted for so long, particularly when it comes from gentlemen who speak with knowledge and with information from the benches opposite. It is really being borne in upon responsible men that the whole policy of this country and of the Allies generally with regard to Germany has been economically disastrous from the start. The people of this country were fed upon the grossest and most exaggerated stories which it was possible for politicians to utter. They have been led on from point to point, with most disastrous effects to themselves and the country generally, with a kind of will-o'-the-wisp of gigantic proportions. They have had German reparations dangled before their eyes for the last six years or more, and they have been led to believe that if they would only gain military victories, and stand the sacrifice required, they need not trouble about finance, that the whole question of national finance would be solved for them, because Germany, forsooth, was to be made to pay.

Lieut. - Commander KENWORTHY

They dared not say that while the fighting was on. It was only after the Armistice.

Mr. WALLHEAD

They said before that that we were to have ton for ton in ships, and there were plenty of indications that vast indemnities were to be demanded. After, I agree, when better counsels should have prevailed, when their former protestations should have been remembered, when eminent statesmen in this country, men who held in their hands the destinies of the world at that time, should have been thinking of what they had told the people of this country previously, they indulged in the wildest flights of imagination as to what they proposed to do. The people of this country had been told, first of all, that we were not at war with the German people, that the German people were a docile people, who had been led by a greedy, rapacious, and vicious crowd of politicians, and led by the Kaiser, like sheep to the slaughter. The Kaiser went. The Hohenzollern rule was ended, and I do not think it is likely to come back again. The German people at least showed their detestation of their rulers, and kicked them out, and then, instead of the politicians, who had egged on the people to fight for that object and had declared that the war was directed not against peoples but against certain guilty governors, acting on those lines, the whole effect of the peace has been to damn the peoples, while the governors themselves can still live in the luxury to which they have always been accustomed.

Then we began the peace negotiations, and we went from point to point, travelling from £24,000,000,000, through £12,000,000,000, down to £6,000,000,000. Why do you not make it £60,000,000,000? You will get the one as soon as the other, because you are not going to get your Dawes Report figure. I do not suppose that any sensible person or economist in this country believes for a moment that you will ever get it, but at least, while you are making the attempt, disaster awaits the people of the world, because that is what we are getting to now. The Prime Minister has told us that there is no question of the sanctions being operated until default takes place, and that then discussion will take place as to how these sanctions are to be operated It has been pointed out by M. Herriot himself that payments may extend up to 40 years, and I suppose we shall not know whether or not sanctions will be necessary until the last payment has been made. Therefore, not only this generation, but the next two generations must live in dread of what may happen if certain fulfilments of the Dawes reparation conditions do not take place. Two generations must live under the dread of what may possibly happen if default takes place, and thus we damn, not only ourselves, but our children's children with this fatal folly of attempting to punish.

I welcomed the speech of the hon. and gallant Member for Leith (Captain W. Benn), but there was one point with which I did not agree. I do not believe that Germany alone was responsible for the late War. I have always demanded revision of the Versailles Treaty, and I want to say that, no matter what the Government does, I shall still believe that revision is necessary. I do not agree to that policy, and I am not prepared to admit that what I have said with regard to the necessity for revision does not still hold good. I believe that it does. I do not believe that history will record the fact that Germany alone was guilty of this War. Wars do not arise in that particular way. As a matter of fact, the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) told us himself, not very long ago, that the more he read about the origins of the War, the more disclosures that were made with regard to the contents of the archives of Foreign Offices, the more he became convinced that no-one willed the War, but that we blundered and stumbled blindly into it. If that be true, it damns the whole basis upon which this miserable Versailles Treaty is built. If the world stumbled into this tragedy, then, in God's name, let us have somebody who is big enough to get us out of it without perpetuating the horrible mistake on which the Treaty is built.

Where are we going to get with this Dawes Report? It has been mentioned already that the operation of the Dawes Report means the enslavement of the German working class. We have had it indicated in discussions in this House already, of a preliminary character, with regard to the Washington Convention relating to the establishment of the 8-hours day. I understand that when the question of the 8-hours day, or the 48-hours week, was mooted some time ago at the International Labour Office Convention in Geneva, it was laid down clearly by the French spokesman that the 8-hours day would not refer to Germany, but that the 10-hours day was to be established there, and it was' accepted by the spokesman of the German Government that the 10-hours day should be established, otherwise Germany could not pay these reparations. In order to pay these reparations, in other words, the German working class, are to be enslaved and kept in a position of economic servitude more intense than that which exists at the present moment. The fact that they pay reparations here brings about the enslavement and degradation of their own working class. That is not a question that can be decided by individual employers. I make no impeachment against the employer's good will who regrets what has to be done. He is the creator of economic forces which he cannot control. There is something else to be said about that.

I am thoroughly convinced that this Report is for the purpose of attempting to place us upon an economic equality with Germany. I believe it was in August, 1922, that the right hon. Gentleman the Member for Carnarvon Boroughs made a speech in which he said that the effect of the depreciation of the German mark had been to wipe out German national indebtedness; that not only was she clear from debt from a national point of view, but her municipal debt had been wiped out also, and he said—I am not quoting his exact words, but the sense of them—"I warn you that Germany free of debt, in competition with our country with a national debt of £7,000,000,000, is something that one cannot contemplate with equanimity." Depreciation has wiped out German national debt. It has wiped out her municipal debt, and we have a national debt of £7,000,000,000. I venture to predict that by the time you have got Germany in a position to pay the reparations which you demand in the Dawes Report, you will begin to consider that after all it is better to lose a war than to win it so far as economics are concerned, because it appears to me that industrial competition is bound to take place. From the economic point of view we are likely to find ourselves worse off than the vanquished. I want to raise my voice in protest against the pursuance of a policy that the Dawes Report contains. I believe that unless this Government or some other Government is prepared to say, "We shall have nothing to do with reparations whatever," there is no possible hope of escape for this country from the commercial point of view.

If the arguments put forward are correct and my own point of view is right, it seems to me the only way in which we can get on equal terms with Germany is to do something to wipe out our own National Debt. That is exactly the proposal of our party, because, if you do not wipe out your National Debt your own business men are recognising that you cannot possibly compete. You may attempt to punish Germany as much as you like, but the goods will come in, and in an attempt to place a burden on Germany that will equal your own National Debt, you cannot do that unless you allow her to send goods into this country. In either case we shall be defeated so far as our own people are concerned. There is no escape as far as I can see. Therefore I want to add my view to the powerful pleas that have been made that common sense shall be the rule in the councils of Europe so far as this vexed question is concerned. I would back up the plea of the hon. Member for Dundee (Mr. Morel) that some man might arise who would find a backing in this country. There are millions of people in this country who have looked to man after man, but always failure has been the result. If only some man had arisen who had determined to look at this question, not from the point of view of the military victors, not from the point of view of the commercial nation fearing again the rise to economic power of a dread rival—if only some man could have arisen who could have read history aright, if only the policy of reconciliation could have been pursued instead of the stupid policy of vengeance and punishment, there might have been hope for the world after all. I cannot see there can be hope for the peoples of Europe as long as the present policy is pursued.

What security can be obtained by nations to-day against modern methods of warfare? It is no good looking to a river or a range of hills for security to-day. The North Sea has become a ditch. What with under-water and over-water methods, what with the power of transporting potent poisons quickly and showering them thickly on defenceless populations, it is no use looking to frontiers for security. Security can only come when nations begin to rid their minds and souls of the idea of vengeance. You cannot gain security by military armaments. I want to add my voice to the other voices that are being raised on this matter. I thank whatever gods there be that, all over Europe and all over the world, there is an increasing number of people who are seeing the hatefulness of old policies and are doing what they can to apply new policies. There is a vast number of people who are ridding their minds of the idea that militarism can bring safety. I welcome the gesture which has been made by the Premier of Denmark—a small country, it is true—but he has seen the futility of armaments in order to make his country safe. He knows that without armaments he will he safer than if be had them. I believe many of those questions should be referred to the League of Nations, which is not already perfect. We could work in that direction and make it as good as we possibly can. Any question that can be referred to them should be so referred. At least we should make it perfectly clear to all those who wish to stand as allies with ourselves in the attempt to resettle and bring peace to Europe that we would have nothing to do with policies composed of hatred and vengeance.

Mr. J. HARRIS

I should like to say that I have listened with some alarm to the suggestion made in this House to-day that the Treaty of Versailles is to be regarded as a kind of sacrosanct instrument. The whole tenour of the Debate, I think I may say, from all the Front Benches has been rather to support the Prime Minister in his appeal in which he urged us to be exceedingly careful how we suggest that any attempt be made to in any way review the Treaty of Versailles. I do not understand that at all. It is a most extraordinary position to take up. Are we for ever to have that Treaty tied round our necks? Are we never to consider any modification of it? It occurs to me that those who are saying that have never taken the trouble to read the Covenant of the League of Nations, which provides for the reconsideration of the Treaty. What are we going to do if some day someone of eminence puts forward a definite proposal at Geneva that the Treaty of Versailles should be reviewed? Again and again in Geneva the question of the revision of Treaties has been discussed, and it has always seemed to be one of the most healthy features of the Assemblies of the League that matters which are usually regarded as only proper to be discussed in the corner in the dark are always discussed there with perfect frankness, openness and friendliness. I am not going to say we can never contemplate any reconsideration of all or any part of the Treaty of Versailles. Another matter with which I want to deal this evening is the suggestion made by hon. Members above the Gangway that the question of reparations, or rather of dropping reparations, has never been dealt with by any of our Front Bench seen. Let me clear up that point beyond question. The first pronouncement made at Paisley by the right hon. Member for Paisley (Mr. Asquith), when he was fighting his first election there, and in that capacity was setting forth the policy of the Liberal party, was to this effect: It is important, no doubt, that Germany should make reparation for the wrong she has done. It is almost equally important—I am not sure if it is not more important for the permanent interest of the world to accelerate, as far as you possibly can—the restoration of the normal economic life of Europe, of which Germany is and will continue to be a most important factor. Then the right hon. Gentleman went on to quote a speech by Mr. Walter Leaf, who, addressing his shareholders at the annual meeting, said: The country must learn to recognise that the attempt to annihilate Germany by preposterous demands for reparations will hurt ourselves far more than it will hurt Germany, and will mean not only economic but the social suicide of Great Britain.

Mr. WALLHEAD

I do not want to carry this discussion too far, but is it not a fact that these words were used at a later date?

Mr. PRINGLE

No, it was in 1922.

Mr. HARRIS

I am dealing with a policy which was quite clearly put forward by the right hon. Member for Paisley at the time I have mentioned, and it is set forth in the clearest possible language which he who runs may read. He did not stop there. As to the point raised by the hon. Member above the Gangway (Mr. Wallhead) I am not complaining of it, I am only trying to show, as a matter of fact, that a Front Bench statement was made which set forth the view of the Liberal party as regards reparations at that time. Later on, speaking in this House, the right hon. Gentleman, the Member for Paisley said: As I have said, that is no new opinion of mine, because, speaking as far back as February, 1920, two-and-a-half years ago—a long time in politics—when I was a candidate for Parliament, I said that for my part, and I should not be at all surprised if the Chancellor of the Exchequer, now the Lord Privy Seal, agreed with me, if I were budgeting in the future I should write them off, and I have always been of that opinion. They are not good debts, not from any want of honour or good faith on the part of those who incurred them, but without incurring something very nearly approaching national bankruptcy they are not in a position to redeem their obligation. To remit, in my opinion, is not an act of magnanimity in the least. It is an act of good business."—[OFFICIAL REPORT 3rd August, 1922; cols. 1751–2, Vol. 157.] I only refer to these two passages in order to lead up to the points I particularly want to raise with the Government to-night. They are points which I have frequently attempted to raise in this House during the last few weeks. The first is that we are now going into a Conference in which not merely the whole world, but in which throughout the length and breadth of this land there is most intent interest and anxiety, and I would like to ask the Government again what steps they propose to take to keep public opinion in touch with the developments which will arise at this Conference? We have been told that the Conference will probably last a week. That is a very optimistic suggestion. I believe that it will last weeks and not a week. The hon. Member for West Woolwich (Sir K. Wood) shakes his head. Perhaps he thinks it will only last a few days. If it only does that it will be followed by another Conference, and the same argument therefore applies. I want to make an appeal to the Government to treat the public of this country in the openest possible manner with regard to every development connected with this Conference. The Prime Minister referred to the phrase "open diplomacy" as a parrot cry. Parrot cry or not, open diplomacy has established itself as a successful form of procedure in international politics. An hon. Gentleman asks where. I will tell him. In 1920 the Council of the League of Nations met for the first time. It met behind closed doors, and any suggestion that those doors should be open to the public and to the Press were regarded with the utmost horror and distrust. We were asked to consider all the difficulties that would arise, the misunderstandings and the dangers that might follow from hasty expressions of opinion, but, ultimately, the view prevailed that those Council meetings would be better held in public.

What happened? They started very nervously with one Council meeting in public. Lord Balfour, I believe, was opposed to holding the meetings in public, but acquiesced in the opinion of the majority, and in the pressure which had been put upon the Council. The first meeting was so successful, that it was decided in future Council meetings should be held in public. It is no use saying that delicate international problems have not been discussed before the Council. They have, again and again. The problem of Poland and Lithuania, which, as everyone knows, was an extremely complicated one, led to a great deal of heat, a great deal of strong feeling, bet never again were the doors of the Council closed to the discussion of that particular subject. Then, last year, what could have been more delicate than the discussion of the Grmæo-Italian difficulty over Corfu? That, again, was discussed in public. No inconvenience has arisen from that, no embarrassments, no misunderstandings, and I think it fairly safe to say that nobody to-day would go back on the bad old policy of always discussing these things behind closed doors.

I would like to repeat what my hon. Friend the Member for Dundee (Mr. Morel) has said, that, of course, when we are pressing for open diplomacy in these matters, no one suggests that there should not be preliminary conversations and preliminary arrangements. The appeal I am endeavouring to make to the hon. Gentleman is that they should, hold their principal conferences in the light of day. If they feel unable to do that, may I urge, as an alternative method, that the practice of the Conference at Lausanne, which was also very successful, should be adopted in this case? In that case, as the hon. Gentle-knows, a competent official attending the Conference, immediately the sessions were over, met the Press, and gave out a full and frank statement of what had happened at that particular Conference, and in that way the public was kept informed. Therefore, I would appeal to the hon. Gentleman to consider by what means they will be able to take the public into the fullest measure of their confidence during the Conference.

There is another matter, which I have raised again and again with the hon. Gentlemen on the Front Bench. Again and again, during the last six months, I have pressed for a statement by the Government as to their attitude with regard to the International Court of Justice. May I remind hon. Members that Great Britain has never yet given full adherence to the International Court? We were parties to the creation of the Court, we had one of our own eminent jurists sitting upon the committee which prepared all the machinery for that Court, and yet we have never to this day taken the final step of giving our wholehearted adherence to the International Court of Justice. The Court was created by reason of the Covenant. The committee for creating the machinery met in 1920, the machinery was accepted and passed by the Assembly in 1921, and in 1922 the Court was completely organised and capable of hearing cases submitted to it. There is in the Protocol of the International Court of Justice what is known as Article 36. This gives an op- tion to the Powers to agree to compulsory jurisdiction within certain limits. Those limits—there are four of them—are as follow: 1, That we would agree to accept automatically, compulsory arbitration upon the interpretation of a Treaty. Why should be fear that? 2, On any question of International Law. Why should we fear arbitration on any question of International Law? 3, The existence of any fact which, if established, would constitute a breach of International engagements. Why fear that? 4, The nature and extent of the reparation to be made for the breach of an International obligation.

I do submit that Great Britain has nothing whatever to fear in accepting those four conditions of international arbitration. Up to the present 47 States out of the 54 members of the League of Nations have agreed to support the International Court of Justice, but up to the present only 21 have accepted the optional Clause on compulsory jurisdiction. Although the Council themselves framed the instrument, they have left it to the smaller Powers. Only one member of the Council has agreed to accept, and that is Brazil, and, I believe I am right in saying, Brazil has accepted on condition that Great Britain should agree to accept. I hope the hon. Gentleman will tell us presently whether it is true that Brazil is the only member of the Council agreeing, and whether its agreement is subject to that of Great Britain. This much I say without fear of contradiction, that if Great Britain were to agree to accept the optional Clause for compulsory jurisdiction within the sphere I have mentioned, she would give such a lead to the whole world as would enormously advance the cause of peace and goodwill throughout the world. Surely it should be possible, after all we have gone through, for our Government to tell the League of Nations Assembly, next September, through the mouth of our Prime Minister, that Great Britain is prepared to give a lead to the nations, and declare that she is prepared to accept the law for the settlement of international disputes.

If the Government are unable to accept that Clause as it stands, then, as the hon. Gentleman knows, it is open to us to accept it with limitations. We can accept it for a period of years. We can accept a jurisdiction more restricted than those four points I have mentioned. We can accept two; if we like, we can accept, one. But my appeal to the Government is that they will agree to accept for a period of years the whole four. There is nothing that we can do which would so tend to strengthen the position of our country amongst the nations of the world than when meeting together next September to give a full and whole-hearted adherence to the protocol of international arbitration. There is no use disguising the fact that recent actions have caused a good deal of concern as to the attitude of the present Government. I am confident, from the reading I have been able to undertake, that the decision to build the five cruisers has had a profoundly disturbing effect throughout Europe. [HON. MEMBERS: "Oh, oh!"] Perhaps after the Recess hon. Members will allow some of us to send them some material to read, and they will then learn what we realise, the disturbing effect which this decision to build vessels of war of the most powerful type has had upon other countries. Here is a chance next September to declare that we will, to save time, adhere to—

Mr. HANNON

Has it not been again and again stated in this House that the ordering of the five cruisers was to make up the deficiency that existed?

Mr. HARRIS

My hon. Friend knows that the first explanation was that these ships were to make up a deficiency. Then we had the statement of the Financial Secretary to the Admiralty that the ships were laid down in view of the serious state of unemployment, this in respect to the class of cruisers which admittedly had been scrapped for years!

Mr. BLUNDELL

Was it not, as a matter of fact, according to the statement of the Financial Secretary to the Admiralty that the building of these vessels was merely being accelerated?

Mr. HARRIS

My hon. Friend may prefer that statement if he pleases. But he will realise that we get to this point: that there are 54 members of the League of Nations, of whom, may I remind him, we are one, who have signed a solemn covenant that we will reduce out armaments to the lowest point consistent with national safety. We have departed from that. [HON. MEMBERS: "No!"] Hon. Members say "No!" That is what I think, and that is the opinion of eminent people who have studied the situation. In conclusion, I hope that the hon. Gentleman the Under-Secretary for Foreign Affairs will be able to give us some assurance in regard to publicity during the Conference; and in regard to the question with which I opened my speech—our willingness to co-operate wholeheartedly in the work of the League, more particularly in those directions which would impress the world as an alternative to methods of warfare, namely, the settlement of international disputes by means of judicial arbitration.

10.0 P.M.

Mr. PRINGLE

The Committee has enjoyed a very interesting Debate this afternoon, which has had this peculiar characteristic, that while there has been unity on the Front Benches in accepting, as of a sacrosanct character, the Treaty of Versailles, there has been on the part of Member on the back benches in all parts of the House a general attack upon that instrument. The House has been treated to a Debate very much like the Debates which occurred during those five years in which we have had an atmosphere of make-believe and pretence. It is only on the Back Benches that you will find those who, in a sense, have been living in a palace of truth. Listening, with great care, to the speech of the Prime Minister I was anxious to ascertain the precise policy with which he is going into the Conference. But the impression on my mind was that of a Celtic twilight. It seemed to me we were living much as in the old Coalition era: that one Celtic performer had gone, and had been succeeded by another Celtic performer. It is quite true that we have had a certain antagonism between the Celts, and probably if the right hon. Gentleman opposite had made the speech, made from this side, it might not have beer very much different, but at least it would have been more intelligible. On this occasion, I have heard only one speech from the other side of the House in which the policy of reparation has been defended. I think that is most significant, that it has been left to the right hon. Gentleman the Member for West Birmingham (Mr. A. Chamberlain) to defend the policy of reparation in the old sense. He endeavoured to make a reply, and, so far as I heard what he said, it seemed to me to be a most inadequate reply to the speech of my hon. Friend the Member for West Stirling (Mr. Johnston). I was surprised, for I never associated the Member for West Birmingham with that view. I thought that even in the Coalition Government the old theory of reparation had been abandoned. The right hon. Winston Churchill made a speech in that sense sc, long ago as 1921. I thought that, as a colleague of the right hon. Gentleman the Member for West Birmingham (Mr. A. Chamberlain), Mr. Churchill would be expressing the general view held by the Coalition Government. This passage deserves to be read, because it is marked by all picturesque qualities so characteristic of the rhetoric of Mr. Churchill. In November, 1921, Mr. Churchill said: He was delighted to see the steady, remorseless march of statesmen of all countries during the last few months towards financial sanity— This was a march in which the right hon. Gentleman the Member for West Birmingham has not shared. He continued: The nonsensical froth, not only of politicians, tub-thumping at elections, but of financial and grave members of the judiciary, about extracting £20,000,000,000 from Germany, has reduced itself to a much more practical statement of our case. He rejoiced to say that the simple fact that the payment from one country to another could only be made in the form of goods or service had once mere become recognised by the most enlightened experts in different countries. It was precisely for stating that doctrine that the right hon. Gentleman the Member for West Birmingham attacked the hon. Member for West Stirling (Mr. T. Johnston). It is precisely because reparation can only be paid in goods and services that hon. Members not only above the Gangway here, but on those benches opposite, the hon. Member for Ilford (Sir F. Wise), the hon. Member for Farnham (Mr. A. M. Samuel), and the hon. Member for Plymouth (Sir A. S. Benn), have all agreed in attacking the policy of reparations. I had hoped that now we had a Labour Government in power that the new policy would emerge. The Prime Minister told ns at the very beginning when he was on the threshold of the Foreign Office that there was to be a new spirit and a new method. I also remember some of the speeches of his colleagues before the Election in which they denounced the folly of the reparations policy, the illegality of the occupation of the Ruhr, and of the occupation in fact of any German territory. There were many hon. Members on these benches who shared the hope that the Prime Minister would have done something to put those views into operation. After all, what difference has the General Election made? Would the right hon. Gentleman the Member for Bewdley (Mr. Baldwin) have put a different policy forward to-day from that which the Prime Minister has placed before the Committee? I am not so sure that from an economic point of view the right hon. Gentleman the Member for Bewdley has sounder views than the Prime Minister, because he did recognise that if reparations are received it will be necessary for this country to become Protectionist.

I desire to congratulate the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George) on the vindication he has received from the Treasury Bench to-night. It has only been in the past the right hon. Gentleman the Member for Canarvon Boroughs who has described the Treaty of Versailles as not being sacrosanct, and he has always maintained that it was an instrument which should be revised, and now he has received as a supporter and follower, the Prime Minister. The hon. Member for Dundee (Mr. Morel) talks about the apotheosis of the old diplomacy, but we have had a kind of the apotheosis of the right hon. Gentleman the Member for Carnarvon Boroughs to-night at the hands of the Prime Minister.

Mr. DICKSON

Is the hon. Gentleman entitled to use Gaelic?

Mr. PRINGLE

If I had been using Gaelic at this time of the night the hon. Member would not have understood it A number of questions have been raised to-night showing that the Labour stands in a peculiar position in regard to reparations. Hon. Members have questioned the policy of the expediency of reparations, and we have heard arguments to the effect that this policy, if it were carried out, was going to inflict injury on the industries of this country and that was the sole argument. The Prime Minister was not content with saying that repara- tions, if carried into effect, would be disastrous, but he also held that the whole policy was immoral. The junior Member for Dundee (Mr. Morel) shared that view, and stated it very clearly and very forcibly to the Committee this evening. The same point was also put by the hon. Member for Merthyr (Mr. Wallhead) who said that the policy of reparations rested on the theory that Germany was solely responsible for the War.

I am not going to argue that point, but it was the theory held by the hon. Member for Dundee, the Prime Minister and the Under-Secretary for Foreign Affairs, and they hold that the policy of reparations would not only be disastrous in its effect but that it was immoral. The question whether a policy is injurious may be open to argument, and the putting of such a policy into operation may be expedient, but if it is immoral then you have no right on any ground of expediency to lend yourself to any proposals which will carry that policy into effect. That is why I cannot understand why the Prime Minister now associates himself with the Dawes Report, the object of which is to carry out a policy of reparations which is to exact £125,000,000 a year from Germany. I cannot understand how this Government, with the Prime Minister at its head, and with the present Under-Secretary of State for Foreign Affairs, assents to the carrying out of an immoral policy. I think that is a matter which requires some explanation from the Front Bench.

There are other questions which arise in this connection. The question of the occupation of the Ruhr is bound up with the acceptance of the Dawes Report. We are told that economic and political sovereignty of Germany is to be recognised over all German territory, but that is apparently to involve the military evacuation of the Ruhr. The Prime Minister holds that the occupation of the Ruhr, both from the economic and military point of view, was illegal under the Treaty of Versailles and every right hon. Gentleman and hon. Gentleman sitting on the Treasury Bench assented to that view. I remember the Government of the right hon. Gentleman opposite (Mr. Baldwin) was attacked with great vigour because he failed to raise the question of the legality of the occupation of the Ruhr at the time it was under- taken. We became aware of this in the month of August last, written by Lord Curzon, who informed us that the late Government regarded the occupation of the Ruhr as illegal and I believe that was announced on the 11th August. If the late Government and if the present Government regard it as illegal why did they not use the machinery laid down in the Treaty for deciding that legality? While the late Government were not to blame for not having made use of that machinery, the present Government should bring it into operation for testing the legality under the terms of the Treaty. Otherwise the proceedings carrying out this Report and the success of the Conference are not very bright.

Then there is the question of the position in regard to the left bank of the Rhine. To my mind, that is even more important than the question of the occupation of the Ruhr. It was raised to-day in the speech of nay right hon. Friend the Member for Paisley (Mr. Asquith). He asked whether the terms of the Treaty were to be carried out in regard to the partial withdrawal from the left bank of the Rhine five years after the Treaty came into operation. That is a most important issue. As my right hon. Friend said, the. French claim that the time has not begun to run at all. On the other hand, every Government in this country since 1918 has held that the time has begun to run. We should like to know from the Under-Secretary whether, in the view of the present Government, the five years have begun to run. Statements have been made that engagements have been entered into with the French—I do not know whether there is any truth in them or not—engagements whereby this question is not to be raised. I believe it to be, however, the most important question of all—the question, in ether words, whether, in the sector of the Rhineland that is occupied by our troops, our troops are to be withdrawn in January of next year.

At the present time there is an additional case, from the French point of view, that withdrawal should not now take place under the Treaty. They can hold that, a default has been declared by the Reparation Commission, and that, as there has been a default, consequently there should not be the partial with- drawal provided for under the Treaty. Immediately this question arises: Is the default which has been declared by the Reparation Commission to be cancelled if the Dawes Report is accepted and put into operation That is a matter which, obviously, must come up at the Conference, because it seems to me that neither from the point of view of Germany nor of the Allies can the acceptance of the Dawes Report be treated apart from its effect on the previous default which has been declared by the Reparation Commission. Can the Under-Secretary give the Committee any information on this point? Has any agreement been made that, if the Dawes Report is accepted, the default which has been declared will be cancelled, and that, therefore, when the five years come to an end, there will he the partial withdrawal provided for in the Treaty? Or is the question going to be raised in the course of the Conference with a view to having the matter settled once and for all, because of the necessity of having it settled before January next?

The obvious line to take on the part of this country is to see that a settlement is made now. If the Dawes Report is to be accepted, obviously the occasion of its acceptance should be made an opportunity for fixing definitely that the withdrawal should take place in January next, and that not only should this with drawal take place, but that the complete withdrawal should be effected in the course of 15 years. Very few people in this country understand why it was that the question of default in reparations was associated with the question of the occupation of the left bank of the Rhine. The documents which are included in the Blue Book dealing with security reveal the French point of view on this matter. It is clearly shown that Marshal Foch, representing the general opinion of the French people, demanded, in January, 1919, that the German frontier should be pushed back to the right bank of the Rhine. That was the demand made at the Conference, and it was supported by M. Clemenceau and the other representatives of France.

That demand was refused both by President Wilson and by the right hon. Gentleman the Member for Carnarvon Boroughs (Mr. Lloyd George); but, after it was refused, the French representatives en- deavoured to secure their object by other methods. When the proposal was made for a temporary occupation up to the left bank of the Rhine, it became the object of the French negotiators to insert conditions in the Treaty by which that withdrawal would be prevented. Two conditions were inserted. One was that there should be in existence the military guarantees which were provided in the Anglo-American-French pact, and the second was that there should be no default in reparations. Now the position is that a large number of people believe that neither of those conditions has been fulfilled. First of all, there is no pact, owing to the failure of America to ratify; and, secondly, a declaration of default has been obtained from the Reparation Commission; and, as neither condition is now fulfilled, the French contention is that they are entitled permanently to occupy up to the left bank of the Rhine. It is very important that the Government should make up its mind on this matter because this goes to the root of the whole problem. We hear a great deal about French security, but French security has always meant the left bank of the Rhine. It is not new. It did not begin in 1918. There was a secret Treaty between the present President of the French Republic and the Russian Secretary for Foreign Affairs in 1916, in which the Russian Government agreed to France's occupation up to the right bank of the Rhine. It is often forgotten in these days, but in those clays he was acting on behalf of the French Government, and that is one of the secret agreements—I think the hon. Member for Dundee (Mr. Morel) will bear me out—made during the War to which the Government of this country was not a party, but it was an agreement made between the Tsarist Government and the present President of the French Republic, representing the French Government of that day. It represents a historic French ambition. It goes back beyond 1870, and you will find that politicians of all parties in France—Republicans. Buonapartists, Royalists—all alike have set this ambition before them, and undoubtedly under this sacrosanct Treaty of Versailles the French now have an opportunity of realising that ambition. I claim that when we are discussing this matter of reparations and the default which has already been declared it is of the most urgent importance that the British Government should make its position clear in this matter, that it should show that it will give no countenance to the French interpretation of the Treaty and what has occurred since the Treaty, because if any countenance is given to that interpretation we may all say farewell to the peace of Europe and look forward with certainty to another war.

Mr. HARDIE

I wish to draw attention to the reasons why the Back Benches find themselves in the position they occupy to-day. From the first time peace was talked about up till now the Labour party cry was "no annexation and no indemnities." That was the basic cry of the Labour party viewing the possible settlement after hostilities had given place to peace. It would be pardonable for anyone looking on and taking an interest in what is taking place to believe that France has not been convinced by the other members of the Entente as to the evil of taking reparations, and that the other parties to the compact have agreed to take reparations in order to bring home to France in a practical way what suffering reparations can bring. That may be the method adopted by the men at the top, but even if that form of arrangement is taking place it ought to be made public. If France is stubborn in any point and will not be convinced, it ought to be a question of a statement in this House or the other House of Parliament. In the Dawes Report you have specially mentioned coal, coke and dyes. In this House it is very difficult to get people interested in actual facts. The interest seems to be in any unattached abstract thing that does not nail anybody down to anything. During the last week we have had a still-born book, and the father of the book is the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George). The right hon. Gentleman desires, on the one hand, reparations, and on the other he publishes a hook to show that to-day in this country the condition of the coal trade is so bad that in many districts two or three days' work per week is all that the miner can get. Nevertheless, he comes to this House and talks about getting coal from Germany. If he had a logical mind, which he never has possessed, he would say, "Yes. I am taking reparation coal from Germany and I am going to sell that coal in place of the coal that our miners would have produced, and I will pay our miners full wages while they are idle." That is the proper way to take an indemnity from another country and yet benefit our working classes. The right hon. Gentleman has so little understanding of British industry and British products that he does not realise that we have 1,300 coke ovens standing idle in this country, and that the workers are on the dole. Yet we have a combination of our present Prime Minister and ex-Prime Ministers wanting to bring in coke from Germany, although our coke ovens are shut down and the men are on the dole.

Now we come to the question of dyes. This question has never been really faced in this House. No matter who has been answering questions from the Government Bench since 1922, every question in relation to dyes from Germany has been met with an evasive answer. There never has been a straightforward, honest answer in relation to German dyes. We cannot get any honest reply as to whether or not the dyes that come from Germany are in their last stage or whether they are basic dyes from which dyes can be made. We cannot get that information. Now the Dawes Report specifics that dyes should be one of the things to be brought in. The right hon. Member for Carnarvon Boroughs was responsible for spending millions of the taxpayers' money in helping to build up dye-works and dye-plant in this country and in Scotland. Now he wants to destroy the industry which he was seeking to build up, by bringing in from Germany the dyes which he said should be made in this country.

As to the loan of £40,000,000 it has been stated that that loan is not a serious matter and that it will be good business to hand out the £40,000,000 to Germany and cut it at that. It would be a good thing to pay £40,000,000 to Germany to present her going us more harm by reparations, because, without doubt, once you begin to take reparations Germany is going to hit you much more than she did in the War, and that was badly enough. Suppose you admit reparations coming in, what form are these payments to take to make it possible for this country to deal with them and yet keep our internal markets as they are? Not one of the Members who are taking part in this Debate has faced that question. There is much airy talk of how you can bring in and send out, but you cannot bring in and send out unless you destroy your present markets or the markets you are looking for in new industry.

Suppose you bring in locomotives from Germany. Here are orders waiting for 4,000 locomotives in Roumania, but the reason we cannot send locomotives to Roumania is because it is stated that Roumania owes us money. But here we are prepared to take coal, coke, dyes and anything else from the country that does owe us money. If it be right to hand out £40,000,000 in order to help Germany to destroy this country by paying reparations, why should Roumania be denied these 4,000 locomotives which might be the means of paying the money which she owes to us? There is a number of us on these Back Benches who are not politicians. That is to say we are not of this opinion to-day and of another opinion to-morrow. We have always believed in the policy of no annexations and no indemnities and in working for a peaceful settlement. We still hold to these opinions and if a Vote is taken tonight we shall have the greatest possible pleasure in voting against the Government.

Question put, and agreed to.