HC Deb 07 August 1925 vol 187 cc1814-40

Question again proposed, "That this House do now adjourn."


(continuing): I was trying to prove that, if you really want better trade relations with the Soviet, what you ought to do would be to try to induce the Soviet Government to adopt more Western methods. The previous speaker said that he wondered what was behind all this, and he ventured upon four things which, he imagined must really be at the back of our minds to prevent us from receiving the Soviet emissaries in this country with open arms. The one upon which I understand he was inclined to put most weight was that we found that this anti-Communist movement was a very important point for us in Elections. I think there is no doubt that the people of this country, at the last General Election, gave with no uncertain voice their verdict against any truck with the Soviet Government. Therefore, I am surprised to find the hon. Gentleman now proposing that we should go back to the arrangement which was put down at the last Election. I would suggest to him another and a fifth reason in our minds, which really makes the average Englishman totally averse from any close dealings with the Soviet Government as at present constituted. After all, we are democratic in this country. We here are elected by the majority of the people, and are sent here to carry out the will of our constituents. The hon. Gentleman knows that in Russia there is no democratic Government at all.


When was there?


It is government by one party, and there is no secret ballot. That party, the Communist party, rules the Third International and also rules the whole Government. No one can hold any office in the country who is not a Communist. Here, from time to time, we may have a Labour Government, or a Conservative Government, or, perhaps, a Liberal Government, according to the will of the people, but in Russia, where 90 per cent. of the people are peasants and anti-Communists, the Government is consistently Communist. Then there is the continued anti-religious propaganda —[Interruption]—and there are the continual massacres of people without trial. Only to-day, in the "Times," there is reported the murder—I call it murder, because it is nothing else—of 58 new unfortunate victims. Is it not perfectly natural that Englishmen who are really Englishmen, who have not gone mad with political prejudice, should have a certain feeling against close relations with any Government like that?

The hon. Gentleman mentioned China, about which I should like to say a few words. I do not know China at all. I was only there for six weeks—perhaps a little longer than the trade delegation spent in Russia. I had not the advantage of three experts with me who knew a little of the language, who would have enabled me to publish a valuable volume when I got back, and who would have written that volume for me. I went there as an ordinary tourist in 1922, and one thing I noticed was that the people were not anti-British, as far as I could see. There was a lot of propaganda against the Japanese, but not against us. The Soviet envoy, Karakhan, arrived in Pekin in 1924. Of course, I do not for a moment say that the whole of the anti-British propaganda in China is engineered by the Soviet, but what I maintain is that the direct anti-British propaganda comes from Moscow. Why is it against England, and not against France, or against Italy, or against Japan? Why is England the arch-enemy? Anyone who has been in China will tell you that the English people have always had the best relations with China. I saw that myself. I think there are certain indications that point to Moscow having deliberately prepared this movement in China. I have mentioned Karakhan, and I should like to quote one or two extracts from Russian newspapers which, as I would remind hon. Gentlemen opposite, are not like British newspapers. They cannot publish anything except at the will of the Russian Government. The "Pravda," on the 5th September, reported that: Instructions had been sent to comrade Tomski"— whose real name is Mikhel Izbitski. He is the son of Mordecai Izbitski. He was not christened, but was given the names of Mikhel Yosel.


On a point of Order. Are not Members of the Russian Government entitled to change their names? Have not Members of the British Government changed their names, and has not even the King himself changed his name?


I am not making any reproach against Comrade Tomski, but I would like to tell the House why he took the name of Tomski. [Interruption.] He simply took that name—[Interruption].


Hon. Members will please address me, and not one another.


I want to address you, Sir, and to ask this question as a point of Order. Is it in Order for a Member of this House to refer to a Member of another Government is such disrespectful terms, as though he had changed his name from some ulterior motive? The Ring of this country has changed his name, and no one thinks any the worse of him for doing it


There was nothing disrespectful. The hon. and gallant Member who was speaking particularly disclaimed anything of that kind.


I am sorry if I ruffled the feelings of hon. Gentlemen opposite. Comrade Tomski is not a member of the Soviet Government at all. I only wanted to mention that at one time he resided, for the good of the State, for a certain number of years in Tomsk, and took his name from that place. I think, now that he has come over to this country to London and to Hull, he, perhaps, ought to change his name to Hullski or Londonski.


Is it not the case that if he changed his name there was ample precedent for it, because he married a rich wife?


That has nothing to do with the subject of the Debate. At the same time, I would suggest that the hon. and gallant Member should devote himself to the point.


I was saying that the "Pravda," on the 5th September, reported that instructions were sent from Russia to Comrade Tomski to form in England a "Workers' Hands-off-China Society." That was done with a certain object. Then there was a speech by Comrade Rykov, an important member of the Russian Government, in December, in which he said: We will live to see that, through the development of the revolutionary movement in China, some British interests will receive a severe set-back from the Chinese. 4.0 P.M.

Then you get Comrade Trotsky rubbing his hands over the state of things in China. I think we have ample proof there that the Government with which the right hon. Gentleman desires to have still closer relations are not keeping up to their part of the agreement made in 1921, but are really extending their anti-British propaganda to Asia. The right hon. Gentleman mentioned the speeches of the Home Secretary. We on this side welcome those speeches, because they show that we have a Government that is out to protect the people of this country against foreign propaganda, and we only wish speeches of that kind were followed up by more action. We had a mandate from the country at the last General Election to deal with this question, and I hope it will be dealt with as it ought to be.


The hon. and gallant Gentleman who has just sat down says the Government received a mandate from the country to take more extreme action against Russia. I believe, if the total votes cast for Liberal candidates, who advocated the extension of the Trade Facilities Act and the export credit scheme to Russia, are added to the total votes cast for Labour candidates, they exceed the total number of votes polled by the Conservative Government. The hon. and gallant Gentleman repeated a statement that has been made by the Foreign Secretary, the President of the Board of Trade, the Parliamentary Secretary to the Overseas Trade Department and other Members of his party that there was a trade balance in this country favourable to Russia with which Russia could, if she so desired, substantially increase her purchases of British goods without any question of the extension of State credits by this country. The policy of the Government is, to my certain knowledge, strictly responsible for thousands of working-class people tramping the streets to-day. I say deliberately, with knowledge of the facts, that working-class people are being sacrificed to the prejudice of the ruling class of this country, and I resent the implication that any man who seeks to promote closer and better relations with Russia is necessarily antagonistic either to his own country or to the development of trade between this country and other parts of the Empire. There are some of us who believe that the best interests of our country will be observed by promoting economic co-operation and goodwill with all countries, and not merely with countries whose political views and whose political form of government we happen to agree. The unsatisfactory state of Anglo-Russian relations is preventing the development of trade between this country and Russia, which would take place, altogether apart from the question of any Government credits. The basis of Anglo-Russian trade, like any other trade, is confidence. Without confidence long-term credits will not be given. That is the key to the whole problem. The present attitude of the Government, instead of restoring confidence, is creating for the exporters of goods to Russia an additional political risk over and above the ordinary commercial risk which, they cannot estimate.

Lieut.-Colonel HENEAGE

How can we on this side, or how can any Government, have confidence in the Russian Government?


The short answer to that is that the present Russian Government have never failed to meet any obligation they have entered into with this or any other country. I know it to be true that the amount of credit that would be extended to Russia by firms who in pre-War days were engaged in the Anglo-Russian trade has been restricted and reduced because of the change of Government. Anglo-Russian trade expanded during last year because the relationships between the two countries improved, and the risk of a political quarrel was much less than it has been during the early part of this year. Therefore the failure to straighten out outstanding questions, the repeated statements of Tchitcherin to the effect that he is willing and anxious to re-open negotiations, and the repeated refusal of the Government, have created a situation of uncertainty which is a very great drawback to those who are doing their best to bring about economic cooperation between this country and Russia. It is no longer a question whether Russia can buy goods abroad or not. She is buying them. The thing we have to consider is whether they are to be bought from this country or from our commercial competitors. In 1921 the total imports, exports and re-exports between Russia and this country were £6,000,000. In 1922 they were £16,000,000, in 1923, £14,000,000, and in 1924, £31,000,000. The whole of that trade between this country and Russia has been done, and I challenge anyone inside or outside the House to say the Russian Government has ever failed to meet any obligations it has contracted, as far as trade is concerned. In 1921 the total foreign trade of Russia was £20,000,000. In 1924 it had risen to £100,000,000.

I want to make a statement with reference to a speech of the Prime Minister last October, in which he said in his opinion the best thing that could happen for this country was the development of Russian trade, as and when it became possible, to be done by Germany. I believe at the back of the Prime Minister's mind is the idea that Russia is to become the overspill for the surplus production of Germany, and that we shall get our return from the payment of reparations. That is all very well for the thoroughly comfortable people in this country who live on incomes, but it is a very unfortunate thing for the thousands of working-class people who depend for their living, or did in pre-War days, upon the manufacture of exports to Russia. The Prime Minister told the Trade Union Congress delegation that met him in June that Russia never had been a great customer of this country, and he spoke in rather disparaging terms of the importance of Russia to this country from the trading point of view. He spoke as if Russian trade was static. As a matter of fact, before the War it was increasing and developing every year. In 15 years, from 1895 to 1910, Russian trade increased by over 50 per cent., and so far as the machinery industry is concerned, particularly the agricultural machinery industry, Russia and Germany together took 41 per cent. of the total output of the trade in my constituency. Year after year, from £600,000 to £700,000 worth of agricultural machinery was exported to Russia, which was paid for on a long-term credit basis.

Let us examine the argument which has been used by the Government, and which was repeated by the last speaker, that because Russia exported to this country £20,000,000 worth of goods during 1924 and only bought from us £11,000,000 worth including re-exports, that left her with a trade balance of £9,000,000 in this country, and that, therefore, there is no necessity to extend the export credits scheme or the Trade Facilities Act to Anglo-Russian trade. If it is true merely as a statement of fact that a favourable trade balance means that there is available in this country credit for the purchase of British goods, I should like to draw attention to the fact that Denmark sold us £48,000,000 worth of goods during 1924 and only bought £25,000,000 worth of our exports. Czechoslovakia enjoys the advantages of the Trade Facilities Act. She bought from us last year something over £l,000,000 worth of goods and exported to us £13,000,000 worth of her products. If the question is as simple and straightforward as that, perhaps someone will explain why Denmark and Czechoslovakia do not take out of this country all the credits in the form of British goods that they raised by their exports. The Government, the Prime Minister, the Foreign Secretary, the President of the Board of Trade and the Minister of Labour, who used the same argument a day or two ago, know perfectly well—they have had the training and they have the intelligence—that transactions in foreign trade are not settled in that simple way. Before the War, Russia always exported to this country more than she imported from us, but, on the other hand, she bought from Germany far more than she sold. Germany was a good customer of British India. Russia was a good customer of India and particularly of the East Indies. The credit which Russia has raised by her imports into this country has been used in a number of ways which prevent its being used for the purpose of financing long-term credit goods going into Russia.

During the first three months of this year Russia bought two and a quarter million pounds' worth of goods more from this country than she sold to us. Her purchases exceeded her imports in the first three months of this year by two and a quarter million pounds. Last year she had to make provision out of the credits that were raised by her imports, for an unfavourable trade balance during the first three months of this year, because of the lack of ordinary accommodation from the British banks. She had to use the credits that were raised in England to pay three and a quarter million pounds in Canada for purchases that were made there, and which fell due for payment during the early part of this year. That leaves, roughly, three and a quarter millions of the credit balance that existed. after deducting from last year's balance the adverse balance on the first three months of this year.

It is well-known that Russia has maintained a stable currency. She has a, balanced Budget. She pays for what she buys and does not buy any more than she can pay for. As a consequence, she has to maintain a reserve for her State bank very largely in American and British currency. Therefore, it is not true to say that these credits raised in this country were available for the purchase of British goods. They were no more available than were the credits raised by Denmark or Czechoslovakia. What is happening? The foreign trade of Russia grows and expands. This country is doing a certain amount of that trade. We are doing a certain amount of it in my own constituency, and getting paid for it too. [Laughter.] It is all very well for those to laugh who know perfectly well that they will be all right to-morrow and the day after and the year after this year, and that whatever happens, their food, clothing, shelter and amenities of life will be safe; but it is another thing to the man who has lost the occupation in which he has been engaged all his life. I want the House to realise that in dealing with this matter there are men behind the problem who look at it from a different point of view from hon. Members opposite.

The growth and development of Russian foreign trade is going largely to our commercial competitors. Let me give a few facts. In 1924 Russia imported goods from the United States of America valued at 9½ million pounds. How was it that with a natural market in Great Britain, created by her imports, America was able to get that business? For a considerable proportion of that business she did frankly better than we did, and the orders went to her on economic grounds; but a considerable proportion of that 9½ milion pounds worth of trade went to America because of the better accommodation that the American banks gave to the Soviet Government. Take Italy. Italy has developed her trade in Russia. In July of this year a contract amounting to £3,000,000 for textiles, shoes and agricultural machinery was placed in Italy by the Soviet trade delegation. Hon. Members opposite will prefer that I should quote reliable authority upon this matter. Therefore I will quote the "Morning Post" for the 13th July last. The following came from their Rome correspondent: Italian business men, backed by Government approval, are increasing their efforts to develop the Russian market. The most recent evidence of this is a contract just concluded, involving 300,000,000 Italian lire. This contract has been signed by the commercial representatives of the Soviet Government in Italy and a group of Italian banks and industrial companies operating under the name of 'Foreign Industrial Commercial Company.' The agreement arranges for the immediate export to Russia from Italy of manufactured goods of the above-mentioned sum—an amount that is claimed to beat Italy's pre-War annual figure to Russia. In consequence of the activity of the Soviet business mission here, the Russian authorities have decided to open a branch office in Milan. Take the development of the Russo-Polish trade. I could give facts to show that the facilities given in Poland for credit business with Russia are such that the trade between those two countries is increasing in lines of goods in which we formerly had a monopoly.

The Soviet Government are placing orders in this country to the value of £15,000,000, and in the schedule of orders there is a sum of over £5,000,000 for the purpose of machinery and 1¼ million pounds for agricultural machinery. I appeal to Members of the Government to realise that the policy of hate, hostility and ostracism between this country and Russia—and the fault is not all on one side—will drag us into conflict which will destroy our trade, and which is full of danger to the future, not only of this country, but of the British Commonwealth of Nations. If we isolate Russia, if we keep her out of the European comity of nations, we shall drive her towards the teeming millions of Asia. Unless this situation is handled with greater care, with a greater desire for a settlement and with more good will by the British Government, it will mean that two or three generations hence the people of this country may stand on the threshold of a new combination in which Russia will be linked up with Asia. I cannot believe that the interests of this country are being served by the attitudes that are being adopted by the Government, and I plead that they should take steps to clear up the outstanding questions between the two countries in order that this country and Russia may march together in the world as friends and not as enemies.


The hon. Member for the Brightside Division (Mr. Ponsonby), who opened this Debate, said that he could not understand what was the reason of the frigid indifference to the necessity of renewing our trade with Russia. He asked what was at the back of all this attitude. Referring to the anti-British propaganda on the part of Russia, he said that it had been grossly exaggerated. When he came to the question of anti- British propaganda in China, he characterised it not only as disproved, but as farcical in the extreme. I hope to be able to suggest to him one or two considerations which may perhaps account for the indifference of the people of this country to an increase of our trade with Russia, and why they cannot share the views entertained by hon. Members opposite as to the farcical character of the propaganda in China.

I cannot help thinking that, instead of debating our relations with the Russian Government, it would have been better if we had put it the other way, and had discussed the relations of the Russian Government with us. To the ordinary man in the street the position is very confusing. On the one hand we have Mr. Krassin coming here with his pockets bulging with a credit for £15,000,000, which he is anxious to employ in relieving our commercial anxieties and in purchasing our machinery, always provided that he does not have to pay spot cash. On the other hand, we have Mr. Zinoviev, the head of the propagandist bureau in Russia, doing everything he can to create conditions all over the world, and particularly in this country, so that we shall not be able to sell any goods to anybody. All this is very puzzling to the ordinary man and to hon. Members on this side of the House. Which is the friend whose hands we are to clasp? Is it Short, the credit-monger, or is it Codlin, the propagandist? We should like to know exactly where we are in this matter. Which of these branches of activity represents the definite policy of the Soviet Government? If the hon. Member were to tell us that, it would enable us to make up our minds as to the right course we ought to pursue Is the Russian policy represented by a desire to trade with us as much as possible, or is it represented by a desire to create revolution, when no trade will be possible all over the world? Until we are satisfied about these matters we, at any rate, on this side of the House shall continue to believe that our interests will be better conserved by having nothing whatever to do with Russia.

I agree to some extent that the British nation is not the sole object of Russian propaganda. She tars us all with the same brush. She wants to dose us all alike with the same virulent poison. She does not care who gets most or who gets it first. She is making a special attack on this country because Great Britain is the biggest game at which she can fly. She thinks—she may be right—that if she can bring down one of the kings of the forest that the lesser beasts are far more likely to fall. What is the reason for this? What was the position of Russia at the end of the War. She found herself an entirely isolated nation. No great Power would have anything to do with her. Instead of baking that part in the peace negotiations which her previous earlier participation would have entitled her to take she found herself an outcast.

She had to begin to find some way by which she could again step into what is called the comity of nations, and she, apparently, came to the conclusion that there were two methods by which she could do this. One was to make it so uncomfortable for every other Western nation that they would be obliged to pay attention to her, and the other was to reduce them all, if she could, to the same state of chaos which she herself enjoyed, and then nobody would have any advantage over the other. She set about doing this. She started in this country. She started in France, in Germany and in Italy. She went further afield and began operations in Mesopotamia and up to India. She established these propagandist bureaux in every quarter of the world from Great Britain and Europe to the Far East. She had not much success in the West, she found that the British people, the French, the Germans and Italians and all the others, were too intelligent or too stupid to be taken in by the glowing prospect which she held out would be attained by universal revolution. Everywhere she was a failure. Then came, two or three years ago, the Treaty or agreement which this country made with her, in return for which she undertook to cease anti-British propaganda in this country and throughout the British Dominions, and possibly beyond them as well, and she came to the conclusion that perhaps she would have to pay some lip service to that agreement, so she began to look round to see where she could better carry on her work elsewhere. She took a more intensive survey of the whole of the globe and particularly of the Far East, and she came to the conclusion that in the Far East there were conditions existing which offered a most fertile field for her benevolent propaganda. The result was that she considerably strengthened her organisation already existing. She sent out from Moscow some of her biggest experts, and established a propagandist, or apparently as it is now called an agitatist bureau—


May I ask the hon. Member to give us some proof or evidence of what he is saying?


The proof and evidence can be found by any person who chooses to make the necessary inquiries in the necessary places. She got extra emissaries from Moscow who she sent to the Far East. She started in Japan, Manchuria, and Korea, but met with little success there. She then devoted her attention to China in particular. She set up a Bolshevik school in Shanghai, which ultimately had to be closed by the municipal police. That is a matter which the right hon. Gentleman can easily verify. She even established a university in which her professors taught Chinese students these revolutionary principles by which she hopes to succeed. She spread her agents over the whole of China. She put her experts into every educational institution in China where she could plant them, and in China she found conditions very favourable. She exploited the anti-foreign sentiment which has always existed in China, and which, I think, will, to a large extent, always exist. What she said and is saying to-day in China to the Chinese is, "Why do you any longer suffer this foreign domination? Why allow these unequal treaties to continue? Why allow these foreigners to live undisturbed in special concessions, instead of being subject to the laws of China? Why allow your sovereignty to be infringed?" There they find a very fertile breeding-ground for discontent among a great many of the Chinese.

In addition, in the state of chaos which exists there at present she has found in the rivalries of the various War Lords another fruitful ground for her enterprise. Expert officers, arms, money, propaganda —she has supplied them all. She is behind the various War Lords whose rivalries are now creating such trouble in China to-day. Her policy was this, that if she could stop foreign trade of all descriptions in the Far East it would have such a reflex effect in this country that it would at once create here the very conditions which she hoped originally to create, but which she failed to create, and she planned a plan of campaign which, having started in the remoter parts of China and Japan, would spread from there to the East Indies and India and thence—


Do we understand the hon. Member to say that all the arms that have been sold to War Lords in China during the past few years have been supplied by Russia? Is it not the case that Italy, Belgium and Britain have been supplying arms?


I did not say that at all. I know that it is quite possible that many nations have supplied arms, but what I do say is that Russia did supply arms, and I say that one in particular of these war lords owes a great deal of his arms, his training, his men and his resources to Russian help. I am aware that this is a, general statement, but it is an incontrovertible fact. Everybody who has been in China or comes from China or knows anything about China knows it to be a fact. You will see it repeated constantly in the Press of all descriptions, and it is too much to ask the British public to believe that there is no foundation for these statements. Then there are the students who come back to China after having been trained in foreign universities, and have found in the conditions in their own country at present no scope for the education which they have gained, with the result that they were, so to speak, kicking their heels about in idleness, and they have no vent for their intellectual activities or their experience or their training. Among them, again, there is found a fertile field for discontent. The result is that, during the last five years in China, you have seen increasing agitation of all descriptions, industrial and otherwise. Russia's hand can be traced in all these matters. In the recent troubles which took place in China, Russians were there. They were seen there, and the letters which we get from China tell us that they were there, with the students encouraging them, inspiring intimidation, and fomenting strikes and disturbances.

You have only to walk about in Shanghai and other cities in China to see these Russians permeating the whole place, side by side with every revolutionary or disturbing element, which exists there, and so far as South China is concerned Russia managed two years ago entirely to win over Sun Yat Sen, and her advisers have been giving him the necessary support. She supplied the necessary officers and she established in Canton a Chinese central corps, officered by Red Russian officers, with Chinese soldiers who were taught the first principles of military warfare and the first principle of revolutionary arms, and they exist to-day in numbers. Canton is honeycombed with them. When that demonstration took place in Canton the other day—the demonstration which led to the foreign concession being fired upon —a procession was marching along one side of the creek, not as wide as this House, which separates the native city from the concession, and there were the Russian officers marching with the students, marshalling and directing and encouraging them. That is a well-known fact, and I make a present of it to the hon. Member for Brightside (Mr. Ponsonby), as one authority at least for the facts which I have mentioned. What are the conditions resulting? British trade is paralysed, our shipping is entirely laid up, and our export trade is at a stand-still. In fact it is the one success which Russia has achieved by her propaganda.

The Chinese are a very shrewd nation. When it suits them they have no objection to taking advantage of these Russian activities. When it no longer suits them, they will drop the Russians and say, "Thank you very much; we have no longer any use for your services." But we shall soon feel in this country, if we are not feeling it now, the reaction of this effect Russia has created in China. We shall soon find in those industries which are engaged, or have been engaged for many years, in exporting goods from this country to the Far East, increased unemployment and increased lack of business, which we may attribute almost entirely, if not quite, to the activities of our Russian friends in the Far East. Yet, if we are to believe hon. Members opposite, our salvation in this country, from the commercial point of view, is to enter into greater trading relations with the very country which is trying to create these conditions throughout the world. It seems to me a very extraordinary suggestion. One hon. Gentleman said it was a question of confidence. I quite agree with him. But I think I am right in saying that it will be some time before the people of this country have any confidence, either that any amount of trade can be done with Russia under any conditions, or that it is wise to trade with a country which in another sphere of her activities is endeavouring to create such conditions that there cannot possibly be any trade at all.


; Two very important subjects have been opened in this Debate, and in the very short time that I can encroach on the House, I can hope to deal with them only in a very fragmentary way, because I know that there are other subjects to come on later. I would like to say at the outset that I share entirely the regret of my hon. Friend the Member for Brightside (Mr. Ponsonby), who opened this Debate, that my right hon. Friend the Foreign Secretary was unable to be here this afternoon. I am sure the House will realise that my right hon. Friend's engagements are exceedingly onerous, and that, as he has to go to Geneva in a few weeks' time, it is almost a mockery to talk of anything in the nature of a holiday for him. In these circumstances, I am sure that the House will excuse his absence, which no one regrets more than I do.

I must say that when my hon. Friend gave me notice, that he was, on this last day of the Session, going to bring before the House the question of our relations with Russia, I did, at least mentally, pay him the compliment of showing extraordinary persistence. In fact I cannot help thinking that my hon. Friend is suffering from what psycho - analysts would probably call the "Soviet Complex." To his persistence he certainly has added assurance, because he actually opened his speech by a reference to the Treaty which he said was turned down by the present Government—a Treaty with which he was so much concerned last year. I do not know whether he thought that there would not be in the House, many Members who were present on that memorable last day of the Session last year. To-day must be almost the anni- versary of it. Any who were here will remember the merciless exposure which was made of my hon. Friend upon that occasion, and the comment.

A few days before, the world had been informed that the long-drawn-out negotiations between the Government of which my hon. Friend was a member and the Soviet Delegation had come to nothing. That was announced: no agreement had been reached. Then there were runnings to and fro, secret meetings held, left wing opposed to right wing; and on the very last day of the Session the Vote Office was entirely innocent of any document on the subject. There was no possibility of getting a copy of the Treaty which we were told had just been signed, but the hon. Member for Brightside came into the House and explained how all the typewriters of the Foreign Office had been kept going all night, and at last the document was handed round to us as the great Treaty which had been concluded with Soviet Russia. Now my hon. Friend asks us why the present Government turned down the Treaty. I can answer that question very shortly. It was turned down by the present Government because the present Government have an overwhelming mandate from the country to do so. It was that comical transaction in which my hon. Friend was so conspicuous, which more than anything else led to the Labour Government's downfall at the Election of last year.

My hon. Friend, as a sort of key-note to his speech, has laid down the proposition to-day that trade relations depend upon political relations. I do not believe for one moment that in any large and general sense that is true. It was completely refuted very shortly after he sat down by an hon. Friend behind him, the Member for Lincoln (Mr. Taylor). The hon. Member for Lincoln, dealing with another point and not seeing its bearing on this particular matter, informed the House that a large body of Russian trade which we ought to be enjoying is going to the United States. The United States is the one great country that has refused to have any political relations whatever with Soviet Russia. It has refused to recognise Russia either de jure or de facto, and when proposals have from time to time been made for a change of policy in the United States, they have been contemptuously rejected. We could not possibly have a better proof that, as far as trade relations are concerned, political relations are not so important as has been suggested.

I have listened to the speeches that have been made from the opposite side of the House complaining of our relations, and explaining, or trying to explain apparently, that much better trade might be done between the two countries if the present Government would alter our relations with the Soviet Government. The hon. Member for Brightside has not told us what he thinks we ought to do. Nor has any speaker told us what we ought to do in order to bring about trade between the two countries. I do not entirely agree with some of my hon. Friends who have implied that it is a matter of comparatively little importance whether we do trade with Russia or not. That is not at all the attitude of His Majesty's Government. We realise that it is of immense importance that we should do trade with Russia. We are anxious to do trade with Russia, but I deny that it is owing to any attitude on the part of His Majesty's Government that we are not doing as much trade with Russia as we might be doing. The real obstacle to larger trade with Russia is not any attitude of the present or any other Government. The real obstacle is, first of all, the monopoly which the Russian Government hold in carrying on foreign trade and the extremely complicated and restrictive machinery which they have put up for carrying on that monopoly. That is, I believe, one of the main obstacles, and another is the Russian Government's want of credit.

The hon. Member for Lincoln declared that the Soviet Government had not defaulted on any engagement of theirs. In a sense that is true. I do not know that the individuals, that small oligarchy who now control the Government of Russia, have personally defaulted. I could not put my finger on any transaction to which they personally have put their signatures, and in which there has been default, but that is not sufficient for the Government of a great country. The Government of a country have not only to implement the engagements which they as individuals sign, but they are under an obligation as regards undertakings given on behalf of the country which they represent, and the present Government of Russia are conspicuously defaulters—I should say the greatest defaulters modem history knows —in repudiating obligations entered into on behalf of their country. So long as that attitude is maintained I think it extremely unlikely that any commercial nation will consent to do very much trade with them. As the hon. Member for Lincoln quite truly pointed out, confidence is the key to trade of this sort. But where is the confidence to come from? Confidence does not spring from any relations between one Government and another. Political confidence may do so, but the confidence which is required in the City of London depends upon a course of business, an attitude towards business and a way of doing business with which Cabinets have really little or nothing to do. The hon. Member for Brightside complained of the attitude of the Government towards Russia, and in explaining exactly wherein that attitude consisted, he told us four reasons which he thought lay at the back of it. I do not think any of those four reasons are governing factors in the matter at all, though, of course, I think it quite true that, so long as the hostility all over the world towards this country—the existence of which the Russian Government can hardly deny—continues, it makes it extremely difficult, first, to have any really cordial relations between the two Governments, and, secondly, to have any increasing trade relations.

I do not want to exaggerate the question of propaganda. My hon. Friend asked for positive proof and says we never give positive proof that propaganda goes on at all. Why should we? I do not think any proof could be so positive that it would convince my hon. Friend. I think his mind is closed to proof, but in any case, why should we give it to him? I really do not want to convince my hon. Friend. All that the Government are concerned with is the justification of their own action. We know perfectly well, though we may not be able to convince my hon. Friend, that propaganda goes on in a great many different parts of the world. We know at the present moment that Russian intrigue is creating great difficulties and making much mischief in China, but, at the same time, I do not want to exaggerate its importance. I do not believe for one moment that the Russian propaganda in the long run will succeed in doing any very material damage to the British Empire. I know they think they are doing a great deal of harm. They are doing their worst, or their best, to injure us so far as they can, and that is not a very friendly attitude. I do not think we are in the least afraid of them. I do not think they will succeed in doing us any very vital injury, but when my hon. Friend says that what is wanted is a friendly relationship between the two countries, you cannot leave these facts out of account, and I think his remonstrances would be much better addressed to Moscow than to His Majesty's Government. I would like to ask my hon. Friend and those who agree with him this plain question when they talk about the absence of certainty and demand proof with regard to propaganda. Does he honestly believe that the present régime in Russia is actuated by friendly motives towards this country? I do not believe for one moment he could answer that question in the affirmative.


I could not answer it in the affirmative as far as His Majesty's present Government are concerned, but with the late Government they were friendly.


I do not deny that it might be possible to buy a more friendly attitude. My hon. Friend in that Treaty which was laughed out of court in the House last year, and still more laughed out of court in the country a short time afterwards, was proposing to give a large loan to the Russian Government.




A guarantee.


Well, a credit which comes to the same thing. We had great discussion as to what the amount of the credit was to be I see that in a recent publication M. Rakowsky names £90,000,000 as a suitable sum to put Russia on its feet. But, after all, behind all these particular ebullitions there is some thing more. I suppose the present Russian régime would acknowledge Lenin as its leader. Not very long before his death he said: The Soviet Republic and capitalist States cannot exist together, and in the long run one of the two will destroy the other. If that doctrine be, as I suppose it is, accepted and held by his followers and disciples, we have a very fair warning at all events of their aim and object. It appears to me to be idle at this time of day to come to this House and pretend, because we do not produce proof convincing to my hon. Friend of every item of propaganda which comes to our knowledge, that the relations between this capitalist country and the Soviet Republic are to be governed by the same friendly attitude which they were able to extend to my hon. Friend.

5.0 P.M.

Before I pass from that subject, let me call attention to a much more recent statement by a prominent statesman, whom I think hon. Members opposite will respect. In the Belgian Chamber, only a week or two ago, a speech was made by M. Vandervelde, who my hon. Friends behind me, without being so familiar with his name as the hon. Members opposite, will know is, of course, not merely the leader of the Socialists in Belgium, but is recognised as one of the leaders of international Socialism. But he is now a Minister of the Crown in Belgium, and, therefore, finds himself in a very responsible position. He was being pressed in the Belgian Chamber the other day, just as I am being pressed to-day, with regard to relations with Russia. He was called upon to give recognition—they have not yet done so—to the Soviet Government, and M. Vandervelde, in reply, said that no doubt recognition would have to come, but, he said: Such recognition can only take place as the result of an economic agreement, and subject to two conditions: Firstly, the recognition by the Soviet Government of the Republics recognised by us, such as Georgia, which are subjected to oppression by them; and secondly, a satisfactory arrangement safeguarding our interests in Russia. It will be necessary for our nationals to obtain substantial and satisfactory compensation. Till this has taken place, the recognition of the Soviet Government would be but an empty gesture. The example of the countries that have taken this course does not encourage us to imitate them. That is the opinion of a very distinguished Socialist statesman at the present moment in Belgium, and I think, myself, that it expresses a very sensible view. But before I pass from the subject, I do not want it to be understood that we underrate the importance of trade with Russia. We are anxious to promote it in every way that we can. I also want to repudiate entirely the idea that there is any active unfriendliness on the part of His Majesty's Government towards Russia. If there be any unfriendliness, it is entirely upon the other side. If the Soviet Government choose to approach us in a perfectly friendly spirit and make proposals, either for the resumption of larger trade or for the promotion of larger trade, any proposals which they make in that way will receive very careful and quite sympathetic consideration. But, as far as we are concerned, after what has passed, and with our knowledge of the policy and methods of the Soviet Government, we think it would be merely waste of time and inviting a rebuff for us to approach them, and we do not intend to do so.

I must pass from that to the other subject which my hon. Friend introduced, the subject of China—a very important one—and I hope he will not mind me saying that on this subject I am bound to be rather cautious in what I say. I am bound to be more cautious than if I had the whole responsibility myself. If my right hon. Friend the Foreign Secretary were here, he possibly might be more explicit and give more information, but my hon. Friend began this part of his subject by saying that the Government were showing supine inertia. I wonder what is the justification for that. How does he say that the Government has been showing supine inertia? He did not develop that. All that I can assure him is that, as far as I am able to judge, there is not the slightest foundation for that charge. At all events, I think His Majesty's Government have been very active, from the very first moment that these troubles developed, to try to bring about, first of all, a wise settlement of the existing troubles, and to go behind them and to devise, encourage and initiate, as far as they could, a wise policy dealing with the whole subject of our relations with China and the internal condition of that country.

I cannot say very much about the actual incidents at Shanghai. My hon. Friend says that the Shanghai papers are now being received in this country, and he asked me whether the accounts which they contain are trustworthy. Well, I am not able to answer that question. I have not myself seen the papers to which he refers, and as we shall have, I hope, in a very short time, information which we believe will be quite trustworthy—at any rate, it will be official information—I do not know that any good purpose would be served by our acting upon, or assuming either the trustworthiness or otherwise of mere Press accounts which may be reaching London at the present time.


I quite understand that it is not possible to say whether or not the whole of the Press accounts are trustworthy, but I think it is important that this House should know whether the three Resolutions which are supposed to have been passed by the Diplomatic Commission are accurately represented.


As I say, I have not myself seen these newspapers, but I will tell my hon. Friend and the House very gladly what I think is the true position with regard to those recommendations.


Is the right hon. Gentleman referring at the moment to the inquiry that is going to be set up in regard to Shanghai?


No. I am referring to another matter, which was introduced by my hon. Friend the Member for Bright-side. When these disturbances took place at Shanghai, the Diplomatic Body sent down from Pekin a Commission, representing them, of some junior members of the Embassies and Legations there, to make an investigation on the spot. It is one of the examples, I think, of the unfortunate effects produced sometimes in these international matters when documents or information are prematurely published. I know that my hon. Friend is a very great devotee of open diplomacy, and does not like any secrecy, but sometimes the divulging of information or reports prematurely gives a very wrong impression and very often creates difficulties. I think that is rather the case in this instance, because that examination or investigation by representatives of the Diplomatic Body in Pekin was only intended to be preliminary. I will not contest that the recommendations that have appeared in the Press are probably correct, but I do not think much turns upon them, because all that will be merged in the much more important, much more searching, and much more authoritative examination of the whole of the circumstances to be conducted by a judicial body to be set up by the Powers, which will consist, no doubt, of very highly qualified judges, and which will have much more power than this rapidly improvised deputation from Pekin in taking all the evidence available and arriving at a perfectly impartial judgment upon the event.

It is towards the setting up of that tribunal that His Majesty's Government have been, above all things, exerting themselves, I may say, from the very first. Hon. Members may say that a long time has elapsed since those events, and that is quite true, but let hon. Members imagine—they have probably all had experience of it—a committee consisting of a number of members trying to draft a document. Even if there are no differences of opinion, everybody knows how difficult it is for a large number of members to draft any document which is satisfactory to everybody, with everybody round the table suggesting an amendment here or an amendment there. That is exactly what took place between a number of different Powers, with the additional difficulty that, instead of doing it across the table in conversation, it had to be done by telegraph between the representatives of those Powers in all the capitals of the world. What happens is that one Power will suggest an amendment. That may be accepted, perhaps, by ourselves. Then it has to be accepted by everybody else, and while that is being done, somebody else suggests an amendment. The consequence is, that in a matter of this importance, where unity is, above all things, necessary, it is a very difficult thing, except at the expenditure of a very considerable amount of time, to get complete agreement upon a draft, either of a Note to the Chinese Government, or terms of reference, or anything of that sort, and it is that difficulty, more than anything else, which has caused so much time to elapse in the setting up of this tribunal.


Could the right hon. Gentleman give us any idea at all as to when this inquiry will begin?


I hope now that all the delay is in the past. We have now-got the agreement of all the principle Powers concerned. I am not quite certain whether there are any points still outstanding with one or two other countries which are entitled to be consulted, but I have every reason to believe now that all the preliminary work has taken place, and that this tribunal will be set up in the very near future. With regard to the larger question of China, to which my hon. Friend referred, first of all he said that the position of affairs was not due to Bolshevist propaganda. I quite agree with him. It is not due to Bolshevist propaganda, or to any single cause, but, notwithstanding that it is not due to Bolshevist propaganda, I do think Bolshevist propaganda has been fishing in troubled waters. I think it has been exasperating tempers. I think it has been making more mischief where there was mischief to begin with, and I have very little doubt my hon. and gallant Friend the Member for Wycombe (Sir A. Knox) was quite right in saying it was very largely due to Bolshevist propaganda that the anti-foreign movement has, for some time past, largely concentrated its animosity upon ourselves rather than upon other nations. I cannot otherwise account for the fact that we should be singled out by Chinese opinion for hostility, when, in point of fact, all the presumption would be that we should escape the lightest, because I do not think anyone who knows the history of our relations with China, and the history of other countries' relations with China, although we may all have been sinners in the past, can deny that we have certainly for a long time past shown ourselves to be the best friends China has among the foreign nations, although I do not want to go into that in any controversial spirit.

What I do want to say is this. Chinese interests and British interests there are identical. There cannot be any doubt about that. What is the chief interest of China? It is, first of all, internal peace, stability, settled Government and prosperity. Is not that necessarily and obviously the interests of this country, too? We are a great trading nation, and trade can only flourish in an atmosphere of peace, stability and confidence. Therefore, it is obviously our interest also that China should enjoy those blessings, and if we are to be prosperous in China, China herself must be prosperous, and, unless she is, we cannot be. The British interests, of course, as everybody knows, are gigantic. In these days of our depressed trade and unemployment, what could not China do for us, if she were peaceful and prosperous, in offering an open market to us in the way of employment and trade? Lancashire could be made booming to-morrow by China alone.

Consequently, as I say, our interest is to promote peace, prosperity, stability and confidence throughout China. It is not an easy thing to do. On the one hand, we find that there is no real central government. My hon. Friend asked me not to fall back upon that plea. I do not. It does not exonerate us from making an effort, and from doing everything we possibly can, both to help us and China, but we must recognise it is an obstacle in our path that there is no central government. But we are very hopeful of what may result both to China and ourselves from the coming conference on tariff revision and on extra-territoriality. As the House knows, those are matters which have not sprung up since the troubles in China, since the anti-foreign movement has become very insistent. The good will displayed by foreign nations to China antedated all those symptoms. In fact, in 1922, as a result of the good will created by all being on the same side in the late War, we showed we were anxious to anticipate those demands, that we were anxious to promote the aspirations of China which we recognised as reasonable, and to do all that we could to help her along the new path she had chosen. That was all embodied in the Treaty at Washington. It was not the fault of this country that delay occurred. It was laid down in Washington that the Conference was to be held three months after ratification of that Treaty. We ratified immediately, and, therefore, of all nations, we may claim we were the most prominent to show our wish to help. Other nations delayed, and the ratifications have only just now taken place. Consequently, the Conference cannot be held immediately, but it will be held very shortly, and I may say that I do not think, in spite of all the difficulties that there are in China, which I cannot enumerate at greater length, but which were dealt with by my right hon. Friend on the 18th June—in spite of much discouragement, I do not think we ought to be pessimistic with regard to the future of China, and what we can do.

For the moment, of course, we have one paramount duty. Recognising the magnitude of the British interests in China, and the danger which the movement there has caused to life and property, the first and paramount duty is to protect the lives of our nationals, and the property upon which British interests depend. That is, of course, a duty which we cannot shirk, and no Government could shirk, but, looking beyond that, we hope the coming Conference will improve the whole of the foreign relations with China, and especially with ourselves. I do not believe that the present concentration of animosity against ourselves can persist. I believe the judicial inquiry at Shanghai will do much to restore sanity. I believe it will do much to bring out the truth. If, under the judgment it delivers, any obligations are thrown upon His Majesty's Government, they will be certainly taken up. We shall not shrink from any admission of fault, if there be any fault in any of our nationals, and we shall do whatever the judgment may lay down to make good any claim that may be preferred and made good against us.

What is more important is that we should lose no opportunity to help the Chinese to help themselves. The Government have scrupulously abstained from interfering in the internal government of China, and that is not an easy course to pursue. There is practically no settled Government. There are provincial Governments, governing vast territories, probably, in most cases under military rule, and technically—in some cases at least—rebels against the central Government, but yet exercising an authority which cannot be ignored. In these circumstances, it is not very easy, while abstaining from internal interference, to do much to help. We intend, however, to do all we can. It is with that aim that we shall enter the forthcoming conference, and in the good hope that it will lead to results which may be of very great and far-reaching importance, and of permanent benefit, not only to the Chinese, but to ourselves.