HC Deb 24 June 1931 vol 254 cc414-7

asked the Secretary of State for Foreign Affairs what is the attitude of His Majesty's Government towards the telegraphic communication addressed to the President of the United States by the German Government on the subject of international indebtedness; and can he state what the terms of the message are?


The text of this message, which was confidential, has not, so far as my right hon. Friend is aware, been published.


(by Private Notice) asked the Chancellor of the Exchequer whether he can now make any further statement in regard to the policy of the Government for giving practical effect to President Hoovers proposal relating to reparations and inter-governmental debts?

The CHANCELLOR of the EXCHEQUER (Mr. Philip Snowden)

As my right hon. Friend the Prime Minister informed the House on the 22nd instant. His Majesty's Government in the United Kingdom subscribe wholeheartedly to the principle of President Hoover's proposal and are prepared to co-operate in the elaboration of details with a view to giving it practical effect without delay. and with the permission of the House I should like to take this opportunity to explain the steps which we have decided to take for this purpose.

The more consideration we give to the President's declaration, the more it seems to us that, having regard particularly to the history of the matter, that declaration constitutes a very great gesture on the part of the United States of America, and it will be a thousand pities if Europe does not respond to it in the same spirit. The beneficial effect of the proposal may be lost unless steps are taken by all the countries concerned to give it prompt and practical effect.

This is particularly the case as regards Germany, which, after all, is the essential difficulty. We agree with the view expressed by the United States Government that there is no time for a conference. A more prompt method must be found for putting into operation the proposal of the United States Government for a complete and immediate suspension of German payments to the creditor Governments.

The procedure which we would favour is that the creditor Governments should forthwith notify the Bank for Inter-national Settlements that they agree to the proposal for the suspension for one year of all the German payments due to them. The decision, of course, does not rest with us alone, and we are awaiting the views of the other creditor Governments; but we hope that it may be possible to secure agreement on these lines as soon as possible.

President Hoover's proposal applies, however, to "all inter-governmental debts, reparations and relief debts." His Majesty's Government for their part accept this proposal in the spirit as well as the letter. They will accordingly be ready to suspend for one year all such inter-governmental debts due to them as soon as President Hoover's proposal has been generally accepted, and, in the meantime, as from the 1st proximo they will refrain from claiming instalments that may fall due. As regards the Relief Debts, His Majesty's Government are at once taking steps to inform the other European Governments which hold Relief Bonds of their action and to invite them to co-operate.

Finally, although His Majesty's Government in the United Kingdom do not regard President Hoover's proposal as directly affecting the War obligations of the Dominions and of India to the United Kingdom, which are a matter for discussion and settlement between those of His Majesty's Governments concerned, we felt that we should be interpreting the wishes of the country in deciding freely to offer to the Dominions and India the same concession as is proposed for foreign countries under the same conditions.

Accordingly, when inviting the assent of the Dominion Governments and the Government of India to the suspension of the German payments so far as regards the share to which they are entitled, we intimated that on the same principle we would readily give them the option of postponing the whole amount of their War Debt payments to the United Kingdom for the period of 12 months from the 1st July, 1931, if they so desire.

These proposals will involve a loss to the current Budget which may reach approximately £11,000,000. This is a serious sacrifice for the taxpayers of this country upon whom such heavy calls have already been made, but we hope that the step which we are taking in co-operation with the United States win be more than justified by the help it will give in reviving confidence and prosperity.


While thanking the right hon. Gentleman for his statement, not having bad an opportunity of reading it beforehand, I will content myself with saying, for my own opinion and I believe the opinion of those behind me, that His Majesty's Government have taken a course fully consistent with the dignity and reputation of our country.


I would like to add that I am very glad that the Government have given such a clear, courageous and unequivocal answer to the very noble gesture of the United States of America.


May I ask the right hon. Gentleman when he proposes to make to the House the statement, which will naturally follow the one which he has just made, in regard to our domestic finance of the present year.?


I cannot give an answer to that question just at the moment. I am afraid we shall have to wait at least for a few days, but I have no objection at once, if a question be put down, to giving a statement as to how it will affect the budgetary position of this country.


asked the Prime Minister whether, in view of recent developments, he will reconsider his decision not to initiate an international conference to discuss the whole question of international indebtedness?


I cannot for the present say more than that we are anxious to co-operate in bringing President Hoover's proposal into practical effect.


In view of recent developments, does not the right hon. Gentleman think that this is a suitable time for reopening this question?


I think it is a most unsuitable time. First of all, we must settle the matter of these proposals, and, if circumstances should eventually develop as to make an international conference desirable, no doubt action would be taken.