§ 24 and 26. Sir W. DAVISON
asked the Secretary of State for Foreign Affairs (1) what progress has been made with regard to the settlement of intergovernmental claims between this country and Soviet Russia, the immediate settlement of which was contemplated on the resumption of diplomatic relations with Soviet Russia, as stated in Clause 2 of the protocol of 3rd October, 1929, signed by Mr. Arthur Henderson and M. Dogalevsky;
(2) What action has been taken to secure an offer from the Soviet Government for the settlement of the debts and 23 claims of British nationals as demanded by the late Foreign Secretary in July last, regard being had to the fact that a settlement of this matter was one of the conditions for the resumption of diplomatic relations between Soviet Russia and this country in 1929?
§ Sir J. SIMON
Since discussing this matter with the Soviet Ambassador on the 9th of December, I have carefully reviewed the negotiations initiated over a year ago, and have consulted with Lord Goschen. I note that throughout the discussions- the Soviet Government have made no offer such as would, in my opinion, justify me in asking Lord Goschen and his British colleagues, in the present circumstances, to devote any further time to these negotiations. I have, therefore, recently indicated this view to the Soviet Ambassador in a note, which was sent to him on 27th January. I propose to have the full note circulated in the OFFICIAL REPORT.
§ Sir J. SIMON
That, obviously, is not a matter that can be settled in answer to a supplementary question, but I can assure the hon. Member that the matter is under the Government's most active consideration.
§ Mr. MAXTON
Is this policy with reference to debts between Russia and this country not in contradiction to the policy of the Government towards the question of War debts generally?
§ Sir J. SIMON
The borrowings in question were not War debts. They were obligations owing to private citizens and other persons in this country.
§ Sir W. DAVISON
Is the hon. Member aware that £250,000,000 of private citizens' debts are involved?
§ Mr. MAXTON
Does the right hon. Gentleman think this policy will be more fruitful in producing results than the previous policy?
§ Mr. THORNE
Are the debts contracted in the early stages of the War wrapped up in these debts mentioned in the question?
§ Sir W. DAVISON
Is the right hon. Gentleman aware that some of these debts are small bank balances belonging to private citizens?
§ Following are the terms of the note:
"Your Excellency,With reference to the negotiations between our respective Governments on the subject of Anglo-Soviet Debts and Claims, I have the honour to remind Your Excellency that on the 24th of July, 1931, Mr. Arthur Henderson, after protesting against the lack of progress in the work of the Joint Committee, represented to you that, in the view of His Majesty's Government in the United Kingdom, the sub-committees should be induced to advance as quickly as possible to the discussion of some general principles of settlement, since without agreement on principles, it was impossible to work out the detail of the negotiations. You replied to Mr. Henderson that your Government were quite ready to study the possibility of an agreement on a certain basis, i.e. on the principle of a combination between a loan or long term credits and compensation for the pre-war debts. You also suggested that if Lord Goschen could see his way to studying any theses of agreement on these lines, then some progress might be made; but added that if this proposal were not acceptable, then it would be better not to continue the negotiations, but to postpone them until a more favourable atmosphere existed. Thereupon Mr. Henderson invited you to provide him with some definite offer in writing so that he might report the Soviet proposal to His Majesty's Government for their consideration, though not necessarily for their acceptance. He declined to express an opinion on a mere oral outline of a scheme which he had not seen in writing; and, when you took leave of him, remained under the impression that you would at an early date communicate to him in writing the principles of your scheme.When my predecessor, the Marquess of Reading, succeeded Mr. Henderson as Secretary of State for Foreign Affairs, he desired that a message should be conveyed to Your Excellency in the Soviet Union, asking that on your return to England you would produce for his consideration the scheme of settlement which had been mentioned to Mr. Henderson. Lord Reading's request was communicated to the Chargé d'Affaires of the Soviet Embassy on 24th September, and Monsieur Bogomoloff replied that he would transmit it to Your Excellency.When, however, I had the honour of receiving you on the 9th of December last, you informed me that there had been a misunderstanding; that Mr. Henderson had been in error; that no offer of a definite proposal had been made; that Mr. Henderson should not have expected any reply from the Soviet Government; and that during your absence from England, neither you nor your Government had given further consideration to the matter. You gave me to 25 understand that the only proposal made by the Government of the Union of Soviet Socialist Republics was that His Majesty's Government should definitely accept the principle that a debt settlement must be associated with arrangements for a credit or a loan before any concrete progress could be made in the debts and claims negotiations. This is a principle which His Majesty's Government have refused to accept in the past, and they do not propose to alter their policy in the present circumstances. I assume, however, that it is still the intention of your Government, as it is that of His Majesty's Government, to abide by the terms of the Protocol signed by Mr. Henderson and Monsieur Dovgalevsky on the 3rd of October, 1929, and to settle by negotiation the question of Anglo-Soviet Debts and Claims. If this principle of maintaining the terms of the Protocol is admitted, then, since the only proposal so far made by your Government is based on a condition which is unacceptable to His Majesty's Government, I find myself reluctantly in agreement with the view expressed by Your Excellency to Mr. Henderson, that it would be better not to continue the negotiations at the present time.