HC Deb 16 July 1934 vol 292 cc899-916

Considered in Committee.

[Captain BOURNE in the Chair.]

CLAUSE 1.—(Alternative to Treasury condition, as respects Dominion stocks.)

The following Amendments stood upon the Order Paper:

In page 1, line 18, after "Kingdom," insert "(either before or after the passing thereof)."

In line 21, leave out from "shall," to "and," in page 2, line 7, and insert: be referred forthwith to a British Commonwealth Tribunal to be appointed in accordance with the provisions of the Schedule to this Act, and that effect will be given to the decision of such tribunal."—[Sir S. Cripps.]


Before I call upon the hon. and learned Member for East Bristol (Sir S. Cripps) to move the first Amendment standing in his name, may I suggest that as this and the subsequent Amendment together with the proposed new Schedule (British Commonwealth Tribunal) on the Paper, all deal with the same subject and are really parts of one Amendment, it might be convenient to the Committee if the hon. and learned Member were to deal with the whole point on the first Amendment?


I beg to move in page 1, line 18, after "Kingdom," to insert: (either before or after the passing thereof). This Amendment and the two Amendments which follow it can conveniently be considered together. Their object is to put in concrete form a suggestion which I made on the Second Reading of the Bill namely that to deal with the possibility of disputes arising in the future as regards legislation by the South African Government on any matter which might affect the security of the investing stockholders or bondholders it is not only desirable but necessary to set up some form of inter-Imperial arbitral tribunal. The Financial Secretary to the Treasury made a speech in reply to that suggestion which was extremely surprising as setting forth the views of this Government. We are becoming almost accustomed to attacks upon the Empire by this Government. We have just witnessed one in the last few hours, and if one is to believe the speech of the hon. and gallant Gentleman this seems to be another.

The first point which the Financial Secretary made in that speech was that he could not agree that we had yet reached the stage in inter-Imperial relations when the principle of an inter-Imperial arbitral tribunal was sufficiently well established to command that confidence and general assent which it would be necessary for such a tribunal to command. Surely this Government, which is always saying, at any rate, that it is in favour of international arbitration for the settlement of disputes by arbitral means, and which, indeed, has pledged itself in the case of certain disputes in the international sphere to means of that kind, is not going to say that the principle, apart from the exact application of inter-Imperial arbitration, is not yet sufficiently accepted to command the confidence of the Empire or the Commonwealth of nations. If hon. Members refer to the summary of proceedings of the Imperial Conference of 1930, Command Paper 3717, they will find on page 22 a paragraph which deals with the question of a Commonwealth Tribunal. It states that the matter was examined by the Conference, and that they found themselves able to make certain definite recommendations with regard to it it. They say: Some machinery for the solution of disputes which may arise between members of the British Commonwealth is desirable. That is, the principle was fully accepted by the Imperial Conference. They also say: Different methods for providing this machinery were explored, and it was agreed in order to avoid too much rigidity not to recommend the constitution of a permanent court but to seek a solution along the lines of ud hoc arbitration proceedings. The Conference thought that this method might be more effective that any other in securing the confidence of the Commonwealth. This is one of the cases in which an opportunity arises for setting up such an ad hoc tribunal in order that, should difficulties arise under this Bill or under the procedure suggested in the Bill, there may then be in existence some tribunal capable of dealing with them. It is rather remarkable that this Government should say through the mouth of one of its Ministers that the principle of inter-Imperial arbitral tribunals is not yet sufficiently accepted when it is the very thing which they have insisted upon the Irish Free State accepting. Time after time Members of the Government have stood up at that Box and said, "The Irish Free State has to accept this method as the only method of settling disputes within the Empire." It has not been a case of saying "we hope Ireland will accept it," or "we would like Ireland to try it," or that "after all they must have confidence in it." No, it has been said that they must accept it as the only way in which the matter can be settled.

Nothing could show a more complete acceptance of the principle of inter-Imperial arbitration than the whole attitude of this Government on the Irish question. Surely the Financial Secretary cannot come forward now and say that it is not a principle which is accepted in the Empire. Think of what a weapon he is giving to Mr. de Valera if he says that. I can imagine no better weapon or one that Mr. de Valera would more like to have in his hands than to be able to point to the hon. and gallant Gentleman's speech and to say: "They say now that the principle of inter-Imperial arbitration is not accepted, and here they are trying to dragoon us into something the principle of which is not accepted in the Commonwealth."

I hope that if the Chancellor of the Exchequer is going to speak he will, quite apart from any question of party, say that the principle of inter-Imperial arbitration is accepted by this Government. If we are to go back now in our inter-Imperial relations to the pre-arbitration period, it means that the only way of settling disputes is by force, because arbitration is the substitute for force in the settlement of disputes. If we are going to give up the principle of the settlement of inter-Imperial disputes by inter-Imperial arbitration, we are going to say that in the last resort in disputes within the Empire we are going to fall back upon and rely upon force because we cannot substitute any other means of settling disputes. I hope therefore that the Chancellor of the Exchequer will tell us that he does not stand by this first proposition put forward by the Financial Secretary as a reason why my suggestion should not be adopted. The second point which the Financial Secretary made was that, even if there were to be inter-Imperial arbitration, this is not one of the matters which should be referred to it. I give his exact words: This is one of the subjects which ought not to go to such a tribunal because it differs from every other Measure and cause of dispute which could possibly arise between the South African Government and ourselves as it is not a question of inter-Imperial policy or indeed of policy at all."—[OFFICIAL REPORT, 11th July, 1934; col. 345, Vol. 292.] But, one of the things which we do not arbitrate about is policy. As the report of the Imperial Conference implied, it is not a matter for arbitration. Inter-Imperial policy is a matter for the Imperial Conference. But here you have a justiciable matter which as the report points out is a matter for decision by some kind of tribunal. A matter may arise for decision such as whether a particular Act which is either proposed or has been passed by the Government of South Africa, is or is not an Act which adversely affects the interests of the bondholders. Take such a case as a conversion. It would be extremely difficult to say whether a Conversion Act adversely affected the interests of bondholders or not. There may be some who are only too glad to get longer terms of security; others may be glad to get shorter terms with a high rate of interest. Some may say that the alteration was against their interest. Someone has to decide whether the Act that brings about a conversion is or is not a breach of the original condition as laid down in the contract under which the bonds were issued. There cannot be anything more justiciary than that, and that is the matter which, under this Bill, is reserved entirely for decision by our Government. Our Government may say without any question or argument, "This issue affects the rights of bondholders whom we represent as English nationals; we therefore insist that you, the South African Government, repeal this." That is how it would work out.

I would ask the right hon. Gentleman the Chancellor of the Exchequer to see what that might lead to. It is admitted that it is a possibility, and not beyond the range of practical politics in the future, that such a dispute might arise. Imagine in the South African Parlia- ment a Minister getting up, and, a Conversion Bill having been passed in the last Session, telling the House that at the request, and, indeed, the compulsion of the British Government, "I am obliged to ask you to repeal the Act you passed last Session." One can hardly imagine anything better calculated to lead to the disruption of the Empire and to strengthen the disruptive group in the Assembly. Circumstances would be entirely different if, instead of our saying this, a Minister were to say, "We have had a dispute with the British Government as to whether an Act was or was not an infringement of the rights of stockholders. It has been referred to inter-Imperial arbitration, and it has been decided, after our case has been put forward, that we must repeal this Act." The effect of that on the House, obviously would be vastly different from the effect of this Government acting as party and judge in its own cause. If one is merely looking at it from the point of view of the security of bondholders, they are far more secure, given circumstances in which the South African Government is more likely to act on the matter of a repeal and not passing legislation. I think everybody would agree that this is far more likely, and that we should be far more likely to make the request if it resulted from an inter-Imperial tribunal, rather than if it resulted from an ipse dixit of our own Government. The Financial Secretary last week said: The Bill now before the House is one which suits their purpose, one which they think will maintain their credit; whereas they do think, as we think, that if the whole of this stock were put in a position in which the interest were no longer guaranteed, as in the past, by His Majesty's Government, but really rested upon some dim inter-Imperial arbitral tribunal, their first reaction to such a proposal would be to say, Well, there are other stocks in which we can invest our money with a better guarantee than this.'"—[OFFICIAL REPORT, 11th July, 1934: col. 346. Vol. 292.] Surely the hon. Gentleman is not going to say that we guarantee all stocks under the Colonial Stock Act. That would be an entirely new guarantee. Stockholders will point to that speech and state that he informed everybody quite clearly of what was hitherto a guarantee by the Government on all these Colonial stocks. Surely that is a matter that ought to be put right if it is not correct. As I understand it, there is no guarantee by this Government of issues of South African bonds. The only thing this Government does is to decide whether they remain on the Trustee List or not. All it decides is the issues in which trustees may invest their funds.

The CHANCELLOR of the EXCHEQUER (Mr. Chamberlain)

We do that, having power to disallow legislation that might injure the interests of stockholders.


I may be wrong, and will be glad if I am corrected by the right hon. Gentleman, who knows more about this than I do, but can he tell me whether in the past the interest has been guaranteed by the Government?


It has not been guaranteed in the legal sense. I am only using the word "guarantee" strictly in the sense in which I used it just now, a guarantee to bondholders that their security shall not be injured by Dominion or Colonial Government Acts, which they knew, if such legislation were contemplated the Home Government had power to disallow.


That was the position. They could prevent legislation which could alter the position of bondholders. We suggest, instead of that power, that with the equal Commonwealth of Nations, there is a larger safety even for bondholders in letting that reside in the consent implied by submission to an arbitral tribunal, rather than trying to maintain the forceful imposition which is a relic of the old methods in pre-Commonwealth days. I know the right hon. Gentleman will say that the South African Government will agree to it, but I am not going to certify that the South African Government will agree to action which might have to be taken by the British Government. I am contemplating the risk of discussion in the future. I am extremely anxious to take steps now to avoid risks, and not to wait, as in the Irish question, to consider the appointment of a tribunal until there is something about which to arbitrate. Then the hon. Gentleman said: We have heard a lot about tribunals and arbitration. I think that was meant to be general, because the Debate was quite short. He went on: Arbitration may be all very well in its way. I wonder what he meant by that. Is this the usual lip service which is given to a thing of which you approve as long as it remains in the air, but that you never put into practice because you do not really trust it? He went on: But at the present time the ordinary bondholder would much rather have the whole guarantee of this Government behind his money than the guarantee of an inter-imperial arbitral tribunal.


The hon. and learned Gentleman has missed out something.


I have missed out quite a lot.


I think I said that the Government were most anxious to see the principle of arbitration established.


I will certainly read it, only it is a long passage. He said: I am sure that it is the opinion and the policy of His Majesty's Government that the more use which is made of arbitration in the future the better. We are anxious that it should be made use of in the present, not always in the future. It is apt to be like to-morrow, which never comes. The hon. Gentleman continued: And it is an ideal of His Majesty's Government that we may reach the time when all disputes are submitted to arbitration. Again something in the dim and distant future, where it always remains. [HON. MEMBERS: "Like Socialism!"] I am glad hon. Members think the National Government will arrive at Socialism as soon as they arrive at arbitration. I dare say they will, but I should not like to say which they will get to first. I should think it would be a close thing. After the passage I have just read about the bondholder who much prefers the guarantee of the Government to that of an inter-Imperial arbitral tribunal, the Lon. Gentleman said: That being the feeling both of His Majesty's Government there and of His Majesty's Government in the Dominion of South Africa, I think the House will he well advised to pass this Bill without further discussion. Frankly, we are much more interested in the maintenance of the Empire than in the maintenance of the bondholders' in- terests, and I suggest that some hon. Members here may live long enough, if they are lucky, to see difficulties arising within the Empire upon just such matters as these, when they will regret that there is no means by which they can be satisfactorily settled. Once these disputes do arise, we have already enough experience to know that then the question of tribunals becomes almost impossible of solution, because you cannot then get the two parties to agree upon the precise tribunal that they would like. It is just as though, in the ordinary courts of this country, you left it to the two parties, who had to agree upon the judge they wanted and did not take the one allotted to them. You would have infinite disagreement and difficulty in ever getting the two parties to agree on the same judge. One of them would always regard him as a plaintiff's judge, and the other as a defendant's judge. I beg that the right hon. Gentleman will consider this matter, because I believe it is of vital importance when introducing a Bill which may lead to difficulty, as is admitted by the hon. Gentleman in his speech, where he said: They are perfectly satisfied with this scheme, and when the hon. Member for East Birkenhead (Mr. White) envisaged the possibility of a dispute between that Government and ourselves—and that possibility is, of course, not beyond the range of practical politics in the future."—[OFFICIAL REPORT, 11th July, 1934; cols. 346–7; Vol. 292.1


He had talked about secession.


I had said what an opportunity this would give to a secessionist party in the Government, and the dispute we were talking about was a dispute which might arise under this Bill. However, the hon. Gentleman says he was referring to some other dispute. It does not make much difference, because it is clear to anyone who reads this Clause that there is ample material for dispute under it. No one can guarantee that the South African Government will necessarily take the identical view that our Government take as to whether one of their Bills is or is not for the benefit of the bondholders here. One does not assume that they would pass a Bill which they thought was not for the benefit of the bondholders here, and this Bill assumes that they have done such a thing, which means that they have taken a different view upon it, and if such a situation arises, as I submit it may arise, I think it will be an immense tragedy if this country and South Africa find themselves, as two nations in the Commonwealth, with no means of deciding that dispute at their disposal.

9.41 p.m.


In the summer of last year I had the advantage of attending, at Toronto, an inter-Imperial Conference at which this matter was fully considered. It was an unofficial conference, but representative. The delegation from this country was selected by the Royal Institute of International Affairs, and similar bodies chose the delegations from Canada, Australia, New Zealand, South Africa, and India. From this House there also attended the present Solicitor-General, not then in office, and the junior Member for Oldham (Mr. H. Kerr), and from the other House Lord Cecil was also a member of the delegation. Many of the members from the Dominions had Ministerial experience or were Members of their Parliaments, and this matter of an inter-Imperial tribunal was discussed at great length and was indeed one of the principal reasons for summoning the conference, which dealt with Commonwealth constitutional relations.

There was, I think, a general feeling—I think unanimous—that it was important for the Empire that there should be established a permanent tribunal for dealing with possible disputes or disagreements that might arise between the various members of the Commonwealth. There was a feeling that the Judicial Committee of the Privy Council is not adequate nowadays to perform such functions, and I believe that those present at that conference had gone beyond the point which was reached by the last Imperial Conference in London, namely, that such a tribunal was desirable but ought to be set up ad hoc to deal with each case as it arose. f think all of us felt that, for the reasons which have been stated by the hon. and learned Member for East Bristol (Sir S. Cripps), it is a dangerous thing to wait until a dispute has arisen, and possibly feelings are embittered, before a selection is made of the tribunal which is to decide a quarrel, and that it would be far better to establish at least a cadre of persons to form the tribunal, or in some other way to create permanent machinery. That is, I feel convinced, most desirable in the general interests of the whole Commonwealth, for the sake of its continued unity and in order to ward off possible dangers in the future.

But the question arises whether this Bill, at this stage, is the right occasion for Parliament to declare that opinion. It is obviously most necessary that before any such step, which is of fundamental constitutional importance, is taken, the Dominions themselves and India should be most fully consulted and that there should be a general agreement; and for one Parliament, namely, our own, to put into a Bill here, without consultation with the other members, a particular form of tribunal would tend, I think, to defeat the very object in view. The actual composition of such as tribunal would need the most careful consideration. All kinds of difficulties and dangers would arise that would have to be warded off beforehand, and no steps should be taken without the fullest prior consultation and without securing agreement. For that reason, it would seem to be improper that this House should vote in favour of an Amendment of this character, however much it might approve of it in general principle us a goal at which we should aim. Furthermore, the Dominion of South Africa and ourselves are the only parties concerned in this particular Bill, and there is now a complete agreement in favour of the terms of the Bill as it stands, and to re-open the matter in this way at this stage with the Dominion of South Africa would seem to be undesirable. Therefore, while I would wholly associate myself with the general line of argument that has been pursued by my hon. and learned Friend, and while I think that it is important that, since the subject has been raised, voices should be, heard in this House in favour of the general principle, I suggest that this is not the occasion on which it should be applied.

9.46 p.m.


I can hardly imagine that the hon. and learned Gentleman who has moved the Amendment has really any desire that it should be inserted in the Bill. I take it that he merely wished to have the opportunity of expressing certain views which he holds. I am sure he will recognise, as readily as the right hon. Gentleman the Member for Darwen (Sir H. Samuel), that it would be impossible for us in this Parliament to insert into this Bill a provision affecting not only ourselves, but other members of the Empire, without previously having had consultation with them. As a matter of fact, the procedure which was laid down in the Bill has not only received the assent of the Union Government of South Africa, but it was actually proposed by that Government. It was their proposal and not ours. It is a proposal to which we have assented on their proposition.

With regard to the general question of an arbitration tribunal to settle disputes between Governments of the Dominions and other countries, or between different self-governing parts of the Empire, this Government accepts the principle which was laid down in the Conference to which allusion has been made. I am doubtful whether it would be wise to set up a permanent tribunal at this stage. I am rather disposed to agree, on the contrary, with members of the Conference, who said that they thought it would be better to have an ad hoc tribunal for particular purposes rather than one set up permanently. I say that because the setting up of a permanent tribunal seems almost to assume that there will arise questions between one Dominion and another, or between one Dominion and another country, which cannot be adjusted by mutual agreement; whereas my experience up to now, with one unfortunate exception, has been that such disputes are always discussed in a friendly manner between two Governments and are susceptible of solution by agreement instead of by arbitration.

When I come to the application of that principle to this particular question, I confess that I am just as much surprised by the speech of the hon. and learned Gentleman as he professes to be by that of my hon. Friend the Financial Secretary when we discussed the Second Reading. I am not surprised that he should make accusations against the Government of neglecting the Empire or prejudicing Socialism. These are commonplaces from him. What I am surprised at is that, clear-headed as I believe him to be, he should not see that this particular case is not one which is susceptible to reference to an arbitration tribunal. I will explain why I take that view. We are not dealing solely with a dispute between two Governments. This hypothetical—I will not call it dispute—this hypothetical difference of opinion concerns three parties, the Dominion Government, the home Government, and also the bondholders. What is the occasion for such a difference of opinion? Let us consider how the matter arises. The Dominion Government wish to attain trustee status for their loans in the London market.


I was taking a case where they had got it.


I am taking the case where they have applied for their loans to have trustee status. Why do the Dominion Government want to have trustee status I It is because they can borrow at a lower rate of interest than if they do not have that status. Why can the Dominion Government borrow at a lower rate of interest if they have trustee status? It is because the investor believes, owing to the conditions laid down by the Treasury in respect of securities having trustee status, that his principal and interest are more secure than if no such conditions had been applied. Therefore, if the investor had lent his money upon that faith and that belief in the conditions which had been laid down, he might very fairly say to the home Government, "If you have given away those conditions, if you have substituted something else, which may be very valuable but which was not present to my mind when you invited me to lend my money, you have been guilty of la breach of faith." I do not know how the British Government would answer a challenge of that kind.

The British Government cannot perform their duty to the existing bondholders of a security having trustee status if they consent to substitute for conditions which have already been laid down and which were present in the investor's mind when he lent his money, something which obviously has not the same security. The hon. and learned Gentleman says it is a better security. Does he think the investor would take that view? The investor has invested his money on the strength of his confidence in the British Government as his trustee and guardian, the guardian of his interests. He knows, or thinks he knows, what the British Government is, and he believes that that Government will take whatever measures are in their power in order to protect that interest. He knows nothing about this tribunal. The hon. and learned Gentleman says that this tribunal would carry greater confidence than the word of the British Government. He scoffs at my hon. Friend the Financial Secretary who says the question of an inter-Imperial Tribunal has not yet acquired sufficient confidence of the public to justify its being brought into operation in a case like this. There never has been such a tribunal. How can the British investor have confidence in a body which has not been set up, of the members of which he knows nothing, and the procedure of which is unknown to him? It is obvious that he cannot have the same confidence in a hypothetical body of that kind that he has in the well-tried and well-known practice of the British Treasury.

The hon. and learned Gentleman is anxious to tell us that he cares more about the maintenance of the British Empire than for the maintenance of the bondholders' interests. That is trying to prejudice the case, because any reasonable person knows that you cannot neglect the interests of the bondholders who have lent money to other parts of the Empire and you cannot repudiate your obligations to them and at the same time maintain the Empire. The one will destroy the other. But, apart from that, what is going to happen if we substitute for a condition which is known this new condition which is unknown? The next time that a Dominion Government which had adopted that condition wanted to borrow money it would find that the investor in the London Market made a distinction between its trustee security and the other trustee securities which still preserved the old conditions, and that it would have to pay something more for the privilege of having this matter referred to a tribunal in case of dispute. The hon. and learned Gentleman will agree that the Government of the Union of South Africa would probably consider all these matters, and they have not asked for a tribunal.


They did not think of it.


I do not think they did think of it. Their interest in this matter is to be able to borrow money as cheaply as possible in the London Market, and it really is too absurd to sketch out fairy tales like the one which the hon. and learned Gentleman produced about a dispute happening and about Governments in the Union of South Africa repudiating the conditions into which their predecessors had entered. That would absolutely destroy their chances in the market, not only in London but all over the world. Nobody would trust a Government which had gone back upon the conditions agreed to by its predecessors. The hon. and learned Gentleman has not only refused to credit the Government of the Union of South Africa with any remnant of common sense, but is putting forward the suggestion that they are going to introduce legislation in their House, to say nothing at all to us about it, are going to confront us with a fait accompli, and then defy us to do our worst.


Then will the right hon. Gentleman tell me why that is exactly what is provided for in the Bill?


I am coming to that. What would happen would be that the Government of the Union of South Africa would come to us, if they were going to introduce any legislation which in their view might give rise to doubts in the minds of the British Government as to whether the interests of the bondholders were being prejudiced. They would let us know through their High Commissioner what they were proposing to do. We are in touch all the time with the High Commissioners of the Dominions, they are constantly talking to us about matters of common interest, and with their interest to preserve their position in the money market and to go on borrowing as cheaply as possible, they would not take a course which would immediately raise the price of money here to them. They would come to us if they wanted to do something which they thought we should regard as doubtful and try to convince us that their action would not prejudice the bondholders.

The hon. and learned Gentleman asks why, in spite of all this, have we provided for a case in which they may have passed legislation? Well, it is human to err. It is conceivable that, in perfect good faith on both sides, some legislation may drop through which, in the opinion of the British Treasury, would be prejudicial to the bondholders. The Union Government have agreed, in the undertaking which is embodied in this Bill, that in that case they will withdraw that legislation or repeal it. What assurance could we get from any tribunal which is better than the word of the Dominion Government that if their attention is called to some accident which has happened and which, without their intention, has prejudiced the cause of the stockholders, they will repeal that legislation? I submit that there is really no case for submitting matters of this kind to the jurisdiction of a tribunal, assuming that there were such a tribunal in existence; that we could not consent to an injustice to the bondholders who were trusting to conditions laid down at the time when they lent the money; and that there is no occasion for this proposal, because the Union Government have not asked for it, but are supporting what is in the Bill. Finally, I say that if they had had so little common sense as to propose a scheme for a tribunal it could only act against their own interest, because it would mean that never again would they be able to borrow as cheaply in the market.

10.0 p.m.


It is really difficult to get a right idea of the British Common-wealth of Nations when we listen first of all to the Secretary of State for the Dominions, who is a great authority on Imperial matters, and then listen to the Chancellor of the Exchequer, a great hereditary authority on the Commonwealth of Nations. Over and over again we have heard the Secretary of State for the Dominions say, "The door is still open," and when we have asked to what door he referred he has said, "It is my great Imperial arbitral tribunal," which, he has told us, was agreed upon at the Imperial Conference. Now comes the Chancellor of the Exchequer to say, "Oh, no, this is a purely visionary thing which does not exist at all."


I cannot allow the hon. Member to misrepresent me in that way. My words were clear and he heard what I said. I fully accepted the principle of arbitration on matters which were in dispute between two Governments, but said that. this particular case was entirely inapplicable to that condition.


I heard what the right hon. Gentleman said, and I thought he said that we did not know anything about the constitution of this tribunal.


I said the bondholders did not know anything about its constitution.


It should be realised that some of us are not interested in the bondholders all the time. The point that arises here is that by inadvertence, as the right hon. Gentleman says, or in some other way, or perhaps by the strange chance that a Government is returned which is not interested in bondholders, legislation is passed that affects the bondholders, and it is in contemplation that it may have done so without previous consultation with this Government. That position may be brought to its notice and then what is to happen? The right hon. Gentleman says, "The South African Government bas agreed that thereupon it will act according to the wishes of His Majesty's Government." But we have seen a great many changes in Governments in some of the Dominions, and it is quite conceivable that there may be a Government which is not devoted to the bondholders and may not agree to what the Government here requests. We have had a great deal of difficulty over the Irish Free State and the whole question of an arbitral tribunal. We have had a great deal of trouble over Newfoundland—that again concerned bondholders. In that case I had to ask, at the time when debt was piling up, whether any step had been taken by the Dominions Office to see that the interests of the holders of previous loans had been preserved, and we learned that no such step had been taken. So there the position was not quite as simple as the right hon. Gentleman suggests.

I want to know whether there is any reality at all in this idea that disputes between parts of the British Commonwealth of nations should be decided by an arbitral tribunal? It may well be that South Africa has never accepted the proposition of an arbitral tribunal. It may well be that my information goes contrary to what the Secretary of State for the Dominions says, and that the Irish Free State and the Union of South Africa do not accept the arbitral tribunal, but every other day when questions are asked we get it from the Dominions Secretary that everybody is bound by the arbitral tribunal. We must put some questions to the Secretary for the Dominions, when next we are asking about the Irish Free State, to see whether he has the same view as the Chancellor of the Exchequer. What we are concerned about is to see that if there are disputes about bondholders we are not drawn into their quarrels. We have two difficulties going on already, and it looks as if the Dominions Secretary might produce a new one every year. It is about time that we considered very carefully exactly what we are doing.

There is a further point it it. It is all very well for the Chancellor of the; Exchequer to talk about the bondholders. We are perfectly well aware that this is a bondholders' Government, from the evidence of almost all the legislation that we have had. All these agreements have been designed to see, in various ways, that the bondholders are safeguarded. We are not desirous of being drawn into disputes on behalf of the bondholders. If the right hon. Gentleman is perfectly satisfied that the Government of South Africa accept this and do not want a tribunal, well and good, but we think that this kind of legislation is extremely dangerous, because it does not contemplate something which may very well happen. We do not desire to get ourselves embroiled with a third Dominion.

10.6 p.m.


I understand that under present legislation, the decision as to whether or not Colonial or Dominion legislation interferes with the bondholder is with the British Government. In the Bill, the decision as to whether legislation is prejudicial to the stockholders will rest with His Majesty's Government in this Kingdom. You cannot have a question going to arbitration unless there are two parties. The decision is put into the hands of His Majesty's Government, and that is agreed to by the Dominion. Members who talk about keeping the Empire together are really saying that it is impossible to make an agreement with any of the Dominions with any hope that the Agreement will be kept. That is the net result of their argument.

Amendment negatived.

Clause 2 (Short title end citation). ordered to stand part of the Bill.

Bill reported, without Amendment; read the Third time, and passed.

The remaining Government Orders were read, and postponed.

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