HC Deb 26 June 1934 vol 291 cc1089-100

I beg to move, in page 2, line 3, to leave out "class of any."

This Amendment meets a point made by the hon. and learned Member for East Bristol (Sir S. Cripps).


I am much obliged. The Amendment is not really to meet my point, but to meet a point which I thought would cause difficulty to the Government if it was not altered.

Amendment agreed to.


I beg to move, in page 3, line 42, after "country," to insert "to which the order applies."

I will not say that this Amendment meets a point of the hon. and learned Member for East Bristol (Sir S. Cripps), but that it arises out of an observation which fell from him.

Amendment agreed to.

Motion made, and Question proposed, "That the Bill be now read the Third time."

10.14 p.m.


I cannot help feeling that we all deeply regret that it has been necessary to bring forward this Bill to-day, and that circumstances of this kind have arisen. We on the Liberal Benches particularly regret that the Government have taken advantage of this opportunity, when dealing with something of an emergency nature in Clause 1, to include in Clause 2 something of a totally different nature which does not hang with Clause 1 at all. We think they have taken unfair advantage of the position they occupy in order to include a long-range policy which required a great deal of discussion. At the same time, regrettable as the Measure is, and certain as I think it is, if it comes into operation, to create chaos and dissatisfaction and harm to the trade of this country as to other countries, we have to ask ourselves, What is the alternative? Are we going to allow Germany for ever to walk over us, to break the Treaty of Versailles, and to manipulate the situation so that she goes free of all her obligations? I have heard in the course of the Debates on this Bill no suggestion of any alternative way of dealing with the situation. I cannot help feeling in the circumstances that it is reasonable for us to give support to the Government in asking for the powers that they require in Clause I to deal with the defaults by Germany. I am glad to see the Government taking resolute action in international affairs, and I only wish that on other subjects in regard to Germany a year ago they had been equally resolute.

What is the situation with which we are faced in this question? I believe it is true to say that Germany has deliberately created the situation which has made it difficult, if not impossible, for her to pay the interest on the Young and Dawes Loans. I think it is a case of fraudulent bankruptcy, because the repudiation policy has been openly boasted of by the Nazi leaders at home for home consumption on many occasions. Dr. Schacht has made no attempt whatever to hide the fact that his personal policy is repudiation and that the Nazi Government intended to do everything in their power to carry out the policy which they are now attempting to enforce. In a recently published Nazi official programme a promise of repudiation is made as its most vital point in the war against international finance and loan capital; and it is further stated that this policy has the personal support of Chancellor Hitler. In these circumstances, what possible alternative have we to the Bill which the Government are proposing? Are we to do nothing at all? That would be an impossible situation.

The first step towards repudiation took place in the spring of 1933, when the re- payments of credits to the United States and various European countries were made deliberately with the obvious purpose of reducing the Reichsbank reserves. No doubt Germany has had her difficulties, as all countries have. There is the trade slump, the tariffs that have been put up between all countries, quotas, currency restrictions, and the depreciation in the pound and in the dollar. Apart from that, I venture to say there are three other deliberate steps taken by the German Government which have created the difficulties which have made for the present depression. First, there is the well known fact that while they are unable, so they say, to transfer currency across the frontier for the purpose of paying interest upon this debt, they find no difficulty in transferring large sums of currency to Austria and to other countries for the purpose of carrying on propaganda, very often against the very foundation of the constitution of certain states bordering upon Germany. Is it not really impossible, in these circumstances, to accept what she now says at its face value?

Furthermore, is it not equally true that she has pursued at home a deliberate policy towards certain members of her own community which has created an inevitable refusal on the part of their comrades, associates and friends to purchase German goods? As a result of the brutal persecution carried out in Germany there has been a revulsion of feeling which in itself has prevented the development of her export trade and, indeed, has severely crippled it. She has only to reverse that policy and to behave like a civilised nation and she will have no difficulty in once more building up her export trade. Again, in the last few months we have noticed that Germany has found it possible to obtain currency for the importation of large quantities of raw materials such as would be very useful in the manufacture of munitions of war, forbidden to her by the Treaty of Versailles. In these circumstances, again, we must look with the utmost suspicion on the statement that she finds it impossible to pay. I do not think there can be any doubt, from what the Chancellor of the Exchequer has said and these real facts which I have ventured to go through, that the situation is one deliberately created, and that we must meet it in some way and devise a check to be placed upon Germany.

It is stated that she could retaliate on the British Empire, but is that really so? Most of the materials she buys from the British Empire are raw materials required for the purpose of her manufactures. For instance, 90 per cent. of her wool comes from Australia. If she were to transfer her purchases from Australia to the Argentine or somewhere else she would have to pay more, and I think it would cripple her internal industry. Therefore, I think there is not very much fear in the way of reprisals against the British Empire. But I would submit that really the problem we are dealing with in this Bill is not an economic one at all, but a political problem. It is difficult to defend this Bill on economic grounds, but it is possible to defend it on political grounds. I am speaking, of course, of Clause 1. I am opposed to Clause 2. I am making the case against Germany on Clause 1, which is the only one which deals with the German situation. Clause 2 may be desirable, in the opinion of the Government, but it does not touch the really vital and urgent problem of Germany which we are considering to-day. I believe that the only way to deal with the present rulers of Germany is to speak to them with the utmost firmness, and to be prepared if necessary to follow up that firmness by acts. I believe that is the only language that those people understand.


Send warships.


They have been able to walk through the Treaty of Versailles as regards disarmament; they are in a position to do pretty well what they like without anybody lifting a finger to stop them. I am glad to know that here, at any rate, something is going to be done to prevent a complete surrender to the present Nazi Government in Germany. Clause 1 of this Bill is in the nature of an economic sanction. I would very much rather it had been put into force as a result of a decision by some international tribunal, and I hope the time will come when we shall have international machinery capable of judging a case of this kind on its merits and giving a definite ruling as to what should be done. But we have no such machinery in operation, we have to act as a State on our own, and I cannot help thinking, in spite of all the difficulties and dangers on the economic side, that in the circumstances of the world to-day, and in view of the deliberate default of the Nazi Government, we are taking the only steps available and that have been brought to our notice in passing this Bill, and if necessary, though I very much hope it will not be necessary, putting it into effect.

10.25 p.m.


It is not often that I find myself in agreement with the hon. Member for East Wolverhampton (Mr. Mander). When economic issues arise, he and I are generally on opposite sides, but I am in complete agreement with every statement that he has made to-night. Like him, I look upon this Bill as a regrettable necessity. Any further argument on the subject was supplied in the speech of the Chancellor of the Exchequer yesterday. That speech confirmed all the impressions that I had about the attitude of Germany. A speech such as he delivered on the introduction of the Bill, as a responsible Minister of the Crown speaking of a great Power, was one of the most serious indictments of a European Power which has ever been delivered in this House, apart from the period of the War. This is a most important juncture in international affairs'. It is a serious reflection on the honesty of Germany that an exceedingly cautious Chancellor of the Exchequer, who weighs every word he speaks in this House, should find it necessary to say: I am afraid I must record that, rightly or wrongly, the creditors of all countries no longer feel the confidence that they did in the good faith of Germany."—[OFFICIAL REPORT, 25th June, 1934; col. 806, Vol. 291.] The present action of Germany recalls memories which we in this House would rather forget. As has been pointed out, that action has taken place at a most significant time when Germany is deliberately re-arming and when, upon a large scale, she is reconditioning her country. I saw in the "News Chronicle" the other day that Germany has just arranged for a five-year plan, during the accomplishment of which she intends to spend £160,000,000 on her roads alone. Just when she is re-arming and reconditioning, the moment is chosen for repudiation of the debt. It was well pointed out in the dispatch sent by the Foreign Secretary that there was no need for repudiation, and that the difficulties of Germany were being aggravated by the political and economic policy of Germany herself and that the sacrifices offered by the creditors could only be justified if Germany did all in her power to preserve and improve her foreign exchange resources. There is no evidence whatever that Germany is endeavouring to do that. While we have no right in any way to criticise the form of any European Government, we have a perfect right to animadvert on any internal policy which is reacting against ourselves. I suggest that the internal policy of Germany—her anti-Semetic policy—has a direct relation to her present financial condition. It is not possible for her to embark upon a policy of ostracism towards the great Jewish race without putting in operation some kind of boomerang which will recoil upon the German people themselves, and I have not the slightest doubt that the policy which the Nazis have adopted towards the Jews in Germany will have the most disastrous results on the present regime. At this late hour I do not intend to delay the House, but I could not help remarking, in the Debate to which I listened yesterday, that some of the speakers who opposed this Bill had not a word to say in condemnation of Germany. The hon. and learned Member for East Bristol (Sir S. Cripps) confined his observations very largely to an attack upon the capitalist system, which in his mental outlook is very like what the head of King Charles was to Mr. Dick. He seemed to forget what the capitalist system has accomplished, and the enormous burdens that it has borne in the last few years; but I am riot going to touch upon that question, particularly now. My hon. Friend the Member for Bridgeton (Mr. Maxton), who took part in the Debate, had nothing whatever to say in condemnation of Germany—


That is not correct.


I always speak subject to correction, but I have not the slightest recollection that he had anything to say in condemnation of Germany.


All I can say is that you have a bad recollection.


As a rule my recollection is extremely good, and I am quite willing to pit it against that of the hon. Member. But I was surprised at the comparative unfairness of my hon. Friend the Member for Bridgeton. I am quite aware that what politics has gained the law has lost in my hon. Friend, because he possesses many of the qualities of a great advocate. One quality he never fails to exhibit, and that is the minimisation of points which tell against him, and the emphasis of points which tell in his favour. For that I do not blame him. But yesterday, in speaking about the German default and the position which this country has been forced to take up, he devoted himself almost entirely to an attack on what he called the rentier. Upon the devoted head of the rentier he poured all the vials of his wrath; he was dispised and rejected. Who is the rentier to whose rescue we are alleged to have gone in this Bill? The rentier is generally a respectable man or woman who has a modest competency in life. The hon. Member for Bridgeton said—I gave him notice that I was going to refer to his speech to-night— Here, however, we have the rentier, the moneylender, the fellow that sits and draws interest, as distinct from the man who goes out and tries to make something."—[OFFICIAL REPORT, 25th June, 1934; cols. 849–850, Vol. 291.] The man who goes out and tries to make something and the rentier are very often one and the same man. A man who has spent a long life in business has saved a certain amount of money and invested it and becomes a rentier.


This is really more suitable to a Second Reading Debate.


I will not follow it any further. I may have an opportunity to refer to it at another time in competition with the hon. Member. I am extremely glad that the Government have taken this bold, decisive step in introducing this Bill which has the almost unanimous support of the House.

10.36 p.m.


The Government are to-night again engaged in a popular Measure. If you took a vote of the people of this country I should say almost 99 per cent. would approve of what you are doing. But that is no reason why responsible people in the House of Commons should not exercise their right of stating a case though public opinion may be against them. This is not the first time that Germany has defaulted. France has also defaulted. By the manipulation of currency countries have defaulted in the past, possibly not in the open straightforward fashion they are now doing, but by making the franc far less valuable than it was before, the same results were gained. I do not read the foreign Press. I do not travel. I am one of the few Members who have never been outside these shores. But I read the other week for the first time in my life American newspapers charging this Government with default on our payments. It may well be, as was suggested by the right hon. Gentleman the Member for Newcastle-under-Lyme (Colonel Wedgwood), that this is tantamount to a declaration of war against Germany. There is a terrible feeling against Hitler. The hon. Member who said that my hon. Friend the Member for Bridgeton (Mr. Maxton) had not a word of condemnation for Germany, if he re-reads his speech, will find that, after a moving appeal by a Tory Member, he said that that appeal, moving and eloquent as it was, would find little response because of the horrible treatment the German rulers had given to the common people there.

The real reason for the popular support of this Bill is not that the German nation has defaulted. It is not the rights and wrongs of the problem, but that the methods of the rulers in Germany are hated and despised by almost every human being in this country. It is said that it is to collect for the Dawes and Young Loans, and that the British Government have given a guarantee. If that be the case, why was it that the Government raised the Young Loan and the Dawes Loan? If it were Government money, why did not the Government raise a loan in the same way as they raise loans for their every day work and pass that loan across to Germany as Government money? But the money was raised distinctly at exceptionally high rates of interest. Why? Because it was not a question of lending it to the British Government, but to a foreign Government. To-day those people, who like Shylock, are demanding from a ruined Germany rates of interest which are a disgrace, are finding that their investments at a high rate of interest would have been much better at a lower rate of interest in this country. We have to pay the price. We may be right or we may be wrong, but great masses of comparatively poor people in Germany who have no more say in the ruling of the German nation than I have, are the shuttlecock.

The dangers are not here, and they have not ended to-night. I see the danger of war. You cannot start an economic war without the other kind of war being just at hand. It is not far away from the feud of individuals. It starts in this way. It gathers momentum as the time goes on, and I see the beginning of a terrible clash which may well end in human slaughter. I say, speaking for the comparatively few for whom I speak in this House and not for any great numbers outside, even if it be the last thing I do in this House, that I look at this Measure with fearful forebodings and with almost the desire that this sort of thing should not be done. I think that those in charge of this Measure might have tried a higher statesmanship and have negotiated and tried something else. I see a danger of human slaughter emerging, and it is because of that that I have intervened in the Debate.

10.43 p.m.


I desire to say only a few words to the House, but there are two things I wish to say. The first is to express appreciation of my hon. Friends and myself of the manner in which the Chancellor of the Exchequer and his colleagues have conducted this Bill through the House to-day. They have shown a most conciliatory spirit. They have made concessions on a number of points, some of them of real importance and substance, and we should like to pay our tribute of gratitude to the Government for the attitude they have adopted. The second thing I wish to say is to explain more clearly the reason why we on these benches entertain a strong objection to Clause 2 of the Bill. Clause 1 of the Bill has attracted the most attention but in the long run I believe that Clause 2 will be the most important. So much the more attention has Clause 1 attracted that the hon. Member for Gorbals (Mr. Buchanan), who has just made an eloquent speech, spoke of Clause 1 as if it were the Bill, and, while continually referring to the Bill, he dealt only with the aspect of the Bill which touches the dispute with Germany on account of her default.

The necessity for Clause 1 we acknowledge and, therefore, we did not vote against the Second Reading. But Clause 2 deals with a wholly different matter, and we dislike it intensely because we are convinced that the whole policy it represents is on wrong lines. The advocates of Clause 2 say that if you are in a war you must fight or be beaten, and that if you are to fight you must have weapons. That is true and cannot be gainsaid, but it is the business of statesmen to obviate war whether in matters of trade or in matters of military action. The world is now beginning to realise, certainly with regard to armaments and also I think in regard to trade, putting the question on the lowest level that in modern civilisation the gains of victory are less than the gains of peace. In military affairs the whole world is beginning to realise that the gains of victory, whatever they may be, are less than the gains of peace; and we shall soon have to recognise the same truth with regard to trade wars, that the gains of victory are less than the gains of peace. Each country always declares that the other country is the aggressor. In every Parliament every Government says that they are compelled to raise their tariffs and adopt quotas because of the action taken by their neighbours. That is common form.

The right hon. Gentleman the Chancellor of the Exchequer yesterday men-tinoed by way of parenthesis that we have not hitherto imposed quotas in this country with the exception of a few cases of agricultural products, where quotas have been imposed for an entirely different purpose. Yes, but those few cases of agricultural products in the French Parliament are made the main reason for the action they have taken against Great Britain. Eloquent appeals of the French Government to French deputies to support measures against Great Britain are the result of the trifling quotas which the right hon. Gentleman mentioned as though they were of little importance. What is one man's parenthesis is another man's peroration. Each country in turn regards the action it takes against its neighbour as unimportant, while the neighbour regards it as the main reason and justification for the action it takes. The consequence is that these measures of retaliation have not proved successful in achieving the result for which they have been designed. The Chancellor of the Exchequer in his Budget Speech of this year made observations which I have quoted before and which must be quoted over and over again until they have been driven into the mind of hon. Members of this House and of the whole electorate. Speaking not on some casual or unimportant occasion, and making some not unconsidered observations, but on the principal occasion of the year on which the Chancellor of the Exchequer appears before the nation in his Budget Speech, always carefully prepared and fully considered, the right hon. Gentleman said: The channels through which our foreign trade formerly flowed so freely are still blocked and, indeed, the passage seems to become more difficult as the spirit of economic nationalism continues to spread. We see new obstacles to international trade continually raised. He did not say that "after three years of effort through the weapon which you put into our hand we have been able to lower obstacles to our trade and get a freer flow of trade all over the world." He comes to Parliament and says that, as a result of three years' work, the position is worse than at the beginning. What else does the right hon. Gentleman mean when he says: The passage (of trade) seems to become more difficult as the spirit of economic nationalism continues to spread. We see new obstacles to international trade continually raised."—[OFFICIAL REPORT, 17th April, 1934; col. 904, Vol. 288.] That means, in effect, that he has written across three years of effort the word "failure." The only way in which a remedy can be found is for a general measure of economic disarmament to be adopted. The only opportunity given to the world to disarm economically was at the World Economic Conference, and that opportunity was defeated because the British Government came forward and said that, while they were not opposed to tariffs, they were opposed to excessive tariffs; though not opposed to quotas, they were opposed to quotas arbitrarily imposed. Those were the words of the leader of the British Delegation. That meant that our tariffs were right and those of other nations were excessive; our quotas were correct, but those of other countries were arbitrarily imposed. How was it possible under such conditions to arrive at international agreement? Quotas breed quotas. While we recognise that you must have weapons in this war, we think this policy wrong from the beginning, and that Clause 2 of this Bill to give fresh weapons to the Government is the aftermath of the breakdown of the World Economic Conference—a breakdown largely due to the policy of His Majesty's Government.

10.53 p.m.

Lieut.-Colonel Sir WILLIAM ALLEN

There are still a few minutes left, and, really, after the speech we have just heard, particularly when the word "failure" was used, I must say something. It is not so long since the Chancellor of the Exchequer introduced a very satisfactory Budget. I do not think the right hon. Gentleman who has just spoken could describe the last year's work on the finance of this country as a failure. I wished to take some exception to the comparison made by the hon. Member for Gorbals (Mr. Buchanan) between the default of this country and the default of Germany. How can there be any comparison? That country was responsible for the most brutal militarism the world has ever seen, and all its horrible results, in which 12,000,000 of the flower of the world were slaughtered and 20,000,000 injured. To compare that country with this is beyond my comprehension. In addition, this country has forgiven a great many of its debtors and reduced its armaments. Germany, on the other hand, we know perfectly well, is arming and spending money on war implements, rather than using it to pay debts. There can be no question of comparison between this country and Germany, the country that violated the neutrality of Belgium. As an Ulsterman, I would like to take up the cudgels for this country.