HC Deb 03 June 1938 vol 336 cc2471-501

1.31 p.m.

Mr. Lansbury

I am rather sorry that I felt obliged to raise the question of economic appeasement on the Motion for the Adjournment this Whitsuntide, but I asked permission to do so because I thought that this would be a better atmosphere in which to discuss this question than during a Debate on the Spanish or Chinese situation or upon armaments generally. Although I think my hon. and right hon. Friends above the Gangway will agree very largely with most of what I say, I wish to explain that I speak only for myself, my constituents and the pacifist groups with which I am associated in this country. I should have liked the Prime Minister to be present to reply, but I understand that he has important public business which prevents him from attending, and therefore none of us can complain.

I wish at the outset to say that I cannot believe that any hon. Member would, for a moment, object to almost any terms of peace if they could be secured, and secured at once. All of us agree that if the Government, the Prime Minister, the Foreign Office or anyone else can do anything, apart from the Measures which I think are necessary, to bring about permanent peace, or even temporary peace, in Europe, we shall all be devoutly thankful. I wish to call attention to the fact that the late Foreign Secretary, speaking in the House, once said that he would go 99 per cent.—I think he said 9½t.—for peace at any price, because of the catastrophe that would result from a European war. When I heard him say that, I was reminded of a statement that was made by the late Professor Freeman many years ago, that the greatest of British interests is peace. I think he would have said that had he been a German, a Frenchman or an American. The over-riding thought of mankind must be to bring about peaceful relations between the nations. since the House reassembled, we have had a strenuous time, and almost every day at Question Time I think the House, pacifists and others, must have been terribly depressed, and almost heartbroken, by the fact that so much time has to be taken up in dealing with war and its consequences. I think there could never have been a more depressing debate than the one which took place this week on air-raid precautions. I do not intend to argue about those things this afternoon, for my views on them are well known; but the proposition that we should pile up armaments for the next two years or so in order to become powerful, above all others, and then be able to enforce peace is, in my opinion, simply a chimerical delusion.

In South Wales last Saturday, at a tremendous gathering, I listened to the oratorio "Samson" and as I heard the end, telling how Samson pulled down the pillars of the temple, destroying himself and his friends as well as his enemies, I had a vision that perhaps this piling up of armaments might be meant in some such way as that. Europe and Asia are too full of combustible material for any of us to acquiesce with anything like contentment in the present situation. I may be wrong, but I think I am right—I never felt myself more right in all my life, but we are all human. A number of us—not a very large number—would vote against armaments every time, if we had the opportunity. There is a consensus of opinion, not only among pacifists but among those who support armaments, that the result of our accentuation of armaments may well be that the civilisation of the world as we know it will be smashed. No one that I have heard, in or out of this House, or to whom I have spoken throughout the world, says anything different. If hon. Members feel obliged to go on with what the Prime Minister termed the madness of armaments expenditure, and if they feel that they must do it, I ask them to consider whether, side by side with that, it is not possible to make some offer along the lines that the only alternative to war is the economic appeasement of the world. There is a consensus of opinion in that direction also.

I was brought up to believe that the economic condition of a nation determines largely the class relationship within that nation. I am now quite confident that although dictators and emperors, and some democracies, may become terribly Imperialistic, ultimate peace can be maintained only when nations are willing to co-operate in sharing the raw materials, the territories and the markets of the world. When it was my good fortune to win in the Ballot in this House, my Friends above the Gangway and I drafted a Motion, and raised the whole of this question in February, 1935. The Government were then very sympathetic, as they had been in the previous Parliament, but they said that the time was not ripe, and that they must have time for further inquiry. When I went abroad I received the same answer that people must have time for preparation. Three years have passed since that February, and nearly six years since the World Economic Conference, in 1932. From that Box I appealed for an effort to be made to reconstitute that conference in another form. The late Mr. Ramsay MacDonald, speaking in reply said what he had previously said, that it was necessary to tackle the economic situation of the world if we were to have peace.

We must not ride off now on the proposition that we must take a lot more time. I met many diplomats abroad, foreign and British. In my ignorance I have probably said a good many hard things about ambassadors and others, but having seen and talked with foreign and British diplomats abroad, I am not at all sure that a conference of those gentlemen would not yield much better results for the future of the world than the sort of conference that has been held. They understand each other, and, what is of greater importance, they understand the conditions in the countries in which they serve. since 1936, when I met M. van Zeeland in Brussels, we have had an inquiry throughout Europe and America. I am not saying that I support everything that M. van Zeeland has said, but in general, I think, everyone who has studied his report will agree that it forms a basis on which discussion can commence. I would call attention to statements made in that connection by the King of the Belgians before the report was published. People like myself who are now a very small minority in this House, occasionally get smitten with a sort of self-conscious inferiority in regard to the rest of the Members, and it is hard to persuade ourselves that we are right. In this case, I am glad to say that it is not so. I have seen all the important Prime Ministers and not only have they agreed with me privately but they are beginning to agree publicly.

Here is what the King of the Belgians wrote to M. van Zeeland—and any Socialist might have written what I am going to read to the House: Neither the lowering of tariffs nor any partial measure can alone put an end to the confusion which is threatening peace. If we really wish to avert war and bring mankind back to a more peaceful frame of mind we must have the courage to tackle the economic question in its entirety and to solve the great problems which menacingly confront humanity, distribution of raw materials, distribution of the means of exchange, international distribution of labour and equilibrium between agricultural and industrial nations. I think that is very important. On hundreds of platforms I have said those things, and I have tried to say them once or twice in this House. The King of the Belgians goes on: I cherish no illusions as to the difficulties "— neither do I— which the realisation of such a vast programme involves. Nevertheless, I am convinced that the moment is favourable for the attempt. We cannot conceal from ourselves that whole sections of the human race are no longer in sympathy with each other. This is what I urge on the Minister to-day: If one first step can be taken to bring them together again, we shall be offering to humanity especially to the East, otherwise than by words, proof that the West values above all immediate considerations of a material nature, the spiritual strength which comes from a genuine feeling of brotherhood. That was the King of the Belgians, last July. In the autumn His Majesty came to the City of London, was entertained in the City, and made an eloquent appeal to the citizens of London, as being citizens of this great Empire, with more power, financial and otherwise, than any other set of men in the world. He made a fervent appeal that something should be done, and practically that appeal has gone unheeded. Then another voice has been heard just lately. On 9th May the Press of this country reported that Mr. Cordell Hull, in a broadcast message to America on the eve of the meeting of the League Council, said he was empowered by the President to say: Co-operation in the solution of economic problems offers one of the practical approaches to the task which the world must undertake. There is a growing realisation that no nation, no group of nations, can enjoy prosperity when a large part of the world is in economic distress. I think that every one of us must agree about that. Between the statement of the King of the Belgians and the present moment this van Zeeland report has come out, and a writer in the "Times" this morning, rather damning with faint praise the proposition of the Liberal Opposition to raise this question again on a Supply Vote, says that the dust is on the shelves and on the report. I think that is a most distressing fact, if it is a fact, because I think my countrymen would join with me in saying that M. van Zeeland has performed a very great service to the world, first by undertaking the mission, and then by bringing forward this report. I repeat that he will not expect any of us to accept it just as it stands, but there are one or two things that he says to which I would like to call the attention of the House. On page 42 he says: We must…admit the considerable difficulties which cumber the ground, and then he points out that on the political plane the reasons for hope appear to be slighter than at any moment since 1918, but on the next page he says, as I say, having read him—and I say it with more emphasis that I otherwise would have done—that if you must arm, you ought to put some one of the Government Departments—I think it should be the Foreign Office, whose business it is to keep peace—to deal with this question, because he goes on to say, what every thoughtful person would say: But, taking it all in all, it seemed to me that such an attitude— that is, an attitude that nothing can be done because of the world situation— would have been sterile, and even dangerous. One has never the right to renounce action or, at any rate, to renounce attempted action. No effort is every completely lost, even if it does not succeed all at once. On the other hand, the persistence of a general situation, which is confused and bristles with contradictions, would incur the risk of very serious consequences, both with the political and in the economic order. He also says something which I think it is worth the while of all of us to consider, and it is this: International trade is not an end in itself, it is only a means directed towards an end. This end cannot be other than the improvement of the standard of life of the masses, the increase of the well-being of the population. Under our present organisation this end is pursued by national entities. That, of course, raises the whole question that he raises in the beginning of the report. I want to quote once more from M. van Zeeland, because it is very important. The argument may be used against me this afternoon—it has been used in the House when I have spoken during other debates—that it is useless to think that you could allow any nation that is living under totalitarian conditions to prosper in trade because of the fact that it would become more aggressive. M. van Zeeland has been arguing about financial assistance, and I think that he meets that point very well indeed when he says, on page 48: Thus one can understand the preoccupation of those who fear to see the financial assistance, the credit facilities, or the facilities for obtaining supplies which would he granted in the execution of the present programme of action— that is, his proposals for action— diverted from their object to serve warlike ends. Guarantees would have to be provided in this respect, and such guarantees are necessarily political in their nature. Again, is it possible to provide an economic solution for the difficulties with which certain national economies will be faced when the point of saturation has been reached in their rearmament policy without evoking the problem of the limitation of armaments? Conversely, it also appears to be true that any concerted policy for the limitation of armaments would require, if its application were not to be obstructed, to be accompanied by economic measures which would also have to be internationally concerted. Over and over again my hon. Friends above the Gangway in the last Parliament emphasised the fact that you could not expect disarmament in the world unless you secured economic disarmament, and one right hon. Gentleman, speaking during a Debate in this House a few days ago, warned the House that we were now embarked on an economic war, which was far more serious for the future of this country than any other kind of war might be. As I listened to that, I thought it was a statement of despair, because if it means that the propositions here, or the Socialist propositions, or any other propositions put forward for economic appeasement are all hopeless and that we are helpless in the matter, I can see nothing for the world except ruin, and complete ruin at that.

M. van Zealand says something else. He winds up his suggestions in this way: I have intentionally refrained from entering into details…On most of the points which I have mentioned, prolonged studies have been undertaken; plans for putting them into effect could be quickly drawn up with the assistance of specialised organs such as the Economic and Financial Committees of the League of Nations, the Bank for International Settlements, the International Chamber of Commerce, the International Institute of Agriculture, etc. I hope the House will forgive me for making so many quotations from the report, but I am anxious to bring out the fact that M. van Zeeland has endeavoured, first, to pose the economic questions that are before the world, plus the territorial and other similar questions, and then has asked that an effort should be made to bring the nations round the table in order to discuss how the proposals that he has made should be applied.

This House will, sooner or later, be forced to face this problem, because we are living, as we are often told in regard to our armaments, in an entirely new world. We are certainly living in a new economic world. Is it not an amazing thing that we are in trouble in Jamaica because we cannot get rid of the sugar that the labourers and others there produce, while there are myriads of people who need the sugar? Is it not an extraordinary thing that in America, that great self-contained continent, there are myriads of people unable to get their daily bread? Is it not an appalling picture which someone with a greater power of descriptive language than I have could paint, that we see in South-Eastern Europe? Almost from the Baltic to the Black Sea right across Europe, there are masses of people suffering semi-starvation and destitution. Is it not also something to remember that the problem in Czechoslovakia, although it is largely racial, is also a problem of economic welfare? I have seen reports on the Sudetan area by impartial investigators, reports which, I think, have gone to the Foreign Office, in which it has been pointed out that nearly all that district has suffered because of the economic blizzard which smote Lancashire and other parts of this country. If you go into Poland, travel where you will, you will find the people suffering terrible destitution. I have come back from talking with ordinary people, with dictators and democrats and statesmen of all kinds, and with clergy and educational people.

I have come back obsessed with the belief that there is no way out unless nations which are like our own, and especially our own, unselfishly take a lead in asking other great nations to join in giving assistance to uplift these people through the development of their own countries. When I was in Poland discussing the conditions with some of the Ministers, they were saying how many of their people must be migrated. I could not help asking them, "Is Poland overdeveloped?" Of course it is not. Is any part of South-Eastern Europe overdeveloped? Of course it is not. But what is standing in the way? It is this horrible nightmare of war. They spend their substance on armaments, and each defends it from the same point of view. They always come back, even the military chiefs, to the one statement, that if they could only solve the economic problem and get rid of the starvation of so many of their people, neither the problem of bloody revolution by the Left nor of bloody revolution by the Right would arise. Do we not know in our own country that when people are crushed by poverty, when they see no hope, they turn hither and thither, first to one thing and then to another, in a vain hope to find a way out?

I did not come here to-day to say that I have a special gilded pill that will cure an earthquake. I am sure that if M. van Zeeland could speak in this House he would not claim that his propositions contain everything that is necessary, or that everything he has proposed could be accepted straight off. What he would ask for, I am sure, and what I am asking for, is a perfectly simple thing—that the Government shall tell us in clear, straight language that this report is not going to lie and rot in the archives of the Foreign Office or of the Board of Trade, but that it will be considered. It is to the credit of Great Britain and France that they asked M. van Zeeland to undertake the inquiry, but that credit imposes a tremendous responsibility on those countries to see that the report is dealt with. Although most hon. Members profoundly disagree with me about pacifism, I do not believe that any one can disagree with me that fundamentally this is a problem of how men and women can get their living in relation to one another, and, chief of all of how the world is to meet the new situation in which there is abundant power to produce and abundant demand if it could be made clamant, and yet myriads of people starving. If a tithe of the energy, knowledge and enthusiasm that are given by the nations to making preparations to destroy one another were given to the economic problems that face us, we could save the world from war, and bring peace for the first time throughout the length and breadth of the world.

2.4 p.m.

Mr. Arthur Henderson

I am sure the House will recognise that the right hon. Gentleman has performed a public service in raising this important question. The need for a policy of economic appeasement was never more necessary than at the present time. The word "war" is on the lips of men and women in every part of the world. The whole world is feverishly re-arming, and last year we were told that the world spent more than £2,400,000,000 on preparations for war. That policy, in my humble opinion, can end only in bankruptcy or catastrophe. But however much we may realise the futility of armaments as a means of solving world problems, it is equally futile not to realise that the desire for national security is the mainspring of the armaments' policy which is being followed at the present time by almost every country in the world. The tragedy of the position lies in the fact that the more one country intensifies the process of arming itself the more other countries follow suit, and so, relatively, no greater security results. To my mind what it necessary is that people should realise that the most effective method of attaining security lies in removing the causes of war, and that, I believe, can only be achieved by securing political and economic appeasement. Wars are not brought about by mere lust for more territory. An examination of history will prove that in most cases they have been due to a desire on the part of nations to secure a higher standard of living for their peoples and a greater share of the wealth of the universe.

As my right hon. Friend the Member for Bow and Bromley (Mr. Lansbury) has said with regard to central Europe, which to-day is perhaps the chief danger spot, a good deal of the political unrest which exists there is due to economic causes. When I recently visited Hungary and Czechoslovakia the impressions which I formed were similar to those of my right hon. Friend. I discovered in the Sudeten territories of Czechoslovakia conditions akin to the conditions in our own distressed areas, and until the economic conditions had become acute, as they have to-day, the political claims put forward on behalf of the German inhabitants of those territories were much less vociferous than they are at the present time. In Hungary large masses of the peasant population are right down to the margin of subsistence. In Poland millions of Jews are living under appalling conditions, and they constitute a problem which in my submission has become an international one, because apparently the Polish Government are unable to deal adequately with it. I suggest that if these people could have reasonable economic prosperity, political problems, whether they be problems of autonomy, boundary revisions or what not, would quickly settle themselves. Nor do I believe that the new policy of autarchy, or economic autonomy, which has been established in Germany and Italy would prove to be an insuperable obstacle to economic appeasement along the lines suggested by M. van Zeeland.

If, as suggested by M. van Zeeland, economic collaboration could be shown to produce better results, I believe that the peoples of Germany and Italy would quickly end the system of autarchy in favour of international economic cooperation. The van Zeeland Report is valuable because it contains practical proposals for securing economic collaboration on a wide basis. Tariffs, quotas, exchanges, raw materials, colonies, immigration—all these matters have been clearly dealt with by M. van Zeeland. He makes concrete proposals in respect of each of them, and I suggest that they are worthy of the very serious consideration of all the Governments of the world. In his report M. van Zeeland urges that the representatives of the principal economic Powers, the United States of America, Great Britain, France, Germany and Italy, should come together to take soundings and prepare the ground. Will not His Majesty's Government respond to that appeal? Will not His Majesty's Government take the initiative with this object in view? I sincerely trust that the vivid description of the writer in the Times "this morning will not be borne out by the facts of the case.

As my right hon. Friend has indicated, this matter has been under consideration for some years now. Apart from the report of M. van Zeeland, the Economic Committee of the League of Nations made concrete proposals two or three years ago for dealing with the obstacles to international trade, but nothing has been done with respect to either of those reports suggest that if, side by side with their policy of rearmament, His Majesty's Government would intensify their efforts to secure the removal of these obstacles to international trade, and bring about a measure of economic collaboration and appeasement, they would do much to remove the dangers of war. I believe that this matter is of vitally urgent importance, and I hope that the Under-Secretary of State for Foreign Affairs will be able to give the House some indication that His Majesty's Government are not going to place this report in the pigeon holes of the Foreign Office and leave it there.

I certainly endorse what my right hon. Friend has said, that if the Governments and peoples of this country and other countries would only apply one-tenth of the energy that they are using in preparing the instruments of war, which bring death and destruction in their wake, to this problem of economic and political appeasement, we should be able to achieve definite results. I am not going to suggest that the responsibility rests alone upon His Majesty's Government. I realise, as we all must realise, that these problems can be solved only on the basis of co-operation among all the nations of the world, but it does sometimes pay to give a lead, and I believe that the British Government, if they are able to secure a trade agreement with the United States of America, will enable a start to be made on the solution of the problem. I hope the Minister will be able to give the House some idea of the prospects of securing agreement with the United States, but even though that be not possible I hope he will be able to give us some real assurance that the Cabinet are applying themselves to this very important problem.

If I may again refer to the position in Central Europe, I believe that the nations of Central Europe are waiting for a lead, particularly from this country. I believe that if this country, in collaboration with Germany and Italy and France and Russia would come together and sponsor an economic conference with a view to the establishment of a Danubian Economic Federation, that that would be a constructive effort which might have a very decisive effect upon the political situation in Central Europe. I believe that if we can secure economic appeasement it will lead to political security, and if as I believe, it is the fundamental desire of every nation to secure political security, then they are more likely to obtain that by political and economic appeasement than by the construction of colossal armaments. I hope, as a result of this Debate, that public opinion will be told by the Government spokesman that some constructive effort is about to be attempted by the Government.

2.17 p.m.

Mr. Loftus

The right hon. Gentleman who introduced this subject this afternoon stated that at times he and his small group of pacifist colleagues were inclined to feel an inferiority complex. There is no justification for such a feeling. Throughout all sections of this House we respect and admire the enthusiasm, energy and sincerity which he puts into his advocacy of peace. I myself do not share his pacifist opinions. I feel that war, abominable as it is, may in the last resort be necessary to defend certain fundamental human rights. But I do not claim that that feeling is superior to his, it may well be that it is inferior and that I cannot rise to the heights of that extreme but logical pacifism advocated by the right hon. Gentleman. I think the right hon. Gentleman's interventions on this subject do fulfil a very useful function. Man is an adaptable animal and can adapt himself to any conditions, and there is a danger to-day that as we move forward into the modern world, this insane and terrible world, we might gradually accustom ourselves to regard such conditions as normal.

That is a danger we must guard against, and the interventions of the right hon. Gentleman serve to remind us that the conditions of Europe to-day are an abomination and that we must never rest content and accept that as part of the normal order of things. In this country we are only beginning to feel the burden of rearmament. But if the world goes on piling up armaments—and I support the rearmament policy of the Government—the divergence of productive energy to the increasing of armaments must lower the standard of life of all peoples. The piling up of debt consequent on that may well force us towards a closed economy in this country. We even see the beginning of it to-day.

The history of this subject, like so many histories, is a record of lost opportunities. At the end of the War there was in existence a system among the Allies for the pooling of supplies of essential materials. That system was an example of what the future organisation of the world should have been, namely, the organisation of resources for the common use of the nations of the world. It is a tragedy that the League of Nations did not adopt such a system, and it was not for want of advice because Italy, when the League was set up, begged that the rectification of these economic grievances should be incorporated and dealt with in the organisation of the League. That was rejected at Versailles. How different the history of the world, and of Italy herself, might have been had her request been granted. While I do not believe that economic factors are the only causes of war, I do think they are a very potent cause, and economic pressure beyond a certain point must cause war.

I dealt with this matter in this House four years ago, and I took then the case of Japan. In the case of Japan, with a crowded population, using every yard of soil capable of growing food for growing food, with the population rising by nearly 1,000,000 a year, an elementary mathematical fact is evident. It is, that if they cannot grow food and use their land to the limit, they must import more food in order to maintain the standard of life. If they cannot do that, the standard of life must go on falling until a certain point is reached where any government of any kind will try foreign adventure rather than risk civil war at home. We say, of course, that these discontended nations can purchase in the markets of the world. That is true, but have they every facility for paying for the materials they want to purchase? I suggest that increasing restrictions prevent them from buying those materials that are so essential for national existence. I do feel that there is a tendency in this House and elsewhere to regard all these restrictions on trade as the causes of the breakdown of international trade. I think that is a mistake. I suggest that all these restrictions such as quotas, currency control and tariffs are symptoms rather than causes, and we must get down very deep to deal with the causes if we are to cure the symptoms. Admirable as is the van Zeeland Report, it does not go deep enough. There is a tendency in the first part of the report to try to re-establish pre-War conditions in the international economic system. I do not believe that that is possible in the world of to-day.

Take the case of Germany, a country faced five years ago wth 6,000,000, unemployed. To get those people to work the government had to extend currency and credit. The government did so, and I hey practically abolished unemployment in Germany. But they could only do so provided they had a closed economy. If they had allowed the free functioning of international exchange the mark would have depreciated. We have to face this fact to-day, that if Germany abolished or greatly diminished her restrictions, the mark would collapse in the money markets of the world. Germany can only maintain that great internal activity and full employment which she has at present by those restrictions, and it is a very difficult problem for a country with a closed economy like Germany to move without wrecking its internal economy.

I shall not attempt to go into the details of the van Zeeland Report, as I understand there is another subject to be discussed on the Adjournment, but I wish to put forward a few suggestions in outline. I believe that we can never successfully tackle this problem of getting international trade going freely unless we recognise the fundamental fact that, in order to do so, it is necessary to have internal prosperity in countries. If there is in any country restriction of purchasing power there follows restriction of the home market. What happens? As the home market contracts, there is fierce competition for it and every home manufacturer demands increased tariffs, so as to secure the home market. But if there is an expanding home market, then the home manufacturer does not require such a high tariff, there is an ample market for goods and that market provides for an increasing flow of imported goods.

To sum up, I would put forward six points which I venture to suggest are worthy of consideration. First, if we are to attempt to restore world prosperity we must get the international price level right, as regards raw materials. The producers of primary commodities are two-thirds of the population of the world. They had their purchasing power destroyed seven years ago by the fall in prices. We have to get that price level right and I think possibly it could be done to a great extent by international action. The second point is one of enormous difficulty. Incidentally, may I say that I admit that the difficulties before us are vast. But we have to face them because the cost of not facing them is so great. My second point is that we have to remove from countries which are at present living more or less in closed economies, the fear that, if they remove restrictions, their currencies will be battered down and broken in the money markets of the world. That is an immensely difficult problem.

My third point is one to which I have already alluded, namely, the question of access to raw materials for all nations and of enabling them to pay fully for their requirements by the export of their goods. The fourth suggestion which I would make is that in order to restore the economic health of the world the creditor countries must be prepared to receive interest payments, in full, in the form of imported goods. Fifthly, I suggest that we must abandon the nineteenth century idea of international trade, which was that of a struggle to secure a favourable balance of trade, to export capital and to hold the debtor countries in tribute for ever. Today I feel that we must base international trade on the idea that the only object of exporting goods is in order to import goods—that when any nation exports goods, it has to import goods to pay for them. Finally, there is the point which I have already mentioned, and that is the necessity for internal prosperity and increased purchasing power in all countries because that is the only possible basis for a revival of international trade.

I felt it incumbent on myself to intervene in this Debate, and I thank the right hon. Gentleman for having brought up the subject. I would say, in conclusion, that when we look round the world to-day and think of the human suffering all over the world—the actual suffering and shortage of food in such countries as Italy and the mental suffering caused by the increasing fear of war—we must feel, to whatever party we may belong, that it is incumbent upon us, first, to study these terribly difficult problems and never to despair of arriving at a solution which will improve the lot of the world, and, secondly, to seek for reconciliation among all peoples and all nations. I support the Prime Minister because I believe that he has broken away from the drift which we have been in during recent years and is seeking to establish peace among all peoples.

2.33 p.m.

Colonel Wedgwood

There is one practical Measure before the Government at the present time for carrying out the ideas of the van Zeeland Report. That is the trade treaty at present being negotiated between this country and the United States. Those negotiations are the outcome of the van Zeeland Report and they are, in a practical way, showing the nations of the world that the two sensible peoples in the world can come together with the object of starting an appeasement policy which will get us back a little way in the direction of freedom. This Debate has gone beyond rather wider than the van Zeeland Report. I think the right hon. Gentleman the Member for Bow and Bromley (Mr. Lansbury) understands very well that all Members in this House on both sides are pacifists. We all want peace. We are mostly not advocates of "peace at any price," but peace at any price except the loss of honour, or, as I would prefer to put it, they want peace at any price except the sacrifice of freedom. I think the difference between us arises really on the question of what is the best way to secure peace.

I do not think, and I do not believe that the majority of the country think, that you can secure peace now by disarming. Our method is collective security in order to enforce the rule of international law, and that depends upon having an adequate force and adequate allies to back the policy and contribute to the force. That is the alternative policy to disarmament, and it is the only policy which will secure peace and lead up to eventual disarmament.

Speech after speech in the Debate has turned on the question of appeasement—political and economic appeasement. Do let us clear our minds of mere words. Who is it whom we want to appease, and is the appeasement to be carried out at the expense of others? If there is a chance of appeasing international jealousies, of appeasing peoples, there is a great deal to be said for it; but if it is merely going to be repeated frightened attempts to appease dictators, it is not a policy which will lead to peace, but merely to further demands from the dictators. Everybody knows that that is true.

Even if appeasement were in the direction of settlement, do let us consider at whose expense that appeasement is to be made. We hear a great deal of talk about redistributing territories in the world. If that means handing over blacks from one Government to another, I think that that form of appeasement might consider at any rate the interests of the blacks who are to be handed over. The thought of handing back colonies to Germany as though it were merely a matter that depended upon the Front Bench here and upon a set of rulers in Germany, seems to me to be a monstrous perversion of justice. If any settlement is come to about colonial questions, I hope the House will realise that there ought to be an international trust in charge of those colonies, throwing them open to trade, but with the main duty of looking after the interests and development and freedom of the native inhabitants of the colonies in question.

When we come to appeasing Italy, are we appeasing Italians or the ruler of Italy? Probably the Italian people, like ourselves, want peace. I should doubt whether any of those who have been fighting in Spain any longer have any illusions as to the beauties of war. Are we to appease Italy now by advancing her money in order that she may be able to provide more munitions of war to destroy the Spanish people? Is the appeasement of Italy to be at the expense of the Spanish people?

Again, take the question of Czechoslovakia. We are told that we should appease Herr Hitler by allowing the Sudeten Deutsch territory to become an independent federated canton under German control. Surely, we should consider the minorities in the Sudeten Deutsch territory. There are over 350,000 Czechs even in the Sudeten Deutsch territory which it is proposed should be handed over. In addition, there must be at least another half-million of people in that territory who are Socialists, and who know that they will be sent to concentration camps if that territory were cantonised and annexed by Germany. Moreover, the Jews, who number many thousands in that territory, are being boycotted, driven out and robbed in Henlein Czechoslovakia. The fear of what has happened in Austria happening in Czechoslovakia is already expelling and robbing the Jewish minority. Czechoslovakia includes many other minorities.

Take the question of finance. One of the main recommendations of the van Zeeland report was, to put it plainly, that England, America and France should advance money to Germany and Italy in order to re-establish their finances, so that they might then be enabled to drop the quota system and buy freely once more. That, no doubt, would be a measure which would be welcomed and hailed with enthusiasm in Germany and in Italy; but at whose expense is it to be carried out, and for what purpose? It is to be carried out at the expense of the British taxpayer, in order that these dictators may build more aeroplanes and make more bombs—so that, whenever they please, they can deal with us as they dealt with the Spaniards, and as they would deal with the Czechs.

Let us look at these questions from a practical point of view. There will always be a demand from Germany, from Italy and from Poland for foreign money; and just as, when the Norse pirates came over to England, we always bought them off with Danegeld year by year in order that they might go away again, so these people who have no money say they are going to be nasty as long as we do not pay them. II is necessary, in order to secure economic appeasement in this world, that we establish international law and reliance upon treaties. As long as you have the Germans saying that they are going to repudiate, not only the Austrian debts, but the Young and Dawes loans as well, how are you to consider any form of international financing, and any sort of confidence whatever? Confidence must depend upon respect for law, and respect for law can only be universal when the law is based on and built up on an adequate force to support the decisions of the courts of law. That seems to be the only possible economic or political method of appeasement.

I would say further to my right hon. Friend the Member for Bow and Bromley, when he goes to Poland and sees the horrible conditions there, look at the position with the sort of eyes that you use in this country. He knows perfectly well that in Poland there are vast empty spaces in which production has hardly scratched the soil, and that landlordism has damned Poland. It is not a question of Green Shirts, or the Social Credit people; it is not a question of Socialism; it is not a question of the fear of war; the real difficulty is that the landlords will not let men work. We cannot pretend that we can solve the Polish problem for the Polish Government; we can only just tell them, "There is the problem under your noses; if you want freedom, you can get it for yourselves." There is one other point in connection with the financing of these bankrupt totalitarian States who have no currency for imports. We are all talking about trying to stabilise prices and stabilise currency. We have this scheme of stabilising —

Mr. Loftus

We are not stabilising currency.

Colonel Wedgwood

We have the tripartite agreement with America, whereby we have stabilised the value of the pound and the dollar, though the franc has sadly fallen out of the picture. There is one certain way of upsetting any stabilisation of that sort. That is by one State in the compact outrunning the constable. France has. If America does, as it is now threatening to, borrow $5,000,000,000 in order to find work for unemployed, the dollar is sure to fall; and then, what is to happen to the pound which we are supporting rigorously by a 5s. 6d. Income Tax? The pound will go up and the dollar will go down, and the whole financial situation of the world will be upset, simply because one country does not balance another's budget. If America and ourselves were united and we had one intelligent Parliament here to rule both countries, there would be no outrunning the constable in those two countries; we should have sound finance triumphant throughout the English-speaking world and we could keep parity. But you cannot keep parity with countries which do not balance their budgets; they will depreciate currency once again. I am afraid the van Zeeland proposals for stabilising the currencies of the world depend on the unpleasant necessity of one Parliament ruling the rest of the world.

2.47 p.m.

Mr. Maxton

It is rather difficult for me, an ordinary average man, to follow the three speakers who have gone before me. [An HON. MEMBER: "Four."] I had forgotten my hon. Friend, admittedly. The right hon. Member for Bow and Bromley (Mr. Lansbury), the hon. Member for Lowestoft (Mr. Loftus) and the right hon. and gallant Member for Newcastle-under-Lyme (Colonel Wedgwood) are very distinct individuals in this House, with very distinct views, all of whom would get a certain amount of company along some of the road, but none of whom would get company over the whole of the road he wants to go. But I want to support the demand that the Government should take definite steps to see that the international aspects of economic problems are not lost sight of. In these recent years and months the political aspects of the problem have come right on top, and the economic aspects have been shoved into the background. I think that was a disgraceful quotation from the "Times" which my right hon. Friend the Member for Bow and Bromley gave, in which they said that the van Zeeland Report was away on the shelves, with the dust collecting on it. When the leading organ of the Government [Interruption]. This is a most shocking moment, when one of the most representative Members in the House laughs at the "Times." I am so concerned that I feel I ought to resume my seat until I have my emotions under control. I say, when this important organ of Conservative opinion in this country throws aside with contempt what was a few months ago held up to us by the Government as a principal item in their international programme, that is a dreadful development.

I do not want to continue the Debate or intervene for any undue length of time, because I understand there will be a full debate on the subject the week after we resume. But I want to say to my friends, when they are talking about economic appeasement, that I have never known a time in the whole of my life when there was not enough wealth in each one of the countries of the world to give everybody in that particular country a reasonable standard of life if the wealth had been reasonably distributed among the people in that nation. Although we have been through what are supposed to be hard times in the last 20 years in this country—and I know a lot of my constituents have been through hard times—a big proportion of the people in this country in the upper classes have never known what it was to want a single meal. The hon. Member for Lowestoft says that we must do this and we must do that. Who are the "we's" that he is talking about?

Mr. Loftus

The individual Members of this House.

Mr. Maxton

No, the hon. Member is talking about "we" as a nation. I do not see that "we." This nation has two classes, with two distinct and antagonistic interests. The hon. Member talks about Great Britain as a great and self-sacrificing nation, prepared to go into international conferences and set an example to others of international unselfishness. But people in this country during this last week have been deliberately throwing shares up and down and wrecking the whole economics of this country and other countries; not to serve any national purpose that I can see, but simply so that at the end of these manipulations they shall have more profits than they had at the beginning. They have no higher motives, no bigger objectives, and no greater knowledge of the things they are counting on than the fellow who went to the Derby.

Mr. Bull

I suggest that every Member on that side of the House ought to go to the Derby.

Mr. Maxton

I did not know what was going to win the Derby.

Mr. Bull

I did not suggest that the hon. Member did; otherwise we should have had a grievance against him.

Mr. Maxton

You would have had no grievance against me. I should have done as I always do; I should have shared my knowledge. The gambling on the Stock Exchanges and what are called the money markets is run by a body of people with no national interest whatever. During the last week I have read of the debates in another part of this building on the coal deposits of this country. These are the sort of people who are supposed to go to Geneva and Germany and set the world an example of British unselfishness in economic affairs. They are trying to extract out of us, the people, double the amount of millions of pounds that they have already been promised for the mineral resources of our country. I am not going on, because hon. Members will realise that I am on a theme that, if developed, would be very fruitful, and on which I could easily allow myself to be carried away. I want to support the view that the economics of the situation should be kept constantly in mind, but that the social aspects of the situation, the problems that can be easily solved, should be also dealt with.

I was in Austria during the starvation in the early post-war years. In the town of Vienna the people were in the most pitiable condition that I have ever seen human beings in my time. I was not in a pitiable condition. I was a millionaire. I was made a millionaire by changing £2; I became a millionaire in Vienna for a week. I could buy anything I wanted, things which I could never get in my own land, but the people in Vienna were starving. That is the essential economic problem that has to be solved. If you are to get a stable economic world free from war danger, you have to get rid of the starving men in countries that are rolling in wealth of all descriptions. That is why I rise to-day to support the demand that, in our rearming and in our burrowing under ground to make ourselves safe from bombs and all the other things upon which we are spending our time, the question of solving the property of the poor man in all lands should be the major preoccupation.

2.56 p.m.

Mr. Edmund Harvey

The picture that hon. Member has given of Vienna in 1920 is a picture of the misery that comes to people as a result of a great war. It is because some of us realise what that means—as I am sure that he does—that we would like to join with the right hon. Gentleman the Member for Bow and Bromley (Mr Lansbury) in appealing to the Government to take this opportunity of making clear that they are determined that the labours of M. van Zeeland shall not have been in vain, and that, without committing themselves in any way to any details of his suggestions, they are prepared to follow up, with all the energy that they can command, the method that he recommends—the method of conference involving willingness to co-operate and to make sacrifices. It is the only method by which not only the economic causes that are leading to war, but the other, deeper as they may seem to some, national causes can be removed. It will be a tragic thing if, after having given days to considering preparations for war and what we are to do if war comes, we cannot find an hour or two to consider the preparations for peace, the need for them, and how we can support the Government in taking every opportunity to make those preparations effective.

It has been said that there is nothing new in the Report of M. van Zeeland. The right hon. and gallant Gentleman the Member for Newcastle-under-Lyme (Colonel Wedgwood) says that that is his view. It is quite true that you can take up each individual proposal and find that someone or somebody has suggested it at some time. That criticism has been made before now of the Sermon on the Mount; that it contained nothing new. It has been seriously made. But this report is new by its authority and by the way in which it brings forward a whole series of suggestions and makes a unit of them. It is new from the fact that for the first time it comes before the world, not as the suggestion of a group of economists or of theorists, but as the proposal of a Prime Minister of experience, who has been asked by the Prime Ministers of Great Britain and France to undertake a mission which has involved visiting the capitals and the governments of a number of the leading countries of Europe, and also the United States of America. It comes to us as a result of all that experience and labour. This thing cannot be put aside as something which can be left in a pigeon-hole to be looked at when a convenient moment comes in the distant future.

All the while rearmament goes on in every country, and some countries are near the breaking-point. The strain on the life of the people in the poorer countries of Europe becomes greater and more intolerable, and unless you can take positive steps to make a halt in the armaments' race possible, and bring the nations together and to make peace real, a breakdown will come which will involve not only the country which now feels the burden greatest, but perhaps the whole of our civilisation. We are not asking for peace which will just be the stabilisation of the status quo. The peace that is to be real must be something much deeper than that. We want to see the real causes of war removed—the causes in the life of the people—and if we can do that, peace will be a noble thing, because it will mean international co-operation in which all nations will be the gainers, though all must be ready to make sacrifices. I would ask that this country in this difficult hour of the world should come forward and say that it will not only be willing to join in such a work, but that it invites other nations to come forward to undertake this method of conference, and that, for its part, it will be willing to make the sacrifice of position and privilege that may be necessary; not to purchase a momentary peace, but to secure peace that will be lasting, because it involves international co-operation and the common welfare of all.

3.4 P.m.

The Under-Secretary of State for Foreign Affairs (Me. Butler)

I am sure that we are all very much indebted to the right hon. Gentleman the Member for Bow and Bromley (Mr. Lansbury) for having introduced this very interesting debate. I have listened on behalf of the Government very carefully to all the thoughtful contributions that have been made during the afternoon. The right hon. Gentleman has, in fact, as usual, advocated a policy of peace by diplomacy, and I should like to accept his speech in that spirit. I would also like to thank him for the reference he has made to the representatives of His Majesty's Government abroad, our Ministers and Ambassadors, whom he has told us, he has recently met, whose qualities he admires and to whom he wishes success. That view is endorsed by the experience we have ourselves of the excellent work which they are doing at this critical time. Having shown the right hon. Gentleman how much importance we attach to diplomacy and all it means in the world to-day, I should like to address myself to several of the topics, points and questions that have been put in the course of the debate. We have been told that if we put right the economic troubles of the world we shall do much to avoid possible war. There is a good deal of truth in that assertion, but in examining it we ought to realise that we must get perfectly clear the inter-relationship of economics and politics. To this particular point M. van Zeeland attached special importance. He said: Let us try, therefore, to find a way for a practical solution, without going beyond the limits of this mission, which is of an economic character, but without pretending that it can be artificially isolated from the political factors which surround it and which impose upon it their conditions. That illustrates the importance which M. van Zeeland attaches to the political atmosphere in which his report was most likely to be successful. I might add, that this copy of his report is quite free from dust, owing to the habitual attention paid to it by His Majesty's Government. In fact, owing to the laborious attention that I always pay to these subjects, I have been able during my short period at the Foreign Office only to wipe the sweat from my brow, but have never had occasion to wipe the dust from any document that I have studied.

Let us consider a little further the inter-relationship of politics and economics. It is true that economic distress is a fruitful cause of political instability. It is also true that a successful measure of what one hon. Member has referred to as economic disarmament might be expected to set up currents favourable to political appeasement. While that is true, it must also be realised that economic nationalism—which is one of the chief obstacles in the way of obtaining a general relaxing of trade barriers—is due as much to political as to economic causes. A certain degree of confidence in the political sphere is, therefore, essential, particularly if we are to try to persuade those who have set up barriers, with which to ensure their own economic self-sufficiency, to pull them down.

This brings me back to some further words of M. van Zeeland, where he says: Improvement in economic conditions requires an atmosphere in which at least a certain degree of confidence, good will, sincerity, order and security prevails in international relations. The whole efforts of His Majesty's Government are being slowly, surely and successfully devoted to these ends, as I hope to show in the course of my remarks.

Before I come to what I would call the political side of my remarks, let me study a little more closely the economic activity of His Majesty's Government to improve matters. I have been asked a question about M. van Zeeland's report itself. There is to be a debate on this specific subject on the Wednesday after the Home resumes. Therefore, I shall be excused, I am sure, from going into the details of the report. The present position in regard to the report was announced by the Prime Minister a short time ago, when he said that the report is still under consideration but that we must defer any decision as to whether effect could be given to its recommendations. I would repeat that the report will continue to receive the consideration which it deserves. The fact that time is being taken in examining it and in preparing the ground, is justified by our experience of the World Economic Conference, where we realised the danger of insufficient preparation. This is an argument in favour of taking particular trouble over such an important matter as this at the present time.

Reference has been made to a feature of the report which desires that equilibrium shall be established between agricultural and industrial conditions. His Majesty's Ministers have this matter very much in mind. A speech of the Minister of Labour at the International Labour Office recently was devoted to this very subject and attracted a great deal of attention at Geneva at the time. If hon. Members will study that speech they will see the importance which the Government attach to this particular aspect of the problem. But I do not want to rest simply on saying that we have this important report under consideration. We have been indulging in very real activities in the sphere of international economics. These activities have been prompted by a realisation of the present position of international trade and by our wish to improve that, as much as by a natural desire to look after our own interests. If we look at the position of international trade we find that in volume it is about half what it was in 1929—a very strong reason for continuing the efforts we have been making.

Mr. Maxton

Will the Under-Secretary make that quite clear, as it is important? Does he mean that the amount of goods which are passing between country and country is half now what it was in 1929?

Mr. Butler

The total volume of international trade exchanged between countries is as I have said.

Mr. A. Henderson

Weight or value?

Mr. Butler

I beg pardon, in value. This is primarily due to economic causes, but we must remember, as I have already said, that it is partly due to the economic nationalism which has created barriers between nations. M. van Zeeland has drawn attention to the difficulties in the path of international trade and has made suggestions for dealing with some of these barriers. We have done our best: in recent years to reconstruct as much as possible of the system of free trade which existed in pre-War days. The attempts that we have made have been most successful in the areas where there has been most political calm. Between Great Britain and her own customers in the Empire there has been a marked development in trade, and this is also true of the development of our trade with Scandinavia and other countries. There has been a modification of the old system we knew before, but I believe that this development, taken in conjunction with the large number of trade agreements which this country has successfully negotiated, shows that we are making a considerable contribution to the development of freedom in international trade.

Colonel Wedgwood

What about America?

Mr. Butler

I am coming to the right hon. and gallant Member's point. If we examine an interesting article in the "Times" to-day we find that Sir George Schuster gives reasons showing that our recent activity in Imperial and other trade need not excite the envy but rather the admiration of other countries for the contribution we have made to economic appeasement. The policy that we have adopted in widening the area of freer trade has been adopted also by the United States of America, and the result is that these two great systems of world trade have been moving on parallel lines. Unlike the rule in geometry, I am glad to say that those lines are now drawing closer together. Here I come to the question raised by the right hon. and gallant Gentleman the Member for Newcastle-under-Lyme (Colonel Wedgwood), who asked me about the proposed trade agreement with America. As the right hon. and gallant Gentleman knows, we have been engaged in negotiating this trade agreement. I cannot give any further news at the present time, but the negotiations are proceeding. We attach importance to the successful outcome of these negotiations, and we hope that this will be a genuine contribution to the improvement of world trade, the importance of which it would be impossible to exaggerate.

In another direction, as the right hon. Gentleman also observed, we participated with the United States, in 1936, in the Tripartite Monetary Agreement with France, by which the three Powers undertook to consult together with a view to maintaining equilibrium between their currencies. The hope was expressed at the time that that agreement might lead to a general reduction in trade restrictions, and it was due to this hope that we then took the initiative in asking M. van Zeeland to produce his report on these very important matters. I think it may really be said with justice that, as far as lies within its power, this country has done its best to improve economic conditions in the world. We are not only satisfied that we have made progress in that sphere, but, having shown what we have tried to do in the economic sphere, I come back to the original statement of M. van Zeeland, that much depends upon political appeasement if we are to have success in the economic field. Let me remind the House again of M. van Zeeland's words. He asked for an atmosphere in which at least a certain degree of confidence, goodwill, sincerity, order and clarity prevails in international relations. I have been asked whether the Government subscribe to several general declarations in favour of peace which were quoted by the right hon. Gentleman the Member for Bow and Bromley (Mr. Lansbury). He asked whether we approve of the recent statement made by Mr. Cordell Hull. I quote what the Prime Minister said on that subject on 1st June— I need hardly add that they [His Majesty's Government] for their part are fully resolved to respect the obligations which they entered into in signing the Pact of Paris."—[OFFICIAL REPORT, 1st June, 1938; col. 2011; Vol. 336.] That, I think, shows that we are ready to adhere to our obligations, and the answer I give to the right hon. Gentleman is that we do subscribe to this statement made by Mr. Cordell Hull and that we support his general appeal for the settlement of disputes by peaceful methods.

Mr. Wedgwood Benn

The Americans have appended to the Kellogg-Briand Pact what is known as the Stimson Declaration. Do the Government accept that?

Mr. Butler

I am confining myself to the statement made by the right hon. Gentleman the Member for Bow and Bromley, who asked a specific question, beyond which I do not propose to go on this occasion. The whole policy of the Government is in favour of widening the area of agreement. We have had occasion to discuss this policy before on one side of the House and the other; in fact, we have had exchanges of opinion with the right hon. Gentleman opposite on this point. I must stress again on this occasion that the whole of our activity and our influence is being used to widen the area of agreement and therefore to create that atmosphere in which, along with the economic steps we have been taking, further implementation can be given to such important reports as that of M. van Zeeland.

The House will remember that on several occasions we have attempted to widen the circle of agreement, but that we have met with opposition from the party opposite. [HON. MEMBERS: Oh !"] Yes, we negotiated an agreement with the Italians that was opposed by hon. Members; that was widening the area of agreement. We have also signed with the new Eire another agreement. On every side one sees that the policy of the Government is being crowned with a good degree of success, and that despite the difficulties with which we are faced in the economic and political spheres we are making slow but sure progress, in the exceptional conditions of the time. I am sure we shall be aided in our efforts if we are inspired by the idealism of the right hon. Gentleman who introduced this subject this afternoon. I am sure that his spirit is the right one, though his spirit is so sincere and so intense that he might not always appreciate some of the more sordid difficulties with which I have been striving. I feel when I hear him that I am threading my way over a difficult plain covered with boulders and rocks which I am trying to negotiate, while he can soar over it in a much more satisfactory way—though I fear occasionally he gets lost in those clouds which merely cast shadows on the ground over which I am walking. The policy of the Government might be summed up in the following way: We are using at the present time our experience in the economic field, and our tradition in the political field for political wisdom and diplomacy, to maintain that balance between politics and economics which we hope will help us out of the difficulties which lie ahead.