CZECHO-SLOVAKIA (FINANCIAL ASSISTANCE) BILL.

HC Deb 07 February 1939 vol 343 cc773-855

Order for Second Reading read.

3.47 p.m.

The Chancellor of the Exchequer (Sir John Simon)

I beg to move, "That the Bill be now read a Second time."

This Bill authorises assistance from public funds and public credit to the Czecho-Slovak State. Hon. Members will recall that the Prime Minister, in the course of his statement following upon the Munich Agreement, told the House on 3rd October that the Czecho-Slovak Government had put forward a request for help to raise a loan of £30,000,000 to be guaranteed by His Majesty's Government. The new Czecho-Slovakia expected to have to make provision for the assistance of a large number of persons who were moving from ceded territories, and the reduction in the area of the State would inevitably call for heavy outlay in readjusting the economic life of the nation. Those were the grounds on which we were approached. His Majesty's Government, as the Prime Minister then said, immediately took this request into consideration, and it was pointed out in the Prime Minister's speech that we had in mind that, while assistance was needed promptly, the terms and conditions of a guaranteed loan raised matters which could not be decided immediately; for example, the question of what Governments should participate in the loan, for the French Government as well as ourselves would naturally be concerned. The French Government as well had to be brought into any discussions.

Obviously, any negotiations for arranging a guaranteed loan in which at least three parties were involved must take time. As it has turned out, it has taken a good deal of time. If hon. Members will turn to the Schedule to the Bill, they will see that the agreements there printed were executed only on 27th January of that year. That was a difficulty which had to be got over, but we felt that, especially in view of the refugee difficulty, assistance should not be postponed on that account, and the Prime Minister stated to the House on 3rd October that a letter had been addressed to the Bank of England requesting the Bank to provide a credit of £10,000,000 sterling which would be at the disposal of the Czechoslovak Government for their urgent needs. I wrote that letter, and in that letter I stated, as the House was informed, that we should ask the House of Commons to pass the necessary legislation to reimburse the Bank from the Exchequer. We had hoped and we had expected to carry those negotiations through to a conclusion in time to present that legislation when the House resumed its sittings after the Recess in November. In the actual handling of it it proved to be a complicated matter, and in spite of our best efforts the Agreement was, as I have said, finally reached only at the end of January, and we now take the first opportunity of introducing this Bill.

I see opposite the right hon. Member for Gorton (Mr. Benn), who has once or twice made comments on the constitutional aspect of this proceeding, and I must say a word or two to establish the constitutional regularity of our proceedings, as to which there really is no question at all. There is no ground for saying that the £10,000,000 provided by the Bank of England was public money. You cannot pay out public money from the Exchequer without the authority of Parliament. It is equally wide of the mark for anyone to imagine that the Bank received some private undisclosed assurance. I have had no communication with the Bank except the letter the terms of which were stated to the House, and the only statement made to the Bank was exactly what the Prime Minister stated to the House on 3rd October, namely, that Parliament would be asked to pass legislation to reimburse the Bank from the Exchequer. That is exactly what I am asking Parliament now to do.

I agree with the right hon. Gentleman that in all normal circumstances, indeed, I would rather say in all circumstances, where the contrary course is not absolutely necessary, Parliamentary authority should be sought in the first instance. Nothing that has been done in this instance and nothing that I am now saying should be regarded as qualifying that proposition. Here we had wholly exceptional circumstances in which the Czechoslovak Government needed instant help. When the matter was stated in the House of Commons on 3rd October that view was shared in all quarters, and the course taken was generally felt to be justified. In the two or three days' Debate which followed the Prime Minister's statement, though there may have been differences of opinion, and controversy on other things, there was no controversy about this, and I recall that the right hon. Member himself, when he took part in the Debate, said on 6th October: We all want to grant this sum of £10,000,000 to Crecho-Slovakia."—[OFFICIAL REPORT, 6th October, 1938; col. 487, Vol. 339.]

Mr. Wedgwood Benn

Of course I remember that statement. It expressed a sentiment which, I think, was shared by all in the House, but it was based on the assumption that we were to have a Czecho-Slovakia very different from what it is to-day.

Sir J. Simon

All that I am saying is that on the constitutional point there really is no ground for suggesting that any irregularity has been committed. I am now asking for the authority of the House of Commons to make a payment out of public funds—up to the present no such authority has been given—for a purpose which commanded the general support of the House of Commons.

I will now state briefly the rather complicated arrangements which have been made to carry out this purpose of giving financial assistance to Czecho-Slovakia. For this purpose it is necessary to have both the Bill, with its Schedules, and also the White Paper, which contains in more detail some of the Agreements. I want the House first to note that the Agreements, wherever necessary, are stated to be entered into subject to Parliamentary approval. If hon. Members will turn to the First Schedule and look at Article 2 they will see that it begins: The Government of the United Kingdom will, subject to Parliamentary approval. It is that approval we now seek. What happened was this: The advance of £10,000,000 was made by the Bank of England. It was placed by the bank at the disposal of the National Bank of Czecho-Slovakia for the use of the Czechoslovak Government. From the first we emphasised that our purpose was, more particularly, to meet the demands which Czecho-Slovakia would in the immediate future have to face in respect of the maintenance and settlement of refugees from the ceded areas. We drew attention to the problem of the ultimate settlement of those German-speaking refugees who did not wish to return to the ceded territories. We stated that if it should prove possible to arrange for a certain number of them to emigrate, to leave Czecho-Slovakia altogether, His Majesty's Government would expect that the cost of such emigration should be met out of the advance, including the payment to emigrants of such sums of money as might be necessary to enable them to enter the countries where it was intended they should settle.

At the same time we communicated with the French Government, who at once expressed their readiness in principle to share in the grant of financial assistance to Czecho-Slovakia, and as a result of prolonged and detailed discussions, during which, as the House will see from the White Paper, great particularity has been developed and precise assurances secured, we have reached the agreements, the effects of which I will now briefly explain. The effect is this: Taking the Second Schedule to the Bill first, His Majesty's Government and the French Government have agreed that they will jointly and severally guarantee a loan of £8,000,000 to be issued by the Czech Government here in London. That is the effect of the agreement in the Second Schedule to the Bill. In the White Paper it happens to be Document Number 1. Secondly, as between the French Government and ourselves any payments that may be made in case of a default on the part of the Czecho-Slovak Government will be shared equally between His Majesty's Government and the French Government. That is Agreement Number 4 in the White Paper. It finds no place in the Schedule to the Bill because it requires no Parliamentary authority. I may say, in passing, that the Czecho-Slovak Government has a good and honourable record in respect of keeping its engagements, and the undertaking does not imply that we are expecting that there will be any default. Of course, the existence of that undertaking by the French Government and ourselves does greatly assist the raising of the money, but it does not imply that there will be any failure in the service of the loan

Next comes this point: Out of the proceeds of this guaranteed loan £6,000,000 will be used to repay part of the £10,000,000 already advanced to Czecho-Slovakia, and the balance of £4,000,000 out of the £10,000,000 will be granted as a free gift. The form of the transaction is that the Treasury pays to the Bank, under the authority that it will now get, £10,000,000, with interest at 1 per cent., and the Czecho-Slovak Government pays to His Majesty's Government, out of the proceeds of the loan, the £6,000,000 I have mentioned, at the same rate of interest. The French Government is making a contribution of approximately equivalent value to our free gift of £4,000,000, though that contribution does not take the same form and does not provide new money. The French Government have offered an undertaking to take over from the Czecho-Slovak Government responsibility for interest on and ultimate repayment of the 5 per cent. Czecho-Slovak loan of 1937–1942, to the nominal value of approximately 700,000,000 francs, which was issued in France. If the French Government had not done that, that would have remained a burden on the Czecho-Slovak Government. The French contribution takes the form of relieving them altogether of that obligation, present and future, and it no doubt will be a very useful addition to the assistance that they are getting. If we treat that as equivalent to another £4,000,000, the total financial assistance given by His Majesty's Government and the French Government will amount approximately to £16,000,000; £8,000,000 as a free gift, and £8,000,000 the proceeds of the guaranteed loan.

Mr. Mander

Has the £10,000,000 all been paid for?

Sir J. Simon

The advance to the National Bank of Czecho-Slovakia was drawn, £5,000,000 at first and £5,000,000 later, but the arrangements, to which I am now calling attention are to secure how the money is to be spent. If I have rightly understood the feeling which a large number of hon. Members have about this business, it is that they are not so much concerned with the precise mechanical details but that one of the things they would like to know is how far it has been possible to secure that the assistance so provided will be used for the purposes intended. That, I feel, is a very general sentiment, and it is one that the Government and myself fully share; and if I have to offer any explanation or excuse for the fact that a good deal of time has passed since this was announced at the beginning of October, the main reason is that we really exerted ourselves, and not, I hope, altogether unsuccessfully, to secure agreements and arrangements which are satisfactory—a not very easy thing in the circumstances, because after all, when you are dealing with a Sovereign State, you must make your arrangements in such a form as is proper, having regard to that fact. Anyhow, very great trouble has been taken to make it plain that this money which we are thus helping to provide will be used for the purposes intended, and I believe—I have examined the matter with a great deal of care—the arrangements are about as good as can be made.

I shall call attention to what the arrangements are. For that purpose the important document is the White Paper. The White Paper repeats the two Agreements that are in a Schedule to the Bill. They are not printed in quite the same order. The first Schedule to the Bill contains the Agreement which is Agreement No. 3 in the White Paper, and the second Schedule to the Bill contains the Agreement which is No. 1 in the White Paper. There are two other Agreements. If hon. Members will turn to page 10 of the White Paper they will see an important letter written by the Czecho-Slovak representative, Dr. Vilem Pospisil, to the Foreign Secretary, which constitutes an important part of the Agreement. It contains references to four Annexes, which are to be found on pages 12, 13, and 14 of the White Paper. I will try to summarise what the effect is. These are the points that should be noted. First of all as to our free gift of £4,000,000. That is to be paid into a special account at the Bank of England.

Mr. de Rothschild

That sum has not been drawn?

Sir J. Simon

It forms part of the original advance of £10,000,000, and will be transferred to a special account in the Bank of England. It is to be in sterling and is to be drawn upon only on the basis and for the purpose and by the methods that are referred to in Dr. Pospisil's letter; the payments, that is to say, are to be payments to the Czecho-Slovak Refugee Institute, and whatever payments are made on application for that purpose must be authorised and will be controlled by the British liaison officer, a gentleman who has already been in Prague helping in the arrangements and is now going there again and is to have complete oversight and to be in touch with every single transaction. I think I may therefore fully claim that as regards the £4,000,000 of our free gift, really careful provisions have been made with the complete good will of the Czecho-Slovak Government, and we are satisfied that the arrangement secures most effectively that the money shall be devoted simply and solely to the assistance of those refugees who want help.

If hon. Members will turn to page 12 of the White Paper they will see what is the definition of a refugee. It is the widest definition we could possibly have. There is an express stipulation that refugees are to be helped regardless of religious belief, political opinions or racial origin. In substance the definition covers everybody who cannot now find a home in Czecho-Slovakia. That is the intention. That is the first thing and the most important thing. I ought to say that the Czecho-Slovak Refugee Institute is an organisation that has been set up in Prague by the Czecho-Slovak Government to deal with this refugee problem. I have pointed out that there is an interlocking arrangement by which none of this fund held in the Bank of England in sterling can be taken away except with the authority of the British liaison officer, who will join in authorising any payment out of it. Secondly, but this is a matter which does not directly affect the British Government, a similar arrangement has been made about the French free contribution. The amounts which the Czechoslovak Government would otherwise have to pay periodically as interest and ultimately in repayment of capital of that French loan, are to be paid by the Czechoslovak Government into a special account, and they are to be similarly used solely for the purpose of assisting the emigration of refugees.

Now we come to the other part of the transaction, the £8,000,000, which is not a gift or grant at all but is a loan which the Czecho-Slovak Government will raise and which they will be liable themselves to repay but in respect of which they have the advantage of the British and French guarantee. I would call attention to the contrast which is pointed out in Annex II on page 12 of the White Paper. The Annex says: The financial facilities to be granted to the Czecho-Slovak Government shall be allocated as follows:

(a) for payment of expenses of emigrants as and when required in accordance with the scale set out in Annex III and with the terms of Annex IV	£4 millions
(b) for the general purposes of the reconstruction of Czecho-Slovakia, including the relief and settlement of refugees in Czecho-Slovakia as at present constituted	£8 millions."

The House will observe the contrast. As regards the £4,000,000, it is to be directed to assist refugees to emigrate, to go away, when they of course will need foreign exchange; the £8,000,000 is rather addressed to what is extremely important and I dare say what in point of numbers is a much greater problem, namely, the relief and settlement of refugees in Czecho-Slovakia, with no doubt a wider reference to the economic reconstruction of Czecho-Slovakia. At the bottom of page 12 of the White Paper there is this paragraph: In the allocation of funds under paragraph 1 (b) the Czecho-Slovak Government undertake that priority will be given to those items of expenditure which will be of special assistance to refugees in Czecho-Slovakia. It is understood that these funds may be applied by the Czecho-Slovak Treasury temporarily for any urgent requirements of national reconstruction provided that the whole of the amounts so applied for purposes other than the requirements of refugee shall be replaced by the Czecho-Slovak Treasury as and when required for expenditure in connection with the relief and settlement of refugees in Czecho-Slovakia as at present constituted. It is understood that one of the primary methods of relief of refugees in Czecho-Slovakia will be the provision of productive employment through public works. I shall return to that in a moment. The paragraph goes on: The Czecho-Slovak Government will as soon as practicable after the end of each quarter supply the United Kingdom and French Governments with a detailed statement of the expenditure actually incurred by them under paragraph 1 (b). I have made a distinction, therefore, between the £4,000,000 and the £8,000,000. I wish to say again, because I regard it as an essential part of the plan, that this Agreement has been secured, I believe, with the general good will of everyone; I am not placing the virtue of one Government against that of another. The relief which is thus being provided, is to be given regardless of religious beliefs, political opinions, or racial origin. I think the whole House will be glad that that has been stipulated, and will be as much concerned as we have been to see that it is carried out.

Mr. David Grenfell

The right hon. Gentleman has not referred to paragraph 3 on page 13, in relation to the French contribution.

Sir J. Simon

Does the hon. Gentleman mean at the end of Annex II?

Mr. Grenfell

Yes.

Sir J. Simon

I thought I had referred to it in a sentence. I am much obliged for the hon. Gentleman's question, because it is important to make the matter clear. I think the House understands that the French contribution really releases in the hands of the Czech Government a certain sum which otherwise would have had to be used for the service and repayment of their French loan, and that the provision is the amount in francs that the Czecho-Slovak Government would have had to provide. It will be utilised for the same purpose as the £4,000,000 from His Majesty's Government, to assist refugees who wish to emigrate.

I would point out now that Annex III is important. It fixes the scale of payments in foreign exchange which is to be provided for emigrants. Unless this provision is made it is hopeless from the financial point of view for these people to attempt to go.

Colonel Wedgwood

To where can the emigrants go?

Sir J. Simon

I think there are places where they can go. Some of them are coming to this country. It is the more necessary to make this provision because most foreign countries which admit emigrants will not be willing to do so unless there is available, in the case of each emigrant family, the minimum sum which is required by those countries. With that fact in mind, Annex III has been drawn up as part of the agreement, and I do not think the House will say that I am wasting time if I read part of it. It states: Each individual (or, in the case of a family, each family) who has complied with the legal requirements of the Czecho-Slovak Government with regard to emigration, but who has no available money of his own, will receive from the Czecho-Slovak Refugee Institute before emigration the sum of £200 (or the equivalent in the currency of the country of immigration), together with the cost of transportation of himself and his family (if any) to the country of destination. That relates to the case of penniless people and is very necessary if they are to be able to emigrate.

Mr. E. J. Williams

Are they expected to repay the money?

Sir J. Simon

Oh, no. The next paragraph deals with the case of individuals who, though very hard up, still have a little money of their own. It states: (a) Each individual (or family) having the necessary funds available in Czecho-Slovak currency will receive before emigration, against payment in Czecho-Slovak currency at the official rate, the sum of £200 (or the equivalent in the currency of the country of immigration), together with the costs of transportation of himself and his family (if any) to the country of destination. Imagine a poor refugee with a small sum of money in Prague. That money is necessarily in Czecho-Slovak currency and even if he were permitted to go where he could make use of it, it would be necessary to give him foreign exchange for that purpose. This provision is intended to supply him with that foreign exchange because he is to live in another country where the foreign currency and not the Czecho-Slovak currency is in circulation. We regard this as a provision of the greatest practical value. I will read to the House one more paragraph relating to the people in better-off circumstances: (b) If any individual (or family) has further funds available in Czecho-Slovak currency, he shall, in addition to the sum which he is entitled to receive under sub-paragraph (a) "— that is, the £200— be entitled to transfer into sterling (or into the currency of the country of immigration) at the official rate of exchange a sum of 50,000 Czech crowns "— I think that is equivalent to about £250— subject to a charge not exceeding 30 per cent., e.g., a net transferable amount of 35,000 Czech crowns. Any sums collected by way of the charge referred to above shall be applied for the benefit of the refugees. The Government in affording this foreign exchange are not to make this large deduction for themselves but for the general purposes of the fund.

Colonel Wedgwood

Under (a) or (b)?

Sir J. Simon

That comes under (b).

Miss Wilkinson

Is not 30 per cent. an extraordinarily high rate of charge?

Sir J. Simon

It says "not exceeding." I do not know what the circumstances are, but the important point is that the money does not go to the benefit of the Government that makes the charge but is really a contribution to the fund for people who are even poorer. The people who are getting this help of so much foreign currency and who are better off, are to make this contribution of 30 per cent. and it will go to the general assistance of the poorer. Bear in mind that this is the case of persons who are substantially richer. This is a useful provision to have in. If the hon. Lady will look at the scheme as a whole she will see that the provision is not put in in order to provide loopholes but for the purpose of making a scheme which will work by general assent. I will not say more about it now.

Captain Cazalet

Do we understand that the maximum which they can take out is about £450 in sterling?

Sir J. Simon

Under this arrangement, yes. There is nothing in the agreement to prevent a man from making arrangement outside.

Lieut.-Colonel Sir A. Lambert Ward

Is it not a fact that the Czecho-Slovak State have very stringent regulations with regard to the export of currency and that an emigrant from Czecho-Slovakia cannot take money away with him?

Sir J. Simon

Yes, I should think that is so. It is certainly so with some other countries on the Continent. I should think that this is a provision which will work. Let there be no doubt that it will greatly facilitate the whole operation of emigration.

Miss Rathbone

What happens if the man is a really rich man with more than 50,000 Czech crowns? Has he to leave the remainder of his fortune in Czecho-Slovakia?

Mr. George Griffiths

He will be all right.

Sir J. Simon

That appears to be a matter of Czecho-Slovak law. I have attempted to give the House a picture of the scheme as a whole and I most seriously claim for it that although it is the result of a most laborious piece of negotiation it will justify the time which was occupied. I regret that we were not able to present the Bill immediately after the arrangement was first proposed. At the Treasury we have had a whole series of close negotiations with French and Czecho-Slovak representatives. For my own part, I believe that the conclusion of the matter, and more particularly all the details in this letter of Dr. Pospisil and the Annexes which form part of the letter, thoroughly justify the occupation of the time and the effort which has been made. I am sure the House will know that I am speaking my deepest feelings when I say that although you cannot expect a Chancellor of the Exchequer in difficult times like these to rejoice when he sees another Bill which is going to make another claim upon the public purse—and, of course, I do not do so—I hope that the House as a whole will be prepared to accept this arrangement.

I shall not discuss questions of policy with which Debates in this House have already been concerned. Let us take things as they are. Czecho-Slovakia is a small country, more restricted in area than it was, acquiring, as it has, a large addition to its own population, sometimes Czecho-Slovaks and sometimes it may be, those who have moved into Czecho-Slovakia from German or Austrian areas. From that point of view I ask that the Bill shall not only be carried but generally approved.

Before I stop I would deal with another matter about which some hon. Members have been gravely exercised. They have been concerned whether or not this provision may really inure to the benefit of third parties. On that matter we have, at any rate, been diligent. It will not be possible to spend the whole of the £8,000,000 immediately for the refugees, in any case. The rate at which you deal with them is not as fast as that. That was why we agreed that, while priority will be given to such expenditure as will be of special assistance to refugees, part of the £8,000,000 may temporarily be applied to certain urgent requirements of national reconstruction, provided that the whole of the amounts are replaced as and when required for refugee purposes. Expenditure on maintenance of refugees cannot be expected to solve the problem as a whole. It cannot in any case, and we have agreed that one of the primary methods of relief shall be the provision of productive employment through public works. That was the passage to which I referred just now in the White Paper. The Czecho-Slovak Government informed us that in speaking of public works they had primarily in mind the construction of certain roads which are of vital importance to them in the new economic development of their country. Many of the road and railway communications existing in that area now run through the territory of other countries and a considerable reorganisation and modification of their road system is necessary.

I wish to add this: The Czecho-Slovak Government have given us a definite assurance that no part of these funds will be expended on building roads with a military object. The so-called German road is, as the House knows, being paid for by Germany. In addition, the Czecho-Slovak Government have undertaken to give us a detailed statement of the expenditure on all the above services actually incurred by them during each quarter. That some Members of the Opposition may find gaps in this scheme is, I suppose, certain. I can only say that it has been the subject of a great deal of work by my officials, and I present it to the House as being a really effective effort in a particular corner to deal with the terribly difficult, the desperately difficult, problem of refugees.

4.31 p.m.

Mr. Wedgwood Benn

I was rather surprised to hear, from a constitutional purist like the Chancellor of the Exchequer, an attempt to make some defence of the procedure adopted in the matter of this Bill. This is a private obligation of the Chancellor's contracted with the Bank of England. I am not sure that you could get a precedent for it without going back to the time when Mr. Fox came down and asked the House of Commons to pay the debts of the Prince of Wales. That was some time ago, but the present Government twice in this year have pledged public money—it is really quibbling to say that it is not public money—without the consent of the House and in both cases without any need. The first case was in regard to food storage, where they bought food and then required the House to give them an indemnity. There was no need for them to do that at all. The food could have been purchased in a secret way under statutory powers and with perfect propriety. The second case is this case. There was no need for the House to be apprised of all the details of the agreement which has been made between the Government and the Czecho- Slovak and French Governments. All that need have been done was for the Government to put down a Motion, saying, "This House will to-morrow set up a Committee," and on such a Motion the difficulties could have been explained and Parliamentary assent obtained.

I do not say this only as a Member of the Opposition, but as a Member of the House, that it is greatly to be deprecated that the Government should be getting into the habit of spending public money without coming to the House for its assent for that purpose. We are bound, in the times in which we live, to delegate a great many powers to executive officers with very wide authority. That is inevitable—we live in arduous times—but that cart only be done with safety if we can be sure that the financial control remains in the hands of this House. Without financial control here, Parliamentary democracy comes to an end. It is very artfully done. The Comptroller and Auditor-General may never get a look at this at all. All the accounts of the Bank of England will not go to him Everything is in perfect order, and nobody is committed to anything. The Bank of England has privately advanced money, and we then repay the money to the Bank, so that the matter would not be the subject of comment or come under the review of the Comptroller and Auditor-General. I think we are entitled to stress this point, and I wish it were possible that the House should make its opinion on this matter clear and effective, because it represents a real danger to Parliamentary government.

I will give just one instance, which the Chancellor will remember. I do not see anyone in the House except the right hon. and gallant Member for Burton (Colonel Gretton), who would remember the circumstances. In 1910 the present Chancellor of the Exchequer was, I think. Home Secretary or Attorney-General.

Sir J. Simon

Solicitor-General.

Mr. Benn

Thank you. It was thought at that time that the Liberal Government would fall owing to the defection of the Irish vote, and the Conservative party was very busy organising divisions and attempting to throw out the Government, if the Irish vote failed them, on a snap division and so get their resignation, and then form a Government. The difficulty was that the right hon. Member for Carnarvon Boroughs (Mr. Lloyd George) was very short of Supply, so that there would be no money, if the Government were defeated on a snap division, with which to carry on the Government. That was exactly the problem that faced Sir Austen Chamberlain and Mr. Balfour and the leaders of the Conservative party. If hon. Members would take the trouble to read Sir Austen Chamberlain's very interesting book—I think it is called "Politics from Within"—they would find that the Conservative leaders in 1910, Mr. Balfour and Sir Austen, were discussing a project for raising a loan in the City in order to carry on in defiance of Parliament, where they could not secure a majority until they had had an election, an election in which they were certain or very hopeful that they would be successful. According to this account by Sir Austen Chamberlain, Mr. Balfour said, "We must be prepared to act in defiance of the law," and he added, "The Comptroller and Auditor-General is the real difficulty." It is largely in the form of a dialogue, but I think it was Sir Austen who said, "Suppose we wanted a loan," and he went on to say that "Natty"—my hon. Friend the Member for the Isle of Ely (Mr. de Rothschild) will know to whom he was referring—had told him he could get a loan from the City easily. Therefore, this is not a small or trifling point. If this House is to permit the Government to raise private loans and then to come back to the House and attempt to secure Parliamentary consent, I say that the real control of Parliament over the Executive has disappeared.

Now let me come to the Bill itself. It is a very sad Bill, when you think that a State which occupied so high and honourable a position in Europe as Czecho-Slovakia did a few months ago should be in the position in which it is to-day. It was a State that was sovereign, it was a State that paid its own way. Dr. Masaryk and Dr. Benes had given an impetus to the reconstruction of Central Europe, and economically Czecho-Slovakia was on the upward grade. As the "Times" said: Nowhere on the Continent do minorities enjoy greater freedom than in Czecho-Slovakia.

Lieut.-Colonel Sir Lambert Ward

On what authority was that?

Mr. Benn

Only the "Times." [An HON. MEMBER: "I do not believe it."] I believe the despatches, but I do not believe the leaders. It is a State of which someone said: It is a State built up on a basis of high ideals, a free democracy based on Christian ideals. That was by the Archbishop of Canterbury—[Laughter]. This is not a matter, in my judgment, for joking; it is a heartbreaking matter. Now you have a broken and a subject State, writhing under foreign control, bound to come here for help, for what help we can give. Why do we have to vote money for Czecho-Slovakia today? It is because she has lost her assets. What assets? Let us take some of them, and first, railways. At 14 points the main line is broken by German territory. You cannot go between the two chief towns in Czecho-Slovakia, from Prague to Brno, without crossing German territory, and I am told—I am sure the Chancellor has gone into the assets of the Czecho-Slovak State, because we are guaranteeing them a loan—that every train that passes through German territory is subject to a tax of 500 crowns daily. That is one of the reasons why we have to provide this money. Another is the question of railway stock. The Prime Minister will remember that when the Munich Agreement was debated in this House we asked what was meant by "installations." We had some idea that an installation meant something that stood where it was put, but I see that the Minister of Communications of the new Czecho-Slovak State has stated that under the Munich Agreement they have lost 800 locomotives, 3,270 passenger waggons, and 23,000 goods waggons. That is another of the reasons why the Chancellor of the Exchequer has to come here and ask for money with which to assist the Czecho-Slovak State.

Take coal, lignite, brown, and hard coal. Lignite and brown coal have been almost completely lost, and of hard coal two-thirds has been lost. Take the figures for brown coal, which is the more important. In December, 1936, they had 1,600,000 tons, and in 1938, 137,000 tons. When their locomotives are made, as they are, to consume brown coal, this loss of brown coal really means that they have to reconstruct all the machinery that depends upon that type of fuel. Take the public debt. They have lost towns and buildings and the millions of pounds which they had spent upon them. Take Ruthenia, one of the three federated States. They have lost their capital, and they are now compelled in the new capital to put up public buildings in wood. When Czecho-Slovakia took over this territory from the Austrian Empire, under Section 203 of the Treaty of St. Germain, they had to assume responsibility for the debt of the territory to which they succeeded.

I would like to ask the Chancellor of the Exchequer—all these arrangements were to be left, under the Munich Agreement, to an international Commission—What has been done? Surely you cannot come to the House of Commons and ask for money for Czecho-Slovakia unless you have seen at least that the terms of the Munich Agreement, so far as the financial position of Czecho-Slovakia is concerned, have been carried out! When did this international Commission meet last? What did Sir Nevile Henderson, or the distinguished official from the Ministry of Agriculture who conducts so much of our foreign negotiations, do? Has this question of the apportionment of the public debt been arranged so that Germany assumes her part of the responsibility in regard to the territory acquired by her? Has that been gone into? I do not think that a prudent Chancellor or, shall I say, a Chancellor with a Gladstonian spirit should come to the House of Commons and ask for money for another State until at least he knows that the people of that State, to whom we are anxious to give the money, have had their own assets properly protected.

There is another point. We are going to guarantee this loan to the Czechoslovak State. What Czecho-Slovak State? What frontiers? Are we going to guarantee a loan to a State whose frontiers we do not know? One of the favourite allusions of Government speakers here and in another place during the time of the Munich Conference and afterwards was this question of guaranteed frontiers. Can we have a plain answer to those questions? Perhaps the Prime Minister, who is here now, will tell us, Does a territorial guarantee of Czecho-Slovakia exist to-day or not? There is no reply. Suppose that tomorrow there is a change in the policy, and Poland and Hungary are permitted to take Ruthenia and have a common frontier, and Ruthenia goes out of Czecho-Slovakia, with all the mineral resources which have been the subject of such careful investigation by metallurgical experts from Berlin in the last few weeks. Obviously the State would not then be so well able to bear the interest on a public debt as would otherwise be the case. But we do not know; we never have known. We have been told repeatedly that there was a guarantee of security, and yet today we can get no answer as to whether such a guarantee is in existence, and we must guarantee a loan to a State whose frontiers we do not know. I know, of course, that the real answer to these questions is that we dare not offer a guarantee, because Germany will not allow us to do so. They have made it plain that they do not intend to have British fingers stuck in the Eastern European pie.

So much for the general side of the Bill, I will come now to the £4,000,000, and that is a part of the Bill of which we can all heartily approve. It is a gift, and I do not know why it was not possible to say, "We will give £10,000,000 to save the victims of the Nazi regime." It was done in the case of the £4,000,000, and I cannot understand why it should not be done in the case of those who remain in the State. However, the £4,000,000 for expatriation is a matter which alone would make it impossible to vote against the Bill.

Let us look at some of the details of this matter. When these people leave Czecho-Slovakia, the cheapest way for them to come, say, to London, or to any zone of safety, would be by a third-class train from Prague to London. That costs £3 us. But Herr Hitler will not allow them to come that way, and we have to pay, out of the £4,000,000, twice that sum in order to ship them from Gdynia, or three times that sum to ship them by air from Prague to London. The total sum involved is only a small one. There will be, we hope, some 10,000 of these people who will be able to escape, and therefore the whole sum cannot be more than £50,000 or £60,000. But it goes against the grain that the House of Commons should be asked to put its hand in its pocket because Herr Hitler will not allow his victims to escape by the cheapest and shortest route.

Again, these people are the salt of the earth—industrious, skilled workmen practising trades which perhaps are not known in this country. Many of them also have capital. The Chancellor spoke at some length about the export of capital, and said that they can only bring 50,000 crowns, or, less the deduction of 30 per cent., 35,000 crowns. Suppose that they have more money and wish to leave, why cannot they bring it with them? One knows, of course, the questions that are asked about how much currency you have in your bag when you leave almost any State in Europe, but one reason why they cannot bring it is because the Czech crown, which was so stable and honourable a currency before Munich, is now a tied and controlled currency.

Sir A. Lambert Ward

It has not been possible to bring currency out of Czecho-Slovakia for four or five years.

Mr. Benn

Certainly there is control at the present moment, and one of the reasons for that is that Czecho-Slovakia, financially and economically, is falling into the German circle.

Sir A. Lambert Ward

That did not apply four years ago.

Mr. Benn

I am speaking of what applies to-day. If Czecho-Slovakia has to buy her coal from Italy and Germany, obviously she will not have so much foreign devisen to give to the man who wants to pay a railway fare. Supposing that Czecho-Slovakia has been told that the plan is—I will read from the "Times," if the hon. and gallant Gentleman will allow me—that: Prague would continue to take Sudeten goods and some German goods, and, in return, Bohemia and Slovakia would sell to Germany agricultural products and what remains of their mineral1 resources. Czecho-Slovak trade with other countries would be sharply cut down. That is one reason why there is not enough devisen to give money to people who want to leave.

Sir A. Lambert Ward

There is not enough devisen to allow the money to be brought out.

Mr. Benn

Obviously, the hon. and gallant Gentleman is very well informed about this matter, but I am only dealing with some of the reasons which make it necessary to restrict the capital which these emigrants can take with them. Recently the Germans took a large quantity of cement—the consumption of which is very great in Germany—from Czecho-Slovakia, and that was done on a clearing arrangement. Instead of sending their cement abroad, and receiving free currency, which might have been at the disposal of these emigrants, all that they got was a clearing, whatever that may mean, of some impossible kind.

Hon. Members

Aspirin.

Sir A. Lambert Ward

I quite agree with the right hon. Gentleman. I was only pointing out that all these restrictions in regard to the export of currency were in force three years ago.

Mr. Benn

I do not think I am qualified to contend with the hon. and gallant Gentleman, with his expert information, but at any rate it is arguable that what has happened to Czecho-Slovakia has much weakened her, and that is one of the reasons why, when we get these highly desirable emigrants, with their skill and character, we cannot get them with their capital, because of the German control of the Czech State at the present time.

Of course, the refugees who are there now are not the only refugees; there are more to come; and in particular I want to ask the Chancellor of the Exchequer about the optants, about whom he has not said one word. Those are the people who are left behind in the Sudetenland and who, under the Munich Supplementary Declaration, were to be given the right to opt. They have only six weeks left in which to exercise the right to opt. We know what has happened. I am really ashamed to refer to the "Times" again, after the castigation I received from the hon. and gallant Gentleman opposite, but we know from the "Times" that the Gestapo arrived almost immediately after the cession, in order to round up Marxists, Socialists and other undesirable individuals, and put them where they ought to be. We know, also, that there were rumours about concentration camps at Karlsbad and Teschen. A Czech friend of mine told me that he had many acquaintances in Sudetenland, and that he had written to them, but had never received a reply except once, when the reply was. a printed postcard from Dochau saying that they were allowed to receive Christmas parcels. There were 400 Czechs there. When the Prime Minister came back with the Munich Agreement, we understood that these Czechs, who had been left behind in enormous numbers, would have an opportunity to escape, but up to this moment we have not heard a word about that. The Chancellor of the Exchequer has not referred to it. And yet, of the six months from 29th September, which will expire on 29th March, there are only six weeks left for these people to get out. Can the right hon. Gentleman tell us something about this, because he is right when he says that the House is very eager indeed to help the refugees? As far as the Germans in Czecho-Slovakia are concerned, they are not allowed to opt; they have to sign a form saying that they do not wish to do so in defiance of the wishes of the Führer. They are told that they have a role to fill.

There is another type of people who will be included among the refugees, namely, the Jews. Everywhere where the shadow of the swastika falls there is Jewish persecution. The notion that it exists only in Germany is the greatest possible mistake. Every neighbouring country is compelled by the Germans to pursue a similar policy. If you go to Memel to-day, you can buy a house quite cheaply, because, although Memel is not Germany, the Jews have moved to Kovno for safety. In Danzig, although it is protected by an international Statute, all the Jews are being forced to leave by pogroms, robbery and the rest; and the same applies to Hungary and other countries. In any State where the shadow of Herr Hitler's rule falls, the Jews will be persecuted, and Czecho-Slovakia will be compelled to adopt a similar policy. M. Chvalkovsky, the Foreign Minister, would, it is generally understood, have been the choice of Czecho-Slovakia for its Presidency if his grandmother had not been a Jewess, and a new law examining into citizens' attestations, or the right of citizenship of residents in Czecho-Slovakia, was published two or three days ago. So far as Slovakia is concerned, you see everywhere the swastika flying alongside the Slovak colours, and a concentration camp has been instituted for Socialists, Jews and other untrustworthy elements.

Do we suppose that all this is being done by the good will of this State of Christian ideals, as the Archbishop described it? It is done under dire pressure from Berlin. We read to-day in the newspapers that a cultural mission has arrived in Prague from Berlin, to assimilate, by literature, films and the like, the cultures of the two peoples. I am not traversing in the least anything that is in the White Paper about the use of this fund for people regardless of race or religion. That is so. I am merely pointing out the facts, and asking for information as to what additional burden will fall upon the fund owing to the demand, covert or open, which is growing in strength, from Berlin, for assimilation of Czech policy to German policy in relation to the Jews.

Let me now say just a word about the £8,000,000—the loan. The Chancellor of the Exchequer drew attention to page 13 of the Memorandum, where particulars are given of this, which is the more important part of the whole transaction. I would like to ask him this question: It was understood that £10,000,000 was made available some weeks or months ago to the National Bank of Czecho-Slovakia. Has he had any account of how the money has been laid out? It is customary in this House, when financial Estimates are laid, that some account should be given of the actual or projected expenditure, and I would therefore be glad if we could be told in the course of the Debate by the Chancellor of the Exchequer, or the Financial Secretary, or whoever replies, whether he has had any account from the National Bank of how this £10,000,000 has actually been laid out. It can be laid out for any purpose urgently, and it is intended that it should be replaced as and when the refugee requirements permit. In considering this question of how the money will be laid out, the House must bear in mind the painful fact that Czecho-Slovakia is subject to-day to the Reich. It is a vassal State. There may be some of the people there who are willing to work with Germany, but I am sure that no Czech desires to be a vassal of Germany. The fact, however, is that Czecho-Slovakia to-day is a vassal State. When, shortly after the Munich Agreement, M. Chvalkovsky, the Foreign Minister, visited Berlin, he said: Plainly we have to assimilate our policy to the policy of the German Reich, economically and politically. They assimilated their political policy by the abolition of parties. To-day there are no parties in Czecho-Slovakia. There is an Opposition and there is a Government, but in effect there are no political parties. To illustrate again the subjection under which they lie, I would ask the Chancellor of the Exchequer or the Under-Secretary of State for Foreign Affairs, who represents this side of the case, why there have been no elections in Bohemia since the Munich Agreement. Elections are to be held in Ruthenia on 12th February, and they were held in Slovakia a short time since. Why is it that in this State, this happy little Switzerland that the Chancellor said we were going to have after the Munich Agreement, there have been no elections? The answer is that they have not dared to have elections, because the Government would have been defeated and a Parliament would have been returned which could not possibly work in the servitude which the Berlin Government requires of the Czech Government. Perhaps the Under-Secretary will deal with this point—I am sure he will if he speaks in the Debate—and will let us know why it is that no elections have been held in Bohemia and Moravia. The subjection in which Prague lies to Germany cannot be illustrated better than by this simple incident. In a neighbouring village, which happens to lie in Germany, one German policeman could turn out the whole electric supply of Prague. The control of the whole supply lies in that village, which is in German territory. That simple illustration shows clearly how completely the subjection has been made effective.

In deciding upon what public works this money is to be spent, the Czech Government will have to have regard to their relations with Berlin. I notice that only a day or two ago a newspaper—it was not the "Times," but the Government paper in Prague—said: We must join the Central European bloc, under Germany's predominant influence. We must consider Germany's situation, and avoid creating new industries in the Republic similar to those which are already numerous in Germany. You will find references again and again by correspondents of newspapers, the "Times" and others, pointing out that the Sudeten Germans are making the firmest possible stand against the erection of competitive industries in what remains of Czecho-Slovakia. No wonder they say in Prague that the present President of Czecho-Slovakia is the first President of the second republic in the Third Reich. The Chancellor said that this money is to be spent on productive employment for Czech refugees. Many hon. Members share his fear that such employment might inure to what he referred to euphemistically as "a third party." It is more than possible that the productive work will inure to the benefit of the third party.

The House will remember that when the Hungarians made their claim on the Czechs, for some reason which was difficult for the Hungarians to understand, Bratislava did not fall to Hungary; it was left in Czecho-Slovakia—a point which was referred to by the hon. and gallant Member for Carlisle (Brigadier-General Spears). The reason was, of course, that there was a known project for a Danube canal, and it was necessary that the Germans should retain this piece of territory, and leave Bratislava in the hands of Czecho-Slovakia, a vassal State, for the purpose. I see that one of the Ministers over there has stated that the canal will be constructed jointly by Czecho-Slovakia and Germany, that the Czech share will be £70,000,000, and that it will employ 25,000 workers. Is that one of the public works? What could be better than to employ refugees on this canal? It would keep them at work for a long time, on a great public project. So the guaranteed loan may possibly mean that the German submarines will have a new entrance to the Black Sea. Let us take another case. The Chancellor was insistent that this money should be spent on roads, but not for military purposes. I do not see how you can ensure that. Do you put up a notice, "This road not to be used for military purposes?" There are several soldiers in the House. Perhaps they can explain how these roads are excluded.

I will not speak about the great road from the German frontier through Czecho-Slovakia. The Germans have also got an arrangement by which they can run military trains and munition trains right through. I will not speak about that road; I will take another road. It is the motor road connecting Western Bohemia with the eastern provinces. It is to be commenced next Spring, and will be 600 miles long and will employ thousands of men. I believe the road is to be started at the Rumanian end. This road is necessary for the Prague Government. At the present time the only communication with the Province of Ruthenia, or what they call Carpathian Ukraine, is by road. This road is in ribbons, because of the military lorries which are being used to carry down soldiers to maintain order in the provinces. There is a road from west to east; here is the £8,000,000 loan. It is merely to send down public officials from Prague to the capital of Ruthenia. Yet it is a road which will lead direct to the Rumanian frontier. It is intended, in the minds of those who would like to see it constructed, for that purpose. It is a road which, with all their rights over this little State, the Germans can use, if necessary, for the purpose of keeping the Hungarians in order. It is a road which ultimately leads to the Black Sea and Russian Ukraine.

What the Government have overlooked is this. The minds we are facing to-day in Germany are strategic minds. Some people think the Germans went to Munich to carry out some principle of Wilsonian self-determination. If they wished to liberate minorities, there are plenty in Poland and in Italy. They went to Munich in pursuit of great strategic objectives to the East. There is more than a danger that we are contributing our mite to establishing what exists almost completely to-day—a political, economic and military domination of the East by Germany.

5.9 p.m.

Mr. Harold Macmillan

The Bill which is now before the House represents the last act of a tragic story and I am not surprised that the Chancellor of the Exchequer, in introducing it, pitched his speech on a very low note. This is a subject on which it is difficult for anyone who has any personal knowledge of any of its ramifications to speak without considerable emotion. I will try to say what I have to say without exaggeration, and I will try to avoid sentimentalism or overstatement. As I understand what the Chancellor has said, the financial effect of these agreements is to increase the sum from the £1,000,000 originally advanced to £12,000,000, of which £4,000,000 is to be a free gift of the British Government, to be spent on refugees outside Czecho-Slovakia, and £8,000,000 is to be a guaranteed loan, to be spent primarily on refugees inside Czecho-Slovakia.

May I say a word on those refugees who are coming out of Czecho-Slovakia, some of them into this country and some into others? Why is this sum necessary? It is necessary for two reasons. First, because of those refugees who had originally left Austrian and German territory and sought asylum in Czecho-Slovakia, and were being demanded back by the German Government. There is grave fear that they may have to return to Germany, and, unless they can be evacuated rapidly, they may become the victims of persecution. There is a second reason: the inhabitants of the Sudeten territory, those people who were liberated by this principle of self-determination, and who, alas, find that their liberation means that they are deprived of all their resources. The right hon. Gentleman rightly pointed out the difficulty of transferring currency. To my personal knowledge, some of these people who are now fugitives from the Sudeten territory, and some who are even living in Sudeten territory, have been deprived of their possessions because they were disliked by the present Government.

One has to be careful of stating cases: certainly I will not state names, but I know a case of some refugees who are now my own guests. They had to leave because they were politically hostile to the Government. They had sufficient fortune to maintain their own families. In one case, only the head of the family, who was disliked by the Government, had to leave. This man thought that his family would be all right, because he had left sufficient to keep them; but that has been seized and turned into block marks, which cannot be taken out. This refugee problem is partly the result of Munich, and partly the result of the terms of the Munich Agreement having been broken, and widely broken, by the Governments concerned.

The remaining £8,000,000 is to cover "general purposes of reconstruction," in Czecho-Slovakia, including the relief and settlement of refugees, but the Chancellor has made it plain, and the right hon. Gentleman who has just spoken made it still more plain, that this money may be spent on other purposes, provided that an equal amount of money is replaced by the Czech Government. So the £8,000,000 is really to be spent for the benefit of the Czech refugees now in Czecho-Slovakia. I will not go into details of the danger of these moneys accruing for the benefit of third parties, but the position really is that this £12,000,000 is now to be spent as to £4,000,000 on refugees who leave the country, and £8,000,000 on refugees who are still within the confines of the borders of Czecho-Slovak territory. What, then, has happened to the long-term reconstruction of the economic life of Czecho-Slovakia, which, when this money was first granted by the Bank, was the purpose of the loan? When the original advance was made in October, 1938, it was in connection with a request to help to raise a loan to Czecho-Slovakia of £30,000,000. That was the sum mentioned by the Prime Minister in the Debate. The £10,000,000 was represented as an instalment justified on the principle—and I use the Prime Minister's own words—that: 'He who gives quickly gives twice'. He spoke of it as being related to a "final" figure as an advance or instalment. I quote his words again: How this advance"— the £10,000,000— will be related to the final figure which may be decided upon hereafter is for the future.''—[OFFICIAL REPORT, 3rd October, 1938; col. 46, Vol. 339.] The reason which the Prime Minister gave at that time for the loan was that we must recognise that Czecho-Slovakia had been put in a position where she has to reconstruct her whole economy, and that in doing that she must encounter difficulties which it would be practically impossible for her to solve alone. At that time no mention of any kind was made of refugees. The Government were not prepared to admit that there would be a refugee problem. The Home Secretary said—he is not in the House at the moment—that "the limited and controlled cession of territory" and the conditions regarding the safety of the new minorities created by the Munich settlement "would be carried out in a fair and reasonable manner." What then, has become of the £30,000,000 of which this £10,000,000 was to be an advance? I know that at the time many of my friends who consulted with experts felt that it might have been a much larger sum, perhaps £100,000,000, really to rebuild the economic structure of Czecho-Slovakia. Why is it that the appeal for a loan adequate for this purpose which the Prime Minister told us on 3rd October would meet with a sympathetic and even generous response, is no longer even under the consideration of this House? Why, is it that we have had to do what one has to do in business, in politics and in other transactions: we have had to write down the whole transaction. We have had to whittle it away and we have had to admit, what the Chancellor of the Exchequer hinted at with great diplomatic decorum, that we are unable to carry out the original purpose of this loan because of the complete transformation of the situation, and because the critics of the Government at that time have proved to be right. Only in October of last year the Prime Minister told us that: It is my hope and belief, that under the new system of guarantees, the new Czecho-Slovakia will find a greater security than she has ever enjoyed in the past. The Home Secretary told us in the same Debate that I believe that the international guarantee, in which we have taken part will more than compensate for the loss of the strategic frontier and that the new Republic would be made as safe as Switzerland has been for many generations in the past on the Continent of Europe. There is an unconscious humour in the last remark, when one considers the present efforts of the Swiss patriots to fight the insidious propaganda of Nazi Germany; when Switzerland is being ordered by Germany to control the free expression of her writers and journalists, and when she is rapidly, almost feverishly, fortifying her frontiers upon the North and upon the East. But would the Government spokesmen to-day repeat the statements in which they visualised Czecho-Slovakia settling down in peace and in security, confident that the political and economic independence, and the territorial integrity of the new Republic, would be freed from the noxious burden of an incompatible population and enter into a new, prosperous and free life? All that has just gone and we may as well be frank about it.

The right hon. Gentleman the Member for Gorton (Mr. Benn), has adduced by chapter and verse many facts which this House may just as well know and admit. The population of Czecho-Slovakia has been reduced from 15,000,000 to 10,000,000; the area of the country has been reduced by 30 per cent.; and it carries the same burden of debt with two-thirds of the population. Fifty per cent. of her productive forces have gone to Germany, and 90 per cent. of her fuel resources have gone to Germany. Slovakia and the Carpatho-Ukraine have become the autonomous territories, and the rolling-stock has been stolen contrary to the conditions of Munich. Political parties have been banned. There is no freedom, and there are no elections and no free Parliaments. The Jews have been disfranchised, and, to refer to what has already been noticed, the greatest irony of all, some of this money may now be spent upon completing the Oder-Danube Canal, for which it was thought necessary without the slightest justification to seize a territory of 70 villages and transfer 20,000 people who are non-German.

We know that assurances had to be given, and have been given, by the Foreign Minister of Czecho-Slovakia that they will pursue what is called a loyal attitude towards Germany. Berchtesgaden was bad enough, then Godesberg, and then Munich. The conditions are far worse than anything ever demonstrated at Godesberg which we were then prepared to resist. I do not know of any words which can describe these conditions except those again of the Prime Minister. The conquest and subjection of a State by a foreign enemy which dominates by the fear of its force"— which is precisely what he said in his broadcast on 27th September—he would feel— must be resisted. It has happened and it has not been resisted.

I am not going to oppose a Bill which, at any rate, gives £4,000,000 to those victims of this settlement who had to leave their country. I have seen enough of them during recent months to vote money willingly if it were ten times this amount. It is the least we can do to cover some of the shame and indignity to which we have been subjected. We ought to face the situation and take this opportunity of asking the Government, do they admit these facts? Are they still trying to cover them up and pretend that it might have been a fair settlement, and would have been a fair settlement perhaps, as they argue, if it had been fairly operated and implemented, but which is, in fact, a tremendous blow, perhaps an irreparable blow to the whole structure and stability of Europe.

Is it too late? We might have given £10,000,000, £12,000,000, £20,000,000 or £50,000,000 and wasted it all, but surely it is not too late. In recent months we have recovered a great deal of our sense of pride and power. We are rebuilding our armed forces, and every day we seem to be gaining in national unity and determination to resist before it is too late further pressure of the kind which we have had to give in to before. Have we abandoned altogether the Eastern Front? Are we attempting to rebuild confidence and to bring together the smaller nations which are still looking for relief? They may be dominated to-day by Germany. What else can they do? They are not willingly dominated. We only need give them a lead in both financial support and trade. Leadership can still be given which depends upon the foreign policy of the Government as well as upon the policy laid down in this Bill to-day, instead of getting out of it cheaply by carrying out what we said we would do and putting a little more into the pool. It is the same when you have a bankrupt friend. You know that if you pay a little more it will not go to him. It all goes to the creditors and will perhaps bring up the payment from 1s. to 2s. in the £. Is it to be that kind of thing, or is it to be a useful service to rebuild a front which, I think, can still be rebuilt if developed with energy and power. The answer turns on Czecho-Slovakia, Rumania, Hungary. It turns on Russia. When we were on the eve of war the Foreign Office issued an official statement on the Tuesday night that, in the event of war, England, France and Russia would stand together. Is that still the policy of the Government? What has happened to our Russian policy?

Mr. Deputy-Speaker (Sir Dennis Herbert)

I am afraid that the hon. Member is getting far away from the provisions of the Bill.

Mr. Macmillan

I apologise if I have wandered from the point which is covered by this Bill. Quite honestly, I believe far more in the unity of the nation to voice what we all want to voice. I am not here to say that this Bill is wrong. I support it. I am not here even to say, "We were right and you were wrong." If we are to be of any use in the future we may as well admit the truth that we have had to write down from the £30,000,000 suggested four months ago, from the £50,000,000 that we talked about, with the idea of reconstructing a free, independent, economic, self-dependent Czecho-Slovakia. We have just had to write it down and do the best we can to deal with the most unhappy victims of persecution. That is what this Bill is for, but at least let the House know, and the country realise, that this is not the picture that was painted four months ago. Let us in that spirit be determined to face reality and not live in a world of unreality and self-deception in which, I am afraid a great part of the people of this country still allow themselves to be deceived.

5.29 p.m.

Sir A. Lambert Ward

It was not my intention to intervene in this Debate but the hon. Gentleman the Member for Stockton-on-Tees (Mr. Harold Macmillan), in his speech committed one or two such glaring inaccuracies that I feel I must contradict him. He said—and I took down his words very carefully—referring to the fuel or coal supply of Czecho-Slovakia, that 90 per cent. of her fuel supply has gone to Germany. A statement like that is hopelessly inaccurate. In the days before the unfortunate instances took place, between 25 per cent. and 30 per cent, of the entire fuel supply of Czecho-Slovakia came from the Teschen area.

Mr. Harold Macmillan

What I said was that under the settlement 90 per cent. of the fuel resources had gone to Germany and Poland.

Sir A. Lambert Ward

No.

Mr. Macmillan

I stand corrected.

Sir A. Lambert Ward

That entirely alters the position. The hon. Gentleman in making an important speech should be more careful in making statements of that kind. It entirely alters the bearing of the subject. In regard to the statement as to the coal supply at Teschen, which has been lost to Czecho-Slovakia, I do not think anyone will mind my saying that the Czecho-Slovak claim to the Teschen coal area is not a very sound one. Let us go back a few years and rehearse what took place, and how Czecho-Slovakia came to be in possession of that area. I think I am right in saying that it happened in the days when Poland was fighting with her back to the wall against Soviet Russia. The frontier delimiting the Teschen area had already been decided upon, but the Czecho-Slovak authorities were not satisfied, and, taking advantage of the opportunity which the parlous state of Poland gave, they simply sent armed military forces into Teschen and occupied the area, where they remained for 20 years. If the hon. Member considers that is a just claim to that particular area, all I can say is that I very much differ from him.

With regard to the statement regarding the roads, it is impossible to define what is a military and a non-military road. All roads are useful for military purposes, but a road which leads directly to another country's frontier is looked upon as being more of a military character than one which runs parallel to the frontier. I think this money could not be better spent than in developing the road system of Czecho-Slovakia. The road system of that country has been notoriously backward for the last 20 years. It is one of the worst in Europe. There is a good system of communications across Germany and to a very large extent across Austria, but in Czecho-Slovakia the road and the railway systems are hopelessly inefficient. The road and rail system of Czecho-Slovakia would return 50 per cent. in value for the money spent upon it. What was necessary before the days of the Munich Agreement is infinitely more necessary now. As the right hon. Gentleman said, the roads and the railways in and out of Germany and Czecho-Slovakia and in and out of Czecho-Slovakia and Hungary lead to a very serious loss of time and are a detriment to trade generally. I should not have thought that the sum which the German Government are demanding from the Czecho-Slovak railway authorities for the running of their trains over what is now a German Government rail road, is excessive. The figures given by the right hon. Gentleman were accurate. He said that 350 crowns per train was the amount. That, I am given to understand, states correctly the sum, and it is not excessive.

Brigadier-General Spears

The Czechs have to pay insurance on trains passing through what is now German territory, and are liable for all risks to their trains in German territory and to German trains in Czech territory. This arrangement is not reciprocal. These risks are not borne by the Germans in regard to their trains in Czech territory.

Sir A. Lambert Ward

I believe that is correct. It is a fact that the German trains pay the same in going through Czecho-Slovakia as the Czech trains pay in going through Germany, with the exception of the insurance, which is not a very serious item. I do not think it amounts to very much. In regard to what was said about the territory of Pressburg, formerly Bratislavia, forming a junction with the Oder-Danube Canal, and the possibility of sending submarines to the Black Sea, that possibility already exists, by the fact that the Rhine-Danube Canal, which has been turned into a ship canal and will be completed in two or three years time, will afford any facility which is necessary.

Mr. Benn

It means just doubling the facilities.

Sir A. Lambert Ward

The facilities provided by the Rhine-Danube Canal will be so ample that doubling will not be necessary. In regard to the actual amount that is being advanced, I am very glad to hear that the Opposition do not intend to divide against the Bill, because it is the least we can do to help the new State of Czecho-Slovakia. I said so in a short speech which I made on the Munich Agreement, and I reiterate it now. It is the least we can do to help. There is not the slightest doubt that Czecho-Slovakia were led astray, not by us but by our Allies, for whom we have some responsibility.

Mr. Crossley

Is it not a fact that what my hon. and gallant Friend said on the Munich Agreement referred to the sum of £30,000,000?

Sir A. Lambert Ward

I do not think that I referred to any actual amount. I expressed approval that an amount of money was being voted to assist the Czechs in their difficulties. As far as I remember, I do not think I criticised the amount or expressed the wish that it should be larger or smaller. As I have already said, we owe something to this country, which has been the victim of very unfortunate circumstances. It is not our fault but to some etxent the fault of our Allies, France and Russia.

Mr. Duff Cooper

Have we any alliance with either country?

Sir A. Lambert Ward

I understand so. I only know what has been said in this House.

Mr. Mander

The hon. and gallant Member says that Czecho-Slovakia was let down by our allies, our allies being France and Russia. Does he really mean that?

Sir A. Lambert Ward

I certainly mean that if the Czech Government in the pre-Munich days had not thought that they would be entitled to support from both France and Russia, they would have come to an agreement with the Sudeten Germans which would have been very much more to their benefit. When I was in the Sudeten area in August of last year no one there even suggested that an alliance with Germany was a desirable thing. All they wanted in those days was home rule, if I may so call it, on the lines of our own Dominions, or something on the lines of Swiss Federal home rule. The Sudeten areas at that time would have been absolutely satisfied with that, and I think they would have got it if the Czech Government had not been encouraged to stand out by promises that were made largely by France.

Mr. Benn

Has the hon. and gallant Member read Lord Runciman's letter—

Sir A. Lambert Ward

Most carefully.

Mr. Benn

—saying that what caused the breakdown in a hopeful situation was encouragement from Germany.

Sir A. Lambert Ward

That was at the very last stage of the discussions. There was not the slightest doubt that the Czech Government would have seen their way to grant some form of home rule long ago if they had not been encouraged by France to stand out against the demands of the German-speaking population of Czecho-Slovakia. My object in rising was to correct some of the incorrect remarks that have been made. I conclude by congratulating the Government on bringing in this Bill and doing something to help a country which has been let down, though not by us.

5.40 p.m.

Mr. Mander

In listening to the hon., and gallant Member who has just sat down I could not help feeling that he belongs to that group in this country who seem to me to be as dangerous in their way as the Nazis in Germany. I do not know which is the most dangerous—the innocence of the Prime Minister and the Government or the arrogance of Herr Hitler and the Nazis. The Measure which we are considering is of very great importance to Czecho-Slovakia and to Europe generally, and it is of special importance to the Chancellor of the Exchequer. The constitutional question has been dealt with in an extremely able way by the right hon. Gentleman, whose words were wise, and I hope that in future no steps will be taken to spend money without statutory authority. It would have been possible for the Chancellor of the Exchequer earlier in the autumn to have come to the House and have got some general authority enabling him to make grants, but he chose not to do that. Therefore, we have the situation to-day that in the event of this Measure being rejected on Second Reading by the House of Commons the Chancellor of the Exchequer, so far as I can see, will be personally liable for the sum of £10,000,000. I imagine that even the overflowing funds of his own party organisation will hardly be sufficient to meet that deficit.

Sir J. Simon

I shall borrow from my friends on the other side of the House.

Mr. Mander

The Chancellor of the Exchequer made no reference in his speech to what I think is a very important passage in the letter from Dr. Pospisil to Lord Halifax, in which it is stated that what has been done falls short of the request for assistance made by the Czech Government. Whoever replies will, I hope, be good enough to say why we were unable to meet the request of the Czech Government. They are not satisfied, because this falls short of what they asked. Therefore, we are entitled to some information. It has been pointed out that the situation which faces us to-day is of a wholly different kind from that of the spacious days of early October. Then, we were contemplating a loan of at least £30,000,000. In the King's Speech there was this statement: My Ministers have already arranged for an advance of £10,000,000 to be placed at the disposal of the Czecho-Slovak Government, to meet urgent requirements. The idea then was that they could do whatever they liked with the money. There was no question of any of it being paid back. It was suggested that probably more would be given. Moreover, at the time when the Czech Government were being pressed very hard by the British and the French Governments to agree to the painful proposals dictated to them, assurances were, I understand, given that financial support would be afforded to them. We all know that what actually happened was that the unfortunate Czech people have been handed over gagged and bound to the oppressor. They are not in a position to resist, and that is why the Government are going back, inevitably, on the idea they had at that time.

What is the Czecho-Slovakia with which we are dealing to-day, compared to what was contemplated? Some reference has been made to it. It is extraordinarily different from the free and happy life that was envisaged by Ministers at that time. The Chancellor of the Exchequer euphemistically referred to certain areas which he said had been ceded. I think "captured by force" would have been a more accurate description of what actually happened. Germany has obtained a great deal more than the Godesberg proposals, which were regarded as outrageous at the time and rejected by the Prime Minister and this country. About 2,850,000 Germans have gone to the Reich, 850,000 Czechs have gone to the Reich, and in the sacred name of self-determination I suppose that 150,000 Czechs have gone to Poland and 200,000 Czechs and Ruthenians have been handed over to Hungary. All the fortifications on which tens of millions of pounds were spent at the instigation and with the encouragement of the British and French Governments have been handed over to the enemy.

Industrially the China porcelain works have gone, two-thirds of the glass, half of the textiles, one-third of the timber and chemicals, and while the Skoda Works still remain within the bounds of the new State, they are bound in the end to come under German domination. Not only is the Czech Army and Air Force no longer available to fight on the side of democracy and liberty but the great Skoda Works, instead of supplying the democratic forces as they did, will now be supplying the enemies of the democratic forces. That is a very serious element in the situation. One hon. Member has referred to what was done with regard to the electric light of Prague. Let me give another example. A German official inside Germany can now by a turn of the hand cut off the water supply of the town of Pilsen. Further, the 300,000 Germans who are living in Czecho-Slovakia are being organised on Nazi lines. They are deliberately advised to work themselves up into an organisation for useful Nazi purposes in the future, and anti-Semitic legislation is in force already. It is estimated that the Czecho-Slovak State has lost over £1,000,000,000. I understand that the Germans are claiming a considerable portion of the gold reserves and the social insurance fund, and in addition that Germany is unwilling to take any share of the national debt of the territory which has actually come to her. It is perfectly clear that the country is becoming a vassal State. We have to recognise it, and that is the reason why it is not possible to act in the generous and lavish way in which I think most hon. Members, whatever they may have thought about the events at Munich, were willing to do last Autumn.

I should like to ask some questions as to the uses to which this fund can be put. At first it was at the free disposal of the Czech Government, but that has gone. I understand that £10,000,000 has been handed over and that it is going to be paid back. I should like to ask in what way the money which has already been spent has been spent? Can we have some information about that? It would be interesting to know what the position would be if the liaison officer who is controlling the expenditure of the new money disagrees with the plans which are put forward. I assume that we have a veto, that if we do not think any particular scheme is a wise way of spending the money we could prevent it being carried out. I should like to make a reference to an important paragraph on page 10 of the White Paper, in which it is laid down that no refugees will be forced to leave Czecho-Slovakia "if they thereby run the risk of danger to health, liberty or life." Does that mean for any destination? Does it mean that not only none of the people on the danger list would be forced to go to the democratic or similar States in Europe, but that they will not be forced to go to Germany? That is the important point.

If that is so, if there is a definite undertaking, I should like to know how it is to be carried out. What power have the Czech Government if they are told to-morrow that they must hand over certain individuals? They have to do as they are told. We want more information as to the precise meaning of these words and how they are going to be carried out in practice. In Annex I of the White Paper a wide definition is given of "refugees," and I assume that it includes not only Austrians and Reich Germans who may have taken refuge in Czecho-Slovakia in the old days but also Sudeten Germans and those who formerly lived in what is now Hungary and what is now Poland. Then there is the important question of reconstruction. Here I should like to read some words from a report published recently by the Royal Institute of International Affairs which gives some interesting information as to what has happened. It says: Not only have her commercial centres and richest agricultural land been ceded to Hungary, but the main railway line connecting Ruthenia with the west now passes through Hungarian territory, and the only communications left to her are three north-south sections of railway and a few ill-kept hill roads, which further emphasise her natural north-south economic basis.… The Czech-German settlement resulted in the cutting of the railway system at no fewer than 58 points. Is any of this money liable to be spent on railways? That certainly is of great military importance. We are told that in connection with the great new road, which is going to be German territory contrary to the Agreement of Munich, from Breslau to Vienna, none of the money can be spent on that. But surely that road is to have ancillary roads, and what is important is that none of this money shall be spent on roads which would be naturally and inevitably feeders of the great German military roads going from north to south. A question has been asked about the east-west road from Jasina to Pilsen. I think we should have a definite assurance that none of this money is going to be spent upon that. The hon. and gallant Member for North-West Hull (Sir A. Lambert Ward) referred to the bad condition of the roads in Czecho-Slovakia. I am afraid that his experience must have been a great deal less happy than mine. I have toured all over the country in a high-powered car at a great pace and found the roads as good as anywhere in Europe. The utmost care will have to be exercised to see that in spending money on reconstruction work we are not in fact assisting Germany in her military plans. On page 14 of the White Paper reference is made to: The transfer into foreign currency of interest, dividends and rents on investments or property owned in Czecho-Slovakia by a refugee who has emigrated and also of the capital amounts concerned. It makes it clear that the transfer of money from other countries will be permitted. In so far as that is practicable it is an important question from this point of view. There are a number of Sudeten Germans now in Czecho-Slovakia who are interested in factories in the territory which has been handed over. They have lost their market in that area, but a great deal of what they made was exported to the United States and that market, that good will, remains. Many of these people would be glad to come over to this country, to transfer their money and set up factories which would give employment, non-competitive employment with articles made here, and so encourage this export trade to the United States. I do not think there is much likelihood of much of the money being spent on factories in Czecho-Slovakia because the Germans have made it clear that they do not intend to allow any possible competitive factories to be set up. They have prohibited it.

Finally, it seems to me that we are looking at a very sorry spectacle to-day; the failure of the hopes of the Government—not a failure of all our hopes because many of us felt that nothing could come out of it—in believing that they were doing something to give a new start and a better and happier life to the people of Czecho-Slovakia. No one can pretend that that exists for a single moment. They are subservient. We are becoming subservient, too. I trust the time will never come when we are a vassal State, but we are steadily moving to my mind in that direction. Here is this little country a shining example in the centre of Europe, with all her democratic ideas, betrayed by her friends. All they can do is to bow their heads in acquiescence at their fate for the moment. But while they bow their heads their spirit is unbroken. They have no intention of losing the ideals for which they stand. I believe they will keep alive in their hearts the flame of their culture until the darkness of the night passes and once more the sunshine of liberty illuminates their land and allows them to hold up their heads once more.

5.59 P.m.

Mr. Boothby

I want to reinforce certain of the questions which have been put to the Government during the Debate. I hope the Under-Secretary will give us some indication of the position of the Government first of all with regard to the guarantee of the frontiers of Czecho-Slovakia. Do they regard the frontiers as having been finally settled, and will they guarantee them or not? There are two other questions which I regard as of great importance. The first is the question of compensation. The Germans have made no attempt to carry out the compensation clauses of the Munich Agreement. Are we going to put any pressure on Germany to deal more fairly with Czecho-Slovakia? It is one of those things which can be rectified. Then there is the vital human question of the refugees, the Czechs in Sudetenland or the Germans who still have a chance under the Munich Agreement to get out if they choose. What is being done about that? Are they all in concentration camps? Are the German Government going to give them a chance to get out if they choose? I feel that the Government might do so much still for Czecho-Slovakia and for the refugees by bringing a little pressure to bear on Berlin. We have had quite enough pressure from Berlin. Could not we now start to put a little gentle, tactful pressure on Berlin for the sake of these unfortunate people? I ask my hon. Friend to give us some indication as to the position with regard to frontiers and whether our guarantee of the frontiers still holds good, and also with regard to compensation and optants.

Every hon. Member who has spoken in the Debate has struck a rather mournful note. I noticed that even my hon. and gallant Friend the Member for North-West Hull (Sir A. Lambert Ward) referred to Munich as an unfortunate incident, which represents a considerable change from the attitude which he took up some months ago. I remember the generous emotion which prompted the original gift to Czecho-Slovakia. It was felt by the Government, and by all of us, that there was a real hope of enabling Czecho-Slovakia, even after the Munich Agreement, to have a good life. I remember very vividly the day following Munich. A feeling of profound gratitude towards Czecho-Slovakia swept over us an; throughout the whole country there was gratitude towards Czecho-Slovakia for saving us from war at that time. It was a national feeling. I remember the immediate response of the Government to the urgent appeal which some of us made for financial assistance, without delay, to the Czecho-Slovak Republic, which had made this great sacrifice. There was the grant of £10,000,000, with the promise of another £20,000,000, and perhaps more, if necessary; there was the guarantee of the frontiers; the hope for the future.

A great deal of water has flowed under the bridge since then. We are in very much more reduced circumstances, and I hope reduced pride, now than we were then. I never had any illusions about the Munich Agreement. I never thought that much good could come of it; but I am bound to admit that I thought more good would come of it than has. The consequences have been so much worse than even the most apprehensive of us feared at the time. Why, after all, has there been this reduction from the £30,000,000 to this very elaborate but quite modest arrangement in the Bill? I suppose the reason is that the Government concur in the view that was so forcibly expressed by the right hon. Gentleman the Member for Gorton (Mr. Benn), that Czecho-Slovakia to-day is in the grip of Germany. The right hon. Gentleman described Czecho-Slovakia as being a vassal State. I think that is an exaggeration, I think the right hon. Gentleman overdid it; and I am not sure that we do not all overdo this idea of Czecho-Slovakia being a vassal State.

There is no doubt that at the present time Czecho-Slovakia is under the military domination of Germany. She is; and why? Because we put her there. It is not her own fault. To some extent Czecho-Slovakia has to conform politically and economically to Germany at the present time, but I submit that, considering the military position in which she is, she has stuck up for her own rights remarkably well. She has made agreements with Germany which were not too bad, and I understand she is still making economic agreements with Germany from which she will emerge with a good deal of economic independence. I think it only disheartens the Czechs, and is an overstatement of the case, to talk in this House about Czecho-Slovakia as though she were a hopeless case and only a vassal State of Germany. I believe that is not so. Czecho-Slovakia has bowed her head—and in my opinion rightly so—to the inevitable. They were ordered to submit by us and the French, and they submitted, for they had no option but to do so. They were ordered to submit by us by telegram from Munich.

Viscountess Astor

To prevent a European war.

Mr. Boothby

I agree, but in circumstances of almost inconceivable difficulty, they have kept their national pride, their national spirit and their national soul, if you like to put it so, in a way which few people would have done. That is not a country which I should ever describe as a vassal State. I wish now to draw the attention of the House to one or two economic facts. In the first place, my right hon. Friend the Chancellor of the Exchequer mentioned that never since the War has Czecho-Slovakia defaulted on any loan made to her, or been behindhand in any interest payment. Secondly, in the course of the Debate, figures have been given as to what Czecho-Slovakia has lost, and it has been stated that she has lost 90 per cent. of her fuel production. She has lost more than that. She has lost about one-third of her industries and one-third of her purchasing power as a result of the Munich Agreement. I will give the House a few examples. Of the glass industry, she has lost 75 per cent.; toy industry, 63 per cent.; textile industry, 58 per cent.; wrought metal, 28 per cent.; clothing, shoe and leather industries, 18 per cent. The national revenue in the former Czecho-Slovakia amounted to Kc. 58 milliards, and after the territories were ceded, it fell to approximately Kc. 38 milliards. There was a terrific economic sacrifice far in excess of the territorial sacrifice, and of course, to it were added all those assets which, at the time of the Munich Agreement, we supposed were fixed, but which have since turned out to be rolling as well. The third point I wish to make with regard to the present economic state of Czecho-Slovakia is the astonishing results of the foreign trade in the last quarter of 1938. In spite of all the political and economic disturbances, the new Czecho-Slovakia showed an export surplus on her trade balance sheet of Kc. 230,000,000—that is, £1,750,000. That was a very remarkable achievement—not the achievement of a wholly vassal State.

By passing this credit, grossly inadequate though I believe it to be, we are helping Czecho-Slovakia to regain a little bit more of her independence, to consolidate her finances and to hasten economic recovery. In 1937 she imported from us over £3,000,000 worth of goods, and from the Empire more than £4,000,000 worth. We took from her £7,000,000 worth. Therefore, there is a good prospect of still doing trade with Czecho-Slovakia if we help her. I submit to the House that it is our bounden duty even now to do everything we can to help Czecho-Slovakia in the economic field during the difficult and anxious time through which we and she are passing. As my hon. Friend the Member for Stockton-on-Tees (Mr. Macmillan) pointed out, we are getting stronger, and in a few months' time, and certainly in a few years' time, we may be in a position once again to exercise such influence on the Continent of Europe as will restore to Czecho-Slovakia, after her heroic struggle, her complete political and economic independence. If Czecho-Slovakia has lost either of these two things, it is not her fault.

I believe the achievement of the Czecho-Slovak people is without parallel in the whole of history. One day in September found them all standing resolutely to arms, manning with fine troops, fully mobilised, the strongest fortified line in the world, apart from the Maginot line, and absolutely ready, coolly and calmly, to take the first shock in the battle for civilisation. That was their position on one day. The next day found them, as they not unnaturally saw it, utterly and shamelessly betrayed by their friends and allies. That was their view, and nobody can deny it. We have our own reasons for thinking that we had no other course to take, but that was obviously how the situation presented itself to them when they received that deluge of telegrams, each one that reached them, shortening the number of hours in which they could give an answer agreeing practically to the dismemberment of their State. Let hon. Members try to conceive what a tremendous psychological adjustment they had to make in 24 hours, from the moment when they were keyed up to fight and the moment when they were forced to make an abject surrender without firing a shot. They must have been a tremendously tough people to go through all that without the slightest loss of morale, without any indiscipline, calmly and coolly withdrawing stage by stage from the fortified lines which they had built up with such care, on which they had spent money for years, and which they valued above everything else; their armies retreating in an orderly way, handing over the ceded territories on date, with no riots in Prague, or Bratislava, or anywhere else. I think that instead of calling Czecho-Slovakia a vassal State, we ought to take off our hats to Czecho Slovakia for having given us an example, during the last few months, which very few nations in the world could have given.

Everybody will admit one thing, whether he agrees with the Munich Agreement or not. The Czechs were sacrificed in the cause of peace. As Mr. Masaryk said in the United States of America, if it means real peace, the sacrifice was worth while; but in the meantime, I think we ought to do everything that lies within our power for these people. I wish this loan were a bigger one, and I hope it is not the last. We ought to do much more than we are doing now for the refugees, not only for the Jews, but for the Czechs. We ought to bring pressure to bear on Berlin, gently and tactfully, of course, but still to put a little pressure on Berlin to mitigate the position. I do not suppose it has ever occurred to the Government for one second to put pressure on Berlin, but it can be done, and I think it would have an extremely good effect. It would be desirable from every point of view. I conclude by repeating that, so far from this Bill being inadvisable, my only complaint is that it does not give sufficient assistance to this nation at the present time. I hope that this loan is not the last. I hope that not only in this way but in every way in the economic field—for instance, through the extension of export credits—we shall help this little nation to keep its spirit at any rate, and to keep as much of its independence as it possibly can. I believe that in the long run, if we do that, they will be grateful to us, and they will win back complete political and economic independence.

6.14 p.m.

Colonel Wedgwood

I propose to approach this question from the point of view of a realist. The first fact we have to remember is the betrayal, a fact which will not be forgotten by history or by the Czecho-Slovak people. The second fact we had better realise is that, although we may well compliment the Chancellor of the Exchequer on reducing our expenditure from £10,000,000 to £8,000,000, the £10,000,000 was going to a free people struggling for freedom, whereas it is now going to Germany. The next fact I want all hon. Members to observe is that the refugees are not being helped half as much as this Paper appears to show. The question is divided into two sections, one, the reconstruction of Czecho-Slovakia representing £8,000,000, and the other the refugees representing, nominally another £8,000,000 including the French contribution.

Take reconstruction first. The real vice of this Agreement and this Bill is that no control is exercised by this House or by this country, which is advancing the money, over the way in which the money will be spent. Anyone drawing up this scheme could have insisted on that control and could have got it, but the Government have betrayed that country again by leaving the expenditure of the money entirely in the hands of the Czecho-Slovak Government, and the Czecho-Slovak Government does not represent the people of Czecho-Slovakia but dances to the tune called by the German Government. Incidentally, do not we wish that we could have £8,000,000 for reconstruction in this country, instead of spending it in another country? How will this £8,000,000 be spent? In part it is to be spent on reconstructing Czecho-Slovakia and employing the refugees who fled from the Sudetenland to Prague, and in part on constructing factories in place of those which have been lost.

I do not believe that the Germans will in the least object to that. Part of our money will be spent in erecting factories to compete with our own. These will be up-to-date factories, the last word in the production of pottery, glass, woodwork, and all those things in which the Czechs have been, up to now, our strongest competitors. All the factories which formerly made those things have now gone over to Germany. They have been stolen by the German Government and our former competitors will be clamouring that this money should be used to build fresh rival factories in Prague and elsewhere inside the remaining territory of Czecho-Slovakia. I do not see that that is doing any good to the working class of this country. Our money is to be spent in constructing works for the people of another country. The Government say they have assurances that this money will be spent on roads, not military roads but roads which do not matter in the least. They may tell that to the horse marines. Having got the money without any conditions on how it is to be spent, those who have got it will spend it in the way that suits them best and what suits them best is what they are told by Germany to do. Therefore, you will have this east and west road and this great military artery to Rumania, to secure the Rumanian oil and in due course bring pressure to bear on Rumania, and all that is being done at the British taxpayers' expense.

That is not all. We are not taking any steps to see how these unfortunate refugees are to be employed. If a lesson is taken from Germany we shall see there also, along these new roads, the establishment of labour camps where people will be employed under warders drawn from the Nazi army. We know how strong the Nazi movement is there. It is the only movement now allowed to exist in Czecho-Slovakia outside the Government party. They walk about the streets of Prague wearing their swastikas and dominating the place, just as the conquistadores from Spain dominated Mexico. You will have people shot trying to escape from these labour camps. There will be no question about what will be paid for the labour. It will be kept alive. Those refugees who are unpopular with the dominant Nazi party will be put into such camps and it is inevitable that they will be treated in the same way as people are treated in similar camps in Germany to-day. There is nothing to stop it. No steps were taken at Munich to protect refugees flying from Sudetenland. Now the Government are advancing £8,000,000 of the British and French taxpayers' money, and are taking no steps to see that the money is not used to exploit an unfortunate lot of people who have no votes, no power to stand up for themselves and nobody to stand up for them.

The Press will not be allowed to see how this great work of reconstruction is being carried out. I doubt whether even the British liaison officer will be allowed to see these camps. All he will be able to do will be to receive the quarterly account and to know that the money has been spent and that therefore a fresh demand can be made on the British Treasury. I have seen the way in which roads and other public works are constructed in Eastern countries. Other hon. Members may have seen or have read of the way in which peones and prisoners were exploited and put to compulsory work in South America. They may have seen, as I have seen in East Africa, wretched natives toiling day after day, without remuneration, without adequate food, without medicine or doctors, employed in making bridges and railways, and wearily carrying on their backs endless basketfuls of earth. I am not at all certain that the worst part of this scheme is not the possibility, nay I fear the probability, that the money which we are voting will be used to set up a system which no man in this House, to whatever party he belongs, could possibly tolerate in any part of the British Empire.

That is one side of the question—the reconstruction side. I am afraid that the other part of the scheme which has been so much praised to-day, the £4,000,000—or should I call it £8,000,000—which is being spent on emigration is nearly as bad from the point of view of the assistance given to the refugees. Emigrants from Czecho-Slovakia and Sudetenland are of two kinds. There are those who want to get out but cannot get in anywhere else, and there are those who do not want to get out but who are being pushed in elsewhere. It is well-known that you have to deal with three different types of refugee in Czecho-Slovakia. You have the Czechs flying from Sudetenland, the German Socialists flying from Sudetenland, and the Jews everywhere. The attitude of the present Czech Government as regards the Czechs and Germans who have fled from Sudetenland is quite frank. They want them to go back to their homes and they do not want to spend money on the Jews. They would like to get rid of them but not to the tune of £200 each.

Is it not obvious, in those circumstances, what emigrants will be helped? The decision as to who will be helped appears to rest solely with the Czecho-Slovak Refugee Institute. Incidentally, we should like to have that view confirmed later. We should be told what the powers of the British liaison officer will be in deciding how much money is to be spent on refugee Jews and how much on refugee Czechs and Germans. But as I read it, it is in the power of the Czecho-Slovak Refugee Institute to decide who is to have first call on our £4,000,000 which is to be used for assisting refugees who emigrate from that country. Obviously, those will be assisted first who can be assisted over the nearest border and if you look at the map now you will see that Czecho-Slovakia is completely surrounded by the German Reich and by vassal states. There is no means of getting out of it, except through countries where the will of the Reich is dominant.

The Germans certainly will not take the Jews, but they are willing to take back the Czechs, and they are willing to take back and deal with the German Socialists who fled from the Sudetenland. They are particularly willing to take them back when they come each with £200 of good, solid British currency, which they never had before in their lives. That is just what the Germans want at the present time. Even if the definition of refugees in this agreement did include all the Jews who wanted a refuge to which they might fly from Czecho-Slovakia, so long as the decision as to who is to get the £200 rests with the Czech Government, I do not think much will go in the direction of the Jews.

But let us look at the definition of a refugee. I think it is clear that definition No. 1 on page 12 of the White Paper excludes all those Jews who reside now and who resided previously in the present Czecho-Slovakia. Although now they are subject to nearly all the disabilities that are inflicted upon Jews in Germany, those Jews who will want to get out, just as much as any Jew in Vienna or Berlin wants to get out, will be excluded from the benefits of this agreement by that definition as I read it. The Chancellor of the Exchequer used much wider words. He said that all Jews living in Czecho-Slovakia who wanted to get out would benefit from the Bill. He cannot have read the Bill, or else he must have some information beyond that contained in page 12 of the White Paper. Residents in the present Czecho-Slovakia who resided there before are not, according to this definition, refugees. Further all those Jews resident in the Sudetenland and in the territory ceded to Hungary, who did not get out before the Germans came in, and who were unable to escape into the present Czecho-Slovakia, are also excluded. The stateless Jews seem to me to be excluded. None who got in after September, 1938—and that includes many from the November pogroms in Germany—stand to benefit or can hope to benefit. Last, but not least, none of those Jews who are unable to get visas into foreign countries and who therefore cannot emigrate, can benefit under this Agreement.

I have already had three cases from Czecho-Slovakia and they are typical of the way in which this Agreement is framed—of the lack of sympathy shown for the people who need our help most at the present time. The first case was a pottery manufacturer from Sudetenland. He communicated with my son to ask whether anything could be done. Nine hours before the Germans were due to arrive the Gestapo had seized his town. They had been taken off to prison and his own mother, aged 70, had been taken out in her night clothes and run up and down the streets—a sort of humorous touch. She escaped and got to Prague. The man is in prison. I thought this was a suitable case about which to write to Lord Runciman, the Lord President of the Council, for, after all, it was a typical case of those people whom we had promised to protect. I never even got an acknowledgment of my letter. I am certain that it was sent on to the Czecho-Slovak Refugee Institute and it was felt that a reply was unnecessary. It will be observed that there are not only no emigration facilities but no hope for that man. He is in prison, I understand, until he agrees to hand over his factory to the Nazis. When he does that he will be free, but if he becomes free he will be unable to get a visa and to come under the terms of the Agreement drawn up by the right hon. Gentleman, unable to benefit in any way, with no chance of compensation or of anything but starvation.

Another case is of a family I once knew in a town called Mucachevo now Munkacs. The girl, who was a school teacher, wrote to me and said they had been handed over to Hungary, and under Hungarian law had all been set adrift. The father had lost his profession and she had lost her job. I was asked whether I could help them to get into America or Australia. I sent that case to the Czecho-Slovak Refugee Institute. I got back almost immediately—which is an unusual thing when you are dealing with refugee questions—the information that the people in Munkacs were unable to benefit from the scheme because they were not in Czecho-Slovakia. There again we get a class of people who are ruled out. The third case, which came only this morning, came from an old school friend of my daughter, who is in Märisch Ostrau, which is still in Czecho-Slovakia. She and her husband had been refugees from Vienna and had gone to Märisch Ostrau, and were carrying on a little business there. She wrote to me in desperation saying that her sister's husband had been gaoled and asking whether they could get anywhere in the Empire. They said they must get out now because they had just received orders to leave the country. If they remained in the country they would be entitled under this agreement as refugees to £200 when they emigrated, plus their railway fare, or steamer fare to Australia if they could get there. As this agreement is going through, however, they and I suppose all people like them, are receiving orders to quit the country, so that before the agreement comes into operation they may be outside the scheme of benefit.

I can see that the mere passing of this Bill and the implementing of this Agreement will cause a fresh wave of terror in Czecho-Slovakia and an attempt to get rid of the few Jews who might benefit from the scheme. These three cases seem to be typical of what no one here knows or imagines to be in this Agreement. Under it, it is easy to get the Czechs just across the frontier into Germany with £200 of good British currency. Suppose there are 50,000 Czech refugees in the present Czecho-Slovakia due to go back to the old Czecho-Slovakia. At £200 a piece it means £1,000,000 going straight into Germany. If the Germans charge a head tax or any special tax on emigrants going into Germany, that, too, is refunded out of the British taxpayer's pocket. In addition to the 50,000 Czechs who may be going back to the Sudetenland there are at least 50,000 Germans also willing to go back if they could secure immunity and if their past could be forgiven. Would it not be easy to have their past forgiven if they could hand over £200 to the Reich officials when they got to the other side? I cannot see anything to stop the whole of the £200 being taken from the politically undesirable and appropriated by Nazi officials.

But it is worse than that. Every emigrant authorised by the Czecho-Slovak Government to go into Germany, whatever his previous history, can take with him £200 of our money What is to stop the Nazis who are in Czecho-Slovakia making a habit of returning as refugees to Germany with £200, coming back again, and doing the trip again until there is very little left in the fund to give to anybody except those who, agreeably to the Germans, will be re-admitted into Germany. This is all possible under this scheme. It would not be possible if we were dealing with a Government which was sympathetic to our Government and our ideals, but we are dealing with a Government which is under the orders of the German Government. The German Government are anxious above everything to get foreign currency. Here is a chance of getting £4,000,000—ultimately £8,000,000—of foreign currency under a ramp which will be of no benefit to the unfortunate Jews for whom we in this country can no longer do anything just because we have retained no control over the way in which this money is expended. When it is a question of getting a refugee into this country we meet with sufficient difficulties from the Home Office, but, at any rate, we can cross-examine the Home Secretary and vote against his salary. What is done with our money in Czecho-Slovakia is apparently no concern of ours. It may be all misappropriated.

I have not the slightest doubt that most of what is spent on reconstruction will find its way into the sticky hands of officials and contractors. In the case of the £4,000,000 which is specially earmarked for the benefit of refugees, I have shown the House a perfectly simple and straightforward way in which all that money can be appropriated by Germany with the least possible difficulty. The whole scheme is a means whereby £16,000,000 of our currency, of our credit, can be transferred to Germany. However it is spent, sooner or later that £6,000,000 will find its way as a subvention to the totalitarian State. We are not dealing with private persons, but with a totalitarian State. This £16,000,000 credit will be used to buy raw materials for German industry. It will be used to buy raw materials for making bombs to drop on our people. It will be used for making cannon to destroy our armies. It will be used in every way to the detriment and destruction of this country. I cannot see how the House can vote for such a scheme as this. We meant it honestly to help the brave people whom we had endangered. It is going, as we must see now, entirely to the oppressor. There is no balm which we can lay to our souls that it will help the Jewish people who are being hunted about Europe to-day. The money is all going to Germany, and I am not going to vote for it.

6.41 p.m.

Mr. Duff Cooper

This is not a proud day for the House of Commons and the sooner it is over the better. We have the feeling that this is not a very happy business but that in the circumstances we cannot do other than what we are proposing to do. Some months ago, in a moment of great relief, there was an uneasy feeling in the minds of many that one country had suffered unduly, and there was a generous impulse in the hearts of all that if that slight twinge of conscience which was present even then could be salved by a money payment, there should be no restraint upon the amount of money that we were prepared to spend. I do not believe the Chancellor of the Exchequer or His Majesty's Government are more to blame than any other Member of the House of Commons, for had they been able to bring forward a Motion on the 3rd October in favour of spending ten, twenty or fifty millions to assist the state of Cecho-Slovakia, it would un- doubtedly have been passed unanimously. Events since then have altered the minds of many.

I had not intended to speak, and I do not think that unless the hon. and gallant Member for North West Hull (Sir A. Lambert Ward) had intervened, I should have spoken. I noticed that even in his speech there was an awakening to a new vision of the situation. He referred to what was once known as the great triumph of Munich as an unfortunate incident, and I am really speaking because I hope that the Under-Secretary for Foreign Affairs, who, I understand, is to reply, will deal with what I consider a most unfortunate utterance that fell from the hon. and gallant Member for North West Hull. He admitted that Czecho-Slovakia had been let down, and he attempted to shift all the blame upon the great friendly country, to which he referred inaccurately as our ally, France. I think he added Russia under the apparent impression, equally erroneous, that Russia is also an ally of ours. There is no truth whatever, I maintain, for the allegation that the Czecho-Slovak Government were encouraged during the summer and autumn of last year to maintain an intransigeant attitude by the French Government. It is most regrettable that a supporter of His Majesty's Government should make that accusation, and I sincerely hope the Under-Secretary for Foreign Affairs will answer that charge. If wrong was done at Munich it was done by France and England together, and if blame is to be borne we should not seek to shirk our share of it.

The hon. Member for East Aberdeen (Mr. Boothby) asked the Under-Secretary to give a clear statement as to how the question of our guarantee of the frontiers of Czecho-Slovakia now stands. Far be it from me to seek to answer the right hon. Gentleman's questions for him. I have no doubt that he has a very adequate and satisfactory reply. The plain truth of the matter is that we cannot possibly guarantee the frontiers of Czecho-Slovakia to-day. We have reduced the money we promised to give them, and we must now let the guarantee go to the winds. The Chancellor of the Exchequer himself referred to the road which is to be built through Czecho-Slovakia from north to south and east to west as "the German road." How can you guarantee the frontiers of a country that has a foreign road running across it? Czecho-Slovakia has no frontiers to-day. It has been stated in print and it has not been contradicted that during the negotiations of the international commission appointed to draw up the frontiers of Czecho-Slovakia the only person who ever spoke against the German claims or sought to modify them was the representative of the Italian Government. The Government of Czecho-Slovakia were prepared to resist if any one would support them, but as nobody would support them, they quite rightly, in face of inevitable facts, decided to bend their neck beneath the yoke, and to bend it properly. No guarantee could be given by any sane government of the frontiers of Czecho-Slovakia to-day, because those frontiers are where Germany cares to say they run.

Those are facts of which we ought to be aware, they are facts which cannot now be changed, but we ought at least, even at this late hour, to be clear in our own minds as to what it is that we are doing. The Chancellor of the Exchequer has made an admirable case showing how this money is all to be spent upon projects which would have the approval of every Member of this House. Is that really of great importance? The Czecho-Slovak Government are certainly going to spend £10,000,000 or £12,000,000 or £20,000,000 on some of many activities which would have the approval of this House, but money spent on those activities simply releases other money to be spent upon other activities. It really does not matter whether it could be proved that all this money was going to be spent on strengthening the German frontier or whether it could be shown that it was all going to be spent on schools or benefit for the unemployed. As the right hon. and gallant Gentleman has just said, it is money which is going to be spent at the dictation of the German Government. It is not for us to blame the Government of Czecho-Slovakia. You cannot blame a prisoner for showing obedience, and even subservience, to the will of the gaoler, especially if you have been partly responsible for getting him into the gaol.

My hon. Friend the Member for East Aberdeen struck a more optimistic note, I think, than anybody else in the House. He would like to increase the sum which we are paying to Czecho-Slovakia, and he notes with great satisfaction the good trade returns of Czecho-Slovakia during the last few months. Those good trade returns are largely owing to the fact that Czecho-Slovakia is now working within the German orbit, and it may be, and, indeed, we should all hope it will be, that the people of Czecho-Slovakia, industrious as they are, will achieve great prosperity, as great a prosperity as they enjoyed before the War. Great commercial prosperity they may win, but they have lost something which is more precious to them, and that is their liberty.

I have not the acquaintance which the right hon. and gallant Member has with the people of Czecho-Slovakia, and have never visited that country, but every day through the post applications come to me, which are as pitiful as any of those which he recounted from unfortunate people who are only longing to get out of their own country. I could have wished, perhaps, that this money had been given where it would have been far better spent. To Lord Baldwin's Fund for Refugees, rather than to the Czecho-Slovak Government, because although we may not wish to use harsh words, and although we may object to the term "a vassal State," we cannot get away from the fact that in the shape of military roads Germany is branding the swastika upon the face of Czecho-Slovakia, and that badge of shame will remain there until the frontiers of Europe are redrawn.

6.50 p.m.

Miss Rathbone

With the exception of the right hon. and gallant Member for Newcastle-under-Lyme (Colonel Wedgwood) I think it has been noticeable that every speaker in the Debate has welcomed this Bill and has had very little criticism to offer upon the actual terms of it. I think we are all glad that the Bill should assure substantial assistance for the refugees from Czecho-Slovakia and that those refugees should include men of all races, creeds and political opinions, but most of the discussion has been devoted to painting a dark background to the Bill and to the events which made it necessary. Many Members have expressed doubts, especially the right hon. and gallant Member, as to whether the money may not actually, whether directly or indirectly, be strengthening the German forces. But according to the terms of the Bill, all the money is eventually to be devoted to the assistance of refugees, half of it for emigrant refugees and half of it for refugees in the country, and I submit that it is not quite true to say that the money would have had to be spent by Czecho-Slovakia anyhow and that therefore we are releasing money which Czecho-Slovakia will be able to spend upon purposes of which we might not approve, because it is clear that Czecho-Slovakia, with her restricted resources, could not be expected to devote considerable sums to assist in the emigration of persons some of whom have been and the great majority of whom will not in future be her nationals. That accounts for £8,000,000 of the £16,000,000 with which the Bill deals directly or indirectly. As to the other £8,000,000 which may be temporarily devoted to works of national reconstruction, I would draw attention to the fact that the whole of that £8,000,000 is eventually to be paid back for the purpose of dealing with refugees within the country, as the money may be required.

The doubt in my mind, on the lines of that expressed by the hon. Member for East Aberdeen (Mr. Boothby), has been whether this Bill really does full justice to our obligations towards Czecho-Slovakia. I come from a great commercial city, Liverpool, and my traditions are those of a business house, and I ask whether if one has made something like a bargain, whether explicit or implicit, one would be justified in repudiating it some time afterwards because of a doubt lest the other party would use the money in a way of which one could not approve. That would not be considered honest business in the commercial world.

What is the position with regard to our obligations to Czecho-Slovakia? It is true that in the speech which the Prime Minister made on 3rd October—and similar words were used by the Foreign Secretary in another place—there was no definite promise of £30,000,000, or any sum but the £10,000,000, which was to be advanced to meet urgent needs. The Prime Minister specifically said that the ultimate figure would depend upon various factors which would have to he settled later, but anyone who reads that speech must see that the Czechs were fully justified in basing upon it expectations of a much larger sum than £10,000,000. Moreover, they were justified in basing upon that speech an expectation of money which they would be free to spend not only upon refugees, which were never mentioned in the course of that speech, but upon the reconstruction of their country. The Prime Minister said of Czecho-Slovakia: We must recognise that she has been put in a position where she has got to reconstruct her whole economy, and that in doing that she must encounter difficulties which it would be practically impossible for her to solve alone." —[OFFICIAL REPORT, 3rd October, 1938; col. 46, vol. 339.] I think that justified the Czechs in expecting that they were to receive a very much larger sum than £10,000,000. Is it quite true to say that any money which they spend upon national reconstruction—and they are only to be allowed to allocate money out of this loan to that temporarily—will necessarily set free money which will somehow or other be used to snake them a more subservient vassal of Germany? In the work of reconstruction Czecho-Slovakia has many things to do, arising from the great sacrifice which she was asked to make, which really do not affect her military relations with Germany at all, but affect her internal economy and social life. As an instance of that I may mention her huge social insurance reserve, which has now been depleted by the demand of Germany that one-third of that reserve should be paid over to her. Is she not entitled to have something to spend on purposes of that kind? We know that in fact Czecho-Slovakia did expect more, and is bitterly disappointed at getting so little.

I look at it in this way—apart from the question of honour, apart from whether we are quite fairly carrying out the promises which we made to her, is it altogether wise to give Czecho-Slovakia reason to feel that she has been completely deserted by the great democracies and that in future she may well look entirely to Germany because she can hope for nothing from anyone else? I believe it is true that at Berchtesgaden or Munich she was given a definite assurance that if she did make the terrific sacrifices asked of her for the sake of European peace, she would receive every kind of financial and other assistance to help her to reconstruct the life of her State. If I were a Czech I think I should share the doubts of the Czechs whether the payment of even £16,000,000 half of it gift and half of it loan, and all eventually to be spent upon refugees, was a complete implementing of the promises thus made. The Czechs did pay the price and the money price was only a small part of what they have had to pay.

There are other issues. A year ago Czecho-Slovakia shared our ideals, our belief in democracy and justice, loyalty to allies and respect for international law. Although that spirit of Czecho-Slovakia is now dumb we are sure that it is not dead, and what I fear is that by our fear of doing anything which should somehow or other strengthen her dependence upon Germany we may actually strengthen that dependence by teaching her that she has only Germany to depend upon, and so kill her belief in those ideals which we have so far shared in common. I think there is another unfortunate result we may achieve. Other small nations, if ever they are asked to make some sacrifice in the interests of European peace, may well draw the lesson that nothing is to be hoped for from the democracies, not even succour in the hour of their deepest distress. On 3rd October the Prime Minister paid this tribute to the people of Czecho-Slovakia. He said: Czecho-Slovakia has earned cur admiration and respect for her restraint, for her dignity, for her magnificent discipline in face of such a trial as few nations have ever been called upon to meet."—[OFFICIAL REPORT, 3rd October, 1938; col. 45, Vol. 339.] But admiration and respect are not all that we owe to Czecho-Slovakia, and not all that we allowed her at that time to expect from us, and the doubt in my mind is not so much as to the provisions of this Bill, which are welcome as far as they go, though I think we shall need further explanations of some of the provisions and safeguards in Committee. The real doubt is whether we are really paying the debt that we owe to that people for the sacrifice that we demanded of her, a debt which we owe not only to Czecho-Slovakia as a State but to every one of her citizens who is now leading a shrunken life, with poorer prospects of employment and poorer social services because of the sacrifices which have been forced upon her.

7.2 p.m.

Sir Walter Smiles

When a supporter of the National Government speaks, it is only right that we should cast our minds back to when the Prime Minister came back from Munich. I remember how grateful I was to him then, and how grateful I believe the majority of the people of the country were. But when the right hon. Gentleman who spoke from the Front Bench quoted from newspapers and seemed to think that every Member who supports the National Government should agree with all the leading articles in the "Times," then I differ. It is enough for us to support the Prime Minister. It is enough for us to support the Cabinet and those who speak from the Front Bench, but when we are asked to support some of the newspapers that he quoted, and a right reverend gentleman who speaks in another place, I think this last straw is too much for the camel to bear. The hon. Member for Wolverhampton East (Mr. Mander) said he did not know which was the most dangerous, the arrogance of the dictators or the innocence of the Prime Minister.

My reaction to this Bill is definitely one of stinginess. I like the British taxpayers' money to be spent upon the British people but I saw something of the money that was spent upon refugees, and I think all of us would agree with voting that money for refugees. At Christmas time I travelled to South America, and we had more than 200 refugees on board. I met a good many of them. Some were Czecho-Slovakians and Jews. They were very nice people indeed and very clever, as I know to my cost, because I played bridge with them. They were definitely under the impression, and they gave me the impression, that the funds we sent to Czecho-Slovakia have been of great use to them. They told me that their passage had been paid by funds from Czecho-Slovakia and they told me also, what I did not know at the time, that the exact sum that they would have when they arrived in South America and started work was £200, so that some, at any rate, of this money that has been given by the British Government has been of use to the people who suffered most.

It is the money that is to be spent on reconstruction that I am anxious about, there are lots of places that want reconstruction in this country and there is no doubt that, if we reconstruct Czecho-Slovakia in the most up-to-date way, she is going to be a competitor of this country. I do not know whether she is going to be a vassal State or not, as the right hon. Gentleman opposite said, but we know that they make textiles, linens and cottons, and we also know that there are lots of mills in this country which should be reconstructed and have more up-to-date machinery, but I have not heard it suggested from the Front Bench that we should spend £3,000,000 or £4,00,000 in equipping our own mills properly. Even if new houses are built in Czecho-Slovakia, there are lots of houses that require building in the United Kingdom and I have not heard that arrangements for new houses should be made on such a generous scale. We are to build new roads in Czecho-Slovakia but there is a road that we have been waiting for for two or three years from one end of Lancashire to the other, and there are roads round London which are still held back for want of finance. The right hon. Gentleman opposite complained that Germany would not allow these refugees to go the cheapest way to the sea through Germany and had to go through Poland. At any rate, if they were paying for their tickets they were paying for them across Poland, and I do not object at all that they paid a few shillings more to sail from a Polish rather than from a German port, but I hope that the money for their tickets is going to be spent on British steamers because we shall get back some of the money at any rate.

I have been looking up the Debate on the loan that we made to Austria six years ago, in February, 1933, and it was very interesting to refresh my memory of what various people said. Frontiers have been mentioned to-day. I notice a remark by the present Secretary of State for War about the frontiers of Austria. He said the "Independence of Austria was inalienable otherwise than with the consent of the Council of the League of Nations." How far have we gone from that to-day? I have not heard the League of Nations mentioned in this Debate. It seems to me that the frontiers of Czecho-Slovakia will have to depend upon themselves, just as the frontiers of the British Empire will have to depend upon ourselves. We cannot depend upon anyone to help us. We have to help ourselves and, if we have money to spend, we have to see that it is spent on our own defences and our own armaments, and the reason why I am very chary about this Bill is that I believe we may be giving money which is not likely to be of any use to anyone in the British Empire, and is perhaps more likely to be used against us than for us. The hon. Member for Wolverhampton, East, quoted some papers from the Institute of International Affairs at Chatham House. I was very surprised to hear him mention that Institute because I thought every debate and every paper there was strictly private and confidential and should never be mentioned. We have to consider whether we shall ever see this money back again. Many of us have friends who come to us to borrow a £10 note. We find it cheaper to say, "No, I will not lend you £10, but I will make you a present of £5." Both we and the borrower are better satisfied. What is the use of calling this a loan when it may be exactly the same as the loan that we made to Austria? I doubt whether we shall ever see the money again and I would sooner make a loss on a gift, because what is given to a friend is never lost, than on a large loan, which Czecho-Slovakia will never he able to repay.

7.10 p.m.

Mr. Gallacher

The Devil was sick, the Devil a saint would be; The Devil was well, the Devil a saint was he. I am reminded of that by the speech we have just heard. How grateful he was to the Prime Minister when he came back from Munich. He tells us that, and I guarantee that when the Prime Minister promised a loan of £30,000,000 to Czecho-Slovakia the hon. and gallant Gentleman cheered as loudly as anyone. But to-day he has no concern with Czecho-Slovakia. I, however, am concerned about Czecho-Slovakia but I am not prepared to support this method of dealing with the question. We are discussing desolation spread over Central Europe and how to deal with it—deep, bitter desolation, the fruit of the Prime Minister's policy of appeasement. Will anyone deny that? It is playing with the question to deal with it in this manner, handing over millions of money to Germany.

I am prepared to support all the millions that can be spared to assist Czecho-Slovakia to get on her feet but not the handing of money which will go into the hands of Germany. We want not only money but a policy. The hon. and gallant Gentleman had a sort of consciousness of that when he said that there had been no mention of the League of Nations in this discussion. The policy of helping Czecho-Slovakia to get on her feet should be a policy associated with the League of Nations. In other words, we should be prepared, in advancing money to rebuild Czecho-Slovakia, to lay down the condition that it should be a completely free and independent Czecho-Slovakia. If you are not going to stand for that, there is no use in handing over the money. No one can ever advocate injustice, no matter what form it takes, but what sort of cowardly attitude is it to say, "A terrible injustice was done, but we had no other course." Of course you had another course. You have always the course of standing for what is right and just, but when anyone suggests that we should stand for what is right and just, we are told "No, it might land us into war." Taking the just course is not the course that leads to war. It is when you take the wrong course that evil comes upon you. When you take the cowardly part you set the forces in motion that lead to war. In providing this money we should have a clear, resolute policy laying it down as clearly as can be done that there is to be a free and independent Czecho-Slovakia and that neither Germany nor any other country has any right to cross her frontier.

The Home Secretary the other day used an American expression and referred to "jitterbugs," but it is on the other side that they are always jittering. There is continual reference to the Munich Agreement. There never was a Munich Agreement. There was a Munich betrayal, but not a Munich Agreement. On Wednesday, 20th September, Members gathered in the House. Were they jitterbugs? They listened to the Prime Minister's speech for an hour and a half, yet Herr Hitler had in his possession a letter which our Prime Minister wrote, and I would like an opportunity of quoting from that letter to show that we are facing now a Czecho-Slovakia which was handed over body and soul to Germany, and that the only result of expending this money will be to pour it into Germany. If we are to spend money we should do so in order to bring that country out of the fix that we put it in. I want to make it clear that we are not discussing some accident. Germany is to make roads through and across Czecho-Slovakia; that is not an accident, but was all arranged and agreed to beforehand. Before this House met on that occasion Herr Hitler had a letter which said: You can get all essentials without war and without delay. What is "all essentials"? Military roads are essentials. Then there is the part of the letter which says that while the Czecho-Slovakian Government cannot be trusted, the might of Britain and France would be used to force that Government to submit.

In the face of that letter, which was in Herr Hitler's hands before this House met, how can any hon. Member on the other side of the House say that the blame for the present situation falls upon France and Russia? How can they say that the situation could have been saved in August if the Czecho-Slovakians had made concessions to the Sudeten Germans when it is notorious that in May the Prime Minister of this country had already decided in favour of Sudetenland being handed over to Germany? Would Herr Hitler have been prepared for anything less than that in the month of August, when the Prime Minister of this country had said in May what I have outlined? There has been a deliberate and calculated betrayal of Czecho-Slovakia and its handing over completely to the power and might of Germany. There is no use in our handing out money to continue a policy of that kind. I would like to see a policy directed towards the freeing of Czecho-Slovakia and providing whatever money was necessary to have Czecho-Slovakia remain free.

Now I would say a word or two about refugees. The stories that one hears and reads in letters from many of those people are terrible. How can any Member on the other side support a policy or try to find justification for it when it imposes unspeakable torture on thousands of people? Thousands of men and women with helpless children are homeless and wandering the roads, suffering the most bitter torture and agony. I have a friend who is heart-broken. It is hardly possible to describe his condition of mind. His young wife is in Prague. She is German and has two little children, aged two years and four years. She must get out of Czecho-Slovakia within two weeks or she will be handed back to Germany, when it will either be the slow torture of the concentration camp for her or the executioner's block. That is the situation. One of the very best lads I have known was over here and travelled in many parts of England and Scotland with me. He was a grand fellow, one of the finest that you could desire to meet and a hard working lad. He was sent back to Germany and the executioner struck his head off on the block. That is the sort of thing that is going on. Thousands of people in Czecho-Slovakia are threatened to-day, as the hon. and gallant Member for Newcastle-under-Lyme (Colonel Wedgwood) has stated, with being sent back to Germany unless they can get out in a few days. How are they to do it? The situation that confronts the masses of the people is terrible. There are Socialists, trade unionists, co-operators, Communists and the great body of Jews. You cannot solve this problem or save those people and their innocent children by a policy of this kind, and by handing out a few million pounds in this way.

I want to see these refugees saved. I want the freedom of Czecho-Slovakia restored. I want the cowardly and treacherous betrayal of Munich wiped out, as far as it is possible to wipe it out, by the power that we have in this country being used, in unison with France, Russia and the United States, to bring back freedom and independence to, and to rebuild, the Czecho-Slovakian Republic.

7.22 p.m.

Mr. Bracken

I would also wish that great countries like Russia and the United States were brought more into the European picture. I should particularly like to see them as co-contributors to this loan. As this Debate has proceeded it has been made clear that this grant to Czecho-Slovakia is based largely upon charity. We might have expected a little help from our American friends and many other countries, including Russia, who feel so deeply the wrongs inflicted on Czecho-Slovakia.

Mr. Gallacher

I am certain that if those countries were invited to co-operate in a policy of freeing and financing Czecho-Slovakia they would respond.

Mr. Bracken

I am also certain that if the hon. Member were willing to go to Russia with hat in hand to collect money for helping Czecho-Slovakia the Chancellor of the Exchequer would probably advance him the money to buy his ticket. I shall not attempt to emulate the hon. Member. He has spoken rather like one of our bishops, with the same ferocity and amount of uplift that one finds in such discourses. I want to get down to something very much smaller.

This is one of the oddest Bills ever introduced into the House of Commons. The Government promised to pay millions of pounds to Czecho-Slovakia without bothering to obtain Parliamentary sanction. Four months passed during which this House passed all sorts of Bills, good, bad and indifferent, and we did not hear anything more about the large sum that was to be paid to Czecho-Slovakia. I am bound to say that the guardians of the public purse have been kept properly in their place. I am not in this case putting all the blame on the Chancellor of the Exchequer; I dare say he would welcome a little help in resisting such demands. When I heard the references to Gladstonian finance I wondered what Mr. Gladstone would have said about a Government that paid out a large sum of money, entered into other fairly widespread commitments, allowed four months to pass and then came to the House of Commons to bring in a Bill like This procedure is more suitable to the Reichstag than to a free Parliament, and it is out of accord with the best traditions of this House.

Let us look at this very interesting transaction. Months ago we advanced £10,000,000 to Czecho-Slovakia. We now tell the Czechs that they can regard £4,000,000 out of that sum as a gift and that they must repay £6,000,000 to the Treasury. To do this they are given facilities to raise a loan of £8,000,000 in London, with the British and French Governments acting, of course, as guarantors. The British Treasury repays itself by planting Czecho-Slovakian securities on the English investor. If in the future the loan is in default, investors will be called upon as taxpayers to pay off this obligation to themselves. I think this is what the Americans call backing the four horses of the Apocalypse both ways.

In his eloquent speech my right hon. Friend the member for St. George's (Mr. Cooper) asked himself a number of questions and gave what appeared on the whole to be very satisfactory answers. He asked to whom we were lending this money. Was it to a small democracy? The appeal for a small democracy always has a great effect on this House, but does anybody honestly believe that you could reconstruct the life of a small democracy with a loan of £8,000,000? That is what it amounts to, the rest of the money being for refugees. I wonder what you could do even to start building up the life of a small democracy on that sum. The Financial Secretary to the Treasury, who has had some experience of industry, will no doubt develop that point when he later speaks on behalf of the Government. [Interruption.] My hon. and gallant Friend informs me that he is not to speak, a fact which will be regretted by us all. My right hon. Friend the member for St. George's said that this small democracy had shown some very undemocratic tendencies. That is true. The anti-Semitic legislation which it introduced can hardly be regarded as a contribution to democracy. I suppose that muzzling the Press would hardly be looked upon as a contribution to democracy. And having to put up with your country being bisected by a great military road under Nazi control is not what you would call planting the seeds of democracy very firmly in the new Czecho-Slovakia.

I am afraid that by this loan we are just gilding a new brand of Nazi-ism, and that is why I do not like it. I am bound to say that anyone who remembers the Austrian loan ought to be extremely suspicious of this loan. I agree with the prophecy that we shall find the proceeds of this loan pouring into the Reichsbank in the end. I was very pleased by some of the observations of my hon. Friend the Member for Blackburn (Sir W. Smiles). He said some very sensible things. While great sympathy has been expressed with the poor Czechs let us remember that we have some poor people in our midst, believe it or not. Ought we not to be very sorry for them? Not enough is being done for the poor in England. If we have millions of pounds to spend, should we not think of spending them on the poor and the down-and-out in this country? The Chancellor of the Exchequer knows Bristol well. As we all know, Bristol is one of the richest cities in England. In 1937, which was a very prosperous year, a survey of poverty was made in Bristol. I recommend hon. Members to read that survey. If they do, they will see that 20 per cent. of the population of Bristol are under-nourished. They will also read a description of poverty in that city which will make them as sorry for Bristolians as they are now for Czecho-Slovaks. If I may say so, our benevolence in this House and in other quarters of this country seems to be in blinkers. We see and pity the poor abroad, but misery at home passes unnoticed.

I am sorry to say that there does not seem to be much possibility of a Division on this Bill. If there were a Division, I should certainly have to vote against it. If the Bill were not passed, we should have to give an indemnity to the Chancellor of the Exchequer. We would gladly give him an indemnity. But we would also teach the Government a lesson, the lesson being that it is time they learned that Parliamentary sanction of expenditure must be obtained before the Treasury is committed, and not four months later. They might also learn another lesson, and no bad lesson either, which is that "charity begins at home."

7.32 p.m.

Sir Robert Tasker

I was glad to hear the hon. Member for North Paddington (Mr. Bracken) say he was sorry for the poor of this country, as I was to hear the right hon. Member for St. George's (Mr. Cooper) referring to a statement made by my hon. Friend the Member for North-West Hull (Sir L. Ward). Perhaps I might call his attention to a statement in the Czech newspaper "Pravu Lidu" towards the end of April, 1938, by Dr. Kriz, Secretary to the Minister, Mr. Becknye, as follows: It is unreasonable to fear that our allies will desert us. However evasively they may speak, our allies—France, Russia, and, let us say openly, Great Britain too will immediately march to a world war. I think there is no justification for bringing in the British Government as one of their allies, though I do not think anyone will deny that the Czechs regarded the Russians and the French as their allies in the event of Germany attempting to overrun Czecho-Slovakia. Why should Britain run the risk of another European war to ensure a longer life for Czecho-Slovakia? As I listened to this "feast of reason and flow of soul, it appeared to me that if Czecho-Slovakia had not been mentioned, I should have thought hon. Members were referring to Hungary, because what happened to the Czechs happened to the Hungarians also, only much worse. An attempt has been made to excite our compassion because the Czechs have been deprived of, it was alleged, 90 per cent. of their coal, but the Hungarians were deprived of 100 per cent. of their coal, most of their salt, and nearly the whole of their timber. There is no compassion, however, for them. If it is urged, as one of the reasons why we should give money to the Czechs, that they have lost about a third of their territory, Hungary lost 75 per cent. of hers, but there is no word of compassion for her. I have yet to learn that the British prisoners of war were as well treated in any part of Austria, as it then was, as anybody else, yet when the American Ambassador went to Budapest to inquire about our prisoners of war, he was told, "We have a race meeting on to-day, and they are all at the races." That is how the Hungarians treated our men. If we must give millions of pounds away, let us give it to the Hungarians before we give to the Czechs.

I am not moved with the depth of feeling which has been exhibited by hon. Members in various parts of the House to-day. It is true that I was not here during that emotional period in September last. I thought the better place in which to find out the real facts was on the spot, and my hon. and gallant Friend the Member for Accrington (Major Procter) and I made Budapest our headquarters, finding out what we could of the real situation in Czecho-Slovakia. We found that these very peaceful people had mined all the bridges, closed the frontiers and massed machine-guns and artillery to prevent any Hungarian entering Czecho-Slovakia from Hungary. Who were these people? Czecho-Slovakia is neither an ethnographic nor a historical geographical unity; it is a State without physical unity; it is the most artificial, least uniform, and least compact of all European States. Slovakia was an integral part of Hungary for a thousand years before the War. They do not even speak the same language as the Czechs. Why pretend, as some hon. Members do, that the Czechs have been a good, virtuous, model democratic people? Had they gone there to see how they treated those who were under their domination, they would not have expressed the views which they have expressed this afternoon. In my view, if the people of this country have four or any other number of millions of money to give away, let charity begin at home. When I get up and plead for our unemployed or for our old age pensioners, I am afraid that I get very little sympathy. I would rather see this £4,000,000 given to the re-establishment of the British people by the formation of roads or in some other direction—I would not care if it were unproductive—which would be doing some good to my own fellow-countrymen.

I regard the criticisms which have been levelled at the Treasury as to the method by which this obligation has been placed upon the British people as well founded. It does not seem to me to be a businesslike proposition for the Bank of England to enter into a commitment—it must have been at the instigation of the Government—and then for the Government to come to the rescue of the Bank of England. There is no doubt that the Front Bench pledged itself to the loan of a certain sum of money. All that money is going to be a gift. I believe it will be just as much a gift to Czecho-Slovakia as the money which has been invested in South America was a gift to the defaulting States and that the money which was loaned to Austria was a gift to Austria. As to raising a loan of £8,000,000 to pay back £16,000,000, I observe that the percentage to be paid on the £6,000,000 is 1 per cent., but the £8,000,000 must be made more productive in income than that before it will be over-subscribed.

I agree with the last speaker that if this Bill were to go to a Division, I should have to vote against the Government. [An HON. MEMBER: "No; you would listen to the Whips."] Hon. Members opposite are afraid of their Whips, but I have never been afraid of the Whips, having always pleased myself. Observe that I am not expecting to be promoted to the Front Bench. I came here just to do my duty to my constituents and to my country and I leave all the rewards, decorations, and ribbons to my hon. and right hon. Friends on the Front Benches on each side of the House. I was remarking that I should have to vote against the Government, as I have done before. I hope my right hon. Friend who is to wind up the Debate will take into consideration the criticisms which have been levelled against this proposed gift and give the House some further explanation than that which has been vouchsafed by my right hon. Friend the Chancellor of the Exchequer.

7.41 p.m.

Brigadier-General Spears

I am not going to follow my hon. Friend the Member for Holborn (Sir R. Tasker). I was a little pleased with his remarks until he went on to explain, in the first place, that he was not here in September, which perhaps explains why he does not realise that the loan which we are now discussing is, after all, a debt of honour. As far as his remarks about Czecho-Slovakia are concerned, they are explained by the fact that he went to study Czecho-Slovakia in Budapest, Hungary being at that time on the point of pouncing on Czecho-Slovakia if she had the opportunity.

Sir R. Tasker

Hungary was not allowed to arm and could not pounce on Czecho-Slovakia.

Brigadier-General Spears

When my hon. Friend and his companion went to pursue their investigations in Czecho-Slovakia, apparently they met with machine guns and artillery, so that their study of the situation in Sudetenland seems to have been somewhat limited in character. I would like to ask how much money will actually be available to the Czechs for reconstruction. After all, that is the whole point of the Bill, for out of this £8,000,000 first of all the refugees have to be satisfied. The burden of the White Paper is that all the needs of the refugees must be satisfied first, and that only under very exceptional circumstances can the Czech Government use the fund at all. How much money did the Czech Government or the Czech delegation say they needed as a minimum to keep going as an independent State? That seems to me to be the main point, and I am afraid that there is not enough money available to enable the Czechs to defend their independence, as they obviously wish to do. I believe that there is a possibility, if insufficient funds are available for Czecho-Slovakia to remain an independent economic unit, that she will be forced into a Customs union with Germany, which is the last thing she wants to do, and it is very much to our interest to prevent that happening and that the minimum sum should be made available to her to achieve her purpose of remaining independent.

I should like also to know something about the question of installations. Is there a Bill outstanding by Germany against Czecho-Slovakia in the matter of installations? It was very much on the tapis some time ago. Has the matter been settled? What are the claims of Germany against Czecho-Slovakia? Surely it is important to know. Further, is Germany asking to be paid in gold for the coal, for instance, which Czecho-Slovakia needs in order to keep going what industries she has? If the German Reich makes claims for gold on the National Bank of Czecho-Slovakia, that again very much affects the security of the loan. I feel that the disparity between the sum of which we are talking to-day and the £30,000,000 which was spoken of in September shows the gap between what was hoped for then and what has been realised. If Czecho-Slovakia were the country we had been led to hope she would be, there would be no difficulty about this loan. Her home industries would have been able to offer double the security that would be needed for a loan of £30,000,000. Now, however, we are dealing with a country which, as has been well said by my hon. Friend the Member for Stockton (Mr. Harold Macmillan), is being submitted to the whims of an over-powerful neighbour, and, in that very lamentable state of affairs, I think we are in honour bound to do what we can to help Czecho-Slovakia. It is the only way in which we can pay for Munich. We have peace; let us pay for it. I think that we ought to watch this question of Czecho-Slovakia, and be prepared to lend more money, if need be, to ensure her being able to remain economically independent of Germany.

7.48 p.m.

Mr. Grenfell

The hon. and gallant Member for Carlisle (Brigadier-General Spears) is prepared to trust the future of Czecho-Slovakia to a greater extent than I can at present. That country has suffered mutilation and injustice which I hope are not beyond repair, but which have reduced it to a condition of serious disability, and that is the reason for the promise which was made in this House—a promise made by all of us. In the emotion of that day, and on the judgment possible on that occasion, the House certainly did agree to make a grant of £10,000,000, and, in the mood of that time, would have been quite willing to give the larger sum to which the hon. and gallant Member has referred.

I am a little in doubt as to whether I should make any contribution to the gloomy background of his speech, but I confess I have been very much saddened by the position of Czecho-Slovakia and its people. Since those days in the latter part of last September, I spent three weeks or a month in Czecho-Slovakia on two occasions, in October and November. I went there for the purpose of trying to arrange for the emigration of as many as possible of those thousands of people who had left the Sudetenland before this House met on 28th September, and who were then in the neighbourhood of Prague in various settlements in towns, villages, large houses, and even in tents. There were known to be in that district, within a radius of 40 miles from Prague, some 40,000 or 50,000 refugees. I arrived there in the second week of October, and found that there was no plan at all for beginning the emigration. With friends we helped to initiate the departure of the first of those who had come there, who were living in conditions of very great distress. I am sure that this House would not have grudged the money already spent, and I played the part that I did on the anticipation that a contribution of this kind would become available.

In this country in recent months we have shown a wonderful generosity and a wonderful sympathy for that large body of homeless and friendless people in various parts of Europe who are now becoming far too numerous for the peace of mind of a good many of us, and whose numbers have every appearance of increasing. We have talked to-day of the refugee problem in Central Europe. I have been occupied with that problem for many weeks past, and so have other Members of the House. There is also a tremendous refugee problem which is not dealt with in this Bill, but which must call for our attention, in the tremendous flow of fugitives from Spain, which is horrible to witness and contemplate.

With regard to Czecho-Slovakia, let me indicate to the House how these people are disposed. They have left their homes, their roof and shelter, their friends and relatives, and have wandered away on foot, by train, and in all kinds of vehicles. We wanted to make a census of the people whom we were to include in our plans for emigration, and we had to send out from Prague 15 people to 15 centres, some of whom were away for two days, in order make even an approximate census of the refugees in the neighbourhood of that city. They came back with an account of 40,000 or 50,000 people, of whom more than 25,000 were members of the Jewish race. The majority of the remainder were German-speaking people from the Sudetenland, most of whom had come away on account of their political activities and associations. When we had the census, we realised the magnitude of the problem, and then came the next stage in the operation of emigration.

Various hon. Members have spoken of their visits, and my right hon. Friend told us of his visits to Warsaw, Danzig, Prague and Budapest. One has to be in Middle Europe in these days to realise what a difficult place it is to get away from. Currency control, and regulations and restrictions of all kinds, stand in the way. Passports and visas are very difficult to get. The right to travel from the country is becoming a more unobtainable privilege day by day. I remember that, when we started to organise the emigration of which have been speaking, we found that 250 men were in immediate danger of being sent back to Germany, and they said they were certain of punishment if they ever found themselves on German soil again. We came to this country, and, to the credit of the Foreign Secretary, we had no difficulty in getting visas for these 250 people. But, having obtained the visas, and having made efforts to organise their departure in parties, we found that there were no train connections. Nobody knew whether a party leaving Prague would have to go to the port of Gdynia, on the Baltic, to Constanza, on the Black Sea, or to a port on the Adriatic. These men, who had left their homes and had abandoned everything, found themselves in despair, up against an immovable wall of obstructions which confined them to the spot on which they were.

After various essays, beginning with the use of Gdynia as the port of departure, my first party from Prague took no less than 60 hours to make the journey. It took 14½ hours to get back from Warsaw. But from that time until a fortnight ago, no fewer than 950 people have reached the shores of this country, and all the organisation has depended upon the receipt of this loan and the use of the money for this purpose. We have relied upon private charity, which has brought these people here, and private charity must be used for the relief of other people in other circumstances who may not qualify for the loan that we have at our disposal to-day. This loan has arrived when we have to deal with the further problem of bringing people to this country, not for settlement here, but for transfer to some of the Dominions and to the American countries, North and South. We have the problem of emigrating no fewer than 7,000 people, according to my estimate.

The White Paper tells us of the wise provision that has been made. I know it will be said that £200 is an enormous sum with which to provide a family, and I have heard references to the unemployed in this country to-day. But into the story of this emigration come men who have left behind far more than £200 of their private wealth, who have left their houses, their small savings, everything, and find themselves penniless and dependent on the charity of this House and of the British public. These people, able now to rely on the organised assistance of this scheme, are planning in very close detail. I admire more than I can say the wonderful organising instinct of the Sudeten-Deutsch people who are in this country at the present time. I am delighted to find that a body of people of this kind have such confidence as to work out their plans for the next two years for settlement in Canada. Some 36 years ago, I was a workman in Canada, and I was never without a pound in my pocket at any time. I know that it requires courage and confidence to enable men to leave this country and go to Canada, build their homes, make their roads, and plough and prepare the land for cultivation, with only £200 to begin with.

None of this money is being wasted in pampering these people. They are given the barest chance to make a start and live under conditions in which they hope to win their bread with honour and credit to themselves and everyone else. This is a loan to Czecho-Slovakia to enable her to provide for her people who are fugitives on political grounds, and this is the way in which the money is being spent. The right hon. Gentleman has told us that it costs £6 or £6 10s., and sometimes more, to bring a refugee to this country, but by the time his travelling expenses here are paid, his expenses here, and his further passage money to America, the cost may be £20, £25 or £30 per person. Under this scheme all that money is paid to British steamship companies, British hostel keepers and hotel proprietors, and, after the further steamship voyage to Canada, to the Canadian railways. If a person settles in a British Dominion, every penny of this money will be spent in a British country by a customer for British goods. This money is not all being paid to Czecho-Slovakia. To the extent that £4,000,000 is to be spent on emigration, it will be spent outside that country, mainly in British countries if, as I hope, the British Dominions will rise to this opportunity of having the help of as fine a body of people as Europe can produce.

I have devoted a good deal of my time, to my pain—I make no apology for saying this—and in the last two and a half years I have given much of my energy, to the people of Spain and Middle Europe. I am sure the House will never go wrong if it encourages these people in distressed Europe—miserable people that we are to have allowed distress to overtake so many in Europe. We cannot divest ourselves of the responsibility. We must take part in the organisation. I am afraid at times that it may become too heavy and onerous for us to carry. I can see how easy it is to liquidate a State and deprive people of that pride in their nationality which belongs to every people and every nation. That will have serious consequences yet for all the people of Europe. But I am not going to-day to spend time in acrimonious controversy in this House. I would like to say a word or two about the other forms of expenditure in Czecho-Slovakia. If the organisation is equal to the task, every penny of £8,000,000 can be spent in emigration. I hope hon. Members will play their parts in connection with that, as I shall. Then there is another £8,000,000 proposed, half of it to be spent in road-making and relief work in Czecho-Slovakia.

We shall not divide against the Bill, and I hope that it will leave this House with sympathy for the Czechs, which we have not got now. I talked to a very intelligent young Czech. He was a waiter in a hotel, and a real gentleman. He said, "My father was a cavalry officer in the Austrian Army. He lost his leg in 1916, when I was only a few weeks old. My mother struggled to rear me. She came back to the Czech village where she had been reared, and I lived in that village all my life. Our village has 100 houses and a cemetery. The cemetery is across the road from the place where the people live. The new frontier has passed through that village, and has left my village, my Czech native home, with only two houses and a cemetery for Czecho-Slovakia. The other houses are German. I cannot go back to live there because I am so opposed to the things represented by German culture and authority, but I must see my mother. I will ask some relative to ask my mother to come out of that village, because I will not go there if I can help it." That is one case of a young man, cultured and sensitive. I spoke to many others. A great injury to their national pride has befallen those people. They were, and still are, a brave people. I do not think they will give away one inch of principle beyond what they are compelled to give. I believe they will sustain the principles of democracy and of their nationality and religion. I hope that they will sustain them, and that when the time comes we shall see that the money is not spent on military work by anybody.

8.7 p.m.

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

I am sure the House will have been moved by the closing sentences of the hon. Gentleman on a subject which is very close to his heart. I have listened to him often on the subject of refugees from Central Europe and from Spain, and I should like to testify to his sincerity to-night. It is in this mood that I ask the House to give a Second Reading to the Bill. I am glad to hear that hon. Members opposite are not in favour of having a Division on the subject. I will confine myself, therefore, to answering the questions put in the Debate. The most apt way to sum up the Bill is that this is a Bill without which the refugees would go short. I have frequently disagreed with the hon. Lady the Member for English Universities (Miss Rathbone), but that phrase which she used is the most apt in describing the Bill. I should like to concentrate on this aspect of relief. If we take into consideration the natural wish of the House to help Czecho-Slovakia, to help this gallant country with a good reputation for solvency, I feel that some of the remarks of the right hon. Gentleman the Member for Gorton (Mr. Benn) may not help that country, particularly when he referred to Czecho-Slovakia as being "a vassal State." I do not regard Czecho-Slovakia either as being a vassal State or, in the words of the hon. Member for Stockton (Mr. Harold Macmillan), as "a bankrupt friend." I regard her, as I described her, as a gallant country with a good reputation for solvency. It is in that light that the Government ask the House to consider Czecho-Slovakia, and to give a Second Reading to the Bill.

My hon. Friend the Member for East Aberdeen (Mr. Boothby) mentioned certain economic facts which must reassure us as to the extent of the economic independence of Czecho-Slovakia at the present time. He also adduced certain figures about her export trade, which point to that same conclusion in another way. There have been many political arguments brought forward in the Debate. I cannot give the right hon. Gentleman any information why there are not elections in Bohemia. If I were to do that, I should indeed be putting Czecho-Slovakia in the position of a vassal State, because I should be answering for matters which concern the internal affairs of Czecho-Slovakia herself. But I do not intend to do that; I have quite enough to do in speaking for my own Government as it is.

The right hon. Gentleman the Member for St. George's (Mr. Cooper) invited me to enter into the question of the crisis which occurred last autumn in connection with this country. I do not propose to do so; indeed, I doubt whether I should be in order; but I will just say that the Government accept full responsibility for what occurred then. It will be remembered that my right hon. Friend the Chancellor of the Exchequer, in that well-known speech of his at that time, put the two alternatives before the House. We recognise that Czecho-Slovakia, in accepting the second alternative, which avoided war, has suffered much. As we have said before from this side of the House, we think she would have suffered infinitely more had the horrors of war devastated her country. We consider that difficult as are the problems, numerous as are the difficulties, and serious as are the responsibilities which any person in public life must feel rest on his shoulders when he realises the difficulties of the refugees, they are infinitely less than the horrors of modern war.

It is in the spirit of humanitarian assistance to Czecho-Slovakia in her difficulties that I will approach one or two questions that have been raised. The first is about the size of the loan. The hon. Member for East Wolverhampton (Mr. blander) pointed out that in his letter the Czech representative indicated that he would have liked more money, and that the sum did not come up to his expectations. If hon. Members will turn to the Prime Minister's original statement of 3rd October, they will see that, in fact, there was no promise that the amount of £30,000,000 would be given. The amount was mentioned because that was the request of the Czecho-Slovak Government. The Prime Minister, in that Debate, used these words: It is evident that the terms and conditions of a guaranteed loan and the question of what Governments would participate in it, may raise matters which could not be decided immediately"— and he referred to the need for consultation with other Governments. That consultation took place, and, with the French Government, we came to the conclusion that this was the sum we would pay to the Czecho-Slovak Government.

Mr. Harold Macmillan

Will my hon. Friend read on?

Mr. Butler

Yes. This is one of those cases where the old proverb applies, that 'He who gives quickly gives twice'.

Mr. Macmillan

Will he read on?

Mr. Butler

Yes. His Majesty's Government are informing the Czecho-Slovak Government that we are prepared immediately to arrange for an advance of £10,000,000 which would be at that Government's disposal for their urgent needs. How this advance will be related to the final figure which may be decided upon hereafter is for the future.''—[OFFICIAL REPORT, 3rd October, 1938; col. 46, Vol. 339.] It is that very question which has been decided in consultation with the French Government, and announced by the Government in the Bill. There is no question of a promise having been given by the Government.

Mr. Mander

The amount asked for was £30,000,000.

Mr. Butler

I have just said that the amount asked for was £30,000,000, and we, after consultation with the French Government, have been able to make the arrangement included in this Bill. We should have liked to have given all we could but considering the objects for which the Bill was introduced, I think we shall find the amount is a suitable one for the purposes in view. I have been asked by the hon. Member for East Wolverhampton and the right hon. Gentleman opposite how the £10,000,000 was spent. I would answer that question in this way: We have general indications of the way in which part of the money has been temporarily used up to now. We know that some of it has been used for refugees going to Palestine, and some of it for the Refugee Institute at Prague, but the final way in which the money will be used is as explained by the Chancellor of the Exchequer. The £4,000,000 is a gift for dealing with emigrants and £8,000,000 is for refugees in general in Czecho-Slovakia in respect of which we are to get detailed accounts approximately every quarter. This Bill, with its arrangements, really covers the way in which the money is to be finally spent.

The hon. Member for Gower (Mr. Grenfell), who closed the Debate for the Opposition, referred to the fact that the money which was being allocated for the purposes of emigration would, in fact in many cases, be used on British soil and for emigrants who populate parts of our Empire. That is the sincere wish of everybody on every side of the House. The present extent of emigration from Czecho-Slovakia may be summed up as follows: Emigration for about 10,500 people has either taken place or is in course of being arranged to various parts of the world. The position as regards the Dominions is that the possibilities of migration to the Dominions are a question for decision by the Dominion Governments themselves. At a very early stage the Sudeten German representatives asked that this question should be discussed with Dominion representatives. It is hoped that arrangements may be made for the admission of a substantial number to various places. The Commonwealth of Australia have recently announced their readiness to issue some 15,000 permits spread over three years for refugees.

Mr. Boothby

For Czech refugees, or any refugees?

Mr. Butler

It may be assumed that they will sympathetically consider allotting a certain number of those permits for Sudeten refugees. It will be seen that the Dominions are giving this matter sympathetic consideration, and I support what the hon. Gentleman said about the value of some of these refugees as stock for emigration to our Dominions. I have myself travelled in Australia and I know what they owe to certain stock which has meant a great deal to her development. There does not seem in the House to be a great difference of opinion about the £4,000,000, but the right hon. and gallant Gentleman the Member for Newcastle-under-Lyme (Colonel Wedgwood) asked one or two questions. He asked how priority was given by the Central Czech Refugee Institute at Prague to the different types. It reminded me of the time when I was at the Ministry of Labour when we were asked how priority was given in the granting of jobs at Employment Exchanges throughout the country. In this case, I hope that the matter will be carried out with perfect fairness.

Every person who comes under that definition is entitled to £200 and passage money. The definition, as hon. Members will have seen is a very wide one. There is no question of priority except priority of getting admission to another country. He also raised the question of stateless Jews. There is some doubt whether stateless Jews will be included in the definition, and as a result of discussion which has taken place, further consideration is to be given to them. He then asked whether there was not likely to be an ugly rush of people to leave the country prior to the introduction of this Agreement. I think that that is answered by the fact that the Agreement is retrospective, and if he will study paragraph 3, on page 10, he will see that it applies to all refugees who emigrate, including those who have emigrated since 15th October, 1938.

There are other detailed points which are of some importance. There was the question whether the new Czech legislation of the last day or two would render ineffective the promises given in the letter from the Czech representative, Dr. Pospisil, to the Foreign Secretary, which is included on page 11 of the White Paper. We have been in touch with the Czecho-Slovak Government and through our representatives we have received assurances that the Czechs are doing their utmost to find new homes for refugees and that no breaches of the assurance in this letter will be found in the new decrees which have just been passed.

I was asked a question by the hon. Gentleman the Member for East Wolverhampton as to the machinery which we could rely upon to see that these particular pledges were carried out. He asked specific questions about whether they would be forced to go to another country by the Czech Government. My answer is that the Czech authorities have said in this letter that no refugees will be forced to leave Czecho-Slovakia if they will thereby run the risk of danger to health or life. That, taken with the phrase "without any discrimination for racial origin or reasons of religion," illustrates that the Czech Government wish to carry out in the letter and the spirit the undertakings they have given to us. I do not wish to enlarge upon this assurance at the present time.

I still have a question asked by the hon. and gallant Gentleman the Member for Carlisle (Brigadier-General Spears). He asked how much money would be available for the reconstruction of the Czech State. That has been referred to by several hon. Gentlemen. The hon. Member for Stockton-on-Tees, I think, would have liked more money for the purpose of this reconstruction. Paragraph 2 in the second Annex on page 12 of the White Paper says: It is understood that these funds may be applied by the Czecho-Slovak Treasury temporarily for any urgent requirements of national reconstruction. It goes on to say that they should come back later for the use of the refugees. That is one manner in which the Czecho-Slovak State will gain benefit from reconstruction by the use of this money. The mere fact of a road or some other matter being improved by the use of this money will surely redound to the advantage of the future economy of the Czech State. Besides that, the money that is to be used by refugees themselves is bound up in this declaration with the prosecution of further public works. It says: It is understood that one of the primary methods for relief of refugees in Czecho-Slovakia will he the provision of productive employment through public works. Therefore not only will the money be temporarily used in work of national economy, but money will be used in relation to the refugees themselves by public works for the refugees and not merely by giving them maintenance. The money applied to refugees and the money used temporarily will affect Czech economy in the future. Considerable stress has been laid on the question of roads. My right hon. Friend said that no part of the funds would be expended in building roads with a military object. Surely, that assurance is of some value. There is a difference in the design of a person who sets out to build a road wtih a military object, and a person who constructs a road upon which at some time in the future a soldier or a mechanised unit may proceed. The right hon. Gentleman has illustrated the need for better communications in Czecho-Slovakia, and it is one of the commonsense features of this Bill that we are providing an opportunity for the Czech road system to be improved. I cannot guarantee that no military formation will ever pass over the roads, but we are satisfied that the roads in question will not be built for a military object.

Mr. Benn

Will the money be available for the west to east road;

Mr. Butler

I cannot give details at this stage, but I must accept the assurance given us by the Czech authorities, and leave the matter there. I think that I have covered most of the questions put to me by hon. and right hon. Members, and I have little more to add.

Mr. Benn

I am sorry to intervene, but the hon. Member has not mentioned two matters which I think are of importance. One is the optants, those who were kept in the Nazi net. They had six weeks to get out. The second point is the guarantee as to the frontiers of Czecho-Slovakia.

Mr. Butler

As regards the guarantee of the frontiers. I have hesitated to speak, because that is not a matter that falls under this Bill; but in answer to the right hon. Gentleman I might say that I have nothing to add to the answer which the Prime Minister gave to the hon. Member for Kingswinford (Mr. A. Henderson) on 31st January, when he said: Apart from the references to this question which I shall be making in my statement at the end of Questions"— That is the statement on the Rome conversations— I can only say that it is still under consideration by the various Powers concerned."—[OFFICIAL FICIAL REPORT, 31st January, 1939; col. 26, Vol. 343.] That is the position in regard to the guarantee, to which I have nothing to add. In regard to the question of the optants the definition of those persons who fall under the operation of this Bill is included in Annexe No. 1, which includes those who are not qualified to opt, or if qualified to opt are unable to support themselves in Czecho-Slovakia as at present constituted. It is immaterial whether Czecho-Slovak nationality has in fact been enjoyed or not. There is a further provision, in order to make the definition very wide, which says: Such other persons as the Government of the United Kingdom, the Government of the French Republic and the Czecho-Slovak Government may agree later to include.

Mr. Mander

I should like to call attention to page 14 of the White Paper, paragraph 5. Is it contemplated that under that provision substantial sums of money can be transferred to this or other countries by Czech industrialists for the purpose of setting up factories?

Mr. Butler

That is a matter upon which we have been in touch with the Czech authorities. It will all depend upon the devolpment of the situation. At a period of crisis in a country's financial history there is always stringency. At a later period it may be possible to consider a matter of that sort, and I should have to leave a final answer until we see how the situation develops. I am sorry that I forgot to deal with those points, but there have been so many.

In conclusion, I would ask the House to give a Second Reading to this Bill, which is of a humanitarian character, to help the refugees who have suffered through recent events. I am sure there can be no hesitation in the minds of hon. and right hon. Members in all quarters of the House in deciding to proceed with the Second Reading of the Bill.

Question, "That the Bill be now read a Second time," put, and agreed to.

Bill read a Second time.

Bill committed to a Committee of the Whole House, for Thursday.—[Captain Margesson.]