§ LORD SYDENHAM rose to ask His Majesty's Government whether attention has been directed to the great excess of exports of cocoa from the United Kingdom during the war, and whether steps are being taken to regulate these exports.
§ The noble Lord said: My Lords, the statistics which have been given as regards the exports of cocoa during the war from the United Kingdom are very remarkable and somewhat disturbing. The principal figures were made public some time ago by Dr. Waller, who is one of our eminent physiologists, and he has supplied me with a graph which I wish could be distributed amongst the members of your Lordships' House, because you would then see far better than from any figures which I can give just what has happened in this connection. The great rise began in September, 1914, and the maximum of exports from this country was reached in November last.
§ Speaking broadly, the total exports of cocoa from the United Kingdom to all countries from August, 1913, to July, 1914, were only 6,638 tons, as compared with 32,086 tons in the corresponding war period. Or if you deal with the matter in another way, during the first sixteen months of the war our total exports were 33,357 tons, whereas they had only been 8,883 tons in the corresponding period of sixteen months before the war. That gives, roughly, an average export of 2,000 920 tons monthly during the war and of only 500 tons before the war. I cannot get at the actual distribution of this large amount among the various importing countries; but Holland, Denmark, Norway and Sweden took between them only 1,161 tons in 1913 against 7,589 tons in 1914 and 15,316 tons up to December 21, 1915. The Board of Trade figures show that our export to Holland was 984 tons in 1913, and that ran up to 5,448 tons in 1914, after less than half a year of war. What the export to Holland was in 1915 I have not been able to ascertain. These figures are very significant, for it is quite impossible that all these neutral countries could have increased their home consumption by these enormous amounts. Holland prohibited the export of raw cocoa and cocoa butter some months ago; but I imagine that manufactured cocoa is not prohibited. It has been stated in your Lordships' House that under the secret arrangements come to with the Danish Chambers the export of cocoa is allowed from Denmark. What happens in Sweden I have no idea, but the imports into Sweden are very large.
§ The two points on which I wish to lay most stress are these—first, that we have apparently permitted cocoa to be increasingly exported to neutrals who could not require it for their own use; and, secondly, that this export of cocoa from the United Kingdom reached its maximum of 4,032 tons in November last. The noble Lord who presides over the Licensing Committee of the War Trade Department (Lord Emmott) said the other day that he was often met with "constant complaints, sometimes in the form of appeals ad misericordiam, sometimes in the form of abuse." I think the exporters of cocoa from this country could hardly plead ad misericordiam, and they certainly had no right to resort to any form of abuse. On December 23 the Under-Secretary of State for Foreign Affairs stated in another place that no export of linseed oil from this country had taken place "for many months past." That statement does not by any means dispose of the whole question of vegetable oils, but it did seem to mark an advance in a question the dealing with which had been exceedingly unsatisfactory in previous times. The noble Marquess the Leader of this House on December 20 spoke of the great importance of oils and fats, which he said was a matter that had 921 given the Government "the greatest anxiety for a long time past." But cocoa contains very nearly half its weight in fat, and is twice as nourishing in the form of human energy as bread. That is why the figures I quote seem to me to be so disturbing.
§ What I would like to ask is this. Have these great exports from this country been permitted in order to prop up our entrepôt system, or to break down the German exchange, or out of tenderness for neutrals, who have in this war enjoyed a measure of prosperity they have never enjoyed in any previous war of which I have any knowledge? in a recent issue of the New York Journal of Commerce, one of the most important papers in New York dealing with commercial questions, it is stated that the United States exports increased by £200,000,000 during the first nine months of the war—in that period it is clear that very few munitions could have come into that large sum—and that the exports to Holland had increased by 50 per cent. in that period. It went on to remark that "most of this is trade that filters through to Germany and Austria-Hungary in spite of the British blockade."
§ My Question deals only with the export of cocoa from the United Kingdom, but it is certain that very large quantities of cocoa are going through to Germany from other sources. The only other figures I have been able to get are these for Denmark and Sweden, and they are very startling. In the eleven months before the war Denmark imported 2,211 tons, and Sweden 1,550 tons; but in eleven months during the war Denmark imported 18,071 tons, and Sweden 11,120. These figures tell their own tale; and they do not include the enormous imports of Holland, which are probably bigger than either of them. I suppose this external trade in cocoa could only be effectually controlled by making cocoa contraband, and I really cannot see why it was not made contraband long ago. A recent Order in Council has prohibited the export of bladders, casings, and sausage skins to all destinations except British possessions. I have no doubt these things are valuable commodities, and I can fancy that the restriction of the export of sausage skins would be annoying to Germany. But I do suggest that cocoa is of infinitely greater importance. Cocoa, as I have found from my own experience, is pecu- 922 liarly valuable as a portable military food for use on a campaign. My Lords, it was always certain that economic pressure must play a great part—perhaps the greatest part—in bringing this war to an end; and if we had acted as the Northern States did in the Civil War I am perfectly certain we should have had peace before this. Every week that passes takes its heavy toll of gallant lives anti steadily increases the burdens we and our Allies will have to bear in the future. Yet all the time we know that the enemy is still being supplied on a very large scale and under the eyes of our Navy with the very commodities known to be most necessary to enable him to prolong the war. I beg to ask the Question standing in my name.
§ THE MARQUESS OF LANSDOWNE
My Lords, I regret that the noble Marquess who leads the House is not able to be in his place this evening. He presides over a Committee which deals largely with these questions, and would have been able to answer my noble friend with more knowledge of the facts than I can pretend to have. My noble friend asks two Questions —whether our attention has been directed to the great excess of exports of cocoa from the United Kingdom during the war, and whether steps are being taken to regulate these exports? If I were to be content with a laconic answer I should state that the reply to both of these Questions is in the affirmative; but I dare say my noble friend will expect me to say a little more than that.
First let me venture to express my entire agreement with him in what he has said as to the importance of cocoa as a source of military supply. I believe I am right in saying that cocoa contains all the ingredients of a complete food and in particular a large proportion of those fatty substances the absence of which is being so severely felt in Germany and Austria at the present time. Therefore there can be no two opinions as to the desirability of preventing cocoa from finding its way to the enemy. The noble Lord gave us figures with which some of us are probably already familiar, and which go to show that since the war began some of these neutral countries which are contiguous to Germany have been receiving an amount of cocoa so entirely out of proportion to their normal supplies that no other conclusion is possible except the conclusion that a great part of that cocoa 923 has been finding its way through those neutral countries to the enemy.
I will not trouble the House with figures. I believe there are some points at which the figures are open to question. For example, I am told that the monthly figures are open to some suspicion for this reason, that they are compiled from the Customs returns, which have reference, not to the actual transactions that took place within the month, but to the transactions recorded within the month, which is not quite the same thing. That, of course, is material when you come to deal with the amount of cocoa that has been exported to these countries from the United Kingdom during the months which followed upon the prohibition of the export of cocoa. But there is one circumstance which does very materially affect the figures, and as to which I should like to say one word. Since the war there has been a very great alteration in the course of the trade in cocoa. Before the war Hamburg was the great entrepôt for cocoa, and immense quantities passed through Hamburg to those neutral countries which we are discussing this evening. A great deal of cocoa went from our own West African Colonies to Hamburg and from Hamburg found its way to Scandinavian countries and other places. When the war broke out Hamburg ceased to be an entrepôt, and a great part of the business previously done at Hamburg came to be done in this country, with the result, of course, of a great inflation in the amount of cocoa passing through Great Britain. That, by itself, would be a circumstance for congratulation, for it tends to show that we are capturing a business which was formerly in the hands of Germany. But there is a good deal more in it than this perfectly legitimate diversion of trade. I said I would not give figures. I will give only one. It is this, that whereas the imports of cocoa into this country during the year 1913 amounted to 78,000,000 lbs., they amounted in the year 1915 to 187,000,000 lbs.—an enormous increase. I ought, perhaps, to add that of this amount 99,000,000 lbs. were entered for home consumption. That is a very large increase, as the figure for 1913 for home consumption was only 56,000,000 lbs. But even allowing for what came to this country for the purposes of home consumption, it is quite clear, as pointed out by my noble friend (Lord Sydenham), that there is 924 an enormous balance of cocoa unaccounted for, some of which it is reasonable to presume found its way to the enemy countries.
Now a word as to the steps which have been taken in order to endeavour to intercept that supply. It was not till last January that cocoa was added to the list of restricted goods, but it appears that the decision then arrived at was held to affect only cocoa powder, and it was so limited in the Proclamations issued during the spring and summer. It was only on July 30 that an amended Proclamation was issued adding to the restricted list raw cocoa of all kinds and all preparations of cocoa, including cocoa husks, cocoa shells, and chocolate. From that date—that is, July 30—the restriction was applied to all cocoa, so that it is only to the period subsequent to that date that you must look if you wish to find the true results accomplished by this policy of restriction. I venture to claim for that policy that it has been attended upon the whole by a very fair measure of success; and if it does not weary your Lordships I should like to tell you exactly what the result has been in its application to the imports of the Scandinavian countries and the Netherlands.
I take first Norway. During the year 1915 Norway took about 820 tons from the United Kingdom, and of that about 200 tons only had been shipped under licence since the prohibition was imposed. Cocoa is allowed to be shipped only to manufacturers, and in no case in excess of their normal requirements. The maximum allowed for any one month has been fixed at 50 tons. The normal requirements of Norway prior to the war were about 100 tons a month from all sources. To Sweden there were over 6,000 tons exported during 1915. Less than 200 tons of that have been exported since the prohibition was imposed, a very marked falling off, and even that figure includes a certain amount of cocoa which was released from the Prize Court. In regard to Denmark the same policy has been pursued. The total export to Denmark for the year was 4,570 tons; of that only 500 tons have been shipped under licence, these also including some consignments released from the Prize Court. In all these cases licences are issued to the manufacturers, limiting them to shipments not in excess of their normal requirements; and in all 925 these cases guarantees are required that the cocoa will be consumed in the country concerned and not re-exported.
The case of the Netherlands is somewhat different. There are there at least two very large businesses, one that of Messrs. Turner and the other that of the well-known firm of Van Houten. I understand that these firms take large quantities of raw cocoa from this country and return it to us in a manufactured state. I believe that about 90 per cent. of the raw material which they take comes back in a manufactured state for consumption in this country. In addition to the transactions with these two large businesses, from 300 to 400 tons a month, or between 30 and 40 per cent. only of the normal requirements of the Netherlands, have been licensed, in every case to manufacturers who are believed to be trustworthy; in all cases it is arranged that the cocoa should be consigned to the Netherlands Oversea Trust, and the noble Lord knows quite well what the nature of our Agreement with that Trust is. In these cases we have been able to make what I understand are regarded as satisfactory arrangements with the British exporters, and I would like to insist upon the necessity of doing what we can to arrive at reasonable arrangements with them; and for this reason. If we are too stringent in our requirements and if our requirements appear to be vexatious there will be a very considerable risk that we shall drive them to cease exporting from this country and to get their goods through by other channels. The result which might follow is obvious. If they were to do that we should lose the opportunity of which we now avail ourselves for issuing licences to them and in other ways making convenient arrangements for the control of the export. Apart from that the further result would be that the same amount of cocoa, instead of reaching the neutral countries through British channels, would reach them overseas, and we should have to fall back upon the much more precarious and difficult methods of intercepting goods with which we have to be content when we are dealing with overseas traffic.
I mention overseas traffic, and would like to say a word upon that subject. I have no doubt that the noble Lord, who has studied this question, is aware that the amount of cocoa which goes to these neutral countries through British channels 926 is a very small one compared with the amount which reaches them overseas, and it is when we come to deal with that part of it that our real difficulties begin. I take the case of Sweden as an illustration. In the first eleven months of 1915 the amount which reached Sweden overseas was 11,120 tons as against a normal 1,595 tons, and of the larger figure no less than 7,218 tons reached Sweden from the United States of America. I will not dwell further upon the difficulties which we have to encounter in dealing with the contraband which passes through neutral countries to the enemy overseas. We have, as the House is well aware, to depend upon our power to satisfy the Prize Court that the goods are really destined to the enemy, and everybody knows that this is not always a very simple or easy task.
In our view, as I tried to explain to the House not long ago, the best way of securing ourselves against a miscarriage of justice is that we should have recourse to the kind of Agreements into which we have entered with the Netherlands Oversea Trust, with the two great Danish trading associations, and with other trailers and combinations of traders. The foundation of those Agreements is to be found in what is conventionally known as the "rationing" of the neutral countries concerned. It is not very difficult to ascertain approximately what the reasonable and normal requirements of the neutral country are. If an Agreement can be arrived at as to that you have, when you take the goods before a Prize Court, the means of establishing inferentially a strong presumption that the goods, if they are in excess of the normal amount, are of enemy destination, and that at any rate helps to some extent in securing their condemnation by the Prize Court. I endeavoured to show just now, in the case of the countries mostly concerned in this trade, that since we had added cocoa to the list of prohibited articles there had been a very considerable improvement in the figures, that the amount licensed was very small compared with the amounts which used to pass before prohibition was resorted to.
§ THE MARQUESS OF LANSDOWNE
No. But I am very far from suggesting that nothing more can be done. I do not think that there can be any reasonable doubt that considerable amounts, in spite of all our precautions, continue to reach the enemy through these channels. I am able to say that this matter is engaging—I do not say will engage, but is engaging—the most careful consideration of the War Trade Department and of His Majesty's Government. I believe that we are justified in looking in certain directions for the possibility of a gradual tightening up of the precautions which we are taking at the present time. I mean that it is possible for us to obtain fuller and more accurate information than we now receive as to the factories in the different countries and their legitimate requirements. I believe it to be possible to do more in the way of restricting licences to cocoa consigned to the firms to which I refer, and I believe it is also possible to do something in the way of arriving at agreements with the shippers under which they would undertake not to consign except to the firms thus selected. I have also no doubt it would be possible to obtain more effectual guarantees against re-export from neutral countries, and in cases where the imports, tested in the manner which I described a moment ago, can be shown to be excessive, there of course we are able to refuse licences and to resort to the ultimate remedy, which is to take the goods before a Prize Court and there establish, if we can, their enemy destination. I have said enough, I hope, to show my noble friend that the question which he has raised is regarded by us as a serious one, and that we are addressing ourselves as best we can to meeting the views which he has expressed.
§ LORD SYDENHAM
I have to thank the noble Marquess for the full answer he has so kindly given to my Question. There will be general satisfaction in knowing that the net is being tightened and that there is a prospect that it will be drawn tighter still. As far as I can see the best thing would be to treat cocoa as contraband in the first instance, and to take the basis of rationing as the test of destination.
My Lords, I hope I may take advantage of the elastic rules under which we debate in this House and ask a supplementary Question, because I 928 am not quite clear what the noble Marquess wished us to understand. As far as Sweden is concerned. I understand that the largely increased imports were from overseas. But there are other countries—Holland particularly—which have been importing very largely increased quantities during the war. Are we to understand that those increases were also overseas, or may they have come through British hands? The noble Marquess, in the course of his reply, referred to our Colonies on the West Coast of Africa, where the cocoa bean, I believe, flourishes. I gathered from what he said that large quantities of cocoa had passed through the hands of British firms to importers in Holland, and the noble Marquess said that it was impossible to doubt that large quantities of these increased imports had gone into enemy hands. It was difficult to avoid the inference that those quantities of cocoa that had gone into enemy hands might have come from the West Coast of Africa Islands through. British firms to importers on the Continent. In that case, is there no way of preventing this? If these increased exports are going through the hands of British firms is it not possible to bring some influence to bear upon these firms and stop the exportation by that means?
§ THE MARQUESS OF LANSDOWNE
I am not sure whether I quite apprehend the question which my noble friend desires to ask. I distinguished between cocoa passing through neutral countries to the enemy on the one hand from this country and on the other overseas, and I tried to explain that, so far as the cocoa which passes through neutral countries to the enemy from the United Kingdom is concerned, we had now in full operation a system under which we issued licences.
§ THE MARQUESS OF LANSDOWNE
No; since last July. I thought I stated that quite clearly. Since July we have had in full operation a system under which cocoa cannot pass through neutral countries to the enemy—cannot pass to neutral countries at all without a licence from us. But overseas trade is, of course, in a quite different position. That we can only deal with by intercepting it at sea, taking it before a Prize Court, and, if we can do so, establishing the fact that it is destined for the enemy.
§ LORD EMMOTT
My Lords, may I add a word which I think will be more or less reassuring to your Lordships about the licensing done in the War Trade Department? The figures which I have had the advantage of seeing showing month by month the exports from this country quite clearly include exports made in months previous to that for which they are entered. For instance, in regard to Sweden the figures show an export from 930 this country in the four months August— November last—that is, since the embargo was put on—of between 2,000 and 3,000 tons. The amount licensed in that time was less than 80 tons; and therefore those figures quite clearly do not apply to the amount that was sent out of this country under licence.
§ House adjourned at half-past Six o'clock, to Tuesday next, half-past Ten o'clock.