HL Deb 05 May 1921 vol 45 cc203-23

My Lords, I may I now ask the noble Earl whether be is in a position to make any statement regarding the recent Conference and the conclusions which, so far as one can judge from the daily Press, have been there arrived at?


My Lords, I think that your Lordships would probably desire, as indeed you have a right, to have as full a statement as it is possible to make about the proceedings of the Allied Conference that has been sitting in London during the past five days, and the deliberations of which concluded this morning. Seated as we have been at that Conference, for many hours of each of these five days, and having only concluded, as I remarked just now, our work at 11 o'clock this morning, it has been difficult for me, in the short interval since then, to prepare an exhaustive account of our proceedings. At the same time, it strikes me that what your Lordships really require is a summary of the situation, and a narrative of the steps by which we have reached the result that I am about to announce, the nature of the decisions themselves, and the consequences that may he expected to ensue; and, if I correctly interpret your wishes in that respect, I will endeavour to the best of my ability to satisfy them.

The Conference that has just adjourned was summoned to bring to an end the long period of argument, negotiation, hesitation and delay in the carrying out by Germany of the terms of the Treaty of Versailles, a process which reached its culminating point when the German Foreign Minister made the speech, with which we are all familiar, at the Conference in London a few weeks ago. At eleven o'clock this morning, the Conference having separated, the Prime Minister handed to the German Ambassador in London a document, the words of which I will read. I will then proceed to explain and comment upon its terms. This is the document in question— The Allied Powers, taking note of the fact that in spite of the successive concessions made by the Allies since the signature of the Treaty of Versailles, and in spite of the warnings and Sanctions agreed upon at Spa and at Paris, as well as of the Sanctions announced in London and since applied, the German Government is still in default in the fulfilment of the obligations incumbent upon it under the terms of the Treaty of Versailles as regards (1), disarmament; (2), the payment due on May 1, 1921, under Article 235 of the Treaty, which the Reparation Commission has already called upon it to make at this date; (3), the trial of the war criminals as further provided for by the Allied Notes of February 13 and May 7, 1920; and (4), certain other important respects, notably those which arise under Articles 264 to 267, 269, 273, 321, 322 and 327 of the Treaty, decide— (a) To proceed forthwith with such preliminary measures as may be required for the occupation of the Ruhr Valley by the Allied Forces on the Rhine in the contingency provided for in paragraph (d) of this note: (b) In accordance with Article 233 of the Treaty, to invite the Reparation Commission to prescribe to the German Government without delay the time and manner for securing and 'discharging the entire obligation incumbent upon that Government and to announce their decision on this point to the German Government at latest on May 6: (c) To call upon the German Government categorically to declare within a period of six days from the receipt of the above decision its resolve (1), to carry out without reserve or condition their obligations as defined by the Reparation Commission; (2), to accept without reserve or condition the guarantees in respect of those obligations prescribed by the Reparation Commission; (3), to carry out without reserve or delay the measures of military, naval and aerial disarmament, notified to the German Government by the Allied Powers in their Note of January 29, 1921, those overdue being completed at once and the remainder by the prescribed dates; (4), to carry out without reserve or delay the trial of the war criminals, and the other unfulfilled portions of the Treaty referred to in the first paragraph of this note. (d) Failing fulfilment by the German Government of the above conditions by May 12 to proceed to the occupation of the Valley of the Ruhr, and to take all other military and naval measures that may be required. Such occupation will continue so long as Germany fails to comply with the conditions summarised in paragraph (c). I will now proceed to offer a few remarks in elucidation of the Declaration I have just read. It is now just two and a half years since the Armistice was signed and hostilities terminated. It is nearly two years since the Treaty of Versailles was signed in June, 1919. It is one and a quarter years since that Treaty was ratified in January, 1920. During this time repeated attempts have been made to induce the German Government to fulfil its obligations, and, on our part, to interpret the demands made upon her in a reasonable and equitable spirit. Conferences have taken place successively at Paris, Brussels, Boulogne, San Remo, Spa, and London. To two of these, at Spa and London, the Germans were admitted to plead their cause or state their case. At each stage the Allies have been willing to grant, and have granted, postponements, relaxations, modifications, delays. A point has now been reached at which all must realise, firstly, that essential portions of the Treaty, to which reference has been made and which I will presently explain in greater detail, remain unfulfilled; secondly, that the German Government has either not the power or the will, possibly it may be deficient in both, to carry them out.

We have, therefore, arrived—I am speaking now of the Powers in Conference —at the unanimous conclusion that there must be an end to this long and infructuous and exhausting suspense. It is bad for the Allies, because their just claims continue to be disregarded; is bad for Germany herself, because she can never regain the confidence of Europe Os long as she continues to play fast and loose with her obligations; and it is bad for the world, because it is impossible in these conditions that either the political, the financial or the economic equilibrium of mankind can be re-established. In order to justify these demands, let me indicate to you the main respects in which Germany is in default, and here I will follow the same order as in the document I have read.

Firstly, I take disarmament. During the last sixteen months the Allies have made numerous demands, notably at Boulogne in June, 1920, and at Spa the same year, and at Paris in January, 1921, to meet the difficulties, in sonic respects the real difficulties, of the German Government in respect of disarmament, and they have, on several occasions, extended the time limits fixed by the Treaty. Nevertheless the German Government, in the case of the military clauses, is still in default in the following matters. Firstly, the organisation of the German Army does not conform to the text of the Treaty in certain respects. An excessive personnel is still employed in different branches of the Army administraton. Secondly, excessive quantities of war material still remain in the hands of the Army authorities and civil population. The Army has been reduced under the terms of the Treaty from 200,000 to 100,000 men, but there has not been a corresponding reduction in arms and equipment, and the Germans have also refused to accept the equipment table for all units prescribed by the Commission of Control. Thirdly, the armament of certain fortresses on the Eastern frontier and North Sea coast is still in excess of the quantities authorised by the Treaty. In three land fortresses in the Eastern ports of Germany there still remain 556 guns. Fourthly, the police force is still many thousands in excess of the numbers authorised. Fifthly, the unauthorised military forces and societies, the Einwohnerwehr in Bavaria and Wurtemburg and East Prussia are still in being and armed.

In Bavaria alone these forces are 320,000 strong, with 240,000 rifles and 2,800 machine guns. It is true that the German Government promulgated only a little while ago, under pressure from the Allies, a law declaring these forces illegal, but the law has been quite inoperative. No administrative action has been taken to carry it out, no date has been fixed for the dissolution of these organisations, no time limit has been named for the surrender of arms and equipment. The Bavarian Government snaps its fingers at the Federal Government and the Federal Government laughs in its sleeve at the impotence of Europe.

A word more as to this particular organisation, the Einwohnerwehr in Bavaria and elsewhere. Of course, it may be said that these forces in their totality do not for a moment constitute a real military danger and that in some respects they are, in the localities where they exist, a guarantee for the presence of internal law and order. I am prepared to concede something in that direction. But, on the other hand, it is equally clear, in the first place, that their numbers are greatly in excess of any possible needs, either of those localities or of the country as a whole, and, in the second place, that if they are allowed to continue indefinitely they may form the basis of a national army and be a real aid to possible future mobilisation, and that in this way they may become, even if they are not now, a real military danger. It is not surprising that France and Belgium, for instance, who are in such a very different position from ourselves, look across their open frontiers with some anxiety and sonic apprehension upon the existence of a potential military force of this description. Moreover, the Statutes of these societies are specially drawn up so as to maintain the spirit of military discipline. Further, we have the teachings of history to warn us, and it is of supreme importance to prevent Germany from repeating the familiar tactics of Prussia in the years from 1806 to 1813. For this reason it is imperative to fix the time limit for the disarmament, disbandment and ultimate disappearance of all these unauthorised military or semi-military forces. Such a time limit was fixed at the Paris Conference in January, 1921. It has been completely ignored. Not a single step has been taken in that direction by the German Government in the interval. Further delay in the matter cannot be tolerated.

The second heading was that of reparation. This is an exceedingly difficult and complex matter, not only involving abstruse financial calculations but entailing also a careful examination, both of the existing and of the potential resources of Germany in the years that lie ahead. I had given to me a memorandum by the Treasury summarising the whole case as regards reparations, but I confess to your Lordships that it was so technical and abstruse in its character, as well as ex tended in its length, that I should hesitate to pass it on in tote to your Lordships, or to ask you to spend so much of your time in listening to me. What I have done, therefore, is to endeavour, in plainer and less technical language, to summarise the situation, because it is around this question of reparation and the figures that are now imposed that the greater part of the controversy will turn, and it is upon the satisfactory solution of that question more than any other that the future good relations with Germany and the recovery of Europe in the main depend.

Let me first remind your Lordships of the position laid down in the Treaty. Under the Treaty of Versailles Germany accepted the responsibility of herself and her Allies for causing all the loss and damage to which the Allied and Associated Governments and their nationals had been subjected as a consequence of the war imposed upon them by the aggression of Germany and her Allies. The Treaty provided that the amount of damage for which compensation was to be given by Germany should be determined by an inter-Allied Commission called the Reparation Commission. The duty of the Commission was to consider the claims of the Allies and to give the German Government a just opportunity of being heard. The findings of the Commission were to be notified to Germany on or before May 1, 1921, and were conclusive as to the amount of Germany's obligations.

After very laborious work for many months in examining the claims formulated by the Allies, the Reparation Commission came to its conclusion and notified Germany that it fixed the total amount of the damage at £6,600,000,000 gold. In addition Germany was liable to pay the cost of the Armies of Occupation and of sums which Belgium had borrowed from the Allies up to November, 1916, with interest. Against these liabilities Germany was entitled to set off amounts paid in kind and the value of certain State property in conceded territories. These amounts were to be determined by the Reparation Commission, and for present purposes it is enough to say that the total for which Germany will have to make provision may be taken broadly speaking to be £6,600,000,000 gold.

The Treaty further provided that bonds payable on May 1, 1921, should be lodged with the Reparation Commission for £1,000,000,000 gold. Germany was entitled to some credits against this for payments in kind already made, but there was undoubtedly a sum of not less than £600,000,000 gold due from her on May 1, 1921. That is the debt that you often see described in the papers under the denomination of so many milliards of gold marks. The Reparation Commission called upon Germany to pay £50,000,000 on account on March 23, and to make proposals for the payment of the balance before May 1 last. Germany made default. She neither made the payments required nor proposals for payment of the balance. This, therefore, was the position so far as the Treaty liabilities of Germany were concerned on May 1, 1921.

Before, however, I pass on to tell the House how the Allies propose to deal with this situation, I think I ought to remind noble Lords of the many opportunities which have been given to Germany to make her own proposals to the Allies. Since last summer repeated efforts have been made at Spa, Brussels and London to arrive at an agreed basis of reparation. I will not weary the House by recapitulating the details of these various proposals. Suffice it to say that ten months have been spent in untiring attempts to settle this reparation liability by a voluntary agreement. The Allies have always recognised that it would be an advantage to all Europe that the amount and method of payment should be settled quickly and by consent.

But ten months have passed without any concrete result. No real effort has been made by Germany to put forward any offer commensurate with her responsibility.

The Reparation Commission has accordingly now settled the total amount which, as I have said, is approximately £6,600,000,000 gold. The Allies, of course, recognise that if the strict terms of the Treaty were to be enforced and the payment of this full sum to be demanded within thirty years by equal annual instalments, with interest as provided by the Treaty, the burden would be greater than Germany could bear. In order to make this payment within the thirty years annuities of over £6,600,000,000 gold a year would have to be made. On the other hand, the Allies are entitled to receive from Germany the full amount which it is within her capacity to pay. But in the rapid recovery that awaits her, her future capacity is likely to be very In itch greater than her present capacity, and it is, of course, not easy to fix in advance exactly what her future capacity is likely to be. If she regains her place in the world's trade as an exporting country her ability to pay debts overseas to the Allies will be greatly increased.

We have, therefore, adopted a system which is intended to provide a relatively low present payment and a means of receiving in future an increase corresponding to her increased capacity to pay. The Allies have agreed to call upon Germany to pay £100,000,000 gold per annum and, in addition, sums equal to 26 per cent. of her exports. These sums will be applied, so far as they go, to payment of interest and sinking fund on three series of bonds which will be created by Germany.

The first series of bonds will he for £600,000,000 gold requiring for interest and sinking fund £36,000,000 gold a year. These bonds will be issued by July 1 and handed by Germany to the Reparation Commission, by whom they will be dealt with on account of the Allies. The second series of bonds will be created, amounting to £1,900,000,000 gold with interest at 5 per cent, and 1 per cent. for sinking fund, and will require for their service £114,000,000 gold per annum. These bonds will be issued on November 1 next, and the Reparation Commission will also receive these bonds and deal with them for the Allies. The third series of bonds will not be created at once. They will only be issued when the amounts payable by Germany are sufficient to provide interest and sinking fund. These bonds will no doubt be issued from time to time and finally the full total, £4,250,000,000 gold, will be issued.

It is to be observed that the first and second series of bonds ought to be covered out of the fixed annuity of £100,000,000 and the percentage of exports, even though the exports remain on a comparatively small scale. But as Germany's recovery proceeds her exports may be expected to increase and the amount she is able to pay will be correspondingly enlarged. The plan provides for a Sub-Committee of the Reparation Commission being set up which will be known as the Committee of Guarantees, to which will be entrusted the supervision, without administrative interference, of the revenues which Germany will be assigned to secure the bonds. This Committee will, in the first instance, consist of representatives of Allies only, but it is hoped that, as the bonds become distributed and pass into the hands of neutrals, representatives of Neutral Powers will also join this Committee. So much for the financial proposals to deal with the reparation issues.

I now come to the third heading in the Allied Declaration—namely, that dealing with the question of the trial of war criminals. This question, in itself so interesting in its reference, for instance, to our own experience, has been much overlaid and, indeed, almost forgotten in recent times, but it is so important in its bearing upon the conclusions which we have now reached that I think your Lordships would like me to give an exact account as to how the position as regards war criminals stands. By Article 228 of the Treaty of Versailles the German Government recognise the right of the Allied and Associated Powers to bring before military tribunals persons accused of having committed acts in violation of the laws and customs of war, and they undertook to hand over to the Allied and Associated Powers all persons accused of having committed acts in violation of the laws and customs of war who were specified either by name, or rank, or office, or employment which they held under German authority.

In accordance with this Article lists of accused persons were prepared by the principal Allied and Associated Govern- ments, and after careful investigation of the evidence available in each case a final list was prepared and presented to the German Government in 1920. The German Government represented that grave political difficulties would ensue if the Allied and Associated Governments insisted upon the surrender of the persons accused, and they proposed that these persons should be tried by the Supreme Court at Leipzig. A Commission was set up to examine this question, and ultimately it was decided that trial at Leipzig should be accepted in the first instance in certain selected cases taken as test cases, to decide the bona fides of the German Government, the rights belonging to us and ceded by Germany under the Treaty not being abrogated but only held for the time being in suspense.

Accordingly, in May, 1920, a shorter list of forty-five names, as compared with several hundreds in the original list, was prepared and handed to the German Government. To this list His Majesty's Government contributed seven names. We picked out the worst and what appeared to us to be the most scandalous cases. It might have been expected that the German Government would have taken immediate steps to effect the arrest of all those persons so as to ensure their trial. Instead, they said that three of the number could not be proceeded against, either by reason of their being out of the country or by reason of their whereabouts being unknown. That is particularly to be deplored in the ease of two of those officers who are charged with the gravest crime. It is stated by the German Government that warrants for their arrest have been issued, but have not been executed at present. The German Government is proceeding with the trial of the remaining four persons. I do not think I need trouble the House with their names.

Having received the list of the accused persons the German Government next represented to the Allied Governments that difficulties were being experienced in obtaining evidence against the persons accused, and at Spa, in July, 1920, it was accordingly arranged that the Allied Governments should collect and provide statements of the evidence against the persons whose names appeared in the short list and transmit them direct to the Attorney-General at Leipzig. It was further arranged that to avoid delay the Attorney-General at Leipzig was to be at liberty to communicate direct with the chief Law Officer of each of the Allied countries—in our case the AttorneyGeneral—for any further information which he might require to enable the charges to be established. His Majesty's Government immediately put in hand the completion of the evidence against all the persons whom they had named, and in October, 1920, a printed volume, containing complete evidence in the cases in which we are concerned, was delivered to the German Ambassador in London for transmission to the Attorney-General at Leipzig. With the information before them contained in this volume it became the duty of the authorities of the German Government to devote their attention to dealing with these cases.

But during the ensuing months numerous communications were received from the German authorities at Leipzig relating to cases which, although in the longer list which had been put on one side, were not in the short list handed to them in May, 1920. Inasmuch as from this correspondence it appeared that the German Government was devoting its attention to cases which had not been submitted to it for trial, thereby intentionally or unintentionally causing delay in those cases which had been submitted to it for trial, it was decided, as a result of a Conference held in Paris, to inform the German Government that requests for information with regard to persons whose names appeared in the longer but not in the shorter list could not be complied with, and a Note to this effect, identical in terms with one delivered to the French Government, was presented to the German Ambassador in London in January last.

It was at the same time decided to force the hand of the German Government and to compel them to proceed with the trials by arranging to take here the evidence on oath of British witnesses who were unable to proceed to Leipzig; and arrangements to give effect to this decision were immediately put in hand. On February 23 last two representatives of the German Government arrived in London to confer with the Attorney-General as to the procedure to be adopted in securing the evidence of the British witnesses. They were informed that it was our intention to arrange for the examination in London, at as early a date as could be fixed, of those witnesses who were unable to proceed to Germany to give oral evidence at the trial, arid the attendance of as many witnesses as could make the journey to Leipzig would be secured. Preparations for obtaining the evidence of all the witnesses were put in hand, a large number of further witnesses were traced, and statements taken from them. These statements were, in due course, communicated to the German Government. On April 26 and subsequent days all the British witnesses who were unable to proceed to Leipzig attended at Bow-street Police Court before the Chief Magistrate and gave evidence on oath. The German Government and the accused German persons were legally represented," and an opportunity was given to them to put questions to the witnesses. Your Lordships will remember reading the account in the newspapers at the time.

The main trials of the four persons out of the seven named by the British Government, against whom the German Government is now proceeding, will commence on four dates in the course of the present month. Arrangements have been made for the attendance at those trials of about fifty-five British witnesses. His Majesty's Government will be represented before the Supreme Court at Leipzig by two members of the English Bar, and the Foreign Office have been requested to apply to the. German Minister of Justice to admit His Majesty's Government as a party to the proceedings in order that they may have a right of audience at the trials. I have given this rather full account for the reason that I indicated at the beginning—namely, that I do not think that these facts are at all generally known. I think I have said enough to show that, making full allowance for the difficulties in the way of taking evidence by which the German Government may be confronted, they have shown only a modicum of readiness and good will in the matter, and have been continuously guilty of evasion, procrastination, and delay.

In the document handed by the Prime Minister there was a fourth heading alluding to certain other important respects in which Germany had failed to fulfil her Treaty obligations. I will not weary your Lordships by recapitulating these, but I will mention two only of their number from which we in this country are especially the losers. The first is this. The German Government, in flagrant defiance of their obligations under. Articles 321, 322, 327 and 273 of the treaty, and in spite of continuous protest, have steadily discriminated against British shipping lines by the refusal of time grant of licences to carry emigrants and of the supply of bunker coal. Secondly, the German Government, in defiance of the provisions of the Clearing Office system, Article 296, have not restrained their nationals from suing British firms for the direct recovery of pre-war debts, which, under the Treaty, British firms can only pay through the Clearing Office.

These are the grounds of the action which the Allied Governments have felt compelled to take. I think your Lordships will agree that they are sufficient; and, indeed, that the Allied Powers have shown exemplary patience in the matter. But, at length, that patience is exhausted, and the hour has struck. Accordingly, the members of the Reparation Commission, who returned to Paris to-day, will this evening hand to the German representative accredited to them the terms of their findings as regards reparation, to which I have referred. And, as I said, this morning the main document of the intentions of the Powers was handed to the German Ambassador by the President of the Conference here. Six days are given, as you will remember, to Germany to announce her intention to carry out the conditions that I have read without further boggling or delay. Otherwise, the Powers will proceed to the occupation of the. Ruhr Valley, and to such military and naval measures as may be required, and all the preliminary steps are being taken should that eventuality arise.

Now, my Lords, you may ask for a word or two about the possible— I hope it is not more than possible—occupation of the Ruhr. And the question may be asked, Why the Ruhr? The Ruhr Valley, which is an area rather larger than the County of Durham, with a total population of about 4,000,000 and a mining population of about 400,000, has been selected because it is the great coal-producing area of Germany. It produced in 1913, 110,000,000 tons of coal, and, in 1920, 80,000,000 tons, in addition to 23,000.000 tons of coke; and last year the Ruhr coal output was sonic 65 per cent. of the total German production. It has been more, I believe, at earlier dates. Further, in 1919, the Ruhr produced sonic 325,000 tons of iron and steel, or about two-thirds of the total German production. All Germany south of the river Main and west of the Elbe is completely dependent, front the industrial point of view, on the Ruhr, and the rest of Germany is dependent upon it to a lesser degree. In addition to the iron and steel industries which I have mentioned, there are also important cement, paper, and textile industries in the Ruhr valley. Before the war it was, as your Lordships know, the great arsenal of Germany. Some idea of the importance of its industrial output may be gathered from the fact that 25,000 15-ton trucks are loaded daily in the Ruhr, or twice the daily goods traffic of the Northern Railway-of France.

As regards the political, as distinct front the physical, aspect of the case, let no one in your Lordships' House imagine for a moment that any of the Powers, and least of all Great Britain, wants to be involved in the costly, thankless, and speculative task of the occupation either of the Ruhr Valley or any portion of Germany. We have other uses for our soldiers and for our resources. The last thing that we dream of is the renewal of strife in any form. We have enough to do with recovery and looking after our own, in many cases, gravely imperilled interests at home. Neither, I must say in fairness, do I think that it is the desire of Frenchmen—at any rate, it is not the desire of the French statesmen whom I have seen and with whom I have had the privilege of associating during the past few days—to be involved in any such occupation. Even if they were forced to occupy they certainly have no intention of staying there. We have received over and over again the most explicit assurances upon this point. The Governments of Italy and Japan both take our view of the matter.

Indeed I may say with truth that we all view the step, should it become necessary, with profound reluctance. I hope myself that it will not take place at all. It will not take place if Germany is now brought to a position in which she will look facts in the face and endeavour sincerely to fulfil her obligations. And if it does take place, it will, I trust, be only a temporary measure of occupation. But we came to the conclusion, after considering every possible alternative, that it is a necessary threat in order to make Germany understand that she cannot trifle any longer with the patience of Europe and (I may add at this stage, because it is a very interesting factor) of America also—your Lordships have read in the newspapers the replies of the American Government, to the German appeals, declining to pay any attention to them—that the patience of Europe and America is exhausted, and that Germany will have, I do not say to bow to the commands of the conqueror, but to fulfil her pledged word under the Treaty which she has signed.

In arriving at these conclusions the Allies have been absolutely united. It has not been an easy path to tread. The financial difficulties alone, which have employed the ablest experts of the day for hours at a time on successive days, have been enough to daunt the bravest spirit. Further, your Lordships must bear in mind, as we continually had to bear in mind, that the points of view of the various countries, notably France and ourselves, are not necessarily the same. I need not expatiate upon that theme, but the conditions of the two, the risks run by the two, are entirely different. We have a very sensitive public opinion of our own to meet in England. It is not the same public opinion as exists in France, but just as we have to consider our own public opinion here—and, I hope, have considered it—so you may be quite sure, and you must realise, that any French Government in its position before the Chamber has to consider very seriously the state of public opinion of its own constituents and of the members of the Chamber, the Deputies, who represent it.

Making due allowance for these differences of approach, I have not, during the last two years, attended any Conference which was more united in its resolution or which separated in a spirit of warmer accord. I am hopeful from such indications as we have had, that the German Government may realise the seriousness of the situation and may conform its own attitude to it. I hope that this long period of higgling and haggling, of obstruction and procrastination on the one side, and of parleying, and treating, and waiting on the other, may now come to an end, and that all of us, Germany included, may before long be allowed to turn our united attention to that which should be the supreme object of us all—namely, the regeneration of the Europe to which we belong.


My Lords, I am very grateful to the noble Earl for having given so full an account of the recent negotiations and conclusions of the Allied Conference. I am sure we are to be congratulated that the Leader of the House and the Secretary of State for Foreign Affairs is a noble Lord who is able to give so balanced and so lucid an account of the very complicated and difficult matters with winch he has just dealt. I have no desire to go back in any way to the terms of the Versailles Treaty, or to criticise those terms, except to this degree, that they have to be considered in so far as they may have to some extent caused those continual evasions and procrastinations on the part of the German Government, of which the noble Earl has, most justly no doubt, complained as causing some part of the difficulties which have confronted Europe during the last two and a half years.

The noble Earl first dealt with the matter of disarmament. On that subject the statement which lie made struck me as not only very complete but as thoroughly fair. When he has spoken of the necessity of the reduction of the amount of war material and of the arms which Germany has continued to retain, I feel sure that he enlisted the general sympathy of your. Lordships' House. I have always felt that this was, at any rate, one matter on which no consideration whatever ought to be shown to the German Government or the German people. They being the main culprits in the war, there can be no excuse for their retention of arms to any degree which can make them still a great military power. And if His Majesty's Government and the Allies have been thoroughly stiff on this matter of disarmament, I feel that they are to be congratulated upon it. It is true of course, as the noble Earl has stated, that for purposes of internal order and what might be described as police purposes in the unsettled circumstances of Germany, it may be necessary to retain a strong, although not a large, military force. But I would very much rather see that regular force maintained at somewhat greater strength, than the retention of a number of arms and munitions of war liable to be used by irregular forces of the kind which the noble Earl has mentioned.

It is, of course, to be remembered that practically no artillery is retained, although I confess I heard with surprise, and with something like horror, of the number of machine guns which the German Government have still retained at their disposal. Still, so far as the menace to the neighbouring countries is concerned—and I am sure we all agreed with the noble Earl that the position of France in this matter has to be regarded with much sympathy, because we ourselves are, of course, immune from any danger owing to German armaments—the fact that the Germans possess no artillery must make the revival of the German Army into a formidable military force a very remote, indeed one hopes an impossible matter. There seems to be all the more reason, as one might point out in dealing with the later portions of the noble Earl's speech, for avoiding as far as possible exciting that feeling which, as he mentioned, after the battle of Jena brought about in Germany a military revival in an unexpectedly short space of time, and on a formidable scale.

As to the matter of reparations, the noble Earl mentioned the gross sum of £6,600,000:000 which the Reparation Commission has decided to be the sum due from Germany a less sum than at any rate some of the Allies were disposed originally to claim, and a larger sum than other critics believed it was possible for Germany to pay. But what we are concerned with at the moment is the method of payment, and that method of payment, I take it, is designed to be as elastic as possible. The fixed sum, if I apprehended the noble Earl rightly, is £100,000,000 a year plus 26 per cent.—that is to say 25 per cent. plus 1 per cent.—on all the German exports. On that the noble Earl did not tell us by what process that 26 per cent: on German exports is to be collected. I assume that the German Government will be held responsible for its collection and for the correctness of the sum, but the noble Earl did not precisely describe to us the machinery by which the collection is to be made. Probably he did not desire to enter at this moment into complete detail.


I would just say, not in correction but in supplement, that that is left in the hands of the Sub-Committee of the Reparation Commission to which, in a sentence, I referred.


I am much obliged to the noble Earl for that explana- tion. I suppose that later on particulars as to the mode of collection will be communicated to the peoples of the different countries. But one matter upon which I should like to be informed is this. What is the relation of this 25 per cent. of exports to the 50 per cent, export tax specially applicable to this country? The noble Earl did not mention that, and I did not quite follow from what he said whether that 50 per cent. tax—which, from what we are informed, has not so far proved highly productive to the revenue of the country—is to be abandoned in favour of this new duty. But perhaps, if the noble Earl says anything in reply, he will explain what is the relation between the two taxes.

Nor was it quite clear, from what the noble Earl said, when the three series of bonds which would be issued for this purpose would be dealt with by the. Commission on the account of the Allies. I was not quite clear what the process would be of placing those bonds on the markets of the different countries, how far they would be brought into competition with the national and other securities of those countries, and how far the amount of issue in each particular case would be allocated according to the desires of the financial authorities in each separate country.

On the matter of reparation there is only one other point to which I wish to allude. The noble Earl said nothing about the possibility of, some form of reparation in kind. We have seen discussed in the public Press of the different countries the possibility of some actual reparation in France by German labour and material. It always seemed to me that that would be a difficult process to bring about. because the choice might appear to be between on the one hand importing a very large number of German free workmen into France, under German control, who might constitute something like a colony there for some considerable period of residence, not under French control, in a manner which would be unpalatable to the inhabitants of that country, and on the other hand introducing German labour under something like servile conditions, or at any rate under those conditions of rigid control which were applicable in former days to the Chinamen in Africa, about whom, the noble Earl will remember, so much controversy was raised. Therefore, I quite understand the difficulty which must have confronted the French in agreeing to anything of that kind, but it did appear to many of us that there was there an avenue towards obtaining a considerable amount of reparation, measured in terms of money, without the trade disturbance which, as we all know, would be caused by a great increase of German exports, very probably competitive with the manufactures of the Allies' own countries.

The noble Earl then passed to the matter of war criminals, and he complained, I have no doubt with justice, of the manner in which the Germans had refused to face the question of the trial of war criminals. Certainly, so far as this country is concerned, the outcome, whatever it may be, is very different from that which was held out at the notable Election in 1918, when the promise that all German war criminals should be punished so highly exhilarated the electors, or a great part of the electors, of this country. The event, whatever it, may he, has not borne out the hopes of anything like a general punishment of German war criminals, whether they were those more highly placed who were concerned in such outrages as the death, or one might say the, murder, of Captain Fryatt, or those who, I understand, are likely to be placed on their trial as guilty of the odious ill-treatment of British prisoners in the different camps.

When it is complained that all these criminals are not forthcoming it does not seem to be surprising that those who knew they were likely to be called upon to give an account of their actions should retire over the frontier to Switzerland, or sonic other country, from which I suppose they are not liable to be brought back by extradition. I am afraid it is the case—the noble Earl will correct me if I am wrong —that people subject to these charges cannot be extradited from neutral countries, and it cannot be amazing that several of them at any rate are not forthcoming in their native land.

The noble Earl mentioned two other failures on the part of the German Government to maintain her obligations—namely, the discrimination against our shipping lines and the bringing of suits for pre-war debts against British subjects, which have tended to pile up the case for action against the German Government. It certainly does seem that in these matters, and in some others, the German Government has shown a certain stupidity in failing to recognise the opinion not merely of their late enemies but of all Europe, and it shows that their mode of regarding life has not altogether changed since the days before the war, when the German Government was what we so well knew it to be.

The last matter which the noble Earl dealt with was the possible occupation of the district of the Ruhr. He expressed a strong hope that such an occupation would not take place. I entirely agree with him. I believe such an occupation would be an unmitigated misfortune for every one concerned; for the Allies generally, for France, and for the future of Europe. The noble Earl believed that nobody, in fact, desired to occupy the Ruhr, and that the French statesmen with whom he has been conversing have no such wish. I can well believe it, although I am afraid that there is a strong body of opinion in France which would look with pleasure and excitement on such an occupation, feeling that it would do something to wipe out the humiliation of the occupation by German troops of so large a portion of France. What strikes an outside observer is that it would be very easy to get into the Ruhr, but exceedingly difficult to get out. If such an occupation takes place, it is very hard to see what is to bring about its termination, and that, of itself, is one of the strongest arguments against A. It is difficult to see how the occupation of that wealthy and populous district can, in itself, assist reparation and the obtaining of the sums of money required for reparation.

The noble Earl, wisely, as I think, regarding the whole thing as hypothetical, and as we hope unlikely, did not enter into much detail on the subject, and did not deal with the question, with which we at any rate must be deeply concerned, as to what is to be the disposal of the products of that district if it is occupied by France. That must be a matter of most serious consideration for us, and it is one which, probably, the noble Earl would think it is unwise to discuss, or attempt to develop at this moment. It is a matter, however, which must be borne in mind in emphasising, as we must, the distaste from many points of view we have for such a possible occupation.

The noble Earl concluded by some words on the position as between France and ourselves, and the need which French statesmen are under of hearing in mind French public opinion. I am glad he laid stress on that fact, because it is one which we all have to bear in mind. Just, as Governments here have to bear in mind our public opinion, so French statesmen cannot always act on what they might consider to be, in the abstract, the best lines, but are obliged to consider the opinion of the (bomber, and, behind that, the opinions of the different Parties in France. One thing I most sincerely hope. It is that, even if the peoples of the two countries and the statesmen of the two countries cannot always see entirely eye to eye on these matters (and there is no use in denying the fact that during these negotiations it has been very difficult for the two countries to see altogether eye to eye) yet that nothing has occurred, or will occur, to break the strong and enduring bond of friendship which, as we trust, will continue between France and ourselves.


My Lords, before the noble Earl replies might I ask one or two questions upon matters of fact. I think he stated that to liquidate the debt of £6,600,000,000 in thirty years would take £400,000,000 annually. He said that was a liability which Germany could not bear at the present time, and that all the liability she was to be asked to hear at present was £100,000,000 a year plus 26 per cent, of her foreign trade. What I want to ask is: Will the difference between the £400,000,000 and the £100,000,000 plus 26 per cent. of the foreign trade be an accumulating liability against Germany? I ask for this reason. We all desire a final settlement—I agree with what the noble Earl said about the final settlement of this question—but it seems to me very difficult to have a final settlement if you leave the figures under such conditions that a liability is mounting up against Germany which, according to the noble Earl's view as I understand it, it would be impossible for Germany to meet. If he would give any further information on that point, I should be very pleased, because I am one of those who think that the settlement of this matter is of essential and immediate importance, and to no country more than to England itself.

I would also ask one question concerning the Ruhr district. The noble Earl showed that the Ruhr district is really the heart of German industrial life. No one questions that; 65 per cent. of the total coal production and a large amount of German industrial life arc dependent on the Ruhr district. We shall all heartily hope that his anticipations will be fulfilled and that no occupation of that district will take place, but if it does, as suggested in the questions asked by the noble Marquess, are there guarantees that the industrial life of Germany will not be interfered with? Of course, if it is really a question of payment for reparation becoming impossible, it is no good asking for an impossibility, and as a great part of the wealth of Germany depends on the industrial life of the Ruhr district, if that district is occupied without sufficient guarantees the consequence is obvious. I do not wish to dwell upon a matter of that kind, but to ask the noble Earl how far it has been considered.


My Lords, I am very much obliged to the noble Marquess who leads the Opposition for the general character of his observations. He put to me some very pertinent questions to which I could, at any rate in part, reply. But I think, in a matter of so much importance as this, it is very desirable that I should only reply after full consideration and after access to sources of information which I do not happen to have brought with me this afternoon. The House will remember that we concluded our labours only at eleven o'clock this morning, and my time since has been occupied in preparing myself for this debate. I hope, therefore, that both noble Lords will allow me to reserve my reply. I shall be very glad to give it on sonic future occasion, if they will give me the opportunity.