§ LOUD FAIRFAX OF CAMERON rose to ask His Majesty's Government if their attention has been called to a law the Rumanian Government have passed to enable Rumanian debtors to postpone the payment of their debts to British traders, thus overruling judgments that have been obtained by British firms in the Rumanian courts; whether various foreign Governments have protested against this law, and whether any protest has been made by His Majesty's Government.
§ The noble Lord said: My Lords, it is with some hesitation that I venture to address your Lordships. Although I have had the honour of being a member of your Lordships' House for several years, I have always found it more pleasant and illuminating to listen to those noble Lords who have addressed us with such eloquence and who have always filled me with admiration and envy on account of their ability to approach such a variety of subjects from so many different angles. I hope your Lordships will give me the kind and gracious attention which I have observed that you always extend to those who are addressing you for the first time, and that you will make allowances for my many shortcomings.
§ I desire to make a few observations arising out of the Question which I have put down upon the Paper on the subject of British trade with Rumania. We all know that when British trade is good it means prosperity for all of us, and that 1491 when it is not good all of us suffer, more or less. We also know that British trade has experienced many vicissitudes and suffered great shocks and cataclysms during the war and its aftermath. I can assure your Lordships that those who are engaged in any business to-day, no matter of what description, are experiencing the very greatest difficulties. I hope, therefore, that anything that can be done to alleviate these conditions and to assist in the rebuilding of our great overseas trade will have the wholehearted support and co-operation of all British people.
§ I have the honour to represent about 25,000 operatives in Lancashire. Should trade decline much further, as many people who ought to know seem to think that it will, I am afraid that a great many of these employees will inevitably find themselves out of employment and will have to rely upon the money which they draw from the Government under the Unemployment Insurance scheme, provided that the country, with a continuance of such adverse conditions, can maintain the dole. Personally, I do not share these pessimistic views, for I have always been an optimist and I believe that with hard work, application and strict attention to business many of these difficulties can be surmounted. I also represent a good many thousands of shareholders, and these are but a small proportion of those who are affected by similar conditions. Unless these difficulties are overcome, I venture to think that His Majesty's Surveyor of Taxes will experience much chagrin and disappointment when he calls with his usual regularity for taxes, and again for more taxes.
§ I feel, therefore, that it is incumbent upon His Majesty's Government to do everything they possibly can to assist British merchants, and particularly those British merchants who have overseas affiliations, and to support and protect them from what I think I am not using too harsh a term in describing as the unjust, even the dishonest, legislation of our friend and Ally, the Rumanian Government. I understand that the Rumanian Government have, or had until recently, a Commission in this country whose object it has been to raise a loan in London, while they have been passing legislation at home which absolutely deprives British 1492 merchants of the right of collecting their debts from Rumanians—debts which have been incurred or created since the termination of the war, notwithstanding the exercise of every vigilance and caution.
§ I desire to set out a few facts of which I have knowledge in support of my case. The law to which I particularly refer is one which has been recently passed in Rumania, preventing Rumanians from paying those of their debts which are payable in sovereigns or non-depreciated currency. This law was passed so recently as June 3, 1923. Under it Rumanian debtors are given the opportunity of taking advantage of the protection afforded by it provided they register their intention of doing so within three months of the date of its promulgation. This is equivalent to giving them a moratorium extending over twenty years. And the points which I should like to make resulting from this law are as follows: As British traders, we cannot understand why a friendly and allied country should be allowed to pass legislation depriving us of our rights of justice in their Courts under the ordinary law of that country. We should all like to know-why strong and vigorous protests have not been made by the representatives of His Majesty's Government to the Rumanian Government against the passing of this law, because I am given to understand that protests have been entered by the French, American, Czecho-Slovakian and Swiss Governments.
§ I think your Lordships will all agree with me that this law is most unjust to British traders because, although the Rumanian debtor is given protection by this legislation, there is no guarantee from the Rumanian Government that the regulations resulting from this law are to be carried out. In this connection I would point out that although the Rumanian debtor can take advantage of this protection if he wants to, and he undoubtedly will, there is nothing in the law to guarantee his solvency over the period of twenty years which is granted to him in which to liquidate his debts. Should the Rumanian currency depreciate in the meantime to anything like the same extent as the currency of some other European countries, it is evident that the Rumanian debtor will never be able to meet his obligations. Furthermore, the 7.33 per 1493 cent. which is allowed for interest under this arrangement is altogether inadequate. I do not think that any Rumanian debtor could obtain an extension of his bills on anything like such favourable terms in the ordinary way of business, and from what I know of the conditions in Eastern Europe I am certain that no one could go to his bank, even on the most approved collateral security, and get accommodation on anything like such terms.
§ Then I think it is most unjust that British traders who have had to go to the Courts and expend large sums of money, and who have obtained judgments, should now be deprived of the benefits of those judgments by this new legislation. I do not wish to detain your Lordships on minor details, but I would like to give you an illustration of how British merchants who are owed money by Rumanians are affected, and to state the experience of one firm in particular. They were owed money by a Rumanian who could have paid but did not do so when the bills first became due, although he could have paid then with very little loss on the exchange. Afterwards, the firm had recourse to the Courts and obtained judgment. Now they cannot get any compensation if the Rumanian debtors take advantage of the protection afforded under this law, which they are almost certain to do.
§ I feel that strong representations should be made to the Rumanian Government in order that British subjects may obtain protection. If this protection is not forthcoming, I do not think Rumanian debtors should be allowed further credit facilities or that the Rumanian Government should be permitted to raise any more loans in the London market. In conclusion, I would add that it would seem to me impossible for British merchants to attempt to do any further business with Rumanians, except on a strictly cash basis, because if they do they will run grave risks of losing their property through some similar legislation on the part of Rumania in the future. I beg to ask the Question which stands in my name.
§ THE EARL OF CLARENDONMy Lords, in reply to the Question which has been addressed to the Government by Lord Fairfax of Cameron, I am authorised to make a short statement on the case which 1494 he has raised, and to give a brief history of how the matter stands at the present moment. In consequence of the continued fall in the international exchange value of the Rumanian currency, and a misplaced confidence in its recovery by Rumanian importers, considerable commercial indebtedness undoubtedly prevailed at the commencement of the year. Rumanian debtors found themselves unable to provide the amount of Rumanian currency required to liquidate the full amount in sterling of their debts. A series of schemes for dealing with the question had already been elaborated in the course of the preceding twelve months, but without, unfortunately, any result.
Finally, the Rumanian Chamber of Commerce at Bucharest decided to send over a delegation to France, Switzerland, and Great Britain, to represent Rumanian debtors in an effort to try to arrive at some satisfactory solution. At the beginning of this year this delegation contracted agreements with the representatives of bodies of creditors in this country, under the auspices of the Manchester and the London Chambers of Commerce for the settlement of debts contracted between November 11, 1918, and December 31, 1921. These agreements, which were substantially the same, provided for the immediate deposit as security by the Rumanian debtor of about twenty per cent. of his debt and the liquidation of the debts by instalments over a minimum period of twelve years and a maximum period of twenty years, the amount of the instalments being dependent upon the rate of exchange.
These agreements which, in terms, covered all the debts falling due within the dates mentioned, and not only those owing to creditors acceding to the agreement, were subject to ratification and subsequent legislation by the Rumanian Government, and in June a law, as the noble Lord has stated, was passed purporting to ratify these agreements. But when this law came to be examined it was found that it differed in certain respects from the arrangements previously made in this country, especially as to the procedure where greater security than that required under the agreement had already been given by the Rumanian debtor. Another clause to which objection was taken was one 1495 which, contrary to the previous agreements, introduced an arbitrary settlement of pre-war debts.
Accordingly, an opportunity was taken by the British creditors of the Rumanian Finance Minister's recent visit to this country to discuss the whole question with him, and M. Bratianu, before he left England, gave certain assurances to the effect that the terms of the agreements entered into at the meeting to which I have referred should prevail. In addition to this, His Majesty's Minister at Bucharest has received instructions to obtain formal confirmation from the Rumanian Government of these assurances. It is confidently hoped, therefore, that before very many months have elapsed a satisfactory solution of the whole of this question will have been arrived at. In regard to the latter part of the noble Lord's Question, I understand that the French and the Italian Ministers at Bucharest have lodged a diplomatic protest against the law, but mainly, it would appear, on the ground that the French and the Italian debtors were not parties to any such agreements as the law is based upon.
§ LORD NEWTONMy Lords, an answer upon this Question was recently given in the House of Commons, and my recollection is that it was expressed in stronger terms than those used by my noble friend who has just spoken. But, reading the two answers together, I have no hesitation in saying that there has seldom been a greater condemnation of the good faith and honesty of a so-called friendly Government than there has been in this case. I rise only for the purpose of pointing out that it is this Rumanian Government, which is responsible for this dishonest legislation, which at this moment is holding up the whole of the financial settlement of Central Europe by reason of its obstruction to the settlement of Hungarian Reparations. I desire as strongly as I can to emphasise this point, and I hope the noble Lord opposite will hold the Government to the statement which has been made this afternoon by my noble friend