Lords Sitting of 7 August 1924

Preamble
The House met at eleven of the clock, The LORD CHANCELLOR on the Woolsack.
SEEDS ACT (1920) AMENDMENT BILL.
Brought from the Commons, read 1a, and to be printed.
WORKMEN'S COMPENSATION (SILIOOSIS) BILL.
Returned from the Commons, agreed to.
AGRICULTURAL WAGES BILL.
Message from the Commons: That they agree to the Amendments made by the Lords to the Agricultural Wages Bill in lieu of certain Amendments made by the Lords to which the Commons have disagreed.
TYNEMOUTH CORPORATION BILL.
Returned from the Commons, with the Amendments, agreed to.
LANARKSHIRE HYDRO-ELECTRIC POWER BILL, [H.L.]
Returned from the Commons, agreed to, with Amendments: The said Amendments considered, and agreed to.

BUSINESS OF THE HOUSE.
THE LORD PRESIDENT OF THE COUNCIL (LORD PARMOOR): My Lords, I beg to move, That Standing Order No. XXXIX be considered in order to its being suspended for this day's sitting. The only matter in respect of which this Motion is now necessary is the Appropriation Bill. Your Lordships will have been glad to hear that, so far as the Agricultural Wages Bill is concerned, the Amendments which were put in by your Lordships have been agreed to.
Moved, That Standing Order No. XXXIX be considered in order to its being suspended for this day's sitting.— (Lord Parmoor.)
THE MARQUESS OF SALISBURY: Is it certain that the Appropriation Bill will reach your Lordships to-day? I understand that it did not receive its Third Reading in the other place last night.
LORD PARMOOR: I do not know whether there is any certainty, but that is the best information that I can give. Perhaps I shall be able to give more precise information a little later.
On Question, Motion agreed to, and ordered accordingly.

THE RECESS.

  PROPOSED ANGLO-RUSSIAN TREATY.
  LORD PARMOORrose to move to resolve, That this House on its adjournment do adjourn to September 30, but if it appears to the satisfaction of the Lord Chancellor that the public interest requires that the House should meet at any earlier time during such adjournment, the Lord Chancellor may give notice to the Peers that he is so satisfied, and thereupon the House shall meet at the time stated in such Notice, and shall transact its business as if it had been duly adjourned to that date.
  The noble and learned Lord said: My Lords, in making this Motion, if it would be convenient to the noble Marquess, Lord Curzon, I can make a statement regarding the question which he asked yesterday in connection with what is called the Russian Treaty. I think that this would be the best time for dealing with it. I have been asked to deal with it merely because, as your Lordships know, I represent the Foreign Office in this House, and consequently matters of this kind have naturally been before me for some time, and I am specially cognisant of them. For that reason the noble and learned Viscount upon the Woolsack has asked me to make a statement. The Treaty, as it has been called, has been printed, but I am not sure whether your Lordships have copies of it. The only copy that I have is a typed copy.
  THE MARQUESS OF SALISBURY: Hear, hear.
  LORD PARMOOR: It is a typed copy, but I should point out that this does not imply any such difficulty as I think the noble Marquess has in mind. I think I can explain the matter quite sufficiently, and, as your Lordships know, it was explained to a very great extent in the other place last night by the Undersecretary of State for Foreign Affairs.
  Let me state one or two matters at the outset, in order that what I have to say may be quite appreciated. In the view of the Government, if the subsequent stages to which I shall have to refer can be carried out, a most valuable Treaty arrangement will have been made between this country and the Union of Soviet Republics. It has been, as your Lordships know, part of our policy from the commencement, and, to a certain extent, part of the policy of our predecessors, that some arrangement should be made in connection with industrial relationships between this country and the Union of Soviet Republics. As an incident to that —I want to make this quite clear—it was necessary that certain claims of a very important kind should be recognised as liabilities, and that arrangements should be made for their liquidation, so far as liquidation of these debts is possible. It is in reference to this that I shall have to ask for your Lordships' rather anxious attention very shortly.
  I should like to make another preliminary statement. The payments to be made will be made in sterling except, I believe, in the case of some bondholders in this country who may have purchased their bonds, say, from French holders. Then payment will be made in francs, because the relationship between the late Government of Russia and the bondholders was that the bondholders of each country should be paid in the currency of that country. As regards the bondholders whose claims are recognised and who took directly from the Russian Government, they will be paid in sterling. As regards bondholders who purchased from French holders they will be in the same position as French holders and be paid in French currency. Then there is another preliminary matter which I may mention. A large number of existing treaties and arrangements, as the noble Marquess knows, were made between this country and the old Tsarist Government. All of those are dealt with in the preliminary
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  Articles of what, for the moment, I will call the Treaty, although I should have to explain that by using the term Treaty I do not mean the final term or arrangement. I want, at the outset, to make that perfectly clear.
  A further matter which I should like to make clear at the outset is what I may call the propagandist question—the question of preventing what has been called Bolshevist propagandism in this country. That is a matter which has always had the very serious attention of His Majesty's Government, who have always held the view that every possible prevision must be taken against any propagandism of that character in this country, and I may read the provision contained in the Treaty so that your Lordships may see how far it goes. It is intended to go as far as an arrangement of this kind possibly can go. It is in Article 16 and is in these words: —
  "The contracting parties solemnly affirm their desire and intention to live in peace and amity with each other, scrupulously to respect the undoubted right of a State to order its own life within its own jurisdiction in its own way, to refrain and to restrain all persons and organisations under their direct or indirect control, including organisations in receipt of any financial assistance from them, from any act overt or covert liable in any way whatsoever to endanger the tranquillity or prosperity of any part of the territory of the British Empire or the Union of Soviet Socialist Republics or intended to embitter the relations of the British Empire or the Union with their neighbours or any other countries."
  Now the intention of that Article in the Treaty is to prevent any form of propagandism in any part of the British Empire.
  Of course, some people will say—it is better to put it quite frankly—Well, you cannot trust the Union of Soviet Republics. I hope that is a wrong view, but at any rate, so far as any provision can be made, it is made in this Treaty. It has been accepted by the representatives of the Union of Soviet Socialist Republics over here, and in the opinion of His Majesty's Government it seems to be a satisfactory arrangement. Of course, I may mention that, in the absence of any Treaty or arrangement between the Union of Soviet Socialist Republics and this country, propagandism is open to them, for what it is worth.
  THE MARQUESS CURZON OF KEDLESTON: Oh ! no, my Lords, the noble and learned Lord is forgetting an arrangement already existing. Under the terms of the Trade Agreement and under the terms of the agreement which I concluded less than a year and a half ago, the same absolute prohibition of propagandism was made, accepted and signed by the Russian representative.
  LORD PARMOOR: I had that in mind and I am obliged to the noble Marquess for putting it more clearly than I could. What I meant was that, starting from the point of view he starts from, the arrangement and the Treaty which he settled are intended to be strengthened and confirmed by the terms inserted by the Soviet Government in the proposed so-called Treaty.
  With those preliminaries may I say one or two words on the terms themselves? First of all, what we are dealing with is called the General Treaty. It is not the Treaty in respect of which any recommendation will be made to Parliament for the advance of public money. That is a subsequent matter, as I will explain to your Lordships. This General Treaty, which is in the nature of a preliminary Treaty, will be signed, or is expected to be signed, shortly, but so far as ratification is concerned it cannot be ratified, and will not be ratified, until twenty-one days after the meeting of Parliament after the adjournment. The intention is to give full opportunity for discussion by Parliament as to whether it shall be ratified or not. I asked about the twenty-one days and I am informed that that is in accordance with the general procedure. Your Lordships may take it for certain that there will be no ratification of any kind of the preliminary or General Treaty until twenty-one days after the meeting of Parliament in the autumn, when there will be full opportunity for discussion.
  Now the first matter dealt with in the preliminary Treaty is the question of fisheries. I want to put that quite shortly. I am glad to see Lord Sumner here, because this is a matter which he will appreciate. The statement says:
  "This Article shall not be deemed to prejudice the views held by either party as to the limits in international law of territorial waters."
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  That is a very important matter, but it is entirely left on one side, in its present condition, so far as the present Treaty is concerned. Then, two matters dealt with in the Treaty must be considered as distinct. One is as regards the special waters in the White Sea—that has reference, of course, only to the Arctic region—within which we shall not be able to exercise fishery rights. Originally the claim of the Russian Government was that we should not be allowed to exercise fishery rights within 68° north latitude. I have asked for a map to be sent down, because I think it might be convenient for your Lordships to see actually what that means. The arrangement come to is that it should not be latitude 68° north but latitude 67° 40° north, which gives us a much larger area within which we can fish. The discussion arose between 68° and 67°, and the actual latitude fixed is, as I have said, 67° 40°.
  The rest of the fishery parts of the Treaty can be very shortly stated, and has reference to police arrangements in the area open to both parties for fishing. I do not think that it is necessary to go into the details, of which there are a large number, which fix at the present time, according to the views of both parties, what is a fair arrangement as regards policing the district where both parties fish, in order to avoid reasons for difficulty and occasions of friction. I do not know whether your Lordships have in your minds the position in the White Sea to which this arrangement relates, but if you desire to see it I have asked that a map should be brought down to the House, and one can hardly appreciate a matter of this kind without seeing the map.
  Then we come to the other part of what is called the General Treaty with which I am now dealing. That contains three matters all of very great importance. First of all, there is the question of an arrangement with the bondholders. The amount involved in the bondholders' claim is about £40,000,000. It is recognised that the Soviet Government cannot pay the whole amount, but there are arrangements by which the amount can be settled between them and the bondholders and there is a provision that nothing will be satisfactory unless at least 50 per cent, of the bondholders consent to the arrangement. The Government have been

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  trying for some time to get a representative body of bondholders. That has been found not to be possible, but it is provided that in no case will the Government assent to any arrangement as between the Soviet Government and the bondholders unless at least 50 per cent, of the bondholders assent to such arrangement. In Article 6 these words occur:—
  "provided that His Britannic Majesty's Government is satisfied that such terms have been accepted by the holders of not less than one-half of the capital values of British holdings in the loans referred to in this Article."
  I think that is a very valuable safeguard. After all, what can the bondholders get unless some arrangement is come to between the Soviet Republic and ourselves? It is believed that the 50 per cent, will undoubtedly be obtained. I cannot go beyond that because, as I have said, there is no representative body of bondholders. But unless 50 per cent, assent, the matter can go no further.
  The next matter dealt with is that of the claims and counter-claims by the Governments against one another. The arrangement is that that shall stand over for the present. It is not proposed to be dealt with at the present time. To use a phrase which was used in another place it is put into " cold storage " for the moment. There are the other claims which are made on behalf of private owners or companies who, in the Treaty, are called " juridical persons " because that is the way in which you express a company entity in the Russian legal language. First of all, there are a certain number of miscellaneous claims. It is believed that these claims amount to somewhere between £30,000,000 and £35,000,000. The nearest figure that we have been able to ascertain is £32,000,000. I do not want to be too certain about it, but I think it may be taken that they do not exceed £35,000,000.
  I will read one or two provisions of the Treaty to show how the matter is safeguarded. This is how the obligation is placed upon the Soviet Government. These claims
  "shall, in view of the admitted preponderance of the claims of British nationals,"—
  that is, that undoubtedly a sum is due to us—
  "be finally settled as between the contracting parties by the payment of a lump sum by the Government of the Union to the Government of His Britannic Majesty."
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  How is that lump sum to be settled?
  "Each of the contracting parties shall appoint three properly qualified persons to examine the claims of which the settlement is to be effected by the payment of the lump sum provided for in Article 8."
  Then there is the ordinary provision that they shall go through all these claims in order to find the terms of a just basis of settlement.
  The only other head of claims is compensation in respect of what one may call nationalised properties or concessions. Undoubtedly, according to our view—and I do not want to modify my term—that implies confiscation, and where there is confiscation in that sense compensation must be provided. I think it would be quite unfair not to make proper provision for compensation. This is the principle on which the compensation is to be assessed:—
  "The Government of the Union will, by way of exception to the decrees nationalising industrial businesses and land, negotiate with British nationals (including juridical persons) ‥‥"
  that means companies—
  "in respect of industrial businesses or concessions which have been nationalised or cancelled by it, in order to arrange for the grant of just compensation for such claims."
  The amount involved is very large. The claims are probably somewhat exaggerated, as claims in these cases are, but they amount to something like £180,000,000. But at any rate, in regard to these industrial businesses or concessions which have been nationalised or cancelled, they must arrange for the grant of just compensation for such claims.
  A Commission will be appointed in the ordinary form:—
  "The Commission shall consist of six persons possessing the necessary qualifications for their task, three being appointed by the Government of His Britannic Majesty and three by the Government of the Union."
  That is the provision for all claims under these three heads—the bondholders, the miscellaneous claims and the claims for compensation where the property or business or land has been nationalised, in other words been taken over by the State. Where it has been taken over by the State His Majesty's Government are determined that just compensation must be paid. Certainly, in my view, compensation is an absolutely essential term of any arrangement of this kind.

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  That is the first step in the procedure. What is the subsequent step? This is contained in Article 11:
  "A second treaty will be entered into which will contain: —
  "(1) the conditions accepted in accordance with Article 6 "—
  that is to say, the actual figure arranged between the Soviet Republics and at least 50 per cent, of the bondholders. There must be an actual figure inserted in what is called the second Treaty. The second Treaty will further contain:
  "(2) the amount and method of payment of compensation for claims under Article 8."
  There you must have the amount again ascertained for those claims.
  THE EARL OF SELBORNE: But supposing that the three and three do not agree?
  LORD PARMOOR: If they do not agree the matter falls through. There must be agreement. That is the basis of the whole matter. The Article goes on:
  "(3) an agreed settlement of property claims other than those directly settled by the Government of the Union of Soviet Socialist Republics."
  That is to say, there are certain outside claims which they may settle directly, and not through the machinery which is provided in the terms of the Treaty.
  It is extremely important that I should explain to your Lordships what the subsequent procedure will be, because I think there has been a misunderstanding on this point—
  "Upon the signature of the treaty referred to in Article 11 "—
  that is the second Treaty, with the figures—
  "His Britannic Majesty's Government will recommend Parliament to enable them to guarantee the interest and sinking fund of a loan to be issued by the Government of the Union of Soviet Socialist Republics."
  That will not be until the second Treaty has been made, and these sums have been ascertained and fixed—
  "The amount, terms and conditions of the said loan and the purposes to which it shall be applied shall be denned in the Treaty provided for in Article 11‥‥"
  That is, not in the present Treaty, but what I call the second Treaty—
  "which will not come into force until the necessary Parliamentary authority for the guarantee of the said loan has been given."
  Therefore nothing can be done as regards completing these arrangements—and,
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  after all, this is a constitutional matter which everyone will understand who appreciates the Constitution of this country—nothing can be done as regards carrying out this second Treaty until the necessary Parliamentary authority for the guarantee of the said loan has been given.
  THE EARL OF MAYO: May I ask the noble and learned Lord whether any sum was mentioned with regard to the loan?
  LORD PARMOOR: No. There is no sum mentioned. That will have to be a matter for negotiation and consideration. I have a document here which shows that before these terms are finally arrived at —I do not mean at this stage—there will be six opportunities for discussion in Parliament. I am one of those who desire that matters of this kind should be fully discussed in Parliament in every possible way. I am not in favour of the ratification of or the entering into obligations of this kind until there has been every possible opportunity of Parliamentary discussion. To-day, of course, we are only at what I may call a preliminary stage.
  LORD SUMNER: Does discussion include rejection, or are we to be told that the honour of the country is pledged and that we can only talk?
  LORD PARMOOR: I think certainly not. I think Parliament has a perfect right to do that—
  LORD SUMNER: To reject?
  LORD PARMOOR: To reject; certainly. If I may put it so, I think it would be a very wrong use of the language I have used if the result of it was that although normally Parliament had the power, it was in fact to be deprived of it. I understand we are to have full power of discussion and full power, therefore, of ultimate determination before the final ratification is made. I think I have gone through what I may call the crucial terms of the Treaty, although I have not gone through all the arrangements in regard to it.
  I want to add that I am quite aware, from discussion in your Lordships' House, that there has been a difference of opinion in regard to coming to terms with the Union of Soviet Republics or not. This Government has never dis-

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  guised that a crucial part of its policy, both as regards our industrial future and the employment of the workers of this country, was that such an arrangement should be come to if it were possible. That, I think, is an extremely important matter. It has been, and is, a foundation problem of our foreign policy. I do not want to go further than I have done to-day, because, after all, we are only in the preliminary stages; but I hope I have afforded your Lordships all the information which you desire. At any rate, it is all that I have to give to your Lordships. One has been connected with these things more or less hitherto, and I am perfectly well aware of the great anxiety which has been gone through in arranging these matters and, if I may say so, at any rate from our point of view, we owe a great debt to Mr. Ponsonby for his perseverance to ultimate success.
  Moved to resolve, That this House on its adjournment do adjourn to 30th September, but that if it appears to the satisfaction of the Lord Chancellor that the public interest requires that the House should meet at any earlier time during such adjournment, the Lord Chancellor may give notice to the Peers that he is so satisfied, and thereupon the House shall meet at the time stated in such Notice, and shall transact its business as if it had been duly adjourned to that date.—(Lord Parmoor.)
  THE MARQUESS CURZON OF KEDLESTON: My Lords, the spectacle of a good man struggling with adversity is one that has always excited the commiseration of mankind. But never was there an occasion when that pity was more needed than at the present moment. The history of this matter, and particularly of the last stages of this matter, is one of the most amazing in the chronicles of Parliament. We have had many reasons to be surprised at the manner in which His Majesty's Government conduct their relations, whether it be with India on one occasion or with Ireland on another. But all their best efforts seem to me to have been concentrated at the end of the Session and to have taken supreme form in their handling of this Russian business.
  Look at what has happened in this House. Yesterday, rumours reached us that an agreement had been concluded and had been announced in another place.
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  I asked the noble and learned Viscount on the Woolsack and he was unaware that any agreement had been concluded, or that any statement had been made. Indeed, he treated the suggestion when it came from me with derisory amiability. It is quite clear that these gentlemen do not consult each other and that one of the most important members of the Cabinet is wholly unaware of what has been done behind his back. Then we come here to-day and the noble and learned Lord opposite, with his customary courtesy, endeavours to put a good face upon this matter. But he expounds to us a Treaty of which no printed copy is yet in existence, of which a typed copy was handed to me by the courtesy of a noble Lord only five minutes ago, and which I have not had time to read, and he asks your Lordships to give at any rate a preliminary approval to these proceedings of which we know nothing.
  LORD PARMOOR: The noble Marquess will pardon me for interrupting him, but I did not say that. Of course, it will be issued as a White Paper. I only thought that the noble Marquess wanted the information that I could give him. I certainly did not suggest any approval at this stage and I do not think It would be right. There will be ample opportunity afterwards.
  THE MARQUESS CURZON OF KEDLESTON: I am very glad the noble and learned Lord does not expect that which he certainly would not receive.
  LORD PARMOOR: I did not ask for it.
  THE MARQUESS CURZON OF KEDLESTON: At any rate, the noble and learned Lord expounds a Treaty we have not seen, of which a typed copy is not in the possession of your Lordships, and as regards one arrangement in which he appeals to a map which is also not before us. Let me briefly remind your Lordships what has been the history of this matter. The noble and learned Lord took great pride to himself just now that as one of its first acts the present Government had entered into relations with the Union of Soviet Republics and recognised them. For my part, and I believe my views are shared by the majority of your Lordships, I thought that was a most premature and ill-judged measure

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  because you gave away on that occasion without the slightest reason, without any knowledge of what was going to be done, the principal card that you had in your hands. However, His Majesty's Government decided that they would proceed in that fashion. Accordingly, a Soviet Delegation was invited to come to this country and for four and a half months they have been sitting in the Foreign Office.
  During that time we have read from time to time vague and illusory statements in the newspapers as to the degree of progress that was being made. We have had two or three debates in your Lordships' House, but we have been unable to extract anything from Ministers opposite. There was a general impression that things were going badly, as indeed they were. Then suddenly, a little while ago—a week or more ago—we heard of the meteoric flight through the air of M. Rakovsky to Russia. He returned with fresh instructions, meetings were again resumed, and then we had an account in the newspapers, no doubt correct, of this famous all-night sitting at the Foreign Office in which these gentle men, regaled by occasional sandwiches and tea, endeavoured for the space of nineteen or twenty hours to translate their platonic embraces into reality. They failed, and they failed so completely that an official statement was published in the newspapers—I forget whether it was yesterday morning or not—
  THE EARL OF SELBORNE: Yes, it was yesterday morning.
  THE MARQUESS CURZON OF KEDLESTON: A statement was published that the negotiations had broken down. No sooner had that announcement been made than the Prime Minister realised that it would never do. It would be, if not fatal, at any rate injurious to his reputation. Accordingly, he is pulled out of bed in the morning and a stream of telephonic messages goes on throughout the entire morning and in the afternoon some sort of arrangement is vamped up with a view of being produced in the House of Commons before the House of Commons adjourns. The House of Commons receives this statement almost with stupefaction. You have merely to read the records of the debate this morning to find that the
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  utterances of the Under-Secretary were received with shouts of laughter. The House of Commons was invited to consider a Treaty of which it knew nothing. Its author apparently could not adequately explain a Treaty which, for the first time in our history, was placed before the House of Commons without any copy of it being in the possession of hon. members and as to which the House of Commons was told that the Ministers proposed to sign it this morning.
  I venture to say that such a proceeding has never before occurred in the history of Parliament. This was too much even for Mr. Lloyd George. For the last six years Mr. Lloyd George has been a passionate advocate of an agreement with the Bolsheviks. Ever since his first attempt at Prinkipo in 1919 he has had this object in view, and has held repeated Conferences in order, in any way and almost at any cost, to conclude some sort of agreement with these people. But even Mr. Lloyd George, the real parent of these efforts, was aghast, and, turning to the Ministers, he told them in another place yesterday evening that their proposal was a fake and a farce. As I said just now, while the late Prime Minister was ridiculing it in the House of Commons the Lord Chancellor was wholly unaware of it in the House of Lords.
  Really, is this the way in which foreign policy is to be conducted by a Labour Government? I recall that when the present Government came into power the Under-Secretary, who has been mainly responsible for these negotiations, made a speech in another place in which he laid down the canons of the new diplomacy. They were to be absolute candour and frankness in everything, the country to know, the House of Commons to know, the old discredited methods of the Conservative Government to be abandoned, and the pure light of democracy to shine upon the international politics of the world. And this is the first fruit—the Treaty of which even the members of his own Government do not know the details, which he cannot expound, the text of which is not forthcoming, and as to which he invites the House of Commons to give their assent and signature before they have even read the paper which the Government is expected to sign. Such is the history of this matter.

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  And now I turn to the exposition of the contemplated arrangement which the noble and learned Lord has just given. I understand him to say that there are to be two Treaties. There is, in the first place, what he calls the General Treaty which it was proposed, had not the House of Commons intervened, to sign to-day, and which he told us must lie on the Table of Parliament for twenty-one days after we resume at the end of September before it can be ratified. Then later on, if things go well—and I will turn to that in a moment—this preliminary and General Treaty is to be followed by a more specific and important Treaty which raises the question of the loan. The noble and learned Lord devoted himself to an exposition of the first or General Treaty in which I will endeavour to follow him. It seems to me, if I may say so, that even this preliminary Treaty is all give and no take. I am wholly unable to see any advantage whatever accruing either to His Majesty's Government or to British subjects by its conclusion.
  Let me take the point upon which the noble and learned Lord laid special emphasis. He plumed himself very much on the condition as regards propaganda. He read it out almost with gusto to your Lordships' House. I am familiar with this question. I have had it for years before me. We were responsible for an almost identical declaration in the Trade Agreement of five or six years ago—a declaration which, on the part ol1 the Russians, was shamelessly and consistently violated from the moment it was signed. I am familiar with the repetition of the same declaration, couched in even stronger language, which, by means of an ultimatum, I was enabled to secure from the Russian representatives here only a year and a half ago. Has that engagement been carried out since? I shall be very much surprised if the records of the Foreign Office reveal that it has. Therefore, when the noble and learned Lord in the innocence of his heart comes here and tells us he has extracted this declaration, and that His Majesty's Government confidently look forward to its scrupulous fulfilment, those assurances go off my back like water off the surface of marble. I wait to see how the Soviet Government fulfil their declarations, and for the moment I attach little importance to their form.
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  Then the noble and learned Lord rather congratulated the Government upon their settlement of the fishing question. Without a map it is rather difficult for me to form a definite opinion, but I gather that on that point there has been a compromise between two degrees of latitude. Whether that compromise is one which will be favourable to the claims of our fishermen, it is impossible for me to say without seeing a map, but I do observe that the much larger question of territorial waters is one which had to be postponed altogether for future decision. I noticed that the noble and learned Lord said nothing about two other clauses in this preliminary Treaty to which I should rather have expected him to devote a word or two. The first proposal is that Russia is to be given the advantage of the export credit scheme, a really very considerable concession. The second is—and I must say that I regard this not without suspicion —that diplomatic immunity is to be given to the offices of the Trade Delegation in London, and to a number of the delegates. I regard that concession with very considerable anxiety. It is one for which I believe there is no precedent, it is one which past events lead us to think might not inconceivably be abused, and it is a concession which ought certainly not to have been made except in return for some very substantial and definite quid pro quo.
  Now I come to those parts of this preliminary Treaty upon which the noble and learned Lord laid special stress. Let us see what they amount to. In the first place, there were what he describes as the claims of the British bondholders, amounting, as he told us, to £40,000,000 sterling. These have not been settled. There is no immediate prospect of their being settled. They are to be left to future negotiations, and the only security we have is that no agreement will be arrived at unless 50 per cent, of the bondholders concerned are in accord. Next, he took the case of what he described as the miscellaneous claims, amounting to something like £32,000,000. Here again, is there a settlement? No. Is there a prospect of a settlement? As far as I can see, none. These claims are merely to be investigated, and a lump sum is to be decided upon by a Joint Committee which has still to be appointed. Thirdly, there are what he called, I think, the property

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  claims—claims to compensation—in cases in which the property of British nationals has been seized or confiscated. This figure he stated at £180,000,000.
  LORD PARMOOR: That is the claims.
  THE MARQUESS CURZON OF KEDLESTON: Well, is this question settled? No. Is there a prospect of settlement? None. Once again this matter is to be referred to a Committee of six persons not yet appointed, who are to inquire some day in the future, and to report some day in a future still more remote, and the noble and learned Lord con gratulates himself that the Government are taking a bold line in saying that they will not agree to anything in this matter until just compensation has been paid. The question I put is: What has been going on during these four and a half months? What prospect is there of creating these new Committees, these joint inquiries? What prospect is there that in future you are any more likely to agree on these points than you have done hitherto? The whole thing is a farce. It is perfectly clear that no agreement has been arrived at, and I will venture to say that no agreement is likely to be arrived at. In order to get your Treaty you have handed over all these unsolved matters to a future inquiry which it is doubtful will ever take place, and which, if it does take place, is no more likely to succeed than the discussions which you have already had. So much for the contents of the preliminary Treaty. Then we come to that which is, after all, the pith and centre of the whole thing— namely, the satisfaction of the War Debts which are owed by Russia to us, amounting to hundreds of millions. There we are told that the matter has been shuffled aside, put in cold storage in fact. What the noble and learned Lord said was that they were to stand over—
  LORD PARMOOR: The claims of both sides.
  THE MARQUESS CURZON OF KEDLESTON: Yes, exactly, but I am much more interested in our claims than in the claims of the Russians. These claims are to stand over, are to be set aside: as the Under-Secretary said in another place they are to be "written down." Written down is a synonym for written off, and
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  everybody knows what that means. This matter is to be set on one side although it is really the crux of the whole question. Then the noble and learned Lord takes us on to the second stage, and the second stage is this, that when all these, as I think, abortive inquiries have been held the second Treaty is to be produced; the agreements referred to are to be registered in it, the figures are to be inserted, and then a Government guarantee for a loan to the Russian Government, the sum unspecified and the conditions unknown, is to be given. That is, as your Lordships know, in absolute contradiction of the pledge given by His Majesty's Government as recently as May 20 last, on which occasion the British Delegation, no doubt officially instructed, replied—
  "It should be understood at once that any assistance which the British Government could give towards the floating of a loan would of necessity be very much limited and that there could be no question of any Government guarantee."
  That undertaking is in course, of being absolutely violated and forgotten.
  What is the upshot of the whole thing? I venture to think that it is exactly what I took the liberty of prophesying to your Lordships would be the case when we had the debate some weeks ago. The noble Lord, Lord Emmott, made a Motion which we discussed, and I said that in my judgment the danger lay in this: that in order not to go away from this Conference with empty hands, in order to pretend that they had had some measure of success, the Government would construct some form of a perfectly illusory agreement to save their faces and rescue themselves from the discredit of a total breakdown. That is exactly what has happened. In the House of Commons this proposal was described by Mr. Lloyd George yesterday as a fake, and by another honourable member as a farce. It is really an imposture, and it is an imposture the true character and dimensions of which will be realised more and more as we go along.
  Fortunately, the matter is not out of the hands of Parliament. The noble and learned Lord told us at the end of his speech that we should have six future occasions on which to discuss this matter. I look forward with great satisfaction to the opportunity of making ix speeches to the noble and learned Lord, in which I have no doubt I shall

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  repeat exactly the same thing several times over, and to which I have no doubt the noble and learned Lord, coming up to the scratch with his customary amiability, will deliver the same completely ineffective replies. That is a prospect to which I look forward when we meet again. Of one thing I am quite certain, and that is that if the course of procedure is to be what the noble and learned Lord expects, and if Parliament is to be asked to cancel these Debts which are now in cold storage and guarantee a loan under anything like the conditions suggested, it will absolutely refuse to do so. I look forward with confidence to the discussions which will take place when Parliament has reassembled at the end of September, but meanwhile I can only say that the conduct of the Government up to the present has been, in my judgment, without parallel in the history of Parliament.
  LORD GAINFORD: My Lords, I regret very much that the Leader of the small Party in this House with which I am associated is unable to be present to-day; he has engagements elsewhere. He asked me to communicate at once with him in the event of anything of importance arising in your Lordships' House. But I, like the Lord Chancellor, was quite ignorant of anything that had taken place at the Foreign Office during yesterday, and it was not until ten o'clock last night that I heard it suggested that an arrangement had been entered into with the representatives of the Soviet Government in Russia, and that the agreement was to be signed to-day. I was unable to communicate with my noble friend Viscount Grey of Fallodon, and it is impossible for him to be present to-day to take part in this debate.
  All I can say, speaking for myself and for no one else, is that the method by which the Government of this country has been carried on in the Foreign Office seems to me to require revision. It is quite impossible for the Prime Minister, with his enormous work in various directions, to be able to conduct the affairs of the Foreign. Office as they ought to be conducted, and I condemn a system in which the Under-Secretary, who, however able, however zealous, is without Cabinet responsibility, is placed in the position of conducting negotiations for four and a
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  half months with a Government such as Russia possesses to-day.
  I am surprised at the proceedings which occurred at the Foreign Office yesterday. In an official notification we were told that all negotiations had broken down, and then at half-past two in the afternoon the terms of two Treaties had practically been arranged, one of which, at any rate, has to be signed to-day. My noble friend Lord Emmott will make some few remarks on the industrial position, but, speaking for myself, I do not accept the view of the noble Marquess the Leader of the Opposition that we have to assume, necessarily, that no advantage under these Treaties may occur to British interests. So far as I realise the position and the statement made by the Lord President, two steps in advance have been secured by the arrangement entered into yesterday morning. One is—in spite of what I understand to be the Russian law —that the private interests and the claims of British subjects in this country are, for the first time, going to be recognised at any rate by the Joint Committee which is to be set up.
  LORD PARMOOR: May I interrupt the noble Lord, as this is somewhat important? They are to be recognised absolutely, but the amount is to be ascertained.
  LORD GAINFORD: Yes, the claims are to be recognised but the amount is to be determined by this Joint Committee. I think that is a step in advance, if it is going to be effective. Whether it will be effective or not time alone will snow. The other point on which an advance seems to have been made is in connection with the dispute which has existed as to where fishermen may fish. I should like to ask the Leader of the House if he is in a position to answer another question. Can he tell us whether British fishermen may from now onwards fish in the waters which have been suggested as those which would come under the terms of the Treaty? We all know that the winter months are of no value to the fishermen, but in the immediate future a real advantage may accrue to them if they may at once go into these territorial waters and fish within the three-mile limit, as has been their claim and as we, as British subjects, believe to be right.
  LORD PARMOOR: May I answer the noble Lord at once? I understand that the answer is in the affirmative. As soon as this matter is signed—of course ratification stands over—I understand that, in the interim, that is so.
  THE MARQUESS CURZON OF KEDLESTON: But I think the noble Lord is unaware, or perhaps he has forgotten, that, under the terms of the arrangement which I had the honour to conclude a year and a half ago, a modus vivendi was agreed to by which certain fishing rights were, pending the ultimate solution of the question, conceded to our fishermen. I do not know whether this modus vivendi can be said to be still in being, but it appears to me to be cut into and reduced by the terms of the proposed arrangement.
  LORD GAINFORD: That is what I wanted to know—whether these fishermen may go into the usual areas, as they have claimed hitherto, and into the White Sea up to the line of 67° 40°, which, I understand, is the line that has been agreed to by the parties at the Foreign Office yesterday. Without having accurate information before me, I can only say that, speaking for myself, I shall watch the development of these negotiations, but that at the present time I do not desire to commit myself one way or the other in regard to approving or disapproving of them.
  LORD SUMNER: My Lords, may I ask for information from the noble Lord on three specific points, as we have now an advantage which soon we may not enjoy of being able to put questions to him? My first question is this. I understand that 50 per cent, of the bondholders, if they agree, can fix the amount that is to be paid for the whole of the bonds.
  LORD PARMOOR: I think that is so.
  LORD SUMNER: What precautions, if any, are being taken to exclude from that 50 per cent, bonds which have been acquired for, or held on behalf of, the Soviet Government themselves? It is quite obvious that, whatever the market price of that vanishing security may have reached by now, there are ways and means by which these bonds can be picked up for the purpose of voting, and I have no doubt, if there is anything in this agree-
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  ment, that the operation has started already. What precautions are being taken to exclude these from voting?
  My second question is concerned with the "cold storage " items claim by the British Government, and counter-claims by the Russian Government, or vice versa. Does that recognition of claims by the Russian Government involve the recognition in principle of the validity of the Russian claims against us for assistance that was given to General Denikin and Admiral Koltchak in the year 1919 and, I think, in 1920? Is it to be understood that there has been some sort of recognition, in principle, that those claims are sustainable, or are they still open to the repudiation which hitherto has been given to them?
  My third question is this. We have heard I am sure with great satisfaction that compensation of the concessionnaires is being provided for, or that, at any rate, they have a promise in principle that they are to be compensated. There are, however, a considerable number of claims against Russia for personal outrage. I instance, merely as an example, the murder of Captain Crombie in the British Embassy at Petrograd. Is that claim in cold storage among the claims of Great Britain, or is it in the miscellaneous claims, as to which, apparently, a set-off has already taken place, and some lump sum to be ascertained is to be given to this country? What is to become of those personal claims? Have they been cared for as tenderly as the concessionnaires, or are they to1 be left to the cold comfort of cold storage?
  THE EARL OF SELBORNE: My Lords, before the noble Lord, the Lord President, replies may I ask one or two supplementary questions? The first is in reference to the diplomatic privileges to be granted to the members of the Trade Delegation. I do not know whether my noble friend has noticed—it has been stated in the public Press, though I do not know with what truth—that in Berlin the German Government found no fewer than 700 persons who were trying to shelter themselves behind the privilege of immunity in the Russian Embassy in Berlin. What steps, if any, are being taken to limit the number of persons who may claim this great privilege? That is my first question.

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  My second question regards these two Committees that are going to be set up to ascertain the amounts payable under the two heads enumerated by my noble friend. I am not now alluding to the bondholders, but to those two different sets of claims. The amount is to be settled by a Joint Committee of three representatives of the Soviet Government and three nominees of His Majesty's Government. Will unanimity be required on the part of those Committees, or can three Russian members and one British member overrule the two other British members? A second point arises in this connection. My noble friend said nothing whatever about the payment of the amount so assessed. I can imagine such a Committee coming to an agreement and the Russian Government then claiming the guaranteed loan. I cannot easily imagine Parliament agreeing to that guaranteed loan, but that is another matter. My question is: Is provision being taken that payment shall be made before any loan is given, and not only that agreement should be reached as to the amount that ought to be paid?
  LORD EMMOTTrose to speak.
  LORD PARMOOR: Would it be convenient if I answered these five questions now?
  LORD EMMOTT: Yes, I should like to hear the answers.
  LORD PARMOOR: First of all, as regards .the 50 per cent, of the bondholders, this is meant to be 50 per cent, of what I might call real bondholders—that is to say, British bondholders. We are dealing here with British claims. Supposing that there were British bondholders claiming in all £20,000,000–I merely give this as an example for I do not know what the sum is—then you have to get the holders of £10,000,000 among these British bondholders (not people who are not bona fide British bondholders) in favour of the agreement before it can go further. As regards the "cold storage" item, the noble and learned Lord asks about validity. I do not want at the present time to go into the validity of specific claims, but there are claims of which the validity is admitted on both sides. I cannot say more than that, and I think it would be very unwise to do so at the present moment. As regards
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  personal claims, I am able to give the noble and learned Lord an answer which I hope will be satisfactory to him. They are included as matters which have to be settled before the second Treaty can arise.
  LORD SUMNER: Under which Article do they come?
  LORD PARMOOR: I think it is the second Article. At any rate, I can say this, if the noble Lord will accept my answer—I have asked this question, the very question which the noble and learned Lord has asked, regarding these personal claims, and I was told that they were included. I think that is the only answer that I can give at the present time.
  THE MARQUESS CURZON OF KEDLESTON: In the first Treaty?
  LORD PARMOOR: Yes, in the first Treaty. Then, as regards the question of extraterritoriality—I think that was the first question which the noble Earl, Lord Selborne, asked me—I do not know whether in the Treaty it is stated at all, but I am told that the proposed arrangement is that ex-territoriality is only to be given to about two or three persons who are in the same position as the commercial attachés to other Embassies. Then as regards Committees, there is this provision the noble Earl will find, and I think this answers his question. It is assumed that if there is a difference of opinion—there will be three Russians on one side and three British representatives on the other—both parties in opposition will make their report. Whether afterwards agreement can be come to on those reports no one can say, but there again figures must be fixed before further steps are to be taken.
  THE EARL OF SELBORNE: The British delegates will act as a body?
  LORD PARMOOR: So I understand. With regard to payments, that question will have to be settled in the second Treaty, and I imagine myself that it will have to be settled satisfactorily to Parliament before any question of guarantee arises.
  LORD EMMOTT: My Lords, with reference to questions of detail, I should like to ask the noble and learned Lord the Leader of the House a question on one specific matter. Although it is really

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  impossible to grasp the effect of a document of this kind which one has only seen for a very few minutes, I think it is clear from Article 7, paragraph (b), that the claim of the Soviet Government to the gold belonging to the former Russian Imperial and Provisional Governments is one of the matters reserved for discussion at a later date; that is to say, the millions here that belonged to the old Russian Governments are not to be handed over to the Soviet Government at the present time.
  LORD PARMOOR: That is so.
  LORD EMMOTT: As regards that particular matter it is satisfactory as far as it goes. I must speak with great reserve to-day, and I am very sorry that Lord Grey of Fallodon was unable to be advised of this debate, so that 'he might be in his place. I should be only too glad if anything can be done to help the Russian people to improve their position, and to lead to a condition of affairs in which we can again commence trading with Russia on a considerable scale. Whether this arrangement which has been made is going to do anything of that kind is, I am afraid, very doubtful. I must say that I entirely agreed with the noble Marquess the Leader of the Opposition, when he said that of all recent affairs this is the most amazing transaction that has ever happened in the history of this country. Evidently the arrangement made was not a matter of Cabinet agreement. So important a member of the Cabinet as the noble and learned Viscount on the Woolsack was unaware of it. If one could know all the alarums and excursions of yesterday, and have a true and full account of them, they would make very amusing or tragic reading. We are asked to rest satisfied with the fact that there will be full opportunities of debate in the future, but I take it that Parliamentary sanction of this kind does not involve the sanction of this House, but merely the sanction of another place.
  THE EARL OF SELBORNE: As regards the loans.
  LORD EMMOTT: As regards the Treaty?
  LORD PARMOOR: As regards the Treaty it will require ratification here. That is my opinion.
  LORD EMMOTT: That is a very important statement.
  LORD PARMOOR: I do not want to be too certain or misleading about a matter of that kind, but that is my impression.
  LORD EMMOTT: I come now to some of the particulars that are supposed to be arranged. Except in regard to fisheries— and I am not aware of the details of that matter—it seems to me that very little has been arranged. As regards the claims, some of them very preposterous, made by the Russians upon us, nothing has been arranged, but the matter is left in cold storage. As regards the bondholders, a Committee is to be appointed consisting of six partisans who may be equally divided, and if they cannot come to an agreement I do not know who will decide. As regards private claims also a Committee is to deal with them, and the same remark applies. As regards War Debts and the loan, nothing whatever has been arranged of a practical character.
  I come now to the question of propaganda. Our experience of Russia does not go to show that these guarantees against conducting propaganda in this country have been observed. I have previously pointed out in your Lordships' House that it is impossible to distinguish between the Third International and the Soviet Government. The two seem to me so entirely intermixed that it would be necessary, in order that the guarantee should be carried out, to have guarantees from both of them; but if I were to hazard an opinion I believe the Third International is the more powerful body of the two, and that the Third International does practically rule the roost in Russia. If that is a fact, we know that the Third International exists for Bolshevist propaganda throughout the whole world, and that in the last few weeks, while the Conference has been sitting here in London, they have declared their intention of making a dead set at propaganda in this country. Therefore, any guarantee given in regard to propaganda by a comparatively unimportant person like Mr. Rakovsky does not really carry that conviction to my mind which I should desire it to carry. In these circumstances it is no use my prolonging this debate to-day. It does seem to me that extraordinarily little has

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  been done, and that what has been done may very well turn out to be a farce. At the same time, if I am wrong, I shall be only too delighted.
  But I must warn His Majesty's Government that they are dealing with exceptionally difficult people, and people who, with all due deference, have shown themselves extremely unreliable in the past. If His Majesty's Government have obtained any victory at all it is in inducing the Bolsheviks to throw over some of their professed principles and to consider the question of compensation for property that has been confiscated—confiscated, it must be remembered, in accordance with what they maintain to be right ethical principles. That being the case, it seems to me that His Majesty's Government is going to have very great difficulty in making any arrangement which is likely to induce the people of this country cordially to come forward with a loan to improve conditions in Russia.
  THE LORD CHANCELLOR (VISCOUNT HALDANE): I think the most convenient course will be that I should now put the Motion for the adjournment which appears on the Paper. Your Lordships will observe that this Motion only comes into operation after we have moved the formal adjournment.
  THE MARQUESS OF SALISBURY: Which adjournment?
  THE LORD CHANCELLOR: The adjournment at the end of the business.
  THE MARQUESS OF SALISBURY: Yes, but see what it says:
  "That this House on its adjournment; do adjourn to 30th September …"
  That means, I think, on its adjournment to-day; but, supposing the Appropriation Bill is not through the House of Commons to-day?
  LORD PARMOOR: It will still be on its adjournment.
  THE MARQUESS OF SALISBURY: Then we shall have to sit to-morrow.
  LORD PARMOOR: I hope not.
  THE MARQUESS OF SALISBURY: But we should have to do so if the Appropriation Bill is not through, and we could not do it if this Motion is passed.
  THE LORD CHANCELLOR: Why not?
  THE MARQUESS OF SALISBURY: Because, by the terms of this Motion, we should be adjourned till September 30. You had better make the Motion read, "on its adjournment for the Summer Recess," or some words of that kind.
  LORD PARMOOR: I think the only possible thing that can interfere with the adjournment is the Appropriation Bill. I think some words of the kind suggested by the noble Marquess would meet the situation.
  THE MARQUESS OF SALISBURY: It would be sufficient if, after the word "adjournment," you put in the words "after the Appropriation Bill has been dealt with in this House."
  LORD PARMOOR: I would accept that.
  THE MARQUESS OF SALISBURY: I beg to move the Amendment in that form.
  Amendment moved—
  After the first "adjournment" to insert (" after the Appropriation Bill has been dealt with in this House ") —(The Marquess of Salisbury.)
  On Question, Amendment agreed to, and Motion, as amended, agreed to.

  BUSINESS OF THE HOUSE.
  THE MARQUESS OF SALISBURY: I should like to know what the noble and learned Viscount proposes to do as to this day's sitting.
  THE LORD CHANCELLOR: My Lords, obviously the convenient thing would be to adjourn during pleasure now, as the Appropriation Bill has to come up and be dealt with. I have endeavoured to ascertain the state of the proceedings in another place, but it would be very rash to make any prediction. We have nothing but the Appropriation Bill to deal with, and, as the proceedings on the Appropriation Bill will be formal, there will then only remain a Royal Commission, and I do not think a large body of your Lordships need trouble to return.
  THE MARQUESS CURZON OF KEDLESTON: I understand that the proceedings on the Appropriation Bill have not been

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  completed in the House of Commons. Does the noble and learned Viscount propose calling this House together at some period later in the afternoon, because, although it may be true that nothing may happen, still the Appropriation Bill is an opportunity which any noble Lord may take to make observations.
  THE LORD CHANCELLOR: We will not call you together, because you are together. I walk out, and we resume at pleasure, and those of your Lordships who wish to make speeches can do so.
  THE MARQUESS OF SALISBURY: Will you mention an hour?
  LORD PARMOOR: There is important business at which the Lord Chancellor and I have to be present, a Cabinet meeting in the Prime Minister's room, at half past three o'clock. Would five o'clock do?
  THE MARQUESS OF SALISBURY: No, six o'clock. Five o'clock would be very inconvenient.
  THE LORD CHANCELLOR: Is not there some Resolution passed by the House of Commons to rise at five o'clock to-day?
  LORD PARMOOR: I know that the Commons hope to get away earlier than the time fixed. No one can say what the actual time will be. I think five o'clock will probably be more convenient for them.
  THE MARQUESS OF SALISBURY: There is an important meeting which we are bound to attend at five o'clock.
  LORD PARMOOR: After consulting the noble Marquess I understand that three o'clock will be a convenient hour.
  [The sifting was suspended at half-past twelve o'clock and resumed at three o'clock.]

  CONSOLIDATED FUND (APPROPRIATION) BILL.
  Brought from the Commons endorsed with the certificate from the Speaker that the Bill is a Money Bill within the meaning of the Parliament Act, 1911.
  Bill read la. Then, Standing Order No. XXXIX having been suspended, Bill read 2a: Committee negatived: Bill read 3a, and passed.
  House adjourned during pleasure.
  House resumed.

  ROYAL COMMISSION.
  The following Bills received the Royal Assent: —
  Consolidated Fund (Appropriation).
  Agricultural Wages.
  Old Age Pensions.
  Post Office (London) Railway.
  Pensions (Increase).
  Local Authorities Loans (Scotland).
  Arbitration Clauses (Protocol).
  Workmen's Compensation (Silicosis).
  National Health Insurance.
  London Traffic.
  Housing (Financial Provisions).
  Pier and Harbour Provisional Orders (No. 2).
  Keighley Corporation (Trolley Vehicles) Provisional Order.
  Ministry of Health Provisional Orders Confirmation (No. 9).
  St. Helens Corporation (Trolley Vehicles) Provisional Order.
  Edinburgh Corporation Water Order Confirmation.
  Midlothian (Calder District) Water Order Confirmation.
  Ashton-under-Lyne Corporation.
  Leeds Corporation.
  Hastings Corporation.
  Taf Fechan Water Supply.
  Londonderry and Lough Swilly Railway.
  Clyde Valley Electrical Power.
  West Cheshire Water.
  Newcastle-upon-Tyne and Gateshead Corporations (Bridge).
  Croydon Corporation.
  Manchester Corporation.
  Rhymney and Aber Gas.
  Tynemouth Corporation.
  Lanarkshire Hydro-Electric Power.
  Scarisbrick Estate Drainage.
  House adjourned during pleasure.
  House resumed.
  House adjourned at twenty minutes past three o'clock to Tuesday, September 30.